Yearbook of Private International Law: Volume XXII Yearbook of Private International Law – 2020/2021 9783504387587

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YEARBOOK OF PRIVATE INTERNATIONAL LAW

YEARBOOK OF PRIVATE INTERNATIONAL LAW VOLUME XXII – 2020 / 2021

Founding Editors PETAR ŠARČEVIĆ † PAUL VOLKEN

Editors ANDREA BONOMI

ILARIA PRETELLI

Professor at the University of Lausanne

Legal Counsel at the Swiss Institute of Comparative Law

GIAN PAOLO ROMANO Professor at the University of Geneva

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)  978-3-504-08016-7 ISBN (eBook)  978-3-504-38758-7

© 2022 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 Wuhan

GENEVIÈVE BASTID-BURDEAU Paris

THOMAS KADNER GRAZIANO Geneva

MICHAEL BOGDAN Lund

EVA LEIN London/Lausanne

SIR LAWRENCE COLLINS London

YASUHlRO OKUDA Tokyo

DIEGO P. FERNÁNDEZ ARROYO Paris

LINDA J. SILBERMAN New York

RICHARD FRIMPONG OPPONG San Diego (California)

SYMEON C. SYMEONIDES Salem (Oregon)

RUI MANUEL GENS DE MOURA RAMOS Lisbon/Coimbra

HANS VAN LOON The Hague

LUKAS HECKENDORN URSCHELER Lausanne

Production Assistant FRANÇOISE HINNI Swiss Institute of Comparative Law

Assistant Editors ALEXANDRA BECHEIKH Research Assistant, University of Lausanne

VITO BUMBACA Research Assistant, University of Geneva

CHRISTINA BLANCHET Research Assistant, University of Lausanne

CORINNE MAMMINO Research Assistant, University of Lausanne

English Revision KAREN DRUCKMAN Lecturer, University of Lausanne VICTORIA GARRINGTON Attorney-at-Law, Fribourg

SHAHEEZA LALANI Executive Director, LL.M. in International Business Law, University of Lausanne HELEN SWALLOW Former Head of Editing Unit, DG TRAD, European Parliament

TABLE OF CONTENTS ________________

Foreword ......................................................................................................... ix Abbreviations .................................................................................................. xi Doctrine Johan MEEUSEN Cross-Border Mobility of European Union Citizens and Continuity of Civil Status – Balancing National and Individual Identities in an Open Society ....................................................................................................... 1 Radu Bogdan BOBEI No More Social Distance between International Law and Conflict of Laws! .................................................................................................... 35 Bernard HAFTEL The Covid-19 Health Crisis and International Contracts .......................... 65 Katarina TRIMMINGS / Konstantina KALAITSOGLOU International Family Law in the United Kingdom beyond Brexit – Focus on Matrimonial Matters and Habitual Residence of the Child ....... 77 Highlights on the Brussels II ter Regulation Cristina GONZÁLEZ BEILFUSS What’s New in Regulation (EU) No 2019/1111? ..................................... 95 Máire NÍ SHÚILLEABHÁIN An Overview of the Principal Reforms in Regulation (EU) 2019/1111 117 Giacomo BIAGIONI / Laura CARPANETO Children under Brussels II ter Regulation .............................................. 139 Vesna LAZIĆ / Ilaria PRETELLI Revised Recognition and Enforcement Procedures in Regulation Brussels II ter .......................................................................................... 155 Mirela ŽUPAN / Christian HOEHN / Ulrike KLUTH Central Authority Cooperation under the Brussels II ter Regulation ....... 183 Private International Law and the Internet Ilaria PRETELLI A Humanist Approach to Private International Law and the Internet – A Focus on Platform Users as Weaker Parties ........................................ 201 Dan Jerker B. SVANTESSON “Scope of Jurisdiction” – A Key Battleground for Private International Law Applied to the Internet .................................................................... 245

Marketa TRIMBLE Res judicata and Unclaimed Foreign Copyright Infringement ............... 275 Birgit VAN HOUTERT Jurisdiction in Cross-Border Copyright Infringement Cases – Rethinking the Approach of the Court of Justice of the European Union ...................................................................................................... 299 National Reports Cecilia FRESNEDO DE AGUIRRE New Uruguayan General Act on Private International Law ................... 335 Marcel ZERNIKOW Recognition and Enforcement of Foreign Decisions in Mercosur – Letters Rogatory (carta rogatória) and National Civil Procedure .......... 353 Mirela ŽUPAN The New Croatian Private International Law Act – Something Old, Something New and much Borrowed ..................................................... 381 Court Decisions Thomas KADNER GRAZIANO Short Limitation Periods in Cross-Border Liability Cases – No Solution Yet (de lege lata) but Five Options for Action (de lege ferenda) .... 405 Guillaume KESSLER The Individualization of the International Public Policy Exception – A New Proposal for the Recognition of Muslim Divorces in France by the Cour de Cassation ........................................................................ 435 Forum Raphaëlle DE GOURCY The Legislative “dépeçage” of the Surviving Spouse’s Patrimonial Status in the Light of the Latest European Union Regulations .......................... 449 Hannes MEYLE Rethinking “the Place of the Damage Rule” in Private International Law – A Critical Analysis of the ECJ Case Law ..................................... 473 Michiel POESEN From Mirages to Aspirations – The Periphery of “Matters Relating to a Contract” in Regulation (EU) No 1215/2012 ......................................... 511 Eolos RIGOPOULOS Deference of State Courts to Arbitral Awards in Vacatur and Enforcement Proceedings ....................................................................... 547 Index ............................................................................................................. 577 viii

FOREWORD ___________ We are pleased to present the XXII volume of the Yearbook, rich in contributions on the latest developments in classical and innovative fields of private international law, such as family law, contracts, torts, arbitration and the internet. The Doctrine section opens with an article on cross-border mobility of European Union citizens and continuity of civil status, suggesting that the European case law in this field is the expression of an approach balancing the identity of individuals and that of Member States within the concept of “open society”. The following article pleads for an interplay of private and public international law for the solution of cross-border problems. Other contributions address the effects of two major crises of our times: the impact of the pandemic on international contracts and the consequences of Brexit in some selected areas of international family law. A specific section is devoted to the main improvements brought by the Brussels II ter Regulation, in particular with respect to the hearing of the child, return proceedings, cooperation among Member States, and recognition and enforcement procedures. It includes some of the contributions presented during the six on-line expert seminar series “New Rules for International Families – revised Brussels IIter regime” held in November and December 2020 under the aegis of the University of Osijek, in cooperation with the Universities of Antwerp, Barcelona, Genoa and the Swiss Institute of Comparative Law. An inspiring section on Private International Law and the internet invites readers to re-think some of the prevailing solutions with respect to applicable law and jurisdiction, in order to better cope with the specific features of virtual tools. Our National Reports will introduce readers to the new Croatian and Uruguayan statutes on Private International Law and acquaint them with the extended notion of judicial co-operation within the Mercosur. The two contributions in the Court Decisions section present the CJEU’s decision in the da Silva Martins case, considering possible options for tackling the problem of limitation periods in cross-border liability cases that are too short, and discuss the methodological implications of the most recent developments in the practice of the French Cour de cassation on public policy. As has been the case in recent years, our final section is rich in original proposals from our most brilliant young scholars.

We wish to thank all our contributors wholeheartedly for their fruitful cooperation in producing a high-quality volume despite the difficulties and constraints brought by the on-going battle against the 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

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 J. Journal L. Law OJ Official Journal PIL Private International Law Q. Quarterly RabelsZ Rabels Zeitschrift für ausländisches und internationales Privatrecht Recueil des Cours Recueil des Cours de l'Académie de la Haye de droit international = Collected Courses of The Hague Academy of International Law Regulation (EU) No 2019/1111 Council Regulation (EU) 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 (recast) OJ L178/1, 2.7.2019 Regulation (EU) No 2201/2003 Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, OJ L 338/1, 23.12.2003 REDI Revista española de derecho internacional

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

Tech. this Yearbook Un.

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

xii

DOCTRINE ________________

CROSS-BORDER MOBILITY OF EUROPEAN UNION CITIZENS AND CONTINUITY OF CIVIL STATUS BALANCING NATIONAL AND INDIVIDUAL IDENTITIES IN AN OPEN EUROPEAN SOCIETY Johan MEEUSEN*

I. II. III. IV.

V.

Introduction Union Citizenship, Cross-Border Status Continuity and EU Member States’ Value Diversity – An (In)Compatible Threesome? A Brief Overview of Selected CJEU Judgments From Respect for the Member States’ National Identities to the Promotion of Union Citizens’ Individual Identities and Diversity in an Open European Society A. A New Balance between Private and Public Interests through a New Understanding of the Union’s Area of Freedom, Security of Justice – An Analysis in 8 Steps B. Intra-EU Mobility Is a Key Right for Union Citizens, and it Requires Status Continuity C. There Is no Absolute Right to Intra-EU Mobility, and hence to Status Continuity, for Union Citizens D. Neither National nor Cultural Identity, but Public Policy Is the Court’s Preferred Justification Ground for Restrictions to Status Continuity E. Public Policy as a Justification Ground Fits with the Recognition of Member States’ Value Diversity F. Cross-Border Mobility with Status Continuity Has Priority over the Protection of the Member States’ National Identities G. The Principle of Sincere Cooperation Goes Hand in Hand with Cross-Border Mobility and the Recognition of Societal Diversity H. Individual Identity, on Basis of Individual Autonomy, and hence Societal Diversity Trump National Identity I. The Area of Freedom, Security and Justice Rests on the Concept of an Open Society, Characterized by Citizen Mobility and Diversity Conclusion

Honorary Vice-Rector and Professor at the Faculty of Law of the University of Antwerp, Belgium, Dr. Johan MEEUSEN, LL.M. (UC Berkeley), Faculty of Law website available at www.uantwerpen.be/johan-meeusen on 21.3.2021. *

Yearbook of Private International Law, Volume 22 (2020/2021), pp. 1-33 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Johan Meeusen

I.

Introduction

Since its start, the European integration process has been characterized by a tension between, on the one hand, the uniformity and harmonization that far-reaching integration requires and, on the other hand, the national diversity that the European Union (EU) still must respect and that is of course dear to its Member States. The search for the right balance between integration and diversity characterizes many different aspects of both institutional and substantive Union law.1 One field that is particularly interesting in that respect, and which is steadily becoming more important both in case law and academic doctrine, is that of the effects of so-called Union citizenship on the civil status of mobile citizens which therefore concerns conflict of laws as well. As will be explained, the interaction between citizenship rights and continuity or permanence of civil status necessitates the further exploration of the Union’s approach towards diversity – a concept that traditionally holds a central spot in debates on the policies and values of private international law as well. For the study of this topic within the context of EU law, it will be necessary, however, to make a further distinction between Member State and individual diversity, or between national and individual identities. These distinctions should be made against the background of an understanding of the EU’s “area of freedom, security and justice” as resting upon the concept of an “open society” that is particular to the EU. In a series of judgments since 2003, the Court of Justice of the European Union (CJEU) has examined the interaction between Union citizens’ freedom of movement and the application of the Member States’ legislation – relating to both its substantive and choice-of-law rules – on various components of citizens’ civil status. Several new cases on civil status and freedom of movement are currently pending before that Court.2 One easily understands the sensitivity of these cases. Within the EU, status is still a Member State competence, as is true more generally for substantive family law. Even among the EU Member States, the pertinent legislation is typically marked by many differences, as it is often rooted in these States’ specific traditions and values. Such legislative divergences may threaten the permanence or continuity of the status of Union citizens who move to different Member States and hence, as a result of the application of pertinent choice-of-law rules, may become subject to different substantive rules in the respective home and host States. This may lead to very troublesome situations. Moreover, status is often no 1 Cf. M. CLAES, Negotiating Constitutional Identity or Whose Identity Is It Anyway?, in M. CLAES/ M. DE VISSER/ P. POPELIER/ C. VAN DE HEYNING (eds), Constitutional Conversations in Europe, Antwerp 2012, p. 213-214. 2 See the preliminary questions that were recently submitted to the CJEU by a Bulgarian and Polish court respectively (case CJEU, C-490/20, Stolichna obshtina, rayon “Pancherevo”, V.M.A, and https://eapil.org/2020/12/16/polish-court-asks-the-cjeu-to-ruleon-the-status-of-children-born-to-same-sex-couples/ available on 2.2.2021) on the registration of same-sex motherhood with respect to children of their nationality born in another Member State.

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Cross-Border Mobility of European Union Citizens longer approached as a whole by the EU Member States, which tend to adopt specific, often divergent, rules for the various components of civil status, both in conflict of laws and in substantive law.3 When the civil status (or elements thereof) acquired in the home Member State is not recognized in the host State, discontinuity of status arises, which is of course a great difficulty for the person concerned, a blow for the traditional private international law objective of international harmony, and a threat to the Union’s objective of intra-Union mobility for all Union citizens. Pataut’s warning that a lack of coordination may result in Mr. Dupont, married in Germany, being called Durand and considered divorced in France,4 seems initially like the start of a good joke, but may become a bitter reality for some migrant Europeans. The interference with cross-border mobility in these circumstances is typically a side-effect of the legislative disparities between the Member States and the resulting lack of international harmony. This is of course a well-known problem in private international law, and actually one of the main triggers to seek internationally shared solutions to cross-border problems, e.g. through international conventions on choice of law. Where status and family law is concerned, the problems of divergence and disharmony tend to be even sharper than in other fields, as the substantive legislation of the various States involved may rest on domestic political choices, which are inspired by particular values and traditions. Within the European Union, which has no competence to harmonize the Member States’ substantive status and family law, these problems arise even more sharply as they affect various – to a certain extent contradictory – concerns of the Union and its Member States. In particular, a conflict may arise between, on the one hand, the stimulus that the Treaties give to cross-border mobility, e.g. through the migration rights granted to Union citizens, and, on the other hand, the respect which the Treaties require in different ways for the Member States’ national identities, cultural diversity and fundamental policy choices. Respect for diversity of values, a quite traditional feature of private international law, is confirmed in EU primary law itself, which refers in more than one respect to various forms of diversity among the Member States. Article 3(3) of the Treaty on European Union (TEU) obliges the Union to respect “its rich cultural and linguistic diversity” which is echoed with respect to cultural diversity in Article 167(4) of the Treaty on the Functioning of the European Union (TFEU). Article 4(2) TEU obliges the Union to respect the Member States’ “national identities”. According to Article 22 of the Charter of Fundamental Rights of the European Union (“Charter”), the EU “shall respect cultural, religious and linguistic diversity”. The Charter’s Preamble refers to the Union’s respect for the diversity of the cultures and traditions of the peoples of Europe as well as to the national identities of the Member States. D. MARTINY, Objectives and Values of (Private) International Law in Family Law, in J. MEEUSEN/ M. PERTEGÁS/ G. STRAETMANS/ F. SWENNEN (eds), International Family Law for the European Union, Antwerp, 2007, p. 78-79; E. PATAUT, La citoyenneté européenne: vers l’élaboration d’un statut personnel et familial, in H. FULCHIRON/ C. BIDAUD-GARON (eds), Vers un statut européen de la famille, Paris, 2014, p. 99. 4 E. PATAUT (note 3), p. 101. 3

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Johan Meeusen The EU Treaties hence harbor an intrinsic conflict between, on the one hand, recognition of the divergence of Member State values and, on the other hand, these same nationals’ private interests in permanence or continuity of status when making use of the opportunities for cross-border mobility that the integrated Union area offers. The tension between these interests probably exceeds the sensitivities that characterize the typical balancing of public and private interests with which the CJEU has become very familiar, e.g. within the framework of the internal market. Few interests are cherished more by the Member States than those which are connected to their national identities and fundamental values in the sense of deeply rooted and strongly held assessments of right and wrong. At the same time, the unhindered cross-border mobility of Union citizens constitutes a prime objective for the European Union. This is not only true for those who are economically active within the internal market, as the right to intra-EU mobility has been extended through Articles 20(1) (a) and 21 TFEU to all Union citizens, irrespective of any economic activity. Today, the generalized free movement of persons constitutes a core ingredient of the “area of freedom, security and justice” which the Union according to Article 3(2) TEU aims to offer its citizens and which, according to Article 81(1) TFEU, includes “judicial cooperation in civil matters having cross-border implications”, EU jargon for private international law. This paper attempts to contribute to the search for the right balance between the various interests involved, in particular as regards national and individual identities.5 These issues of course are not new, but have most often been examined from the perspective of Member State value diversity versus the uniform application of EU law, including its free movement provisions.6 This contribution, however, adopts a different perspective. As will be further clarified in the following pages, the introduction of Union citizenship appears to have instigated a prioritization of the achievement of personal, individual identity, as a core ingredient of an open European society, over the enforcement and protection of the respective Member States’ national identities. If that observation is correct, one must conclude that the Union, in spite of its lack of competence with respect to substantive status and family law, promotes, through the CJEU’s judgments on citizenship and status recognition, a particular societal model which is not necessarily shared in all respects by all Member States. This model continues to be the subject of much political debate, although it lends substance to the area of freedom, security and justice and hence promotes, actually through conflict of laws, a particular brand of European identity.

5 See on the “conflict of identities” also L. HÜBNER, Die Integration der primärrechtlichen Anerkennungsmethode in das IPR, RabelsZ, 2021, p. 125 et seq. 6 See e.g. K. LENAERTS, How the CJEU Thinks: A Study on Judicial Legitimacy, Fordham Int’l L.J., 2013, p. 1330.

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Cross-Border Mobility of European Union Citizens

II.

Union Citizenship, Cross-Border Status Continuity and EU Member States’ Value Diversity – An (In)Compatible Threesome?

The Treaty of Maastricht, concluded in 1992, has had in many respects a major and lasting impact on the evolution of EU law. It has created the “European Union” and deepened and broadened European integration in a new framework that attempted to protect Member State interests as well. Among that Treaty’s many innovations, the introduction of so-called “Union citizenship”, which according to Articles 9 TEU and 20(1) TFEU is automatically granted to all nationals of the Member States, has turned out to be of great significance. The CJEU’s uncompromising interpretation of the pertinent Treaty provisions on citizenship has been particularly important. It has endowed all nationals of the Member States with important, directly enforceable rights irrespective of their economic activities. Though it was initially greeted with mixed feelings and by many considered to be no more than a public relations gimmick meant to counter rising “euroscepticism”, Union citizenship actually has greatly contributed to the transformation of European integration into a process that extends far beyond purely economic integration and even affects the very foundations of the Member States’ constitutional systems.7 Another important trigger of that transformation is the Union’s objective, as formulated in Article 3(2) TEU, to offer its citizens an “area of freedom, security and justice” (AFSJ). This objective finds its roots in “Maastricht” as well, more particularly in the then new, so-called “third pillar”, devoted to “Cooperation in the fields of justice and home affairs” which this Treaty introduced. Since then, stimulated in particular by the abolition of the former pillar structure by the Treaty of Lisbon, this policy field has systematically gained in importance as is evidenced by its prominent place in Article 3 TEU, at the same level as the Union’s objective to establish an internal market. One of the AFSJ’s key ingredients is judicial cooperation in civil matters having cross-border implications, which the Union shall develop on basis of Articles 67(4) and 81 TFEU. This policy field encompasses the traditional components of private international law – jurisdiction, choice of law and recognition and enforcement – and has been the subject of intense legislative activity by the Union in the past two decades. This also encompasses the adoption of choice-of-law rules in the broad field of status and family law, which however has been achieved only through so-called enhanced cooperation and obviously with due respect for the Member State competences on substantive law.8 The latter limitation is reflected in the legislature’s very careful approach with respect to, e.g., the validity of marriage.9 Cf. P.M. HUBER, Unionsbürgerschaft, Europarecht, 2013, p. 637-638. See in particular, with respect to choice of law, 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 (“cited below: Rome III”), 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 7 8

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Johan Meeusen The significance of private international law in the EU is not limited to the harmonization measures adopted on the basis of Articles 67(4) and 81 TFEU, but becomes visible as well in the CJEU’s case law on the Treaty conformity of (the application of) the Member States’ non-harmonized choice-of-law rules. Of particular significance has been the CJEU’s examination, in a series of preliminary judgments since the mid-eighties, of the compatibility of Member States’ international company law rules with the right of establishment (Articles 49 and 54 TFEU). Since the introduction of Union citizenship, however, the CJEU’s control perspective goes far beyond the internal market and stretches, e.g., to the Member States’ conflicts rules on matters of civil status whenever their application might result in discrimination or a restriction of the citizens’ right to cross-border movement. The EU’s efforts with respect to private international law, through both its legislature and the CJEU, are of great societal importance. While we pride ourselves on being global citizens living within a globalized world, the sad truth is that cross-border movement still often results in multiple problems.10 This is particularly true where status matters are concerned, stretching from the legal determination of a person’s gender and sexual identity to marital status, names and parentage. In spite of numerous efforts and international collaboration, global remedies remain only an ideal difficult to attain. The EU legislature could of course address this problem and liberate at least intra-EU mobility from the problems that stem from the applicability of divergent private law rules. But the unanimity requirement imposed by Article 81(3) TFEU makes it unrealistic to hope for any swift adoption of new and effective EU choice of law legislation on status matters. Although the European Commission, in its Green Paper of 2010, developed the idea of introducing the necessary legislative rules on the mutual recognition of civil status records,11 the regulation that was eventually adopted on the basis of Article 21(2) TFEU has only administrative objectives and hence is limited to the sole issue of free movement of public documents through, e.g., the elimination of legalization and similar formalities and the simplification of other formalities among the Member States.12 matters of matrimonial property regimes 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. 9 See Articles 1(2) and 13 Regulation (EU) No 1259/2010 and Article 1(2) Regulation (EU) No 2016/1103. 10 A. BUCHER, La dimension sociale du droit international privé, Recueil des Cours, 2009, vol. 341, p. 116-117. 11 Green paper on “Less bureaucracy for citizens: promoting free movement of public documents and recognition of the effects of civil status records”, COM(2010) 747. 12 Regulation (EU) No 2016/1191 of the European Parliament and of the Council of 6 July 2016 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union and amending Regulation (EU) No 1024/2012. See in particular its Article 2(4): “This Regulation does not apply to the recognition in a Member State of legal effects relating to the content of public documents issued by the authorities of another Member State”.

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Cross-Border Mobility of European Union Citizens Even in the absence of further legislative harmonization, the CJEU could obviously play a major role with respect to cross-border status problems through its interpretation of the effects of Union citizenship. Apart from their other rights, examples of which are listed in Article 20(2) TFEU, all Union citizens enjoy the right not to be discriminated against on grounds of nationality within the Treaties’ scope of application and to move and reside freely within the territory of the Member States (Article 20 TFEU, read together with Article 18 TFEU, and Article 21 TFEU). The full exercise of these rights may be threatened whenever intra-EU mobility of Union citizens is affected by divergent rules on civil status. Of course, when the CJEU must examine such cases, e.g. through the preliminary reference procedure, it faces complicated and sensitive questions. First, the determination of a person’s status still falls within the competence of the Member States. This is not likely to change soon as this is a matter about which many of the Member States maintain not only different rules but truly divergent, (more or less) conservative or progressive views, which are often rooted in long-standing cultural or religious traditions that inspire their respective societies.13 Moreover, all Member States are (and must be) committed to the fundamental values upon which the EU, according to Article 2 TEU, is founded. Yet, it is only natural that Member States in fields such as status and family law, for which they have jealously guarded their competence, continue to adhere to different political and societal views and values. This diversity is not only reflected in the Member States’ divergent substantive law rules. It typically becomes concrete as well through the application of various rules and mechanisms of private international law, such as the use of nationality as the connecting factor for a State’s multilateral choice-of-law rules in status matters, the recourse to the public policy exception in order to reject the application of foreign law or the refusal to recognize foreign legal acts (such as marriages) or judgments. Secondly, and this is particularly true where status is concerned, the combination of legislative disparities and insufficient coordination between the conflicts systems of different States inevitably results in “limping” situations. This has correctly been called one of the most visible deficiencies of the current system of private international law.14 According to Jayme, private international law should indeed take up the task of coordinating the national, culturally divergent rules that belong to the identities of the respective legal systems’.15 At the European level, this certainly could be a very worthwhile perspective for the EU legislature, on the basis of the competence granted by Article 81(2)(a) TFEU to ensure “the compatibility of the rules applicable in the Member States concerning conflict of laws

13 Cf. M. ANTOKOLSKAIA, Objectives and Values of Substantive Family Law, in J. MEEUSEN/ M. PERTEGÁS/ G. STRAETMANS/ F. SWENNEN (eds), International Family Law for the European Union, Antwerp 2007, p. 54 et seq. 14 M. LEHMANN, What’s in a name? Grunkin-Paul and beyond, this Yearbook, 2008, p. 138. 15 E. JAYME, Die kulturelle Dimension des Rechts – ihre Bedeutung fur das Internationale Privatrecht und die Rechtsvergleichung, RabelsZ, 2003, p. 215.

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Johan Meeusen (…)”.16 With respect to civil status, the most important result of such compatibility, or harmonization, of choice-of-law rules, is permanence or continuity of status. Its absence obviously threatens Union citizens’ unhindered cross-border mobility. While the juxtaposition or even “confrontation” between different legal systems is “business as usual” in private international law, these conflicts are especially sensitive within the European Union. In the EU’s multilevel governance system, it is obviously impossible to limit the effects of value diversity to the national level. According to the CJEU’s well-established case law, Member States must in exercising their competences, e.g. on civil status, comply with EU law, in particular the Treaty provisions on the freedom conferred on all Union citizens to move and reside in the territory of the Member States.17 The exercise of Member States’ competences regarding status has previously collided with free movement rights within the framework of the internal market.18 The introduction of Union citizenship appears to have resulted, however, in even sharper interactions between the different governance levels involved. The generalized right to intra-EU mobility that the Treaty provisions on Union citizenship have granted to the Member States’ nationals can be impacted easily through the divergences that characterize the Member States’ legislation on status matters such as gender, names, marriage and parentage. Both the reservation of their competence and the societal sensitivity of the issues involved often convince the Member States to (try to) stick to their respective positions, even if this results in disturbed cross-border movement. Union citizenship and the mobility rights it implies, civil status and Member State value diversity hence are often difficult to reconcile. Their interaction can result in sharp disputes, which are often characterized as cases that involve questions of EU private international law. However, a closer look reveals that it is actually rather seldom that the CJEU is asked to decide on conflict of laws issues sensu stricto. As will be discussed below in further detail, of all cases examined in this contribution only Grunkin and Paul and Coman have confronted the CJEU with questions that (more or less) directly relate to private international law. There is no doubt, however, that the other cases have piqued the particular interest of conflicts lawyers as well. Still, it is important to approach all these judgments first and foremost as citizenship cases under EU law, irrespective of their further thematic categorization. As they all relate to cross-border movement of EU nationals, however, it seems not far-fetched to give attention as well to their significance for the Union’s area of freedom, security and justice (its component of civil judicial cooperation, and hence private international law, included). For the remainder of this contribution, we will follow a simple structure. First, the CJEU judgments which are most pertinent for our purposes will be 16 V. LIPP, Die “Anerkennung” des ausländischen Namens eines Bürgers der Europäischen Union – Von “Konstantinidis” bis “Runevič-Vardyn/Wardyn”, in Essays in honour of Spyridon Vl. Vrellis, Athens 2014, p. 539-540. 17 See e.g. CJEU, 5 June 2018, Coman, C-673/16, ECLI:EU:C:2018:385, para. 38, with further references. 18 See in particular CJEU, 30 March 1993, Konstantinidis, C-168/91, ECLI:EU:C:1993:115.

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Cross-Border Mobility of European Union Citizens briefly surveyed. Thereafter, through an analysis in different steps, we will attempt to lay bare what, if any, particular approach the CJEU follows with respect to the subject examined and whether its position deserves agreement. Our analysis will include some further thoughts on the understanding and development of the EU’s area of freedom, security and justice.

III. A Brief Overview of Selected Judgments of the CJEU In this section, we will give particular attention to selected CJEU judgments which, with respect to disputes characterized by cross-border elements, involve questions that touch upon various aspects of Union citizens’ civil status and affect one or more peculiar aspects of Member State value diversity.19 As these judgments are rather well-known, our survey of them can remain brief and limited to those points which are most pertinent for our purposes. A first relevant judgment, which did not relate to conflict of laws sensu stricto, was rendered by the CJEU in the Garcia Avello case, which concerned the determination of the surname of two children with dual Belgian and Spanish nationality who resided in Belgium with their Spanish father and Belgian mother.20 According to the CJEU, Articles 18 and 20 TFEU preclude a Member State’s administrative authority from refusing an application for a change of surname made on behalf of minor children resident in that State and having dual nationality of that State and of another Member State, where the purpose of that application is to enable those children to bear the surname to which they are entitled according to the law and tradition of the second Member State. Pertinent for our purposes is the justification argument invoked by the Belgian State, which submitted that the principle of the immutability of surnames was a founding principle of social order of which it continued to be an essential element. The CJEU, which found the Belgian refusal disproportionate, rejected this argument, and reasoned that it is common ground that, in particular because of the scale of migration within the Union, different national systems for the attribution of surnames coexist in the same Member State, with the result being that parentage cannot necessarily be assessed within the social life of a Member State based solely on the criterion of the system applicable to nationals of that latter State.21 In its Grunkin and Paul judgment of 2008, the CJEU examined for the first time the compatibility of the application of a national (in casu German) choice-of-

19 As they are not concerned to the same extent with issues of value diversity within the EU, as examined in this contribution, we will not give specific attention to the CJEU’s judgments in the cases of Freitag (CJEU, 8 June 2017, Freitag C-541/15, ECLI:EU:C:2017:432) or SM (CJEU, 26 March 2019, C-129/18, ECLI:EU:C:2019:248). 20 CJEU, 2 October 2003, Garcia Avello, C-148/02, ECLI:EU:C:2003:539. 21 Garcia Avello, para. 42.

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Johan Meeusen law rule with the Treaty provisions on Union citizenship.22 Sitting in Grand Chamber, it held that current Article 21 TFEU precluded the German authorities – through the application of German law on the basis of the nationality reference in German conflict of laws – from refusing to recognize a German child’s surname, as determined and registered, based on its choice-of-law rule that used the child’s Danish residence as the connecting factor, in Demark where the child was born and had been resident since birth. As it had done in Garcia Avello, the CJEU held that the discrepancy in surnames was liable to cause “serious inconvenience”. Therefore, it was liable to hamper the exercise of the right, established in current Article 21 TFEU, to move and reside freely within the territory of the Member States. The CJEU rejected the grounds that were put forward to justifiy the application of German rules, which related in particular to the use of the connecting factor of nationality, and added explicitly that no specific reason had been cited that might possibly preclude recognition of the child’s surname, e.g. that his name was contrary to public policy in Germany.23 Nonetheless, the sensitivity of the matter examined became clear through the intervention of the Lithuanian government who argued that no Member State should be required to recognize names given to its nationals in accordance with foreign law if those names are incompatible with the structure of its national language, which the government called “a fundamental part of its national heritage” and related to “national policy”.24 In its judgment, the CJEU did not respond to this particular argument. In her Opinion in this case, Advocate General (AG) Sharpston rejected it as not being pertinent for the particular case examined. She further argued that there was no suggestion that a surname such as that given to the child in Denmark “offends against fundamental values of the German language”.25 Another interesting CJEU judgment that attracted quite a bit of attention, although not decided by the Court’s Grand Chamber but by its Second Chamber, concerned the Sayn-Wittgenstein case.26 Here, the CJEU was not asked to examine the compatibility with EU law of a choice-of-law rule, as the two Member States involved, Austria and Germany, had similar conflicts rules that referred the determination of a person’s surname to that person’s national law. Based on Austria’s Law on the abolition of nobility, which has constitutional status, the Austrian authorities corrected the entry in the Austrian register of civil status of the family name “Fürstin von Sayn-Wittgenstein” acquired by an Austrian citizen in Germany following an adoption by a German national, and replaced it with the name “Sayn-Wittgenstein”. The Court, which also referred to the fundamental rights protection on basis of Article 7 of the Charter and Article 8 of the European Human Rights Convention (ECHR), first considered that the Austrian refusal to recognize the surname as determined in Germany restricted Union citizens’ freedom of movement as conferred by Article 21 TFEU, but eventually concluded CJEU, 14 October 2008, Grunkin and Paul, C-353/06, ECLI:EU:C:2008:559. Grunkin and Paul, para. 38. 24 See the argument of the Lithuanian government, as referred to in pt 84 of AG Sharpston’s Opinion. 25 Opinion of AG Sharpston in Grunkin and Paul, pt 85. 26 CJEU, 22 December 2010, Sayn-Wittgenstein, C-208/09, ECLI:EU:C:2010:806. 22 23

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Cross-Border Mobility of European Union Citizens that this restriction was justified. It is in this last respect that the judgment is, for our purposes, the most noteworthy. Supported by other governments, the Austrian government invoked “the history and fundamental values of the Republic of Austria” and “the fundamental legal values of the Austrian legal order”, and referred to “the constitutional identity of the Republic of Austria” and its public policy; it considered the recognition of the surname as acquired in Germany incompatible with the principle of equal treatment enshrined in the Austrian constitution and implemented by its Law on the abolition of nobility.27 The CJEU accepted the justification invoked by Austria, and did not consider its refusal of recognition disproportionate in view of the “fundamental constitutional objective” pursued. In so doing, the Court first mentioned that it must be accepted that, in the context of Austrian constitutional history, the Law on the abolition of nobility, as an element of national identity, may be taken into consideration when a balance is being struck between legitimate interests and the free movement of persons as recognized under EU law. It interpreted the Austrian government’s argument as one of reliance on public policy, in respect of which the national authorities must be allowed a certain “margin of discretion,” as the specific circumstances which may justify recourse to public policy may vary from one Member State to another and from one era to another. It also referred explicitly to Article 20 Charter, which enshrines the principle of equal treatment, and to Article 4(2) TEU according to which the Union is to respect the national identities of the Member States, which include the status of the State as a Republic.28 In the Runevič-Vardyn case, the CJEU’s Second Chamber examined the compatibility with Article 21 TFEU of the Lithuanian rules on the way in which a person’s surname and forename are spelled on certificates of civil status.29 While Lithuanian law requires compliance with the rules governing the spelling of the official national language, the applicants – a Lithuanian national belonging to the Polish minority in Lithuania and her Polish husband who live in Belgium – requested the change of the entries on the relevant birth and marriage certificates in accordance with the Polish spelling rules. In their dispute with the Lithuanian authorities, the applicants had filed three requests for amendment of the civil status certificates concerned. With respect to two of them – on the amendment of the woman’s forename and maiden name on the birth and marriage certificates and of the husband’s forenames on the marriage certificate, respectively – the CJEU swiftly concluded that the refusal by the Lithuanian authorities did not constitute a restriction of the freedoms conferred by Article 21 TFEU to every Union citizen. As regards the Lithuanian refusal to amend the marriage certificate in order that the joint surname of husband and wife be entered uniformly and in accordance with the Polish spellings rules, the CJEU left it to the national court to decide whether this was liable to cause “serious inconvenience”, in which case it would be a restriction on the freedoms conferred by Article 21 TFEU.30 In response to the insistence of the Lithuanian government that the Lithuanian language constitutes a Sayn-Wittgenstein, paras 73-79. Sayn-Wittgenstein, paras 81-95. 29 CJEU, 12 May 2011, Runevič-Vardyn, C-391/09, ECLI:EU:C:2011:291. 30 Runevič-Vardyn, paras 66-82. 27 28

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Johan Meeusen constitutional asset which preserves the nation’s identity, the CJEU admitted, however, that EU law does not preclude the adoption of a policy for the protection and promotion of a Member State’s national and first official language and that the Union must respect its rich cultural and linguistic diversity. It referred in that regard to Article 3(3) TEU and Article 22 Charter, and to the respect for the Member States’ national identities required by Article 4(2) TEU, which would include protection of a State’s official national language. Therefore, the objective pursued by the pertinent Lithuanian rules, to protect the official national language by imposing the rules which govern the spelling of that language, constitutes a legitimate objective capable of justifying free movement restrictions, subject however to the requirement of proportionality. The CJEU also referred in this context to the protection of the right to private and family life as enshrined in the Charter and the European Human Rights Convention. Nonetheless, the CJEU eventually left it to the national court to decide whether the refusal to amend the civil status certificates reflected a fair balance between the interests at issue i.e. on the one hand, the right of the Polish-Lithuanian spouses to respect for their private and family life and, on the other hand, the legitimate protection by Lithuania of its official national language and its traditions.31 The issues examined by the CJEU, once again sitting in its Second Chamber, in Bogendorff von Wolffersdorff32, bore some resemblance to those of Sayn-Wittgenstein. A preliminary reference was made to the CJEU in the dispute between Mr Bogendorff von Wolffersdorff, with double German and British nationality, and the authorities of the German city of Karlsruhe. Through successive changes of his forenames and surname as well as through the acquisition of British nationality by naturalization, Nabiel Bagdadi had managed to become known, under English law, as Peter Mark Emanuel Graf von Wolffersdorff Freiherr von Bogendorff... The German authorities however refused to modify the forenames and surname entered on his birth certificate and to state in the civil status register tokens of nobility forming part of the surname acquired by him in the United Kingdom. The CJEU, which did not look into the choice-of-law aspects of the case, first decided that this refusal constituted a restriction on the freedoms conferred by Article 21 TFEU on all citizens of the Union, having referred as well to their fundamental rights.33 Thereafter, the Court examined four possible justification grounds, three of which it rejected.34 The fourth justification ground that was invoked, i.e. the equality of German citizens before the law and the constitutional choice, set out in Article 109 of the Weimar Constitution read in conjunction with Paragraph 123 of Germany’s Basic Law, to abolish privileges and inequalities and to prohibit the bearing of titles of nobility, was treated differently. The Court, which also considered this constitutional choice to be an element of German national identity as referred to in Article 4(2) TEU, accepted this justification as relating to a ground of public policy, which was defined in the Runevič-Vardyn, paras 83-93. CJEU, 2 June 2016, Bogendorff ECLI:EU:C:2016:401. 33 Bogendorff von Wolffersdorff, paras 35-47. 34 Bogendorff von Wolffersdorff, paras 50-60. 31 32

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Cross-Border Mobility of European Union Citizens traditionally restrictive way though not without confirming that national authorities enjoy “a certain discretion” in this respect. It eventually left it to the national court to decide on proportionality by ascertaining whether a refusal of recognition is indeed appropriate and necessary to ensure compliance with the principle that all German citizens are equal before the law.35 Of all CJEU judgments examined in this contribution, Coman is the most recent but probably also the most well-known and remarkable one.36 This case concerned a quintessential and sensitive conflict of laws issue – the recognition in Romania of a same-sex marriage concluded in Belgium between a Romanian and an American man – that was examined from the specific angle of intra-EU movement and residence rights for Union citizens and their spouses. The Court, sitting in Grand Chamber, held that the refusal by the authorities of a Member State to recognize, for the sole purpose of granting a derived right of residence to a third-country national, the same-sex marriage of that person to a Union citizen legally concluded during the period of their genuine residence in another Member State, may interfere with the free movement and residence rights of that Union citizen under Article 21(1) TFEU.37 In response to the justification arguments raised by several governments, the CJEU considered that an obligation to recognize such marriages for the sole purpose of granting a derived right of residence to third-country nationals does not undermine the national identity, which Article 4(2) TEU protects, nor does it pose a threat to the public policy of the host Member State. The Court concluded its reasoning with a reference to the ECHR’s case law according to which the relationship of a homosexual couple may fall within the notions of “private life” and “family life” in the same way as that of a heterosexual couple in the same situation.38 The Court, undoubtedly well aware of the controversies that the obligation to recognize same-sex marriages would spark in more conservative Member States, clearly attempted to downplay the impact of its decision through its insistence, throughout its judgment, that it concerned “an obligation to recognize such marriages for the sole purpose of granting a derived right of residence”,39 its explicit confirmation that, as a person’s status falls within their competence, the Member States are free to decide whether or not to allow marriage for persons of the same sex,40 and a rather brief reference to the genderneutrality of the term “spouse” within the meaning of Directive 2004/38.41 This restraint contrasts with the more outspoken approach of AG Wathelet. With respect to the interpretation of the concept of “spouse”, in his view the legal recognition of same-sex marriages reflects a general development in society as this kind of marriage is now recognized on all continents; it is not something associated with a specific culture or history, but corresponds to a universal recognition of the Bogendorff von Wolffersdorff, paras 61-84. CJEU, 5 June 2018, Coman, C-673/16, ECLI:EU:C:2018:385. 37 Coman, paras 28-40. 38 Coman, paras 41-51. 39 Coman, paras 36, 40, 45 and 46. 40 Coman, para. 37. 41 Coman, para. 35. 35 36

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Johan Meeusen diversity of families.42 In that same context, he also referred to “the development of European society”, as reflected in the number of Member States whose legislation permits same-sex marriages and in the current definition of family life in Article 7 Charter.43

IV. From Respect for the Member States’ National Identities to the Promotion of Union Citizens’ Individual Identities and Diversity in an Open European Society A.

A New Balance between Private and Public Interests through a New Understanding of the Union’s Area of Freedom, Security of Justice – An Analysis in 8 Steps

All judgments mentioned in the previous chapter relate to the interaction between civil status and Union citizenship rights in cross-border situations. As the determination of civil status is still a Member State competence, and the pertinent national legislation often reflects essential value assessments that are deeply rooted in their respective societies and inspired by cultural, religious or other traditions, this is inevitably one of the few remaining fields that is characterized by value diversity among the 27 EU Member States. The judgments examined demonstrate that these legislative divergences easily surface in situations of cross-border mobility. As AG Jacobs remarked in his Opinion in Konstantinidis, it is a cause of great discomfort when, as a result of the entries made in official registers to record personal events that mark one’s status, one would be forced to adopt different identities in different Member States.44 Most often, this is due to these States’ different choice-of-law rules whose application leads to different decisions on the law applicable to a person’s status, as was the case e.g. in Grunkin and Paul. But even the use of identical choice-of-law rules may eventually result in different outcomes, e.g. through the recourse to particular “escape devices”, such as the public policy exception which was (implicitly) invoked by the Romanian courts in Coman, or when the law referred to is applied differently in the Member States concerned, as was the case in Sayn-Wittgenstein. Still, it must be admitted that, contrary to what one might expect in times of ever-increasing migration, the number of CJEU judgments concerning issues of strong value diversity between EU Member States, at least with respect to disputes on civil status and cross-border mobility, has remained rather limited. Certainly, Coman was a very sensitive and controversial case in which the CJEU was really obliged to confront a sharp cleavage between the societal views, and their legal Opinion of AG Wathelet in Coman, pt 58. Opinion of AG Wathelet in Coman, pt 80. 44 Opinion of AG Jacobs in Konstantinidis, C-168/91, ECLI:EU:C:1992:504, pt 26. 42 43

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Cross-Border Mobility of European Union Citizens translation, in the Member States involved. The other CJEU judgments mentioned all related to various aspects of the law of names and perhaps appeared at first sight less sensitive from a broader societal perspective,45 in spite of their great importance for the individuals concerned and the protection of their private and family lives.46 Yet, even apart from the obviously important objective of identification, the law of names can touch upon many sensitivities. On the one hand, it is one of those fields which are characterized by great divergences between the Member States, inspired by historic, religious, linguistic and cultural factors, which find their expression at both the levels of substantive law and of conflict of laws.47 On the other hand, the pertinence for these cases of the Member States’ policies on nobility, and the closely related topic of equal treatment of their citizens, but also language, touched upon these States’ constitutional choices and related, heavily debated topics of constitutional and national identity. As one should expect no transfer of Member State competences on civil status to the EU in the near future, and the EU remains characterized by intense political divergences between so-called progressive and conservative Member States, it is very likely that the CJEU will soon be called upon to once again interpret the Treaty provisions on Union citizenship rights in similar cases of value diversity. At the time of writing, several such cases, which essentially relate to the recognition of same-sex parentage, are pending before the CJEU (supra). Our question is whether the judgments mentioned, from Garcia Avello to Coman, can provide us with any guidelines as to how the CJEU will approach these and other future cases, and whether that approach is clear and convincing? The Court’s interpretation of Union citizenship in status cases appears to reflect a new balance between public and private interests, and more particularly between the recognition of the Member States’ particular value assessments and the mobile citizens’ interest in status continuity. Certainly, these citizens’ individual identities, as they seek to have them confirmed and protected by law, may differ strongly from their own Member State’s national identity.48 As the following analysis in 8 steps clarifies, the Court’s case law on Union citizenship triggers a better understanding not only of the position of the individuals vis-à-vis the Member States, but also of the Union’s “area of freedom, security and justice” and the respective positions of individual and national identities in that respect. Cf. H. FULCHIRON, La reconnaissance au service de la libre circulation des personnes et de leur statut familial dans l’espace européen, in Mélanges en l’honneur du Professeur Bernard Audit. Les relations privées internationales, Paris 2014, p. 371; U. SPELLENBERG, Der EUGH und das internationale Namensrecht, in A-L. VERBEKE/ J.M. SCHERPE/ CH. DECLERCK/ T. HELMS et al. (eds), Confronting the Frontiers of Family and Succession Law. Liber Amicorum Walter Pintens, Cambridge 2012, p. 1369. 46 Cf. ECHR, 9 November 2010, Losonci Rose and Rose v. Switzerland, App. No 664/06, para. 51. 47 Green paper on “Less bureaucracy for citizens: promoting free movement of public documents and recognition of the effects of civil status records”, COM(2010) 747, Chapter/title 4.1; E. PATAUT, Vers un état civil européen?, in Essays in honour of Spyridon Vl. Vrellis, Athens 2014, p. 759-760. 48 P. MANKOWSKI, Kulturelle Identität und Internationales Privatrecht, IPRax, 2004, p. 284. 45

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Johan Meeusen B.

Intra-EU Mobility Is a Key Right for Union Citizens, and it Requires Status Continuity

Freedom of movement is a key principle of the EU and an essential right for all Union citizens. Through its uncompromising interpretation of this right, as laid down in Article 20(2)(a) and 21 TFEU, the CJEU has greatly improved the legal position of individuals as stakeholders within the European integration process. The judgments examined in the previous chapter have demonstrated the specific importance of Union citizenship for the legal status of the nationals of the Member States. Since the CJEU’s judgment in Grunkin and Paul especially, there is no doubt that Union citizens’ right to intra-Union cross-border mobility obliges the Member States to recognize the civil status that the Union citizen obtained in another Member State, irrespective of the conflicts rules of the host Member State. Effective Union citizenship hence implies status continuity.49 The strong impact of Union citizenship in this field is further strengthened by the protection of the fundamental rights, as recognized in Union law, of the individuals concerned. Issues of civil status are closely connected with a person’s identity and private and family life, the protection of which is enshrined in both Article 7 of the Charter and Article 8 of the ECHR.50 The other side of the coin is that the fundamental rights of others constitute the obvious limit to the reliance on fundamental rights in view of status continuity.51 Subject to that important reservation, reliance on fundamental rights will strengthen the individual’s claim to be granted a unitary legal status irrespective of the legal diversity of the States with which that individual is connected and across whose borders he or she travels.52 Both elements weigh heavily in favor of far-reaching free movement rights, which essentially serve the private interests of the Union citizens. Still, and possibly inspired by the wish to respect as much as possible the Member States’ competences in this field, the CJEU evidences prudence when venturing into the delicate field of civil status. It is one of the CJEU’s standard considerations, in its case law regarding the internal market, that “any restriction, even minor, of one of the fundamental freedoms enshrined by the TFEU is prohibited by it”.53 But when examining the effects of status divergence on Union citizens’ freedom of movement, it has since its judgment in Garcia Avello almost systematically applied a test of so-called “serious inconvenience”.54 Yet, as it is not quite clear in what respect a “serious” inconvenience would differ from any other 49 E. PATAUT, Les particularismes nationaux, les droits fondamentaux et le contenu de la citoyenneté européenne, Revue trimestrielle de droit européen, 2011, p. 572. 50 Sayn-Wittgenstein, para 52; Runevič-Vardyn, para 66 and 89; Bogendorff von Wolffersdorff, paras 35 and 54; Coman, paras 49 and 50. 51 P. MANKOWSKI (note 48), p. 289. 52 A. BUCHER (note 10), p. 120. 53 See e.g. CJEU, 21 June 2016, New Valmar, C-15/15, ECLI:EU:C:2016:464, para. 37. See more recently with respect to the free movement of persons in particular, para. 29 of the CJEU’s judgment in case C-651/16, DW, ECLI:EU:C:2018:162. 54 Garcia Avello, para. 36; Grunkin and Paul, paras 23-28; Sayn-Wittgenstein, para. 67; Runevič-Vardyn, para. 76; Bogendorff von Wolffersdorff, para. 38.

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Cross-Border Mobility of European Union Citizens restriction to the freedom of movement, the nuances of the Union citizens’ right to status continuity should rather be associated with the justifications which the CJEU admits with respect to such restrictions. C.

There Is No Absolute Right to Intra-EU Mobility, and hence to Status Continuity, for Union Citizens

Despite their great importance, the free movement rights of Union citizens and the protection of status continuity are not absolute. Article 21(1) TFEU holds that every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and the measures adopted to give them effect. In contrast to the explicit justification grounds for restrictions to freedom of movement within the framework of the Union’s internal market,55 the TFEU does not mention expressly such justification for restrictions to the general free movement right of Union citizens. The CJEU has never left any doubt, however, that restrictions to the Union citizens’ freedom of movement can be justified, though only under very strict conditions. As the CJEU has also confirmed in the judgments examined, using terminology that echoes that of the “rule of reason” which it has accepted since Cassis de Dijon with respect to economic free movement,56 Member State justification of such restrictions must be based on objective public-interest considerations and must be proportionate to a legitimate objective pursued by national law.57 The latter condition is fulfilled if the restrictive measure, while appropriate for securing the attainment of the objective pursued, does not go beyond what is necessary in order to attain that objective.58 The limited discretion allowed to the Member States to rely on so-called “legitimate interests” to counterbalance the citizens’ freedom of movement has enabled them, with respect to the subject examined in this contribution, to invoke those values which are particularly cherished by some, though not necessarily all Member States, e.g. those which enjoy particular protection in their constitutions or those which can be considered to be part of the respective Member States’ national or cultural identities. Such grounds for justification are not beyond reason. As mentioned above, EU primary law itself refers in various respects to interests in that sphere, e.g. in Articles 3(3) and 4(2) TEU.

Articles 36, 45(3) and 4, 51, 52, 62 and 65 TFEU. CJEU, 20 February 1979, Rewe-Zentral AG v. Bundesmonopolverwaltung für Branntwein, C-120/78, ECLI:EU:C:1979:42. 57 Grunkin and Paul, para. 29; Sayn-Wittgenstein, para. 81; Runevič-Vardyn, para. 83; Bogendorff van Wolffersdorff, para. 48; Coman, para. 41. 58 Coman, para. 41. 55 56

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Johan Meeusen D.

Neither National nor Cultural Identity, but Public Policy Is the Court’s Preferred Justification Ground for Restrictions to Status Continuity

In the judgments examined, the CJEU has mainly understood the “legitimate interests” which the Member States have invoked as relating to public policy. It has not given much weight to the Treaty or Charter provisions that explicitly recognize the importance of diversity through the requirement of respect for the Member States’ national or cultural identities. It has mentioned Article 3(3) TEU and Article 22 Charter only once in this respect.59 Article 4(2) TEU has been referred to several times by the CJEU, though not in a consistent manner. Most often, the latter provision appears to have been mentioned as an additional, not strictly necessary, argument related to the justification upon which a Member State relies, in particular public policy.60 Only in Coman, has the CJEU appeared to consider the required respect for a Member State’s national identity as a separate justification ground at the same level as public policy, though without really further developing this; neither of these grounds was successful in that case.61 In Runevič-Vardyn, the CJEU identified the objective of protecting the official national language as a legitimate Member State objective, for which it first referred to its earlier standpoint in Groener that Union law does not prohibit the adoption of a policy for the protection and promotion of a language of a Member State which is both the national language and the first official language.62 It then further referred to the respect for cultural and linguistic diversity as required by Article 3(3) TEU and Article 22 Charter and to the respect for the national identity of the Member States which Article 4(2) TEU requires and which includes protection of that language.63 While one could interpret this reference to Article 4(2) TEU in different ways, this provision was most probably used only as an argument to support the identification of the protection of the official national language as a legitimate objective, rather than as an additional justification ground in its own right. The reference to Article 4(2) TEU in the judgments examined does not really differ from the generally limited role that this clause has played in the CJEU judgments on other matters.64 The Court’s interpretation of Article 4(2) has even been set away, rather disparagingly, as a “jurisprudential banality”65 that neutralizes the concept of national identity.66 Runevič-Vardyn, paras 86-87. Sayn-Wittgenstein, para. 92; Bogendorff von Wolffersdorff, para. 64. 61 Coman, paras 43-46. 62 CJEU, 28 November 1989, Groener, C-379/87, ECLI:EU:C:1989:599, para. 19. 63 Runevič-Vardyn, paras 85-87. 64 Cf. M. CLAES (note 1), p. 226 et seq.; O. HAMULAK/ T. KERIKMÄE/ D. KOPAL, Identité nationale et constitutionnelle dans la jurisprudence de la Cour de justice de l’Union européenne, p. 16-19, available at https://www.researchgate.net/publication/322357720_ Identite_nationale_et_constitutionnelle_dans_la_judisprudence_de_la_Cour_de_Justice_de_ l%27Union_Europeenne (on 2.2.2021). 65 L. BURGORGUE-LARSEN, A Huron at the Kirchberg Plateau or a few naive thoughts on constitutional identity in the case-law of the judge of the European Union, in 59 60

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Cross-Border Mobility of European Union Citizens Whatever the approach chosen, the impact of the respect that is due to national identity according to Article 4(2) TEU, appears to be rather limited. Notwithstanding the AG Opinions67 and doctrinal pleas68 in such sense, the CJEU does not appear to view this provision as a forceful alternative ground for justification, to those already available to the Member States. Certainly, it does not function as a trump card nor does it function as an alternative kind of exception to the supremacy of EU law.69 What it can do, however, is to lend additional strength to another, more traditional justification ground that Member States invoke, in particular public policy. When the proportionality of a restrictive Member State measure is examined, the reference to Article 4(2) TEU can thus help to tip the balance in favor of that Member State’s interest.70 An example can be found in the Court’s considerations in Sayn-Wittgenstein (infra). E.

Public Policy as a Justification Ground Fits with the Recognition of Member States’ Value Diversity

According to the CJEU’s standard case law, public policy may be relied on only if there is “a genuine and sufficiently serious threat to a fundamental interest of society”.71 As becomes clear upon a closer look, the CJEU’s characterization of Member States’ value-related justification grounds as a reliance on public policy fits quite well with the underlying concern of recognition of diversity. The CJEU indeed has long accepted a degree of Member State diversity, including on the basis of moral or cultural views, when it comes to reliance on the public policy justification ground.72 In its recent judgments as well, the Court has repeatedly considered that the specific circumstances, which may justify recourse to the concept A. SAIZ ARNAIZ/ C. ALCOBERRO LLIVINA (eds), National Constitutional Identity and European Integration, Cambridge 2013, p. 304. See also L.F.M. BESSELINK, Respecting Constitutional Identity in the EU, Common Market Law Rev., 2012, p. 682. 66

O. HAMULAK/ T. KERIKMÄE/ D. KOPAL (note 64), p. 24-25.

See the Opinion of AG Poiares Maduro in case C-213/07, Michaniki, ECLI:EU:C:2008:544, pt 32. 68 A. SCHNETTGER, Article 4(2) TEU as a Vehicle for National Constitutional Identity in the Shared European Legal System, in C. CALLIES/ G. VAN DER SCHYFF (eds), Constitutional Identity in a Europe of Multilevel Constitutionalism, Cambridge 2020, p. 3435. 69 C. CALLIES/ G. VAN DER SCHYFF, Constitutional Identity Introduced, in C. CALLIES/ G. VAN DER SCHYFF (eds), Constitutional Identity in a Europe of Multilevel Constitutionalism, Cambridge 2020, p. 4. 70 Cf. K. LENAERTS (note 6), p. 1330-1331. 71 See e.g. Sayn-Wittgenstein, para. 86; Bogendorff von Wolffersdorff, para. 67; Coman, para. 44. 72 See e.g. CJEU, 4 December 1974, Van Duyn, C-41/74, ECLI:EU:C:1974:133, para. 18; CJEU, 14 October 2004, Omega, C-36/02, ECLI:EU:C:2004:614, paras 31 and 3738; CJEU, 14 February 2008, Dynamic Medien, C-244/06, ECLI:EU:C:2008:85, para. 44. 67

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Johan Meeusen of public policy, may vary from one Member State to another and from one era to another. This means that, as the Court has opined in some of its judgments, the competent national authorities must be allowed “a margin of discretion within the limits imposed by the Treaty”.73 Hence, it is not indispensable for a Member State’s restrictive measures “to correspond to a conception shared by all Member States as regards the precise way in which the fundamental right or legitimate interest in question is to be protected and […], on the contrary, the need for, and proportionality of, the provisions adopted are not excluded merely because one Member State has chosen a system of protection different from that adopted by another State”.74 The more divergent the Member States’ opinions are, the stronger their reliance on their proper understanding of public policy will be.75 This margin of discretion benefits Member State diversity, and permits them to rely on interests that rest upon very specific, maybe even constitutional values that they particularly cherish. Still, this will only be possible under strict conditions and by way of an exceptional derogation to the citizens’ freedom of movement. As the latter is considered to be of prime importance, the balance sought is not one between interests that are considered to be of equal weight. The protection of Union citizens’ cross-border mobility with continuity of status can be outweighed only exceptionally by the pertinent Member State’s public policy concerns. F.

Cross-Border Mobility with Status Continuity Has Priority over the Protection of the Member States’ National Identities

AG Wathelet’s Opinion in Coman, which, as to its substantive outcome, was followed by the Court, illustrates clearly the great weight that is granted to citizen mobility with status continuity. In his considerations on the interpretation of the concept of “spouse” in Directive 2004/38, Wathelet emphasized that the legal issue at the heart of the dispute was not that of legalization of marriage between persons of the same sex, but that of the freedom of movement of a Union citizen. The central place granted to this right of free movement could not be weakened by the fact that marriage is enshrined in certain national constitutions.76 The effects of the AG’s considerations, which actually do no more than refer to the Court’s essential task of interpreting the Treaties and hence EU law, remain far-reaching: by putting the focus on citizen mobility instead of the substantive law objectives (same-sex marriage), he not only warns against the possible prioritization of the host State’s interests (i.e. Romania’s rejection of same-sex marriage) but also manifests indifference vis-à-vis the home State’s interests (i.e. Belgium’s admission of sameSayn-Wittgenstein, para. 87; Bogendorff von Wolffersdorff, para. 68. Sayn-Wittgenstein, para. 91; Bogendorff von Wolffersdorff, para. 73. See also AG Sharpston’s Opinion in Sayn-Wittgenstein, pt 60. 75 CH. WALTER/ M. VORDERMAYER, Verfassungsidentität als Instrument richterlicher Selbstbeschränkung in transnationalen Integrationsprozessen, Jahrbuch des öffentlichen Rechts der Gegenwart, 2015, p. 165. 76 Opinion of AG Wathelet in Coman, pts 38-39. 73 74

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Cross-Border Mobility of European Union Citizens sex marriage). What matters, then, is the cross-border mobility of the Union citizen concerned, which implies status continuity insofar as the rights under EU law are at stake, whatever this status may be.77 This means that the migrant Union citizen is central to the dispute, although the CJEU does not and cannot envisage the broad recognition in Romanian private law of the foreign same-sex marriage, which considerably reduces the scope and effects of the judgment.78 The restraint that the Member States must practice with respect to the enforcement of their policies, is of varied origin. First, in order to emphasize the importance attached to it by primary law, the CJEU has systematically held that Union citizenship is destined to be the fundamental status of nationals of the Member States, as a result of which it of course gains a particular interest.79 Moreover, as has often been emphasized as well, when exercising their competences relating to a person’s status, Member States must obviously comply with Union law and, in particular, the Treaty provisions on the freedom of every Union citizen to move and reside in the territory of the Member States, on which all those citizens are entitled to rely.80 With respect to issues of civil status, the Union citizens’ free movement rights are even further strengthened by the protection of their fundamental rights, in particular, the right to respect for their private and family life. Coman actually constitutes an excellent example. The CJEU first rejected Romania’s reliance on public policy, as it deemed that the obligation to recognize same-sex marriages for the sole purpose of granting a derived right of residence to a third-country-national did not undermine its national identity nor did it pose a threat to its public policy, and then referred to the homosexual couple’s fundamental rights as protected by the Charter and the European Human Rights Convention.81 Last but not least, it is only logical – from an EU perspective at least82 – that the Member States’ reliance on their particular values and “national identities” – whether through the public policy exception or otherwise- is always subject to the See also V. LIPP (note 16), p. 552. Cf. M. BOGDAN, The relevance of family status created abroad for the freedom of movement in the EU, Acta Universitatis Carolinae - Iuridica 2020, n°4, p. 91-92; P. KINSCH, European courts and the obligation (partially) to recognize foreign same-sex marriages, this Yearbook, 2018/2019, p. 57. 79 Garcia Avello, para. 22; Runevič-Vardyn, para. 60; Bogendorff von Wolffersdorff, para. 29; Coman, para. 30. See also the Opinion of AG Jacobs in the first Grunkin and Paul case in which the CJEU denied its jurisdiction to answer the preliminary question referred to it (Opinion of 30 June 2005 in Standesamt Stadt Niebüll, C-96/04, ECLI:EU:C:2005:419, pt 56). 80 Garcia Avello, para. 25; Grunkin and Paul, para. 16; Sayn-Wittgenstein, paras 3839; Runevič-Vardyn, para. 63; Bogendorff von Wolffersdorff, para. 32; Coman, para. 38. 81 Coman, paras 47-50. 82 For an analysis of, by way of example, the German perspective as expressed by the Bundesverfassungsgericht, see M. CLAES/ J-H. REESTMAN, The Protection of National Constitutional Identity and the Limits of European Integration at the Occasion of the Gauweiler Case, German L. J., 2015, p. 938 et seq. 77 78

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Johan Meeusen vital requirement of proportionality and hence lacks absolute priority.83 In the judgments under consideration, the CJEU has either examined the proportionality of the restrictive Member State measure itself84 or required the referring national court to do so in view of a number of particular considerations.85 Only in SaynWittgenstein, did the CJEU itself declare the host Member State’s restrictive measure – the Austrian refusal to recognize the nobility elements in the surname of one of its nationals, as determined in the Member State of that national’s residence – compatible with Article 21 TFEU as it was not disproportionate to that State’s legitimate objective of protecting the principle of equal treatment. The way the CJEU in that case balanced the respective public and private interests involved illustrates that the former must have a particular force in order to gain priority. It interpreted the justification invoked by Austria as a reliance on public policy, which however gained particular strength through the Court’s explicit reference to the characterization of equal treatment as a general principle, to Article 20 Charter and to Article 4(2) TEU as the status of a State as a Republic forms part of its national identity.86 The latter argument hence fits into a quite traditional proportionality test.87 Although the existence of a nationality link with the host State was assessed differently in other cases such as Grunkin and Paul or Coman, it is very probable that the fact that the case concerned an Austrian citizen, which was mentioned several times by the CJEU when it examined its proportionality88, added further force to the Austrian justification.89 The Court apparently considered that the inconvenience for Mrs Sayn-Wittgenstein to become known under that name was serious, though not in such degree as to outweigh Austria’s interests. This has surprised some commentators, who have compared the CJEU’s approach in this case to the more liberal one in Coman or wondered whether the CJEU did not underestimate the weight of her private interests, as she had been identified for no less than 15 years with the surname Fürstin von Sayn-Wittgenstein.90 The Court’s K. LENAERTS (note 6), p. 1330; A. VON BOGDANDY/ S. SCHILL, Overcoming Absolute Primacy: Respect for National Identity under the Lisbon Treaty, Common Market L. Rev., 2011, p. 1441. 84 Garcia Avello, paras 41-44; Grunkin and Paul, paras 31-38; Sayn-Wittgenstein, paras 90-94. 85 Runevič-Vardyn, paras 88-93; Bogendorff van Wolffersdorff, paras 72-83. 86 Sayn-Wittgenstein, paras 84-94. 87 M. CLAES (note 1), p. 229; K. LENAERTS (note 6), p. 1330; A. VON BOGDANDY/ S. SCHILL (note 83), p. 1442-1443. 88 Sayn-Wittgenstein, paras 85, 88, 93 and 94. 89 Cf. M. MELCHER, Private International Law and Registered Relationships: An EU Perspective, Eur. Rev. of Priv. L., 2012, p. 1085. 90 See e.g. J-Y. CARLIER, Vers un ordre public européen des droits fondamentaux. L’exemple de la reconnaissance des mariages de personnes de même sexe dans l’arrêt Coman, Revue trimestrielle des droits de l’homme, 2019, p. 222; TH. KRÖLL, Der EuGH als “Hüter” des republikanischen Grundprinzips der österreichischen Bundesverfassung?, in G. LIENBACHER/ G. WIELINGER (eds), Öffentliches Recht. Jahrbuch 2011, Vienna 2011, p. 328-329; F. SWENNEN, case note, SEW – Tijdschrift voor Europees en economisch recht, 2012, p. 80. 83

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Cross-Border Mobility of European Union Citizens proportionality test in this case has even been referred to as “the thinnest possible”.91 Yet, more often than not, the application of the proportionality test is a delicate matter. It may perhaps be deduced from the terminology used by the Court in Sayn-Wittgenstein that the Court didn’t underestimate the private interest involved, but rather – in a way that is comparable with its earlier Omega judgment92 – granted particular weight to the Member State’s public interests involved in view of their constitutional foundations and the respect that Article 4(2) TEU requires for Austria’s national identity as it was inherent in its constitutional structures.93 The Court first considered that, in the context of Austrian constitutional history, its Law on the abolition of the nobility, as an element of national identity, might be taken into consideration when a balance is struck between legitimate interests and the right to free movement of persons.94 This way it appeared willing to add an additional layer of importance to public policy, the Member State interest at issue. In the same vein, it concluded its examination of the proportionality of the Austrian measure with the consideration that the Austrian authorities did not appear to have gone further than necessary in order to ensure, not just Austria’s legitimate interest, but rather “the attainment of the fundamental constitutional objective pursued by them”.95 Very probably, the equal treatment objective was of particular significance as well for the Court’s proportionality calculation, as it linked this objective to the Charter and hence fundamental rights protection while in other cases, such as Coman, the fundamental rights of the citizen concerned were emphasized. G.

