Yearbook of Private International Law: Volume XXI Yearbook of Private International Law Vol. XXI - 2019/2020 9783504386962

Citation preview

YEARBOOK OF PRIVATE INTERNATIONAL LAW

YEARBOOK OF PRIVATE INTERNATIONAL LAW VOLUME XXI – 2019 / 2020

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)  978-3-504-08015-0 ISBN (eBook)  978-3-504-38696-2

© 2021 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 ................................................................................................ xiii Doctrine Janeen CARRUTHERS Discerning the Meaning of “Habitual Residence of the Child” in UK Courts – A Case for the Oracle of Delphi ............................................. 1 Christian KOHLER The EU Succession Regulation before the German Courts 2016-2019 ..... 37 Mihail DANOV Cross-Border Litigation – New Data, Initial Brexit Implications in England and Wales and Long-Term Policy Choices ................................. 57 Nikitas E. HATZIMIHAIL On the Doctrinal Beginnings of the Conflict of Laws ............................. 101 Interim Measures in International Commercial Litigation Proceedings of the SICL’s 31st Private International Law Day – Lausanne, 23 May 2019

Andrea BONOMI Interim Measures at the Crossroads of International Litigation and Arbitration – Some Remarks on Concurrent Jurisdiction and CrossBorder Enforcement ................................................................................. 137 Alexander LAYTON Interim Measures in English Law and their Circulation .......................... 159 Sandrine GIROUD / Noémie RAETZO The Recognition and Enforcement of Foreign Interim Measures in Switzerland .......................................................................................... 175 Ilaria PRETELLI The Law Applicable to Provisional and Protective Measures – With a Focus on the EU System of Ancillary Reliefs....................................... 197 Gilles CUNIBERTI Jurisdiction to Grant Interim Measures in Support of Arbitration – The Influence of European Law .............................................................. 225 Laurent HIRSCH Swiss Practice of Interim Relief in International Arbitration .................. 237 Karim EL CHAZLI / Ahmed HABIB Interim Measures in International Arbitration – An Arab Perspective .... 259

The 2019 Hague Judgments Convention Matthias WELLER The Jurisdictional Filters of the HCCH 2019 Judgments Convention ..... 279 Marko JOVANOVIC Thou Shall (Not) Pass – Grounds for Refusal of Recognition and Enforcement under the 2019 Hague Judgments Convention ................... 309 Lidia SPITZ Refusal of Recognition and Enforcement of Foreign Judgments on Public Policy Grounds in the Hague Judgments Convention – A Comparison with The 1958 New York Convention............................. 333 Cristina M. MARIOTTINI Establishment of Treaty Relations under The 2019 Hague Judgments Convention............................................................................................... 365 National Reports Yitshak COHEN International Jurisdiction of the Rabbinical Courts in Claims for Divorce in Israel ...................................................................................... 381 Florence GUILLAUME The Connecting Factor of the Place of Celebration of Marriage in Swiss Private International Law .............................................................. 399 Yin LIU Recognition of Foreign Same-Sex Unions in China ................................ 425 Richard Frimpong OPPONG / Sam TECLE The lex loci delicti Rule in Canadian Conflict of Laws ........................... 457 Eduardo PICAND ALBÓNICO Law of Succession to Estates of Deceased Persons in Chilean Private International Law ..................................................................................... 489 Court Decision Wolfgang FABER Foreign Proprietary Security Rights Failing to Comply with National Publicity Standards to Be Accepted? On Case No. 3 OB 249/18S of the Austrian Supreme Court of Justice .......................................................... 509

viii

Forum Pascal FAVROD-COUNE The Legal Position of the Weaker Party in B2B Relationships with Online Platforms in the European Union – An Analysis of Dispute Resolution Mechanisms in Regulation (EU) 2019/1150.......................... 523 Maria Chiara MARULLO “Almost” Universal Jurisdiction .............................................................. 549 Adeline MICHOUD Public Policy Exceptions in U.S. and European Private International Law – An Ultimate Fortress for Social and Environmental Standards? 569 Chukwuma Samuel Adesina OKOLI Choice of Law in The European Union – Common Law Procedure and Evidence .................................................................................................. 589 Sven RIVA Decentralized Autonomous Organizations (DAOs) in the Swiss Legal Order .............................................................................................. 601 Cassius Jean SOSSOU BIADJA Bridging the Gap in the OHADA Treaty with Respect to the Interpretative Role of the CCJA in Arbitration Matters........................... 639

Index ............................................................................................................. 663

ix

FOREWORD ___________ The present volume comprises contributions on some of the most momentous issues of private international law worldwide. The “doctrine” section opens with Janeen Carruthers voicing her bewilderment with the criteria to locate the habitual residence of the child as a connecting factor. The focus is on the UK, which is one of the most experienced jurisdictions in handling litigation involving children, including child abduction cases. Christian Kohler offers a report on the first experiences of implementation of the EU Succession Regulation in Germany, highlighting some uncertainties that seem likely to need clarification from the CJEU. Some of the consequences flowing from Brexit as regards the EU-UK relationship in civil litigation are addressed by Mihail Danov, while Nikitas Hatzimihail will bring you back to the foundations of private international law through an illustration of the medieval beginnings of the present conflict methodologies. At the core of the volume you will find no less than seven essays on interim measures in international commercial disputes, which was the subject of the SICL's 31st Private International Law held in Lausanne on May 23rd, 2019. What is original about this section is the novel attempt to combine contributions on international litigation before state courts and international arbitration, which is justified by the fact that several common issues arise in these fields with respect to interim relief, as highlighted in the introductory paper by one of the cosignatory Editors. Some of these papers are focused on statecourt litigation: Alexander Layton presents core aspects of interim relief in English law; the recognition and enforcement of foreign interim measures in Switzerland is addressed by Sandrine Giroud and Noémie Raetzo; and the law applicable to provisional and protective measures is explored by another Co-Editor. Others deal with international arbitration: while Gilles Cuniberti adds to the arguments on the absence of logical or normative difficulties in granting interim measures in support of arbitration proceedings, the Swiss experience is presented by Laurent Hirsch and Karim El Chazli and Ahmed Habib offer insights in the practice within the Arab world. Four papers nurture the Section on the Hague Judgments Convention. Some of them were intended to be presented at the conference which should have taken place in Milan on April, 23rd 2020, convened by Professor Pietro Franzina of the Catholic University (Università cattolica del Sacro Cuore), which had to be cancelled due to Covid-19 pandemic. We thank Professor Franzina for allowing us to include these papers in the present Volume. They address the very complex provisions on the recognition bases, the grounds for refusal of recognition and enforcement, and in

particular public policy, as well as the politically sensitive provision on the establishment of treaty relations among the Contracting States. Contributions from Austria, Canada, Chile, China, Israel, and Switzerland enrich the traditional “national reports” and “court decisions” sections. A majority deal with issues in family and succession law. The frictions between religious and political rules in Israel in matters of divorce – already known to our habitual readers – are presented by Yitshak Cohen from the perspective of the extraterritorial reach of rabbinical jurisdiction. Florence Guillaume emphasizes the role that the place of celebration will play as a connecting factor in international marriage law once same-sex marriage is introduced in Switzerland. A courageous article by Yin Liu demonstrates the inexistence of any real legal obstacles to the recognition of foreign same-sex marriages and partnerships in China, although such recognition has met with widespread resistance to date. Eduardo Picand Albónico presents the Chilean system of succession to estates in Chilean private international law, especially after the 2018 Tompkins case. With respect to torts, Oppong and Tecle portray the interpretation of lex loci delicti in the Canadian case-law and reflect on how this rule may evolve as a consequence of an increasing number of defamation cases, including through the internet. Finally, Wolfgang Faber presents an Austrian case on the recognition of foreign security rights not complying with national publicity standards. The “forum” section offers the summary of no less than six PhD dissertations on such diverse subjects as universal jurisdiction, public policy in U.S. and European law, the many-fold role of the CCJA in the OHADA area, the European Regulation on transparency for business users in online intermediation services and a tentative categorisation of DAOs and analysis of their status in Switzerland. We wish to wholeheartedly thank all our contributors for timely sending over their papers and for allowing us to produce a high quality volume despite the disruptions caused by Covid-19 pandemic. 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

xiii

DOCTRINE ________________

DISCERNING THE MEANING OF “HABITUAL RESIDENCE OF THE CHILD” IN UK COURTS A CASE FOR THE ORACLE OF DELPHI Janeen CARRUTHERS* I. II.

III.

IV.

Introduction The General Approach in UK Courts to the Ascertainment of a Child’s Habitual Residence A. Habitual Residence – A Fragmented Concept B. Absence of Legislative Definition C. A Mixed Question of Fact and Law D. Resisting Juridification of the Concept Habitual Residence of the Child – Characteristics and Indicia A. Integration in a Social and Family Environment B. The Extent of Integration 1. Assessing Integration 2. Impossibility of Dual Habitual Residence C. The Speed of Integration and the Absence of any Minimum Period of Residence D. The Importance of Stability of Residence E. The Characteristics of Residence 1. The Need for Physical Presence 2. The Impact of Coerced Residence 3. Illegal Residence F. A Factor Capable of Being Changed by a Parent Unilaterally G. Habitual Residence of a Child Will Often, but Not Inevitably, Coincide with Parental Habitual Residence H. The Relevance of Intention 1. The Child’s State of Mind 2. Parental Intention I. Absence of Habitual Residence 1. Legal Limbo Is Possible but Exceptional 2. Endeavouring to Fill the Lacuna Reflections on the Interpretative Evolution of the Factor

Professor of Private Law at the University of Glasgow. The author wishes to record her gratitude to Professor Elizabeth B. Crawford, University of Glasgow, for her valuable comments on a draft of this essay. *

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 1-35 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Janeen Carruthers

I.

Introduction

Increasingly in international family law the connecting factor of “habitual residence” is employed. In the United Kingdom, habitual residence has been used as a connecting factor in a variety of contexts since the middle of the 20th century. Its rise to prominence, however, was precipitated by the fact that in 1980 (by which time, it had established its place in the pantheon of jurisdiction rules as “the principal internationally-recognised basis for according jurisdiction to the upbringing of children”1), the choice fell upon the “habitual residence of the child” as the foundation on which the Hague Conference on Private International Law built its ambitious structure to regulate the civil aspects of international child abduction.2 From that international investiture in 1980, habitual residence now is deployed in a wide range of matrimonial, child custody and family property matters. Typically, it trumps domicile and nationality as the preferred personal law connecting factor (in practice, even if not always in terms of strict drafting hierarchy) to resolve international private law problems, having achieved a favoured status in harmonisation instruments emanating from the European Union and the Hague Conference and being a favourite tool of European regulations and international conventions alike. Thus, habitual residence is the principal connecting factor in matters pertaining to divorce, legal separation and marriage annulment, encapsulated in Regulation (EU) No 2201/20033 and Rome III;4 in rules relating to parental responsibility in terms of Regulation (EU) No 2201/20035 and the 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children (“the 1996 Convention”),6 as well as in adoption;7 in problems

Re C (Children) (Abduction) [2018] UKSC 8, per Lord HUGHES, at 20, referring to the 1961 Hague Convention concerning the powers of authorities and the law applicable in respect of the protection of infants, article 1. 2 1980 Hague Convention on the Civil Aspects of International Child Abduction (“the 1980 Convention”), article 3. 3 Council Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility, repealing Regulation (EC) No 1347/2000 (OJ L 338, 23.12.2003, pp. 1–29) (“Regulation No 2201/2003”), article 3. See also Council Regulation (EU) No 2019/1111 of 25 June 2019 on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (“Brussels II bis Recast”) (OJ L 178, 2.7.2019, pp. 1–115), article 3. 4 Council Regulation (EU) No 1259/2010 of 20 December 2010 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation (“Rome III”) (OJ L 343, 29.12.2010, pp. 10–16) (into which the UK did not opt), articles 5 and 8. 5 Article 8. See also Brussels II bis Recast, article 7. 6 E.g. Article 5. 7 1993 Hague Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption, article 2. 1

2

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” pertaining to maintenance in terms of the EU Maintenance Regulation8 and associated Hague instruments;9 in matters concerning matrimonial property and property of registered partners;10 in social security law;11 and even in problems concerning wills and succession regulated by the EU Succession Regulation.12 In these disparate contexts, habitual residence operates variously as a connecting factor for the purpose of allocating jurisdiction and in choice of law qua applicable law. One of the most prominent manifestations of the use of habitual residence still is in relation to international child abduction under the 1980 Convention and/or cross-border parental responsibility matters under Regulation No 2201/2003. Habitual residence of the child, though the fulcrum of the 1980 Convention, has rather an unusual use within the instrument, making its function difficult to categorise in international private law terms. It forms neither the basis of jurisdiction13 nor judgment recognition,14 nor does it constitute the applicable law,15 but rather is a device by which to restore the status quo ante following the wrongful removal or retention of a child. The decision whether or not a removal or retention is wrongful is one referable to the law of the child’s habitual residence and it is generally for the courts of that legal system to determine the ultimate substantive custody outcome. In the abduction context especially, the meaning and application of the connecting factor of habitual residence of the child has generated animated legal 8 Council Regulation (EC) No 4/2009 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations (OJ L 7, 10.1.2009, pp. 1–79), article 3. 9 E.g. 2007 Hague Protocol on the Law Applicable to Maintenance Obligations, article 3. 10 Council Regulation (EU) No 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, pp. 1–29), articles 5, 6, 22.1 and 26.1; and Council Regulation (EU) No 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, pp. 30–56), articles 5, 6 and 22.1. The UK did not opt into either Regulation. 11 E.g. Swaddling v Adjudication Officer [1999] All ER (EC) 217; Nessa v Chief Adjudication Officer [1999] 4 All ER 677; and Gingi v Secretary of State for Work and Pensions [2001] EWCA Civ 1685. 12 Regulation (EU) No 650/2012 of the European Parliament and of the Council 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, pp. 107–134) (into which the UK did not opt), articles 4 and 21. 13 At least not directly. Indirectly, however, it determines in which country is the appropriate forum to decide the merits of the dispute, that is, where and with whom a child’s future should lie. 14 E. PÉREZ-VERA, Explanatory Report on the 1980 Hague Child Abduction Convention (“PÉREZ-VERA Report”), para. 36. 15 Ibidem, para. 36.

Yearbook of Private International Law, Volume 21 (2019/2020)

3

Janeen Carruthers debate not only across Europe, but also globally among the legal systems of states party to the 1980 Hague Convention. In recent years the connecting factor has generated voluminous and highly significant case law in UK courts.16 Extraordinarily, since 2013, the United Kingdom Supreme Court has had occasion to consider the meaning of habitual residence of the child in six cases: A v A and another (Children: Habitual Residence) (Reunite International Child Abduction Centre and others intervening);17 In re L (A Child) (Custody: Habitual Residence) (Reunite International Child Abduction Centre intervening);18 In re LC (Children) (Reunite International Child Abduction Centre intervening);19 In re R (Children) (Reunite International Child Abduction Centre and others intervening);20 In re B (A Child) (Reunite International Child Abduction Centre and others intervening);21 and Re C (Children) (Abduction).22 It is not the ambition of this essay to provide detailed commentary on each of these important cases.23 Rather, it is intended, first, to analyse the general approach in UK courts to ascertainment of a child’s habitual residence; secondly, having distilled the key principles from UK case law and wider European and global influences, to depict the characteristics and identify the indicia of the connecting factor; and finally to offer some reflections on the interpretative evolution of the factor.

16 For early analysis of the topic from a UK perspective, see E.B. CRAWFORD, “Habitual Residence of the Child” as the Connecting Factor in Child Abduction Cases: A Consideration of Recent Cases, Juridical Review 1992, p. 177. See also E.B. CRAWFORD, A Day is Not Enough: Further Views on the Meaning of Habitual Residence, Juridical Review 2000, p. 89; E.B. CRAWFORD, Payment postponed: exploring the extent of Nessa's authority, 10 Journal of Social Security Law, 2003, p. 52; E.M. CLIVE, The Concept of Habitual Residence, Juridical Review, 1997, p. 137; E.M. CLIVE, The New Hague Convention on Children, Juridical Review 1998, p. 169; and P. ROGERSON, Habitual Residence: The New Domicile?, 49 International and Comparative Law Quarterly 2000, p. 86. 17 [2013] UKSC 60 (“A v A”). 18 Also known as DL v EL (Hague Abduction Convention: Effect of Reversal of Return Order on Appeal) [2013] UKSC 75 (“In re L”). 19 [2014] UKSC 1 (“In re LC”). 20 Also known as AR v RN [2015] UKSC 35 (“In re R”). 21 [2016] UKSC 4 (“In re B”). 22 [2018] UKSC 8 (“In re C”). 23 For detailed commentary, see N.V. LOWE, The UK Senior Court’s Contribution to the Global Jurisprudence on International Child Abduction, 135 Law Quarterly Review 2019, p. 114.

4

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child”

II.

The General Approach in UK Courts to the Ascertainment of a Child’s Habitual Residence

A.

Habitual Residence – A Fragmented Concept

In international private law rules operative in the UK, the connecting factor of domicile is recognised to be a unitary concept.24 Its rules remain the same in whichever private law context it is called into play (e.g. marriage, succession, or child law etc.), subject only to the specialties of tax law and certain other legislative particularities. Specifically, one must bear in mind the different forms of ascription of domicile to persons at birth and under 16 years of age under English and Scots law, respectively,25 and the fundamentally different meaning which the concept of domicile carries within the European framework of rules of civil and commercial jurisdiction and judgment recognition and enforcement.26 In contrast, the meaning of habitual residence, to some extent at least, varies according to the subject matter context in which it is encountered and therefore is a fragmented concept. Although the meaning of the factor ought to be consistent within a single instrument27 and, more broadly, across different instruments within a single subject area, e.g. in child law,28 and even across different Hague Conventions regulating different subject areas,29 as between, e.g., child law and the law of obligations, the meaning and interpretation of the connecting factor differ markedly. In contrast to its role in the family law sphere, habitual residence has emerged as merely a bit player in choice of law rules pertaining to contractual and non-contractual obligations and an autonomous legislative definition of the concept is provided within each of the Rome I and Rome II Regulations.30 Such 24 E.B. CRAWFORD/ J.M. CARRUTHERS, International Private Law: A Scots Perspective, 4th ed., Edinburgh 2015, para 6-36. 25 Domicile of origin and domicile of dependence exist in English law, whereas in Scots law the “domicile of persons under 16” has replaced those concepts per the Family Law (Scotland) Act 2006, section 22. 26 Regulation (EU) No 1215/2012 of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (“Brussels I Recast”), OJ L 351, 20.12.2012, pp. 1-32, articles 62 and 63. 27 E.g. CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, para. 41: consistent interpretation for the respective purposes of articles 8, 10 and 11 of Regulation No 2201/2003. 28 E.g. CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, at Opinion of the AG, paras 37 and 39; see also the Opinion of the AG SAUGMANDSGAARD ØE, emphasising in the context of child law, the “importance of a consistent and uniform application of the criterion of habitual residence both within the EU and in all the States Signatories to the Hague Conventions” (Opinion of the AG, ECLI:EU:C:2018:749, para. 40). 29 See e.g. remarks of COBB J in TD v KD [2019] EWCOP 56 at [10]. 30 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”) (OJ L 177, 4.7.2008, pp. 6-16), article 19; and Regulation (EC) No 864/2007 of the European

Yearbook of Private International Law, Volume 21 (2019/2020)

5

Janeen Carruthers explicit legislative definition is rare and the concept has been left largely to judicial interpretation. B.

Absence of Legislative Definition

It is well known that the 1980 Convention does not supply a definition of habitual residence. As has been observed on many occasions, notably by the High Court of Australia,31 this is not unusual in the context of Hague Conventions. The absence of a definition is not inadvertent. The rapporteur on the 1980 Convention, Professor Elisa PÉREZ-VERA, made clear that, “Following a longestablished tradition of the Hague Conference,32 the Convention avoided defining its terms, with the exception of those in article 5 concerning custody and access rights, where it was absolutely necessary to establish the scope of the Convention’s subject-matter.”33 Honouring this tradition34 has led, at different times, to courts enjoying flexibility and discretion in interpreting habitual residence (to the perceived benefit of the child in question and/or either parent), but also to the drawback of uncertainty of meaning and to the cost and delay inherent in litigation to resolve the matter. The absence of any fixed legislative definition has spawned, in the context of return applications under the 1980 Convention, countless disputes on where a child is considered to be habitually resident for the purpose of that instrument. It is difficult, therefore, for advice in advance of litigation confidently to be offered to a parent. The rationale for eschewing a formal definition in any given instrument seemingly is to afford latitude to domestic courts in interpreting and applying the instrument in question35 and “to avoid the application of rigid formulas”36 or “rigid Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (“Rome II”) (OJ L 199, 31.7.2007, pp. 40-49), article 23. Cf. the elaboration of the meaning of habitual residence in Regulation (EU) No 650/2012, Recitals 23 and 24. 31 L.K. v. Director-General, Department of Community Services [2009] HCA 9 at [21]. Cf., in Canada, Beairsto v. Cook, 2018 NSCA 90, per BEVERIDGE J. A., at [41]. 32 The concept, undefined, was used in a Hague Convention on civil procedure as long ago as 1905. 33 E. PÉREZ-VERA Report (note 14), para. 53. 34 Cf. Absence of definition in the 1996 Hague Convention and in the 2000 Hague Convention on the International Protection of Adults, observed by COBB J in TD v KD [2019] EWCOP 56 at [10] – [14], and by MOYLAN J in An English Authority v SW and others [2014] EWCOP 43 at [64]. 35 See comments in litigation before the United States Supreme Court sub nom. Monasky v Taglieri (Case Number 18-935), the Brief of Amicus Curiae per Reunite International Child Abduction Centre in support of neither party (on Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit) (August 21, 2019), p. 5. See, subsequently, Monasky v Taglieri 589 U.S. _ (2020). 36 Monasky v Taglieri (Case Number 18-935), Brief of Amicus Curiae – per International Academy of Family Lawyers, at p 3. Cf. Re LC (Children) (Habitual Residence: Grave Risk of Harm) (AKA M v F) [2014] EWFC 8; [2015] 1 F.L.R. 1019; [2014] Fam. Law 1377), per RODERIC WOOD J, at [13].

6

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” legal rules”.37 In 1997, Professor Eric CLIVE wrote that, “The attraction of the concept of habitual residence has always been that it is a simple, non-technical concept that can be applied directly to the facts of cases.”38 While this feature furnishes domestic courts with considerable discretion and extends to them the power to exercise autonomy – not least because, in respect of Hague conventions, there is no supranational court with overarching jurisdiction to control interpretation of key terms and provisions – it is apparent that judges frequently have strained to identify criteria to steer their approach to finding a child’s habitual residence, a factor which, in practice, often proves difficult to discern.39 Negotiators at the Hague Conference, and likewise the drafters of Regulation No 2201/2003 and of Brussels II bis Recast, having determined not to define habitual residence, UK judges have grappled with the concept and have endeavoured over many decades to settle on a clear working practice, if not a definition, to assist them in their application of the connecting factor of habitual residence.40 C.

A Mixed Question of Fact and Law

The PÉREZ-VERA Report expressly states that the Hague Conference regards the notion of habitual residence “as a question of pure fact, differing in that respect from domicile”.41 The notion repeatedly has been described as a matter of fact not law, that is, “as something to which no technical legal definition is attached so that judges from any legal system can address themselves directly to the facts.”42 Following the first, famous articulation of the proposition in the UK House of Lords, by Lord BRANDON OF OAKBROOK in In re J (A Minor) (Abduction: Custody Rights),43 that “… the question whether a person is or is not habitually resident in a specified country is a question of fact to be decided by reference to all the circumstances of any particular case”,44 British judges have said often, and firmly,

37 CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, at Opinion of the AG, para. 38. 38 E.M. CLIVE, The Concept of Habitual Residence, Juridical Review 1997, at 137. 39 E.g. in Re E (A Child) (Abduction: Article 13B: Deferred Return Order) [2019] EWHC 256 (Fam), KNOWLES J remarked, at [59], that the child’s habitual residence did not “reveal itself instantly”. Cf. In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J, at [16]. 40 E.g. Cruse v Chittum [1974] 2 All E.R. 940; R. v Barnet LBC Ex p. Shah [1983] 2 A.C. 309 at 342- 343; and Re P-J (Children) [2009] EWCA Civ. 588, See, however, A v A [2013] UKSC 60, per Baroness HALE OF RICHMOND, at [54]. 41 E. PÉREZ-VERA Report (note 14), para. 66. 42 L.K. v. Director-General, Department of Community Services [2009] HCA 9 at [21]. 43 [1990] 2 A.C. 562. 44 Ibidem, at 578.

Yearbook of Private International Law, Volume 21 (2019/2020)

7

Janeen Carruthers that the words “habitual residence” should bear their ordinary and natural meaning, for the term is not a term of art with some special import, but a matter of fact.45 The rejection by UK courts of a “rule-based” approach to the determination of habitual residence is attributable, at least partly, to European influence. In 2013, in A v A,46 Baroness HALE OF RICHMOND DPSC (with whom Lords Wilson, Reed and Toulson JJSC agreed), when “drawing the threads together”,47 ruled that, “(i) All are agreed that habitual residence is a question of fact and not a legal concept such as domicile. There is no legal rule akin to that whereby a child automatically takes the domicile of his parents.”48 The argument was made that since the Hague Conference, and the UK Parliament in enacting the Child Abduction and Custody Act 1985, had determined not to define the concept, “… it would be wrong to purport to lay down a series of legal propositions about the meaning of habitual residence. That would not only convert the concept into a technical legal concept like domicile but would also greatly increase the risk of the concept acquiring different meanings in different countries.”49 However, the characterisation of habitual residence as a matter of fact not law is a more subtle, chameleon point than at first sight may appear. Thus Professor CLIVE stated, in connection with the 1996 Hague Convention, that habitual residence “… is a legal concept, but one which depends almost entirely on the facts of the situation.”50 This contention was judicially affirmed in 2016 in the UK House of Lords in In re B.51 Lord Wilson JSC having asserted that the identification of a child’s habitual residence is “overarchingly a question of fact”,52 Baroness Hale DPSC and Lord Toulson JSC opined – qualifying, in effect albeit not expressly, the Supreme Court’s earlier ruling in A v A53 – that, “[a]t the risk of 45 E.g. Re P-J (Children) (Abduction: Habitual Residence: Consent) [2009] EWCA Civ 588; A v A (Children) (Habitual Residence) [2013] UKSC 60; [2014] A.C. 1, per Baroness HALE OF RICHMOND DPSC at [54], and per Lord HUGHES JSC at [80]; In re LC (Children) (Reunite International Child Abduction Centre intervening) [2014] UKSC 1, [2014] A.C. 1038, per Baroness HALE OF RICHMOND DPSC at [59]; Re LC (Children) (Habitual Residence: Grave Risk of Harm) (AKA M v F) [2014] EWFC 8; [2015] 1 F.L.R. 1019; [2014] Fam. Law 1377), per RODERIC WOOD J at [13]; and In re B (A Child) (Reunite International Child Abduction Centre and others intervening) [2016] UKSC 4, per Lord WILSON JSC at [46] and per Baroness HALE OF RICHMOND DPSC and Lord TOULSON JJSC, at [57]. 46 [2013] UKSC 60; [2014] A.C. 1. 47 Ibidem at [54] – [58]. See also [36]. 48 Ibidem at [54]. 49 E.M. CLIVE (note 38), at 137. 50 E.M. CLIVE, The New Hague Convention on Children, Juridical Review 1998, p. 169, at 174. 51 [2016] UKSC 4. 52 Ibidem, at [46]. See also per Lord CLARKE OF STONE-CUM-EBONY JSC (dissenting) at [93]. 53 [2013] UKSC 60; [2014] A.C. 1. Cf. also dicta of Baroness HALE OF RICHMOND DPSC (with whom Lord SUMPTION JSC agreed) in In re LC [2014] UKSC 1 at [59]: “The first principle is that habitual residence is a question of fact ...”.

8

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” appearing pedantic, we would prefer to describe it as a mixed question of fact and law, because the concept is a matter of law but its application is a matter of fact.”54 A similar line was followed by the dissenting judges in In re B, to the effect that, “… while the test for what constitutes habitual residence is a question of law, whether it is satisfied is a question of fact.”55 Interestingly, the United States Supreme Court has concluded that a child’s habitual residence presents, “what U.S. law types a ‘mixed question of law and fact albeit barely so’ … The inquiry begins with a legal question: What is the appropriate standard for habitual residence? Once the trial court correctly identifies the governing totality-of-the-circumstances standard, however, what remains for the court to do in applying that standard … is to answer a factual question: Was the child at home in the particular country at issue?”56 The characterisation of habitual residence as a matter of fact or law is significant partly because it may affect whether or not a trial court’s determination of a child’s habitual residence is subject to review by an appellate court. But its significance lies also in the edict that judges should avoid juridification of the concept, that is, they should avoid formulating, whether by accident or design, rules or principles which dictate the process by which, or the manner in which, a child’s habitual residence is to be ascertained.57 Critically, as Baroness Hale of Richmond DPSC directed in A v A,58 “(vii) The essentially factual and individual nature of the inquiry should not be glossed with legal concepts which would produce a different result from that which the factual inquiry would produce.”59 In re B [2016] UKSC 4, at [57]. Cf. A v A [2013] UKSC 60; [2014] A.C. 1, per Lord HUGHES, who conceded at [92] that, “it is well established that although rules of law are generally inappropriate the concept of habitual residence is necessarily to some extent a legal one; [as PATTEN LJ said [2013] Fam 232, para. 59,] it is a jurisdictional concept.” Cf. TD v KD [2019] EWCOP 56, per COBB J at [14], “… despite the important legal consequences attaching to it, [habitual residence’] should remain a factual concept”. 55 In re B, ibidem, per Lord SUMPTION JSC (dissenting), with whom Lord CLARKE OF STONE-CUM-EBONY JSC agreed, at [64]. 56 Monasky v Taglieri 589 U.S. _ (2020), Opinion of the Court delivered by GINSBURG J, at p. 15. See also Opinion of ALITO J, at p. 2: ‘Habitual residence’ is not a pure question of fact … But it does involve a heavily factual inquiry.” 57 Cf. remarks of Baroness HALE OF RICHMOND DPSC in A v A [2013] UKSC 60 at [37]. See also R. SCHUZ, Habitual residence of children under the Hague Child Abduction Convention – theory and practice, 13 Child and Family Law Quarterly, 2001, p. 4. 58 Ibidem at [54]. 59 Cf. In re L [2013] UKSC 75, per Baroness HALE OF RICHMOND DPSC (with whom Lord NEUBERGER OF ABBOTSBURY PSC, Lord WILSON, Lord HUGHES and Lord HODGE JJSC agreed) at [20]; and the approach taken by the UKSC in In re R (Children) [2015] UKSC 35, [2015] 2 W.L.R. 1583. See also In re E (Children [2011] UKSC 27, [2012] 1 A.C. 144, at [31], where Baroness HALE OF RICHMOND and Lord WILSON JJSC, delivering the judgment of the Supreme Court, held that the words in article 13 of the Hague Convention were “quite plain” and needed “no further elaboration or «gloss».” Cf. In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [17]. 54

Yearbook of Private International Law, Volume 21 (2019/2020)

9

Janeen Carruthers So far, so good. However, the delineation between fact and law can be blurred. Moreover, there is a difficulty, noted by Lord Hughes JSC in A v A when he highlighted “[the] long-standing tension between the generally accepted proposition that habitual residence is a question of fact and the desire to provide some guidance on the approach which courts should adopt when deciding whether it has been demonstrated.”60 Lord Hughes, drawing a distinction between a judge (permissibly) making a “helpful generalisation of fact” concerning the determination of a child’s habitual residence and his/her essaying a “proposition of law”,61 concluded that doing the latter cannot be acceptable for it would destroy the agreed starting point that habitual residence is a question of fact. But where is the boundary to be drawn between a judge making a “helpful generalisation of fact” and his/her expressing a “proposition of law”? When does “guidance on the approach which courts should adopt” tip into the framing of a proposition of law and the improper application of legal gloss? In response to a submission in In re B62 that the court should strive not to introduce any gloss on the meaning of habitual residence, Lord Wilson JSC said that, “A gloss is a purported sub-rule which distorts application of the rule. … In making the following three suggestions about the point at which habitual residence might be lost and gained, I offer not subrules63 but expectations which the fact-finder may well find to be unfulfilled in the case before him: … ”64 While the distinction between fact and law may seem plain in theory, as a matter of practice, in the context of a given dispute, it can be far from clear. As Lord Sumption JSC said with a note of resignation in In re B, with regard to the question whether one habitual residence may be lost before a new one has been acquired, “I remain uncertain whether this is said to be a principle of law or a proposition of fact.”65 One judge’s bald statement of a proposition of fact may be deemed by another to be the application of legal gloss.

A v A [2013] UKSC 60; [2014] A.C. 1, at [72]. Ibidem at [73]. 62 [2016] UKSC 4. 63 Nor, apparently, does his Lordship offer “rules”: see In re B, ibidem, per Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC, at [57]: “We do not … understand Lord WILSON JSC to be laying down a rule of law that a child must always have an habitual residence: rather that, as a matter of fact, the loss of an established habitual residence in a single day before having gained a new one would be unusual.” (emphases added). 64 Ibidem, per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [46]. 65 In re B [2016] UKSC 4 at [64]. Cf. doubt expressed by BLACK LJ in Re H (Children) [2014] EWCA Civ. 1101 at [34]. 60 61

10

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” D.

Resisting Juridification of the Concept

In 1998 Professor CLIVE remarked that, “If the [1996 Hague Children] Convention is to work well it will be important that all Contracting States resist the temptation to embellish the concept of habitual residence with subsidiary legal rules of a technical nature. The two words ‘habitual’ and ‘residence’ contain all the ingredients required to make the concept work.”66 Habitual residence is intended to be a common sense concept, one readily understandable by the man or woman (possibly even the mature child) in the street. But the person in the street would be astonished at the areas of doubt and complexity which a deconstruction of the concept lays bare. Despite habitual residence being overarchingly a question of fact, the facts of cases have demanded that difficult questions be addressed. Fundamentally, for example: – how does an individual acquire an habitual residence?67 – is physical residence necessary and, if so, what period of time qualifies as “habitual”? 68 – how does an individual lose habitual residence, and how quickly? – can a person be without an habitual residence, i.e. can there be a gap or lacuna between residences? – can a person have more than one habitual residence concurrently?69 Aside from such fundamental questions, there are more subtle nuances: – must that residence be lawful? – to what extent is the mental attitude of the propositus relevant, be s/he an adult or a child? – must there be free will or “voluntariness” at the outset of the residence, and throughout the period of residence? – must there be “settled” intention, that is, a settled purpose before habitual residence can be said to have been acquired? – is the habitual residence of a child necessarily the same as that of the parent having care and control of him? – can the habitual residence of a child be changed through the unilateral actings of one parent? – can (must) an unborn,70 or newborn,71 child have an habitual residence and, if so, how is it to be assigned? 66 E.M. CLIVE, The New Hague Convention on Children, Juridical Review 1998, p. 169, at 174. 67 E.g. Re J (A Minor) (Abduction: Custody Rights) [1990] 2 A.C. 562 at 578, 579; Re N (Child Abduction: Habitual Residence) [1993] 2 F.L.R. 124; Re R (Wardship: Child Abduction) (No.2) [1993] 1 F.L.R. 249; Al-H v F [2001] EWCA Civ 186; [2001] 1 F.L.R. 951; Re R (Abduction: Habitual Residence) [2003] EWHC 1968; [2004] 1 F.L.R. 216; Re D (Abduction: Habitual Residence) [2005] EWHC 518; [2005] 2 F.L.R. 403; Re A (Abduction: Consent: Habitual Residence: Consent) [2005] EWHC 2998; [2006] 2 F.L.R. 1; E v E [2007] EWHC 276; [2007] Fam. Law 480; and W v F [2007] EWHC 779 (Fam). 68 E.g. A v A [2013] UKSC 60. 69 E.g. C v FC [2004] 1 F.L.R. 362. 70 E.g. Re F (Abduction: Unborn Child) [2006] EWHC 2199 (Fam).

Yearbook of Private International Law, Volume 21 (2019/2020)

11

Janeen Carruthers These questions, all arising in the area of child law, have been prompted by real life scenarios. One must ask whether, in practice, it is possible for courts applying a so-called “simple, non-technical concept” to resist the temptation to embellish it and to clothe it with legal raiment. And even if that temptation can be resisted, one must observe that in the application (a matter of fact) of a legal concept, judges need some framework to guide them. In the UK, over many decades of jurisprudence, the indicia of the connecting factor of domicile have been built up, and the rules pertaining to its acquisition, retention and loss, in the main, are well established. Habitual residence, as conceived, was never intended to be constrained by an equivalent framework of rules.72 But what is seen in practice is that the varied, often complex living patterns of families (patterns often inadequately vouched by evidence) require that questions such as those listed above be investigated and that courts provide answers. Although judges are urged to abstain from expressing formulas, rules, sub-rules and glosses, it is clear from scrutiny of cases that habitual residence as an operational connecting factor is in a state of constant refinement in light of factual circumstances presenting. Analysis of case law enables certain characteristics to be discerned73 and indicia perceived74 and it is the aim of the following section to cast light on these features and traits.

III. Habitual Residence of the Child – Characteristics and Indicia A.

Integration in a Social and Family Environment

At the start of its use in the modern era, the meaning of habitual residence inevitably varied from one national forum to another. Different nuances of interpretation In A v A [2013] UKSC 60, Lord HUGHES JSC stated at [69] that, “ … although it is unusual for the habitual residence of a new born baby to fall for consideration when he has not yet reached the shores of his family’s established home, both this case and B v H (Habitual Residence: Wardship) [2002] 1 FLR 388 show that it is by no means hypothetical.” 72 A v A [2013] UKSC 60, per Baroness HALE at [36]. 73 A careful distillation of principles presented by HAYDEN J in In re B (A Child) (Custody Rights: Habitual Residence), [2016] EWHC 2174, J at [17] has become, in effect, a working guide relied upon by many other first instance judges, e.g. AH v CD [2018] EWHC 1643 (Fam), per WILLIAMS J at [38]; KD v AM [2018] EWFC 64, per THEIS J at [26]; Re E (A Child) (Abduction: Article 13B: Deferred Return Order) [2019] EWHC 256 (Fam), per KNOWLES J at [56]; and L v M (Jurisdiction: Repudiatory Retention) [2019] EWHC 219 (Fam), per LIEVEN J at [50]. Cf. AB v CD [2018] EWHC 1021 Fam, per KEEHAN J at [5]. 74 Cf. Office of the Children’s Lawyer v Balev (earlier Balev v Baggott) 2018 Supreme Court of Canada 16 (20 April 2018), per MCLACHLIN CJ at [47]: “courts allude to factors or considerations that tend to recur …”. 71

12

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” across courts in the contracting states to the 1980 Convention were inevitable. The europeanisation of family law, however, entailed significant European influence on UK (and other Member State) courts in relation to the meaning and application of habitual residence. Following in the same tradition as the 1980 Hague Convention, neither Regulation (EU) No 2201/2003 nor its Recast successor incorporates any definition of habitual residence.75 Clear direction, however, on the meaning of the habitual residence of a child was handed down by the European Court of Justice in Proceedings brought by A,76 a Finnish case concerning the operation of Regulation (EU) No 2201/2003, article 8, a provision which bestows jurisdiction in matters of parental responsibility on the courts of the Member State where a child was habitually resident. The main question referred to the CJEU by the Finnish Court of Appeal (Korkein hallinto-oikeus) concerned what, in the context of article 8, were the criteria for determining habitual residence, particularly where a child was permanently resident in one state, but was staying in another state carrying on a peripatetic life there. Significantly, on the reference, the CJEU (Third Chamber) held that that the words “habitually resident” in article 8(1) denoted: “… the place which reflects some degree of integration by the child in a social and family environment. To that end, in particular the duration, regularity, conditions and reasons for the stay on the territory of a Member State and the family’s move to that state, the child’s nationality, the place and conditions of attendance at school, linguistic knowledge and the family and social relationships of the child in that state must be taken into consideration. It is for the national court to establish the habitual residence of the child, taking account of all the circumstances specific to each individual case.”77 This interpretation was confirmed by the CJEU (First Chamber), on a reference from the English Court of Appeal, in Mercredi v Chaffe,78 where the CJEU ruled that: “According to settled case law, it follows from the need for a uniform application of European Union law and the principle of equality that the terms of a provision of European Union law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an independent and uniform interpretation throughout the European 75 As noted by CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436; and in CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835; [2019], I.L.Pr. 27, para. 45. 76 CJEU, 2 April 2009, Korkein hallinto-oikeus – Finland, ECLI:EU:C:2009:225; [2010] Fam 42; [2009] I.L.Pr. 39. 77 Ibidem, para. 44. 78 CJEU (First Chamber), 22 December 2010, Barbara Mercredi v Richard Chaffe, preliminary ruling: Court of Appeal (England and Wales) United Kingdom, ECLI:EU:C:2010:829, [2011] I.L.Pr. 23, [2012] Fam. 22. See, subsequently, in the English Court of Appeal [2011] EWCA Civ 272.

Yearbook of Private International Law, Volume 21 (2019/2020)

13

Janeen Carruthers Union, having regard to the context of the provision and the objective pursued by the legislation in question:”79 Moreover, in OL v PQ,80 the CJEU ruled that since the concept of habitual residence is undefined in each of the 1980 Convention and Regulation (EU) No 2201/2003 and since the articles of the latter instrument which refer to it do not contain any “express reference to the law of the Member States for the purpose of defining its meaning and scope”,81 the concept – an autonomous one of EU law82 – “has to be interpreted in the light of the context of the provisions referring to that concept and the objectives of Regulation No 2201/2003…”.83 Thus, although the 1980 Convention does not define habitual residence and it is clear that not all states party to it apply an identical test, Regulation (EU) No 2201/2003, in laying down a uniform jurisdictional scheme among European Member States, has had the effect that all EU Member State courts in the application of that instrument must interpret the concept in the manner articulated by the CJEU. An autonomous European meaning of habitual residence of the child having emerged, UK courts have settled upon the same interpretation for all purposes within the particular area of conflict of laws rules concerning children. In 2013, Baroness HALE OF RICHMOND DPSC, in a significant judgment in A v A,84 noted that, “It has hitherto been thought … that the concept of habitual residence, as developed by the courts of England and Wales for the purposes of both the [Family Law Act] 1986 … and the [1980] Hague Convention … is different from the concept of habitual residence as interpreted by the Court of Justice of the European Union for the purposes of the [Regulation (EU) No 2201/2003]. … Nevertheless, it is highly desirable that the same test be adopted and that, if there is any difference, it is that adopted by the Court of Justice.”85 79 Ibidem, para. 45. Cf. CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, paras 39-41. 80 CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436. 81 Ibidem, para. 39. 82 The autonomous nature of the concept was confirmed in CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, at Opinion of the AG, paras 40 and 46. As noted in Section II.A, above, however, despite the emergence of an autonomous and uniform application of the concept of the habitual residence of a child throughout the EU, it cannot yet be said that a European meaning for one purpose, e.g., jurisdiction in parental responsibility matters, can be transposed directly to another, e.g. choice of law in succession in terms of the EU Succession Regulation, or choice of law in contract in terms of the Rome I Regulation. To this extent, the factor remains fragmented. 83 CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, para. 40. 84 [2013] UKSC 60. 85 Ibidem at [34] and [35]. Cf. DL v EL (Hague Abduction Convention: Effect of Reversal of Return Order on Appeal) [2013] EWCA Civ 865, in which the English Court of Appeal, per THORPE LJ at [48], accepted that “there is now no distinction to be drawn” among the tests expounded by the CJEU in Proceedings brought by A and Mercredi v Chaffe, the autonomous law of the Hague Convention and English domestic law. See also In re L [2013] UKSC 75; and In re R [2015] UKSC 35, [2015] 2 W.L.R. 1583, per Lord REED JSC at [12].

14

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” It has become clear that the concept of habitual residence arising in child law matters in UK courts now is the “modern international concept of habitual residence”.86 Following the European model, it is apparent that in UK law habitual residence of the child corresponds to the place which reflects some degree of integration by the child in a social and family environment. This conscious alignment of national and European concepts is appropriate, for the sake of coherence and simplicity. However, the emergence of a uniform European concept and streamlining of national laws should not be regarded as a panacea, curing all interpretative difficulties for, in practice, as will be seen, questions have persisted concerning the precise contours of the concept. B.

The Extent of Integration

1.

Assessing Integration

Plainly, a child can be integrated, to some degree, in more than one place simultaneously. The pertinent question in ascertaining a child’s habitual residence is whether the child has achieved “some” degree of integration in a social and family environment. The factual enquiry should be centred on the child’s life and integration ought to be determined according to objective and subjective factors.87 Although evidence of complete integration in a state (that is, to the exclusion of some degree of integration in, or attachment to, another country) is not necessary in order to establish habitual residence in the former territory,88 the assessment of integration appears to entail a comparative exercise, whereby a child’s connections to the erstwhile habitual residence and the putative (new) habitual residence are measured. The comparative analysis, seemingly, need not be explicit, but the exercise ought at least generally be undertaken.89 In the assessment of integration, the weight that should be commanded by any single factor is not predetermined. The factual approach means that there is no fixed tariff or pre-conceived ranking of individual factors and seemingly it is the case that no single factor is uniformly dispositive of the matter.90 In many cases, in the absence of judicial determination, habitual residence is very difficult to predict or state with confidence, which is strange for an allegedly simple, common sense concept. 86 In re B [2016] UKSC 4, per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed) at [30]. See also AH v CD [2018] EWHC 1643 (Fam) per WILLIAMS J at [38]. 87 AB v CD [2018] EWHC 1643 (Fam) per WILLIAMS J at [38]. See also In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [17] and Section III.H, below. 88 In re B [2016] UKSC 4, per Lord WILSON JSC at [39]; and In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [17]. 89 AH v CD [2018] EWHC 1643 (Fam), per WILLIAMS J at [38]. 90 Cf. Monasky v Taglieri 589 U.S. _ (2020), Opinion of the Court delivered by GINSBURG J, at pp. 8-9.

Yearbook of Private International Law, Volume 21 (2019/2020)

15

Janeen Carruthers Neither the 1980 Convention nor Regulation (EU) No 2201/2003 establishes a standard of proof, but the usual civil standard of the balance of probabilities is to be applied.91 The question who bears the onus of proof has received mixed answers,92 in contrast to the position regarding proof of change of domicile, where it is clear that the party who is averring a change of domicile bears the burden of proof. 2.

Impossibility of Dual Habitual Residence

While the possibility of an individual having dual or multiple habitual residences concurrently is a point which has been debated more in relation to adults than in respect of children,93 the question whether or not a child, simultaneously, can be habitually resident in more than one place is a pertinent one.94 The premise of the international legislative framework is that a child can have only one habitual residence at any given time, and as the CJEU made clear in Proceedings brought by HR (with the participation of KO and another),95 habitual residence is the place which, in practice, is the centre of the child’s life. On the logic that there can be only one centre, a child, for the purpose of international legal instruments, can have only one habitual residence at any given point in time.96 The task of identifying where the centre of the child’s life was located at the tempus inspiciendum is one for the national court.97 C.

The Speed of Integration and the Absence of any Minimum Period of Residence

Some degree of integration (that is, the “requisite degree of integration”98) in a social and family environment can occur quickly. There is no particular requireCf. Bell v Kennedy (1868) 6 M (HL) 60. See AH v CD [2018] EWHC 1643 (Fam), per WILLIAMS J at [39]. 93 See, e.g., with regard to matrimonial jurisdiction, Marinos v Marinos [2007] EWHC 2047 (Fam), per MUNBY J at [34]; V v V [2011] 2 FLR 778, per PETER JACKSON J, at [50] – [51]; Tan v Choy [2014] 1 FLR 492 at [31]; AJ v DM [2019] EWHC 702 (Fam), per COHEN J, at [34]; and Pierburg v Pierburg [2019] EWFC 24, per MOOR J, at [46]. 94 See, e.g., X v Y, decision of the Court of Appeal of The Hague (3 April 2019) (Reference: ECLI:NL:GHDHA:2019:758), at p. 13, available at https://www.incadat.com/ en/case/1426. 95 CJEU (Fifth Chamber), 28 June 2018, Sad Rejonowy Poznan v Stare Miasto w Poznaniu, ECLI:EU:C:2018:513, [2018] Fam 385, paras 42 and 66. 96 Even though a person can be (ordinarily) resident in two countries at the same time: Pierburg v Pierburg [2019] EWFC 24, per MOOR J at [46]. 97 CJEU (Fifth Chamber), 28 June 2018, Proceedings brought by HR (with the participation of KO and another), ECLI:EU:C:2018:513, [2018] Fam 385, para. 66. 98 In re B [2016] UKSC 4, per Lord WILSON JSC, at [39]; and In re B (A Child) (Custody Rights: Habitual Residence), [2016] EWHC 2174, per HAYDEN J, at [17]. 91 92

16

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” ment that a child should have been resident in a country for a prescribed minimum period of time.99 The sufficiency of integration may be dependent on the nature and extent of pre-existing connections. The revival of previous connections is likely to happen more quickly than is the cultivation of new connections. Analysing the correlation between loss of one habitual residence and acquisition of another,100 Lord WILSON JSC in In re B101 stated that, “The concept operates in the expectation that, when a child gains a new habitual residence, he loses his old one. Simple analogies are best: consider a see-saw. As, probably quite quickly, he puts down those first roots which represent the requisite degree of integration in the environment of the new state, up will probably come the child's roots in that of the old state to the point at which he achieves the requisite de-integration (or, better, disengagement) from it.” 102 There is a clear link between loss of one habitual residence and acquisition of another. Focusing on the extent and speed of integration in the new country (rather than on disintegration of existing ties), Lord WILSON indicated – not by way of “sub-rules”, but merely by way of “expectations which the fact-finder may well find to be unfulfilled in the case before him” – that, “(a) the deeper the child's integration in the old state, probably the less fast his achievement of the requisite degree of integration in the new state; (b) the greater the amount of adult pre-planning of the move, including pre-arrangements for the child’s day-to-day life in the new state, probably the faster his achievement of that requisite degree; and (c) were all the central members of the child’s life in the old state to have moved with him, probably the faster his achievement of it and, conversely, were any of them to have remained behind and thus to represent for him a continuing link with the old state, probably the less fast his achievement of it.”103 While Lady HALE DPSC and Lord TOULSON JSC expressly stated in In re B that “the loss of an established habitual residence in a single day before having gained a new one would be unusual”,104 seemingly it is theoretically possible to acquire a Re G-E (Children) (Hague Convention 1980: Repudiatory Retention and Habitual Residence) [2019] EWCA Civ 283, at [61]; and CM v ER [2017] CSIH 18, per Lady PATON, at 27. 100 In respect of which, see Section III.I, below. 101 [2016] UKSC 4. 102 Ibidem, per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [45]. 103 Ibidem, at [46]. See, by way of example, G v E [2018] EWHC 2980, per HILLIER J at [101] – [113]; AB v CD [2018], EWHC 1021 Fam, per KEEHAN J, at [19]; DP v CP [2019] EWHC 3098 (Fam), per TEERTHA GUPTA QC at [47]; and Re I (Children) (1996 Hague Child Protection Convention: Inherent Jurisdiction) [2019] EWCA Civ 1956, per MOYLAND LJ, at [79]. 104 [2016] UKSC 4 at [57]. 99

Yearbook of Private International Law, Volume 21 (2019/2020)

17

Janeen Carruthers new habitual residence in a single day.105 This would not be immediately obvious to any individual not well versed in the relevant jurisprudence, for the lay person would not ordinarily construe “habitual” as denoting residence of only one day. This, therefore, is in conflict with the much-vaunted “simple” character of the concept. While it is clear from case law that no strict timeframe should be put on the matter, a more typical period of integration may be as indicated by HAYDEN J in In re B (A Child) (Custody Rights: Habitual Residence), namely that, “the requisite degree of integration can, in certain circumstances, develop quite quickly (article 9 of Brussels IIA envisages within three months)”.106 D.

The Importance of Stability of Residence

It has been stressed in UK case law that it is the stability or regularity of residence that is important in assessing if it is habitual, and not its perceived permanence.107 In In re LC,108 Baroness HALE OF RICHMOND DPSC explained that the question to be asked by the investigating court is, “… has the residence of a particular person in a particular place acquired the necessary degree of stability (permanent is the word used in the English versions of the two CJEU judgments) to become habitual?”109 A stable residence appears to denote that a child’s residence in a place is settled,110 not accidental.111 While it is possible for physical settlement to be construed in terms of length of residence,112 it is apparent that stability in this context is 105 In re B [2016] UKSC 4 at [57], and per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [34] and [47]. See also In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [17]; AB v CD [2018] EWHC 1021 Fam, per KEEHAN J at 5; and AH v CD [2018] EWHC 1643 (Fam), per WILLIAMS J at [38]. Contrast the position taken by the House of Lords in Re J (A Minor) (Abduction: Custody Rights) [1990] 2 A.C. 562, per Lord BRANDON, at 965, namely, that, “An appreciable period of time and a settled intention will be necessary to enable [a person] to become [habitually resident in a country]” (emphases added). 106 [2016] EWHC 2174, per HAYDEN J at [17]. 107 See, e.g., KD v AM [2018] EWFC 64, per THEIS J at [60]. Cf. UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, para. 45, and also, in Canada, Beairsto v. Cook, 2018 NSCA 90. 108 [2014] UKSC 1, [2014] A.C. 1038. 109 Ibidem at [59]. 110 E.g. NN v HN [2018] CSOH 56, per Lady WISE at [23], “The fact that the parties always planned to move to Austria in the longer term in no way precluded the children from acquiring a habitual residence in Germany… I conclude that they acquired a habitual residence in Germany shortly after the parties moved there and settled into the home in Town K which the petitioner had organised and already moved into.” (emphasis added) 111 Cf. approach of District Court of The Hague in X v Y (Application Number FA RK 18-1) (Case Number C/09/545612), available at https://www.incadat.com/en/case/1391. 112 Though, as noted above at Section III.C, residence need not be long in order to qualify as habitual.

18

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” to be determined according to a qualitative, not quantitative, assessment and a wide range of factors will be taken into account to determine stability: “it is the integration of the child into the environment rather than a mere measurement of the time a child spends there”.113 In reality, it is difficult to reconcile the concept of a stable residence with one which has endured for as little as one day. In Re J (A Child) (Finland: Habitual Residence),114 the Court of Appeal acknowledged that, although acquisition of a new habitual residence in one day is theoretically possible, it would need justification and evidence of some degree of integration. Brief residence, when set in the context of unsettled residence, will not suffice to found habitual residence.115 The practical difficulty in this regard is that the “most commonly troublesome questions” tend to concern those “associated with moves from one country to another which one side contends to be temporary and the other to be sufficiently settled”.116 Demonstrating settlement is a concept familiar to judges hearing return applications under the 1980 Convention. In the context of article 12 of the 1980 Hague Convention, “settlement” has been construed as having an emotional as well as a physical element,117 and arguably it is the case that, for any residence to be deemed habitual, it should demonstrate stability in terms of the child’s emotional wellbeing. E.

The Characteristics of Residence

1.

The Need for Physical Presence

Simple physical presence per se is not sufficient to constitute habitual residence,118 but the question whether or not habitual residence can be acquired by a child without his/her physical presence in the legal system in question has been a contentious one. In L-S (A child),119 prior to consideration of the point by the CJEU In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [17]. See also Re P (A Child: Jurisdiction) [2018] EWFC 38. Cf. in divorce proceedings, Ikimi v Ikimi [2002] Fam.72. 114 [2017] EWCA Civ 80. 115 E.g. Re P (A Child: Jurisdiction) [2018] EWFC 38 (referring to the 4-week placement of a child in foster care). In RV v VT [2018] EWHC 2808 (Fam) habitual residence in Latvia was established in less than six months, and in Re I (Children) [2018] EWCA Civ 580 the Court of Appeal determined that habitual residence could be established in as little as three months (per MCFARLANE LJ at [13], [36] and [37]). 116 A v A [2013] UKSC 60, per Lord HUGHES at [71]. 117 Re E (Abduction: Intolerable Situation) [2008] EWHC 2112 (Fam). See also Re M (Abduction: Rights of Custody) [2008] 1 A.C. 1288. 118 A v A [2013] UKSC 60, per Lord HUGHES at [80]. See also the Opinion of the Advocate General SAUGMANDSGAARD ØE in CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, at Opinion of the AG, para. 44. Cf. Monasky v Taglieri 589 U.S. _ (2020), Opinion of the Court delivered by GINSBURG J, at p. 12. 119 [2017] EWCA Civ 2177. 113

Yearbook of Private International Law, Volume 21 (2019/2020)

19

Janeen Carruthers in UD v XB,120 the English Court of Appeal had accepted, as common ground between the parents of the child in question, that it was not possible for a very young child to be habitually resident in a country to which he had never physically been.121 The reference to the CJEU by the English High Court in UD v XB,122 on a point of interpretation of article 8(1) of Regulation (EU) No 2201/2003, provided an opportunity fully to explore the issue of whether or not physical presence in a country is a precondition of habitual residence there. The request for a preliminary ruling was made in proceedings between UD, the mother of a girl born in Bangladesh in February 2017, and XB, the father, concerning applications made by the mother for orders that the child should be made a ward of the referring court and for her return with the child to England to participate in proceedings before the High Court. The background to the instant case was discussion in the UK Supreme Court in A v A,123 concerning the habitual residence of a young child, born in Pakistan, who had never physically set foot in the UK. His mother, after living for several years in England where she had already given birth to three children, had travelled to Pakistan before conceiving her fourth child, with the intention of paying only a temporary visit there. Against her will, the mother was detained by her husband in Pakistan and was obliged to give birth there to her fourth child, the subject of the legal proceedings. Determined to hold fast to the notion that habitual residence is a factual concept, Baroness HALE DPSC asked , “… which approach accords most closely with the factual situation of the child – an approach which holds that presence is a necessary precursor to residence and thus to habitual residence or an approach which focusses on the relationship between the child and his primary carer?”124 The answer, in the view of the majority of the Court,125 was the former. As expressed by Baroness HALE (with whom Lords WILSON, REED and TOULSON JJSC agreed): “It is one thing to say that a child’s integration in the place where he is at present depends on the degree of integration of his primary carer. It is another thing to say that he can be integrated in a place to which his primary carer has never taken him. It is one thing to say that a person can remain habitually resident in a country from which he is temporarily absent. It is another thing to say that a person can acquire a habitual residence without ever setting foot in a country. It is one thing to say that a child is integrated in the family environment of his primary carer and siblings. It is another thing to say that 120 CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27. 121 [2017] EWCA Civ 2177, per MCFARLANE LJ at [21]. See Section III.H.2, below, regarding relevance of parental intention. 122 CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27. 123 [2013] UKSC 60. 124 Ibidem at [55]. 125 Lord HUGHES JSC delivered a dissenting judgment: [71] – [94].

20

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” he is also integrated into the social environment of a country where he has never been.”126 Baroness HALE noted, however, that whether or not Regulation (EU) No 2201/2003 required some physical presence as a prerequisite of habitual residence was not acte clair for the purpose of EU law,127 and accordingly that the Supreme Court would not have been able to dispose of the case on that basis without having made a reference to the Court of Justice for its prior determination – something, however, which was not necessary in the circumstances of the case, the Supreme Court in any event having inherent jurisdiction qua parens patriae to make the order sought. The question, therefore, was left open.128 In UD v XB, in contrast to the view of the majority of justices in the UK Supreme Court,129 and taking an approach which cleaves to the notion that habitual residence is a matter to be determined on the basis of a child-centric test, the opinion of Advocate General SAUGMANDSGAARD ØE was that a child’s physical presence in a particular state should not be a prerequisite for determining that s/he is habitually resident there.130 Although it is counter-intuitive to say that, as a pure matter of fact, a child can be habitually resident in a country which he has not visited (for that, in effect, presumably would be on the basis of some abstract legal tie between the child and said country), to say otherwise would be to lay down a sub-rule which would offend the principle that habitual residence is matter of fact, not law. There is not scope in this essay to rehearse the arguments in favour of, and against, the proposition that physical presence should be a necessary precondition of habitual residence.131 Rather, it suffices to note that the CJEU (First Chamber),132 departing from the Advocate General’s opinion, decided that a child must have been physically present in a Member State to be regarded as habitually resident there for the purpose of article 8 of Regulation (EU) No 2201/2003. Accordingly, an English court did not have jurisdiction to consider an application by the mother, a Bangladeshi national, that her child be made a ward of court in circumstances Ibidem, at [55]. Ibidem, at [56]. 128 AG SAUGMANDSGAARD ØE observed in CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27 (Opinion of the AG, para. 44), that the same problem had been brought to the attention of the French courts. 129 But, curiously, in common with the opinion of the UK Government (as well as of the child’s mother and the Czech Government) in CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, para. 44, and Opinion of the AG, paras 64 and 69. 130 Ibidem, Opinion of the AG, para. 46. See also ibid., para. 79: “… decisive weight cannot automatically, without consideration of the particular features of each case, be attributed to the criterion of physical presence.” 131 See, however, Opinion of AG SAUGMANDSGAARD ØE, in UD v XB (note 128), at paras 64 – 79, for a very helpful resumé of the arguments. 132 Upholding the arguments laid by the child’s father and the European Commission: CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, para. 44. 126 127

Yearbook of Private International Law, Volume 21 (2019/2020)

21

Janeen Carruthers where the child had been born and remained in Bangladesh and had never been present in the UK. The recognition that a child’s habitual residence in a given Member State requires at least that the child has been physically present in that state – thereby establishing physical presence as a prerequisite of integration, of stable residence and therefore of habitual residence – amounts, in effect, to a legal gloss or sub-rule on the meaning of habitual residence.133 Although the judgment of the CJEU strictly is confined to the circumstances of article 8 of Regulation (EU) No 2201/2003, it would be artificial and at odds with previous direction from the Court, not to extend the same principle to the habitual residence of children more generally. A related question is whether or not habitual residence can be retained after final departure from a country. Lord Hughes in A v A stated that “…habitual residence can and often does co-exist with actual current absence.”134 It appears to be clear that habitual residence in a country is capable of surviving the propositus’ final departure therefrom albeit the de-integration of the child’s ties in that country, be it sudden or gradual, likely will commence immediately on the point of departure. 2.

The Impact of Coerced Residence

The CJEU’s judgment in UD v XB135 does not stipulate that residence, in order to found habitual residence, need be voluntary. Coerced residence (as in the instant case, where the Bangladeshi mother of a girl, born in Bangladesh, was duped by the child’s father into travelling there and then was detained when he thwarted her attempt to return with her four children to England), as a pure matter of fact, can be “settled” and therefore qualify as habitual. The focus is on the de facto situation of the child and circumstances such as one parent’s coercion of the other, or force majeure whereby a child’s presence in a country is involuntary and compelled by circumstances, do not seemingly have any determinative bearing on the wider factual enquiry.136 In JK v SS,137 where, during a planned short visit to Scotland, the infant child who was the subject of the proceedings was diagnosed as suffering from a Ibidem, at H9 and H10, and paras 52 and 53. [2013] UKSC 60; [2014] A.C. 1, at [92]. 135 CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27. Cf. AB v CD [2018] EWHC 1643 (Fam) per WILLIAMS J at [38]. 136 CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, at H14 and para 70. Cf. Re PT (A Child) [2020] EWHC 834 (Fam) per David REES QC (Deputy Judge of English High Court) at [46] – [48]. Sed contra, the view of the United States Supreme Court in Monasky v Taglieri 589 U.S. _ (2020): “… suppose, for instance, that an infant lived in a country only because a caregiving parent had been coerced into remaining there. Those circumstances should figure in the calculus.” (Opinion of the Court delivered by GINSBURG J, at p. 9). See Section III.H.2, below. 137 JK v SS [2019] CSOH 4. 133 134

22

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” tumour in her pelvis and requiring immediate treatment, including chemotherapy, in Edinburgh, Lady WISE noted the existence of conflicting authorities on the question whether or not residence need be voluntary to qualify as habitual.138 On the facts, her Ladyship was not required to address the perceived conflict in earlier case law,139 but the tenor of modern case law (in the absence of explicit direction to the contrary) suggests that voluntariness of residence is not a pre-condition of habitual residence.140 3.

Illegal Residence

In relation to the law on domicile, the question has been asked whether or not unlawful residence in a country suffices as a basis on which to found, with animus manendi, a domicile of choice. The early view of the English courts was that acquisition of a domicile of choice in a country could not be founded upon such illegal residence,141 but that position was qualified by the unanimous decision of the House of Lords in Mark v Mark,142 a divorce jurisdiction case, in which the petitioner’s Nigerian husband argued that the habitual residence of the wife in England for 12 months prior to the petition could not clothe the court with jurisdiction because her presence in England was unlawful, her leave to remain in the UK having expired. The House of Lords, taking a purposive approach, held that the residence of a petitioner need not be lawful residence to establish jurisdiction under section 5(2) of the Domicile and Matrimonial Proceedings Act 1973. The view that lawfulness of presence was not a prerequisite of a finding of habitual residence received support from the House of Lords, at least with regard to its meaning for the purposes of the 1973 Act. Likewise, in the context of the settlement defence set out in article 12 of the 1980 Convention, the Family Division of the English High Court in Re E (Abduction: Intolerable Situation)143 held that a child had settled physically and emotionally in the UK, clear evidence being given of his integration into family and school life, despite the fact that he and his mother were overstayers in the UK, of insecure immigration status. In the context of determination of habitual residence, it is clear that habitual residence, as a matter of fact, may be based on unlawful residence, but it should be

138 Ibidem, at [27], referring to, e.g. Dickson v Dickson 1990 SCLR 693, which indicates that the acquisition of habitual residence is a voluntary state, whereas the contrary was suggested in Cameron v Cameron (No 1) 1996 SC 17. 139 [2019] CSOH 4, at [27]. 140 CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, paras 61 and 70. 141 Puttick v Attorney General [1980] Fam. 1. 142 Mark v Mark [2006] 1 A.C. 98. 143 [2008] EWHC 2112 (Fam). Cf. B, Petitioner 2014 G.W.D. 2-43.

Yearbook of Private International Law, Volume 21 (2019/2020)

23

Janeen Carruthers noted that that very quality may prevent residence from being sufficiently stable and settled as to qualify as habitual.144 F.

A Factor Capable of Being Changed by a Parent Unilaterally

Where wrongful removal or retention of a child is said to have occurred, the question whether or not the removing parent may establish for the child an habitual residence in the “new” country is of crucial importance.145 It was established early in the corpus of UK case law interpretative of the 1980 Hague Convention that, where both parents have parental responsibility, it should not be possible for one parent to effect a change in the habitual residence of a child through unilateral wrongful actings, that is to say, although, as a matter of fact, the child might be residing in the legal system to which s/he has been removed, in law his/her habitual residence remains the legal system from which s/he has been taken.146 The traditional view had been that to allow otherwise would be a charter for abduction. However, there has been an observable change of attitude by UK courts towards unilateralism, to the effect now that a change in a child’s habitual residence is capable of being effected by the unilateral actings of one parent. In Mercredi v Chaffe,147 the CJEU (First Chamber) revealed a pro-unilateralist stance insofar as it held that the intention of the person with parental responsibility to settle permanently with the child in another Member State,148 manifested by certain tangible steps such as the purchase or rental of accommodation in the host Member State, can constitute an indicator of the transfer of habitual residence. Following Mercredi, the UK Supreme Court, stressing the point that habitual residence is a factual construct, was critical in A v A149 of any attempt to overlay

In re L [2013] UKSC 75, per Baroness HALE OF RICHMOND DPSC at [26]. See Section III.D, above. 145 Examples can be found of UK and other legislative provisions designed to secure for a limited period, by means of a “deeming” provision, continuing jurisdiction to adjudicate upon the case: e.g. Family Law Act 1986 s 41(1)(b) and Regulation (EU) No 2201/2003, article 10. 146 E.g. In re P (GE) (An Infant) [1965] Ch 568; and In re J (A Minor) (Abduction: Custody Rights) [1990] 2 A.C. 562, in which the House of Lords affirmed the decision of the Court of Appeal, where Lord DONALDSON, at 572, expressed himself firmly against the power of one parent unilaterally to terminate the habitual residence of the child by wrongfully removing him/her from the jurisdiction, in breach of the other parent’s rights. 147 CJEU (First Chamber), 22 December 2010, Barbara Mercredi v Richard Chaffe, preliminary ruling: Court of Appeal (England and Wales) United Kingdom, ECLI:EU:C:2010:829, [2011] I.L.Pr. 23, [2012] Fam. 22, para. 50. In Mercredi, however, as in In re J (note 146), the abducting parent had sole parental responsibility. 148 See further, Section III.H.2, below. 149 A v A [2013] UKSC 60, per Baroness HALE at [39]; and per Lord HUGHES JSC at [76] with regard to habitual residence in circumstances of wrongful retention. 144

24

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” it with legal constructs along the lines of a “rule”150 whereby one parent cannot unilaterally change the habitual residence of a child in circumstances where two parents share parental responsibility for the child.151 Subsequently, in 2015, the UK Supreme Court in In re R152 affirmed the decision of the Extra Division of the Inner House of the Court of Session,153 to the effect that the first instance judge had erred, not only in identifying a shared parental intention to move permanently to Scotland as an essential element in any alteration in the children’s habitual residence from France to Scotland, but also in failing to consider whether or not on all the evidence the residence had the necessary quality of stability. On the important question of unilateralism, the Supreme Court held that since, as explained, the essentially factual and individual nature of the inquiry is not to be glossed with legal concepts which would produce a different result from that which the factual inquiry would produce, there is no rule that one parent cannot unilaterally change the habitual residence of a child. It is now clear, therefore, that it is legally possible for a parent unilaterally to cause a child to change habitual residence by removing the child to another jurisdiction without the consent of the other parent (albeit that the withholding of consent by one parent may adversely affect the extent or quality of integration by the child in the “new” state). The articulation of this principle is highly significant in international child abduction cases. The so-called “rule” that where both parents had parental responsibility neither unilaterally could change the child’s habitual residence has been superseded by a factual inquiry into where the child was habitually resident, tailored to the circumstances of the individual case, as a part of which the court may take into account the purposes and intentions of the parents.154 Accordingly, the mere fact that one parent neither wanted nor sanctioned a child’s move to another country will not prevent the child from becoming habitually resident there. G.

Habitual Residence of a Child Will Often, but Not Inevitably, Coincide with Parental Habitual Residence

As explained by the UK Supreme Court in 2013 in A v A,155 there is no legal rule akin to that whereby a child automatically takes the domicile of his parents.156 150 See In re H (Children) (Reunite International Child Abduction Centre intervening) [2014] EWCA Civ 1101, [2015] 1 W.L.R. 863, where BLACK LJ noted at [26] that, “… it is worth remembering that no authority has been found in which the “rule” is articulated as part of the ratio; it has simply been taken for granted for many years.” 151 Cf. Office of the Children’s Lawyer v Balev (earlier Balev v Baggott) 2018 Supreme Court of Canada 16 (20 April 2018), per MCLACHLIN CJ at [42]. 152 [2015] UKSC 35, [2015] 2 W.L.R. 1583. 153 R, Petitioner [2014] CSIH 95, 2014 SLT 1080. 154 In re H (Children) (Reunite International Child Abduction Centre intervening) [2014] EWCA Civ 1101, [2015] 1 W.L.R. 863, per BLACK LJ at [34]. See further, Section III.H.2, below. 155 [2013] UKSC 60; [2014] A.C. 1.

Yearbook of Private International Law, Volume 21 (2019/2020)

25

Janeen Carruthers Habitual residence of a child is not an adjunct concept based on dependency on an adult: a child’s habitual residence does not derive legally from that of his/her parent(s), but rather rotates around the axis of the child. In contrast to what previously was understood to be the position, a child’s habitual residence will not necessarily follow the habitual residence of the parent with whom s/he lives.157 That said, a child’s habitual residence cannot be viewed in isolation from his/her parent’s(s’) residence, for parental residence is likely to have a “powerful impact”158 upon the outcome of the child’s habitual residence. This is true particularly in relation to a newborn or very young child. Although such a child’s habitual residence does not legally depend upon his/her carer’s circumstances, the circumstances of the carer’s integration are likely to be inextricably linked to those of the child and so will be of considerable importance in determining the place which is the centre of the child’s life.159 Thus usually, though not inevitably, the habitual residence of a newborn or very young child will be the same as the parent having day-to-day care:160 “integration, where it involves a very young child, must be understood in the context of her tender age, her dependence on her primary caregiver...”.161 But against that proposition, the older the child, the “greater the degree of distinction may be”.162 In view of the principle, discussed above,163 that a child’s habitual residence in a given Member State requires at least that the child has been physically present in that Member State, there is no scope for ascribing to a newborn child the habitual residence of his parent with care in circumstances where the child has not physically been integrated in that state or had a stable residence there.164

Ibidem, at [54]. In re B [2016] UKSC 4, per Lord WILSON at [31], referring to Re LC (Children) (International Abduction: Child's Objections to Return) [2014] UKSC 1 per Lord WILSON at [34] – [37]. 158 Re W (A child) [2017] EWCA Civ 2152, per McFarlane LJ at [22]. Cf. AH v CD [2018] EWHC 1643 (Fam), per WILLIAMS J at [38]. 159 See e.g. CM v ER [2017] CSIH 18, per Lady PATON, at 34; CJEU (Fifth Chamber), 28 June 2018, Proceedings brought by HR (with the participation of KO and another), ECLI:EU:C:2018:513, [2018] Fam 385, para. 44; and JK v SS [2019] CSOH 4, per Lady WISE at [28]. See also CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, para. 45; and judgment of District Court of The Hague in X v Y (Application Number FA RK 18-1, Case Number C/09/545612), available at https://www.incadat.com/en/case/1391. 160 Re P (A Child: Jurisdiction) [2018] EWFC 38, per BELLAMY J at [30]; and AB v CD [2018] EWHC 1021 Fam, per KEEHAN J at [5]. 161 JK v SS [2019] CSOH 4, per Lady WISE at [31]. Cf. UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27 at Opinion of the AG, para. 50. 162 AH v CD [2018] EWHC 1643 (Fam), per WILLIAMS J at [38]. 163 See further, Section III.E.1, above. 164 UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27. See also CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, para. 25. 156 157

26

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” H.

The Relevance of Intention

1.

The Child’s State of Mind

In In re LC (Children),165 the UK Supreme Court stated explicitly that the acquisition of habitual residence is not a matter of intention: “… one does not acquire a habitual residence merely by intending to do so; nor does one fail to acquire one merely by not intending to do so.”166 However, introducing a novel mental dimension into the determination of a petition for return of a child under the 1980 Hague Convention, the Court made explicit the link between intention and integration in a social and family environment. Lord WILSON JSC (with whom Lord TOULSON and Lord HODGE JJSC agreed), stated that, “… where the child is older, in particular one who is an adolescent or who should be treated as an adolescent because she (or he) has the maturity of an adolescent …, the inquiry into her integration in the new environment must encompass more than the surface features of her life there. I see no justification for a refusal even to consider evidence of her own state of mind during the period of her residence there. Her mind may – possibly – have been in a state of rebellious turmoil about the home chosen for her which would be inconsistent with any significant degree of integration on her part. In the debate in this court about the occasional relevance of this dimension, references have been made to the ‘wishes’, ‘views’, ‘intentions’ and ‘decisions’ of the child. But, in my opinion, none of those words is apt. What can occasionally be relevant to whether an older child shares her parent’s habitual residence is her state of mind during the period of her residence with that parent.”167 Widening the role traditionally afforded under the 1980 Convention to the child’s state of mind (namely, the ability to voice objection in terms of article 13), the Supreme Court consigned to history the notion previously adhered to in UK courts,168 namely, that evidence of state of mind was not relevant to the determination of an individual’s habitual residence. Thus, the assertions and insights of an adolescent child regarding his/her state of mind during a period of residence in a country seemingly are relevant to the determination whether or not the residence there was habitual. Integration is not to be viewed solely through the lens of physical settlement, but rather may entail consideration of the state of mind of the young person in question. Going further still, Baroness Hale (with whom Lord Sumption JSC agreed) argued that the question of principle, whether the state of mind of a child is [2014] UKSC 1, [2014] A.C. 1038. Ibidem, per Baroness HALE OF RICHMOND DPSC (with whom Lord SUMPTION JSC agreed), at [59]. 167 Ibidem, per Lord WILSON JSC, at [37]. 168 See, e.g., R. v Barnet LBC Ex p. Shah [1983] 2 A.C. 309, per Lord SCARMAN, at [344], referred to by Lord Wilson JSC in In re LC (Children) (note 165), at [37]. 165 166

Yearbook of Private International Law, Volume 21 (2019/2020)

27

Janeen Carruthers relevant to whether or not s/he has acquired a habitual residence in the place where s/he is living, ought not to be restricted to adolescent children, for it should apply equally, in her Ladyship’s judgment, to younger children.169 However, the view of the majority of the Bench prevailed, namely, that the state of mind of a younger child, on its own, may not affect a first instance judge’s deliberation on habitual residence. The state of mind of a young child should not be a factor to be weighed in the balance. It will be apparent that the jurisprudence concerning the meaning of habitual residence in cases affecting children is fast-moving; who can say for how long the “rule” expressed by the majority will reflect accurately the state of UK law on the point? 2.