The Principle of Sincere Cooperation Goes Hand in Hand with CrossBorder Mobility and the Recognition of Societal Diversity

In his Opinion in Coman, AG Wathelet emphasized that, with respect to Article 4(2) TEU, restraint is needed where Member States invoke the Union’s obligation to respect their respective national identities as such obligation cannot be construed independently of their own obligation of sincere cooperation set out in Article 4-3 TEU.96 In the present context, the CJEU has not yet referred explicitly to the latter obligation. There are clear signals however that respect for value diversity is not only a right that Member States enjoy within the EU and which is protected by the CJEU, but also a duty that rests upon them and which is enforced by the CJEU. This duty of openness towards the application or recognition of other Member States’ laws can be considered an expression of the duty of sincere cooperation L.F.M. BESSELINK (note 65), p. 692. Omega, para. 39. 93 Cf. J. ÖBERG, The Principle of Proportionality, Federalism and Judicial Review in the Law of Free Movement, in L. AZOULAI/ L. BOUCON/ F-X. MILLET (eds), Deconstructing EU Federalism through Competences, EUI Working Paper, Florence 2012, p. 77. 94 Sayn-Wittgenstein, para. 83. 95 Sayn-Wittgenstein, para. 93. 96 Opinion of AG Wathelet in Coman, pt 40. 91 92

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Johan Meeusen between Member States, but seems intrinsically related as well to the very existence of cross-border migration within the Union, considered to be of the greatest importance. When Belgium submitted in the Garcia Avello case that its discrimination against the Belgian-Spanish children was justified by the principle of immutability of surnames, as a founding principle of social order, the CJEU rejected this attempted justification with a reference to the effects of migration itself. It held that “it is common ground that, by reason in particular of the scale of migration within the Union, different national systems for the attribution of surnames coexist in the same Member State, with the result that parentage cannot necessarily be assessed within the social life of a Member State solely on the basis of the criterion of the system applicable to nationals of the latter State”.97 In other words, while the prevention of the risk of confusion as to identity or parentage of persons is a legitimate objective, it is in view of the migration that takes place within the EU disproportionate to permit recourse to the Member State’s own system of surname transmission only to achieve it. The specific reference which the CJEU here makes to migration is of course very pertinent, and its importance will evidently not diminish. The stimulus that the EU wishes to give to citizens’ cross-border mobility, as the achievement of unhindered freedom of movement is one of the Union’s key objectives, naturally requires the Member States to accept diversity on their territories, stemming from the diverse legal rules which are applicable to migrants and their relationships.98 In that sense, the particular value that is attached to intra-Union cross-border mobility and the inter-State duty of sincere cooperation go hand in hand.99 Enabling migration implies the acceptance of diversity, and the acceptance of diversity implies that due recognition is granted to other Member States’ legislation according to which the legal status of mobile Union citizens has been determined, even if it diverges in important respects from the host State’s law. It is impossible to stimulate the free movement of persons, in a context where both harmonized and non-harmonized choice-of-law rules can refer to the applicability of foreign law, without openness for the application of legal rules that are different from the lex fori. (Stimulus of) Mobility inevitably implies diversity and tolerance. H.

Individual Identity, on Basis of Individual Autonomy, and hence Societal Diversity Trump National Identity

If it is true, as explained under the previous point, that (stimulus of) mobility inevitably implies diversity and tolerance, one must conclude as well that, within the European Union, individual and hence societal diversity trump Member States’ national identities. The evolution in favor of unhindered mobility and obligatory Garcia Avello, para. 42. A. ILIOPOULOU, What’s in a name? Citoyenneté, égalité et droit au nom. A propos de l’arrêt Garcia Avello, Revue trimestrielle de droit européen, 2004, p. 575-576. 99 R. BARATTA, La reconnaissance internationale des situations juridiques personnelles et familiales, Recueil des Cours, 2010, Vol. 348, p. 442. 97 98

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Cross-Border Mobility of European Union Citizens recognition of civil status obtained abroad, has actually been severely criticized for that precise reason – should we foster liberalism towards those citizens who have the flexibility and financial means to move throughout the Union and enjoy a status which they cannot obtain in their home country? – and led to appeals to maintain a significant role for the limit that public policy can impose on recognition.100 The pertinence of a Member State’s national identity, as expressed in particular through public policy, is indeed beyond doubt. Respect for the Member States’ diverse legal and cultural traditions and sensitivities is embedded in the Treaties, and rightly so, and value diversity is protected by the CJEU.101 Still, it should only be very exceptional for (host) Member States to be able to restrict on that basis the cross-border mobility of Union citizens through the refusal of recognition of their status which does not comply with national values. While at first sight this seems to be no more than the confirmation of the Union’s traditional approach in favor of freedom of movement, subject only to limited exceptions under strict conditions, the importance that is attached to individual identity and the societal diversity that it implies, actually goes further. Of course, the Treaties require respect for Member States’ national identities apart from their provisions on justifications and exceptions to the freedom of movement. Logically, this could result in a different assessment of the interaction between mobility and Member State interests. The cases examined, when taken together, demonstrate that the assessment should indeed be different, though in the sense that Member State value diversity can only in the most exceptional circumstances be given priority over the societal diversity that cross-border mobility implies. Apart from those situations, respect for the citizens’ individual identities, and hence the acceptance of societal diversity or multiculturalism, take precedence over the Member States’ national identities and national uniformity.102 The strong protection granted to the right to cross-border mobility of Union citizens actually fits with a general societal and legal evolution in favor of individual autonomy. In a modern understanding of private international law more generally, hence not limited to the EU, such self-determination has been considered a first guiding principle.103 As is well known, this trend in favor of individual autonomy has also characterized recent developments in private international law with respect to status and family law.104 This is not only true where legislation is 100 See e.g. T. VIGNAL, Ordre public et reconnaissance, in Le droit entre tradition et modernité. Mélanges à la mémoire de Patrick Courbe, Paris 2012, p. 547. 101 K. LENAERTS (note 6), p. 1370. 102 Cf. CH. KOHLER, Unification of Private International Law in Family Matters in the European Union: Cultural issues, in I. VIARENGO/ F.C. VILLATA (eds), Planning the Future of Cross Border Families. A Path Through Coordination, Oxford 2020, p. 9; M. LEHMANN (note 14), p. 156-157. 103 Cf. A. FLESSNER, Die Methode des IPR für den innereuropäischen Rechtsraum – Gedanken über Tatbestand und Rechtsfolge der Kollisionsnorm, in F. HEINDLER (ed.), Festschrift 40 Jahre IPRG, Vienna 2020, p. 34; M-P. WELLER, Vom Staat zum Menschen: Die Methodentrias des Internationalen Privatrechts unserer Zeit, RabelsZ, 2017, p. 761. 104 In addition to the general study devoted to this topic by C. GONZALEZ BEILFUSS, Party autonomy in international family law, Recueil des Cours, 2020, Vol. 408, p. 107 et

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Johan Meeusen concerned, both at the national and EU levels, but this trend, which KINSCH characterizes as the translation into law of our age’s neoliberalism,105 is clearly discernible as well in the CJEU judgments on the civil status of Union citizens. It follows that citizenship appears to imply individual autonomy through the respect that is due to the choice of civil status.106 As a result, the CJEU gives more weight to the personal choices of the citizens involved, as to their status, than to the traditional connecting factors of conflict of laws.107 Take Garcia Avello, e.g., where the CJEU did not hesitate to follow the children’s wish to refer to the Spanish system for the attribution of surnames, although, objectively speaking, they had more connections with Belgium.108 Clearly, the interests of the individuals concerned, as expressed through their own cultural identification with Spain, were decisive for the Court in that case.109 I.

The Area of Freedom, Security and Justice Rests on the Concept of an Open Society, Characterized by Citizen Mobility and Diversity

The great value that attaches to citizens’ individual identities, and hence societal diversity, can probably be considered part of a “European identity”. It certainly characterizes and gives substance to the Union’s area of freedom, security and justice. Earlier, AG Szpunar convincingly characterized Union citizenship, and in particular the freedom of movement which it implies, as an essential part of a

seq., see also P. COURBE, L’influence des réformes du droit de la famille sur le droit international privé, in Vers de nouveaux équilibres entre ordres juridiques. Mélanges en l’honneur de Hélène Gaudemet-Tallon, Paris 2008, p. 708; H. GAUDEMET-TALLON, Individualisme et mondialisation: aspects de droit international privé de la famille, in The Permanent Bureau of the Hague Conference on Private International Law (ed.), A Commitment to Private International Law. Essays in honour of Hans van Loon, Cambridge 2013, p. 182 et seq.; CH. KOHLER, L’autonomie de la volonté en droit international privé: un principe universel entre libéralisme et étatisme, Recueil des Cours, 2013, Vol. 359, p. 398 et seq. 105 Cf. P. KINSCH, Le rôle du politique en droit international privé. Cours général de droit international privé, Recueil des Cours, 2019, Vol. 402, p. 165 et seq. and, with respect to the CJEU’s case law in the field of personal and family law, in particular p. 175. 106 S. POILLOT-PERUZZETTO, Les contours d’un ordre public européen: l’apport du droit de l’Union européenne, in H. FULCHIRON/ C. BIDAUD-GARON (eds), Vers un statut européen de la famille, Paris 2014, p. 168. 107 Cf. M-P. WELLER (note 103), p. 761-762. 108 CH. KOHLER, Der Einfluss der Globalisierung auf die Wahl der Anknüpfungsmomente im Internationalen Familienrecht, in R. FREITAG/ S. LEIBLE/ H. SIPPEL/ U. WANITZEK (eds), Internationales Familienrecht für das 21. Jahrhundert. Symposium zum 65. Geburtstag von Ulrich Spellenberg, München 2006, p. 17-18. 109 A. ILIOPOULOU (note 98), p. 577 ; H-P. MANSEL, Die kulturelle Identität im Internationalen Privatrecht, in Pluralistische Gesellschaften und internationales Recht, Heidelberg 2008, p. 156.

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Cross-Border Mobility of European Union Citizens European identity.110 Perhaps, the substance of such identity could be deduced not only from legal sources, but also from particular societal evolutions that can be discerned in the various Member States. According to an evolutionary interpretation – that is reminiscent of the European Court of Human Rights' well-known "living instrument" approach'111 – several Advocates General haven taken into account the legislative or societal evolutions in other Member States in order to evaluate the weight that should be granted to a particular Member State’s concerns. In his Opinion in Garcia Avello, AG Jacobs considered that Belgium exaggerated the importance of the immutability of surnames as it had not been found necessary in other Member States to restrict changes of surnames in order to avoid confusion.112 He further opined that, as the legal rules and social practice with respect to surname transmission had changed, and continued to change throughout the EU, e.g. under the influence of increasing numbers of divorces and remarriages, there was no overriding public interest in ensuring that one particular pattern of such transmission should always prevail for the citizens of a Member State within its territory.113 As previously mentioned, AG Wathelet in his Opinion in Coman, also relied heavily upon the “development of European society” and the “universal recognition of the diversity of families” to propose an interpretation of the term “spouse“ that was independent of sexual orientation.114 While these Advocates General do not deny the Member States’ margin of discretion as such, they emphasize the broader, European perspective. Almost inevitably, at least with respect to policy fields for which Member States have retained their competence, as regards cross-border movement, this creates some distance from the views of the host State and hence more room for openness towards the application or recognition of the home State’s law or, at least, its choice-of-law process. In other words, it is not only mobility but also diversity, or “the acceptance of otherness”,115 that is promoted among the 27 Member States. Earlier, Basedow conceptualized the so-called “open society” at the international level as characterized by a growing cross-border movement of persons and economic resources and a growing confrontation of individuals and peoples with the habits and laws of other communities116. Approached in those terms, the promoOpinions of AG Szpunar in McCarthy, C-202/13; ECLI:EU:C:2014:345, pt 40 and in Rendón Marín and CS, C-165/14 and C-304/14; ECLI:EU:C:2016:75, pt 108. 111 Cf. ECHR, 25 April 1978, Tyrer v. The United Kingdom, App. No 5856/72, para. 31. See, about this interpretation method, i.a., E. BJORGE, The Convention as a Living Instrument Rooted in the Past, Looking to the Future, Human Rights L. J., 2016, p. 243 et seq. 112 Opinion of AG Jacobs in Garcia Avello, pt 70. 113 Opinion of AG Jacobs in Garcia Avello, pt 71. 114 Opinion of AG Wathelet in Coman, pts 56-58 and 80. 115 H. MUIR WATT, European Federalism and the “New Unilateralism”, Tulane Law Rev., 2008, p. 1988. 116 Cf. J. BASEDOW, The Law of Open Societies – Private Ordering and Public Regulation of International Relations. General Course on Private International Law, Recueil des Cours, 2013, Vol. 360, p. 471. In the present contribution, the concept of open societies is used for the intra-EU relationships (comp. the remarks by C. KESSEDJIAN on the EU as a 110

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Johan Meeusen tion of citizen mobility and diversity that appears to be proper to the EU must be deemed to constitute the essential core of a particular “European” type of open society that can even be said to reflect a “European identity”. Tolerance of diversity – also recognizable in the reference by Article 2 TEU to pluralism, non-discrimination and tolerance – includes respects for individual diversity. Personal and individual diversity have been called “the trademark of a European”.117 The strong trend, in society and law, in favor of far-reaching but not absolute individual autonomy, obviously promotes individual diversity. It would therefore be reasonable to consider the priority that is given to the development of one’s own individual identity, and hence eventually to societal diversity, as part and parcel of an implicit European identity and hence a core element of EU integration.118 According to this understanding, such a European identity would not have a fixed substantive meaning, and particularly not one based upon “a monolithic European morality”,119 but would rather shield individual moral choices from too much governmental interference. Or, put differently, it might be true, as some claim, that the CJEU’s case law rests on a particular European family model,120 but one that is open and essentially characterized by the recognition of diversity. Compare AG Wathelet’s plea, in his opinion in Coman, for the recognition of diversity, on the basis of a European and even universal trend, with the Court’s earlier rejection in cases such as Grant and D and Sweden/Council of the equivalence of same-sex and heterosexual relationships. To reach that negative conclusion, the Court in Grant relied on what it identified as the then common European perspective on gender and relationships.121 In D and Sweden/Council, the Court came to the same conclusion, with respect to the concept of marriage, that “it is not in question that, according to the definition generally accepted by the Member “closed society” in the debate following the Communication by L. D’AVOUT, La reconnaissance dans le champ des conflits de lois, Travaux du Comité français de droit international privé, 2014/2016, p. 253). 117 H.J. THUE, European Private International Law as the European Solution, and the European Economic Area (EEA/EWR) Problem, in G. REICHELT (ed.), Europäisches Gemeinschaftsrecht und IPR, Vienna 2007, p. 94. 118 Cf. L. AZOULAI, L’autonomie de l’individu européen et la question du statut, in C. KESSEDJIAN (ed.), Autonomie en droit européen. Stratégie des citoyens, des entreprises et des États, Paris 2013, p. 204. 119 Cf. F. DE WITTE, Sex, Drugs & EU Law: The Recognition of Moral and Ethical Diversity in EU Law, Common Market Law Rev., 2013, p. 1561. 120 See e.g. G. KESSLER, La consécration par la CJUE du droit de séjour du conjoint de même sexe du citoyen européen: un pas supplémentaire vers la libre circulation des situations familiales au sein de l’Union européenne?, Clunet, 2019, p. 43. 121 CJEU, 17 February 1998, Grant, C-249/96, ECLI:EU:C:1998:63, paras 31-35. See earlier also CJEU, 17 April 1986, Reed, 59/85, ECLI:EU:C:1986:157, paras 13-15, on the interpretation, “in the absence of any indication of a general social development which would justify a broad construction” while “any interpretation of a legal term on the basis of social developments must take into account the situation in the whole Community, not merely in one Member State”, of the term “spouse” as referring to a marital relationship only.

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Cross-Border Mobility of European Union Citizens States, the term marriage means a union between two persons of the opposite sex”.122 Twenty years later, the opinions had changed in favor of stronger legal protection of individual choices and a much greater restraint for the legislature throughout the Union to impose standard societal views, to the disadvantage of individual autonomy. According to AG Jacobs, this diversity must be considered an essential characteristic of an area of freedom, security and justice that rests upon systematic cross-border movement. As he wrote in his Opinion in Garcia Avello, “the concept of ‘moving and residing freely in the territory of the Member States’ is not based on the hypothesis of a single move from one Member State to another, to be followed by integration into the latter. The intention is rather to allow free, and possibly repeated or even continuous, movement within a single ‘area of freedom, security and justice’ in which both cultural diversity and freedom from discrimination are ensured”.123 Jacobs supported this statement by referring i.a. to Article 151(4) EC Treaty, the current Article 167(4) TFEU, according to which the Union shall generally in its actions take cultural aspects into account, in particular in order to respect and to promote the diversity of its cultures. Through the connection of structural mobility with diversity, AG Jacobs linked the EU’s AFSJ to the concept of an “open society” as defined above. Jacobs added a substantive component to the Treaties’ rather enigmatic AFSJ concept. According to Article 3(2) TEU, the Union shall offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime. The Treaties do not really give any further definition of this area, in spite of its importance. Its identity apparently must be deduced from the very broad range of policies and measures that must be developed and adopted on the basis of Articles 77-89 TFEU. That is why we have earlier referred to the AFSJ as “a formula, in search of a concept”.124 Gradually, however, the Court’s case law on Union citizenship, read together with the pertinent Treaty provisions and several AG Opinions, puts some flesh on its bones.125 AG Jacobs’s understanding of the area foreshadowed in two respects its post-Lisbon conceptualization. First, in accordance with the political approach since the adoption of the so-called Tampere Milestones,126 several Treaty provisions confirm mutual recognition as a cornerstone of the AFSJ, also where its CJEU, 31 May 2001, D and Kingdom of Sweden v. Council of the European Union, joined cases C-122/99 P and C-125/99 P, ECLI:EU:C:2001:304, para. 34. 123 Opinion of AG Jacobs in Garcia Avello, pt 72. 124 J. MEEUSEN, Conflict of Laws and the Area of Freedom, Security and Justice after the Treaty of Lisbon, in P. LINDSKOUG/ U. MAUNSBACH/ G. MILLQVIST et al. (eds), Essays in Honour of Michael Bogdan, Lund 2013, p. 312. 125 See also P. MANKOWSKI, Primärrechtliche Anerkennungspflicht im Internationalen Familienrecht?, in K. HILBIG-LUGANI/ D. JAKOB/ G. MÄSCH et al. (eds), Zwischenbilanz. Festschrift für Dagmar Coester-Waltjen, Bielefeld 2015, p. 578. 126 Presidency Conclusions, Tampere European Council in Tampere, 15 and 16 October 1999, No 33. 122

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Johan Meeusen private law effects are concerned (cf. Articles 67(4) and 81(1) TFEU). The principle of mutual recognition today is even considered a constitutional principle that underpins this area.127 Second, but no less important, Article 67(1) TFEU characterizes the area as one “with respect for fundamental rights and the different legal systems and traditions of the Member States”. In light of the Court’s case law on the rights of mobile Union citizens, this reference to legal diversity, combined with the required protection of the fundamental rights of the individuals concerned, must be understood as a duty for the Member States to respect the legal rules and traditions of the other Member States – and hence to accept diversity as an essential characteristic of the AFSJ128 – to the advantage of the mobile citizen, rather than as a right to enforce their own rules at all costs. The Coman judgment in particular, read against the background of the earlier judgments which have been examined in this contribution, might signal important nuances to the reliance by Member States on their respective national identities in order to stop the acceptance of divergent family models.129 Moreover, the effects of the Court’s reasoning in this case may be quite far-reaching. First of all, the essence of the CJEU’s reasoning in Coman appears to be valid not only for same-sex marriages concluded during a period of genuine residence in another Member State, as mentioned by the Court, but for all kinds of individual status that have been legally acquired abroad, in particular in other Member States but – why not? – also in third States.130 Further, and very importantly, its significance may stretch beyond the sole issue of residence rights. As mentioned above, the CJEU in Coman strongly emphasized that it only confirmed the obligation for a Member State to recognize a same-sex marriage concluded in another Member State “for the sole purpose of granting a derived right of residence to a third-country national” and so considerably reduced this judgment’s effects. The Court, however, also broadened its perspective and added that this recognition was confined to the obligation to recognize such marriages for the sole purpose of enabling persons of the same sex “to exercise the rights they enjoy under EU law”.131 It appears therefore that the Court viewed these residence rights as only one application of a broader recognition of rights under EU law. If the latter interpretation is correct, the CJEU confirms the understanding of the EU and its legal system as an area in which the rights of migrant citizens, who rely on a particular civil status that they have legally acquired in another Member State, enjoy strong protection in the other Member States (though limited

127 K. LENAERTS, The Principle of Mutual Recognition in the Area of Freedom, Security and Justice, Il Diritto dell'Unione Europea, 2015, p. 526. 128 S. POILLOT-PERUZZETTO, Le défi de la construction de l’espace de liberté, de sécurité et de justice, in Vers de nouveaux équilibres entre ordres juridiques. Mélanges en l’honneur de Hélène Gaudemet-Tallon, Paris 2008, p. 591. 129 Cf. G. KESSLER (note 120), p. 45. 130 Cf. M. BOGDAN (note 78), p. 91-92. 131 Coman, para. 45, to be read jointly with para. 46 (“Accordingly….”).

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Cross-Border Mobility of European Union Citizens of course to the rights granted under EU law).132 Even apart from economic integration and freedom of movement within the internal market, and in spite of the lingering political controversies between the Member States on these sensitive issues of status and family law, the EU is developing into a full area of freedom, security and justice which essentially integrates the concept of a true “open society”.

V.

Conclusion

According to the Preamble of the Charter, the Union “places the individual at the heart of its activities, by establishing the citizenship of the Union and by creating an area of freedom, security and justice”. The judgments examined above, as we understand them, strongly contribute to that goal. At the very least, they oblige us to take a fresh look at the precise reach of EU integration, the pertinence in that respect of Union citizenship, mobility rights and conflict of laws and the precise balance of the private and Member State interests involved. Within the EU, and at least with respect to cross-border status law as it is impacted by Union citizenship, the traditional conflict of laws principle of proximity, as defined by LAGARDE,133 gives way to the substantive concerns of individual autonomy and status continuity.134 MICHAELS has suggested that EU law integrates a particular conflict of laws method, which does not rest on the search for the closest connection but regulates the conflict between states’ regulatory interests, on the one hand, and private rights, on the other hand, as protected through the four freedoms.135 According to the judgments examined, the protection of individual autonomy and status continuity could determine that new balancing model and so characterize a truly European approach to the disputes that arise from the conflict between cross-border movement of citizens and hence their private interests, on the one hand, and the protection of the EU Member States national identities, as expressed through legislation that is often characterized by value diversity, on the other.

See also J-Y. CARLIER (note 90), p. 217-218 and M. FALLON, Observations sous CJUE, 5 juin 2018, gr. ch., Coman, C-673/16, EU:C:2018:385, Cahiers de l’EDEM, June 2018. 133 P. LAGARDE, Le principe de proximité dans le droit international privé contemporain. Cours général de droit international privé, Recueil des Cours, 1986, vol.196, p. 25-26 according to whom this principle expresses “l’idée du rattachement d’un rapport de droit à l’ordre juridique du pays avec lequel il présente les liens les plus étroits” and who understands private international law therefore as “un droit de rattachement”. 134 K. FUNKEN, Das Anerkennungsprinzip im internationalen Privatrecht, Tübingen 2009, p. 289. 135 R. MICHAELS, The New European Choice-of-Law Revolution, Tulane L. Rev., 2008, p. 1639. 132

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Johan Meeusen The CJEU’s interpretation of citizenship rights contributes to the transformation of the EU into a true area of freedom, security and justice, which rests on the concept of an open European society. The area is understood as a common space of the 27 Member States in which the mobile Union citizen, with his or her particular identity, is granted the central spot.136 One can deduce from the judgments examined, that the Union citizen must be respected as an individual who, relying on his or her fundamental rights, may rightfully claim the recognition and continuity of his or her status, despite (intensive) movement across the Member States’ borders and despite the differences between the Member States involved as to the substantive rules on civil status. AG Poiares Maduro earlier linked the Union’s ambition to be an area of freedom, security and justice specifically with the goal “to establish a society characterized by pluralism”.137 Status continuity for the individual therefore goes hand in hand with a “differentiated” concept of Union citizenship,138 which, within the Union’s area of freedom, security and justice, should be accommodated rather than eliminated.139 This can be done through mutual recognition, which serves to ensure the mobile citizen’s single, permanent civil status within the EU.140 Protection of fundamental rights adds to this: it further strengthens the legal status of the Union citizen and transforms it into a true right to a single identity which must be recognized throughout the AFSJ.141 The Court’s interpretation of Union citizenship in cross-border cases, combined with the specific attention that it has given to fundamental rights protection, follows in line with political initiatives such as the Stockholm Programme.142 It has profoundly influenced the understanding of the Union’s AFSJ, through the increased emphasis on its components of “freedom” and “justice”. Together with other judgments on related issues in which fundamental rights protection has

E. PATAUT, Citoyenneté de l’Union, Revue trimestrielle de droit européen, 2010, p. 617. See also S. POILLOT-PERUZZETTO (note 106), p. 169. 137 Opinion of AG Poiares Maduro in Kingdom of Spain v. Eurojust, C-160/03, ECLI:EU:C:2004:817, pt 35. 138 Cf. E. CLOOTS, National Identity in EU Law, Oxford 2015, p. 240 et seq. and p. 265 et seq. 139 Accord: F. DEANA, Cross-border continuity of family status and public policy concerns in the European Union, DPCE Online, 2019, p. 1992-1993. 140 A. BUCHER (note 10), p. 361; H. GAUDEMET-TALLON (note 104), p. 193. 141 A. BUCHER (note 10), p. 378. 142 Cf. S. COUTTS, Citizenship of the European Union, in D. ACOSTA ARCARAZO/ C.C. MURHPY (eds), EU Security and Justice Law, Oxford 2014, p. 101. 136

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Cross-Border Mobility of European Union Citizens played a pivotal role,143 these fifteen years of CJEU case law, from Garcia Avello to Coman, have strengthened the human dimension of European integration.144

143 See in particular SM, paras 64-72 and the comments on this judgment by S. PEERS, Guardianship, free movement and the rights of the child: the SM judgment, EU Law Analysis 26 march 2019, available at http://eulawanalysis.blogspot.com/2019/03/ guardianship-free-movement-and-rights.html (on 2.2.2021) and F. STRUMIA, The Family in EU Law After the SM Ruling: Variable Geometry and Conditional Deference, European Papers, 2019, p. 391-392. 144 Cf. A. ILIOPOULOU (note 98), p. 579.

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NO MORE SOCIAL DISTANCE BETWEEN INTERNATIONAL LAW AND CONFLICT OF LAWS! Radu Bogdan BOBEI*

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

Introduction Back to the … Future Suggested by the Past! Transnational Situations – A Crystal-Clear Reality of the Late 20th and of Early 21st Centuries Is the (Firm) Public/Private Distinction in International Law Becoming Passé? EU Law – A Sub-Regional Version of Transnational Law Facilitating the Confluence of Public Law and Conflict of Laws Farewell to the Fragmentation of International Law, and the Message of Global Society Conclusion

International law and conflict of laws are socializing (again) in transnational settings. The transnational situations that we are facing today are constantly developing. My paper modestly shows that today’s interrelated global society needs interrelated international law and conflict of laws. That interrelation reminds us all of the idea that international law and conflict of laws were not conceived of separately by the first practitioners and scholars of jus gentium. The initial monism of international law is today becoming a true neo-monism of this branch of law. The Past and the Future of international law show an undeniable Present: there is no social distance between international law and conflict of laws.

* Dr. BOBEI serves as an Honorary Member of the UNIDROIT Governing Council. He was one of the members of the UNIDROIT Governing Council (2014-2018). In his capacity of Associate Professor, Dr. BOBEI teaches Transnational Commercial Law at the University of Bucharest, Faculty of Law. He is engaged in research activities and writes regularly in the fields of international trade law, conflict of laws and transnational law. The opinions, if any, expressed in this paper are solely the author’s and do not engage the institution(s) to which he belongs.

Yearbook of Private International Law, Volume 22 (2020/2021), pp. 35-63 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Radu Bogdan Bobei

I.

Introduction

The public/private distinction in domestic law entered the stage of a specific decrepitude. Furthermore, that same distinction, which is (still) promoted more or less worldwide, between public (international) law and private (international) law1 no longer fits the transnational situations that we frequently face today. These situations were not conceived of in the liberal approach to thinking about the social world in terms of a variety of rigid distinctions (e.g. state/society, public/private).2 It should be remembered that, at least in domestic law, the rise of liberal capitalism and industrialization in the 18th century was accompanied by the rise of the public/ private distinction.3 It should be noted too that the legal thinking of the 19th century fervently promoted as one of its goals the clear separation between public (domestic) law (e.g. constitutional law, criminal law or regulatory law) and private (domestic) law or the law of private transactions (e.g. torts, contracts, property and commercial law). The 20th century saw the start of the erosion of that way of legal thinking. In the early 21st century, the erosion of the distinction between public and private flourished in cross-borders activities. One of causes of this erosion was the fact that private actors and informal networks acting across borders acquired the regulatory power traditionally attributed to the sovereign nation states4 that had been set up more or less in the light of the Westphalian logic. Private actors sometimes deprived the nation states, at least partially, of their (main) regulatory power(s). In other words, the nation states are no longer the (main) legislators. In the light of globalization, they have become or are becoming facilitators of self1 For the purposes of this paper, private international law is to be understood mainly in its narrow dimension; that is, the dimension of the conflict of laws. In my view, truly private international law encompasses only the conflict of laws. In the French and Belgian views, the concept of private international law also covers, respectively, the issue of recognition and enforcement of foreign decisions/awards, and issues related to nationality and the status of foreigners. In the light of such views, the concept of “private international law” might also be understood in its dimension of the law of nationality. On the narrow and/or broad approaches to the notion of private international law, see H. VAN LOON/ S. DE DYCKER, The Role of the International Court of Justice in the Development of Private International Law, available at https://sociedip.files.wordpress.com/2013/12/the-role-of-theinternational-court-of-justice-in-the-development-of-private-international-law-hans-vanloon.pdf on 13.4.2021. 2 D. KENNEDY, The stages of the decline of the public/private distinction, Un.of Pennsylvania Law Rev., 1982, p. 1349, available at https://scholarship.law.upenn.edu/ penn_law_review/vol130/iss6/4 on 27.7.2020. 3 J.R. PAUL, The Isolation of Private International Law, Wisconsin Int’l L. J., 1988, Vol. 7, p. 149, available at https://repository.uchastings.edu/faculty_scholarship/630/ on 27.7.2020; J. R. PAUL, The Transformation of International Comity, Law & Contemporary Problems 2008, p. 19, available at http://repository.uchastings.edu/faculty_scholarship/629 on 27.7.2020. 4 H. BUXBAUM, Conflict of Economic Laws: From Sovereignty to Substance, Indiana University Maurer School of Law, Virginia J. of Int’l L., 2002, p. 931, available at https://www.repository.law.indiana.edu/facpub/389 on 27.7.2020.

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No More Social Distance between International Law and Conflict of Laws! regulated systems.5 Furthermore, the process of globalization, be it reality, theory, ideology or a combination thereof,6 implied, at least up to 2020, the privatization of public (international) law and the making public of private (international) law.7 The former and the latter processes called into serious question the public (international) law / private (international) law distinction. That distinction began to be weakened in the light of the concept of transnational law, the roots of which are to be found in international law, conflict of laws, comparative law and sociological jurisprudence.8 We shall see also that, at the sub-regional level, European Union law has experimented systematically with transnational law. At the global level, transnational law is experimented with as a response to the decline, if any, of globalization.9 I have previously suggested that one should cautiously approach the concept of conflict of laws as purely technique and science, irrespective of the nature of its legal background, be it international, quasi-federal or domestic.10 I feel confident that my suggestion remains relevant. Furthermore, that suggestion does not contradict the purpose of this paper. The main idea behind that purpose can be expressed as follows: at least prior to 2020, the social distance between international law and conflict of law was coming to an end. The circumstances of globalization are transposing that ending into reality. We shall see that the concept of the territorial sovereignty of the nation state – which emerged in the late 15th century – has nurtured the aforementioned social distance. The Westphalian reality – based on the territoriality and autonomy of states – is no longer the reality of the 21st century.11 It is appropriate to recall that the Treaty of Westphalia (1648) was the first constitutive document of international law in its modern form. It embodies the principles of both state sovereignty 5 J. VERHOEVEN, Souveraineté et mondialisation: Libres propos, in E. LOQUIN/ C. KESSEDJIAN (eds), La mondialisation du droit, Paris 2000, p. 53, as quoted by M. KOSKENNIEMI/ P. LEINO, Fragmentation of International Law. Postmodern Anxieties, Leiden J. of Int’l Law 2002, p. 553-579. 6 R. MICHAELS, Globalization and Law: Law beyond the State, in R. BANAKAR/ M. TRAVERS (eds), Law and Society Theory, Hart Publishing 2013, p. 289. 7 H. MUIR WATT, Droit public et droit privé dans les rapports internationaux (Vers la publicisation des conflicts de lois ?, Archives de philosophy du droit- le privé et le public, 1997, p. 207; P. SCHIFF BERMAN, From International Law to Law and Globalization, Columbia J. of Transnational Law 2005, p. 485, 518-523. These papers have been quoted by R. MICHAELS, Public and Private International Law: German Views on Global Issues, J. of Priv. Int’l Law 2008, p. 121-138. 8 See P. ZUMBANSEN, Happy spells? Constructing and Deconstructing a Private-Law Perspective on Subsidiarity, Law and Contemporary Problems 2016, p. 215-238, available at https://scholarship.law.duke.edu/lcp/vol79/iss2/10 on 27.7.2020. 9 See R. MICHAELS, State Law as Transnational Legal Order, UC Irvine J. of Int’l, Transnational, and Comparative Law, p. 141. 10 See R.B. BOBEI, Theory of Conflict of Laws, Universul Juridic Publishing House, Bucharest, 2020. 11 See S. KRASNER, Pervasive not Perverse: Semi-Sovereigns as the Global Norm, Cornell Int’l Law J. 1997, p. 651, 656.

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Radu Bogdan Bobei and equality among states, and this international document does not neglect the principle of respect for religious minorities.12 At least until 2020, the reality of the 21st century included the evolving process of globalization, displacing colonialism and the Cold War.13 Furthermore, this reality mirrors the concept of Global Bukovina coined by G. Teubner.14 Nonterritoriality and the interdependence of nation states has led to the undeniable reality of the interpenetration of domestic systems and the international system, as well as the blending of public and private issues15 in different arenas, whether domestic or international or quasi-federal (EU style), or a combination thereof. The private side (conflict of laws) of international law therefore required a form of permission from scholars to return to its source – international law. Under the umbrella of international law, such a blending of public and private issues is facilitated by transnational law, be it a (new) body or field of law, a transnational legal process, a method of decision making, a tool to be used in legal methodology or a theory of law.16 In other words, transnational law can be seen as a true incentive for the unification of the public and private sides of international law. The complex and interrelated cross-border situations we are experiencing are in great need of such unification. The reality of the 21st century has seen the spread of frequent, intertwined cross-border activities by various actors, whether states or non-state actors (e.g. individuals, business corporations, NGOs). These players interact frequently and inevitably in cross-border situations. I have taken the liberty of reflecting on some of the pillars of this reality, which is changing the status of the lawyer from its international dimension, if any, to a transnational dimension. The latter dimension empowers any lawyer to use the tools provided by both international law and conflict of laws in order to manage what are nowadays transnational situations. The first pillar is historical in nature. I will briefly explain how the birth of conflict of laws took place under the auspices of international law, which means that the social distance between international law and the conflict of laws did not initially exist (II). The second pillar relies on the concept of transnational situations. This kind of situation involves by its very nature private – domestic or international – and public – domestic or international – interests that need to be approached and solved

12 See L. GROSS, The Peace of Westphalia, 1648-1948, Am. J. of Int’l Law 1948, p. 20, p. 28-33. 13 See J.R. PAUL, Holding Multinational Corporations Responsible under International Law, Hastings Int’l Law and Comp. Law Rev. 2001, p. 285, available at https://repository.uchastings.edu/hastings_international_comparative_law_review/vol24/iss 3/1 on 27.7.2020. 14 See G. TEUBNER, Global Bukovina: Legal Pluralism in the World Society, in G. TEUBNER (ed.), Global Law Without a State, Dartsmouth, 1996, p. 3-30. 15 See H.H. KOH, Why Do Nations Obey International Law?, Yale Law J. 1997, available at https://digitalcommons.law.yale.edu/fss_papers/2101/ on 13.04.2020. 16 See R.B. BOBEI, Preliminary focus on the various meanings of the term “transnational law”, Romanian J. of Int’l L. 2020, p. 7-45.

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No More Social Distance between International Law and Conflict of Laws! in the light of cross-borders needs.17 The words “in the light of cross-border needs” suggest, at least implicitly, that any transnational situation requires a hybrid method of approaching and solving it. In other words, this method consists in assessing public and private interests/issues in combination. International law and conflict of laws issues must also be assessed together. This method thus involves no social distance between international law and conflict of laws (III). The third pillar relies on some “case backgrounds”. These case backgrounds show how public and private interests intertwine, or how public and private actors interact across borders. This interaction is indicative of the absence of social distance between international law and conflict of laws. In other words, it is no longer appropriate to see (public) international law and (private) international law as isolated from one another (IV). The fourth pillar is sub-regional in nature: it is the sub-regional experiment (EU law) with respect to conflict of laws. Since the enactment of the Treaty of Amsterdam, this experiment suggests that the concept of conflict of laws has become, at least in the EU, a concept of public (mainly European) law. We shall see that in the EU the concept of conflict of laws is based on a functional rather than a territorial approach. The EU experiment thus firmly states that no social distance exists (any longer) between the conflict of laws and the public law of this quasiand sub-regional federation. In other words, the conflict of (private) laws constitutes the private side of the public law of the EU. These issues are all highly relevant in the light of the idea that EU public law is to be distinguished from truly international law. The EU public law experiment provides scholars of international law with a particular argument – that of pointing out the public (and truly international) nature of the concept of conflict of laws. This is a small but important step towards re-stating the question as follows: conflict of laws has from its very beginnings constituted a discrete and private side of public – this time international – law. The other side, or life, of the latter law is logically public in nature (so-called “public international law”) because it does not deal with relations between private actors acting across borders (V). The final section will point out that, with globalization, at least as it has evolved up 2020, the fragmentation of international law has come to an end. For the purpose of this paper, fragmentation is to be understood exclusively as a way of stating the distinction between the public and the private side of international law (VI). My conclusion suggests that present-day transnational settings are contributing to an undeniable reconnection between international law and conflict of laws (VII).

17 See the ideology of P.C. Jessup as seen by H.E. YNTEMA, The Objectives of Private International Law, The Canadian Bar Rev. 1957, p. 721.

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Radu Bogdan Bobei

II.

Back to the … Future Suggested by the Past!

The technique underlying conflict of laws relies upon the basic idea that a local court may be able to apply foreign law in cases involving foreigners, hereinafter “foreign cases”. The Ancient World was not at all generous with the aforementioned technique. The cases involving foreigners were resolved by special courts on the basis of local/native customs. In the age of the Roman Republic, for instance, recuperatores and then the praetor peregrinus solved foreign cases by applying special laws for racial groups within political communities.18 In the age of the Roman Empire, which was designed to be universal, many authors suggested that there was no room in it for conflict of laws. The universal empire that had been designed was very much in need of universal law (Roman law). Universality – as the expression of the unification of all (private) laws – excludes, logically, any conflict of laws; in other words, the planned universality of Roman law, understood here in its dimension of jus civile, rendered conflict of laws (completely) redundant.19 It is well known that jus civile applied exclusively in cases involving Roman citizens. Cases involving non-Roman citizens were resolved by the praetor peregrinus in the light of the law of peoples (jus gentium) or the law of nations. Because of the universality of Roman law, numerous authors suggested that no true conflict between Roman law and the law of foreigners or resident non-citizens had ever existed. It seems to me that the universality of Roman law was only designed or imagined, but never realized. I therefore boldly dare to state that, because of the unfulfilled universality of Roman law, several conflicts of laws emerged, although in their sui generis version, between jus civile and the law of foreigners or resident non-citizens. In any case, the special ancient Roman courts (praetor peregrinus) resolved such sui generis conflicts by applying jus gentium directly in foreign cases. This conflict was not resolved by selecting, from among jus civile and the law of foreigners or resident non-citizens, the (private) law applicable to the merits of the case. As we will see, the method of solving the conflict of laws by selecting the law applicable in foreign cases was subsequently thought up by medieval Italian interpreters of Roman law. Irrespective of its characterization or not as a natural law system, jus gentium was invoked by the praetor peregrinus in foreign cases as an expression of universal law. In foreign cases, jus gentium was (directly) applied by the special Roman ancient courts in its dimension of truly universal (natural) law,20 but was not applied in its dimension, if any such existed, of private law

18 See H.E. YNTEMA, The Historic Basis of Private International Law, Am. J. of Comp. Law, 1953, p. 297-317. 19 A. MILLS, The Confluence of Public and Private International Law: Justice, Pluralism and Subsidiarity in the International Constitutional Ordering of Private Law, Cambridge 2009, p. 29. 20 A. MILLS, The Private History of International Law, I.C.L.Q., 2006, p. 1-50. As to the role of the so-called “praetor peregrinus” in conceiving jus gentium as a truly transnational law dealing with the “transnational” transactions concluded by the Romans and the Greeks, see F.K. JUENGER, The Lex Mercatoria and Private International Law,

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No More Social Distance between International Law and Conflict of Laws! applicable to non-Roman citizens. Understood as such, jus gentium – which contains the ingredients of the future (public) international law – might be labelled as the first … law that was (directly) applied in order to resolve foreign cases under the Roman Empire. This direct application of jus gentium constituted the first methodological way of solving the conflict of laws in the Roman Empire, which was conceived as universal. In other words, the first method of solving the conflict of laws was envisaged as a purely direct method. We will see below that this method could be labelled as a substantive method. This direct method logically amounted to the direct application of jus gentium in all foreign cases. So one might even cautiously state today that the conflict of laws constituted from its very beginning an integral part of the jus gentium, which is the ancestor of the future (public) international law. One more argument could be added to consolidate this statement. In the Ancient World, foreign cases were not solved exclusively by directly applying jus gentium. They were also resolved by using other institutions such as reciprocal treaty arrangements or arbitration.21 For instance, in the 4th century B.C. the conflict between the laws of the Greek city states that traded with one another was solved by the conclusion of treaties between those city states; that conflict was also managed by the creation of special courts dealing with commercial and maritime matters.22 Notwithstanding, the dominant approach to solving the above-mentioned conflicts was based on the lex fori principle. In other words, each Greek city state applied its own law in its own courts. Then and now, any reciprocal treaty arrangement is to be regarded as a source of international law. In the Ancient World, therefore, any other way of solving foreign cases, particularly reciprocal treaty arrangements, was equivalent to the methods familiar to (public) international law. The techniques for solving foreign cases, whether reciprocal treaty arrangements or conflict of laws, were truly the ingredients of international law itself. In the early Middle Ages, the law of nations was looked upon as jus nature et gentium; it should be remembered that jus nature et gentium is a universal law binding upon all mankind.23 The law of nations embraced, therefore, the law of states, the maritime law and the mercantile law (lex mercatoria) applicable in the context of any cross-border commercial transaction.24 In the light of the law of nations, the early Middle Ages did not make any distinction, or at least any clear distinction, between domestic and cross-border or international issues, or between public and private issues. Strictly speaking, no such distinction existed. In other words, the system of jus nature et gentium – the predecessor of the future (public) Louisiana Law Rev. 2000, available at https://digitalcommons.law.lsu.edu/lalrev/vol60/ iss4/10 on 27.7.2020. 21 See H.E. YNTEMA, (note 18), p. 721. 22 See G. RUHL, Methods and Approaches in Choice of Law: An Economic Perspective, Berkeley J. of Int’l Law 2006, available at https://ssrn.com/abstract=920999 on 27.7.2020. 23 See H.H. KOH, (note 15), p. 2605. 24 See H.J. BERMAN/ C. KAUFMAN, The Law of International Commercial Transaction (Lex Mercatoria), Harvard Int’l Law J. 1978, p. 221, 224-229.

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Radu Bogdan Bobei international law – was entirely monistic in that it encompassed both public and private issues. Around the time of the Italian Renaissance, the social organization across Europe mimicked the style familiar from the Italian city states. Those city states developed a sort of local or territorial law. Each city state applied its law – that is to say, local law – to all the disputes dealt with by its courts.25 The local law was designed to be consistently applied within the territorial area marked by walls by the city state itself. The expansion of commerce and trade between city states generated the emergence of a particular situation whereby the local law of any given city state entered into conflict with a different law enacted by another city state. In the late 12th century, such conflicts of local laws, including the law of the city state of Bologna, were for the first time considered in ideological terms by Aldricus. According to Aldricus, the conflict of local laws enacted, for instance, by different Italian city states was to be resolved by selecting the better and more useful law.26 At this stage, it is appropriate to mention two ideas. Firstly, Aldricus created the second methodology for solving the conflict of (local) laws. As pointed out above, the first methodology for solving the conflict of laws consisted in the direct application of jus gentium. This methodology amounted to the concept of substantivism in the choice of law between the (local) laws in conflict. I have also pointed out that the ancient Romans invented the praetor peregrinus to solve (commercial) disputes between Roman citizens and foreigners. By using his legal imagination and the concept of good faith, the praetor peregrinus simply invented a set of substantive rules designed only for cross-border transactions involving foreign merchants.27 These rules developed into the core of the future (public) international law that is jus gentium. In other words, the substantivism crafted by the praetor peregrinus means that this special ancient Roman court imagined or created a new substantive law to be directly applied in foreign cases. In the light of substantivism, there was no room for selection of the applicable law for at least one reason – in the context of solving the merits of the crossborder commercial dispute, the praetor peregrinus selected neither jus civile, as it was not applicable to foreigners, nor the law of the foreigners. Secondly, Aldricus’ method involved selection of the law applicable to the merits of the dispute. This is the approach of the so-called “selection method” in the choice of law. In fact, this is the first version of that method. Under that first version, the applicable law was to be selected in the light of its functional (better and more useful) background suggested by the broad principles of jus gentium. It is striking that the first version of this second methodology had its roots in the realm of the future (public) international law. Therefore, even under the selection method, the fundamentals of the conflict of laws derived from international law, which was originally based on the principles of jus gentium.

25

See A. MILLS, (note 20), p 9. See M. WOLFF, Private International Law, 2nd ed. Oxford 1950, as quoted by A. MILLS, (note 20), p. 10. 27 See G. RUHL, (note 22), p. 19. 26

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No More Social Distance between International Law and Conflict of Laws! In the Ancient World and the Middle Ages, no social distance existed between international law and conflict of laws. That concept emerged as an inherent component of international law itself. Respected scholars have pointed out before me that, in the Middle Ages, Bartolus (1313-1357) and Baldus (1327-1400) conceived of private (international) law – that is, the concept of conflict of laws – as a particular branch of international law.28 It is easy to understand this approach in the light of the following idea that has already been pointed out: the law of nations – the predecessor of international law – was thought to encompass any type of transaction, be it public or private, domestic or cross-border (international). The aforementioned way of perceiving the conflict of laws did not prevent the Italian scholars from inventing and developing another idea. That was the idea related to the lex causae approach to solving any conflict of laws. Under this approach, in cases involving merchants from different Italian city states each court was entitled to apply the law of one of the city states involved. In other words, the Italian scholars resorted to the application of the lex causae approach to facilitate the choice between forum (lex fori) and foreign law.29 This is the point where the Greek and the Italian approaches diverge. The former approach derived its spirit from the lex fori principle, which was frequently applied in spite of the conclusion of various treaties between the Greek city states; the latter approach derived its spirit from the lex causae principle. In the light of the lex causae approach, the Italian scholars developed the second version of the selection method in the choice of law. This time, the choice between forum (lex fori) and foreign law was based on unilateralism.30 This version inspired the Italian medieval scholars to logically develop the unilateral method of solving the conflict of (local) laws. In the context of defining the spatial reach of the laws, these scholars divided the laws into personal and territorial ones. The conflict of laws was solved on the basis of the nature of the laws in conflict. The personal laws applied in foreign cases involving the citizens of a particular city state; it did not matter where those citizens were located. The territorial laws of the Italian city states applied in foreign cases to citizens and foreigners alike only if those citizens and foreigners were located within the boundaries of the city states. In the light of the lex causae approach, Carl Friedrich von Savigny developed the third version of the selection method in the choice of law. That is the version of multilateralism. Under multilateralism, the applicable law must be selected in order to deliver uniform consequences, irrespective of the place of litigation. Savigny suggested ascertaining the place of any legal relationship for the purpose of determining the applicable law.31 That place could be identified by linking any legal relationship with a particular legal order. In order to link the legal 28 See A. NUSSBAUM, A Concise History of the Law of Nations 1947, p. 47. This paper had been quoted by H.H. KOH, (note 15), p. 2605. 29 See G. RUHL, (note 22), p. 7. 30 G. RUHL, (note 22), p. 25. 31 R. MICHAELS, Globalizing Savigny? The State in Savigny’s Private International Law and the Challenge of Europeanization and Globalization, Duke Law School Legal Studies Paper, No 74, September 2005, available at https://ssrn.com/abstract=796228 or http://dx.doi.org/10.2139/ssrn.796228 on 27.7.2020.

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Radu Bogdan Bobei relationship properly, Savigny also suggested using some connecting factors such as the place of the transaction or the person’s domicile. The underlying background to multilateralism arose from Savigny’s fundamental idea, whereby conflict of law rules must be universal and common to all nations. Furthermore, the conflict of law rules constitute the basic element of the international community of law, and the latter community is derived from the community of nations.32 The third version of the selection method in the choice of law reminds us all of the initial and international basis of the conflict of laws. The suggested universal – and common to all nations – rules, including conflict of law rules, logically derive only from international law and from its predecessor (jus gentium). It should be noted that jus gentium is to be understood as a universally common law rather than a law between nation states.33 To sum up, Savigny formulated, at least doctrinally, the idea of the conflict of laws by noting the lack of social distance between international law and the concept of conflict of laws. In the world of common law, the alter ego of Savigny is Joseph Story. It should be noted that Story coined the term “private international law” in the light of his fundamental belief that private international law is to be regarded as part of international law because of the comity between states.34 As to the absence of the aforementioned social distance, it is appropriate to mention several additional ideas. At least in the Ancient Word and the Middle Ages, that absence can be attributed to a less scientific approach to law, an approach that is based on natural law deductions. In other words, the principles of natural law, whether or not it is understood in the version of jus gentium, stemmed from the deductive reasoning approach to accepted (universal) fundamentals.35 These fundamentals provided the background against which local laws emerged and flourished. In Europe, the social distance between international law and conflict of laws appeared as a result of the rise of territorial sovereignty in the late 16th century. In his Les Six Livres de la République, Bodin proclaimed for the first time the absolute and perpetual power of (territorial – my addition) sovereignty.36 Bodin’s ideas inspired Hugo Grotius in such a way that the latter embraced the positivist approach to international law. Hugo Grotius thus regarded the law of nations as being part of voluntary law and not part of natural law; in other words, the origin of international law resides in the free will of man.37 In so reasoning, Hugo Grotius separated not only international law from natural law, but also the internal sovereign law of states from external international law, the latter of which arises from state practices and the will of the states. The separation between domestic 32 F.K. JUENGER, A Historical Overview, in Selected Essays on the Conflict of Laws, New York 2001, as quoted by A. MILLS, (note 20), p. 35. 33 See J. WALDRON, Foreign law and the Modern Ius Gentium, Harvard L. Rev. 2005, p.129, 132. 34 See R. MICHAELS, (note 31), p. 124. 35 See A. MILLS, (note 20), p. 7-9. The author points to the interplay between personal law(s), natural law and local law(s) after the collapse of the Roman empire. 36 See H.E.YNTEMA, (note 18), p. 305. 37 See A. MILLS, (note 20), p. 19.

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No More Social Distance between International Law and Conflict of Laws! and international law evolved in the light of a specific and pragmatic approach to law. This was the positivist approach to international law. Under the umbrella of this approach, the rules of international law are to be regarded as the result of observing states’ behaviour. According to this approach, only inductive reasoning matters, not the deductive way of reasoning that evolved prior to the late 16th century. In Europe, the social distance between international law and the conflict of laws was consolidated in 1648. The treaties concluded in the context of the Peace of Westphalia are to be regarded as underlying the positivist approach to international law developed by Jeremy Bentham. I would venture to assert that, by coining the term ‘international law’, Bentham promoted, if only implicitly, the first (tragic) fragmentation of international law. This fragmentation is to be understood in the following context: any private (particularly commercial – my note) dispute connected with more than one state is to be characterized as part of the domestic area; therefore, the legal background governing it is to be regarded as part of domestic law. These assertions led to the above-mentioned (first) fragmentation based on the territorial approach to sovereignty. In the light of the positivist account of international law, this approach amounted to the emergence of the boundary between internal and external aspects of any state, or between domestic and international issues.38 The private (international) branch of international law had thus been detached from its source – that is, international law itself. In this way the private side of international law was expropriated by the enactment of the domestic codifications that flourished in the 19th century. The approach to private (international) law as part of domestic law (of domestic Civil Codes – my note) evolved in the context of the industrial revolution, promoted by liberal legal reasoning. In the 19th and 20th centuries, legal reasoning such as this also facilitated the distinction between public and private issues, or between law and society issues. In other words, the rise of the sovereign nation state in the late 19th century and the positivist approach to international law promoted distinct and separate existences for the public and private sides of international law itself. In the early 21st century, the promise of a globalized market led – at least until 2020 – to the emergence of another form of (legal) reasoning. This approach stated the unity of international law in its public and private dimensions. International law needs not only a public side, but also a private one, in order to properly manage transnational problems. As I have already pointed out, transnational law – in its function as a methodological tool – has entered the world arena to re-state the unity of international law (in both public and private issues). Transnational law also enters into the EU arena, with the aim of defining new methods of transnational governance. One method is closely related to the concept of conflict of laws. In the context of EU transnational governance, the conflict of laws is not (necessarily – my note) about the selection of rules; it is about the search for responses to legal diversity.39 Those responses, if any, must address 38

A. MILLS, (note 20), p. 20. C. JOERGES, Rethinking European Law’s Supremacy with Comments by D. CHALMERS, R. NICKEL, F. RODL, R. WAI, EUI Working Paper Law, July 2005, no 2005/12, available at https://ssrn.com/abstract=838110 or http://dx.doi.org/10.2139/ ssrn.838110 on 27.7.2020. 39

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Radu Bogdan Bobei the transnational situations occurring not only in Europe and the EU, but also worldwide. The transnational problems mirror both the co-existence of public and private interests and the legal diversity established by the Westphalian state system.40 That co-existence has led to the collapse of the firm distinction between public and private issues. In the era of globalization, the co-existence based on the power’s dominant role has been replaced by cooperation.41 The background to the aforementioned collapse defines the relationship between conflict of laws and public (domestic) law in its dimension of constitutional law. As Jacco Bomhoff has stated, conflict of laws informs constitutional law, and vice versa;42 in other words, transnationalism suggests the constitutionalization (in the USA or Canada), or the quasi-constitutionalization (in the EU), of the conflict of laws.43 In the early 21st century, transnational problems put pressure – as exerted by territorial sovereignty – under the ... pressure. It should be borne in mind that the traditional source of private (and international) law, the so-called “jus commune”, has broken down under the pressure of sovereignty.44 The time has come to briefly focus on the concept of transnational situations.

III. Transnational Situations – A Crystal-Clear Reality of the Late 20th and Early 21st Centuries “More extravagantly, the suggestion has been made that the traditional divisions between public international law and private international law and even some

40 C. JOERGES, The Challenges of Europeanization in the Realm of Private Law: A Plea for a New Legal Discipline, 2004, available at https://ssrn.com/abstract=635387 or http://dx.doi.org/10.2139/ssrn.635387 on 27.7.2020. 41 On the areas of international relations where co-existence had been replaced by cooperation, see G. SHAFFER, Legal Realism and International Law, 2018, in J.L. DUNOFF/ M. A. POLLACK (eds), International Legal Theory: Foundations and Frontiers, Cambridge University Press, 2021, Forthcoming; UC Irvine School of Law Research paper, No 201855, available at https://ssrn.com/abstract=3230401 on 27.7.2020. 42 See J. BOMHOFF, The Reach of Rights: “The Foreign” and the “The Private” in Conflict-of-Laws, State-Action, and Fundamental-Rights Cases with Foreign Elements, Law and Contemporary Problems 2008, p. 39, as quoted by K. KNOP/ R. MICHAELS & A. RILES, Transdisciplinary Conflict of Laws Foreword: Caver’s Double Legacy, Law and Contemporary Problems 2008, p. 1028, available at http://scholarship.law.cornell.edu/ facpub/1028 on 27.7.2020. 43 On the constitutionalization of the conflict of laws in USA and Canada, see R. WAI, The Interlegality of Transnational Private Law, Law and Contemporary Problems, 2008, p. 107-127, available at https://ssrn.com/abstract=1596680 on 27.7.2020. 44 See R. MICHAELS, Post-critical Private International Law: From Politics to Technique, in H. MUIR WATT/ D. P. FERNÁNDEZ ARROYO (eds), Private International Law and Global Governance, Oxford University Press, 2014, p. 55-69.

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No More Social Distance between International Law and Conflict of Laws! national law might be submerged in an ocean of ‘transnational law’”.45 In the light of these words, I note that transnational legal problems are arising from various transnational or cross-border situations. These situations work in such a way that a neat distinction between the categories of public and private issues becomes an illusion.46 Transnational situations are to be understood logically as being localized in more than one domestic jurisdiction. Traditionally, (public) international law provides the tools for solving transnational legal problems where only public actors (mainly states) are involved. (Private) international law provides the tools for solving the same type of legal problem where only private actors (mainly corporations) are involved. However, human problems do not concern themselves with public matters alone or with private matters alone. Human problems are universal in nature, and that universality means that both public and private issues are involved, and must be solved at the same time. This is the concept of the universality of human problems developed by Philip C. Jessup in the 1950s. Understood as such, universality exposes the arbitrariness of the public/private law division in cross-border issues. This arbitrariness is based on the idea that “transnational situations […] may involve individuals, corporations, states, organization of states, or other groups”.47 Thus the public and private sides of international law meet again under the umbrella of the so-called neo-monism of international law itself.48 That meeting, if it occurs, is not necessarily peaceful. It should be noted that Philip C. Jessup saw the nature of cross-border problems as frequently amounting to a competition between public actors (states, mainly) and private actors, whether individuals or corporations.49 That competition gives birth to the concept of transnational (and disputed) legal problems. The meaning of this concept was explored in the 1960s as follows: “The problems that have foreign dimensions and may require a special response within a national legal system take many forms… How a nation reacts to these and related problems… necessarily affects other countries and their nationals. Thus, such expressions of national legal systems can be viewed as having transnational character. Together with public international law and with regulation by inter45 See P. ZUMBANSEN, Introduction: Transnational Law, with and beyond Jessup, in P. ZUMBANSEN (ed.), The Many Lives of Transnational Law. Critical Engagements with Jessup’s Bold Proposal, Cambridge 2020, p. 11, quoting P.C. JESSUP, The Use of International Law 63, 1959, 164, available at https://digitalcommons.law.lsu.edu /lalrev/vol20/iss3/17/ on 13 4.2021. 46 “The neat distinction of the categories of public and private law has long ceased to be expressive of the realities of contemporary municipal, as well as international, law, even though the distinction still dominates the teaching curricula of law schools”. P. ZUMBANSEN, (note 45), p. 21, citing W. FRIEDMANN, The Changing Structure of International Law, 1964, p. 40. 47 See P.C. JESSUP, Transnational Law, New Haven 1956, p. 3. 48 On the three strands (rationalist-instrumentalist, liberal and constructivist) of neomonistic international law, see H.H. KOH, (note 15), p. 2631. 49 P. ZUMBANSEN, (note 45), p. 13.