Parental Intention

The role of parental intention in the determination of a child’s habitual residence has been controversial in the UK as elsewhere.170 The UK Supreme Court held in A v A171 that any test that purports to rely on the purposes and intentions of a child’s parents in determining his/her habitual residence should be abandoned.172 This move away from the parental intention approach is a positive step given the often emotionally charged circumstances of parental abduction cases, the vagaries and inconsistencies of parental intention, and the difficulty of judging with certainty what an individual or couple may have intended at any given time.173 However, parental intention, though not determinative, remains a relevant factor and part of the factual matrix.174 The UK Supreme Court further held in In [2014] UKSC 1, [2014] A.C. 1038, at [57] – [58]. On the facts, the adolescent girl was 13 years, and the younger children were boys aged 11 and 9 years, respectively. 170 E.g. Monasky v Taglieri 589 U.S. _ (2020). 171 [2013] UKSC 60, at [54]. 172 See also NN v HN [2018] CSOH 56, per Lady WISE at [21]. For background detail, see Monasky v Taglieri: Brief of Amicus Curiae – per Reunite International Child Abduction Centre in support of neither party (On Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit) (August 21, 2019), pp. 6-7. See, subsequently, Monasky v Taglieri 589 U.S. _ (2020), in which the United States Supreme Court held categorically that “an actual agreement between the parents is not necessary to establish an infant’s habitual residence” (Opinion of the Court, per GINSBURG J, at pp. 2 and 7). 173 E.g. L v M (Jurisdiction: Repudiatory Retention) [2019] EWHC 219 (Fam), per LIEVEN J at [14] and [29]; and NN v HN [2018] CSOH 56, per Lady WISE at [25]. 174 E.g. In re R (Children) (Reunite International Child Abduction Centre and others intervening) [2015] UKSC 35, per Lord REED JSC at [21]; In re B (A Child) (Custody Rights: Habitual Residence), [2016] EWHC 2174, per HAYDEN J at [17]; L-S (A child) [2017] EWCA Civ 2177, per MCFARLANE LJ at [21]; CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, para. 51; CJEU (Fifth Chamber), 28 June 2018, Proceedings brought by HR (with the participation of KO and another), ECLI:EU:C:2018:513, [2018] Fam 385, para. 62; JK v SS [2019] CSOH 4, per Lady WISE at [28]; and Re G-E (Children) (Hague Convention 1980: Repudiatory Retention and Habitual Residence) [2019] EWCA Civ 283, per MOYLAN LJ at [60]. See also, in Canada, Beairsto v. Cook, 2018 NSCA 90, per BEVERIDGE JA at [117]. 169

28

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” re L175 that although a child may lose his/her habitual residence without a parent’s consent, parental intent “in relation to the reasons for a child’s leaving one country and going to stay in another”176 is relevant to establishing or changing a child’s habitual residence and ought to be taken into account along with other relevant factors in deciding whether a move to another country carried a sufficient degree of stability as to constitute such a change.177 Baroness HALE OF RICHMOND DPSC made plain that, in the same way that a child’s habitual residence may change by means of court order in the face of opposition from one parent, so too habitual residence may change in the face of shared parental intent to the contrary.178 The important point is that parental intention, if it is to be deemed relevant, must be buttressed by conduct evidencing integration;179 intention, be it express, implied or imputed, cannot prevail over factual circumstances to the contrary. Parental intention to settle with a child in a country is likely to be relevant only where it is “manifested by certain tangible steps” in the host state.180 In this way, such intention is, at most, an “indicator”, capable of complementing a body of other consistent evidence”181 and will not override the determination of habitual residence based on objective circumstances.182 Rather than binding the court, parental intention at best will cast light on the extent of a child’s integration in a particular environment, which is the real focus of the factual enquiry. Thus, where a child was born and lived continuously with her mother for several months in Greece, in accordance with the joint wishes of her parents, the initial intention of her parents with respect to the return of the mother and child to Italy, where the parents were habitually resident before her birth, could not justify a conclusion that the child was habitually resident in Italy.183 Echoing developments in the EU, the Supreme Court of Canada, by majority decision in Office of the Children’s Lawyer v Balev, 184 recently took the law in Canada in a change of direction by adopting a multi-factored hybrid approach to the determination of a child’s habitual residence in preference to a parental intention approach, holding that courts should look at all relevant considerations and [2013] UKSC 75. Ibidem, per Baroness HALE OF RICHMOND DPSC at [23]. 177 Ibidem. 178 Ibidem, at [25]. Cf. CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, para. 51. 179 CJEU (Fifth Chamber), 8 June 2017, OL v PQ, ECLI:EU:C:2017:436, para. 47. 180 Ibidem, para. 46. See also CJEU (Fifth Chamber), 28 June 2018, Proceedings brought by HR (with the participation of KO and another), ECLI:EU:C:2018:513, [2018] Fam 385, para. 46; and CJEU (First Chamber), 17 October 2018, UD v XB, ECLI:EU:C:2018:835, [2019] I.L.Pr. 27, at Opinion of the AG, para. 48. 181 OL v PQ, (note 174), para. 47. 182 CJEU (Fifth Chamber), 28 June 2018, Proceedings brought by HR (with the participation of KO and another), ECLI:EU:C:2018:513, [2018] Fam 385, para. 64. 183 OL v PQ, (note 174), para. 70. 184 Office of the Children’s Lawyer v Balev (earlier Balev v Baggott) 2018 Supreme Court of Canada 16 (20 April 2018). 175 176

Yearbook of Private International Law, Volume 21 (2019/2020)

29

Janeen Carruthers circumstances to ascertain a child’s habitual residence. The Court, by 6-3 majority, did not deem the parental intention approach, which pre-Balev had dominated Canadian jurisprudence,185 to be in keeping with the “dominant thread of international Hague Convention jurisprudence”.186 The majority approach in Balev is in line with jurisprudence in the UK and elsewhere, to the effect that parental intention is not determinative in the assessment of a child’s habitual residence, nor will it prevail over other factors. The weight which will be attributed in any given case to parental intention seemingly will depend on the facts and circumstances of the individual case.187 I.

Absence of Habitual Residence

1.

Legal Limbo Is Possible but Exceptional

An issue recently arising for consideration in the UK Supreme Court was the question whether or not a child can be without an habitual residence at any given time. Can there be a gap or lacuna? In 1990, in In re J (A Minor) (Abduction: Custody Rights),188 the UK House of Lords ruled that a state of limbo was legally possible. Speaking for a unanimous Appellate Committee, Lord BRANDON stated in the third of his four propositions, that: “… there is a significant difference between a person ceasing to be habitually resident in country A, and his subsequently becoming habitually resident in country B. A person may cease to be habitually resident in country A in a single day if he or she leaves it with a settled intention not to return to it but to take up long-term residence in country B instead. Such a person cannot, however, become habitually resident in country B in a single day.189 An appreciable period of time and a settled intention will be necessary to enable him or her to become so. During that appreciable period of time the person will have ceased to be habitually resident in country A but not yet have become habitually resident in country B.” 190

Ibidem, per MCLACHLIN CJ at [40]. Beairsto v. Cook, 2018 NSCA 90, per BEVERIDGE JA at [117]. The dissenting justices in Balev (CÔTÉ and ROWE JJ, with MOLDAVER J concurring) opined that, in situations where the parents’ intentions were clear, those intentions should carry decisive weight, leading to faster and more predictable decisions. 187 Monasky v Taglieri: Brief of Amicus Curiae - per Reunite International Child Abduction Centre in support of neither party (On Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit) (August 21, 2019), p. 4. See, subsequently, Monasky v Taglieri 589 U.S. _ (2020). 188 [1990] 2 A.C. 562. 189 See now, however, Section III.C, above. 190 [1990] 2 A.C. 562, per Lord BRANDON OF OAKBROOK at 578. 185 186

30

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” On the European plane, the state of legal limbo (i.e. a transitional phase when a child is “between” habitual residences) was countenanced by Advocate General KOKOTT in Proceedings brought by A,191 and by the CJEU (First Chamber) in Mercredi v Chaffe.192 Following the European line, the UK Supreme Court in A v A193 put it beyond doubt in UK law that, “… it is possible that a child may have no country of habitual residence at a particular point in time.”194 2.

Endeavouring to Fill the Lacuna

Although the state of legal limbo – being without an habitual residence – is legally possible, it will very rarely be desirable for a child to be without an habitual residence given the “international primacy”195 and central role now played by that factor in allocating jurisdiction for parental responsibility matters. A state of legal limbo, therefore, will be exceptional.196 Explicitly in the context of Regulation (EU) No 2201/2003,197 and according to judicial interpretation of the 1980 Hague Convention,198 habitual residence is a factor to be “shaped in the light of the best interests of the child, in particular on the criterion of proximity”. Respecting this premise, the UK Supreme Court held in In re B199 that, where possible, a child should have an habitual residence for it is not in the interests of children routinely to be left without one.200 Citing Professor CLIVE, Lord WILSON JSC explained that,

191 CJEU, 2 April 2009, Korkein hallinto-oikeus - Finland, ECLI:EU:C:2009:225, [2010] Fam 42, [2009] I.L.Pr. 39, at Opinion AG paras 45, 52 and 81. 192 CJEU (First Chamber), 22 December 2010, Barbara Mercredi v Richard Chaffe, preliminary ruling: Court of Appeal (England and Wales) United Kingdom, ECLI:EU:C:2010:829, [2011] I.L.Pr. 23, [2012] Fam. 22. 193 [2013] UKSC 60. 194 [2013] UKSC 60, per Baroness HALE at [54]. Cf. In re LC [2014] UKSC 1, [2014] A.C. 1038, per Baroness HALE OF RICHMOND DPSC (with whom Lord SUMPTION JSC agreed) at [63]. See further Re G (Children) (Jurisdiction: Presence in England and Wales) [2018] EWHC 381 (Fam), per BAKER J at [20]. 195 In re B [2016] UKSC 4, per Lord Wilson JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [30]. 196 A v A [2013] UKSC 60, per Lord HUGHES JSC at [80]. See also NN v HN [2018] CSOH 56, per Lady WISE at [24] and [27]; and DP v CP [2019] EWHC 3098 (Fam), where Judge GUPTA QC, referred at [10], to the "default setting" that a child will have a habitual residence somewhere. 197 Recital 12. Cf. Brussels II bis Recast, recital 19. 198 In Re E (Children) (Abduction: Custody Appeal) [2011] UKSC 27, per Baroness HALE and Lord WILSON at [52]: “… the whole of the Hague Convention is designed for the benefit of children, not of adults. The best interests, not only of children generally, but also of any individual child involved are a primary concern in the Hague Convention process.” 199 In re B [2016] UKSC 4. 200 Ibidem, per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [30].

Yearbook of Private International Law, Volume 21 (2019/2020)

31

Janeen Carruthers “In that event [i.e. where a child lacks an habitual residence] the machinery of international instruments designed to achieve an orderly resolution of issues relating to them does not operate as primarily intended.”201 Specifically, the absence of habitual residence will deprive a child of the cloak of protection conferred by the 1980 Convention. Taking cognisance of this potential deprivation, it has been recommended that, if interpretation of the concept of habitual residence in the circumstances reasonably can yield two options, first, a conclusion that a child has a habitual residence and, alternatively, a conclusion that he lacks one, the court should prefer the former interpretation.202 Accordingly, it will be highly unusual for a child to be without a habitual residence.203 The modern supposition in UK courts is that only when a child gains a new habitual residence does he lose the old one, rendering it, “highly unlikely, albeit conceivable, that a child will be in … limbo …”.204 This is a subtle change of position for, as Lord WILSON JSC indicated in In re B (A Child), “It has been hard-wired into the mind of many family lawyers in England and Wales that, were a parent to remove a child from a state in which they were habitually resident to another state with the settled intention that they would cease to reside in that first state and make their home in that second state, the child would be likely to lose habitual residence in the first state immediately upon the removal and, until later acquiring habitual residence in the second state, would be likely not to be habitually resident anywhere.”205 The two dissenting justices, Lords SUMPTION and CLARKE OF STONE-CUM-EBONY JJSC, expressed the view that “there is nothing wrong in principle with a finding that a former habitual residence has been lost before a new one has been obtained”.206 Stressing that the lack of a habitual residence, as a matter of law, does not subject a child to jurisdictional limbo since jurisdiction can be founded on the presence of the child,207 their Lordships said that whatever may be the flaws of “presence” as a ground of jurisdiction, “for better or for worse”, that is what the law provides.208 Ibidem. Ibidem, per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [42]. 203 In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [17]. 204 Ibidem. In AB v CD [2018] EWHC 1021 Fam, at [5], KEEHAN J refers to the “seamless transfer” from one habitual residence to another. 205 In re B [2016] UKSC 4 per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [1] (emphasis added). 206 Ibidem, at [92]. 207 Ibidem, per Lord SUMPTION JSC (dissenting) (with whom Lord CLARKE OF STONE-CUM-EBONY JSC agreed) at [66]. 208 Ibidem, per Lord SUMPTION JSC, at [74] and [76]. 201 202

32

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” However, the majority of the Supreme Court having held that it is not in the interests of children routinely to be left without a habitual residence, In re B has repercussions regarding the loss of one habitual residence and the acquisition of another. There is inevitably a correlation between the two, between de-integration in one state (or achieving the “requisite degree of disengagement” 209) and integration or engagement in another: “In assessing whether a child has lost a pre-existing habitual residence and gained a new one, the court must weigh up the degree of connection which the child had with the state in which he resided before the move …”.210 The deeper the degree of integration in the former state, the slower is the likely integration in the new state.211 While historically, the focus of the judicial enquiry was on the time at which one habitual residence was lost, the focus now is more likely to be on the point of acquisition of a new habitual residence. As Lord WILSON JSC indicated, although the question is whether or not the propositus has achieved the requisite degree of disengagement from the erstwhile habitual residence, in truth the court is scrutinising whether or not s/he has by that date achieved the requisite degree of integration in the new environment.212 The search is for the “tipping point” of the so-called seesaw to ascertain when integration in the new environment has occurred;213 the early signs are that the tipping point more readily is being deemed to have been reached.

IV. Reflections on the Interpretative Evolution of the Factor It is too easy in litigation between disputatious parents for the focus to shift from the child to the adults, but it is the duty of the court to “drill deep for information about the child’s life and routine” if that has not already been “mined to the surface in the preparation of the case”.214 Since the “very object of the international framework is to protect the best interests of the child”,215 it is right that, in understanding 209 Ibidem, per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [49]. See also Re J (A Child) (Finland: Habitual Residence) [2017] EWCA Civ 80. 210 In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [17]. Cf. NN v HN [2018] CSOH 56, per Lady WISE at [27]. 211 In re B (A Child) (Reunite International Child Abduction Centre and others intervening) [2016] UKSC 4 per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [46]. 212 In re B [2016] UKSC 4, per Lord WILSON JSC (with whom Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC agreed), at [48]. 213 Cf. G v E [2018] EWHC 2980, per HILLIER J at [101]. 214 Ibidem. 215 In re B [2016] UKSC 4, per Baroness HALE OF RICHMOND DPSC and Lord TOULSON JSC at [62].

Yearbook of Private International Law, Volume 21 (2019/2020)

33

Janeen Carruthers and applying the concept of habitual residence of the child, the child should be at the centre of the court’s scrutiny. It is apparent from recent jurisprudence in the UK that the child is “at the centre of the exercise when evaluating his or her habitual residence”.216 A child’s habitual residence evidently will depend on the precise nuances of the case. As the United States Supreme Court opined in Monasky v Taglieri, “The inquiry into a child’s habitual residence is a fact-intensive determination that cannot be reduced to a predetermined formula and necessarily varies with the circumstances of each case.”217 Arguably, the malleability of the concept of habitual residence, in the hands of judges who are trying to do their best for the child in question, is its greatest virtue. But it is also its vice; a tool which has no legislative definition lays itself open to a variety of interpretations and to the temptation of result selection. In the absence of a fixed definition or predetermined formula, the connecting factor is fluid and sometimes volatile, which is quite something for a lauded, common sense criterion and unnerving for parent and adviser. The meaning of habitual residence has evolved significantly since it was first deployed as a tool in the child law field. European developments have been highly influential, as has the case law of courts around the world. In the UK, the jurisprudence of the UK Supreme Court has transformed the concept in many ways, for it is clear that judges have departed from tenets formerly followed; that which was an accepted position in 1990218 can be seen to have been supplanted through the subtly dismissive prose of a later judgment.219 The same can be said of practice in other senior courts around the world.220 The hope has been expressed that since identification in law of habitual residence entails a factual exploration, in the overwhelming majority of cases, the concept ought to be “readily capable of identification by the parties”. 221 Yet case law on the meaning and operation of habitual residence – a matter which frequently arises merely as a preliminary issue222 – is copious, slippery and difficult to master. Even confining consideration of the connecting factor to the child law context, the high volume and lively state of case law reveals that the unique, factual circumstances of any given case frequently tempt judges to essay propositions of law, while at the same time denying that they are doing so; sometimes there is an element of protesting too much. Although judicial “distaste for subsidiary rules”223 is evident, the facts of cases mean that, to some extent, the concept of 216 In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [18]. 217 Monasky v Taglieri 589 U.S. _ (2020), Opinion of the Court, per GINSBURG J at p. 9. 218 E.g. In re J (A Minor) (Abduction: Custody Rights) [1990] 2 A.C. 562, per Lord DONALDSON, at 572. 219 E.g. In re L [2013] UKSC 75, per Baroness HALE OF RICHMOND DPSC, at [21]. 220 E.g. Monasky v Taglieri 589 U.S. _ (2020), Opinion of THOMAS J, at p. 4. 221 In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174, per HAYDEN J at [18]. 222 E.g. Re J (A Child) (Finland: Habitual Residence) [2017] EWCA Civ 80. 223 Re H (Children) [2014] EWCA Civ. 1101, per BLACK LJ at [34].

34

Yearbook of Private International Law, Volume 21 (2019/2020)

Discerning the Meaning of “Habitual Residence of the Child” habitual residence gradually is being adorned in legal raiment as, progressively, judges in specific instances depict its characteristics and identify its indicia. The concept increasingly is subject to gloss in the form of a continually developing body of case law comprising judicial guidance on how to resolve individual cases. In Greek mythology, Croesus, King of Lydia, around 560 BC, tested the oracles of the world and concluded that the high priestess of the Temple of Apollo at Delphi provided the most accurate, albeit cryptic, answers. As is well known, the Delphic pronouncements required interpretation. The concept of habitual residence, like the Delphic pronouncements, though apparently straightforward, is unexpectedly abstruse. “Habitual residence” looks simple and is alleged to be simple, but scrutiny of its operation in practice shows it to be far from simple. It is ironic that, despite swathes of case law, the self-styled eschewing of rules by the judiciary and the concomitant increase in judicial discretion render it difficult for a family law adviser or commentator confidently to predict the outcome in a UK court of a dispute pertaining to the determination of a child’s habitual residence. Those who seek the meaning of habitual residence of the child know that there are many oracles – courts far and near, high and low – though, insofar as concerns the 1980 Hague Convention, there is none of overarching, worldwide authority. A UK adviser must study the most recent pronouncements of the UK Supreme Court. It is hoped that this examination of the subject will assist in interpreting the nuances of these judicial pronouncements.

Yearbook of Private International Law, Volume 21 (2019/2020)

35

THE EU SUCCESSION REGULATION BEFORE THE GERMAN COURTS 2016-2019 Christian KOHLER*

I. II.

III.

I.

Introduction: Impact of the Succession Regulation on the German System of Private International Law German Case Law on the Succession Regulation A. Jurisdiction 1. The Habitual Residence of the Deceased in General 2. Cross-Border Commuters and Modern “Nomads” 3. Pensioners Spending their Life in Southern Europe or Overseas 4. Declining Jurisdiction in the Event of a Choice of Law B. Applicable Law 1. Choice of Law Demonstrated by the Terms of a Will 2. Transitional Provisions on the Validity of a Choice of Law 3. Transitional Provisions on the Validity and Interpretation of a Will 4. Scope of the Applicable Law C. European Certificate of Succession D. Relationship with International Conventions Concluding Remarks

Introduction: Impact of the Succession Regulation on the German System of Private International Law

The adoption of uniform provisions on jurisdiction, applicable law, and recognition and enforcement of decisions in matters of succession by Regulation No 650/20121 (to which I will refer hereafter as the Succession Regulation, or SR) * Former Director General at the Court of Justice of the European Union; Honorarprofessor at the Europa-Institut of Saarland University, Germany. The article is an expanded and updated version of a paper which the author delivered at the conference “Application of the Succession Regulation in the EU Member States” held at the University of Silesia in September 2019, and which will be published in Problemy Prawa Prywatnego Międzynarodowego, 2020. 1 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 2012 L 201, p. 107.

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 37-56 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Christian Kohler had, unsurprisingly, a dramatic impact on the systems of conflict of laws of the EU Member States. Although it was not the most affected, the German conflicts system also underwent important changes. These changes were of two kinds. They resulted, firstly, from certain guiding principles enacted in the Succession Regulation itself, and secondly, from a number of rulings of the Court of Justice of the European Union (CJEU). The most far-reaching change generated by the Succession Regulation was the choice of the habitual residence of the deceased as the general connecting factor for the purposes of determining both jurisdiction and applicable law. It replaced the long-standing German conflicts rule according to which the nationality of the deceased was the decisive factor for the determination of the lex successionis. A further change resulted from the possibility for the testator to choose – instead of the law of the habitual residence – the law of the State whose nationality he possesses as the law governing his succession. Until then, the applicable rule in Germany only allowed the choice of German law for succession with respect to immovables situated in Germany. So far for the most important changes brought about by the Succession Regulation itself. It may be mentioned in that context that another general principle of the Succession Regulation, according to which the applicable law is to govern the succession as a whole, was not novel, as German conflicts law had adhered since long to the principle of unity of succession (Nachlasseinheit) and, in particular, did not distinguish, as far as the scope of the applicable law is concerned, between succession with respect to movables and immovables. In addition to these changes, German conflicts law, in matters of succession, was affected by three decisions of the CJEU regarding the Succession Regulation. The first decision, rendered in the Polish-German case Kubicka,2 involved the recognition, in Germany, of the material effect of a legacy “by vindication” provided for by the law governing the succession (in that case, Polish law). Although German law only provides for legacies “by damnation” (which only have effect in personam),3 the CJEU ruled that where immovable property situated in Germany is the object of a legacy “by vindication”, Germany has to recognise the direct material effect provided for by the Polish lex successionis. In its judgment the CJEU insisted on the principle of unity of the succession: to accept that Article 1(2)(l) of Regulation No 650/2012 allows the acquisition of ownership of an asset by legacy “by vindication” to be excluded from the scope of that regulation would lead to the frag2 CJEU, 12.10.2017, Kubicka, C-218/16, ECLI:EU:C:2017:755; cf. the comment by K. THORN/ C. LASTHAUS, IPRax 2019, p. 24; J. WEBER, Deutsche Notar-Zeitschrift (DNotZ) 2018, p. 16. 3 Before the European Court, the German government referred to the Explanatory Memorandum of the German draft law on international succession law and amending the provisions governing the certificate of succession and other provisions (Gesetzentwurf der Bundesregierung, BT-Drs. 17/5451 of 4 March 2015) which provides that it is not obligatory, in the context of Regulation No 650/2012, for German law to recognise a legacy “by vindication” on the basis of a will drawn up according to the law of another Member State.

38

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 mentation of the succession, which is incompatible with the wording of Article 23 of the same regulation and with its objective.4 The second ruling of the CJEU likewise obliged Germany to depart from a principle of German private international law. It related to the characterisation of a provision of German substantive law at the intersection between succession and matrimonial property law. That provision, § 1371(1) of the Civil Code (BGB), refers to the share of the inheritance of the surviving spouse if the spouses lived in the property regime of community of accrued gains (Zugewinngemeinschaft). It provides that at the death of a spouse “the equalisation of the accrued gains is effected by increasing the share in the inheritance on intestacy of the surviving spouse by one quarter of the estate”. Whether that provision is part of inheritance law or matrimonial property law was highly controversial in German private international law until the Bundesgerichtshof (BGH) ruled in 2015 that the “flat-rate equalisation” of accrued gains was to be classified as “purely matrimonial property law”.5 For the BGH, the purpose of the provision was decisive: to dispose of the matrimonial property regime as a special arrangement of the property of the spouses, not to allow the survivor to participate in the disposal of deceased's property by virtue of his or her relation to the deceased. The increase in the statutory share of the inheritance was conceived by the legislature as a special modality of equalisation of gains, and that function was not called into question by the fact that it was achieved “by way of inheritance law”. It was no surprise that the analogous issue presented itself under the Succession Regulation: does a provision like § 1371(1) BGB fall within the concept of succession upon death or is it excluded therefrom because it relates to “matrimonial property regimes” (Art. 1(2)(d))? Contrary to expectations of legal scholars, who had predominantly welcomed the matrimonial property characterisation by the BGH, the CJEU decided that § 1371(1) BGB had to be characterised as belonging to the law of succession.6 In contrast to the BGH, the Court of Justice, in agreement with the Opinion of Advocate General (AG) SZPUNAR, saw the “main purpose” of this provision not in the division of property between the spouses or in the termination of the matrimonial property regime, but “in the determination of the portion of the inheritance which belongs to the surviving spouse in relation to the other heirs”.7 Such a provision “principally concerns the succession to the estate of the deceased spouse and not the division of assets between spouses or the termination of the Para 57, emphasis added. BGH 13.5.2015 - IV ZB 30/14, BGHZ 205, p. 289, Zeitschrift für das gesamte Familienrecht (FamRZ) 2015, p. 1180 with a comment by P. MANKOWSKI. In that case, the inheritance share of the surviving spouse was to be determined in accordance with Greek law and amounted to one quarter; the spouses had lived in the matrimonial property regime of community of accrued gains pursuant to German law, so that the increase of the statutory inheritance portion by one quarter pursuant to § 1371(1) BGB was effected by virtue of matrimonial property law. 6 CJEU, 1.3.2018, Mahnkopf, C-558/16, ECLI:EU:C:2018:138; cf., inter alia, the comments by M. FORNASIER, FamRZ 2018, 632; CH. KOHLER/ W. PINTENS, FamRZ 2018, p. 1369, 1374 et seq. 7 Para 40 of the judgment. 4 5

Yearbook of Private International Law, Volume 21 (2019/2020)

39

Christian Kohler matrimonial property regime”.8 The consequence of this is, in particular, that information on the increased share of the inheritance pursuant to § 1371(1) BGB has to be included in the European Certificate of Succession. The CJEU added that the objectives pursued by that certificate would be significantly compromised if it did not “include full information relating to the surviving spouse’s rights regarding the estate”.9 Following the CJEU’s ruling, the application of the Succession Regulation is undoubtedly facilitated; moreover, the effet utile of the European Certificate of Succession is ensured. With the characterisation of § 1371(1) BGB as belonging to inheritance law, the CJEU did not, however, eliminate the problem of the interfaces between inheritance law and property law, but merely reversed its signs. Since the “matrimonial property quarter” assumes that the spouses have lived under the property regime of community of accrued gains, a “clean” solution presupposes that German law governs both the succession and the property regime. If the succession and property regimes diverge, problems of coordination and adaptation arise as before. The third ruling of the CJEU which had an important impact on German law and practice in matters of international successions involved the scope of Article 4 SR, a rule concerning the general jurisdiction of the courts of the Member State in which the deceased had his habitual residence “to rule on the succession as a whole”. Does that provision, which applies to the issuing of European Certificates of Succession (ECS), also apply to the issuing of national certificates of succession (which are not precluded by the ECS)? By way of background, a provision of German law relating to the (international and territorial) jurisdiction of courts in matters of succession10 stipulated that where the deceased did not have his habitual residence in Germany, the Amtsgericht Schöneberg in Berlin had jurisdiction if the deceased was a German national or if part of the estate was located in Germany. The CJEU ruled that Article 4 SR prevailed over national legislation such as this German provision.11 In agreement with AG SZPUNAR, the Court understood Article 4 as applying to all proceedings in matters of succession taking place before the courts of the Member States irrespective of whether decisions were given in contentious or non-contentious proceedings. Thus, Article 4 was found to also cover procedures not leading to the adoption of a judicial decision, as defined by the Succession Regulation. Again, the Court emphasised the principle of the unity of the succession, to which it added that the rules of the Regulation are devised so as to ensure that the court with jurisdiction will, in most situations, have 8 This statement is also supported by the fact that according to § 1371(1) BGB the increase in the statutory share of the inheritance by a quarter is independent of whether the spouses have made any gains at all. 9 Para 43 of the judgment. 10 § 343(3) of the law on proceedings in family matters and matters subject to noncontentious proceedings (Gesetz über das Verfahren in Familiensachen und in den Angelegenheiten der freiwilligen Gerichtsbarkeit (FamFG)). Whether that provision was overruled by Article 4 SR was a matter of controversy when the German implementing legislation was prepared, see the details reported by M. FORNASIER, FamRZ 2018, p. 1265. 11 CJEU, 21.6.2018, Oberle, C-20/17, ECLI:EU:C:2018:485; cf. the comment by M. FORNASIER, FamRZ 2018, p. 1262.

40

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 to apply its own law. Clearly, allowing the courts of the Member States to issue national certificates of succession when they have jurisdiction according to national law runs the risk that the Gleichlauf-principle is not respected and that contradictory decisions relating to the succession may be rendered in the Member States. The CJEU’s ruling puts an end to the long-standing practice of German courts issuing (national) certificates of succession under foreign law relating, and limited, to assets located in Germany (gegenständlich beschränkte Fremdrechtserbscheine). At the same time, the ruling strengthens the role of the ECS, although national certificates of succession may still be issued by the courts or a competent authority in the Member State having jurisdiction under Article 4 or under other jurisdictional rules of the Regulation.

II. German Case Law on the Succession Regulation Decisions of German courts on the Succession Regulation have become known since 2016. However, there are no reliable figures on the number of cases decided under the SR. Since judgments or orders of first instance courts have rarely been made public,12 most of the case law publicly available emanates from higher regional courts, the Oberlandesgerichte (OLG), which take decisions on appeal.13 The first and, so far, only relevant decision of the BGH14 was delivered in July 2019.15 Most of the decisions have been published in legal periodicals, and some only in the juris database. The decisions have mainly been rendered in noncontentious proceedings relating to the issuing of certificates of succession, either European or national. They frequently address points of jurisdiction, while questions relating to the applicable law are less frequent. The following paragraphs will present decisions which deserve particular attention. A.

Jurisdiction

1.

The Habitual Residence of the Deceased in General

In matters of jurisdiction, the habitual residence of the deceased – the main connecting factor for the determination of both the jurisdiction of courts and the applicable law – frequently had to be assessed by the courts. Where that concept is discussed in some depth, the courts refer to Recitals 23 and 24 of the SR and to the But see infra, notes 21 and 36. For the present article, approximately 30 appeal decisions have been considered. 14 The BGH decides on further appeals (Revision or Rechtsbeschwerde), which require that leave to appeal has been granted by the OLG. In contentious proceedings, the decision not to grant leave to appeal may itself be appealed; by contrast, no such appeal lies if leave to appeal is not granted in non-contentious proceedings. 15 See infra, note 31. 12 13

Yearbook of Private International Law, Volume 21 (2019/2020)

41

Christian Kohler case law of the CJEU on Regulation Brussels IIa.16 The Opinion of Advocate General Sánchez-Bordona in Case 80/19 follows the same approach.17 On the basis that it is an autonomous concept of EU law, the German courts are often paraphrasing the requirement, formulated in Recital 23, that they have to “make an overall assessment of the circumstances of the life of the deceased during the years preceding his death and at the time of his death, taking account of all relevant factual elements, in particular the duration and regularity of the deceased’s presence in the State concerned and the conditions and reasons for that presence. The habitual residence thus determined should reveal a close and stable connection with the State concerned taking into account the specific aims of the Regulation”. Apart from that, there can be no reasonable doubt: there can be only one habitual residence. In his opinion in Case C-80/19, the Advocate General pointed out that “Los argumentos de previsibilidad, seguridad jurídica, prevención de resultados contradictorios o la vocación de la ley aplicable para regir la totalidad de la sucesión y así evitar su fragmentación, que se enumeran en el considerando trigésimo séptimo del Reglamento, auspician que la residencia habitual haya de ser una. El considerando vigésimo séptimo, conforme al que las normas del Reglamento están concebidas para garantizar que la autoridad que sustancie la sucesión aplique, en la mayoría de los casos, su propio derecho, abunda en esta idea.”18 Furthermore, Recital 24 of the SR addresses cases where the habitual residence may be difficult to determine. Where for example, the deceased, for professional or economic reasons, had gone to live abroad to work there, but had maintained a close and stable connection with his State of origin, the deceased could, “depending on the circumstances of the case”, be considered to still have his habitual residence in that State of origin. Recital 24 then points to the situation

The case law referred to includes in particular the judgments in the A-case (2.4.2009, C-523/07, ECLI:EU:C:2009:225) and the Mercredi-case (22.12.2010, C-497/10 PPU, ECLI:EU:C:2010:829). For a comprehensive discussion of the concept see S. KURTH, Der gewöhnliche Aufenthalt in Art. 4, 21 Abs. 1 EuErbVO, Bielefeld 2017, reviewed by P. MANKOWSKI, FamRZ 2018, p. 672. 17 Cf. Opinion of 26.3.2020 in Case 80/19, E.E., ECLI:EU:C:2020:230, paras 45 et seq. The CJEU confirmed (16.07.2020, C-80/19, ECLI:EU:C:2020:569). 18 Opinion of 26.3.2020 in Case 80/19, E.E., ECLI:EU:C:2020:230, para 42 (emphasis added): « Les arguments tirés de la prévisibilité, de la sécurité juridique, de la prévention des résultats contradictoires ou de la vocation de la loi applicable à régir l’ensemble de la succession afin d’éviter son morcellement, qui sont énumérés au considérant 37 du règlement, plaident en faveur de l’unicité de la résidence habituelle. Cette thèse est renforcée par le considérant 27, selon lequel les dispositions du règlement sont conçues pour assurer que l’autorité chargée de la succession en vienne, dans la plupart des cas, à appliquer son droit national. » (English translation not yet available). 16

42

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 “where the deceased lived in several States alternately or travelled from one State to another without settling permanently in any of them. If the deceased was a national of one of those States or had all his main assets in one of those States, his nationality or the location of those assets could be a special factor in the overall assessment of all the factual circumstances.” This shows that, even in those situations, what has to be determined is “the” habitual residence, whereas the idea that there might be multiple habitual residences in a number of States is completely alien to the Succession Regulation. A number of decisions by German courts have adopted the same approach. 2.

Cross-Border Commuters and Modern “Nomads”

Two scenarios of more general interest have been discussed by the courts. The first relates to the determination of the habitual residence of cross-border commuters and modern “nomads”. In a case decided by the Berlin Kammergericht in 2016,19 the deceased, a German national, had, after retirement, moved to Poland where he had rented a flat close to the German border. He maintained an apartment in his daughter’s house in Berlin but apparently never stayed there. He continued his former business as a construction entrepreneur on the German side of the border while always returning to his place of residence in Poland. It appeared that his family and social contacts in Berlin were not disrupted and continued as before; he also kept his German bank accounts. By contrast, his ties to Poland were tenuous. He did not speak Polish and had no contacts in Poland, with the exception of casual conversations with the pastor of the local church, who spoke German. On these findings, the Kammergericht concluded that the centre of the life interests (Mittelpunkt des Lebensinteresses) of the deceased had not changed after retirement and that his habitual residence continued to be in Germany. Although that conclusion seems perfectly arguable, one German author has rightly remarked that particularly strong elements are required to rebut the presumption that the habitual residence is “where one goes to sleep”.20 However, taking into account the approach formulated in Recital 24, there were sufficient factors to rebut that presumption in this case. This may be different when it comes to modern European professionals: a French couple, working in Luxembourg with an international organisation, who rent an apartment on the German side of the Moselle where they return every night may be deemed to have their habitual residence in Germany even if the couple does not speak German and goes frequently to Paris over weekends; the German place of abode creates a prima facie presumption.

Kammergericht, 26.4.2016, FamRZ 2016, 1203 with a comment by P. MANKOWSKI, and IPRax 2018, p. 72 with a comment by D. MARTINY, p. 29. 20 P. MANKOWSKI, FamRZ 2016, p. 1204 s. 19

Yearbook of Private International Law, Volume 21 (2019/2020)

43

Christian Kohler In a case decided by the Amtsgericht Altenkirchen21 the deceased was a French national who died in Germany but was buried in Switzerland. He had led what the court described as a “nomadic way of life” (nomadischer Lebensstil). Although the Swiss courts had denied jurisdiction, the German court held that the centre of the deceased’s life was in Switzerland where his financial interests were located and from where he departed to go to France and Germany to look for cars for his collection in Switzerland. There was no genuine connection with Germany: the fact that the deceased had spent several months there before his death was insufficient to establish a habitual residence in Germany according to Article 4 of the SR. The court added that, ultimately, the French courts had jurisdiction under Article 10(1)(a) of the Succession Regulation. 3.

Pensioners Spending their Life in the South of Europe or Overseas

The second scenario relates to the situation of German pensioners spending their life after retirement out of Germany, preferably in Spain, while keeping at least part of their family and social relations in Germany. The determination of the centre of life of the deceased may be difficult in those cases. As the courts consider “habitual residence” to be a factual concept, its determination requires them, in the first place, to bring together the “factual elements” mentioned in Recital 23 of the SR.22 The evaluation of those elements is left to the discretion of the court, and it does not come as a surprise that, in a given case, the first instance court and the appeal court may come, with equal persuasion, to opposite results. In a case decided by the Oberlandesgericht Hamm23 the deceased, who had died in Spain in 2016, had lived in that country for many years, inter alia during his second marriage which had been dissolved in 2003. That marriage was followed by a third one in Germany, but the deceased had separated from his wife and returned to Spain in 2015. However, he was still a registered resident in Germany and his mail was not forwarded to Spain. He received medical treatment in Germany, and allegedly wished to return there. While the first instance court had concluded that the habitual residence of the deceased was in Spain, the Oberlandesgericht came to the opposite result: the “preponderant entirety of circumstances” (überwiegende Gesamtheit von Umständen) supported the conclusion that the deceased had maintained his centre of life in Germany. In determining the last habitual residence, the courts emphasise at times that the points to be taken into account include not only objective but also subjective elements, in particular the intention of the deceased to stay and to remain in a

21 Amtsgericht Altenkirchen (Rheinland-Pfalz), 6.6.2018 – 16 VI 156/17, FamRZ 2019, p. 1824. 22 See Oberlandesgericht Hamburg, 16.11.2016, FamRZ 2017, p. 568; Oberlandesgericht Köln, 4.7.2018 – 2 Wx 222/18, juris. 23 Oberlandesgericht Hamm, 2.1.2018, IPRax 2019, p. 151 with a critical comment by S. KURTH, p. 123); FamRZ 2019, p. 1553.

44

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 given place.24 To that end, the courts often cite commentators of the Succession Regulation who refer to the CJEU’s judgment in the Mercredi case where the Court said: “Before habitual residence can be transferred to the host State, it is of paramount importance that the person concerned has it in mind to establish there the permanent or habitual centre of his interests, with the intention that it should be of a lasting character. Accordingly, the duration of a stay can serve only as an indicator in the assessment of the permanence of the residence, and that assessment must be carried out in the light of all the circumstances of fact specific to the individual case.”25 The Mercredi case involved the interpretation of Article 8 of Regulation Brussels IIa. There are valid reasons to transpose the statement of the CJEU, mutatis mutandis, to the interpretation of the concept of habitual residence in the Succession Regulation. But this is far from being acte clair, and a reference to the CJEU would seem appropriate before reaching that conclusion. Particular problems arise where the deceased dies in a hospital or a nursing home in an overseas country (where he or she had been brought by relatives to benefit from the lower cost of long-term care). What elements are required in order to conclude that the habitual residence of the deceased has been transferred to that country? German courts have discussed the analogous question in domestic cases where they had to establish their territorial competence under a provision of German law which had been amended in order to be in line with Article 4 SR. Accordingly, the habitual residence of the deceased is the only relevant factor for determining that competence in domestic cases,26 and the German courts strive to come to a uniform interpretation of that provision and Article 4 SR. According to the Oberlandesgericht München,27 in addition to the factual Lebensmittelpunkt the intention of the deceased to stay and to remain in the new place of abode must also be established in case of a relocation to a nursing home. On the basis that habitual residence is a factual concept, the court held that the animus manendi does not require full legal capacity, but that the person concerned must be in a position to Obviously, the existence of an animus manendi is often inferred from objective elements and thus again left to the discretion of the courts. In the case referred to in the previous footnote, the Oberlandesgericht Hamm emphasised that the deceased had lacked the intention to stay permanently in Spain. A certain “homeward trend” may have guided that conclusion of the German court. It may also be noted that in the case of Spain, the designation of the applicable law may be complex as that State comprises several territorial units, each of which has its own rules of law regarding succession. Art. 36(1) SR provides here that “the internal conflict-of-law rules of that State shall determine the relevant territorial unit whose rules are to apply”; cf. the examples discussed in A. BONOMI/ P. WAUTELET, El derecho europeo des sucesiones. Versión traducida y adaptada al Derecho español por S. ÁLVAREZ GONZÁLEZ e.a., Cizur Menor 2015, Arts. 36-38, paras 11 et seq. 25 CJEU, 22.12.2010, Mercredi, C-497/10 PPU (note 16), para 51. 26 See § 343(1) FamFG (supra, note 10). 27 Oberlandesgericht München, 22.3.2017, FamRZ 2017, p. 1251. 24

Yearbook of Private International Law, Volume 21 (2019/2020)

45

Christian Kohler express his intentions.28 The court also emphasised that there can be no legal representation of the person concerned when establishing a habitual residence; otherwise, the legal representative would be in a position to choose the applicable law to the succession of that person. Clearly, also with regard to that issue, a reference to the CJEU would be required in an appropriate case. 4.

Declining Jurisdiction in the Event of a Choice of Law

Article 6(a) SR provides that, where the deceased has chosen the law of a Member State to govern his succession pursuant to Article 22, the court seised pursuant to Article 4 or Article 10 SR “may, at the request of one of the parties to the proceedings, decline jurisdiction if it considers that the courts of the Member State of the chosen law are better placed to rule on the succession, taking into account the practical circumstances of the succession, such as the habitual residence of the parties and the location of the assets”. German courts had to interpret that provision in a case where the deceased, of German origin, had died in the Netherlands, where he had lived since 1999. In a handwritten will, drawn up in German in the Netherlands in 2007, he had made various dispositions relating, inter alia, to immovable property in the Netherlands. The beneficiaries named in the will were a nephew and the life companion of the deceased; his wife was not mentioned. In 2017, a notary in Kerkrade (Netherlands) issued a declaration of succession (verklaring van erfrecht) according to which the wife of the deceased was the sole heir. In 2018, the nephew applied for an ECS before the Amtsgericht Schöneberg in Berlin. The applicant joined a letter from a notary in Enschede (Netherlands) of 26.9.2018 according to which, following an opinion delivered by a collaborator of Het Notarieel Bureau, the succession of the deceased was governed by German law. The notary further declared that he was not specialised in the German law of succession and that the German authorities were in a better position to assess the validity and implications of the handwritten will (which would not be considered valid under Dutch law); accordingly, he declined his jurisdiction pursuant to Article 6(a) SR. The Amtsgericht Schöneberg referred the case to the Amtsgericht Aachen in whose district the deceased had his last habitual residence in Germany. The latter court dismissed the application as inadmissible, and that ruling was upheld on appeal by the Oberlandesgericht Köln.29 That court approved the first court’s holding that German courts had no jurisdiction to issue an ECS, as the deceased had his last habitual residence, according to Article 4 SR, in the Netherlands. Neither did the jurisdiction of the In the words of the court, “the deceased must be capable of forming a will of his own” (“Der Erblasser muss zur eigenen Willensbildung fähig sein”). But see Oberlandesgericht Celle, 12.9.2019, Zeitschrift für Erbrecht und Vermögensnachfolge (ZEV) 2020, p. 229, where the point of the animus manendi is not raised, cf. the comment by S. KURTH, ibid. 29 Oberlandesgericht Köln, 11.12.2019 – 2 Wx 332/19, ZEV 2020, p. 230. 28

46

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 German courts follow from Article 7(a) SR. That provision gave jurisdiction to the courts of a Member State whose law had been chosen by the deceased pursuant to Article 22 if “a court previously seised has declined jurisdiction in the same case pursuant to Article 6”. However, the notary’s letter of 26.9.2018 did not amount to a decision declining jurisdiction pursuant to Article 6, as two conditions imposed by that provision were not met. First, there was no request by one of the parties to the proceedings, as required by Article 6(a), and second, there could be no question of a choice of law pursuant to Article 22 SR. The notary’s letter was insufficient in that respect, as was the simple reference to the opinion of the Notarieel Bureau. B.

Applicable Law

There have so far been only a few cases where the choice-of-law rules of the Succession Regulation have been discussed by the German courts. 1.

Choice of Law Demonstrated by the Terms of a Will

The Oberlandesgericht Köln30 had to decide a case where the deceased, a Romanian national who, in addition, had acquired German nationality in 1984, had his last habitual residence in Germany. In 2017, he died during a holiday in Romania. In 2016, he had made a will before a notary in Romania, leaving his entire property to his wife. The will, drawn up in Romanian, referred to certain provisions of the Romanian Civil Code. The wife, who had initially waived the succession but later challenged the waiver, applied before the German court of the deceased’s habitual residence for a certificate showing her as the sole heir. Contrary to the first instance court, the Oberlandesgericht held that the wife was the sole heir of the deceased. It held that the succession was governed by Romanian law following a choice of law by the deceased, made validly under Article 22(1)(2) SR, as the deceased possessed also the Romanian nationality, and under Article 22(2) SR, as that choice was demonstrated by the terms of the will and the circumstances of its making. The court referred to Recital 39 of the Regulation according to which “a choice of law could be regarded as demonstrated by a disposition of property upon death where, for instance, the deceased had referred in his disposition to specific provisions of the law of the State of his nationality”; additional elements to be taken into account were the language of the will and its creation before a Romanian notary. The court held that, under Romanian Law, the initial waiver of the succession by the wife did not preclude a subsequent acceptance, and that the challenge of the waiver by the wife amounted to an implicit acceptance, which was also timely, as it occurred within one year of the opening of the succession.

30

Oberlandesgericht Köln, 5.6.2019 – 2 Wx 142/19, FamRZ 2019, p. 1566.

Yearbook of Private International Law, Volume 21 (2019/2020)

47

Christian Kohler 2.

Transitional Provisions on the Validity of a Choice of Law

In the case decided by the BGH in July 2019 the choice-of-law rules of the Succession Regulation had to be applied pursuant to the transitional provisions of Art. 83 SR.31 The deceased, a German national who died in 2017, left two dispositions of property upon death, an agreement of 1998 as to succession (Erbvertrag) and a will of 2016; both instruments were signed in Germany before a notary. The deceased had signed the agreement with her then life companion, an Italian national who had lived in Germany since 1986. In the agreement, each was appointed the sole heir of the other; their two children were to be heirs of the surviving party. They also declared that their succession was to be governed in every respect by German law. In 1998, however, such a choice was not permitted under German conflicts law.32 In 2016, after their relationship had come to an end, the deceased made a will in which she appointed, as heirs, her unborn grand-children and, in case no grand-children were living at the time of her death, another person, the appellant in this case. After her death, her former companion claimed to be her sole heir, alleging that the 2016 will was void because it violated the 1998 agreement. That claim was refuted by the presumptive heir, who argued that the 1998 agreement was invalid as it was governed, as far as the companion of the deceased was concerned, by Italian law (the national law of the companion of the deceased) according to which a disposition of property with binding effect is invalid because it limits the testamentary freedom of the testator.33 The BGH upheld the claim of the deceased’s companion. Starting from Article 83(2) SR, the court held that pursuant to Article 25(3) SR, the parties to the 1998 agreement had validly chosen German law to govern the agreement as that provision permits the parties to choose the law of a State of which either of the parties is a national. German law, validly chosen, allows agreements as to succession with binding effect and provides that a subsequent disposition of property upon death is invalid to the extent that it impairs the rights of the beneficiary of the

Bundesgerichtshof, 10.7.2019 – IV ZB 22/18, Neue Juristische Wochenschrift (NJW) 2019, p. 3499; FamRZ 2019, p. 1561, with a comment by Christiane VON BARY. I am grateful to Dr Carl-Friedrich NORDMEIER for his comments on this decision. 32 It was, however, allowed under Italian law: see the following footnote. 33 See Article 458 Codice civile. It is, however, open to doubt whether Italian law was applicable at the time the agreement was made. Under German conflict of law rules in force in 1998, the admissibility of the agreement was governed for each party by his or her national law, i.e. German law and Italian law in the present case. However, the reference to Italian law included the rules of private international law, and according to Article 46(2) of the Italian Act on Private International Law (Law No. 218 of 1995) a person could choose, as the law to govern his succession instead of the lex patriae which would normally apply, the law of the State of his habitual residence (cf. F. KRUIS, Das italienische internationale Erbrecht, München 2005, p. 78 et seq., where the Italo-German situation is discussed). Thus, in this case, the choice of German law by the Italian companion of the deceased was valid and led to a renvoi to German law. As a result, since German law applied in any case to the deceased because of her German nationality, the admissibility of the 1998 agreement was to be assessed, in any event, solely under that law. 31

48

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 agreement.34 The BGH then discussed the appellant’s argument that the retroactive application of the conflict rules of the SR – which led to the validity of the initially invalid choice of German law – violates the principles of legal certainty and nonretroactivity recognised by EU law and German constitutional law. However, according to the court, these principles apply only to cases of authentic retroactivity, i.e. cases where the provision in question is designed to control a situation which is already “closed” because it has produced its effects in the past. In the present context that would have been the case if the testator had died and the succession had been opened before the applicability of the Succession Regulation.35 By contrast, the retroactive effect of Article 83(2) SR is acceptable – as inauthentic retroactivity – where the testator died on or after 17 August 2015, because the succession is opened only at that time. The court referred to the objectives of the transitional rules, which tend not only to ensure the validity of dispositions of property made before the applicability of the Succession Regulation but also to permit invalid dispositions to become valid. The court detected here a favor testamenti and a rule of validation, whereas it was not prepared to protect a party’s expectations as to the invalidity of a previous disposition of property upon death. 3.

Transitional Provisions on the Validity and Interpretation of a Will

In a case before the Amtsgericht Hamburg-Wandsbeck,36 the court had to decide on the interpretation of a joint will that had been made by the deceased and her husband in Chicago in 1967. Both were German nationals who had emigrated to the United States. The will was typewritten and signed by the couple and three witnesses. It stated that upon the death of one of the spouses, that spouse’s property “shall be held by the survivor to use the same as the survivor may see fit, and to have and to hold to the said survivor, survivor’s heirs and assigns forever”. The husband died in the United States in 1968. The wife died when the Succession Regulation already applied. Before the Hamburg court, a dispute about the inheritance arose between the wife’s siblings and other relatives. The court held that the succession of the deceased was governed by the SR according to Article 83(1) SR. The formal validity of the joint will made in 1967 was then assessed according to the 1961 Hague Convention on the form of wills (to which Art. 75(1) SR refers). The court applied Illinois law as the law of the place where the testamentary disposition had been made, and affirmed the formal validity of the will according See § 2289 BGB. In a case decided by the Oberlandesgericht Schleswig (25.4.2016 – 3 Wx 122/15, FamRZ 2016, p. 1606), the presumptive heir of the deceased, a national of Poland who had died in 2014, argued that the German legislator had ordered the retroactive application of the SR so as to cover the succession of the deceased. That argument was rightly rejected by the court: the new Art. 25 of the Introductory Law to the BGB, which became applicable on 17 August 2015, provides for the analogous application of Chapter III of the SR in matters of succession not covered by the Regulation. A retroactive application of the SR itself was of course not intended. 36 Amtsgericht Hamburg-Wandsbeck, 17.5.2018, FamRZ 2018, p. 1274 with a critical comment by I. LUDWIG. 34 35

Yearbook of Private International Law, Volume 21 (2019/2020)

49

Christian Kohler to § 43 of the Illinois Probate Act of 1939, as applicable in 1967. The court then determined the law applicable to the interpretation of the will, which was at the centre of the dispute. Since, according to Article 26(1)(d) SR, the interpretation pertains to the substantive validity of the will, the court had to determine the law applicable in that respect. Applying Article 83(3) and Article 24(1) SR , the court referred to Illinois law as the law of the habitual residence of the testator at the time the will was made which, according to Article 21 SR, would have been applicable to the succession if the testator had died on the day on which the disposition was made. Thus Illinois law, as the hypothetically applicable law, was found to also govern the interpretation of the will. Having reached that conclusion, the court, in an obiter dictum, expressed doubts as to its result. It noted that, under the German conflict rules in force in 1967, the interpretation of the will of the testators would have been governed by German law as the law governing the succession because of the nationality of the couple. That situation changed with the applicability of the SR in 2015. According to the court, the change of the applicable law seems problematic as the testators had relied since 1967 on the applicability of German law. The court then looked for a possibility to apply German law under the rules of the SR. It envisaged the application of Article 21(2) SR, which provides, by way of exception, for the application of the law of a State other than that of the habitual residence if the deceased was manifestly more closely connected with that other State. Referring to the German nationality of the deceased, her lasting connections with Germany, and the fact that the beneficiaries of the will were in Germany, the court seemed prepared to conclude that the deceased was more closely connected to Germany than to Illinois. However, it did not decide the issue, as the interpretation of the will according to German law would have yielded the same result as the interpretation according to the law of Illinois. 4.

Scope of the Applicable Law

As far as the scope of the applicable law is concerned, a decision of the Oberlandesgericht Saarbrücken, applying the reasoning of the CJEU’s ruling in Kubicka deserves mentioning.37 A resident of France died in 2016, without leaving a will. His estate included an apartment in Germany. French law governed the succession, and the heirs on intestacy were the wife of the deceased, and descendants. The wife applied to the competent German court for a rectification of the land register (Grundbuch) where the deceased was registered as owner of the apartment. She presented an ECS, issued by a notary in Paris, according to which, upon the partition of the estate, she was entitled to five eighths as full property, and three eighths as usufruct, and asked that her position be registered accordingly. The first instance court dismissed the application. Regarding the registration of the usufruct, that court noted that a transfer of title by the heirs was necessary because the usufruct had no effect in rem for the purposes of registration in the German land register. On appeal, that decision was overturned. Referring to the CJEU’s 37

50

Oberlandesgericht Saarbrücken, 23.5.2019 – 5 W 25/19, FamRZ 2019, p. 1569.

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 judgment in Kubicka,38 the appeal court said that where the lex successionis provided for the direct material effect of a legacy (“legacy by vindication”), that effect was to be recognised also in a Member State whose law provides only for legacies “by damnation”, which only have effect in personam. That principle applied to the usufruct of the surviving spouse according to French law. Accordingly, the registration of the usufruct did not require a consensual transfer of title, as the wife acquired that right with direct effect ex lege upon the death of her spouse.39 This meant that the German land register was no longer correct and had to be rectified. In order to prove the error in the land register, it was sufficient, according to the court, for the beneficiary to present an ECS containing the information about the right in question. The court pointed to Article 63(2)(b) SR, according to which the ECS could be used to demonstrate “the attribution of a specific asset (…) of the estate to the heir(s) or (…) the legatee(s) mentioned in the Certificate”. That Certificate had to be accepted as proof for the purposes of registration of an asset of the estate. The court rejected the argument put forward by German authors that it still had to verify whether, according to the lex successionis, the acquisition of the right mentioned in the Certificate took place with immediate effect. The court referred to Article 69(2)(2) SR which provides that the person mentioned in the Certificate as heir or legatee is “presumed to have the status”40 and hold the right therein mentioned “with no conditions and/or restrictions being attached to the right in question other than those stated in the Certificate”. However, that presumption may be rebutted, and the authority to which the Certificate is presented is entitled to verify its content “like in the case of national certificates of succession” where there are doubts as to its accuracy. Finally the court gave detailed instructions to the lower court as to how to proceed. The reasoning elaborated by the court demonstrates that it is conscious that the outcome of cases under the Succession Regulation is dramatically different from the outcome of such cases under rules that had previously been applicable and overturns the long-standing German practice in matters of administering successions governed by foreign law. C.

European Certificate of Succession

In the cases just mentioned, the German courts had to deal with the administration of estates where foreign law governed the succession. Another line of cases shows that comparable problems may arise where German law is applicable in that respect. A number of decisions delivered by the appeal courts in Nuremberg and Munich involved cases in which the estate of the deceased included immovable property situated in other Member States. In these cases, in order to register the acquisition of the property by the heirs, the foreign registration authority asked for Supra, note 2. See also E. JACOBY, Die Rechte des überlebenden Ehegatten und das europäische Nachlasszeugnis in den deutsch-französischen Beziehungen, GPR – Zeitschrift für das Privatrecht der Europäischen Union 2018, p. 303. 40 Emphasis added. 38 39

Yearbook of Private International Law, Volume 21 (2019/2020)

51

Christian Kohler a certificate of succession where the concrete immovable was identified. As German law adheres to the principle of Univeralsukzession,41 where the succession as a whole, or a share thereof, passes to the heir(s), a national certificate of succession (Erbschein), which demonstrates the status of the heir(s), never mentions single assets of the estate. Does that principle apply also to the ECS? In a typical case involving immovable property in Austria, the Munich Oberlandesgericht refused the application of the sole heir to have the property mentioned in the ECS for the purposes of registration in Austria.42 The court emphasised that the principle of universal succession excludes any mention of individual assets in the ECS. It then turned to Article 63(2)(b) SR, which provides that the Certificate may be used to demonstrate the attribution of specific assets to the heirs, and Article 68(l) SR, according to which the Certificate may contain a list of assets for any given heir. According the court, those provisions only apply where individual assets are attributed to the heir with immediate effect ex lege, as in the case of the partition of an estate according to foreign law (legacies by vindication are not mentioned by the court). As German law provides for the attribution of the succession as a whole the said provisions were not applicable. The court followed here with the interpretation of the provisions in cases previously decided by the Nuremberg appeal court.43 However, that case law has rightly been criticised by German authors,44 who emphasise that nothing in the wording of Article 68(l) and (m) SR warrants the narrow interpretation advanced by the Nuremberg and Munich courts. On the contrary, the objectives and the effet utile of the ECS to facilitate the administration of successions in the EU are better served if individual assets are also mentioned in the Certificate in cases where the lex successionis follows the principle of universal succession. Indeed, a broader interpretation of the provisions of the SR, as also advocated by the Oberlandesgericht Saarbrücken in the above-mentioned decision,45 appears to be in line with the CJEU’s decisions in Kubicka46 and Mahnkopf47 where the objectives of the ECS were referred to in order to support the CJEU’s findings. However, the narrow interpretation of the provisions on the ECS was again followed in 2020 by the Oberlandesgericht München in a case where the

As opposed to Singularsukzession or Einzelrechtsnachfolge. Oberlandesgericht München, 12.9.2017, FamRZ 2018, p. 142. It appears, however, that the position of the lower Austrian courts has been overruled by the Austrian Supreme Court, which is ready to accept an ECS concerning successions under German law where immovables in Austria are not mentioned, see OGH, 29.8.2017 – 5 Ob 108/17v, FamRZ 2018, p. 635, and OGH, 15.5.2018 – 5 Ob 35/18k, EvBl 2018/151. 43 See Oberlandesgericht Nürnberg, decisions of 5.4.2017, FamRZ 2018, p. 143, IPRax 2019, p. 327, and 27.10.2017, IPRax 2019, p. 328. 44 See in particular C.-F. NORDMEIER, Die Aufnahme einzelner Nachlassgegenstände in das Europäische Nachlasszeugnis – zum durch den Todesfall bedingten Rechtserwerb und zur Reichweite der Art. 68 lit. l und m EuErbVO, IPRax 2019, p. 306. 45 Supra, note 37. 46 Supra, note 2. 47 Supra, note 6. 41 42

52

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 succession was governed by Austrian law.48 The deceased was the registered owner of one quarter of a property situated in Germany. He left a will in which B and K were designated as heirs of his estate. He further determined that B was to be the sole owner of the quarter of the German property. However, after the devolution of the estate, B and K were both registered as joint owners in the German land register.49 That registration was based on the decision of the competent Austrian court (Einantwortungsbeschluss) of 13 March 2017 according to which the estate was devolved in equal shares to B and K. On the same day, the competent Austrian authority issued an ECS which, in Annex IV of Form V,50 named B as heir and the quarter of the German property as an “asset attributed to the heir for which certification was requested”. Submitting that he ought to be registered as sole owner of the quarter of the property, B applied for a rectification of the land register. The application was dismissed in both instances. According to the Oberlandesgericht, the land register would have been inaccurate only if B had acquired sole ownership of the quarter of the property with immediate effect at the death of the deceased. However, the court noted that Austrian law followed the principle of Universalsukzession and did not provide for a partition of the estate with effect in rem. After a detailed discussion of the situation under Austrian law, the court concluded that B and K were joint owners of the quarter of the German property. It went on to say that the above-mentioned information in the ECS regarding the asset attributed to B, was without effect, as it was contrary to Austrian law and not covered by the presumption in Article 69(2) SR. The court’s ruling deserves criticism.51 It is submitted that the court misconstrued the provisions on the ECS. Articles 71 to 73 SR make it clear that the rectification, modification or withdrawal of the ECS, as well as the suspension of its effects, come under the exclusive jurisdiction of the issuing authority. As long as that authority has not acted according to those provisions, the presumption of accuracy of the information certified in the ECS applies according to Article 69(2) SR. In any case, the narrow interpretation of the latter provision would have required a prior reference to the CJEU under Article 267 TFEU.52 Regardless, it should be noted that individual rights or assets may be mentioned in the ECS only if they have been attributed to the beneficiary successionis causa. Rights, interests and assets “created or transferred otherwise than by succession” are excluded from the scope of the SR according to Article 1(2) lit. g). That principle was applied by the Nuremberg court of appeal53 in a case where the deceased and her husband were joint owners of an apartment in Austria. 48 Oberlandesgericht München, 10.2.2020 – 34 Wx 357/17, ZEV 2020, p. 233, with a critical note by R. SÜß. I am grateful to Dr Marlene BROSCH for her observations on this decision. 49 I.e. owners “in a community of heirs” (in Erbengemeinschaft). 50 Cf. Commission Implementing Regulation No 1329/2014 establishing the forms referred to in the Succession Regulation. 51 Cf. R. SÜß (note 48). 52 According to the third subparagraph of Art. 267 TFEU, the Oberlandesgericht was obliged to bring the matter before the Court as leave to appeal had not been granted. 53 Oberlandesgericht Nürnberg, 25.4.2017, IPRax 2019, p. 328.

Yearbook of Private International Law, Volume 21 (2019/2020)

53

Christian Kohler According to the relevant Austrian legislation, the surviving spouse acquires full ownership by way of accrual (Anwachsung) upon the death of the other spouse.54 According to the court, such acquisition was comparable to the effects of a joint tenancy55 and took place otherwise than by succession. It is thus excluded from the Succession Regulation, and the right of ownership acquired by way of accrual could not be mentioned in the ECS. Nevertheless, in order to define the conditions under which individual assets of the estate may be mentioned in the ECS under Article 68 SR, in particular in cases where such mention is necessary for the purposes of registration, a reference to the CJEU would seem required in an appropriate case. D.

Relationship with International Conventions

Article 75(1) SR provides that the Regulation shall not affect the application of international conventions to which a Member State is a party and which concern matters covered by the Regulation. Germany is bound by three relevant bilateral conventions with Iran,56 Turkey,57 and the USSR.58 They contain conflict rules in matters of succession which, in many respects, differ from those of the Succession Regulation. The Agreement on Succession with Turkey, which is part of the Consular Treaty of 1929, subjects the inheritance of movables to the national law of the deceased, whereas the inheritance of immovables is governed by the lex rei sitae. By contrast, the Treaty with Iran provides that the national law of the deceased is applicable to his or her succession as a whole.59 While these conventions are of considerable practical importance, relevant cases decided after the date of application of the SR are still a rarity. However, a decision delivered by the Oberlandesgericht Karlsruhe on 27 February 2018 (two days prior to the § 14 Wohnungseigentumsgesetz. Expressly mentioned in the German version of Art. 1(2) lit. g) SR. 56 Agreement on Establishment between the German Empire and the Persian Empire of 1929. 57 Consular Treaty between the German Empire and the Republic of Turkey (1929), which contains an Agreement on Succession (Nachlassabkommen). The impact of the Succession Regulation on the application of the Agreement is discussed by M. GEBAUER, Das deutsch-türkische Nachlassabkommen im Sog des Europäischen Kollisionsrechts, IPRax 2018, p. 345. 58 Consular Treaty between the Federal Republic of Germany and the Union of Soviet Socialist Republics of 1958. 59 A comparable rule is contained in the Treaty of Friendship and Establishment between Austria and Iran (1959). According to the Austrian Supreme Court, where Iranian law of succession is applicable under Art. 10(3) of that Treaty, this does not preclude the application of the Austrian public policy exception, see OGH 29.1.2019 – 2 Ob 170/18s, FamRZ 2019, p. 738. In that case, the court held that the discrimination of female heirs under Iranian law violated Austrian public policy, which had to be viewed also in the light of Art. 10(3) of Regulation Rome III; cf. also the discussion by W. PINTENS, Public policy in succession matters, in B. HESS/ E. JAYME/ H.-P. MANSEL (eds), Europa als Rechts- und Lebensraum. Liber amicorum für Christian Kohler, Bielefeld 2018, p. 393. 54 55

54

Yearbook of Private International Law, Volume 21 (2019/2020)

The EU Succession Regulation before the German Courts 2016-2019 Mahnkopf judgment of the CJEU60) deserves attention.61 In a German-Turkish inheritance case where German law applied to the inheritance of immovable property located in Germany, the court decided that the wife's share of the inheritance did not have to be increased under § 1371(1) of the BGB because the spouses had lived under the Turkish matrimonial property regime of community of gains accrued during the marriage. Therefore, according to the court, the question of the characterisation of § 1371(1) BGB was not relevant "from the outset": even if that provision had to be classified as belonging to the law of succession, it applied only if the spouses had lived under the German property regime of participation in the accrued gains, which was not the case. The Karlsruhe court did not discuss whether the German property regime could possibly have been substituted by the Turkish regime of community of gains made during the marriage. However, even in that case, it found that the flat-rate equalisation under § 1371(1) BGB would probably have to be excluded62 because the surviving spouse was already compensated according to the Turkish matrimonial property regime.63 Obviously, a question that may be asked after the Mahnkopf ruling is whether the CJEU’s classification of the German provision applies also in the context of the application of an international convention like the German-Turkish Succession Agreement. Although this is probably not warranted under EU law,64 it has been observed that it is in the interest of a harmonious administration of international succession cases by the courts to apply the “European” classification of the German provision also in cases where the conflict rules in matters of succession are those of an international convention.65

Supra note 6. Oberlandesgericht Karlsruhe, 27.2.2018, FamRZ 2018, p. 858 with a comment by M. FORNASIER. Cf. also M. GEBAUER, § 1371 Abs. 1 BGB und das deutsch-türkische Nachlassabkommen im Sog der erbrechtlichen Qualifikation, IPRax 2018, p. 586. 62 That result is in fact reached in a similar case by the Oberlandesgericht Hamm (21.3.2019 – 10 W 31/17, FamRZ 2019, p. 1566): the court held that if § 1371(1) BGB had to be classified as belonging to the law of succession, it would apply only if the Turkish property regime under which the spouses had lived could be substituted to the German property regime of participation in the accrued gains. However, that was neither the case of the current regime of community of gains, nor of the former regime community of goods. 63 This is discussed by M. FORNASIER (FamRZ 2018, p. 860), who argues that an increase of the share in the inheritance pursuant to § 1371(1) BGB is ruled out because otherwise there would be "double compensation" for the survivor. 64 The Oberlandesgericht München (24.9.2019 – 31 Wx 326/18, FamRZ 2020, p. 197, with a comment by M. Sonnentag) held that the CJEU’s decision in Mahnkopf only applied in cases governed by the Succession Regulation, whereas in cases governed by the previously applicable conflict rules of German law, § 1371(1) BGB had to be classified as belonging to the matrimonial property law according to the decision of the BGH of 13.5.2015 (supra, note 5). 65 See M. FORNASIER, loc. cit. If the German provision were to be classified as belonging to the matrimonial property regime, additional problems would arise: the German-Turkish Agreement is not concerned with matrimonial property regimes, and the conflict rules of EU Regulation 2016/1103 (which in any case apply only to marriages 60 61

Yearbook of Private International Law, Volume 21 (2019/2020)

55

Christian Kohler

III. Concluding Remarks It is too early to draw solid conclusions from the German case law delivered so far under the Succession Regulation. The number of reported cases is relatively small, and decisions merely applying the provisions of the Regulation are of limited interest. However, three tentative findings may be formulated. First, the cases presented show a general willingness of the courts to cope with the fundamental changes introduced by the SR. They also show that the courts are ready to interpret key concepts of the Regulation in a European way. In particular, the concept of “habitual residence” is applied on the basis of an autonomous interpretation by reference to the case law of the CJEU on Regulation Brussels IIa, and is mindful of a coherent application of the concepts of European private international law. Second, a number of decisions demonstrate that the courts are sometimes slow to accept the consequences which flow from the changes brought about by the Regulation, and which require a reconsideration of the traditional German practice in matters of international successions. That appears particularly in the context of the issuing of an ECS. In that respect the provisions of the Regulation are sometimes viewed under the strict rules governing the issuing of the German Erbschein. The third finding concerns the role of the CJEU. German courts have already triggered three preliminary rulings on the interpretation of the SR.66 In the cases presented here, a number of issues have become apparent which deserve to be referred to the CJEU. They relate, inter alia, to elements of the concept of habitual residence in Articles 4 and 21 SR,67 and essential aspects of the ECS.68 In that respect, the reluctance of certain Oberlandesgerichte to refer questions to the CJEU is regrettable and conflicts with the obligation flowing from Article 267 in cases where no appeal lies from their decisions. Clearly, a further contribution of the European Court would be welcome in order to facilitate, and harmonise, the application of the Succession Regulation in the Member States.

contracted on or after 29 January 2019) are not applicable to § 1371(1) BGB, as the Mahnkopf classification has to be respected in that context. 66 The Mahnkopf case (C-558/16) and the Oberle case (C-20/17) have both been referred to by the Kammergericht, Berlin, and the Brisch case (C-102/18, see the judgment of 17.1.2019 concerning the mandatory or optional nature of a form established by the Implementing Regulation No 1329/2014) by the Oberlandesgericht Köln. 67 Supra III, 1 and 2. 68 Supra III, 3.

56

Yearbook of Private International Law, Volume 21 (2019/2020)

CROSS-BORDER LITIGATION NEW DATA, INITIAL BREXIT IMPLICATIONS IN ENGLAND AND WALES AND LONG-TERM POLICY CHOICES Mihail DANOV*

I. II. III. IV. V. VI. VII. VIII.

Introduction and Preliminary Remarks Research Methodology Brexit and Forum Selection Parallel Proceedings: Legal Landscape – Parties’ Strategies – Access to Remedies Recognition and Enforcement: Legal Landscape – Parties’ Strategies – Access to Remedies Applicable Law: Legal Landscape – Parties’ Strategies – Access to Remedies Long-Term Policy Options: Governance Aspects – Access to Justice in CrossBorder Cases Conclusion – Important Issues to Be Addressed

The UK decision to leave the European Union could directly (or indirectly) impact on the legal landscape in relation to private international law (“PIL”) in the UK. Any fresh legal uncertainty driven by such a change in the PIL framework could have significant impact on private parties’ access to remedies which might adversely affect the attractiveness of the English courts. This article offers, on the basis of recent data which was gathered as part of a pilot study in the period from May to September 2018, an initial evaluation of the Brexit impact on litigants’ access to legal remedies in cross-border case before the English courts. It shows that a decision on the long-term policy options for judicial cooperation in crossborder cases is a complex one which requires some wider economic interests to be factored in and appropriate policy choices to be made. The pilot study identifies * Associate Professor, School of Law, University of Exeter, Amory Building, Rennes Drive, Exeter, EX4 4RJ, [email protected]. This paper is written within the framework of the AHRC Research Network “Where do we go from here? The development of private international law in the UK and the post Brexit environment.” The relevant data was gathered as part of a pilot study which was funded by the University of Exeter Center for Commercial and Corporate Law. The author is very thankful to the interview participants as well as to the law firms that took part in the survey. The relevant data is deposited with the UK Data Archive – M. DANOV, Data Collection – Cross-border litigation in England and Wales: Initial Brexit implications, 2016-2018 Colchester, Essex: UK Data Service, available at: http://doi.org/10.5255/UKDA-SN-853743.

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 57-99 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Mihail Danov some important issues which might potentially be impacting on the parties’ strategies, inflating the litigation costs and requiring attention by the UK policymakers.

I.

Introduction and Preliminary Remarks

The increasingly high level of globalisation1 of economic activities means that there is a significant number of multinational companies which are often active through their own subsidiaries in a number of different jurisdictions. It has been submitted that “[i]t is a commonplace that multinational companies now move their headquarters (and sometimes their plants and offices) to exploit lighter tax regimes and avoid larger ones.”2 The companies (and the multinational groups of companies in particular) appear to be very selective when deciding (in the light of the relevant regulatory landscape) where to have their primary and/or secondary establishments. Such multinational companies may be equally strategic when deciding where to issue legal proceedings in cross-border civil and commercial disputes. The latter set of strategic decisions would, in turn, impact on the crossborder litigation pattern, with some jurisdictions naturally attracting more disputes with an international element than others. In order to “facilitate the free circulation of judgments and to [...] enhance access to justice”3 in cross-border cases, the EU Member States have agreed upon applying harmonised EU PIL rules across the European Union.4 Article 81 of the

A.-M. SLAUGHTER, A New World Order, Princeton University Press 2004; S. SASSEN, A Sociology of Globalization, New York 2007; W. MATTLI/ N. WOODS, The Politics of Global Regulation, Princeton University Press 2009; P.S. BERMAN, Global Legal Pluralism: A Jurisprudence of Law Beyond Borders, Cambridge University Press 2012); N. WALKER, Intimations of Global Law, Cambridge University Press 2014. 2 J. AGNEW, Globalisation and Sovereignty, Plymouth 2009, p. 3. 3 Recital 1 of the 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”). See also M. DANOV/ P. BEAUMONT, Measuring the Effectiveness of the EU Civil Justice Framework: Theoretical and Methodological Challenges, this Yearbook 2015/16, p. 151 et seq. 4 E.g. Brussels Ia (note 3); 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 (“Brussels IIa”); 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 (“Maintenance Regulation”); 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”); and Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (“Rome II”). See also R. GARNETT, Substance and Procedure in Private International Law, Oxford 2012, p. 67-68; P. BEAUMONT/ M. DANOV, The EU Civil Justice Framework and Private 1

58

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications Treaty on the Functioning of the European Union (TFEU) enabled the EU and its Member States to adopt a number of EU PIL legislative instruments with a view to advancing a level of “judicial cooperation in civil matters having cross-border implications.”5 For example, certain EU regulations (e.g. Brussels Ia, Brussels IIa, Maintenance Regulation) were set to allocate jurisdiction among EU Member States’ courts and facilitate the enforcement of EU Member States’ court judgments within the EU. Other EU legislative instruments (e.g. Rome I, Rome II) were put in place to ascertain the applicable law in cross-border civil and commercial cases. Furthermore, Regulation (EC) No 1393/2007 (Service Regulation) was introduced “to improve and expedite the transmission of judicial and extrajudicial documents in civil or commercial matters for service between the Member States.”6 This resulted in the creation of an EU judicial area where legal practitioners – benefitting from mutual recognition of professional qualifications – are freely providing legal services. The wide bases for jurisdiction under the EU PIL rules7 suggest that alternative fora are available for sophisticated and strategic parties (with access to finance). The EU model for administration of justice provided the possibility for claimants to choose where to bring their cross-border (family; civil and commercial) claims. This is an important aspect because different legal entities may be exercising economic activities in several jurisdictions which are located within the EU internal market. Parties to such transactions need to take strategic decisions where/whether to issue private proceedings arising out of their cross-border economic activities within the EU. The place of litigation would often depend on the parties’ perceptions about such attributes of their claims as: the value of the legal remedy (that could often depend on the applicable substantive law) to which they believe are entitled; litigation costs, including parties’ access to finance; procedural rules; reputation of the relevant legal system; experience of legal practitioners (broadly defined to cover judges and lawyers) in dealing with a particular set of disputes; speed in achieving the desired result (which would be pre-determined by the place of litigation as ascertained by the relevant jurisdictional rules).8 In other words,

Law: Integration through [Private International] Law, 22 Maastricht J. of European and Comp. L. 2015, p. 706. 5 Art. 81(1) TFEU. 6 Recital 2 of Regulation (EC) No 1393/2007 of the European Parliament and of the Council on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters. 7 See the long-lasting jurisdictional battles: Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents) [2019] UKSC 20; Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191; The LCD Appeals [2018] EWCA Civ 220. 8 P. BEAUMONT et al., Great Britain, in P. BEAUMONT/ M. DANOV/ K. TRIMMINGS/ B. YUKSEL (eds), Cross-Border Litigation in Europe, Oxford 2017, p. 79-124. See also E. LEIN et al., Factors Influencing International Litigants Decisions to Bring Commercial Claims to the London Based Courts, available at: https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/396343/factors-influencing-international-litigants-with

Yearbook of Private International Law, Volume 21 (2019/2020)

59

Mihail Danov offering a choice for private parties to decide where to bring their cross-border claims (whilst ensuring that the rendered judgments will be enforced within the EU) is an important governance feature of the EU PIL framework. It is well established the EU PIL regime promoted a level of adjudicatory competition which was driven by the law firms. Lawyers from different international law firms offering cross-border litigation services within the EU internal market may compete by promoting their own jurisdictions as venues of choice for high value private law claims.9 The fact that London is a global business/financial centre taken together with the high quality of the UK judiciary (and legal profession),10 which have traditions in resolving cross-border civil and commercial disputes, enabled England and Wales to establish itself as one of the leading jurisdictions in the EU (facilitating parties’ access to effective legal remedies in high value complex cross-border cases within the EU internal market and beyond it).11 Indeed, it is now well established that “London is a global centre for commercial disputes. Over eighty per cent of commercial cases handled by London law firms now involve an international party.”12 In other words, the courts in London are widely perceived as a major venue for the resolution of complex civil and commercial disputes with an international element. This has increased the influence of the English and Welsh courts as well as of the English law firms which have acquired enormous experience of dealing with cross-border disputes that might often involve multiple parties (as claimants and/or defendants). The UK decision to leave the European Union poses the following questions: “What would happen if”13 the regulatory framework for cross-border trade/ services as well as the legal framework for judicial cooperation between the UK and EU were to change in the post-Brexit era? What would be the Brexit implications for private parties’ access to effective legal remedies in cross-border cases? PIL scholars have considered the Brexit options, proposing different policy options -commercial-claims.pdf; The Lord Chief Justice’s Report 2017, available at: https://www. judiciary.gov.uk/wp-content/uploads/2017/09/lcj-report-2017-final.pdf. 9 See more M. DANOV/ P. BEAUMONT (note 3). 10 E. LEIN et al. (note 8). 11 TheCityUK, The Impact of Brexit on the UK-Based Legal Sector – December 2016 – Appendix 3, available at: https://www.thecityuk.com/assets/2016/Reports-PDF/Theimpact-of-Brexit-on-the-UK-based-legal-services-sector.pdf; TheCityUK, Legal Excellence, internationally renowned: UK legal services 2017 23 Nov 2017, available at: https://www. thecityuk.com/assets/2017/Reports-PDF/Legal-excellence-internationally-renowned-Legalservices-2017.pdf. See also P. BEAUMONT et al. (note 8); E. LEIN et al. (note 8). 12 Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals, Transforming Our Justice System, September 2016, available at: https://www.judiciary. gov.uk/wp-content/uploads/2016/09/narrative.pdf 11. 13 Mr George Peretz’s response to Q4226 – Oral evidence: submitted to the Exiting the European Union Committee – 15 May 2019, The progress of the UK’s negotiations on EU withdrawal, HC 372, available at http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/exiting-the-european-union-committee/the-progress-ofthe-uks-negotiations-on-eu-withdrawal/oral/102216.html.

60

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications (largely similar to the current EU PIL regime).14 A major omission in the relevant analysis of the proposed models for judicial cooperation is that the parties’ access to effective legal remedies in cross-border cases has only a secondary role to the regulatory framework for cross-border trade and services that facilitates transnational economic activities (broadly defined to cover the free movement of workers) within the EU internal market. For example, in analysing the various post-Brexit models, Professor Tang considered “five potential models, i.e. the transposition model, multilateral model, bilateral model, unilateral model and international model”15 for judicial cooperation in the post-Brexit era. However, Professor Tang’s article falls short of analysing how the proposed model/s for judicial cooperation would interrelate with the chosen model for the UK/EU trade relationship (because the UK and EU policymakers are yet to finalise the regulatory framework for cross-border trade and services in post-Brexit era). It is difficult to see how the long-term policy options for private international law could be thoroughly analysed and ascertained, without knowing what the post-Brexit trade relations are going to be. This is a significant gap in the analysis in so far as the political risk/s (which could impact on the UK/EU trade arrangements) may be regarded as the main source of uncertainty for businesses. The point was made by George Peretz QC in front of the UK House of Commons’ Exiting the European Union Committee where he stated: “it is important, when thinking about the EEA, to understand that it will be a comparative exercise in the end, rather than an absolute one. You have to measure that model against other models that may or may not be available. In any regime where we are in level playing field territory and dynamic alignment, the UK will be the smaller party vis-à-vis the EU. The EU is bigger and has legal difficulties of its own in agreeing ever to be influenced by a third country because of the principle of autonomy of EU law. In any model of dynamic alignment aligning to the single market, whatever that means, whatever one is thinking of, there will be a relationship where the UK is reacting to EU developments and under some form of obligation to follow, which may be qualified and limited in various ways. The question one has to ask is whether that model that one comes up with is better or worse than the EEA model. In the end, that is a political question, but that is the right question to ask, rather than whether the EEA will turn the UK into a rule-taker.” 16

14 A. DICKINSON, Back to the future: the UK’s EU exit and the conflict of laws, 12 Journal of Private International Law 2016, p. 195-210; G RÜHL, Judicial cooperation in civil and commercial matters after Brexit: which way forward?, ICLQ 2018, p. 99; S. TANG, UK-EU civil judicial cooperation after Brexit: five models, EL Rev. 2018, p. 648. A more detailed review of relevant literature is made in M. DANOV, Cross-Border Litigation: Evaluating the Brexit impact – A Socio-Legal Model for Data Analysis, Maastricht J. of European and Comp. L. 2020 p. 199 at 206 et seq. 15 S. TANG (note 14), p. 651. 16 Mr George Peretz’s response to Q4226 (note 13).

Yearbook of Private International Law, Volume 21 (2019/2020)

61

Mihail Danov Therefore, deciding on the appropriate regime for judicial cooperation in the postBrexit era is a very complex task. The policy options for the UK/EU PIL framework could only be meaningfully analysed after the EU and UK have agreed upon their preferred regulatory regime for cross-border business activities – reflecting inter alia far-reaching and broader policy objectives concerning the regulatory framework for cross-border trade and services (including competition law) as well as the free movement of workers.17 Although the prevailing view is that the “UK will not become a tax haven after Brexit,”18 there is a level of political uncertainty which appears to impact on the decision-making processes that are central to various cross-border economic activities. The various and wider economic and political interests – which may impact on any country’s decision in relation to judicial cooperation – strongly indicate that Brexit could affect the legal landscape in relation to PIL. This could potentially have a significant impact on litigants’ strategies and – in turn – on parties’ access to effective remedies in cross-border civil and commercial disputes. There could be real issues in disputes arising out of the existing supply chains. The matter is important and the New Political Declaration concerning the future UK/EU relationship appears to signify that: “The Parties recognise that they have a particularly important trading and investment relationship, reflecting more than 45 years of economic integration during the United Kingdom’s membership of the Union, the sizes of the two economies and their geographic proximity, which have led to complex and integrated supply chains.”19 The fact that the UK and EU appear to acknowledge that they both have a common interest20 in maintaining the existing supply chains is a strong indication that the relevant regulatory framework concerning trade will be thoroughly negotiated21 as part of an appropriate Free Trade Agreement.22 The point was clearly reflected in the UK23 and EU24 negotiating positions. But, what would be the appropriate level A. MORAVCSIK, Preferences, Power and Institutions in 21st-century Europe, Journal of Common Market Studies 2018, at 1648. 18 Sky News, UK will not become a tax haven after Brexit, Philip Hammond say, available at http://news.sky.com/story/uk-will-not-be-tax-haven-after-brexit-hammond-says10968530. 19 HM Government, Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom, published 19 October 2020 [20]. 20 A. MORAVCSIK (note 17). 21 Ibid., at 1649. 22 Ibid. 23 HM Government, “The Future Relationship with the EU: The UK’s Approach to Negotiations” CP211 – February 2020. See also The UK Draft of the UK-EU Comprehensive Free Trade Agreement (CFTA) https://www.gov.uk/government/ publications/our-approach-to-the-future-relationship-with-the-eu. 24 Council of the European Union, Annex to Council Decision authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for 17

62

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications of judicial cooperation in civil and commercial matters? The UK suggestion is for the UK policy-makers to: “continu[e] to work together with the EU in the area of civil judicial cooperation through multilateral precedents set by the Hague Conference on Private International Law and through the UK’s accession as an independent contracting party to the Lugano Convention 2007.”25 Whilst a level of judicial cooperation within the Hague Conference’s framework is an appropriate policy choice for the UK to pursue post-Brexit, the UK’s accession to the Lugano Convention – without being a party to the European Free Trade Association (“EFTA”) – would require “the unanimous agreement of the Contracting Parties”.26 Would the EU give the necessary consent? The response to this question would be central to the UK’s accession to the Lugano Convention. However, there could – in theory – be a major obstacle for such a consent to be granted by the EU. The issue is that the Lugano regime is set to strengthen the “links between [the Contracting Parties], which have been sanctioned in the economic field by the free trade agreements concluded between the European Community and certain States members of the European Free Trade Association.”27 But – by definition – Brexit may weaken the current economic and legal ties between the UK and EU.28 Thus, there may be real difficulties to ascertain the appropriate solutions which are necessary with a view to facilitating private parties’ access to effective legal remedies in disputes arising out of the existing cross-border supply chains in the post-Brexit era. The relevant political processes should be thoroughly factored in, not least because the European project appears to be facing a mass wave of national populism.29 Some political scientists submit that Brexit inter alia represents people’s revolt against “neoliberal globalized economics”.30 There is a view that policymakers should consider: “the way in which neoliberal globalized has stoked strong feelings of what psychologists call relative deprivation as a result of rising inequalities of income and wealth in the West and a loss of faith in a better future. […] This profound sense of loss is intimately entwined a new partnership agreement (“Negotiating Directives”) Brussels, 25 February 2020. See also The EU Draft Text of the Agreement on the New Partnership with the United Kingdom UKTF (2020) 14 – 18 March 2020. 25 Ibid. [64]. See also Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter Lugano Convention) O.J.E.V. 21.12.2007, L393/3. 26 Article 72(3) of the Lugano Convention. 27 See the Preamble of the Lugano Convention. 28 The UK’s Approach to Negotiations (note 23), [6-8]. 29 R. EATWELL/ M. GOODWIN, National Populism: The Revolt Against Liberal Democracy, Penguin UK, 2018. 30 Ibid, at xxii.

Yearbook of Private International Law, Volume 21 (2019/2020)

63

Mihail Danov with the way in which people think through issues like immigration and identity.”31 Such political processes might explain the impetus of the former UK Prime Minister to conduct the Brexit negotiations by setting out specified red lines.32 Any compromise on the advanced red lines appeared to raise the risks about the approval of the Withdrawal Agreement by the members of the UK Parliament. More importantly, the UK election results from the EU Parliament Elections as well as from UK General Elections in 2019 appear to reflect wider public interests which may, in turn, impact on the regulatory framework for cross-border trade and services in the post-Brexit era. Indeed, the fact that the Brexit Party won most of the votes in May 201933 and the categorical win for the Conservative Party in December 2019 strongly indicate that the UK “will not agree to any obligations for [UK] laws to be aligned with the EU’s, or for the EU's institutions, including the Court of Justice, to have any jurisdiction in the UK.”34 In view of the foregoing, the EU might be reluctant to give its consent for the UK to join the Lugano Convention. This might be deduced from the fact that the Council of the European Union has recently approved the EU negotiating directives, without conferring any mandate on the European Commission to negotiate in such an important area as the judicial cooperation in civil and commercial matters. An analysis of the relevant the EU negotiating directives strongly indicates that the EU position was carefully thought through. The European Commission has a mandate to “explore options for enhanced judicial cooperation in matrimonial, parental responsibility and other related matters”35 as well as to “provide for close law enforcement and judicial cooperation in criminal matters”.36 But, the EU policy-makers appear to have deliberately decided not to confer a negotiating mandate for a continuous judicial cooperation in civil and commercial matters post-Brexit. Hence, agreeing/acceding to a multilateral regime for judicial cooperation is, to a large extent, a political decision to be reached by the Contracting Parties. The EU position, as it stands at present, may be seen as an indication that it is possible for the UK to no longer have access to the EU institutional framework for judicial cooperation in cross-border civil and commercial cases arising in the EU Ibid. A. BARKER/ G. PARKER, Theresa May straddles her red lines in search of Brexit deal, Financial Times – 14 October 2018, available at: https://www.ft.com/content/ 52e20306-cfa3-11e8-a9f2-7574db66bcd5. 33 R. SHRIMSLEY, The forces of Brexit compromise lose in the European elections: Both Labour and the Conservatives will now find themselves at the mercy of hardliners, Financial Times – 27 May 2019, available at: https://www.ft.com/content/575bf094-805211e9-9935-ad75bb96c849; BBC News, European elections 2019: Brexit Party dominates as Tories and Labour suffer – 27 May 2019, available at: https://www.bbc.co.uk/news/ukpolitics-48417228. 34 The UK’s Approach to Negotiations (note 23), at [5]. 35 Negotiating Directives (note 24), at [59]. 36 Ibid., at [117-8]. 31 32

64

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications context.37 A governance perspective in analysing the relevant policy choices in relation to PIL would be much needed, not least because – historically – PIL forms part of each country’s legal order, with every jurisdiction having its own (potentially different) set of PIL rules (which are used to allocate jurisdiction and ascertain applicable law, and facilitate the recognition and enforcement of foreign judgments). In other words, Brexit means that an alternative framework for international cooperation38 in cross-border civil and commercial cases must be considered by the UK to replace the existing arrangements which may set the scene for a new framework for global judicial cooperation in the post-Brexit era. In this business and political context, this article is set to demonstrate that a decision concerning the long-term policy choices for judicial cooperation in civil and commercial matters is a complex one which pre-supposes a major empirical study, measuring the Brexit impact on parties’ access to effective legal remedies. As part of such a study, long-term policy options need to be thoroughly considered. The article draws on a pilot study which was conducted from May to September 2018. The purpose of the pilot study was to measure the expected initial impact of Brexit on parties’ strategies which will in turn have a bearing on the litigants’ access to legal remedies (as well as on settlement dynamics) in cross-border disputes. The project was designed to consider the aspects of the current PIL framework which – if changed post-Brexit – could have an impact on parties’ access to legal remedies. The advanced paradigm is set to reflect the fact that the outcome39 of the cross-border dispute would depend on the procedure (i.e. provisions allocating jurisdiction indicating inter alia whether the rendered judgments will be recognised and enforced abroad) and substantive laws (i.e. choice-of-law rules) which will be shaping litigants strategies. Therefore, since the issues concerning the methodology for an appropriate Brexit impact assessment are indeed numerous, a relevant socio-legal model is needed.40

II.

Research Methodology

41

The important role that PIL plays for the effective resolution of disputes with an international element is reflected in the advanced theoretical model which is set to be used to determine the Brexit impact on access to legal remedies in cross-border Art. 81 TFEU. Compare: MORAVCSIK (note 17), at 1649. 39 H. GENN, Understanding Civil Justice, Current Legal Problems 1997, p. 155. 40 See Figure 1 – Triangular relationship (jurisdiction – choice of law – legal remedy) and litigants’ strategies in M. DANOV, Cross-Border Litigation in England and Wales: Pre-Brexit Data and Post-Brexit Implications, Maastricht J. of European and Comp. L. 2018, p. 139-167, at 147, as well as M. DANOV/ P. BEAUMONT (note 3) and M. DANOV (note 14). 41 See more M. DANOV (note 14), at 211-5. 37 38

Yearbook of Private International Law, Volume 21 (2019/2020)

65

Mihail Danov cases. More specifically, the proposed socio-legal model42 is developed around the litigants’ strategies which are defined as directing the litigation (settlement) result that is desired by the party devising it.43 In other words, parties will be devising their strategies, considering the relevant legal landscape and attributes of the claim with a view to attaining an appropriate and desirable legal remedy44 in cross-border cases.45 Since the opposing parties will seek to attain dissimilar legal remedies (whilst holding clashing views as to what their entitlement/liability is), the model is set to consider the interplay between different strategies which claimants and defendants devise in individual cases.46 As part of this process, it is important to analyse the dynamics of a triangular relationship47 that will be formed by three key variables which would shape the litigants’ strategies in cross-border cases: jurisdictional rules (which predetermine the applicable procedures, including evidential rules); applicable laws (ascertaining the parties’ entitlement to legal remedies); private parties’ access to remedies (final judgment/settlement, materialising the outcome). In order to analyse the triangular relationship systematically, two major correlations need to be considered. First, it is necessary to consider how the relevant PIL framework shapes the litigants’ strategies (factoring in various broader attributes – e.g. types of parties (individuals, SMEs, multinational companies), desired remedy, including the value of the claim; facts of the cases; relevant substantive laws; costs, including access to finance and exposure to costs). Second, it is equally important to consider whether the (so devised) parties’ strategies are facilitating or impeding their opponents’ access to legal remedies. In this context, the specific aspects of the legal landscape in relation to PIL (e.g. Brussels Ia or IIa) and the broader attributes of a particular claim (e.g. value, types of parties, costs, access to finance) would need to be considered. In theory, any change in the legal landscape in relation to private international law – in so far as it shapes the litigants’ strategies in cross-border cases – may have significant implications for the parties’ access to appropriate legal remedies. Hence, a reasonable working hypothesis is that any fresh legal uncertainty/ ambiguity attributed to Brexit would be exploited by strategic parties (in order to adversely affect their opponents’ expectations about the outcome of litigation). The nil hypothesis is that there will be no change in the litigation strategies (and private parties’ access to legal remedies). To test this hypothesis as well as to test the advanced socio-legal model, empirical data was gathered through: 1) self-compleM. DANOV (note 40). Compare: M. SHUBIK, Game theory and the study of social behaviour: an introductory exposition, in M. SHUBIK (ed), Game Theory and Related Approaches to Social Behaviour, Wiley, New York 1964, p. 1, 13; L.M. LOPUCKI/ W.O. WEYRAUCH, A Theory of Legal Strategy, Duke L. J. 2000, at 1411. 44 H. GENN (note 39), at 173. 45 P. BEAUMONT/ M. DANOV/ K. TRIMMINGS/ B. YUKSEL, Cross-border Litigation in Europe: Some Theoretical Issues and Some Practical Challenges (note 8), p. 824-831. 46 M. DANOV (note 14), at 212-3; M. DANOV (note 40). 47 The various cost implications need to be duly considered in this context. See Lord Chancellor et al. (note 12), at 11. 42 43

66

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications tion survey questionnaires (which were sent to the heads of litigation departments and family law within sampled law firms; 2) semi-structured interviews (which were conducted with legal practitioners in England and Wales). The primary quantitative data (from the self-completion survey) provides information about the statics of the cross-border litigation pattern (e.g. volume change; type of cases). The quantitative data was gathered from the litigation departments and/or the family law units within the sampled law firms. The list of the relevant law firms for the quantitative survey was drawn, in April 2018, from the Legal 500 and Chambers & Partners. In family law, the list included eighty two (82) family law firms. They were all approached. Fourteen (14) responses were received back, with the response rate being approximately 17%. In commercial law, a list of one hundred forty four (144) was drawn. Twenty eight (28) responses were received which amounted to a response rate of 19.44%. It should be noted that the quantitative data was very difficult to obtain because many law firms do not record the information which was needed. Indeed, the response rate was disappointing, but – since nearly all respondents appear to indicate that the litigation pattern is broadly similar to the one before the Brexit vote – the collected data should suggest that, statistically, there is hardly much of a change at this stage. Methodologically, the difficulties in obtaining quantitative data may be regarded as an indication that the qualitative data should be more revealing about any Brexit implications in the first instance. Indeed, any Brexit impact would not necessarily be statistically verifiable for a few years after Brexit had actually materialised. The qualitative element of the pilot study was particularly important because, given the high number of settlements48 (inter alia suggesting that there is a high level of privatisation49 of justice) in cross-border cases, any theoretical model which does not factor in the relationship between PIL and ADR/settlement negotiations50 in England and Wales is bound to be incomplete. The primary qualitative data (from the semi-structured interviews) provided information about the parties’ strategies (i.e. the dynamics of the cross-border litigation pattern). The views of the legal practitioners were much needed. The sampling framework, which was drawn for the EUPILLAR project,51 was adjusted to reflect the pilot nature of the study. It should be noted that, given the pilot nature of the study and the fact that the legislative framework has not changed yet – the judges were excluded from the sampling framework. The names of the actively practicing barristers was drawn from the judgments rendered in the EU PIL cases,

48 The Right Honorable the Lord Woolf, Access to Justice – Final Report to the Lord Chancellor on the Civil Justice System in England and Wales (HMSO, 1996). 49 H. GENN, Why the privatisation of justice is a rule of law issue, 36th F.A. Mann Lecture – Lincoln’s Inn, 19 November 2012, available at: www.laws.ucl.ac.uk/wp-content/ uploads/2014/08/36th-F-A-Mann-Lecture-19.11.12-Professor-Hazel-Genn.pdf. 50 M. DANOV/ S. BARIATTI, The Relationship between Litigation and ADR: Evaluating the Effect of the EU PIL Framework on ADR/Settlements in Cross-Border Cases, (note 8), p. 689-707. 51 P. BEAUMONT et al. (note 7).

Yearbook of Private International Law, Volume 21 (2019/2020)

67

Mihail Danov as identified for the EUPILLAR databases.52 The list with names of solicitors was drawn to include the names of the leading individuals listed on the Legal 500 and Chambers and Partners. The solicitors’ lists intended to represent both London lawyers and those working elsewhere in England and Wales by adding names of solicitors from regional law firms and branches of large law firms. After any duplicates were eliminated and the lists were updated to reflect any changes in the status of legal practitioners, the sampling framework included: 393 barristers (civil and commercial law); 217 barristers (family law); 457 solicitors (specialising in commercial law) and 396 solicitors (specialising in family law). The potential interview respondents were randomly selected from each category, and invited to take part in the pilot study. (If one of the selected potential participants nominated their colleague as being better placed and willing to be interviewed, then the interview was conducted with the relevant nominee.) There were 15 interview respondents – 7 family law practitioners (4 barristers from London, including 1 QC; and 3 solicitors – 1 from London and 2 from regional law firms); 8 civil and commercial law practitioners (3 barristers from London, including 1 QC; 5 solicitors – 3 from London, 2 from regional law firms). The collected data was organised to capture the correlation PIL rules (and potential changes in this respect) – litigants’ strategies – access to remedies, trying to identify the relevant Brexit implications (considering the level of speculation/ uncertainty). There are three distinct stages of the litigation process which need to be analysed with a view to considering the Brexit implications for the correlation between any (actual and/or potential) changes in the UK legal landscape and parties’ strategies in disputes with an international element in England and Wales. More specifically, quantitative and qualitative data was gathered about three distinct, but closely interrelated stages: 1) pre-action conduct of the parties broadly defined to cover forum-selection process;53 2) strategies of the parties after the claim has been issued; 3) strategies of the parties related to the recognition and enforcement of an English and Welsh judgment in the EU Member States and beyond. There are two caveats which should be made. First, many of the litigators in England and Wales would have a broad client base acting on cases which would involve parties from across the globe. Although the business activities of the respondents’ clients (which may be groups of companies) would be international, the respondents were not expected “to ascertain whether particular corporations, for whom [they] act, are necessarily domiciled in the UK.”54 Hence, any Brexit implications should not be overstated. Secondly, given the fact that Brexit had not materialised at the time when the pilot study was conducted (i.e. the summer of 2018), the collected data was largely related to actual/potential pre-action strategies of the parties to minimise the Brexit related uncertainties and potential litigants’ strategies which might be devised to exploit any fresh uncertainty. In other words, it should be acknowledged The EUPILLAR Database, established and maintained by the University of Aberdeen, available at: https://w3.abdn.ac.uk/clsm/eupillar/#/home. 53 Compare: Civil Procedure Rules: Practice Direction – Pre-Action Conduct and Protocols. 54 Interview Transcript No 14, at 1. 52

68

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications that the Brexit’s potential impact is difficult to be ascertained at this stage, and the collected data has its limitations. Also, by definition, Brexit might not have much of a direct impact for litigants’ strategies in cases which involve UK and non-EU parties with regard to non-EU relationships between the litigants.

III. Brexit and Forum Selection As already noted above, English and Welsh courts have traditionally been attracting a significant volume of complex disputes with an international element. In order to identify any post-Brexit changes which may impede/facilitate private parties’ access to legal remedies, the correlation between the legal landscape in relation to PIL and the litigants’ strategies in cross-border cases needs to be considered. The prevailing assumption among interview respondents appeared to be that the legal landscape will, in the short term, remain broadly similar to the one we have. As one interview respondent put it, “the old cliché that people tend to overestimate the immediate effect and underestimate the long-term effect entirely applies here.”55 The quantitative data from the self-completion surveys reinforces the impression that the short-term Brexit impact on the attractiveness of London as a litigation venue is likely to be insignificant. In family law cases, 100% of our respondents appear to state that they have observed a broadly similar pattern when comparing the volume and type of their cases with the ones in the period before the Brexit vote. Similarly, in civil and commercial law cases, approximately 92% of the survey respondents do suggest that they are dealing with a broadly similar volume and type of case as they used to deal with before the Brexit vote. Only on one occasion, it was recorded that the respondent law firm was dealing with slightly less cases (1-2 cases) in comparison to the pre-Brexit vote period, with the data missing on another occasion. There is a strong case that Brexit could hardly have any statistically significant and immediate impact on the number of crossborder cases before the English and Welsh courts. This is bound to be so, not least because many of the relevant disputes relate to cross-border relations and/or transactions which had occurred a while ago. That said, Brexit might potentially trigger processes concerning the development of the dispute resolution mechanisms in a global context. Governing these process is central to facilitating private parties’ access to appropriate legal remedies with a view to enhancing the appropriateness/attractiveness of the English and Welsh courts. To this end, the long term policy options must be carefully considered in the light of the relevant data which is properly organised and analysed. The point concerning the potential long-term impact was put forward by one interview respondent who submitted: “It will be very interesting, I would say, to have this conversation in three years’ time and in 13 years’ time. And I am fascinated the extent to which the conversation will be different.”56 A number of 55 56

CH. BURDETT, Interview Transcript No 11, at 3. Ibid, at 24.

Yearbook of Private International Law, Volume 21 (2019/2020)

69

Mihail Danov appropriately planned qualitative studies should enable researchers to systematically identify and address the risks concerning access to legal remedies which might adversely affect the parties’ desire to litigate in England and the appropriateness of the English and Welsh courts to deal with various categories of crossborder cases. The pilot study shows that an analysis of the litigation strategies which aims to consider the Brexit impact on parties’ strategic decisions to issue proceedings in England and Wales needs to take account of the following questions: Is it the procedural or substantive law which is the major attraction for some parties (e.g. those having bargaining power)? Or is it rather the fairness and robustness of the outcome (which is a function of the application of both procedure rules and substantive law in individual cases) that is the major attraction for some sophisticate parties who might prefer to litigate in England and Wales? Would Brexit have (any positive or negative) impact on the parties’ willingness/desire to litigate in England and Wales? In the pre-Brexit era, the BIICL study57 and EUPILLAR project58 appeared to suggest that the relevant aspects, which could impact on the parties’ decisions to sue in England and Wales rather than elsewhere, include: experience of judges; procedural and evidential rules; value of the desired remedy; cost and costrecovery rules; length of proceedings.59 However, in order to inform policy choices in a post-Brexit context, a detailed analysis of the interrelations between the identified factors is necessary. It is important to consider how the identified factors interrelate with each other in individual cases in different jurisdictions (considering the relevant claims’ attributes which would inter alia include: value of desired remedy; parties’ access to finance; applicable regulatory regimes). In other words, relevant data needs to be gathered from other EU Member States (i.e. some competing jurisdictions). The collected data should indicate whether any Brexitdriven changes in the English and Welsh legal landscape in relation to PIL would diminish/enhance the attractiveness of the courts in London, whilst increasing/ lowering the level of the attractiveness of the other EU Member States. The pilot study appears to demonstrate that Brexit has intensified a level of adjudicatory competition between the various fora (broadly defined to include arbitration) within the EU. This appears to be an issue in civil and commercial cases which was recurrently re-appearing in interviews with legal practitioners from London and regional law firms. This is so despite the fact that it is beyond any doubt that the ability of judges to deal with cross-border cases is an important factor in the forum selection process. Indeed, as an interview respondent noted, it is widely accepted that: “it is the independence and quality of the judiciary[;] that is the most important factor – you cannot buy a judge in England and Wales.”60 It is a safe assumption that this will remain to be the case in the years to come, so that Brexit is highly unlikely to make any impact in this respect.

E. LEIN et al. (note 8), at 15. P. BEAUMONT et al. (note 8). 59 E. LEIN et al. (note 8), at 15. See also P. BEAUMONT et al. (note 8). 60 D. HONEY, Interview Transcript No 6, at 9. 57 58

70

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications Nonetheless, Brexit appears to be having another initial impact on the preaction conduct of the potential litigants. The qualitative data from the pilot study strongly suggests that the post-Brexit risks – concerning the recognition and enforcement of English and Welsh judgments – may be regarded as a major reason, which prompts more parties to include arbitration clauses (rather than jurisdiction clauses) into their contracts with parties based in the EU. It was noted that: “Where [Brexit] has had the most impact has been at the contractual drafting stage. So Brexit has allowed people the opportunity to speculate on the effectiveness of English jurisdiction and governing law clauses. I think, as a firm, and in fact as an industry in London, we are fairly comfortable with the answer to those kind of questions and that speculation. But, there are a lot of vested interests: and so it gives arbitration lawyers the opportunity to say, “Well, you know, maybe you should think about an arbitration clause”; and Dutch lawyers to say, “Well, maybe you should think about Dutch law and some of our international courts.” So clients are being pulled in different directions. And, they are asking questions about it. But, I do not think it has had an effect on actual behaviour in disputes so far.”61 It seems that one consequence of the Brexit vote is that some legal practitioners from England and Wales are increasingly advising their clients, who “are dealing with very long-term arrangements and [their] assets are in Europe, [that it is] probably safer to go for arbitration because we know what is going to happen with arbitration; we do not know what is going to happen with court judgments.”62 Therefore, in order to minimise any Brexit uncertainty, parties’ strategies would reflect the effect, which any actual and/or potential change in the legal landscape in relation to PIL would have on their access to legal remedies in cross-border cases. The management of the relevant risks might entail inclusion of appropriate choice of court agreements (and choice of law agreements) which might have a long-term (rather than short-term) impact on the attractiveness and – in turn – on the global influence of the commercial courts in London. Although the UK policy-makers appear to have now addressed this issue (trying to minimise the impact) by acceding to the Hague Choice of Court Agreement Convention (which would potentially be a solution to the problem in cases where there are contractual disputes), there might not be enough practice on this in the first instance (and the solicitors might be somewhat guarded in recommending it initially). Moreover, the pilot study indicates that – even though the arbitration is perceived as a viable option to minimise any Brexit-driven litigation risks (with Articles II and V of the New Convention – dealing with the problems concerning parallel proceedings and the recognition and enforcement of arbitral awards), there could be real issues for SMEs.

61 62

Interview Transcript No 5, at 2-3. L. GLEGG, Interview Transcript No 1, at 4, 19, 23.

Yearbook of Private International Law, Volume 21 (2019/2020)

71

Mihail Danov Access to effective legal remedies might be more of an issue for SMEs. There appear to be two major reasons. First, an important point – which came through in the course of the interviews – is that arbitration can be costly for some parties. This might adversely affect the accessibility to arbitral proceedings for some classes of parties and SMEs in particular. One interview respondent noted: “People complain about the cost of litigation. Arbitration is, in my experience, even more expensive. From an SME point of view, it is not really a hugely attractive option.” 63 Secondly, the political risks concerning the change in the regulatory landscape for cross-border trade and services might impact on the SMEs’ business activities which may make them more willing to minimise their litigation costs. The same respondent – who deals primarily with SMEs – noted: “parties are more cautious about spending money on litigation, perhaps, because they do not know what the consequences of Brexit are going to be. Not just in terms of litigation, but in terms of their business generally.”64 There is a strong case that the Brexit impact on businesses (e.g. large – multinational companies; small – SMEs) might be different. The point could be strengthened by making a reference to an open letter,65 in which the Confederation of British Industry (“CBI”) appeared to indicate that small and medium-sized enterprises (“SME”) are most vulnerable by the existing level of political uncertainty. In particular, the CBI Director-General, Carolyn Fairbairn, stated: “Firms large and small are clear that leaving the EU with a deal is the best way forward. Short-term disruption and long-term damage to British competitiveness will be severe if we leave without one. The vast majority of firms can never be prepared for no-deal, particularly our SME members who cannot afford complex and costly contingency plans.”66 The CBI’s open letter signifies that various wider economic interests may be impacting on businesses’ strategic decisions and their long-term strategies. More importantly, the letter strongly indicates that a modified trade pattern may impact differently on SMEs and multinational companies. By analogy, there is a strong case that Brexit may impact differently on the litigation strategies of the various parties (SMEs, multinational companies, individuals) as well as on their access to effective legal remedies in cross-border disputes arising out of the existing panEuropean supply chains. Since SMEs (as opposed to sophisticated big companies with access to finance) would be less mobile and reluctant to litigate abroad, their access to legal remedies in cross-border cases might be limited post-Brexit. The S. INGLIS, Interview Transcript No 15, at 20. Ibid, at 14. 65 C. FAIRBAIRN, Champion business – Open letter from CBI to all Conservative Party Leadership candidates, 30 May 2019, available at: https://www.cbi.org.uk/media-centre/articles/champion-business-open-letter-from-cbi-to-all-conservative-party-leadershipcandidates. 66 Ibid. 63 64

72

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications issues are important, not least because such SMEs might be part of long supply chains which were promoted by the free movement of goods and services within the EU internal market. Admittedly, access to legal remedies in cross-border cases might be less of an issue for sophisticated multinational companies which may have various other options (e.g. arbitration; litigation elsewhere). But, there would be another issue for UK policy-makers to consider. Such multinational companies will have access to finance and appropriate legal advice, so that they can afford to be very selective when deciding where to resolve their cross-border disputes. This means that they might strategically decide to litigate elsewhere. In view of this, it should be reiterated that, as already noted above, the qualitative data appears to demonstrate that Brexit has intensified the level of adjudicatory competition between the courts in London and the leading national courts in some of the other EU Member States. Although this is a process which – one should say – had started in the pre-Brexit era67 in so far as a level of adjudicatory jurisdiction had been promoted by the Brussels I/Ia framework,68 the Brexit uncertainty has possibly added another dimension to the process of adjudicatory competition within the EU. It appears that London’s competitors may be more openly questioning the attractiveness and appropriateness of the English and Welsh courts in a post-Brexit context. The problem has been pointed out by a number of interview respondents,69 with one interview respondent submitting that “[l]aw firms and governments – in particularly Germany, France, Belgium and Holland – see a business opportunity to try and attract some of the legal services market of London to those places.”70 One might go a step further and ask: Could Brexit also be seen by some EU Member States as an opportunity to expand the influence of their national courts (trying to diminish the influence of the English and Welsh courts in certain categories of cross-border disputes, perhaps)? These recent developments pose new challenges to be addressed by the UK policy-makers. A real issue is that both solutions (i.e. Hague Choice-of Court Agreements; and arbitration) to Brexit problems would be available only in contract-based disputes. There may be issues in non-contractual types of disputes (e.g. tortious; regulatory71). Could the newly adopted Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters be an appropriate solution72? Also, could the forum selection process be affected by the parties’ perceptions about such issues as: avoidance of parallel proceedings; swift recognition and enforcement of rendered judgments; the relevant regulatory framework which is to be used to ascertain the rights of the obligations of the parties? See more E. LEIN et al. (note 8); P. BEAUMONT et al. (note 8). M. DANOV (note 40). 69 E.g. Interview Transcripts No 5 and 6. 70 D. HONEY, Interview Transcript No 6, at 2. 71 See Section VI below. 72 Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, available on the website of the Hague Conference on Private International Law, www.hcch.net. 67 68

Yearbook of Private International Law, Volume 21 (2019/2020)

73

Mihail Danov

IV. Parallel Proceedings: Legal Landscape – Parties’ Strategies – Access to Remedies The cross-border trade – by definition – would involve business relationships arising out of supply chains which span across a number of jurisdictions. The increasingly complex nature of cross-border economic activities and the related economic migration of individuals cumulatively indicate that there can be multiple competent courts to deal with disputes arising of such transnational ventures. The importance of the rules, which are meant to avoid parallel court proceedings, could not be questioned in a cross-border context. It is well established that the solutions advanced by the common law and EU PIL, respectively, are based on different principles. Under EU PIL, any court – other than the court which is first seised – should normally stay its proceedings.73 One major exception to this rule concerns cases where there is an exclusive choice-of-court agreement between the parties. In such circumstances, “any court of another Member State shall stay the proceedings until such time as the court seized on the basis of the agreement declares that it has no jurisdiction under the agreement.”74 Under the common law the judges have more discretion when deciding whether to assume jurisdiction. In order for a claim form to be served out of the jurisdiction, the claimant must demonstrate that: one of the grounds of Practice Direction 6B75 is satisfied;76 “the claim has a reasonable prospect of success”;77 “England and Wales is the proper place in which to bring the claim.”78 More importantly, Lord Briggs has very recently reiterated that: “Even if the court concludes […] that a foreign jurisdiction is the proper place in which the case should be tried, the court may nonetheless permit (or refuse to set aside) service of English proceedings on the foreign defendant if satisfied, by cogent evidence, that there is a real risk that substantial justice will not be obtainable in that foreign jurisdiction.”79 Brexit might be an opportunity for the academic community (along with prominent legal practitioners) to consider how the balance between the court-first-seised rule (as developed by the EU PIL regime) and the forum non conveniens doctrine (as it is functioning under the English common law) is to be struck by the UK policymakers in the post-Brexit era. The response to this question matters because it is closely connected with the risks of parallel proceedings which would inflate the See Article 29 of Brussels Ia and Article 19 of Brussels IIa. See Article 31(2) of Brussels Ia. 75 Civil Procedure Rules – Practice Direction 6B. 76 CPR 6.36. 77 CPR 6.37(1)(a). AK Investment CJSC [2011] 4 All ER 1027 [71]. 78 CPR 6.37(3). 79 Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents) [2019] UKSC 20 [88]. 73 74

74

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications litigation costs, adversely affecting parties’ expectations about the outcome of litigation and their access to legal remedies in cross-border cases. There are two policy aspects which need to be considered. On the one hand, in the pre-Brexit era, the court-first-seised rule (which is a characteristic feature for the current EU PIL regime) was often seen as encouraging pre-emptive strikes by potential defendants. For example, such a party might gain a negotiating advantage by issuing proceedings and seeking a negative declaration in a jurisdiction (which may be more or less effectively/efficiently functioning rather another). As a result, the rule was occasionally criticised in the pre-Brexit literature80 for being far too rigid, incentivising parties to be strategic in cases where there is no jurisdiction agreement. On the other hand, the doctrine of forum non conveniens has a discretionary element which – albeit allowing judges to have a greater degree of flexibility by considering a number of factors in deciding on the appropriateness of the English and Welsh courts – brings a level of legal uncertainty/ambiguity which might be exploited by strategic parties. The discretionary element means that some strategic defendants may often get involved in pro-longed jurisdictional battles which may inflate the litigation costs and generate delay,81 potentially impacting on the relevant settlement dynamics. Since the legal practitioners would naturally have a first-hand experience with both court-first-seised and forum non conveniens regimes, the pilot study was inter alia set to find out what the respondents’ feelings and attitude were as to the appropriate way forward. The overwhelming view appeared to be that the legal practitioners are quite comfortable with the way the court-first-seised rule shapes the litigants’ strategies. Although one respondent in particular raised some concerns about how consistently the court-first-seised rule is being applied by some Member States’ courts,82 the overall impression is that the respondents are satisfied with the way the rule is functioning83 in relation to civil and commercial matters. One respondent, who predominantly deals with non-contractual (competition law) claims went further to take the following view: “I probably have a very claimant focused view of this. But, from that perspective, there should be a court first seised rule because – as I say – without that you do not have certainty. It, then, becomes much less appealing to start proceedings in this country. There should be; T. HARTLEY, The European Union and the Systematic Dismantling of the Common Law of Conflict of Laws, ICLQ 2005, p. 813-828; A. BRIGGS, The Impact of Recent Judgments of the European Court on English Procedural Law and Practice, available at: http://papers.ssrn.com. 81 See the recent Vedanta dispute on a preliminary issue of jurisdiction which started on 31 July 2015 – Dominic Liswaniso Lungowe & Others v Vedanta Resources Plc and Konkola Copper Mines Plc [2016] EWHC 975 (TCC); Dominic Liswaniso Lungowe and others v Vedanta Resources Plc and Konkola Copper Mines Plc [2017] EWCA Civ 1528; Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents) [2019] UKSC 20. 82 D. HONEY, Interview Transcript No 6. 83 E.g. Interview Transcripts No 3, at 5, 8, 14. 80

Yearbook of Private International Law, Volume 21 (2019/2020)

75

Mihail Danov as I say, it is claimant friendly – I think it is probably also English legal services friendly. Because if we want these claims to continue being brought here, you need certainty because otherwise claimants will not do it.”84 The pilot study appears to capture two major issues which need to be factored in when re-designing the legal landscape in relation to PIL. First, it seems desirable to have some court-first-seised elements in a workable solution which is set to avoid parallel proceedings in cross-border cases. Because the doctrine of forum non conveniens might incentivise strategic defendants to challenge the jurisdiction of the English and Welsh courts. Any related level of legal uncertainty about the English courts’ competence would, in turn, cause delay and inflate the litigation costs which would impede claimants’ access to legal remedies, adversely affecting the attractiveness of the English and Welsh courts for certain parties which are in position to be selective. Secondly, the pilot study sheds some light which is necessary to better understand and analyse the pre-Brexit data. In particular, in the pre-Brexit era, interview respondents would often note that the court-first-seised rule might occasionally be abused by strategic litigants.85 If someone were to enter into settlement negotiations without seising a court, then there would be a significant risk for such a party to face a pre-emptive strike (e.g. seeking a non-liability declaration86) which could be initiated by their opponent in a different EU Member State to the one in which the party in question intends to litigate in. The pilot study suggest that, despite the fact the court-first-seised rule might be improved by an appropriate mechanism which allows judges to properly handle abusive litigants’ strategies, the legal practitioners dealing with commercial law disputes appear to be content with the court-first-seised rule in principle. This means that any appropriate future solution might need to somehow endeavour to integrate a courtfirst-seised element. The results of the pilot study in relation to the court-first-seised rule are even more interesting in cross-border matrimonial cases. The implications of the court-first-seised rule for disputes arising under Brussels IIa or Maintenance have been significant. The weaknesses of the court-first-seised rule were exposed in S v S.87 In this case, the parties “engage[d] in […] extensive, expensive and futile manoeuvres”88 to seise their desired courts in France and England, respectively. The wife won the jurisdictional battle by seising the English court several hours before the husband seised the French court. When assessing the significance of the court-first-seised rule, one respondent submitted: Interview Transcripts No 8, at 8. P. BEAUMONT et al. (note 8). 86 Cooper Tire & Rubber Company v Shell Chemicals UK Limited [2009] EWHC 2609 (Comm); Cooper Tire & Rubber Company Europe Limited & Others [2010] EWCA Civ 864; McGraw-Hill International (UK) Limited v Deutsche Apotheker – und Arztebank EG, Uniqa Alternative Investments GMBH, Uniqa Capital Markets GMBH, Stichting Ratings Redress, The Royal Bank of Scotland N.V. [2014] EWHC 2436 (Comm). 87 S v S [2014] EWHC 3613 (Fam). 88 Ibid, at [17]. 84 85

76

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications “[Parties] are strategic, and there is one major disadvantage. Which is that, if someone comes into my office and says, ‘I am thinking of getting divorced; I still love my husband or I still love my wife, but I am not sure what to do; I am just taking advice’; and I realise that there is this potential thing – I am going to say: ‘Look, it is not for me to end marriages but – I think – it could make a huge difference if you filed in France immediately. Do not let her file in England because she will get a much better order here.’ What am I doing? I am killing a marriage. I have had that discussion with quite a few people and most of them go the route of filing the petition, and some of them say, ‘I am not going to do that. What do I do to make the marriage better?’ We then discuss that. But most say, ‘You are right.’ […I]t catapults people. We are not comfortable, as divorce lawyers, with that. […] I think it is really good that it is just clear, but I think it is bad that it has this – it is – a completely unintended consequence.”89 It seems clear that court-first-seised rule impacts on parties’ decisions whether to make a marriage works or rather whether to issue in a jurisdiction where it would be more advantageous for their own financial interests. This would be the case in high-value cross-border matrimonial because “the more money there is, the more proportionate it is to argue about things that could make a difference to the outcome”.90 In such disputes, some strategic parties would not enter into out-of-court settlement negotiations before issuing proceedings in an EU Member State.91 This means that, in high value matrimonial disputes with an international element, a strategic party would often first issue court proceedings and only thereafter parties could enter into out-of-court settlement negotiations. Nonetheless, an interesting observation was made: “For us, as divorce lawyers, [the court-first-seised rule] is critical. It is a really big change of law because I have been practicing for about 40 years. When I started, we obviously did not have that at all. And, it was completely different. We had a forum conveniens. So when there were two petitions, it was a forum conveniens decision. Completely different. Now, it is just first past the post. […] You are talking to one of the few people who is lived through both. The court first seised rule, I did not like it when it came because it was just a change. We do not like change, as lawyers. I thought it was harsh in some situations, but – actually – it is not really. It is a

P. COLLIS, Interview Transcript No 2, at 10. A. BULL, Interview Transcript No 12, at 5. 91 M. DANOV/ S. BARIATTI (note 50). 89 90

Yearbook of Private International Law, Volume 21 (2019/2020)

77

Mihail Danov practical way of cutting the argument. You have either got your petition in, or you have not.”92 The pilot study suggests that, whilst the court-first-seised rule – as already noted above – might be improved by providing an appropriate mechanism which national judges could use to deal with abusive litigation strategies,93 a significant proportion of the interview respondents dealing with family law would be content with the court-first-seised rule. It seems that the rule in question might work reasonably well in matrimonial proceedings (which do not concern high value financial remedies) as well as in disputes involving children.94 That said, one interview respondent noted: “If I were able to make a magic wand and change things, I think I would keep the lis alibi pendens rule, but I would amend it. So that the country first seised with the divorce is also to be seised with all other aspects of the financial dealings unless (and to the extent that) both parties unequivocally agree that there should be a different jurisdiction to deal with their financial remedies.”95 It seems that an important issue – which would potentially be impacting on the competence of the English and Welsh courts – concerns how effectively the problem of parallel proceedings is dealt with post-Brexit. At present, the court-firstseised rule is particularly valued as having “the advantage of being positive – a bright line rather than first to the finishing post – forum conveniens type of thing.”96 The pilot study appears to suggest that forum non conveniens might be useful for strategic defendants (and less than useful for claimants) in both crossborder family as well as in cross-border commercial disputes. However, introducing a court-first-seised rule might not be a solution on its own, not least because – as one respondent noted – a level of reciprocity is necessary for a court-first-seised rule to function effectively in cross-border cases: “The trouble with first seised is that it is only really terribly valuable, if the other country you are concerned with operates the same system. If you are operating the first seised and the other country is not, it does not really help you very much.”97 Could forum non conveniens along with anti-suit injunctions be used to deal with the problems concerning parallel proceedings, post-Brexit? A significant proportion of the respondents appear to indicate that this might potentially be a solution in civil and commercial cases. A related consequence, however, is that this will inflate the litigation costs which may potentially have an impact on access to legal remedies in cross-border cases. It seems to this author that, if Brussels Ia (or P. COLLIS, Interview Transcript No 2, at 9. P. BEAUMONT et al. (note 45). 94 E.g. Interview Transcripts No 4, 7 and 9. 95 R. CABEZA, Interview Transcript No 7, at 8. 96 J. TURNER QC, Interview Transcript No 10, at 7. 97 J. TURNER QC, Interview Transcript No 10, at 7. See also: S. TANG (note 14). 92 93

78

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications Lugano) regime were to no longer apply in England and Wales, there could be a risk for some strategic parties to start seeking anti-suit injunctions with a view to frustrating foreign proceedings. A comparative data would be needed to see how the anti-suit injunctions would impact (if at all) on the proceedings in other EU Member States (and attractiveness of their courts). Another related problem – which claimants might need to consider post-Brexit – concerns the aspects related to the service of documents. As one interview respondent noted, “if you are serving – getting out; applying for serve out the jurisdiction; going through diplomatic channels – all that kind of stuff could be a massively helpful thing for defendants.”98 Moreover, there would be particular issues concerning costs which would need to be considered in family law proceedings because a forum non conveniens dispute would presuppose “preliminary hearings to determine the jurisdiction. And, that is going to increase costs for the clients, but also factor in delay.”99 Indeed, the inflexibility of the English PIL to allow English courts to apply foreign law in cross-border matrimonial proceedings means that long-lasting forum non conveniens disputes are likely to ensue in high value disputes before the English courts post-Brexit. There is a strong view suggesting that anti-suit injunctions might not always be an appropriate solution in family law disputes because: “The courts are very loath to issue injunctions preventing people litigating abroad, if they have got a legitimate basis. Certainly, in England, in family law, they will only do it if you are misusing a power. They will not say, ‘Oh, well, we think you should be litigating here; therefore, we will injunct you from proceeding anywhere else.’ I mean, we will not do that, because that would be an improper fetter.”100 This opinion may be strengthened further by powerful comity considerations.101 Therefore, the Brexit developments strongly indicate that, in the context of parallel proceedings, there are several major questions for the UK policy-makers to address: Should there be a court-first-seised rule (and how could this be introduced, if at all) post-Brexit? Or should the common law concept of forum non conveniens be revived (and how)? Or should there be perhaps a new contemporary rule102 to deal with parallel proceedings, post-Brexit. CH. BURDETT, Interview Transcript No 11, at 17. Interview Transcript No 13, at 5. 100 J. TURNER QC, Interview Transcript No 10, at 17. See the view of the U.S. U.S. Court of Appeal in Laker Airways Limited v Sabena 731 F.2d 909 at 938, 954-5 (DC Circuit, 1984). 101 T.C. HARTLEY, Comity and the Use of Antisuit Injunctions in International Litigation, 35 American Journal of Comparative Law 1987, p. 487; L. COLLINS, Comity in Modern Private International Law, in J.J. FAWCETT (ed), Reform and Development of Private International Law: Essays in Honour of Sir Peter North, Oxford 2002, p. 89. 102 Compare: A. ARZANDEH, Should the Spiliada Test Be Revised?, Journal of Private International Law 2014, p. 89-112. 98 99

Yearbook of Private International Law, Volume 21 (2019/2020)

79

Mihail Danov

V.

Recognition and Enforcement: Legal Landscape – Parties’ Strategies – Access to Remedies

Any Brexit-driven risks concerning parallel proceedings need to be considered along with the issues related to the subsequent recognition and enforcement of the rendered judgment.103 A judgment rendered by an English and Welsh court would have a res judicata effect in another jurisdiction only after they had been duly recognised.104 Similarly, a foreign judgment needs to be recognised and enforced in England and Wales. This would be a difficult task under the common law rules. It is well established that the current common law regime is a relatively obstructive one which is largely due to “the English courts’ restrictive interpretation of international jurisdictional competence on the part of the foreign courts.”105 It is well established that various multilateral and/or bilateral agreements for judicial cooperation may be used to facilitate the recognition and enforcement of foreign judgments in England and Wales as well as of English and Welsh judgments in other countries. Possibly, a potentially significant Brexit related issue concerns the fact that – as already noted106 – the EU PIL framework has succeeded in facilitating the recognition and enforcement of foreign judgments within the EU internal market.107 The issues might need to be addressed because a potential nonapplication of the Brussels Ia and IIa regime in the post-Brexit era can be regarded as a risk for private parties’ effective access to legal remedies in cross-border cases. In particular, a change in the legal landscape in relation to PIL could depreciate the value of some English and Welsh judgments which might – in turn – impact on the forum selection process. This should explain why a number of policy options concerning the recognition and enforcement (e.g. common law, Brussels Ia and IIa, Lugano, The Hague Choice-of-Court Agreements) have been considered to apply post-Brexit.108 The issue was inter alia considered before the Justice Sub-Committee where Mr Hugh Mercer QC noted: “if you are knocked down in the street in Nicosia, you can bring your claim against the Cypriot insurer in English courts. It is certainty for the little guy. The oligarchs can always afford the Compare: Article 33(1)(a) of the Brussels Ia Regulation. P. BARNETT, Res Judicata, Estoppel and Foreign Judgments: The preclusive effects of foreign judgments in private international law, Oxford 2001, at p. 31 and 41. 105 A. ARZANDEH, Reformulating the common law rules on the recognition and enforcement of foreign judgments, Legal Studies 2019, p. 56, at 61. 106 M. DANOV (note 40). 107 See more: B. HESS/ T. PFEIFFER/ P. SCHLOSSER, Study JLS/C4/2005/03 – Report on the Application of Regulation Brussels I in the Member States, Heidelberg 2007, available at: http://ec.europa.eu/civiljustice/news/docs/study_application_brussels_1_en.pdf [52–53]; P. BEAUMONT et al. (note 8). 108 House of Lords – European Union Committee, Brexit: justice for families, individuals and businesses?, HL Paper 134, available at: https://publications.parliament.uk/pa/ld201617/ldselect/ldeucom/134/134.pdf. See also A. DICKINSON (note 14); G. RÜHL (note 14); S. TANG (note 14). 103 104

80

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications common law, but the little guy is given certainty and uniformity. It is very useful for judgments; you get your judgment against the Cypriot insurer, you can take it to Cyprus and it will be recognised automatically. You know that there is a uniform procedure for that. So when you start the litigation back in your home country, you are pretty certain that you will get the money at the end of the day.”109 Although this type of risks could potentially be minimised through more comprehensive travel insurance policies, this opinion nicely captures the important role the EU PIL framework has played in facilitating the private parties’ access to effective legal remedies within the EU. The pilot study strongly suggests that the eventual recognition and enforcement of an English and Welsh judgment abroad would impact on the forum selection process. In commercial cases, 100% of all our survey respondents (i.e. 28 respondents regarding commercial law disputes) felt that that this was the case. However, 75% of the survey respondents did indicate that the recognition and enforcement it is only a factor which needs to be considered along with the other attributes of a claim. Similarly, in family law disputes, an overwhelming majority of respondents (13 out of 14 respondents regarding family law disputes) appear to be taking the view that there might be a link between the forum selection process and the eventual non-recognition and/or non-enforcement of an English and Welsh judgment abroad. But, a significant majority 53% (i.e. 8 out of 14 respondents) also submitted that the potential non-recognition would only be one of the relevant factors. Hence, a significant majority of legal practitioners – specialising in both commercial law and family law – indicate that there could be other important attributes which need to be thoroughly identified and considered in individual cases. The pilot study further indicates that the eventual non-recognition and/or non-enforcement of an English and Welsh judgment abroad would impact on the settlement negotiations. Approximately 93% of all respondents appear to take this view. Once more, a substantial proportion 82% (i.e. 23 out of 28) of the commercial law respondents and 42% (i.e. 6 out of 14) of the family law respondent, nonetheless, submitted that the potential non-recognition would only be one factor to be considered in settlement negotiations along with the other relevant factors. Since the survey responses strongly suggest that a substantial proportion of the respondents’ cases settle, the research interviews turned out to be central in shedding further light on these issues. The qualitative data shows that a very important attribute of the case – which might be considered by strategic parties – is the location of the parties’ assets. More importantly, the fact that London is a business centre might be an important consideration in high value matrimonial proceedings. An interview respondent summarised this nicely by submitting:

H. MERCER, Oral Evidence presented to the House of Lords, Select Committee on the European Union – Justice Sub-Committee – Tuesday 10 January 2017 at 10.45 am, available at: http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/eu-justice-subcommittee/brexit-civil-justice-cooperation/oral/45378.html. 109

Yearbook of Private International Law, Volume 21 (2019/2020)

81

Mihail Danov “[the judgment-debtor] does really have to come back to London – from time to time – for his business. So you look at all of that – and I have had to give this advice to [client] – unless you are prepared never to return, you are going to ignore all the orders and you are not going to pay her a penny. But, you know you cannot come back to this country – you will be arrested if you do. We are lucky because London is a business centre, so that might be a factor.”110 The increasingly global nature of the business activities (as reflected in the corporate structure of the contemporary groups of companies) appears to be another major attribute which might impact on the potential recognition and enforcement of English and Welsh judgments. This attribute – taken together with the fact that London is a global business centre – may well be a very important consideration for parties in certain cross-border commercial disputes. More specifically, the parties in some high value commercial disputes might feel that the question whether the rendered judgement will be recognised and enforced within the EU might be less of an issue because the parties may have assets in England and Wales and/or in other jurisdictions where the rendered English and Welsh judgment may be recognised. One interview respondent noted: “[…] currently there is a perception that certainly a judgment from the English courts – even if there are not formal recognition processes – there will be some means of enforcing the judgment somewhere in the world. Secondly, given the clients – I either act for or against – tend to have international operations, the likelihood is, as I say, that an English judgement will be able to be enforced somewhere.”111 The fact that London is perceived as business and financial centre may indeed turn out to be a major consideration which promotes (and will continue to promote) the use of English jurisdiction and law. Since London is likely to remain an important business and financial centre for some years (to say the least), the recognition and enforcement would potentially be less of an issue in cases involving big multinational companies. There could also be cases, where the relevant reputational112 risks for parties (or one of the parties) could force settlements, with the recognition and enforcement potentially becoming marginally important in such cases. However, if the issues concerning parallel proceedings and potential nonrecognition and enforcement are considered cumulatively in individual cases, they might – in theory – encourage strategic parties (with access to finance) to raise new preliminary PIL issues (concerning service; forum non conveniens; bringing strategic claims elsewhere; commencing strategic proceedings seeking anti-suit injunctions). In other words, there appears to be a risk for parties’ strategies to be devised with a view to exploiting PIL issues (concerning parallel proceedings and potential non-recognition of foreign judgments). Such strategies may generate P. COLLIS, Interview Transcript No 2, at 7. Interview Transcript No 14, at 5. 112 Interview Transcripts No 5 and 15. 110 111

82

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications delay and costs which could in turn adversely affect their opponents’ expectations about the outcome of litigation, impeding certain parties’ access to effective legal remedies in cross-border cases and adversely affecting the attractiveness/appropriateness of the English and Welsh courts. The latter issues is closely linked with the question about the parties’ entitlement to legal remedies in cross-border cases which is strongly correlated with the governance issues to be addressed by UK policy-makers post-Brexit.

VI. Applicable Law: Legal Landscape – Parties’ Strategies – Access to Remedies The parties’ entitlement to legal remedies would depend on the applicable law which should apply to the merits of a cross-border dispute. The pre-Brexit vote data and the recent data from the pilot study strongly indicate that strategic parties would only devote their financial resources to argue about the applicable law in cases where the application of one set of substantive law (rather than another) would impact on the outcome of their dispute.113 Disputes about applicable could be time-consuming and resource-intensive, not least because the parties’ entitlement to remedies (and indeed the aspects which would impact on the monetary value of their desired legal remedies) may be impacted by the applicable substantive law. The data from the pilot study unequivocally suggests that sophisticate parties (with access to finance) would often undertake comparative studies, in order to ascertain the remedies they would be entitled to recover under the potentially applicable rules. It is unlikely that the parties’ approach would change, but would English law change? In order to ensure that the same set of substantive laws would be used to determine the rights and obligations of the parties irrespective of where they litigate, the EU legislator harmonised the PIL rules applicable to contractual and non-contractual obligations in civil and commercial matters. To this end, the Rome I and II Regulations were adopted by the EU. Most recently, the UK policy-makers appeared to address the issues concerning the applicable laws in civil and commercial matters by adopting a statutory instrument114 which ensures that “Rome I and Rome II (and for the purposes of certain old contracts, the Rome Convention rules) will continue to apply, as domestic law, post exit”.115 This is indeed a welcome development. But, is this enough to address the specific issues concerning the applicable law in cross-border disputes, post-Brexit?

113 M. DANOV (note 40). See also M. DANOV/ P. BEAUMONT (note 3) and P. BEAUMONT et al. (note 8). 114 The Law Applicable to Contractual Obligations and Non- Contractual Obligations (Amendment etc.) (EU Exit) Regulations 2018. 115 Explanatory Memorandum to The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment, etc) (EU Exit) Regulations 2018 [2.3].

Yearbook of Private International Law, Volume 21 (2019/2020)

83

Mihail Danov A number of academics appear to take the view that English substantive law will not change post-Brexit.116 One interview respondent shared this view by submitting that “[a] lot of law firms are putting out in Europe a lot of misinformation about the impact of Brexit – essentially saying the English law is going to change as a consequence of Brexit.”117 The Great Repeal Bill,118 however, indicates that it is highly likely for the English law to gradually change119 in so far as, at present, the EU law forms part of English law. In particular, even if the English contract law were to remain the same, some of the cross-border disputes would raise regulatory aspects related to cross-border trade and services within the EU. In this context, it should be noted that the principle of mutual recognition is a major feature of legal landscape within the EU internal market.120 It is well established that “[a]ccording to that principle, a Member State may not prohibit the sale on its territory of products which are lawfully marketed in another Member State […]”.121 The relevant regulatory risks would inevitably impact on the various strategic decisions which are taken by businesses that operate within the UK.122 There is a strong case that any change in the regulatory landscape would impact on the rights and obligations of the parties that are involved in cross-border economic activities. This would impact on the UK’s desirability as a place for doing business which would in turn impact on the attractiveness/appropriateness of the English and Welsh courts for the resolution of certain types of disputes. Various sectors/industries (e.g. manufacturing; trade; services) would be affected differently by a post-Brexit change in the regulatory framework for cross116 R. FENTIMAN, Response to Question 3, Oral Evidence presented to the House of Lords, Select Committee on the European Union – Justice Sub-Committee – Tuesday 6 December 2016 at 10.45 am, available at: http://data.parliament.uk/writtenevidence/ committeeevidence.svc/evidencedocument/eu-justice-subcommittee/brexit-civil-justice-coo peration/oral/44259.html. See also J. HARRIS, Brexit – choice of law, jurisdiction and enforcement, available at: http://www.nortonrosefulbright.com/knowledge/videos/143504/ brexit-choice-of-law-jurisdiction-and-enforcement; A. BRIGGS – Written evidence (CJC0002), Secession from the European Union and Private International Law, available at: http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/eujustice-subcommittee/brexit-civil-justice-cooperation/written/46823.html; A. BRIGGS, Secession from the European Union and private international law: the cloud with a silver lining, Lecture to the COMBAR Association – 24 January 2017, available at: https://www. blackstonechambers.com/documents/311/Secession_from_the_European_Union_and_ private_international_law.pdf, at 29. 117 D. HONEY, Interview Transcript No 6, at 2. 118 European Union (Withdrawal) Bill, available at: https://publications. parliament.uk/pa/bills/cbill/2017-2019/0005/18005.pdf. 119 HM Government, The United Kingdom’s exit from and new partnership with the European Union (2017) Cm 9417, at [1.3]. 120 Art. 26 TFEU. 121 Regulation (EC) No 764/2008 laying down procedures relating to the application of certain national technical rules to products lawfully marketed in another Member State. 122 Compare: HM Government, The future relationship between the United Kingdom and the European Union (2018) Cm 9593 [28].

84

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications border trade. The point can be illustrated with the following examples. A European chief executive of an international bank who is anonymously cited by the Financial Times appears to submit that: “[t]he whole thing is politicised […]. There is a fight on for City jobs with the EU, and the ECB is part of Europe’s armoury.”123 Also, private equity firms appear to be impacted by Brexit. It is widely perceived that “the UK is the place to be for private equity firms but [a private equity executive, Mr John Sinik] says political uncertainty about the country’s future relationship with Europe is pushing it close to ‘breaking point’.”124 A change in the pattern for cross-border trade/services could impact on the litigation pattern in disputes arising out of the relevant economic activities. The point that any change in the regulatory framework for cross-border trade and/or cross-border services might subsequently lead to a change in the litigation pattern came through in the course of the interviews. “There are all these academic issues, which people are discussing – relating to jurisdiction, choice of law, contracts – all those kind of things. I understand that. I think from my perspective – I suppose there are two aspects, which do not necessarily get headlines. The first is inevitably it will depend on the risk of flight from London. For example – if the insurance industry – if Lloyds finds itself becoming much more Europe-centric whether that is Paris or Brussels or Munich; if the businesses come away from London and establish elsewhere [… – t]he pattern of trade or services changes – if you are based in Munich, for example, and many of your contracts and your service providers, your customers go with you; and the same for auto parts; it is the same for all these different types of sectors; then, it is much less likely that you are going to choose English law and jurisdiction because you are not here, so I can see that being a thing.”125 It seems that it might be possible for Brexit to potentially have an impact on the choice of English law as being used to ascertain the rights and obligations of the parties in some categories of cross-border commercial disputes with a regulatory element, to say the least. This means that the broader regulatory context for particular sectors (e.g. insurance, finance, car manufacturing) should be primarily considered as a separate attribute. The cross-border litigation would only have a secondary role in allowing parties to transnational transactions (and/or any other cross-border interactions) to attain legal remedies in disputes arising out of these transaction/interactions which are shaped by the regulatory landscape.

123 S. MORRIS/ J. BRUNSDEN, How London banks are trying to dodge Brexit, Financial Times – 10 April 2019, available at: https://www.ft.com/content/970680cc-5abb11e9-9dde-7aedca0a081a. 124 J. ESPINOZA, The Brexit effect: private equity firms shun UK for Europe, Financial Times – 12 May 2019, available at: https://www.ft.com/content/7dbefce0-6d9211e9-80c7-60ee53e6681d. 125 CH. BURDETT, Interview Transcript No 11, at 2.

Yearbook of Private International Law, Volume 21 (2019/2020)

85

Mihail Danov Given the Brexit context of the pilot study, a very important question was: Is the fact that EU law is part of English law seen as anyhow important by respondents’ clients? The pilot study inter alia aimed to determine whether the fact the EU may no longer be part of English law could potentially impact on the use of English choice-of-law clauses. There was no evidence that this was a major risk, if any. As one interview respondent noted, the fact that EU law is part of English law “is an assumption that [the] clients subconsciously make [without] consciously think[ing] of it as a separate consideration.”126 Hence, it was not possible to determine how much of a factor this has been in the forum selection process and further data in a comparative context is necessary. Nonetheless, it seems clear that the fact that London is perceived as business and financial centre may indeed turn out to be a very important consideration which promoted the use of English law (and English jurisdiction clauses). Brexit might have somewhat different initial implications in family law. As noted above, it is well established that an English and Welsh court will not normally apply foreign law/s in cross-border matrimonial disputes. In the pre-Brexit era, the correlation between the parties’ entitlement to legal remedies and their strategies is reflected in the jurisdictional battles before the English and Welsh courts.127 The fact that England and Wales is a venue of choice for high value matrimonial disputes is a strong indication that parties with access to finance would consider their entitlement to remedies under the potentially different applicable laws. This was clearly reinforced by the qualitative data from the pilot study which shows that this is unlikely to change. However, Brexit would potentially have another impact on certain cross-border family law disputes (or rather potential family law disputes) before English courts in so far as the public law concerning migration would potentially change. This would impact on the parties’ migration status, shaping their litigants’ strategies accordingly. The pilot study unequivocally demonstrates that any potential change of the regulatory framework concerning migration appears to impact on parties’ strategies in cross-border cases. “[…] a lot of clients are obviously taking advice about their immigration status; are worried about enforcement – that has certainly come up – they are worried about enforcement post Brexit. It does affect the position regarding the child arrangements; and if one parent wants to leave the jurisdiction with the children, how easy (or not) it is going to be to get them back. […] There are concerns, but it is quite difficult for anybody to do anything specific. I think the most specific thing that people are doing is applying for British nationality (if they are entitled to do so) and taking advice about that in circumstances where they would never have bothered before – they were just European. People, who might be about to lose their right to live

126 127

86

Interview Transcript No 14, at 8. See S v S [2014] EWHC 3613 (Fam).

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications in this country, are seeing where they stand – and that includes people who are married, but the marriage is not great.”128 Therefore, there is a strong case that the legal landscape concerning cross-border economic activities (broadly defined to cover the free movement of workers and EU citizens’ rights) within the EU turns out to be a very important attribute of the case. This attribute could have a significant impact on the correlation between the litigants’ strategies and the applicable substantive law/s. The point could be strengthened further by the Brexit implications in cases raising regulatory issues. There may be important issues to be addressed in the light of further comparative data because the commercial disputes are becoming more complex, involving multiple issues: “When you have a very complex piece of litigation – inevitably, it involves contractual and non-contractual disputes; it probably involves trust disputes; it probably involves regulatory disputes and compliance disputes. Regulatory, in our world is hugely important. And, in the finance sector, it is very rare to have a claim which does not include regulatory issues. It is hugely important. I suppose, the starting point of all of these claims is contract. That is the starting point. Although I have had fraud cases, where we have tried to found jurisdiction here where there is no prior contractual relation. But generally – rule of thumb – you start with a contract and then, everything else flows away from that.”129 There would be complex issues (contractual, regulatory, tortious). The pilot study shows that a number of potential Brexit amendments in the UK PIL framework might impact on the litigants’ strategies broadly defined to cover the forum-selection process. The so devised litigants’ strategies might affect the attainability of desired remedies, with the defendants potentially questioning how the relevant EU regulatory rules should be interpreted, post-Brexit. This may in turn impact on the attractiveness/appropriateness of the English and Welsh courts in certain categories of regulatory disputes. This means that various competing law firms based in other EU jurisdictions may start devising different marketing strategies, in order to attract such high value regulatory disputes, expanding the influence of their own jurisdictions/laws.

VII. Long-Term Policy Options: Governance Aspects – Access to Justice in Cross-Border Cases A PIL framework could only effectively pursue an appropriate governance function, if the (national/regional/global) policy-makers have devised it by taking into 128 129

P. COLLIS, Interview Transcript No 2, at 3. CH. BURDETT, Interview Transcript No 11, at 4.

Yearbook of Private International Law, Volume 21 (2019/2020)

87

Mihail Danov account the way in which PIL rules shape the litigants’ strategies, and there is a mechanism which enables judges to swiftly defeat abusive litigation tactics.130 If these issues are not carefully considered by the UK policy-makers, then there is a real risk that an ineffectively functioning PIL framework could be exploited by strategic litigants with a view to impeding their opponents’ access to effective legal remedies. There is a risk that any fresh legal uncertainty which would be connected to a post-Brexit change of the PIL rules could be exploited by strategic parties. Carefully devised litigation strategies exploiting any Brexit-driven uncertainty (or rather any Brexit related speculation as the case may be) and inflating the litigation costs could – in turn – adversely affect parties’ expectations about the outcome of litigation and private parties’ access to legal remedies. This would impact on the attractiveness of London as a venue of choice. However, a careful analysis of the interview data appears to suggest that the major and most immediate Brexit risk is a reputational one which might potentially diminish the global status of the English courts. This is indeed a key issue which might need to be addressed as priority. As an interviewee put it: “the attraction and status of the English court – in particular, the English commercial court – as an established and recognised venue for the resolution of commercial disputes will be prejudicially affected by Brexit. Because, it seems to me that there is no doubt that Brexit has diminished the status of England abroad. I mean, people cannot understand why England has voted to leave its major trading block. They see it as an act of senseless self-harm. I think there is a concern that the status of the English courts is going to be affected.”131 An appropriately re-designed UK PIL landscape which facilitates private parties’ access to justice (and access to the legal remedies in particular) in cross-border cases is much needed. This will in turn enhance the attractiveness of English and Welsh courts as a venue of choice in a global context. Therefore, a major question which needs to be considered is: If the English and Welsh courts are considered to be among the leading in the world and if the pattern of the trade changes, how could the UK PIL landscapes be re-designed, so that the English courts continue to be attractive? The response to this question matters because the international law firms with offices in London may swiftly adjust their strategies accordingly, in order to be better placed to serve their international clients: “If you are mainly based in London, and you have one or two offices elsewhere, or none, could be a real problem. We have numerous offices globally – we are in every jurisdiction. For us, in terms of P. BEAUMONT et al. (note 8). Interview Transcript No 14, at 2. See also L. GLEGG, Interview Transcript No 1, at 24. Compare: D. THOMAS, Business urges next PM to repair UK’s international reputation Fresh attempt by CBI to be heard in run-up to October Brexit deadline, Financial Times – 17 June 2019, available at: https://www.ft.com/content/3a0a9dc8-8ec7-11e9-a24db42f641eca37. 130 131

88

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications partnership, it then becomes a balancing exercise. Do we beef up arbitration in Singapore? Do we beef up arbitration in Dubai? Do we say, ‘Okay, well, it is all kind of swings and roundabouts.’? For us, as a law firm – it is not so much necessarily how do we squarely deal with the issues in London – it is how, as a global law firm, do we balance our footprint; so as to best deal with those issues; which is very exciting.”132 In order to identify the most appropriate policy options, there are different aspects which need to be carefully considered in the Brexit context. On the one hand, it is true that the UK participation in the EU PIL framework provided the necessary legal mechanisms, which enabled London (as a major business centre) to further strengthen its dominant position on the market for cross-border adjudication services.133 On the other hand, an appropriate analysis of the relevant policy options concerning judicial cooperation should be closely linked with the agreed framework for the future EU/UK relationship. Depending on the future EU/UK regulatory regime for trade and service, it is necessary to consider whether the UK needs to continue to be part of an EU PIL framework which, whilst providing for a semi-automatic enforcement of the UK courts’ judgments, may be less than effectively functioning, bringing about negative externalities. More specifically, being part of the EU PIL framework for judicial cooperation may not only bring advantages, but it may also produce disadvantages which may spread across, if the institutional architecture for the implementation of the adopted is less effective/efficient than desirable. The negative externalities could be significant because any system of cooperation, which is based on the principle of mutual trust,134 is bound to export deficiencies of the national judicial systems (which may occasionally be far too slow, for example).135 If the Brussels I and II Regulations and/or the Service Regulation (which require a level of reciprocity) were to no longer apply post-Brexit, what are the aspects of the legal landscape in relation to PIL which need to be revised as a matter of priority? Indeed, Brexit might be an opportunity to re-consider and redesign the legal landscape in relation to PIL. Brexit might hopefully spur an institutional reform within the EU. As one interview respondent (who deals with family law disputes) puts it: “international jurisdiction […] is an absolute crock off – if you sat down and said, “How are we going to work out something that makes sense?” It would not be any of the stuff that we have got currently. It is just massively complicated – really, really expensive

CH. BURDETT, Interview Transcript No 11, at 3. B. HESS/ M. REQUEJO-ISIDRO, Brexit – Immediate Consequences on the London Judicial Market, available at: http://conflictoflaws.net/2016/brexit-immediate-consequenceson-the-london-judicial-market/. See also E. LEIN et al. (note 8); M. DANOV (note 40); M. DANOV/ P. BEAUMONT (note 3). 134 Recital 26 of Brussels Ia; Recital 21 Brussels IIa. 135 M. DANOV (note 40). See also P. BEAUMONT et al. (note 8). 132 133

Yearbook of Private International Law, Volume 21 (2019/2020)

89

Mihail Danov with potential pitfalls at every turn. And totally ignores what you are actually trying to achieve, which is what I have just spoken about.”136 Brexit may spur a wider debate which should inform policy choices, enabling the UK policy-makers to create a more effectively functioning legal framework for judicial cooperation, post-Brexit. It is indeed high time for policy-makers to consider the long-term policy options, systematically addressing any short-term and long-term challenges. There is a strong case for the UK policy-makers to take a global perspective on the issues considering the global developments. Promoting a level of judicial cooperation in a global context is far from simple, not least because the wider economic interest in fostering international trade and farreaching policy reasons concerning migration need to be considered when redesigning the current legal landscape in relation to PIL.137 Why is England and Wales well placed to take a lead along with some other leading jurisdictions (where global or pan-European business centres are being based)? The difficult issues concerning choice-of-court agreements (and/or choiceof-law clauses) are less to do with drafting of the relevant jurisdiction agreement and more to do with the complexity of the disputes which parties are being involved nowadays.138 Resolving such complex cross-border disputes pre-suppose a well-functioning legal system which is founded on appropriately reliable procedural rules, allowing judges to robustly ascertain the relevant facts and competently apply the applicable substantive laws. As the interview data suggests: “Th[e litigants] want to achieve a result, but they want to achieve a result that they think is going to be fair and correct. I mean, there are I am sure jurisdictions in the world where you can get a much quicker result. But, you would not have confidence in its correctness.”139 It is a time for the PIL scholars in this country and across the globe to consider the relevant policy options and governance aspects on the basis of a relevant empirical data by using an appropriate research methodology and theoretical model for measuring the Brexit impact in different sectors. Alternatives to the EU/EEA route to judicial cooperation in civil and commercial matters should be considered. Since the judicial cooperation in civil and commercial matters is closely linked to the pattern of trade in the post-Brexit, one should consider the global regulatory landscape. As one expert witnesses submitted in front of the House of Commons’ Exiting the European Union Committee, “[y]ou have Trump’s America, you have China and you have the EU”140 or remain neutral (perhaps?). A. BULL, Interview Transcript No 12, at 21. M. DANOV (note 14). 138 Interview Transcript No 14, at 7 139 Ibid at 6. 140 S. OGILVIE, response to Q4226 – Oral evidence: submitted to the House of Commons’ Exiting the European Union Committee, The progress of the UK’s negotiations on EU withdrawal, HC 372, available at: http://data.parliament.uk/writtenevidence/ committeeevidence.svc/evidencedocument/exiting-the-european-union-committee/theprogress-of-the-uks-negotiations-on-eu-withdrawal/oral/102216.html. 136 137

90

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications The UK policy-makers have some important decisions to make in this respect. Different policy options may be considered with a view to facilitating private parties’ access to justice in cross-border cases arising in a global context which will in turn enhance the attractiveness of the English and Welsh courts. Setting up an appropriate research network, involving experienced legal practitioners, is central to re-designing the legal landscape and contributing to the debate under the auspices of the Hague Conference. As one interview respondent noted: “[t]here is a level of lack of practical awareness of how disputes are resolved in these discussions. I think a sense of commercial reality is often quite important as to how the enforcement regime globally is working at the moment, particularly within Europe. And the English courts and the English experience is very relevant because we see a huge amount of disputes being resolved in the English courts, much, much more than in the rest of Europe.”141 In a post-Brexit context, the proposed socio-legal model142 would capture the effect of various aspects of PIL rules which, for example, would impact on the claimant’s decision to issue legal proceedings in England and continue with the litigation or make/accept a settlement offer. Devising a PIL regime to facilitate private parties’ access to remedies in cross-border cases pre-supposes a level of cooperation between the different legal orders.143 This means that a distinction must be drawn between what the desirable framework is and what regime actually is achievable, considering the different legal orders’ “compliance costs”.144 The problems concerning the governance aspects of globalisation in general have been widely discussed in the regulatory theory,145 with Picciotto submitting that: “Liberalization, privatization, and the emergence of new forms of regulation have also been international processes, and are central to what is described as globalization. National liberalization initially focused on the removal of border barriers (quotas, tariffs, and exchange controls) as the immediate obstacles to the flows of goods and finance. However, the opening up of the markets to competition created awareness of the differences between national regulatory requirements, and concerns that such differences constituted ‘nontariffs barriers’. This has led to new approaches to international regulatory coordination involving different degrees and combinations of regulatory competition and harmonization.”146 D. HONEY, Interview Transcript No 6, at 25. M. DANOV (note 40). 143 J.-P. LANGLOIS/ C.C. LANGLOIS, Dispute Settlement Design for Unequal Partners: A Game Theoretic Perspective, International Interactions 2007, at 347. 144 Ibid., at 362. 145 See more literature listed in S. PICCIOTTO, Introduction: Reconceptualizing Regulation in the Era of Globalization, in S. PICCIOTTO/ D. CAMPBELL (eds), New Directions in Regulatory Theory, Oxford 2002, p. 1-11. 146 Ibid, at 5. 141 142

Yearbook of Private International Law, Volume 21 (2019/2020)

91

Mihail Danov This type of research will fall on the cross-roads of legal scholarship and political sciences, considering the literature about globalisation and containing an interdisciplinary element. Nearly 45 years ago, von Mehren’s proposed “special substantive rules for multistate problems”147 which could be adapted as a truly global approach in addressing the regulatory problems in cross-border cases.148 Given the increasingly empirical nature of the legal scholarship nowadays, there is a case for a new type of collaborative PIL research projects which consider the political processes as well as practical challenges surrounding the adoption and implementation of the PIL instruments which are to be applied regionally/globally. As part of this process, a close attention should be paid to the strategic litigants’ behaviour which needs to be factored in the re-designed UK PIL framework postBrexit. The case for a new approach in the PIL theory could be strengthened by considering how the national sovereignty interrelates with the process of globalisation, enabling the English and Welsh courts to dispense justice in a global context. There are several aspects of globalisation which have been considered by Agnew,149 in order to demonstrate the “complexity of sovereignty”150 in this day and age, whilst referring to the Tajik Aluminium Plant litigation.151 This was a high value dispute involving “the biggest industrial enterprise in Tajikistan [which] accounts for a significant proportion of the country’s GDP.”152 The proceedings were issued in London by the Tajikistan legal entity (which was responsible for the business administration of the plant). The defendants included the plants’ former director, Abdukadir Ermatov, who allegedly entered into some illegitimate/corrupt contractual arrangements with another individual from Tajikistan, Avaz Nazarov. Interestingly, the jurisdiction was not challenged,153 with all parties being content for the English courts to hear and determine their dispute. With this in mind, Agnew submits: “[…] three thousand miles away from the [plant] in question and under a foreign jurisdiction, a legal case of major importance to Tajikistan – the smelter is one of the country’s only major industrial assets – will be eventually determined. This examples indicates several features of contemporary sovereignty and globalization. One is that London is a global center in litigation because of its specialized law firms and the reputation of its courts. […] But, it also suggests, of course, that Tajikistan, ‘independent’ from the former A.T. VON MEHREN, Special Substantive Rules for Multistate Problems: Their role and significance in contemporary choice of law methodology, Harvard L. Rev. 1974–75, at 347. 148 M. DANOV, Global Competition Law Framework: A Private International Law Solution Needed, 12 J. of Private Int’l L. 2016, p. 77. 149 J. AGNEW (note 2). 150 Ibid, at 2. 151 Tajik Aluminium Plant v Ermativ and others [2005] EWHC 2241 (Ch.) 152 Ibid, at [1]. 153 Ibid, at [5]. 147

92

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications Soviet Union since 1992, has only a nominal sovereignty in many respects over its own territory. Other actors have varying degrees of effective control over its territory. Even authority can be outsourced. Indeed, the decision of a London court can have greater legitimacy, because it is plausibly based on greater transparency, than more local ones.”154 Whilst this example would no doubt capture the phenomenon of globalisation (limiting sovereignty) from the perspective of political scientists, it also shows that it is largely the private parties’ trust in the credibility and the reputation of a given forum (which is broadly defined to cover the expertise of the judges and legal practitioners as well as procedural rules) that is the major factor that impacts the forum selection process.155 Therefore, enhancing the reputation of the UK as a place for doing business is central to boosting the attractiveness of London as a venue for dispute resolution in cross-border cases. The point was captured by the former Lord Chancellor notes, in his report, that the English and Welsh “commercial courts are recognized as pre-eminent. International litigators come here because they know they will be treated fairly […]. That confidence translated into a £25.7 billion contribution to the UK economy by legal services in 2015.”156 This means that the UK international law firms might have an important role to play in contributing to the development of the relevant legal landscape by advising on the drafting of the different choice of court and choice of law agreements which might gradually become a norm for particular industries.157 Such a governance perspective could be taken in the light of the recent research on the role of private rules in the process of the global rulemaking.158 The legal theory has broadly identified how these developments could bring forward new players who could aid in shaping the development of the relevant global landscape, with Snyder submitting that: “Viewed from a political standpoint, globalisation has witnessed the rise of new political actors such as multinational firms, nongovernmental organisations and social movements. It has tended to weaken, fragment, and sometimes even restructure the state, but has not by any means destroyed or replaced it. Globalisation has also radically altered the relationship to which we have become accustomed in recent history between governance and territory. It has thus blurred and splintered the boundaries between the domestic and external spheres of nation-states and of regional integration organisations, fostered the articulation of systems of multi-level governance, interlocking politics and policy networks, and helped to render J. AGNEW (note 2), at 3. Ibid. 156 Lord Chancellor et al. (note 12), at 3. 157 See International Swaps and Derivatives Association, ISDA Brexit Briefings, available at: https://www2.isda.org/functional-areas/legal-and-documentation/uk-brexit/ 158 T. BUTHE/ W. MATTLI, The New Global Rulers: The Privatization of Regulation in the World Economy, Princeton 2011. 154 155

Yearbook of Private International Law, Volume 21 (2019/2020)

93

Mihail Danov universal the discourse of, and claims for, human rights. In many political and legal settings, such as the European Union, it has raised serious questions about the nature and appropriate form of contemporary governance.”159 The UK experience in shaping the development of the EU PIL regime (through the negotiations of the relevant PIL instruments at governmental level) and its implementation (through the application of the EU PIL instruments) appears to suggest that devising a regional PIL regime may be a complex task. Should the UK policymakers and law firm join forces to enhance the attractiveness of London as venue of a choice? Could there be new opportunities, post-Brexit? In the course of the research interviews in London, one respondent submitted: “[…] what is quite exciting and has not had enough coverage is the government promise to establish a new court in the City, dealing with financial fraud. Although – of course – the commercial court already does, it is going to be a very specialist court – specialist judges, dealing with all these kind of – money laundering, fraud – issues. Actually, I think that is going to be quite a good forum for these kind of cases. I think that that in itself may encourage English law and jurisdiction for a particular type of transaction. It may also encourage – where you do not necessarily have a law and jurisdiction clause – people maybe much more keen to pursue some of these cases in this new court in the City. Now, goodness knows how that will play out in practice. It is fine words, we are going to establish this great court. But, potentially, if it works and it has teeth, then that could be a real attraction for litigants.”160 One could add that there is already a specialised Competition Appeal Tribunal which could be made even more attractive to resolve global antitrust disputes in the post-Brexit era. The UK is further well placed to seek to play a more central role in shaping the global landscape in relation to PIL through the Hague Conference on Private International Law.