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Radu Bogdan Bobei national organizations, such phases of national law form a complex of rules, policies, principles, attitudes and processes bearing upon relationships among nations or among their nationals. It is that complex to which book refers as ‘transnational legal problems’ or ‘transnational law’”.50 According to that meaning – which is not outdated –, any transnational situation or any transnational legal problem that arises from it brings together public and private issues, or international law and domestic law. This type of situation or legal problem brings together the public and the private dimensions of international law itself. The international courts and tribunals have been aware, ever since their creation, of the interaction between the two sides (public and private) of international law. Those courts and tribunals have therefore developed a body of case law that straddles the boundaries, if any, between (public) international law and (private) international law, understood exclusively in its dimension of conflict of laws. It should be noted that individuals and companies/corporations acting internationally frequently challenge such borders and develop (public) international law.51

IV. Is the (Firm) Public/Private Distinction in International Law Becoming Passé? Certainly yes: the realities of the 20th century and of the early 21st century show that the (firm) public/private distinction in international law has become passé. A particularly complex and disordered web of relations between public actors (mainly states) and private actors (mainly individuals and multinational corporations) suggests the affirmative answer.52 This web of relationships must be assessed in the light of legal realism. The scientific discourse of legal realism focuses first of all on facts or realities; legal concepts or notions are then considered in the light of those facts.53 I will therefore briefly explore two types of fact and case back50 H.J. STEINER/ D.F. VAGTS, Transnational Legal Problems: Materials and Text, 1968, as quoted by V. KANWAR, Epilogue Difficulties for Every Solution. Defining Transnational Law at the Edge of Transdisciplinary, in P. ZUMBANSEN, (note 45), p. 476477. 51 D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, Public and Private International law in International Courts and Tribunals. Evidence of an inescapable interaction, Columbia J. of Transnational Law, 2018, p. 797-854. The authors quote Urbaser S.A. et al. v. Argentina, ICSID Case No ARB/07/26, 8 December 2006, p. 1195-1196. The ICSID Tribunal ruled that “(…) it can no longer be admitted that companies operating internationally are immune from becoming subjects of international law”. 52 Z. DOUGLAS, The International Law of Investment Claims, 2012. This author is quoted by D.P.FERNANDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 824. 53 On the legal realist approach to international law, see G. SHAFFER, (note 42) and also ID., The New Legal Realist Approach to International Law, Leiden J. of Int’l Law 2015, p. 189.

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No More Social Distance between International Law and Conflict of Laws! ground that can lead to the disappearance of any sharp (theoretical) distinction between the public and private (especially commercial) sides of international law.54 We will see the interaction of those sides evolving in a way that enables any court or arbitration tribunal, whether domestic or international, to apply international law in both its public and private dimensions. Pragmatically speaking, it has become pointless to examine the aforementioned distinction theoretically. Instead, the case backgrounds outlined below will show how the confluence of public and private international law emerges.55 The first type of fact/case background involves the International Court of Justice, hereinafter “ICJ”. The ICJ is a (public) international law institution.56 This court therefore exercises a purely public international law function;57 the disputes brought before it are decided in accordance with international law. In spite of its function, the ICJ – which is international in nature – has not been prevented from adjudicating both public and private claims. Consequently, the obligation of the ICJ to apply both public and private international norms in the same dispute is undeniable. “Applying private international law norms” means applying not only international, but also domestic, norms; it is well known that the technique of conflict of laws allows for the enforcement of domestic law(s). Contemporary scholars have pointed out that the ICJ has become an institution at the place where public and private international law intersect.58 This dimension of the ICJ has evolved over time. For instance, in the Serbian and Brazilian Loans cases, the predecessor of the ICJ – the Permanent Court of International Justice, hereinafter “PCIJ” – applied conflict of laws mechanisms and tools in order to decide (public) international law disputes.59 Given the nature of their participants, these cases were 54 On critiques of the public/private distinction, see A. CLAIRE CUTLER, Artifice, Ideology and Paradox: The Public/Private Distinction in International Law, Rev. of Int’l Political Economy 1997, p. 261-285. 55 See A. MILLS, (note 19 or 20), p. 29. 56 On the interactions between public and private international law issues in (mainly) international or domestic judicial or arbitral proceedings, see D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE (note 51), p. 798-854. 57 See TH.M. de BOER, Living apart together: the relationship between public and private international law, Netherlands Int’l Law Rev., 2010, p. 183-207. 58 S. DE DYCKER, Private International Law Disputes before the International Court of Justice, J. of Int’l Dispute Settlement, 2010, p. 475, 476. See also the Belgium v. Switzerland case submitted to the ICJ in 2009. It should be remembered that this case was discontinued at Belgium’s request. Consequently, the ICJ removed it from its list in April 2011. On the idea that “the ICJ remains the ultimate international judicial forum before which not only disputes on pure inter-State matters but (…) also questions of interpretation and application of conventions on private international law may be brought”, see H. VAN LOON/ S. DE DYCKER, (note 1), p. 12-13. 59 See Payment of Various Serbian Loans Issued in France, Judgment, (Fr. V. Yugo.), July 12, 1929, P.C.I.J. (ser. A) No 20, available at on http://www.worldcourts.com/ pcij/eng/decisions/1929.07.12_payment1.htm 14.4.2021, and Payment in Gold of Brazilian Federal Loans Contracted in France, (Fr. V. Braz.), July 12, 1929, P.C.I.J. (ser. A), No 21, available at http://www.worldcourts.com/pcij/eng/decisions/1929.07.12_payment2.htm on

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Radu Bogdan Bobei initiated as transnational; “transnational” in the sense that the disputes involved both states and private individuals. In other words, the aforementioned cases were transnational in nature because the nature of the participants was hybrid; the controversies opposed states and private individuals, and not only states or private individuals. In the light of the law applicable to the merits of the disputes, the same cases were initiated as international and evolved into being transnational; “transnational” in the sense that not only international law(s) but also domestic law(s) were applied. The latter laws were applied in accordance with the choice of law principle. It should be borne in mind that the choice of law and the party’s autonomy principles are the main pillars of the concept of conflict of laws. The PCIJ had to decide the issue “whether the payment of the Serbian [and Brazilian – my note] loans to French bondholders issued before the First World War should be effected in francs at gold value or in francs at their depreciated current value”.60 In both cases, treaty or customary norm provisions governing at least two issues were lacking: first, the issue of which law should be applied to the loan contracts; secondly, the issue of which law should be applied to the currency of payment. The PCIJ had to resolve both issues in the light of the approaches and/or techniques familiar to (private) international law, understood in the narrow dimension of conflict of laws. Let us recall the principles outlined on the occasion of resolving the aforementioned issues. The PCIJ held as follows: “Any contract which is not a contract between States in their capacity as subjects of international law is based on the municipal law of some country. The question as to which this law is forms the subject of that branch of law which is at the present day usually described as private international law or the doctrine of the conflict of laws. The rules thereof may be common to several States and may even be established by international conventions or customs, and in the latter case may possess the character or true international law governing the relations between States. But apart from this, it has to be considered that these rules form part of municipal law”’.61 In order to identify the law applicable to the loan contracts and to the currency of payment, it was necessary to identify the municipal conflict of laws rules, whether Serbian, French or Brazilian. Instead of doing that, the PCIJ directly identified the law(s) governing the aforementioned issues as follows: “The Court, which has before it a dispute involving the question as to the law which governs the contractual obligations at issue, can determine what this law is by reference to the actual nature of these 14.04.21. For a brief overview of this case law, see D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 798-854; see also H. VAN LOON/ S. DE DYCKER, (note 1), p. 6. 60 H. VAN LOON/ S. DE DYCKER, (note 1), p. 6. 61 See Payment of Various Serbian Loans Issued in France, Judgment, 1929 PCIJ (ser.A) no 20, para 86, (July 12). The aforementioned paragraph is quoted by D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 798-854.

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No More Social Distance between International Law and Conflict of Laws! obligations and to the circumstances attendant upon their creation, though it may also take into account the expressed or presumed intention of the Parties. Moreover, this would seem to be in accord with the practice of municipal courts in the absence of municipal law concerning the settlement of conflict of laws”.62 The confluence of public and private international law quickly emerged. The PCIJ firmly pointed out how that confluence worked. The conflict of law rules arose from domestic or municipal legislation; the conflict of law rules “may be elevated to the status of public international law rules and may thus govern the relations between States”.63 The twofold legal identity of the conflict of laws rules did not prevent the PCIJ from employing the distinction suggested by the local state courts in the light of their private international law rules and their practice; that is, the distinction between the law applicable to the loan contracts and the law applicable to the currency of payment. The vehicle of this distinction was the concept of depeçage. Using this distinction, the PCIJ held that Serbian law applied to the substance of the debt, while French law governed the currency in which payment was to be made. The French creditors were hence allowed to validly obtain payment in francs at gold value. The lessons drawn from the above cases can be summarized as follows: the absence of treaty or customary norm provisions regarding the applicable law(s) did not prevent the PCIJ from pragmatically examining the link between the public and private dimensions of international law. The social distance between public and private international law was eradicated in a bold way, by (directly) adopting private international law techniques (e.g. the technique of depeçage) in order to solve public international law disputes;64 the technique(s) of private international law allowed the PCIJ to apply domestic laws in those disputes. The confluence of public and private international law changed the nature of the cases brought before the PCIJ. In other words, that confluence led to something in the nature of transnational disputes instead of international cases. As already pointed out, the hybrid nature of the participants in the dispute and of the tools employed by the PCIJ provided the transnational background for those cases. In the context of this transnationalism, the public and private dimensions of international law are no longer defined in isolation from one another. Transnationalism and its (in)famous tool – transnational law, hereinafter “TL” – go beyond the distinctions between public (international) and private (international) law, hard and soft law, legal and non-legal, territoriality and extraterritoriality. Transnationalism and its tool allowed the PCIJ, a court designed only to administer international law, also to administer, although in subsidiary way, domestic law (Serbian, Brazilian and French law).

62

Ibidem. See also H. VAN LOON/ S. DE DYCKER, (note 1), p. 6-7. See D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 798-854. 64 For the various scenarios involving the interactions between public and private international law in the decisions of the PCIJ and ICJ, see D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 792-854. 63

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Radu Bogdan Bobei The second type of fact/case background focuses on the investment arbitration hypothesis. International arbitration, especially investment arbitration, inspired Philip Jessup to suggest to lawyers the concept of TL.65 The New Haven School’s ideological background suggested the idea that international law needed to be adjusted to the complex post-WWII realities. This adjustment was needed because of the involvement of both state and non-state actors in the overlapping social fields. It should be remembered that “the New Haven School argued that international law is not a body of rules but a process of authoritative decisionmaking”.66 The aforementioned ideological background facilitated the co-existence of international law and conflict of laws under the generous umbrella of TL. I venture to assess TL as an extensive process of authoritative decision-making. It is extensive because of the multiple state and non-state actors involved in any transnational situation. It is also extensive because it involves many sets of rules of law or even (domestic) laws. It should be borne in mind that Philip Jessup considered TL to include “all law which regulates actions or events that transcend national frontiers. Both public and private international law are included, as are other rules which do not wholly fit into such standard categories”.67 In our time, the dialogue between conflict of laws and international law continues to flourish, at least in the context of “global governance”.68 International arbitration, whether commercial or investment-related, could be considered a specific and genuine vehicle of global governance. One raison d’être of global governance is hence to address international arbitration, especially in its investment dimension, more effectively. I take this opportunity to state that any given investment arbitration case is neither international nor domestic. Let us be frank: this type of case is truly transnational, because it involves hybrid actors (state and non-state actors); it also involves hybrid sets of laws (domestic and international) that are applied to the merits of the dispute. Furthermore, it is truly transnational because it does not present any hierarchy between the rules of law or laws that are applied to the merits of the dispute, or between the actors that are interacting, under the label of investment arbitration, in a variety of public and private arenas.69 In fact, investment arbitration cases facilitate the absence of social distance between international law and conflict of laws. The party autonomy principle ena65 See F. GRISEL, Transnational Law in Context. The Relevance of Jessup’s Analysis for the Study of “International” Arbitration, in P. ZUMBANSEN (ed.), (note 45), p. 186-196. 66 See H.H. KOH, Why Do Nations Obey International Law?, in Symposium: Group Conflict and the Constitution: Race, Sexuality, and Religion, The Yale Law J. 1997, p. 2599-2659, available at https://digitalcommons.law.yale.edu/ylj/vol106/iss8/7/ on 14.4.2021. 67 See P.C. JESSUP, (note 47), p. 2. 68 See C.A. WHYTOCK, Toward a New Dialogue between Conflict of Laws and International Law, Am. J. of Int’l Law (AJIL Unbound), 2016, available at https://ssrn.com/ abstract=3145220 on 27.7.2020. 69 On the lack of the aforementioned hierarchy, see E. GAILLARD/ Y. BANIFATEMI, The Meaning of “and” in Article 42(1), Second Sentence, of the Washington Convention: The Role of International Law in the ICSID Choice of Law Process, ICSID Review – Foreign Investment L. J., 2003, Vol. 18, Issue 2, p. 375-411.

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No More Social Distance between International Law and Conflict of Laws! bles the parties to the investment treaty and the private contract itself to draft choice of (rules of) law clauses in favour of the applicability of the general principles of law and/or of domestic laws to be applied. General principles of law recognized by civilized nations constitute one of the sources of international law. This is crystal-clear from the wording of Article 38 of the ICJ’s Statute. Any domestic law can be applied in investment arbitration cases because of one of the ideological pillars of the conflict of laws – the party autonomy principle. The social proximity of international law and conflict of laws therefore emerges fully in any investment arbitration case. This social proximity arises from the wording of Article 42 (1) of the ICSID Convention: “The Tribunal shall decide a dispute in accordance with such rules of law [including laws – my note] as may be agreed by the parties. In the absence of such agreement, the Arbitral Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable”. Prior to the enactment of the ICSID Convention, Phillip C. Jessup examined a particular choice-of-law clause that allowed various sources of applicable law. This choice-of-law clause had been drafted in the context of a specific conglomerate agreement concluded in 1954 between Western investors and the Government of Iran.70 That clause reads: “In view of the diverse nationalities of the parties to this Agreement, it shall be governed by and interpreted and applied in accordance with principles of law common to Iran and the several nations in which the other parties to this Agreement are incorporated, and in the absence of such common principles, then by and in accordance with principles of law recognized by civilized nations in general, including such of those principles as may have been applied by international tribunals”.71 In the light of this choice-of-law clause, Phillip C. Jessup “anticipated how arbitral tribunals would later construe the rules [whether international or domestic – my note] to investor-states disputes”.72 Following to the enactment of the ICSID Convention, the social proximity between international law and conflict of laws emerged fully in at least two scenarios.73 The first scenario relates to the so-called “compound choice of law clauses”, which might refer to both public international law and the domestic law 70

See F. GRISEL, (note 65), p. 189. See P.C. JESSUP Collection, Library of Congress, Box I-220, p. 105. This collection is cited by F. GRISEL, (note 65), p. 189. The latter author also mentions the Award in the Matter of an Arbitration between Kuwait and the American Independent Oil Company, where the arbitrators applied both Kuwaiti law and public international law. 72 See F. GRISEL, (note 65), p. 189. 73 On these scenarios, see D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 792-854. 71

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Radu Bogdan Bobei of the state; the latter law is applied pursuant to the party autonomy principle familiar in the context of conflict of laws. The first scenario encompasses, for instance, Texaco Overseas Petroleum v. Libyan Arab Republic (1978) and Libyan American Oil Co (Liamco) v. Libyan Arab Republic (1977). The aforementioned social proximity had been, even if only indirectly, arising from the way in which Phillip C. Jessup conceived of international law as addressing complex situations involving state and non-state actors, or the applicability of international law and domestic law. It is appropriate to recall the Opinion of Phillip C. Jessup delivered at the request of Cecil Olmstead, at that time vice-president of Texaco: “The international judicial position of the corporation has developed pari passu with that of the individual and of the international organization. Because much of international law now deals with the rights of corporations and because there are semantic difficulties in applying the term ‘international’ to relations between states and individuals or corporations, I suggested in 1956 the term ‘transnational law’ but that term is not meant to deny the applicability of international law to the interrelationships in question”.74 The second scenario relates to the UNIDROIT Principles of International Commercial Contracts, hereinafter “UNIDROIT Principles”. The choice of (rule of) law clause in favour of the UNIDROIT Principles is wholly permissible in any investment arbitration case. The UNIDROIT Principles have been assessed as both best-practice rules and generally accepted principles of law; as such principles, the UNIDROIT Principles constitute a source of international law under Article 38 (1) (c) of the Statute of the ICJ.75 Therefore, in any investment arbitration case where the UNIDROIT Principles are applied in the light of the choice of (rule of) law clause, the social distance between international law and conflict of laws is entirely absent. As to the legal nature of the UNIDROIT Principles, the ruling of the arbitral tribunal in the Joseph Lemire v. Ukraine case should be recalled: “It is impossible to place the UNIDROIT Principles – a private codification [or restatement – my note] of civil law, approved by an intergovernmental institution – within the traditional sources of law. The UNIDROIT Principles are neither treaty, nor compilation of usages, nor standard terms of contract. They are in fact a manifestation of transnational law”.76

74 See Opinion on Certain Issues in Topco-Calasiatic/Libya Arbitral Tribunal by Professor P.C. JESSUP, dated 1 June 1975, p.4, in P.C. JESSUP Collection, Library of Congress, Box II-68. The Opinion is quoted by F. GRISEL, (note 65), p. 196. 75 See G. CORDERO-MOSS, International Commercial Contracts, 2014, p. 27-36 and p. 41-57. This author is also quoted by D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 792-854. 76 D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, (note 51), p. 792-854. See also R. MICHAELS, The UNIDROIT Principles as Global Background law, Uniform Law Rev., 2014, p. 643.

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No More Social Distance between International Law and Conflict of Laws! In sum, the hypothesis of investment arbitration – which is transnational by its nature – today constitutes a true expression of the idea propagated by Lord McNair and Lauterpacht in the 1920s. This idea concerns the principle of not distinguishing between contracts and treaties for at least one reason: “it is essential [in international law – my note] that the resources of private law should be exploited ungrudgingly and to the full”.77 This suggestion of exploitation encouraged Philip C. Jessup to use the term of “transnational law” to properly describe any transnational situation. Such situations could truly be managed by using the tools of both international law and conflict of laws. Therefore, any social distance between international law and conflict of laws must be rapidly erased under the umbrella of transnational law. The delay in doing so causes practitioners in the investment arbitration area to act in accordance with the old-fashioned Westphalian logic. That logic has had its day; transnationalism has to be the future that we are living in … now.

V.

EU Law – A Sub-Regional Version of Transnational Law Facilitating the Confluence of Public Law and Conflict of Laws

The social distance between international law and conflict of laws no longer exists in EU law. The EU regulations enacted in various areas – for instance in contractual and non-contractual matters – undoubtedly prove that the concept of conflict of laws has become independent of territorial delimitations between the EU member (nation) states. A functional approach – instead of the territorial one – to the conflict of laws has emerged since the conclusion of the Treaty of Amsterdam. The concept of a “functional approach” relates to at least two dimensions of the EU constitutionalization of the conflict of laws. First, the latter concept is one of the key elements to be employed “in the creation of a European economic constitution, in which the European private law society and the European competitive order are central” (the ordoliberal ideology suggested by E.-J. Mestmäcker).78 Second, the same concept extends the debate on private law beyond the member (nation – my note) states.79 In the light of the latter dimension, the conflict of laws

77 See A. MACNAIR, Forward to H. LAUTERPACHT, Private Law Sources and Analogies of International Law, 1927. 78 E.-J. MESTMÄCKER, Auf dem Wege zu einer Ordnungspolitik für Europa, in E-J. MESTMÄCKER/ H.MÖLLER & H.P.SCHWARTZ (eds), Eine Ordungspolitik für Europa: Festschrift für HANS VON DER GROEBEN, Baden-Baden, 1987, p. 9-49. 79 H.-W. MICKLITZ, The Threefold Phenomena of Constitutionalisation in Private Law, in Eppur si muove: The Age of Uniform Law - Essays in honour of MICHAEL JOACHIM BONELL to celebrate his 70th birthday, International Institute for the Unification of Private Law (UNIDROIT), Rome 2016, p. 168-186.

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Radu Bogdan Bobei is to be regarded as a specific concept arising out of the EU legal system, which could be looked upon as a sub-regional version of transnational law.80 The Treaty of Amsterdam provides more “public law background” to the conflict of laws, which acquires a social purpose amounting to a fundamental public law issue – the issue of EU authority. In connection with this issue, the key question emerges: “Which member (nation) State will be allocated the legal power to regulate the matter?” In other words, “all [EU – my note] conflict of law issues are issues of allocation of public power. The question of allocation of public power is also the fundamental question of public international law”.81 EU law must logically be distinguished from (public) international law. Notwithstanding this distinction, in the EU system the concept of conflict of laws is about the determination of “how regulatory authority over private law questions is allocated between states”.82 The EU conflict of laws system thus amounts to a kind of subregional public ordering or sub-regional governance. From the angle of subregional governance, the concept of conflict of laws coordinates the diversity of the laws enacted by the EU member [nation – my note] states. This coordinating trend is not surprising, given that the conflict of laws was first conceived as an element of “a universal (natural) international law system, encompassing the modern territory of both public and private international law, designed to address the problem of coordinating legal diversity”.83 EU law implements the transnationalization of private law by regulating the concept of conflict of (private) laws within its public law instruments (regulations). The social proximity of EU public law and conflict of (private) laws is becoming ever more real. The EU conflict of (private) laws system is turning into public law as a result of the sub-regional version of transnationalisation that has evolved throughout the EU. In other words, EU private law means private law beyond or through the member (nation) states; “beyond” or “through” amounts here to a truly transnational private EU law that is managed under the umbrella of conflict of (private) laws by the mechanisms of EU public law. The EU transnationalisation of the conflict of laws system is logically accompanied by the denationalization of local conflict of laws systems. The denationalization is in only partial operation 80 M. AVBELJ, The European Union under Transnational Law: A Pluralist Appraisal, Oxford/Portland, 2018. See also M. MADURO/ K. TUORI & S. SANKARI (eds), Transnational Law: Rethinking European Law and Legal Thinking, Cambridge 2014. 81 J.P. TRACHTMAN, The International Economic Law Revolution, Un. of Pennsylvania J. of Int’l Law, 1996, p. 33-61. 82 A. MILLS, Connecting Public and Private International Law, in V. RUIZ ABOUNIGM/ K. MCCALL-SMITH/ D. FRENCH (eds), Linkages and Boundaries in Private and Public International Law, Hart, 2018, available at https://ssrn.com/abstract=3133078 on 27.7.2020. 83 H.J. BERMAN, Is Conflict of Laws Becoming Passe? An Historical Response, in H.-E. RASMUSSEN-BONNE et al. (eds), Balancing of Interests: Liber Amicorum Peter Hay zum 70. Geburtstag, Frankfurt am Main, 2005, Emory Public Law Research Paper No 0542, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=870455 on 14.4.2021. This author suggests that “conflicts rules were not originally and should not be, applied primarily in order to preserve the autonomy of competing laws but primarily in order to achieve common goals of justice”.

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No More Social Distance between International Law and Conflict of Laws! because the EU member (nation) states (still) preserve some prerogatives in the area of conflict of (private) laws. The EU confluence of public law and conflict of laws is evolving in its entirety because of the transformation in the nature of its member states. Those states are no longer true nation states, but market states.84 My impression is that the EU market needs more market (member – my note) states rather than nation states. The EU has well understood this new dimension in the nature of its member states. The EU has therefore started to promote the idea that a transformation of this kind usually involves a sort of hybridization of public and private law. This hybridization mechanism – which also involves the conflict of (private) laws – finds an inspiring source in the concept of “interlegality”, designed originally to operate at a global level. However, despite this global dimension, there is nothing to prevent interlegality from operating at a specific sub-regional level – the EU level. The concept of interlegality was devised to characterize the overlap and/or interpenetration and/or dialogue between multiple networks of legal orders, whether they are regarded as public or as private legal landscapes.85 As B. de Sousa Santos put it: “we live in a time of porous legality or of legal porosity, multiple networks of legal orders forcing us to constant transitions and trespassing. Our legal life is constituted by an intersection of different legal orders, that is interlegality”.86 At the sub-regional level, interlegality promotes the hybridization of EU public and private law. This hybridization leads to a lack of social distance between EU public law and conflict of laws. The enactment of EU regulations – truly public law instruments – in various areas is ample proof of that. EU law could hence be characterized as a sub-regional version of transnational law that facilitates the confluence of public law and conflict of laws.87 It has been stated by others before me that “EU law is part of a wider phenomenon of legal hybridization and development of transnational law worldwide”.88 EU law is transnational law in the sense that it first arose, like the WTO legal system for instance, “from classical international law sources (i.e. international treaties), but over time it gradually developed 84 H.-W.MICKLITZ/ D. PATTERSON, From the Nation State to the Market: The evolution of EU private law, in B. VAN VOOREN/ S. BLOCKMANS & J. WOUTERS (eds), The EU’s Role in Global Governance: The Legal Dimension, Oxford University Press, 2013, p. 59-78. 85 L. ANTONIOLLI, The Future of European Private Law at the Crossroads of Public and Private Law, in Eppur si muove: (note 79), p. 481-500. 86 B. DE SOUSA SANTOS, Toward a New Legal Common Sense, Cambridge, 2nd ed., 2002. This author is quoted by L. ANTONIOLLI, (note 85), p. 489. 87 On the goals of “private international law” in the US and the EU, see A. MILLS, The Identities of Private International Law: Lessons from the U.S. and EU Revolutions, Duke J. of Comp. and Int’l Law, 2013, p. 445-475, available at https://scholarship. law.duke.edu/djcil/vol23/iss3/2 on 27.7.2020. 88 H.P. GLENN, A Transnational Concept of Law, in P. CANE/ M.V. TUSHNET (eds), The Oxford Handbook of Legal Studies, Oxford 2005, p. 839.

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Radu Bogdan Bobei distinctive and autonomous features, which reach a threshold where it becomes autonomous and hybrid”.89 The aforementioned characterization of the EU legal system allows the return, either partial or total, of the conflict of laws into the universe of (EU) public law. It is a sub-regional experiment that takes into account the identity of the EU legal system. Its identity is reflected in an independent legal order which is very different from both the international legal order and domestic or local legal orders. The European Court of Justice, hereinafter “ECJ”, has clearly ruled in this direction.90 Furthermore, we are talking about a sub-regional experiment which can be taken as a model for initiating a broader experiment, the experiment that will allow conflict of laws to re-enter the universe of (public) international law itself. In my view, any failure of the EU experiment would not prevent conflict of laws from becoming a global system capable of nurturing the pluralist international ordering of private law.91 In short, in the EU legal system the social distance between public law and conflict of laws does not shine any more. EU scholars and bureaucrats have finally understood that an EU political community must be organized on a basis with the characteristics of federalism. The EU is certainly not a federation, but its conflict of laws system had nevertheless to be designed against the particular background of a quasi-federation, the nature of which lends it affinities with public law. By acting in this way, the EU is developing more possibilities for fruitfully managing the multiplicity of private laws enacted by the national bodies of the member states. Given this approach, it seems to me that the EU conflict of (private) laws system falls within the ambit of both public and private law, but with a quasifederal orientation and quasi-federal objectives. This orientation will remind us all of the “Integration through Law” project developed under the auspices of the European University Institute. One of the main objectives of this project “was the ongoing progression of European nation states toward a quasi-federal model in which competencies and powers would be transferred to central authorities while keeping sovereignty in the hands of constituent members”; in the context of this quasi-federalization, conflict of laws can be regarded as the technique of choice for legal integration.92 The hybrid nature and goals mentioned earlier must be reconciled with the internationalizing (cross-border) trend of the conflict of laws 89

See L. ANTONIOLLI, (note 85), p. 488. See CJEU, 5 February1963, N.V.Algemene Transport-en Expeditie Onerneming van Gen & Loos v Administration Fiscale Neerlandaise, ECLI:EU:C:1963:1, C-26/62; CJEU, 15 July 1964, Costa v E.N.E.L., ECLI:EU:C:1964:66, C-6/64. This caselaw is also mentioned by L. ANTONIOLLI, (note 85), p. 488. 91 On the interplay between (public and private) international law and global governance in the 21st century, see A. MILLS, Towards a Public International Perspective on Private International Law: Variable Geometry and Peer Governance, 2012, available at https://ssrn.com/abstract=2025616 or http://dx.doi.org/10.2139/ssrn.2025616 on 27.7.2020. 92 See D. CARUSO, Private Law and State-Making in the Age of Globalization, New York Un. J. of Int’l Law and Politics, 2006, Boston Un. School of Law Working Paper No 06-09, available at https://ssrn.com/abstract=900106 on 27.7.2020. 90

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No More Social Distance between International Law and Conflict of Laws! emerging not only in Europe, but also in foreign jurisdictions (for example in the USA).93

VI. Farewell to the Fragmentation of International Law, and the Message of the Global Society As already pointed out, for the purposes of this article the concept of “fragmentation” covers only the debate on the (theoretical) distinction between public and private international law. A farewell to this fragmentation is mainly suggested by the advent of global society in the light of the concept of “law and globalization”.94 Within that concept the system of international law is developing in a broader way, and that broadness encourages scholars to bridge the (theoretical) divide between public and private international law. In other words, the dualistic era of international law is coming to an end; we are living in a new age of international law – the age of monism reloaded or of neo-monism. That age is abundantly accommodated by the technique of TL.95 As already (implicitly) suggested, the technique of TL provides a true bridge between, for instance, international law and domestic laws, law and non-law, hard law and soft law. In the light of TL, public and private international law will be understood not as different legal fields but as two branches of the same legal field. The law and the globalization tendencies associated with the global society have contributed to the emergence of this new (and old) approach to international law with the help of at least two trends. The first relates to the networks developed by professionals (e.g. business people, lawyers, professors of law) in an age of 93 See R. MICHAELS, The Conflicts Restatement and the World, Am. J. of Int’l Law Unbound, 2016, Vol. 110, p. 155. See also R. MICHAELS/ C.A. WHYTOCK, Internationalizing the New Conflict of Laws Restatement, Duke J. of Comp. & Int’l Law, 2017, Vol. 27, No 3, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3140839 on 14.4.2021. 94 See P. SCHIFF BERMAN, (note 7), p. 485. 95 The list of TL issues is very generous. This list could cover various and multiple areas such us “international human rights law, international criminal law, international trade law, international financial law, international environmental law, internet regulation, international commercial arbitration practice, transnational regulation of merchant communities (lex mercatoria), EU law, the law of the World Trade Organization(WTO), private selfregulation in transnational industries, transnational corporate governance or principles”. See R. COTTERRELL, What is Transnational Law?, Queen Mary School of Law Legal Studies Research Paper No 103/2012, 2012, Law & Social Inquiry, p. 500-524. In the light of transnational legal ordering, the so-called “transnational norms” focus also on labour protection (L. CATÁ BACKER), financial derivatives (H. BUXBAUM), conflict-of-laws regimes (CH. WHYTOCK), legal pluralism and transnational legal orders (R. MICHAELS). See G. SHAFFER, Theorizing Transnational Legal Ordering of Private and Business Law, UC Irvine J. of Int’l, Transnational, and Comparative Law, 2016, p. 1-10, UC Irvine School of Law Research Paper, No 2017-34, available at https://ssrn.com/abstract=2987941 on 27.7.2020.

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Radu Bogdan Bobei complex, multi-level, global governance.96 That age would appear to have started after the ending of the bi-polar Cold War order. The networks brought about a shift in focus from government to governance; that shift provided a new impetus towards erasing the artificial (and theoretical – my note) boundary between public and private international law.97 Global governance, logically, will not last for ever; nothing lasts for ever. That is why the following course of events is anticipated: the concept of “global governance” suggests one major transformation – the transformation relating to “the counting of time ‘before’ and ‘after’ globalization”.98 The second trend relates to the phenomenon dubbed “the re-medievalisation of the (modern) world”.99 The idea of re-medievalisation suggests that the decline of nation states’ authority is followed by the rise of non-state authority. A. Claire Cutler has made clear that this rise is supported by the nation states themselves. At least in commercial and private areas, a new (and genuine) lex mercatoria has been developed beyond, but not without, the nation states.100 The aforementioned fall and rise has caused a particular trend in our contemporary period: that of “experiencing a merging of public and private authority in a transnational managerial

96

“Global governance” could be defined as “the sum of the many ways individuals and institutions, public and private, manage their common affairs”. See K. NOWROT, Global Governance and International Law, in C. TIETJE/ G. KRAFT/ R. SETHE (eds), Beiträge zum Transnationalen Wirtschaftrecht, 2004, p. 1-38, available at www.wirtschaftsrecht.unihalle.de on 27.7.2020. “Transnational governance” means “various and untraditional types of international and regional collaboration among both public and private actors”. See C. JOERGES, Transnational Governance and Constitutionalism: Exploring a Magic Triangle, in C. JOERGES et al. (eds), Transnational Governance and Constitutionalism, 2004. The latter work is quoted by R. WAI, (note 44), p. 107-127. On the concept of “transnational corporate governance”, see P. ZUMBANSEN, Neither “public” nor “private”, “national” nor “international”: Transnational Corporate Governance from a Legal Pluralist Perspective, June 17, 2010, Osgoode CLPE Research Paper, No 22/2010, available at https://ssrn.com/abstract=1626338 or http://dx.doi.org/10.2139/ssrn.1626338 on 27.7.2020. 97 See P. SCHIFF BERMAN, (note 7), p. 501 and 520. 98 See P.C. ZUMBANSEN, Transnational Legal Pluralism, Transnational Legal Theory, January 26, 2010, p. 141-189, CLPE Research Paper No 01/2010, available at https://ssrn.com/abstract=1542907 on 27.7.2020. 99 See D. HELD, Democracy and the Global Order: From the Modern State to Cosmopolitan Governance, Stanford University Press, 1995. This author is quoted by A. CLAIRE CUTLER, Artifice, ideology and paradox: the public/private distinction in international law, Rev. of Int’l Political Economy, 1997, p. 261-285. See also P. ZUMBANSEN, Sustaining Paradox Boundaries: Perspectives on Internal Affairs in Domestic and International Law, Economic J. of Int’l Law, 2004, p. 197-211. The latter contribution is a book review of A. CLAIRE CUTLER, Private Power and Global Authority – Transnational Merchant Law in the Global Political Economy, Cambridge 2003. 100 See R. MICHAELS, The True Lex Mercatoria: Law Beyond the State, Indiana J. of Global Legal Studies, 2007, Article 11, available at https://www.repository.law.indiana.edu /ijgls/vol14/iss2/11 on 27.7.2020.

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No More Social Distance between International Law and Conflict of Laws! and commercial elite committed to neoliberalism and the privatization and globalization of authority”.101 With these trends in mind, the erosion of the distinction between public and private international law is clearly apparent. Prominent scholars, mainly outside Europe, have suggested a lively interaction between public international law and private international law and numerous rules of transnational legal ordering. (Public) international law, therefore, “should not be viewed [any longer – my note] in isolation of private international law, national law, and private legal ordering”.102 The combination of the public and private sides of international law has flourished under the umbrella of the technique – not necessarily a body of law – labelled since the 1950s as “TL”. That technique may facilitate the emergence of a sui generis discipline – TL –, “in which law is understood as universal and plural at the same time”.103 The plurality and the universality of law give rise to a paradoxical situation. How can something be plural as well as universal? Conversely, how can something be universal as well as plural? This sui generis characterisation of law came about in the light of the “fragmentation of law”, whether international or domestic. As to the fragmentation of (public) international law, one of the general conclusions of the well-known Report of the Study Group of the International Law Commission104 is that “spheres of life (…) that transgress national boundaries (…) are difficult to regulate through traditional international law. National laws seem insufficient owing to the transnational nature of the networks while international law only inadequately takes account of their specialized objectives and needs”.

101

See R.W.COX, Social forces, states, and world orders: beyond international relations theory, reproduced in R.W. COX/ T.J. SINCLAIR , Approaches to World Order, Cambridge 1996. These contributions are quoted by A. CLAIRE CUTLER, (note 99), p. 275. 102 See G. SHAFFER/ C. COYE, From International Law to Jessup’s Transnational Law, from Transnational Law to Transnational Legal Orders, in P. ZUMBANSEN, (note 45), p. 126-152. “Transnational legal ordering” is to be distinguished from “transnational legal orders”. The former concept “refers to the transnational construction, flow, settlement, and unsettlement of legal norms in particular domains”. See G. SHAFFER, Transnational Legal Ordering and State Change, in Gregory SHAFFER (ed.), Transnational Legal Ordering and State Change, New York 2013, p. 1-22. “Transnational Legal Orders mean a collection of formalized legal norms and associated organizations and actors that authoritatively order the understanding and practice of law across national jurisdictions” in many and various and domains. See T.C. HALLIDAY/ G. SHAFFER, Transnational Legal Orders, 2015, p. 258-287. These authors coined the concept of “transnational legal orders”. 103 See R. MICHAELS, Beyond Universalism and Particularism in International LawInsights from Comparative Law and Private International Law, available at https://www.bu. edu/bulawreview/files/2019/04/MICHAELS.pdf on 27.7.2020. 104 See M. KOSKENNIEMI, Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law, Report of the Study Group of the International Law Commission, 2006, available at https://legal.un.org/ilc/documentation /english/a_cn4_l682.pdf on 14.4.2021.

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Radu Bogdan Bobei The word “transgress” even implicitly suggests that a complex interrelated world community is in great need of a technique and/or a body of law to regulate its activity with global scope. The report throws into sharp relief that neither (traditional public) international law, nor domestic laws are able to regulate the activities of any technical cooperation network acting beyond the territories of the nation states. It seems that a specific technique and/or body of law is needed. The technique and/or body of law must be functionally designed; geographical design is useless. The fragmentation of (public) international law has been identified as the core of the post-modern age of this branch of law.105 For a number of reasons this fragmentation is not a tragedy. Scholars are able to manage it by building bridges between the many and various areas (e.g. the environmental, trade and human rights areas) of (public) international law. The bridge is constituted by TL itself; that bridge erases the social distance between the international law system and domestic law systems, and between the public and private sides of international law. In other words, any post-modern anxieties arising from the fragmentation of international law can be allayed by using a post-post-modern methodological tool. That tool is TL. Ironically, the fragmentation of (public) international law points up the need to promote the lost unity of that branch of law. This unity could be understood in the sense that the public and private sides of international law frequently interrelate in the world arena; therefore, the system of international law must be unified. The transnational realities of the early 21st century undoubtedly indicate that it is no longer appropriate to see the conflict of laws as “national in blood, international in soul”.106 It has became truly international again in both blood and soul thanks to the virtues of TL. The blood of conflict of laws had its domestic source in the Westphalian logic. That logic is over and done with. The increasingly private side of state actors and public agencies has become an undeniable post-post-modern truth.107 “Post-post-modern” truth refers to the truth arising from the origins of the conflict of laws. These origins repose upon at least three ideas: Roman law did not distinguish private from public international law; Lord Mansfield, who introduced mercantile law to the world of common law, drew no distinction between public and private international law; in 1834, Joseph Story invented the term “private international law” – an integral branch of international law itself.108 In view of the aforementioned post-post-modern truth, the return of international law to its 105

M. KOSKENNIEMI/ P. LEINO, (note 5), p. 553-557. R. WIETHÖLTER, Begriffs- oder Interessenjurisprudenz – falsche Fronten im IPR und Wirtschaftsverfassungsrecht: Bemerkungen zur selbstgerechten Kollisionsnorm, in A. LÜDERITZ/ J. SCHRÖDER (eds), Internationales Privatrecht und Rechtsvergleichung im Ausgang des 20. Jahrhunderts: Bewahrung oder Wende?: Festschrift für Gerhard Kegel, Frankfurt am Main 1977, p. 215. The aforementioned work is quoted by P. ZUMBANSEN, Piercing the Legal Veil: Commercial Arbitration and Transnational Law, European L. J. 2002, p. 400-432. Available at https://digitalcommons.osgoode.yorku.ca/scholarly _works/2361 on 27.7.2020. 107 J.R. PAUL, (note 3), p. 174. 108 J.R. PAUL, (note 3), p. 156 and 159. 106

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No More Social Distance between International Law and Conflict of Laws! private (law) sources is inevitable. Today’s transnational background therefore calls for a new (and old, but not old-fashioned) approach – “to highlight the role of principles of private law in the construction of international legal relationships”.109

VII. Conclusion The undeniable confluence of public and private international law logically suggests at least one idea: the absence of social distance between the public and private sides of international law itself. That confluence is nurtured by a mix of public and private interests claimed by both governments and non-state (private) actors in the (same) disputes brought before both local courts or tribunals and international courts or tribunals.110 That mix calls to mind the words of Benjamin N. Cardozo: “We must enlarge it [the law] till it is broad enough to answer to realities”.111 The vehicle of any such enlargement could be transnational law. Transnational law is fully able to facilitate a dynamic confluence of both the lives (public and private) of international law. All of this can be achieved if transnational law is deemed the proper method to be used to unify the different branches of international law. That unification would give rise to a sui generis law to cover the various ways in which the extraterritoriality of law(s) behaves in a globalized world.112 We should also bear in mind that Jessup’s 1956 lecture was seen as addressing the increasing fluidity of the traditional distinction between public and private international law” by means of transnational law. It was also noted that transnational law “would not start with sovereignty or power, but from the premise that jurisdiction is essentially a matter of procedure which could be amicably arranged among the nations of the world”.113 The fluidity of national sovereignty or power would thus find its source in evolving transnational settings and – why not? – in mankind’s faith in universal principles. Those settings constitute the future in which we are living … every day.

109 H. LAUTERPACHT, (note 77). This author is quoted by M. KOSKENNIEMI, (note 104), p. 240. 110 H. VAN LOON/ S. DE DYCKER, (note 1), p. 2. 111 B.N. CARDOZO, The Nature of the Judicial Process, 1960, p. 127. 112 G. LHUILIER, Le Droit Transnational, Paris 2016, p. 33. See also A.F. LOWENFELD, Public Law in the International Arena: Conflict of Laws, International Law, and Some Suggestions for Their Interaction, in Recueil des Cours, Vol. 163, Leiden/Boston, 1979, p. 311. 113 See P.C. JESSUP, (note 47), p. 71. See also W.G. FRIEDMANN, Corporate Power, Government by Private Groups, and the Law, Columbia L. Rev. 1957, p. 155 and 176. This author and his paper are mentioned by P. SINGH, The Private Life of Transnational Law: Reading Jessup from the Post-Colony, in P. ZUMBANSEN (ed), (note 45), p. 419-439.

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THE COVID-19 HEALTH CRISIS AND INTERNATIONAL CONTRACTS Bernard HAFTEL*

I. II.

III.

The Conflict of Laws Rule Beyond the Scope of the Conflict Rule A. Overriding Mandatory Provisions B. The Other Ways Below the Scope of the Conflict Rule

The COVID-19 health crisis is a global crisis. It extends to every type of relationship, not least contractual relationships, and it extends to virtually every country in the world. Thus, international contracts are at the forefront of the legal issues impacted by the crisis. Of course, most of the issues raised by the health crisis in the contractual field concern questions of substantive law,1 such as: does the change of circumstances constitute force majeure? Is a contractor liable if pre* Professor at the Sorbonne Paris Nord University, Co-director of the Institut de Recherche pour un Droit Attractif (IRDA). 1 See J. HEINICH, L'incidence de l'épidémie de coronavirus sur les contrats d'affaires: de la force majeure à l'imprévision, Recueil Dalloz, 2020, p. 611 et seq., M. MEKKI, De l’urgence à l’imprévu du Covid-19: quelle boîte à outils contractuels?, AJ Contrat 2020, p. 164 et seq., R. ZIADÉ/ C. CAVICCHIOLI, L'impact du Covid 19 sur les contrats commerciaux, ibid. p. 176 et seq., S. REGNAULT, Covid 19 et bail commercial, ibid. p. 193 et seq., A. GOUËZEL, L'ordonnance ‘délais II’ du 15 avril 2020 et le droit des contrats, ibid. p. 210 et seq., C. LEROY, Crise Covid 19: rupture, suspension des contrats, impossibilité matérielle ou financière d'exécution, ibid., p. 214 et seq., C.-E. BUCHER, Contrats: la force majeure et l'imprévision: remèdes à l'épidémie de covid-19?, Contrats Concurrance Consommation, 2020, étude 5, C. GRIMALDI, Ordonnances du 25 mars 2020 relatives au Covid-19 et droit des contrats immobiliers: des questions subsistent, Defrénois 2 avril 2020, No 159e6, p. 17 et seq., G. DURAND-PASQUIER, La crise du Covid-19 et les contrats immobiliers et de la construction. Des effets retors des ordonnances ‘délais’ aux ressorts du droit commun, Construction – Urbanisme, No 5, Mai 2020, alerte 32, B. ANCEL, Les contrats français et américains face au covid-19: un futur nimbé d'incertitude?, AJ Contrat, mai 2020, see also B. HAFTEL/ M. MEKKI (eds), La crise sanitaire et le contrat, Conference at the Cour de cassation, 16 october 2020, https://www.courdecassation.fr/evenements_23/ colloques_4/colloques_videos_6111/contrat_9930/crise_sanitaire_contrats_45844.html, A. JANSSEN/ C.J. WAHNSCHAFFE, COVID-19 and international sale contracts: unprecedented grounds for exemption or business as usual?, Uniform L. Rev., 2021, p. 1-30, C. TWIGGFLESNER, A comparative Perspective on Commercial Contracts and the impact of COVID19 – Change of Circumstances, Force Majeure, or what?, in K. PISTOR (ed.), Law in the Time of COVID-19, Columbia Law School, New York 2020, p. 155 et seq.

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Bernard Haftel vented from performing by a curfew or lockdown measure? Can a contractor suspend his payments? Can a contractor suspend rent payments during the statutory closure of businesses? These substantive law questions may well impact international contracts, especially when they arise in situations near an international border, bearing the familiar question: which law applies?2 Most of the time, the answer will be quite simple. The law that applies is usually the law indicated by the conflict rule, which is particularly easy to identify in contractual matters. Most of the time the lex contractus will apply, i.e. the law chosen by the parties (Rome I Regulation, article 3). But such a solution cannot reasonably be applied in all cases, in all situations involved in the health crisis. In most of the countries affected by the crisis, three types of legal rules can be observed that can be mobilized to adapt contracts to the health situation. For obvious reasons, we will essentially rely on French legislation, from which we will draw most of our examples, but the observations we will make apply to most of the countries concerned, which, once again, have all reacted to the exceptional situation we are experiencing in similar ways. Obviously, the rules are not exactly the same. The trade-offs made by the political authorities may have tipped the balance, here in one direction, there in another. Above all, the crisis did not affect all countries at the same time, so that the measures to tackle it were not implemented at the same time. The laws are therefore substantially different from one country to another, and the question of the conflict of laws remains relevant. This being said, while the content of the rules adopted here and there may vary, the methods implemented are basically always the same, calling for answers from the point of view of private international law that can be made general. The first set of rules that can obviously be used are the ordinary rules of contract law. In some cases, those rules will be enough to satisfactorily resolve the situation. Contract law is, in every country, a venerable and ancient branch of law, built over time and forged through experience. Its concepts are generally flexible, general and adaptable so that, paradoxical as it may be to say, the (idea of) unforeseen is not really unforeseen in contract law.3 In a sort of second tier, which can in some cases be combined with the rules mentioned above, we can place all the rules adopted by the different States to fight against the health crisis and whose applicability, in an international context, also raises questions. I am thinking here of the various restrictions on movement, administrative closures of businesses, bans on public demonstrations or gatherings, curfews, lock-downs… Finally, even if ordinary contract law provides some useful tools for dealing with the health crisis, it is quite clear that these tools are, in many cases, not enough. In order to take into account, on the one hand, the pandemic itself and its 2 See B. HAFTEL, Le Covid 19 et les contrats internationaux, Recueil Dalloz, 2020, p. 1040 et seq., ID., Les contrats internationaux à l'heure du Covid-19, Revue des Contrats, 2020, No 117b6, p. 70 et seq. 3 For a comparative view, see H. BEALE/ A. HARTKAMP/ H. KÖTZ & D. TALLON, Cases, Materials and Text on Contract Law, Hart, 2002, p. 591 et seq.

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The COVID-19 Health Crisis and International Contracts impact on contractual relations and, on the other hand, the impact of the other above-mentioned measures, various legislators have adopted a kind of derived contractual legislation, specific to the health crisis. In French law, in that regard, the government was authorized by a law of March 23, 2020 to legislate by means of executive orders (ordonnances) under Article 38 of the Constitution, which allowed it to adopt specific measures to adapt to the situation. Numerous provisions were adopted in this way, in particular several ordonnances of March 25, 2020, including one on “deadlines” (délais) extending deadlines (among which, some contractual deadlines) that had expired during a “protected” period (which was in fact the period of intense crisis that began in France in March 2020), another extending the same system to deadlines for civil proceedings, and one on “rents and invoices” prohibiting, during the same period, the suspension or even reduction of the supply of electricity, gas, or water, as well as any contractual sanction or implementation of securities in the event of non-payment of rent. Most of these provisions have been modified, extended, deactivated and reactivated several times to adapt to the evolution of the crisis.4 In an international context, all these provisions put to the test the different methods of private international law: the conflict of law rule (I), of course, but also more peculiar methods that unexpectedly find their use and purpose in an exceptional situation like the current crisis, and make it possible to extend the applicability of the above-mentioned provisions beyond the conflict of laws rule (II), or even, in certain cases, to confine them below it (III).

I.

The Conflict of Laws Rule

Most of the provisions mentionned above belong quite clearly to contractual matters. This is true, first, of the ordinary rules of contract law that may be mobilized to take into consideration the consequences of the pandemic and its immediate effects: force majeure, hardship, frustration, change of circumstances, good faith, rules governing termination for non-performance, etc. This is also true of some of the specific COVID-19 legislation that most countries have adopted. By way of illustration, in French law, article 4 of the “deadlines” ordonnance provides for an extension-suspension5 of penalty payments and contractual clauses sanctioning the non-performance of obligations during the protected period, and article 5 provides for a similar solution for contractual termination or denunciation periods. Similarly, Article 2 refers to “any act, recourse, legal action, formality, registration, declaration, notification or publication prescribed by law or In this regard, see also ordonnances No 2020-427 of April 15, 2020, No 2020-560 of May 13, 2020, No 2020-666 of June 3, 2020, No 2020-737 of June 17, 2020, Loi No 2020-1379 of November 14, 2020, décrets No 2020-1262 of October 16, 2020 and No 2020-1310 of October 29, 2020. 5 Concerning the nature of this extension-suspension, see M. MEKKI, De l’urgence à l’imprévu du COVID-19: quelle boîte à outils contractuels?, AJ Contrat 2020.164. 4

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Bernard Haftel regulation on pain of nullity, penalty, lapse, foreclosure, prescription, nonopposability, inadmissibility, lapse, automatic withdrawal, application of a particular regime, non-admission or forfeiture of any right”. It is therefore likely to have a wider scope than just contractual matters, but will be able, in particular, to apply to contractual provisions, especially modern contracts full of mandatory provisions (consumer contracts, insurance contracts, commercial leases, etc.). For all these questions, the applicable law will therefore normally be the lex contractus. In accordance with the Rome I Regulation, the applicable law will therefore be the law chosen by the parties if such a choice has been made and, if not, the law designated by Article 4 of that Regulation, i.e. in general the law of the country of habitual residence of the debtor of the characteristic performance. Of course, if the contract affected is a contract covered by a specific provision – I am thinking in particular of consumer contracts – it is this specific provision that will apply. The other area of the law that can be affected is the procedural one. In some countries, the lockdown was such that it led, sometimes for many months, to an almost total paralysis of institutions, including judicial institutions. As a result, certain provisions, like the “civil procedure” ordonnance mentioned above, suspended or extended the ordinary procedural deadlines. In this case, the applicable law won’t be the law of the contract, but rather the law generally applicable to procedural matters, i.e. the lex fori.6 All that is quite easy to understand and doesn’t require much more explanation. At most, it can be recalled that, in accordance with Article 12 of the Rome I Regulation,7 questions of prescription are analysed as matters of substance, falling not under the lex fori but under the lex contractus. However, something more is clearly required as this presentation alone would imply that the parties could set aside all provisions specifically adopted to combat the health crisis by a simple expression of will, by a mere choice of law. To a large extent, as will be seen, the logic of this special legislation implies an application beyond the realm of the lex contractus.

II.

Beyond the Scope of the Conflict Rule

When one thinks of allowing the application in contractual matters of rules which do not belong to the lex contractus, the first method which comes to mind is that of overriding mandatory provisions. And it is indeed essentially by this means that some of the special legislation can be applied. Other, more unusual, solutions may also be implemented at a marginal level.

See P. MAYER/ V. HEUZÉ & B. REMY, Droit international privé, LGDJ, 12e éd., § 514 et seq., B. AUDIT/ L. D’AVOUT, Droit international privé, LGDJ, 8e éd., § 502 et seq. 7 See also art. 2221 of the French Civil code. 6

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The COVID-19 Health Crisis and International Contracts A.

Overriding Mandatory Provisions

The first question would be: do the specific provisions previously mentioned constitute overriding mandatory provisions within the meaning of Article 8 of the Rome I Regulation? Of course, a full study of the different laws adopted by the different countries would be necessary to address the question accurately. However, a schematic presentation remains possible since, in essence, regardless of the contingencies specific to each country, the specific legislation adopted to deal with the health crisis can be broken down into two types of provisions. Firstly, independently of contract law, most countries have adopted measures to restrict freedoms in response to the spread of the pandemic. To a large extent, these are restrictions on freedom of movement: confinements, curfews, more or less watertight closure of borders, the need to carry passes, etc. It also involves restrictions on the freedom of trade and industry: administrative closures of certain businesses (in particular those receiving the public in a closed environment and making it difficult to apply distancing measures), prohibition of events – sporting, cultural, festive, etc. involving the public, or a particularly large public, restrictions on commercial spaces, restrictions on the density of customers in commercial spaces, etc. Secondly, in order to draw the consequences of the pandemic, the resulting paralysis or institutional slowdowns, and the aforementioned restrictions on freedom of movement and trade and industry, some legislators have adopted legislation that has specific effects on contractual matters: suspension or extension of deadlines, paralysis of contractual mechanisms for non-performance, deferral or cancellation of debts, etc. The first type of provision will be considered below, under the heading of other ways of extending the applicability of specific COVID-19 provisions beyond the conflict rule. The second type of legislation, however, is obviously made of provisions that can be regarded as overriding mandatory provisions within the meaning of the Rome I Regulation. The above-mentionned French ordonnances of March 25, 2020 can be taken as examples. Article 9 of the Rome I Regulation defines overriding mandatory provisions as “provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation”.8

8 On the Overriding Mandatory Provisions in the context of the Rome I Regulation, see L. D’AVOUT, Le sort des règles impératives dans le règlement Rome I, Recueil Dalloz. 2008, p. 2165 et seq., § 12, P. DE VAREILLES-SOMMIÈRES, Lois de police et politiques législatives, Rev. crit. dr. int. pr. 2011 p. 207 et seq., D. BUREAU/ H. MUIR WATT, Droit international privé, t. II, Partie spéciale, Paris, 4e éd., 2017, § 915-1.

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Bernard Haftel The text thus largely reproduces the terms used by the ECJ in the Arblade case,9 which were themselves clearly inspired by Francescakis classic definition of lois de police as “laws the observance of which is necessary for the safeguarding of the political, social or economic organisation of the country”.10 If we think of the 25 March 2020 ordonnances, and indeed of all the provisions of this type found in comparative law, there is no real doubt that it corresponds to this definition.11 In fact, rarely have we seen provisions whose application was so obviously necessary to safeguard the social, political and economic organisation of the country. It is enough to note that the ordonnances in question were taken in application of the emergency law of 23 March 2020, “in order to deal with the economic, financial and social consequences of the spread of the COVID-19 epidemic and the consequences of the measures taken to limit this spread, and in particular in order to prevent and limit the cessation of activity of natural and legal persons exercising an economic activity and of associations as well as its impact on employment”. Since they are most likely overriding mandatory provisions, it can be inferred that they will apply to any situation falling within their scope, regardless of the law governing the contract. The parties' choice of another law will therefore have no effect on their applicability. However, their applicability will depend on one crucial and not so obvious point: their scope. The mere qualification of overriding mandatory provisions is not sufficient to justify their application in all cases. For an overriding mandatory provision to apply, the situation must still fall within its scope. So, what is their scope? Again, it mainly depends on the will of the legislator, and thus on the specific wording of each text. Nevertheless, the underlying method can be clarified. The scope of an overriding mandatory provision depends on its purpose, on its goal. This is what French case law recalls when it states that the application of such a rule implies “characterising the existence of a connection between the operation and France with regard to the objective (...) pursued by the text (...)”.12 This is also implicit in Article 9 of the Rome I Regulation, which state that an overriding mandatory provision has a purpose which implies its application “to any situation falling within [its] scope”.

CJCE, 23 November 1999, Arblade, Joined Cases C-369/96 and C-376/96 ECLI:EU:C:1999:575. 10 PH. FRANCESCAKIS, Rép. D. Droit inter. (1ère éd.), v° Conflit de lois, No 137, and see also, ID., Quelques précisions sur les ‘lois d’application immédiate’ et leurs rapports avec les règles de conflit de lois, Rev. crit. dr. int. pr. 1966, p. 1 et seq. 11 Although curiously, the report to the President of the Republic on this ordonnance seems to suggest that the rule would not be mandatory in domestic law, which would rule out its status as an overriding mandatory provision in private international law. This statement, which is in contradiction with the circular relating to this text and with the aim pursued by it, must however be set aside (in this sense, see B. HAFTEL, Les contrats internationaux à l’épreuve du COVID-19, (note 2)). 12 See Cass. com., 27 avr. 2011, No 09-13.524, Bull. No 60. 9

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The COVID-19 Health Crisis and International Contracts In some cases, the legislator will have specified itself the scope of application of the rule, explicitly or implicitly. For example, in the “rents and invoices” ordonnance, the French legislator made it clear, through a series of textual references, that the provision only applied to persons domiciled in France for tax purposes. But most of the time, the legislator doesn’t specify the scope of application of its law, nor indeed even their status as overriding mandatory provisions. It will then be up to the judges to answer these questions on the basis of the purposes pursued by the texts in question. Generally speaking, the rules envisaged here are intended to combat the pandemic and its paralysing effects on institutions and economic life. It is a question of taking into account the impossibility of bringing a case before a judge at certain times and in certain places. The closure of businesses at certain times and in certain places. The impossibility of carrying out a commercial service, a concert, a wedding, etc. at certain times and in certain places... Now, if this type of paralysis is found in most of the countries affected by the crisis, that is to say most of the countries in the world, it is not found in the same way. Some countries have closed down businesses, while others have restricted them. Some have restricted gatherings of more than 1000 people, others 100, others 10, others 6... Some have confined for several months, some for several weeks, some not at all. Some in winter, some in summer. In other words, although the crisis is global, it is not legally the same crisis everywhere. In the legal sense, there is a French health crisis, a German health crisis, an Italian health crisis, etc. It therefore seems that only a territorial approach can reasonably account for this plurality. The question is therefore: by which of these territorial crises was the contract affected? In most respects, a contract will be affected by the law of the country in which it is to be performed. The provisions in question here may therefore be applied as overriding mandatory rules, and independently of the lex contractus, as long as they belong to the law of the place of performance of the contract. In some cases, though, notably for contracts entirely performed online or for contracts involving one contractor living in another country, most notably in the case of border relationships, the law of the place of residence of the contractors could also be relevant. In a very similar way to mandatory rules in the strict sense, Articles 6, 7 and 8 of the Rome I Regulation provide for the derogatory application, over and above the lex contractus, of mandatory provisions protecting the weaker party in matters of consumption, insurance and employment. These provisions may also be used whenever the legislator of a given State decides to use this channel to deal with the consequences of the pandemic. This is the case, for example, in German law, which in Article 240§1 of the EGBGB provides for a moratorium adapting consumer relations to the health situation.

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Bernard Haftel B.

The Other Ways

Although the use of overriding mandatory provisions is likely to be heavily mobilized in the implementation of all this health crisis-specific legislation, it will not always be sufficient. In two instances in particular, this method will not be adequate. Firstly, with regard to the provisions restricting freedom of movement and trade, previously envisaged and reserved. Despite appearances, these provisions are not really overriding mandatory provisions. Certainly, they are imperative provisions and crucial for the respect of the organization of society. But they are not overriding mandatory provisions within the meaning of Article 9 of the Rome I Regulation, for two main reasons. The first and most important reason is that those provisions are not rules of private law and, for this reason, fall outside the scope of the conflict of laws itself. Strictly speaking, the overriding mandatory rules method applies only in private law matters, where it derogates from the ordinary connecting mechanism constituted by the bilateral conflict rule. This is their raison d'être: to derogate from the conflict-of-laws rule. Thus, in contractual matters, the Rome I Regulation applies only to “civil and commercial matters”, and therefore not to public law matters. Whereas in private law matters, overriding mandatory provisions constitute a derogation from the conflict-of-laws rule, by contrast, public law and criminal law are not subject to the conflict rule method but to mandatory unilateral connections, essentially territorial, making the derogatory method constituted by private law overriding mandatory rules superfluous and irrelevant. In contrast to private law, where the application of a foreign law is possible, public law excludes any conflict of laws. To put it another way, there is no law other than French law to say who can circulate on the public space in France, under what conditions, for what reasons, whether they must wear masks, respect safety distances...13 The second reason is that those rules are not rules of contract law. Sure, they can obviously have consequences for private law contracts. It is enough to imagine a contract for the provision of a service, such as restaurant service, the performance of which would be prevented because of a text ordering the administrative closure of restaurants. But these consequences will then be governed by other rules: the rules of contract law such as unforeseeability, frustration or force majeure. The rules restricting freedom, on the other hand, provide for other consequences, of an administrative or even criminal nature. Not contract law sanctions. Not only are those provisions not overriding mandatory rules within the meaning of Article 9 of the Rome I Regulation, but in any case, they cannot strictly speaking be applied in contractual matters. They can’t be applied but they can be taken into account. Taking into account or taking into consideration (prise en consideration in French) is when the applicable law requires that another, presumably non-applicable, law be consulted in order for the former to be properly applied.14 The law taken into consideration is For the distinction between Public Law and overriding mandatory provisions, see also P. MAYER, Les lois de police étrangères, Clunet 1981, p. 277 et seq., p. 301 et seq. 14 On this notion, see E. FOHRER, La prise en considération des normes étrangères, LGDJ, 2008, D. BODEN, L’ordre public: limite et condition de la tolérance. Recherches sur 13

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The COVID-19 Health Crisis and International Contracts not really applied. It is considered as a fact and produces effect only indirectly, through the applicable law, under the conditions and through the effects provided for by the latter. As a matter of fact, the CJEU allows the taking into account of provisions that don’t belong to a law that should be deemed applicable otherwise (such as the lex contractus or an applicable overriding mandatory provision).15 In the cases we are dealing with here, this means that even when the contract is subject to a foreign law, the latter may take into account rules restricting freedom of movement or trade as a case of force majeure or as grounds for frustration or any appropriate concept provided for by that law. Indeed, most legal systems provide that an unforeseeable and irresistible situation making the performance of the contract impossible, at least exonerates the debtor from his responsibility, or even constitutes a cause for suspension or termination of the contract. Similarly, a pandemic or the lock-down or curfew measures adopted here and there may constitute a case of frustration triggering a legal revision regime or a contractual renegotiation clause. These cases of force majeure or the cause of frustration may therefore result not only from purely factual situations, such as the pandemic itself, but also from the legal rules organising the response to this pandemic, foremost among which are the rules restricting freedom of movement or trade. The second case in which the overriding mandatory provisions method does not suffice is where rules that are undoubtedly overriding mandatory provisions cannot, however, be applied as such because of the restrictive conditions surrounding the applicability of foreign overriding laws. Article 9 of the Rome I Regulation provides indeed for two particularly drastic restrictions on the applicability of foreign overriding mandatory provisions. In order for an overriding mandatory provision of one State to be applied as such by the court of another State, it is necessary that it be the law of the country of performance of the contract and that it render the performance of the contract unlawful, the two conditions being cumulative. Sometimes, however, the relevant overriding mandatory provisions will not be those of the country of performance. Here we find the hypothesis of border relations mentioned above. A contracting party may well be affected by the law of his place of domicile even if the contract is performed on the other side of a border. Above all, most of the rules envisaged, even if they are overriding mandatory rules, do not have the effect of making the performance of the contract illegal. Rather, they provide for suspensions or extensions of time limits, alterations to the process of contractual sanctions, paralysis of security interests, etc. In all these cases, because of the restrictions provided for in Article 9 of the Rome I Regulation, it would be sufficient for the forum not to be the court of the country from which the mandatory rules in question emanate for them to be neutralised under le pluralisme juridique, th. Paris 1, 2001, No 131 et seq., F. SOIRAT, Les règles de rattachement à caractère substantiel, th. Paris 1, 1995, Nos 16 et seq., S. BOLLÉE, La prise en considération des lois de police étrangères dans le règlement Rome I, in Mélanges en l'honneur du Professeur Bertrand Ancel - Le droit à l'épreuve des siècles et des frontières, 2018, p. 203 et seq. 15 CJUE, 18 October 2016, Nikiforidis, C-135-15, ECLI:EU:C:2016:774.