VIII. Conclusion – Important Issues to be Addressed Since the EU has incentivised economic integration by liberalising cross-border trade and services, there is an increasingly dense network of pan-European supply chains (or even global supply chains161) which span across the EU, including multiF. SNYDER, Governing Economic Globalisation: Global Legal Pluralism and European Law, European L. J. 1999, at 336. 160 CH. BURDETT, Interview Transcript No 11, at 2. 161 See the complex disputes regarding global supply chains: The LCD Appeals [2018] EWCA Civ 220; Motorila Mobility LLC v AU Optronics Corp 775 F.3d 816, 824 (7th Cir. 2015). See also G. TASSEY, Competing in Advanced Manufacturing: The Need for 159

94

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications national companies, large national distributors/purchasers, SMEs and consumers from the EU and UK. The resolution of cross-border civil and commercial disputes in the EU is not a new issue, but Brexit has pushed it up on the agenda. Because Brexit poses new challenges for EU/UK policy-makers who should consider how the existing framework for judicial cooperation within the EU would need to be redesigned.162 That said, determining the Brexit impact is not an easy issue. If the EU Civil Justice framework163 – which is set to facilitate the resolution of disputes arising out of these supply chains – were not to apply in England and Wales, the parties down the chain of the distribution might face some difficulties in accessing appropriate legal remedies. It should be stressed that any Brexitdriven change in the legal landscape would impact differently on the diverse parties’ (SMEs’, multinational companies’, consumers’) access to appropriate legal remedies cross-border disputes arising out of the pan-European supply chains. Systematically ascertaining the Brexit implications for different parties’ access to legal remedies is central to devising a comprehensive and well-functioning PIL framework post-Brexit. The issues are important because, following the Brexit vote, any potential change in the legal landscape in relation to PIL (which presupposes a level of reciprocity for various rules to apply in different Member States) could bring fresh uncertainty which would inflate litigation costs, impacting on the settlement dynamics. In theory, there are three different perspectives concerning uncertainty which could be considered: “First, uncertainty may concern what cognitive and affect-driven goals are relevant in a situation. What do I want to achieve and strive for? Second, uncertainty may exist concerning how the goals determined by affect and values should be mapped on the decision alternatives. How do I assign attractiveness to the alternatives given my goals? Third, uncertainty may concern outcome uncertainty. What is the likelihood for this or that event to follow a decision? Usually, the last of these uncertainties has been modelled in decision theories, exemplified by theories based on the expected utility concept.”164 The Brexit-driven uncertainties might be exploited by strategic parties to impede their opponents’ access to legal remedies in so far as such strategies might impact on parties’ expectations about the outcome of a cross-border dispute. The parties’ strategies will be devised and developed in the course of the litigation proceedings and every success/failure of litigants at different junctures in this process would have a bearing on the settlement negotiations and vice versa. In order to set out an Improved Growth Models and Policies, Journal of Economic Perspectives 2014, at 31–35; D.K. NANTO, Globalized Supply Chains and U.S. Policy, Congressional Research Service (Jan. 27, 2010), available at: http://assets. opencrs.com/rpts/R40167_20100127.pdf. 162 P. BEAUMONT et al. (note 45), p. 831. 163 Recital 3 Brussels Ia. 164 O. SVENSON, Values, Affect, and Processes in Human Decision Making: A Consolidation Theory Perspective, in S.L. SCHNEIDER/ J. SHANTEAU (eds), Emerging Perspectives on Judgment and Decision Research, Cambridge 2003, at 319.

Yearbook of Private International Law, Volume 21 (2019/2020)

95

Mihail Danov effectively functioning PIL regime post-Brexit, the strategic litigants’ decisionmaking must be analysed in the light of the relevant political processes surrounding the adoption of multilateral PIL instruments which are to be applied globally by national judges, sharing different legal traditions and legal heritages. Different aspects of the relevant PIL regimes (e.g. court-first-seised rule under Brussels Ia; forum non conveniens under the English common law) must be factored in along with the various attributes (e.g. value; litigation costs) of the relevant claims which will impact differently on the claimants/defendants’ strategies in individual cases. In other words, a distinction must be drawn between the aspects of the PIL landscape (including the relevant body of case law dealing with the contentious PIL issues), on the one hand, and the broader attributes (eg types of parties – individuals, SMEs, multinational companies; desired remedy – including its monetary value, if any; facts of the cases; relevant substantive laws; costs – including cost-shifting rule and defendant’s access to finance), on the other hand. Indeed, many cross-border disputes may raise a mixture of issues (contractual, tortious, IP, competition and other regulatory aspects) and involve multiple parties, respectively, as claimants and defendants. In each individual case (considering the relevant attributes of the claim), strategic parties would be singling out the applicable PIL rules which could be exploited post-Brexit (by them or their opponents) with a view to devising their strategies and/or neutralising their opponents’ strategies, in order to attain their desired legal remedies. Furthermore, the decision of the UK to leave the EU appears to spur a level of adjudicatory competition165 which may reasonably be expected in view of the fact that one of the leading jurisdictions in the EU is leaving the EU civil justice system for judicial cooperation in civil and commercial matters. There should be incentives for some of the other EU Member States’ law firms and perhaps the jurisdictions (where they are based) to attract high value claims which are being dealt with by the English courts at present. Since there is now an increase in English-speaking courts in other EU jurisdictions, these wider factors might well be very important. Indeed, some very original suggestions have been put forward by Rühl: “[W]hat can the remaining Member States do to offer European and other companies an attractive post-Brexit forum to settle their disputes? In a soon to be published study for the European Parliament I suggest a package of measures, one of which envisions the establishment of a European Commercial Court. This Court would complement the courts of the Member States and offer commercial litigants one more forum for the settlement of international commercial disputes. It would come with a number of advantages that national courts are not able to offer.”166

P. BEAUMONT et al. (note 45). G. RÜHL, Towards a European Commercial Court? Conflict of Laws.net: New and Views in Private International Law – 11 August 2018, available at http://conflicoflaws. net (accessed 30 September 2018). 165 166

96

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications The case for an EU commercial court is strengthened in Rühl’s study, entitled “Building Competence in Commercial Law in the Member States”.167 It has been suggested that, “at the level of the EU, the European legislature should seek to establish a European Commercial Court […].”168 Whilst the idea to create an EU commercial court is – without any doubt – a very original one, there are three major issues which need to be carefully considered as part of appropriate comparative studies which are set to consider other policy choices. First, given that there is no EU commercial law (as such), it seems that the new supranational court will apply French, German or any other national law to deal with the merits of the dispute. Secondly, creating a specialised supranational commercial EU court would pre-suppose for the EU policy-makers to devise a new set of civil procedure rules which would potentially generate some fresh uncertainty (initially, to say the least). This poses the question whether such a solution would fully address the problems concerning private parties’ access to legal remedies in cross-border cases in the EU. It is questionable whether German Bank A would trust a new European commercial court to resolve its multi-billion dispute with French Bank B. It might be preferable for the parties to go to Luxembourg, or Amsterdam, or Dublin. Thirdly, a proposal for a specialised EU commercial court may not be fully taking account of the political processes. The political science literature which appears to suggest that the Brexit vote might be reflecting the revolt against “[t]he [p]ower of International “Governance” Elites.”169 To address more comprehensively these issues, Brexit calls for a new socio-legal model (that sets out the foundation for inter-disciplinary research). On this basis, more appropriate solutions might be provided in a post-Brexit context..170 If there was no case for an EU commercial court (in so far as there is no EU commercial law as yet), there may be a strong case for a specialised EU competition court where public and private enforcement proceedings could be consolidated to provide a pan-European redress mechanism, facilitating injured parties’ access to effective legal remedies in cross-border competition law disputes.171 Hence, a diversified approach is desirable with a view to facilitating private parties’ access to appropriate legal remedies. Because what works for cross-border competition law disputes may not work for international sale of goods contract and vice versa. Hence, a long-term strategy is needed. The pilot study appears to shows that it will take a while before any Brexit impact will have materialised. This means that – once the UK/EU trade relationships have been finalised – UK/EU policy-makers, PIL scholars and legal G. RÜHL, Study for the JURI Committee, Building Competence in Commercial Law in the Member States – Legal and Parliamentary Affairs Directorate General for Internal Policies of the Union, Policy Department for Citizens’ Rights and Constitutional Affairs – PE 604.980- September 2018. G. RÜHL (note 166). 168 Study for the JURI Committee (note 167), at [2.2.4]. 169 R. EATWELL/ N. GOODWIN (note 32), at 96. 170 J.-P. LANGLOIS/ C.C. LANGLOIS (note 143), at 362. 171 M. DANOV/ F. BECKER/ P. BEAUMONT, Cross-border EU Competition Law Actions, Hart Publishing – Competition Law Series, Oxford 2013. 167

Yearbook of Private International Law, Volume 21 (2019/2020)

97

Mihail Danov practitioners would have some time to re-design the legal landscape in relation to PIL. An analysis of litigants’ strategies in cross-border cases (which is set to capture the dynamics of the cross-border litigation pattern) could be used to inform policy choices which UK/EU policy-makers need to make, in order to achieve broader public policy interests concerning trade and migration in the post-Brexit era. To this end, achieving a level of constructive alignment between the parties’ legitimate goals and the policy-makers’ objectives in devising a legal landscape in relation to PIL is a necessary pre-condition for devising an appropriate institutional framework in cross-border cases post-Brexit. The pilot study further shows that the major issue at present appears to be a reputational one, with the status of the English and Welsh courts potentially diminished by the prolonged Brexit negotiations. There is continuous uncertainty as to how cross-border pan-European business activities (trade and services) would be regulated post-Brexit. This inevitably has spillover effects, posing questions about the private parties’ access to legal remedies in the post-Brexit era as well as about the attractiveness/appropriateness of the English and Welsh courts. The correlation between the parties’ strategies (which factor in any Brexit-driven uncertainty) and litigants’ access to legal remedies in cross-border cases is a very important indicator as to how best to re-design the legal landscape when considering long-term policy options. Given the nature of the pilot study, it is concluded that a major empirical study is needed to appropriately ascertain the actual Brexit impact on parties’ access to legal remedies in cross-border cases in England and Wales. There are several key PIL matters which need to be appropriately considered. They concern the following issues: parallel proceedings (and their avoidance); recognition and enforcement of English and Welsh courts’ judgments within the EU; the applicable law in relation to cross-border regulatory disputes. All these aspects (jointly and severally) might potentially be impacting on the parties’ strategies, inflating the litigation costs and impeding their access to legal remedies in cross-border cases. There is a strong case for the UK policy-makers to set out a detailed strategy specifying how the UK PIL landscape should be re-designed by comprehensively dealing with these issues. Similarly, comparative studies which cover different jurisdictions that share different legal traditions – are important to examine whether Brexit would have any impact on the functioning of the EU Civil Justice framework and on private parties’ access to effective legal remedies in the EU. The following questions must be addressed in a long-run by the UK/EU policy-makers in a post-Brexit context: Will Brexit reduce the overall effectiveness of the EU Civil Justice system? What are the appropriate long-term policy choices that should be made by the UK/EU policy-makers to facilitate the private parties’ access to appropriate legal remedies? The answers to these questions should inform policy choices and facilitate private parties’ access to appropriate legal remedies in cross-border cases, postBrexit. Therefore, robust research projects are needed to consider the practical challenges (regarding access to effective legal remedies) as well as the political processes (regarding different interests shared by stakeholders) in the design of an effectively functioning framework for judicial cooperation which facilitates 98

Yearbook of Private International Law, Volume 21 (2019/2020)

Cross-Border Litigation – Brexit Implications parties’ access to effective legal remedies in the post-Brexit era. Such research studies are central to devising a well-functioning framework for judicial cooperation which facilitates private parties’ access to legal remedies, enhancing the attractiveness/ appropriateness of the English and Welsh courts for resolution of cross-border disputes arising in a global context.

Yearbook of Private International Law, Volume 21 (2019/2020)

99

ON THE DOCTRINAL BEGINNINGS OF THE CONFLICT OF LAWS Nikitas E. HATZIMIHAIL*

I. II.

IV.

Introduction History A. Medieval Schools and Literary Sources of a Conflicts History B. Authoritative Texts C. Doctrinal Texts 1. Aldricus: “potior et utilior” 2. A French Interlude 3. Carolus: “Si Mutinensis” 4. Accursius: “Si Bononiensis” Historiography A. Foundations B. In Search of the Foundational Moment 1. The Gloss as Foundational Moment 2. Aldricus as an Alternative Foundational Moment? Conclusion

I.

Introduction

III.

This article is concerned with the doctrinal beginnings of the conflict of laws. These beginnings are commonly traced to the scholarly output of the Italian universities of the High Middle Ages.1 Commonly but not universally: a growing tendency in modern literature has been to look for conflicts norms in the Antiquity, whereas there are also those who would argue that we cannot speak of “conflict of laws” prior to the elaboration of the concept of sovereignty in the Early Modern Associate Professor of Private Law and Legal History at the University of Cyprus. See e.g. F. LAURENT, Droit civil international, vol. I, Bruxelles 1880; A. LAINE, Introduction au droit international privé, 2 vols., Paris 1888-1982 (citations below are from vol. I, but vol. II also includes valuable discussions of medieval doctrines); M. GUTZWILLER, Le développement historique du droit international privé, Recueil des cours 29 (1929), p. 287-400; E.M. MEIJERS, L’histoire des principes fondamentaux du droit international privé à partir du Moyen Age, Recueil des cours 49 (1934), p. 542-686; H. YNTEMA, The Historic Bases of Private International Law, Am. J. Com. L. 1953, p. 293-317; M. GUTZWILLER, Geschichte des Internationalprivatrechts, Basel/Stuttgart 1977; B. ANCEL, Histoire du droit international privé, Paris 2008. * 1

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 101-133 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Nikitas Hatzimihail era.2 But the consensus has been to look to the medieval scholarship in the learned law as our remotest discursive ancestors.3 In this regard, the first specimens of conflicts scholarship are to be found in the so-called school of Glossators and their literary output, especially short texts (“glosses”) appended as comments to fundamental passages of the Justinian Corpus Iuris Civilis. The real question is: why does it matter? The answer is twofold. First, the historical examination of these beginnings may allow us to better understand the early canonical texts of the discipline: their meanings, their context, and their contribution to the discussions of their time as well as ours. Second, even more telling is the examination of how these beginnings have been approached in the subsequent doctrinal literature, as well as of their place in our historical consciousness. This article is therefore constructed along two axes – history and historiography – which are explored in Parts II and III below. The article’s main subject consists of the three texts most commonly mentioned as the first doctrinal contribution to the conflict of laws: Accursius, whose mid-thirteenth-century gloss became the starting point for the subsequent, more famous conflicts treatments; Carolus, who, a generation earlier, wrote a similar, largely forgotten gloss; and Aldricus, yet another generation prior, to whom an alternative text is attributed. In order to understand these texts we shall consider the legal authorities on which these glosses were anchored.

II.

History

A.

Medieval Schools and Literary Sources of a Conflicts History

The history of the conflict of laws in the Middle Ages has been primarily a history of medieval legal doctrine – more specifically, of the scholarship on the ius civile.4 On the contrary, relatively little attention has been paid to court records – and such research has made very little inroads to the historical consciousness of private international law.5 Respectively see e.g. F. JUENGER, Choice of Law and Multistate Justice, The Hague 1993, p. 6 et seq. and S.E. THORNE, Sovereignty and the Conflict of Laws, in Bartolo da Sassoferrato: Studi e Documenti per il VI Centenario, vol. II, Perugia 1962, p. 673-689. 3 These ideas and the concept of historical consciousness of private international law are explored in N. HATZIMIHAIL, Preclassical Conflict of Laws, Cambridge (forthcoming in 2021). 4 Relatively little attention has been paid to the potential contribution of the other stream of medieval learned law, the canon law. See notably K. NEUMEYER, Das kanonische Recht und die Lehren der Kanonisten in ihrem Einfluß auf die Entwicklung des internationalen Privatrechts (1250-1357), Tijdschrift voor Rechtsgeschiedenis 1965, p. 177-197; A. VAN HOVE, La territorialité et la personnalité des lois en droit canonique depuis Gratien (vers 1140) jusqu’à Jean Andre (1348), Tijdschrift voor Rechtsgeschiedenis 1922, p. 277322. 5 The most notable exceptions have been E.M. MEIJERS (note 1), and ID., Études d’histoire du droit international privé, Paris 1967; P.-C. TIMBAL, La contribution des 2

102

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law Ius civile scholarship is presented, in legal history, in terms of two schools, the Glossators who flourished in the twelfth andthirteenth century (i.e. the High Middle Ages) and the Commentators who flourished especially in the fourteenth but also dominated the fifteenth century (i.e. the Late Middle Ages): these schools are connected by the late thirteenth-century postglossators who taught in the universities of Southern France (hence ultramontani).6 The school of Glossators took its name from the glossae – explanatory notes made on the margins of the authoritative main text.7 It culminated to the consolidation of glosses (apparatus) by Accursius, around 1220-1250, which became known as the Standard Gloss (Glossa ordinaria).8 The first histories of private international law, written in the late nineteenth century, began with the Commentators or their ultramontani teachers.9 By the early twentieth century, however, we see more attention paid to the Glossators.10 These are the doctrinal beginnings we shall discuss. Inevitably, however, our understanding of the Glossators has been coloured by our increased familiarity with their immediate successors. For example, the most famous medieval conflicts text, by the illustrious Bartolus da Sassoferrato (1314-1357), is as an extended commentary on a gloss by Accursius.11 Whereas, however, Bartolus has been much discussed, minimal attention has been paid to the authority he reacts upon. auteurs et de la pratique coutumière au droit international privé du moyen âge, Rev. crit. dr. int. pr. 1955, p. 17-32; B. ANCEL (note 1), p. 52-90. 6 See especially R LESAFFER, European Legal History, Cambridge 2009, p. 25-29; O.F. ROBINSON/ T.D. FERGUS/ W.M. GORDON, European Legal History, 3rd ed., Oxford 2000, p. 42 et seq. and p. 59 et seq.; F. WIEACKER, A History of Private Law in Europe, trans. T. Weir, Oxford 1995, p. 28 et seq., 55 et seq.; F. CALASSO, Medio Evo del diritto, vol. I, Milano 1954, p. 511 et seq., p. 563 et seq. F.C. VON SAVIGNY, Geschichte des Römischen Rechts im Mittelalter, 2nd ed., Heidelberg 1834-1851 still remains a vital reference especially for biographical information. 7 See e.g. M. BELLOMO, The Common Legal Past of Europe, trans. Lydia Cochrane, Washington, D.C. 1995, p. 129 et seq. 8 The traditional view held that a first edition of the Glossa (minus the Institutes), was published by 1228. It is now believed that the Glossa was constantly revised over a broader timeframe, such as 1220-1250. See e.g. R. FIGUEIRA, Glossa Ordinaria: Roman Law, in CH. KLEINHERZ (ed.), Medieval Italy: An Encyclopaedia, vol. I (2004), 437-439. 9 F. LAURENT (note 1), A. LAINE (note 1), p. 115 et seq. 10 K. NEUMEYER, Die gemeinrechtliche Entwickelung des internationalen Privatund Strafrechts bis Bartolus, vol. I, Munich 1901, and especially vol. II, Munich 1916, which is cited below, was especially influential in this regard: whereas Lainé, whose examination begins with the postglossators, worked with the systematic works of Commentators, Neumeyer brought into focus the latter part of the Early Middle Age and the High Middle Age and brought to light several texts, including the ones presented in Section C below. Neumeyer clearly and fruitfully influenced M. GUTZWILLER, Le développement historique du droit international privé, Recueil des cours 29 (1929), p. 287-400, to this day one of the principal texts of conflicts historiography. His influence is also evident in E. MEIJERS (note 1), who went further into primary research of archives and manuscript sources. 11 BARTOLUS ad C. 1.1.1, nu. 13-51. I am discussing Bartolus in my forthcoming book (note 3), esp. Ch. 7-10, which significantly expands upon – and replace –

Yearbook of Private International Law, Volume 21 (2019/2020)

103

Nikitas Hatzimihail Research into medieval conflicts doctrine draws primarily from two groups of literary sources: systematic works and discussion of individualised cases.12 Sources from the first group are found inside systematic doctrinal expositions of Roman law, organised around the individual passages of the Corpus Iuris, especially the Code and the Digest. Most of our earliest texts come from these sources, which span the entire period from 1200 to 1600. It is these texts that have traditionally been discussed in the literature. In the case of Glossators, such texts tend to have the size of a paragraph or even be limited to a single sentence, whereas Commentators produced booklet-size treatments. In either case, the fact that these texts form part of systematic works does not mean that they themselves are exhaustive or comprehensive, or even that they do not contradict other passages, by the same author, in the same work. Medieval doctrinal writing was a multi-generational endeavour: such systematic works developed gradually and, especially at first, in the shadow of a rich oral tradition.13 Some of the Late Medieval conflicts treatments that made their way into systematic works originally came in the form of a repetitio – an evening lecture, delivered separately from the standardised morning lectures on the curriculum, where the professor would analyse in depth a textual fragment.14 On the contrary, we have no examples of a standalone short treatise (tractatus) dedicated to our subject.15 The second group of sources consists of material involving concrete cases, notably quaestiones and consilia. In a quaestio, a genre developed and used to great effect by the Glossators, a problem was raised and discussed, often with a position and a counter-position presented. In many older quaestiones, the master’s own answer is laconically stated with a simple yes or no.16 Such quaestiones – which may or may not have arisen out of actual cases – were often put together in collections including texts and ideas of several authors. Many of them found their way to systematic works. The consilium was a legal opinion, concerning an N. HATZIMIHAIL, Bartolus on the Conflict of Laws, Revue hellénique de drot international 2007, p. 37-97. 12 This account is by definition incomplete. It moreover cannot do justice to the many literary forms in which the Glossators’ prolific inventiveness appears to have been expressed but do not have an immediate relation with our subject. See e.g. O.F. ROBINSON/ T.D. FERGUS/ W.M. GORDON (note 6) p. 52-56. 13 In the words of M. BELLOMO (note 7), p. 129: “If over the years some professors and a good many students had not noted down their glossae on parchment as a way of documenting and remembering the lecturae, we would today know little or nothing of that world of ideas, beliefs and values today. Thanks to them, we can manage to know something – on the condition that we keep in mind that the glossae were only an extremely feeble projection of a much fuller investment of both individual and collective reflection, and that we remember that they are a fragmentary and highly reductive expression of the oral activities that revolved around a central nucleus of the few certain, authoritative, and sacred texts.” 14 R. LESAFFER (note 6), p. 252; M. BELLOMO (note 7), p. 137-139. 15 O.F. ROBINSON/ T.D. FERGUS/ W.M. GORDON (note 6), p. 53, p. 64-65. 16 M. BELLOMO (note 7), p. 139-143.

104

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law individual case, rendered, at the instigation of the court or a party to the case, by a jurist, who was concerned less with bringing up for discussion both sides of the argument and more with providing support for the solution he proposed.17 Glossators evidently wrote consilia (indeed we cannot know when a quaestio was a purely academic one or inspired from an actual case or even consultation given by its author) but it was the subsequent school of Commentators who developed this genre.18 B.

Authoritative Texts

For over four centuries, between 1200 and 1600, authors attempting to provide a general approach to what we regard as conflict-of-laws issues have included their treatment of such questions in their comments on the first title – indeed the first passage – of Justinian’s Code.19 The locus chosen was the Edict of Thessalonica, which in 380 AD re-affirmed Nicene Christianity as the official religion of the Empire and laid the foundation for the suppression of all Christian heresies and polytheistic religions.20 “Emperors Gratian, Valentinian, and Theodosius Augusti to the People of Constantinople: We desire that all people (cunctos populos) who are governed by the moderation of Our Clemency shall practice that religion which was handed down by the divine Apostle Peter to the Romans, as shown by the religion introduced by him and transmitted down to this day – the religion which, it is clear, is now followed by the Pontiff Damasus and by Peter, Bishop of Alexandria, a man of apostolic sanctity; that is, according to apostolic learning and the teaching of the evangelists, we shall believe in one deity of the Father and the Son and the Holy Spirit, in equal majesty and in a pious Trinity. 1. We order all who obey this law to embrace the name of Catholic Christians, and all others, whom We 17 O.F. ROBINSON/ T.D. FERGUS/ W.M. GORDON (note 6), p. 55, 66-67; M. BELLOMO (note 7), p. 211-215. 18 Such consilia circulated more broadly in the age of the printed book, when it became easier, and more affordable, to assemble the entire work (omnia opera) especially of famous jurists. Not unlike the present, some medieval scholars did their best work in commissioned legal opinions. Baldus, for example, who wrote a landmark systematic treatment, second only to Bartolus among medieval jurists, was especially prolific as an author of consilia. A subsequent Bartolist, Alexander Tartagnus, became known primarily because of his consilia – through which Bartolan doctrines on conflicts survived, albeit caricatured, to the nineteenth century. These consilia were, among others, republished with commentaries by Dumoulin – himself the author of the most famous consilium in the history of private international law. 19 C. 1.1 De summa trinitate et de fide catholica et ut nemo de ea publice contendere audeat. 20 See e.g. E.D. HUNT, Imperial Law or Councils of the Church? Theodosius I and the Imposition of Doctrinal Uniformity, Studies in Church History 2007, p. 57-68.

Yearbook of Private International Law, Volume 21 (2019/2020)

105

Nikitas Hatzimihail deem mad and insane, to suffer the infamy of heretical doctrine; they shall be stricken, first, by divine vengeance and, second, also by the vengeance of Our wrath, which We shall take in accordance with the judgment of Heaven.” 21 This passage became known with its first words, cunctos populos. Medieval scholars glossed to the passage comments on subjects for which they regarded it as constituting authority, including, as might be expected, the definition and consequences of heresy, insanity and infamy; legal aspects of religion (e.g. usury); and the meaning of certain words such as the pronoun qui (who) and the verb volere (will/desire).22 And, finally, the “matter of statutes”,23 as reframed, for example, much later than our texts, by Bartolus. “Now let us come to the gloss which says “if a Bolognese makes a contract at Modena, he shall not be judged by the statute of Modena”. As to this, two things are to be noticed: first, whether a statute extends to those not subject (non-subjects); second, whether the effect of a statute extends beyond the territory of those who set it down (the legislator).”24 L. cunctos populos was not the only textual authority used as anchor. The other main contender was l. de quibus, a passage in the first book of the Digest, which states the following: “What ought to be held in those cases (de quibus causis) where we have no applicable written law, is the practice established by customs and usage (quod moribus et consuetudine inductum est). And if this is in some way deficient, we should hold to what is most nearly analogical to and entailed by such a practice. If even this is obscure, then we ought to apply law as it in use in the City of Rome. 1. Ageencrusted custom is not undeservedly cherished as having almost statutory force, and this is the kind of law which is said to be 21

C. 1.1.1, as translated in B. FRIER (ed.), The Codex of Justinian, Cambridge 2016,

p. 14: Imppp. Gratianus Valentianus et Theodosius AAA. ad populum urbis Constantinopolitanae. Cunctos populos, quos clementiae nostrae regit temperamentum, in tali volumus religione versari, quam divinum Petrum apostulum tradidisse Romanis religio usque ad nunc ab ipso insinuata declarat quamque pontificem Damasum sequi claret et Petrum Alexandriae episcopum virum apostolicae sanctitatis, hoc est ut secundum apostolicam disciplinam evangelicamque doctrinam patris et filii et spiritus sancti unam deitatem sub pari maiestate et sub pia trinitate credamus. 1. Hanc legem sequentes christianorum catholicorum nomen iubemus amplecti, reliquos vero dementes vesanosque iudicantes haeretici dogmatis infamiam sustinere, divina primum vindicta, post etiam motus nostri, quem ex caelesti arbitrio sumpserimus, ultione plectendos. 22 See e.g. BARTOLUS ad C.1.1.1, nus. 1-12. 23 BALDUS ad C. 1.1.1, nu. 49 (“Nunc venio ad materiam statutorum”). 24 BARTOLUS ad C.1.1.1, nu. 13.

106

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law established by use and wont. For given that statutes themselves are binding upon us for no other reason than that they have been accepted by the judgment of the populace, certainly it is fitting that what the populace has approved without any writing shall be binding upon everyone. What does it matter whether the people declares its will by voting or by the very substance of its actions? Accordingly, it is absolutely right to accept the point that statutes may be repealed not only by vote of the legislature but also by the silent agreement of everyone expressed through desuetude.”25 The best known example of a conflicts treatment anchored on de quibus is, in fact, again by Bartolus.26 That text has been translated by J.A. Clarence Smith, along with Bartolus’s commentary on cunctos populos.27 Bartolus is of course known for that latter commentary, and for good reason: the text on cunctos populos refines certain ideas and adds crucial aspects of Bartolan doctrine, to the point that we can safely conclude that it was either written, or at least revised and revisited, subsequently. Yet another contender was the sibling passage (ex non scripto) in the Institutes.28 This is, for example, where Jacobus de Ravanis (Jacques de Révigny), a very influential late thirteenth-century jurist, discussed whether a custom (consuetudo) bound clerics and foreigners in quaestiones of his repetitio on the respective provisions of the Institutes; remarkably, Jacobus did not include this same discussion in his repetitio on de quibus.29 There are also other passages that played a small part in the earliest stages of medieval doctrine.30 The most notable, which we will come across below, comes from the first title from the fifth book of the Digest, entitled “Actions: Where a Man Should Sue and be Sued”, whose first passage reads as follows:

25 D.1.3.32 (Julian, Digest, Book 84). Translation from A. WATSON, Digest of Justinian, vol. I, Philadelphia Penn. 1985, p. 13. 26 BARTOLUS ad D.1.3.32, nus 25-31, p. 44b-45b, Basel 1562. 27 J.A. CLARENCE SMITH, Bartolo on the Conflict of Laws, Am. J. Leg. Hist. 1970, p. 157-183, p. 247-275. 28 JI.1.2.9: “Law comes into being without writing (ex non scripto ius venit) when a rule is approved by use (usus). Long-standing custom (mores) founded on the consent of those who follow it is just like legislation.” Translation from P. BIRKS/ G. MCLEOD, Justinian’s Institutes, Ithaca N.Y. 1987, p. 39. 29 See L. WAELKENS, La théorie de la coutume chez Jacques de Révigny: édition et analyse de sa répetition sur la loi De quibus, Leiden 1984, esp. p. 405 et seq. 30 See also C. 8.52 (Quae sit longa consuetudo), which also provides authority for the status of long-held customs (longa consuetudo) but also a reservation that they cannot overcome reason or law; C. 8.48.1 (a father born elsewhere is able to emancipate his son if munipical law conferred such power to the local magistrates). Both these texts were used by Azo and Accursius, as noted by E.M. MEIJERS (note 1), p. 593 n. 1.

Yearbook of Private International Law, Volume 21 (2019/2020)

107

Nikitas Hatzimihail If people submit themselves and agree to someone’s jurisdiction, any judge who is in charge of a seat of judgment or has other jurisdiction has jurisdiction over those agreeing.31 This brings us to a twofold question. First, why anchor the treatment of conflicts issues to a text – any text – that addresses a very different subject in a very different environment (essentially, a unitary legal system)? Second, why cunctos populos? Charles Dumoulin, for example, the last important author to have written on conflicts as a commentary on l. cunctos populos (during his time as a professor in imperial universities, outside the Kingdom of France), was clearly responding to an established tradition.32 But what about Bartolus? And what are we to make of the fact that, even though in his discussion of l. cunctos populos he appears to respond to Accursius’ gloss, he essentially replicated his treatment in discussing l. de quibus? Did he respond to a need, or a convention, in addressing the subject in both places? Is there any significance in his apparently conscious choice to devote more effort to the former rather than the latter treatment? The very first question is easily addressed. Even by the end of the Middle Ages, the subject was important enough to be included in systematic doctrinal works but not developed enough to merit a separate treatment. Bartolus for example, who was quite familiar with the genre of tractatus, did not publish one on statutes. We know however that both his treatment of l. cunctos populos and the one on l. de quibus were presented as repetitiones.33 In both cases – especially l. cunctos populos – our subject takes up most of the repetitio but coexists with other subjects. Whether such treatments developed out of their association with the locus, or autonomously from and anchored to it, the fact of the association remains. We will have to get to the Eighteenth Century to find standalone books on conflict-of-laws issues, and this only in France, where legal literature had a different character. Early Modern authors, such as Ulric Huber and Johannes Voet, included their own conflicts treatments as autonomous chapters of their commentary on the Digest.34 The abandonment of l. cunctos populos by Early Modern authors writing in the learned law tradition has to do with the decline in the importance of the Code, in favour of the Digest (and the Institutes). This also related to the changing attitudes as to why Roman law was to be regarded as authoritative: instead of the fiction of Roman imperial continuity (Romidee), any authority Roman law enjoyed derived from the idea that it embodied Reason and from the decision of the sovereign to make it applicable (Reception theory). This brings us to the second, more challenging, question. One explanation for the primacy of cunctos populos has to do with its place in the overall system of D 5.1.1 (Ulpian, Edict, bk. 2). Translation from WATSON (note 25), p. 164. C. MOLINAEUS ad C.1.1.1, Opera omnia, Paris 1680, p. 556a. 33 This is evidenced by the manuscripts listed by F. CALASSO, Bartolo da Sassoferrato, Annali di storia del diritto 1965, p. 472-520. 34 U. HUBER, Praelectiones ad Pandectas, vol. I, Franeker 1689; J. VOET, Commentarius ad Pandectas, vol. I, The Hague 1698. Their conflicts treatments appear as appendices to Bk. 1 Title 3 (Huber) and Bk. 1 Title 4 (Voet). 31 32

108

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law the Corpus Iuris Civilis, being located at the very beginning of the Code. A late thirteenth-century French jurist, Petrus Bellaperticus (Pierre de Belleperche), is quoted as saying that cunctos populos may not have raised the same questions if it was found at the end of the book, “but it is the first, and this place vests it with a solemn character”.35 The lex de quibus was likewise located relatively early in another book, taught in different years of study (often by different teachers).36 This explanation does not fully account for the victory of l. cunctos populos over l. de quibus, however. Nor does it explain why we have to get to the mid to late thirteenth century to start seeing either locus being used seriously. To achieve this, we must consider the medieval context and look to both authoritative texts as argumentative tools – at least, foundations for the legal reasoning developed by the Glossators. As a rule, Glossators were heavily invested in the revival of the Roman imperial idea and in the elevated position of imperial Roman law. They were more reluctant to acknowledge deviations from the scope of local law than their successors, the ultramontani French jurists of the late thirteenth-century and the Commentators of the fourteenth (and fifteenth) century, who insisted on the legal power of Roman law but could no longer harbor illusions of an actual political restoration of imperial power. Medieval jurists were faced with the revived imperial Roman law (the “common law”, ius commune), on the one hand, and local norms derogating from that common law, on the other. Such local law consisted of customs and statutes. Many customs de facto preceded the effective revival of Roman law, but de jure Roman law had preceded them and any legal authority they would possess was supposed to emanate from Roman law. Older customary law had given way to written codifications, first by private initiative and eventually given official sanction or form. For example, the customs of Bologna were reportedly first written down in curia Bulgari, i.e. at the initiative of Bulgarus (d. 1166), one of the leading twelfth-century Glossators, perhaps as he exercised some adjudicative function.37 In fact, when Emperor Henry V in 1116 granted to the concives of Bologna the privilege of imperial protection and of pursuing their own customs (consuetudines) in matters of commerce, that privilege did not comprise public rights.38 Indeed, at the Diet of Roncaglia (1158) the famous Four Doctors – including Bulgarus – declared that the Emperor maintained power in matters such as taxation and appointment of magistrates.39 But a century later, in 1265, when the time came A. LAINÉ (note 1) p. 106 (“la revète d’un caractère solennel”). Following the restorative work by Irnerius, the Corpus Iuris Civilis was divided into five codices (books), three for the Digest – Digestum vetus (D. 1 – 24.2), Infortiatum (D. 24.3 – 38.17), Digestum novum (39.1-50. 17) – one for the first nine books of the Code and another one (Authenticum) for the last three books of the Code, the Institutes and the Novels. 37 M. BELLOMO (note 7), p. 84. 38 G. TAMBA, Civic Institutions (12th-early 15th centuries), in S. BLANSHEI (ed.), Companion to Medieval and Rennaissance Bologna, Leyden 2017, p. 211. 39 K. PENNINGTON, The Prince and the Law, 1200-1600: Sovereignty and Rights in the Western Legal Tradition, Berkeley (Cal.) 1993, p. 8 et seq. 35 36

Yearbook of Private International Law, Volume 21 (2019/2020)

109

Nikitas Hatzimihail to update the statutes of Bologna, 265 volumes had to be examined.40 It is telling that, whereas Glossators called statuta “written custom,” by the mid-fourteenth century Baldus calls custom a “tacit statute” (tacitum statutum).41 In this environment, de quibus would at first look like a more appropriate locus to discuss the legal status of customs. But it could be either too restrictive (“no applicable written law”) or too permissive (allowing city judges to define too broadly what is not expressly covered by Roman law). In the long run, it possessed the advantage of allowing different types of norms to be treated differently – eventually encouraging the Bartolan typology of distinguishing between “burdensome” and “favorable”, “permissive” and “prohibitive” norms. But it provided no general rule, no answer to the question of whether such a custom would extend its effect over all those found within the city’s territory – notably foreigners, but also clerics who possessed a distinct legal and jurisdictional regime. L. cunctos populos could provide some better guidance in that regard, which also happened to fit the imperialist attitude of the leading Glossators. The opening phrases of the imperial Edict provided a powerful argument by analogy. More precisely, an argument a maiore ad minus with allusions to an argument a contrario: if, in a matter as vital as religion, imperial Roman law would restrict its application to those under the Emperor’s power, it goes without saying that neither would Roman law apply beyond the territory of the Empire, nor could the local laws and customs of cities apply beyond the narrow confines left to them by Roman law, for example over a citizen of another city. Over time, that argument was weakened as the cities’ flexing of their legal muscles had given rise to coherent systems of local norms, and the legal fiction of the Empire had subsided. But this was a gradual process. By that time, not only was cunctos populos established as an anchor in the legal tradition, but it also helped underline that this was an issue of jurisdiction, not of legal sources. C.

Doctrinal Texts

The primary sources we shall consider all come from the period between midtwelfth and mid-thirteenth century – the Age of the Glossators.42 Leaving aside the anonymous French text, all three texts which vie in the historical consciousness of private international law for the title of the first doctrinal text of our field come from Italy indeed the law professors of Bologna. They also correspond – chronologically – and we will see in their substance as well – to the three different stages of the schools of Glossators. Aldricus lived at the time of the first peak of High Medieval legal scholarship but before the consolidation of masters’ colleges 40

Ph. JONES, The Italian City-State: From Commune to Signoria, Oxford 1997,

41

J. CANNING, The Political Thought of Baldus de Ubaldis, Cambridge 1987, p. 102

p. 373. n. 31. 42 For all four texts, I have been using the transcription of E.M. MEIJERS (note 5), (with the exception of Accursius). All four translations are by Professor Charles Donahue, originally for N. HATZIMIHAIL (note 3).

110

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law led to the medieval university, and the doctrinal literature, we are familiar with, by the time of Carolus. In the time of Carolus, doctrinal discussion was especially prolific and vibrant, culminating in efforts of systematization and consolidation by the time of Accursius. This was also a transformative time both for political theory and the formation of the Italian polities, which became the focus also of the subsequent, better known, generations of medieval jurists.43 1.

Aldricus: “potior et utilior”

Relatively little is known about Master (Magister) Aldricus: his work has survived in the texts of others, but there is clear evidence that he was alive between 1154 and 1177 and probably taught in Bologna.44 He was thus a contemporary of the famous Four Doctors – Martinus, Bulgarus, Jacobus and Hugo – whom we saw above taking a pro-imperial legal stance but also better known as the main pupils of Irnerius, the man who recomposed and established an authoritative version of the entire Corpus Iuris Civilis and thus laid the foundations for the textual authority on which all subsequent medieval scholarship relied.45 We saw above that Bulgarus is associated with the writing down of Bolognese customary law: he is also regarded as having advocated “a more rigorous method for analysis of the formal logic of Justinian law”, in contrast to Martinus who explored the equitable possibilities of the ius commune.46 This would mean that Aldricus lived in an environment where not just the hierarchy but the content of the sources of law themselves was still a work in progress. All this should illuminate the passage for which he has found a place in our historical consciousness. “It is asked: if men of different provinces which have different customs litigate before one and the same judge (iudex), which of them [the customs] ought the judge who undertakes to judge the case follow? I reply that [custom] which seems stronger and more useful (potior et utilior). For he ought to judge according to what has seemed better to him. According to Aldricus.”47

43 In the words of PH. JONES (note 40), p. 371, by the mid-twelfth century “[the Italian communes’] development in various spheres was so advanced as to influence the practice of empire and then papacy. In the next hundred years, critical in the history of all medieval governments, down to c. 1250, the communes perfected a political system which, though constantly evolving, experienced little substantial change before the fifteenth century.” 44 H. LANGE, Römisches Recht im Mittelalter, vol. I, Munich 1997, p. 202-204; F.C. SAVIGNY (note 6), vol. 4, p. 231-236, noting that what we have from Aldricus consists of subsequent authors referring to his oral lectures. 45 F. WIEACKER (note 6), p. 28 and 40; F.C. SAVIGNY (note 6), vol. 4, p. 9 et seq. 46 M. BELLOMO (note 7), p. 167. 47 Codex Chisiani Collectio §46 (An consuetudo legem vincat vel abrogare possit), in fine:

Yearbook of Private International Law, Volume 21 (2019/2020)

111

Nikitas Hatzimihail We must first consider the text itself. This passage is found in a collection of “Disputes among the masters” (dissensiones dominorum).48 These collections presented conflicting interpretations of legal questions by various glossators, between those insisting on strict law and those advocating a more equitable approach.49 In this case, our passage comes at the end of a discussion on whether a custom could prevail over or abrogate a law (An consuetudo legem vincat vel abrogare possit). The passage takes the form of a quaestio, but we cannot know if it referred to an actual case. We cannot in fact even know how the passage relates to the broader argument originally provided by Aldricus. We can draw inferences in considering the entire text, but caution must be exercised. With this in mind, we shall consider the argument – and norm – advanced. It must be noted that our text does not specify if the forum (the “one and same judge”) is found in the province of one of the parties, or in a third province. In this regard, the text is markedly different than all the subsequent ones we will examine, where not only the forum, but also its connection to both litigants is clearly defined. There is more than one way to read the text. The first one is to think in terms of a “domestic” case. In the Early Middle Ages, the iudex tended to simply mean the one who judges, not necessarily a trained jurist.50 A iudex in the Kingdom of Lombardy presided over a judicial territory including several smaller court districts (schulteis).51 The solution that Aldricus gives compels the judge to exercise his judgment, by choosing between the competing customs as alleged by the parties and thus deciding the case himself, instead of relying upon compurgation or judicial duel – the ancient method of judicial proof under Lombard law, which had been waning for centuries. This would be in the spirit of the procedural reform movement, which had started in ecclesiastical courts. It would also lead to the ascertainment and writing down of customary law, in the spirit of Bulgarus and in the light of eleventh-century efforts, such as the Lombarda, to organise systematically Early Medieval Lombard legislation.52 But it is also possible, and indeed desirable, to examine the text from a conflict-of-laws perspective. It must be apparent that I do not share the enthusiasm

Sed quaeritur, si homines diversarum provinciarum, quae diversas habent consuetudines, sub uno eodemque iudice litigant, utrum earum iudex qui iudicandum suscepit sequi debeat? Respondeo eam, quae potior et utilior videtur; debet enim iudicare secundum quod melius ei visum fuerit. Secundum Aldricum. I am using the original printed edition by G. HÄNEL (ed.), Dissensiones dominorum, Leipzig 1834, p. 153. The text was originally found in a manuscript (Codex Chisianus). It was brought to our attention by K. NEUMEYER (note 10), p. 67 and made more widely known by M. GUTZWILLER (note 1), p. 301. 48 Codex Chisianus collectio, §46, in G. HÄNEL (note 47), p. 151-153. 49 O.F. ROBINSON/ T.D. FERGUS/ W.M. GORDON (note 6), p. 55. 50 M. BELLOMO (note 7), p. 45. 51 K. FISHER DREW, The Lombard Laws, Philadelphia (Penn.) 1973, p. 25. 52 O.F. ROBINSON/ T.D. FERGUS/ W.M. GORDON (note 6), p. 23.

112

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law of some modern authors, who regard Aldricus as offering us an early example of a multilateral or a better-law approach. An important reason for such misreading is that the passage is read as synchronous to the subsequent medieval texts, all the while appearing very different from them. Glossators, such as Carolus and Accursius, and commentators, such as Bartolus, primarily addressed questions of conflicts between the ius commune and the local custom or statute. Once the power of a city to issue a statute governing the conduct of its own “subjects” in its own territory had been established, the next question concerned the power of the city to govern the same conduct by “non-subjects” in its own territory, and then by its subjects outside its territory. This is the reason why medieval jurists have tended to be regarded as unilateralists in conflicts literature. Aldricus himself addresses a horizontal conflict – one between different customs of different territories. He thus avoids any consideration of the role of the ius commune – he could have offered the same answer before a provincial imperial court in the Late Antiquity. He even uses the political vocabulary of Late Antiquity, in speaking of “provinces” rather than referring to cities. He also avoids any consideration of political power (and jurisdiction). In fact, his actual solution confirms this: rather than employing formal criteria, such as the custom prevailing in his own province, the judge should use his own judgment to select that custom which seems to him stronger and more useful: the meaning of either word is unclear, but they make apparent where Aldricus lies in the debate between “strict law” and an equitable approach. There is moreover an intermediate approach, which requires us to not to think in purely abstract terms – as has predominantly been the case in our historical literature – but to consider instead what kind of problems each text is concerned with. Our Glossators’ texts offer us little help by themselves, so we must infer from what we know from general legal and social history. It is there where we discern an expansion of the material scope of local norms, as we move from the transactional consuetudines of the early twelfth century to elaborate systems of statuta regulating especially patrimonial aspects of family and succession, by the fourteenth.53 This is discernible in Bartolus: eight of the nine sections of his conflicts treatment evidently address the question in terms of defining the personal, territorial and material scope of derogation of such city statutes from the ius commune, Roman law.54 But his very first section looks different – both as to how the question is posed and as to the wording of Bartolus’ solutions, which indeed look like multilateral choice-of-law rules. Even the distinctions Bartolus employs have affinities to our own: “matters arising out of the nature of the contract itself at the time it was made” are governed by the law of place where 53 For an overview of potential issues see e.g. TH. KUEHN, Property of Spouses in Law in Renaissance Florence, in M.G. DI RENZO VILLATA (ed.), Family Law and Society in Europe from the Middle Ages to the Contemporary Era, Cham 2016, p. 109-133; J. KIRSHNER, Materials for a Gilded Cage: Nondotal Assets in Florence, 1300-1500” in idem, Marriage, Dowry, and Citizenship In Late Medieval and Renaissance Europe, Toronto 2015, p. 74-93. 54 BARTOLUS ad C.1.1.1, nus. 20-51.

Yearbook of Private International Law, Volume 21 (2019/2020)

113

Nikitas Hatzimihail the contract was concluded, whereas “matters arising ex post facto due to neglect or delay” are governed by the place of performance.55 This by itself takes further the distinction elaborated by Jacobus Balduinus (1175-1235), who had reputedly first drawn a distinction between matters concerning the manner of conducting the case (ad ordinatoria litis) and matters concerning the decision itself (ad litis decisionem), in which it was not necessary for the law of the judge to apply.56 On the other hand, almost two centuries after Aldricus and over a century following Jacobus, Bartolus devotes some effort to distinguish conceptually between the place of the trial and the place of contractual performance. This should lead us to the conclusion that Aldricus had in mind a contractual case – a point to which we shall return as we discuss our subsequent texts. But it could not change our verdict on Aldricus as an aspiring founder of private international law. His approach undoubtedly captured the tensions, inherent in the judicial work of the time, between creative work and formalized decision making. It is also remarkable how many ideas are included in these 37 words. But, in the end, Aldricus did not provide any standards useful to the thousands of lawyers and judges who were faced with an increasing number of such cases. His solution moreover does not take into account political power or the hierarchies of jurisdiction. This may explain why we have little evidence of influence of Aldricus’s approach – with the single exception of Hugolinus (d. 1233), whose collection of quaestiones was characteristically entitled Insolubilia.57 2.

A French Interlude

We do not know the author of the next text, but we can safely assume he was not Italian. E.M. Meijers, who brought it to light, came to the conclusion that it was probably authored by someone who taught in Paris, before the Pope abolished law teaching in Paris in 1219.58 Let us suppose that it is the custom in the city of Paris that if someone contracts marriage with some woman, the marriage having been dissolved by the death of the woman, the man ought to have half the goods given on account of the marriage (donatio propter nuptias) and it is the custom of the city of Chartres, that if the marriage is Ibidem, nus. 13-19. E.M. MEIJERS (note 1), p. 595 and K. NEUMEYER (note 10), p. 86-87. This is reported by Jacobus’s students, Odofredus and Jacobus de Ravanis in their glosses to D. 5.1.1. 57 E.M. MEIJERS (note 1), p. 593 n. 1, following Neumeyer and citing HUGOLINUS ad C.8.52-53.1 vo controversiarum. 58 E.M. MEIJERS (note 1), p. 585, notes that even though the manuscript contains some more recent glosses from Bologna, he believes that it came to France around 1200. See also A. FLINIAUX, Le manuscrit 141 de la Bibliothèque municipale d’Avranches et le problème de l’introduction en France au Moyen-âge de texte des compilations de Justinien, in Atti del Congresso internazionale di diritto romano (Bologna e Roma, 17-28 Aprile 1934), vol. I, Pavia 1934, p. 313-327. 55 56

114

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law dissolved by the death of the woman, the man has nothing. Let us suppose that someone contracts marriage in the city of Paris and afterwards goes to the city of Chartres and stays there properly (recte) for a year and more and in that city the woman dies. The man seeks a half of the donatio propter nuptias. It is asked whether he can claim [to get it], because the heirs [of the woman] want to have the case decided by the customs of the city of Chartres and not by the custom of Paris. But someone said in reply that he can properly claim.59 Even though Meijers placed the text in his treatment of early customary and court practice, prior to his discussion of the “Italian theory”, where he included Aldricus, this is a text in the learned-law tradition, whose roots were not very deep in the North of France. It is also more or less contemporaneous to the gloss by Carolus de Tocco. In a way, this text is the most modern of the four: it states a clear, horizontal conflict between two laws – the customary law of Chartres and Paris. Even the substance of the case itself is more concrete than our Italian passages – which, at best, simply allude to a contractual dispute being litigated. This is a classic case that was to be raised again and again over the next centuries, including in some of the most canonical texts of preclassical and even classical conflict of laws, even as the subject moved from contracts to family law, and our doctrine from interpretative method to conflits de systèmes. 60 The wife dies childless, which means that her blood relatives are her heirs. With the marriage dissolved, the wife’s proprietary interests must be restituted to her heirs, which raises the question of whether the husband should be allowed to keep part of the gift bestowed upon him by his wife, by way of contribution to the household needs. Such gifts raised questions because of the Roman law restrictions of gifts between spouses. A conflict is thus triggered between the laws of the place where the marriage was celebrated (and the dowry contract executed), and the place where the couple subsequently made their home (the husband’s domicile). What makes this case even more interesting is that here each party seeks application of the custom (and jurisdiction of the courts) of the place of the other party’s domicile. 59 MS 141, Bibliothèque municipale d’Avranches, fol. 248v. Hic ponitur quedam questio. Ponamus ut est de consuetudine in civitate Parisiensi quod si aliquis contrahat matrimonium cum aliqu[a] muliere, matrimonio soluto per mortem mulieris, vir debet habere medietatem rerum donatarum propter nuptias, et est de consuetudine in civitate Carnotensi, quod si matrimonium dissolvatur per mortem mulieris, quod vir nihil habebat. Ponamus quidam contrahit matrimonium in civitate Parisiensi et postea advenit ad civitatem Carnotensem et ibi moratur recte per annum et amplius et in illa civitate mulier decedit; ille vir petit medietatem donationem propter nuptias. Queritur utrum potest, quia heredes volunt quod illa causa determinatur ex consuetudinibus Carnotensibus et non ex consuetudine Parisiensi. Sed quidam respondens dicebat quod bene potuit petere. 60 See e.g. BARTOLUS ad C.1.1.1, nu. 19.

Yearbook of Private International Law, Volume 21 (2019/2020)

115

Nikitas Hatzimihail On the other hand, the author of the gloss takes no position here, except to refer to a responsum by a jurist who advocated the application of the custom of Paris. It is unfortunate we cannot know the arguments of the responsum, especially because, for many centuries, subsequent scholarship took the opposite position. For Bartolus, for example, these cases constitute an exception to his general rule about the place of contracting determining matters arising from the contract itself.61 Bartolus gives no explanation for his position, which must have been the dominant one in practice, except for referring to the Digest.62 But that reasoning was apparently enough, until Dumoulin grounded the same rule on the presumed intention of the parties.63 It would be tempting to read into our text, especially the responsum in the final sentence, a preference for lex fori or for the place of contracting – or, alternatively, for the expansive application of the custom of Paris (which moreover was closer to the Germanic ideas of northern French customary law about community of property). It is equally, if not more, likely that there were substantive considerations involved: it is stated that the couple lived “properly” (recte) and therefore the contract of marriage was fulfilled, inducing the husband into expenses for which the donation constituted consideration. So would it not be unjust for him not to keep anything? On the other hand, especially given that the couple lived together for a little more than a year, would it not be too generous for the husband to keep half of the donatio propter nuptias? And what should we make of the fact that the wife’s family only expected to receive half of the donation in case of early dissolution of the marriage? The truth is we do not know the arguments on which the case was decided or even which solution prevailed. And this may well have been the author’s purpose: our text looks more like a quaestio, with the facts balanced so as to best invite arguments on both sides, and readers left imagining what these arguments were. Viewed from this perspective, this text represents a moment of transition: the problem of a “conflict” between customary norms applicable to the same question in different territories has been identified. It is clear that the judge must choose between one law or the other. It is also clear that hard choices are involved. But it is yet unclear what legal arguments should be employed to that effect. We cannot even be sure as to whether the response would have been the same if the substantive provision was the reverse.

BARTOLUS ad C.1.1.1, nu. 19. D. 5.1.65: “A wife should lay claim to her dowry in the place where her husband had his home, not where the dowry agreement was drawn up; for it is not the sort of contract in which the place where the dowry agreement was made has also to be considered rather than the man to whose home the wife herself was due to go under the conditions of the marriage.” 63 C. MOLINAEUS, Consilium 53, Opera Omnia, vol. 2 (Paris 1681), p. 953-956b. 61 62

116

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law 3.

Carolus: “Si Mutinensis”

Carolus de Tocco lived in the late twelfth and early thirteenth century.64 This was a time of prolific literary production, including the first serious efforts at comprehensive treatments of the Corpus Iuris material: Carolus’ more famous contemporaries, Hugolinus and especially Azo, are known for their apparatus, especially on the Code. The late twelfth century also saw the first instances of professors leaving Bologna for other towns attempting to set up universities. Carolus himself taught in Bologna but also spent some time in Piacenza and exercised judicial functions in Salerno. His most celebrated – and widely circulated – work was his systematic commentary (apparatus) on the Lombarda.65 In contrast, little has survived of his glosses and summae on the Corpus Iuris, but that includes the following gloss on cunctos populos: Here note that he does not want to bind others than those who are subject to his imperium, and there is an argument [in this direction] below [C.3.1.14]. This is, however, contrary to the customs of the cities which also want to bind others with their statutes. And there is an argument that if a Modenese litigates against a Bolognese in this city [i.e., Bologna] that the statute not harm the Modenese. But some, however, say the contrary to this, [using the] argument that the Modenese here follows the forum by summoning the Bolognese [to the Bolognese court], and by this act (unde) he accepts all the laws of this forum.66, 67 This text is markedly different from the previous ones. Unlike Aldricus, Carolus defines the issue in terms of a conflict between the law in place in two different city-states and seems to acknowledge the existence of political and jurisdictional entities. There are elements of a quaestio in the way in which Carolus presents both sides of the argument without taking himself a clear position but we also see, for the first time, actual arguments and references to legal authorities. The starting point is the argument by analogy from l. cunctos populos, as was suggested above: a polity can only bind those subject to its imperium. This is See F.C. SAVIGNY (note 6), vol. 5, p. 174-183. See e.g. F. CALASSO (note 6), p. 552. 66 CAROLUS ad C.1.1.1 MS Bibl. nat. 4546 vo clementiae fol. 2a. Hic nota quod alios noluit ligare nisi subditos imperio suo et est argumentum, infra, de iudiciis l. rem. primo responso (C.3.1.14 vo quum igitur, etc.). Est autem hoc contra consuetudines civitatum quae etiam alios constringere volunt cum suis statutis. Et est argumentum si litigat Mutinensis contra Bononiensem in hac civitate, quod statutum non noceat Mutinensi. Sed quidam contra hoc autem dicunt, argumento illo quod Mutinensis hic forum sequitur conveniendo Bononiensem, unde omnes leges illius fori recipiat. 67 The text was transcribed by K. NEUMEYER (note 10), 2:75 (who attributed the manuscript to Rodofredus) and then E.M. MEIJERS (note 1), p. 594. Neumeyer followed Savigny in attributing the manuscript to Rodofredus. See the contrary argument of E.M. MEIJERS (note 1), p. 594 n. 1. 64 65

Yearbook of Private International Law, Volume 21 (2019/2020)

117

Nikitas Hatzimihail an argument that was to have a long life thereafter. However, unlike the Commentators of a century later, Carolus does not elaborate on this point or draw distinctions. Neither is there any reference to a political word such as “citizens” (cives), “subjects” (subditi) or “foreigners” (forenses). He does refer in support to another passage of the Code (rem non novat): this is a constitutio of Justinian, which extolls legal certainty and orders the judges to apply his law.68 At this point come the opposing arguments, in favour of the application of Bolognese law. Carolus makes a pragmatic remark: this line of argument runs contrary to the customs of the cities who want to bind “others” with their statutes. This is an acknowledgment of the existing practice of cities to apply “their” law in cases brought before them.69 Glossators found imperial Roman support for this practice by relying, on the one hand, on the acknowledged force of a custom and, on the other hand, on the Digest passage regarding submission to a judge’s jurisdiction.70 It is to that locus that Carolus seems to allude to, in the argument he provides. It is tempting to think of Carolus as providing a choice-of-law rule. Even stronger would be the temptation to regard the argument of submission to jurisdiction as also constituting submission to the pertinent customs and statutes of the city, which is found in our text, as the first recorded instance of a tacit agreement, or consent, being invoked in order to determine the applicable law: by suing in the courts of Bologna, the Modenese has accepted all the laws of the Bolognese court. One cannot deny the affinities in argumentative patterns with subsequent doctrine, but we must also consider the context. The notion of consent is connected to the doctrine on custom. An argument based on submission would make sense especially with regard to commercial transactions, where the judge should choose between competing trade usages, but also in other contractual disputes. For example, it would allow us to resolve the Paris/Chartres case from the previous section: the husband sues in Paris, being subjected to the – favourable – Parisian custom. But the same case would also entail a different response if the donatio had already been delivered and his wife’s heirs sued him in Chartres. Another example concerns a problem case of particular interest for Italian commerce (and a long history ahead): prescription. Bartolus offered a case of a Florentine, who borrowed money in curia Romae with the promise to repay the money in Perugia, where however such actions are barred after ten years: everyone seems to agree that the law of Perugia should apply and the action is barred, with earlier jurists arguing that this is so because Perugia is the place of trial (locus iudicii), until Bartolus who argues that Perugia is the place of performance.71 Bartolus did go in that regard further than any other jurist until then, but the attempt to draw distinctions between between matters concerning the manner of conducting the case (ad litis ordinationem) and matters concerning the decision itself (ad litis decisionem), in which it was not necessary for the law of

C. 3.1.14 See E.M. MEIJERS (note 1), p. 594, citing Azo and Accursius (in other glosses). 70 D 5.1.1. 71 BARTOLUS ad C.1.1.1, nu. 19. 68 69

118

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law the judge to apply, was reputedly first made by a contemporary of Carolus, Jacobus Balduinus (1175-1235) in his comment on si se subiciant.72 Carolus de Tocco was a representative of his age – an age of learned-law exploration of ius commune and its relation with the emerging iura propria and of efforts to consolidate three generations’ worth of scholarly work. His short text puts together not just opposing answers to the conflict-of-laws question but also opposing approaches: legal hierarchies and political power, jurisdiction and substantive law are contrasted to submission and consent, procedural law, and custom. Carolus acquired a place in our historical consciousness because of the invocation of l. lex cunctos populos, but his true legacy appears to be in illustrating the different directions that could be taken. 4.

Accursius: “Si Bononiensis”

We thus come to Accursius (1185-1263), professor at Bologna and author of the Standard Gloss (Glossa ordinaria, Magna Glossa, or simply “the Gloss”). Accursius consolidated a lot of pre-existing material and was especially influenced by his master Azo, but also by the latter’s rival, Hugolinus. Over time, the work of Accursius overshadowed much of that earlier material.73 The Glossa ordinaria maintained its authoritative status up to the seventeenth century, but Accursius has also invited a lot of hostility and accusations of unoriginality. There are several glosses of interest to our subject in the Gloss, but they fall outside the scope of this study. Accursius has secured his place in our historical consciousness with the following gloss to l. cunctos populos: Argument that if a Bolognese (si Bononiensis) is sued in Modena he ought not be judged according to the statutes of Modena to which he is not subject, because it says [i.e., the lex] ‘which [the imperium] of our clemency [rules]’.74 There are three separate questions here. The first one concerns the relation between si Bononiensis and Carolus’s si Mutinenis. The second is about the significance of si Bononienis in its own context. The third one is about the relation of si Bononiensis to subsequent doctrine. Viewed in isolation, the gloss of Accursius sounds like a response to Carolus. We could even be tempted to perceive the gloss si Bononiensis, which only presents one side of the argument, as lacking in comparison with si Mutinensis, which presented a fuller discussion, a clear indication that there were 72 E.M. MEIJERS (note 1), p. 595 and K. NEUMEYER (note 10), p. 86-87. This is reported by Jacobus’s students, Odofredus and Jacobus de Ravanis in their glosses to D. 5.1.1. 73 J.W. WESSELS, History of the Roman-Dutch Law, Grahamstown 1908, 116-117, quoting F.C. SAVIGNY (note 6), 5:262 et seq. 74 ACCURSIUS ad C.1.1.1 vo quos, Lugdunum 1527, fol. 13: Argumentum quod si Bononiensis conveniatur Mutinae non debet iudicari secundum Statuta Mutinae quibus non subest, cum dicat: quos nostrae clementiae.

Yearbook of Private International Law, Volume 21 (2019/2020)

119

Nikitas Hatzimihail arguments on both sides. Likewise, Accursius is here setting unequivocal limits on the city’s ability to regulate its own territory, even though we know that Italian cities have in the meantime pushed further with their projects of asserting political and legal power. On the other hand, if we follow Meijers’s thesis, that the most important development for the birth of conflict-of-laws doctrine was the notion that a forum may not necessarily apply its “own” law, it must be granted that Accursius states this position unequivocally, unlike Carolus. Carolus had left open the possibility that the claim of a Modenese being sued in Bologna will be adjudicated in accordance with Bolognese statutes. Accursius reverses the facts of the case. This does not appear accidental: given his conclusion, this reversal makes it more palatable to an audience that should include at least as many, if not more, Bolognese as Modenese. The effect of Accursius’ position is thus to spare the Bolognese his subjection to Modenese statutes and customs. Nothing is said about the reverse case – and this would remind a modern jurist of unilateralism – but the principle that Accursius states should be regarded as applicable in the reverse case as well. Meijers presents si Bononienis as a mild variation of si Mutinensis.75 Meijers considers the positions Accursius takes in other glosses (including de quibus), in which he appears more favourable to the idea of the court applying its own laws to a case and surmises that Accursius originally followed the position of his master Azo, to that effect, with si Bononiensis being a relatively late addition (around 1245).76 I am not in position to dispute this conclusion and indeed there is no reason to – but this does not mean that Accursius changed his mind. Accursius was certainly very much influenced by Azo, but he also incorporated into his own apparatus other material and ideas; he himself lived a long and full life, getting involved in the practice and politics of his time and establishing a dynasty of jurists. We know that the Gloss was written over a long period of time and a work of such scope and ambition was not meant to be without any internal contradictions.77 But it would befit the scholastic spirit to consider whether there is concordance between these diverse glosses. My tentative conclusion would be that such concordance should be found in Accursius: even if he was content with the customary locus iudicii to provide the solution in such cases, this would not prejudice his answer to the general question. In his other glosses, Accursius is dealing with concrete legal problems, such the ones discussed in the preceding sections, which tend to involve “conflicts” between customary norms or usages. For example, the E.M. MEIJERS (note 6), p. 595 (“cette glosse a été répétée avec quelque variante par Accurse”). 76 Ibidem, p. 595 (“Accurse avait soutenu d’abord, dans son appareil primitive, l’opinion de son maître Azon, qu’on doit suivre toujours la lex fori”) and p. 593 n. 1, where Meijers refers to Azo ad D 5.1.1 and Accursius ad C. 8.52.1, vo controversiarium, ad C. 8.48. vo duumviris, D. 1.3.32 vo de quibus. 77 The traditional view held that a first edition of the Glossa (minus the Institutes), was published by 1228. It is now believed that the Gloss was constantly revised over a broader timeframe, such as 1220-1250. See e.g. R. FIGUEIRA, Glossa Ordinaria: Roman Law, in CH. KLEINHERZ ed., Medieval Italy: An Encyclopedia, vol. I (2004), 437-439. 75

120

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law cases Accursius uses in his gloss on de quibus causis concern statuta altering norms of feudal law.78 All indications are of a “domestic” case.79 On the contrary, si Bononienis does not only provide a general rule but also deals with a different kind of problem: a conflict between city statute and the ius commune, which is vertical as well as horizontal. Accursius seems concerned, in his gloss, with instances where city legislation is encroaching upon the ius commune, especially in matters pertaining to status, succession and patrimonial aspects of the family. The proliferation of such legislation by the time of Bartolus, a century later, makes this trend especially visible in his work, whose bulk is devoted to such questions: to give an example, alongside the simple, “horizontal” conflict of laws as to dowry we must add questions scattered in that repetitio about the effect of statutes prohibiting a husband from instituting his wife as heir, or prohibiting one spouse from leaving a legacy to another.80 And to them we should add, as the medieval practitioner probably would, statutes altering the legal norms as to who could be heir (notably daughters or illegitimate children), which would thus have a transformative effect to the same question. Accursius responded to these emergent questions by stating the classic position expected of a glossator, who stood for imperial power: the city statutes represent a local derogation from the ius commune and may therefore only bind their city’s own citizens. The argument by analogy from the limitation of imperial power is made in an addition to the gloss and then again repeated in the paratitla. Contrary to a modern lawyer’s reflective understanding, the Bolognese facing the Modena court could not be subject to Bolognese law: it would appear highly unlikely for a thirteenth-century Modena court to apply a particular Bolognese statute. The alternative to the law of Modena is the common Roman law. The same would be expected of another case not mentioned in the gloss: whether a Bologna statute might regulate the conduct of Bolognese outside the territory of their town. Accursius settles the matter easily and by implication. By the time of Bartolus, however, such an answer would not suffice. It is in responding to that question that Bartolus employs his typology of statutes, which became associated with medieval conflicts doctrine. Bartolus draws at a primary level, a distinction between prohibitive and permissive statutes. Within each category, further distinctions are drawn: between statutes regarding a thing or person, and between “favourable” (favorabilia) and “burdensome” (odiosa) statutes.81 This is obviously not the place to discuss Bartolus but, on the whole, he seems to have attempted to minimize disruption of the common legal regime and fourteenth-century social life. Bartolus and his contemporaries, however, faced a very different political and legal landscape and approached the role of learned law and the relationship between Roman law and Italian society through another lens. The very act of inclusion of the gloss in his work would be enough for Accursius to merit a place in our historical consciousness. Azo, his master of ACCURSIUS ad D 1.3.32 vo de quibus causis, Lugdunum 1627, col. 41. ACCURSIUS ad D 5.1.1 vo Si se, Lugdunum 1627, col. 633, is a casus involving two Modenese agreeing to litigate in Bologna. 80 BARTOLUS ad C.1.1.1, nu. 26, 32. 81 Ibidem, nus. 32-33. 78 79

Yearbook of Private International Law, Volume 21 (2019/2020)

121

Nikitas Hatzimihail Accursius, does not discuss at all the subject in his own gloss on l. cunctos populos.82 But even Odofredus, his contemporary (possibly a student and to some extent one of the High Medieval voices not completely shadowed by Accursius) limits himself to noting that such city statutes do not extend over “scholars” (this includes university students) and clerics – a first step, in the same direction as Accursius, but hardly a general principle.83 But we should not limit ourselves to this. Accursian doctrine captures the political and social, as well as legal and jurisdictional, transformation of Italian polities. It is easy to dismiss the gloss as a relic of the Romidee, obsolete in its own time. But it must be acknowledged that it gave the impetus for the rich doctrinal discourse of the next century, and beyond. In the long run, it identified the political dimension of what we regard as private law. In its own time, it signifies an awareness that a new way of thinking would be required to manage the legal regulation of emerging social problems.

III. Historiography The historical examination of the preceding section constitutes a re-interpretation of primary sources, which were brought to light by the grand men of conflicts historiography. Undoubtedly, such examination relates to a different question: how these doctrinal beginnings of the conflict of laws have been approached in the existing literature and how they have registered in the historical consciousness of private international law. The answer is that two distinct themes are being explored, each corresponding to the two subjects considered in the previous section. Some authors have paid attention to the textual authority most commonly used as anchor of medieval conflicts treatments, i.e. the lex cunctos populos: this discussion revolves around the significance and possible relation (or lack thereof) between that text and our subject. A more common preoccupation has been to designate the first jurist, or jurists, who wrote on conflicts doctrine: identification of the founder is related to what is presented as the foundational moment. A.

Foundations

Cunctos populos may have worked as an anchor for four centuries, but over time its use as a founding stone of conflicts doctrine has evoked hard reactions. Already in the sixteenth century, Guy de Coquille was disparaging medieval writers:

AZO ad C 1.1, (Summa, Venetia 1631), col. 7-9. ODOFREDUS ad C. 1.1.1, nu. 2, Lectura super Codice, Lyon 1552, fol. 5rb. “Statuta civitatum non ligant scolares aut clericos”. 82 83

122

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law someone randomly chose the text, and the rest aped him.84 Such derision relates to broader jurisprudential ideas and the evolution in legal style: as the humanist mos gallicus replacing the scholastic mos italicus, legal humanists accused their medieval forefathers, especially the glossators, for their failure to understand the Roman world, and its language. Accursius himself was a prominent target of such attacks.85 Humanist viciousness inaugurated a longstanding tradition of deriding the relationship between the lex cunctos populos and conflicts issues. In the late nineteenth century, François Laurent would question the link between cunctos populos and statutes, wondering “what relationship could possibly exist between an incomprehensible dogma and a legal doctrine.”86 A century later, Friedrich Juenger calls the glossators’ reasoning “preposterous.”87 A more sympathetic take was offered by Ernst Rabel, who spoke of conflict of laws being “artificially incorporated” into Roman law.88 Even Armand Lainé, who defended the choice made by medieval jurists and explained their reasoning, conceded that they were “blinded by their faith” that the Corpus Iuris contained everything.89 84 G. COQUILLE, Questions et responses sur les articles des coutumes, Paris 1644, p. 345 (Quest. CXXXI (also quoted in A. LAINÉ (note 1), p. 104) Et comme ce domicile semble avoir été mal elleu et choisi, parce que le texte n’y est aucunement à propos, aussi la question y est traitée trop prolixement pour y être bien traitée. Mais le dessein du premier docteur qui a commencé a été suivy comme par singerie et indiscrette imitation par les autres suivants : tous lesquelles à la file ayans divisé chacun de trois volumes des Digestes, et le Code en deux parties, ont travaillé de tout leur pouvoir d’enrichir les premières lectures de cette partie, en y ramassant pêle mêle toutes les belles questions qu’ils sçavoient; et au milieu et à la fin de chacune desdites parties ont passé comme en courant disant peu, ou du tou n’y ont rien dict. Et selon mon advis ils eussent mieux fait de dire mediocrement à l’entrée, et suivre par tout avec la même mediocrité et style, pour enseigner par tout. 85 J. VALÉRY, Manuel de droit international privé, Paris 1914, p. 26 mentions the following quotation by François Rabelais’ Pantagruel 2.5 (quoting from T. URQUHART, The Works of Francis Rabelais, vol. I, London 1849, p. 309): “the books of the civil law were like unto a wonderfully precious, royal, and triumphant robe of cloth of gold edged with dirt; for in the world are no goodlier books to be seen, more ornate, nor more eloquent than the Texts of the Pandects; but the bordering of them, that is to say, the Gloss of Accursius, is so scurvy, vile, base, and unsavoury (tant salle, tant infame, et punaise), that it is nothing but filthiness and villainy (ordure et villenie).” 86 LAURENT (note 1), p. 297 and 298: Les glossateurs fondent leur doctrine sur des textes mal interprétés, donc sur une base imaginaire. Ceci n’est pas un reproche. Les légistes du moyen âge étaient étrangers à toutes études, littéraires, historiques et philosophiques; il faut s’étonner, non de leurs erreurs, mais de la subtilité de leur intelligence, digne de la race italienne. 87 F.K. JUENGER (note 2), p. 11: “The reasoning is, of course, preposterous.” 88 E. RABEL, Comparative Conflict of Laws, vol. I, Ann Arbor (Mich.) 1945, p. 6-7. 89 A. LAINÉ (note 1), p. 106-109. Cf. ibidem, p. 109:

Yearbook of Private International Law, Volume 21 (2019/2020)

123

Nikitas Hatzimihail It must be noted that those authors who actually took pains to examine primary sources – or even serious secondary literature – are the ones most sympathetic of medieval jurists. Nonetheless, there is more to these modern reactions than simply failure to understand the medieval mind. I would suggest that what makes of the attachment of a gloss, such as si Bononiensis, to Justinian’s Code, a seminal moment for the discipline of private international law is the discovery of a doctrinal foundation. This is a moment signifying the linkage of the discipline with Roman law and thus with learned law and doctrinal sophistication. Going further, there are two issues involved. First, the role of doctrine – in contrast to that of the legislator and especially the judges. Second, the author’s understanding (and “narrative”) of how conflict-of-laws doctrine evolves. Whereas it is relatively common to look for a foundational moment, or even moments, few authors seem to take into account, in their narratives, the anchoring of early conflicts doctrine to a “legislative” or at least authoritative provision – moreover, one with a very different subject and approach. Among those who do, their attitudes seem to reflect their opinions on the role of legislation. Let us take, for example, the two leading early classical scholars who wrote histories of private international law in the French language, in the late nineteenth century, François Laurent and Armand Lainé. Their own different attitudes can also be associated to the evolving politics and aspirations of classical conflict of laws. Laurent promoted an optimistic progress narrative, a veritable Universalgeschichte, in which each stage of history (and doctrinal pre-history) is leading us to the present moment of creation of the discipline of private international law (and eventually, an international codification of private international law principles). Perceiving his mission, near the end of his life, as helping lay the groundwork for a new beginning, he does not look for validation of his views in Medieval or Early Modern doctrine. He looks to the “glossators” for an elaboration of the distinction between real and personal statutes, for which he found little basis on cunctos populos. In contrast, Lainé, who wrote only a few years later, represents another generation. His understanding of history was certainly not Hegelian. Lainé, who read more medieval texts, and closer than probably anyone before or since, also expressed considerable sympathy with the Italian school, which he identified with the pursuit of justice rather than a mechanical distinction between real and personal statutes. An instrumental figure of the School of international law for decades, at the time when its original manifestos were evolving into a web of doctrinal works, journals and academic deliberations, Lainé was also more of a pragmatist – less keen on a grand break with the past, more eager to keep what building materials and moral victories tradition could give him. He was also better able to understand the importance for a nascent subject of being anchored at the beginning of the Code, i.e. in a more visible place, than in the middle of the Digest or of a Ils s’imaginèrent à tort que le Corpus juris contenait tout, ne pouvait faire défaut à qui le scrutait bien. Aveuglés par leur foi, ils crurent sincèrement avoir trouvé ce qu’ils cherchaient avec tant de confiance; ils donnèrent pour des règles concernant les conflits de lois des décisions qui sont en rapport très indirect, très éloigné avec cet ordre d’idées, quand elles n’y sont pas entièrement étrangères.

124

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law French provincial Custom. He thus notes that until the – recent – emergence of specialist treatises, the subject had been “always attached accessorily, in a more or less arbitrary fashion, to other subjects.”90 It is the word always that has the biggest importance: Coquille, d’Argentré and Paul Voet have more in common with Bartolus and his predecessors than the claim. The decisive break happens when the subject has obtained its own foundations so as to construct standalone doctrinal edifices. If we now turn to twentieth-century reactions, it should come as no surprise that the most derisory reference comes from Friedrich Juenger, in the same work in which he attacked “scholars’ predominance” as the cause of “our discipline’s obscurity and vexing nomenclature,” and lamented the “speculative minds … drawn into our discipline precisely because it offers a ‘mental game with infinite complications’”.91 Accusing medieval jurists of “preposterous reasoning,” immediately following several pages of examples of an alternative approach to choice-of-law principles, makes sense given Juenger’s professed hostility to scholarly insistence on the choice-of-law method. Mature classical scholars took a different approach. Max Gutzwiller, writing in the interwar period, and projecting his own progress narrative – of scholarly development eventually giving rise to national and finally international legislative codification – in which the role of courts and practice is, in the long run, subordinate to that of legal doctrine. In his story, Roman law allowed jurists to move away from the “instinctive” preference of courts for the lex fori.92 By placing the conflicts of laws within the “common law of Roman origin”, it eventually became easier for courts to apply the statutists’ system of conflicts norms.93 Gutzwiller notes the emotional and doctrinal importance of the anchor: the nascent doctrine found a home, a permanent seat and secured its place within the great system of medieval Roman law.94 90 A. LAINÉ (note 1), p. 108: “Au surplus, est-ce que la matière des conflits de lois, jusqu’au jour où par son importance elle est devenue l’objet de traités spéciaux, n’a pas toujours été accessoirement rattachée de façon plus ou moins arbitraire à d’autres sujets?”. 91 F.K. JUENGER (note 2), p. 162-163. 92 M. GUTZWILLER (note 1), p. 298 (“Il est saisissant de constater que la « solution » instinctive de la jurisprudence fut celle en faveur de la lex fori. C’est là le principle primitif.”) 93 Ibidem, p. 293-294: Les juges appliquent les règles de ce système statutaire non pas en vertu d’une autorisation supérieure, non parce qu’ils y sont obligés, mais simplement parce qu’ils obéissent à une autorité scientifique, parce qu’ils rangent le Droit international privé dans cet ensemble, dans ce système doctrinaire qu’on appelle le Droit commun d’origine romaine, qui le Droit privé par excellence, la raison écrite commune point de départ de ce Droit civilisé. 94 Ibidem, p. 303. Grâce à cette source présumée, la doctrine naissante du Droit international privé trouve à travers les siècles son point de départ, son siège permanent: « seine Heimat », selon l’expression heureuse de M. Neumeyer. C’est à ce propos que les gloses et les commentaires exposent leurs opinions relatives aux conflits de lois; c’est en vertu de cette place que le Droit international

Yearbook of Private International Law, Volume 21 (2019/2020)

125

Nikitas Hatzimihail In the mid-twentieth century, Ernst Rabel, leading member of the comparative school, also presents a narrative emphasizing the power of scholarship to bring together diverse national practices. In its generally accepted sense, the law of conflicts or private international law dates from the medieval school of the postglossators … Like the Roman law in which it was artificially incorporated, this branch of law was regarded as universally binding. The territorial realm of the doctrines of the postglossators exceeded even the boundaries within which the canon and Roman laws were received as “written reason,” representing the law of all Christendom. […] The law of conflicts thus became one field, in which the common and civil laws had a common doctrinal basis and which could be thought of as a truly international law. 95 In Rabel’s account, conflict of laws was “artificially incorporated” into Roman law and thus became “universally binding,” leading over time to “a truly international law.” One comes to think of early conflicts doctrine as a living thing trying to survive and conquer the world.96 The connection to Roman law eventually leads to a connection with the cosmopolitan learned-law world of the ius commune, and its legacy. At the same time, these conflicts doctrines reach territories well beyond the reach of the medieval learned law – a sign of the impact of scholarship in this area, as well as of its ability to bridge the great divide between Common law and Civil Law. B.

In Search of the Foundational Moment

Conflicts literature has tended to move the foundational moment earlier in time. François Laurent had started with Bartolus (and the distinction between real and personal statutes).97 Armand Lainé effectively started with the immediate predecessors of Bartolus, postglossators and early Commentators, his own focus being on the devolpment of doctrines in the pursuit of multistate justice.98 By the beginnings of the twentieth century, the gloss emerges as the foundational moment and we see references to Accursius and, especially after the diffusion of Neumeyer’s work, Carolus. These references constitute the standard narrative as to the foundational moment: there is no difference depending on who is named as the founder. The founder has become simply a name. Aldricus himself, even though he was also brought to the forefront by Neumeyer, has acquired a distinct place in conflicts historiography: in some narratives, he is presented as an alternative foundational moment that must be examined. privé acquit une position systématique assurée au milieu du grand système du Droit romain mediéval. 95 E. RABEL (note 88), p. 6-7. 96 See especially ibidem, p. 7-9. 97 F. LAURENT (note 1), p. 297. 98 A. LAINÉ (note 1), p. 115 et seq.

126

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law It is remarkable, in this regard, that the French text discussed above does not feature in these discussions and more generally has not really registered in our historical consciousness. The text does not lack originality; it is moreover a text of learned law, which represents a venerable tradition of medieval scholarship, highlighted by the contribution of the ultramontani in late thirtenth-century Southern France, where university education in law flourished. Obviously, its claim to fame was not helped either by our inability to attribute it to a scholar or by its perceived sympathy towards lex fori. But the principal reason is that it has been connected, since Meijers brought to the fore, with customary and judicial practice. Meijers himself placed the text earlier than the other three, consonant to his narrative of a move from courts’ territorial insistence on lex fori to the scholars’ elaboration of doctrinal alternatives.99 This also connected to his impressive archival work concerning legal practice in France and the Low Countries prior to the development of the learned law. The – select few – French authors who discussed the text also placed it within their examination of early French case law. 100 1.

The Gloss as Foundational Moment

Ever since E.M. Meijers, following Neumeyer, brought him to the forefront, Carolus has been the one most often credited with being the first.101 But in our historical consciousness, Carolus has simply become the author who said first what Accursius diffused more successfully later.102 It is remarkable that few if any appear to have noticed the doctrinal differences between Carolus and Accursius – let alone to have understood what it might suggest for the state of legal practice in thirteenth-century Italy.103 The gloss presents two issues in historical consciousness. First, understanding its meaning in historical terms – as a moment in its own time, even if approached through our own conceptual framework. Second, the significance of the gloss for the subsequent development of private international law. Relatively few authors have contemplated the meaning of the gloss, apart from its representation of a beginning. Viewed outside its context, the wording of the gloss appears unilateralist – and this would fit the common perception of E.M. MEIJERS (note 1), p. 585. B. ANCEL (note 1), p. 81; J-P. NIBOYET, Traité du droit international privé, vol. III, Paris 1944, p. 62-63. 101 See e.g. Y. LOUSSOUARN / P. BOURREL / P. de VAREILLES-SOMMIÈRES, Droit international privé, 8th ed., Paris, 2004, p. 87; T. BALLARINO, Diritto internazionale privato, 3rd ed., Padova 1999, p. 16. More surprisingly, H. YNTEMA (note 1), p. 302 suggests, two decades after Meijers, that “Accursius himself is believed to have made [this “seemingly casual addition”] to the Glossa Cunctos Populos.” 102 See e.g. H. GAUDEMET-TALLON, Le pluralisme en droit international privé: richesses et faiblesses, Recueil des cours 312 (2005), p. 9-488, p. 177. 103 E.M. MEIJERS (note 1), p. 595 (“cette glosse a été répétée avec quelque variante par Accurse”); P. LALIVE, Tendances et méthodes en droit international privé, Recueil des cours 155 (1977), p. 56. Cf. B. ANCEL (note 1), p. 93-94. 99

100

Yearbook of Private International Law, Volume 21 (2019/2020)

127

Nikitas Hatzimihail medieval – and more generally preclassical – doctrine as unilateralist. Moreover, the reflective understanding of a modern lawyer examining the text of Accursius by itself would be to assume that Accursius argues that the Bolognese facing the Modena court is subject to Bolognese law. If we see this as a purely horizontal conflict, the next step would be to regard Accursius as an advocate of extreme personalism. For example, Jules Valéry presents Accursius in “formal opposition” to the territoriality principle and even acknowledges that he went too far.104 Valéry (who, remarkably, had earlier on noted that these were conflicts between city statutes and Roman law), is so perplexed or embarrassed as to suggest there may have been some personal motive behind this “absolute” position.105 What seems to have occupied more the literature is the importance of the gloss as a step in the subsequent evolution of the discipline. Three perspectives are observable in this regard. The first one emphasizes the discovery of a positive-law foundation for the conflict of laws, as examined above. Others place emphasis on the conflict-of-laws problem having been identified: Hessel Yntema, for example, underlines the “rapid acceptance of the fruitful idea that a court should discriminate according to the nature of the case in the application of law to a foreigner”.106 Another view shifts the viewpoint to the approach adopted: let us consider Meijers who tells the history of early conflicts doctrine in terms of a move from a mostly “territorial” court practice to the development of a more general legal doctrine. In this story, the first two approaches considered was the application of lex fori, on the one hand, and allowing the judge to select what he deemed the best solution, on the other.107 Meijers evidently relegates the latter to part of a footnote, regarding lex fori a much bigger challenge, having been adopted even by eminent glossators, including Accursius in his earlier work.108 The gloss of Carolus on cunctos populos, reprised by Accursius, laid the foundation for a break from earlier jurists’ (and courts’) absolute reliance on lex fori, but Meijers places the decisive break with the distinction made by Jacobus Balduinus between procedure (ordinatoria litis), to which the lex fori was applicable, and substance (decisoria litis), which was subjected to a lex causae, notably the lex loci contractus.109 It is that distinction that constitutes, to Meijers, the true foundational moment of conflicts scholarship.110 This view has found some support in the literature.111 104 J. VALÉRY (note 85), p. 23: (“[la proposition ainsi formulée ... était assurement trop absolue”). 105 Ibidem (“il est permis de croire qu’elle fut inspirée à Accurse par le désir de servir les intérêts de quelque Bolonais de ses amis engagés dans une instance portée devant les juges de la ville voisine”). 106 H. YNTEMA (note 1), p. 302. 107 E.M. MEIJERS (note 1), p. 593. 108 Ibidem, p. 593 n. 2. 109 Ibidem, p. 594-597, also noting that Jacobus’s distinction became accepted faster among the ultramontanani in Southern France than in Italy. 110 Ibidem, p. 596 (“[a]vec cette distinction …la science moderne du droit international privé était née”). A. LAINÉ (note 1), p. 253 also accepts that the Italian school was founded upon this distinction capitale with which he credits Petrus Bellaperticus.

128

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law Contrasting Yntema and Meijers shows a difference in emphasis. Yntema, a U.S. scholar writing in an environment shaped by legal realism, and the early stages of the “conflicts revolution” takes a perspective more external to doctrinal development: Yntema does not privilege here an approach – for him, it is enough that the conflict-of-laws problem has been identified and the domestic distinguished from the international. In contrast, Meijers was a leading light of mature classical conflict of laws – an emblematic figure of the reconstructive movement of European conflicts scholarship in the interwar and early postwar period, which sought to build a new synthesis overcoming both the naïve personalism of early classical internationalists and the doctrinaire territorialism of particularists. By emphasizing the substance/procedure distinction, Meijers illustrates the importance of the doctrinal art, telling a story of doctrinal development: doctrine also overcomes judicial prejudices. In normative terms, Meijers takes a middle position, dismissive of the excesses of both lex fori proponents and proponents of substantive considerations. At the same time, he denies to the personalists the legacy of the gloss, while tell the story of doctrinal development as a move away from lex fori. 2.

Aldricus as an Alternative Foundational Moment?

Aldricus appears relatively late in conflicts historiography, that is after the discovery of his passage by Karl Neumayer.112 He became better known thanks to Max Gutzwiller, who in his 1929 Hague Course placed Aldricus “at the forefront of those distinguished by an independent and novel conception of the problem of application of laws.”113 Gutzwiller himself took a moderate position: Aldricus was notable because he was the first to identify the conflict-of-laws problem: Gutzwiller’s remark, about the importance of framing the question in great scholarly problems,114 aptly captures his own moment, of doctrinal reconstruction of the classical paradigm. That position has been shared by many.115 But not all. In his own Hague course, five years later, E.M. Meijers limited Aldricus to one line in a footnote, characterizing him as a proponent of the “free 111 Meijers is followed by K. LIPSTEIN, The General Principles of Private International Law, Recueil des cours 135 (1972), p. 111; CH. FORSYTH, Private International Law, Cape Town 2012, p. 36-37 who grants Jacobus right of first place. See also M. WOLFF, Private International Law, 2nd ed., Oxford 1950, p. 24; P. LALIVE (note 104), p. 57 and p. 375 n. 85 (speaking of “distinction radicale”). 112 K. NEUMEYER (note 10), p. 66 (“…den Ruhm, die wissenschaftliche Lehre vom internationalen Privatrecht begründet zu haben”). 113 M. GUTZWILLER (note 1), p. 301. 114 Ibidem, p. 301-302: “Comme dans tous les grands problèmes scientifiques, ce n’est pas la solution qui nous étonne le plus, mais bien la question.” 115 A. MIAJA DE LA MUELA, Derecho internacional privado, vol. I, 8th ed., Madrid 1979, p. 102; G. MARIDAKIS, Introduction au droit international privé, Recueil des cours 105 (1962), p. 375-515, p. 486, 487.

Yearbook of Private International Law, Volume 21 (2019/2020)

129

Nikitas Hatzimihail choice of the judge,”116 and proceeding swiftly to the beginning of the thirteenth century when “the science received a durable basis” in the principle statutum non ligat nisi subditos.117 This has been the most common position in the literature: Aldricus is presented as a jurist making a primitive effort to solve the conflict of laws problem without conceiving of it as a distinct problem.118 But other authors make no mention of Aldricus in their narratives.119 Even Gutzwiller himself was much more nuanced in the History he wrote, half a century later.120 On the opposite end, there are those who cast Aldricus in a more favorable light. In a modern treatise, for example, he is presented not just as the “probable founder of conflicts law”, but also an early proponent of a “multilateral approach” which is contrasted to the unilateral approach purportedly adopted by his statutist successors.121 A stronger tendency has been to present him as a “partisan of the ‘better law.’”122 This is a popular idea in Anglophone – and especially U.S. – literature, especially following Hessel Yntema’s glowing presentation of Aldricus and his “equitable conception”.123 In English works, Aldricus is presented “an ancient proponent of some very modern theories”,124 and in his turn David Cavers is described a “new Aldricus”.125 E.M. MEIJERS (note 1), p. 593 n. 2. Ibidem, p. 594. 118 See e.g. B. AUDIT, Droit international privé, 4th ed., Paris 2006, p. 60; J. KROPHOLLER, Internationales Privatrecht, 6th ed., Tübingen 2006, p. 12. A. ANTON, Private International Law, Edinburgh 1967, p. 19 takes a middle position between Continental Europeans and Americans. M. WOLFF (note 112), p. 22 seems more appreciative but he makes his conclusion that Aldricus “was referring to the quality of the law itself” seem like a fallback (Wolff apparently, and mistakenly, thinks that Gutzwiller circa 1929 thought Aldricus a sponsor of the “most real connexion with the subject of litigation” approach). 119 No mention in T. BALLARINO (note 102); Y. LOUSSOUARN/ P. BOURREL/ P. DE VAREILLES-SOMMIERES (note 102), p. 86-87. 120 M. GUTZWILLER, Geschichte (note 1), p. 14-15. 121 R. MORTENSEN/ R. GARNETT/ M. KEYES, Private International Law in Australia, 4th ed. (LexisNexis Australia, 2018), p. 8. 122 LALIVE, (note 103), p. 56-57; See especially F.K. JUENGER (note 2), p. 12; also S. SYMEONIDES / W. PERDUE / A. T. VON MEHREN, Conflict of Laws: American, Comparative, International, St Paul Minn. 1998, p. 7 n. 2; A. SACK, Conflicts of Laws in the History of the English Law,” in Law – A Century of Progress, vol. 3, New York 1937, p. 342; L. MCDOUGAL, “Private” International Law: Ius Gentium versus Choice of Law Rules or Approaches, Am. J. Comp. L. 1990, p. 531. 123 See H. YNTEMA (note 1), p. 301 (“a younger and esteemed contemporary of the four celebrated ‘doctores’ of Bologna”), p. 302 (“had the genius to propose”, “equitable conception”), p. 311 (“equitable conception”), p. 317 (Yntema’s Postscript noting we have come full circle from the “equitable conception”). 124 C. FORSYTH (note 111), p. 36 n. 46, noting that “[t]he opinions of this ancient proponent of some very modern theories did not amount to much.” 125 K. LIPSTEIN (note 111), p. 157. Cf. C. FORSYTH (note 111), p. 64-65: even though he only mentions Aldricus by name in a footnote in his discussion of medieval conflict of laws, he uses his name in the title of that subsection, discussing the doctrine of David Cavers. 116 117

130

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law This diversity of opinion is telling as to current concerns. Those sympathetic to “better law” approaches, or at least to an increased role for judicial discretion, or substantive considerations, in the choice-of-law process view Aldricus indeed as an early ancestor: this is why this attitude is more common in the U.S., where such approaches form, in the very least, a legitimate part of modern conflicts discussion. But there are also those who, by emphasizing the medieval precedent of a very modern doctrine, suggest that this approach has been tried – and lost – before. We see a similar pattern in the parallels drawn between modern unilateralists and the unilateralist statutists. In Continental doctrine, the dividing line is drawn differently: those sympathetic to Aldricus view him as having made a – crucial – first step towards the elaboration of conflicts doctrine. But from another point of view, which again relates to modern sensibilities, Aldricus is seen as not having conceptualized the conflict of laws as such: if Aldricus had had his way, either there would have been no conflict of laws or, at the very least, learned law would have received stronger competition from the judge.

IV. Conclusion The study of doctrinal beginnings undertaken in this paper has involved three dimensions. The first one was to be mindful of the methodological challenges involved, in the choice of material and in striking a balance between too much of an intrinsic or extrinsic historical perspective. The second one was to examine critically our secondary literature, in order to understand the historical consciousness, and literature, of present-day private international law, as it has formed over time. The third one was the historical examination properly speaking, evaluating texts and context with a view to the doctrinal discussion of private international law. The method employed in this article was to rely on a textual analysis of specific primary texts, attempting to place them in context but also to understand them in terms of an evolution in legal thought. These texts acquire meaning through our ongoing discourse, our awareness of certain problems, the employment of certain argumentative and conceptual tools. But too often in the literature they have been seen as setting a general theory, whereas these are living texts that must be perceived in terms of their intended audience and, especially, of the problems they were intended to address. Our study has presented several examples of history as genealogy. Aldricus is a characteristic case in point: neglected by some, elevated by others to a precursor of modern approaches, the treatment of Aldricus’ short, second-hand passage in the literature is telling of each author’s sensibilities. But we have also seen that the same holds true of the gloss si Bononiensis itself, or even of the gloss’ anchor to l. cunctos populos, which we have used to discern different attitudes concerning the role of legal doctrine vis-à-vis the courts, or even the legislator, and even different normative agendas in private international law. We have therefore seen different narratives, emphasizing respectively the positive-law foundation or the elaboration of a distinct conflicts doctrine. We have also seen narratives elevating, Yearbook of Private International Law, Volume 21 (2019/2020)

131

Nikitas Hatzimihail or denigrating, legal scholarship; narratives emphasizing the departure from the judicial inclination towards lex fori, and others promoting a partnership between theory and practice. Some narratives personify the founding figure – a homage to the role that individual scholars have played in the development of our subject. Yet others anonymize this foundational moment – alluding to the necessity of these ideas taking course or even promoting alternatives to the doctrinal conflict of laws. In these narratives, historical context fades in the background, as the main driving force is to draw parallels to modern ideas, arguments in present-day battles or to convey a cyclical or evolutionary understanding of doctrine. But the reader is nonetheless motivated to make connections with the past, to seek out affinities. The historical dimension of this study was concerned with understanding the context (and implications thereof) in which “conflict of laws” can be said to have emerged as a subject of doctrinal study, rather than with identifying a “founder”. From a purely historical point of view, we shall never be certain of the precise doctrinal beginnings of the conflict of laws. So much of the glossators’ writing has been lost and, for much that survives, it is impossible to attribute with confidence the paternity of an idea: medieval doctrine was a collaborative exercise. One could thus acclaim Carolus as the first to produce what can be truly regarded as a doctrinal text on the conflict of laws, identifying a conflict between approaches as well as laws and employing language not unfamiliar to the doctrinal discourse that was started. But it was Accursius who really launched the doctrinal discourse, by adopting the gloss of Carolus into his own, widely circulated, systematic work. Whereas Accursius was very conscious of the scholarly – and commercial – value of his Glossa ordinaria, and was also mindful of the immediate legal consequences of his gloss on si Bononienis, it is improbable that he could imagine his single-sentence comment as constituting a foundational text for a distinct legal discourse. And this matters, because these doctrinal beginnings have acquired their value ex post, that is through the eventual construction of a distinct subject of the conflict of laws and, eventually, of a discipline of private international law. Three principal conclusions can be derived from this timid examination. The first one involves the political dimension: the assertion of adjudicative and normative jurisdiction by the emerging Italian polities. The High Middle Ages was a time when the imperial power was asserted, supported by strong legal arguments, and our texts played right into that: from the point of view of medieval legal history, if we could discern a pattern from Aldricus to Accursius via Carolus, it is precisely the increased confidence in limiting the power of the city to apply its law. Aldricus would enable the judge to choose the “stronger” among competing customs in a case: there is no mention of a superior law that must be applied, which would suggest that he was concerned with a contractual case rather than the more policy-heavy instances of legislative intervention on succession and personal status, which we see preoccupying Bartolus, a few generations later. Carolus hints at the limits imposed by the ius commune on a city’s power but he acknowledges a potent argument (of tacit submission) for the city applying its law: the idea of jurisdiction is here finally making its appearance. Accursius is more confident in denying the city the application of its law, in derogation of the ius commune, to non-subjects. This a powerful assertion of the application of the ius commune, the 132

Yearbook of Private International Law, Volume 21 (2019/2020)

On the Doctrinal Beginnings of Private International Law Roman law, which would however be increasingly challenged, leading to a development of an entire doctrine by the next century. Even though their language (and political theology) is markedly different from ours, medieval jurists writing on conflicts issues are in this regard not unlike classical and modern private international lawyers, tasked with managing the parochial assertions of jurisdiction and using to that effect a combination of pragmatic arguments and legal fictions of hierarchy. Even the complicated relationship between the universal aspirations of medieval scholarship and the hard, local realities of court practice should find resonance with us. The second issue concerns the employment of a doctrinal foundation. Historical consciousness aside, it seems more likely that l. cunctos populos became an anchor for subsequent treatments once thinking about such conflicts could make use of such an anchor. The choice of locus had its own significance for our story, but it is the doctrinal edifices to which it gave rise that matter most. We must neither underestimate the power, and use, of doctrinal foundations, nor mistake them for the actual doctrine they are supposed to support, but not supplant. This brings us to a third observation, regarding the relationship between doctrine and the legal subject matter. The polities of the High Middle Ages attempted to address the needs of commerce and social life by navigating between tradition and innovation and the same holds true of the learned law. This is reflected in the conceptual evolution that, if carefully examined, is discernible in our principal texts (but also the other medieval texts discussed in the background). In the medieval theory of sources, with which especially the Italian school of conflicts doctrine is intimately connected, custom equalled statute. But, in terms of law and society, it appears that the polities’ move from custom to statute entailed a different approach to thinking about the scope of law and the relation between ius commune and iura propria. Ernst Rabel suggested that “this branch of law … seems predestined always to lag behind the currents of general jurisprudence”.126 This need not be so, however: we cannot understand the conflict of laws without understanding the “general jurisprudence” on which it has been constructed, and with which it has to constantly interact but we must also be mindful of our potential contribution, and even the capacity of our specialised discourse to help in the understanding of the legal phenomenon.

126

E. RABEL (note 88), p. 9.

Yearbook of Private International Law, Volume 21 (2019/2020)

133

INTERIM MEASURES AT THE CROSSROADS OF INTERNATIONAL LITIGATION AND ARBITRATION SOME REMARKS ON CONCURRENT JURISDICTION AND CROSS-BORDER ENFORCEMENT Andrea BONOMI*

I. II.

IV.

The Crucial Role of Interim Measures Jurisdiction to Order Interim Measures A. The Principle of Concurrent Jurisdiction B. The Rationale for Concurrent Jurisdiction C. The Need for Coordination D. The Role of Party Autonomy Cross-Border Enforcement of Interim Measures A. Traditional Resistance and Increasing Openness B. Arguments for and against Cross-Border Enforcement C. Court Assistance in the Enforcement of Interim Measures Conclusion

I.

The Crucial Role of Interim Measures

III.

As is the case in domestic litigation, interim measures are often a game changer in international disputes. Conservative and protective measures (Sicherungsmaßnahmen) preserve and enhance the likelihood of future fruitful enforcement, pending a decision on the merits. Measures of provisional regulation (Regelungsmaßnahmen) ensure the continued safeguarding of rights during the proceedings, and anticipatory measures (Leistungsmaßnahmen) help to reduce the often too lengthy gap between timely performance and coercive enforcement of an executory decision. Evidence measures (Beweismaßnahmen) – albeit not always included in the category of interim measures stricto sensu – often prove crucial to securing one party’s chances of success on the merits.

* Professor at the University of Lausanne; director of the Centre for Comparative, European and International Law; co-director of the LL.M. in International Business Law.

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 137-157 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Andrea Bonomi While interim measures are key in all jurisdictions, their added value grows with the anticipated length of the proceedings. This is particularly true of certain kinds of measure, such as those of provisional regulation and anticipated performance. The longer proceedings are expected to last, the more important it is to provisionally safeguard the parties’ rights pending a decision on the merits. Interim relief is also often requested when the parties have opted for arbitral proceedings. While arbitration is generally expected to lead swiftly to an award on the merits, it is well known that in real life arbitral proceedings often last several months, sometimes years, thus increasing the need for interim protection. Also, if spontaneous compliance with arbitral awards remains more frequent than with court rulings, the practical importance of coercive enforcement is increasing: as practice shows, the end of the arbitral proceedings is often but the start of another long road, full of pitfalls, towards the actual fulfillment of the creditor’s rights. Provisional measures are important even where arbitral proceedings are particularly swift and enforcement is not an issue. Proceedings before the Court of Arbitration for Sport (CAS) are a good example: although CAS awards should be rendered within very short time limits,1 and sometimes even overnight as in the case of the “ad hoc” CAS divisions,2 both the “CAS Code” and the other CAS arbitration rules include a detailed regulation of interim relief,3 which might prove crucial, inter alia, to ensuring the right of the athletes to take part in ongoing or upcoming competitions. The reason for the centrality of interim measures is that they are often the practical tool for safeguarding a fundamental principle of civil procedure, i.e., the right to effective access to justice. As widely recognized in the case law of the ECtHR, both a reasonable length of proceedings and the availability of effective remedies are core ingredients of the right to a fair trial.4 Under specific circumstances, access to interim relief can be crucial to safeguarding those objectives. With this in mind, a functional approach should guide the interpretation of several issues that are still unsettled in the law of interim measures, in particular in cross-border cases. Most of these questions arise in a similar way in state court litigation and arbitration; a comparison between these distinct but parallel fields can 1 Under Article R59(5) of the Code of Sports-related Arbitration (2019 edition), “[t]he operative part of the award shall be communicated to the parties within three months after the transfer of the file to the Panel. Such time limit may be extended by the President of the Appeals Arbitration Division upon a reasoned request from the President of the Panel.” 2 Under Article 18 of the CAS Arbitration Rules for the Olympic Games (ad hoc) “[t]he Panel shall give a decision within 24 hours of the lodging of the application. In exceptional cases, this time limit may be extended by the President of the ad hoc Division if circumstances so require.” 3 See Article R37 of the Code of Sports-related Arbitration and Article 14 of the CAS Arbitration Rules for the Olympic Games. 4 Handbook of European law relating to access to justice (jointly prepared by the European Union Agency for Fundamental Rights and the Council of Europe, together with the Registry of the European Court of Human Rights), Luxembourg 2016, at 91 et seq., 133 et seq.

138

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration help to a better understanding of the issues at stake and encourage crossfertilization.

II.

Jurisdiction to Order Interim Measures

A.

The Principle of Concurrent Jurisdiction

While concurrent jurisdiction and parallel proceedings are often regarded, in both national and supranational systems, as negative situations, to be prevented through appropriate jurisdictional rules or rules on lis pendens and related actions, these phenomena are widely regarded as perfectly acceptable as far as interim measures are concerned. Indeed, it is a widely accepted reality that – besides the courts or tribunals having jurisdiction on the merits of the case – the courts of one or several other countries – normally those of the place of enforcement – may also have concurrent jurisdiction to order interim relief. This is first the case with respect to state court litigation. Under national systems of jurisdiction, it is common to allow local courts the power to issue interim measures, even though they do not have jurisdiction on the merits. This is the case, at the very least, when the object of the requested measure is situated within the territory of the forum state. Article 10 of the Swiss PIL Act is a good example of this approach, which is also followed in several other PIL systems: “Jurisdiction to order interim relief lies: a. with either the Swiss courts or authorities having jurisdiction for the principal action; or b. with the Swiss courts or authorities at the place where the interim measures are to be enforced.” More surprisingly, this is also recognized in the European judicial space. In the wake of the Brussels Convention, most EU regulations include a specific provision providing that “[a]pplication 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 Member State, even if the courts of another Member State have jurisdiction as to the substance of the matter.”5

5 See Article 35 of the Brussels I bis Regulation. Similar provisions are included in the Maintenance Regulation (Art. 14), the Succession Regulation (Art. 19), the Matrimonial Property Regulation (Art. 19) and the Registered Partnership Regulation (Art. 19). The Brussels II bis and Brussels II ter Regulations include slightly different provisions (see infra, section II.C).

Yearbook of Private International Law, Volume 21 (2019/2020)

139

Andrea Bonomi Despite some limits established in the case law of the CJEU6 and partly codified in the Brussels I bis Regulation,7 the reference made by this provision to the national law of the Member States is very broad. At the same time, it does not rule out – but rather implicitly confirms – that provisional measures can also be issued by the court having jurisdiction on the merits, as also recognized by the CJEU8; the consequence is a broad admission of concurrent jurisdiction. This approach contrasts with the philosophy of most EU regulations, which tend – not only for civil and commercial matters, but also in succession matters and in some fields of family law – to limit concurrent jurisdiction and encourage concentration of the proceedings before one single court, or at least before the courts of one single Member State. The contradiction is even more striking if one considers that the strict lis pendens rules included in all EU regulations do not apply where requests for provisional measures are concerned.9 Concurrent jurisdiction is also accepted in most national arbitration laws. While in the past the authority of arbitral tribunals to issue interim measures was controversial, it is now widely recognized in the great majority of national arbitration laws, under the influence of the UNCITRAL Model Law.10 Notwithstanding, a concurrent jurisdiction of state courts to order such measures is also admitted, with only rare exceptions.11 The jurisdiction of state courts to order interim measures should not be confused with their role, which is also recognized in several arbitration laws, of assisting the arbitral tribunal and/or the requesting party in implementing interim measures issued by the arbitral tribunal.12 What we are referring to here is the authority of the court to issue its own provisional measures, notwithstanding the CJEU, 17 November 1998, Van Uden, Case C-391/95, ECLI:EU:C:1998:543; CJEU, 21 May 1980, Denilauler, Case C-125/79, ECLI:EU:C:1980:130. 7 Article 2(a), para. 2, and Recital 33 of the Brussels I bis Regulation. See infra, section II.C. 8 CJEU, 17 November 1998, Van Uden (note 6), para. 19. 9 J. KROPHOLLER/ J. VON HEIN, Europäisches Zivilprozessrecht, 9th ed., Frankfurt a.M. 2011, Article 27, para. 14. 10 See Article 17 of the UNCITRAL Model Law. A great majority of national arbitration laws and virtually all arbitration rules expressly recognize the authority of the arbitral tribunal to order interim relief, with only a few exceptions (Chinese and Italian law, for instance). 11 See Article 17 J of the UNCITRAL Model Law, as amended in 2006. Most national arbitration laws also admit that an arbitration agreement does not rule out the concurrent jurisdiction of state courts to order provisional measures: see the express wording of Art. 183 Swiss PIL Act. This is also recognized in several arbitration rules, although sometimes with some restrictions (see infra, note 30). On concurrent jurisdiction see G.B. BORN, International Commercial Arbitration, vol. II, Wolters Kluwer 2009, at 1972 et seq.; 2043 et seq. According to this author (at 2032), the U.S. decision in the case Mc Creary Tire & Rubber Co. v. CEAT, SpA, 501 F.2d at 1032 – often cited as an exception to the general trend – “is not inconsistent with a general principle of concurrent jurisdiction”. 12 We will address this possibility infra, in section III.C, because it represents one of the tools available at the stage of enforcement of arbitral measures. 6

140

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration existence of a valid arbitration agreement and the jurisdiction of the arbitral tribunal resulting therefrom. The admission of this authority results, here again, in concurrent jurisdiction. The admission of a two-track jurisdiction system for ordering provisional measures in the context of arbitration might also be surprising, at first sight, if one considers that the main purpose of arbitration agreements is to deprive state courts of their jurisdiction to rule on the merits.13 However, this negative effect does not extend to interim relief. Based on national arbitration laws, this outcome is also compatible with EU regulations. While arbitration is expressly excluded from the scope of the EU instruments applicable in civil and commercial matters,14 the CJEU has ruled, in the seminal Van Uden case, that a Member State’s jurisdiction to issue interim measures is not precluded by the existence of a valid arbitration agreement.15 Although the Court did not expressly say so, this ruling also sanctions concurrent jurisdiction of courts and arbitral tribunals.

B.

The Rationale for Concurrent Jurisdiction

The rationale for concurrent jurisdiction obviously lies in the protection of the principle of effective access to justice. It certainly makes sense that the court or the arbitral tribunal having jurisdiction on the merits is recognized as having the authority to order interim measures, when requested by one of the parties. The court or tribunal seized with the merits has an extensive knowledge of the case and is thus well placed to decide whether a request for interim relief is well founded. Under virtually all national laws, a first condition for ordering provisional measures is the likelihood of success on the merits:16 the judge seized with merits is obviously best placed to evaluate this. That same judge is often also in a position to correctly assess the other usual conditions for interim relief, i.e., the risk of irreparable harm, as well as the need to strike a fair balance between the parties’ interests. However, there are also strong reasons in favour of allowing a party to request provisional measures from courts not seized with the merits. Generally speaking, these reasons reflect the need to ensure effective access to justice. A first ground is that provisional measures frequently need to be enforced on assets or against persons that are beyond the territorial reach of the court seized See G.B. BORN (note 11), at 2049 (“an exception to the general objective of international arbitration agreements”). 14 See Article 1(2)(d) of the Brussels I bis Regulation, which reproduces similar provisions of the Brussels Convention and the Brussels I Regulation. 15 CJEU, 17 November 1998, Van Uden (note 6), paras 23-25. Noteworthy is the fact that the Recast Proposal included specific language confirming that Article 35 applies even when jurisdiction on the merits is conferred on an arbitral tribunal. 16 This also applies to arbitration: see Article 17 A(1)(b) of the UNCITRAL Model Law. 13

Yearbook of Private International Law, Volume 21 (2019/2020)

141

Andrea Bonomi with the merit. This is often the case for conservative measures, but can also be true of other kinds of measure. In such situations, a court might lack the power, as a matter of national law, to issue extraterritorial orders; attachment of assets, for instance, is sometimes regarded as a purely territorial measure, which can only be issued on assets located within the territorial boundaries of the issuing court. When an extraterritorial order can be issued, cross-border enforcement might be needed but is not always available: as we will mention below, several state laws only allow for recognition and enforcement of final decisions on the merits, thus excluding interim measures.17 Even when cross-border enforcement is in principle allowed, it is often subject to limitations, which might significantly affect the effectiveness of the provisional measure: thus, in the European justice space, the circulation of ex parte measures is only possible when the opposing party is given, before enforcement, the opportunity to be heard, which is unanimously regarded as a severe restriction of the surprise effect and thus of the efficacy of those measures.18 Finally, cross-border enforcement of a foreign measure is often subject to intermediary “exequatur” proceedings, which might delay the implementation. For all these reasons, the principle of effectiveness is sometimes only (or better) protected by the possibility of filing a direct request with the court of the place of enforcement. This argument is also very important with respect to arbitration. According to the prevailing view, provisional measures cannot benefit from enforcement under the New York Convention.19 Although the 2006 revised version of the Model Law includes express provisions allowing the recognition and enforcement of foreign provisional measures, many national arbitration laws are still silent on this issue.20 The concurrent jurisdiction of the state courts in the country of enforcement is therefore crucial to ensuring effective protection. Additional arguments specifically support the principle of concurrent jurisdiction in the field of arbitration. First, provisional measures cannot be requested from the arbitral tribunal until it is constituted; although alternative mechanisms are provided for under a growing number of institutional rules (emergency arbitrator21, president of the relevant CAS division22), they are not always available. Second, and more relevantly, the arbitral tribunal cannot address provisional orders to third parties, because these are not bound by the arbitration agreement.23 Third, certain categories of interim measure cannot be, or are rarely, ordered by the

See infra, section III.A. CJEU, 21 May 1980, Denilauler (note 6), and now Article 2(a), para. 2, of the Brussels I bis Regulation. 19 See infra, section III.A. 20 See infra, section III.A. 21 See Appendix V of the ICC Rules, Article 43 of the Swiss Rules, Article 9b of LCIA Rules. 22 See Article R37(3) of the Code of Sports-related Arbitration. 23 See G.B. BORN (note 11), at 1965 et seq., 2049. 17 18

142

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration arbitral tribunal (e.g. attachments).24 Although arbitrators are often vested, in theory, with the authority to issue ex parte orders as well as anticipatory measures, it is well known that they rarely make use of this power, in their efforts to observe meticulously the right to be heard and to avert all legitimate doubts as to their impartiality.25 In all of these cases, only state courts can grant effective provisional remedies.

C.

The Need for Coordination

Although justified, to a certain extent, by the need for effective remedies, concurrent jurisdiction inevitably creates some sort of duplicative litigation. Admittedly, the resulting inconvenience cannot be compared to the downsides of parallel proceedings on the merits. Indeed, provisional measures, by their very nature, cannot jeopardize the litigation outcome on the substance of the dispute; concurrent jurisdiction in this field cannot therefore result in irreconcilable decisions. The increase in costs and resources is also more limited than in the case of parallel proceedings on the merits, provisional measures being generally obtained through expeditious and summary proceedings. Nevertheless, interferences between interim relief and proceedings on the merits cannot be denied.26 On the one hand, the possibility exists, although it does not often materialize, of contradictory decisions on parallel requests for the same or similar provisional measures: one court or tribunal might order them, while the other rejects the request.27 Admittedly, an occurrence such as this does not often lead to open conflict: first, because of the territorially limited reach of many such measures, and second, because of the widespread position of refusing their crossborder enforcement.28 However, even though contradictory decisions do not collide, the simple fact of their coexistence may weaken the credibility, and thus the very efficacy, of provisional relief. On the other hand, while it is true that a decision on a request for provisional measures cannot prejudice the final decision on the merits, various significant connections exist between the two. To begin with, an important condition for ordering interim relief is – as mentioned above – the likelihood of success on the merits. Of course, this requirement is, and can only be, examined in a summary way, based on prima facie evidence, in order not to prejudge the substance of the case. Nonetheless, it is somewhat disturbing that the parties’ chances of 24 This is the case in Switzerland: see G. KAUFMANN-KOHLER/ A. RIGOZZI, International Arbitration – Law and Practice in Switzerland, Oxford 2015, para. 6.116. 25 On ex parte measures, see the criticism by G.B. BORN (note 11), at 2016 et seq. 26 See also G.B. BORN (note 11), at 2049. 27 See CJEU, 6.6.2002, Italian Leather, C-80/00, ECLI:EU:C:2002:342, where the Court held that “a foreign decision on interim measures ordering an obligor not to carry out certain acts is irreconcilable with a decision on interim measures refusing to grant such an order in a dispute between the same parties in the State where recognition is sought”. 28 See infra, section III.A.

Yearbook of Private International Law, Volume 21 (2019/2020)

143

Andrea Bonomi success in pending or future litigation should be examined by a court without jurisdiction on the merits. The other usual conditions for interim relief – the risk of irreparable harm and the balance of inconveniences –, albeit not always directly connected with the decision on the merits, may also have a significant link with the substance of the case, and can be better analysed by the court or tribunal which is (or will be) seized with it. The intensity of the connections between interim relief and the decision on the merits also depends on the kind of measure requested. While such connections can be relatively loose in the case of conservative (protective) measures, which generally do not have the same content as the final decision and only aim to facilitate the enforcement of the latter, they are normally extremely tight when it comes to regulatory measures and measures of anticipatory performance, which are intended as an anticipation of the decision on the merits. Such interferences suggest that concurrent jurisdiction should be used with some restraint, only when it is necessary or, at least, reasonable. This idea is often put forward in the field of arbitration. While the arbitration agreement does not rule out the concurrent jurisdiction of state courts for interim relief, it nonetheless clearly shows the parties’ preference for private justice. Therefore, according to a widely held opinion, state courts should show particular restraint when asked for provisional measures and only exert their jurisdiction when this appears justified by the circumstances of the case, i.e., when the arbitral tribunal is not in a position to order effective relief.29 This idea of subsidiarity of state courts is expressed in particularly clear terms in the English Arbitration Act of 1996. Pursuant to Section 44 of the Act: “[...] (3) If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such order as it thinks necessary for the purpose of preserving evidence or assets. (4) If the case is not one of urgency, the court may, on the application of a party to the arbitral proceedings (upon notice to the other parties and to the tribunal) made with the permission of the tribunal or the agreement in writing of the other parties. (5) In any case the court shall act only if and to the extent that the arbitral tribunal, and any arbitral or other institution or person vested by the parties with the power in that regard, has no power or is unable for the time being to act effectively.” (emphasis added) Similar limitations are sometimes provided for in institutional arbitration rules.30 See G. KAUFMANN-KOHLER/ A. RIGOZZI, (note 24), para. 6.100 et seq. Under Article 28(2) of the ICC Rules, a party can address a request for interim relief to state courts after the file is transmitted to the arbitral tribunal, but only “in appropriate circumstances”. Under Article 25(3) of the LCIA Rules, after the formation of the Arbitral Tribunal, such a request is only admissible “in exceptional cases and with the Arbitral Tribunal’s authorization”. 29 30

144

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration In other national arbitration systems, in the absence of equally clear legislative language, a similar approach is sometimes taken by the courts.31 While this does not raise any particular question in countries where courts traditionally enjoy some discretion with respect to the exercise of jurisdiction (such as most common law systems), it is also acceptable in countries (such as those with civil law systems) where jurisdiction is interpreted as implying the duty of the courts to take a decision; indeed, even in such systems, the competent court is never obliged to order interim measures, but is expected to weigh the parties’ interests in the light of all the circumstances of the case. In this framework, the possibility of obtaining effective relief from the arbitral tribunal can be regarded as one of the relevant circumstances. Although the idea of subsidiarity of the courts without jurisdiction on the merits is less frequently spelled out with respect to litigation before state courts, it also occasionally surfaces in that context. This is particularly true in family law cases. Thus, the drafting of Article 15 of the Brussels II ter Regulation – while confirming the system of concurrent jurisdiction provided for in other EU regulations32 – is clearly intended to set up some limitations to interim relief granted by the court without jurisdiction on the merits. On one hand, Article 15(1) provides that “[i]n 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.” The explicit reference to the condition of “urgency”, together with the territorial limitations that were not mentioned in the Brussels II bis Regulation, indicate that the power of a court not having jurisdiction as to the substance should be used with parsimony. The subsidiary nature of such power results even more clearly from Article 15(3) of the Regulation: “The measures referred to in paragraph 1 shall cease to apply when 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 […].”

31 In the case Mc Creary Tire & Rubber Co. v. CEAT, SpA, 501 F.2d at 1032, the U.S. Court of Appeals for the 3d Circuit rejected a request for interim relief holding that, in the specific circumstances of the case, a court order would bypass the parties’ agreement to arbitrate their dispute. 32 See supra, note 5.

Yearbook of Private International Law, Volume 21 (2019/2020)

145

Andrea Bonomi Noteworthy, under this provision, is the fact that the effect of the measures taken by the court without jurisdiction on the merits does not cease only when the decision on the merits is rendered (as is normally the case for interim measures), but already when the court seized with the merits takes appropriate measures. This confirms that the concurrent jurisdiction of a national court under Article 15 of the Brussels II ter Regulation is considered subsidiary to the jurisdiction of the ordinarily competent court.33 In family law disputes, some state courts have also clearly adopted an approach based on subsidiarity. An interesting example is provided by the case law of the Swiss Federal Tribunal on the possibility of obtaining, in Switzerland, provisional regulatory measures in divorce cases filed with a foreign court. According to the highest Swiss court, such measures are only available under specific circumstances, in particular when equivalent measures cannot be obtained – within reasonable time limits – from the foreign court seized with the merits, or when the measures ordered by that court cannot be enforced in Switzerland.34 It might be argued that this approach is particularly welcome in family law cases.35 In this field, interim relief mostly consists of regulatory measures, which, as mentioned above, are particularly closely related to the substance of the dispute, and therefore should in principle be ordered by the court with jurisdiction on the merits. However, a similar argument may also apply in civil and commercial matters, at least when regulatory and anticipatory measures are requested. In a wider perspective, good reasons speak for extending beyond arbitration and family law cases the self-restraint practised by some national courts when they do not have jurisdiction on the merits. While favouring the concentration of litigation and thus procedural economy, this approach also prevents interferences with the main proceedings and reflects an idea of comity. More importantly, by imposing on the court seized with a request for interim relief a previous analysis of the ability of the court seized with the merits to order appropriate measures, the idea of subsidiarity emphasizes that concurrent jurisdiction in this field is only justified by the need to provide effective remedies. To be sure, nothing in the Brussels I bis Regulation suggests that the power of national courts under Article 35 is subsidiary to the power of courts having jurisdiction as to the substance. Also, the CJEU – while clearly worried by the excessive territorial reach of interim measures ordered on the basis of that provision – has never suggested that subsidiarity should (also) be a key factor. However, 33

I. PRETELLI, Provisional Measures in Family Law, this Yearbook, 2018/2019,

p. 126. ATF 134 III 334; ATF 104 II 247. See also judgments of 5.3.1991, 5C.243/1990, 21.4.2008, 5A_677/2007, of 30.8.2010, 5A_461/2010, and of 12.11.2014, 5A_588/2014. On this case law, see A. BUCHER, in A. BUCHER (ed.), Commentaire romand LDIP/CL, Bâle 2011, Art. 62, n° 5. 35 See also I. PRETELLI (note 33), at 125, who argues that provisional and protective measures in family matters also deserve different treatment because of “the object of the measure, which is not merely material (e.g. a sum of money, the property of an object, etc.), but consists in a substantial interference on the self-determination of one or more persons”. 34

146

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration since Article 35 largely refers to national law, nothing prevents Member State courts from spontaneously including this standard in their analysis.

D.

The Role of Party Autonomy

It is uncontested that party autonomy can play a positive role in the allocation of jurisdiction to order interim measures. This is obvious in the field of arbitration: since the jurisdiction of the arbitral tribunal to rule on the substance of the dispute always depends on the existence of a valid arbitration agreement, this also applies to the tribunal’s jurisdiction to grant interim relief. The same is also true of state courts: a valid choice-of-court agreement also grants the chosen court the power to issue provisional measures.36 In both cases, the parties do not need to provide specifically for interim measures in their agreement: the authority to order them follows from the principle that courts and tribunals having jurisdiction on the merits also have the authority to grant interim relief. Can the parties expressly grant the chosen court or tribunal such authority when this does not result from the applicable law? In arbitration, this possibility follows from the uncontested right of the parties to adapt the arbitral procedure to their needs: on this basis, most arbitration rules expressly provide for the authority of the tribunal to order provisional relief.37 However, such rules as, more generally, the party agreement are subject to mandatory rules of the lex arbitrii, which reserve the power of issuing interim measures for state courts.38 The mandatory nature of the procedural rules of the lex fori will also normally preclude a party agreement specifically conferring the power to issue interim measures on a state court which would otherwise lack such power. Of course, whenever jurisdiction depends on a choice-of-court or an arbitration agreement, its scope is determined by the parties’ will. As far as a dispute is not covered by the forum-selection agreement and therefore falls under the jurisdiction of a court having jurisdiction under the objective rules, this court will also retain its authority to order provisional measures in that respect. Similarly, in the rare cases where a choice-of-court agreement (or the arbitration agreement, which is even less frequent) is not exclusive, it will not deprive the courts having concurrent jurisdiction on the merits of their power to also rule on requests for provisional measures.

36 A. BUCHER (note 34), Article 23 CL, para. 47. See also the decision of the Swiss Federal Tribunal in the case SodaStream (ATF 125 III 451), which however deals in particular with the negative effects of a choice-of-court agreement. 37 Article 28 ICC Rules, Article 26 Swiss Rules, Article 25 LCIA Rules. The authority of emergency arbitrators also rests on a specific allocation of jurisdiction to order interim relief ante causam. 38 This is for instance the case in China: see Article 28 of the Chinese Arbitration Law.

Yearbook of Private International Law, Volume 21 (2019/2020)

147

Andrea Bonomi A more difficult question is whether party autonomy can also play a negative role, in other words whether parties have the right to exclude the jurisdiction of a court or a tribunal to order interim relief. At first sight, this might sound like a rather theoretical question, devoid of practical interest. Why would the parties wish to restrict their right to apply for interim relief before concurrent courts or tribunals? While it is true that such agreements remain unusual, they might sometimes be appealing to the parties or to one of them. Indeed, concurrent jurisdiction – albeit often useful – is also a source of complexity, which the party may, for various reasons, wish to avoid. First, the concentration of the dispute in the hands of a single court or tribunal might appear desirable for both parties.39 While the idea of “one-stop” dispute resolution is often mentioned as one of the advantages of arbitration, a choice-of-court agreement may also be seen as pursuing a similar objective. By reducing complexity, concentration reduces the costs and inconveniences of parallel proceedings, and prevents contradictory decisions. Secondly, it may happen that one of the parties – for whatever reason – particularly fears exposure to provisional measures, and thus wishes to limit their availability. This may be the case of the licensee of an IP right who might fear being the target of injunctions requested by the licensor, or of a debtor holding most of its assets within a “safe-haven” jurisdiction. If the bargaining power of that party is sufficiently strong, it may result in an attempt to exclude (or limit) concurrent jurisdiction for provisional measures. Thirdly, there might be a particular wish to rule out the jurisdiction of state courts (as opposed to arbitral tribunals) in order to protect confidentiality,40 or to preserve the autonomy of a specific field: sport-governing bodies are, for instance, generally interested in limiting interferences of state courts in order to take account of the peculiarities of sport-related disputes.41 Finally, one of the parties may wish to exclude interferences from the courts of a certain country because of lack of trust in their independence and impartiality, or due to concerns about their (too) extensive powers to grant extraterritorial measures. In the field of arbitration, there seems to be no doubt that the parties can rule out the authority of the arbitral tribunal to order provisional measures. Although rarely used, this possibility is expressly recognized by several arbitration laws;42 more generally it follows from the wide admission of party autonomy in

With respect to arbitration, see G.B. BORN (note 11), at 1973 and 2052. Ibid. 41 See infra, note 45, on Article R37 of the Article 37 of the Code for Sports-related Arbitration. 42 Article 17 of the UNCITRAL Model Law (“Unless otherwise agreed by the parties […]”). See also Article 183(1) Swiss PIL Act and § 38(1) of the English 1996 Arbitration Act. 39 40

148

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration this field,43 and in particular from the parties’ right to mould the arbitration procedure. By contrast, parties’ autonomy to exclude court-ordered provisional measures is more controversial. While more liberal courts and commentators uphold such agreements,44 a more restrictive opinion is that they should not deprive a party of its right to obtain effective remedy. It follows that state courts will retain their power to order interim relief, notwithstanding the party agreement to the contrary, whenever the arbitral tribunal is not in a position to grant an effective equivalent of the requested measure.45 This can be the case, for instance, when the tribunal is not yet constituted, when a measure is to be addressed against a third party, or when its cross-border enforcement is not available. It is submitted that a similar approach should also be followed in the field of state court litigation. As far as the parties are allowed to agree on the exclusive jurisdiction of a court to rule on the substance of the dispute, they should also be allowed, in principle, to enter into an exclusive choice-of-court agreement concerning interim measures, thus excluding the concurrent jurisdiction of other national courts.46 However, such an agreement cannot affect their right to obtain effective remedies, and should therefore be disregarded when the chosen court is unable to grant appropriate relief.47

III. Cross-Border Enforcement of Interim Measures A.

Traditional Resistance and Increasing Openness

Provisional measures requested from the court at the place of enforcement can be directly executed, if necessary by coercion, within the territory where they were 43

G.B. BORN (note 11), at 1973; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 24),

at 6.91. G.B. BORN (note 11), at 2051 et seq.; E. GAILLARD/ J. SAVAGE (eds), Fouchard, Gaillard Goldman on International Commercial Arbitration, Kluwer 1999, at 1319; S. BESSON, Arbitrage international et mesures provisoires – Etudes de droit comparé, Zurich 1998, paras 225 et 299. The validity of such agreements was recognized in principle, in an ICSID case, by the French Cour de Cassation in its decision of 21.4.1986, Société Atlantic Triton v. République populaire révolutionnaire de Guinée e.a., Rev. arb. 1987, at 315. 45 G. KAUFMANN-KOHLER/ A. RIGOZZI (note 24), para. 6.108. The question is often discussed in the area of sports arbitration, because Article 37 of the Code for Sports-related Arbitration, while providing CAS panels with the jurisdiction to order provisional measures, rules out the concurrent jurisdiction of state courts. 46 G.B. BORN (note 11), at 2057 et seq. 47 With respect to the Lugano Convention, see the decision of the Swiss Federal Tribunal in the case SodaStream (ATF 125 III 451); A. BUCHER (note 34), Article 23 CL, para. 47. 44

Yearbook of Private International Law, Volume 21 (2019/2020)

149

Andrea Bonomi ordered. The issue of cross-border enforcement thus only arises for such measures as are provided (or may be provided) with an extraterritorial effect. Cross-border enforcement of provisional measures is accepted within the European judicial area. Indeed, such measures fall within the very broad definition of “decisions” provided for in EU regulations and thus benefit from their very open system of recognition and enforcement. However, important limitations have been set up by the case law of the CJEU and in the Brussels I bis Regulation. A first, undisputed, restriction concerns ex parte measures: on the basis of the Denilauler decision,48 these can only be enforced in another Member State once the defendant has been given a genuine opportunity to be heard.49 This important practical limitation – now expressly codified in Article 2(a), para. 2, of the Brussels I bis Regulation50 – deprives extraterritorial ex parte measures of their “surprise effect” and thus of some of their usefulness. Other restrictions apply specifically to measures ordered by the court without jurisdiction on the merits. On the one hand, cross-border enforcement is clearly excluded with regard to anticipatory measures, such as an interim order of payment. By requiring in the van Uden decision that such measures “[relate] only to specific assets of the defendant located or to be located within the confines of the territorial jurisdiction of the court to which application is made”,51 the CJEU has clearly deprived them of any extraterritorial effect; their cross-border enforcement is therefore excluded, as also confirmed in the Mietz case.52 On the other hand, the situation was (and still is) more controversial with respect to other kinds of provisional measure ordered by a Member State court without jurisdiction on the merits. Before the recast, such measures could probably benefit from cross-border enforcement. In its van Uden and Mietz decisions, the Court had only intended to curtail the extraterritorial effect (and the cross-border recognition) of anticipatory measures, because of the specific dangers connected with this category of measure; a contrario, other kinds of measures still benefitted from recognition and enforcement even when ordered by a court without jurisdiction on the merits.53 The only CJEU, 21 May 1980, Denilauler (note 6). Recognition and enforcement are possible provided that the defendant was served, and thus enabled to challenge the interim measure in the State of origin, before enforcement: CJEU, 13 July 1995, Hengst, C-474/93, ECLI:EU:C:1995:243 [1995] ECR I-2113, paras 14-15. See also the decision of the Swiss Federal Tribunal in the case Motorola (ATF 129 III 626, point 5.2.2). 50 According to this provision the notion of “judgment” under the Regulation “[…] does not include a provisional, including protective, measure which is ordered by such a court or tribunal without the defendant being summoned to appear, unless the judgment containing the measure is served on the defendant prior to enforcement”. See also Recital 33 of the preamble to the Regulation. 51 CJEU, 17 November 1998, Van Uden (note 6), para. 47. 52 CJEU, 27.4.1999, Mietz, C-99/96, ECLI:EU:C:1999:202. 53 In this sense, see also M. PERTEGÁS SENDER, in U. MAGNUS/P. MANKOWSKI (eds), Brussels I Regulation, Munich, 2007, Art. 30, para 27 et seq.; A. NUYTS, in A. DICKINSON/ E. LEIN (eds.), The Brussels I Regulation Recast, London 2015, Art. 2a, para 2.108 et seq. 48 49

150

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration question was whether the requirement of a “real connecting link” between the subject matter of the measures and the territorial jurisdiction of the issuing court, set up by the CJEU in van Uden,54 could also be reviewed at the stage of recognition and enforcement.55 This question, still relevant under the Lugano Convention, has probably become moot under the Brussel I bis Regulation, which has simply excluded from the benefits of Chapter III all provisional measures ordered by a court without jurisdiction on the merits. According to a widely held (albeit not unanimous) opinion, this is the effect of Article 2(a), para. 1, of the Regulation, which includes in the definition of judgments only “provisional, including protective, measures ordered by a court or tribunal which by virtue of this Regulation has jurisdiction as to the substance of the matter.”56 While it can hardly be contested that this was the intention of the EU lawmaker, this restriction gives rise to some perplexity. Contrary to the reference, in the same provision, to ex parte measures, the restrictive definition adopted in Brussels I bis goes beyond a mere codification of the case law of the CJEU, and rules out from the benefits of Chapter III all categories of provisional measures ordered on the basis of Article 35. This may be regarded as overkill.57 Despite these limitations, the Brussels I bis Regulation and the Lugano Convention are still very recognition-friendly in comparative terms. Indeed, comparative analysis shows that, in many national systems recognition and

See also CJEU, 6.6.2002, Italian Leather (note 27), where the Court held that, for the purpose of the applicability of the rules on recognition of the Brussels Convention, “it is unimportant whether the judgments at issue have been delivered in proceedings for interim measures or in proceedings on the substance”, and, implicitly, the Swiss Federal Court in the Motorola case (ATF 129 III 626, point 5.3.1: “[i]m vorliegenden Verfahren steht keine Leistungsverfügung zur Beurteilung”). However, several commentators expressed an opposite view: see F. POCAR, Explanatory Report to the 2007 Lugano Convention, JO C 319, 23.12.200. point 127; H. GAUDEMET-TALLON/ M.-E. ANCEL, Compétence et exécution des jugements en Europe, 6 ed., Paris, 2018, p. 496 et seq.; 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, Short Studies in Private International Law, TMC Asser Instituut, 2017, p. 110 et seq. 54 CJEU, 17 November 1998, Van Uden (note 6), para. 40. 55 In the Motorola case (ATF 129 III 626, point 5.3), the Swiss Federal Tribunal seemed to accept this (although it finally refused to apply this ground for refusal to the benefit of a defendant domiciled in a third country). However, this approach is not completely consistent with the EU recognition system, in which review of indirect jurisdiction is normally excluded. 56 See also Recital 33: “[…] Where provisional, including protecting, measures are ordered by the court of a Member State not having jurisdiction as to the substance of the matter, the effect of such measures should be confined, under this Regulation, to the territory of that Member State.” 57 See also A. NUYTS (note 53), para. 2.110 (“a step backword in respect of the free circulation of judgments”).

Yearbook of Private International Law, Volume 21 (2019/2020)

151

Andrea Bonomi enforcement – if at all possible58 – are reserved for “final decisions”, which is often interpreted as only including final judgments on the merits.59 International conventions on recognition and enforcement – other than the Brussels and Lugano Conventions – often also exclude interim measures from their scope60 or remain silent on the issue.61 However, this restrictive view is not universally shared: a modern trend – probably influenced by the European legislation – is emerging in some jurisdictions, which are now open to cross-border enforcement of foreign interim measures. An interesting example is Brazil: since the recent reform of the Brazilian rules on recognition and enforcement of foreign judgments, the 2015 Code of Civil Procedure62 now expressly provides for the enforcement of foreign interim measures.63 As in the European system, foreign ex parte measures can only be enforced when the debtor has subsequently been given the right to challenge them.64 In Switzerland the question is still unsettled,65 but an increasing number of scholars and court decisions interpret the “finality” requirement set up for recognition and enforcement of foreign decisions in Article 25(b) Swiss PIL Act as not precluding enforcement of foreign interim measures.66 58 In several countries, recognition and enforcement of foreign decisions is only possible on a treaty basis: this is the case, inter alia, in China, Russia and some Scandinavian countries. 59 For the United States, see also AMERICAN LAW INSTITUTE, Recognition and Enforcement of Foreign Judgments: Analysis and Proposed Federal Statute (May 2005), at 142. The same is true in Canada and Japan. 60 This is the case of the 2005 Hague Choice of Court Convention (Art. 7) and of the recent 2019 Hague Judgments Convention (Article 3(1)(b), in fine: “An interim measure of protection is not a judgment”). See A. BONOMI/ C. MARIOTTINI, A Game Changer in International Litigation? Roadmap to the 2019 Hague Judgment Convention, in this Yearbook 2018-2019, p. 545. By contrast, the 1999 draft preliminary convention included interim measures ordered by the court having jurisdiction on the merits of a case (Article 13). 61 Like most bilateral treaties on recognition and enforcement of decisions. 62 Law No. 13.105/2015. See H. DALLA BERNARDINA DE PINHO/ F. PEREIRA HILL, Considerações sobre a homologação de sentença estrangeira no novo Código de Processo Civil, Revista Eletrônica de Direito Processual, 2016, pp. 112-134; L. SPITZ, Recognition and Enforcement of Foreign Judgments in Brazil, this Yearbook 2018/2019, pp. 221-241. 63 Article 962 of the Code of Civil Procedure. See L. SPITZ (note 62) at 230. 64 Article 962 § 2 of the Code of Civil Procedure. 65 The Swiss Federal Court mentioned the issue, but left it unanswered: ATF 124 II 221, point 3bb; 5P.252/200, point 3.3. 66 Appellationsgericht Basel, 22.9.2004, BJM 2006, p. 29; Appellationsgericht Basel, 29.12.1993, BJM 1994, p. 147; Kantonsgericht Sankt-Gallen, 19.12.1991, GVP 1992 No 40. D. TUNIK, L’exécution en Suisse de mesures provisionnelles étrangères : un état de lieux de la pratique, Semaine Judiciaire 2005 II 275, at 288; A. BUCHER (note 34), Article 25 paras 26-31; M. MÜLLER-CHEN, in M. MÜLLER-CHEN/ C. WIDMER LÜCHINGER, Zürcher Kommentar zum IPRG, 3d ed., Zurich 2018, Article 25, para. 66 et seq. Contra: Obergericht

152

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration A similar trend can be observed in the field of international arbitration. Under the interpretation prevailing in several Contracting States, provisional measures ordered by an arbitral tribunal do not benefit from the very recognitionfriendly rules of the New York Convention.67 This is not surprising when one considers that the authority of arbitral tribunals to order interim relief was still very controversial in 1958. Even the 1985 UNCITRAL Model Law, which expressly recognized such authority, did not include, in its original version, any specific language on the cross-border enforcement of provisional measures ordered by arbitrators. National arbitration laws are also often silent on this issue.68 However, the 2006 revision of the Model Law includes – among several detailed provisions on interim relief69 – specific provisions on recognition and enforcement of foreign provisional measures. Under Article 17 H, a tribunalordered measure “[…] shall be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the competent court, irrespective of the country in which it was issued […],” subject to a limited number of grounds for refusal.70 B.

Arguments for and against Cross-Border Enforcement

The discussion about the desirability of cross-border enforcement of foreign provisional measures very often revolves around technical issues of interpretation, such as the meaning of “finality” of foreign decisions or the nature of an order for interim relief. In Switzerland, for example, the opponents of cross-border enforcement very often argue that provisional measures are not “final” because, by definition, they cease to apply when a decision is rendered on the merits and they can be modified at any time pending that decision. Conversely, the supporters of enforcement stress that – albeit temporary and subject to adjustment – an order issuing ZH 23.10.2001, ZR 2002 No 84; Obergericht ZH, 11.7.1989, ZR 1989 p. 126; I. CHABLOZ, La reconnaissance et l’exécution des mesures provisoires, in J. KREN KOSTKIEWICZ et al. (eds), Vorsorglicher Rechtsschutz, Bern 2011, at 101. 67 See B. EHLE, Article I, in: R. WOLFF (ed.), New York Convention – Article-bArticle Commentary, 2d ed., Munich 2019, Article I para. 66 et seq. (with respect to “binding decisions that are interlocutory or temporary in nature”) and para. 71a (with respect to orders issued by emergency arbitrators); G. KAUFMANN-KOHLER/ A. RIGOZZI (note 24), paras 6.135 and 8.244. However, a different view prevails in some countries, such as the U.S.: see references in G.B. BORN (note 11), at 2021 et seq. 68 See for instance the U.S. Federal Arbitration Act and the French Code of Civil procedure. 69 Articles 17 to 17 J of the 2006 UNCITRAL Model Law. 70 These are listed in Article 17 I of the 2006 UNCITRAL Model Law and correspond to the grounds for refusal applicable to foreign awards under Article 36 of the Model Law and in Article 5 of the New York Convention.

Yearbook of Private International Law, Volume 21 (2019/2020)

153

Andrea Bonomi interim relief is “final”, because it disposes of a request for relief and is not subject to challenge.71 Similar arguments are put forward not only in other countries but also in the field of arbitration in favour of denying interim measures the benefits of the New York Convention.72 The applicability of this treaty is sometimes also rejected on the grounds that provisional measures are not “foreign arbitral awards”, but procedural orders.73 However, such technicalities are not very enlightening on the policy reasons that should be taken into consideration in order to decide whether to allow or rule out cross-border enforcement of provisional measures. Trying to speculate on the real grounds for rejection, a first reason might be the “precarious” nature of interim measures: their lack of sufficient “stability” would oblige the enforcing court to continuously re-assess the situation in order to adjust the measures of enforcement, and in any event create a danger of prejudice for the addressee when the provision is ultimately revoked. On closer examination, such arguments are hardly convincing. It is of course important to ensure that the effects of an interim measure abroad are reconsidered when the order is modified and, in any event, that they cease when a decision is rendered on the merits. It is also crucial that restitutio in integrum is granted to the addressee when it is clear that the measure was illfounded. However, such objectives must be preserved not only in cross-border cases, but also in purely domestic situations. Some additional practical difficulties can certainly arise in transnational situations, but concrete solutions can be found, for instance by ensuring that the enforcing court is kept continuously informed74 and by imposing a security upon the requesting party.75 Rejecting cross-border enforcement altogether is overkill.

For reference, see the authors cited supra, at note 66. See supra, note 67. 73 G. KAUFMANN-KOHLER/ A. RIGOZZI (note 24), paras 6.135, footnote 169, who stress that the Swiss Federal Tribunal characterised provisional measures as procedural orders, not subject, as such, to being challenged under Article 190 Swiss PIL Act (ATF 136 III 200). 74 See Article 17 H(2) of the 2066 UNCITRAL Model Law: “[t]he party who is seeking or has obtained recognition or enforcement of an interim measure shall promptly inform the court of any termination, suspension or modification of that interim measure”. 75 See Article 17 H(3) of the 2006 UNCITRAL Model Law: “[t]he court of the State where recognition or enforcement is sought may, if it considers it proper, order the requesting party to provide appropriate security if the arbitral tribunal has not already made a determination with respect to security or where such a decision is necessary to protect the rights of third parties”. The case law of the CJEU concerning anticipatory measures confirms this: according to the Court, interim payment orders can only be considered as a provisional measure within the meaning of Article 24 of the Brussels Convention, when “repayment to the defendant of the sum awarded is guaranteed if the plaintiff is unsuccessful as regards the substance of his claim”: CJEU, 17 November 1998, Van Uden (note 6), para. 47; CJEU, 27.4.1999, Mietz (note 52), para. 42. 71 72

154

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration Another reason for rejecting cross-border enforcement might be that provisional measures are regarded as the expression of a state’s power (imperium), which is by definition territorial. Such reasoning might have been convincing in the past; indeed, the lack of imperium used to be the main argument for denying the arbitrator’s authority to order such measures. The now almost universal recognition of the arbitral power to order interim relief, as well as the trend towards allowing coercive enforcement of measures ordered by both arbitral tribunals and foreign courts, greatly undermines the persuasiveness of this argument. Also, since foreign judgments and awards are routinely enforced across state boundaries it is difficult to argue that provisional measures should not be. While the arguments against cross-border enforcement of interim measures are rather unconvincing, the right to effective remedies clearly supports it, at least when the measures are ordered by the court or the arbitral tribunal having jurisdiction on the substance of the proceedings. As mentioned above,76 the jurisdiction of such a court or tribunal is, for several reasons, hardly contested, in particular because of its ability to concentrate litigation in a single forum and thus ensure procedural economy. Cross-border enforcement of such measures is often a necessary requirement for their efficacy. Of course, some conditions need to be complied with. Besides the usual grounds for refusal, applicable to all foreign decisions (which also encompass European law restrictions concerning ex parte measures), specific safeguards should be put in place to ensure, when needed, re-adjustment of the enforcement measures and restitutio in integrum to the benefit of the debtor. C.

Court Assistance in the Enforcement of Interim Measures

While it is submitted that foreign and arbitral interim measures should be recognised and enforced under the same conditions as other foreign judgments, such an obligation might entail a significant change in the law and practice of some national legal systems. To facilitate the transition, an alternative, less constraining, solution might consist in providing the courts of the requested state with the authority to “assist” in the enforcement of the measure, without imposing a mechanical recognition. A mechanism of this kind is well-known in arbitration, where several arbitration laws provide that the arbitral tribunal,77 or one of the parties,78 can request the assistance of state courts in enforcing provisional measures. Under some arbitration laws, court assistance is limited to the implementation of provisional measures within the country of the seat of arbitration,79 while in See supra, section II.A. Thus, Article 183(2) of the Swiss Pil Act provides that if a party does not voluntarily compy with a provisional measure ordered by the tribunal, “the arbitral tribunal may request the assistance of the competent court.” 78 See inter alia § 1041(2) of the German Code of Civil Procedure; § 42(1) of the English Arbitration Act. 76 77

Yearbook of Private International Law, Volume 21 (2019/2020)

155

Andrea Bonomi other countries it is also available for measures ordered by a tribunal sitting abroad.80 In the latter case, the assistance of the local courts comes very close to plain cross-border enforcement of the tribunal-ordered measure,81 but it should not be confused with it. First, the assisting court has the authority to order its own measures, and to adapt and complement those ordered by the tribunal,82 and is therefore not subject to the strict prohibition of review on the merits. Such measures of enforcement are based on national law.83 Second, the requested court seems to enjoy some discretion, both in its decision to assist and in the modalities. However, this discretion is limited. The request for assistance should be distinguished from an (autonomous) request for interim relief directly addressed to the state courts of the place of enforcement. Thus, the court should not review whether the requirements for interim relief are met.84 This is because the court is not requested, in this case, to order its own provisional measures, but only to assist (as “juge d’appui”) in the implementation of the measures ordered by the arbitral tribunal. Although originally designed for tribunal-ordered measures, nothing prevents a similar, intermediate mechanism to be also introduced in state litigation to the benefit of foreign court-ordered measures. An interesting proposal along these lines was included in the 2005 ALI Proposed Federal Statute on the Recognition and Enforcement of Foreign Judgments.85 Under the title “Provisional Measures in Aid of Foreign Proceedings”, § 12 of this draft provides that “[a] court in the United States may grant provisional relief in support of an order, whether or not it is final, issued by a foreign court (i) to secure enforcement of a judgment entitled to recognition and enforcement […]; or (ii) to provide security or disclosure of assets in connection with proceedings likely to result in a judgment entitled to recognition and enforcement […]”.