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Bernard Haftel Article 9. Fortunately, it will then be possible to use the method of taking into consideration, even if they are indeed overriding mandatory provisions and even if the conditions of Article 9 are not met. The CJEU has indeed clarified that the taking into consideration of foreign overriding mandatory provisions is not subject to the conditions of Article 9.16 Finally, at the margin, beyond the methods of overriding mandatory provisions and taking into consideration, one could think of giving effect to the specific legislation for the health crisis through the notion of “manner of performance”. Article 12 of the Rome I Regulation, while recalling that the law of the contract governs enforcement, nevertheless provides that “In relation to the manner of performance and the steps to be taken in the event of defective performance, regard shall be had to the law of the country in which performance takes place”. The great vagueness of this rule has long been pointed out. What is the “manner of performance”?17 And, indeed, what does “having regard to” the law of the place of enforcement mean? The whole provision has always been shrouded in uncertainty, and this uncertainty may well benefit the rules organising the response to the health crisis. Indeed, it is generally agreed that the rules governing working days and public holidays, opening hours, or the regulation of administrative authorisations should be included in the “manner of performance”.18 Obviously, the rules organising administrative closures, lock-downs or curfews, in that they specify what is open and closed, who may or may not go out, and under what conditions, come close to these hypotheses and could therefore be classified as “manner of performance”. The judge, therefore, will at least have regard to these rules. Again, what does it mean? By this wording, which is again very uncertain, there is general agreement on the idea that the judge has a certain flexibility enabling him to apply or take into consideration these rules. The result is that, on the margin and beyond the hypotheses previously considered, the court may give a certain effect to the rules of the country of performance even if they are not qualified as overriding mandatory provisions, for the sole reason that they constitute the factual context of the contract's performance.

III. Below the Scope of the Conflict Rule There remains a problematic and less obvious question than the previous one. In the above-mentionned Nikiforidis judgment. See M.-E. ANCEL/ P. DEUMIER & M. LAAZOUZI, Droit des contrats internationaux, 2e éd., 2020, § 309 et seq., B. HAFTEL, La notion de matière contractuelle en droit international privé – Etude dans le domaine du conflit de lois, th. Paris II, 2008, § 894 et seq., A. TOUBIANA, Le domaine de la loi du contrat en droit international privé (contrats internationaux et dirigisme étatiques), Paris 1972, § 119 et seq., A. BROGGINI, Le modalità d’esecuzione dei contratti in diritto internazionale privato, Fribourg 1951, B. CONFORTI, L’esecuzione delle obbligazioni nel diritto internazionale privato, 1962, p. 39 et seq. 18 See The Giuliano-Lagarde report on the Rome Convention of June 19, 1980, OJEC 31.10.1980, No C 282/1, art. 10§2. 16 17

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The COVID-19 Health Crisis and International Contracts While it is quite natural, especially in contractual matters, to ask whether special and mandatory provisions may apply despite the parties' choice of another law, it is less obvious to ask whether the same provisions should not, in certain cases, be set aside even though they belong to the law chosen by the parties to govern their contract. Generally, when the law of a State is designated as applicable by the conflict rule, all its substantive provisions falling within the relevant category may be applied. In other words, in principle, the international scope of application of the substantive provisions of a given law follow the contours set by the conflict rule. However, by way of exception, some provisions have a narrower scope of application. They apply only to part of the situations which the conflict rule attributes to the law to which they belong. They are referred to as self-limiting (or self-limited) provisions because they are limited not only by the conflict rule, but also by their own purpose.19 They are in a way an inverse of the overriding mandatory provisions.20 Whereas in the case of an overriding mandatory provision, the purpose of the rule has the effect of extending it beyond the scope of application resulting from the conflict rule, in the case of a self-limiting provision, the purpose of the provision has the effect of confining it to below that same scope of application. The proximity between the two notions is real. In both cases, it is the purpose of the rule that explains why, by way of exception, it does not follow the exact contours indicated by the conflict rule. It is therefore common, although not systematic, for provisions constituting overriding legislation to be self-limiting provisions at the same time. Insofar as much of the legislation specific to the health crisis pursues a precisely identified purpose, justifying a derogatory application with respect to what the ordinary conflict of law rules provide, the question of their self-limiting character arises. As regards the provisions restricting freedom of movement and trade, the answer is fairly easy. As has already been said, since they are public law provisions, they are strictly territorial in application. They are applicable to any activity taking place on the territory of the State which has enacted them, whatever the law applicable to the contract in question. They are also, for the same reason, radically inapplicable to situations which do not take place on the territory of the State which enacted them. But if this is so, it is certainly because of their inherent selflimitation, but also because, as laws of public law, they are not capable of being designated by a conflict rule. 19 On which see R. DE NOVA, Conflits des lois et normes fixant leur propre domaine d’application, in Mélanges Jacques Maury, t. I, 1960, p. 377 et seq.; K. LIPSTEIN., Les normes fixant leur propre domaine d’application: les expériences anglaises et américaines, Travaux du Comité français de droit international privé 1977-79, p. 187; P. KINSCH, L’autolimitation implicite des normes de droit privé matériel, Rev. crit. dr. int. pr. 2003, p. 403 et seq.; B. HAFTEL, Les normes auto-limitées en droit international privé, in Mélanges Bertrand Ancel (note 14), p. 847 et seq. For an application to commercial agencies, see CJUE, 16 February 2017, Agro oreign Trade & Agency v Petersime, C-507/15, ECLI:EU:C:2017:129. 20 On this specific issue, see B. HAFTEL (note 19).

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Bernard Haftel The real question concerns the other branch of legislation specific to the health crisis: the provisions adopted in the contractual field to adapt ordinary contractual mechanisms and deadlines to the crisis, by suspending, postponing, paralysing... deadlines, payment mechanisms, guarantees or sanctions. And, very specifically, the question is: when the contract is governed by the law of a given country but is not performed on or even remotely connected to the territory of that country, do the specific provisions adopted in the contractual field by the law of that country to combat the health crisis apply? As with the previously considered question of the qualification as overriding mandatory provisions and scope of application of the provisions in question, the answer will depend on the specific content of each individual provision and it is therefore not possible to give a generally valid answer. But once again, it is possible to recall the methodological bases. Firstly, in the simplest case, the legislature will itself have expressly proceeded to self-limit its norm. This is the case with the French ordinance on “rents and invoices” which is limited to persons domiciled in France for tax purposes. In order to determine whether a mandatory law is at the same time a self-limiting provision, it is necessary to determine whether the rule laid down constitutes the ordinary law in the matter, i.e. the normal solution of the lex contractus, or a derogatory solution that is only justified in the context of the derogatory scope that it claims. While the precise answer will obviously depend on the individual provision under consideration, it seems to us that the answer will very generally be no. In the vast majority of cases, the contractual legislation adopted to deal with the health crisis will constitute a right of exception, derogating from ordinary law, and only justified by the particular health situation and its legal, judicial and institutional consequences. A good example can be found in the “deadlines” executive order discussed above. The reasons for the system of extension of time limits are not only the pandemic, which is found in most countries, but also, in the words of the order, “the consequences, in particular of an administrative or jurisdictional nature, of the spread of the COVID-19 pandemic and of the measures taken to limit that spread”. The administrative and jurisdictional consequences referred to are indeed those of the French institutions and the measures referred to are also those taken by French law, in application of the state of emergency law. There is therefore a direct link between the state of health emergency, the measures taken by French law in this context, including their timetable, and the mechanism for extending the time limits. There would be little point in applying this mechanism to a contract performed in Italy or Germany which would not have been affected by the pandemic in the same way or on the same dates. The result is that the time-limit order does not constitute French ordinary law, but a law of exception, expressly espousing the temporal and substantive scope of application of the law on a state of health emergency, which in terms of private international law is a self-limiting law of territorial application.

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INTERNATIONAL FAMILY LAW IN THE UNITED KINGDOM BEYOND BREXIT FOCUS ON MATRIMONIAL MATTERS AND HABITUAL RESIDENCE OF THE CHILD Katarina TRIMMINGS*/ Konstantina KALAITSOGLOU **

I. II.

IV.

Introduction Matrimonial Matters A. Abandoning the lis pendens Rule and Reverting to forum non conveniens B. Recognition of Divorce, Nullity, and Legal Separation 1. The 1970 Hague Convention on the Recognition of Divorces and Legal Separations 2. Foreign Divorce Recognition in the UK under the Family Law Act 1986 Habitual Residence of the Child A. The European Union (Withdrawal) Act 2018 and UK Courts B. Discerning a Possible Post-Brexit Approach of the Supreme Court towards the Concept of Habitual Residence of the Child Conclusion

I.

Introduction

III.

The consequences of Brexit for international family law in the United Kingdom (“the UK”) have been significant: from the loss of Regulation No 2201/20031 to potential dilemmas over the interpretation of key private international law concepts that had been expounded by the CJEU for the purposes of the EU private international law Regulations over the past decades and embedded in the UK domestic law.2 The loss of the EU private international law regime will be felt more in some Senior Lecturer at the University of Aberdeen, United Kingdom. Teaching Assistant at the University of Aberdeen. 1 Full quote supra Abbreviations, p. IX. 2 More generally, see e.g. R. LAMONT, Not a European Family: Implications of “Brexit” for International Family Law, Child & Family L. Q. 2017, 29, p. 267 et seq; P. BEAUMONT, Private International Law Concerning Children in the UK after Brexit: Comparing Hague Treaty Law with EU Regulations, Child & Family Law Quarterly L. Q. 2017, 29; A. CRITCHLEY , Brexit and Family Law: the Fog Begins to Clear, Scottish Private *

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Printed in Germany

Katarina Trimmings/ Konstantina Kalaitsoglou areas than in others, with the sphere of matrimonial matters being perhaps most substantially affected. Another issue that merits thorough analysis is the likely interpretation of the concept of habitual residence of a child by the UK courts postBrexit, for the purposes of parental responsibility and parental child abduction cases. Accordingly, the core of this article is divided into two parts – the first part addresses the legal landscape in the UK post-Brexit applicable to jurisdiction and recognition and enforcement in matrimonial matters, and the second part assesses the likelihood of diverging jurisprudence post-Brexit through the lens of habitual residence of the child. This is followed by a concluding section that brings together the key points made throughout the analysis.

II.

Matrimonial Matters

A.

Abandoning the lis pendens Rule and Reverting to forum non conveniens

Prior to the entry into force of the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters3 in the UK, the courts of England and Wales stayed divorce applications relying on “the inherent power of the High Court to govern its own proceedings” and utilising the forum non conveniens doctrine to decide whether an alternative, more appropriate forum should hear the claim.4 Although the concept of forum non conveniens featured in the negotiations, it was finally not inserted either in the Brussels Convention, or subsequently in the Regulation No 2201/2003, primarily due to the lack of a corresponding concept in major EU jurisdictions and the Benelux countries.5 Instead, the default tool to Client L. Rev. 2021, 74; M.C. MARTINEZ, Brexit and Private International Law: Looking Forward from the UK but Actually Going Backward, Spanish Yearbook of Int’l L. 2020/24, p. 73 et seq.; and D. HODSON, Family Law Leaves the EU - A Summary Guide for Practitioners, London 2020. 3 Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, (OJ L 299, 31.12.1972, pp. 32-42) (“Brussels Convention”). The Brussels Covnention was agreed on 27 September 1968 by the (then) six Member States of the European Economic Community. Effect was given to the Convention in the UK by the Civil Jurisdiction and Judgments Act 1982, which came fully into force on 1 January 1987. 4 P. BEAUMONT, Conflicts of Jurisdiction in Divorce Cases: Forum Non Conveniens, I.C.L.Q. 1987, 36(1), p. 117, L. COLLINS/ J. HARRIS et al., Dicey and Morris on the Conflict of Laws, 15th ed., London 2018, at 11-075; P. TORREMANS/ U. GRUŠIĆ et al., Cheshire, North & Fawcett; Private International Law, 15th ed., London 2017, 392, 977. The “inherent power” to stay proceedings has been put in statutory footing under section 49(3) Senior Courts Act 1981. 5 Ibidem; P. BEAUMONT, Forum non Conveniens and the EU rules on Conflicts of Jurisdiction: A Possible Global Solution, Centre for Priv. Int’l L. Working Paper No. 2018/4, p. 3. Available at https://www.abdn.ac.uk/law/research/working-papers-455.php on 10.5.2021.

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International Family Law in the United Kingdom beyond Brexit determine jurisdiction became the lis alibi pendens rule, according to which the court second seised must stay proceedings until the court first seised has decided upon its own jurisdiction.6 Understandably, lis pendens was a significant departure from the common law doctrine of forum non conveniens – a disparity that was amplified by the reflexive application of the Regulation No 2201/2003.7 For many years, the lis pendens rule sat uncomfortably with the UK courts,8 until forum non conveniens was severely curtailed in Owusu v Jackson, when the CJEU passed down its landmark ruling that the Member States are to adhere to lis pendens even in “outward cases” involving a third state.9 At the dawn of Brexit, commentators strongly advised the UK government to abandon lis pendens and to revert to forum non conveniens.10 Lis pendens has been praised for its predictability and is considered a pillar in establishing a pan-European scheme for determining jurisdiction in an efficient manner, while avoiding parallel proceedings.11 At the same time, the rule has been criticised, especially in common law systems. A prominent disadvantage of lis pendens is that by default it encourages a “race to the court” for parties will prefer to initiate litigation in their forum of preference, often producing “arbitrary” jurisdictions – assigning claims to forums with little connection to the case.12 The problem is “exacerbated by the fact that Art 3(1) provides seven different possibilities for jurisdiction without a hierarchy”, resulting in the possibility of multiple alternative jurisdictions and uncertainty which will deal with the divorce.13 A reallife illustration of the “race to the court” implications are the so-called “Eurostar 6 7

Regulation No 2201/2003, Article 19. M. NÍ SHÚILLEABHÁIN, Cross-border Divorce Law Brussels II bis, New York 2010,

p. 217. 8 In re Harrods (Buenos Aires) Ltd. [1992] Ch 72 per DILLON LJ, at [96]-[98], affirmed in Anton Durbeck GmbH v. Den Norske Bank ASA [2003] EWCA 147. 9 [2005] Q.B. 801; EU:C:2005:120. See L. COLLINS/ J. HARRIS et al. (note 3), at 11028; P. TORREMANS/ U. GRUŠIĆ et al. (note 3), p. 974 et seq.; and G. CUNIBERTI, Forum Non Conveniens and the Brussels Convention I.C.L.Q. 2005, 54(1), pp. 973, 980. 10 See e.g. M. NÍ SHÚILLEABHÁIN, Ten Years of European Family Law: Retrospective Reflections From a Common Law Perspective I.C.L.Q. 2010, 59(4), p. 1021; G. SMITH/ D. HODSON et al., Brexit and international family law: a pragmatic approach to divorce and maintenance, Fam Law 1554, 2018 at [49]. Available at https://www.familylaw. co.uk/docs/pdf-files/Brexit_and_International_Family_Law.pdf on 30.3.2021; P. BEAUMONT (note 1), p. 56; “(…) it would be wise to deviate from the preclusive model of the forum non conveniens doctrine (..)” J. HAM, (Br)Exit Strategy: The Future of the Forum Non Conveniens Doctrine in the United Kingdom after “Brexit” Cornell Int’l L. J. 2020, 52(4), p. 742 et seq. 11 A. BORRÁS, Explanatory Report on the Convention, drawn up on the basis of Article K.3 of the Treaty on European Union, on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters OJ C 221, p. 45. 12 L-K v K (No 3) [2006] EWHC 3281 (Fam), per SINGER J at [44]; J. REDDIN, An Unhappy Marriage: The EU and the Divorce Jurisdiction System under Brussels II Bis, Un. College Dublin L. Rev. 2020, 20, p. 46.; M. NÍ SHÚILLEABHÁIN (note 9), p. 1028.; G. CUNIBERTI (note 8), p. 978. 13 J. REDDIN (note 11), p. 46.

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Katarina Trimmings/ Konstantina Kalaitsoglou divorces” of Anglo-French couples.14 In a “Eurostar divorce”, the financially weaker party rushed to the courts of England and Wales where the system provides for open-ended maintenance to the detriment of the financially stronger party.15 In contrast, the latter rushed to the French courts where maintenance is approached as a means for the financially weaker party to gain financial standing in the short term, to avoid the financial obligation.16 Due to the involvement of litigation, and accordingly, cost, lis pendens “favour[ed] the richer party, who can afford the specialist legal advice that is crucial in these cases.”17 By operation of lis pendens, in “Eurostar divorces” and other cases, the statutory requirement or encouragement of parties to utilise conciliation or mediation prior to divorce proceedings came to be either abandoned or doomed.18 While mediation is willingly underutilised in commercial cases, it plays a crucial role in family matters, where contentious proceedings can prove detrimental. States have consistently attempted to incentivise the use of non-contentious processes; an objective that lis pendens has frustrated.19 With the revocation of the Regulation No 2201/2003 in the UK,20 the lis pendens rule was abrogated, resulting in a “shift back” to domestic jurisdictional rules. Post-Brexit, matrimonial proceedings may be instituted in the UK upon proof that one of the expanded bases under the Domicile and Matrimonial Proceedings Act 1973 exists.21 If actions have been raised in another jurisdiction parallel to the domestic action under an alternative jurisdictional base, the UK courts would now apply the “balance of convenience and fairness” test outlined in Schedule 3 of the 1973 Act, which places the doctrine of forum non conveniens on a statutory footing. The burden would be on the petitioner to prove to the court’s satisfaction that it is the appropriate forum as compared to any alternative jurisdiction. Accordingly, forum non conveniens is highly likely to become increasingly relevant in international family law cases. Considering the significant lapse of time since the curtailment of the concept of forum non conveniens in Owusu v Jackson, it is worth exploring the doctrine’s latest developments and assess the extent to which modernisation might be necessary. The concept was originally developed in Scotland22 and accepted in Ibidem. Ibidem. 16 Ibidem. 17 G. SMITH/ D. HODSON et al. (note 10), at [18]. 18 See M.M. CASALS, Divorce Mediation in Europe: An Introductory Outline, Electronic J. of Comp. L. 2005, 9(2). 19 Ibidem. See also M. NÍ SHÚILLEABHÁIN (note 9), p. 217. 20 The Jurisdiction and Judgments (Family) (Amendment etc.) (EU Exit) Regulations 2019, Regulation 3. 21 Section 5(2) Domicile and Matrimonial Proceedings Act 1973 as amended by the Jurisdiction and Judgments (Family) (Amendment etc.) (EU Exit) Regulations 2019. These jurisdictional grounds are based on the applicable Regulation No 2201/2003 rules, with sole domicile as a ground of jurisdiction having been added. 22 Sim v Robinow (1892) 19 R 665. See A. ARZANDEH, The origins of the Scottish forum non conveniens doctrine J. of Priv. Int’l L. 2017, 13(1), p. 132 et seq. 14 15

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International Family Law in the United Kingdom beyond Brexit England and Wales in the Spiliada23 case, resulting in the “English discretion to stay now [being] indistinguishable from the Scottish doctrine.”24 The core principle is that the court will grant a stay on the basis of forum non conveniens where the court is convinced that an alternative jurisdiction is “the appropriate forum;” it is better suited to hear the action in question.25 The doctrine, as expressed in Spiliada, was transposed to “non-domestic matrimonial applications” in De Dampierre v de Dampierre, where the court laid out several indicators of forum appropriateness.26 The bases considered by the court were the conventional connecting factors that are widely recognised as such – nationality and the place of residence – and less widespread factors such as the cultural heritage of the parties and family ties.27 It was recognised that factors such as the location of assets were of importance. In W v W, the court noted the significance of unity of proceedings in assessing convenience and found that it was “inconceivable” that property issues would be dealt separately to capital issues.28 In S v S, Wilson J suggested that the mere fact that another court has been seised with the claim would not prevent the domestic proceedings, because “it would be unfortunate to encourage litigants to think that they can win advantage by racing,” albeit it would be a relevant consideration in light of practicability.29 In O v O (Appeal against Stay: Divorce Petition), on similar grounds of practicability, Thorpe LJ, when assessing forum conveniens, highlighted the “convenience of witnesses, delay and expense” in participating in proceedings.30 In its search for the appropriate forum, UK courts have presented a plethora of factors to be considered. The flexible application of the doctrine is its comparative advantage; it is a formidable tool in identifying the most appropriate forum because it morphs on a case-by-case basis. However, in the doctrine’s flexibility lies also its greatest pitfall; its discretionary nature comes hand-in-hand with each judge’s idiosyncrasy on what constitutes undefined and arguably personal concepts such as culture and family ties. In a modern world, and especially a highly multicultural jurisdiction such as the UK, it is perhaps unfortunate to decide on forum appropriateness on the basis of factors such as cultural heritage or family ties. Technological advances come to challenge the practicability grounds proposed in W v W and S v S. Especially during the past year, the rise of telecommunications has shed light on online dispute resolution becoming the default, allowing for witnesses located anywhere to participate effortlessly. Further, the practicability ground regarding the location of assets is likely to be less relevant today, at least Spiliada Maritime Corp v Cansulex Ltd [1986] UKHL 10. P. TORREMANS/ U. GRUŠIĆ (note 3), p. 393. 25 Spiliada [1987] A.C. 460 at 476. 26 [1988] 1 AC 92 (HL) per LORD GOFF at [108]. See P. TORREMANS/ U. GRUŠIĆ (note 3), p. 973 et seq. 27 Ibidem, per LORD TEMPLEMAN at [96] and [103]. 28 W v W (Financial Relief: Appropriate Forum) [1997] 2 FCR 659. 29 S v S (Matrimonial Proceedings: Appropriate Forum) [1997 1 WLR 1200 per WILSON J at [1212]. 30 [2002] EWCA Civ 949, per THORPE LJ at [63]. 23 24

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Katarina Trimmings/ Konstantina Kalaitsoglou with regards to assets other than immoveable property; digital banking, asset fluidity and blockchain mean that persons are able to both transfer assets between States instantaneously and maintain assets at an a-national cloud, making any declarations with regards to location vain. Against this background, it becomes evident that the cherished doctrine of forum non conveniens might not be so apt for the contemporary world, which adds to the existing unpredictability of this flexible concept.31 B.

Recognition of Divorce, Nullity, and Legal Separation

Recognition of foreign divorces involving the UK and EU Member States is an area where the loss of the Regulation No 2201/2003 will be felt. The post-Brexit regulatory framework consists of the 1970 Hague Convention on the Recognition of Divorces and Legal Separations (“the 1970 Convention”),32 existing Bilateral Treaties between the UK and EU Member States and individual State private international rules. The hurdle of recognition will inevitably vary from State to State and the set of rules applicable in each case. 1.

The 1970 Hague Convention on the Recognition of Divorces and Legal Separations

The scope of the 1970 Convention is limited to divorces and legal separations which follow judicial or other proceedings officially recognised in that state and which are legally effective.33 Accordingly, the annulment of marriages, findings of fault or ancillary orders, including orders for pecuniary obligations, are excluded.34 Notably, the 1970 Convention does not include any direct rules on jurisdiction, which is a “considerable flexibility” compared to the Regulation No 2201/2003.35 The 1970 Convention is considerate of the different levels of conservatism of States towards the notion of matrimony and divorce by providing a mechanism for

See e.g. J. HAM (note 9) for suggestions how the doctrine of forum non conveniens could be adapted. 32 1970 Hague Convention on the Recognition of Divorces and Legal Separations (“the 1970 Convention”). 33 1970 Convention, Article 1. See P. BELLET/ B. GOLDMAN, Explanatory Report to the Convention on the Recognition of Divorces and Legal Separations (“BELLET-GOLDMAN Report”), at 12-18. The Explanatory Report, p. 3, adds that as “divorce is often followed by re-marriage […] it is consequently as much a matter of facilitating recognition of the validity of the second marriage as of recognising the validity of the divorce.” 34 Ibidem, at 6. 35 M. NÍ SHÚILLEABHÁIN (note 6), p. 16. 31

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International Family Law in the United Kingdom beyond Brexit States to broaden or narrow their grounds for recognition.36 The majority of Contracting Parties have a reservation, declaration, or notification in place.37 For a divorce to be recognised under the 1970 Convention, the parties must satisfy specific connecting factors centred around habitual residence and nationality.38 Interestingly, Article 3 proclaims that where relevant, the concept of habitual residence includes that of domicile. In the Explanatory Report it is understood that the aim of Article 3 is to “make recognition subject to the general jurisdiction of the State of origin, without concerning itself with where, within that State, the authority from which the decision emanates is situated” and essentially transposes “domicile” to Article 2(1) and (2), mutandis mutandis “habitual residence.”39 For the UK, Article 3 translates to a positive change from the Regulation No 2201/2003 regime, where it was possible that courts of different intra-UK domiciliary territories would hear different family law issues. Refraining from determining a specific domestic court, especially in multi-territorial states such as the UK, avoids unnecessary complexity and intra-state intervention that does not exist in States consisting of a single domiciliary territory. The 1970 Convention prescribes narrow grounds for the non-recognition of divorces in Articles 8-10.40 Under Article 8, divorce may not be recognised if the applicant has not taken adequate steps to notify the respondent. Under Article 9, recognition may be refused if there is a previous relevant decision that has been recognised or is capable of recognition in the state recognition is sought. Under Article 10, a court may refuse recognition if the divorce is “manifestly incompatible with [the state's] public policy.” Public policy in the Hague Conventions has been the source of significant scholarly debate; however, there is no specific added criticism concerning its expression in the 1970 Convention. The 1970 Convention has been acknowledged to be fit for purpose, not posing significant interpretational challenges and achieving “a reasonably high level of harmonisation, without encroaching unduly on national interests.”41 Although there is no evidence that the 1970 Convention would be incompatible with either civil or common law systems, it has been ratified by only two common law jurisdictions - Australia and the UK.42 The most significant lacuna of the 1970 Convention lies in its restricted application as only twelve EU Member States are

1970 Convention, Articles 17, 19 and 20. Only 6 of the 20 Contracting Parties have acceded to the Convention in toto. See also BELLET-GOLDMAN Report (note 31), at 4. 38 1970 Convention, Article 2. See D. HODSON/ G. SMITH & V. LE GRICE, Brexit and international family law: a pragmatic approach to divorce and maintenance, Fam Law, 2018, 1554; and BELLET-GOLDMAN Report (note 31), at 24-31. 39 BELLET-GOLDMAN Report (note 31), at 10. 40 Ibidem, at 46-50. 41 M. NÍ SHÚILLEABHÁIN (note 6), p. 15. 42 Ibidem. See the status table of the Convention of 1 June 1970 on the Recognition of Divorces and Legal Separations at https://www.hcch.net/en/instruments/conventions/ status-table/?cid=80 on 10.4.2021. 36 37

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Katarina Trimmings/ Konstantina Kalaitsoglou Contracting Parties.43 Accordingly, the 1970 Convention's usage rate and success as a reliable international instrument post-Brexit will heavily depend on whether the EU will accede en bloc to maintain a degree of coherence with the UK. There is, however, faint evidence of such a scenario coming to fruition; as far back as 1997, it was reported that two key EU States, France, and Germany, were negatively predisposed to the 1970 Convention.44 Although the post-Brexit political status quo might ignite a reassessment of options, it is questionable whether EU states, individually or collectively, would yield towards ratification for the sole purpose of maintaining coherence with the UK. From the outset, the French and German rejections of the Convention were based on a desire “to have a European solution to questions of jurisdiction and recognition in matrimonial matters,” and a reluctance “to give up the rights of […] citizens to have recourse to [national] courts” except in the context of reciprocity of the EU. Considering the dynamics of the European politics, the fact that two pillar Member States have rejected the 1970 Convention, and most other EU Member States have been indifferent, indicate that an en bloc accession by the EU is an unlikely event. At present, the 1970 Convention could be inviting an added layer of abuse by acting as a “doorway” to recognising divorces in Europe. For instance, if a divorce decree issued by UK courts is recognised in any of the Convention’s Contracting States that are also EU Member States, the applicant may tactically seek to enforce that Contracting State's judicial decision on the recognition of the divorce decree in the other Member States more efficiently. The Explanatory Report to the Convention leaves this possibility unanswered, perhaps because such situations could not have reasonably been envisaged at the time the Convention was drafted. 2.

Foreign Divorce Recognition in the UK under the Family Law Act 1986

Part II of the Family Law Act 1986 lays out the framework for the recognition of divorces, annulments, and legal separations.45 Mirroring Article 2 of the 1970 Convention to a considerable extent,46 Section 46(1) provides that an overseas divorce, annulment or legal separation, “obtained by means of proceedings” will be recognised if either party was habitually resident, domiciled, or a national of the granting state and the decree is legally effective there.47 Similarly to the 1970 Convention, foreign decisions refusing the granting of a divorce, annulment or legal 43 The contracting parties do not include France or Germany. In this context, M. NÍ SHÚILLEABHÁIN, (note 6), p. 16, rightly notes that “[f]rom the point of view of English law, German and French ratification would have been a preferable solution.”. 44 Ibidem. See HOUSE OF LORDS SELECT COMMITTEE ON THE EUROPEAN COMMUNITIES, Brussels II: The Draft Convention on Jurisdiction, Recognition and Enforcement of Judgements in Matrimonial Matters, House of Lords Select Committee Reports 1997-98/5, at [9], [56]. 45 Family Law Act 1986, Sections 44-54. 46 Interpreted in conjunction with Article 3 of the 1970 Convention. 47 Family Law Act 1986, Section 4(1)(b)(i)-(iii).

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International Family Law in the United Kingdom beyond Brexit separation are excluded from the scope of the recognition sections under the 1986 Act; should a party that has failed to obtain a granting decree overseas wish to start fresh proceedings in the UK, it is permitted to do so, subject to satisfying the relevant jurisdictional grounds. Under Section 46(1), the concept of “domicile” refers either to the common law concept or the concept envisaged under the granting state’s national law.48 According to Ni Shuilleabhan, the rule sanctions “the recognition of decrees of ‘divorce mills’”, i.e. states where a party may acquire domicile following brief residence and therefore become entitled to a divorce decree.49 Previously, there had been intense discussion surrounding religious divorce such as talaqs, and whether they qualified as “proceedings” under Section 46(2) of the 1986 Act.50 This question is important considering the significantly wider bases for recognition under Section 46(1) when compared to Section 46(2).51 The issue is now definitively settled, and there is a strong line of precedent including them in the interpretation of section 46(1).52 A similar debate had concerned the negotiating parties of the 1970 Convention, which reached the same interpretation – i.e. talaqs are to be included in the scope of Article 1.53 Under Section 46(1), a potential pain point is the requirement of legal effectiveness in the state of origin. There is no clear corresponding rule under the Regulation No 2201/2003 although there are a fortiori indications of such a requirement under other Articles of the Regulation.54 Therefore, it is probable that future recognition cases will include an enquiry into legal effectiveness, which did not exist previously. The added requirement of Section 46(1) is not necessarily negative; arguably, under Regulation No 2201/2003, it was possible for decrees that were considered void in their state of origin to enjoy automatic recognition.55 Still, there is a scope for irreconcilable interpretations under the 1986 Act and common law, and in particular, the extent to which the interpretation of the 1986

Family Law Act 1986, Section 46(5). Messina (formerly Smith orde Vervaeke) v Smith [1971] P 322 (P) 339. See also M. NÍ SHÚILLEABHÁIN (note 6), p. 232; P. TORREMANS/ U. GRUŠIĆ et al. (note 3), p. 1025. 50 Section 46(2) of the Family Law Act 1986 regulates the recognition of “the validity of an overseas divorce, annulment or legal separation obtained otherwise than by means of proceedings […].” M. NÍ SHÚILLEABHÁIN (note 6), p. 234. 51 Under Section 46(2) of the Family Law Act 1986, it is possible that a divorce, nullity or legal separation be recognised if not acquired through judicial proceedings, however, the bases for recognition are significantly narrower. P. TORREMANS/ U. GRUŠIĆ et al. (note 3), p. 1021. 52 El Fadl v El Fadl [2000] 1 FLR 175 (F); Quazi v Quazi [1980] A.C. 744. 53 BELLET-GOLDMAN Report (note 31), at 13; P. TORREMANS/ U. GRUŠIĆ et al. (note 3), p. 1017. 54 E.g. Article 46 of the Regulation No 2201/2003 requires the concerned private agreements to be enforceable in their state of origin. M. NÍ SHÚILLEABHÁIN (note 6), p. 241. 55 Ibidem, p. 242. 48 49

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Katarina Trimmings/ Konstantina Kalaitsoglou Act departs from established precedent.56 Before codifying the rules on recognition, the common law approach appeared to permit the recognition of decrees that contained defects; only decrees declared ineffective in their state of origin would be denied recognition. In Pemberton v Huges, where the recognition of a defective divorce decree granted in Florida was sought, the court was unequivocal that “an English court cannot go behind the final decree of a foreign court upon the ground that the foreign court made a slip in its own procedure,” nor would it be possible to examine the matter on its merits.57 The commentary in the Explanatory Report to the 1970 Convention provides an aligned explanation of the corresponding requirement under Article 1 and limits the types of decrees that are not “legally effective” to “divorces which are not effective in the state in which they were obtained,” and therefore, necessarily to decrees that have already undergone or are undergoing an appeal procedure with a negating effect.58 The more recent case law suggests a mixed treatment of the above approach. For instance, in D v D, a divorce decree granted by the Ghanaian Customary Arbitration Tribunal was not recognised, inter alia, because of the possibility for the decree to be set aside in judicial review proceedings.59 Recognition under the 1986 Act is further subject to Section 51, which provides three exclusive and narrow grounds for refusal of recognition. Firstly, a decree will not be recognisable if there is res judicata between the parties, determining the same matter.60 Under Section 51(2), recognition may be refused if the divorce was “obtained at a time when, according to […] [English law], there was no subsisting marriage between the parties.”61 Notably, annulments are excluded from the scope of the proviso to take into account cases where the marriage was void ab initio and no judicial decision of annulment exists.62 The third ground for non-recognition is a failure to take steps to notify a party of proceedings or if a party was not given an adequate opportunity to be heard.63 The standard upon which the requirement is to be determined is the “English standards,” interpreted to refer to “European standards applicable in the UK.”64 There is no evidence of a shift away from this approach. Courts have applied the rule flexibly and consider “all circumstances” of a case.65 It is established that courts should be “very slow”

56

Ibidem, p. 235; P. TORREMANS/ U. GRUŠIĆ et al. (note 3), p. 999. Pemberton v Hughes [1889] 1 Ch 781 (CA). 58 BELLET-GOLDMAN Report (note 31), at 14. 59 D v D (Recognition of Foreign Divorce) [1994] 1 FLR 38. 60 Family Law Act 1986, Section 51(1). 61 Family Law Act 1986, Section 51(2). See P. TORREMANS/ U. GRUŠIĆ et al. (note 3), p. 1026. 62 Ibidem. 63 Family Law Act 1986, Section 51(3)(a). 64 Liaw v Lee [2015] EWHC 1462 (Fam), [2016] 1 FLR 533, per MR JUSTICE MOSTYN at [8]. 65 Duhur Johnson v Duhur Johnson [2005] 2 FLR 1042. See P. TORREMANS/ U. GRUŠIĆ et. al. (note 3), p. 1027. In Law v Gustin [1976] Fam 155, it was acceptable that 57

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International Family Law in the United Kingdom beyond Brexit to exercise their discretion under the grounds of Section 51.66 Public policy as a ground for non-recognition is contained in Section 51(3)(c). This is a discretionary power of the courts, however in Golubovich v Golubovich it was submitted that, if recognition is found to be manifestly contrary to public policy, the courts' residual power in such cases necessarily commands a refusal.67 The courts are highly likely to seek guidance from established precedent, even though common law does not offer a separate public policy ground for refusal to Section 51(3)(c).68 Despite the uncertainty around decrees which are capable of being set aside or quashed in their state of origin, commentators agree that other aspects of Part II of the 1986 Act are “reasonably clear” and recognition of divorces is “almost automatic.”69 The grounds for non-recognition were modelled after the 1970 Convention and were narrow prior to the Regulation No 2201/2003 coming into force, indicating that they will likely continue being so after Brexit. Evidence suggests that courts will continue to have regard to the interpretation of corresponding concepts of the 1986 Act in the Regulation No 2201/2003 as passed down by the CJEU. For instance, in Liaw v Lee, Mr Justice Mostyn observed the benefits of utilising harmonised international rules and submitted that the interpretation of Section 51(3) of the 1986 Act “must be informed by the judicial interpretation of Article 22(b)” because “it would be bizarre if totally different rules” applied to petitions from an EU Member state and third states.70 While it is expected that direct parallelisms with the Regulation No 2201/2003 might end, it is envisaged that the courts will continue to “have regard” to the CJEU and other EU judicial interpretations of core concepts such as procedural fairness, as a result of efforts to maintain desirable coherence. Notwithstanding, in practical terms, parties wishing to have their divorce, annulment, or legal separation recognised in the UK, will be disadvantaged by the loss of the EU-exclusive automatic recognition feature post-Brexit.71 Previously, recognition of the relevant decrees was automatic across all EU Member States. Under the post-Brexit regime, parties will have to apply for a status declaration under Section 55(1)(d) of the 1986 Act to have the divorce decree recognised. The procedure encompasses a potentially hefty burden on the applicant to convince the

five days of notice were given to the other party, whilst in Mitford v Mitford [1923] P 130 an annulment decree was recognised despite one party being absent from the proceedings due to war. 66 Olafisoye v Olafisoye [2010] EWHC 3540 (Fam) at [35]. See P. TORREMANS/ U. GRUŠIĆ et al. (note 3), p. 1028. 67 Golubovich v Golubovich [2010] EWCA Civ 810 per THORPE J at [69] cf. Ibidem, p. 1030. 68 Ibidem, p. 1048 cf Chaudhary v Chaudhary [1085] Fam 19 per WOOD J at [29]. 69 M. NÍ SHÚILLEABHÁIN (note 6), p. 236; D. HODSON, Brexit: England and Wales as a global family law leader or EU-emasculated?, Family Law Journal 2016, p. 574.; M. NÍ SHÚILLEABHÁIN (note 9), p. 1021. 70 [2015] EWHC 1462 (Fam), [2016] 1 FLR 533, per MR JUSTICE MOSTYN at [8]. 71 Article 21(1) of the Regulation No 2201/2003 permits the automatic recognition of decrees without requiring a court hearing.

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Katarina Trimmings/ Konstantina Kalaitsoglou court of “the truth of the proposition to be declared” to the court's satisfaction.72 The related proceedings are contentious, encompassing the matrimonial parties as petitioner and respondent, which can be a combative and consuming process.73 Accordingly, post-Brexit, the substantive grounds for refusal of recognition might not be felt in practice, as both systems provide for a laissez-faire approach. The impact of Brexit might be felt more in the de-harmonised procedure for enforcement, which will be significant in the UK.

III. Habitual Residence of the Child It is impossible to pinpoint with certainty the approach of the UK courts towards retained EU case law and the extent of divergence occurring in the future.74 Nevertheless, it is worth analysing whether, and if so, to what extent, UK courts are empowered to deviate from retained EU case law. Assessing potential post-Brexit approaches of the Supreme Court through the lens of a “Europeanised” concept such as the habitual residence of children offers grounds for fruitful discussion. A.

The European Union (Withdrawal) Act 2018 and UK Courts

The European Union (Withdrawal) Act 2018 (“the Withdrawal Act”) embodies core legal changes applicable post-Brexit, inter alia, the newly found power of certain UK courts to deviate from retained EU case law.75 Per Sections 2-4 of the Withdrawal Act, “retained EU Law” includes retained EU-derived law in the UK by statute or statutory instrument that implemented EU law when it was binding in the UK, retained EU direct law, which was applicable in the UK without the need of national legislation, and other rights, and obligations derived from Section 2(1) of the European Communities Act 1972 not falling in one of the two previous categories. “Direct EU legislation” expressly includes decisions of the CJEU as they had effect immediately before the exit day. Under Section 6(2) of the Withdrawal Act, UK courts “may have regard” to future CJEU decisions and decisions of “another EU entity or the EU so far as relevant to any matter before the court or tribunal.” The word “may” may lead to the interpretation that UK courts are under no obligation to follow future EU decisions or consider them to any specific extent.

Family Law Act 1986, Section 58(1). M. NÍ SHÚILLEABHÁIN (note 6), p. 243. 74 See also K. TRIMMINGS, International Family Law in the UK beyond Brexit: Focus on Parental Child Abduction, Int’l Family Law, 2021, pp. 121-124. 75 European Union (Withdrawal) Act 2018. Available at https://www.legislation. gov.uk/ukpga/2018/16/contents/enacted on 30.03.2021. 72 73

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International Family Law in the United Kingdom beyond Brexit The Supreme Court, the High Court of Justiciary (in criminal matters) and a number of appeal courts may depart from retained EU case law.76 When deciding whether to depart, the Supreme Court and the High Court of Justiciary “must apply the same test as it would apply in deciding whether to depart from its own case law,” while the relevant lower courts must apply the same test.77 The referred test is laid out in the Practice Statement of the UK Supreme Court and is primarily based on the court's discretion; the court will regard precedent “as normally binding, [but] depart from a previous decision when it appears right to do so”.78 A fortiori, retained EU case law will remain “normally binding” but the qualifying UK courts will depart if “it appear[s] right to do so.”79 The test was applied recently in Peninsula Securities Ltd v Dunnes Stores (Bangor) Ltd (Northern Ireland), where Lord Wilson, quoting Lord Bingham in Horton v Sadler,80 found that the Supreme Court will only depart from earlier decisions “rarely and sparingly” and “with a high degree of caution” because a “sudden change in the law is likely to destabilise it”.81 Considering Lord Wilson's dicta, it is expected that the Supreme Court will be setting a high threshold to depart from retained EU case law. The relevant test of the Inner Temple of Scottish Justiciary is centred around the court’s discretion, albeit phrased differently, to allow departure from precedent “when the interests of justice require it.”82 76 Section 6(4) makes note of the Supreme Court and High Court of Justiciary only, however, Section 3(a)-(g) of The European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020 adds the following courts to the courts that may depart from retained EU case law: (a) the Court Marial Appeal Court, (b) the Court of Appeal in England and Wales, (c) the Inner House of the Court of Session, (d) the High Court of Justiciary when sitting as a court of appeal in relation to a compatibility issue (within the meaning given by section 288ZA(2) of the Criminal Procedure (Scotland) Act 1995(3)) or a devolution issue (within the meaning given by paragraph 1 of Schedule 6 to the Scotland Act 1998(4)), (e) the court for hearing appeals under section 57(1)(b) of the Representation of the People Act 1983(5), (f) the Lands Valuation Appeal Court, and (g) the Court of Appeal in Northern Ireland. 77 European Union (Withdrawal) Act 2018, Section 6(5). 78 The test was laid out in Practice Statement (Judicial Precedent) 1966: [1966] 1 W.L.R. 1234. This has been confirmed to apply to the Supreme Court in subsequent case law: Austin v Mayor and Burgess of the Borough of Southwark [2010] UKSC 28 per LORD HOPE at [24]; THE SUPREME COURT OF THE UNITED KINGDOM, Practice Direction 4, UKSC Practice Direction 4, at 4.2.4. Available at https://www.supremecourt.uk/procedures/ practice-direction-04.html on 30.03.2021; “The Supreme Court and Europe” (UK Supreme Court, 2021) Available at https://www.supremecourt.uk/about/the-supreme-court-andeurope.html on. 16.3.2021. 79 Ibidem. 80 Horton v Sadler [2007] 1 AC 307. 81 Peninsula Securities Ltd v Dunnes Stores (Bangor) Ltd (Northern Ireland) [2020] UKSC 36 per LORD WILSON at [49]. 82 Consultation; Retained EU Case Law consultation on the Departure from retained EU case law by UK courts and tribunals, UK Ministry of Justice 2020, p. 21. Available at https://www.gov.uk/government/consultations/departure-from-retained-eu-case-law-by-ukcourts-and-tribunals on 30.03.2021.

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Katarina Trimmings/ Konstantina Kalaitsoglou The Supreme Court test was introduced as a safety valve against uncertainty but effecting desirable incoherence in a timely manner and avoiding the “fossilisation” of UK law.83 It was initially thought that only the Supreme Court should have the power to depart from retained case law; a proposition that was later expanded to include an array of courts, despite the majority of responses to the relevant consultation paper having indicated support for the first.84 The seemingly straightforward test, contemplated in its newly found context, hides several lacunas, the initial being of conceptual nature. Understandably, the test was not designed to be utilised by courts other than the Supreme Court, even if they hold an appellate function. Each court in the UK judicial order that has been empowered under the Withdrawal Act has established, well-defined and narrow grounds upon which departure from its own precedent is permitted, while the discretionary test remains reserved for the Supreme Court. The arrangement is not merely reflective of the longstanding hierarchy of the courts; the test exists to allow the Supreme Court to correct injustices and synchronise the law with modernity. The innate uncertainty and discretionary phrasing of the test are necessary and justified by the Supreme Court’s role as an apex court. Contrastingly, with a partial exemption of the High Court of Justiciary, decisions of the relevant courts under the Withdrawal Act are subject to judicial review or may be appealed, thus not requiring a test to revise own precedent. The vertical expansion of the application of the test is not reflective of either the UK judicial order or the specific roles of the courts. It is uncertain how the test will develop in the context of Brexit; however, it is probable that the empowered courts will continue to follow retained EU case law that has been confirmed in Supreme Court cases, out of respect to the judicial hierarchy, which is rooted in centuries of tradition. B.

Discerning a Possible Post-Brexit Approach of the Supreme Court towards the Concept of Habitual Residence of the Child

It is well-established that UK family law has been influenced to a considerable extent by EU law. According to Lamont, “the emphasis [of the EU] on legal certainty and mutual trust was a significant shift away from for English approach to international family law based on discretion and forum conveniens.”85 The UK legal order has shifted significantly to align with the EU rule of law, and the lapse of decades of the pre-Brexit status quo has blurred the distinctions between EU and UK legal concepts. Due to the blending of laws, the invariable consequences of Brexit do not necessarily encompass a stark “shift back” to purely domestic concepts, especially considering a portion of adapting retained EU law has been entrusted to the judiciary, resulting in necessarily gradual, case-by-case change. 83 Consultation response; Response to the consultation on the departure from retained EU case law by UK courts and tribunals, UK Ministry of Justice 2020, p. 16. Available at https://www.gov.uk/government/consultations/departure-from-retained-eucase-law-by-uk-courts-and-tribunals on 16.03.2021. 84 Ibidem. 85 R. LAMONT (note 1), p. 272.

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International Family Law in the United Kingdom beyond Brexit Although it is impossible to define the extent of divergence accurately from the Supreme Courts’ approach in established precedent, it is discernible that, at least regarding habitual residence of children, the departure will be subtle and slow unless incoherence is manually accelerated via the introduction of a new law by the UK legislator. Discussing a possible post-Brexit approach of the Supreme Court in the context of habitual residence of children is of particular interest because the concept has been left systematically undefined, fact-based, and fragmented.86 As such, judicial interpretation gains prominence and becomes the primary source of understanding of the concept. To discern potential post-Brexit approach of the Supreme Court, the authors have examined two significant non intra-EU cases involving the 1980 Hague Convention on the Civil Aspects of International Child Abduction (“the 1980 (Hague) Convention”),87 where the definition of habitual residence was at issue: In the matter of KL (A Child)88 and In the matter of A (Children).89 The respective decisions include accounts of both the CJEU definition of habitual residence and UK case law, theoretically providing grounds for fruitful discussion about postBrexit interpretation of the concept of habitual residence of children. In In the matter of KL (A Child), Baroness Hale straightforwardly recognised that “not all states parties [of the 1980 Hague Convention] would apply an identical test [to determine habitual residence]”;90 a powerful reminder that the concept has different facets according to jurisdiction. Notwithstanding, citing A v A and another (Children: Habitual Residence) (Reunite International Child Abduction Centre intervening),91 Baroness Hale proceeded to apply the concept of habitual residence “as explained” by the CJEU. Arguably, Lady Hale's justification for considering the UK and EU concepts conjunctively, albeit separating their existence, extends further to the UK’s membership in the EU. Specifically, Baroness Hale anchored her dicta, inter alia, in the fact that the 1980 Convention “formed part of the legislative history of the [Regulation No 2201/2003]” and the proposition by Advocate-General Kokott in A v A (Children) (Habitual Residence),92 that such an approach would ensure “a uniform understanding of the concept of habitual residence”.93 86 J. CARRUTHERS, Discerning the meaning of “habitual residence of the child” in UK courts; a case of the oracle of Delphi, this Yearbook 2020, p. 1, 5, 10, 14. 87 1980 Hague Convention on the Civil Aspects of International Child Abduction [“the 1980 (Hague) Convention”]. For an account of the relationship between the Regulation No 2201/2003 and the 1980 Convention in the context of Brexit see e.g. L. WALKER, The Potential Effects of Brexit on the Cross-Border Circulation of Private Family Law Judgments; with a Particular Focus on Questions Relating to Gender in M. DUSTIN/ N. FERREIRA (eds) et al., Gender and Queer Perspectives on Brexit, Gender and Politics, Cham, 2019. 88 In the matter of KL (A Child) [2013] UKSC 75. 89 In the matter of A (Children) [2013] UKSC 60. 90 Ibidem, per BARONESS HALE at [18]. 91 [2013] UKSC 60. 92 A v A (Children) (Habitual Residence) [2014] A.C. 1. 93 In the matter of KL (A Child) [2013] UKSC 75, per BARONESS HALE at [19].

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Katarina Trimmings/ Konstantina Kalaitsoglou Similarly, in In matter of A (Children), Baroness Hale, with whom Lord Wilson, Lord Reed and Lord Toulson agreed, explicitly distinguished the UK concept of habitual residence from the concept adopted by the CJEU, however, stating that “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.”94 Baroness Hale referred to a recommendation by the Law Commission of England and Wales, which preferred the adoption of “habitual residence” over alternatives such as domicile and “ordinary residence” precisely because of its extended use in international conventions such as the 1980 Hague Convention and the increased likelihood of it being recognised in an array of jurisdictions.95 The embedment of the EU concept of habitual residence in UK precedent is more pervasive than the eye meets. According to Carruthers, it is clear that UK courts have “follow[ed] the European model” in “conscious alignment of the national and European concepts.”96 Arguably, there is faint evidence that the Supreme Court might reconsider its stance; in In matter of A, Baroness Hale hinted that there might be scope for debate with regards to Lord Justice Thorpe’s dicta in DL v EL97 that “there is now no distinction to be drawn” between the CJEU, the 1980 Convention and the English domestic law test of habitual residence.98 If Lord Thorpe’s approach is adopted, there might be a reasonably uncomplicated departure from the status quo in future international child abduction cases. Albeit an unlikely scenario, it might be legally within the scope of section 6 of the Withdrawal Act 2018 for the UK courts to depart from precedent on habitual residence if the concept utilised in the domestic context is considered to be the one of the CJEU, directly effective. It is plausible that the UK courts hold the power to depart from retained EU case law subject to the Supreme Court’s test for departing from its own case law. If Baroness Hale’s interpretation is accepted, perceiving habitual residence to be an autonomous and potentially divergent concept under each legal order will not be a direct consequence of Brexit; the seeds of the debate are evident in the respective judgments.99 Further, to an extent, subtle divergence exists. As noted by Carruthers, “[UK] judges in specific instances depict […] characteristics [of habitual residence] and identify its indicia”, thus forming a stare decisis of

“Very recently, in DL v EL [2013] EWCA Civ 865, at para 48, the Court of Appeal has expressed the view that “there is now no distinction to be drawn” between the test adopted in each of those three contexts. As we are dealing only with habitual residence under the Regulation, it is not strictly necessary for us to resolve that debate.” Ibidem, at [34]. 95 Ibidem. Custody of Children – Jurisdiction and Enforcement within the United Kingdom, Law Commission No 138, Scottish Law Commission No 91, at [4.15]. Available at https://www.scotlawcom.gov.uk/files/1013/1365/3643/rep91.pdf on 16.03.2021. 96 J. CARRUTHERS (note 84), p. 15. 97 [2013] EWCA Civ 865. 98 In the matter of A (Children) [2013] UKSC 60, per BARONESS HALE at [34]. 99 Ibidem at [34] cf. DL v EL (Hague Abduction Convention: Effect of Reversal of Return Order on Appeal) [2013] EWCA Civ 865 per LORD THORPE at [48]. 94

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International Family Law in the United Kingdom beyond Brexit detailed and nuanced legal glosses to the concept.100 Arguably the “legal glosses,” emanating from the extensive judicial commentary that habitual residence has received in the UK courts, might have been influenced by the CJEU decisions but not vice versa. The English domestic concept of habitual residence might have been “Europeanised,” but it is unlikely that the CJEU will consider national interpretations of habitual residence as authoritative in its decision making. Immediately, the concepts are necessarily separate and (subtly) divergent within the different legal orders. What remains unanswered is the extent to which the Supreme Court will depart from its previous case law embedding the CJEU concept into English domestic law. Arguably, cases such as In the matter of KL and In the matter of A may be characterised as only partly retained EU case law because the CJEU and UK approach to the concept is analysed in conjunction, but carefully preserving their separate legal existence; effectively, the cases incorporate the CJEU interpretation in Supreme Court precedent, not as an alien concept imposed on the court, but by interpreting the UK concept of habitual residence as akin to the CJEU understanding. As the UK courts are empowered to depart from retained EU case law only, it is unclear whether an established precedent of a “Europeanised,” rather than a “European” concept can be departed under section 6 of the Withdrawal Act 2018.101 The question is one of lex ferenda. Considering the explicit and far-reaching influence of the CJEU interpretation of habitual residence and the attention paid by the Supreme Court to international coherence, it is not unimaginable that it will not readily depart from its previous precedent and “have regard” to future CJEU decisions on habitual residence, in recognition of the CJEU's extra-territorial harmonising role.

IV. Conclusion In respect of jurisdiction in matrimonial matters, the loss of the Regulation No 2201/2003 has resulted in the revival of the doctrine of forum non conveniens in the UK. It, however, appears that in the light of modern technological advances some of the rationales behind this doctrine may now be less persuasive, leading to questions over the fitness of this doctrine as a tool to assist in determining jurisdiction post-Brexit. With regards to recognition of decisions on divorce, nullity and legal separation, the legal landscape post-Brexit is rather incoherent, with the 1970 Convention, existing Bilateral Treaties between the UK and EU Member States and individual state private international rules being all part of the framework. This means that the hurdle of recognition and the applicable rules will inevitably vary from one case to another. Navigating this framework is likely to prove more complicated for legal practitioners and judges and more costly for parties. Against J. CARRUTHERS (note 84), pp. 1, 35. The term ‘Europeanisation’ refers to the replacement of national legal provisions by those originating from the European Union in N.A. BAARSMA, The Europeanisation of International Family Law, Hague 2011, p. 6. 100 101

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Katarina Trimmings/ Konstantina Kalaitsoglou this background it can be concluded that this is an area where the loss of Regulation No 2201/2003 will be felt most. Although it is impossible to predict with any certainty how the UK courts will approach retained EU case law, when it comes to interpreting habitual residence of the child, there is an additional uncertainty. In particular, the interpretation of habitual residence of the child by the UK courts, although embracing the CJEU approach, may be characterised as only partly retained EU case law because the CJEU approach is supplemented by guidance from the UK Supreme Court. In effect, the Supreme Court presents the UK approach to habitual residence as akin to the CJEU understanding rather than an (alien) EU concept imposed on the UK courts. This brings into prominence the question whether an established precedent of a “Europeanised,” rather than a “European” concept can be departed from under Section 6 of the Withdrawal Act 2018. Assuming that the answer to this question is yes and having regard to the harmonising role of the CJEU, it appears plausible to conclude that the Supreme Court will not readily depart from its interpretation of the concept of habitual residence of the child and may even “have regard” to future CJEU decisions on habitual residence.

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HIGHLIGHTS ON THE BRUSSELS II TER REGULATION ________________

WHAT’S NEW IN REGULATION (EU) NO 2019/1111? Cristina GONZÁLEZ BEILFUSS*

I. II.

IV. V. VI.

Introduction Public Documents and Agreements A. Private Divorces B. Decisions, Private Agreements and Authentic Instruments or Agreements as Defined in Regulation (EU) No 2019/1111 C. The Recognition of Authentic Instruments and Agreements under Section 4 of Chapter III of Regulation (EU) No 2019/1111 Private Autonomy A. Choice of Court B. Mediation in Child Abduction Proceedings The Abolition of exequatur and Common Enforcement Provisions Direct Judicial Communication Concluding Remarks

I.

Introduction

III.

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 was published in the Official Journal on 2nd July 2019 and entered into force twenty days later.1 As is customary in EU law it will not, however, become applicable until 1st August 2022.2 This time gap is intended to provide time for implementing measures and for allowing the legal community to familiarize itself with the upcoming changes.3 Professor of Private International Law at the University of Barcelona. Art. 105.1 Regulation (EU) No 2019/1111, full quote supra (Abbreviations), p. XI. 2 Art. 105.2 Regulation (EU) No 2019/1111. 3 CJEU, 17 November 2011, C-412/10, Homawoo, ECLI: EU:C:2011:747. * 1

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Printed in Germany

Cristina González Beilfuss To this end, a group of scholars4 organised a series of webinars in November and December 2020. The purpose of the present paper, which corresponds to the opening session of the webinar series, is an overall evaluation of the reform. Regulation (EU) No 2019/1111 is, in essence, a conservative text. It is a Recast that starts from the assumption that the rules of its predecessor, Regulation No 2201/2003 (Brussels IIa),5 function well and have provided important benefits.6 The aim of the law-maker was, therefore, not the overhaul of the system but its improvement.7 The Recast was, moreover, negotiated in a hostile environment against the phantom of “enhanced cooperation”,8 which had to be avoided at all costs. Ambitions had to be limited in order to secure unanimity within the Council.9 Bearing the aforementioned in mind, it is no surprise that most changes brought about by Regulation (EU) No 2019/1111 are operational. They incorporate into the normative text clarifications made by the CJEU in its case-law, or tweaks to the current rules aimed at facilitating application and increasing efficiency. There are, however, a few new rules which go beyond codification of the status quo. These will be the focus of the present contribution. The reform contains new rules on public documents and agreements that were mainly introduced in order to deal with “private divorces”. These rules incorporate a recognition approach that is interesting from a methodological perspective and might be of more general use in the future. Another change worth stressing is an increased reliance on private autonomy in connection with dispute resolution. Regulation (EU) No 2019/1111 has strengthened the possibilities for choice of court in parental responsibility matters. In child abduction disputes, the new rules require a systematic consideration of mediation, and may signal a timid change in the approach to unlawful relocation. The Chapter on recognition and enforcement of judgments contains the most obvious changes. The new Regulation follows the policy of abolition of exequatur by importing the regime introduced in Regulation No 1215/2012 The webinar series was organised by Mirela ŽUPAN with the cooperation of Thalia KRUGER, Laura CARPANETO, Ilaria PRETELLI and myself. 5 Council Regulation (EC) No 2201/2003 full quote supra (Abbreviations), p. IX. 6 See the Report by the Commission (COM(2014) 225 final), p. 16. 7 See Recital 1 of Regulation (EU) No 2019/1111. 8 Enhanced cooperation comes into play when unanimity, as required in Art. 81.3 of the Treaty on the Functioning of the European Union for the adoption of measures in the field of Family Law, cannot be reached. It is not a workable option for a Recast since it would entail the older Regulation continuing to apply for those Member States that chose not to participate. It would thus lead to further fragmentation of EU private international law. 9 A revision of the rules in matrimonial matters could not, for example, be proposed since there was a risk that, if the concept of marriage entered the negotiations, they would fail completely. As we know, there is a rift between States that have introduced same-sex marriage and those that ban it. 4

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What’s New in Regulation (EU) No 2019/1111? (Brussels I Recast).10 Regulation (EU) No 2019/1111 further establishes common rules as regards enforcement that, even though rather thin in substance, have the potential for future development. The new Regulation also opts for generally providing for direct judicial communication. This implies that the idea of cooperative adjudication is gaining a footing in EU private international law.

II.

Public Documents and Agreements

A.

Private Divorces

The introduction of new rules on public documents and private agreements was triggered by national divorce reforms that introduced so-called “private divorces”. What is determinative for the characterization of divorces as “private” is that even though public bodies may be involved in divorce procedures, their intervention cannot replace agreement. Divorce is not decreed by an authority but agreed on by spouses.11 Private divorces have, for example, been introduced in Italy, Spain and France. In Italy, a reform undertaken in 201412 provides for divorce following a socalled “negoziazione assistita”. Spouses can negotiate, with the assistance of a lawyer, an agreement about the dissolution of their marriage and its consequences. Upon presentation to the court, the agreement becomes an enforceable title and produces effects that are analogous to those of a court decision.13 Spain likewise outsourced divorce from courts in 201514 by introducing the possibility of consensual divorce before a notary. This is open to spouses who also agree on all the economic consequences of marriage dissolution. The divorce is recorded in a

10 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 (OJ L 351, 20.12.2012). 11 See V. GÄRTNER, Die Privatscheidung im deutschen und gemeinschaftsrechtlichen Internationalen Privat- und Verfahrensrecht, Tübingen 2008, p. 5-7. 12 Legge 10 novembre 2014, n. 162 - Conversione in legge, con modificazioni, del d.l. n. 132 del 2014, recante misure urgenti di degiurisdizionalizzazione ed altri interventi per la definizione dell'arretrato in materia di processo civile (Gazzetta ufficiale del 10 novembre 2014, n. 261). 13 See S. PATTI, Stand des Scheidungsrechts in Italien, in A. DUTTA/ D. SCHWAB/ D. HENRICH et al. Scheidung ohne Gericht? Neue Entwicklungen im europäischen Scheidungsrecht, Bielefeld 2017, p. 106-111. 14 Ley 15/2015, de 2 de julio, de la Jurisdicción Voluntaria. (BOE núm. 158, de 3 de julio de 2015).