79 This is true of Art. 183(2) Swiss PIL Act, at least according to some commentators: see A. BUCHER (note 34), Article 183, para. 20. 80 See § 1041(2) and (3) of the German Code of Civil Procedure: see G. KAUFMANNKOHLER/ A. RIGOZZI (note 24), para. 6.137, with further reference. 81 In BORN’s treatise such provisions are presented under the heading “Specialized National Arbitration Legislation Permittiong Enforcement of Provisional Measures”: see G.B. BORN (note 11), at 2024. 82 A. BUCHER (note 34), Article 183, para. 14; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 24), para. 6.138. 83 See Article 183(2) Swiss PIL Act; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 24), para. 6.138. 84 G. KAUFMANN-KOHLER/ A. RIGOZZI (note 24), para. 6.139. 85 See AMERICAN LAW INSTITUTE (note 59), at 139.

156

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in International Litigation and Arbitration As explained in the comment, the purpose of the proposed provision was to enable U.S. courts “to issue an ancillary order in support of the order of the foreign court”.86 This would be needed because interim orders “do not come within the definition of ‘foreign judgment’ in § 1 [of the Proposed Federal Statute] because they are interlocutory orders, not final judgments”.87 Contrary to plain cross-border enforcement, the decision whether to issue such an ancillary order would fall within the discretion of the U.S. courts and depend on their own assessment of the interests of justice.88

IV. Conclusion Provisional measures are often crucial to the practical outcome of disputes, both in state court litigation and in arbitration cases. Several important questions relating to jurisdiction and cross-border enforcement of such measures arise in comparable terms in these two contexts, and sometimes call for similar answers. The concurrent jurisdiction of the courts having jurisdiction on the merits and of those provided with the authority to issue interim relief, which is a characteristic feature of the EU regulations on judicial cooperation in civil matters, is also well established in arbitration under a large majority of national laws. Since, the rationale behind this “double track” system is comparable in both fields, analogous answers might be envisaged to improve the coordination between parallel proceedings, as well as to define the role and limits of party autonomy to that end. Similar questions also arise with regard to cross-border enforcement of court-ordered and tribunal-ordered provisional measures. Here also congruent trends seem to be emerging and analogous technical solutions might be put forward.

Ibid., at 142. Ibid. 88 Ibid. 86 87

Yearbook of Private International Law, Volume 21 (2019/2020)

157

INTERIM MEASURES IN ENGLISH LAW AND THEIR CIRCULATION Alexander LAYTON*

I. II. III.

IV. V. VI. VII.

Overview Injunctions – Generally Freezing Injunctions A. General Features B. Requirements for Obtaining a Freezing Injunction C. Injunctions “without Notice” D. Effects of the Injunction Anti-Suit Injunctions Other Interim Measures Cross-Border Enforcement Brexit

A substantial number of international commercial disputes come before the English courts and English law over time has developed a range of interim measures1 which are fast and effective to prevent a dissipation of assets or preserve a legal situation pending a trial of the merits or to assist in effective enforcement of judgments. The purpose of this paper is to offer an outline description of such measures, to consider some of the issues around their international circulation and to discuss the potential impact of Brexit on their future use in an international context.

I.

Overview

There is no meaningful distinction in English law between interim orders of a substantive nature (such as a temporary injunction to restrain a threatened tort) and those of a procedural nature (such as an order to prevent pursuit of foreign Queen’s Counsel; Visiting Professor, King’s College London. Traditionally English law has used the terms “interlocutory” or “interim” to describe such measures and the Civil Procedural Rules (part 25) refer to “Interim Remedies”. But, particularly in the European context (doubtless under the influence of what is now Article 35 of Regulation (EU) No 1215/2012 – the “Brussels I Recast”) the terms “provisional” and, if appropriate, “protective” measures are often seen. * 1

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 159-173 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Alexander Layton proceedings or to secure the preservation of evidence). Both have a provisional nature and can subsequently be amended or lifted. Most interim measures can be, and in some cases usually are, granted on a “without notice” application, that is ex parte – on the unilateral application of one party without notice to another, although “without notice” applications carry with them onerous additional duties for the applicant to satisfy. The best-known interim measures are various types of injunction, notably “freezing orders” and “anti-suit injunctions”. But a range of other measures are also available and will be mentioned briefly towards the end of this paper.

II.

Injunctions – Generally

An injunction is “[a] court order prohibiting a person from doing something or requiring a person to do something”.2 Historically, the courts’ powers to grant injunctions derive from the powers of the Court of Chancery to order a person to act or refrain from acting in accordance with the principles of equity.3 The power is set out in very wide terms in what is now section 37 of the Senior Courts Act 1981, the first part of which reads, (1) The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so. (2) Any such order may be made either unconditionally or on such terms and conditions as the court thinks just. Despite its very wide terms, however, the exercise of the power is circumscribed by judicial authority, which can be developed incrementally to apply old principles to new situations, consistently with an overriding principle of justice. The guiding principles which have been developed by the courts over many years are that an injunction must be precisely defined, and that its grant is discretionary – no one has a right to an injunction. Further principles guide the grant in interim injunctions, namely that there must be a serious question to be tried, that damages would not be an adequate remedy, and that the balance of convenience lies with granting an injunction.4 An interim injunction may relate to the underlying subject-matter of the claim, such as an order temporarily barring the publication of a statement alleged to be libellous, or temporarily restraining acts alleged to be a breach of intellectual property rights, or it may be of a kind not claimed in the underlying claim, such as a freezing injunction. Civil Procedure Rules (“CPR”), Glossary. Note the word “grant”. The Court of Chancery exercised powers, deriving from the Crown’s prerogative, to mitigate the harshness of the strict application of the law. Since the merger of the courts of common law and equity in 1873 the power has been on a statutory footing. 4 American Cyanamid v Ethicon [1975] AC 396 [HL]. 2 3

160

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in English Law and their Circulation Interim injunctions will not normally be granted unless the applicant gives a “cross-undertaking” to the court to pay compensation to the defendant if ordered to do so, if it is subsequently held that the injunction should not have been granted.5 In an appropriate case, a similar undertaking may be required of an applicant for the benefit of third parties affected by the injunction, whether or not the injunction should have been granted. The court cannot order a party to give such a crossundertaking, but a failure to offer it will normally result in the injunction not being granted. The fact that the undertaking is given to the court means that it is not in the nature of a contractual obligation towards the opposing party, but rather that it can be enforced by processes of “contempt of court” (ultimately involving imprisonment or the sequestration of a legal person’s assets). By contrast with, for example, a French law claim for abus de droit, English law provides a wrongly injuncted person with no legal means which can be readily used to provide redress, whereas the court can make an order requiring a person to comply with an undertaking given to it. In cases where a public authority seeks an injunction in order to enforce the law for the benefit of the public generally, a cross-undertaking will not normally be required by the court unless there are special circumstances requiring that one should be given.6 In an appropriate case, a court may decline to accept the undertaking unless it is strengthened by the provision of adequate security.

III. Freezing Injunctions A.

General Features

Freezing injunctions are perhaps internationally the best known example of an English interim measure. Developed by the courts over a period of about 20 years from the mid-1970’s on the basis of the general power to grant an injunction, they were originally called “Mareva injunctions” after an early case in which such an injunction was granted.7 When the new Civil Procedure Rules were introduced in 1999,8 specific provision was made for them, effectively consolidating what had by then become detailed judicial practice. Originally and at its simplest, the injunction restrained defendants from moving their assets outside the territorial jurisdiction of the court, but subsequently the orders restrained defendants from dissipating or even (subject to some exceptions) from dealing with them. Their purpose has been described as follows: F. Hoffmann-La Roche & Co A.G. v Secretary of State for Trade and Industry [1975] A.C. 295, HL, at p. 361, per Lord Diplock. 6 Financial Services Authority v Sinaloa Gold Plc [2013] UKSC 11; [2013] 2 AC 28 [SC]. 7 Mareva Compania Naviera SA v International Bulk Carriers SA (“The Mareva”) [1975] 2 Lloyd’s Rep. 509 [CA]. 8 CPR, 25.1(1)(f) and (g). 5

Yearbook of Private International Law, Volume 21 (2019/2020)

161

Alexander Layton “Mareva (or freezing) injunctions were from the beginning, and continue to be, granted for an important but limited purpose: to prevent a defendant dissipating his assets with the intention or effect of frustrating enforcement of a prospective judgment. They are not a proprietary remedy. They are not granted to give a claimant advance security for his claim, although they may have that effect. They are not an end in themselves. They are a supplementary remedy, granted to protect the efficacy of court proceedings, domestic or foreign.”9 Although the term “freezing order” is used to describe them, strictly speaking it is a misnomer, because as that passage suggests, the injunction has no erga omnes effect and creates no priority for the claimant over other creditors. It is to be distinguished from a similar form of injunction which may be granted where a claimant claims proprietary rights over assets in a defendant’s possession or under his control, often called a “tracing claim”. Rather, the injunction has just an in personam effect on the person against whom it is made, although a degree of thirdparty effect derives from a separate line of case law which has developed the principle that a person who has notice of an injunction is under a duty not to frustrate its operation. The fact that the injunction operates in personam has two notable effects, one (theoretically) limiting and the other expansive. The theoretically limiting effect is that it may only be granted against a person who is personally subject to the jurisdiction of the court. In practice, however, that constraint is of little limiting effect because the jurisdictional rules applicable to such a claim are so wide. If the substantive claim is one over which English courts have jurisdiction under the Brussels I Recast or the Lugano Convention,10 then they have jurisdiction to grant an interim measure.11 If they do not have jurisdiction over the substance, whether under the European regimes12 or under national law, English law nevertheless contains powers to grant interim relief,13 if there is a sufficient case for such relief and England is, on a case-by-case assessment by the judge, the proper place in which to bring such a claim.14 An order made in the absence of jurisdiction over the merits must, if it is to be recognised in other EU or Lugano states satisfy the two criteria laid down by the European Court of Justice in Van Uden, namely that there is a real Fourie v LeRoux [2007] UKHL 1, para. 2 (Lord Bingham). Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, Lugano, 30 October 2007 (“Lugano Convention”). The Contracting parties are the EU, Switzerland, Iceland and Norway. 11 CJEU, 17 November 1998, Case C-391/95, Van Uden Maritime BV, trading as Van Uden Africa Line v Kommanditgesellschaft in Firma Deco-Line, ECLI:EU:C:1998:543, [1998] ECR I-7091, para. 19. 12 See Brussels I Recast, Article 35; Lugano Convention, Article 31. 13 Civil Jurisdiction and Judgments Act 1982, s.25; Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997/302, Article 2. 14 CPR 6.36 with PD6B, para. 3.1(5); CPR 6.37(3); Seaconsar Far East Ltd v. Bank Markazi [1994] AC 438; Spiliada Maritime Corp. v. Cansulex [1987] AC 460. 9

10

162

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in English Law and their Circulation territorial link with the English court and that the court should take into account the need to impose conditions or stipulations such as to guarantee its provisional or protective character.15 We may call these the “Van Uden conditions”. It must also, if it is to be recognised in other Member States, either have been made on notice to the defendant or have been served before enforcement measures are taken.16 The expansive effect of a freezing injunction operating in personam is to enhance its extraterritorial effect, because it binds the defendant and in some circumstances also third parties wherever they may be found. Originally, freezing injunctions could only be made in respect of assets located within England and Wales, but as the case law developed it extended the injunctions, in an appropriate case, to encompass assets wherever they were located. An injunction which has this wider effect is called a “worldwide” freezing injunction. But, in the interests of comity and out of respect for the judicial sovereignty of other states, the courts and subsequently the legislator have heavily qualified those extraterritorial effects, as discussed below. B.

Requirements for Obtaining a Freezing Injunction

In current practice, a basic freezing injunction extends only to assets located within England and Wales. In order to obtain such an injunction, the claimant must satisfy the court (a) that it has a “good arguable case” on the substance of its claim, that (b) there are assets within England and Wales, that (c) there is a real risk of such assets being dissipated or hidden and (d) that it is just and convenient in all the circumstances for such an order to be made. As noted above, (e) the claimant must also give cross-undertakings to protect the position of the defendant and third parties. Each element will be briefly considered. (a) Good arguable case. Much effort has been expended by the courts in trying to define what is meant by a “good arguable case”, which is undoubtedly a nebulous concept. The same term is used to describe the standard of proof required for a court to establish jurisdiction – in which context it has been described as requiring that the claimant have “a much better argument on the material available”17 – but that description does not necessarily apply in this context. All that can be said with confidence is that it is a threshold lower than the balance of probabilities, which is what would be required to win a case at trial.18 The claim must be one in support of an existing legal or equitable right, that is, it cannot exist as a claim in isolation, it must be parasitic on a Van Uden, supra, paras 40, 41. Brussels I Recast, Article 2(a). 17 Canada Trust Co. v Stolzenberg (No 2) [1998] 1 WLR 547, p. 555B. 18 Kazakhstan Kagazy Plc v. Maksat Askaruly Arip [2014] EWCA Civ 381, para. 66, approving this description: “a case which is more than barely capable of serious argument, and yet not necessarily one which the Judge believes to have a better than a 50 per cent chance of success.” 15 16

Yearbook of Private International Law, Volume 21 (2019/2020)

163

Alexander Layton substantive right, which will usually, but not always, be an existing cause of action.19 A future debt or a contingent right to contribution would, for example, satisfy this test. (b) Assets within the jurisdiction. The assets need not be physical assets, but must be more than a mere cause of action such as a right to draw down under a loan facility.20 The assets must either be held in the name of the defendant or be ones which he has power to dispose of. This latter option is important in that it helps to prevent a defendant from hiding personal assets within corporate or trust structures. As the order does not have proprietary effects and is provisional in nature it does not ultimately prejudice third parties’ rights of ownership, but assertions of third party ownership will not be taken at face value. The order will not cover all assets of the defendant, but will be subject to a limit sufficient to satisfy the claim. In an appropriate case, the court may even add a (third party) company as an additional defendant if it has a defendant’s assets and if the defendant controls it, in order to grant an injunction against it too, even in the absence of a substantive claim against it.21 (c) Risk of dissipation. The claimant must show that there is a risk that, absent a freezing order, the defendant will so dissipate or hide his assets within the jurisdiction that there is a real risk that enforcement of a subsequent judgment would be frustrated. But the disposal of assets in the ordinary course of business or for the purposes of meeting living expenses and legal fees will be excepted from the scope of the order. (d) Just and convenient in all the circumstances. This test is not further refined and is an expression of the fact that the power to grant or refuse an injunction is within the discretion of the court with a view to providing a remedy at an interlocutory stage which meets the needs of justice. (e) Cross-undertakings. These have been described above. C.

Injunctions “without Notice”

If, as will usually be the case, the application for a freezing injunction is made without notice to the defendant in the first instance, in order to maintain an essential element of surprise, the claimant is placed under other additional duties. The foremost duty is one requiring the claimant to make full and frank disclosure to the 19

Kazakhstan Kagazy PLC & ors v. Shuns & ors [2016] EWCA Civ 1036, at paras.

20

JSC BTA Bank v Abylazov (#10) [2015] UKSC 64. TSB v. Chabra [1992] 1 WLR 231.

23-29. 21

164

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in English Law and their Circulation court not only of facts and arguments supporting his own case, but also to inform the court in an open and comprehensive way of any facts or arguments which the defendant would or might draw to the court’s attention if he were responding to the application. It does not matter whether those facts or arguments would make a difference to the court’s decision, it is sufficient if they might have done so. The duty of full and frank disclosure arises in an attempt to counter-balance the inevitable prejudice to a defendant in not being heard before a freezing order is made22 and is regarded with great seriousness. If it subsequently transpires that there has been a failure to comply with that duty, even innocently, the order may be set aside even if it would otherwise have been justified, although it may then be re-imposed on an inter partes basis, subject usually to costs penalties. If and when a freezing injunction is made without notice, strict orders are made requiring the claimant to bring the order to the attention of the defendant, often by a range of informal methods such as electronic communications, as well as requiring formal service of the order as soon as possible. An early return date is fixed by the order at which the defendant will be able to make representations about the order and even within that short period the defendant will have the right to apply to the court for the order to be discharged or amended. Other duties that are imposed on a claimant who applies for a freezing injunction without notice to the defendant include duties to provide copies of all documents which were provided to the court, together with a transcript or comprehensive note of all oral submissions made to the court and remarks made by the court. D.

Effects of the Injunction

As noted above, persons who have notice of the injunction are bound by it. That means, in the case of freezing injunctions, that they must do what they can to preserve the assets and not assist in their disposal. In particular this affects banks; once they have notice of the injunction they are bound by it, even if that means overriding their customer’s instructions. But protection is afforded to third parties, not only by the claimant’s cross-undertaking in damages, fortified if necessary by security, but also usually by a provision in the order that it does not affect a bank’s right to set off debts owed to the bank against assets held by it (characteristically, credits in one account being set against a debit balance on a loan or other account). A mechanism that gives a freezing injunction particular potency is the ancillary orders which can, and usually are, added to it. Most importantly, the order may contain a provision ordering the defendant to give sworn disclosure of his assets within certain financial limits, including assets over which the defendant has control even if not held in his name, and to provide details of their location, including the identity of bank accounts etc. Such disclosure must usually be made within tight time constraints. In proprietary cases where the claimant claims an entitlement to the particular assets, the court may go further, even appointing a receiver 22 The duty arises on any “without notice” application, not just in the case of freezing orders.

Yearbook of Private International Law, Volume 21 (2019/2020)

165

Alexander Layton to take possession of assets. And just as a third party may be added for the purpose of obtaining an injunction to prevent the disposal of assets, so too can a third party be added to require it to give disclosure if the third party has been mixed up in the defendant’s wrongdoing.23 As we have seen, freezing orders may have extraterritorial effect, but the court is careful to circumscribe that effect by detailed provisions. Subject to three exceptions, the standard prescribed form of order provides that it is not to apply to or concern anyone outside the (territorial) jurisdiction of the court. The exceptions are, first, the defendant himself and his or its officers and agents; secondly, persons who are themselves personally subject to the jurisdiction of the court, who have been given notice of the order at their residence or place of business in the (territorial) jurisdiction of the court and who are able to prevent acts or omissions outside that territory which constitute (or assist in) a breach of the order; and, thirdly, any other person to the extent that the order has been declared enforceable by, or is enforced by, a foreign local court. Interestingly enough, the standard form of order does not appear to have been modified so as to extend the third category of exception to persons against whom enforcement may be sought without exequatur under Chapter III of the Brussels I Recast (while that continues to apply to UK judgments)24, but it is to be expected that in an appropriate case a court would be willing to make that modification. As regards assets located outside England and Wales, the standard form of order provides that it does not prevent a third party from complying with what it reasonably believes to be its obligations under local or otherwise applicable law or with local court orders, provided notice is given to the claimant of any application for such an order. The claimant will also normally be required not to seek the enforcement of the order outside England and Wales without the permission of the English court, nor to apply for an equivalent order elsewhere without such permission.

IV. Anti-Suit Injunctions A second type of injunction which has gained some European notoriety is the “anti-suit” injunction. These are injunctions which restrain the respondent from starting or continuing proceedings in a foreign court. They originated in the practice of the Chancery courts ordering a person not to pursue claims in the common law courts and largely fell into disuse after the merger of the courts of common law and equity in 1873.25 But with growing international trade in the mid-twentieth century they enjoyed a revival and became commonplace in cross-border commercial litigation. 23

Norwich Pharmacal c. v Customs & Excise Commissioners [1974] AC 133. See section VII below. 25 For a comprehensive discussion of anti-suit injunctions, including their historical origins, development and current law and practice, see Thomas Raphael, The Anti-Suit Injunction, 2nd ed., Oxford 2019. 24

166

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in English Law and their Circulation Like other injunctions, they operate in personam and for this reason the English courts have taken the view that they do not infringe the judicial sovereignty of foreign courts.26 This view, however, has not been shared by the European Court which has ruled that such injunctions contravene the principle of mutual trust underlying the regimes now embodied in the Brussels I Recast and the more general European law principle of effectiveness.27 Accordingly, as a matter of European law, courts may no longer grant such injunctions in respect of courts having jurisdiction under the Brussels I Recast.28 They remain, however, important in relation to proceedings in the wider world. Like other injunctions, anti-suit injunctions may only be granted in support of an existing legal or equitable right and as such require that the conduct of the respondent be wrongful. In practice, such injunctions are of two kinds. Much the more common is the situation where foreign proceedings are brought in breach of an exclusive choice of forum clause or arbitration agreement – both are enforceable legal (contractual) promises not to pursue proceedings except in the chosen forum. In these cases, an injunction will “ordinarily” be granted unless there are “strong reasons” not to do so.29 Less common are those cases where foreign proceedings are – in the antiquated language which applies in this context – “unconscionable” without infringing a legal right.30 These are cases where the respondent’s conduct is unconscionable in relation to pending English proceedings and derive from a litigant’s equitable right not to be “vexed” in the conduct of his English proceedings, conduct which may be seen as an abuse of English process.31

Turner v Grovit [2001] UKHL 65, [2002] 1 W.L.R. 107, para. 23 (Lord Hobhouse). 27 CJEU, 27 April 2004, Case C-159/02, Turner v Grovit, ECLI:EU:C:2004:228, [2004] ECR I-3565; CJEU, 10 February 2009, Case C-185/07, Allianz SpA and Generali Assicurazioni Generali SpA v. West Tankers Inc., ECLI:EU:C:2009:69 [2009] ECR I-663. The same result can confidently be expected in respect of cases falling within the Lugano Convention, although the arguments in those cases are perhaps more nuanced. 28 Although it seems that arbitral tribunals may still make anti-suit awards: Gazprom OAO (Case C-536-13) EU:C:2015:316. 29 The Angelic Grace [1995] 1 Lloyd’s Rep 87, 96 (CA); Donohue v Armco [2002] 1 Lloyd’s Rep 425, paras. 24, 45 (HL). 30 The language is confusing. It should be understood in light of the technical distinction between law and equity (both of which form part of the law): “legal” rights are those which derive from the common law (or statute) as distinct from equitable rights which derive from the principles of equity. 31 Turner v Grovit itself was such a case, where Spanish proceedings were commenced by the defendants at a time when English employment tribunal proceedings were pending against them. 26

Yearbook of Private International Law, Volume 21 (2019/2020)

167

Alexander Layton

V.

Other Interim Measures

English law makes provision for interim measures other than interim injunctions, which may be used to preserve a state of affairs or provide temporary relief pending resolution of the underlying case, to assist the progress of a case, or to facilitate enforcement.32 The appointment of a receiver in aid of a freezing order has already been mentioned, but a receiver may instead be appointed as a free-standing measure, for example to collect third party debts where the rights or identity of the creditor are in issue.33 A receiver may also be appointed as an interim (or final) enforcement measure. An interim declaration may be made, although such an order would be a rarity. The court may make orders for the interim detention, preservation, inspection or sampling of property or for its sale (for example if it is perishable) and orders permitting entry onto land or into buildings for that purpose, and it may make an interim order for delivery up of goods. It may make orders (known as “search orders”34) for a supervised entry into land or buildings to search for and seize evidence. Search orders were more common in the era of pirated tapes and discs, but a move to downloading and file-sharing has perhaps reduced their frequency. Measures of enforcement may be made on an interim basis (and in some cases must initially be made on such a basis), examples being third party debts order (formerly called “garnishee orders”), attachment of earnings orders and orders placing a charge over land or securities.

VI. Cross-Border Enforcement Interim measures ordered by an English court fall within the definition of “judgment” in Article 2(a) of the Brussels I Recast and hence are prima facie enforceable under Chapter III of that Regulation. But that definition, unlike its predecessors in the Brussels Convention of 1968 and Regulation 44/2001, and unlike the Lugano Convention, contains a second paragraph which includes two important clarifications. Article 2(a) provides: “ « judgment » means any judgment given by a court or tribunal of a Member State, whatever the judgment may be called, including a decree, order, decision or writ of execution, as well as a decision on the determination of costs or expenses by an officer of the court. For the purposes of Chapter III, “judgment” includes provisional, including protective, measures ordered by a court or tribunal which The types of measure than may be made are listed non-exhaustively in CPR 25.1. Senior Courts Act 1981, s.37; CPR, part 69. 34 Formerly known as “Anton Piller” orders. 32 33

168

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in English Law and their Circulation by virtue of this Regulation has jurisdiction as to the substance of the matter. It does not include a provisional, including protective, measure which is ordered by such a court or tribunal without the defendant being summoned to appear, unless the judgment containing the measure is served on the defendant prior to enforcement.” The first paragraph is in wide terms, certainly wide enough to encompass provisional including protective measures and indeed any other judgment within the temporal and subject-matter scope of the Regulation, whether the court’s jurisdiction is based on the Regulation or, for example, pursuant to national law where the defendant is not domiciled in a Member State.35 The second paragraph then contains two additional points. It refers first to a court having jurisdiction by virtue of the Regulation. This is a somewhat difficult provision. The Article then goes on to exclude a class of judgments for the purposes of recognition and enforcement. Taking the second of these points first, it was decided by the European Court that orders made without notice to the defendants were not of a kind that it was envisaged would be subject to circulation under the Brussels regime although, if they were initially granted on the basis of a unilateral application but the order could since have been challenged by the defendant in the state of origin, that restriction would cease to apply.36 So, in this respect, the previous regimes including the Lugano Convention contained comparable protections to those which now appear in this second point, although the requirement that the order be served before enforcement is spelt out here rather more clearly. The first point relating to the jurisdiction of the court making the order is less straightforward. The conventional view is that this precludes cross-border enforcement of provisional measures;37 but in the present author’s view the position is less than clear. Three situations may be envisaged. The first is where the interim measures are made by a court that has jurisdiction over the substance. 38 In this situation, the paragraph is clear enough in stipulating that the definition of a judgment extends for the purposes of recognition and enforcement to those interim measures. The second situation is where the court of another Member State has jurisdiction over the substance, with the consequence that the court making the interim Article 6(1) provides: “If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Article 18(1), Article 21(2) and Articles 24 and 25, be determined by the law of that Member State.” 36 CJEU, 21 May 1980, Case C-474/93, Denilauler v SNC Couchet Frères, Case C-125/79, ECLI:EU:C:1980:130 [1980] ECR 1553;CJEU, 13 July 1995, C-474/93, Hengst Import BV v Campese, ECLI:EU:C:1995:243 [1995] ECR I-2113. See also CJEU, 25 May 2016, Case C-559/14, Meroni v Recoletos Ltd, ECLI:EU:C:1999:202, to similar effect in respect of the rights of a third person affected by the order. 37 See, for example, G. CUNIBERTI, Jurisdiction to Grant Interim Measures in Support of Arbitration – The Influence of European Law, this Yearbook, section III.c; T. HARTLEY, Civil Jurisdiction and Judgments in Europe (2017), para. 22.34. For a more nuanced view, see A. NUYTS, Provisional Measures, in A. DICKINSON/ E. LEIN (eds.), The Brussels I Regulation Recast, London 2015, paras. 12.46-12.48. 38 Reflecting Van Uden, para. 19 (supra, note 11). 35

Yearbook of Private International Law, Volume 21 (2019/2020)

169

Alexander Layton measures does not have jurisdiction. This is the situation envisaged by the Van Uden and Mietz39 decisions, where compliance with the Van Uden conditions of territorial proximity and provisionality is required for the making of the order and of its recognition in other Member States.40 The third situation is where neither the court making the interim order nor the courts of another Member State have jurisdiction (usually where the courts of a third state have jurisdiction over the substance). The distinction between the second and third situations is that jurisdiction in respect of the former is envisaged by Article 35, while the latter is not, or at least not expressly. What Article 35 does is to say that interim measures may be granted even if the court of another Member State has jurisdiction over the substance.41 Jurisdiction over the substance in cases in the second situation will be regulated directly by the Brussels-Lugano regimes, while in the third situation it will be regulated by national law, as envisaged by Article 6(1). In both situations, personal jurisdiction and the scope of the powers (if any) to grant interim measures in the absence of jurisdiction over the substance are all matters for national law.42 The question thus arises whether an interim order which satisfies the Van Uden conditions of territorial proximity and provisionality and in which the rights of the defence have been protected,43 made by a court which does not have jurisdiction over the substance but which does have jurisdiction under its national law to make the order, is susceptible to recognition and enforcement in other Member States. In principle, under the Lugano and earlier Brussels regimes, the liberality of the recognition and enforcement regime, and the wide definition of “judgment”, coupled with the reasoning in Denilauler, Hengst, Van Uden and Mietz, would seem to lead to the answer “Yes”. Mietz, in particular, makes clear that the reason why the interim order in that case was not to be recognised or enforced in other Member States was its non-compliance with the Van Uden conditions, rather than the court’s lack of jurisdiction over the substance. In practice, the situations in which an order which satisfies the Van Uden conditions, especially that of territorial proximity, would come to be recognised and enforced in other Member States is perhaps rather rare; absent the assets against which to enforce the order recognition and enforcement is not likely to arise, at least in the ordinary case. But that is not necessarily always so, especially

39 CJEU, 17 April 1999, Case C- 99/96, Mietz v Intership Yachting Sneek BV, ECLI:EU:C:1999:202, [1999] ECR I-2277. 40 See A. LAYTON/ H. MERCER, European Civil Practice. 2nd ed., London, 2004, paras 23.022-23.023. 41 Article 35: “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 Member State, even if the courts of another Member State have jurisdiction as to the substance of the matter.” 42 English law contains wide powers to grant such relief see above (text to n.13). 43 By being made on notice to the defendant and/or where the defendant could since have challenged it in the state of origin, and where it has been served before enforcement.

170

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in English Law and their Circulation when it comes to recognition44 as distinct from enforcement or where the location of assets is unclear (such as certain incorporeal assets) or transient. The first sentence of the second paragraph of Article 2(a) was included no doubt to reflect the European Court’s clarification in Van Uden that jurisdiction over the substance comports jurisdiction to grant interim measures, even though they are not expressly mentioned in Article 35. But the wording has at least two difficulties which mean that it can be read as aligning the position of interim measures where the court does not have jurisdiction over the substance with the position of other judgments as defined in the first paragraph. On one hand, the words “by virtue of this Regulation” may refer only to the jurisdictional provisions of the Regulation itself, or they may also refer to those cases where Article 6(1) envisages that jurisdiction may be founded on national law; while on the other hand the fact that the first sentence is merely a partial definition (“includes…”) leaves open the possibility that it is merely silent about cases where the court’s jurisdiction over the substance is based not on the Regulation but on national law. These ambiguities as a matter of the legislative text remain to be resolved. That will doubtless be assisted by the terms of Recital 33, which states, “Where provisional, including protective, measures are ordered by a court having jurisdiction as to the substance of the matter, their free circulation 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 unless the judgment 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. Where 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, under this Regulation, to the territory of that Member State.” But that assistance will not be conclusive (quite apart from the familiar point that a recital does not have direct legislative effect). Apart from the last sentence, it refers only to orders made by a court having jurisdiction as to the substance, including the possibility of recognition and enforcement pursuant to national law of measures made without notice to the defendant (and without taking account of the possibility, recognised in Hengst, that the defendant may since have had the opportunity to contest the order in the state of origin). Only in the last sentence does it refer to orders made by courts not having jurisdiction as to the substance, suggesting that the “effect” of such interim orders should be confined to the territory of the Member State granting the order. But, as noted above, that it not reflected 44 The relevance of recognition is enhanced by the European Court’s decision that res judicata extends not only to “the operative part of the judgment in question, but also attaches to the ratio decidendi of that judgment, which provides the necessary underpinning for the operative part and is inseparable from it”: CJEU, 15 November 2012, Case C-456/11, Gothaer Allgemeine Versicherung KG v Samskip GmbH, ECLI:EU:C:2012:719, para. 40.

Yearbook of Private International Law, Volume 21 (2019/2020)

171

Alexander Layton expressly in the legislative text and it anyway leaves open the issue of how wide a meaning is to be given to the word “effect”. In the context of enforcement, it is easy enough to see that the absence of “effect” in other Member States would most probably lead to the non-enforcement of such orders. But when it comes to recognition, it is the authority of the order, rather than its effect which is in issue, and it remains unclear whether the legislator intended that orders made by courts not having jurisdiction as to the substance should ipso facto be denied recognition in other Member States.

VII. Brexit Since June 2016, no discussion of English law in a European context would be complete without mention of the impact of the United Kingdom’s departure from the European Union. At the time of writing (April 2020), the position on the matters discussed in this paper is, in summary, as follows. The United Kingdom left the European Union on 31 January 2020, but until the end of the transition period, which is currently set at 31 December 2020, the jurisdictional provisions of the Brussels I Recast and related instruments continue to apply in the UK as well as in the Member States in situations involving the UK.45 They will also apply to the recognition and enforcement of judgments given in proceedings instituted before the end of the transition period.46 During that same period, at least as a matter of European law and UK law, the Lugano Convention as part of the acquis communautaire continues to apply in and in respect of the United Kingdom.47 Whether it continues to apply in relation to the United Kingdom as a matter of the law of non-EU Lugano states (Switzerland, Norway and Iceland) will depend on the law of each of those states. What happens after the transition period expires will depend on what, if any, provision is made in the agreements concerning the future relationship between the UK and the EU which are (optimistically) expected to be concluded during the course of 2020. The United Kingdom has said that it wishes to continue to apply the Lugano Convention, and has secured the agreement of the non-EU Lugano states to that;48 but this will only occur if the EU agrees.49 Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, 19 October 2019 (“EU Withdrawal Agreement”), Article 67(1), given effect in UK law by the European Union (Withdrawal Agreement) Act 2020. Although the Withdrawal Agreement contains provision for the transition period to be extended, the UK government is legally bound not to agree such an extension: European Union (Withdrawal) Act 2018, s.15A. 46 EU Withdrawal Agreement, Article 67(2). 47 EU Withdrawal Agreement, Article 129(1). 48 Statement by the (UK) Ministry of Justice, 28 January 2020, https://www.gov.uk/ government/news/support-for-the-uks-intent-to-accede-to-the-lugano-convention-2007 (accessed 9 April 2020). 45

172

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in English Law and their Circulation In the absence of any agreement, or any agreement covering these issues, UK legislation drawn up in 2019 might be put into effect.50 This would have the effect of revoking the Brussels I Recast, Lugano Convention and related instruments, but would then re-enact as domestic legislation the consumer and employment provisions in Articles 17 to 23 of the Brussels I Recast. Unless the UK accedes to the Lugano Convention, the practical consequence of the UK’s departure from the EU will be that English interim measures will no longer be recognised or enforced in other Member States or Lugano Contracting States (although national law may still accord recognition), and it is to be expected that anti-suit injunctions will stage a come-back in relation to European litigation.

49 Lugano Convention, Articles 70(1)(c); 72(3). The European Commission has since been reported as advising EU Member States that there are clear grounds to reject the UK’s application to accede to the Lugano Convention: “Britain risks losing access to valuable European legal pact”, Financial Times, 27 April 2020. 50 Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019/479.

Yearbook of Private International Law, Volume 21 (2019/2020)

173

THE RECOGNITION AND ENFORCEMENT OF FOREIGN INTERIM MEASURES IN SWITZERLAND Sandrine GIROUD*/ Noémie RAETZO**

I. II.

IV.

Introduction The Swiss Legal Framework Regarding the Recognition and Enforcement of Foreign Interim Measures A. Enforcement of Interim Measures Issued by a Court of a Lugano Convention Contracting State 1. Conditions for Enforcement 2. Procedure 3. Protective Measures in Support of the Enforcement B. Recognition and Enforcement of Interim Measures Issued by a Foreign Court Outside the Scope of the Lugano Convention 1. Conditions for Enforcement 2. Procedure Execution of Foreign Interim Measures in Switzerland A. Particularities of Swiss Interim Measures B. Practical Considerations 1. Mere Declaration of Enforceability 2. Measures in rem or in personam? 3. The Threat of Criminal Sanctions under Article 292 SCrC 4. A Single Code, Yet Multiple Cantonal Interpretations 5. Lessons Learned Regarding the Execution of English Worldwide Freezing Orders in Switzerland Conclusion

I.

Introduction

III.

In a globalised world, few legal relationships are purely domestic. When a legal dispute arises, coordination among the various legal systems involved is therefore critical, in particular where time is of the essence and interim measures are *

Partner with LALIVE, Geneva. The author can be contacted at [email protected]. Attorney-at-law with LALIVE, Geneva. The author can be contacted at [email protected]. The authors would like to thank Anita Subedi for her helpful review. **

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 175-196 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Sandrine Giroud / Noémie Raetzo required to maintain the status quo. Such measures may be required in Switzerland because this is where the assets that are subject to the dispute are located or where one or more of the parties, or third parties, involved in the dispute are based. In this context, two options are available to the party seeking interim measures: (i) request a Swiss court to issue interim measures in support of foreign proceedings, or (ii) request the enforcement in Switzerland of interim measures issued by a foreign court. The present article focuses on the latter scenario. Obtaining Swiss interim measures may seem the more straightforward approach and help prevent issues at the enforcement stage. However, there may be good reasons for a party to prefer to request interim measures abroad and their subsequent enforcement in Switzerland instead. Depending on the circumstances, the foreign court seised of the merits may be more familiar with the case and, as a result, more inclined to order interim measures than a Swiss court. There are also practical and procedural benefits to centralizing the proceedings in the same jurisdiction as the main proceedings. Moreover, and probably most importantly, the type of interim measures envisaged may not be available under Swiss procedural law – for example, the equivalent of English Worldwide Freezing Orders (WFOs). Additionally, a foreign court may simply have powers, that a Swiss court would not, to issue interim measures that are more suited to the matter.1 The enforcement and execution of foreign interim measures in Switzerland remain, however, full of pitfalls. Although Switzerland adopted a unified set of rules regulating civil procedure in 2011 with the Swiss Code of Civil Procedure (SCCP), the judiciary and courts’ organisation remain within the jurisdiction of the cantons. Accordingly, there are almost as many different interpretations of the SCCP as there are cantons. This article aims to provide guidance on (i) the process for recognition and enforcement of foreign interim measures in Switzerland (see below II) and (ii) the execution of such processes (see below III). To this end, we will first describe the legal framework applicable to the recognition and enforcement of foreign interim measures in Switzerland, i.e. the process whereby a foreign decision acquires the effects attributed to it in its State of origin. We will then focus on the concrete In a 2018 judgment, the Vaud Court for Debt Recovery and Bankruptcy Proceedings refused to grant a Swiss attachment order requested by an applicant which had previously obtained a Worldwide Freezing Order (WFO) from an English court. The applicant could have sought enforcement of the WFO but surprisingly did not do so; instead, the applicant requested a Swiss (independent) attachment order on the basis of Article 271(1)(2) of the Swiss Federal Debt Enforcement and Bankruptcy Act (DEBA) on the grounds that the debtor was concealing her assets, absconding or making preparations to abscond so as to evade the fulfilment of her obligations. The court cancelled the attachment order granted by the first instance court, stating that the obtaining of an English WFO did not influence the separate findings on whether the debtor was concealing assets (Vaud Court for Debt Recovery and Bankruptcy Proceedings, 30 October 2018, Séquestre/2018/11, No 279). This example shows that even in cases where interim measures are awarded by a foreign court on the basis of the same set of facts in the same matter, Swiss interim measures may nonetheless be refused. This is despite the fact that the foreign interim measures could be recognised and take full effect on Swiss territory through recognition and enforcement proceedings. 1

176

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland execution of said measures in Switzerland, i.e. the implementation methods, and their coercive character. We will further address selected key issues often encountered in practice, as well as specific considerations on English WFOs. As there is no universal definition of interim measures, which are sometimes referred to as “provisional measures”, “protective measures”, “conservatory measures” or “provisional relief”, we will use in this article the generic term “interim measures” in the sense given by the Court of Justice of the European Union (CJEU; formerly the European Court of Justice). In Reichert, the court held that interim measures are taken to mean “measures which are intended to maintain a situation of fact or law in order to safeguard rights whose recognition is otherwise sought from the court hearing the case.”2

II. The Swiss Legal Framework Regarding the Recognition and Enforcement of Foreign Interim Measures The legal regime applicable to the recognition and enforcement of foreign interim measures will depend on the issuing court. The 2007 Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Lugano Convention)3 will apply to the enforcement of interim measures issued by the court of a State that is a signatory to the Lugano Convention.4 In contrast, interim measures issued by a court of another jurisdiction, absent a bilateral agreement between that jurisdiction and Switzerland, will be regulated by the 1987 Swiss Private International Law Act (PILA). The conditions and procedural modalities under each regime are further developed below.

2 CJEU, 26 March 1992, Mario Reichert, Hans-Heinz Reichert and Ingeborg Kockler v. Dresdner Bank AG, C-261/90, ECLI:EU:C:1992:149, para 34. See also Official explanatory report on the Lugano Convention, by Professor Fausto POCAR, OJ C 319/1, 23.12.2009 (hereinafter, “the Pocar Report”), para 126. 3 The Lugano Convention is the successor to the 1988 Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1988 Lugano Convention). The 1988 Lugano Convention and the Lugano Convention are parallel agreements to the 1968 Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (Brussels Convention) and 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), respectively. The Lugano Convention has not been further aligned with Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. 4 Given that most decisions now fall within the scope of the Lugano Convention, this article will focus on the application of this Convention.

Yearbook of Private International Law, Volume 21 (2019/2020)

177

Sandrine Giroud / Noémie Raetzo A.

Enforcement of Interim Measures Issued by a Court of a Lugano Convention Contracting State

1.

Conditions for Enforcement

Interim measures are not defined in the Lugano Convention,5 but rather by national laws which are to be interpreted in light of the case law of the CJEU.6 Accordingly, many types of decision qualify as interim measures.7 The definition given by the CJEU in Reichert,8 mentioned above, generally includes interim measures provided by Swiss law. However, a particular category of interim measures, namely those which take effect anticipating the decision on the merits (“mesures d’exécution anticipée”), raise certain practical issues and can only be recognised in Switzerland under stricter conditions (see below c).9 Interim measures rendered by the court of a State that is a signatory to the Lugano Convention are considered “decisions” under the meaning of Article 32 Lugano Convention.10 As such, they are recognised and enforceable in Switzerland pursuant to Articles 38 to 56 Lugano Convention,11 provided the related conditions are met as further detailed below. In particular, the decision must satisfy certain procedural safeguards, namely the respondent’s right to be heard (see below a). The issuing court must also have jurisdiction: either on the merits of the case under one of the grounds laid down in the Lugano Convention or under national law, 5 The experts in charge of the revision of the 1988 Lugano Convention intentionally chose not to define it (see the Pocar Report, paras 124 and 125); F. GUILLAUME/ N. PELLATON, Le séquestre en tant que mesure conservatoire visant à garantir l’exécution des décisions en application de la Convention de Lugano, in F. BOHNET (ed.), Quelques actions en exécution, Neuchâtel 2011, para 7. 6 Pocar Report, para 126. 7 See Commission of the European Communities, Communication to the Council and the European Parliament, Towards greater efficiency in obtaining and enforcing judgments in the European Union, 26 November 1997, COM [97] 609, para 23: “A comparative survey of national legislation reveals that there are virtually no definitions of provisional/protective measures and that the legal situations vary widely. The only convergence that can be ascertained is between the function of such measures, which is to secure the subsequent enforcement of judgments on the substance of a case (or their anticipated enforcement), organise factual situations or the parties’ rights pro tem and safeguard all interests affected pending settlement of the dispute.” 8 CJEU, 26 March 1992, Mario Reichert, Hans-Heinz Reichert and Ingeborg Kockler v. Dresdner Bank AG, C-261/90, ECLI:EU:C:1992:149, para 34. 9 Pocar Report, para 126 in fine. 10 Swiss Federal Court, 22 October 2009, ATF 135 III 670, para 3.1.2. 11 Swiss Federal Court, 30 July 2003, ATF 129 III 626 (Uzan v. Motorola Credit Corporation), concerning an English WFO; Swiss Federal Court, 22 October 2009, ATF 135 III 670, concerning a sequestro conservativo; CJEU, 21 May 1980, Bernard Denilauler v. SNC Couchet Frères, C-125/79, ECLI:EU:C:1980:130; S. KOFMEL EHRENZELLER, in F. DASSER/ P. OBERHAMMER (eds), Kommentar zum Lugano-Übereinkommen (LugÜ), 2nd ed., Bern 2011, Article 31, para 34; Pocar Report, para 130.

178

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland provided that there is a connecting link between the court and the subject matter of the measures sought (see below b).12 It is also worth noting that some measures may qualify as interim measures in one jurisdiction even though they are in substance procedural measures or measures for the taking of evidence. These measures would not fall within the definition of a “decision” under the Lugano Convention and can therefore not be recognised and enforced.13 a)

Minimum Procedural Safeguards and Right to Be Heard

In Denilauer,14 the CJEU held that foreign interim measures will not be recognised and enforced under the Lugano Convention if they were delivered without previous notice to the respondent. Applying Denilauer in the landmark “Motorola” ruling of 2003, the Swiss Federal Court held that foreign interim measures could be recognised if the interim proceedings might have become contradictory before enforcement was sought in Switzerland.15 In other words, the respondent must have been given the opportunity to object or appeal the interim decision before its recognition is sought in Switzerland.16 The Swiss Federal Court has not specified the timeframe which should be given to the respondent to exercise his/her right to be heard before the applicant can seek enforcement of the foreign interim Pocar Report, para 126. In St. Paul Dairy, the CJEU held that “a measure ordering the hearing of a witness for the purpose of enabling the applicant to decide whether to bring a case, determine whether it would be well founded and assess the relevance of evidence which might be adduced in that regard is not covered by the notion of ‛provisional, including protective, measures’” (CJEU, 28 April 2005, St. Paul Dairy Industries NV v. Unibel Exser BVBA., C-104/03, ECLI:EU:C:2004:509). See also Vaud Court of Appeal, 8 December 2011, No 240, which left open the question whether a mesure d’instruction in futurum provided under French law would be enforceable under the Lugano Convention, but noting that a measure of preuves à futur (i.e. precautionary taking of evidence), as known under Swiss law, would not; J. ROUVINEZ, Le sort des mesures de preuve à futur du droit suisse dans le système de la Convention de Lugano, Journal des tribunaux (JdT) 2012/III, p. 219. 14 CJEU, 21 May 1980, Bernard Denilauler v. SNC Couchet Frères, C-125/79, ECLI:EU:C:1980:130. 15 Swiss Federal Court, 30 July 2003, ATF 129 III 626 (Uzan v. Motorola Credit Corporation); Swiss Federal Court, 1st March 2006, 4P_331/2005. 16 A decreto ingiuntivo, which, under Italian law, is immediately enforceable, i.e. without the opportunity being given to the respondent party to challenge it before it becomes enforceable, is not a decision that can be recognised and enforced in Switzerland within the meaning of Article 32 Lugano Convention. To be enforceable, there must have been an opportunity for the defendant to be heard in contradictory proceedings (Swiss Federal Court, 21 August 2015, 5A_752/2014 and Swiss Federal Court, 8 April 2013, ATF 139 III 232; CJEU, 13 July 1995, Hengst Import BV v Anna Maria Campese, C474/93, ECLI:EU:C:2001:647, paras 14, 19 and 20). By contrast, if the same type of interim measure is declared enforceable by the Italian courts “in the absence of opposition by the debtor”, it can be recognised in Switzerland (Swiss Federal Court, 3 July 2012, 5A_48/2012). 12 13

Yearbook of Private International Law, Volume 21 (2019/2020)

179

Sandrine Giroud / Noémie Raetzo measure.17 This should be decided on a case-by-case basis and the court has wide discretionary powers in this respect.18 For instance, a three-week deadline was considered sufficient,19 but a five-working-day period insufficient.20 As an illustration, in a 2017 decision, the Geneva Court of First Instance considered that the absence of formal service of an English decision to the respondent was not an obstacle to recognition and enforcement since the respondent had in fact received the decision, albeit not through formal channels. It had therefore, in reality, been given the opportunity to defend itself but had validly waived its rights.21 Denilauer, although well-established case law, has often been criticised for removing the element of surprise, as it prevents the enforcement of interim measures that have not yet been served on the respondent.22 Other commentators consider that this notification requirement is unproblematic since the applicant can always request Swiss domestic ex parte interim measures (albeit under stricter conditions).23 b)

Jurisdiction of the Foreign Court and the “Real Connecting Link” Requirement

To be recognised under the Lugano Convention, interim measures must meet a specific jurisdictional threshold. In Motorola,24 the Swiss Federal Court held, in

According to S. PHURTAG, the applicant must at least wait for the deadline for challenging the foreign decision abroad to pass before seeking recognition (S. PHURTAG Vorsorgliche Massnahmen im internationalen Zivilprozessrecht, Bern 2019, para 802; W. GERHARD, Vorsorgliche Massnahmen bei fehlender Hauptsachezuständigkeit, in Vorsorgliche Massnahmen aus internationaler Sicht, Zürich 2000, para 650); see also S. GIROUD, Do You Speak Mareva? How Worldwide Freezing Orders Are Enforced in Switzerland, in this Yearbook 2012-2013, p. 445. 18 Swiss Federal Court, 7 January 2008, 5A_560/2007, para 3.3.2. 19 Swiss Federal Court, 7 January 2008, 5A_560/2007. 20 Swiss Federal Court, 1st March 2006, 4P_331/2005. 21 Geneva Court of First Instance, 23 November 2017, JTPI/15321/2017; see also, Swiss Federal Court, 9 January 2019, 5A_711/2018, para 6.3.1. 22 See D. TUNIK, L’exécution en Suisse de mesures provisionnelles étrangères : un état des lieux de la pratique, Semaine judiciaire (SJ) 2005 II, p. 325; see also the references cited in M. VEIT/ T. K. SPRANGE, Enforcing English Worldwide Freezing Injunctions in Switzerland – Denilauler, Van Uden and Mietz revisited, in Business Law International 2004, p. 409. 23 Y. DONZALLAZ, La Convention de Lugano du 16 septembre 1988 concernant la compétence judiciaire et l’exécution des décisions en matière civile et commerciale, Vol. 2, Berne 1996-1998, paras 2162 et seq.; D. FAVALLI/ T. AUGSBURGER, in C. OETIKER/ T. WEIBEL (eds), Basler Kommentar Lugano-Übereinkommen, Bâle 2011, Article 31, para 212. 24 Swiss Federal Court, 30 July 2003, ATF 129 III 626 (Uzan v. Motorola Credit Corporation), para 5.3.2. 17

180

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland line with the Van Uden and Mietz decisions by the CJEU,25 that foreign interim measures will be recognised and enforced in Switzerland: (i) if they are ordered by a foreign court having jurisdiction (concrete or virtual) on the merits under the Lugano Convention, or (ii) if they are ordered on the basis of Article 31 Lugano Convention, which enables a court that does not have jurisdiction on the merits to issue interim measures, provided, however, there exists a “real connecting link” between the subject matter of the measures sought and the territorial jurisdiction of the court before which those measures are sought. Determining whether the foreign court issuing the measures had concrete or virtual jurisdiction (first scenario) may not be immediately apparent from its decision. Absent a specific reference in the foreign decision, the Swiss court enforcing the decision should determine whether jurisdiction can be established for the foreign court under the Lugano Convention.26 However, difficulties may arise in practice. As an illustration, in a 2019 decision, the Geneva Court of First Instance refused to enforce interim measures rendered by the District Court of Hamburg and held that the German court “did not appear to have territorial jurisdiction to take such measures,” as the order did not indicate on which provisions of domestic or international law the German court had based its territorial and substantive jurisdiction.27 The Geneva court did not examine whether the foreign court had jurisdiction (concrete or virtual) to issue its decision. Given that the grounds for jurisdiction were not directly specified in the German interim measure decision, the Geneva court held that the measures were ordered under German law within the meaning of Article 31 Lugano Convention. As they dismissed the matter on other grounds, they did not examine further whether the “real connecting link” requirement was met. Practitioners should anticipate these issues by ensuring that the foreign court specifies the basis on which the interim measure order is issued or demonstrate the existence of such jurisdiction in their application for recognition and enforcement. If issued under Article 31 Lugano Convention (second scenario), interim measures must meet a higher jurisdictional threshold to be recognised and enforced abroad. They must be based on a “real connecting link” between the jurisdiction of the issuing court and the matter.28 The reference to a real connecting link should be understood as an invitation to the court seised to exercise with circumspection its jurisdiction pursuant to Article 31 Lugano Convention.29 CJEU, 17 November 1998, Van Uden Maritime BV v. Kommanditgesellschaft in Firma Deco-Line and Another, C-391/95, ECLI:EU:C:1998:543, where the CJEU had to deal with the enforcement of Dutch interim measures that provisionally ordered the respondent to pay a contractual debt (kort geding); CJEU, 7 April 1999, Hans-Hermann Mietz v. Intership Yachting Sneek BV, C-99/96, ECLI:EU:C:1999:202. 26 See D. TUNIK (note 22), p. 304. 27 Geneva Court of First Instance, 19 June 2019, JTPI/9033/2019. 28 CJEU, 17 November 1998, Van Uden Maritime BV v. Kommanditgesellschaft in Firma Deco-Line and Another, C-391/95, ECLI:EU:C:1998:543 and CJEU, 27 April 1999, Hans-Hermann Mietz v. Intership Yachting Sneek BV, C-99/96, ECLI:EU:C:1999:202. 29 See D. TUNIK (note 22), p. 309. 25

Yearbook of Private International Law, Volume 21 (2019/2020)

181

Sandrine Giroud / Noémie Raetzo c)

“Early Enforcement” Interim Measures

So-called “early enforcement” interim measures are a certain type of interim measures which pre-empts the result of the decision on the merits; their purpose is to ensure performance of the right which is the subject of the dispute on the merits. The best-known examples are the référé-provision under French law and the kort geding under Dutch law. Such measures may be recognised and enforced in Switzerland under the Lugano Convention regime, but under stricter conditions than those governing other traditional interim measures.30 In particular, early enforcement interim measures can easily be recognised and enforced when the court issuing them has jurisdiction over the merits of the dispute under the Lugano Convention.31 If issued on the basis of Article 31 Lugano Convention, early enforcement measures may only be implemented if additional conditions are met.32 Such measures must be coupled with specific safeguards so that the provisional character of the measure can be ensured. This is required as the enforcement of such measures leads de facto to the enforcement of the claim on the merits. The order must therefore provide a guarantee to the respondent that the status quo ante will be restored if the claim on the merits proves to be unfounded.33 If the status quo ante cannot be restored, the measure is not enforceable. In practice, it may be difficult to determine whether a certain type of interim measure would qualify as an “early enforcement measure”. Although, in the view of the authors, the decision is disputable, in 2019 the Geneva Court of First Instance took a clear position: it categorised a prohibition measure (on the sale of concert tickets) that was issued by a German court against a company located in Switzerland as an “early enforcement measure”.34 The Geneva Court considered that the German court had issued this decision on the basis of its own national law. As a result, the conditions developed by the Swiss Federal Court for recognition of early enforcement measures needed to be fulfilled. In that case, since the ban on concert tickets did not provide any guarantee or security in the event that the claim 30 CJEU, 17 November 1998, Van Uden Maritime BV v. Kommanditgesellschaft in Firma Deco-Line and Another, C-391/95, ECLI:EU:C:1998:543, paras 46 and 47; CJEU, 27 April 1999, Hans-Hermann Mietz v. Intership Yachting Sneek BV, C-99/96, ECLI:EU:C:1999:202, para 42; Swiss Federal Court, 30 July 2003, ATF 129 III 626; Swiss Federal Court, 17 September 1999, ATF 125 III 451; D. FAVALLI/ T. AUGSBURGER, (note 23), Article 31, paras 56 et seq.; F. GUILLAUME/ N. PELLATON (note 5), para 10. 31 D. FAVALLI/ T. AUGSBURGER, (note 23), Article 31, paras 56 et seq.; A. BUCHER, in A. BUCHER (ed.), Commentaire romand, Loi fédérale sur le droit international privé (LDIP)/Convention de Lugano (CL), Bâle 2011, Article 31 CL, paras 43 et seq. 32 These conditions were developed in the context of early performance of a contractual service (Swiss Federal Court, 17 September 1999, ATF 125 III 451, para 3a). Their applicability to other forms of early enforcement measures, such as a restraining order in the context of a tort claim, has never been decided to date by the Swiss Federal Court or by the CJEU. 33 Swiss Federal Court, 17 September 1999, ATF 125 III 451, para 3b; Swiss Federal Court, 31 August 2007, 4A_80/2007; A. BUCHER (note 31), Article 31 CL, paras 43-46. 34 Geneva Court of First Instance, 19 June 2019, JTPI/9033/2019.

182

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland was subsequently rejected on its merits, the prohibition measures did not allow a return to the status quo ante and could thus cause irreparable harm to the party against which the measures were directed. Against this background, the Geneva Court of First Instance refused to recognise the German order. 2.

Procedure

The enforcement of foreign interim measures follows the usual (non-adversarial) procedure for recognition provided by Articles 41 et seq. Lugano Convention. Article 41 Lugano Convention gives an automatic right to the applicant to obtain an exequatur35 of a decision, without being subject to examination of the general conditions for recognition set forth in Articles 34 and 35 of the Convention. Pursuant to Article 39(1) Lugano Convention, the request for recognition is to be submitted to the court or to the competent authority as indicated in Annex II of the Convention. For Switzerland, this will be the “cantonal enforcement court”. Pursuant to Article 39(2) Lugano Convention, local jurisdiction is determined by reference to the respondent’s place of domicile or by reference to the place of enforcement. Article 40(1) Lugano Convention provides that “the procedure for making the application shall be governed by the law of the State in which enforcement is sought.” The applicant must give an address for service within the area of jurisdiction of the court receiving the application (Article 40(2) Lugano Convention). The documents referred to in Articles 53 and 54 Lugano Convention, i.e. the original or certified copy of the decision36 and the certificate using the standard form (set out in Annex V to the Convention), must be attached to the application.37 No legalisation or apostille is required for original documents (Article 56 Lugano Convention). If the certificate cannot be produced in a timely manner, or at all, the court or other competent authority may, pursuant to Article 55(1) Lugano Convention, specify a time for its production, accept an equivalent document38 or, if it considers that it has sufficient information, renounce the requirement for the document’s production altogether. A translation of the decision and certificate is

35 The exequatur refers generally to the procedure that aims to declare a foreign judgment enforceable before the actual enforcement; it encompasses the declaration of enforceability. 36 The production of a photocopy is insufficient, even if the respondent does not dispute compliance with the original (Swiss Federal Court, 24 September 2009, 5A_241/2009, para 2.2). 37 An applicant whose application is rejected for failure to produce one of these two documents may submit a new application with the missing document. In such cases, the decision refusing the exequatur has no res judicata effect (Swiss Federal Court, 9 February 2001, ATF 127 III 186). 38 E.g. if the applicant can otherwise demonstrate the enforceability of the decision in the State of origin by means of a certificate (or stamp) affixed directly on the decision, from which it is apparent that it was not rendered by default.

Yearbook of Private International Law, Volume 21 (2019/2020)

183

Sandrine Giroud / Noémie Raetzo not mandatory but may be requested by the court of the requested state (Article 55(2) Lugano Convention).39 According to Article 41 Lugano Convention, the enforcing court may declare the decision enforceable as soon as the formalities provided for in Articles 53 and 54 Lugano Convention are satisfied, without hearing the opposing party or examining the grounds for refusal (set out in Articles 34 and 35 Lugano Convention). The respondent may appeal the exequatur decision. In this instance, the authority hearing the appeal will examine, with full power of review (Article 327a(1) SCCP), whether there are any grounds for refusing recognition and enforcement. The time limit for appealing against the exequatur decision is one month if the respondent lives in Switzerland and two months if he/she is domiciled in another State bound by the Convention (Articles 43(5) Lugano Convention and 327a(3) SCCP). For an unsuccessful applicant, however, the deadline is only 10 days (Article 321(2) SCCP).40 3.

Protective Measures in Support of the Enforcement

As soon as the decision is enforceable in the State of origin, “protective measures” may be requested in Switzerland, prior to obtaining a declaration of enforceability, pursuant to Article 47(1) Lugano Convention. Any measures ordered pursuant to this provision must in principle comply with Swiss law and its conditions – for example, the condition of urgency.41 Once the declaration of enforceability has been obtained, the party seeking enforcement is entitled to obtain “protective measures” in the State of enforcement pursuant to Article 47(2) Lugano Convention.42 The declaration of enforceability of 39 The Geneva courts do not seem to require a French translation (Geneva Court of Appeal, 10 February 2017, ACJC/146/2017). 40 F. GUILLAUME/ N. PELLATON (note 5), para 6. 41 Under the SCCP, the applicant for an interim measure has to establish the likelihood that he/she is entitled, on the merits, to the same relief which the requested interim measure is intended to protect (i.e. the likely existence of a valid cause of action on the merits); that there is an impending injury to the rights on which the applicant relies (condition of “urgency”); and that if no interim relief is granted, the detriment resulting from the injury may not be easily remedied (“irreparable harm”). In addition, the provisional measure requested has to respect the principle of proportionality and be appropriate in view of both parties’ interests (“balance of interests”). Compliance with these criteria must be established prima facie. The threshold is thus lower than a requirement for full proof, but it nonetheless requires more than mere allegations. If these conditions are fulfilled, courts may order any interim measure suitable to prevent imminent harm. 42 The measures based on Article 47(2) Lugano Convention must at least constitute “an effective and unconditional security measure”, that is “independent of other material requirements such as a state of urgency”. By contrast, Swiss law requires the existence of urgency (Message relatif à l’arrêté fédéral portant approbation et mise en œuvre de la Convention de Lugano révisée concernant la compétence judiciaire, la reconnaissance et l’exécution des décisions en matière civile et commerciale, FF 2009 1497, p. 1532).

184

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland a decision rendered by the court of a Contracting State gives a “right” to the applicant to request protective measures available under Swiss law (Article 47(2) Lugano Convention),43 but without having to comply with the conditions of Swiss law for ordering them. In practice, interim measures requested in support of the exequatur (whether ordered on the basis of Articles 47(1) or 47(2) Lugano Convention), i.e. “exequatur measures”, often overlap with the execution as such of foreign interim measures, i.e. with “execution measures”. In a 2020 decision, the Swiss Federal Court addressed the interaction between exequatur measures and execution measures.44 In particular, it noted that the very nature of a Swiss attachment order, granted on the basis of Article 47(2) and Article 271(1)(6) of the Swiss Federal Debt Enforcement and Bankruptcy Act (DEBA) in support of the declaration of enforceability of an Italian freezing order, had changed once the enforceability decision had become final. When the exequatur was confirmed, the attachment order took on the character of an interim measure based on Articles 33(1) and 38(1) Lugano Convention, which provide for the transposition of a foreign measure into an equivalent measure under Swiss law.45 This example shows that the boundaries between the execution as such of interim measures and interim measures in support of an exequatur are often blurred. This sometimes leads to unfortunate and even contradictory reasonings from courts, which are difficult to apprehend. B.

Recognition and Enforcement of Interim Measures Issued by a Foreign Court Outside the Scope of the Lugano Convention

The aim of the Lugano Convention regime is to facilitate the recognition and enforcement of decisions within its territorial scope. It is therefore unsurprising that the Swiss regime for recognition and enforcement of foreign decisions is stricter for foreign interim measures, when such recognition and enforcement is not barred altogether. 1.

Conditions for Enforcement

A decision rendered by the court of a non-Lugano Convention Contracting State can be recognised and enforced in Switzerland if the following conditions are met: (i) the judicial or administrative authorities of the State in which the decision was rendered must have had jurisdiction (Article 25(a) PILA); (ii) it is not possible to lodge an ordinary appeal against the decision, or the decision is final (Article 25(b) PILA); and (iii) there are no grounds for refusal under Article 27 PILA (Article 25(c) PILA).

See F. GUILLAUME/ N. PELLATON (note 5), para 32. Swiss Federal Court, 7 January 2020, 5A_311/2018 and 5A_312/2018. 45 Swiss Federal Court, 7 January 2020, 5A_311/2018 and 5A_312/2018, para 7.1. 43 44

Yearbook of Private International Law, Volume 21 (2019/2020)

185

Sandrine Giroud / Noémie Raetzo The grounds for refusal under Article 27 PILA include: (a) incompatibility with Swiss public policy; (b) lack of proper service of the proceedings on the respondent according to the law of the respondent’s domicile or place of habitual residence (unless the respondent had proceeded to the merits without contesting jurisdiction); (c) violation of fundamental principles of Swiss procedural law (in particular if the respondent was denied the right to be heard), or (d) lis pendens and res judicata. The question as to whether foreign interim measures issued by the court of a non-Lugano Convention Contracting State should be considered “decisions” within the meaning of Article 25 PILA has long been disputed among scholars and still remains to be decided by the Swiss Federal Court.46 The legislative work that led to the drafting of PILA did not specify whether foreign interim measures would be considered “foreign decisions” within the meaning of Article 25 PILA.47 In its Explanatory Report, the Swiss Federal Council further stated that the PILA “does not deal with” the recognition of foreign interim measures.48 Despite this historical background,49 the majority of Swiss scholars now seem to consider interim measures to be “decisions” within the meaning of Article 25 PILA.50 Some authors have also advocated a middle path, namely a differentiated approach based on the nature of the interim measures concerned.51 To date, the Swiss Federal Court has left the question open52 and cantonal case law is inconsistent on the issue. Geneva courts, which used to prefer a restrictive approach,53 now seem to consider such interim measures enforceable decisions,54 whereas the Vaud courts seem rather 46 For an exhaustive summary of scholars’ positions after the PILA entered into force, see L. GAILLARD, Les mesures provisionnelles en droit international privé, Semaine judiciaire (SJ) 1993, p. 147. 47 Ibidem. 48 Message concernant une loi fédérale sur le droit international privé (loi de DIP) du 10 novembre 1982, FF 1983 I 255, p. 320. 49 S. PHURTAG (note 17), para 121. 50 B. DUTOIT, Droit international privé suisse, Commentaire de la loi fédérale du 18 décembre 1987, 5th ed., Bâle 2016, Article 25, para 9; A. BUCHER (note 31), Article 25 PILA, para 24; O. VOGEL/ K. SPÜHLER, Grundriss des Zivilprozessrechts und des internationalen Zivilprozessrechts der Schweiz, 8th ed., Bern 2006, para 15a; S. GRUNDMANN, Anerkennung und Vollstreckung ausländischer einstweiliger Massnahmen nach IPRG und Lugano-Übereinkommen, Basel/Frankfurt am Main 1996, p. 97. 51 See L. GAILLARD (note 46), p. 149, who proposed recognizing regulatory measures (i.e. measures aimed at provisionally settling a legal situation pending a decision), but not protective measures as such (i.e. measures aimed at ensuring the success of a subsequent compulsory execution). See also T. S. STOJAN, Die Anerkennung und Vollstreckung ausländischer Zivilurteile in Handelssachen, Zürcher Studien zum Verfahrensrecht 1986 No 72, p. 49. Contra S. PHURTAG (note 17), para 332. 52 Swiss Federal Court, 18 March 2004, 5P.252/2003, para 3.3. 53 Geneva Court of Appeal, 8 February 1990, Semaine judiciaire (SJ) 1990, p. 196. See D. TUNIK (note 22), p. 290; L. GAILLARD (note 46), p. 144 and 151. 54 Geneva Court of Appeal, 28 February 2019, ACJC/294/2019, para 3.2; Geneva Court of Appeal, 10 March 2017, ACJC/264/2017, para 4.4.1.

186

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland hesitant.55 Zurich courts initially accepted recognition in principle,56 but they seem to have subsequently changed their position, although they have not specifically decided on this issue.57 As seen above, jurisdiction of the foreign court is the first condition for recognition (Article 25(a) PILA). This condition creates specific issues when enforcing interim measures. When the issuing foreign court has jurisdiction on the merits according to PILA, its jurisdiction to issue interim measures is established. The situation is different when the foreign court relies on a jurisdictional ground similar to Article 10 PILA (the Swiss legal basis for ordering Swiss interim measures in an international context). In such cases, in the authors’ view, recognition should not be possible.58 Indeed, Article 26(a) PILA notably states that a foreign court’s jurisdiction is established if it results from a provision of PILA. However, except for Article 96(3) PILA (precautionary measures in relation to heritance law), the PILA does not contain any rule establishing jurisdiction of foreign authorities for issuing interim measures. These considerations lead to the conclusion that if the foreign court issuing the provisional order had no grounds for jurisdiction within the meaning of Article 26 PILA, its decision may not be enforced in Switzerland. Another difference with the Lugano Convention regime is that, under the PILA, exequatur proceedings are adversarial; accordingly, exequatur cannot be granted without the respondent party having first been heard.59 2.

Procedure

The application for recognition or enforcement of decisions rendered by nonLugano Convention Contracting State courts must be submitted to the authority of the canton where the foreign decision is to be invoked (Article 29(1) PILA). Such request must be supported by (i) a certified copy of the decision in full (Article 29(1)(a) PILA), (ii) a confirmation that it is not possible to lodge an ordinary appeal against the decision or that the decision is final (Article 29(1)(b) PILA) and, in the case of a decision rendered by default, (iii) an official document Vaud Court of Appeal, 12 December 2013, JS13.003426-131791, para 3b, where the court held that the recognition of interim measures issued by a non-EU Member State court was “uncertain” and disputed amongst scholars. 56 Zurich Court of First Instance, 11 July 1989, para 3, in Blätter für Zürcherische Rechtsprechung 1989, No 37 p. 126. 57 See Zurich Court of First Instance, 23 October 2001, para 3, in Blätter für Zürcherische Rechtsprechung 2002, No 84, p. 257. According to PHURTAG, the position of the Zurich court refusing recognition of such measures also derives from a 2013 judgment of the Zurich Commercial Court (Zurich Commercial Court, 17 June 2013, HG050433) in which the court did not have to address the issue but specifically referred to a scholar against recognition, namely P. VOLKEN (see S. PHURTAG (note 17), para 327). 58 See also D. TUNIK (note 22), p. 310; S. PHURTAG, (note 17), para 312. 59 See D. TUNIK (note 22), p. 325; A. BUCHER (note 31), Article 29 PILA, para 6. 55

Yearbook of Private International Law, Volume 21 (2019/2020)

187

Sandrine Giroud / Noémie Raetzo establishing that the respondent party was duly summoned and had the opportunity to enter a defence (Article 29(1)(c) PILA). However, the confirmation required by Article 29(1)(b) PILA is not mandatorily required. Where the information to be provided is apparent from other documents in the file, the requested authority may dispense with the production of the confirmation.60 Pursuant to Article 29(2) PILA, the party opposing recognition and enforcement shall have the right to a hearing and may introduce evidence.

III. Execution of Foreign Interim Measures in Switzerland Where foreign interim measures meet the conditions for recognition and enforcement in Switzerland, they can be executed, which means they will be implemented in Switzerland pursuant to Swiss civil procedural rules;61 indeed, the measures will only be implemented to the extent that they match the types of measure available under Swiss procedural law.62 The translation of foreign interim measures into Swiss procedural law is however not unproblematic. In particular, foreign interim measures must be sufficiently determined.63 To help navigate this complex and sometimes obscure field of the law, we set out below the particularities of Swiss interim measures (see below A) and practical issues encountered when transposing foreign interim measures into equivalent Swiss interim measures (see below B). As noted, there is no decision of the Swiss Federal Court on the recognition and enforcement of interim measures issued by foreign courts outside the scope of the Lugano Convention. Unless otherwise specified, our analysis therefore focuses only on interim measures issued by foreign courts that fall within the scope of the Lugano Convention.

Swiss Federal Court, 30 April 2010, 5A_840/2009, para 2.3. A. BUCHER (note 31), Article 38 CL, para 6; F. GUILLAUME/ N. PELLATON (note 5), para 7. 62 Swiss Federal Court, 7 January 2020, 5A_311/2018 and 5A_312/2018, para 4.1. 63 The Swiss Federal Court recently gave a reminder in an obiter dictum that foreign interim measures (in casu rendered by the court of a Lugano Convention Contracting State) can only be recognised and executed in Switzerland provided that they are sufficiently determined: “Misure provvisionali sono pure suscettibili di essere riconosciute e dichiarate esecutive […], a patto che la misura ordinata sia sufficientemente determinata” (Swiss Federal Court, 7 January 2020, 5A_311/2018 and 5A_312/2018, para 6.2). See also S. GIROUD (note 17), p. 448. 60 61

188

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland A.

Particularities of Swiss Interim Measures

Under Swiss law, it is generally accepted that interim measures fall into three categories depending on their function: (i) measures aimed at ensuring the success of a subsequent enforcement (protective measures), (ii) measures aimed at provisionally settling a legal situation pending a decision (regulatory or accompanying measures) and (iii) measures aimed at ensuring the preservation of evidence.64 With regard to the execution process under Swiss domestic law, Swiss law further distinguishes between non-monetary claims (e.g. specific performance) and monetary claims (i.e. payment of an amount of money). Whilst execution of nonmonetary claims is governed by the SCCP, in particular Article 335 et seq., enforcement of monetary claims is regulated by the DEBA (Article 335(2) SCCP).65 Article 340 SCCP is the relevant legal basis for issuing protective orders in the framework of enforcement of non-monetary judgments but it does not list what types of interim measure are permissible. The interim measures can take the form of injunctions, orders to remedy an unlawful situation, orders made to registries or to third parties, etc. In particular, if the decision to execute provides for an obligation to act, to refrain from acting or to tolerate something, the enforcement court may (i) issue a threat of criminal penalty under Article 292 Swiss Criminal Code (SCrC),66 (ii) impose a disciplinary fine not exceeding CHF 5,000, (iii) impose a disciplinary fine not exceeding CHF 1,000 for each day of non-compliance, (iv) order a compulsory measure such as taking away a movable item or vacating immovable property, or (v) order performance by a third party (Article 343 SCCP). If the decision relates to a declaration of intent, the enforceable decision takes the place of the declaration; if it concerns a public register, such as the land register or the commercial register, the court making the decision must issue the instructions addressed to the registrar (Article 344 SCCP).The parties may draw inspiration from Article 262 et seq. SCCP (which is the relevant Swiss provision for domestic interim measures) to identify the type of possible measures they may seek.67 In practice, a common interim measure order that is requested is the registration of property rights in a public register, such as the Land Register. Interim measures can also be requested to prevent a party from disposing of company shares or moveable property (Article 265 SCCP). F. GUILLAUME/ N. PELLATON (note 5), para 8. In practice, the most common situation is that of an applicant wishing to secure a monetary claim by attaching the debtor’s assets, such as bank accounts held in Switzerland. By way of an attachment order, the debtor or garnishee (the third party holding the debtor’s assets, such as a Swiss bank) is prohibited, under the threat of criminal sanctions, to dispose of or transfer the attached assets (Articles 271 et seq. DEBA). 66 Article 292 SCrC provides that: “Any person who fails to comply with an official order that has been issued to her/him by a competent authority or public official under the threat of the criminal penalty for non-compliance in terms of this provision is liable to a fine.” 67 J. PAHUD, Le séquestre et la protection provisoire des créances pécuniaires dans le contexte interne et international, Fribourg 2018, para 86. 64 65

Yearbook of Private International Law, Volume 21 (2019/2020)

189

Sandrine Giroud / Noémie Raetzo It is also noteworthy that, by nature, interim measures provided under the SCCP are in personam measures, whereas attachment orders are in rem measures, which is an important distinction, as further developed below. B.

Practical Considerations

1.

Mere Declaration of Enforceability

Sometimes the mere declaration of enforceability of the foreign interim measures may be sufficient for the applicant and there will be no need for further execution measures, i.e. concrete measures implementing the foreign interim measures. Indeed, foreign interim measure orders which have been recognised and declared enforceable in Switzerland take effect in the same way as if they had been rendered by a Swiss court. As an example, in a Geneva case concerning the recognition and enforcement of an English WFO, the applicant requested (and obtained) the exequatur of the order and the court’s notification of the exequatur to the bank where the respondent’s assets were located. The applicant was satisfied with the notification of the exequatur decision to the bank and did not request any accompanying protective interim measures.68 Zurich courts initially considered that a request for a mere declaration of enforceability would be inadmissible due to, inter alia, a lack of legal interest.69 The Swiss Federal Court clarified this point in 2011 and held that a party benefiting from a foreign interim measure had a legitimate interest in obtaining a mere declaration of enforceability from a Swiss court, without requesting Swiss protective interim measures in support thereof.70 However, a declaration of enforceability may not always be sufficient to protect the applicant’s rights, as no coercive measures prevent the respondent from violating the order. This is why, in practice, a request for a declaration of enforceability is often combined with a request for protective interim measures and/or a request that enforcement be ordered under the threat of criminal sanctions pursuant to Article 292 SCrC in the event of a breach thereof. 2.

Measures in rem or in personam?

The transposition of foreign interim measures in Switzerland and the type of measures that can be ordered in support thereof will depend on the nature of the foreign interim measure. If the aim of the interim measure is to secure assets, it is essential to determine whether it would have an in personam effect, i.e. if it is aimed at a person, or an in rem effect, i.e. if it is aimed at the person’s assets. Geneva Court of Appeal, 11 January 2018, ACJC/59/2018. Zurich Court of First Instance, 22 December 2010, EU100827. See also S. GIROUD (note 17), p. 445. 70 Swiss Federal Court, 31 October 2011, 4A_366/2011. 68 69

190

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland Until 2017, there was a particular uncertainty as to which measures could be requested in Switzerland to support each of these types of measure. The Swiss Federal Court has now clarified this issue and provided a clear roadmap for decisions rendered by Lugano Convention Contracting States’ courts.71 Accordingly, in personam interim measures are transposable into Swiss law via the protective measures set forth in Article 340 SCCP72 (i.e. the protective measures that the “enforcement court” may generally issue, if necessary without hearing the opposing party beforehand). By contrast, the Swiss Federal Court held that in rem interim measures rendered by Lugano Convention Contracting States’ courts are transposable via a Swiss attachment order pursuant to Article 271(1)(6) DEBA. This decision is important in that it puts an end to divergent cantonal practices.73 3.