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Cristina González Beilfuss notarial deed which constitutes an enforceable title.15 In France, divorce law was reformed in 2016.16 Spouses who agree about the divorce and its consequences must divorce outside court. The only cases that go to court are those in which a minor child wishes to be heard by a judge,17 and contentious cases. The spouses’ agreement has to be concluded with the assistance of independent legal advice. It is recorded in a private document, which is registered by a notary in order to become enforceable.18 The aforementioned reforms pose several private international questions in connection with the application of the Brussels IIa and Rome III Regulations.19 These Regulations were drafted on the basis of the assumption that divorce is decreed by an authority that renders a divorce decision. It is disputed whether they also apply to private divorces, whether jurisdiction rules limit the intervention of notaries and whether authentic instruments on divorce can circulate in Europe as decisions. In 2016 and 2017 the CJEU was confronted twice with the Sahyouni case.20 In its second decision, the Court concluded that the Rome III Regulation “covers solely divorces pronounced either by a national court or by, or under the supervision of, a public authority21”. In an obiter dictum the Court stated that the Brussels IIa Regulation does not apply to private divorce either, since “it would be inconsistent … to make the respective scopes of those Regulations diverge”.22 The Sahyouni case is about the recognition in Germany of a private religious divorce pronounced in Syria. The Court was, however, well aware that private divorce had been introduced into the law of several European jurisdictions 15 See J. FERRER RIBA, Stand des Scheidungsrechts in Spanien, in A. DUTTA/ D. SCHWAB/ D. HENRICH et al. Scheidung ohne Gericht? Neue Entwicklungen im europäischen Scheidungsrecht, Bielefeld 2017, p. 131-142. 16 Loi n° 2016-1547 du 18 novembre 2016 de modernisation de la justice du XXIe siècle (JORF n° 0269 du 19 novembre 2016). 17 The reform is very problematic from a child protection perspective. See H. GAUDEMET-TALLON, La loi française sur le divorce sans juge confronteé au droit européen et international, in B. HESS/ E. JAYME/ H.P. MANSEL: Europa als Rechts-und Lebensraum. Liber Amicorum für Christian Kohler zum 75. Geburtstag am 18. Juni 2018, Bielefeld 2018, p. 98-101; F. FERRAND, Non-judicial divorce in France: progress or mess? in G. DOUGLAS/ M. MUNCH/ V. STEPHENS: International and National Perspectives on Child and Family Law. Essays in honour of Nigel Lowe, Cambridge-Antwerp-Chicago, 2018, p. 203-204. 18 See F. FERRAND, Stand des Scheidungsrechts in Frankreich, in A. DUTTA/ D. SCHWAB/ D. HENRICH et al. Scheidung ohne Gericht? Neue Entwicklungen im europäischen Scheidungsrecht, Bielefeld 2017, p. 170-178. 19 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 (OJ L 343, 29.12.2010). 20 CJEU, 12 May 2016, Sahyouni (I), C-281/15, ECLI:EU:C:2016:343 and CJEU, 20 December 2017, Sahyouni (II), C-372/16, ECLI: EU:C:2017:988. 21 See para.48 of Sahyouni (II). 22 See para. 42 of Sahyouni (II).

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What’s New in Regulation (EU) No 2019/1111? and that its findings might therefore also apply to European divorces. It nevertheless found that “the inclusion of private divorces within the scope of that Regulation [Rome III] would require arrangements coming under the competence of the EU legislature alone”.23 Whether the French, Italian or Spanish private divorces fall within the scope of application of the Brussels IIa and Rome III Regulations is a matter of characterization that will not be explored any further in the context of the present contribution.24 What matters here is that the appeal to the lawmaker made by the CJEU in the Sahyouni II decision was taken up in the course of the negotiations of Regulation (EU) No 2019/1111. New rules guaranteeing that European private divorces would be able to circulate in Europe were introduced. These rules apply to authentic instruments and agreements on divorce, legal separation and annulment and also in parental responsibility matters.25 B.

Decisions, Private Agreements and Authentic Instruments or Agreements as Defined in Regulation (EU) No 2019/1111

Regulation (EU) No 2019/1111 distinguishes among three categories, namely among, first, decisions, second, authentic instruments or agreements falling within the definitions of Articles 2.2 and 2.3 of Regulation (EU) No 2019/1111, and, third, by way of exclusion, other instruments or agreements. Each category follows a distinct legal regime. One of the main challenges will thus be characterization. Decisions are rendered by a court, in the European Union definition of the term, which includes “any authority with jurisdiction in the matters falling within the scope of the Regulation”,26 “following an examination of the substance in accordance with national law and procedure”.27 A decision can be rendered by a judicial authority, an administrative authority or even a notary if this authority examines the substance and does not limit itself to recording what the parties have agreed. Decisions are recognised in other Member States in accordance with the rules established in Chapter IV, Sections 1 and 2 of Regulation (EU) No 2019/1111. See para. 47 of Sahyouni (II). The answer may differ depending on how notarial divorce is regulated in the different jurisdictions and, in particular, on the role assigned to notaries. See C. GONZÁLEZ BEILFUSS, El divorcio notarial: cuestiones de Derecho internacional privado, in E. PÉREZ VERA/ J.C. FERNÁNDEZ ROZAS/ M. GUZMÁN ZAPATER et al., El Derecho internacional privado entre la tradición y la innovación. Libro homenaje al Profesor Doctor José María Espinar Vicente, Madrid, 2020, p. 347-363. 25 They do not cover the economic consequences of divorce since maintenance between former spouses and matrimonial property are outside the substantive scope of Regulation (EU) No 2019/1111 and fall under different EU private international law instruments. 26 See Art. 2 (1) of Regulation (EU) No 2019/1111. 27 See Recital 14 of the Preamble to Regulation (EU) No 2019/1111. 23 24

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Cristina González Beilfuss The second category comprises authentic instruments and agreements as defined in Arts. 2.2 and 2.3 of Regulation (EU) No 2019/1111. This category is subject to the new regime contained in Section 4 of Chapter IV, which will be analysed hereinafter. The third category consists of documents and agreements that do not fall within the definitions of Arts. 2.2 and 2.3 of the new Regulation. Recital 14 of the Preamble states that these “private agreements” should not circulate under the Regulation. This does not, however, imply that they cannot produce legal effects under other private international law norms. In most Member States the approach used to deal with the intrinsic validity of such documents or agreements, ergo with their content, would be conflictual. It would be for the applicable law determined by the choice of law rules of the requested State to establish whether these “private agreements” can produce legal effects. C.

The Recognition of Authentic Instruments and Agreements under Section 4 of Chapter III of Regulation (EU) No 2019/1111

The interesting thing about Regulation (EU) No 2019/1111 is the second new category of authentic instruments and agreements falling within the definition of Articles 2.2 and 2.3. For the purposes of the Regulation, authentic instruments are documents formally drawn up or registered. The authenticity of these instruments relates to their signature and content and is established by a public or other authority empowered for that purpose.28 Article 2.3 defines an agreement for the purposes of Chapter 4 as a document which is not an authentic instrument, has been concluded by the parties and has been registered by a public authority. In order to fall under Section 4 of Chapter III, authentic instruments and agreements need to fulfil two conditions. They need, first, to be binding. This is a matter governed by the applicable law, which may to this effect establish certain conditions. In the area of parental responsibility, it is, for example, not uncommon for substantive law to require that agreements be validated by an authority after scrutiny, so as to ensure conformity with the best interests of the child.29 A purely private contract between parental responsibility holders would not be binding in such a system and would thus not be able to circulate under the new rules.30

Art. 2.2 (2) of Regulation (EU) No 2019/1111. See, for example, in connection with agreements about the maintenance of personal relatinships, the comparative overview in K. BOELE-WOELKI/ F. FERRAND/ C. GONZÁLEZ BEILFUSS et al., Principles of European Family Law Regarding Parental Responsibilities, Antwerpen/Oxford, 2007, p. 182-183. 30 If the agreement were, upon scrutiny, incorporated into a court decision it would qualify as a decision and follow the recognition rules for decisions. See C. HONORATI/ S. BERNASCONI, L’efficacia cross-border degli accordi stragiudiziali in materia familiare tra i regolamenti Bruxelles II-bis e Bruxelles II-ter, Freedom, Security & Justice: European Legal Studies Rivista quadrimestrale on line sullo Spazio europeo di libertà, sicurezza e giustizia, 2020, p. 40. 28 29

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What’s New in Regulation (EU) No 2019/1111? Regulation (EU) No 2019/1111 further requires, as already mentioned, the intervention of a public authority that formally draws up or registers agreements or instruments. This authority must be communicated to the Commission.31 The intervention of an authority is thus mandatory in the system and implies some degree of supervision. It furthermore also entails that authentic instruments and agreements falling under the new rules will be easily identifiable.32 Binding agreements and authentic instruments follow the rules of Section IV of Chapter IV of Regulation (EU) No 2019/1111. Recital 70 of the Preamble clarifies that the legal regime therein established is procedural and not conflictual. Authentic instruments and agreements are to be treated as equivalent to decisions and are thus subject to rules of recognition. The law applied is hence not controlled in the requested State. Article 64 specifies, however, that in order to benefit from the recognition system established in Regulation (EU) No 2019/1111, authentic instruments or agreements need to have been formally drawn up or registered in a Member State that would have had jurisdiction under the rules of Chapter II. These rules function in the system as indirect jurisdiction rules.33 The Regulation cannot ensure that authentic instruments and agreements are only drawn up or concluded in a Member State that would have had jurisdiction if the matter had been brought to court; it can, however, establish that, unless this is the case, they will not circulate freely as decisions under the rules of the Regulation.34 Indirect jurisdiction is controlled in the State of origin of the agreement or authentic instrument. The recognition procedure established in Section IV of Chapter IV requires the issuance of a certificate35 by a court or competent authority of the State of origin.36 Article 66.5 of the Regulation establishes that the certificate is not optional. Without it, the authentic instrument or agreement cannot be recognised. The issuance of the certificate requires, as mentioned, compliance with the jurisdiction rules under Chapter II of the Regulation. The certificate can, moreover, only be issued if the agreement is binding, which, as already noted, is to be determined by the law applicable. In parental responsibility matters a further condition is likely to be more problematic in practice. Article 66.3 provides, namely, that the certificate may not be issued if there are indications that the 31 Recital 14 of the Preamble clarifies that agreements on parental responsibility can be registered by a notary, even though this notary is not acting as a public authority, but exercising a liberal profession as regards these matters. 32 See C. HONORATI/ S. BERNASCONI, note 30, p. 40. 33 See C. HONORATI/ S. BERNASCONI, note 30, p. 45. 34 A. DUTTA, Privatscheidungen und Brüssel IIb: drei Fragen an den neuen Art. 65 Abs. 1, Zeitschrift für das gesamte Familienrecht (FamRZ), 2020, p. 1430. 35 Annex VIII to Regulation (EU) No 2019/1111 contains a certificate that must be used if the instrument or agreement refers to matrimonial matters, whereas the certificate to be used for parental responsibility instruments or agreements is contained in Annex IX. 36 Art. 103 of Regulation (EU) No 2019/1111 requires that each Member State communicate the authority issuing the certificate to the Commission.

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Cristina González Beilfuss content of the authentic instrument or agreement is contrary to the best interests of the child. It is not immediately apparent how the authority issuing the certificate will be in a position to evaluate whether the best interests of the child justify denying the issuance of the certificate without examining the substance of the instrument or agreement and determining whether it was and continues to be appropriate. This would imply the need for scrutiny of the agreement. Implementing legislation should clarify how this is going to work in practice. The certified instrument or agreement must be recognised and, in the case of instruments or agreements on parental responsibility matters, also enforced,37 unless there is a ground for refusal of such recognition and enforcement. The grounds for refusal established in Article 68 of Regulation (EU) No 2019/1111 differ depending on the subject matter and are very similar to those applying to decisions.38 Upon presentation of the certificate, the rules for the recognition and enforcement of decisions contained in Sections 1, 2 and 3 apply.39 Difficulties may arise, in particular, concerning the hearing of the child, which may be a ground for refusal of authentic instruments and agreements under Article 68.3 of the new Regulation. The guidance offered by Recital 71 of the Preamble is ambiguous. On the one hand, it is stated that “the obligation to provide the child with the opportunity to express his or her views under this Regulation should not apply to authentic instruments and agreements” and that “the fact that the child was not given the opportunity to express his or her views should not automatically be a ground of refusal of recognition and enforcement”. On the other hand, however, the Recital stresses that “the right of the child to express his or her views should continue to apply pursuant to Article 24 of the Charter and in light of Article 12 of the UN Convention on the Rights of the Child as implemented by national law and procedure.” Recital 71 of the Preamble is a perfect example of the dangers implicit in the way Preambles are currently being used in negotiations. Recitals are sometimes drafted to iron out discrepancies that might endanger the adoption of the norm. Such political use of Preambles, however, runs counter to their role as an element of authentic interpretation of the adopted text. Preambles have as such no full normative value.40 It should, therefore, be of little consequence that the Preamble states that agreements should circulate even though children have not been given the opportunity to be heard. This statement can obviously not prevail over the rights of the child as recognised in the Charter and International law. The certificate must contain a summary of the enforceable obligation. See Art. 66.1 of Regulation (EU) No 2019/11111. 38 Art. 68 of Regulation (EU) No 2019/1111. 39 These rules often refer to national procedural law. Member States would thus be free to differentiate between procedures applying to decisions or procedures applying to authentic instruments or agreements if they deemed it necessary. 40 See M. REQUEJO ISIDRO, Reflections on the Preambles to the EU Private International Law Regulations, in B. HESS/ E. JAYME & H.P. MANSEL: Europa als Rechtsund Lebensraum. Liber Amicorum für Christian Kohler zum 75. Geburtstag am 18. Juni 2018, Bielefeld 2018, p. 425 et seq. 37

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What’s New in Regulation (EU) No 2019/1111? If the rights of the child are taken seriously, agreements should not be made without involving children who are capable of forming their own views. It is primarily for national law to guarantee that children participate in agreements affecting them. At present many domestic systems are deficient in this area, which might be the reason why the Preamble tries to build a bridge. But this is, in my view, not to be welcomed. It might confuse the authorities that have to apply the Regulation. In spite of these deficiencies, the system designed for the recognition of authentic instruments and agreements is quite appealing. It strikes a balance between facilitating free circulation and ensuring compliance with jurisdiction rules. The agreements and instruments that circulate have a strong connection with the jurisdiction in which they originate. There is also an underlying uniformity of the choice of law rules in the Member States. Divorce and legal separation are governed by the law designed by Regulation Rome III, and parental responsibility falls under the Hague 1996 Convention, to which all EU Member States are party.41 The main drawback of the new regime is that differentiating between decisions and authentic instruments as defined in Article 2.2 Regulation (EU) No 2019/1111 is far from easy.42 As regards Spanish notarial divorce one could, in fact, argue in both directions. All in all, I would be inclined to say that notaries do not examine the substance of the divorce petition43 and thus do not qualify as courts. They simply verify that spouses want a divorce and that the marriage has lasted for at least three months, which is a legal requirement for being able to request marriage dissolution under Arts. 81. 1 and 2 of the Spanish Civil Code. But if divorce is consensual, judges do not go any further either and it would certainly be odd to argue that they do not qualify as a court. Under a system where divorce is granted on the basis of consent or unilateral demand, there is simply no examination of the substance of the petition. Difficulties in deciding whether notaries qualify as courts are not new. They are well known in connection with other instruments, such as the Succession Regulation,44 and have given rise to several preliminary rulings by the CJEU.45 41 Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children. 42 A. DUTTA, note (34), p. 1428. 43 They examine the substance of the agreements on financial matters that are excluded from Regulation (EU) No 2019/1111. 44 Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (OJ L 201, 27.7.2012). 45 CJEU, 23 May 2019, WB, Case C-658/17, ECLI:EU:C:2019:444 and CJEU, 16 July 2020, E. E, C‑80/19, ECLI:EU:C:2020:569. On this matter, M. REQUEJO ISIDRO, El artículo 3 apartado 2, del Reglamento No 650/2012: autoridades no judiciales y otros profesionales del Derecho, Revista electrónica de estudios internacionales (REEI), 2020, DOI: 10.17103/reei.39.03.

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Cristina González Beilfuss Characterization may, in fact, create fewer practical difficulties in connection with Regulation (EU) No 2019/1111 than elsewhere, since the recognition rules applying to decisions and authentic instruments or agreements are ultimately alike. The operation of these recognition rules can, furthermore, be quite simple if Member States implement them correctly. The authority that issues the certificate in the requesting State can be the same authority that registers the agreement or formally draws up or registers the authentic instrument.46 The system designed by Regulation (EU) No 2019/1111 could, in my opinion, be used more generally for public documents on civil status. As is well known, the EU had to curtail its ambitions and limit the Public Documents Regulation47 to dealing with extrinsic validity. The pending task is to facilitate the free circulation of the content of public documents on status while preserving the application of private international law norms. A system of registration or certification that guarantees compliance with agreed jurisdiction criteria and possibly also with uniform choice of law rules, which would need to be developed, could be of assistance in the matter.

III. Private Autonomy The aforementioned rules favour the free circulation of agreements in parental responsibility matters and thus reinforce private autonomy. The ability of parental responsibility holders to solve their disputes by means of contract is further strengthened in two ways. The new Regulation enhances the possibilities for jurisdiction agreements and favours the amicable settlement of child abduction cases. A.

Choice of Court

Prorogation in parental responsibility matters is not an absolute novelty. It is already provided for in Article 12 of the current Brussels IIa Regulation. This provision has given rise to several interpretation difficulties which have been addressed in the new text. Article 12 of Regulation Brussels IIa distinguishes between two different scenarios, namely (i) prorogation to a court dealing with divorce, legal separation and annulment under Article 3 of the Regulation (Art. 12.1) and (ii) prorogation in proceedings other than these (Art. 12.3). Under Article 12.3 of the Brussels IIa Regulation, prorogation is subject to three conditions: (a) that the chosen court has 46 This is quite obvious upon examination of Annex VIII to Regulation (EU) No 2019/1111 (see 7.1 or 8.1). 47 Regulation (EU) 2016/1191 of the European Parliament and of the Council of 6 July 2016 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union and amending Regulation (EU) No 1024/2012 (OJ L 200, 26.7.2016).

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What’s New in Regulation (EU) No 2019/1111? a substantial connection to the child, (b) that prorogation has been accepted expressly or otherwise in an unequivocal manner at the time the court is seised, and (c) that prorogation is in the best interests of the child. The conditions under (b) and (c) also apply when parental responsibility is ancillary to divorce proceedings,48 whereas (a) is dispensed with. The potential reach of Article 12.3 was a controversial issue which the CJEU was requested to clarify. It was unclear whether the provision required that other proceedings were already pending or not. In its judgment in the L case the Court ruled that Article 12.3 “must be interpreted as allowing, […], the jurisdiction of a court […] to be established even where no other proceedings are pending before the court chosen”.49 By virtue of this interpretation, Article 12.3 mutated into a general jurisdiction rule allowing parental responsibility holders to conclude jurisdiction agreements. The first change brought about by Regulation (EU) No 2019/1111 is that the regime on choice of court is now unitary and applies to all parental responsibility matters.50 Prorogation to the divorce court, therefore, also requires that the child have a substantial connection with the Member State where divorce proceedings take place. The child is brought into the centre of the examination and it is no longer assumed that the divorce court is inherently sufficiently connected with the child.51 This is to be welcomed. Whether the new substantial connection requirement will bring about significant changes in practice remains, however, to be seen. There is, in my view, some degree of overlap between the substantial connection examination and the best interests test that is already available under the current rules. Proximity is a key factor in the assessment of the best interests of the child in the context of jurisdiction rules, because what needs to be analysed is whether the chosen court is in a position to uphold the best interests of the child and to guarantee that the child can be heard. It is, therefore, difficult to imagine how an agreement on jurisdiction can be compliant with the best interests of the child without a sufficient degree of proximity between the child and the Member State where the court is situated.

48 There is one difference though. Under Article 12.1 Regulation Brussels IIa it is spouses and parental responsibility holders who have to agree, whereas Article 12.3 makes reference to all the parties to the proceedings, which has been interpreted to include, for example, the Public Prosecutor. Regulation (EU) No 2019/1111 differentiates and stipulates, in Art. 10.2, that in the case of persons who become parties to the proceedings after the court was seised, their agreement is to be regarded as implicit, in the absence of their opposition. 49 Judgment of the Court (Third Chamber), 12 November 2014, L v M, Case C‑656/13, ECLI:EU:C:2014:2364. 50 Including when parental responsibility is ancillary to divorce proceedings. See Recital 23 of the Preamble. 51 Jurisdiction in divorce proceedings may, for example, be based on the common nationality of the spouses, which may not even be the nationality of the child. See S. CORNELOUP/ TH. KRUGER, Le règlement 2019/1111, Bruxelles II: la protection des enfants gagne du ter(rain), Rev. crit. dr. int. pr., 2020, p. 229.

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Cristina González Beilfuss The new rules also clarify that acceptance of jurisdiction by the defendant cannot be inferred from mere failure to challenge jurisdiction. Article10(1)(b)(ii) of Regulation (EU) No 2019/1111 provides namely that the court where the action is brought has the duty to ensure that parties are informed of their right not to accept jurisdiction52 and that such acceptance must be express. The new rules thus overcome the ambiguities of the current rules, which admit that acceptance can take place otherwise than in an express manner, provided that such manner is unequivocal. Courts have struggled with the perplexities of how to interpret this requirement and developed different standards.53 In view of the far-reaching consequences of jurisdiction agreements it seems appropriate that the new rules try to make sure that there is informed consent. This is particularly important in Member States where litigants might act without legal representation.54 The real innovation is, however, in my view, that Regulation (EU) No 2019/1111 specifies that the choice of court agreement can be concluded at any time and is binding on the parties, provided that it was made in writing, dated and signed (Art. 10(2)).55 The current rules require agreement at the time the court is seised, which implies that parties to a jurisdiction agreement concluded before that are not bound by it if they later disagree. At present, choice of court in parental responsibility matters substantially differs from choice of court agreements made in a commercial context. It is, from this perspective, closer to tacit prorogation, which also requires an agreement at the time the court is seised.56 Under the new rules, parental responsibility holders will be bound by an agreement made even before the dispute has arisen. Such a jurisdiction agreement is, however, subject to the conditions established in Arts. 10(1)(a) and (c) of the Regulation. The chosen court must be substantially connected to the child, and the agreement must be in conformity with the child’s best interests. These two requirements are checked by the chosen court when proceedings are initiated, in the course of the ex officio examination of jurisdiction (Art. 18). The chosen court is granted discretion to refuse a jurisdiction agreement made by parental responsibility holders.

52 It is further stipulated that the jurisdiction agreement needs to be included in the court record in accordance with national law and procedure. 53 C. GONZÁLEZ BEILFUSS, Prorogation of jurisdiction, in C. HONORATI (ed.), Jurisdiction in matrimonial matters, parental responsibility and international abduction. A handbook on the application of Brussels IIa Regulation in national courts, Torino, 2017, p. 193-194. 54 This is, for example, possible in Romania. See the information in the e-justice portal available at https://e-justice.europa.eu/content_how_to_proceed-34-ro-en.do?member =1#toc_6 on 12.5.21. 55 See A. SCHULZ, Die Neufassung der Brüssel IIa-Verordnung, Zeitschrift für das gesamte Familienrecht (FamRZ), 2020, p. 1142. 56 See D. COESTER-WALTJEN, Parteiautonomie in der internationalen Zuständigkeit in S. LORENZ/ A. TRUNK/ H. EIDENMÜLLER et al., Festschrift für Andreas Heldrich zum 70ten Geburtstag, München, 2005, p. 560.

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What’s New in Regulation (EU) No 2019/1111? Unlike under the general rules applying in a civil and commercial context, the agreement is not binding on the court. This is, in my opinion, fully justified. If the child’s best interests are paramount, it must be possible to set aside a jurisdiction agreement concluded by parental responsibility holders that is not in conformity with such best interests. The parties’ wishes and interests are subordinate and the court’s priority is the child. Article 10(4) of Regulation (EU) No 2019/1111 further provides that only jurisdiction derived from an agreement concluded in the course of proceedings is exclusive. A sensu contrario, this implies that jurisdiction based on an agreement concluded before is not exclusive, unless parties confirm that they still agree when they initiate proceedings. In legal writing this rule has been criticised for not providing the level of predictability and certainty that is known under Regulation (EU) No 1215/2012 (Brussels I Recast).57 But certainty is, in a family law context, not the predominant value. The rule has been designed to deal with a situation in which one of the parental responsibility holders no longer agrees with the jurisdiction agreement concluded by his or her former self. This party would in such a case be free to file the claim at the child’s habitual residence, which is still in many ways the natural forum. If the party wishing to uphold the agreement strikes first, however, the chosen court would, as the court first seised, retain jurisdiction under the lis pendens rule (Art. 20), provided that it had jurisdiction, i.e. that there was a sufficient connection with the child and that prorogation was consistent with his or her best interests. By virtue of the discretion granted to the court in connection with prorogation, the lis pendens rule also changes its nature and applies in a less mechanical manner, subject to a forum conveniens test. The new rules on prorogation in Regulation (EU) No 2019/1111 are, in my view, well suited to a family law context. Autonomy, the power of families to make plans and order their relationship as they deem fit, is finely balanced against the protection of the best interests of the child, who remains at the centre of the dispute. B.

Mediation in Child Abduction Proceedings

As is well known, the negotiations on the Brussels IIa Regulation were marked by a dispute among Member States as to whether there should be European rules to regulate the unlawful removal of a child habitually resident in one Member State to another Member State. Whereas some negotiating Member States argued that this was unnecessary because the Hague Child Abduction Convention58 already worked 57 See A.SCHULZ (note 55), p, 1142 and B. CAMPUZANO DIAZ, Los acuerdos de elección de foro en materia de responsabilidad parental: un análisis del art. 10 del reglamento (UE) 2019/1111, Revista electrónica de estudios internacionales, (REEI), 2020, DOI: 10.17103/reei.40.10. 58 Convention of 25 October 1980 on the Civil Aspects of International Child Abduction.

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Cristina González Beilfuss reasonably well, others found the percentage of non-return orders under that instrument excessive. In the end a compromise was reached.59 The Hague return mechanism was combined with some special rules, applying both during return proceedings60 and after the issuance of a non-return order based on Article 13 of the Hague Convention.61 The overall objective of such rules was to increase the percentages of return orders. The overriding mechanism is the most characteristic feature of the European Child abduction rules. Following a non-return order in Hague proceedings, custody can be examined in the Member State of the child’s habitual residence prior to removal. Authorities in that State retain jurisdiction on parental responsibility because an unlawful relocation does not in principle change habitual residence.62 If the decision resulting from custody proceedings implies the return of the child, it trumps the non-return order issued in the Hague proceedings. The custody decision is a so-called privileged decision. The Member State to which the child was taken is obliged to recognise it.63 The overriding mechanism has for this reason sometimes been called the second-chance procedure. A left-behind parent who did not prevail in Hague proceedings can continue to fight for the return of the child in custody proceedings. The overriding mechanism has been highly controversial. In legal writing, the prevailing opinion is that it has not improved the situation of abducted children.64 The Commission was, however, not prepared to give it up, probably because it is a European specificity loaded with symbolism and political meaning. Regulation (EU) No 2019/1111 does not question the traditional approach to child abduction. The response to an unlawful removal continues to be based on the Hague return mechanism conceived forty years ago, and reinforced by the European overriding mechanism incorporated in the early years of the twenty-first century.65 There is, however, one apparently innocuous provision that might signal a timid change of direction, namely Article 25. There it is provided that “as early as possible and at any stage of the proceedings, the court […] shall invite the 59 P. MCELEAVY, The New Child Abduction Regime in the European Union: Symbiotic Relationship or Forced Partnership?, Journal of Priv. Int’l Law, 2005, p. 5 et seq. 60 Arts. 11.2-11.5 of Regulation No 2201/2003. 61 Arts. 11.6-11.8 of Regulation No 2201/2003. 62 Art. 10 of Regulation 2201/2003. 63 Art. 42.1 of Regulation 2201/2003. 64 P. BEAUMONT/ L. WALKER & J. HOLLIDAY, Conflicts of EU Courts on Child Abduction: The Reality of Article 11(6)-(8) Brussels IIa Proceedings Across the EU, Journal of Priv. Int’l Law, 2016, p. 211. See, however, for a positive evaluation L. CARPANETO, In-depth Consideration of Family Life v. Immediate Return of the Child in Child Abduction Proceedings Within the EU, Riv. dir. int. priv. proc., 2014, p. 936 et seq. 65 Regulation (EU) No 2019/1111 subjects, however, the overrriding mechanism to stricter conditions. See C.GONZÁLEZ BEILFUSS, La sustracción de menores en el nuevo Reglamento 2019/1111, in R. ARENAS GARCÍA/ S. ALVAREZ GONZÁLEZ/ P.A. DE MIGUEL ASENSIO et al., Relaciones transfronterizas, globalización y derecho. Homenaje al Profesor Doctor José Carlos Fernández Rozas, Madrid, 2020, p. 394 et seq.

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What’s New in Regulation (EU) No 2019/1111? parties to consider whether they are willing to engage in mediation or other means of alternative dispute resolution”.66 Mediation and alternative dispute settlement must be systematically considered by a court hearing a return application under the new rules.67 The 1980 Hague Convention equates the amicable settlement of the dispute with the obtention of a voluntary return. Article 25 of Regulation (EU) No 2019/1111 refers to mediation without prescribing the result. In a rather indirect way it is thus admitted that the return of abducted children is not the only satisfactory outcome, that priority should be given to dispute resolution by agreement, whatever it entails. It remains to be seen whether Article 25 will impact significantly upon the practice of those Member States where alternative dispute resolution has not so far been used in child abduction cases. For Article 25 to be implemented correctly it is necessary to develop mediation structures adapted to child abduction and international family law disputes. The issue of cost is not insignificant either, since mediation is expensive and not always covered by legal aid. Mediation is, moreover, only as good as the mediators, and requires parties, and their lawyers, to renounce the winner-loser dynamic unfortunately prevalent in high-conflict family law disputes. It is, however, an important step that mediation must be considered systematically in child abduction cases, since it can contribute to mitigating the harshness and inadequacies of the return mechanism. There are other provisions in Regulation (EU) No 2019/1111 that attempt to mitigate this harshness. Article 27(2) of the Regulation stipulates that the court hearing the return petition should consider ensuring contact between the child and the left-behind parent. The child’s right to maintain personal relations and direct contact with both parents in cases where they live in different States is recognised in Article 10 of the UN Convention on the Rights of the Child. It should not be suspended during return proceedings, as is unfortunately too often the case. In the same vein, Article 27(5) of Regulation (EU) No 2019/1111 recommends the adoption of protection measures in cases in which the child is ordered to return in spite of a grave risk under Article 13(1)(b) of the Hague Convention. Regulation 2201/2003 stipulated that children should be returned even in such situations if adequate arrangements to guarantee protection were made (Art. 11(4)). Whereas the current system requires protection measures to be put in place by the authorities in the State of habitual residence, i.e. in the State of origin, the new rules expressly stipulate that the court hearing the return petition take protection measures. The Regulation moreover provides that such measures should 66 Mediation is being used already. See Guide to Good Practice under the 1980 Hague Convention – Mediation published by the HCCH in 2012. For an in-depth study M.C. CHÉLIZ INGLÉS, La sustracción internacional de menores y la mediación, Valencia, 2019. 67 This does not mean that mediation must be proposed to parties in all cases. It can be considered unsuitable if it is contrary to the best interests of the child, is not appropriate in the particular case or would unduly delay the proceedings. Recital 43 of the Preamble to Regulation (EU) No 2019/1111 specifically clarifies that one situation where mediation is not appropriate is domestic violence.

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Cristina González Beilfuss circulate among Member States.68 Since they are adopted by a court not having jurisdiction as to the substance, on the basis of Article 15 of the new instrument, this is an exception to the regime applying to such provisional measures.69 The focus of Regulation (EU) No 2019/1111 is thus not only on increasing the number of return decisions in child abduction cases. The Regulation favours dispute settlement by the parties. The right of the child to maintain contact with the left-behind parent must be respected while the case is being heard. If return is ordered it must take place safely, in full compliance with the rights of children and under the control of the authorities in both the Member State of origin and the Member State of refuge. To this effect, Article 27(4) of Regulation (EU) No 2019/1111 recommends cooperation between competent authorities. As will be analysed hereinafter, it is even admitted that in exceptional cases the enforcement of a return order be suspended or refused. All in all, Regulation (EU) No 2019/1111 represents a more nuanced and sophisticated approach to child abduction than the Brussels IIa Regulation. The black-and-white picture of the abductor as the wrongdoer and the left-behind parent as the victim is less prevalent. Using mediation in child abduction cases, however, poses new legal difficulties that the Regulation only addresses partially in the Preamble. The Preamble, again, is used rather unconventionally, this time as a Practice Guide for lawyers representing parties in child abduction proceedings. The difficulty is the following. Agreements reached in the course of mediation most often need to be scrutinised by an authority in order to be binding and enforceable. Since jurisdiction on parental responsibility matters is vested in the courts of the child’s habitual residence, it would, in principle, not be for authorities hearing the return petition to validate the agreements reached in the course of mediation. Recital 43 of the Preamble assists perplexed lawyers in realizing that parties could use prorogation so that the court seised under the 1980 Hague Convention had jurisdiction to give binding legal effect to these agreements.70 Article 10 of Regulation (EU) No 2019/1111 will not, however, solve all the difficulties. Agreements reached in the course of mediation very often also touch on the economic consequences of the child’s parents’ break-up and other issues that matter to parents. Parties will, therefore, need to check first whether agreements on issues other than parental responsibility also need to be homologated. This is to be determined by the law governing such matters. If validation is necessary, the parties will also need to find out whether the court chosen in accordance with Article 10 of Regulation (EU) No 2019/1111 has jurisdiction to See Recital 59 of the Preamble to Regulation (EU) No 2019/111. See 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, Genève, 2020, p. 324-326. 70 Member States that have concentrated jurisdiction on child abduction cases are requested to introduce the necessary changes in order to make this possible. See Recital 43 of the Preamble to Regulation (EU) No 2019/1111. 68 69

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What’s New in Regulation (EU) No 2019/1111? validate these other agreements. The exercise is rather sophisticated and involves applying a variety of international and European instruments. In order to be effective, agreements also need to be portable. They must be binding and enforceable not only in the Member State where the return petition is heard but also in the Member State of origin and other States related to the case. Again, it is immediately apparent that agreements containing a package deal, i.e., touching upon a variety of subject matters, fall under different instruments and different rules. It is thus not an easy task to ascertain that agreements reached in the course of mediation will be binding and enforceable in the other jurisdiction(s) related to the case. The problem described is well known. It was analysed in the framework of an Expert Group on Family Agreements at the Hague Conference on Private International Law that met several times between 2012 and 2018.71 The Group developed a “Navigation Tool” showing how existing international instruments must be applied in order to make an agreement on family law matters portable. The difficulties that were encountered in finalizing the navigation tool72 prove, in my view, that further action is desirable. The Expert Group in fact recommended that a new instrument creating a one-stop shop for package deal agreements be negotiated.73 This proposal has not so far been endorsed by the Council of General Affairs of the Hague Conference. For reasons that I fail to understand, the Member States of this organization were not convinced that developing such an instrument was feasible or desirable. The idea could and should be taken up at EU level. It is a necessary complement to the increased recourse to mediation in family law. However, such recourse runs into the sand if there is no guarantee that the agreements reached in the course of mediation will be binding and enforceable across borders.

The present author was a member of this Expert Group throughout its existence. See, for further information: https://www.hcch.net/es/projects/legislative-projects/ recognition-and-enforcement-of-agreements on 16.5.2021. 72 The Expert Group submitted a Draft Practical Guide on cross-border recognition and enforcement of agreements reached in the course of family matters involving children to the 2019 Council on General Affairs and Policy of the Hague Conference. Council did not approve it in light of the concerns expressed by certain Member States (See Para 19 of the 2019 Conclusions and Recommendations of the Council on General Affairs and Policy at https://assets.hcch.net/docs/c4af61a8-d8bf-400e-9deb-afcd87ab4a56.pdf). Approval is still pending. See Para 10 of the 2020 Conclusions and Recommendations of the Council on General Affairs and Policy (at https://assets.hcch.net/docs/70458042-f771-4e94-9c56df3257a1e5ff.pdf) and Para 13 of the Conclusions and Recommendations of the 2021 Council on General Affairs and Policy (at https://assets.hcch.net/docs/94e2d886-1cbf-4250b436-5c1899cb942b.pdf on 16.5.21). 73 See the Expert Group’s Conclusions and Recommendations of the meeting of 2829 June 2018 for the attention of the Council on General Affairs and Policy of March 2019 (See https://assets.hcch.net/docs/9502157a-088b-4560-8bbc-78631d10cf55.pdf on 16.5.21). 71

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IV. The Abolition of exequatur and Common Enforcement Provisions One of the major objectives of the Recast was the abolition of exequatur in order to bring the instrument into line with the Recast of the Brussels I Regulation. Regulation (EU) No 2019/1111 therefore provides that an enforceable decision given in a Member State is enforceable in other Member States without any declaration of enforceability being required (Art. 34(1)). In order to preserve the possibility of challenging the recognition of such decisions, it is, however, stipulated that the party against whom enforcement is sought needs to be served with the certificate provided for in Article 36 prior to the first enforcement measure. Recognition of the decision can be refused on the basis of the grounds for refusal contained in Arts. 38 and 39.74 This system exists, however, alongside a special regime applying to certain privileged decisions that was introduced by the current Brussels IIa Regulation. Decisions granting rights of access and custody decisions rendered in the Member State of habitual residence of an abducted child following a non-return order must be recognised and enforced without any possibility of opposing recognition.75 The privileged recognition regime is an essential element of the overriding mechanism applying in child abduction that was referred to previously. It was challenged as contrary to fundamental rights in the Aguirre Zárraga case.76 The requesting court in Germany had doubts as to whether a serious breach of fundamental rights – in the case in question, a breach of the right of the child to be heard – could justify a refusal to recognise the Spanish custody decision. The CJEU ruled that the fact that lawfulness of the foreign decision was challenged on grounds of a breach of fundamental rights did not warrant any exception to the regime applying to privileged decisions. Questions concerning the lawfulness of the judgment ordering return can thus only be raised before the courts of the Member State of origin.77 The European Court of Human Rights later confirmed

74 Recital 54 of Regulation (EU) No 2019/1111 clarifies that it is left to national law whether the grounds for refusal may be raised by a party or apply ex officio. 75 The only refusal possible is that the decision is found to be irreconcilable with a later decision. See Art. 43.1 of Regulation (EU) No 2019/1111. 76 CJEU, 22 December 2010, C-491/10 PPU, Aguirre Zarraga (ECLI:EU:C:2010:828). 77 CJEU, 1 July 2010, C-211/10 PPU, Povse, (ECLI:EU:C:2010:400), paras 80 to 83.

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What’s New in Regulation (EU) No 2019/1111? that this regime does not infringe the European Convention on Human Rights.78 It used the Bosphorus case law in order to justify that decision.79 Regulation (EU) No 2019/1111 seems, at first sight, to endorse the status quo. Article 56(4)-(6), however, provide for the possibility of suspending or even refusing enforcement in exceptional cases, if enforcement would expose the child to a grave risk of physical or psychological harm.80 It is remarkable that the language used in Article 13(1)(b) of the Hague Convention, an exception which EU law restricts, has now come back at the enforcement stage. The overriding mechanism was sometimes described as giving the last word to authorities in the State of origin, or as a second-chance procedure. The new European enforcement rules now seem to give the last word back to the State of refuge. Challenging the enforcement of the custody decision would thus be the “third-chance” procedure. And child abduction proceedings the never-ending story of court-room battle. It can be argued that the requested State already had the last word under the current system in so far as enforcement was governed by national law and this law provided for a ground of suspension and refusal based on the best interests of the child. Even though the CJEU had ruled that recognition of the Spanish custody decision could not be refused in Germany, the decision in the Aguirre Zárraga case was never enforced and the child stayed in Germany. This outcome, which resulted from national enforcement rules, has now been incorporated into Regulation 2019/1111 and europeanised. This comes, in my view, close to admitting that the ruthlessness of the regime needed a corrective. The fact that Regulation (EU) No 2019/1111 contains common rules on enforcement is, moreover, in itself, a positive development. The 2014 Report on Regulation Brussels IIa had namely revealed that it was not so much exequatur that created difficulties and delays, but that the real problem lay in the enforcement of decisions on parental responsibility matters.81 The Commission had thus proposed that Regulation (EU) No 2019/1111 went beyond private international

As has been rightly pointed out, it cannot be excluded that the ECHR will change its approach if in a specific case it finds that mutual trust cannot prevail over the best interests of the child. See M.C. BARUFFI, A child-friendly area of freedom, security and justice: work in progress in international child abduction cases, Journal of Priv. Int’l Law, 2018, p. 407. 79 See ECHR, 18.6. 2013, Povse v. Austria, Application 3890/11. In this order the ECHR applied its Bosphorus doctrine, presuming that Member States comply with their obligations under the European Convention on Human Rights when they apply EU law. 80 This new European ground for suspending or even refusing enforcement coexists with grounds for suspension or refusal existing under national law. See Art. 57 of Regulation (EU) No 2019/1111. 81 In the Evaluation Report (see note 6, p. 15) the Commission concluded that it would “review the enforcement of decisions in this area, including the appropriateness of introducing common minimum enforcement standards.” 78

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Cristina González Beilfuss law and sought to harmonise national enforcement law. 82 From the beginning of negotiations, however, it became clear that the Member States were not ready to embrace such a proposal. Regulation (EU) No 2019/1111 nevertheless devotes section III of Chapter IV to common enforcement rules. The content of this section is, at first sight, quite disappointing. Rather ironically it seems that the main substantial achievement is the European ground for suspending and refusing enforcement of Article 56(4)-(6). But Europe is built in small steps. And this is a first step in the right direction. One of the main differences between cooperation in civil matters and traditional private international law is that the former puts citizens at the centre of legal discourse. And whether difficulties lie in recognition or in enforcement hardly makes a difference from the citizens’ point of view. What matters to them is whether a judgment rendered in one Member State is effective in the other.

V.

Direct Judicial Communication

The most salient new feature in the area of cooperation83 is, in my view, Article 86 of Regulation (EU) No 2019/1111. It is significant that this provision is not placed in Chapter V (Cooperation in matters of parental responsibility) but in Chapter VI (General provisions). It enables courts from different Member States to cooperate, communicate or request information directly from each other in all cases that are appropriate in view of the purposes of the Regulation. Article 86 involves a general authorisation to engage in direct judicial cooperation.84 The only limits referred to are respect for the procedural rights of the parties to the proceedings85 and the confidentiality of information.86 Art. 81(2)(f) of the TFEU enables the adoption of measures aimed at ensuring the elimination of obstacles to the proper functioning of civil proceedings, if necessary by promoting the compatibility of the rules on civil procedure applicable in the Member States. 83 On cooperation in Regulation (EU) No 2019/1111 more broadly, see C. GONZÁLEZ BEILFUSS, Cooperation Between Authorities in Child Protection Matters, in G. BARRETT/ J.-PH. RAGEADE/ D. WALLIS & H. WEIL, The Future of Legal Europe: Will We Trust in It? Liber Amicorum in Honour of Wolfgang Heusel, 2021, p. 349 et seq. 84 The second paragraph of Article 86 describes a number of situations in which such direct judicial cooperation might be appropriate; the list is, however, open-ended. 85 The Regulation does not specify what exactly is meant by this. The Hague Conference on Private International Law has, within the context of the International Hague Network of Judges, developed commonly accepted safeguards for direct judicial communications in specific cases which might guide the interpretation of Article 86 of Regulation (EU) No 2019/1111. Direct judicial communications should in no case compromise the independence of any of the judges involved in reaching their own decision on the matter at issue. Transparency, except in special circumstances, should be at the heart of the procedure. Parties should be notified of the nature of the proposed communication, and a record of communications should be kept and made available to them. See Direct Judicial Communications – Emerging Guidance regarding the development of the 82

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What’s New in Regulation (EU) No 2019/1111? Article 86 implies a conceptual shift that goes much further than may be apparent at first sight. Direct judicial communications are the basis upon which a model of cooperative justice can be built.87 They entail a dialogue between judges at horizontal level88 which is increasingly proposed whenever coordination of proceedings and decisions in several jurisdictions becomes indispensable in order to deal adequately with a cross-border situation. This is by no means a phenomenon confined to child protection matters. The European Insolvency Regulation89 also provides for direct judicial cooperation in order to facilitate the coordination of main, territorial and secondary insolvency proceedings concerning the same debtor,90 or where insolvency proceedings relate to two or more members of a group of companies.91 The Court of Justice had already implied an obligation of cooperation regarding provisional measures taken by a court not having jurisdiction over the International Hague Network of Judges and General Principles for Judicial Communications, including commonly accepted safeguards for Direct Judicial Communications in specific cases, within the context of the International Hague Network of Judges at https://www.hcch.net/en/publications-and-studies/details4/?pid=6024&dtid=3, on 19.5.2021. The EU Cross-Border Insolvency Court-to-Court Guidelines, which go together with the EU Cross-Border Insolvency Court-to-Court Cooperation Principles (“EU JudgeCo Principles”) incorporate similar procedural safeguards. The Principles intend to foster efficient communication and rapid cooperation between courts, while ensuring due process for all concerned. See B. WESSELS, EU cross-border insolvency court-to-court cooperation principles, The Hague, 2015. 86 Since cooperation involves the exchange of personal data, the General Data Protection Regulation (Regulation (EU) 2016/679 of the European Parliament and of the Council) applies. In accordance with Article 88 of Regulation (EU) No 2019/1111, it is, however, permitted to defer the notification of the data subject until after the request or application has been carried out where there is a risk that it may prejudice the effective carrying out of the request or application for which the information was transmitted. Recital 87 of the Preamble cites as an example the notification of data requested for locating a child in the context of a request for the return of an abducted child or a request for measures of protection for the person or property of a child. Another important provision regarding the transmission of information is Article 89, which applies in cases where a disclosure or confirmation of relevant information could jeopardise the health, safety or liberty of either a child or another person. 87 See L. CADIET, The Emergence of a Model of Cooperative Justice in Europe: Horizontal Dimensions. European University Institute Centre for Judicial Cooperation Distinguished Lecture at http://cadmus.eui.eu/handle/1814/32632, on 19.5.1921. 88 See C. GONZÁLEZ BEILFUSS, Diálogos verticales y horizontales en el Derecho Internacional Privado Europeo, in D. GONZÁLEZ HERRERA & J. MARTÍN Y PÉREZ DE NANCLARES (dir.), El diálogo judicial internacional en la protección de los derechos fundamentales, Valencia, 2019, p. 69 et seq., generally B. HESS & S. MÉNETREY, Les dialogues des juges en Europe. Brussels, 2014. 89 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (OJ L 141 of 5.6.2015). 90 Article 42(2) of the EU Insolvency Regulation. 91 Article 57(2) of the EU Insolvency Regulation.

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Cristina González Beilfuss subject matter in parental responsibility cases. It had affirmed that “in so far as the protection of the best interests of the child so require, the national court which has taken provisional or protective measures must inform, directly or through the central authority designated under Article 53 of the Regulation, the court of another Member State having jurisdiction”.92 This requirement has now been codified in Article 15(2) of Regulation (EU) No 2019/1111. Direct judicial communications and the development of a model of cooperative justice require a change of mindset on the part of judicial authorities and the acquisition of skills enabling judges to communicate effectively and cooperate across jurisdictions. In the area of insolvency, a project funded by the European Union has led to the development of a set of 26 EU Cross-Border Insolvency Court-to-Court Cooperation Principles (“EU JudgeCo Principles”) and 18 EU Cross-Border Insolvency Court-to-Court Communications Guidelines (“EU JudgeCo Guidelines”).93 Strengthening efficient and effective communication between courts will also require action by European judicial training providers.

VI. Concluding Remarks Regulation (EU) No 2019/1111 was never intended to mark a radical change in the rules applying to jurisdiction and the recognition and enforcement of decisions in matrimonial and parental responsibility matters. The present contribution shows, however, that it opens new ground in connection with several matters. Many of these changes are, in principle and in theory, positive. The main challenge for the future is, however, to turn the law in the books into law in action. At a time when family lawyers and courts in Europe were starting to come to terms with European rules, these are changing again and becoming ever more complex and sophisticated. International family law cases are no longer a minority. They do not concern only the wealthy and well informed, who can buy the advice of expert lawyers, but also the ordinary citizen and economic migrant who has to rely on legal aid. Has anyone performed the exercise of calculating how much time is, on average, available for an individual case? Is the cause of justice well served by enacting legal rules that descend into every detail? These are all open questions that only time will answer.

92

Judgment of the CJEU of 2 April 2009. A., Case C-523/07, ECLI:EU:C:2009:225,

93

See B. WESSELS, note 85.

ruling.

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AN OVERVIEW OF THE PRINCIPAL REFORMS IN REGULATION (EU) 2019/1111 Máire NÍ SHÚILLEABHÁIN*

I. II.

III.

IV.

Introduction Divorce and Matrimonial Matters A. Private Divorces B. Coverage of Same-Sex Marriage C. Non-Reform of Divorce Jurisdiction Parental Responsibility A. Jurisdiction in Parental Responsibility Matters B. The Child’s Right to be Heard C. International Child Abduction D. Recognition and Enforcement Conclusion

This article will analyse and evaluate the reforms introduced by Brussels II ter. It will also attempt to identify the missed opportunities and to highlight problematic instances of non-reform. It is argued that the new Regulation will bring about some positive changes (including, for example, an increased focus on the child’s rights, the abolition of exequatur, better alignment with the 1996 Hague Convention on Protection of Children and an increased accommodation of private ordering including private divorces). Nonetheless, it is to be regretted that there was no reform of divorce jurisdiction and no clarification of the legal status of same-sex couples who are divorcing in an EU Member State. The complexity of the new text is also a matter of concern, as is the perpetuation of the “override” procedure in child abduction cases (albeit in a modified form).

*

Associate Professor of Law, University College Dublin, maire.nishuilleabhain@

ucd.ie Yearbook of Private International Law, Volume 22 (2020/2021), pp. 117-137 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Máire Ní Shúilleabháin

I.

Introduction

This article provides an overview and critical assessment of the principal reforms introduced by the Brussels II ter Regulation1 which will replace the Brussels II bis Regulation,2 from August 2022.3 Lawyers who are familiar with the text of Brussels II bis Regulation (and with the reforms undertaken in the Revised Brussels I Regulation4) will be struck by the relative scale and breadth of Brussels II ter.5 As will be seen, the new Regulation (or “Recast”) introduces a vast array of textual amendments and an altered structure. It is also much longer, and more detailed and complex than its predecessor (running to 115 pages in the Official Journal, compared with 29 pages for the Brussels II bis Regulation). The result is a Recast with a very different “look and feel”, and a sense of alien terrain for those who had come to grips with the previous scheme.6 The unfamiliarity of the new text might create an initial impression of root and branch reform throughout, but in fact most of the pre-existing jurisdictional rules have been retained (albeit in a different order and with some new formulations and caveats). The more radical reform is in the domains of international child abduction and recognition and enforcement. With respect to the latter, the Recast is notable for its abolition of exequatur for parental responsibility orders, and its introduction of new arrangements for circulation of “private divorces” and parental responsibility agreements, and also for cross-border enforcement of certain return and access orders. These innovations are discussed below. Council Regulation (EU) 2019/1111. Full quote supra, (Abbreviations), p. XI. Council Regulation (EU) 2201/2003. Full quote supra, (Abbreviations), p. XI. 3 See also M. BROSCH/ C. MARIOTTINI, EUFAMS II: Facilitating Cross-Border Family Life: Towards a Common European Understanding: Report on the International Exchange Seminar Max Planck Institute, Luxembourg, 20 December 2019, available at www2.ipr.uniheidelberg.de/eufams/index.php?site=projektberichte on 30 April 2021; B. MUSSEVA, The Recast of the Brussels IIa Regulation: the Sweet and Sour Fruits of Unanimity, ERA Forum 2020, p. 129; S. CORNELOUP/ Th. KRUGER, Le Règlement 2019/1111, Bruxelles II: La Protection des Enfants Gagne du Ter(rain) Rev. crit. dr. int. pr. 2020, p. 215; H. BLACKBURN/ M. MICHAELIDES, The Advent of Brussels II bis Recast, Int’l Family Law 2019, p. 252; B. JURIK, Le “nouveau” Règlement Bruxelles II ter: le changement, ce n’est pas pour maintenant! Journal d’actualité des droits européeens 2019; L. CARPANETO, Impact of the Best Interests of the Child on the Brussels II ter Regulation, in E. BERGAMINI/ C. RAGNI (eds), Fundamental Rights and Best Interests of the Child in Transnational Families, Cambridge 2019, p. 265. 4 Council Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L 351/1, 20.12.2012. The reforms introduced by this (Brussels I) recast could be summarised with ease (see eg A. BRIGGS, The Conflict of Laws, 3rd ed, Oxford 2013, p. 109-111, 161-163) and there was a strong sense of continuity from the previous instrument. 5 See S. CORNELOUP/ TH. KRUGER (note 3), p. 219; M. BROSCH/ C. MARIOTTINI (note 3) p. 19. 6 See M. BROSCH/ C. MARIOTTINI (note 3), p. 17. 1 2

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 In Recital 3, the new Regulation expresses a desire that “access to justice should be simplified” but it seems that whatever the merits of the new scheme (and it does bring about many improvements), simplification of access to justice is not one of them (at least not in the short to medium term). The literature7 and case-law8 tended to suggest that many lawyers and judges were already struggling with the much simpler framework of the Brussels II bis scheme, and so the additional complexity of the new Recast is likely to exacerbate these difficulties and to increase the risk of erroneous application. The Recitals, in particular, are likely to provoke difficulty. There are 98 of these, and they move well beyond the broad statements of principle and aspiration that one might expect, often laying down very specific instructions for judges (and other stake-holders).9 This kind of granular detail can be very helpful in guiding judges in their application and understanding of the operative provisions, and indeed these recitals often fill what were perceived as problematic gaps in the Brussels II bis Regulation.10 However, related recitals are not necessarily located adjacent to one another,11 and judges will face a navigational challenge in drawing relevant provisions together and in identifying the supplementary judicial directions, where they are scattered amongst recitals dealing with different subject-matter (and alongside recitals addressed to different audiences). Of course, the Practice Guide will assist in this task, as will dedicated judicial training,12 and the sense that one is drowning in a sea of detail will recede as the new Recast becomes more familiar and as the case-law and literature develops. This article will begin with a discussion of the treatment of divorce and matrimonial relationships and then move on to consider the reform of the provisions relevant to children and parental responsibility. 7 Q. LOBACH/ T. RAPP, EUFAMS II: Facilitating Cross-Border Family Life: Towards a Common European Understanding: An Empirical Study on European Family and Succession Law Heidelberg, 31 May 2019, p. 16-17, 21, 38, available at www2.ipr.uniheidelberg.de/eufams/index.php?site=projektberichte on 30 April 2021; L. FRIDRICH, The Experience of a National Central Authority, in EUROPEAN PARLIAMENT (ed), Recasting the Brussels IIa Regulation: Workshop on 8 November 2016, PE 571.383, Brussels 2016, p. 45 at 52-54. 8 See e.g. ECJ, 16 January 2019, Liberato v Grigorescu ECLI:EU:C:2019:24; ECJ, 19 November 2015, PPU P v Q ECLI:EU:C:2015:763. 9 See M. BROSCH/ C. MARIOTTINI (note 3), p. 19 noting the existence of different target groups for different recitals, and arguing that the “mixture is hard to understand and leaves the exact scope and substance of the Recitals unclear”. See also C. GONZÁLEZ BEILFUSS, What is New in Regulation (EU) No 2019/1111?, this Yearbook, supra. 10 See e.g. Recital 48 which requires a (requested) judge refusing the return of an abducted child to refer explicitly to the relevant article of the 1980 Hague Convention on which the refusal was based. Under Brussels II bis, there was no specific articulation of this obligation and yet Articles 11(8) and 42 required the requesting judge to have this information: C. HONORATI, The Commission’s Proposal for a Recast of Brussels IIa Regulation Int’l Family Law 2017, p. 97 at 107. 11 See the references to relevant recitals in footnotes below. 12 W. POSTULSKI, Developing Training and Meeting Opportunities for National Judicial Authorities, in EUROPEAN PARLIAMENT (note 7), p. 81 et seq;

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II.

Divorce and Matrimonial Matters

A preliminary Report13 in 2014 had raised expectations of substantial reform in this area, with the EU Commission expressing a desire to tackle forum shopping or “rush to court”, to reform residual jurisdiction under Articles 6 and 7 Brussels II bis and to facilitate party autonomy and choice-of-court agreements. However, when the proposal issued in 2016,14 the EU Commission had abandoned these plans (largely, it seems, due to disagreement amongst Member States on the scope of “matrimonial matters” and their inclusion of same-sex marriage15) and it was decided to focus exclusively on reforms relating to children and parental responsibility. Nonetheless, when Regulation 2019/1111 was adopted, it did, in the end, include some significant divorce reforms, with a view to facilitating the free movement of “private divorces”.16 A.

Private Divorces

In the years preceding the adoption of the Brussels II ter Regulation, there was a shift towards the “dejuridification”17 of divorce, and a number of Member States had sanctioned the dissolution of marriage without any court involvement. In France, from 2017, a divorce could be effected by private agreement countersigned by two lawyers and registered by a notary,18 while in Italy, from 2014, spouses could divorce European Commission, Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Council Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgements in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000 COM (2014) 225 final (hereafter “2014 Report”). 14 European Commission, Proposal for a Council Regulation on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast) COM (2016) 411 final (hereafter “2016 Proposal”). 15 See European Commission, Impact Assessment, Accompanying the document Proposal for a Council Regulation on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast) SWD (2016) 207 final, p. 9-23 (hereafter “Impact Assessment”); also TH. KRUGER, Brussels IIa Recast Moving Forward Nederlands Internationaal Privaatrecht 2017, p. 462 at 466 et seq; C. HONORATI (note 10), p. 98; S. CORNELOUP/ TH. KRUGER (note 3), p. 219 and p. 241. 16 See M. BROSCH/ C. MARIOTTINI (note 3), p. 4; E. D’ALESSANDRO, The Impact of Private Divorces on EU Private International Law, in J. SCHERPE/ E. BARGELLI (eds), The Interaction between Family Law, Succession Law and Private International Law, Cambridge 2021, p. 59 at 73. 17 M. ANTOKOLSKAIA, Divorce Law in a European Perspective, in J. SCHERPE (ed.), European Family Law, Volume III: Family Law in a European Perspective, Cheltenham 2016, p. 41 at 72. 18 B. BARET et al., A Chronicle of French Family Law, in M. BRINIG (ed.), The International Survey of Family Law 2017 Edition, Bristol 2017, p. 99. 13

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 by agreement signed before a civil status officer, or by agreement reached at a negotiation table and assisted by legal counsel, provided the agreement was subsequently endorsed at a public prosecutor’s office.19 Other Member States (including Belgium, Estonia, Greece, Latvia, Portugal, Romania, Slovenia and Spain) had also made provision for extra-judicial divorce.20 It was unclear to what extent these divorces were eligible for cross-border recognition under the Brussels II bis Regulation. On the one hand, that Regulation did allow for enforcement of authentic instruments and private agreements (in Article 46)21 but on the other hand, in the Sahyouni case (on the Rome III Regulation22) it was suggested that Brussels II bis only applies to “divorces pronounced either by a national court or by, or under the supervision of, a public authority”. 23 Brussels II ter attempts to bring some clarity to this area in legislating for recognition of divorces evidenced by an authentic instrument, the authenticity of which has been “established by a public authority or other authority empowered for that purpose”,24 or concluded by agreement of the parties and registered by a public authority.25 In order for such divorces to be eligible for automatic recognition in other Member States, they must first be certified by a court or competent authority in the Member State of origin pursuant to Article 66.26 The certifying authority must verify that the divorce is binding in the Member State of origin, and that this Member State of origin had jurisdiction under Chapter II. E. D’ALESSANDRO (note 16), p. 61. E. D’ ALESSANDRO (note 16), p. 59. On the accommodation of “private divorces” under Brussels II ter, see also C. GONZÁLEZ BEILFUSS, (note 9), and V. LAZIĆ/ I. PRETELLI, Revised Recognition and Enforcement Procedures in Regulation Brussels II ter, this Yearbook, infra. 21 Although it has been suggested that references to “enforceability” in Article 46 preclude its application where the question is one of recognition of a divorce: see E. D’ ALESSANDRO (note 16), p. 70; U. MAGNUS, Authentic Instruments and Agreements, in U. MAGNUS/ P. MANKOWSKI (eds), European Commentaries on Private International Law: Commentary Brussels II bis Regulation, Cologne 2017, p. 411 at 415; A GANDÍA SELLENS/ A. FAUCON ALONSO/ P. SIAPLAOURAS, Jurisdiction, in I. VIARENGO/ F. VILLATA (eds), Planning the Future of Cross-Border Families, Oxford 2020, p. 163 at 171. 22 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 OJ L343/10, 29.12.2010. 23 ECJ, 20 December 2017, Sahyouni v Mamisch ECLI:EU:C:2017:988 at [39]-[40]. See A. DUTTA, Private Divorces Outside Rome III and Brussels II bis? The Sahyouni Gap, Common Market L. Rev. 2019, p 1661 at 1670 noting that it is unclear as to “what degree of State involvement” in the divorce process will warrant inclusion under Brussels II bis. 24 Articles 2(2)(ii) and 64-68 Brussels II ter (also Recitals 14-15). 25 Articles 2(2)(iii) and 64-68 Brussels II ter (also Recital 14). On the face of it, Article 65 Brussels II ter provides for the recognition of the authentic instruments and agreements, rather than the divorces per se: see A. DUTTA (note 23), p 1670. However, Recital 70 appears to put the matter beyond doubt, insofar as it confirms that authentic instruments and agreements on divorce “should be treated as equivalent to ‘decisions’ for the purpose of the application of the rules on recognition”. 26 See “Member State of origin” defined in Article 2(2)(iv) Brussels II ter. 19 20

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Máire Ní Shúilleabháin This new procedure for recognition of “private divorces” is a welcome development in the context of increased deregulation of divorce, but some concerns remain. Although one can easily understand the need for verification of jurisdiction by the certifying authority, the fact that it occurs after the event may lead to a situation whereby some private divorces are effective only at the national level, while others (capable of certification) are effective across the EU.27 The emergence of a separate category of Member State divorces which are not eligible for crossborder recognition under EU law is retrogressive and inimical to legal certainty: under Brussels II bis, as enacted, it was envisaged that all divorces obtained in a Member State (from the date of entry into force) would be entitled to automatic recognition, whereas under Brussels II ter this can no longer be assumed as a matter of course. Also, insofar as European “private divorces” come in a variety of different forms,28 it may also emerge that while some of these systems align well with the EU conceptions of “authentic instrument” and “agreement”, others do not.29 If some Member State “private divorces” fall outside of both of these EU categories, they may be per se ineligible for free circulation (even where jurisdiction is not an issue). Furthermore, under Article 100, the new Regulation will apply only to those authentic instruments formally drawn up or registered and to agreements registered on or after 1 August 2022, and so it seems a cloud of uncertainty will continue to hang over those private divorces which have been registered in Member States in the past few years, and their eligibility for cross-border recognition will remain unclear. It has also been suggested that the new system may be amenable to abuse, and that German couples, for example, are likely to seek out a French “private divorce” in circumvention of the (stricter) German laws.30 This assumes a lack of rigorous verification of jurisdiction by the certifying authority, but since national courts often accept the parties’ assertion of habitual residence at face value,31 it is not unreasonable to suggest that there may be even more latitude where extra-curial authorities are responsible.32 It is also interesting to note that while Article 69 prohibits the use of the public policy defence for jurisdictional review, Article 69 refers only to the defences relevant to “decisions” – and the Article 68 public policy defence (relevant to “private divorces”) is not mentioned. It arguably follows that there is enhanced scope for jurisdictional review where private divorces are concerned, and that other

27 E. D’ALESSANDRO (note 16), p. 60-62 observes that while in Spain a check on jurisdiction is built into the “private divorce” process, there is no equivalent requirement under French or Italian law and so the risk of non-compliance with jurisdictional requirements is much higher. 28 E. D’ALESSANDRO (note 16), p. 60 et seq. 29 Recital 14 indicates that notaries, even where they are exercising a liberal profession, might qualify as public authorities who can register “agreements”. 30 See M. BROSCH/ C. MARIOTTINI (note 3), p. 8, 12. 31 Q. LOBACH/ T. RAPP (note 7), p. 35-36. 32 See M. BROSCH/ C. MARIOTTINI (note 3), p. 8: under Article 103 the Member States can invest this power in any state authority.