The Threat of Criminal Sanctions under Article 292 SCrC

As noted, Swiss law provides the possibility of combining interim measures with the threat of criminal sanctions under Article 292 SCrC, which leads to a fine in the event of violation. Prior to the entry into force of the SCCP, the Swiss Federal Court already held, in Motorola,74 that it is, in principle, possible to order interim measures in support of the exequatur and to combine them with the threat of criminal sanctions pursuant to Article 292 SCrC. However, in that particular case, it considered that the formulation of the English WFO order allowing the spending of a certain sum for certain payments “in the ordinary and proper course of business” was not precise and specific enough to be subject to criminal sanctions in the event of violation. Nowadays, cantonal courts generally admit such injunctions, provided that the foreign interim measures are sufficiently clear and determined.75 Pending a 71 Swiss Federal Court, 27 November 2017, ATF 143 III 693, para 3, regarding the recognition and enforcement of a Greek “conservatory attachment”. 72 The parties may draw inspiration from the catalogue of measures provided by Article 262 SCCP (injunction, order to remedy an unlawful situation, order to a registry or to a third party, etc., it being specified that the list is only indicative). 73 Swiss Federal Court, 27 November 2017, ATF 143 III 693. This decision put an end to the practice of the Geneva courts, which, until then, refused to transpose a Lugano Convention Contracting State’s court freezing order with in rem effect into a Swiss attachment order, arguing – in our view erroneously – that such measures were “conservatory” and not measures condemning to the payment of an amount, thus falling outside the scope of Article 271(1)(6) DEBA (Geneva Court of Appeal, 9 June 2017, ACJC/655/2017). In its decision, the Swiss Federal Court correctly underlined that the relevant question was whether the measure to enforce was an “enforceable” decision within the meaning of the Lugano Convention and not whether such measure was “conservatory” or “condemnatory”. 74 Swiss Federal Court, 30 July 2003, ATF 129 III 626 (Uzan v. Motorola Credit Corporation). 75 Zurich Court of Appeal, 1st March 2013, RV120014; Zurich Court of Appeal, 2 April 2014, RV140001, para 2.1; Geneva Court of Appeal, 18 January 2018,

Yearbook of Private International Law, Volume 21 (2019/2020)

191

Sandrine Giroud / Noémie Raetzo decision of the Swiss Federal Court to clarify the issue, a prudent approach requires to ensure that the foreign interim measure application contains an equivalent sanction to Article 292 SCrC and is as self-executory as possible so as to avoid issues of transposition. 4.

A Single Code, Yet Multiple Cantonal Interpretations

In addition to the specific issues mentioned above, one important obstacle to the execution of foreign interim measures remains the lack of case law on this topic and the different approaches, if not contradictory views, taken by cantonal courts. Given the provisional nature of Swiss interim measures and the anticipated length of appeal proceedings, combined with the stricter threshold to appeal interim measures,76 applicants rarely challenge cantonal decisions issuing such measures before the Swiss Federal Court. As a result, the Swiss Federal Court’s case law is very scarce and the main body of case law comes from the cantonal courts, whose practice varies considerably among cantons. As illustrated by the examples set out below, the bulk of Swiss case law relates to the enforcement of WFOs, which is not surprising given their popularity in international litigation. The interpretation of the conditions for admissibility of an application for execution of foreign interim measures is one example of divergent opinions among cantonal courts. The SCCP provides that a Swiss court shall consider such an application only if the conditions of admissibility are met, among which is the existence of a legitimate interest for the applicant (Article 59(2)(a) SCCP). Taking a very narrow view, Zurich courts have specifically considered this condition of admissibility to be a condition for the granting of interim measures under Article 47(2) Lugano Convention. They tend to consider that such interest is lacking if the declaration of enforceability for the foreign interim measures has the same effect as the protective interim measures requested in support of the exequatur.77 The position may, however, be different if the foreign interim measures could only have their full effect in Switzerland when combined with specific Swiss protective interim measures, in addition to the declaration of enforceability. By contrast, Vaud courts seem to grant protective measures more generously. In a 2016 ruling, the Vaud Court of Appeal rejected an appeal filed against a

ACJC/62/2018. The Geneva Court of Appeal granted an order under the threat of criminal sanctions in the following terms: “(…) a prima facie examination of the case shows that the sanctions under English law provided for by the Freezing Injunction have, as the appellant points out, no effect in Switzerland; the appellant’s subsidiary conclusion that Article 292 of the Swiss Criminal Code should be applied is therefore justified on the basis of a superprovisional assessment”. 76 An appeal before the Swiss Federal Court against provisional measures is only allowed for the violation of constitutional rights (Article 98 Federal Court Act). 77 Zurich Court of Appeal, 1st March 2013, RV120014, section II.

192

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland first instance ruling78 that ordered protective measures in support of an English WFO containing an “Angel Bell” clause.79 In a decision rendered ex parte, the court fully implemented the WFO by prohibiting the respondent from disposing of any of his assets in the amount of up to USD 335 million and requesting the local Land Registry to record a prohibition against disposal of certain real estate on its books. Interestingly, the court had no difficulty in transposing the Angel Bell clause into Swiss protective measures. This practice contradicts that of other cantonal courts, such as the Zurich courts, which refuse to transpose Angel Bell clauses owing to their imprecision and lack of determinability.80 In the present case, the Vaud court did not hesitate to prohibit the respondent from disposing of his assets subject to some exceptions provided for in the WFO. More specifically, it ruled that the respondent was not prohibited from spending the amounts necessary for his current expenses, up to a maximum of CHF 30,000 per month, and a reasonable amount for his legal representation costs, up to a maximum of USD 1 million per month. The original English WFO provided for more exceptions. For example, it specifically provided that the respondent was not precluded from dealing with or disposing of his property in the ordinary course of business, subject to prior notice to the applicant. The Vaud court surprisingly ordered the abovementioned interim relief ex parte without taking these exceptions into consideration. In comparison, Geneva courts did not initially share the same hesitations or objections as the Zurich courts when accepting protective measures in support of foreign in personam interim measures. In several decisions rendered in 2009 and

The first instance judge granted an order ex parte in the following terms: “Prohibits [Respondent] from disposing of any of its property or reducing the value of any of its property in any manner whatsoever up to an amount of USD 335 million and in particular the real estate and bank accounts listed in the English decision and orders the [Land Registry] to annotate a prohibition to dispose of the land in question. Declares that the injunctions provided for are issued subject to the exceptions provided for in the English Order of 1st July 2015, so that, provided that the legal representatives of the [Applicant] are informed of the source of the funds before any expenditure is made, the [Respondent] is not prohibited from spending the amounts necessary for its current expenses up to a maximum of CHF 30,000/month and a reasonable amount for its legal representation costs up to a maximum of CHF 1,000,000/month. Orders the above injunctions under the threat of a fine under Article 292 of the Swiss Criminal Code and states that the order is valid until a decision is rendered on the recognition and enforcement of the English Order of 1st July 2015.” 79 The “Angel Bell” exception forms part of the English Commercial Court standard form Freezing Order and reads as follows: “This order does not prohibit the respondent from dealing with or disposing of any of its, her or his assets in the ordinary and proper course of business, [but before doing so the respondent must tell the applicant’s legal representatives]”; it aims to avoid the situation of a Freezing Order preventing a respondent from carrying out its ordinary business dealings. 80 Zurich Court of First Instance, 22 December 2010, EU102419; Zurich Court of Appeal, 9 May 2011, NL 110006. 78

Yearbook of Private International Law, Volume 21 (2019/2020)

193

Sandrine Giroud / Noémie Raetzo 2013,81 the Geneva Court of First Instance declared English WFOs enforceable and granted the requested prohibition orders against the respondents to prevent the disposal of their assets up to a specified amount. By contrast, in 2018,82 the Geneva Court of First Instance rejected a request for protective measures in support of an English WFO, on the basis that a WFO, once declared enforceable, does not require a pairing with other measures in order to be immediately effective or prevent the loss of the protected assets. Although not specifically stated, it seems that, similarly to the Zurich courts, the Geneva Court of First Instance considered that interim measures are conditional on the existence of “a legitimate interest”. The Geneva Court of Appeal confirmed the lower court’s decision on this issue and refused to grant protective interim measures, but on another ground. The court surprisingly held that the attachment of the assets located in Switzerland – which was requested as a protective interim measure – would have to fulfil the conditions set forth in Article 271(1)(6) DEBA. It further considered that the lack of determinability of the WFO or its transposability into a Swiss attachment was a barrier to the granting of equivalent protective interim measures. The court noted in this regard that the WFO permitted access to the frozen assets under certain conditions, an exception which was “difficult to reconcile” with the requested attachment. 5.

Lessons Learned Regarding the Execution of English Worldwide Freezing Orders in Switzerland

The English WFO is a powerful weapon in preventing respondents from disposing of their assets pending the resolution of an underlying dispute. However, a WFO is only as effective as its ability to be executed abroad. Practical considerations should already be kept in mind when applying for the WFO in England in order to best anticipate the possible obstacles at the enforcement stage. As seen from the above-mentioned examples, many difficulties arise when implementing WFOs in Switzerland. The in personam nature of such measures is not an obstacle per se. Although Swiss attachment orders are not available, as they can only be ordered in support of foreign measures with in rem effect, the applicant still has the possibility to request, together with a declaration of enforceability, Swiss protective measures and/or a declaration that the WFO is enforced under the threat of Swiss criminal sanctions. The difficulties lie in the fact that in practice, certain cantonal courts struggle to translate the in personam effect of a WFO into Swiss measures, especially when such measures provide for certain exceptions (such as Angel Bell clauses) and are not straightforward. Where the applicant knows from the outset that it intends to request the recognition and enforcement of the WFO in 81 Geneva Court of First Instance, 19 January 2009, Case No C/566/2009; Geneva Court of First Instance, 2 April 2013, OTPI/545/2013; Geneva Court of First Instance, 17 October 2013, Case No C/21682/2013. 82 Geneva Court of Appeal, 18 January 2018, ACJC/62/2018. See also Geneva Court of Appeal, 9 June 2017, ACJC/655/2017 regarding a German Arrestbefehl.

194

Yearbook of Private International Law, Volume 21 (2019/2020)

Enforcement and Execution of Foreign Interim Measures in Switzerland Switzerland, practitioners should be aware of the issues concerning the sufficient determinability of the measure in order to adapt, if possible, the wording of the WFO upfront and avoid, for example, the use of Angel Bell clauses which may, depending on the canton, be an obstacle to the transposition of the measure in Switzerland. The practical difficulties described above may be worsened by Brexit.83 The effects of Brexit are delayed until the end of the “transition period” which lapses on 31 December 2020, and the Lugano Convention will still apply in the meantime. English WFOs will continue to be enforceable in Switzerland pursuant to the Lugano Convention at least until 31 December 2020, but the legal regime which will apply after the transition period is as yet unknown. While unlikely, it is possible that England and Wales will lose the benefit of the facilitating legal framework provided by the Lugano Convention.84

IV. Conclusion Interim measures are often critical to securing the successful outcome of a case and to ensuring that, pending a decision on the merits, the status quo is respected. Yet, ensuring the full effect of interim measures abroad is not straightforward. As shown, foreign interim measures issued by a court of a Lugano Convention Contracting State can be recognised and enforced in Switzerland although, practically, the road is paved with obstacles. The road is even more complicated for foreign interim measures issued by courts of a non-Lugano Convention Contracting State, since there is still legal uncertainty as to whether such interim measures can be recognised and enforced under the PILA. More than thirty years after the entry into force of the PILA, it would be a welcome clarification if the Swiss Federal Court finally had the opportunity to settle this long outstanding issue. Meanwhile, the Swiss Federal Court has provided a clear roadmap for the enforcement and transposition into the Swiss legal order of foreign interim measures rendered by courts of Lugano Convention Contracting States. Accordingly, an applicant can request protective measures set forth in Articles 340 et seq. SCCP in support of in personam interim measures, while interim measures with in rem effect are transposable via a Swiss attachment order pursuant to Article 271(1)(6) DEBA. Despite the existing legal basis for obtaining protective interim measures in support of the exequatur of foreign interim measures, applicants are often denied 83 A. LAYTON, Interim Measures in English Law and their Circulation, in this Yearbook , section VII. 84 S. GABRIEL/ S. GIROUD/ B. MAURON/ V. MEEROVICH, Brexit: A New Era for Recognition and Enforcement of English Judgments in Europe or Turning Back the Clock? Lessons to Be Learned From the Swiss Example, in Dispute Resolution International, Vol. 13 No 1, p. 81.

Yearbook of Private International Law, Volume 21 (2019/2020)

195

Sandrine Giroud / Noémie Raetzo the right to protective interim measures for lack of determinability of the foreign order or lack of interest to said measures. Given the different approaches taken by Swiss cantonal courts, it is therefore of the utmost importance to conduct a careful strategic analysis, in the first instance abroad when applying for interim measures, with a view to anticipating enforcement issues, and then also in Switzerland when choosing an enforcement court, so as to best take advantage of its particular practice. In view of the interests at stake in such matters, the complexity of the law and the scarcity of the case law, this field still promises interesting legal battles.

196

Yearbook of Private International Law, Volume 21 (2019/2020)

THE LAW APPLICABLE TO PROVISIONAL AND PROTECTIVE MEASURES WITH A FOCUS ON THE EU SYSTEM OF ANCILLARY RELIEFS Ilaria PRETELLI* I.

II.

III.

Ancillary Reliefs in a Comparative Perspective A. A Functional Taxonomy 1. Provisional Measures Anticipating the Merits 2. Protective Measures 3. Measures Securing Evidence B. Structural Categorisations and Existing Dichotomies 1. Measures Taken in Contentious vs Non-Contentious Jurisdiction 2. Interim Reliefs vs Measures Ante Causam, whether Ex Parte or Audita et Altera Parte 3. Discretionary vs Presumptive Decision-Making 4. Typical vs Atypical Measures 5. Measures in Rem vs Measures in Personam C. Essence and Scope of Ancillary Reliefs The Law Applicable to Ancillary Reliefs A. Cuius Forum Eius Lex? The Supremacy of the Law of the Forum 1. Shortcomings of the Exclusive Application of the Lex Fori 2. The EU Model of Coordination Between the Lex Fori and the Lex Causae B. The Scope of the Law Applicable to the Merits Includes the Merits of Provisional Measures 1. The Law Applicable to Provisional Measures in Family Matters 2. The Law Applicable to the Substantive Conditions for Issuing Protective Measures Taking Foreign Law Seriously

Provisional and protective measures are reliefs with an ancillary character, since they are always issued in support of pending or prospective proceedings. In the private international law tradition, they were thought to be subject to the lex fori by virtue of their characterisation either as procedural rules or as * Swiss Institute of Comparative Law. This study was carried out as part of research funded by the Spanish Ministerio de Economía, Industria y Competitividad (DER201675318-P). All websites quoted in the following footnotes were last checked on July 2, 2020.

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 197-223 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law Printed in Germany

Ilaria Pretelli mandatory rules. When the legal basis of the claim for provisional justice rests on a foreign-law-based relationship, interpreters have mainly framed the conflict-oflaws issue by investigating the jurisdictional power of the local judge to issue a relief ancillary to the foreign litigation at stake, to the extraterritorial reach of interim reliefs and/or to their enforcement abroad. On the other hand, analyses on the law applicable to ancillary remedies are rare and often marginal. In brief, the commonly held idea may still be that “le problème du conflit de lois est assez largement absorbé par celui du conflit de juridictions”.1 However, since interim remedies and provisional measures are considered a game changer in international litigation in commercial matters, as well as in family, succession and many other matters,2 the problem of the applicable law is becoming increasingly unavoidable and, with it, that of the clarification of the notion of provisional and protective measures. Having sketched elsewhere the elements of the CJEU’s autonomous characterisation of provisional and protective measures within the Brussels I3 and Brussels II systems,4 this article synthesises the elements of ancillary reliefs that are retrievable from a comparative analysis and suggests a methodology for the selection of the law applicable to ancillary reliefs.

1 P. DE VAREILLES-SOMMIÈRES, La compétence internationale des tribunaux français en matière des mesures provisoires, Rev. crit. dr. int. pr., 1996, p. 398. Similarly, J.-P. REMERY, le juge des référés face aux conflits de lois, in Le droit international privé : esprit et méthodes – Mélanges en l’honneur de Paul Lagarde, Paris 2005, p. 712, writes: “il nous semble plus simple de conclure qu’il n’existe pas, pour la détermination du droit applicable aux mesures relevant des pouvoirs du juge des référés, de véritable problème de conflit de lois”. The author is, however, convinced that the situation should change and favours a “future” enshrining of recourse to conflicts-of-laws methods by the provisional judge to the same extent as “any other judge” (p. 723). In France, the debate had been largely influenced by V. DELAPORTE, Les mesures provisoires et conservatoires en droit international privé, Trav. com. fr. dr. int. pr. 1987-88, CNRS, Paris, 1989, p. 167 et seq., and has been recurrently dealt with in doctoral theses since the seminal work by G. CUNIBERTI, Les mesures conservatoires portant sur des biens situés à l’étranger, Paris 2000. See S. LACASSAGNE, Le contentieux provisoire international, Thèse Paris 10, 2003; M. NIOCHE, La décision provisoire en droit international privé européen, Bruxelles 2012. 2 See, supra, A. BONOMI, Interim Measures at the Crossroads of International Litigation and Arbitration, this Yearbook, at the very beginning of the article. G.P. ROMANO, Certezze e incertezze nella giurisprudenza recente in materia di misure provvisorie nel contenzioso transfrontaliero, in G.A. BERNASCONI/ R. FILIPPINI (eds), Giurisprudenza recente del Tribunale federale: sentenze di principio, cambiamenti di prassi e questioni lasciate aperte: atti della Giornata di studio del 6 giugno 2016, Basel, 2017, p. 55-69. 3 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, Short Studies in Private International Law, TMC Asser Instituut, 2017, p. 97-117. 4 I. PRETELLI, Provisional Measures in Family Law, this Yearbook, 2018/2019, p. 113-148.

198

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures

I.

Ancillary Reliefs from in a Comparative Perspective

A comparative review of the remedies available in support of future or pending proceedings shows a great variety of procedural mechanisms. These remedies also embody optimal strategies for a rapid response to pragmatic needs, as well as one for circumventing the risk of a judicial decision being inutiliter data, having turned out to be nothing more than a useless piece of paper. Given their effectiveness, coupled with the reversibility of their effects, forum shopping for provisional measures is not always, nor necessarily, a bad thing. Aware of these circumstances, the EU legislator at first attempted to unify the adjudication of provisional justice among Member States and then began to create its own instruments. Since the 1968 Brussels Convention, the concurrent jurisdiction of the judge enjoying jurisdiction on the merits and that of the judge deriving jurisdiction from the principle of effectiveness – Franz KAHN’s Näherberechtigung – is plainly admitted. Whenever the target of the measure is within a jurisdiction’s borders, it is reasonable to vest with jurisdiction the judge who can actually enforce the measure, since the local court can make a difference in ensuring a measure’s timeliness and efficiency.5 More recently, the EU legislator has started to promote the implementation of specific harmonised instruments, which are bound to increase in number,6 and also a powerful uniform instrument – the European

5 In English law, a forum without jurisdiction as to the substance was traditionally forbidden to grant injunctions (The Siskina vs Distos Compania Naviera S.a. 1979 A.C. 2109), until it became apparent that the lacuna generated excessively great procedural disadvantages. At present, interim remedies in support of foreign proceedings find a legal basis in The Civil Jurisdiction and Judgments Act 1982, s. 25. See P. ROGERSON, Provisional measures, Collier's Conflict of Laws, Cambridge University Press, 2013, p. 206216. The Swiss Federal Private International Law Act (PILA) regulates jurisdiction to issue provisional measures in Article 10, prescribing that: a) either the Swiss issuing court enjoy jurisdiction on the merits; or b) the provisional measure needs to be enacted in Switzerland. See A. BUCHER, Commentaire romand à la LDIP/CL, Helbing Lichtenhahn, 2011, No. 14 ad Article 10 LDIP. The same rule is laid down in Article 22sexies of the Ley Orgánica del Poder Judicial, 6/1985, BOE-A-1985-12666 (“Los Tribunales españoles serán competentes cuando se trate de adoptar medidas provisionales o de aseguramiento respecto de personas o bienes que se hallen en territorio español y deban cumplirse en España. Serán también competentes para adoptar estas medidas si lo son para conocer del asunto principal”). 6 Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (OJ L 157, 30.4.2004); Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (Text with EEA relevance) OJ L 157, 15.6.2016, p. 1-18. See infra, I.C.

Yearbook of Private International Law, Volume 21 (2019/2020)

199

Ilaria Pretelli Account Preservation Order.7 These EU-rooted ancillary reliefs enrich still further the national arsenals of temporary reliefs.8 This rising heterogeneity is compensated for by time-honoured common characteristics, expressed in homogeneous, typical functions (A); in their ancillary character (B); and in the substantive conditions under which they are generally issued (C). A.

A Functional Taxonomy

Within the EU procedural system, the 1968 Brussels Convention’s lexicon has naturally driven theoretical analyses of the functional distinction between provisional measures and protective reliefs. More recently, mainly after the 2005 case St. Paul Dairy,9 a sub-species of protective measures has gained so much attention that it deserves a separate analysis. It includes measures aimed at securing evidence so that such evidence can be used to proof the merits in future proceedings. 1.

Provisional Measures Anticipating the Merits

Interim or ex ante measures are provisional when they offer a temporary solution that will subsequently be confirmed, or rejected, by the judgment on the merits. Most provisional measures are granted at a very early stage of the dispute, to temporarily protect rights that seem deserving of it, whenever there are needs that must be immediately addressed. In the German literature, it is common to differentiate Regelungsmaßnahmen, which “ensure the continuing safeguard of rights during the proceedings”,10 and Leistungsmaßnahmen, which “help to reduce the often too lengthy gap between timely performance and coercive enforcement of an executory decision”.11 Both kinds of remedy can be subsumed under the larger category of provisional measures, because their main objective is a significant, albeit temporary, settlement of rights on the merits. Among these measures are the French référéprovision (e.g. Article 809 c.p.c.), the Italian ordinanza presidenziale nell’interesse dei coniugi e della prole (Article 708 c.p.c. and 4-8 Law No. 898/1970) and the ordinanza provvisionale (Article 186bis and 423 c.p.c.), the Swiss mesures 7 EU Regulation No 655/2014, on which G. CUNIBERTI/ S. MIGLIORINI, The European Account Preservation Order Regulation, A Commentary, Cambridge University Press, 2018. 8 See, recently, F. GUILLAUME/ I. PRETELLI, Coherences and Incoherences in the Regime of Provisional and Protective Measures in European Private International Law, in J. FORNER DELAYGUA/ A. SANTOS (eds), Coherence of the Scope of Application - EU Private International Legal Instruments, Schulthess 2020, p. 277-333. 9 CJEU, 28 April 2005, St. Paul Dairy Industries NV vs Unibel Exser BVBA, ECLI:EU:C:2005:255. 10 Supra A. BONOMI (note 2). 11 Ibidem.

200

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures provisionnelles (Article 261 et seq. c.p.c.) and superprovisionnelles (Article 265 c.p.c.), and the German Befriedigungsverfügung (§940 ZPO).12 These kinds of measure are critical – and thus particularly frequent – in family matters. They serve to ensure the continuity of a legal relationship – insbesondere bei dauernden Rechtsverhältnissen, as stated in §940 ZPO – so that there is no significant gap or legal vacuum between the circumstance at the origin of the dispute (e.g. the break-up of the family home) and its end (e.g. divorce establishing the future settlement). Clearly, during the time it takes for a final decision on alimony to be issued, vulnerable persons such as children or incomeless homemakers may need a temporary, enforceable provisional decision in order to enjoy their basic right to life and its corollaries. However, anticipatory measures may also be ancillary to proceedings in contracts or torts. In the case of torts, it can be important to temporarily award damages in order to address promptly personal needs arising from the accident, inter alia with a view to preventing any aggravation of the tort’s consequences for the victim, especially in those states where proceedings on the merits suffer from structural delays.13 2.

Protective Measures

Interim or ex ante protective measures preserve a situation of fact pending a decision on the merits. They may serve either to guarantee or to anticipate the enforcement of the decision on the merits, or to safeguard a situation of fact during the time of uncertainty regarding the rights of the claimant. The first kind of measure includes the English freezing injunction14 and order for the retention of property, the German Arrest (§916 et seq. ZPO), the French saisie conservatoire (Article L511-1 c.p.c.) and the Italian sequestro conservativo (Article 671 et seq. c.p.c.). The second kind of measure includes the Italian sequestro giudiziario (Article 670 c.p.c.) and the German Sicherungsverfügung (§935 ZPO). Restraining orders and the EAPO also fall within the “protective measures” category. The typical function of protective measures is to prevent the defendant (rectius the party opposed to the measure) from taking advantage of the time it

In the text and hereinafter, the abbreviation c.p.c. refers to the codes of civil procedure in force in the country concerned. ZPO also refers to the German law of civil procedure in force (Zivilprozessordnung). 13 See, in Italy, Cassazione civile, October 31st, 2019, No. 27984 and February 13th, 2020, No 2079, with reference to ordinanze anticipatorie di condanna ex Article 186quater of the Italian code of civil procedure, which state that, pending the proceedings on torts, allegation of evidence as regards part of the torts allows the temporary award of part of the damages to the victim. 14 Freezing orders prevent the debtor from contriving insolvency in order to avoid payments (e.g. JSC BTA Bank (Appellant) vs Ablyazov (Respondent) [2015] UKSC 64) and exist in various contexts: see section 37 of the Matrimonial Causes Act 1973 (MCA 1973) and NP vs KP (asset freezing) [2011] EWHC 457 (Fam); section 23 of the Pensions Act 2004; etc. 12

Yearbook of Private International Law, Volume 21 (2019/2020)

201

Ilaria Pretelli takes for a final decision to be issued in order to prepare a strategy to frustrate its concrete enforceability. Practice has long since shown that a typical strategy to avoid payments consists in dissipating assets so that the future judgement, instead of recovering justice, will be nothing more than a piece of paper. Based on the similar assumption that often ex facto oritur ius, the 1980 Hague Child Abduction Convention has created a relief (the return order) to prevent the factual legitimation of an illegal situation. Such a relief, which does not enter into the merits of the parental dispute over custody, is often crucial to accurate implementation of any parallel litigation on the merits of custody.15 In sum, the effectiveness of protective measures granted ex ante or pending the proceeding may be crucial to ensuring a successful enforcement of the decision on the merits. 3.

Measures Securing Evidence

Protective measures include measures securing evidence,16 since they serve to prevent the defendant from destroying the plaintiff’s chances of having full enjoyment of their rights. Effective access to justice may well be hindered by the destruction or concealment of the evidence needed to prove the claimant’s rights. As already observed, measures securing evidence have increasingly gained doctrinal attention and legislative interest, and are currently being treated as a separate category. The Evidence Regulation (EC) No 1206/200117 explicitly includes ex ante measures in its scope of application. In Articles 1-2, it states that requests for intra-EU cooperation to obtain evidence may be used in judicial proceedings either “commenced or contemplated”.18 The CJEU made it clear that EU judges are still entitled to use their own national mechanisms to obtain evidence abroad, instead of enacting the cooperation mechanisms of the Regulation.19 All available instruments

It may be worth pointing out that, although frequent in practice, a parallel litigation on the merits of custody is not a condition for issuing of the return order. This being the case, it would be wrong to characterise the 1980 Hague Convention’s return order as a provisional measure. 16 E. PATAUT, La décision ordonnant l’audition d’un témoin est-elle une mesure provisoire ou conservatoire?, Rev. crit. dr. int. pr., 2005, p. 742 et seq., which considers the consequences of the CJEU decision St. Paul Dairy Industries (note 9) as regards to the French mesures d’instruction in futurum. 17 Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters. 18 See CJEU, 21 February 2013, ProRail BV vs Xpedys NV and Others, ECLI:EU:C:2013:87 and, previously, 6 September 2012, Maurice Robert Josse Marie Ghislain Lippens and Others vs Hendrikus Cornelis Kortekaas and Others, ECLI:EU:C:2012:540. 19 CJEU, 17 February 2011, Artur Weryński vs Mediatel 4B spółka z o.o., ECLI:EU:C:2011:85. 15

202

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures in support of judicial proceedings are considered to favour access to justice, and hence no restriction of their use appears justified.20 The most efficient instruments, in this respect, are offered by US procedural laws and take the form of disclosure orders relating to documentary evidence. These include practices of “pre-trial discovery” unknown in most EU member states, even though certain, less intrusive, preventive disclosure orders are known in the UK and Ireland.21 These include Anton Piller orders and Norwich orders that allow the taking of evidence ex parte from a third person.22 Following the IP Directive of the European Union No 2004/4823 and the EU Trade Secrets Directive No 2016/943, measures in support of pending or prospective proceedings are being introduced in national legislations. Articles 9 and 11 of the IP Directive have led to the adoption of efficient harmonised national measures.24 Similarly, pursuant to Article 10 of the Trade Secrets Directive, CJEU, 22 December 2010, Joseba Andoni Aguirre Zarraga vs Simone Pelz, ECLI:EU:C:2010:828, pt. 67 “… the court of the Member State of origin must, in so far as possible and always taking into consideration the child’s best interests, use all means available to it under national law as well as the specific instruments of international judicial cooperation, including, when appropriate, those provided for by Regulation No 1206/2001.” 21 The differences between pre-emptive discovery procedures have led to the extensive failure of The Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters, and to the adoption of “blocking statutes” in defence of national sovereignty by countries such as England and France. See P.J. YOUNGBLOOD/ J.J. WELSH, Obtaining Evidence Abroad: A Model for Defining and Resolving the Choice of Law Between the Federal Rules of Civil Procedure and The Hague Evidence Convention, U. Pennsylvania J. Int'l Business L. 1988, p. 1 et seq., https://scholarship.law.upenn.edu/jil/vol10/iss1/1, which comments on the decision Société Nationale Industrielle Aérospatiale vs United States District Court for the Southern District of Iowa 482 U.S. 522, 107 S.Ct. 2542, 96 L.Ed.2d 461. More recently, CH. BESSO, Cooperation in the Taking of Evidence: The European Attitude, Int’l J. of Procedural L., 2012, p. 68-87. 22 See P. ROGERSON (note 5). 23 Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (OJ L 157, 30.4.2004). 24 See European Observatory on Counterfeiting and Piracy, Injunctions in Intellectual Property Rights, “In some Member States (e.g. Denmark, Slovenia, Greece and Italy), it was reported that rights-holders even rely on precautionary/provisional measures as their primary enforcement remedy; in some countries (e.g. Italy and Germany) ex parte injunctions can usually be obtained within a few days (or months, in complex patent cases), and are reportedly the most effective remedies. The willingness of the courts to grant interim injunctions (where appropriate, ex parte) implies that, in many cases, the filing of an action on the merits is not necessary because a settlement can be concluded with the infringer, who recognises the infringement, abides by the court order and agrees to compensate the prejudice incurred by the rights-holder as a result of the infringement, in order to avoid further proceedings” published at https://euipo.europa.eu/ohimportal/ documents/11370/80606/Injunctions+in+Intellectual+Property+rights. On the other hand, Member States have been more reluctant to adopt efficient provisional measures for the disclosure of evidence on the basis of Articles 6 and 7 of the IP Directive 2004/48 (note 23), with the consequence that the harmonised rules are considered unsatisfactory. See G. CUMMING/ M. FREUDENTHAL & R. JANAL, Enforcement of Intellectual Property Rights in 20

Yearbook of Private International Law, Volume 21 (2019/2020)

203

Ilaria Pretelli Member States have introduced interim remedies and precautionary measures to prevent or protect trade secrets.25 Continental procedural laws include specific preemptive discovery proceedings that may consist in the provisional hearing of witnesses or in the inspection of places by experts, forensic scientists or the judges themselves (e.g. the Italian “procedimenti di istruzione preventiva” ex Articles 692-699 c.p.c.; the Swiss Vorsorgliche Beweisführung / Preuve à futur / Assunzione di prove a titolo cautelare of Article 158 c.p.c.). B.

Structural Categorisations

A series of dichotomies provides helpful assistance with understanding the mode of operation of ancillary reliefs. Their structure is inevitably influenced by their function, the best possible way to ensure their efficiency being borne in mind. For instance, protective measures aimed at preventing a dissipation of assets by the debtor are more likely to be ex parte, ante causam freezing orders, whereas provisional measures aimed at ensuring a temporary settlement of the future organisation of a family will tend to be interim reliefs, with an anticipatory character, taken once audita et altera parte. 1.

Measures Taken in Contentious vs Non-Contentious Jurisdiction

One first structural difference needs to be clearly set out and described in order better to understand the specificities of measures taken in non-contentious cases. It is well known that the Italian and German schools have developed a sophisticated theory of civil procedure that contrasts the general contentious jurisdiction with a freiwillige Gerichtsbarkeit, volontaria giurisdizione (in French juridiction gracieuse). Despite this, non-contentious cases still suffer to a great extent from an original “lawsuit-morphic bias” that naturally drives interpreters and lawmakers to make them subject, by analogy, to procedural rules created for contentious proceedings, whereas there are important ontological characteristics of the latter that they do not share. Contentious cases are retrospective, i.e. they investigate the past in order to mend the tear in the social fabric caused by the violation of rules of legal coexistence: the breach of a contract, a tort, the violation of a proprietary right or of Dutch, English and German Civil Procedure, Wolters Kluwer, 2008, p. 150; The European Observatory on Counterfeiting and Piracy, Evidence and Right of Information in Intellectual Property Rights, https://euipo.europa.eu/ohimportal/documents/11370/80606/Evidence+ and+right+of+information+in+Intellectual+Property+rights. 25 Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (Text with EEA relevance) OJ L 157, 15.6.2016, p. 1–18. A bird’s eye comparative review is provided here: https://cms.law/en/ che/publication/eu-trade-secret-law-reforms.

204

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures company-law rules, etc. Non-contentious cases are, on the other hand, prospective, i.e. they are not about assessing which of the parties is right and which is wrong, but about determining how to organise a different set of living arrangements for one or more individuals. Non-contentious decisions organise the future: the settlement of a new family’s living and economic environment, the settlement of property belonging to a person who has disappeared and is not taking care of it, etc. As popular wisdom has it, the future is always uncertain, so a decision taken today in anticipation of the future may well prove tomorrow to be inadequate and based on quite false expectations. This explains why the decision on the merits of non-contentious cases needs to be – and always is – subject to a rebus sic stantibus clause. The principle of res iudicata does not apply in non-contentious cases, so that a final decision can always be reversed to take account of new, often unexpected, circumstances. It is always possible to change a decision on the custody of a child or on the amount of alimony to be paid. This is manifestly impossible in the case of contentious cases, where a decision, once it has assessed who is right and who is wrong, and once it has become final, needs to be irreversible so as to put a stop to the contention once and for all. When it comes to provisional justice, this ontological difference and its consequences in procedural law is taken into consideration, albeit only in part. Within the EU civil procedural Regulations, three regimes for provisional measures exist. The traditional regime of provisional and protective measures is the one derived from the Brussels I system and reflected in the Lugano Conventions. The Brussels II system then deviated partially from it with the additional introduction of a subdivision hinging on the purpose of the measures: within the family law regime of provisional and protective measures, it draws up more specific rules for measures taken in proceedings on child abduction or wrongful removal of children. Such a regime consists in allowing extraterritorial effect for provisional measures taken in respect of the child. As observed elsewhere,26 this distinction could be the starting point for a more extensive differentiation between measures retrospectively targeting credits or property and provisional measures that prospectively restrict the self-determination and freedom of movement of persons, in particular vulnerable persons such as children and, in many socio-economic environments, women. 2.

Interim Reliefs vs Measures Ante Causam, whether Ex Parte or Audita et Altera Parte

Measures available – or granted – before litigation (ante causam) are differentiated from measures issued during the proceedings (interim reliefs). Among the measures granted ante causam, one can additionally separate unilateral measures (ex parte) from adversarial ones (audita et altera parte). The first reliefs are issued on the sole basis of the allegations of the applicant, whereas the second are granted

26

I. PRETELLI (note 4), p. 146; (note 8), p. 302 et seq.

Yearbook of Private International Law, Volume 21 (2019/2020)

205

Ilaria Pretelli once the defendant has been given the opportunity to present their arguments. Ex parte measures are particularly efficient given the “surprise effect” they carry.27 Most protective measures, including measures securing evidence, may be granted ex parte. 3.

Discretionary vs Presumptive Decision-Making

A traditional distinction draws on the scope of the analysis of the merits required of the judge. Whenever the defendant does not seriously challenge the plaintiff’s claim, provisional and protective measures may be issued “without substantial analysis of the merits”.28 The French référé cannot be issued if it requires a prior investigation by the judge.29 In a case opposing the Islamic Republic of Iran and a Lichtenstein Foundation and others, the sequestration by référé of Iranian archaeological artefacts ordered before a private sale could take place in a Parisian hotel was quashed by the Appellate Court of Paris. The Cour de cassation confirmed the decision, underlining that the French judge of référé had no power of investigation on the merits and could not therefore be asked to rebut the presumption of ownership enjoyed by the possessors by recognising the right of ownership of the Iranian Republic, subject also to an investigation of the content of the Iranian law applicable to the right of ownership.30 On the other hand, a more thoroughgoing investigation is inherent to other kinds of measure, and may also include an analysis of whether the measure itself may cause irreparable harm to the defendant instead of preventing it. A freezing order may, for instance, cause the insolvency of a business company, regardless of the

27 P. SCHLOSSER, Die Überraschungseffekt der Zwangsvollstreckung -- national und international, Recht der Internationalen Wirtschaft, 2002, p. 809, https://online.ruw.de/ suche/riw/Der-ueberraschungseff-der-Zwangsvollstreck----nati-de1db961a994c320865249 fac9475120. 28 D. LEIPOLD, Grundlagen des einstweiligen Rechtsschutzes, München 1971, and O. MERKT, Les mesures provisoires, Neuchâtel, 1993, p. 53, who compares German and English provisional measures leading to “summary judgments”. 29 In his comment on the decision annihilating a series of actes de justice privée through a référé (Trib. grande inst., Parigi (réf.), 6 novembre 1980, Rev. trim. droit civil, 1981, p. 438), J. NORMAND, ibid., memorably described the judge of the référé as: “Juge de l'évident et de l'incontestable”. 30 Cass., 4 Avril 1991 - n° 89-18.020, République islamique d'Iran, représentée par son ministre de la Culture M. Claude Boisgirard, commissaire-priseur et autres, unpublished, “attendu que, […], la République islamique d'Iran a demandé à la cour d'appel de reconnaître son droit de propriété sur les objets archéologiques litigieux, de déclarer viciée et équivoque la possession desdits objets par les vendeurs, et de dire la loi iranienne seule applicable au litige; [mais attendu] que le juge des référés était incompétent pour trancher [ces] points […]”.

206

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures “abstract” reversibility of the measure’s effects.31 In the field of maritime law, the arrest of ships often causes damage to the vessel itself or to its cargo (infra II.B.2.). In order to avoid damage, a deeper investigation (summaria cognitio) before granting a measure may be of the essence.32 4.

Typical vs Atypical Measures

The breadth of the judge’s discretion in deciding the content of the measure allows measures with typical content and effects to be differentiated from orders that the judge adapts to the situation laid down in front of her by the claimant. Article 700 of the Italian code of civil procedure allows the adoption of any “urgent order that appears, according to the circumstances, the most apt to temporarily guarantee the effect of the decision on the merits”.33 Other atypical measures are the French référé (see in particular, Article 810 c.p.c.) and the German einstweilige Verfügungen (especially §940 ZPO). Spanish and Greek law have similar kinds of atypical measure. Because atypical measures allow the judge to create the most suitable measure for a given situation as yet unforeseen by the legislator, they are particularly helpful for addressing new kinds of conflict or sensitive social conflicts. 5.

Measures in Rem vs Measures in Personam

Most measures may be either in rem or in personam. The advantage of a measure targeting an asset, such as a freezing order, is that it can be addressed to a third party, such as a bank, and that it has erga omnes effects. In other words, it carries a restraining effect vis-à-vis any party. Through the use of measures in personam such as anti-suit injunctions, which are typical restraining orders, the subject of the order is only one person. Measures in personam are orders to do or to refrain from doing certain actions. In continental legal systems measures in rem are commonly used for protective purposes, whereas measures in personam are more frequently issued in family law proceedings and in the framework of anticipatory judgements.

31 CJEU, 27 April 1999, Hans-Hermann Mietz vs Intership Yachting Sneek BV, ECLI:EU:C:1999:202, explicitly set out the requirement of “reversibility of effects” with reference to the characterisation of the Dutch kort geding within the Brussels I system. In a system of uniform fora, claiming an interim relief elsewhere than in the jurisdiction entrusted with the power to decide on the merits only makes sense provided that the measure relates to assets located within the territorial jurisdiction of the court to which application for the measure is made. See I. PRETELLI (note 3) p. 109 with special reference to pt. 2 of the aforementioned decision. 32 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 et seq.; P. PICONE, Misure provvisorie in materia familiare e diritto internazionale privato, Riv. dir. int. priv. proc., 1995, p. 7-75. 33 The translation of Article 700 of the Italian CCP is our own.

Yearbook of Private International Law, Volume 21 (2019/2020)

207

Ilaria Pretelli Often, when issued in the framework of family relations, restraining orders may restrict the freedom of movement of persons, as well as other human rights such as the right to stay in contact with family members. However, it has been pointed out that the same result may be obtained by means of either a specific restraining order or a measure in rem. This was shown by a French case34 where it was held that a French saisie conservatoire could be pronounced in addition to a Mareva injunction issued in Cyprus against a French company. The French Cour de cassation considered that, although the Mareva injunction allowed preservation of the asset targeted by the saisie to be obtained, there would be no overlap between the two measures, the first preventing the defendant from removing it from the jurisdiction, the second freezing it.35 C.

Essence and Scope of Ancillary Reliefs

The legal essence of provisional and protective measures, interim and precautionary reliefs, etc. resides in their ancillary character. These reliefs do not satisfy the interests of the claimant, per se, but are instruments serving as support for contemplated or pending proceedings. Likewise, in the French and Italian literature, they are said to have a rapport instrumental (rapporto di strumentalità) in relation to the principal litigation. The more prompt the ancillary relief, the more efficient will be access to justice. The success of ancillary reliefs in legal practice is attested by the fact that obtaining a provisional measure may be tantamount to winning a case.36 34 Civ. Comm., 3 octobre 2018, No. 17-20.296, on which PH . THÉRY, À propos des mesures conservatoires: la difficile combinaison des injonctions personnelles et des saisies conservatoires, Rev. trim. dr. civ., 2019, p. 395; S. MÉNÉTCREY/ G. CUNIBERTI, Saisie conservatoire en France sur des biens gelés par une injonction Mareva chypriote : le (faible) jeu de l'autorité de chose jugée, Rev. crit. dr. int. pr. 2019, p. 215. See also H. MUIR WATT, Extraterritorialité des mesures conservatoires in personam (à propos de l’arrêt de la Court of Appeal, Crédit Suisse Fides Trust v. Cuoghi), Rev. crit. dr. int. pr. 1998, p. 27. 35 A. GIARDINA, Provisional Measures in Europe, Some Comparative Observations, in Etudes de droit international en l’honneur de Pierre Lalive, Basel 1993, p. 500, TH. WEIBEL, Enforcement of English freezing orders (“Mareva injunctions”) in Switzerland, Helbing & Lichtenhahn, Basel 2005, E. GUINCHARD, Réflexions autour de l’accueil de l’injonction Mareva par la cour de cassation française (note sous Cass. civ. 30 juin 2004, M. Stolzenberg), Int’l Lis, 2005, p. 41-47, H. MUIR WATT, Le for naturel du litige : l’injonction anti-suit en droit international privé français: réflexions au sujet de l’arrêt Brachot de la Cour de Cassation, in Apprendre à douter: questions de droit, questions sur le droit : études offertes à Claude Lombois, Limoges 2004, p. 897-911. 36 M. STORME, Rapprochement du Droit Judiciaire de l’Union européenne, Martinus Nijhoff Publishers, 1994, p. 105, stating, with reference to the French référé, that what is provisional in law might be final in fact; similarly, M. VERWILGHEN/ H. VAN HOUTTE, Conflits d’autorités et de juridictions relatifs à la protection de la personne du mineur, Rev. Belge dr. int. 1980, p. 407 observe that in Belgian practice provisional measures concerning the protection of children are often confirmed in final decisions (“l’expérience prouve d’ailleurs qu’en ce domaine, le provisoire devient souvent définitif, les premières mesures n’étant guère remises en cause”).

208

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures Nevertheless, their inherently assisting character and function affects their essential legal status as purely ancillary reliefs. As regards the “merits” of ancillary reliefs, the scope of the judge’s analysis required for the issuing of an ancillary relief (cognitio) may be traced back to the Roman-rooted conditions of fumus boni iuris and periculum in mora.37 The CJEU has argued that the second element may be sufficient for the issuing of a European Account Preservation Order, when the creditor already has an “authentic instrument”.38 Fumus boni iuris est in instrumento ipso. However, both elements are necessary for the issuing of an EAPO in all other cases.39 Fumus boni iuris may take different forms according to the depth of the judicial investigation allowed the judge. It may be limited to the assessment that the claim “is not seriously challenged” by the defendant, as seen above with reference to the référé. In a case of patent infringement, the CJEU has defined periculum in mora as a delay likely to cause irreparable harm,40 further specifying that “a finding that an application for provisional measures is unjustified presupposes, primarily, that there is no risk that irreparable harm may be caused to the holder of an intellectual property right in the event of delay in the adoption of the measures sought by “him”.41

C. CHANAIS, La protection juridictionnelle provisoire dans le procès civil en droits français et italien, Dalloz 2007, p. 220 observes that every jurisdictional system needs rules on provisional justice (une protection juridictionnelle provisoire) able to prevent the danger of a denial of justice. Such a danger would not be avoidable, according to the author, in the absence of anticipatory or precautionary measures that are available before a decision on the merits can be taken. Based on a comparative review of the Italian and French systems, the author sees as conditions inherent to the right of citizens to obtain provisional justice: “son caractère justifié prima facie, mais aussi et surtout l'existence d'un periculum in mora”. See, across the Channel, NP vs KP (asset freezing) [2011] EWHC 457 (Fam) at 8, concluding “whilst the words used are different the language all points in the same direction, namely that there must be a good case put before the court, supported by objective facts, that there is a likelihood of the movement, or the dissipation, or the spiriting away, or the salting away, or the squirrelling away, or the making of a disposition, or the transfer, of assets, with the intention of defeating a claim” [emphasis added]. 37

CJEU, 7 November 2019, C-555/18, K.H.K. vs B.A.C., E.E.K., ECLI:EU:C:2019: 937, pt. 40. 39 Ibid. stating that “for the issue of a European Account Preservation Order [if] the creditor has […] already obtained an instrument requiring the debtor to pay the claim in the Member State of origin […] the creditor is required to establish only that the measure is needed as a matter of urgency on account of imminent risk, whereas [if he has not already obtained such an instrument] he must also satisfy the court that he is likely to succeed on the substance of his claim” (fumus boni iuris). 38

40 CJEU, 12 September 2019, Case C-688/17, Bayer Pharma AG vs Richter Gedeon Vegyészeti Gyár Nyrt. and Exeltis Magyarország Gyógyszerkereskedelmi Kft., ECLI:EU:C:2019:722, pt. 61. 41 Ibid. pt. 62.

Yearbook of Private International Law, Volume 21 (2019/2020)

209

Ilaria Pretelli In more general terms, these Roman-rooted elements are dependent upon the capacity of the claimant to present a good arguable case and the existence of an actual risk of irreparable harm.42

II. The Law Applicable to Ancillary Reliefs A.

Cuius Forum Eius Lex? The Supremacy of the Law of the Forum

Case-law is anything but rich in examples of provisional measures granted on the basis of a foreign law. These are regularly issued, in purely internal as well as cross-border cases, without any previous discussion of the applicable law and often unmistakeably on the basis of the lex fori.43 Even when a discussion takes place, the solution frequently remains that of preferring the law of the forum, sometimes with a back-up function, failing ascertainment of the applicable foreign rule. These are all ready-made solutions that do not require any venturing into investigations of the content of a foreign law, an erudite exercise which is regularly coupled with obvious linguistic difficulties. Whether consciously or not, these lex fori decisions are based on antiquated opinions that characterise provisional measures as procedural instruments (following the doctrine of Etienne BARTIN) or as reliefs governed by the forum’s lois de police (Jean-Paulin NIBOYET). In addition, especially – but not exclusively44 – in the field of family law, expressed or implicit hesitations as to the private or public nature of protective orders suggest that the judge ordering the measure is often thought to use her imperium. By definition, like any act of imperium, the protective order would thus need to be issued on the sole basis of the law of the forum.

See I. PRETELLI (notes 3 and 4), passim. In family matters, the following French decisions have plainly applied French law, the lex fori, to provisional and protective measures with foreign elements: App. Paris, 7 juillet 1959, Rev. crit. dr. int. pr. 1960, p. 354, note Y. LOUSSOUARN; App. 13 novembre 1979, Rev. crit. dr. int. pr. 1980, p. 568, note Y. LEQUETTE. The French Cour de cassation has indicated the application of French law in the past – Civ. 13 février 1973, Rev. crit. dr. int. pr. 1974, p. 631, note L. TOPOR – and more recently – Civ. 13 mai 2015, Rev. crit. dr. int. pr. 2015, p. 940 note H. GAUDEMET-TALLON. 44 J.-P. REMERY (note 1), p. 712 according to whom the lex fori intervenes as the law governing the imperium of the judge, thus “non en tant que loi de procédure, mais en tant qu’elle délimite la sphère de compétence du juge français du provisoire”. 42 43

210

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures 1.

Shortcomings of the Exclusive Application of the Lex Fori

Exclusive application of the lex fori to a protective order was made in the famous ICJ Boll case,45 arising from the decision of the Swedish authorities to entrust the supervision of a Dutch child to a Swedish institution. The daughter of a Dutch ship’s captain, Marie Elisabeth Boll had been living with her maternal grandparents since the death of her Swedish mother. Given the long absences of her father and given that she was exposed to an abusive environment, a protective measure, the skyddsuppfostran, had been issued and subsequently maintained by the Swedish authorities. The protective measure encroached, to a certain extent, on the guardianship granted by the Dutch authorities in conformity with The Hague Convention of 12 June 1902 on the Guardianship of Infants in force between the Netherlands and Sweden. The International Court of Justice was hence seized by the Netherlands, invoking a violation by Sweden of Article 1 of the said Convention, giving exclusive jurisdiction to the Dutch legal order as regards the child’s custody. Despite recognising “some points of contact between matters governed by the national law of the infant which is applicable to guardianship and matters falling within the ambit of the local law”,46 the ICJ did not find any violation of the Treaty by Sweden, characterising the measure as one of protection based on urgency and reversible, thus provisional (“Its functions correspond to preoccupations of a moral and social order”),47 and not as a decision awarding custody that would have been in open contradiction with, and would possibly have reversed, the decisions in force in the Dutch legal order. The importance of the local law in the assessment of the best interests of minor children is also underlined by the Appellate Court of Brussels in a case where, unlike in the Boll case, the Court reversed the custody granted by the competent foreign legal order.48 The tribunal of Haifa had awarded full custody of the children to the father and a visiting right to the mother. However, for ten years she had always taken care of the children's emotional, psychological, physical and financial needs, and she had also relocated with them to Belgium just one year after the decision had been pronounced in Haifa. The Belgian court explicitly observed that the foreign International Court of Justice, Case concerning the application of the Convention of 1902 Governing the Guardianship of Infants (Netherlands vs Sweden), Reports 1958, p. 55. 46 Ibid., p. 68. 47 Ibid., p. 70. 48 App. Bruxelles, 23 octobre 1964, Schweiter vs Levy, Pasicrisie belge, 1965, II, 221, Clunet, 1965, 676 (Somm.). 45

Yearbook of Private International Law, Volume 21 (2019/2020)

211

Ilaria Pretelli decision could not affect the “droit d’appréciation souverain” of the local judge and that the Belgian rule making the award of custody subject to the children’s best interests constituted “un principe d’ordre public belge”. The foreign decision on divorce was thus modified accordingly. These decisions show the importance of the concurrent jurisdiction of the judge in whose jurisdiction the children find themselves, regardless of her jurisdictional power on the merits of broader issues, and the difficulty of finding suitable modes of coordination. A first, rudimentary, mode of coordination consists in establishing the borders of each law’s reach (as in the Boll case). However, this may imply the acceptance of a rupture of international harmony through the admission of contradictory decisions (as in the Haifa case). The contradiction is either resolved in favour of the local jurisdiction, which is in a position to enforce its own evaluations, or settled by means of a uniform rule prescribing the application of the law applicable to the merits by both the courts concerned (subject to the general admission of the principle of the best interests of children in matters affecting them). Whereas the first represents an easy solution to the conflict of decisions but encourages phenomena such as forum shopping – or even parental kidnapping –, the second is the only way to prevent uncertain outcomes, but requires a solid international solution to be found to the conflicts of law in these matters. 2.

The EU Model of Coordination Between the Lex Fori and the Lex Causae

In line with Article 2 of the Rome II Regulation,49 which includes in its scope “non-contractual obligations that are likely to arise”, Article 15-d prescribes that the law applicable to non-contractual obligations regulates “the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation”, as long as it can be issued “within the limits of powers conferred on the court by its procedural law”.50 In the same vein, Article 6 of said Regulation refers to the lex loci damni as applicable both to acts of unfair competition and to acts that are “likely to” affect

Regulation (EC) No. 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II). 50 Doubts arising from an apparent contradiction between the rule of the procedural regulation and that of the substantial regulation are expressed by O. BOSKOVIC, Le domaine de la loi applicable, in S. CORNELOUP/ N. JOUBERT, Le règlement communautaire “Rome II” sur la loi applicable aux obligations non contractuelles, Paris 2008, p. 192 et seq. and A. SUSSAROVA, La portée du principe “forum regit processum” dans la pratique judiciaire belge, Revue de droit commercial belge 2012, p. 159. For the coordination researched by Article 15-d between the lex fori and the lex causae see, however, I. PRETELLI, La legge applicabile alle obbligazioni non contrattuali nel Regolamento “Roma II”, in A. BONOMI (ed), Diritto internazionale privato e cooperazione giudiziara in materia civile, Trattato di diritto privato dell'Unione Europea a cura di G. Ajani & G. A. Benacchio, Torino 2009, p. 463. 49

212

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures “competitive relations or the collective interests of consumers”. Anticipating the general rule of Article 15-d, the Article states that ex ante precautionary measures are to be decided in accordance with the law of the state of the market affected, if it is different from the lex fori. Echoing, but rejecting, the ancient British double actionability rule, according to which action in tort had to be consistent with both the lex fori and the lex causae in order to be filed in the forum, the Rome II Regulation offers an EU model for smooth coordination of the laws in potential conflict: the lex fori providing the procedural instrument, the lex causae the conditions for its issuing. This being the case, the exercise of the injunction or precautionary action designed by that law applicable to the merits does not have the effect of extending or interfering with the powers conferred on the judge by her legal system. In sum, the inherently pragmatic nature of ancillary reliefs shows that the supremacy of the lex fori in regulating a provisional measure is absolute as regards its strictly procedural aspects. This law does, however, have significant limitations as regards the conditions subject to which the measure may be adopted. B.

The Scope of the Law Applicable to the Merits Includes the Merits of Provisional Measures

In deciding provisional and protective measures in matters covered by the Rome II Regulation, the judge needs to scrutinise, take into account and, in many cases, apply the lex causae, i.e. the law governing the relationship between the plaintiff and the defendant. In addition, it has already been affirmed in many countries, albeit not unanimously, that the lex causae also has its part to play in cases of provisional measures in family matters.51 As a matter of fact, there is quite a general consensus that provisional measures ancillary to divorce proceedings should be subject to the law applicable to the divorce.52 Two French precedents

51 See O. MERKT (note 28), p. 155-162 and the analysis of the doctrinal opinions quoted therein. For a French precedent, see App. Versailles, 18 janvier 1982, Rev. crit. dr. int. pr. 1983, p. 442, note H. GAUDEMET-TALLON; J.-P. REMERY (note 1), p. 707. 52 See, extensively, P. PICONE, (note 32), passim; H. GAUDEMET-TALLON, Divorce international: des précisions quant à la détermination de la loi applicable, Note sous Cour de cassation (1re civ.), 13 mai 2015, No. 13-21.827, Rev. crit. dr. int. pr., 2015 p. 940 esp. p. 946 criticising the decision for having applied the French law of the forum to the provisional measures instead of applying the Belgian law applicable to the divorce; H. MUIR WATT, note sous Cass., 4 juillet 2007, Bull. civ. I No. 25, Rev. crit. dr. int. pr. 2007, p. 840, No. 8 ; E. JEULAND, Les internationalistes et les processualistes ont-ils une vision commune de la notion même de coordination des justices étatiques? Etude de canardologie, in E. PATAUT/ S. BOLLÉE/ L. CADIET & E. JEULAND (eds), Les nouvelles formes de coordination des justices étatiques, IRJS éd. 2013, p. 14. With reference to Article 62-2 PILA see I. SCHWANDER, Gutachten zur Frage des Internationalen Privat- und des Internationalen Zivilprozessrechts im Zusammenhang der Modernisierung des Familienrechts vom 25. Oktober 2013, https://www.bj.admin.ch/bj/de/home/publiservice/publikationen/externe/ 2013-10-25.html, p. 21; D. CANDRIAN, Scheidung und Trennung im internationalen Privatrecht der Schweiz - unter Berücksichtigung des deutschen, österreichischen,

Yearbook of Private International Law, Volume 21 (2019/2020)

213

Ilaria Pretelli involving provisional measures taken in the framework of divorce proceedings may be quoted in this context: the first concerned an Iranian couple and the second a Belgian one. In both cases the applicability of the lex causae was affirmed, although the Iranian lex causae had ultimately to be overridden by French law because its content was at odds with the French ordre public. 53 Unlike the Rome II Regulation, the Maintenance Regulation54 does not explicitly refer to the lex causae in connection with provisional measures. Nevertheless, following a methodical examination of the whole system – and in particular of the philosophy underlying the coordination between Article 15-d of the Rome II Regulation and Article 35 of the Brussels Ibis Regulation – we find it logical that the same law should also govern provisional and final justice in family matters, and that it should do so beyond issues of maintenance. Provided that the procedural instruments remain subject to the lex fori, as suggested by Article 20 of the Brussels II ter Regulation and by Article 14 of the Maintenance Regulation, and thus that each judge uses the arsenal at hand, the foreign law applicable on the substance remains applicable to the assessment of the fumus boni iuris, the periculum in mora and the other pertinent conditions prescribed by the law applicable to the merits for granting provisional justice. 1.

The Law Applicable to Provisional Measures in Family Matters

a)

The Law Applicable to Provisional Justice in Non-Contentious Cases

In the context of non-contentious cases, questions such as the identification of the spouse entitled to occupy the marital home during the proceedings, the pension due to the wife (or, more rarely, to the husband, or to the registered partner) need to be dealt with in light of the law applicable to the matrimonial regime of the spouses, since this law will determine the final settlement of both issues. It is hard to find reasons why provisional justice would need to be rendered on the basis of a different law from justice on the merits. Another example concerns the determination of parental responsibility when it needs to be checked before provisional measures are issued affecting the custody and care of minor children during divorce proceedings. In addition to interfering as the law moulding the procedural type of relief through which obtaining the provisional measure, the law of the forum will always be relevant in

französischen, italienischen, spanischen und liechtensteinischen Rechts, St.-Gallen 1994, p. 128. 53 Cour de Paris, 13 juillet 1951, Clunet, 1952, p. 612 et seq., note J.-B. SIALELLI, the lex fori is applied subsidiarily, because the Iranian foreign law collided with the French ordre public. 54 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, 10.1.2009.

214

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures assessing compliance with the fundamental rights and values of the forum, including respect for the principle of the child’s best interests.55 Divorce proceedings and proceedings involving children strongly affect the future lives of everyone involved and often seriously restrict their freedom of movement. Within the EU, this impacts one of the system’s cornerstones, namely the first of the four European basic fundamental freedoms: the free movement of persons. Because of this, it is important to consider provisional and anticipatory measures very carefully and to prevent the series of contradictory judicial decisions that occur in the case law on child abduction proceedings. A wrong attribution of custody – which may also result from the application of the law of the forum instead of that governing the parent-child relationship – could end up by legitimising or encouraging abduction of a child and compromising for ever the relationship between the child and one of its parents.56 Because of the gravity of the consequences, it is a duty of the judge awarding the provisional measure to avoid departing from the applicable law on the pretext of not knowing its content and taking decisions on the basis of the lex fori. b)

The Swiss Federal Court on the Law Applicable to Provisional PostMarital Alimony in the Aftermath of a Foreign Divorce

A Czecho-Swiss case57 is particularly telling as to how precautionary measures must be subject to the lex causae so that they do not provisionally settle or award more than it will be possible to award in the later final judgment. The Swiss judge was asked to award provisional post-marital alimony in the aftermath of a divorce decided in the Czech Republic and subject to Czech law. The case concerns a married couple, both Czech citizens, who, after dissolving their marriage in accordance with Czech law, continued to live in Switzerland, their last common domicile, until one of them left the country for the Czech Republic. The divorce decision by a district court in the Czech Republic had not regulated the secondary consequences of the divorce. The former wife, still resident in Switzerland, filed an action with the Regional 55 In the aforementioned case decided by the Cour de Paris, 13 juillet 1951 (note 48), the applicable Iranian law failed to pass the French international ordre public test and was disregarded. See also CA Lyon, 21 mars 2011, n° 2006/12371, CA Paris, 10 juill. 2014, n° 12/17948 : JurisData n° 2014-020580 referring to the Moroccan code of family law, applied on the basis of Article 9 of the Convention franco-marocaine du 10 août 1981, including the specific rules on provisional measures. 56 See, for instance, CJEU, 22 December 2010, case C-491/10 PPU, Aguirre Zarraga vs Simone Pelz, ECLI:EU:C:2010:828. For a very concise analysis, si vis, I. PRETELLI, Original Aporiae in the 1980 Child Abduction Convention and in the Brussels II System, iFamZ (interdisziplinäre Zeitschrift für Familienrecht) 2019, p. 275-279. Amplius, G.P. ROMANO, Conflicts between parents and between legal orders in respect of parental responsibility, this Yearbook 2015, p. 129-166. 57 BGE 144 III 368.

Yearbook of Private International Law, Volume 21 (2019/2020)

215

Ilaria Pretelli Court of Appeal to regulate the ancillary consequences of divorce, namely post-marital maintenance. At the same time, she applied for the enactment of various precautionary measures, including her former husband’s obligation to pay alimony for the year prior to the filing of the suit and “until the supplementary judgement becomes final”. The cantonal courts of first and second instance recognised the Czech judgment and granted her a provisional maintenance contribution on the basis of Swiss law. The husband lodged an appeal in civil matters with the Federal Supreme Court. Among the many issues at stake, the Court explored that of the law applicable to the precautionary measures asked for by the former wife. The Court reported the absence of significant precedents on the question of the applicable law in the case of maintenance applied for as a precautionary measure for the duration of the proceedings to supplement a divorce decree.58 Since this situation involved a divorce decree, and maintenance between divorced spouses i.e. post-marital maintenance, was thus at issue, it identified Article 8 para. 1 of The Hague Convention on the Law Applicable to Maintenance Obligations of 1973 as the relevant private international law rule.59 The article prescribes that the law applicable to provisional measures is the law applicable to the procedure regulating the ancillary effects of the divorce. In casu, it was thus according to Czech law that alimony needed to be provisionally awarded, given that the divorce decree pronounced in the Czech Republic had been recognised in Switzerland and was final and absolute. Accordingly, since the maintenance claimed as a precautionary measure had been assessed in accordance with Swiss law and was thus manifestly untenable, the decisions were quashed and the matter referred back to the lower instance. In this case, the Federal Court was aware that Czech law provided for a more limited maintenance obligation than Swiss law. Thus, had the provisional measure been decided according to the lex fori, it would have certainly been overruled by the final judgement. The lower instance was therefore ordered to render a new decision, applying Czech law to determine the conditions and amount of the provisional maintenance contribution.

The Court refers, nevertheless, to a series of its previous decisions on the same topic: BGE 130 III 489 E. 2.2; rulings 5A_163/2015 of 14 October 2015 E. 2; 5A_393/2010 / 5A_394/2010 of 9 March 2011 E. 2; 5P.3/2004 of 26 March 2004 E. 2. 59 Article 4 of The Hague Convention of 2 October 1973 on maintenance obligations determines the law applicable to alimony in cases where the spouses have separated, with a view to divorcing, but the divorce has not yet taken place, whereas Article 8(1) of the Convention provides that in a Contracting State in which the divorce has been pronounced or recognised, the law applicable to the divorce shall govern maintenance obligations between the divorced spouses and the modification of decisions relating to such obligations. 58

216

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures This solution safeguards the principle of “international harmony of solutions”, which used to be the ultimate goal of private international law since its theorisation by SAVIGNY, and remains one of its main objectives. 60 Application of the lex fori to anticipatory measures would have granted the claimant more than she would eventually be entitled to, thus creating an imbalance between the parties instead of provisionally anticipating the final balance decided by the competent law. 2.

The Law Applicable to the Substantive Conditions to Issue Protective Measures

a)

The Law Ascertaining whether the Case is Good and Arguable and the Risk of Irreparable Harm

The role of the lex causae goes beyond influencing the content of provisional and, more particularly, anticipatory measures. It is true that this type of ancillary relief, as shown by a survey of doctrinal opinions, is particularly sensitive to the merits of the dispute, and the application of the lex causae has been authoritatively advocated in the field of family law. Even though measures such as protective ones may have a specific content, not necessarily influenced by that of the claim on the merits – such as a freezing order applied for in order to secure a monetary debt –, this does not mean that they can be issued on the sole basis of the lex fori. In order to obtain a provisional and/or protective measure, the claimant must prove that the claim fulfils a series of substantive conditions, which vary according to the procedural relief, but are easily synthesised by reference to the existence of a good and arguable case and the risk of irreparable harm.61 The scope of the law applicable to the merits, the lex causae, encompasses such conditions. It is hard to take the law applicable to the merits out of the equation in order to verify that, at least prima facie, the case is good and arguable. For this reason, the issuing of measures having a protective character and associated with a specific procedural device – such as freezing orders – requires certain conditions to be inspected on the basis of the law applicable to the merits. For instance, the legitimacy of the interest in acting as a condition for the existence of the legal action would be hard to verify without reference to the law applicable to the merits. If, according to the applicable law, the claim is not time-barred under the statute of limitations, the court should award any freezing order despite the statute of limitations of the lex fori (and vice versa). A Spanish road transportation company sues a French company in France for provisional payment for its services. The payment 60 The principle is an acquis of private international law and is frequently referred to by French and Italian authors. See Y. LEQUETTE, Le droit international privé et les droits fondamentaux, in R. CABRILLAC/ M.-A. FRISON ROCHE/ TH. REVET (eds), Libertés et droits fondamentaux, Dalloz, 6ème éd. 2000, p. 96. 61 Supra sub I.C.

Yearbook of Private International Law, Volume 21 (2019/2020)

217

Ilaria Pretelli appears to be time-barred under Article 32 of the Convention on the Contract for the International Carriage of Goods by Road.62 However, since the latter has no rule on the statute of limitations when it comes to direct actions filed by the vector against the recipient of the transported goods, timeliness needs to be verified on the basis of the law made applicable by the 1980 Rome Convention – in this case the Spanish law.63 Similarly, the risk of irreparable harm may require the foreign law applicable to the merits to be taken into account. A choice among the law of the forum, the law applicable to the merits of the claim and the law of nationality of the ship is required for the issuing of provisional measures targeting ships. 64 Despite this, it seems that the lex causae is rarely taken into account, since the 1952 Brussels Convention “n’y fait jamais allusion”.65 Therefore, the choice lies between the lex fori and the lex navis or a combination of the two. Despite this, in certain cases it seems natural to take the lex causae into account. In an Italian case, the employees of a foreign ship-owner's vessel docked in an Italian harbour, asked for and obtained its precautionary seizure (sequestro conservativo) with a view to protecting their maritime lien to wages. Lacking jurisdiction on the merits of such rights, the Italian judge is nevertheless competent as regards the precautionary seizure.66 It is not clear from the judgement whether the evaluation of fumus boni iuris and periculum in mora took account of the law applicable to the employment contract, but it is hard to imagine how these elements could be proven by the applicants without reference to the employment contract and the law governing it.

The CMR Convention of Geneva, 19 May 1956 as amended by the CMR Protocol of Geneva, 5 July 1978. 63 French cases similar to the one described in the text are: Cass. com., 13 juillet 2010, No. 10-12.154, FS-P+B+R+I, SA Système U Centrale Régionale Sud c/ Sté Transbidasoa, Revue de droit des transports 2010, comm. 183, note by Ch. PAULIN, Cass. com., 13 juillet 2010, No. 09-13.354, FS-D, Sté Transimaz Cargo SL c/ Sté ID Logistics France, JurisData n° 2010-012467, and Cass. com., 24 mars 2004, Bull. civ. 2004, IV, n° 63. 64 See Y. TASSEL/ A. MONTAS, Saisie conservatoire du navire, JC Transport, fasc. 1128, 2013; Y. TASSEL/ L. LAUVERGNAT, Navire et bateau – Mesures conservatoires, JC Voies d’exécution, fasc. 885, 2019. 65 Ibid. 66 Cassazione civile, 24 ottobre 1990, No. 10322, Diritto marittimo 1991, p. 974 et seq. 62

218

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures A few French precedents also consider that the lex navis is applicable to the granting and lifting in the place where the ship is moored of a ship arrest ordered abroad.67 b)

The Audiencia Provincial de Barcelona on a Preventive Seizure of Immovable Assets

In a recent case, the Audiencia Provincial de Barcelona stressed that the only law capable of indicating whether the case is good and arguable is the law applicable on the merits, and no room is given to the lex fori in this context, not even through a subsidiary intervention.68 Several investment companies and holdings were pitted against each other in proceedings concerning the early termination of a loan agreement for non-performance. The agreement contained a choice of law in favour of the law of the State of Luxembourg. During the proceedings, pending in Luxembourg, the claimants had sought and obtained, as a precautionary measure, the preventive seizure of nine immovable properties belonging to the defendants, all of them located in the city of Barcelona. Some of the defendants had been targeted “disregarding their legal entity” on the basis of the liftingthe-corporate-veil theory, because they were thought to function as mere covers for the principal defendant. The preventive seizures freezing their assets had been granted inaudita altera parte and had been maintained on the basis of Article 725.2 of the Spanish law of civil procedure (Ley de Enjuiciamiento Civil, hereinafter LEC). This rule allows precautionary measures awarded by the territorially incompetent judge to be maintained, subject to the condition of urgency, among others.69 Article 728 LEC sets four procedural App. Aix-en-Provence, 31 mai 1983, navire Gevisa, Droit maritime français, 1985, p. 303, concerns an Italian ship moored in Marseille, seized by two creditors and targeted by the administrator of a bankruptcy: “Un syndic de faillite italien n'est pas fondé à demander qu'un navire italien, saisi conservatoirement à Marseille par deux créanciers, soit autorisé à partir. Ces dispositions ne concernent en effet que l'éventualité d'un ou plusieurs voyages laissant substituer la saisie, alors qu'en l'espèce il s'agit pour le syndic appelant d'obtenir le départ définitif du navire pour Messine. […] La mainlevée des saisies conservatoires effectuées pour des créances non contestées en l'état ne pourrait […] être ordonnée que par référence à la loi italienne.” See, amplius, Y. TASSEL/ A. MONTAS and Y. TASSEL/ L. LAUVERGNAT (both note 64). 68 The decision is publicly available, in the original Spanish language, on the web at http://www.poderjudicial.es/search/contenidos.action?action=contentpdf&databasematch=A N&reference=8543148&links=extranjero&optimize=20181023&publicinterface=true. 69 A consolidated version of the Spanish Ley de Enjuiciamiento Civil No. 1/2000 de 7 de enero, is available on line at https://www.boe.es/buscar/pdf/2000/BOE-A-2000-323consolidado.pdf. Its Artículo 725. Examen de oficio de la competencia. Medidas cautelares en prevención prescribes, in its second indent, “2. […] si el tribunal se considerara territorialmente incompetente, podrá, no obstante, cuando las circunstancias del caso lo 67

Yearbook of Private International Law, Volume 21 (2019/2020)

219

Ilaria Pretelli conditions for the award of precautionary measures, which are entirely logical from a comparative law point of view: i) periculum in mora (peligro en la demora);70 ii) urgency;71 iii) fumus boni iuris (apariencia de buen derecho);72 iv) reversibility of effects.73 The Court recognised that the assessment of fumus boni iuris, “which is a provisional and indicative judgment in favour of the claim”,74 could not be carried out without a prior analysis of the merits, and that this could only be carried out under the law applicable to the subject matter of the main proceedings, namely the law of Luxembourg. After noting that the claimant had not been able to justify his case by proving that he was entitled to terminate the contract as a consequence of his counterpart’s non-performance under the law of Luxembourg, which was applicable to the contract, the audiencia lifted and rendered ineffective the preventive seizures at stake and condemned the plaintiff to pay any damages that the precautionary measures might have caused to the defendants. The Audiencia Provincial stressed that the lex fori could not possibly intervene in assessing whether the case was good and arguable enough for the maintaining of the measures, even in a subsidiary role.75 The court acknowledged the existence of

aconsejaren, ordenar en prevención aquellas medidas cautelares que resulten más urgentes, remitiendo posteriormente los autos al tribunal que resulte competente.” This translation and those in the following footnotes are ours. 70 The court (note 68) defines the periculum in mora as follows: “if the requested measures are not adopted, situations could arise during the pendency of the process that impede or hinder the effectiveness of the protection that could be granted in a possible ruling”. 71 The condition advocated in the text as one of urgency is defined, ibid., as “that such measures are not intended to alter the factual situation to which the applicant has consented for a long time, unless he justifies the reasons why they have not been applied for in advance”. 72 The court, ibid., defines the fumus boni iuris as follows: “to put forward facts, arguments and justifications leading the court, without prejudging the merits of the case, to make a provisional and preliminary ruling in favour of the merits of his claim”. 73 A security payment is required to ensure the condition of reversibility of effect. This makes it possible to “provide sufficient security to cover any damages to the defendant's assets that may result from the adoption of the interim measure”. Ibid. 74 Ibid. 75 BGE, 5A_60/2013, 27 May 2013, has applied Swiss law to a summary proceeding based on Article 251 of the Swiss civil procedure code, because “il n'est pas arbitraire, au vu de l'urgence de l'affaire (art. 278 al. 2 LP), de renoncer à établir le contenu du droit étranger et d'appliquer directement le droit suisse […] le juge n'est pas tenu de faire usage de tous les moyens à sa disposition pour en déterminer le contenu, comme le ferait le juge dans la procédure au fond”. See the critical comment by G. P. ROMANO (note 2), p. 9-10 of the open-access version, accessible from https://archive-ouverte.unige.ch/unige:135052.

220

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures several precedents concerning the subsidiary application of Spanish law, in the absence of proof of the content of the foreign applicable law,76 but stated: “this is not a declaratory process, which would necessarily require a ruling on the merits … but measures prior to the filing of a lawsuit in foreign courts whose purpose is the early termination of a contract subject to other legislation, and it is under this legislation that the early termination and expiration is sought. Therefore, the provisional and indiciary judgment on the legal basis of this claim (the appearance of good faith or fumus boni iuris), must be examined in light of the law that the applicant itself considers applicable, and the lack of evidence of this law does not imply the application of national law, but rather the lack of evidence of the appearance of a good and arguable case and, therefore, the preclusion (improcedencia) of the precautionary measures requested.”77

III. Taking Foreign Law Seriously The image of a lawyer vigorously milking the cow disputed over by litigants is well known to legal scholars. Other satirical depictions include Doctor Quibbleweaver in The Betrothed and many others.78 Most of these negative images centre around lawyers’ abuse of their legal knowledge in order to fool lay people or foreigners who cannot follow their convoluted legal arguments. Cross-border interim remedies and provisional measures are often thought to represent a strategic tool in such milking exercises. The complications of private international rules, added to the speed that is characteristic of interim judicial orders, render these instruments particularly appetising for unscrupulous lawyers, a circumstance which has already necessitated normative adjustments, for instance on the occasion of the Brussels I recast.79 The debate on recognition of the power of arbitrators to issue provisional measures in competition with national legal systems is also filled with good arguments for the dispensability of the lex fori in the granting of ancillary reliefs. Although freezing orders and similar measures may require the imperium of a 76 In particular, the decision (note 68) quotes a previous judgement of the Tribunal Supremo STS of 17 April 2015, referring to the various precedents quoted therein. 77 Ibid. 78 See John Mullan, Ten of the Best Bad Lawyers in Literature, posted on Sat 2 Jan 2010 00.08 GMT at https://www.theguardian.com/books/2010/jan/02/charlesdickensjaneausten on 2.6.2020. 79 F. GARCIMARTÍN, Provisional and Protective Measures in the Brussels I Regulation recast, this Yearbook, vol. XVI, 2014/2015, 57–83; N. NISI, Provisional measures in the new Brussels I regulation, Cuadernos de Derecho Transnacional, 2015, vol. 7, p. 128-141.