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 Member States may refuse recognition (on public policy grounds) where the private divorce was obtained in violation of the Brussels II ter jurisdictional rules.33 B.

Coverage of Same-Sex Marriage

The operative provisions of Brussels II bis, like those of Brussels II ter, were genderneutral in referring to “spouses”, thus allowing for a broad interpretation which included same-sex spouses. However, in Annex I to Brussels II bis, spouses were described as “wife” and “husband” respectively, and for this and other reasons it was often assumed that the Brussels II bis Regulation did not extend to same-sex spouses.34 As indicated above, the definition of “matrimonial matters” was considered highly contentious at the time of negotiation of Brussels II ter, and there was no overt change in policy on this matter when Brussels II ter was adopted. However, it is noteworthy that the Annexes to Brussels II ter are gender-neutral throughout, and there is no longer any reference to “wife” or “husband”.35 The argument for inclusion of same-sex marriage under Brussels II ter received a further boost with the Coman judgment where the ECJ indicated a commitment to gender-neutral interpretation of “spouses” in EU legislation, referring to “the obligation to recognise such marriages … for the… purpose of enabling such persons to exercise the rights they enjoy under EU law”.36 Nonetheless, the matter is not beyond doubt. The principle of continuity from the 1998 Brussels II Convention is articulated in Recital 90 Brussels II ter and it seems likely that only heterosexual marriage was in contemplation at the time of adopting that Convention. Additionally, even if “matrimonial matters” is defined broadly to include same-sex couples, subject-matter jurisdiction remains a matter of domestic autonomy (and domestic law determines the conditions under which divorce may be obtained).37 See M. BROSCH/ C. MARIOTTINI (note 3), p. 8. See e.g. M. NÍ SHÚILLEABHÁIN, Cross-Border Divorce Law: Brussels II bis, Oxford 2010, p. 106 et seq; TH. KRUGER/ L. SAMYN Brussels II bis: Successes and Suggested Improvements, Journal of Private International Law 2016, p. 132 at 135; W. PINTENS, Scope and Definitions, in U. MAGNUS/ P. MANKOWSKI (eds) (note 21), p. 52 at 59 et seq; K. BOELEWOELKI/ C. GONZÁLEZ BEILFUSS, The Impact and Application of the Brussels II bis Regulation in the Member States: Comparative Synthesis, in K. BOELE-WOELKI/ C. GONZÁLEZ BEILFUSS (eds), Brussels II bis: Its Impact and Application in the Member States, Antwerp/ Oxford 2007, p. 23 at 29. 35 See M. BROSCH/ C. MARIOTTINI (note 3), p. 9-10. 36 ECJ, 5 June 2018, Coman v Inspectoratul General pentru Imigrǎri, ECLI:EU:C:2018:385 at [35], [45]. See M. NÍ SHÚILLEABHÁIN, Cross-Border (Non-) Recognition of Marriage and Registered Partnership: Free Movement and EU Private International Law, in J. SCHERPE/ E. BARGELLI (eds) (note 16), p. 13 at 17-18; D. KOCHENOV/ U. BELAVUSAU, Same-Sex Spouses: More Free Movement, but What About Marriage? Coman, Common Market L. Rev. 2020, p. 227 at 237. 37 M. NÍ SHÚILLEABHÁIN (note 34), p. 103-104. The non-focus on matrimonial ties in recasting Brussels II bis has also resulted in the shelving of the question of equivalent treatment for dissolutions of registered partnerships (see Impact Assessment (note 15), p. 11, p. 84 and p. 103). Former registered partners must inevitably encounter the same problems as 33 34

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Non-Reform of Divorce Jurisdiction

As indicated above, the EU Commission had initially raised hopes for substantial reform of the divorce jurisdiction rules. Article 3 Brussels II bis was widely criticised for its flat “à la carte” structure38 (facilitating forum shopping) and for its failure to facilitate party autonomy. The literature strongly supported the introduction (and prioritisation) of jurisdiction based on the parties’ agreed choice,39 and many commentators favoured the extension of the intra-EU transfer mechanism (available in parental responsibility cases under Article 15 Brussels II bis) to divorce cases.40 There were also calls for reform of the extremely complex (and uneven) residual jurisdiction rules,41 and for the adoption of new rules (akin to those laid down in Articles 33 and 34 of the Revised Brussels I Regulation42) allowing for a discretionary stay of Member State divorce proceedings in the event of a prior action in a third country.43 In addition, the wording of some of the individual Article 3 rules

divorced spouses as they engage in free movement (see Recital 3 Brussels II ter), indeed probably far more so since the cross-border recognition of the partnership itself is so uneven and these partnerships are so various. In these circumstances, an extended definition of “matrimonial matters” in Brussels II ter – to include registered partners – would have been helpful to some extent, but perhaps also undesirable since the challenges are different: see further M. NÍ SHÚILLEABHÁIN (note 36), p. 13 et seq; also M. NÍ SHÚILLEABHÁIN, Private International Law Implications of “Equal Civil Partnerships”, I.C.L.Q. 2019, p. 161; P. WAUTELET, Private International Law Aspects of Same-Sex Marriages and Partnerships in Europe – Divided We Stand?, in K. BOELE-WOELKI/ A. FUCHS (eds), Legal Recognition of Same-Sex Relationships in Europe, Cambridge 2012, p. 143 et seq. 38 J. REDDIN, An Unhappy Marriage: The EU and the Divorce Jurisdiction System under Brussels II Bis, University College Dublin Law Review 2020, p. 39 at 47; also M. NÍ SHÚILLEABHÁIN, Ten Years of European Family Law: Retrospective Reflections from a Common Law Perspective, I.C.L.Q. 2010, p. 1021; V. LAZIĆ/ W. SCHRAMA/ J. GRAY et al. (eds), Recommendations to Improve the Rules on Jurisdiction and on the Enforcement of Decisions in Matrimonial Matters and Matters of Parental Responsibility in the European Union, The Hague 2018, p. 57 et seq, available at https://www.asser.nl on 30 April 2021; S. CORNELOUP/ TH. KRUGER (note 3), p. 242. 39 See e.g. A. BORRÁS, Grounds of Jurisdiction in Matrimonial Matters: Recasting the Brussels IIa Regulation, Nederlands Internationaal Privaatrecht 2015, p. 3 at 6 et seq; TH. KRUGER/ L. SAMYN (note 34), p. 143-145; also the 2019 GEDIP Proposal for a Regulation on jurisdiction, applicable law and recognition of judgments and decrees with regard to divorce and legal separation at Articles 5 and 6, available at www.gedip-egpil.eu/ reunionstravail/2019_Katowice/divorce/DIV-Txt-ENG-27.11.19.pdf on 30 April 2021. 40 See e.g. J. BORG-BARTHET, Jurisdiction in Matrimonial Matters – Reflections for the Review of the Brussels IIa Regulation, Study for the JURI Committee of the European Parliament, Brussels 2016, p. 34; M. NÍ SHÚILLEABHÁIN (note 34), p. 224-227; also the GEDIP proposal (note 39) at Article 10. 41 A. BORRÁS (note 39), p. 7-8; M. NÍ SHÚILLEABHÁIN (note 34), p. 156-165; V. LAZIĆ/ W. SCHRAMA/ J. GRAY (eds) (note 38), p. 61. 42 Regulation (EU) No 1215/2012 (note 4). 43 See M. BROSCH/ C. MARIOTTINI (note 3), p. 9; TH. KRUGER (note 15), p. 471.

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 had caused difficulty, with different Member States adopting different interpretations of the same rule.44 The Commission’s decision to leave divorce jurisdiction untouched45 appears to have been a political one (designed to ensure that the whole reform proposal would not be derailed);46 however, the upshot is that divorce jurisdiction rules agreed in 1998 are frozen in time until 2032 at the very earliest.47 The divorce jurisdictional scheme has a particular significance insofar as it serves as an anchor for other forms of jurisdiction (see Article 3(c) of the Maintenance Regulation48 and Article 5 of the Matrimonial Property Regulation49). In failing to confer jurisdiction based on choiceof-court, Brussels II ter also serves to undermine the party autonomy provisions of other instruments: an agreed choice-of-law under Rome III50 can be subverted (by litigating in a non-participating Member State) and enforcement of an agreement on maintenance jurisdiction can lead to a split action. The inclusion in Brussels II ter of divorce jurisdiction based on an agreed choice-of-court would have facilitated spouses in consolidating all of their proceedings in a single agreed forum and under a single governing law. Thus, while it may have been unavoidable, in order to secure the unanimity which is necessary under Article 81(3) TFEU, the non-reform of divorce jurisdiction should be seen as a major setback in the EU judicial cooperation project. As SCHRAMA puts it, “as long as there is no choice of forum for the divorce, the idea of party autonomy as a starting point … does not work in practice”.51

J. REDDIN (note 38), p. 48-49; D. HODSON, What is Jurisdiction for Divorce in the EU? The Contradictory Law and Practice Around Europe, International Family Law 2014, p. 170. 45 The only amendments are very minor: what were Articles 6 and 7 Brussels II bis are consolidated into a single provision (Article 6 Brussels II ter) and Article 3 no longer makes express reference to the use of domicile (for Ireland) because it is separately specified (in Article 2(3)). 46 See (note 15) above. 47 Article 101 Brussels II ter provides for a further review in 2032. 48 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 7/1, 10.1.2009. 49 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 L183/1, 8.7.2016. 50 Regulation (EU) No 1259/2010 (note 22). 51 W. SCHRAMA, Empowering Private Autonomy as a Means to Navigate the Patchwork of EU Regulations on Family Law in, in J. SCHERPE/ E. BARGELLI (eds) (note 16), p. 35 at 52. 44

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III. Parental Responsibility The Brussels II ter Recast introduces substantial reform in the domain of parental responsibility. Beyond the headline abolition of exequatur, there are significant revisions to the provisions on child abduction and there is a much improved alignment with other relevant international instruments such as the 1989 UN Convention on the Rights of the Child (CRC) and the 1996 Hague Convention on Protection of Children.52 As will be seen, there is a stronger focus on practical cooperation53 and on private ordering, and the Recast reflects the reorientation of child law away from court-based solutions.54 In line with the accommodation of “private divorces”, Brussels II ter makes detailed provision for enforcement of agreements on parental responsibility (and authentic instruments) on the same footing as court decisions from another Member State.55 The Recast also resolves many of the linguistic difficulties encountered in the parental responsibility provisions of Brussels II bis and addresses some of the anomalies thrown up by the case-law of the CJEU (while also giving concrete expression to some of its interpretative solutions). The language of the Recast is better attuned to the idea of the child as an independent bearer of rights,56 and there is a much increased focus on the best interests of the child, by comparison with the text of Brussels II bis.57 52 On alignment with the 1996 Hague Convention, see PERMAMENT BUREAU OF THE HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW, The Link with International Instruments and Third Countries, in EUROPEAN PARLIAMENT (ed) (note 7), p. 63 et seq; H. VAN LOON, The Brussels IIa Regulation: Towards a Review?, in EUROPEAN PARLIAMENT (ed), Cross-Border Activities in the EU – Making Life Easier for Citizens: Workshop for the JURI Committee, PE 510.003, Brussels 2015, p. 178; G. BIAGIONI/ L. CARPANETO, Children under Brussels II ter Regulation, this Yearbook, infra. 53 See further TH. KRUGER, Enhancing Cross-Border Cooperation, in EUROPEAN PARLIAMENT (ed) (note 7), p. 36 et seq; M. ŽUPAN/ C. HOEHN/ U. KLUTH, Central Authority Cooperation under the Brussels II ter Regulation, this Yearbook; Articles 76-86 Brussels II ter; Recitals 45, 72-88. The procedure for placement of children in another Member State (previously Article 56 Brussels II bis) is now subject to more detailed regulation under Article 82 Brussels II ter and Recitals 11 and 83-84: see further V. LAZIĆ/ W. SCHRAMA/ J. GRAY (eds) (note 38), p. 47 et seq; B. MUSSEVA (note 3), p. 141-142; L. CARPANETO (note 3), p. 282-3; G. BIAGIONI/ L. CARPANETO, (note 52). 54 C. HONORATI (note 10), p. 98; J. SINGER, The Privatization of Family Law, Wisconsin L. Rev. 1992, p. 1443. See also the very broad definition of “court” in Article 2(2) and Recital 14 Brussels II ter and also the new Article 1(1) which refers simply to the application of the Regulation “in civil matters” (and not “whatever the nature of the court or tribunal, in civil matters” as was the case under Article 1(1) Regulation 2201/2003). 55 Articles 64-68; Recital 70 Brussels II ter. 56 See the discussion below of the child’s right to be heard, and also Recitals 83 and 84 Brussels II ter (invoking the child’s rights under Article 8 ECHR and Articles 8, 9 and 20 CRC). 57 There were 5 references to the best interests of the child in the text of Brussels II bis; there are 31 references in Brussels II ter. See L. CARPANETO (note 3), p. 265 et seq; G. BIAGIONI/ L. CARPANETO, (note 52). The “best interests of the child” is to be interpreted in

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 While some desired innovations proved impossible (due to concerns about EU encroachment on domestic procedural autonomy), Brussels II ter was able to bring about many very useful reforms (and, as will be seen, some reforms which are of more questionable merit). A.

Jurisdiction in Parental Responsibility Matters

Under Brussels II ter, the grounds for parental responsibility jurisdiction remain largely the same as under Brussels II bis,58 but there has been some degree of textual amendment (mostly reflecting the tendencies and priorities just outlined). The Recast includes an expanded (and reformulated59) “choice of court” provision (Article 10 Brussels II ter) which allows for jurisdiction based on an agreement concluded prior to the proceedings, at the time of commencement of proceedings or during the proceedings (provided this is in the best interests of the child). Article 10 also elaborates on the formalities for an effective agreement.60 While this enhancement and clarification of party autonomy is to be welcomed, it is important to note that Article 10 draws a sharp distinction between a prior agreement and agreement at the time the court is seised: the latter confers exclusive jurisdiction (under Article 10(4)), but the former confers concurrent jurisdiction only.61 light of the CRC and Article 24 of the EU Charter of Fundamental Rights (Recital 19 Brussels II ter). 58 The most notable changes are discussed above. What were Articles 8 and 9 Brussels II bis are now Articles 7 and 8 Brussels II ter and these provisions remain the same (subject to very minor changes in wording). What was Article 15 Brussels II bis (dealing with transfers) is now divided into two provisions (Articles 12 and 13 Brussels II ter), thus reflecting the approach adopted in Articles 8 and 9 of the 1996 Hague Protection of Children Convention. Articles 12 and 13 Brussels II ter are substantively very similar to the old Article 15, although the question is now whether the other court “would be better placed to assess the best interests of the child” and there is a new seven week time-limit, and a prohibition on transfer from the court with Article 10 exclusive jurisdiction. (On transfer, see also Recitals 21, 26-28, 37). 59 Happily, the Recast drops the rather confusing reference to “the superior interests of the child” and the ambiguous requirement of acceptance “in an unequivocal manner” in Article 12 Brussels II bis: see C. HONORATI (note 10), p. 100; E. PATAUT/ E. GALLANT, Article 12: Prorogation of Jurisdiction, in U. MAGNUS/ P. MANKOWSKI (eds) (note 21), p. 150 at 165. Article 10 Brussels II ter also departs from its predecessor in laying down a unified set of requirements for all parental responsibility cases, in contrast to Article 12 Brussels II bis which catered separately for standalone parental responsibility proceedings and those linked with matrimonial proceedings, albeit applying substantially the same criteria. It is submitted that the new unified approach is preferable and that the previous bifurcation added unnecessary complexity. On the new Article 10 Brussels II ter, see also G. BIAGIONI/ L. CARPANETO, (note 52); C. GONZÁLEZ BEILFUSS, (note 9). 60 Article 10(2) Brussels II ter. On substantive validity, see Recital 23. As is noted by B. MUSSEVA (note 3), p. 133, Brussels II ter does not follow the approach to substantive validity adopted in Article 25 Revised Brussels I Regulation (Regulation (EU) No 1215/2012) (note 4). 61 See M. BROSCH/ C. MARIOTTINI (note 3), p. 19.

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Máire Ní Shúilleabháin Apparently taking inspiration from Article 31 of the Revised Brussels I Regulation,62 Article 20(4) and (5) Brussels II ter adapt the lis pendens doctrine to give priority to the court second-seised where that court has exclusive jurisdiction under Article 10 Brussels II ter.63 However, while there are clearly some parallels with Article 31 of the Revised Brussels I Regulation, it seems that, in the end, the rationale for this Article 20 Brussels II ter reversal of lis pendens is significantly different to that contemplated in the Revised Brussels I Regulation: while under the Revised Brussels I Regulation the whole objective was to ensure compliance with an earlier jurisdiction agreement which no longer suits one of the parties, under Brussels II ter the reversal of lis pendens does not apply in precisely that situation. It seems to follow that the reversal of lis pendens under Brussels II ter is of much more limited practical significance.64 In terms of parental responsibility jurisdiction, it is significant to see a new “disconnection” clause in Article 97 Brussels II ter which allows for the operation of the transfer, choice-of-court and lis pendens provisions of the 1996 Hague Protection of Children Convention in cases connected to an EU Member State and a non-EU Convention State. This is most welcome because the text of the Brussels II bis Regulation (Article 61) suggested that where a child was habitually resident in an EU Member State, there could be no transfers to a non-EU Convention State and no accommodation of a jurisdiction agreement in favour of a non-EU Convention State and no deference to a prior action in a non-EU Convention State.65 Presence-based jurisdiction (now Article 11)66 and residual jurisdiction (Article 14: Recital 29) are also adjusted to achieve better cohesion with the 1996 Hague Convention and to give it more visibility within the Brussels II ter framework.67 Article 15 on provisional, including protective, measures in urgent cases (previously Article 20 Brussels II bis),68 has been reformulated and now refers to a “child” who is present, replacing an ambiguous reference to “persons” (and addressing an anomalous interpretation of Article 20 Brussels II bis in Detiček v Sgueglia).69 In contrast to its predecessor, Article 15 Brussels II ter now also invites an exchange of information between the court issuing provisional, including protective, measures and the court with jurisdiction as to the substance (either directly Regulation (EU) No 1215/2012 (note 4). See M. BROSCH/ C. MARIOTTINI (note 3), p. 13; B. MUSSEVA (note 3), p. 135. 63 See also Recital 38 Brussels II ter. 64 See M. BROSCH/ C. MARIOTTINI (note 3), p. 19. 65 TH. KRUGER (note 15), p. 473; S. CORNELOUP/ TH. KRUGER (note 3), p. 231. 66 See also Recital 25 Brussels II ter; L. CARPANETO (note 3), p. 273. 67 B. MUSSEVA (note 3), p. 133-134. See also Article 2 Brussels II ter which defines “child” in line with the 1996 Hague Convention (also Recital 17 Brussels II ter); also Recital 92 Brussels II ter which cross-refers to the choice-of-law provisions under the 1996 Hague Convention (as recommended by H. VAN LOON (note 52), p. 200). 68 See I. PRETELLI, Provisional Measures in Family Law and the Brussels II ter Regulation, this Yearbook 2018/19, p. 113. 69 ECJ, 23 December 2009, Detiček v Sgueglia, ECLI:EU:C:2009:810 [50]-[52]. See TH. KRUGER/ L. SAMYN (note 34), p. 149. 62

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 or between the relevant Central Authorities).70 The inapplicability of the lis pendens doctrine in cases where the jurisdiction of the court first seised is based on Article 15 (previously laid down in Purrucker71) is now expressly confirmed by the wording of the lis pendens provision (Article 20 Brussels II ter). B.

The Child’s Right to be Heard

Brussels II ter gives centre stage (and increased visibility72) to the child’s right to be heard, in terms which accurately reflect the formulation of Article 12 CRC. Previously this right was only incorporated into the abduction provisions of Brussels II bis73 (and was not directly referenced in the context of parental responsibility jurisdiction, as it is now at Article 21 Brussels II ter), and the old text presented “age” and “maturity” as eligibility criteria, when under the CRC, the only eligibility criterion is the capacity to form a view.74 Article 21 Brussels II ter, in line with the CRC, now cites age and maturity as factors going to the weight to be attached to the child’s views (and not as threshold criteria). Reflecting the language of the Court of Justice in Zarraga v Pelz, Article 21 requires eligible children to be given “a genuine and effective opportunity” to express their views.75 Case-law on Brussels II bis (like Zarraga) had exposed difficulties arising from different national practices on hearing children,76 and consideration was given to procedural harmonisation in this area.77 In the end, however, (and perhaps not surprisingly), Member States were resistant to such interference in their domestic procedural practices,78 and the determination of who should hear a child, and how, and where, remains a matter for the lex fori.79

See also Recitals 30 and 59 Brussels II ter. ECJ, 9 November 2010, Purrucker v Vallés Pérez ECLI:EU:C:2010:665. 72 C. HONORATI (note 10), p. 102; see also M. BROSCH/ C. MARIOTTINI (note 3), p. 22; G. BIAGIONI/L. CARPANETO, (note 52). See Recitals 39, 53, 57, 69 and Articles 21, 26, 39, 47 and 68 Brussels II ter (and the many references in the Annexes/Certificates to the child’s right to be heard). 73 Article 11(2) Brussels II bis. 74 J. FAWCETT/ M. NÍ SHÚILLEABHÁIN/ S. SHAH, Human Rights and Private International Law, Oxford 2016, p. 721-722. 75 ECJ, 22 December 2010, Zarraga v Pelz, ECLI:EU:C: 2010: 828 [66], [68]. 76 S. ARAS KRAMAR, The Voice of the Child: Are the Procedural Rights of the Child Better Protected in the New Brussels II Regulation, Open J. for Legal Studies 2020, p. 87 at 94. 77 2014 Report (note 13), p. 11; H. BLACKBURN/ M. MICHAELIDES (note 3), p. 253; B. UBERTAZZI, The Hearing of the Child in the Brussels IIa Regulation and its Recast Proposal, J. of Priv. Int’l Law 2017, p. 568 at 599-601. 78 B. MUSSEVA (note 3), p. 135. 79 Article 21(1); Recital 39; also B. MUSSEVA (note 3), p. 135. 70 71

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Máire Ní Shúilleabháin A failure to afford an eligible child an opportunity to be heard remains a “defence” to recognition and enforcement under the Recast,80 but while previously under Article 23(b) Brussels II bis the focus was on the “violation of fundamental principles of procedure of the Member State in which recognition is sought”, it is now no longer possible to deny recognition and enforcement on the basis that “the court of origin used a different method to hear the child than a court in the Member State of recognition would use”.81 So, under the Recast, the focus of the defence is on the substantive denial of the right enshrined under Article 12 CRC,82 and not on the (different) procedural norms of the recognising Member State.83 This defence is inapplicable where the urgency of the case did not allow for hearing the child,84 or where the case concerned the property of the child. The defence extends to recognition and enforcement of “private agreements” or “authentic instruments” dealing with parental responsibility,85 but there is some doubt as to whether children will be heard in this context of consensual solutions, where national law often tends to dispense with this requirement, and where there is no inbuilt mechanism for hearing children.86 C.

International Child Abduction

Brussels II ter creates a new Chapter III87 dealing with international child abduction, and laying down rules to supplement the operation of the 1980 Hague Child Abduction Convention in an intra-EU context. This Chapter retains most aspects of Article 11 Brussels II bis88 but builds on these pre-existing obligations to develop a more elaborate supplementary scheme.89 Article 39(2) Brussels II ter. Recital 57 Brussels II ter. See S. CORNELOUP/ TH. KRUGER (note 3), p. 236. 82 See Recital 39 Brussels II ter defining the right by reference to Article 12 CRC and Article 24 EU Charter of Fundamental Rights. 83 M. BROSCH/ C. MARIOTTINI (note 3), p. 15. 84 Recital 57 Brussels II ter elaborates on when “the urgency of the case” would justify not hearing the child. 85 Article 68(3) Brussels II ter. 86 M. BROSCH/ C. MARIOTTINI (note 3), p. 18 and p. 21-22; H. BLACKBURN/ M. MICHAELIDES (note 3), p. 253. Also it is suggested in Recitals 39 and 71 that the child’s right to be heard may not apply in the same way in the context of agreements. For a critical perspective, see C. GONZÁLEZ BEILFUSS, (note 9). 87 Articles 22-29 Brussels II ter. 88 Insofar as Article 11(2) and (5) Brussels II bis required the hearing of the child and the left-behind parent (prior to the issuance of a non-return order), these requirements are retained in Article 26 Brussels II ter (which requires Article 21 to apply in return proceedings) and Article 27(1) Brussels II ter. 89 International child abduction is also addressed elsewhere in Brussels II ter. The new provisions on enforcement of “override” return orders under Chapter IV are discussed below. Article 9 Brussels II ter, dealing with the post-abduction transfer of jurisdiction (previously Article 10 Brussels II bis) has also been amended to take account of other situations in which 80 81

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 Chapter III recognises that time is of the essence, in protecting abducted children, and in ensuring the efficacy of the return procedure.90 Article 11 Brussels II bis required requested courts to “act expeditiously … using the most expeditious procedures available in national law” and this duty is retained in Article 24(1) Brussels II ter. Under Article 11 Brussels II bis, the requested court was required “except where exceptional circumstances make this impossible” to issue its judgment within 6 weeks of lodgment of the application. It was unclear as to whether this deadline applied only to first instance proceedings, or whether it was expected that all of the return proceedings, including any appeals, would be disposed of within 6 weeks,91 and this ambiguity is now resolved in Article 24, insofar it envisages a six-week turnaround at each instance (subject to the “exceptional circumstances” caveat).92 Chapter III also provides some clarity on when this six-week period starts running in the context of appellate proceedings.93 There are new obligations for requested Central Authorities to “act expeditiously” in processing return applications, and to acknowledge receipt of an application within 5 working days, and to inform the requesting Central Authority “without undue delay” of the “initial steps” being taken.94 Effective enforcement of return orders has often been a problem95 (highlighted by many complaints to the European Court of Human Rights96) and the new Chapter III of Brussels II ter seeks to fill the gap left by the 1980 Hague Convention (which does not focus on enforcement of return orders) and to encourage speedy enforcement in intra-EU cases. To this end, Article 27(5) allows return orders to be declared provisionally enforceable, notwithstanding any appeal,97 and Article 28 requires “expeditious” processing of applications for enforcement of return orders, and allows the requesting authorities to seek a statement of the reasons for the delay, if a return order has not been enforced within 6 weeks of the initiation of the enforcement proceedings. It is hoped that explicit obligations of this nature in an EU Regulation will assist in focussing minds on the need for speedy enforcement and

the return of the child is not in prospect. See also Recitals 16-17, 22, 27, 30, 39-52, 58-59, 66, 72-73, 75, 79, 87; Article 1(3), Article 35(2), Article 36(1)(c) and Articles 85-89 and Article 96. 90 RH. SCHUZ, The Hague Child Abduction Convention: A Critical Analysis, Oxford/Portland 2013, p. 448; Impact Assessment (note 15), p. 35. 91 Impact Assessment (note 15), p. 36. 92 This is considered more realistic than an expectation that all proceedings be disposed of within 6 weeks: C. HONORATI (note 10), p. 105. On “exceptional circumstances”, see also Recital 42 Brussels II ter. 93 Article 24(3) and Recital 42 Brussels II ter. 94 Article 23 Brussels II ter. 95 RH. SCHUZ (note 90), p. 47-48. 96 J. FAWCETT/ M. NÍ SHÚILLEABHÁIN/ S. SHAH (note 74), p. 715. 97 See also Recitals 47 and 66 Brussels II ter. Article 1(3), Article 2(1)(a), Article 36(1)(c), Article 96 and Recital 16 Brussels II ter also envisage that a return order issued by the requested court will be enforceable in all Member States, thereby obviating the need for a new application under the 1980 Hague Convention, in the event that the abducting parent absconds with the child to another Member State in the face of the return order.

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Máire Ní Shúilleabháin allow the ECJ to support the development of these (complex98) obligations. Brussels II ter also recognises that delays in return proceedings can alienate the child from the left-behind parent99 and so Article 27(2) invites the requested court to consider utilizing Article 15 to facilitate contact during the proceedings, where this is in the best interests of the child. In order to speed up the processing of return applications, it had originally been proposed that Brussels II ter would require Member States to concentrate jurisdiction on a small number of specialist courts,100 and to allow for only one appeal.101 However, these proposals were probably perceived as a usurpation of domestic procedural autonomy,102 and in the end, were watered down and confined to the recitals of Brussels II ter as mere recommendations for the consideration of Member States.103 The Recast also introduces a new provision (Article 25) allowing the requested court, in an appropriate case, to invite the parties to consider engaging in mediation or other means of alternative dispute resolution.104 Article 25 is justified on the basis that mediated solutions are more likely to be accepted, and mediation can bring about an ongoing cooperation in the best interests of the child.105 Insofar as there are concerns that mediation might be abused by the abducting parent as a delaying tactic,106 Article 25 discourages the use of mediation where it would “unduly delay the proceedings”.107 It is also recognised that mediation may be wholly inappropriate where there are allegations of domestic violence,108 and Recital 43 directs against the use of mediation in such cases. Ultimately, it seems that the value and utility of Article 25 will depend on the availability of specialist mediators with appropriate skills and training.109 Recitals 60 and 65 Brussels II ter. Which, in turn, may harm the child, see RH. SCHUZ (note 90), p. 65 et seq. 100 Article 22 and Recital 26 of the 2016 Proposal (note 14). 101 Article 25(4) of the 2016 Proposal (note 14). 102 C. HONORATI (note 10), p. 102 and 105; see M. BROSCH/ C. MARIOTTINI (note 3), 98 99

p. 20. Recitals 41 and 42 Brussels II ter. As C. HONORATI (note 10), p. 103 points out, the proposal for concentration of jurisdiction, would have enhanced not only the speed of proceedings, but would also have allowed for a more “correct and appropriate” response to the child’s interests. 104 See also Recitals 22 and 43 and Articles 9 and 10 Brussels II ter on jurisdictional agreements in return proceedings; also C. GONZÁLEZ BEILFUSS, (note 9). 105 RH. SCHUZ (note 90), p. 410; C. HONORATI (note 10), p. 104; I. PRETELLI, Child Abduction and Return Proceedings, in EUROPEAN PARLIAMENT (ed) (note 7), p. 11; TH. KRUGER (note 53), p. 41-42; H. VAN LOON (note 52), p. 196-197. 106 RH. SCHUZ (note 90), p. 412. 107 See also Recitals 42-43 Brussels II ter. 108 RH. SCHUZ (note 90), p. 415. 109 M. BROSCH/ C. MARIOTTINI (note 3), p. 23; CH. PAUL, The Role of Family Mediation in Matters of Parental Responsibility, in EUROPEAN PARLIAMENT (ed) (note 7), p. 18 et seq. 103

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 Article 11(4) Brussels II bis prohibited the use of the “grave risk” exception in refusing to return the child if it was “established that adequate arrangements have been made to secure the protection of the child after his or her return”. This obligation, which is supported by the Strasbourg case-law on Article 8 ECHR,110 is given greater specificity under Article 27 of the new Recast (and hopefully a new vitality).111 It is now clear that the primary onus rests on the party seeking the return of the child to provide sufficient evidence of such arrangements, but “adequate arrangements” can also be secured by way of direct judicial communication, or through the Central Authorities.112 In addition, it is envisaged that the child’s return might be facilitated by way of provisional, including protective, orders from the requesting, or requested, court, and the provisional orders of the latter (exceptionally) are binding on all other Member States until the requesting court (with jurisdiction as to the substance) intervenes.113 It is hoped that this new capacity, for the issuance of cross-border protective orders by the requested authorities, will allow for the safe return of children in more cases.114 The “override” or “veto” procedure was the most controversial aspect of the child abduction rules introduced by Brussels II bis: while under the 1980 Hague Convention, the requested court has the final say on whether the child returns, under Brussels II bis, the requesting court was entitled to issue a mandatory return order which “overrode” or “vetoed” a non-return order of the requested court (where it was based on Article 13 of the 1980 Hague Convention). This “override” return order, once certified under Article 42 Brussels II bis, was entitled to immediate recognition and enforcement, without recourse to any defences.115 This system did not appear to work very well: in practice, these certified return orders were often ignored, and the absolute nature of the return obligation could be inimical to the child’s best interests and incompatible with human rights obligations.116 Many eminent commentators had suggested that this “override” procedure should be jettisoned in the Recast Regulation;117 but, in the end, it has been retained, albeit in a modified form,118 and the obligation to enforce the certified return order is no longer J. FAWCETT/ M. NÍ SHÚILLEABHÁIN/ S. SHAH (note 74), p. 730-731. C. HONORATI (note 10), p. 106 suggests that Article 11(4) Brussels II bis was little used in practice. 112 Article 27(3)-(4); Recital 45 Brussels II ter. 113 Article 2(1)(b), Article 27(5), Article 35(2), Article 36(1)(c), Article 53(3) and Recitals 30, 44-46 and 59 Brussels II ter. 114 H. VAN LOON (note 52), p. 193-194 and p. 197. 115 See Article 11(8) and Article 42 Brussels II bis; also J. FAWCETT/ M. NÍ SHÚILLEABHÁIN/ S. SHAH (note 74), p. 740 et seq; V. LAZIĆ/ I. PRETELLI, (note 20), infra. 116 Ibid; also P. BEAUMONT/ L. WALKER/ J. HOLLIDAY, Not Heard and Not Returned: the Reality of Article 11(8) Proceedings, Int’l Family Law 2015, p. 124. 117 See Th. KRUGER/ L. SAMYN (note 34), p. 158-159; P. BEAUMONT/ L. WALKER/ J. HOLLIDAY, Conflicts of EU Courts on Child Abduction: the Reality of Article 11(6)-(8) Brussels IIa Proceedings Across the EU, J. of Priv. Int’l Law 2016, p. 211 at 258; V. LAZIĆ / W. SCHRAMA/ J. GRAY (eds) (note 38), p. 27 and p. 35; H. VAN LOON (note 52), p. 203. 118 Article 29 and Recitals 48-52 Brussels II ter. The new override procedure has addressed some of the shortcomings of its predecessor under Brussels II bis. The procedure 110 111

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Máire Ní Shúilleabháin quite so absolute. Thus, Brussels II ter envisages a “veto” on the “veto” (for example, where an “override” return order has been granted but the authorities in the requested state perceive a grave risk of a lasting nature119). These qualifications (under Articles 50, 56 and 57) address concerns associated with the uncompromising nature of the Brussels II bis override procedure – e.g. where the requested court was of the view that the return of the child would amount to a violation of the child’s fundamental rights120 – and from that perspective, the new Recast takes a welcome “step back”.121 However, it is far from clear that an additional round of litigation will serve the best interests of the child122 and there is considerable uncertainty as to when exactly a requested court or authority may refuse to enforce a certified return order, or in other words, as to when Articles 50, 56 and 57 may be invoked.123 D.

Recognition and Enforcement

Brussels II bis had laid down a two-track enforcement system, with an abolition of exequatur for “override” return orders (certified under Article 42) and access orders (certified under Article 41), and with all other parental responsibility orders requiring a declaration of enforceability. Brussels II ter has abolished exequatur across the board, but has maintained the two-track system, insofar as access orders and “override” return orders are still singled out for a more seamless form of enforcement.124 Following the model adopted under the Revised Brussels I Regulation,125 Brussels II ter allows respondents to apply for non-recognition of “standard” parental responsibility orders on various grounds listed in Article 39 including public policy (taking into account the best interests of the child), inadequate service, audi has narrowed insofar as it is now only triggered if either Article 13(1)(b) or Article 13(2) of the 1980 Hague Convention is invoked in justification of non-return (although it is suggested that it should not apply in Article 13(2) cases where non-return is based on the child’s opposition: see S. CORNELOUP/ Th. KRUGER (note 3), p. 224 arguing that this aspect of the override mechanism is incompatible with a commitment to truly hearing the child). Also the way in which the override procedure is initiated has been amended (compare Article 11(6)(7) Brussels II bis and Article 29(3)-(5) Brussels II ter). Significantly, Article 29(6) Brussels II ter now confirms that the override mechanism can only be invoked where the requesting court has made a substantive determination of custody which entails the return of the child, in contrast to the position under Article 11(8) Brussels II bis: see C. HONORATI (note 10), p. 108-109. 119 Article 56(6) Brussels II ter. 120 ECJ, 22 December 2010, Zarraga v Pelz, ECLI:EU:C:2010:828; ECJ, 1 July 2010, Povse v Alpago, ECLI:EU:C:2010:400. 121 I. PRETELLI (note 105), p. 12. 122 J. FAWCETT/ M. NÍ SHÚILLEABHÁIN/ S. SHAH (note 74), p. 753. 123 See M. BROSCH/ C. MARIOTTINI (note 3), p. 16. 124 See Recital 52 Brussels II ter and Section 2 of Chapter IV (Articles 42-50). For a detailed discussion of recognition and enforcement under Brussels II ter, see S. CORNELOUP/ TH. KRUGER (note 3), p. 231 et seq; V. LAZIĆ/ I. PRETELLI, (note 20). 125 Regulation (EU) No 1215/2012 (note 4); S. CORNELOUP/ TH. KRUGER (note 3), p. 233.

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 alteram partem, irreconcilable judgments and failure to give a child an opportunity to be heard in line with Article 21.126 There is, however, no longer any requirement that the applicant seek a declaration of enforceability127 and the order from another Member State is amenable to immediate enforcement upon production of the decision, and a certificate issued in accordance with Article 36 and Annex III,128 and following service on the respondent.129 Certified access and “override” return orders remain “privileged”130 and there is no scope for any application for non-recognition on Article 39 grounds.131 However, as already indicated, Brussels II ter has moved away from the hardline position adopted in Brussels II bis, and admits of non-recognition and non-enforcement of these “privileged” orders in certain narrow circumstances.132 A subsequent irreconcilable judgment can justify non-recognition under Article 50,133 and Article 56 envisages that enforcement can be suspended in the event of a “grave risk … due to temporary impediments”134 and refused altogether in the event of “grave risk … of a lasting nature”.135 It may also be possible to invoke certain grounds for refusal of enforcement under the national law of the recognising Member State (Article 57).136 The general abolition of exequatur has broadly been welcomed insofar as it simplifies the cross-border enforcement of parental responsibility orders, and saves time and money for international families.137 The maintenance of a two-track system is, however, more difficult to understand.138 With the removal of exequatur for “standard” parental responsibility orders, and the introduction of new grounds for non-enforcement of “privileged” decisions, the gap between the two “tracks” has narrowed very considerably and it is reasonable to ask whether the “fast-track” enforcement of “privileged” orders adds sufficient value to outweigh the complexities entailed in having separate enforcement regimes. As has already been seen, the 126 Articles 39-41 and 59-62; Recitals 54-56 Brussels II ter. Recitals 54 and 62 indicate that it is for national law to determine whether these grounds for non-recognition may also be invoked ex officio. 127 Article 34 Brussels II ter. 128 Articles 31 and 35 Brussels II ter. 129 Article 55 and Recital 64 Brussels II ter. 130 Recitals 52 and 58 (and title to Section 2 of Chapter IV) Brussels II ter. 131 Article 43(1) Brussels II ter. 132 Article 54 and Recital 61 also envisage that the authorities of the enforcing Member State may adjust the contents of an incoming access order in order to facilitate enforceability. 133 On the invocation of Article 50, see Recital 52 Brussels II ter. 134 Article 56(4) Brussels II ter. 135 Article 56(6) Brussels II ter. On the invocation of Article 56, see Recitals 67-69. 136 On when Article 57 might be invoked, see Recital 63 Brussels II ter. Articles 56 and 57 are also applicable to “non-privileged” decisions. 137 L. CARPANETO (note 3), p. 277; H. BLACKBURN/ M. MICHAELIDES (note 3), p. 253; V. LAZIĆ/ W. SCHRAMA/ J. GRAY (eds) (note 38), p. 28 and p. 34; also Recital 58 Brussels II ter. See also V. LAZIĆ/ I. PRETELLI, (note 20). 138 M. BROSCH/ C. MARIOTTINI (note 3), p. 19-20.

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Máire Ní Shúilleabháin very existence of the “override” or “veto” procedure is highly controversial (and remains so even with the new “veto” on the “veto”) and it is submitted that it would have been better if Brussels II ter had abolished the “override” (accepting the finality of a non-return order issued by the requested court) and had put access orders on the same footing as other parental responsibility orders. Indeed, as KRUGER and SAMYN point out, in practice it can be difficult to distinguish access orders from other parental responsibility orders,139 and this ambiguous demarcation provides yet another reason for questioning the wisdom of a “two-track” enforcement system which assumes a clear line of division between the two.

IV. Conclusion Brussels II ter brings many positive developments. Its language is much clearer than that of its predecessor, and it is a much more child-centred instrument. It allows for a much better “fit” with other international measures, in particular the 1996 Hague Convention, and, in the future, international families will be spared the delay and cost associated with exequatur. While it is a real pity that there was no reform of divorce jurisdiction, and no move towards clarity on applicability to same-sex spouses, the new provisions on “private divorces” will ensure that EU private international law keeps step with trends towards informality in domestic divorce law. With respect to parental responsibility and child abduction, it is a shame that the proposal for concentrated jurisdiction was sidelined, and that the “override” procedure and “two-track” enforcement have been carried over into the Recast – but, on the other hand, the revised provisions on the processing and enforcement of return orders (Articles 23-24 and Article 28), on mediation (Article 25), on protective orders (Article 27), and on hearing children (Article 21), are very promising. Of course, the proof of the pudding will be in the eating, and the effectiveness of these innovations will really only become apparent when the Regulation enters into force in 2022.140 Indeed, in the beginning, it may be that the scale and complexity of the Recast will cause significant problems, with judges and authorities falling into error in interpreting and applying its provisions, but, in time, as the new scheme becomes more familiar, these kinds of difficulties should ebb away. Ultimately, the increased focus on practical cooperation may prove to be one of the most valuable innovations of Brussels II ter: the recitals repeatedly refer to

139 TH. KRUGER/ L. SAMYN (note 34), p. 160; see also Recital 18 and Article 2(2)(x) Brussels II ter. 140 In this regard, it is noteworthy that pursuant to Article 101(2) Brussels II ter, the EU Commission will be monitoring compliance with the 6-week turnaround envisaged in Article 28, and also the level of usage of the Article 39 defences (presumably with a particular focus on the “hearing the child” defence which was often invoked in the past: see B. UBERTAZZI (note 77), p. 600).

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An Overview of the Principal Reforms in Regulation (EU) 2019/1111 the need for (and value of) “mutual trust”141 and it seems likely that day-to-day contact and the building of personal relationships will assist in realising that objective142 (although the failure to ensure concentrated jurisdiction and the continuation of the override procedure may also act as a hindrance in fostering trust143). Also, as has often been noted, family law matters (and in particular disputes concerning children) are not amenable to the kind of cut-and-dried legal analysis which may be suited to other civil disputes,144 and from this perspective, it is heartening to see the deeper penetration of Brussels II ter into the underlying infrastructure of the family law justice-system (and beyond the courts), along with an expectation of pro-active, dynamic judicial cooperation. In terms of child abduction, it is hoped that when Brussels II ter comes to be revised, that a harmonised relocation jurisdiction might be considered as a “prevention is better than cure” strategy.145 Brussels II ter seeks to redress the effects of abduction, but the increased facilitation of relocation orders might nip many of these problems in the bud.

141 Recitals 3, 54 and 55 Brussels II ter. For a critical perspective on the principle of “mutual trust” in family law, see V. LAZIĆ/ I. PRETELLI, (note 20). 142 See W. POSTULSKI (note 12), p. 83 and p. 88; A. OLLAND, A Judge’s Perspective on the Cooperation Mechanisms in EUROPEAN PARLIAMENT (ed) (note 7), p. 59-62; V. LAZIĆ/ W. SCHRAMA/ J. GRAY (eds) (note 38), p. 34-35. 143 On concentration of jurisdiction as a vehicle for “mutual trust”, see e.g. PERMANENT BUREAU (note 52), p. 68; C. HONORATI (note 10), p. 103 and on the impact of the override procedure on “mutual trust”, see Th. KRUGER (note 15), p. 470-471; J. FAWCETT/ M. NÍ SHÚILLEABHÁIN/ S. SHAH (note 74), p. 754. 144 See C. HONORATI (note 10), p. 113; I. PRETELLI (note 105), p. 9. 145 M. BROSCH/ C. MARIOTTINI (note 3), p. 24 noting that, at present, some Member States do not make provision for relocation orders; also H. VAN LOON (note 52), p. 192-193.

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CHILDREN UNDER BRUSSELS II TER REGULATION Giacomo BIAGIONI*/ Laura CARPANETO**

I. II. III. IV.

Best Interests of the Child as the Centre of Gravity Jurisdiction in Parental Responsibility Matters – Old and New Problems Children’s Right to Participate in Proceedings Affecting them Best Interests of the Child and Protection Measures

The recast of the Brussels II bis Regulation focused primarily on the rules concerning children, with the aim of better protecting “the best interests of the child by simplifying the procedures and enhancing their efficiency”. Has the mission been accomplished? The paper seeks to answer this question by reflecting on the role of the principle of best interests in Regulation 2019/1111 and by considering the new rules of the Regulation concerning jurisdiction, children’s right to participate in proceedings affecting them and protection measures in the light of the same principle.

I.

Best Interests of the Child as the Centre of Gravity

The practice regarding Regulation (EU) No 2201/20031 has confirmed the utmost importance of the principle of the best interests of the child in the interpretation and application of private international law rules in matters of parental responsibility. The case-law of the Court of Justice of the European Union was particularly helpful in putting flesh and bones on the several references to the principle contained in provisions of the Regulation.

Professor at the University of Cagliari. Professor at the University of Genoa. Despite being the result of joint work by the Authors, paras 1 and 2 are to be attributed to Giacomo Biagioni and paras 3 and 4 to Laura Carpaneto. 1 Also referred to as the Brussels II bis Regulation. Full quote supra (Abbreviations), p. XI. *

**

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Giacomo Biagioni/ Laura Carpaneto In this context, the twofold dimension of the principle clearly emerged.2 On the one hand, the Court made extensive reference to the principle in order to promote the pivotal role of legal certainty (best interests of the child in abstracto): this happened both for jurisdictional competence, by stressing the centrality of the forum of the habitual residence of the child,3 and for the circulation of judgments by giving a narrow interpretation of possible obstacles to recognition and enforcement.4 On the other hand, the Court accepted the necessity of a case-by-case approach (best interests of the child in concreto) for provisions calling upon domestic courts to evaluate whether recourse to certain mechanisms (choice of court, public policy clause, etc.) is compatible with the best interests of the child.5 It must be added that the balance between those two approaches in the implementation of the Regulation has to be struck also by taking into consideration the possible intervention of the European Court of Human Rights as an ex-post assessment of the best interests of the child. Unsuprisingly, Regulation (EU) 2019/1111, while pursuing the objective of improving the functioning of the existing rules in matters of parental responsibility, placed additional emphasis on the principle.6 However, in this regard, the novelties brought about by the new Regulation do not imply major changes in the structure of the text, as the principle was already operating as a cornerstone of the system established by Regulation 2201/2003 (in combination with the 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Cooperation in Respect of Parental Responsibility and Measures for the Protection of Children). Accordingly, they can be considered as especially aimed at providing useful clarifications or at responding to needs arisen in the implementation of Regulation 2201/2003. The preamble of Regulation 2019/1111 includes now a wide set of references to the best interests of the child, pointing out that the principle was at the core of the drafting process. It is especially meaningful that recital 19 establishes a direct link to Article 24 of the EU Charter of Fundamental Rights and to the 1989 UN Convention on the Rights of the Child (hereinafter UNCRC).7 While the Court 2 L. CARPANETO, La ricerca di una (nuova) sintesi tra interesse superiore del minore “in astratto” e “in concreto” nella riforma del regolamento Bruxelles II bis, Riv. dir. int. priv. proc., 2018, p. 944 et seq. 3 See eg CJEU, 17 October 2018, UD v XB, ECLI:EU:C:2018:835. 4 CJEU, 19 November 2015, P v Q, ECLI:EU:C:2015:763. 5 Cf. CJEU, 27 October 2016, Child and Family Agency v. J.D. / R.P.D., ECLI:EU:C:2016:819. 6 See M.C. BARUFFI, Il principio dei best interests of the child negli strumenti di cooperazione giudiziaria civile europea, in A. DI STASI & L.S. ROSSI (a cura di), Lo Spazio di libertà sicurezza e giustizia. A vent’anni dal Consiglio europeo di Tampere, Napoli, 2020, p. 233-255; L. CARPANETO, Impact of the Best Interests of the Child on the Brussels II ter Regulation, in E. BERGAMINI & C. RAGNI, Fundamental Rights and Best Interests of the Child in Transnational Families, Cambridge, 2019, p. 265-286; C. E. TUO, Superiore interesse del minore e e regolamenti UE di diritto internazionale privato della famiglia, in Nuova giurisprudenza civile commentata, 2020, p. 676-686. 7 On the significance of the principle of the best interests of the child in private international law matters, cf. M. ŻUPAN, The Best Interests of the Child: A Guiding Princi-

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Children under Brussels II ter Regulation of Justice has often made use of the Charter in preliminary rulings concerning Regulation 2201/2003, hopefully the existence of an express mention of the Convention will now lead the Court to take into more careful consideration its provisions, that afford an all-encompassing protection of children’s rights. Even if many of the rights protected by the Convention may not be of immediate importance for private international law notions, they can help sketch out in clearer terms the concept itself of the best interests of the child. In fact, in this regard the case-law is unsatisfactory to date. Even though the evaluation of best interests in the context of the determination of jurisdictional competence or of the recognition and enforcement of judgments is to be made on a case-by-case basis, it would be desirable that the Court could provide clearer guidance to domestic courts about factors that are possibly relevant for the implementation of the principle. In order to ensure a complete implementation of the principle, the consideration of all aspects of the protection of the child, as devised in the Convention, should be taken into account. In addition, Regulation 2019/1111 sets forth a close connection between its own objectives and the principle of the best interests of the child. From this perspective, the proximity principle on which the rules on jurisdictional competence are based and the particular significance attributed to the habitual residence of the child8 are seen as promanating from the principle (Recital 20). In the same vein, the facilitation of recognition and enforcement of judgments appear to fulfil the obligation to protect the best interests of the child (Recital 55). Such an approach displays the possibility to use the best interests of the child as a conceptual tool in order to develop general solutions that may serve the purposes of judicial cooperation in civil matters, namely legal certainty and circulation of judgments. It is thus assumed that in most cases the jurisdictional competence of the State in which the child is habitually resident and quick and expeditious procedures for the recognition and enforcement of a judgment issued there will contribute to protect the rights of the child. However, one should not conclude that these general features exhaust the scope of application of the principle of the best interests of the child in matters of parental responsibility, as they represent only one face of the coin. As was already envisaged by Regulation 2201/2003, the principle also points to the necessity of ensuring a certain degree of flexibility, that is preserved and even expanded under Regulation 2019/1111. In fact, neither proximity as a basis for jurisdictional competence nor circulation of judgments can be seen as absolute values, rather they must be weighed against the special circumstances of the case, which may require a departure from general rules. In the field of jurisdictional competence, in the new Regulation some instances – choice of court, transfer of jurisdiction – still occur in which the application of the principle of the best interests of the child involves a derogation from ple in Administering Cross-Border Child-Related Matters?, in T. LIEFAARD & J. SLOTHNIELSEN (eds), The United Nations Convention on the Rights of the Child, Leiden, 2015, p. 213 et seq. 8 A. FIORINI, The Protection of the Best Interests of Migrant Children – Private International Law Perspectives, in F. IPPOLITO & G. BIAGIONI (eds), Migrant Children: Challenges for Public and Private International Law, Napoli, 2016, p. 394 et seq.

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Giacomo Biagioni/ Laura Carpaneto the general forum of the habitual residence of the child. Even though the relevant provisions were the subject of some amendments (as will be discussed below), the characteristics and function of the mechanisms so envisaged remain virtually unchanged. The need to ensure some flexibility in situations in which the best interests of the child might be affected will certainly have a deeper impact on the circulation of judgments.9 Regulation 2019/1111 provides for new grounds of non-recognition or non-enforcement of judgments in matters of parental responsibility, in order to avoid that their unrestricted circulation may, at least in exceptional cases, lead to disregard the fundamental rights of the child. In the regime established by Regulation 2201/2003 such a danger may exist especially in matters of rights of access or of proceedings about the return of an abducted child, as no procedure can be used to oppose the recognition or enforcement of a judgment allegedly violating fundamental rights.10 Two provisions contained in the new Regulation may now help prevent those risks and can therefore be traced back to the functioning in concreto of the principle of the best interests of the child. On the one hand, Article 50 provides that recognition of a judgment shall be refused “if and to the extent that it is irreconcilable with a later decision relating to parental responsibility concerning the same child”, so ensuring that a subsequent decision may prevail, as it can be expected to be more in conformity with the actual situation of the child. On the other hand, Article 56 allows for suspension of enforcement proceedings “in exceptional cases…if enforcement would expose the child to a grave risk of physical or psychological harm due to temporary impediments which have arisen after the decision was given, or by virtue of any other significant change of circumstances”, so paving the way for a broader consideration of the general situation of the child even at the stage of enforcement proceedings. It must be stressed that both provisions apply also to those decisions referred to in the Regulation as “privileged”, as their circulation is subject to a smaller number of obstacles. That solution may give response to concerns raised with reference to the capacity of a very “liberal” regime to completely fulfil obligations relating to the protection of fundamental rights.

On the abolition of exequatur procedures in the new Regulation, see S. CORNELOUP & T. KRUGER, Le règlement 2019/1111, Bruxelles II: la protection des enfants gagne du ter(rain), Rev. crit. dr. int. pr., 2020, p. 215-245. 10 See also R. LAMONT, Protecting Children's Rights aft er Child Abduction: The Interaction of the CJEU and ECHR in Interpreting Brussels II bis, in E. BERGAMINI & C. RAGNI (note 6), p. 225-242. 9

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Children under Brussels II ter Regulation

II. Jurisdiction in Parental Responsibility Matters – Old and New Problems If one looks more closely at the system of jurisdictional competence in parental responsibility matters, as devised by Regulation 2019/1111, it is easy to conclude that the European Union legislator chose to refrain from radical changes and to confine itself to small adjustments. However, one can wonder which consequences will be actually triggered by the new Regulation and whether other amendments could have been in fact desirable. As anticipated, the rules on jurisdictional competence still revolve around the general forum of the habitual residence of the child: the primacy of that forum over other possible grounds of jurisdiction, as expressly established in the case-law of the Court of Justice, cannot be influenced by the somewhat ambiguous reference, contained in Article 7.2, to its subjection to Articles 8, 9 and 10. After the entry into force of Regulation 2201/2003, a relatively large number of requests for preliminary ruling concerned the notion of “habitual residence of the child”,11 so allowing the Court to establish a now well-settled definition.12 However, this judicial activity is not the result of a lack of clarity of the concept, whose broad scope leaves sufficient room for domestic courts to accommodate different situations. The most recent practice shows that the difficulties encountered by domestic courts can be derived by a supposed need for more flexibility in the establishment of the habitual residence of the child. A possible avenue would have been to add a clause échappatoire, ensuring that in special cases a different and closer connection be taken into consideration instead of the habitual residence of the child. While the Court of Justice appears to be manifestly unwilling to open a possible Pandora’s box,13 its approach in this regard will be probably strengthened by the decision of the political institutions to leave things as they now stand in Regulation 2019/1111. The same position was taken with regard to other provisions of the Regulation, that would have probably required some kind of reform. A striking example can be found in Article 13 of Regulation 2201/2003, now Article 11 of Regulation 2019/1111, providing for the subsidiary jurisdiction of the courts of the Member State where the child is present. According to its text, the provision concerns situations in which the habitual residence of the child cannot be established or cases of “refugee children or children internationally displaced”. However, in line with the attitude of general 11 On the development of the notion of habitual residence in domestic case law, see A. LIMANTE, Establishing Habitual Residence of Adults Under the Brussels IIa Regulation: Best Practices from National Case-Law, in J. of Priv. Int’l Law, 2018, p. 160-181. 12 Among others, CJEU, 28 June 2018, HR v KO, EC LI: EU:C:2018:513. Contra, J. CARRUTHERS, Discerning the Meaning of “Habitual Residence of the Child” in UK Courts A Case for the Oracle of Delphi, this Yearbook, 2019/2020, p. 1-35. 13 See, recently, CJEU, 24 March 2021, SS v MCP, ECLI:EU:C:2021:231, paras 44-46.

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Giacomo Biagioni/ Laura Carpaneto deference towards the 1996 Hague Convention,14 Recital 25 now clarifies that the presence rule is going to apply only when the habitual residence of the child was in a Member State. Being such a scenario unlikely, the possible scope of application of the provision will be exceptional, even though the similar provision contained in Article 6 of the 1996 Hague Convention can be relied upon when the child is habitually resident in a third State. Notwithstanding that, the fact that the provision remains unaltered after the recast of the Regulation sounds like a missed chance for its modernisation in conformity with emerging needs in the society. In the first place, the opportunity could have been seised to add more appropriate rules for a smooth coordination with the categories or, at least, with the terminology commonly used under the EU asylum policy.15 Incorporating the definitions that appear in Directive (EU) 2011/95 (usually referred to as Qualification Directive) could have been helpful in order to have a uniform notion in different legislative acts, that concern possibly overlapping groups of minors. In that context, the option of extending the presence rule to children that may qualify for the so-called “subsidiary protection” could have been taken into account, with a view to providing further clarifications about the more general concept of “internationally displaced children”. In any event, one may really regret the lack of any mention of the category of “unaccompanied minors” in the framework of the new Regulation, notwithstanding the emphasis placed on their situation by doctrinal studies and by current practice of migration. The absence of any reference in the recast Regulation appears to be particularly serious, as the special vulnerability of those children, while characterising them as a separate category, could have suggested the adoption of special rules on jurisdictional competence. In fact, their position as unaccompanied minors implies that protection measures, falling within parental responsibility matters, such as the appointment of a legal representative, are particularly urgent for them. Another feature of the system of jurisdictional competence in parental responsibility matters was preserved in Article 14 of Regulation 2019/1111, namely residual jurisdiction according to national private international law rules. This solution may come as a disappointment in comparison to other EU regulations concerning judicial cooperation in civil matters, in which the European legislator chose to include a self-sufficient set of rules on jurisdiction. In parental responsibility matters the enduring usefulness of domestic rules can be explained in connection with the need to have a broad scope of jurisdiction for EU courts in family matters: in order to achieve this objective, the reference to exorbitant fora 14 For the consideration that “Brussels IIter aligns the EU provisions to the “Hague rules” on the protection of children”, see I. PRETELLI, Provisional Measures in Family Law and the Brussels II-ter Regulation, this Yearbook, 2018/2019, p. 113-148, esp. p. 137. On the relationship between the new Regulation and the 1996 Hague Convention in general, see B. CAMPUZANO DÍAZ, El nuevo reglamento (UE) 2019/1111: análisis de las mejoras en las relaciones con el convenio de la Haya de 19 de Octubre de 1996 sobre responsabilidad parental, in Cuadernos de derecho transnacional, 2020, p. 97-117. 15 C. HONORATI, La tutela dei minori migranti e il diritto internazionale privato: quali rapporti tra Dublino III e Bruxelles II bis?, Riv. dir. int. priv. proc., 2019, p. 691 et seq.

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Children under Brussels II ter Regulation existing under domestic law was probably a much easier option than devising uniform rules. However, one cannot escape the impression that the EU legislator preferred to remain within the boundaries of a “minimalist” revision of Regulation 2201/2003, as it was not even proposed to introduce a provision on the forum of necessity for disputes on parental responsibility. That mechanism, already included in other legislative acts probably concerning even less sensitive matters, such as succession or property regimes between spouses or partners, could have been especially useful for assuming jurisdiction over children who have a weak connection with the State of the forum and find themselves in need of urgent protection, like unaccompanied minors. Even though one can consider that subsidiary jurisdiction based on presence is in itself sufficient, the enactment of a forum of necessity, to be available only as a “safety valve”, would have been consistent with the general approach of the European legislation regarding judicial cooperation in civil matters. The only provision concerning jurisdiction in parental responsibility matters which underwent a significant revision is Article 12 of Regulation 2201/2003, that has now become Article 10 of Regulation 2019/1111.16 The new provision is devoted to choice of court in parental responsibility matters and may have general application, provided that the numerous substantive and formal requirements are met. In particular, the necessity of an express analysis of the suitability of the exercise of jurisdiction for the best interests of the child is still in place. The caselaw of the Court of Justice did not provide notable guidance as to the terms of the duty of domestic courts in this regard,17 but it seems that, following an express agreement between the holders of parental responsibility, compatibility with the best interests of the child can be presumed, unless special circumstances prove the contrary (e.g. extortion of consent). In addition, in accordance with a general tendency in EU private international law, recourse to choice of court will be easier under Regulation 2019/1111, as the notion of “substantial connection” between the child and the State of the forum was slightly expanded and acceptance of jurisdiction during the proceedings is now permitted. However, as the devil is in the details, a possible avenue to rule out an undesired choice of court agreement can be afforded to the parties by the necessary acceptance by all the holders of parental responsibility: since this notion may include also grandparents according to the case-law of the Court of Justice,18 the opposition of the latter to the choice of court agreement may prove to be sufficient to prevent exercise of jurisdiction under Article 10 of Regulation 2019/1111, at least when their rights of access will be at stake in the proceedings.

16 On the original, less ambitious proposal of the Commission with regard to this provision, see C. HONORATI, The Commission’s Proposal For A Recast Of Brussels IIa Regulation, in Int’l Family Law, 2017, p. 97-114. 17 CJEU, 19 April 2018, Alessandro Saponaro and Kalliopi-Chloi Xylina, ECLI:EU:C:2018:265. 18 CJEU, 31 May 2018, Neli Valcheva v Georgios Babanarakis, ECLI:EU:C:2018:359.

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Giacomo Biagioni/ Laura Carpaneto

III. Children’s Right to Participate in Proceedings Affecting them The importance of the hearing of the child is acknowledged in the Brussels II bis Regulation now in force.19 More precisely, (i) the child shall be offered a genuine possibility to be heard in child abduction proceedings (Art. 11.2),20 (ii) the lack of hearing of the child, not justified on matters of urgency, is one of the ground for refusing recognition of decisions in matters of parental responsibility (Article 23, lit. b)21 and (iii) the hearing of the child is one of the conditions for the issuing of the certificate for the circulation of the privileged decisions (on the rights of visit and on the return of the child after an abduction, under Articles 41 and 42). From the adoption of the Brussels II bis Regulation to the beginning of its recast, however, the context has significantly changed: there is a greater emphasis on the need to develop a child friendly justice system and participation of the child is a key element in this regard.22 Participation has been described as an “umbrella term” for a cluster of rights, allowing children to have an active role in their own lives and their community.23 Surely it includes the children right “to freely express their views, to be heard and to contribute to decision making on matters affecting them, their views being given due weight in accordance with their age and maturity”. But, at the same time, participation is also the means through which children rights may be better respected and protected. It is commonly recognised that for participation to be real/effective, children need to be afforded (i) space and time to form and express views, (ii) appropriate information, (iii) adults with power and authority to act listening to them, (iv) the possibility for their views to be taken properly into consideration, even if not necessarily followed.24.

On the role of the hearing of the child under the Brussels II bis Regulation, B. UBERTAZZI, The hearing of the child in the Brussels IIa Regulation and its Recast Proposal, in J. of Priv. Int’l Law, 2017, p. 576. 20 Such a rule has been considered more a reminder than a new obligation, given that all EU Member States are bound by Article 12 of the UNCRC. On the other hand, it has been stressed that “a reminder in a piece of EU legislation has proved to be useful, as EU law is directly applicable in the Member States and judges receive training on it”. See T. KRUGER & F. MAOLI, The Hague Conventions and EU Instruments in Private International Law, in W. SCHRAMA/ M. FREEMAN/ N. TAYLOR & M. BRUNING (eds), International Handbook on child participation in family law, 2021, forthcoming, p. 79. 21 A similar provision is envisaged under Article 23 of the 1996 Hague Convention. 22 With specific reference to the duty to hear the child, see ECHR, 1 February 2018, MK v. Greece, App. No 51312/16, para 75. 23 See Comment to “Article 12: The Views of the Child”, in W. VANDENHOLE/ G. ERDEM TURKELLI & S. LEMBRECHTS (eds), A Commentary on the Convention on the Rights of the Child and Its Protocols, 2019. 24 Reference is made to the Lundy model of child participation based on the following four elements: space, voice, audience and influence . See L. LUNDY, “Voice” is 19

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Children under Brussels II ter Regulation Given the above, it is worth considering whether the new Brussels II ter Regulation meets the expectations of a greater involvement of the child in proceedings affecting him or her.25 Under the new Regulation, the right of the child to express his or her views is clarified and strengthened:26 Article 21 of Regulation 2019/1111 envisages a general duty to hear the child, extended to all parental responsibility matters and no longer limited to limited to child abduction proceedings. Moreover, its wording is now aligned to Article 12 of the UN CRC: the duty to hear the child is not anymore dependent on age and maturity. The courts shall give a child that is capable of forming his or her views a genuine opportunity to be heard. Age and maturity become relevant when the court must assess the weight to give to their views. Such attention to the hearing of the child is unprecedented: the children enjoy an effective right to participate, regardless of their age and maturity. Problems clearly still exists in cross-border cases:27 it may happen that the judge who is under the duty to hear the child is in a country different from the one where the child is. In compliance with the principle of procedural autonomy, the Regulation makes general recommendations, such as holding a hearing through videoconference or other communication technology28 as well as making use of the Evidence Regulation29, but does not provide further indications. It is for each Member State to regulate and organize the hearing of children in a proper way in compliance with the relevant instruments for the protection of the rights of the children.30 The importance of the hearing of the child is further stressed in Article 26, where the right of the child to express his or her views is reiterated with specific reference to child abduction proceedings and consists in a gentle reminder, unnec-

not enough: conceptualizing article 12 of the United Nations Convention on the Rights of the Child, British Educational Research J., 2007, p. 927-942. 25 See recital 2 of the Regulation 2019/1111 stating that the Regulation “clarifies the child’s right to be provided with an opportunity to express his or her views in proceedings to which he or she is subject (…)”. 26 See Recommendation of the Council of Europe Committee of Ministers CM/Rec (2012) 2 on the participation of children and young people under the age of 18. See also Council of Europe, Handbook on children’s participation, 2020. 27 See T. KRUGER & F. MAOLI (note 20), p. 86. 28 See Recital 53 of Regulation No 2019/1111. 29 Regulation (EU) 2020/1783 of the European Parliament and of the Council of 25 November 2020 on cooperation between the courts of the Member States in the taking of evidenc in civil or commercial matters (taking of evidence) (recast) OJ L 405, 2.12.2020, p. 1-39. 30 More precisely, it is for national law to determine the modalities of the hearing of the child, the way the child is informed about the proceeding, the persons who listen to the child and also whether the child have a right to separate legal representation. For an analysis of child participation rules in different national legal orders, see W. SCHRAMA/ M. FREEMAN/ N. TAYLOR & M. BRUNING (note 20).

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Giacomo Biagioni/ Laura Carpaneto essary from a legal standpoint, but opportune given the importance of the effective examination of the situation of the child in such proceedings. The tension between the need to act expeditiously and the child’s participation in abduction proceedings, given the summary nature of those proceedings, still exists under the new Regulation. It is important to stress that Article 29 of Regulation 2019/1111 now clarifies that the second-chance procedure is a proceeding on the “substance of rights of custody” and Recital 48 asks to the court of the State of origin an evaluation of the entire child situation and of his or her family situation.31 Such novelties are important in two respects. Firstly, because they set aside the diverging practices developed in the Member States and eatablishes a uniform procedure before the courts of the State of origin of the child.32 Secondly, because in asking for an examination of the family situation, Recital 48 echoes the indications of the caselaw of the European Court of Human Rights.33 On the other hand, given the time constraints, the task of evaluating the entire child situation is not an easy one to perform.34 Similarly to the Brussels II bis regime, Article 47.3 of Regulation 2019/1111 enlists the hearing of the child among the conditions to be met for the issuing of the certificate for privileged decisions concerning the return of the child after an abduction (rendered at the end of the second-chance proceeding above mentioned) as well as decisions on the right of visit. As regards the regime on recognition and enforcement, two important novelties shall be considered with regard to the hearing and involvement of the child. First of all, the hearing of the child shall not be at any cost35 and, as a consequence, failure to offer the child an opportunity to express his or her view does not

31 Such novelties are important in two respects. Firstly, because under the Brussels II bis Regulation it was not clear whether the second chance procedure was a summary proceeding or a proceeding on the merit. Italian case-law, as an example, considered it as a summary proceeding (see the decision of the Italian Corte di Cassazione, 14 July 2010, No 16549, Riv. Dir. Int. Priv. e Proc., 2011, p. 443). Secondly, because in asking for an examination of the family situation, Recital 48 echoes the indications of the case-law of the European Court of Human Rights (see ECHR, 6 July 2020, Neulinger and Shuruk v. Switzerland, App. No 41615/07, ECHR, decision 13 december 2011, X v. Latvia, App. No 27853/09). 32 Under the Brussels II bis Regulation it was not clear whether the second chance procedure was a summary proceeding or a proceeding on the merit. Italian case-law, as an example, considered it as a summary proceeding (see the decision of the Italian Corte di Cassazione, 14 July 2010, No 16549 (note 30). 33 ECHR, 6 July 2020, Neulinger and Shuruk v. Switzerland, App. No 41615/07, ECHR, 13 december 2011, X v. Latvia, App. No 27853/09. 34 Recital 42 clarifies that in return proceedings, the courts at every instance should give their decision within six weeks, except when exceptional circumstances make this impossible. 35 See Recital 57 and 71 of Regulation 2019/1111.

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Children under Brussels II ter Regulation necessarily integrate a ground of refusal of recognition of decisions as well as of authentic instruments and agreements in parental responsibility matters.36 This softer approach was introduced by Regulation 2019/1111, which, as for the decisions, envisages two situations where it might be reasonable not to offer the child an opportunity to express his/her views: (a) in proceedings concerning the property of the child or (ii) in cases where there were serious grounds to be taken into consideration and, in particular, the urgency of the case.37 A further element showing an intention to intensify the participation of the child in cross-border proceedings in parental responsibility matters is the inclusion of the child, duly represented, among the persons entitled for suspension or termination of the enforcement of a decision. One of the main features of the new regime is the abolition of the exequatur for all decisions concerning parental responsibility matters (not anymore limited to the privileged decisions on the right of visit and on the return of the child). Such an important novelty is balanced by the mentioned introduction of a new provision under Article 56, which, in exceptional cases, makes it possible for the competent court to suspend the enforcement of a decision. The provision clarifies that, beside the person (adult) against whom enforcement is sought, it is also possible for the child concerned “where applicable under national law” to make an application for suspension. Such a right to make an application, independently from the parents and from the carers, is not envisaged in all legal orders of the EU Member States.38 However, it is clearly a very important example of direct participation in parental responsibility proceedings. If one considers that it is not the mission of private international rules to address the opportunity and method for child participation in judicial proceedings,39 matters which are to be dealt by national procedural law rules, as compared with its predecessor (as well as to other instruments such as the 1980 Hague Convention and the 1996 Hague Convention), Regulation 2019/1111 gives to children greater room to actively participate in proceedings affecting them. It remains to be seen what impact the above improvement will have on national legal orders. Problems may arise, for example, in those ones which traditionally restrict the hearing to children over twelve years old. A similar restriction may be deemed 36 Both Article 39.2 of Regulation 2019/1111 for decisions and Article 68.3 for authentic instruments and agreements in parental responsibility matters use the verb “may” in framing the ground of refusal of recognition concerning the hearing of the child (as opposed to Regulation 2201/2003, where Article 23 for decisions uses the verb “shall”). 37 See Article 39.2 of Regulation 2019/1111. 38 For an analysis of child participation under Italian law, see E. DI NAPOLI & F. MAOLI, Italy, in W. SCHRAMA et al. (note 20), p. 219 et seq., E. D’ALESSANDRO, Verso una giustizia “a misura di minore” nella giustizia civile: garanzie e giusto processo”, in AUTORITÀ GARANTE PER L’INFANZIA E L’ADOLESCENZA (ed), La Convenzione delle Nazioni Unite sui diritti dell’infanzia e dell’adolescenza. Conquiste e prospettive a trent’anni dall’adozione, 2019, p. 334 available (with abstracts in English) at https://www.garante infanzia.org/sites/default/files/agia_30_anni_convenzione.pdf. 39 See T. KRUGER & F. MAOLI, (note 20), p. 70.

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Giacomo Biagioni/ Laura Carpaneto not to be in compliance with articles 21 and 26 of the Regulation as well as with human rights law. On the other hand, the possibility, envisaged under the law of some of the Member States, for the child concerned to make an application for the suspension of execution of a decision40 may in the long term influence the evolution of those legal order which do not foresee such forms of direct participation.

IV. Best Interests of the Child and Protection Measures The scope of application of the Brussels II bis Regulation is modelled on the one of the 1996 Hague Convention, which focuses on measures of protection. The two instruments are not perfectly aligned: the 1996 Hague Convention expressly includes kafalah within its scope of application as a measure of protection, Brussels II bis Regulation does not. However, the EU Court of Justice considers the Brussels II bis Regulation as the cornerstone in family matters and tends to interpret its scope of application extensively. Under the ratione materiae perspective, this is proved by the fact that protection measures which under national law are qualified as public law have been considered as falling within the notion of civil matters for the purposes of the Brussels II bis Regulation. But it is also proved, under the ratione personae perspective, by the case-law highlighting the importance to extend the right of access not only to the parents of the child, but also to “other persons with whom it is important for the child to maintain personal relationship” and, among them, to the grandparents.41 The new Regulation 2019/1111 does not expressly incorporate the latter case-law, whilst under Recital 4 it points out that, irrespective of the point of view of national legal system, a measure falls within the notion of civil matters if it has to do with matters of parental responsibility within the meaning of the Regulation itself and in accordance with its objective. As for the Islamic kafalah, the new Regulation has not taken any specific position. However, it seems difficult to exclude from its scope of application the relationship between the child and its guardian under this form of custody, since the child and its guardian form a genuine family life and the child is dependent on its guardian.42 Clearly the best interests of the child under Article 24 of the Charter See Article 56 of Regulation 2019/1111. See CJEU, 31 May 2018, Valcheva, ECLI:EU:C:2018:359, para 33. 42 Such a pragmatic approach has been in fact followed in the SM case (CJEU 26 March 2019, SM v. Entry Clearance Officer, UK Visa Section ECLI:EU:C:2018:129) concerning the application of Directive 2004/38, where the Court of Justice excluded that a child placed in the permanent legal guardianship of a citizen of the Union under the Algerian kafalah system is a “direct descendent” for the purposes of Directive, but stated that the child could be considered as “other family member”, once that is it assessed that the 40 41

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Children under Brussels II ter Regulation as well as the protection of family life under Article 7 of the Charter could play a key role in this regard. With reference to protection measures, the most significant novelties introduced by Regulation 2019/1111 are those related to the regime of cross-border placement (Article 82). As is well known, placement is a measure of protection for children in need of care, which is in the interest of the child himself/herself, of the parents and of other family members, but it is also in the interest of the community at large, since it protects the children’s rights and avoid the adverse effects deriving from the behavior of minors lacking adequate material and moral care. Beside this private and public dimension, placement has also acquired a cross-border dimension a care solution available in a State other than the child’s State of origin may better meet the child’s individual needs. Specific mechanisms of cooperation has been established to this purpose first of all, at global level, under the 1996 Hague Convention (Article 33) and within the EU under the Brussels II bis Regulation (Article 56). On the occasion of the recast of the latter Regulation, the attention has been focused on the critical aspects regarding the application of the cross-border placement.43 More precisely, it results that Article 56 applies not only to “pure” crossborder placement, but also to other forms of placement where the cross-border dimension is less evident, because the children are placed in solutions of care which are organised under the direction of the State of origin. Sometimes the cross-border placement procedure regulated by Article 56 applied also to placement of children with their family members (such as grandparents for example). Furthermore, the mechanism of cooperation between the requesting State and the requested State does not work properly: children are frequently placed abroad before (and, in some cases, without) the consent of the authorities of the requested State. As a consequence, even a somewhat inappropriate solution of care may be put into place in the absence of a proper coordination among the authorities involved, contrary to the best interest of the child. In addition to this, the division of tasks among the authorities involved in the procedure is not clear. More precisely, it is not clear (i) what kind of information should be provided by the requesting State to the requested State and (ii) what kind of investigation the requested State may put into place. Lastly, the exequatur procedure is under the Brussels II bis Regulation necessary for a placement order to be enforced, even if the rules results as largely disregarded in practice. Regulation 2019/1111 has tackled many of the major criticisms mentioned. child and its guardian are called to lead a genuine family life and that the child is dependent on its guardian. 43 Information and data on the functioning of cross-border placement of children in 12 EU countries are provided in L. CARPANETO, Cross-border placement of children, Brussels, 2016, available at https://www.europarl.europa.eu/RegData/etudes/STUD/2016/ 556945/IPOL_STU(2016)556945_EN.pdf.

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Giacomo Biagioni/ Laura Carpaneto First of all, the general abolition of exequatur has strongly simplified the cross-border placement. Secondly, Article 82 has strengthened the coordination between the requesting and requested State. The consent of the latter State is now mandatory and it has to be provided before the placement itself: from the entry into force of the new Regulation it will, therefore, not anymore being possible that a child is placed in another Member State, in the absence of the consent of that Member States’ competent authorities.44 Such a consent will be also an informed one, since the authorities of the requiring State, together with the request of consent, shall present also a report on the child, providing a picture of the situation of the child and explaining the reasons for the proposed placement or provision of care.45 A further important novelty is the time limit: but for the case of exceptional circumstances, the decision granting or refusing consent shall be transmitted to the requesting Central Authority within three months following the receipt of the request. The procedure described does not apply in case of placement with one of the parents of the child. However, as for the placement with relatives, it will be for the Member States to decide whether, within their territory, they want that the procedure for the cross-border placement above described shall not take place, provided that a specific communication on the above category of relatives is given to the Commission under Article 103 of the Regulation itself. Given that cross-border placement generally is a measure limited in time, it might be possible that the competent authorities of the requiring State consider it necessary to extend it. Article 82 does not provide indications in this regard, but Recital 57 points out that in such cases a new request of consent of the requested authority is needed. Such a clarification, even if envisaged in a recital and not in an article of the Regulation, is particularly important, since practice proved that cross-border placement tend to last longer than originally foreseen and no specific information is given to the authorities of the requested State, having jurisdiction on the children placed within their territory. Despite the fact that the new Regulation has tackled the main problems in the functioning of intra-EU cross-border placement, there are still some open issues. The first concerns unaccompanied and abandoned children. Nothing in the new Regulation excludes from its scope of application unaccompanied and abandoned children. On the contrary, there is a specific ground of jurisdiction for the above children, that might grant them access to the courts of the Member State

44 Under Article 56 of the Brussels II bis Regulation the consent of the requested Member State is not always mandatory. It depends on whether such consent is required for domestic cases of child placement. 45 See Recital 83 of Regulation 2019/1111.

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Children under Brussels II ter Regulation where they are, if they fall within the categories of “refugee children” or of “children internationally displaced”.46 In the course of the recast the European Parliament proposed an amendment which was clearly aimed at extending the scope of application of the jurisdictional rule and to overcome any possible doubt on the inclusion of unaccompanied and migrant children within the scope of application of the Regulation. More precisely, a Recital was proposed to clarify that “Under this Regulation jurisdiction rules should also be applicable to all children who are present on Union territory and whose habitual residence cannot be established with certainty. The scope of such rules should extend in particular to cover refugee children and children who have been internationally displaced either for socioeconomic reasons or because of disturbances occurring in their country”.47 Such an amendment would have made it possible to include among the reasons giving rise to the forced movement of the child not only disturbances raising the level of riots, civil war or severe discrimination on the grounds of race, sex, religious or other grounds, but also (and expressly) “socioeconomic” ones.48 It is, therefore, regrettable that the above the amendment has not been incorporated in the Regulation 2019/1111. Similarly, as regards the application of the “twin” instrument of the 1996 Hague Convention, an attempt to clarify how the latter instrument can grant protection of unaccompanied minors has been made: during the Special session of 2017 a document expressly clarifying it, while supported by some participating States, has not been supported by others and, as a consequence, it has been removed with a view of possibly replacing it in the future.49 Despite the failure of the above attempts to clarify the scope of application of the the Regulation 2019/1111 and of the 1996 Hague Convention, there is little doubt that both instrument apply (also) to migrant children and, in particular, to unaccompanied children, i.e. children who are not cared for by another relative or an adult who by law or custom is responsible for doing so. 46 It is the so-called “presence rule” provided by art. 11 of Regulation 2019/1111, which takes as a source of inspirtion art. 6 of the 1996 Hague Convention. 47 See Recital 6a in the European Parliament legislative resolution of 8 January 2018 on the proposal for a Council regulation on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and matters of parental responsibility, and on international child abduction (recast), (COM (2016) 0411 – C8-0322/2016 – 2016/0190 (CNS)), P8_TA(2018)0017. 48 In favor of such an extensive interpretation, see Study for the JURI committee made by S. CORNELOUP/ B. HEIDEROFF/ C. HONORATI/ F. JAULT-SESEKE/ T. KRUGER, C. RUPP/ H. VAN LOON & J. VERHELLEN, Children on the move: a private international law perspective, PE 583-158 – June 2017, Brussels, spec. p. 15-16. An important point of reference in this respect is the Committee on the Rights of the Child’s General Comment considering as relevant disturbances not only civil war and famine, but also environmental and socio economic disturbance. 49 Preliminary Doc. No 7 of July 2017 – The application of the 1996 Hague Child Protection Convention to unaccompanied and separated children mentioned under paras 33 and 34 of Conclusions and Reccomendations adopted by the Special Commission, available at https://assets.hcch.net/docs/edce6628-3a76-4be8-a092-43783a49bef.pdf.

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Giacomo Biagioni/ Laura Carpaneto These children are in situation of particular vulnerability, given the lack of protection from adults. Irrespectively from the international protection which might be granted to the them because of their condition of migrant children, they urgently need the adoption of the specific measures envisaged by the Regulation 2201/2003 and by the 1996 Hague Convention.50 The second open issue has to do with the pandemic: as very recently pointed out by the Commission, the situation of children has significantly worsened during the pandemic and many children are in a condition of poverty, malnutrition and lack of education.51 The Commission has also stressed that poverty should not be the only reason for placing children under care. Hovewer, beside unaccompanied minors, the above mentioned children may also be in need of protection measures such as cross-border placement from a State which cannot provide adequate protection and assistance, to a requested Member State which might grant better solutions of care and better conditions of life. Such forms of placement are grounded not only and not specifically on the situation of the child, but also on the impossibility of the requesting State to provide an adequate solution of care for that child, due to the absence of resources and the situation of crisis. In other terms, the search is not for the best measure of protection existing in the EU for that specific child, but for the Member State where unaccompanied minors or minors which are in a difficult situation may be granted the care which they deserve and which the Member State where they are cannot provide.

See Ph. LORTIE & C. ARMSTRONG HALL, Tools in International Law for the Protection of Unaccompanied and Separated Children: Applying the 1996 Hague Child Protection Convention in Europe and Beyond, in International Family Law, Policy and Practice, 2017, p. 5-18, at 11; E. DI NAPOLI, Sinergie tra diritto dell’immigrazione e diritto internazionale privato: il caso dei minori stranieri non accompagnati, in La Convenzione delle Nazioni Unite sui diritti dell’infanzia e dell’adolescenza. Conquiste e prospettive a 30 anni dall’adozione, Roma 2019, p. 431-449. See also EUROPEAN UNION AGENCY FOR FUNDAMENTAL RIGHTS, Returning unaccompanied children: fundamental rights consideration, 2019, at p. 2, 12 and 30. 51 See the EU Strategy on the rights of the child, COM (2021) 142 final, 24 March 2021, p. 6 where the Commission stresses the need to combat child poverty and fostering equal opportunities for children, given that in 2019 22,2% of children in the EU were at risk of poverty and social exclusion. 50

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REVISED RECOGNITION AND ENFORCEMENT PROCEDURES IN REGULATION BRUSSELS II TER Vesna LAZIĆ*/ Ilaria PRETELLI**

I. II.

III.

IV.

Introduction Recognition of Divorces, Separations and Annulment of Marriages A. Private Divorces 1. Comparative overview 2. Characterisation of Private Divorces 3. Freedom of Circulation B. Decisions within the Scope – Definition in Art. 2 C. Incidental Recognition of Divorces, Separations and Annulment of Marriages Enforcement of Decisions in Matters of Parental Responsibility A. Grounds for Refusal of Recognition and Enforcement B. Certain Privileged Decisions – International Child Abduction 1. International Child Abduction – Jurisdiction 2. International Child Abduction – Refusal of Recognition and Enforcement C. Procedure of Enforcement 1. Common Enforcement Standards 2. The Best Interests of the Child vs Mutual Trust Conclusions A. A Proliferation of Rules and Procedures… B. … within the Area of Freedom, Security and Justice

The revised Regulation is another EU instrument of private international law in the area of family law and related matters that abolishes the exequatur. The extension of the abolition of exequatur to matters of parental responsibilities is the most important improvement of the Recast. This does not only concern, as in the previous Brussels II regime, privileged decisions, which are urgent and temporary. It also concerns, albeit though different rules, ordinary decisions that ought to be long-lasting. This contribution analyses the changes in the enforcement scheme * Associate Professor at the University of Utrecht; Senior Researcher, T.M.C. Asser. Institute, The Hague. ** Swiss Institute of Comparative Law. The article is the result of joint work by the Authors. Paras II(B); III; III(A); III(B) and IV(A) are to be attributed to Vesna LAZIĆ and paras I; II; II(A); II(C); III(C) and IV(B) to Ilaria PRETELLI.

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Printed in Germany

Vesna Lazić/ Ilaria Pretelli introduced by it and evaluates how likely the amendments are to tackle difficulties encountered in practice. Further, it provides a critical assessment on whether the new scheme contributes to enhancing consistency in regulating enforcement of decisions in family law matters within the EU area of freedom, justice and security.

I.

Introduction

The Recast1 of the Brussels II bis Regulation2 on the recognition and enforcement of decisions in matters of parental responsibility introduces some considerable adjustments to the existing procedural framework.3 These will be applied as of August 1, 2022 in the European Area of Freedom, Security and Justice.4 The importance of the new rules as regards recognition and enforcement of foreign acts and decisions on matrimonial matters and matters of parental responsibilities is testified by the number of provisions related to those phases of the proceedings, which cover almost half of the whole Regulation No 1111/2019. In addition to the more than 40 procedural rules written in the Recast, judges and practitioners in charge of the recognition or enforcement of an intra-EU divorce, separation, annulment of a marriage or modification of parental responsibility will need to simultaneously apply, in most cases, the parallel rules contained in other EU Regulations, namely the following: the Maintenance Regulation, the Matrimonial and Domestic Partnership Regulations, the Succession Regulation, and, in some cases, the Protection Measures Regulation.5 Council Regulation (EU) 2019/1111. Council Regulation (EC) No 2201/2003. 3 A comprehensive synthesis is provided by B. MUSSEVA, The recast of the Brussels IIa Regulation: the sweet and sour fruits of unanimity, ERA Forum, 2020, 21:129-142. 4 All Member States except Denmark participate in the Recast. As a consequence, all acts and decisions on matrimonial matters and parental responsibilities from Member States except Denmark will be recognised and enforced according to the common rules set by the Recast in its Chapter IV. 5 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, 1-79); Regulation (EU) 2016/1103 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes and Regulation (EU) 2016/1104 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 (both in OJ L 183, 8.7.2016, 1-56); Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (OJ L 201, 27.7.2012, 107–134); Regulation (EU) No 606/2013 of the European Parliament and of the Council of 12 June 2013 on mutual recognition of protection measures in civil matters (OJ L 181, 29.6.2013, 4-12). 1 2

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Recognition and Enforcement Procedures in the Brussels II ter Regulation Regardless of the increased sophistication of the new legal framework, the most significant change of the Recast consists, in a nutshell, in abolishing the exequatur procedure for the enforcement of decisions concerning parental responsibility. This confirms the positive experience of the abolition of exequatur within the European Area, opened by the Brussels II bis Regulation in the midst of initial political criticism. That Regulation had introduced a different enforcement procedure for urgent decisions and ordinary decisions. The former would be enforced immediately and under the same conditions in the whole European area, the latter would be subject to the well-known regime already tried and tested in the framework of the Brussels I Regulation. Six years later, a similar distinction was enacted in the Maintenance Regulation in order to exempt from exequatur the decisions on maintenance obligations that were taken by Member States under the uniform rules of the Hague Protocol of 2007.6 This further move towards the abolition of exequatur confirms the positive experience with the circulation of judgements on visiting rights and on return orders – also called “return orders ‘notwithstanding’ refusal” (i.e. notwithstanding the refusal to order return by the country of refuge) – in terms of costs of the procedure, timing of enforcement and administrative ease for the victims of a wrongful removal, retention or, more in general, of a wrongful separation from a parent. Regulation Brussels II ter endures in this direction, introducing a third layer of exemption from exequatur, between privileged and ordinary decisions. In this respect, the existing gap between ordinary and privileged decisions is narrowed by the introduction of a more general abolition of exequatur, mainly with regard to matters of parental responsibility. Another important addition is the attempt to harmonise certain rules on enforcement. Whilst national laws on enforcement remain applicable, timid steps have been made with the aim of ensuring to children a smoother and more uniform implementation of the decisions on their relations with their parents in Europe. As is well known, one of the reasons for legislative intervention7 concerned the dubious automatic character of the intra-European recognition and enforcement of decisions returning abducted children. The authoritative critical voice of the European Court of Human Rights had prompted doctrinal reflection on the opportunity to maintain a hard line on the exception to return.8 Automatic recognition 6 It is perhaps no coincidence that the Child Abduction section of the Brussels II Regulation and the Maintenance Regulation constitute regional systems of coordination, set within the larger framework of two Hague Conventions (the 1980 Child Abduction convention and the 2007 Maintenance Convention). 7 See C. GONZÁLEZ BEILFUSS, What is New in Regulation (EU) No 2019/1111?, this Yearbook. 8 The ECHR had criticised an excessively restrictive interpretation of the exceptions to return in the framework of the decision pronounced on July, 6th, 2010, in the case Neulinger and Shuruk v. Switzerland (No 41615/07). The specific EU framework was also examined by the Court in X v. Latvia and M.R. and L.R. v. Estonia (No 13520/12), para 37) See C. MOL, & Th. KRUGER, International child abduction and the best interests of the child: an analysis of judicial reasoning in two jurisdictions, Journal of Private International Law, 2018, p. 421-454; P. BEAUMONT/ L. WALKER & J. HOLLIDAY, Conflicts of EU courts on child abduction: the reality of Article 11(6)-(8) Brussels IIa proceedings across the EU,

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Vesna Lazić/ Ilaria Pretelli was based on the principle of mutual trust, which ever since the adoption of the Brussels II bis Regulation had begun to contaminate the return mechanism imagined and organised by the 1980 Hague Convention on the civil aspects of international child abduction. Mutual trust has substantially affected the operation of the “return mechanism” in the case of transfers of children from one Member State to another, introducing the risk of prejudicing the best interests of the children involved in those transfers by privileging freedom of circulation of decisions.9 Unsurprisingly, rules on intra-EU child abduction cases, including the rules on the enforcement, have been modified considerably. Although retaining the controversial “overriding mechanism”, the Recast weakens, to a large extent, its far-reaching effects.

II.

Recognition of Divorces, Separations and Annulment of Marriages

Divorce, separation and all other issues concerning the breakup of a marriage are mostly covered by the 2009 Regulation on Maintenance Obligations and by the 2016 Matrimonial Property and Domestic Partnerships Regimes. This is the reason why divorce and separation decrees or decisions rarely need to be enforced and often merely need recognition, sometimes only an incidental one, needed in the framework of other subject-matter proceedings. In this respect, the new Regulation innovates in two respects: Firstly, because it reacts to the lack of rules concerning private divorces in the Brussels IIbis Regulation. Freedom of circulation of private divorces has become more urgent in light of the recent legislative trends in favouring these forms of divorce in many Member States.

Journal of Private International Law, 2016, p. 211-260; H. KELLER, & C. HERI, Protecting the Best Interests of the Child: International Child Abduction and the European Court of Human Rights, Nordic Journal of International Law, 2015, p. 270-296; P. MC ELEAVY, The European Court of Human Rights and the Hague Child Abduction Convention: Prioritising Return or Reflection? Netherlands International Law Review, 2015, p. 365-405; F. TROMBETTA-PANIGADI, The European Court of Human Rights and the best interests of the child in the recent case law on international child abduction, N. BOSCHIERO et al (eds), International courts and the development of international law: essays in honour of Tullio Treves, 2013, p. 599-611; H. VAN LOON, Statement of the Secretary General of the Hague Conference on Private International Law at the 41st meeting of the Committee of Legal Advisers on Public International Law, Strasbourg, 17 March 2011, http://www.hcch.net/ upload/coe2011.pdf. 9 See I. PRETELLI, Three Patterns, One Law: Plea for a Reinterpretation of The Hague Child Abduction Convention to Protect Children from Exposure to Sexism, Mysogyny And Violence Against Women, forthcoming; and ID., Original Aporiae in the 1980 Child Abduction Convention and in the Brussels II System, IFamZ, 2019, p. 275-279.

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Recognition and Enforcement Procedures in the Brussels II ter Regulation Secondly, because it addresses a need that came to full light with the 2015 Matoušková case.10 It concerns rules on incidental recognition of divorce and separation decrees. A.

Private Divorces

Secularisation of family law and the increased recognition of party autonomy in family matters are parallel phenomena, sometimes intertwined. EU Member States, at different moments and to different extents, have admitted divorce by consent or by unilateral will, without requiring specific reasons or conditions. As a consequence, judicial scrutiny of the legitimacy of a divorce petition is thought to be superfluous. Only very rarely courts intervene, retrospectively, to assess whether to blame the husband or the wife for the failure of the marriage. Their intervention is prospective and seeks to ensure that the settlement of the consequences of a divorce are viable for the persons involved, and, in the presence of children, to evaluate their compliance with the principle of the best interests of the child. The diffusion of divorces, separations and step-families are a natural consequence of the liberalisation of divorce laws by Member States. The increase in the number of divorces that ensued has long since brought to attention the statistical importance of cases of life-consuming procedures of divorce. This phenomenon, labelled with the suggestive name of “high-conflict divorce”, has tragic consequences for the persons involved, in particular children, sometimes causing them irreparable harm. In addition, it has a very negative impact on the efficiency of the judiciary. A sounder awareness of this phenomenon is leading Member States to introduce forms of private divorce, encouraging parties to find a cheaper, consensual settlement, under the surveillance of their lawyers and, in certain cases, that of an official or public authority. From a comparative perspective, the authority to formalise private divorces is mainly vested in notaries,11 yet many jurisdictions also empower civil status officers, or lawyers with similar functions of certification. The extent of the control on the substance of the divorce agreement by these authorities varies in the different jurisdictions. However, overall, it seems limited to a minimum, thereby confirming the present deferent trend to the widest possible recognition of party autonomy.12 Doubts may rise in presence of a serious disequilibrium between the parental bargaining power that may affect the point where the meeting of the parties’ wills occurs. An imbalance may be the consequence of such diverse factors as the 10 CJEU, 6 October 2015, Marie Matoušková, Case C-404/14, ECLI:EU: C:2015:653. 11 See C. GONZÁLEZ BEILFUSS, El divorcio notarial: cuestiones de Derecho internacional privado, in E. PÉREZ VERA/ J.C. FERNÁNDEZ ROZAS/ M. GUZMÁN ZAPATER et al., El Derecho internacional privado entre la tradición y la innovación. Libro homenaje al Profesor Doctor José María Espinar Vicente, Madrid, 2020, p. 347-363. 12 See the critical observation of M. FABRE-MAGNAN, L’institution de la liberté, Paris 2008, passim as to the assimilation of party autonomy to the exercise of individual freedoms.

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Vesna Lazić/ Ilaria Pretelli following: serious psychological or medical condition of one of the spouses (depression, post-traumatic stress; chronic anxiety etc.); wide gap as to the accessibility of the employment market (with the resulting differences in economic power); social and cultural integration in the family’s context or in the country of habitual residence; etc. A professional preparation on these aspects seems critical to ensure a fair settlement of divorce. However, at present, due the relatively recent introduction of these options, such a need does not seem to have been felt by legislators. As a matter of fact, and although Member States demand different degrees of external control on the divorce agreement by the authorities in charge of licensing private divorces, such external control seems mostly on formal aspects, sometimes even in the presence of minor children. In France, a circulaire du Ministre de la justice details the points subject to control by the parties’ lawyers and those subject to control by the notary in charge of the private divorce deed.13 Some jurisdictions have excluded the possibility to regulate, by means of a private divorce agreement, sensitive topics as that of the reciprocal parental duties and rights. These affect human rights or the rights of children and need a specific judicial or social services’ control. In Italy, for instance, couples have the possibility to settle all economic issues related to their divorce, and the divorce itself, outside court, whilst issues related to parental responsibilities remain within the compulsory jurisdiction of the judge. These issues are understood as presenting a higher risk of impairment of fundamental rights for two reasons: the inherent vulnerability of the persons involved – i.e. minor children or children of full age requiring assistance because of their disabilities; and their necessary subjection to the decisions of the persons enjoying parental responsibilities. The rationale is that, despite the highly emotional phase of their life entailed by the dissolution of their marriage, spouses will still be able to make the right decisions for themselves with the assistance of lawyers or public officers. On the contrary, decisions that parents assume in respect of their children present a higher risk and are thus commonly understood as requiring appropriate judicial scrutiny. 1.

Comparative overview

Portugal has a long experience of private divorce agreements, yet limited to issues pertaining to the dissolution of marriage that do not involve parental responsibilities and custody of minor children. A Portuguese Decree Law of 1995 already offered spouses the option to request a mutually consented separation or divorce from the Civil Registry.14 More recently, when divorces and separations are

Circulaire du 26 janvier 2017 du Ministre de la justice (JUSC1638274C; CIV/02/17; Cl/713-2016/3.11.1/SM / 4) online at https://www.gazette-du-palais.fr/wpcontent/uploads/2017/12/951.pdf. 14 See the Portugueuse Decree Law No 131/95, de 06 de Junho, Aprova o Código do Registo Civil (Diário da República n.º 131/1995, Série I-A de 1995-06-06). 13

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Recognition and Enforcement Procedures in the Brussels II ter Regulation decided by mutual consent, the settlement is necessarily out-of-court. The agreement is filed with the Civil Registry Office, either in person or online.15 Italy introduced a form of private divorce, assisted by lawyers, in 2014.16 The procedure for divorcing privately was named “negoziazione assistita” to evoke the bargaining (negoziazione) between the divorcing spouses occurring with the assistance of lawyers.17 The negotiation, as well as the agreement supposed to follow, may concern the dissolution of their marriage and its consequences. In this case, for the agreement to become enforceable and produce the same legal effects as a court decision, it suffices to present to the competent civil status officer who will record it in the register. It goes differently when issues of parental responsibilities are negotiated; such agreements are subject to the compulsory evaluation of the public prosecutor. The public prosecutor authorises the parental agreement if it considers it respondent to the interests of their common children, either of minor age or of full age but still requiring parental help because of serious disabilities. In presence of doubts as to the agreement’s compliance with the best interests of the children involved, the public prosecutor will transmit it speedily (within five days) to the competent Court that will fix a specific hearing of the parties involved, including the children, in the following thirty days. In the first case, the agreement becomes enforceable after its authorisation by the public prosecutor; in the second, after its authorisation by the court.18 Among the Member States that have opened the possibility to divorce by notarial deed are Spain, France, Romania, Greece, Latvia, Estonia and Slovenia. In Estonia, in addition to notaries, vital record officers may also formalise a divorce

15 See the Portugueuse Decree Law No 272/2001, de 13 de Outubro, Processos Da Competência Do M.º P.º E Das C. Registo Civil (Diário da República n.º 238/2001, Série IA de 2001-10-13). See G. DE OLIVEIRA/ P.T. VÍTOR, Family and Succession Law in Portugal, 2019, p. 129 et seq. 16 Legge 10 novembre 2014, No 162, Conversione in legge, con modificazioni, del d.l. n. 132 del 2014, recante misure urgenti di degiurisdizionalizzazione ed altri interventi per la definizione dell’arretrato in materia di processo civile (G.U. 10 novembre 2014, No 261). 17 The procedure of “negoziazione assistita” may be used in lieu of judicial decisions for obtaining the following legal effects: a separation; a divorce; the modification of the conditions of separation or divorce. See E. D’ALESSANDRO, La negoziazione assistita in materia di separazione e divorzio: profili di diritto processuale civile europeo, in M. LUPANO/ CH. BESSO, Separarsi e divorziare senza giudice?, 2018, p. 109-117; S. PATTI, Stand des Scheidungsrechts in Italien, in A. DUTTA/ D. SCHWAB & D. HENRICH et al. Scheidung ohne Gericht? Neue Entwicklungen im europäischen Scheidungsrecht, Bielefeld 2017, p. 106-111. 18 Article 6(2) of the Law 162/2014 (note 15). See also the Circolare del Ministero dell’Interno No 6/2015 clarifying certain aspects of the law’s implementation to civil status officers (available at https://dait.interno.gov.it/documenti/circ-006-servdemo-24-04-2015. pdf).

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Vesna Lazić/ Ilaria Pretelli agreed by the parties on the assumption that there is no open or concealed dispute regarding common children, the division of joint property or maintenance.19 The Spanish law allowing notaries to “certify” consensual divorce dates from 2015.20 It also concerns the separation or divorce by mutual agreement of spouses without common children requiring parental assistance – either because of their minor age or in connection with a judicial incapacitation due to their disability at full age. It allows divorcing spouses to avoid the judicial sphere by addressing themselves to the Secretary of the Court and the Notary.21 As with the Italian law, it pursues a privatisation of divorce, reserving the compulsory intervention of the judge to those cases where a supervision of the fundamental rights of vulnerable persons such as minors, or persons with modified capacity to act, is necessary. The notarial deed in which the divorce and its economic consequences are recorded constitutes the enforceable title. Private divorce by mutual consent may be settled before Slovenian notaries as of April 15, 2019. The Slovenian Family Code excludes private agreements on parental responsibilities22 and prescribes also that the deed constitutes an enforceable title.23 France enacted “private divorce” in 2016.24 As in Spain, it opens the option of divorcing by mutual consent before a notary. However, differently from Spain, the agreement may also include decisions on parental responsibilities and even in

19 Article 64 of the Estonian Family Law Act: “A marriage may be dissolved in a registry office by mutual agreement of the spouses on the basis of a joint written application by the spouses. The matrimonial property court may dissolve the marriage if both spouses are domiciled in Estonia.” 20 Ley 15/2015, de 2 de julio, de la Jurisdicción Voluntaria. (BOE núm. 158, de 3 de julio de 2015). 21 See J. FERRER RIBA, Stand des Scheidungsrechts in Spanien, in A. DUTTA/ D. SCHWAB/ D. HENRICH et al. Scheidung ohne Gericht? Neue Entwicklungen im europäischen Scheidungsrecht, Bielefeld 2017, p. 131-142 22 See Article 97(1) Družinski zakonik (“If spouses who do not have children in common over whom they have parental care wish to divorce and agree on the division of the community property, on which of them shall remain or become the tenant of the dwelling in which they live, and on the maintenance of a spouse who has no means of subsistence and who, through no fault of his or her own, is not employed, they shall request a notary to draw up a notarial record of the agreement of the spouses on the dissolution of the marriage”) online in Slovenian at Code de famille (DZ) (pisrs.si). See S. KRALJIĆ, New Family Code and the Dejudicialization of Divorce in Slovenia, Balkan Social Science Rev., 2020, p. 157-177.  23 See Article 97 (2) “The marriage shall be dissolved on the date of signature of the notarial deed referred to in the preceding paragraph. The notarial deed referred to in the preceding paragraph shall constitute the legal basis for the entry of the divorce in the civil registry. (3) The notary shall send the notarial deed referred to in paragraph 1 of this Article to the administrative unit which shall enter the divorce in the civil registry within eight days after the notarial agreement has been signed”. 24 Loi n° 2016-1547 du 18 novembre 2016 de modernisation de la justice du XXIe siècle (JORF n° 0269 du 19 novembre 2016).

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Recognition and Enforcement Procedures in the Brussels II ter Regulation this respect, differently from the Italian law, is not subject to any judicial review.25 A mechanism of protection consists in the provision of a “délai de réflexion” of 15 days before the parties may sign the agreement reached.26 The notary exercises a purely formal control even though he may alert the lawyers having assisted the parties, whenever he sees clauses that may affect French public order (i.e. a clause of non-remarriage).27 Article 262 of the Civil Code provides that the divorce is enforceable against third parties from the day on which it is recorded in the margin of civil status records. Romania28 and Greece29 also allow spouses to settle their divorce before a notary. Subject to certain conditions, issues relating to parental responsibilities may be settled in both jurisdictions.30 Greece requires the presence of attorneys before the deed is signed31 and limits the validity of the agreement as regards 25 See also supra C. GONZÁLEZ BEILFUSS (note 7); H. GAUDEMET-TALLON, La loi française sur le divorce sans juge confrontée au droit européen et international, in B. HESS/ E. JAYME/ H.P. MANSEL: Europa als Rechts-und Lebensraum. Liber Amicorum für Christian Kohler zum 75. Geburtstag am 18. Juni 2018, Bielefeld 2018, p. 98-101; F. FERRAND, Nonjudicial divorce in France: progress or mess? in G. DOUGLAS/ M. MUNCH & V. STEPHENS: International and National Perspectives on Child and Family Law. Essays in honour of Nigel Lowe, Cambridge-Antwerp-Chicago, 2018, p. 203-204. 26 See Article 229-4 of the French Civil Code. A similar provision, with a 30 daysperiod, exists in Romania following the instructions regarding notaries public’s fulfillment of the divorce procedures adopted through Decision No 15/2011 of the Executive Bureau of the National Union of Public Notaries from Romania (retrieved from: https://notari.pro/divort/instructiuni-procedura-divort-notari-publici). See F.-A. BAIAS, Art. 376 No 2 (Termenul de reflecţie), in F.-A. BAIAS/ E. CHELARU/ R. CONSTATINOVICI/ I. MACOVEI, Noul Cod Civil, Bucharest, 2012, p. 405. 27 The example is found in the Fiche 6, p. 1, of the Circulaire du 26 janvier 2017 du Ministre de la justice (note 10). 28 See F.-A. BAIAS, Articles 375-378, in F.-A. BAIAS/ E. CHELARU/ R. CONSTATINOVICI/ I. MACOVEI (note 26), p. 402-408. 29 See in particular art. 1441 of the Greek Civil Code (Αστικός Κώδικας as modified by the Law No 4509/2017. See I. ANDROULIDAKIS-DIMITRIADIS/ E. POULOU, Family and Succession Law in Greece, revised ed. 2019, p. 72 et seq. 30 Article 375(2) prescribes the following: “Divorce by agreement of the spouses may also be established by a public notary if there are minor children born or adopted within or outside the marriage, if the spouses agree on all matters concerning the family name they will bear after the divorce, as well as on the exercise of custody by both parents, the place of residence of the children after the divorce, the manner in which they will maintain personal ties between the separated parents and each of the children, and the determination of parental contributions to the costs of the care, education, instruction and vocational training of the children […]” (the translation from the French version – D. BORCAN/ M. CIURUC, Nouveau code civil roumain, 2013 – is ours). A social report must ensure that the joint exercise of parental custody and the determination of the place of residence of the children, as agreed in the deed, correspond to the children’s best interests, otherwise these aspects will need to be settled in court. 31 The notarial agreement is concluded by the spouses in the presence of their attorneys. If the couple has underage children, a written agreement of the spouses regulating the custody of the children, contact and their alimony is required. Signatures are

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Vesna Lazić/ Ilaria Pretelli parental responsibilities to two years.32 The rule may be subject to criticism because it forces a renegotiation between parents that may prove difficult. On the other hand, it allows both parties to adapt their mutual responsibilities to the inevitable change of circumstances given by the aging of their children. 2.

Characterisation of Private Divorces

The afore-sketched comparative analysis shows that an “act of divorce” from a Member State will not always be formally enshrined in a judicial decision, nor in an authentic instrument. It will, however, postulate the intervention of a public authority, be it a notary, a lawyer or a civil officer. As private divorces had not been foreseen neither by the Brussels II nor by the Rome III33 Regulations, it was doubtful whether the acts declaring such divorces could benefit of the fifth EU fundamental freedom. The problem was twice brought before the Court of Justice of the European Union, albeit in the different context of a Sharia repudiation brought from Syria to Germany, and in relation to the application of German national rules that extend the operation of the Rome III Regulation to divorces from non-Member States.34 authenticated by the Secretary of the County Court. See I. ANDROULIDAKIS-DIMITRIADIS/ E. POULOU, (note 29), p. 72 et seq. Since the early 1980s reform, consensual divorce required a complete agreement by the spouses (i.e. also taking care of child custody and patrimonial relations) to be approved by court with certain procedural formalism requirements. 32 A new provision states that decisions on the allocation of care (επιμέλεια) and parental responsibility (μέριμνα) made by a “written agreement” or a “common digital declaration” expires after two years unless maintained. See Article 1441(2) on consensual divorce as amended by Article 4 of L. 4800/2021: “The above written agreement or common digital declaration is valid for at least two (2) years and is extended automatically [ipso facto], unless either parent [one of the parents] declares in writing to the other parent, prior to the expiry of the agreed upon time, that he/she does not desire its extension.” [2. Αν υπάρχουν ανήλικα τέκνα, για να λυθεί ο γάμος, πρέπει με την έγγραφη συμφωνία ή την κοινή ψηφιακή δήλωση της παρ. 1 ή με άλλη συμφωνία μεταξύ των συζύγων, που καταρτίζεται, όπως ορίζεται στην παρ. 1, να ρυθμίζεται η κατανομή της γονικής μέριμνας και ιδίως η επιμέλεια των τέκνων, ο τόπος διαμονής τους, ο γονέας με τον οποίο διαμένουν, η επικοινωνία τους με τον άλλο γονέα και η διατροφή τους. Η ανωτέρω έγγραφη συμφωνία ή η κοινή ψηφιακή δήλωση ισχύει για τουλάχιστον δύο (2) έτη και παρατείνεται αυτοδικαίως, εκτός αν κάποιος από τους δύο γονείς δηλώσει εγγράφως στον άλλο γονέα, πριν τη λήξη του συμφωνημένου χρόνου, ότι δεν επιθυμεί την παράτασή της]. Article 18 of L. 4800/2021 states that the new provision extend to cases pending before courts. I owe the information to N. HATZIMIHAIL, whom I thank. 33 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 (OJ L 343, 29.12.2010). 34 Gesetz zur Anpassung der Vorschriften des Internationalen Privatrechts an die Verordnung (EU) Nr. 1259/2010 und zur Änderung anderer Vorschriften des Internationalen Privatrechts. Initially, the CJEU, 12 May 2016, Sahyouni (order), C-281/15, ECLI:EU:C:2016:343 had considered itself lacking “jurisdiction to answer the questions referred by the Oberlandesgericht München”. Subsequently, CJEU, 20 December 2017,

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Recognition and Enforcement Procedures in the Brussels II ter Regulation A marriage between two Syrian and German nationals living in Germany – Mr Mamisch and Ms Sahyouni – was concluded in Syria. They had been living in Syria and in Germany. During the civil war in Syria, they had been living in Germany, in Kuwait and Lebanon, while visiting Syria from time to time. On 19 May 2013, Mr Mamisch pronounced, via a representative, the Sharia divorce formula before a religious court in Syria (Lakatia). Subsequently, Mr Mamisch asked the President of the Oberlandesgericht München (Higher Regional Court, Munich) to recognize the syrian court declaration of divorce in Germany. Ms Sahyouni applied to have that decision set aside and a declaration on grounds that the conditions for recognition of the divorce were not satisfied. In a first judgement the CJEU declared its incompetence to decide whether the Rome III Regulation was applicable to private divorces. In a second judgement, it excluded private divorces from the scope of that Regulation. The Court also stated that the scope of the Rome III and the Brussels IIbis Regulation should not diverge.35 Despite the substantial difference between a Sharia unilateral repudiation and a privately agreed divorce, the case contains interesting elements that have influenced the rules of the Recast. The new rules now contemplate a tertium genus of acts benefiting of the European freedom of movement.36 Private agreements of divorce will benefit from the same rules allowing the circulation of authentic acts (Articles 64 to 66 of the Recast) whenever they are recorded by a licensing officer whose role has been notified to the Commission for the purposes of said circulation.37 Licensing officers encompass the various figures certifying private divorces in Member States: State authorities as civil status or vital records officers, or independent professionals as notaries and lawyers. Besides authentic instruments, private agreements on divorce, on legal separation, on the annulment of marriage or, if applicable, on matters of parental responsibility will also be recognisable abroad. These new rules need to be appropriately coordinated with other existing instruments, in particular with the Maintenance Regulation. Article 2.3. of the Recast refers to this tertium genus of acts, in which private divorces may be subsumed. According to the circumstances, private divorces may be characterised as “authentic instruments”, or as “agreements”. It depends on the definition in which these may be subsumed. Private divorces fall in the category of “authentic instruments” if: Sahyouni (decision), C-372/16, ECLI: EU:C:2017:988 found itself competent because “it is clear from settled case-law of the Court that the interpretation of a provision of EU law may be relevant in cases in which, although the facts of the main proceedings are outside the direct scope of EU law, the provisions of EU law have been made applicable by national legislation, which, in dealing with situations confined in all respects within a single Member State, follows the same approach as that provided for by EU law” (para 28). 35 See para 42 of Sahyouni (decision). 36 See para. 47 of Sahyouni (decision). 37 See Recital 14; Art. 2 § 2, 3 and Art. 103 of the Recast.

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Vesna Lazić/ Ilaria Pretelli “formally drawn up or registered as an authentic instrument in any Member State in the matters falling within the scope of this Regulation and the authenticity of which: (a) relates to the signature and the content of the instrument; and (b) has been established by a public authority or other authority empowered for that purpose. […]”38; If a private divorce does not fall in the category of “authentic instruments”, it may still benefit from freedom of circulation, if the Member State establishing the procedure for private divorce agreements promotes their extraterritorial effects by notifying the relevant procedure to the Commission (pursuant to Article 103 of the Recast). Private divorces fall in the category of “agreements” if: “[they do not fall within the definition of an authentic instrument, but do fall] within the scope of [the Brussels IIter] Regulation and [have] been registered by a public authority as communicated to the Commission by a Member State in accordance with Article 103 for that purpose”.39 Articles 2.2. and 2.3. offer two alternative options for the characterisation of a private divorce agreement, although they provide the same rules as regards their circulation and enforcement. A third option occurs when the private divorce agreement contains rules having required the intervention of a judicial authority. As seen above, in Italy, it is possible to formalise a divorce by negoziazione assistita with provisions on parental responsibilities and custody, after judicial scrutiny of its compliance with the best interests of the children involved. Such judicial scrutiny may take either the form of an authorisation by the public prosecutor authorisation or that of a court decision after a hearing of the parties involved. In this case, it is questionable whether the private agreement shall circulate as such. Rather, it has been suggested that it shall be characterised as a “decision”, which in turn brings about the applicability of a different regime of circulation. The doctrine has foreseen the application of the rules on the circulation of judgments for private divorces requiring judicial scrutiny on matters of parental responsibilities.40 If this interpretation is correct, a private divorce may fall within one of the four following cases: i) private divorce agreements with judicial intervention, circulating as decisions according to Article 30 et seq.; ii) private divorce agreements formally enshrined in an authentic instrument, circulating according to Article 64 et seq.; iii) private divorce agreements that are not enshrined in authentic instruments, but are also circulating according to according to Article 64 et seq.; iv) purely private divorce agreements i.e. either not registered by a public authority or, See Articles 2.2. ibidem. See Articles 2.3. ibidem. 40 C. HONORATI/ S. BERNASCONI, L’efficacia cross-border degli accordi stragiudiziali in materia familiare tra i regolamenti Bruxelles II-bis e Bruxelles II-ter, Freedom, Security & Justice: European Legal Studies Rivista quadrimestrale on line sullo Spazio europeo di libertà, sicurezza e giustizia, 2020, p. 40 et seq.; A. DUTTA, Privatscheidungen und Brüssel IIb: drei Fragen an den neuen Art. 65 Abs. 1, Zeitschrift für das gesamte Familienrecht (FamRZ), 2020, p. 1428. 38 39

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Recognition and Enforcement Procedures in the Brussels II ter Regulation when registered by a public authority, registered by an authority whose name has not been previously communicated to the Commission in conformity to Article 103 of the Recast. In the last case, if a private divorce does not fall within either of the categories, it may only be recognised in a Member State if its national law allows this.41 3.

Freedom of Circulation

The extraterritorial (albeit intra-European) circulation of private divorces is subject to three conditions: a purely administrative pre-condition (the communication to the commission of the public authority vested by national law of the right to formalise a private divorce ex Article 103); a substantive condition (they must be binding and, if applicable, enforceable, ex Article 65); a procedural condition (they must be coming from the competent Member State ex Article 64). The condition of registration by a public authority concerns solelyagreements that do not fall in the well-known category of authentic instruments. It allows Member States to favour the circulation of selected national private divorces, whether formalised by lawyers (as the Italian negoziazione assistita); notaries (as in most legal orders); or civil officers (as in the Estonian or Portuguese models). This administrative requirement has the advantage of clarifying, once and for all, at the moment of the communication, which national procedure for private divorce fall within the scope of Chapter IV of the Recast. Even though, as we have seen, in most legal orders supervision by certain public authorities is limited to formal requirements, the intervention of a public authority is thought to guarantee some form of control on the agreement.42 Despite risks with regard to the possible unequal bargaining power of the parties entering the agreement, the frequency of divorces and separations seems to have suggested a departure from casuistic analysis and abdication from the legislative function of ensuring protection to vulnerable parties that do not fall in an abstract category (as children or incapacitated adults). In line with the aforementioned trend to the widest possible recognition of party autonomy, both the national and the European legislator seem to consider formal requirements plainly satisfactory. The respect of formalities is considered sufficient to presume that the reciprocal concessions at the origin of the agreement are genuine; that the conditions of the divorce are fair to both parties.43 A substantive condition is set by Article 65, which – quite logically – commands that only agreements that are binding in the Member State in which they are formalised may be recognized in another Member State. If they concern 41 Supra C. GONZÁLEZ BEILFUSS, (note 7); ID., El divorcio notarial: cuestiones de Derecho internacional privado, in E. PÉREZ VERA/ J.C. FERNÁNDEZ ROZAS/ M. GUZMÁN ZAPATER et al., El Derecho internacional privado entre la tradición y la innovación. Libro homenaje al Profesor Doctor José María Espinar Vicente, Madrid, 2020, p. 347-363. 42 Supra C. GONZÁLEZ BEILFUSS, (note 7). 43 Supra (note 11).

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Vesna Lazić/ Ilaria Pretelli enforceable prescriptions, as agreements on parental responsibility are, they must also be enforceable. These rules respond to the aim of guaranteeing a uniform legal framework to the existing national disharmonic variants of private divorces.44 At the same time, they prevent purely private agreements from circulating. A third condition, set by Article 64, concerns territorial competence: only authentic instruments or agreements formally drawn or registered in a Member State that would have had jurisdiction under the rules of Chapter II of the Recast may be circulate. The introduction of indirect rules of jurisdiction is quite surprising. The main innovation brought by the 1968 Brussels Convention was precisely that of introducing direct rules of jurisdiction instead of the traditional indirect ones. The introduction of indirect rules of jurisdiction seem to represent an unfortunate way to prevent the parties from “divorce shopping”. This phenomenon, integrating a fraude à la loi, consists in manipulating private international law rules in order to obtain a cheaper divorce and had been observed, in particular, in certain eastern countries. Agencies publicly advertising themselves on the web propose to counterfeit connecting factors in order to enable foreigners to access “divorce services” in their country and reduce the costs of proceedings. In order to counteract this phenomenon and in line with the trend to bureaucratisation that characterises the present construction of an EU legal order, it has appeared more consistent to introduce a certificate with a specific case concerning the respect of indirect jurisdiction by the issuing authority.45 The certificate is compulsory according to Article 66(5). The doctrine has already identified, as a foreseeable practical difficulty, that of understanding which regime to apply to certain private divorces that may fall either within the definition of “decision” or to that of “authentic instruments”.46 Cristina GONZALES BEILFUSS observes that a hesitation is allowed with regard to the Spanish notarial divorce: since notaries do not examine the substance of the divorce petition (except as regards financial matters that are excluded from the Recast), their deed should not qualify as “decision”. 47 Nevertheless, their activity is comparable to that of judges examining consensual divorces and it could seem unfair to distinguish the regime of circulation of a divorce, agreed on the same premises and subject to the same degree of control, according to the authority that formalised it. If the evolution of the Spanish legislation will resemble the Portuguese one, and contemplate the competence of notaries only for consensual divorces, in the future the contradiction may disappear. Time will tell. In addition, it can be observed that circulation of divorce is not affected by the regime provided by See C. HONORATI/ S. BERNASCONI (note 37), p. 40. The certificate for instruments or agreements in matrimonial matters is in Annex VIII and the one for instruments or agreements on parental responsibility in Annex IX. 46 Amplius A. DUTTA, Privatscheidungen und Brüssel IIb: drei Fragen an den neuen Art. 65 Abs. 1, Zeitschrift für das gesamte Familienrecht (FamRZ), 2020, p. 1428. 47 The CJEU, C-484/15 has excluded the possibility to characterize notaries as judges. See also CJEU 23 May 2019, WB, Case C-658/17, ECLI:EU:C:2019:444 and CJEU, 16 July 2020, E. E, C‑80/19, ECLI:EU:C:2020:569. 44 45

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Recognition and Enforcement Procedures in the Brussels II ter Regulation Chapter IV, since the rules for the circulation of decisions and for the circulation of authentic acts and agreements are “ultimately alike”.48 More to the point, the advancement in freedom of circulation of private divorces is limited to their recognition, since their practical effects remain covered by the 2009 Regulation on Maintenance Obligations and by the 2016 Matrimonial Property Regimes Regulation that do not (yet?) contain rules harmonised to those of the Recast. Still, an important first step has been made. B.

Decisions within the Scope – Definition in Art. 2

The Recast defines types of decisions which fall within its scope of application for the purpose of recognition and enforcement with a greater detail than the current provision of Article 2(1). It expressly provides that a decision on the return of child pursuant to 1980 Child Abduction Convention is a “decision” enforceable under the Regulation in other Member States. Such a clarification is certainly an improvement to the current framework.49 Besides, in a manner similar to the definition in the Brussels Ibis Regulation, it specifies which decisions on provisional measures are enforceable in other Member States. Thus, provisional including protective measures issued by a court having jurisdiction on the merits of the case will be enforceable under Chapter IV of the Recast. In addition to that, a provisional measure issued by the court ordering the return of the child under Article 27(5), with the purpose of protecting the child from the grave risk within the meaning of Article 13(1) of the 1980 Hague Convention, is enforceable in other Member States.50 This is a significant development, since the measures of protection would “follow the child” when returning to the Member State of his/her habitual residence immediately before a wrongful removal or retention and will be enforceable there as domestic decisions. Effects of provisional measures ordered by a court in a Member State which does not have jurisdiction as to the substance of the matter will be limited to the territory of that Member State, i.e., such measures are not given an extraterritorial effect. Specifying the type of a decision on provisional measures will have effects in other Member State is a substantial improvement, in the light of uncertainties which have remained insufficiently clarified in the relevant CJEU case law. A “decision” that may be enforced under the Regulation includes a decision given in ex parte proceedings, provided that the decision on the measure is served on the respondent prior to enforcement. The Recast does not codify the CJEU case law concerning posthumous and third party nullity procedures.51

Supra C. GONZÁLEZ BEILFUSS, (note 7). See MUSSEVA, (note 3), p. 130. 50 See B. MUSSEVA, (note 3), p. 137. 51 CJEU Case C-294/15 Edyta Mikołajczyk v Marie Louise Czarnecka and Stefan Czarnecki 210 [2017] ECLI:EU:C:2016:772. 48 49

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Vesna Lazić/ Ilaria Pretelli C.