Yearbook of Private International Law, Volume 21 (2019/2020)

221

Ilaria Pretelli specific state for their enforcement, they may also be spontaneously obeyed without the need for intervention by public authorities. As in the case of the arbitral award itself, only in the event of non-compliance does intervention by a state’s authorities become necessary and, with it, the intervention of the lex fori.80 Undoubtedly, ensuring access to justice necessarily includes access to provisional protection. This article has tried to sketch a comparative methodology for the classification of provisional and protective measures, with the general aim of providing orientation and the more specific one of helping the interpreter of the EU Regulations on provisional measures. Beyond a descriptive role, the taxonomy outlined here attempts to provide a basis for normative differences. As already observed, measures having a provisional and, more importantly, an anticipatory character are particularly dependent on the law applicable to the merits of the dispute, and should be taken in full awareness of the evaluations based on the latter. In most cases provisional measures anticipating the merits in non-contentious cases interfere with the first EU fundamental freedom and, for this reason, are a delicate matter and need also to be considered in light of the lex causae governing the relationships under judicial scrutiny. In line with what is prescribed by Article 15-d of the Rome II Regulation, read in conjunction with Article 35 of the Brussels I bis Regulation, coordination of the law of the forum with the law governing the relationship at stake flows naturally from the separation of procedural and substantive issues, which is quintessential to private international law as a discipline. The issuing of a measure by an authority implies that the latter is vested, by the state it represents, with the necessary powers to pronounce that measure. This means that the measure’s procedural type is necessarily determined by the forum. A French judge will not be able to issue a kort geding, nor an Italian one a référéprovision. However, each national type of provisional measure is subject to conditions. As observed above, these can all be quite easily subsumed under the well-known categories of fumus boni iuris and periculum in mora. They represent the “merits” of provisional justice. Now, there is no logical need to verify these conditions in the sole light of the law of the forum. Especially where provisional measures with an anticipatory character are concerned, indiscriminate application of the law of the forum is hard to justify if, in the final judgment, the corresponding claim has to be assessed under foreign law. This will be the case especially in the evaluation of the legitimacy of the interest in acting, as well as in all other “substantive” conditions under which the forum dispenses provisional justice. If, according to the applicable law, the claim is time-barred under the relevant statute of limitations, a court should not award any ancillary relief, despite the timeliness of the claim according to the statute of limitations of the lex fori. In a nutshell, though the “taking of the measure” and its “binding character” must be consistent with national law and with the requirements of EU law, where

80 See, for instance, in Switzerland: BGE 135 III 670 E. 3.1.2, enforcing an Italian “Sequestro conservativo”; BGE 129 III 626 E. 5, enforcing an English “Freezing Injunction”.

222

Yearbook of Private International Law, Volume 21 (2019/2020)

The Law Applicable to Provisional and Protective Measures applicable, the content and merits of the measure need to take account of the law applicable to the substance of the case.

Yearbook of Private International Law, Volume 21 (2019/2020)

223

JURISDICTION TO GRANT INTERIM MEASURES IN SUPPORT OF ARBITRATION THE INFLUENCE OF EUROPEAN LAW Gilles CUNIBERTI*

I. II.

IV.

Introduction The Scope of the European Law of Jurisdiction A. Material Scope 1. Provisional Measures Protecting Substantive Rights 2. Provisional Measures Related to the Arbitration Procedure B. Territorial Scope The Limitations on the Power to Grant Provisional Measures under the European Law of Jurisdiction A. Provisional B. Protective C. Territorial Concluding Remarks

I.

Introduction

III.

Arbitration is excluded from the scope from the European law of jurisdiction and judgments.1 On the model of Article 1(d) of the 1968 Brussels Convention,2 all subsequent instruments unifying rules of jurisdiction in Europe have excluded “arbitration” from their scope.3 During the process leading to the recast of the Professor at the University of Luxembourg. European efforts to unify the rules of jurisdiction and enforcement and recognition of judgments were not only conducted among Member States of the European Union, but also among certain States of the European Free Trade Association. The reference to the European law of jurisdiction refers to the similar instruments adopted in both settings, in particular the Brussels I bis Regulation and the 2007 Lugano Convention. 2 Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed in Brussels on 27 September 1968. 3 See Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter “the Brussels I Regulation”); Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed in Lugano on 30 October 2007 (hereinafter “the Lugano Convention”); Regulation (EU) No 1215/2012 of the European Parliament and of the * 1

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 225-236 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Gilles Cuniberti Brussels I Regulation, it was proposed to introduce new rules in this respect, but the language of the exclusion was eventually left untouched, with only a new recital added in the preamble to clarify some of the consequences of the exclusion.4 A logical consequence of the exclusion of arbitration could have been that the power of courts5 to grant interim measures in support of arbitration would have fallen entirely outside of the scope of European law and would thus have been governed solely by the national laws of European states. As will be developed in this contribution, however, the Court of Justice of the European Union (CJEU) ruled otherwise in Van Uden v. Deco-Line6 and extended the scope of the European law of jurisdiction to the power of courts to grant at least certain types of interim measures in support of arbitration. In order to fully appreciate the consequences of the Van Uden judgment, it is necessary to briefly explain that two sets of courts have jurisdiction to grant interim relief under the European law of jurisdiction. The first set of courts consists of all courts having jurisdiction on the merits under the relevant instrument. The ECJ confirmed in Van Uden that, logically, they should also be considered as having jurisdiction to issue any interim measure they deem appropriate, without any limitation. The power of the second set of courts is provided by the only express provision of the Brussels I bis Regulation (Art. 35) and the Lugano Convention (Art. 31) on “provisional, including protective measures”. These (almost)7 identical provisions grant power to issue interim measures, in accordance with their national rules of jurisdiction, to courts which do not have jurisdiction on the merits. However, as this rule could provide an incentive to litigants to bypass the uniform rules on jurisdiction laid down by the Regulation and the Convention, the CJEU has laid down in Van Uden and subsequent judgments severe limitations on the measures that courts could grant based on Articles 35 and 31.8 Obviously, one of the effects of the existence of an arbitration agreement is to deprive courts of their jurisdiction to decide the merits of the claim. The most controversial part of the Van Uden decision9 was to draw a seemingly logical, but ultimately maybe too formal consequence of the lack of jurisdiction of courts to Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter “the Brussels I bis Regulation”). 4 See, e.g., in a vast literature, S. BOLLÉE, L’arbitrage et le nouveau règlement Bruxelles I, Rev. arb. 2013, p. 979; T. HARTLEY, The Brussels I Regulation and Arbitration, ICLQ 2014, p. 843; L. HAUBERG WILHELMSEN, The Recast Brussels I Regulation and Arbitration: Revisited or Revised? Arb Int’l 2014, p. 169; S. MENETREY/ J.-B. RACINE, L’arbitrage et le règlement Bruxelles Ibis, in E. GUINCHARD (ed.), Le nouveau règlement Bruxelles Ibis, Larcier, 2014, p. 13. 5 It was never disputed that the power of arbitral tribunals to issue interim measures would fall within the arbitration exception. 6 CJEU, 17 November 1998, Case C-391/95, Van Uden Maritime BV, trading as Van Uden Africa Line v Kommanditgesellschaft in Firma Deco-Line and Another ECLI:EU:C:1998:543. 7 On the slight difference after the Brussels I Recast, see below II.B. 8 These limitations are discussed in part III of this Article. 9 For an assessment of the decision in this respect, see below part IV.

226

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in Support of Arbitration and European Law decide the dispute on the merits and thus to rule that the first set of courts described above would be unavailable to issue provisional measures in support of arbitration, and that only courts having jurisdiction under Articles 35/31 would have such power. The result is that, remarkably, Article 35 of the Brussels I bis Regulation and Article 31 of the Lugano Convention apply to determine the jurisdiction of courts to grant provisional measures in support of arbitration. Articles 35 and 31, however, do not lay down a uniform rule of jurisdiction. Instead, they refer to national law, but establish limitations to the power of courts to issue interim relief. This means that the primary rule of jurisdiction in this context is to be found in the national law of the relevant European state, including rules specifically applicable in the context of arbitration.10 But the operation of these national rules is subject to a number of limitations laid down by the CJEU. These limitations are discussed in Part III of this Article. Before doing so, however, it is important to explore how the definition of the scope of the arbitration exclusion interacts with the definition of the scope of provisional measures adopted by the CJEU (Part II).

II.

The Scope of the European Law of Jurisdiction

As was just underscored, the ECJ ruled in Van Uden that Article 35 of the Brussels I bis Regulation and Article 31 of the Lugano Convention limit the jurisdiction of courts of Member and Contracting States to issue provisional measures in support of arbitration. It is therefore crucial to assess the scope of these rules, which remains unclear both from a material (A) and a territorial perspective (B). A.

Material Scope

The case law of the CJEU interpreting the exclusion of arbitration from the scope of the European law of jurisdiction has focused on the subject matter of the relevant proceedings. Where the subject matter of the action relates to arbitration, it falls within the scope of the exception and thus outside the scope of the Brussels I bis Regulation or the Lugano Convention. The Court held that this was the case for an application to appoint an arbitrator.11 This view has now been replicated in Recital 12 of the preamble to the Brussels Ibis Regulation, which provides: “This Regulation should not apply to any action or ancillary proceedings relating to, in particular, the establishment of an arbitral tribunal, the powers of arbitrators, the conduct of an arbitration 10 For instance, rules limiting the jurisdiction of courts after the arbitral tribunal has been constituted: see, e.g., French Code of civil procedure, Art. 1449. 11 CJEU, 25 July 1981, Case C-190/89, Rich v Società Italiana Impianti, EU:C:1991:319.

Yearbook of Private International Law, Volume 21 (2019/2020)

227

Gilles Cuniberti procedure or any other aspects of such a procedure, nor to any action or judgment concerning the annulment, review, appeal, recognition or enforcement of an arbitral award.” In contrast, the CJEU has held that, where the action aims at protecting substantive rights which are civil and commercial, it falls within the scope of the European law of jurisdiction. Importantly, the Court held that this is so irrespective of whether an arbitration agreement might apply to those rights and mandate that they be arbitrated,12 or indeed that the claim is already pending before an arbitral tribunal.13 The action falls within the scope of the European law of jurisdiction, irrespective of whether the applicability of the relevant arbitration agreement is raised.14 The CJEU applied this analysis to provisional measures in Van Uden v Firma Deco-Line.15 In this case, a party was seeking a provisional payment order for breach of a contract containing an arbitration clause. The arbitration proceedings had already been initiated. The Court held that the action did not fall within the scope of the arbitration exception. While the Van Uden case was concerned with a provisional payment order, its ruling interpreted Article 24 of the Brussels Convention (now Article 35 of the Brussels I bis Regulation), which is a general provision on “provisional, including protective measures”. Nothing in the ruling suggested that it distinguished between the various categories of provisional measures, and its contribution has been understood to apply to all provisional and protective measures.16 The fundamental distinction for the purpose of defining the scope of the arbitration exception with respect to provisional measures is thus the difference between measures protecting substantive rights and measures ancillary to the arbitration. More specifically, the issue arises as to whether some provisional measures could be characterized as “relating to (…) the conduct of the arbitration procedure or any other aspect of such procedure” and thus fall outside of the scope of the Brussels I bis Regulation. At the outset, it should be recognised that the pertinence of the distinction could be disputed. It could be argued that the ultimate purpose of all steps of any adjudicatory process is to decide on substantive rights. While an antisuit injunction is not directly concerned with the rights of the applicant, but rather with the integrity of the adjudicatory process that the injunction aims at protecting, the ultimate goal is to allow the adjudicator issuing the injunction to decide on the 12 CJEU, 10 February 2009, Case C-185/07, Allianz SpA and Generali Assicurazioni Generali SpA v. West Tankers Inc., ECLI:EU:C:2009:69. 13 Case C-391/95, Van Uden (note 6). 14 The Court had held that the part of the judgment ruling on this arbitration issue thus also fell within the scope of the predecessor to the Brussels I bis Regulation, but Recital 12 of the preamble to the Brussels I bis Regulation now explains that the recognition of this part of the judgment (as opposed to the part ruling on the substantive dispute) is governed by national law. 15 Case C-391/95, Van Uden (note 6). 16 The Brussels Ibis Regulation was amended to incorporate some of the rules laid down by the Court in Van Uden, and has made no distinction between provisional measures either: see below, part III.C.

228

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in Support of Arbitration and European Law substantive rights of the parties. These arguments have merits, but accepting them would make the distinction introduced by the CJEU meaningless, as it would empty entirely the category of actions ancillary to arbitration. It is therefore submitted that the distinction is more precisely between actions which directly aim at protecting substantive rights and actions which, while having indirectly the same aim, have the more immediate goal of improving the arbitral process. 1.

Provisional Measures Protecting Substantive Rights

The most common forms of interim measures are directly concerned with the preservation of substantive rights. This is the case of injunctions to maintain or restore the status quo pending determination of the dispute. The status quo contemplated here is the substantive rights of the parties, typically flowing from their contractual arrangements. Likewise, injunctions to take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm are also directly concerned with substantive rights. The harm that one party might suffer would result from an infringement of his substantive rights, the recognition of which that party is typically seeking from the arbitral tribunal. Interim measures aimed at preserving assets should also be considered as primarily concerned with the protection of substantive rights. This is obvious when the subject matter of the dispute is the relevant asset, over which both parties claim to have rights. But this is also clear when the purpose of the measure is to ensure that the future decision on the merits can be enforced. An almost universal criterion for granting freezing orders or provisional attachments is that the applicant demonstrates that he has a reasonable chance to prevail on the merits of the case.17 This strongly suggests that the purpose of such measures is to protect the substantive rights which are litigated in the proceedings on the merits. Finally, many legal systems offer provisional measures which aim at anticipating the final resolution of the dispute. For instance, in about half of the Member States of the European Union, it is possible to obtain a provisional order to pay the financial claim, the recognition of which is sought in the main proceedings.18 Likewise, it might be possible to obtain a provisional injunction immediately granting satisfaction to the applicant in order to avoid irreparable harm. The provisional nature of such anticipatory relief has often been challenged on the ground that the applicant whose claim is satisfied at an early stage of the proceedings might not pursue it on the merits, but the CJEU has accepted that, with appropriate safeguards, such remedies could be characterized as provisional for the purpose of the European law of jurisdiction.19 The CJEU has also made clear that such remedy 17 See, e.g., the requirement of a “good arguable case” in English civil procedure (The Niedersachsen [1983] 2 Lloyd's Rep. 600), or of a claim founded in principle under French civil procedure (Code of civil enforcement proceedings, Art. L. 511-1). 18 See G. CUNIBERTI, in B. HESS/ P. ORTOLANI (eds), Impediments of National Procedural Law to the Free Movement of Judgments, Beck Hart Nomos 2019, p. 139. 19 Case C-391/95, Van Uden (note 6) and below, part III.A.

Yearbook of Private International Law, Volume 21 (2019/2020)

229

Gilles Cuniberti would fall within the scope of the European law of jurisdiction even where the jurisdiction to decide the dispute on the merits would lie with an arbitral tribunal,20 which is easily understandable. Anticipatory relief, more than any other provisional measures, are concerned with the substantive rights of the applicant, that they immediately satisfy. 2.

Provisional Measures Related to the Arbitration Procedure

In contrast, the immediate goal of some forms of interim measures is to protect the arbitral process itself. This is the case, for instance, of antisuit injunctions, which aim at preventing one of the parties from interfering in the arbitral process by initiating proceedings before another adjudicator.21 The recognition of this difference was the reason why the 2006 Amendments to the UNCITRAL Model Law on International Commercial Arbitration adopted a new definition of interim measures22 which suppressed the requirement that there be a connection between the interim measure and the subject matter of the dispute and defined interim measures as including not only orders to take action that would prevent “current or imminent harm”, but also “prejudice to the arbitral process itself”.23 Likewise, it seems clear that measures relating to the costs of the arbitration would be found to relate to the arbitration procedure. Thus, applications for a security for costs, which is characterized as an interim measure in a number of national legislations,24 should be considered as falling outside of the scope of the European law of jurisdiction. This, however, would only apply to a security for the payment of the costs of the actors of the arbitral process (arbitrators and lawyers, in particular). In contrast, a security aiming at compensating harm caused by an interim measure25 would arguably be directly related to substantive rights. Finally, it seems that measures relating to evidence should also be considered to relate to the arbitral procedure and thus fall outside of the scope of the European law of jurisdiction. The taking of evidence is a major part of most arbitral procedures. Arbitral hearings are often essentially concerned with hearing witnesses. Additionally, in many legal systems, the applicant for evidentiary measures is not required to demonstrate that s/he has a reasonable chance to

Case C-391/95, Van Uden (note 6). Case C-185/07, Allianz (note 12); A. BRIGGS & P. REES, Civil Jurisdiction and Judgments, Informa 2009, para 2.40. 22 See UNCITRAL Model Law on International Commercial Arbitration, Art. 17(2)(b) (2006 amended version). 23 See Working Group Report A/CN.9/589 (12 October 2005), para. 20. 24 See, e.g., New Zealand Arbitration Act 1996, Schedule 1 Art 17; South African International Arbitration Act 2017 Schedule 1 Art 17; Mauritian International Arbitration Act 2008 (as amended), s 21; British Columbia International Commercial Arbitration Act 2018. 25 See, e.g., UNCITRAL Model Law on International Commercial Arbitration, Art. 17 (original 1985 version), Art .17E and 17H(3) (2006 amended version). 20 21

230

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in Support of Arbitration and European Law succeed on the merits.26 The UNCITRAL Model Law, for instance, expressly grants discretion to the arbitral tribunal to relax this requirement for interim measures aimed at preserving evidence.27 This shows that the taking of evidence is crucial to the adjudicatory process in general and is not only necessary to allow the parties to vindicate their rights. It is thus submitted that all evidentiary measures related to an arbitral procedure should be considered as excluded from the scope of the European law of jurisdiction, including evidence preservation, discovery of documents, hearing of witnesses and inspection of premises. B.

Territorial Scope

The scope of the European law of jurisdiction is limited territorially. In principle, the jurisdictional rules of the Brussels I bis Regulation or the Lugano Convention only apply if the defendant is domiciled on the territory of one of the Member or Contracting States.28 The territorial scope of certain jurisdictional rules is defined differently, in particular rules related to exclusive jurisdiction and choice of court agreements. The territorial scope of the rule on provisional measures is unclear, however. This is because the general rule defining the territorial scope of the European law of jurisdiction specifically refers to most of the jurisdictional rules laid down by the relevant instruments, but omits the rule on provisional measures.29 A literary interpretation would thus lead to the conclusion that the application of this rule is not limited to cases where the defendant is domiciled on the territory of one of the Member or Contracting States. Under the Brussels I bis Regulation, this interpretation is reinforced by the new language of Article 35. While previous versions of the provision referred to provisional measures granted in support of proceedings initiated before courts of other Members or Contracting States which have jurisdiction on the substance “under this Regulation” [Convention], Article 35 has omitted this qualification. It follows that Article 35 can apply in case where the jurisdiction on the merits is not based on the European law of jurisdiction,30 which immediately suggests that the defendant could well be domiciled outside of the European Union.31 One could certainly argue that, in the absence of any connection with any European state, it is difficult to see that the European law of jurisdiction could be concerned to impose any limitation upon the powers of courts to grant interim 26

This is the case under French law, for instance (French Code of civil procedure,

Art. 145). 27 See, e.g., UNCITRAL Model Law on International Commercial Arbitration, Art .17A(2) (2006 amended version). 28 Brussels Ibis Regulation, Art. 6(1); Lugano Convention, Art. 4(1). 29 Brussels Ibis Regulation, Art. 5(1); Lugano Convention, Art. 3(1). 30 H. GAUDEMET-TALLON/ M.-E. ANCEL, Compétence et exécution des jugements en Europe, LGDJ 2018, No 328. 31 A. NUYTS, in A. DICKINSON/ E. LEIN (eds), The Brussels Regulation Recast, OUP 2015, para. 12.02.

Yearbook of Private International Law, Volume 21 (2019/2020)

231

Gilles Cuniberti relief.32 A number of European scholars have thus argued that the general territorial limitation of the European law of jurisdiction should apply.33 Depending on the interpretation which will prevail, the territorial scope of Articles 35 and 31, and the limitations that they impose, will only apply to proceedings initiated against defendants domiciled in the European judicial area, or will apply irrespective of the domicile of the defendant.

III. The Limitations on the Power to Grant Provisional Measures under the European Law of Jurisdiction Article 35 of the Brussels I bis Regulation and Article 31 of the Lugano Convention do not provide a uniform rule of jurisdiction to grant interim measures. Instead, they refer to the national law of jurisdiction of the Member States. Yet, this does not mean that Articles 35 and 31 have no influence on the operation of those national rules. Quite to the contrary, the CJEU has laid down a series of limitations to the operation of the rule, which were endorsed by the EU lawmaker. As a result, the applicability of Articles 35 and 31 in the context of arbitration entails that the limitations laid down by the CJEU apply and severely limit the power of courts to support arbitration proceedings. There are three such limitations: the interim measures should be provisional, protective and territorial. A.

Provisional

The first limitation on the measures that courts may grant under Articles 35 and 31 is that such measures should be provisional. It should be possible to cancel their effect at a later stage if it appears that they should not have been granted. This limitation was introduced by the ECJ in the Van Uden case. In this case, the Court insisted that measures granted under Article 35 should not enable litigants to pre-empt the decision on the substance of the case and thus circumvent the jurisdiction of the court having jurisdiction on the merits. In other words, a court seised on the basis of Article 35 or 31 should not be allowed to issue a measure which could not be undone and might then finally settle the case. In Van Uden, the plaintiff was seeking an interim payment order. The court ruled that such an order could only be issued by an Article 35/31 court if repayment to the defendant of the sum awarded was guaranteed, should the plaintiff ultimately be unsuccessful on the merits. In this case, the adjudicator having jurisdiction on the merits was an arbitral tribunal. This means that, unless the plaintiff can offer a guarantee for repayment, courts cannot grant interim payment orders.

A. BRIGGS/ P. REES, Civil Jurisdiction and Judgments, Informa 2009, para. 6.14. M. PERTEGAS SENDER/ TH. GARBER, in U. MAGNUS/ P. MANKOWSKI (eds), Brussels Ibis Regulation, Otto Schmidt 2015, Art. 35 No 15. 32 33

232

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in Support of Arbitration and European Law There is support for the position of the court in certain linguistic versions of the Brussels I bis Regulation and the Lugano Convention. In English, the title of Articles 35 and 31 is “Provisional, including protective measures”, which suggests that all Article 35/31 measures should be provisional. Yet, in a number of other linguistic versions, the title is “Provisional and protective measures”,34 which would allow for a different interpretation.35 Most interim measures are provisional in character. This is the case, in particular, of measures aiming at maintaining the status quo. But comparative civil procedure shows that, under the law of many states, interim measures include remedies which are anticipatory of the outcome on the merits. If such measures cannot be undone, they fall outside of the scope of Articles 35 and 31, and courts in the European judicial area lack power to grant them in support of arbitration. B.

Protective

The second limitation on the measures that courts may grant under Articles 35 and 31 is that they should be protective in nature. They should aim at preserving a factual or legal situation. This limitation flows from the definition of “provisional, including protective measures” that the ECJ has adopted since the 1990s: “the expression ‘provisional, including protective, measures’ within the meaning of Article [35 of the Brussels I bis Regulation] is to be understood as referring to measures which, in matters within the scope of the [Regulation], are intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is otherwise sought from the court having jurisdiction as to the substance of the case.”36 The purpose of interim measures in the meaning of Articles 35 and 31 should thus be preserve a situation so as to safeguard the rights vindicated in the proceedings on the merits. In the St Paul Dairy case,37 the Court has thus excluded from the concept of provisional measures and thus from the scope of Article 35 measures ordering the hearing of a witness for the purpose of determining whether to pursue litigation. The central proposition of this judgment was endorsed by the EU lawmaker, who explained in Recital 25 of the Preamble to the Brussels I bis Regulation: 34 This is the case in the French version, for instance: “Mesures provisoires et conservatoires”. 35 A broader interpretation could be that measures could be either provisional or protective. But a narrower interpretation was endorsed by the ECJ: interim measures should be both provisional and protective: see below, part B. 36 CJEU, 26 March 1992, Case C-261/90, Reichert and Kockler v Dresdner Bank, para. 24; Van Uden (note 6), para. 37. 37 CJEU, 28 April 2005, Case C-104/03, St Paul Dairy Industries [2005] ECR I03481.

Yearbook of Private International Law, Volume 21 (2019/2020)

233

Gilles Cuniberti “The notion of provisional, including protective, measures (…) should not include measures which are not of a protective nature, such as measures ordering the hearing of a witness.” The St Paul Dairy case was concerned with an evidentiary measure, and it is for evidentiary measures that its impact has been essentially discussed.38 For the purpose of this Article, however, it is unnecessary to elaborate on the limitations introduced by Articles 35 and 31 on the power of courts to grant such measures, since as argued above evidentiary measures should not be considered to relate to substantive rights, but rather to process, and that they are thus outside of the scope of the Regulation in presence of an arbitration agreement. There are, however, other kinds of provisional measures which might not serve a protective function. One example could be provisional payment orders, the function of which is to grant immediate satisfaction to the creditor on the ground that the existence of the claim is undisputable.39 In contrast, provisional payment orders aiming at providing financial resources to a party lacking them40 could be regarded as protective in nature. C.

Territorial

Finally, the third limitation is that measures granted by courts having jurisdiction under Article 35 or 31 should be territorial. The limitation was introduced by the Van Uden decision, which held that there should be “a real connecting link between the subject-matter of the measures sought and the territorial jurisdiction of the Contracting State of the court before which those measures are sought”. It was clearly laid down by the CJEU with a certain type of interim measure in mind, those aimed at preserving assets,41 but the Court also applied it to the measure with which the case was concerned, an interim payment order.42 There is, for instance, a debate as to whether that judgment excludes the appointment of judicial experts for the purpose of gathering (as opposed to preserving) evidence. The Belgian and French highest civil courts (Cour de cassation) had initially rightly ruled that under Article 35 courts may only appoint experts to preserve evidence (Belgian Cass. Civ. 1ère, 3 September 2009, Case No C.08.0480.N; French Cass. Civ. 1ère, 4 May 2011, Case No 10-13.712). French courts have since then changed their mind, thereby ignoring the limitation laid down by the CJEU: see French Cass. Civ., 14 March 2018, Cases No 16-19731 and 16-27913, JDI (Clunet) 2018, Comm. 15, with obs. H. GAUDEMET-TALLON, Rev. crit. dr. int. 2019, p. 186 with obs. G. CUNIBERTI. 39 This is the case in France, Italy and Luxembourg, for instance: see G. CUNIBERTI (note 18), p. 140. 40 This is the case in Austria, Germany, Portugal and Belgium, for instance: see G. CUNIBERTI (note 18), at p. 141. 41 The Court specifically insisted that that the courts of the place where the assets subject to the measure sought are situated are those best able to assess whether the measure should be granted: see Van Uden (note 6), at para. 39. 42 The Court held that the measure should “relate only to specific assets” located or to be located within the jurisdiction of the issuing court (Van Uden (note 6), at para. 47). As such a payment order is only binding on the defendant and does not relate to any specific 38

234

Yearbook of Private International Law, Volume 21 (2019/2020)

Interim Measures in Support of Arbitration and European Law The requirement of territoriality was reformulated by the European lawmaker in the Brussels I bis Regulation as precluding cross-border enforcement. The Regulation now expressly provides for the enforcement of provisional measures, but defines eligible measures as “measures ordered by a court or tribunal which by virtue of this Regulation has jurisdiction as to the substance of the matter”.43 In other words, provisional measures granted under Article 35 may not benefit from the enforcement regime of the Regulation and are thus necessarily territorial, at least to the extent that they cannot produce effect in other Member States without being enforced abroad. The power of courts granting provisional measures in support of arbitration under Articles 35 and 31 is thus limited territorially. Several aspects of the limitation, however, remain unclear. The first is whether the limitation only precludes cross border enforcement of provisional measures, or also any extra-territorial effect, irrespective of whether the relevant measure can produce effect abroad without cross-border enforcement.44 The second is whether the limitation precludes issuance of measures which produce effect in several states.45

IV. Concluding Remarks The European law of jurisdiction imposes significant limitations on the power of the courts of Member or Contracting States to grant provisional measures in support of arbitration. Where the relevant measures aim at protecting substantive rights, they may only be issued if they are provisional, protective and territorial. In contrast, the European law of jurisdiction does not limit the power of courts to issue provisional measures which relate to the arbitration procedure. The Van Uden decision has been widely criticised. It was underscored that the purpose of Article 35 is to allocate jurisdiction to grant interim measures between courts having jurisdiction on the merits and other courts, and that such allocation is precisely unnecessary where no court has jurisdiction on the merits.46 It was also argued that the effect of an arbitration agreement should only deprive courts of the power of deciding dispute on the merits, and that there is no reason why it should also strip the power of the same court to issue interim measures.47 There is, however, a convincing rationale for applying Articles 35 and 31 in the context of arbitration. The reason why the CJEU laid down limitations on the power of courts which do not have jurisdiction on the merits to issue provisional asset in particular, the requirement should rather be understood as meaning that assets sufficient to satisfy the order should be available within the jurisdiction. 43 Brussels Ibis Regulation, art 2(a) & 42(2)(b). 44 A. NUYTS (note 31), para. 12.47. See also Recital 33 to the Preamble of the Brussels Ibis Regulation. 45 A. NUYTS (note 31), para. 12.43. 46 H. GAUDEMET-TALLON/ M.-E. ANCEL (note 30), No 52. 47 M. PERTEGAS SENDER/ TH. GARBER (note 33), Art. 35 No 78.

Yearbook of Private International Law, Volume 21 (2019/2020)

235

Gilles Cuniberti measures was to prevent those courts from bypassing the jurisdiction of courts which do have jurisdiction on the merits and are thus perceived as the natural forum to issue such measures. The same is true, and indeed possibly more so, where the competent adjudicator to decide the dispute on the merits is an arbitral tribunal.48 Courts should be available to grant interim measures in support of arbitration, but this power should not allow the litigants to bypass the jurisdiction of the arbitral tribunal. The only difference between an arbitral tribunal and a court in this respect is that arbitral tribunals have traditionally been perceived as lacking the power to issue certain interim measures49 which, as a consequence, may only be issued by courts. The CJEU should create a specific exception for measures which may not be issued by arbitral tribunals, to reserve the power to issue them to courts without any limitation.

The Van Uden case offers a perfect example: the problem of the concurrent jurisdiction of Article 35/31 courts to grant interim payment orders is the same whether the competent adjudicator on the merits is a court or an arbitral tribunal. 49 The main reasons are the lack of coercive power of arbitral tribunals, and the lack of power to bind third parties. The clearest case is the power to authorize provisional attachment, which is expressly denied to arbitral tribunals by a number of arbitration legislations (see, e.g. Belgian Judicial code, Art. 1691; French Code of civil procedure, Art. 1468). 48

236

Yearbook of Private International Law, Volume 21 (2019/2020)

SWISS PRACTICE OF INTERIM RELIEF IN INTERNATIONAL ARBITRATION Laurent HIRSCH*

I. II.

III.

IV.

V.

VI.

VII.

VIII.

Introduction The Principle that Arbitral Tribunals Have Jurisdiction A. Jurisdiction under Article 183(1) Swiss PILA B. The Situation Previously under the 1969 Concordat C. Possibility for the Parties to Agree Otherwise Arbitral Tribunal and Emergency Arbitrator A. In General B. Emergency Arbitrator Scope of the Arbitral Tribunal’s Jurisdiction A. Notion of Interim Relief B. Various Criteria of Interim Relief Classification in Literature C. Procedural Interim Relief and Interim Relief on the Merits D. Example (October 2009 WIPO Case) Conditions for Interim Relief A. Applicable Law B. International Arbitration Swiss Practice 1. Prima Facie Jurisdiction of the Arbitral Tribunal 2. Likelihood of Success on the Merits 3. Avoiding Pre-Judging 4. Risk of Hardly Reparable Damage 5. Urgency? 6. Proportionality 7. Security Proceedings A. Due Process B. Ex Parte C. Delegation Form A. Award or Order B. No Court Challenge Limits A. Not Binding on Third Parties, nor in rem B. No Imperium C. No Definitive Decision D. Exequatur Possibility?

* Attorney-at-law, Geneva. This article is based on the conference held at the Swiss Institute of Comparative Law on 23 May 2019 and the oral style has been kept.

Yearbook of Private International Law, Volume 21 (2019/2020), pp. 237-258 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Laurent Hirsch IX.

XI.

Effectiveness of the Decision Ordering Interim Relief A. Damages B. Costs C. Sympathy of the Arbitral Tribunal D. Astreintes E. Negative Inferences F. Assistance from the Arbitral Institution State Courts A. Parallel Jurisdiction B. Possibility to Exclude the Jurisdiction of the State Judge C. Assistance of the State Judge D. Competition between Arbitral Tribunal and State Judge Conclusion

I.

Introduction

X.

This paper focuses on the practice of arbitral tribunals in Switzerland in connection with interim relief. While it includes a number of scholarly references, it does not attempt to provide a rigorous and comprehensive legal analysis of various interesting issues, but rather a review of basic principles and relevant practices.

II.

The Principle that Arbitral Tribunals Have Jurisdiction

A.

Jurisdiction under Article 183(1) Swiss PILA

Swiss law provides a clear basis, in Article 183(1) Swiss PILA,1 regarding the jurisdiction of arbitral tribunals to order interim measures: “Unless otherwise agreed upon by the parties, the arbitral tribunal may, upon request of a party, order preliminary or protective measures”.2

This article will focus on international arbitration, although the situation would not be much different in domestic arbitration. Regarding specifically the jurisdiction to order interim measures, Article 374(1) of the Swiss Code of Civil Procedure has wording similar to that of Article 183(1) Swiss PILA. 2 While English is obviously not an official language in Switzerland, so that the authoritative versions are the German, French and Italian ones, the English version of Chapter 12 of Swiss PILA is widely used and no reference to other languages is needed in connection with these provisions. 1

238

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration Since the Swiss PILA entered into force, some 30 years ago, this is clear law and a settled issue.3 B.

The Situation Previously under the 1969 Concordat

While the situation is clear today, it might still be worth recalling that that was not always so. Some 30 years ago in international arbitration (and until 10 years ago in domestic arbitration), the relevant provision in the 1969 Concordat4 provided that the arbitral tribunal could propose interim measures, but that the arbitral tribunal had no jurisdiction to actually order such measures. C.

Possibility for the Parties to Agree Otherwise

It should also be noted that the legal provision provides that the principle of full jurisdiction applies “unless otherwise agreed upon by the parties”. This means that the parties are free to provide otherwise, to provide that the arbitral tribunal would have no jurisdiction, or to limit the arbitral tribunal’s jurisdiction, e.g. by providing that a certain type of interim measures could be ordered and not another type. The parties may not, however, extend the jurisdiction of the arbitral tribunal: there is no room for any extension, since the principle does not leave any interim measures outside the scope of the arbitral tribunal’s jurisdiction. In practice, there are no such clauses by which the parties would agree otherwise. There are obviously no such clauses in arbitration rules, which do not provide anything specific in this regard.5 There are also no tailor-made such clauses in practice (at least I did not come across any arbitration clause providing for a more limited jurisdiction, or no jurisdiction at all to order interim measures).

3 Switzerland still has a dual regime of arbitration, international arbitration being governed by the 1987 Swiss Private International Law Act (Swiss PILA) and domestic arbitration being governed by the 2008 Swiss Code of Civil Procedure. While the Swiss PILA is currently being revised (the revised law coming into force probably in 2021), the revision does not touch upon the topics addressed in this article and in particular not Article 183(1) Swiss PILA. 4 Article 26 of the Intercantonal Arbitration Convention adopted by the Cantonal Justice Directors’ Conference on 27th March 1969: “1. Les autorités judiciaires ordinaires sont seules compétentes pour ordonner des mesures provisionnelles. 2. Toutefois, les parties peuvent se soumettre volontairement aux mesures provisionnelles proposées par le tribunal arbitral”. 5 Article 26 of the Swiss Rules of International Arbitration, Article 28 of the ICC Rules of Arbitration and Article 48 of the WIPO Rules of Arbitration confirm and do not limit the jurisdiction of the arbitral tribunal to order interim relief (while only those three sets of rules are referred to expressly in this article, for sake of simplicity, there are obviously many more relevant sets of arbitration rules, which generally contain similar provisions).

Yearbook of Private International Law, Volume 21 (2019/2020)

239

Laurent Hirsch

III. Arbitral Tribunal and Emergency Arbitrator A.

In General

The general principle is accordingly that the arbitral tribunal has full jurisdiction to order interim measures. In order to be able to order interim relief, it is obviously necessary that the arbitral tribunal be constituted. The downside is therefore that it may take a while until the arbitral tribunal is constituted. Until a few years ago, if a party had a request for truly urgent interim measures, that party would have to request such interim measures from the state court. B.

Emergency Arbitrator

In order to allow interim measures to be ordered even before the constitution of the arbitral tribunal, a new mechanism of emergency arbitrator was set up. Since 2012, the Swiss Rules have provided a detailed mechanism regarding the jurisdiction of the emergency arbitrator.6 The ICC issued a detailed report in 2019 addressing the emergency arbitrator’s mechanism and experiences.7 It appears from this ICC report in particular that: – Relief is granted only in a minority of emergency arbitrator applications;8 – Emergency arbitrators apply international standards rather than national laws, both on procedural matters9 and on applicable conditions;10 – Emergency arbitrator proceedings generally do not include witness evidence but allow for a hearing with the parties.11 6 Article 43 of the Swiss Rules of International Arbitration. Article 29 of the ICC Rules of Arbitration and Article 49 of the WIPO Arbitration Rules also contain a detailed mechanism regarding the emergency arbitrator. It may be noted that the provision of the Swiss Rules is also applicable if the arbitration clause was entered into before 2012, while Article 29(6) of the ICC Rules provides that “[t]he Emergency Arbitrator provisions shall not apply if the arbitration agreement under the Rules was concluded before 1 January 2012” and Article 49(a) of the WIPO Rules provides that “[…] the provisions of this Article shall apply to arbitrations conducted under Arbitration Agreements entered on or after June 1, 2014”. 7 The report is entitled “Emergency Arbitrator Proceedings: Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings” (hereinafter the “ICC Report”), is dated April 2019, is 91 pages long, contains an overview of the first 80 ICC emergency arbitrator applications (of which 12 were seated in Switzerland) and reviews of selected practical topics; it is available at: https://library. iccwbo.org/content/dr/COMMISSION_REPORTS/CR_0058.htm?l1=Commission+Reports on 23.4.2020. 8 ICC Report (note 7), para. 8. 9 ICC Report (note 7), para. 22. 10 ICC Report (note 7), para. 30.

240

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration One question, purely from the practice perspective: would the emergency arbitrator be inclined to grant interim measures more easily than the arbitral tribunal constituted to rule on the merits? I organised a small poll, informally and without aiming at representativity, with a dozen Geneva practitioners, on various questions in connection with interim relief.12 On this specific question, the answers vary,13 some answering that it is identical, while other consider that the emergency arbitrator would be more inclined to grant interim relief, for various reasons which are not based on any dogmatic difference, but are strictly limited to a practical perspective. I would submit that the reasons might be that a decision by the emergency arbitrator does not cause any risk to the neutrality of the arbitral tribunal in the merits phase and that while interim relief may be requested again (later in the proceedings) before the arbitral tribunal, there is only one possibility to request it from an emergency arbitrator. Regarding jurisdiction, the emergency arbitrator has the same jurisdiction as the arbitral tribunal on interim relief (while the arbitral tribunal obviously has, in addition, jurisdiction on the merits).

IV. Scope of the Arbitral Tribunal’s Jurisdiction A.

Notion of Interim Relief

The question may be asked about what exactly interim relief is, or how it would be defined. “We consider interim relief to be provisional measures, generally meant to be effective during the proceedings on the merits and aiming to protect substantive rights of the requesting party or more widely to prevent any effect which might jeopardise the running or the efficacy of the proceedings on the merits”.14 I believe that this wide definition, provided by S. BESSON in a 2014 article, renouncing any categorisation exercise and providing a general and generic description of interim relief, is convincing and appropriate.

ICC Report (note 7), para. 26. See the results of the informal poll, Annex 1 below. 13 Annex 1, question 4. 14 “Nous retiendrons que les mesures provisoires sont des mesures temporaires, généralement destinées à produire leurs effets pendant la durée de la procédure sur le fond, et tendant à protéger les droits matériels de la partie requérante ou, plus largement, à empêcher des atteintes qui risqueraient de compromettre le déroulement ou l’efficacité de la procédure sur le fond” (S. BESSON, Les mesures provisoires et conservatoires dans la pratique arbitrale – notions, types de mesures, conditions d’octroi et responsabilité en cas de mesures injustifiées, in L’arbitre international et l’urgence, Bruylant 2014, p. 37-59, § 9). 11 12

Yearbook of Private International Law, Volume 21 (2019/2020)

241

Laurent Hirsch B.

Various Criteria of Interim Relief Classification in Literature

The wording of the relevant legal provision (Art. 183(1) Swiss PILA) refers to “preliminary or protective” measures, i.e. it uses two different adjectives to describe the available interim relief. It does not appear that there would be any clear distinction between preliminary measures and protective measures15 and the choice to use two adjectives was probably meant to make it clear that the scope of available interim relief should be wide. If one tries to make distinctions (and indeed some lawyers enjoy making distinctions), there are conservatory measures, regulatory measures and anticipatory performance measures (Sicherungsmassnahmen, Regelungsmassnahmen and Leistungsmassnahmen, using the German terminology used classically to describe these various categories).16 From a practical perspective, I consider this classification not to be very relevant.17 To the extent that there are no consequences of any specific interim relief being classified under one or the other, and that there are no different conditions to grant interim relief of one sort or the other, I believe this classification is rather an intellectual exercice and I shall not dwell on it further. C.

Procedural Interim Relief and Interim Relief on the Merits

Another distinction, which might be more relevant in practice, might be between the interim relief regarding the merits, normally including the three kinds described above, and the procedural interim relief covering for example antisuit injunctions, in order to preserve evidence and security for costs. Security for costs typically appears as a category where there is a distinct practice18 and where there are different conditions; for example, when one refers to fumus boni iuris19 or to urgency, such conditions are not relevant in connection with security for costs.

S. BESSON (note 14), para. 4. C. BOOG, in M. ARROYO (ed.) Arbitration in Switzerland – The Practitioner’s Guide, 2nd ed., Kluwer 2018, chapter 18 part. III, Interim Measures in International Arbitration, para. 17; B. BERGER/ F. KELLERHALS, International and Domestic Arbitration in Switzerland, 3rd ed., Stämpfli 2015, § 19, para. 1256; T. GÖKSU, Schiedsgerichtsbarkeit, Dike 2014, para. 1901-4; G. KAUFMANN-KOHLER/ A. RIGOZZI, International Arbitration Law and Practice in Switzerland, Oxford 2015, § 6.85; R. MABILLARD, in H. HONSELL/ N.P. VOGT/ A.K. SCHNYDER et al. (eds), Basler Kommentar, Internationales Privatrecht, 3rd ed., Helbing & Lichtenhahn 2013, ad art. 183 IPRG, para. 6a; C. OETIKER, in M. MÜLLER-CHEN/ C. WIDMER LÜCHINGER (eds), Zürcher Kommentar zum IPRG, 3rd ed., Schulthess 2018, ad art. 183 IPRG, para. 35. 17 S. BESSON (note 14), para. 16. 18 B. BERGER, Security for Costs: Trends and Developments in Swiss Arbitral CaseLaw, ASA Bulletin 2010, p. 7 et seq.; S. BESSON (note 14), para. 35. 19 Fumus boni iuris being the latin sometimes used for the condition about the likelihood of the alleged claim, see below, section V.B. 15 16

242

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration Procedural interim relief would perhaps not constitute interim relief in state court proceedings. Whether safeguarding of evidence falls within interim relief is an open issue in state court proceedings. However, in arbitration, there is only one large category of interim relief and there is no real question that all this constitutes interim relief. Still, it might be that the conditions are not necessarily the same when interim relief is procedural in nature. A specific kind of interim relief which might be interesting is the prohibition on aggravating the dispute, which can cover various situations.20 One might still question, however, whether this is a true category of interim relief in itself, aimed at specific situations and corresponding relief, or whether it might be just an additional argument to draw the attention of the arbitral tribunal, considering that the arbitral tribunal is normally inclined to avoid aggravating the dispute (and it could still be a useful argument to make if the arbitral tribunal could be convinced that some requested interim relief would be necessary to avoid aggravating the dispute). D.

Example (October 2009 WIPO Case)

An interesting example to address is a decision in a WIPO arbitration case from 2009.21 The sole arbitrator was appointed to rule on the merits and was seised of requests for interim relief from both parties. It was a trademark license case with a dispute between licensor and licensee following termination of the license agreement. While both parties eventually agreed that the license agreement was terminated, they disagreed about the consequences of the termination, and in particular the fate of the stock of clothes bearing the licensed trademark. The licensee wanted to proceed to sell the stock (as under the license agreement) and the licensor disagreed, considering that the conditions of such sale would not be in accordance with its trademark policy, so the sole arbitrator was requested to decide about the interim regime. The sole arbitrator issued a decision in which he decided that the licensee should sell the whole stock to the licensor, so that the licensor could eventually sell it to third parties. Regarding the price, there was a minimum price recognised by the licensor, so the licensor should at least pay this minimum price, as a provisional price, whereas the final price would be decided by the arbitrator with the award on the merits. In the meantime, the stock of clothes would accordingly have to be transferred from the licensee to the licensor. The licensee objected that, since he was bound to transfer the stock of clothes finally and irrevocably, which transfer of property could not be subsequently cancelled, this would not constitute interim relief and the licensee accordingly challenged the decision before the Swiss Federal Supreme Court.

20 21

S. BESSON (note 14), para. 43. Unpublished WIPO interim award of 7 October 2009, in French (24 pages).

Yearbook of Private International Law, Volume 21 (2019/2020)

243

Laurent Hirsch The Swiss Federal Supreme Court22 confirmed that the measure ordered by the sole arbitrator properly constituted interim relief, because although it would not be a conservatory measure, it could be seen as a regulatory measure or an anticipatory performance measure23 and although the transfer of property was final and irrevocable, the Swiss Federal Supreme Court confirmed that it was still interim relief.24 This answer may not be applicable in other jurisdictions, it may perhaps not be applicable in the practice in other seats, but I believe it corresponds to the Swiss practice and to the wide notion of interim relief in Swiss arbitral practice.

V.

Conditions for Interim Relief

A.

Applicable Law

A serious legal analysis of the topic would require a test of the issue of applicable law, in particular whether the issue should be looked at under the lex causae or the lex arbitri.25 However, I will not address this issue, since this article focuses on practice and in practice the applicable law is rarely addressed by the parties, as the parties rather submit arguments on the basis of international standards and arbitral tribunals eventually decide on the basis of international standards,26 without deciding which law should be applicable.

ATF/BGE 136 III 200, decision of 13 April 2010 in case 4A_582/2009. “Cette argumentation n’est pas pertinente. Elle restreint, en effet, l’objet des mesures provisionnelles à l’une des trois catégories susmentionnées, ignorant l’existence des deux autres. Or, c’est bien dans la catégorie des mesures d’exécution anticipée provisoires ou dans celles des mesures de réglementation, voire dans les deux, qu’il convient de ranger l’ordre donné à la recourante de céder le stock de vêtements à l’intimée” (ATF/BGE 136 III 200, para. 2.3.4.2, p. 206). 24 “Pour le surplus, le texte même de la décision querellée fait ressortir clairement la volonté de l’arbitre unique de ne trancher définitivement aucune des prétentions des parties” (ATF/BGE 136 III 200, para. 2.3.4.1, p. 206). 25 S. BESSON (note 14), para. 12; C. BOOG (note 16), para. 15; B. BERGER/ F. KELLERHALS (note 16), § 19, para. 1251; A. FURRER/ D. GIRSBERGER/ I. AMBAUEN, in A. FURRER/ D. GIRSBERGER/ M. MÜLLER-CHEN (eds), Handkommentar zum Schweizer Privatrecht, Internationales Privatrecht, 3rd ed., Schulthess 2016, ad IPRG 182-186, para. 17; T. GÖKSU (note 16), para. 1124; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 16), § 6.112; C. OETIKER (note 16), ad art. 183 IPRG, para. 19; J.F. POUDRET/ S. BESSON, Comparative Law of International Arbitration, 2nd ed., Sweet & Maxwell 2007, para. 624. 26 The 2019 ICC Report mentioned that most emergency arbitrators “have applied substantive criteria developed in connection with the granting of interim measures by arbitral tribunals and by reference to standards distilled from international arbitration practice rather than in accordance with any specific domestic laws. […] An approach based on international practice is consistent with the parties’ expectations and will encourage predictability and uniformity of results.” (ICC Report (note 7), para. 30). 22 23

244

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration Still, it could be argued that the so-called international standards are tainted. M. SCHERER recently mentioned in a public conference that although arbitrators pretend to apply international standards, in reality each applies his or her own international standard, so that eventually there might not be truly international standards.27 B.

International Arbitration Swiss Practice

In the Swiss practice of international arbitration, while the issue of applicable law does not arise, the arbitral tribunals usually review a number of conditions. E. GEISINGER suggested the following conditions in a 2005 article.28 1.

Prima Facie Jurisdiction of the Arbitral Tribunal

While the arbitral tribunal should be satisfied that it has prima facie jurisdiction, it does not need to be fully satisfied that it does have jurisdiction, a prima facie appearance being sufficient. The interim relief obviously falls if the arbitral tribunal subsequently makes a finding of no jurisdiction. 2.

Likelihood of Success on the Merits

The likelihood of success on the merits is not even always reviewed by the arbitral tribunal.

27 “It was observed that in requesting interim relief, parties will argue what they say is an international standard, but such standard is often tainted by the local law standard of counsel’s jurisdiction of origin”, in Provisional Measures in International Arbitration, Report by A. ROSENBERG and R. GARDEN of a conference on “Provisional Measures in International Arbitration” that took place on 4 April 2019, International Business Law Journal 2019, p. 361-373, at p. 370. 28 E. GEISINGER, Les relations entre l’arbitrage commercial international et la justice étatique en matière de mesures provisionnelles, Semaine Judiciaire 2005 II, pp. 375-396, at p. 379 : “- la compétence prima facie du tribunal arbitral; - la vraisemblance du droit au fond; - le risque d’un préjudice difficilement réparable ou non susceptible d’être réparé par une condamnation pécuniaire; - l’urgence : le risque doit être imminent; - la proportionnalité de la mesure; - souvent, la fourniture préalable de sûretés.”

Yearbook of Private International Law, Volume 21 (2019/2020)

245

Laurent Hirsch 3.

Avoiding Pre-judging

While there is a wide consensus that the arbitral tribunal should not pre-judge,29 in particular order interim relief which would make the merits phase moot, this condition is generally only mentioned passim, without any further examination. This pre-judging could mean two things, i.e. avoid giving the impression that the arbitral tribunal already made its mind, or avoid ordering a measure which would be sufficient to satisfy the requests of the party on the merits. 4.

Risk of Hardly Reparable Damage

While the risk of hardly reparable damage is a standard condition in state court proceedings, it is often also mentioned in arbitration proceedings, but it does not appear to be a strict condition. This condition might actually be included in the balance of interests and proportionality test. It appears that there might be cases in which there would be no such risk and still interim relief might be ordered. 5.

Urgency?

While urgency is obviously a relevant criterion, it also depends how urgency would be defined. While in some court proceedings urgency is defined narrowly, the condition not being met if the requesting party waited beyond a very short period of time before requesting interim relief, such a strict test is not applied in the Swiss practice of international arbitration.30 In practice, it looks like it would not be from this perspective that the urgency would actually be examined. 6.

Proportionality

Eventually, my reading of the practice (although this is obviously an open discussion) is that proportionality and balance of interests is the core issue which is always addressed. Interim relief is not granted or denied in practice without this condition being closely looked at. The UNCITRAL Model Law, as it was amended in 2006, provides the following test: “such harm substantially outweighs the harm that is likely to result to 29 C. BOOG (note 16), para. 34; B. BERGER/ F. KELLERHALS (note 16), § 19, para. 1252. 30 While an expert Swiss practitioner and scholar suggests that it might be difficult to order interim relief if the request would be somehow delayed after the requesting party realised the risk (S. BESSON (note 14), para. 70), I would submit that arbitral tribunals in Switzerland are not too rigorous towards applicants and accept to entertain requests even if somehow delayed, provided (i) that the delay may be taken into account of when assessing proportionality, and (ii) that a serious delay might be construed as an acceptance of the situation or a waiver of the right to challenge such situation.

246

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration the party against whom the measure is directed if the measure is granted”.31 While there are countries which simply copy the Model Law, there are a number of countries which do not, but this test still represents a standard which is applied in international practice, including in Switzerland. This is a pragmatic approach (it might be soft law), focusing on the balance of interests and the balance of inconvenience. A 2003 award already referred to this test of the balance of the harms: “Thus, in exercising the discretion that they enjoy under Article 23(1) of the ICC Rules, arbitrators must endeavour to balance the relative harm to each party that may or may not flow from the granting or denial of the measures requested”.32 In the award in the above-mentioned WIPO 2009 case, the sole arbitrator was apparently inspired by the principle of the balance of harms: in other words, he considered it necessary to check whether granting the requested relief would cause to the party against which such relief would be ordered some prejudice exceeding the advantage enjoyed by the requesting party from the grant of the interim relief.33 I submit this is a kind of proportionality test. I would suggest one could try to compare this with the principle of proportionality under Swiss public law. Traditionally, under Swiss public law, the principle of proportionality can be split in three sub-principles being aptitude, necessity and proportionality in a narrow sense.34 Aptitude is a requirement that the measure might be effective to obtain the requested result. This is a public law test, but the same question could be raised in interim relief in international arbitration when one would address the issue of usefulness. Necessity could be connected to urgency, i.e. the requesting party has a need to get the interim relief. Eventually, proportionality in a narrow sense is this balance of interests of the parties to check whether the requesting party has an interest which is more important than the party against which interim relief is requested. 7.

Security

Obviously, the arbitral tribunal may order security. This is expressly provided for by Article 183(3) Swiss PILA.35

Article 17A(1)(g) of the UNCITRAL Model Law. ICC Case 12361(2003), published in ICC Bulletin, vol. 22, p. 62, para. 43. 33 “Dans le cadre de son appréciation provisoire, sans préjudice à la décision qu’il prendra au fond, le Tribunal arbitral est guidé par le principe de la « balance des préjudices » ou « balance des intérêts ». En d’autres termes, il lui appartient de vérifier si l’octroi de la mesure sollicitée implique ou non pour la partie contre qui une telle mesure est demandée un préjudice hors de proportion avec l’avantage que retirerait l’autre partie de l’octroi de la mesure” (para. 73 of the unpublished WIPO award of 7 October 2009). 34 T. TANQUEREL, Manuel de droit administratif, Schulthess 2011, para. 550 et seq. 35 “The arbitral tribunal or the judge may condition the requested preliminary or protective measures upon the posting of adequate security” (this provision is also untouched by the current revision of the Swiss PILA). 31 32

Yearbook of Private International Law, Volume 21 (2019/2020)

247

Laurent Hirsch In my non-representative informal poll, the number of cases in which securities are ordered when interim relief is granted (obviously the issue does not arise if interim relief is not granted) is below 20%.36 It would therefore appear that in about 80% of cases the arbitral tribunal is inclined to grant interim relief without requesting security.

VI. Proceedings A.

Due Process

Due process, or the right to be heard, is obviously essential. It is an important requirement in State court proceedings and it is also an important requirement in international arbitration, including in connection with interim relief. B.

Ex Parte

Still, the question arises whether interim relief may be granted ex parte, i.e. without hearing the party against which interim relief is requested. Article 26(3) of the Swiss Rules of International Arbitration provides that interim relief may be granted ex parte in exceptional circumstances.37 Obviously, the fact that there is an express provision in the Swiss Rules is insufficient to conclude that such possibility is in accordance with Swiss law. Still, the literature appears nowadays unanimous, at least in Switzerland, on the fact that it is possible for an arbitral tribunal to grant interim relief ex parte.38 This applies both to an arbitral tribunal constituted to rule on the merits and seised of a request for interim relief and to an emergency arbitrator. Obviously, one can criticise this opinion, but in practice, the principle is now fully accepted. Still, in international arbitration Swiss practice, such ex parte interim relief is almost never applied. I asked this question in my informal non-representative Annex 1, question 5. “In exceptional circumstances, the arbitral tribunal may rule on a request for interim measures by way of a preliminary order before the request has been communicated to any other party, provided that such communication is made at the latest together with the preliminary order or that the other parties are immediately granted an opportunity to be heard”. 38 C. BOOG (note 16), paras 44-46; B. BERGER/ F. KELLERHALS (note 16), § 19, para. 1260; A. BUCHER, Commentaire Romand, Loi sur le droit international privé – Convention de Lugano, Helbing 2011, ad 183 LDIP, para. 8; A. FURRER/ D. GIRSBERGER/ I. AMBAUEN (note 25), ad IPRG 182-186, para. 15; T. GÖKSU (note 16), para. 1927; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 16), § 6.124; R. MABILLARD (note 16), ad art. 183 IPRG, para. 12; C. OETIKER (note 16), ad art. 183 IPRG, para. 45; J.F. POUDRET/ S. BESSON (note 25), para. 626. 36 37

248

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration poll and amongst the various polled practitioners, only one case arose during the last three years where an arbitrator granted ex parte interim relief.39 In summary, this is now clearly possible, but in practice hardly applied. C.

Delegation

Is it possible to delegate to the president of the arbitral tribunal the task to grant interim relief? The Swiss literature is split, with some authors accepting the principle of such delegation,40 noting that there is no legal basis preventing the arbitral tribunal from delegating such power to the chair, and other authors who consider such delegation to be impermissible,41 relying also on the wording of Article 183 Swiss PILA, granting the jurisdiction to the arbitral tribunal without reserving a delegation possibility. It is certainly not the usual practice to allow the arbitral tribunal’s chair to decide alone on interim relief. One reason is probably that interim relief is not an accessory question, but a substantive important issue, to which it would make sense having the three arbitrators (if the arbitral tribunal is a three member tribunal) fully participate. Another reason is that the chances of the parties complying voluntarily with an interim relief decision are probably higher if all three members of the arbitral tribunal stand behind such decision.42 Based on those practical considerations, I would submit that it should not be permissible to the arbitral tribunal to delegate the decision to its chair.

VII. Form A.

Award or Order

Internationally, the question of whether an arbitral decision on interim relief constitutes an arbitral award or a procedural order is widely debated.43 From a Swiss perspective, the answer is clear: it is a procedural order. This was decided by the Swiss Federal Supreme Court in the 2009 WIPO case, in which the Swiss Federal Supreme Court found the challenge inadmissible as its object was not an award.44 Annex 1, question 6. A. BUCHER (note 38), ad 183 LDIP, para. 8, and R. MABILLARD (note 16), ad art. 183 IPRG, para. 8. 41 C. BOOG (note 16), para. 43; B. BERGER/ F. KELLERHALS (note 16), para. 1254 and footnote 24 and C. OETIKER (note 16), ad art. 183 IPRG, para. 41. 42 See in this regard section IX.C below. 43 Anecdotally, I still remember a case 25 years ago, in which Claimant’s counsel was invited by the arbitral tribunal to specify whether the interim relief requested should be ordered, if at all, in the framework of an arbitral award (subject to ICC scrutiny) or of a procedural order. 39 40

Yearbook of Private International Law, Volume 21 (2019/2020)

249

Laurent Hirsch While some scholars consider that there might be exceptions to the principle45 (i.e. that some interim relief decisions could qualify as arbitral awards or could otherwise be challenged before the Swiss Federal Supreme Court), it would seem to me, on the basis of the Swiss Federal Supreme Court’s case, that there should be no exception. B.

No Court Challenge

To the extent the decision on interim relief qualifies as a procedural order, there is no challenge open before any Swiss court against such decision. Whether enforcement is possible is addressed below.

VIII. Limits While arbitral tribunals have jurisdiction to order interim relief, and while such orders are binding on the parties, there are some limits to such arbitral awards, in particular when compared to State court decisions. A.

Not Binding on Third Parties, nor in rem

Since only the parties are bound by the decision of the arbitral tribunal, third parties would not be bound and may disregard the order of the arbitral tribunal. If the aim of the interim relief is e.g. to prevent a bank from paying a bank guarantee, arbitral interim relief might not constitute the appropriate remedy. Similarly, any interim relief ordered by an arbitral tribunal would not apply in rem, nor erga omnes. If the requested interim relief would be attachment of a ship or a piece of art, arbitral interim relief might not constitute the most appropriate remedy (except obviously if the ship or the piece of art is in the hands of the respondent, which can be ordered to deposit it with the arbitrators). B.

No Imperium

I will not expand on the distinction between jurisdiction (the power to issue an enforceable decision) and imperium (the power to enforce such decision), but it is

ATF/BGE 136 III 200, which ratio was summarised in para. 2.3.5 : “Dirigé, non pas contre une sentence, mais contre une décision de mesures provisionnelles au sens de l’art. 183 LDIP, le présent recours est, dès lors, irrecevable. Aussi n’est-il pas possible d’entrer en matière sur ses conclusions, qu’elles tendent à l’annulation de ladite décision ou à la constatation de sa nullité”. 45 T. GÖKSU (note 16), para. 193; C. OETIKER (note 16), ad art. 183 IPRG, para. 44. 44

250

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration rather clear that arbitral tribunal has no imperium, i.e. cannot easily enforce its decision. C.

No Definitive Decision

The decision on interim relief by an arbitral award is not definitive or final, which means that the arbitral tribunal has discretion to modify its decision.46 D.

Exequatur Possibility?

Regarding exequatur, i.e. the enforcement by State courts of an arbitral interim relief decision, the regime is linked to the question whether the interim relief decision is an award or a procedural order. From a Swiss perspective, it is rather clear that an arbitral decision on interim relief cannot be enforced, because it does not constitute an award, as decided by the Swiss Federal Supreme Court.47 Still, the analysis should not stop here, because other countries might take a different view, and therefore an arbitral decision on interim relief which cannot be enforced in Switzerland could be enforced in other countries. The 2019 ICC report contains a table indicating the situation in various countries.48 Switzerland is certainly not isolated, as in particular France and Sweden also do not enforce arbitral decisions on interim relief. There are however a number of countries, including the United Kingdom, Spain, Portugal, Belgium, The Netherlands, Austria, Germany, Poland and Greece, which allow enforcement. This means that one may accordingly get an interim relief from an arbitral tribunal in Switzerland and then enforce this interim relief decision in those countries.

46 While the same is true for a State court, there are clear procedural rules providing when and how a State court may review an interim decision. Even though there are not such procedural provisions in arbitral proceedings, in practice, arbitral tribunals are disinclined to review their decisions, except if new evidence would be available. Even if the interim decision was made by an emergency arbitrator, an arbitral tribunal would often be reluctant to review the decision by the emergency arbitrator (although the arbitral tribunal would soon have more evidence and more arguments put in front of it than the emergency arbitrator had, the arbitral tribunal is inclined to leave the status quo as decided by the emergency arbitrator and defer making a decision until it can rule on the merits). 47 ATF/BGE 136 III 200. 48 ICC Report (note 7), Annex II, ICC National Committee’s Answers to Questionnaire on the Status of EA Proceedings under Local Law, p. 42-87 covering 45 countries.

Yearbook of Private International Law, Volume 21 (2019/2020)

251

Laurent Hirsch

IX. Effectiveness of the Decision Ordering Interim Relief In view of the above limits, in particular the absence of a clear and efficient enforcement mechanism, the question may be raised as to how effective a decision on interim relief by an arbitral tribunal would be. What are the chances that the decision would be complied with voluntarily? Which remedies would be available if the decision is not applied voluntarily (which remedies might also constitute an incentive for the party to comply voluntarily)? A.

Damages

Damages may be claimed by the party having obtained interim relief against the party having failed to perform an arbitral decision on interim relief. While the principle of damages is widely acknowledged, the issue is hardly relevant in practice.49 I would accordingly submit that damages would not constitute an effective remedy, nor an effective incentive to comply voluntarily with an arbitral decision on interim relief. Conversely, damages might be claimed by the party having complied with a decision on interim relief, against the party having sought such interim relief, in case the interim relief eventually appears not justified. This is a different issue, quite complex, very interesting from a dogmatic perspective,50 but hardly used in practice, therefore I will not it address here. B.

Costs

Obviously, the arbitral tribunal has some leverage with its costs decision. The arbitral tribunal has a wide discretion regarding allocation of costs and a party might fear that it would have to bear more costs if it failed to perform an arbitral decision on interim relief. However, the importance of costs is generally not as important to the parties as the interim relief, so I would submit that in practice, costs would not constitute an effective remedy, nor would constitute an effective incentive for the party to comply voluntarily.

Often, the interim relief is needed because damages would not constitute an adequate remedy. If the only remedy against breach of an interim relief order would be damages, that might not make a difference with the situation in which no interim relief would have been ordered. 50 S. BESSON (note 14), para. 85-93; B. BERGER/ F. KELLERHALS (note 16), § 19, paras 95-96; A. BUCHER (note 38), ad 183 LDIP, para. 9; T. GÖKSU (note 16), para. 19501970; R. MABILLARD (note 16), ad art. 183 IPRG, para. 15; C. OETIKER (note 16), ad art. 183 IPRG, para. 46-48. 49

252

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration C.

Sympathy of the Arbitral Tribunal

The arbitral tribunal has some moral authority since the arbitrators have generally been appointed by the parties and the parties may wish to comply voluntarily either because they would trust the arbitral tribunal, or because they would wish to avoid antagonising the arbitral tribunal. E. GEISINGER had this attractive formula: “Not to conform to an arbitral decision is an efficient means to alienate, at least provisionally, the benevolence of the arbitral tribunal”.51 There appears to be a consensus that wishing to avoid alienating the sympathy of the arbitral tribunal is an effective incentive for the parties to voluntarily comply with arbitral decisions on interim relief.52 D.

Astreintes

While it is now settled that the arbitral tribunal does not have jurisdiction to make its order under the threat of criminal penalties,53 may the arbitral tribunal order civil penalties? Astreintes is a French law concept, almost unknown in Swiss law, being a financial penalty to be paid to the other party in case of non-performance, generally for each day of non-performance. Do arbitral tribunals have jurisdiction to order such astreintes? This is a rather complex legal topic. A review of the literature shows some authors who consider that arbitral tribunals do have such jurisdiction,54 some authors who consider that arbitral tribunals do not (or do normally not) have such jurisdiction55 and a few authors who apparently do not take position.56 Going back to the practice and my informal non-representative poll, none of the practitioners had a case where such astreintes were ordered in the last three years by arbitral tribunals seated in Switzerland.57

51 E. GEISINGER (note 28), p. 385: “Ne pas se soumettre à une décision arbitrale est un moyen efficace de s’aliéner, à tout le moins temporairement, la bienveillance du tribunal arbitral”. 52 C. BOOG (note 16), para. 54; A. BUCHER (note 38), ad 183 LDIP, para. 10; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 16), § 6.132; J.F. POUDRET/ S. BESSON (note 25), para. 630. 53 B. BERGER/ F. KELLERHALS (note 16), § 19, para. 1262. 54 C. BOOG, Die Durchsetzung einstweiliger Massnahmen in international Schiedsverfahren, Schulthess 2011, para. 151-158; E. GEISINGER (note 28), p. 378; G. KAUFMANNKOHLER/ A. RIGOZZI (note 16), para. 6.133; L. LÉVY, Les astreintes et l’arbitrage international en Suisse, ASA Bulletin 2001, p. 21-36. 55 B. BERGER/ F. KELLERHALS (note 16), para. 1263; C. OETIKER (note 16), ad art. 183 IPRG, para. 55. 56 X. FAVRE-BULLE, Les mesures provisionnelles, in Arbitrage interne et international, Lausanne 2010, p. 101; T. GÖKSU (note 16), para. 1907. 57 Annex 1, question 7.

Yearbook of Private International Law, Volume 21 (2019/2020)

253

Laurent Hirsch While I still believe that the topic is interesting and potentially promising (worth perhaps further reviewing in view of the various views of the authors), in practice, the instrument is not much used. E.

Negative Inferences

The concept of negative inferences is mostly relevant in connection with document production: if a party fails to produce documents requested by the arbitral tribunal, the arbitral tribunal may infer that such documents would have a negative consequence for the position of that party.58 While it is sometimes said that the arbitral tribunal may also draw negative inferences from a party failing to comply with an arbitral interim relief decision,59 I am not sure how much this would be relevant. To the extent the negative inference would mean that the arbitral tribunal would consider that party not to act in good faith and accordingly not to deserve to prevail on the merits, this may also fall under the under the heading ‘sympathy of the tribunal’ discussed above. To the extent the negative inferences concept would be the same as in document production, i.e. mean that failure to comply with an arbitral interim relief decision would allow the arbitral tribunal to presume adverse facts against that party, I submit that this might not really be justified. F.

Assistance from the Arbitral Institution

In theory, the arbitral institution could help in enforcing an arbitral interim relief decision. While in theory there might be provisions in arbitration rules providing for such consequences, I am not aware of any such rules. While the arbitral institution has some leverage and some power, I do not believe that arbitral institutions would be keen to pressure a party to comply with an arbitral interim relief decision.

B. BERGER/ F. KELLERHALS (note 16), § 19, para. 1325; A. BUCHER (note 38), ad 184 LDIP, para. 7; T. GÖKSU (note 16), para. 1573; J.F. POUDRET/ S. BESSON (note 25), para. 650; M. SCHNEIDER/ M. SCHERER, in H. HONSELL/ N.P. VOGT/ A.K. SCHNYDER et al. (eds), Basler Kommentar, Internationales Privatrecht, 3rd ed., Helbing & Lichtenhahn 2013, ad art. 184 IPRG, para. 21. 59 C. BOOG (note 16), para. 59; C. OETIKER (note 16), ad art. 183 IPRG, para. 57. 58

254

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration

X.

State Courts

A.

Parallel Jurisdiction

The general rule is that state courts have parallel jurisdiction, so the requesting party is free to request interim relief either from state courts or from arbitral tribunals. B.

Possibility to Exclude the Jurisdiction of the State Judge

The question arises whether the parties are free to provide in the arbitration clause that they exclude the right for either party to apply to the state judge for interim relief and commit to request such interim relief exclusively from arbitral tribunals. Although I consider it a difficult issue, it appears that except one author,60 most accept the right of the parties to exclude the jurisdiction of the state judge.61 The classic view is that the interim relief is similar to the regime for the merits and the principle of autonomy of the parties and free disposal of the dispute would be applicable. Although Swiss arbitration authors appear almost unanimous, one should not too quickly consider the issue to be settled. First, whether the parties do or do not have such possibility would not be governed by chapter 12 of the Swiss PILA, but would depend from the Swiss Civil Code of Procedure. We should therefore not expect arbitration practitioners or international arbitration literature to answer this question. Also, the answer is based simply on general principles, but generally without a serious and detailed analysis. While S. BESSON proceeded to such analysis, he based his reasoning on a precedent regarding the possibility to renounce to the right to appeal in state court proceedings.62 However, while such possibility was then accepted, the Swiss Federal Supreme Court since decided that parties do not have the power to renounce the right to appeal.63 The analysis by S. BESSON T. GÖKSU (note 16), para. 1920. C. BOOG (note 16), para. 69; B. BERGER/ F. KELLERHALS (note 16), § 19, para. 1276; A. BUCHER (note 38), ad 183 LDIP, paras 7 and 21; A. FURRER/ D. GIRSBERGER/ I. AMBAUEN (note 25), ad IPRG 182-186, para. 13; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 16), § 6.106; R. MABILLARD (note 16), ad art. 183 IPRG, para. 5; C. OETIKER (note 16), ad art. 183 IPRG, para. 6. 62 S. BESSON, Arbitrage international et mesures provisoires, Zurich 1998, para. 303. 63 ATF/BGE 141 III 596. This case was quite interesting as the Swiss literature on civil proceedings was in favour of the possibility to renounce the right to appeal and the First Civil Division, which has jurisdiction in contractual matters and in arbitration (the First Civil Division is favourable to the principle of the party autonomy), discussed it and a majority considered that it was indeed possible to renounce the right to appeal in state court proceedings. However, as the question would be applicable beyond the scope of jurisdiction of the First Civil Division and also apply to other divisions of the Swiss Federal Supreme Court, including the Second Civil Division and the Criminal Division, the latter also had their say. Those three divisions together had a hearing and the majority was then that one 60 61

Yearbook of Private International Law, Volume 21 (2019/2020)

255

Laurent Hirsch accordingly looks a little less convincing. The Swiss Federal Supreme Court stated that “State proceedings is a public service which should offer the applicable guarantees under the rule of law. Its organisation and functioning cannot be left to the autonomy of the parties.”64 When one reads that, one could think that applying the same principle to the possibility to renounce to apply to the state judge for interim relief could bring the same kind of answer, i.e. not a positive answer. C.

Assistance of the State Judge

Article 183(2) of the Swiss PILA provides that: “If the party concerned fails to submit voluntarily to the measure ordered, the arbitral tribunal may request the assistance of the judge; he shall apply his own law” Although this provision might look promising on paper, it appears that it almost never applies in practice.65 As the revised Swiss PILA would allow the parties to apply to the judge, without the need for the arbitral tribunal to make such request,66 would this provision become more relevant and used in practice? I would submit that it probably would not, as (i) interim relief orders are complied with voluntarily most of the time, and (ii) execution is rarely needed in Switzerland, but generally in other countries. D.

Competition between Arbitral Tribunal and State Judge

To the extent there is parallel jurisdiction, there might be some competition between an arbitral tribunal and the state judge about interim relief requested from both. The matter could arise in various settings, including: – If simultaneous requests are filed before the state court and the arbitral tribunal; – If a request for interim relief is filed with the arbitral tribunal after having been denied by the state court; could not renounce the right to appeal in state court proceedings. So while the First Civil Division would be more flexible, those three divisions together took a more conservative stance. 64 “La juridiction étatique est un service public qui doit offrir les garanties inhérentes à un état de droit. Son organisation et son fonctionnement ne peuvent être livrés à l’autonomie des parties”; ATF/BGE 141 III 596, para.1.4.5, p. 606. 65 See informal poll in Annex 1, question 8. 66 The current revision of the Swiss PILA somehow widens the scope of this provision, by giving the possibility also to the parties to apply to the judge: “If the party concerned fails to submit voluntarily to the measure ordered, the arbitral tribunal or a party may request the assistance of the judge; he shall apply his own law”.

256

Yearbook of Private International Law, Volume 21 (2019/2020)

Swiss Practice of Interim Relief in International Arbitration – If a request is filed with the arbitral tribunal to terminate an interim relief ordered by the state judge; – If a request is filed with the state judge after the same request has been denied by an arbitral tribunal; – If a request is filed with a state judge to terminate an interim relief ordered by the arbitral tribunal. The theory is quite complex and it might appear impossible to propose a coherent approach which would apply comprehensively to the various possible scenarios.67 Still, in practice, it appears that there are two principles which might be applied, both by the arbitral tribunal and by the state judge. One principle is good faith, which would prevent a party from seeking the same remedy from two different competent bodies. The other is some form of respect (akin to comity between courts of different jurisdictions), i.e. the respect that the state judge would have for a decision by an arbitral tribunal and that the arbitral tribunal would have for a decision rendered by the state judge.

XI. Conclusion Globally, interim relief before arbitral tribunals in Switzerland seems to be working smoothly and efficiently. With the emergency arbitrator mechanism, interim relief can be ordered quickly and efficiently in an international arbitration setting. The fact that the arbitral tribunals have no imperium and that interim relief ordered by arbitral tribunals are not enforceable as state court decisions in Switzerland does not appear to constitute a real obstacle in practice. Still, whether the astreintes would constitute a useful remedy is an open point, which might deserve further consideration.

Annex 1 Interim Measures in International Arbitration in Switzerland May 2019 informal non-representative polling with a dozen Geneva practitioners Within the last three years (2016-2019): 1. What is the percentage of cases were there was a request for interim relief, whether before an arbitral tribunal or before an emergency arbitrator? 5-10%

C. BOOG (note 16), paras 80-81; B. BERGER/ F. KELLERHALS (note 16), paras 1278-1279; T. GÖKSU (note 16), paras 1914-1919; G. KAUFMANN-KOHLER/ A. RIGOZZI (note 16), § 6.109-111; C. OETIKER (note 16), ad art. 183 IPRG, para. 7-8; J.F. POUDRET/ S. BESSON (note 25), paras 619-622. 67

Yearbook of Private International Law, Volume 21 (2019/2020)

257

Laurent Hirsch 2. Do you feel that request for interim relief are on the rise (compared to the 2000-2010 period)? 3. When interim relief was requested, what is the percentage of cases were it was ordered by the arbitral tribunal or the emergency arbitrator, totally or partially? 4. Do you feel that interim relief would be more easily granted by the emergency arbitrator than by the arbitral tribunal constituted to rule on the merits? 5. When interim relief was ordered, what is the percentage of cases were security was ordered against the requesting party? 6. In all these cases, were there any interim relief ordered ex parte, without hearing the other party? 7. When interim relief was ordered in an arbitration with seat in Switzerland and Swiss law applicable, were there any cases in which the arbitral tribunal or the emergency arbitrator ordered astreintes in support of this interim relief? 8. When interim relief was ordered, are you aware of cases were it was necessary to enforce such interim relief by a State court, in Switzerland or in other countries? 9. Regarding interim relief actually ordered by an arbitral tribunal or an emergency arbitrator, what were the kind of interim relief most often ordered?  a. measures prohibiting a party to perform certain acts (sell, sign, …) b. attachment of an amount of money c. attachment of shares or other material d. a provisional payment e. an obligation to perform (including the obligation to provisionally continue performing the contract) f. safeguarding evidence material (including through expert work)  g. a measure concerning arbitration costs (security for costs) h. a prohibition to initiate or continue State court proceedings (antisuit injunction) i. other measures

258

Rather not (60/40)

50-65%

Split (55/45)