Incidental Recognition of Divorces, Separations and Annulment of Marriages

Very often, the recognition of a decision on divorce or separation is requested in the framework of different proceedings. It may be raised as a preliminary question within a dispute on property rights or successions. In these hypotheses, the point on recognition may constitute a simply incidental question, required by its unescapable role in the chain of the logical reasoning of the decision, and not always truly disputed. The rule on incidental recognition of decisions exists in the EU acquis on private international law since its codification in Article 26(3) of the 1968 Brussels Convention.52 Article 21(4) of the Brussels IIbis Regulation had reproduced its tralatitious formulation, which did not precise whether the Court deciding the incidental question should be competent for it. The 2015 Matoušková case highlighted the need to clarify this issue. The case concerned a measure for the protection of minor children in relation to an agreement for the sharing out of an estate that they had inherited.53 In the framework of succession proceedings pending before the Court of Brno, Ms Matoušková, a notary, was authorised to act as court commissioner concerning the estate of a Ms Martinus who had died in the Netherlands on 8 May 2009. The deceased was a citizen of the Czech Republic who was living in Brno (Czech Republic), at the time of her death. The heirs were the deceased’s spouse and two minor children, living in the Netherlands. The Municipal Court of Brno appointed a guardian ad litem to represent the interests of the minor children. However, doubts were raised as regards jurisdiction of the Czech courts that had appointed the guardian to also approve the agreement on the sharing-out of the estate in the interest of those children, as they were Dutch residents. As the CJEU explicitly acknowledges, the measure was undoubtedly related to the exercise of parental responsibility, within the meaning of Article 1(1)(b) of the Brussels IIbis Regulation and not as relating to succession, within the meaning of Article 1(3)(f) of the Succession Regulation. However, the CJEU also admits that “the best interests of the child would be compromised by a splitting of the decision-making process concerning matters relating to succession between two different Member States, one in which the succession proceedings have been opened and the other which is the habitual residence of the child, laid down in Article 8(1) of Regulation No 2201/2003”. Anticipating the solution that would have later been drafted in the framework of the Recast, the CJEU fixed three conditions for the incidental recognition of a

52 See, already, the explanatory report concerning that Convention prepared by A. BORRÁS (OJ C 221, 16.7.1998, p. 27). 53 CJEU, 6 October 2015, Marie Matoušková, Case C-404/14, ECLI:EU:C:2015:653.

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Recognition and Enforcement Procedures in the Brussels II ter Regulation decision by the court of a Member State not having jurisdiction on the matter covered by that decision: “where, first, the child has a substantial connection with that Member State, in particular by virtue of the fact that one of the holders of parental responsibility is habitually resident in that Member State or that the child is a national of that Member State”; and where, second, “the jurisdiction of the courts has been accepted expressly or otherwise in an unequivocal manner by all the parties to the proceedings at the time the court is seised; and, third and above all, where the jurisdiction of the latter is in the best interests of the child”. [emphasis added]. In the Matoušková case the CJEU found that, in light of the aforementioned circumstances, Article 12(3) of the Brussels IIbis Regulation represented a sufficient legal basis for Czech courts to exercise jurisdiction with regard to the approval of the agreement on the sharing out of the inherited estate. Since the solution imagined by the CJEU was by no means obvious, it has appeared wise to codify it conclusively in the Recast. Its Article 16 now clarifies that the court seised for a succession procedure, may also be vested with the incidental issue related to parental responsibilities. As within the previous regime, the incidental recognition remains confined to the needs of the inheritance settlement.54

III. Enforcement of Decisions in Matters of Parental Responsibility The major change is that Recast does away with the exequatur, so that decisions rendered by courts in EU Member States will be enforceable in other Member States as domestic judgements with no need for an intermediate procedure to obtain a declaration of enforceability. However, the enforcement regime in the revised Regulation differs from the legislative framework in some other closely related legal instruments which had also abolished exequatur, such as the

See also Recitals 10 : “it should be possible for the provisions of this Regulation on jurisdiction over incidental questions to apply [to Measures relating to the child’s property which do not concern the protection of the child]” and 32 [“if the object of the proceedings is, for instance, a succession dispute in which the child is involved and a guardian ad litem needs to be appointed to represent the child in those proceedings, the Member State having jurisdiction for the succession dispute should be allowed to appoint the guardian for the pending proceedings, regardless of whether it has jurisdiction for matters of parental responsibility under this Regulation. Any such determination should only produce effects in the proceedings for which it was made.” Emphasis added]. 54

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Vesna Lazić/ Ilaria Pretelli Maintenance Regulation.55 In the latter, the irreconcilability of judgments and a loss of the right of enforcement by the effect of prescription or the limitation of action are the only reasons to refuse the enforcement of judgment on maintenance under Article 21(2). The idea is that a court in the Member State of origin is to ensure that requirements of due process are met. To this end, a defendant in ex parte proceedings is given is the possibility to apply for review in the country of origin if a failure to enter an appearance was a result of an improper service, force majeure or another extraordinary circumstance without any fault on the defendant’s part.56 Decisions of the court of origin may not be reviewed or controlled in a Member State of enforcement, not even for a compliance with the requirements of “due process” and fairness of proceedings.57 A similar rationale and a method of facilitating mutual trust amongst Member States is followed in regulating enforcement scheme of some other EU legal instruments in the field of civil and commercial matters.58 In contrast, the list of reasons for which the recognition and enforcement may be refused under the Recast are more extensive. In fact, the grounds have predominantly been retained, as it will be detailed infra under III.A.59 Hence, there is no consistency even amongst EU legal instruments in which exequatur is abandoned, notably Maintenance Regulation and the Brussels IIter. Moreover, although abolishing exequatur, the Recast retains a distinct enforcement scheme for decisions on parental responsibility and the so-called “privileged decisions” as will be addressed in more detail infra, under III.B. In addition, the EU legislators do not pursue the same trend of abolishing exequatur when unifying private international law rules in all family law matters. Namely, for matters of matrimonial property and property of registers partners, the EU legislators opted to retain the exequatur. Consequently, there are enforcement schemes with and without the need to obtain a declaration of enforceability.60 Such a multiplicity of enforcement schemes in the legal instruments that deal with 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 (hereinafter Maintenance Regulation). 56 Art. 19 Maintenance Regulation. 57 See also, I. VIARENGO, “The Enforcement of Maintenance Decisions in the EU: Requiem for Public Policy? Family Relationships and the (Partial) Abolition of Exequatur”; in P. BEAUMONT et al. (eds), The Recovery of Maintenance in the EU and Worldwide, Hart Publishing, 2014, 473. 58 See, e.g., Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims, OJ L 143; Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European Small Claims Procedure, OJ L 199; and Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure, OJ L 399. 59 Abolishing exequatur whilst keeping virtually all reasons for opposing the recognition or enforcement follows closely the approach taken when revising the enforcement under Brussels I Regulation. 60 See also, Regulation on Wills and Succession (note 7). 55

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Recognition and Enforcement Procedures in the Brussels II ter Regulation closely related matters of family law does not facilitate an easy application and interpretation for national courts, central authorities and other legal practitioners. A.

Grounds for Refusal of Recognition and Enforcement

The grounds to refuse recognition of decisions in matters of parental responsibility are contained in Article 39. They also represent the reasons to refuse the enforcement according to Article 41 and are almost identical to those under the Regulation Brussels IIbis. This includes a violation of procedure for placing a child in another Member State according to Article 82 of the Recast, which reason was suggested to be excluded in Article 38 of the Commission’s Proposal of 2016.61 Another suggestion of the Commission’s Proposal of 2016 was to omit a failure to hear from a child from the list of grounds to refuse the recognition and enforcement. It is admirable that the EU legislator did not follow the deletion suggested in Article 38(1)(b) of the Proposal. The exclusion of this ground could have caused uncertainties and inconsistencies in application amongst Member States. In particular, considering the importance that some Member States attach to a hearing of a child, it is possible that their courts would interpret a failure to hear a child as a violation of public policy.62 Hearing from the child has been retained as a reason to refuse the enforcement with a slight adjustment in limiting the possibilities of relying on it. Thus, the reason of failing to hear a child may not be brought up against the enforcement if the decision relates only to the child’s property and giving such opportunity of expressing the view was not required in light of the subject matter or “there were serious grounds taking into account … the urgency of the case”.63 Recital (57) clarifies such serious grounds by indicating a number of examples, such as an imminent danger for the child’s life or physical and psychological integrity and “any further delay might bear the risk that this danger materializes”. The right of the child to express his or her views is expressly dealt with in Article 21, in Chapter II amongst provisions common to the rules on jurisdiction. The provision of Article 21 offers no standard on how to hear the child, which is the matter left to the national laws of the Member States.64 Consequently, incon61 Proposal for a Council Regulation on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast), COM(2016) 411 final (hereinafter: 2016 Commission’s Proposal or Proposal). 62 See, V. LAZIĆ et al., Recommendations to Improve the Rules on Jurisdiction and Enforcement of Decisions in Matters of Parental Responsibility, as part of the final output from the project “Cross-Border Proceedings in Family Law Matters before National Courts and CJEU”, funded by the European Commission’s Justice Programme (GA – JUST/2014/JCOO/AG/CIVI/7722), p. 31, available at https://www.asser.nl/media/4662/m5796-ec-justice-cross-border-proceedings-in-family-law-matters-10-publications-00-publica tions-on-asser-website-recommendations.pdf (hereinafter: LAZIĆ et al., Recommendations). 63 Art. 39(2)(b) of the Recast. 64 This follows from the Recital (39) of the Recast. See also, Council of Bars and Law Societies of Europe (CCBE).

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Vesna Lazić/ Ilaria Pretelli sistencies resulting from diverging rules amongst Member States will remain since there are no guidelines in the Recast on “how, where and by whom” the hearing is to take place. As already mentioned, the same grounds for refusal of recognition listed in Article 39 may be invoked against the enforcement of decisions in matters of parental responsibility according to the relevant provision of Article 41. Additionally, the latter refers further to Article 56(6)65 and this is a most significant alteration to the current enforcement scheme of the Brussels IIbis Regulation. This is because the reference to Article 56(6) introduces an additional ground to refuse the enforcement – an ongoing exposure of the child to a grave risk of physical or psychological harm. Although entitled “Suspension and refusal”, the provision of Article 56 primarily concerns the reasons for which the enforcement may be suspended. Amongst the reasons for the suspension are: suspension of enforceability of the decision, a lodging an appeal or the fact that a time limit for its lodging has not expired in the Member State of origin, an application for the withdrawal of the certificate issued for certain privilege decisions in the Member State of origin, as well as an application for refusal of enforcement in the Member State of enforcement.66 In addition to that, the enforcement proceedings may be suspended “if enforcement would expose the child to a grave risk of physical or psychological harm” due to impediments of a temporary nature that have developed after the decision was rendered, “or by virtue of any other significant change of circumstances”.67 As soon as the grave risk of physical or psychological harm comes to an end, enforcement proceedings shall be resumed. However, if the grave risk of physical or psychological harm is not only of a temporary character, but is of a “lasting nature”, it may be a reason to refuse the enforcement, according to paragraph 6 of Article 56. The wording in paragraph 5 implies that a decision on the refusal of the enforcement should not be taken easily and without a thorough consideration. Instead, the court should take appropriate steps to facilitate the enforcement in accordance with national law and best interest of the child. A decision refusing the enforcement should be preceded by an attempt to ensure implementation of the decision by using assistance of professionals, such as social workers or psychologists. In addition, the court or other enforcement authority should try whenever possible to surmount impediments created by a change of circumstances and to refuse enforcement only if a disregard of the subsequently changed circumstance would “amount to a grave risk of physical or psychological harm for the child”.68 In other words, there is a clear message that a decision refusing enforcement should be taken solely when the enforcement would 65 Art. 41 of the Recast reads as follows: “Without prejudice to Article 56(6), the enforcement of decisions in matters of parental responsibility shall be refused if one of the grounds for refusal of recognition referred to in Article 39 is found to exist.” 66 Art. 56(1) and 2 of the Recast. 67 Art. 56(4) of the Recast. 68 Recital (69). It gives as an example of such an impediment: manifest objection of the child after the decision was given been so strong that, if ignored, would amount to such a grave risk.

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Recognition and Enforcement Procedures in the Brussels II ter Regulation put at risk the child’s physical or psychological health. Although widening the list of grounds may seem to undermine mutual trust, the introduction of this ground may be justified to protect best interest of the child. An application for suspension and for enforcement under paragraphs 4 and 6, as well as for the reasons in paragraph 2, can be made by a person against whom the enforcement is sought, or the child or any interested party acting in the best interest of the child. However, a suspension of enforcement due to the suspended enforceability of the decision in the Member State of origin may be granted either upon an application or of an own motion of the court or other competent authority in the Member State of enforcement. Yet, there is no obligation of the court in the Member State of enforcement to investigate actively whether in the meantime the enforceability has been suspended in the Member State of origin.69 Indeed, a decision on the suspension or refusal due to reasons of Article 56 is left to the discretion of the court or other competent authority in the Member State of enforcement. It should be emphasised that Article 56 applies whenever an application for refusal has been submitted – either on the basis of the grounds referred to in Article 41 or on the grounds existing under a national law insofar they are not incompatible with the Regulation.70 Also, it applies when an application is submitted to refuse enforcement of a so-called “privileged decision” on the ground of irreconcilability of decisions within the meaning of Article 50. The Recast leaves no uncertainty in that respect, since there is an express reference to these provisions in Article 56(2)(c). A party opposing the enforcement may challenge the enforcement “in the procedure for enforcement and should be able to raise, within one procedure” grounds under the Regulation and those available under national law for refusing the enforcement.71 B.

Certain Privileged Decisions – International Child Abduction

The fact that recognition and enforcement of all decisions are in the Recast dealt with in the same Chapter IV adds to a clearer structure and as such should ease the application in practice. The so-called “certain privileged decisions” – decision granting right of access and return orders within the context of “overriding mechanism” – are dealt with in Section 2 of Chapter IV. The procedure for the recognition, enforcement, as well as issuing, rectification and withdrawal of the certificate will be addressed infra, under III.C.. This part addresses most relevant alterations regarding the “overriding mechanism” or a “second chance procedure”, which is regrettably retained in the Recast. The “overriding mechanism” set out in Article 11 (6), (7)- (8) has often been criticized for numerous reasons, to name just a few: for its potential impact

Recital (67) of the Recast. Art. 57 of the Recast. 71 Recital (63) of the Recast. 69 70

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Vesna Lazić/ Ilaria Pretelli on the protection of fundamental rights,72 as undermining a mutual trust73, for proving inefficient in practice.74 Indeed, there are many examples where the “overriding mechanism” has failed to reach its intended purpose75 and has proven even counterproductive, operating against those whose rights were meant to be protected.76 Besides, it substantially alters the procedure for the return of the child under the 1980 Hague Child Abduction Convention in the context of intra EU child abduction cases: it shifts the jurisdiction to render a final decision on the return of the child from authorities in the “receiving” EU Member State to the authorities in the Member State of the child’s habitual residence prior to a wrongful removal or retention. The CJEU cases of Zarraga77 and Povse78 are most illustrative examples of inefficiency and inappropriateness of the current framework.79 Despite its apparent shortcomings, the Recast has kept a mechanism whereby the courts in the requesting Member State may “override” a decision not to return the child issued by the court in the requested Member State, provided that such a non-return order is based on the reason provided under point (b) of Article 13(1) and (2) of the 1980 Child Abduction Convention – grave risk of physical or psychological harm or other intolerable situation for the child. Yet, there are a number of important adjustments which will substantially reduce far-reaching

72 M. HAZELHORST, The ECtHR’s Decision on Povse: Guidance for the Future of the Abolition of Exequatur for Civil Judgments in the European Union, Nederlands Internationaal Privaatrecht (NIPR), 2014, p. 27. 73 T. KRUGER & L. SAMYN, “Brussels II bis: Successes and Suggested Improvements”, Journal of Private International Law, 2016, p. 158-159. 74 P. BEAUMONT, L. WALKER & J. HOLLIDAY, “Not Heard and Not Returned: The Reality of Article 11(8) Proceedings” International Family Law, 2015, p. 124. 75 P. MCELEAVY, “The European Court of Human Rights and the Hague Child Abduction Convention: Prioritising Return or Reflection?”, 62 Netherlands International Law Review, 2015, p. 373. See also, V. LAZIĆ et al. (note 59), p. 31. “The Rights of the Child and the Right to Respect for Family Life in the Revised Brussels II bis Regulation”, in S. IGLESIAS SÁNCHEZ & M. GONZÁLEZ PASCUAL (eds), Fundamental Rights in the EU Area of Freedom, Security and Justice, Cambridge University Press, 2020, pp. 192-210. 76 V. LAZIĆ et al., (note 59), p. 31; V. LAZIĆ (note 70), pp. 192-210. 77 CJEU Case C-491/10 PPU Aguirre Zarraga v Pelz [2010] ECR I-14247. (C-491/10, Zarraga) 78 CJEU Case C-211/10 PPU Povse v Alpago [2010] ECR I-6673. (C-211/10 Povse) 79 For a detailed analysis of these cases and the criticism on the consequences, see, V. LAZIĆ, “Family Private International Law Issues before the European Court of Human Rights – Lessons to be Learned from Povse v. Austria in Revising the Brussels IIa Regulation and its Relevance for Future Abolition of Exequatur in the European Union”, in CH. PAULUSSEN/ T. TAKACS/ V. LAZIĆ & B. ROMPUY (eds), Fundamental Rights in International and European Law – Public and Private Law Perspectives, Asser Press, Springer, 2016, pp. 161-185; V. LAZIĆ, Legal Framework for International Child Abduction in the European Union – The Need for Changes in the Light of Povse v. Austria, in M. ŽUPAN (ed.), Private International Law in the Jurisprudence of European Courts – Family at Focus, Faculty of Law Osijek, 2015, pp. 295-317.

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Recognition and Enforcement Procedures in the Brussels II ter Regulation consequences of the current scheme, both with respect to jurisdiction and to enforcement of “overriding” decisions. 1.

International Child Abduction – Jurisdiction

Procedure following a refusal to return the child under point (b) of Article 13(1) and (2) of the 1980 Child Abduction Convention is now contained in a separate provision of Article 29. With respect to many points, there is generally no significant departure from Article 11(6)-(8) of the Brussels IIbis Regulation. In addition to a better structure and slight adjustment is the wording Article 29 introduces the use of certificates by the court refusing the return of the child. However, there is a substantial clarification in paragraph (6) Article 29 which overrules one of negative consequences of the CJEU Povse-judgment.80 Most problematic in the Povse-judgement is the reasoning that Article 11(8) of the Brussels IIbis Regulation applies to “any subsequent judgment which requires the return of the child”81 and that this judgment does not necessarily have to be preceded by a final judgment of that court relating to rights of custody over the child.82 In other words, it can be any decision of a court of the Member State from which the child was wrongly removed that can issue an order to return the child, and not necessarily a decision of the competent court when bringing the decision over custody. It is obvious that the latter court can subsequently render a decision that is incompatible with the return order issued by a court of that Member State. Since this inevitably further complicates and prolongs the proceedings, the change in the Recast is to be met with approval. Thus, Article 29(6) alters the state of law resulting from the CJEU Povse judgment by expressly referring to “any decision on the substance of rights of custody… which entails the return of the child”. Clearly, it is not “any court” that may issue a decision on the return. Instead, a return order can be issued only by the court having jurisdiction over the custody and must be brought together with that decision, i.e., must be a part of the decision on custody. Only such a decision qualifies as a “privileged decision” enforceable under the conditions set out in Chapter IV of the Recast. This presents an important improvement which mitigates at least some shortcomings of the “overriding mechanism”. 2.

International Child Abduction – Refusal of Recognition and Enforcement

A judgment reversing a non-return order is automatically enforceable in all EU Member States in the special procedure which requires no exequatur as set out in section 4 of chapter III of the Brussels IIbis Regulation. Moreover, a decision certified in accordance with Article 42 must be automatically enforced with

80

C-211/10 Povse. Id., para 52. 82 Id., para 67. 81

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Vesna Lazić/ Ilaria Pretelli virtually no possibility of opposing recognition and enforcement,83 even when a certificate is issued in violation of conditions of Article 42, such as the requirement of hearing a child. In Zarraga, the CJEU clearly confirmed this view holding that a decision certified in accordance with Article 42 must be automatically enforced, even if it manifestly violates the fundamental right of the child to be heard.84 Obviously, the idea is that it is an obligation of the court reversing a non-return order to ensure that these requirements of Article 42 have been fulfilled. The “overriding mechanism” under the Brussels IIbis Regulation clearly concentrates the possibility of controlling the conditions for issuing the certificate in the Member State where a decision reversing a non-return order has been brought. A subsequent irreconcilable judgment is the only reason to refuse the enforcement under Article 47(2) of the Brussels IIbis Regulation. In Povse judgment the CJEU was to decide on the question whether the ground under Article 47(2) refers to an irreconcilable judgment subsequently rendered in the “country of origin” or in the Member State where the enforcement of the order has been requested. The Court left no doubt that it was a subsequent judgment rendered in the “country of origin”, i.e., the Member State where the return order was issued.85 Consequently, there is virtually no possibility of examining, overruling or refusing the enforcement of such orders by any decision in a Member State of enforcement. The Recast clearly overrules the state of law created by the CJEU Povse judgment. In Article 50, it specifies that irreconcilability refers to the “Member State in which recognition is invoked”86 (emphasis added) or “in another Member State or in the non-Member State of the habitual residence of the child provided that that the latter decision fulfils the conditions necessary for its recognition in the Member State where the recognition is invoked”.87 When compared with the wording of Article 47(2) of the Brussels IIbis Regulation, the amendment may seem to merely clarify the rule, i.e., the rule specifies the relevant court. However, when viewed in the context of the CJEU ruling in the Povse judgment, it presents a departure from the current state of law. It enables the court of a Member State of enforcement to refuse the enforcement if its court renders a subsequent judgment which is irreconcilable with the return order rendered by a court of a Member State within the meaning of Article 29. Last but not the least, the possibility to refuse the enforcement under Article 56(6) weakens further the consequences of the “overriding mechanism”, since this provision undoubtedly applies to the enforcement of all types of decision under the Recast, including “certain privileged decision” such as overriding return orders. It would have been a better option if the “second chance procedure” or “overriding mechanism” had been entirely omitted in the Recast. Yet the amendments seriously diminish the effects of the “overriding mechanism” and hopefully 83

Art. 42(1) Brussels II bis Regulation. C-491/10, Zarraga, para. 75. 85 C-211/10 Povse, para. 78. 86 Art. 50(a) of the Recast. 87 Art. 50(b) of the Recast. 84

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Recognition and Enforcement Procedures in the Brussels II ter Regulation will be sufficient to reduce the risk of facing difficulties that have been encountered under the current legal framework. C.

Procedure of Enforcement

1.

Common Enforcement Standards

A 2014 Report by the European Commission had identified several “enforcement issues” negatively affecting the operation of the Brussels IIbis Regulation.88 It noted, in particular, a great diversity in national law systems of enforcement of decisions in family matters, with certain Member States lacking a specific procedure and resorting to the general one (more apt to civil and commercial matters). Overall, it assessed the desirability of “common minimum enforcement standards” in order to increase the chances of an effective and expeditious enforcement, especially as regards to return orders. A first step in this direction consists in the replacement of the exequatur procedure with a series of standard certificates, with the aim of speeding and facilitating the enforcement of foreign decisions. Once certified, “a decision given in a Member State which is enforceable in the Member State of origin shall be enforced in the Member State of enforcement under the same conditions as a decision given in that Member State” (Article 51 of the Recast). Otherwise, the uniform rules are rather limited. Article 51 of the recast goes on prescribing that “the procedure for the enforcement of decisions given in another Member State shall be governed by the law of the Member State of enforcement”; “The party seeking the enforcement of a decision given in another Member State shall not be required to have a postal address in the Member State of enforcement”; “That party shall be required to have an authorised representative in the Member State of enforcement only if such a representative is mandatory under the law of the Member State of enforcement irrespective of the nationality of the parties”. It is easy to observe that these rules are far from designing a uniform procedure of enforcement, as initially envisaged by the Commission, still they bring some clarity as regards practical requirements, that may be difficult to assess by a foreigner with no everyday experience in the forum of enforcement. The provision of Article 52, requiring a communication of the enforcement authorities to the Commission, responds to the same practical need. Moreover, the EU legal order admits the possibility of judicial proceedings settling matrimonial matters in different Member States. This may happen when a judicial decision annuls a marriage between dual citizens in State A, without disposing of matrimonial property or alimonies. The Courts of Member State B may recognise the decision of State A and settle the issue of maintenance obligations and the division of the marital community between the spouses. Those decisions may further be recognised and enforced in Member State C, one on the basis of the Brussels II Regime, the other on the basis of the Maintenance obligations Regula88

COM(2014) 225 final, p. 14 et seq.

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Vesna Lazić/ Ilaria Pretelli tion and the Matrimonial Property Regulation. As observed above, the circulation of decisions should not be affected by the plurality of regimes since all these rules respond to a same logic.89 2.

The Best Interests of the Child vs Mutual Trust

The new rules grant a wider marge de manoeuvre to the Member State of enforcement, possibly under the pressure of the lesson received by the European Court of Human Rights on the illegitimacy of the rules of the Brussels IIbis regulation that obliged Member States Courts to give absolute precedence to the principle of mutual trust. As regards access rights, the practice had revealed that their enforcement abroad could encounter difficulties when the manner of exercising them differs in the jurisdiction of enforcement or if the decision to enforce asserts them without a sufficient level of detail. Since passages from one parent to the other are very delicate and often source of disputes in front of the children, that are very detrimental to them, it is important to decide in advance all relevant circumstances: where, since when and until when the children have access to the other parent; who is in charge of bringing them or picking them up; if the access need to be supervised or occur in a neutral environment, where and in front of whom this will happen, etc. Anticipating Article 54, Recital 61 states that the competent authorities in the Member State of enforcement may specify details “regarding practical circumstances or legal conditions required under the law of the Member State of enforcement” to facilitate access rights. Article 54 contains a rule on coordination ensuring that control over the compliance of the enforcement of access rights with the decision granting them remains in the court of the Member State issuing the decision.90 Article 56 contains “the main substantial achievement” of the Recast91 as regards a “common minimum enforcement standard”, dictated by the manifest and urgent need to make the Brussels IIbis Regulation consistent with the principle of the best interests of the child.92 This has meant abandoning the initial focus on mutual trust, rectius defined “blind trust”93 in order to prioritise the best interests of the child standing in front of the enforcement authority. Supra (note 48). See V. LAZIĆ et al., Regulation Brussels IIbis, Guide for Application, as part of the final output from the project “Cross-Border Proceedings in Family Law Matters before National Courts and CJEU”, funded by the European Commission’s Justice Programme (GA – JUST/2014/JCOO/AG/CIVI/7722), available at https://www.asser.nl/media/5260/ cross-border-proceedings-guide-for-application.pdf, p. 274 et seq. 91 Supra C. GONZÁLEZ BEILFUSS, (note 7). 92 Supra para III(B). 93 L. BAY LARSEN, “Some Reflections on Mutual Recognition in the Area of Freedom, Security and Justice”, in P. CARDONNEL/ A. ROSAS & N. WAHL (eds), Constitutionalising the EU Judicial System: Essays in Honour of Pernilla Lindh, Oxford, 2012, at 140 aknoweldged by K. LENAERTS, The Principle of Mutual Recognition in the Area of 89 90

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Recognition and Enforcement Procedures in the Brussels II ter Regulation The new rules are a welcome attempt to correct the draconian remedy enacted in Article 11 of the Brussels IIbis Regulation to reinforce the return mechanism of the 1980 Hague Convention on the civil aspects of international child abduction. Its paras 6-8 provided for an automatic regime of recognition and execution. The governing principles on the free movement of goods have probably influenced a vision – or, rather, a bureaucratic policy – to prevent the judge of “destination” from challenging the findings of the judge of “origin”, as if the situation of a child could be assessed once and for all.94 Paradoxically, this rule may have the side effect of promoting a better collaboration between the Member States involved, because the State of destination is no longer in a position of total subjugation. Case law reveals that certain authorities were often reluctant to accept their colleague’s decisions when they perceived a real risk of irreparable harm for the child and would not hesitate to resort to escape stratagems.

IV. Conclusions A.

A Proliferation of Rules and Procedures…

The structure of recognition and enforcement of decisions is adjusted so that all types of decisions are now dealt with in one chapter (IV) of the Recast. However, a substantial expansion of provisions on enforcement may undermine the expected easier application of the Brussels II regime in practice. Overall, the Recast adds to the diversity of the existing series of enforcement schemes in family and related matters. Whereas some legal instruments still require exequatur, such as the matrimonial property regulation, others, such as the Maintenance Regulation abolish exequatur. Likewise, the Recast does away with exequatur in matters of parental responsibility, yet in a somewhat different manner and with a wider list of grounds for refusal. Last but not the least, the Recast continues to maintain a separate enforcement scheme for privileged decisions distinct from other decisions on parental responsibility. Consequently, different approaches and grounds for refusal now exist.95 One of the major drawbacks consists in retaining the “overriding mechanism”, despite an attempt to contain its draconian effects by, inter alia, adding rules allowing the authorities of enforcement to stay proceedings in order to preserve children from the grave risks of irreparable harm to which enforcement would expose them. Welcome improvements are amendments reversing negative Freedom, Security and Justice, The Fourth Annual Sir Jeremy Lever Lecture, University of Oxford, 30 January 2015, www.law.ox.ac.uk, p. 3. 94 Amplius I. PRETELLI, (note 9). 95 M. NÍ SHÚILLEABHÁIN, An Overview of the Principal Reforms in Regulation (EU) 2019/1111, this Yearbook, supra, drawing on the critical observations by Th. KRUGER/L. SAMYN, Brussels II bis: Successes and Suggested Improvements, J. of Priv. Int’l Law 2016, p. 132, observes that different forms of exemption from exequatur bring more complications than a real added value.

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Vesna Lazić/ Ilaria Pretelli consequences of the relevant CJEU case law relating to the interpretation and application of the “overriding mechanism”. This particularly holds true for the amendment which explicitly vests jurisdiction to render an “overriding” solely with the court which decides on the substance of the custody of the child. B.

… within the Area of Freedom, Security and Justice

Incadat, the database of The Child Abduction Section on the Website of the Hague Conference offers a tragic collection of cases testifying of various judicial stratagems to escape the overriding mechanism in the best interests of the children involved. The Recast contains rules aimed at lowering the emotional tension between the courts involved in child abduction proceedings and transform their contradictory evaluations into attitudes of judicial cooperation. The existing very polarised opinions as to the expediency of maintaining an overriding mechanism has resulted in a failure openly to address the problem and resolve it through the Recast, whereas only timid steps have been made in order to enable Member States to protect the child without violating the constitutional principle of freedom of circulation of judgments. It is certainly difficult to protect, at one and the same time, constitutional principles of the same rank that go in opposite directions. However, one could argue that administrative needs should not prevail over the need to protect the vulnerable. Some steps needed to be taken to reconcile the need for prompt EU-wide enforcement and respect for the best interests of children. Eventually, the recast improves the overriding mechanism by widening the scope of the “return order notwithstanding” which means that the non-return decision of the court of refuge can certainly be overridden but not when contrary to the best interests of the child assessed in concreto, by looking at the situation of the child standing before the authority in charge of enforcement. The Recast will also be a test of the tenure of the new system in cases of violence against women. The European Parliament’s has driven attention to complaints about the negative effects of the Brussels II system in cases of child abduction proceedings occurring in contexts of gender-based violence.96 Time will tell whether the new enforcement rules will prove more efficient in enhancing the quality of life of the most vulnerable.

96 C. PERARO/ A.I. LOPES/ C. CHATEAU, Brussels IIa: Towards a Review. Main Recommendations from External Experts to the European Parliament, PE 571.366, p. 4; I. PRETELLI, Child Abduction and Return Procedures, Recasting the Brussels IIa Regulation, PE 571383, p. 8; J.H.A. VAN LOON, The Brussels IIa Regulation: towards a Review?, Crossborder activities in the EU - making life easier to citizens, PE 510.003, 2015, p. 189.

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CENTRAL AUTHORITY COOPERATION UNDER THE BRUSSELS II TER REGULATION Mirela ŽUPAN* / Christian HOEHN** / Ulrike KLUTH***

I. II. III. IV.

V.

I.

Introduction Background to Cooperation between Central Authorities Justification for a Thoroughgoing Revision of Provisions on the Central Authority Central Authority under Brussels II ter A. Designation of the Central Authority B. General Tasks of the Central Authority C. Working Method and Nature of the Central Authority Support D. Specific Tasks – Requests through Central Authority E. Central Authority Assisting Procedures in Matters of Parental Responsibility F. Central Authority Facilitating Communication between the Courts G. Central Authority Role in Child Abduction Cases H. Central Authority Role in Placement of a Child Procedures I. Internal Communication Instead of a Conclusion – Is there still some Missing Regulation on Cooperation between Central Authorities?

Introduction

Following long-term negotiations within the European Union, Council Regulation (EU) 2019/1111 on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and matters of parental responsibility, and on international child abduction was adopted on 25 June 2019 (Brussels II ter).1 As of 1 August 2022, it will replace the regulation that lies at the heart of European family law: the Brussels II bis Regulation.2 Among the significant changes introduced on parental responsibility matters, what stands out is a novel approach to cooperation between Central Authorities. The weight the EU legislator has given to various forms of Mirela ŽUPAN, Full Professor, Josip Juraj Strossmayer University of Osijek, Faculty of Law Osijek. ** Bundesamt für Justiz/Federal Office of Justice – Central Authority for international custody conflicts – Bonn, Germany. *** Bundesamt für Justiz/Federal Office of Justice – Central Authority for international custody conflicts – Bonn, Germany. 1 ST/8214/2019/INIT OJ L 178, 2.7.2019, p. 1-115. 2 Council Regulation (EC) No 2201/2003. Full quote supra (Abbreviations), p. XI. *

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Mirela Župan/ Christian Hoehn/ Ulrike Kluth administrative, judicial and mixed cooperation indicates that it has acknowledged the latter’s potential to maximize the benefits of private international law rules. This approach comes as a natural consequence of a growing number of crossborder child-related disputes in Europe and worldwide, where strategic choices as regards logistics are inevitable in order to ensure legal protection of the most vulnerable – the child. Parties to such disputes often lack the resources and capacity to engage a legal representative or to take legal action in a foreign country. This paper will present the main features of the future EU cooperation between Central Authorities. The authors deal with the setup of the provisions, their practical implications and their possible shortcomings.3

II.

Background to Cooperation between Central Authorities

The advent of Cooperation between Central Authorities dates back to the mid-20th century,4 with its first appearance in the 1956 UN Convention on Maintenance Recovery.5 The idea was taken over and promoted to the widest extent by the Hague Conference on Private International Law (HCCH).6 The assignments, tasks and duties of a Central Authority (CA) developed over the decades with the Hague Conventions of 1980, 1993, 1996 and 2007.7 The CA mechanism was also incorporated into the Council of Europe conventions relating to international family

3 This article presents the personal opinions of its authors. It is intended to provoke thought in the reader and discussion among readers, just as it provoked discussion among the authors, who have still not reached, and may never reach, full agreement on all the issues mentioned. 4 M. SARDENBER, Judicial and administrative cooperation in family law matters: introduction, in P. WYBO HEERE (ed.), International law and the Hague’s 750th anniversary, The Hague, T.M.C. Asser Press 1999. 5 On issues connected with practical operations, cf.: W. DUNCAN, The Development of the New Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance, 38 Family Law Quarterly 2004, p. 666. 6 C.S. BRUCH, The Central Authority's Role under the Hague Child Abduction Convention: A Friend in Deed, 28 Family Law Quarterly 1/1994, p. 37. 7 Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children. Proceedings of the Eighteenth Session 1996 II, The Hague 1996, p. 615; Convention of 25 October 1980 on the Civil Aspects of International Child Abduction, Actes et documents de la Quatorzième session 1980, III, The Hague 1980, p. 481; Convention of 29 May 1993 on Protection of Children and Co-operation in Respect of Intercountry Adoption, Proceedings of the Seventeenth Session 1993, II, The Hague 1993, p. 659; Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, Final Act of the Twenty-First Session, The Hague, 23 November 2007 http://www.hcch.net/index_en.php.

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Central Authority Cooperation under the Brussels II ter Regulation law.8 The CA system did not receive proper attention when European judicial cooperation in family matters was established, as neither the Brussels Convention nor the Brussels II regulation contained any provisions on CA cooperation.9 However, a swift replacement of the latter with Brussels II bis brought with it the introduction of the Central Authorities into the EU regulatory system as well. Brussels II bis Articles 53–59 refer to to the administrative cooperation system.10 As the adoption the Brussels II bis was tempestuous, the CA rules were simply taken over, in a modified form, from the 1996 Hague Convention.11 The Central Authorities under Brussels II bis have been in operation since 1 March 2005. The shift in the EU’s attitude towards more detailed Central Authority rules, implying a significant increase in the tasks and obligations of the Central Authorities, was clearly manifested with the adoption of regulation 4/2009.12 As the adoption of the maintenance obligations regulation ran in parallel with the 2007 Hague Convention,13 the European legislator was inspired by the Hague Convention’s Central Authorities role.14 The adoption of the extensive regulation of Central Authorities with the Brussels II ter regulation strongly suggests a continuation of the attitude adopted with the maintenance project. This outcome was predicted in a maintenance obligations paper entitled “The Future Is Bright, The Future is Central Authorities.”15

The European Convention on recognition and enforcement of decisions concerning custody of children and on restoration of custody of children, ETS No. 105 – Luxembourg 20.05.1980; The European Convention on the exercise of children's rights, ETS No 160 – Strasbourg, 25.01.1996; Convention on contact concerning children, Strasbourg, 15.V.2003. 9 Convention on jurisdiction and the recognition and enforcement of judgments in matrimonial matters of 28 May 1998; Council Regulation (EC) No 1347/2000 of 29 May 2000 on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility for children of both spouses, OJ L 160, 30.6.2000, p. 19-36. 10 M. ŽUPAN, Cooperation of Central Authorities in C. HONORATI (ed), Jurisdiction in matrimonial matters, parental responsibility and abduction proceedings. A Handbook on the Application of Brussels IIa Regulation in National Courts, Giappichelli/ Peter Lang Torino 2017, pp. 265-313. 11 U. MAGNUS/ P. MANKOWSKI, Brussels IIbis Regulation, Walter de Gruyter 2012, p. 18-19. 12 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, p. 1-79. 13 P. BEAUMONT et al. (eds), Recovery of maintenance in the EU and worldwide, Hart Law Publishing, 2014. 14 H. GRUBIŠIĆ, The Cooperation of Central Authorities under the Maintenance Regulation, in I. VIARENGO/ F. VILLATA (eds), Planning the future of cross-border families: a path through coordination, Hart Law Publishing 2020, p. 416. 15 I. CURRY-SUMNER, Transnational Recovery of Child Maintenance in Europe: The Future Is Bright, The Future is Central Authorities, http://www.law.muni.cz/sborniky/Daysof-public-law/files/pdf/mep/Curry-Sumner.pdf. 8

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III. Justification for a Thoroughgoing Revision of Provisions on the Central Authority During the years of implementation of Brussels II bis, a number of objections to the Central Authority mechanism were raised in both EU studies16 and academia.17 They justified the massive intervention of Brussels II ter in that area. The shortcomings may be grouped into two major categories: issues of an operational nature (daily workflow) and issues arising from insufficiently detailed or absent rules in Brussels II bis (wording of relevant provisions, lacunae). The operational issues were largely caused by lacunae remaining in the provisions of the regulation on the Central Authority system, together with inadequate national law responses. One of the major issues was related to delays in handling requests.18 As no rules on electronic submission of information existed, authorities often failed to provide an acknowledgement of receipt, or information on the application progress or its outcome within a reasonable time. In most Member States, the same Central Authority was appointed to cooperate under many regulations and Hague Conventions. Since the Central Authorities gained many competences through the enactment of various regulations and conventions, they faced an enormous workload. Cooperation between Central Authorities was often hindered by disparities in the resources (human, technical, financial) available to them. Additionally, Central 16 Study on the assessment of Regulation (EC) 2201/2003 and the policy options for its amendment (Final Report) and Analytical Annexes https://op.europa.eu/en/publicationdetail/-/publication/924728ec-9148-11e8-8bc1-01aa75ed71a1; Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Council Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgements in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, Brussels, 15.4.2014 COM(2014) 225 final, p. 11 et seq; COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Council Regulation on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast) Brussels, 30 June 2016 (Impact Assessment). 17 T. KRUGER, Enhancing Cross-border cooperation, p. 36-45 and L. FRIDRICH, The experience of a national central authority, p. 45-55, in Recasting the Brussels IIa regulation, Workshop 8 November 2016, Compilation of briefings for the JURI Committee, Directorate General for internal policies policy department C: Citizens' rights and constitutional affairs 2016; V. LAZIĆ/ W. SHRAMA, Cooperation between Central Authorities in Matters of Parental Responsibility in V. LAZIĆ (ed.), Regulation Brussels IIbis Guide for Application, Asser 2018, p. 282-303; C. HONORATI, The Commission's Proposal for a Recast of Brussels IIa Regulation, Forthcoming, International Family Law 2/2017; L. CARPANETO, On the Recast of the Brussels II-bis Regulation Regime on Parental Responsibility: Few Proposals, in I. QUEIROLO, B. HEIDERHOFF (eds), Party Autonomy in European Private (and) International Law, Ariccia 2015, p. 247; M.C. BARUFFI, La riforma del regolamento Bruxelles II-bis e la tutela dell’interesse superiore del minore, in E. TRIGGIANI et al. Dialoghi con Ugo Villani II, Bari 2017, p. 1087. 18 Final Report (note 16) p. 51, Impact Assessment (note 16) pp. 36, 37, 52, 60 and 86.

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Central Authority Cooperation under the Brussels II ter Regulation Authority staff often lacked support and training. Practical guides, if drafted, were not translated into local languages. The implementing legislation is often not sufficiently specific on the actions Central Authorities need to take.19 The issues relating simply to the provisions of Brussels II bis are the main concern of the authors here. The cooperation provisions were not sufficiently specific. A lack of detail created uncertainty among applicants, as they did not know what kind of a help they could expect.20 An obvious example is the wording of Art 55 on collection and exchange of information on the situation of a child. The absence of specification of how exactly it was to be performed left room for different interpretations. One of the most doubtful issues was whether it provided a proper basis for collecting information with respect to the situation of the parents, relatives or siblings abroad, or only with respect to the child. Problematic cooperation with child welfare authorities and other local authorities was also emphasized.21 Moreover, the issue has two dimensions – internal and international. Internal (within the same Member State) cooperation between a Central Authority and the local authorities or child welfare authorities is inevitable when the Central Authority in one Member State requests information from the Central Authority in another. In most situations, the Central Authority would not have access to the necessary information, but would obtain it from the local authorities or child welfare authorities in its Member State. Local authorities are often not aware of the nature of the request; they are not specialized in dealing with it and they do not prioritize the request. Secondly, the legal basis for direct international cooperation between the local authorities or child welfare authorities in one Member State and the Central Authority or local authorities in another Member State was subject to various interpretations. Another set of obstacles related to the compatibility of cooperation provisions with the parallel 1996 Hague Convention was to a certain extent mirrored, but also modified, in the Brussels regime. A similar scenario also pertained in the case of the Maintenance Regulation cooperation provisions.22 Difficulties also occurred because Brussels II bis simply failed to provide for language and translation (costs). The regulation lacked any mandatory forms for communication between Central Authorities designed to increase the efficiency of the cooperation and overcome the language issue. Revision of the Central Authorities rules was among the top six priorities of the Recast Proposal.23 The proposed reform of Central Authorities primarily took C. HONORATI (note 17) p. 19; A. SCHULZ, The Cooperation between the Central Authorities under the Brussels II a Regulation, in I. VIARENGO/ F. VILLATA (eds), Planning the future of cross-border families: a path through coordination, Hart Law Publishing 2020, pp. 407-414. 20 Final Evaluation Report (note 16) p. 53. 21 Analytical Annexes (note 16), p. 28, 159. 22 Comparison of Brussels IIbis with Article 7, 1980 Hague Convention, or Article 51, Maintenance Regulation. 23 Proposal for a Council Regulation on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast) COM(2016) 411 final 2016/0190 (CNS) of 30.6.2016. 19

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Mirela Župan/ Christian Hoehn/ Ulrike Kluth the form of a new Chapter V, completely devoted to cooperation (Articles 60-67), supplemented with certain provisions in other chapters.24 However, not all the changes envisaged in the Recast Proposal were adopted in the end.

IV. Central Authority under Brussels II ter Central Authority rules are dispersed throughout the Brussels II ter Regulation. The new Chapter V is completely devoted to cooperation in matters of parental responsibility (Articles 76-84). However, provisions referring to the Central Authority are spread across the Brussels II ter rules on International Child abduction within Chapter III, and General Provisions within Chapter VI. Additionally, the exhaustive recitals of this regulation refer at many points to Central Authorities. The recitals indicate hypothetical cases, sometimes even providing examples. A.

Designation of the Central Authority

The provision on the designation of a Central Authority has not been altered with the revision. Like its predecessor, Brussels II ter invites each Member State to designate one or more Central Authorities with a clear geographical and functional jurisdiction. The fact is that most Member States have designated one Central Authority, but throughout the EU a variety of national authorities have been nominated (justice ministry, family ministry, foreign affairs ministry, public prosecutor, ministry of justice and family). Some Member States have designated more authorities with a functional jurisdiction. The designation of the same authority to parallel the Hague Conventions is now advocated, though the recast has refrained from imposing such an obligation.25 This innovation with respect to designation has its merits and its shortcomings. A bundling of the knowledge of certain Hague Conference instruments within just one Central Authority brings benefits with regard to an overview of the systems, their functioning, and the links between the different areas. On the other hand, this bundling would result in an even greater lack of adequate resources, especially in Member States with a high caseload. The polite invitation extended in Recital 72 to merge Central Authorities does not promote consistency of designations with the Maintenance Regulation. Although the fact that parental responsibility matters are often linked to child maintenance may seem to favour this scenario, this form of merger of Central Authorities may not be entirely beneficial. In practice, the parties often argue, for example by trad24 See Articles 12,14, 25, 26, 32 of the Recast Proposal. For a detailed discussion, see SCHULZ (note 19). 25 Recital 72, Brussels II ter, “…. Member States should consider designating the same Central Authority for this Regulation as designated for the 1980 and 1996 Hague Conventions. Member States should ensure that Central Authorities have adequate financial and human resources to enable them to carry out the tasks assigned to them under this Regulation.”

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Central Authority Cooperation under the Brussels II ter Regulation ing off access against support during proceedings, which tends to be disadvantageous from the child's point of view. Applicant/respondent roles may be reversed (in outgoing and incoming cases with different subject matter), depending on the context. This means that the role of the Central Authority may also be totally different, often resulting in a potential for (internal) conflict. Furthermore, the sharing of information in the different areas of, or proceedings on, custody and support also raises serious data protection issues because of the opposing positions. A handy solution is found in Germany: both Central Authorities are located within the same unit (=BfJ), but in separate divisions. Central Authority actions under different regimes are generally kept separate, but are very close and able to interact/coordinate if necessary. Such an organizational model is, of course, dependent on available resources. Although the Recast Proposal clearly intended to impose an obligation upon Member States to provide adequate financial and human resources to any designated Central Authority in order to enable it to carry out the tasks assigned,26 this highly debated resource issue has been addressed only within the recitals of the Regulation.27 B.

General Tasks of the Central Authority

The basic formulation of the general tasks of a Central Authority in communicating information on national laws, procedures and services available has been retained.28 A valuable item added by Brussels II ter is an obligation on the Central Authorities to cooperate and promote cooperation among the competent authorities in their Member States in order to fulfil the purposes of the Regulation.29 In the same way as the Maintenance Regulation,30 Brussels II ter implicitly recognized that apart from Central Authorities, other national authorities have a role in the application of the regulation.31 This provision now clearly places other national authorities within the scope of the Regulation. Designated Central Authorities are invited to use the European Judicial Network in civil and commercial matters to perform general tasks.32 Regrettably, the regulation does not envisage use of the Hague International Judicial Network.33 Recast Proposal Art 61. Recital 72 Brussels II ter. 28 Article 77 Brussels II ter. 29 Article 77 para 2 Brussels II ter. 30 Article 50 para 1(a) Maintenance Regulation. 31 H. GRUBIŠIĆ (note 17) p. 417; M. ERB-KLUENEMANN/ K. NIETHAMMER-JUERGENS, Die neue Brüssel IIa-VO Familien Rechtsberater, FamRB 2019, p. 454; S. SCHLAUSS, Aktuelle Entwicklungen bei den Aufgaben des Bundesamts für Justiz, ZKJ 2019, pp. 255261 at p. 260. 32 M. ŽUPAN/ I. KUNDA/ P. PORETTI, Judicial Training in European Family and Succession Matters, in T. PFEIFFER/ Q.C. LOBACH/ T. RAPP (eds), Facilitating Cross-Border Family Life: Towards a Common European Understanding, Heidelberg University Publishing 2021. 33 C. HONORATI (note 17) p. 18. 26 27

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Working Method and Nature of Central Authority Support

One of the most problematic issues addressed was the lacunae in the previous regime relating to the circulation of requests. The issue has been clarified and specified by the introduction in Article 78 of rules on the initiation of cooperation and circulation of requests. Any request under Chapter V may be initiated by the court or competent authority, while some may also be initiated by the holder of parental responsibility.34 The circulation of requests is detailed in the rule. Requests are submitted to the Central Authority of the MS of the requesting court/authority or the applicant’s habitual residence. What is in fact introduced by this new scheme is a centralized way of communication via the Central Authorities. Unless otherwise permitted,35 alternative ways of communication are no longer applicable. Although the default model of administrative cooperation should be Central Authority to Central Authority (CA to CA), in urgent cases direct cross-border contact of the court or competent authority of the requested state with the court or authority in the other state would be permitted. An illustrative example of an urgent case that would entail direct contact of this kind is a situation of imminent risk to a child. Surprisingly, it seems that the interpretation of the channels of communication contained in Recital 76 departs from this default model, in that it advocates that only the initial communication must be CA to CA, whereas subsequent communication between Member State authorities may take place directly. One might wonder what the legislator’s intention was. By monopolizing the method of communication, the role of the Central Authority has been significantly strengthened. Of course, this has had very positive effects in terms of the consulting and assistance that the Central Authority can provide to competent authorities. In addition, since Central Authorities communicate mainly in English and may not require translation between themselves, the speed of handling applications is often increased by this skipping of translation requirements. On the other hand, as mentioned above, the original corresponding provision on equipping the Central Authority with adequate resources was dropped and reduced to a recital. Additionally, by essentially forbidding alternative ways of communication, in particular direct communication between Competent Authorities, communication may also have effectively been slowed down in some cases. Recital 76, therefore, seems to be an attempt to minimize such effects and simply acknowledges the fact that it is not a brand-new regulation but a revision of an existing one, so that direct communication may be well established already. Apparently, in future cases, a Central Authority should thereby be more involved whereas established channels of communication can be retained.36 Finally, the channeling of requests through the Central Authority results in additional burden for legislators in Member States with federalist systems, since the Regulation may, for its purposes of international cooperation, limit its provisions to the manner of communication between Member

Requests under Article 79 c) and g) and Article 80(1)(c) Brussels II ter. See, for example, Article 78(4) Brussels II ter. 36 See also, for example, the rather similar idea with respect to agreements between competent authorities in Article 82 para. 8 Brussels II ter. 34 35

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Central Authority Cooperation under the Brussels II ter Regulation States.37 However, national implementing laws must now correspondingly issue rules on how applications are actually carried out within those Member States.38 The imperative or facultative nature of the support provided by the Central Authority has also been addressed. The interpretation of the CJEU, 39 considering, in a maintenance obligation context, that the aid of the Central Authority is a right rather than an obligation, has now been confirmed. Hence, the holder of parental responsibility is not prevented from applying directly to the courts of another Member State. However, it is noteworthy that the right of private persons to apply under Article 78 para 2 of the new Regulation is limited in comparison with the rather broad and undefined Article 55 of Brussels II bis. D.

Specific Tasks – Requests through Central Authority

Specific tasks of the requested Central Authority are listed in Articles 79-82. Slightly altering the previous regime, Article 79 (formerly Article 55) enumerates specific functions to be performed by the requested Central Authorities acting directly or through courts, competent authorities or other bodies. Generally, compared to Brussels II bis Articles 54 and, especially, Article 55, the enumeration in the new Regulation is much more detailed. It is apparently a compromise between the rather general provisions of the existing Article 55 and the even more specific individual provisions of Articles 29 following the 1996 Hague Convention. Nevertheless, just as in Article 55, the new provisions include specific ones on assistance and consultation in general, as well as very explicit and specific individual requests. Particularly in the latter context, a requested Authority is to “provide assistance, in accordance with national law and procedure, in discovering the whereabouts of a child where it appears that the child may be present within the territory of the requested Member State and that information is necessary for carrying out an application or request under this Regulation.” This sounds new and is derived from Article 31(c) of the 1996 Hague Convention. However, in practice, many Member States already allowed such requests in effect in view of Article 55(a). However, in practice, the explicit mention of the obligation will certainly help clarify things. Nevertheless, the Regulation again does not regulate the means for discovery; this is still up to national law. Accordingly, the provision will result in additional work not only for the Central Authority and competent authorities, but also for national legislators, who will have to create implementing provisions. As to the Central Authority and its assistance to individual stakeholders, which is very valuable for such applicants in practice, an explicit inclusion of information

37 But, see also Article 78 para 3 containing a rule on internal communication within one Member State! 38 Article 79 lacks any specific provision on the competency of Central Authorities and competent authorities but leaves that to the individual Member States. However, the method of communication is centralized by the Regulation. See further below, for example, regarding Article 80 para 4 Brussels II ter. 39 ECJ, 9 February 2017, M.S. v P.S., ECLI:EU:C:2017:104.

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Mirela Župan/ Christian Hoehn/ Ulrike Kluth on legal aid may prove burdensome to some Central Authorities, although it should already be included in the obligation to provide general information. E.

Central Authority Assisting Procedures in Matters of Parental Responsibility

Important changes relate to a specific function with respect to collecting and exchanging information relevant in procedures in matters of parental responsibility.40 Brussels II ter now gives legal bases for providing any other information besides that relating only to the child, if such information is relevant in procedures in matters of parental responsibility in the requesting Member State. The Regulation addresses in particular the situation of a parent, relative or other person who may be suitable to care for the child.41 This certainly makes things clearer than the wording of the current regime.42 In practice, a lot of requests already refer to the situation of a parent, relative or other person who may be suitable to care for the child rather than to the situation of the child itself. Brussels II ter further takes due account of a possible situation of exposure of a child to serious danger. There is an obligation on the court or competent authority contemplating or having taken measures for the protection of the child to inform the courts or competent authorities of the other Member State about the danger involved and the measures taken or under consideration. Such an obligation exists only if the authority is aware that the child’s residence has changed or that the child is present in another Member State. In terms of the system, this is a significant step since it amounts to direct harmonization of family law by explicitly stipulating obligations for competent authorities. In practice, this ex officio obligation should serve well to improve the protection of children.43 Brussels II ter has additionally clarified the language requirements by determining that documents must be accompanied by a translation into the official language of the requested Member State.44 Information requested under the Brussels II ter provisions on cooperation in matters of parental responsibility should be transmitted to the requesting Member State by the Central Authority of the requested Member State no later than three months following the receipt of the request, except where exceptional circumstances make this impossible. Brussels II ter fails to clarify what happens if the request and supporting documents are not complete and need to be updated. In fact, the Regulation is imprecise in this respect since the time limit/obligation rests solely on the Central Authority, whereas in practice the Central Authority internally passes the requests on to other competent national, most often local, authorities. Again, the Regulation focuses Article 80 Brussels II ter. See, by way of comparison, Article 35 para 2 of the 1996 Hague Convention. 42 S. SCHLAUSS (note 31) p. 255, 260 and A. SCHULZ, Die Neufassung der Brüssel IIa-Verordnung, FamRZ 2020, pp. 1141-1150, 1149. 43 See, by way of comparison, Articles 34 and 35 para 1 of the 1996 Hague Convention allowing for exchange of information, but not stipulating an obligation to do so. 44 Article 80 para 3 Brussels II ter. 40 41

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Central Authority Cooperation under the Brussels II ter Regulation exclusively on communication being channelled through Central Authorities, but does not fully regulate the competency for carrying out the obligation to provide a report as such. However, as Article 80 para 2 shows, this might not have been impossible. Again, the task of filling the still empty legal slots is left completely up to national law,45 imposing further legislative obligations on national legislators. Recital 85 takes account of this internal situation by advocating that all the competent authorities involved are encouraged to provide a reply even more quickly than required by the maximum timeframe.46 However, difficulties will probably remain in practice, especially when legislators are slow. No timeframe is set for the scenario where the requested Central Authority is not able to provide the information requested. A provision corresponding to that of the Maintenance Regulation should have been inserted,47 stating that in a situation such as this the requested Central Authority should inform the requesting Central Authority immediately and specify the reason for this impossibility. F.

Central Authority Facilitating Communication between the Courts

Among its specific functions, the Central Authority serves to facilitate communication between courts, competent authorities and other bodies involved, in particular with regard to the application of provisions relating to the transfer of jurisdiction, provisional measures and lis pendens. The role of the Central Authority should be interpreted in conjunction with relevant provisions. However, the legislator has adopted a different methodology for setting the role of the Central Authority assistance provided to the courts. Namely, provisions on the transfer of jurisdiction (Articles 12-13) similar to the ones on lis pendens and dependent actions (Article 20) do not envisage an exact role for the Central Authority. Brussels II ter has here left room for national legislation and practice to establish the pathway of assistance. The rule on provisional and protective measures, on the other hand, is precise with respect to the Central Authority’s role. The Central Authority acts in a situation where a court other than the court of merits takes the protection measure to safeguard the best interest of a child.48 The provision reflects the findings of the CJEU in Purrucker I.49 Having taken the measure, the court is now obliged to act swiftly in informing the court or competent authority of the Member State having jurisdiction pursuant to Article 7 of the measure taken. The court may opt for direct communication or communication through the Central Authority. The court of merits that takes the protection measure may again use one of the possible

See Article 80 para 1 Brussels II ter. Recital 85 Brussels II ter. 47 Article 53 para 2 c of the Maintenance regulation. 48 I. PRETELLI, Provisional Measures in Family Law and the Brussels II Ter Regulation, Yearbook of Private International Law 2019, p. 126. 49 ECJ 9 November 2010, Bianca Purrucker v Guillermo Vallés Pérez ECLI:EU:C:2010:665. 45 46

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Mirela Župan/ Christian Hoehn/ Ulrike Kluth channels to inform the court or competent authority of the Member State having jurisdiction that the measure has been issued.50 G.

Central Authority Role in Child Abduction Cases

The innovation of Brussels II ter is an entire chapter, Chapter III, referring to child abduction. The role of the Central Authority is clearly indicated in the different stages of processing a return application. Firstly, an application for the return of a child under the 1980 Hague Convention may be either directly referred to the court or processed by the Central Authority. Time limits for the receipt and processing of applications by Central Authorities mean that expeditious action is taken.51 The Central Authority must acknowledge receipt of the application for return upon its receipt, within no more than five working days. It is also obliged to communicate with the Central Authority or the applicant on the progress of the application, as well as to request any further necessary documents and information. With the aim of bringing about the voluntary return of the child, the court must make efforts towards alternative dispute resolution, either directly or through the Central Authority.52 The involvement of Central Authorities in the promotion of mediation is not clearly established by the provision. This is presumably due to the lack of common ground and harmonization on mediation schemes and rules throughout the EU. The level of mediation in Member States and the organization and regulation thereof differ significantly.53 In addition, family mediation may also require a special kind of mediation. The revision could have been used as a starting point for implementing and promoting increased harmonization, at least in the area concerned here, but it seems that there was not yet enough common ground for this. However, many Central Authorities already offer mediation services or facilitate them. In view of the more prominent role of Central Authorities in general in the new Regulation, mediation may also become more prominent in the routine of Central Authorities. Another role of the Central Authority occurs in the course of court return proceedings. If the abduction court is considering refusing the return of a child solely on the basis of grave risk of harm under Article 13 para 1b of the 1980 Hague Convention, Brussels II ter imposes an obligation to collect sufficient evidence and secure the protection of the child after his or her return. Communication with the competent authorities of the return Member State may be either direct or proceed via the Central Authorities mechanism.54 Should the court issue a protective measure, the Central Authority will again play a role.55 Article 15 Brussels II ter. Article 22, 23 Brussels II ter. 52 Article 25 Brussels II ter. 53 For Member State profiles see https://e-justice.europa.eu/content_crossborder_ family_mediation-372-en. 54 Article 27 Brussels II ter. 55 See Article 27 para 5, in conjunction with Article 79, para (e), Brussels II ter. 50 51

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Central Authority Cooperation under the Brussels II ter Regulation This will probably result in major changes in practice, since the original 1980 Hague Convention leaves the functions and role of the Central Authority entirely to the discretion of the contracting Member States. The Central Authority role could thus be limited to mere facilitation of general information and a very indirect role in return proceedings. In many 1980 Hague Convention states, the role of the Central Authority is actually, therefore, not very prominent and the Central Authority is often completely uninvolved in the actual judicial return proceeding.56 The new Regulation requires more involvement by Central Authorities in judicial proceedings, by virtue of the simple fact that the return courts are also exposed to more concrete obligations, such as the aforementioned obligatory communication on protective measures directly or via the Central Authority. At the stage of enforcement of decisions ordering the return of a child, the Central Authority again has a new role. If the decision is not enforced within six weeks of the date when the enforcement proceedings were initiated, the Central Authority has the right to request a statement of the reasons for the delay from the authority competent for enforcement.57 Again, this will result in more involvement of Central Authorities in judicial return proceedings as a corresponding provision to Article 11 of the 1980 Hague Convention. If the abduction court reaches a decision to refuse the return of a child, it must transmit to the court of the habitual residence of the child before wrongful removal where the procedure on the parental responsibility merits is pending, either directly or through the Central Authorities, a copy of its decision, a certificate using the form set out in Annex I, and other documents it considers relevant.58 All in all, the provisions on child abduction are aimed at speeding up the proceedings, as time is of the essence in the context of child abduction. This goes hand in hand with more obligations and a higher workload for the Central Authorities. In countries where the role of the Central Authorities has so far been rather limited, more legislative actions will be necessary to implement the new provisions. H.

Central Authority Role in Placement of a Child Procedures

The Central Authority has a specific function in collecting such information and giving such assistance as are needed by the courts and competent authorities in order to apply Article 82 (ex 56) on the placement of a child in another Member State.59 Brussels II ter has introduced CJEU findings in a Health Service Executive 56 Many CAs merely name the competent court, provide assistance in acquiring an attorney, and provide other general information, e.g. on legal aid and mediation. This is sufficient under the 1980 Hague Convention, which effectively stipulates only assistance with access to justice as the major CA obligation. Nevertheless, the Good Practice Guide on Central Authorities, for example, also outlines a more active role for CAs. 57 Article 28 Brussels II ter. 58 Article 29 para 3 Brussels II ter. 59 L. CARPANETO, Cross-border placement of children in the European Union, Directorate General for Internal Policies, Policy Department C: Citizens’ Rights And Constitutional Affairs, European Union 2016, p. 10.

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Mirela Župan/ Christian Hoehn/ Ulrike Kluth case60 obliging a court or a competent authority that is contemplating the placement of a child in another Member State to first obtain the consent (previously only consultation) of the competent authority in the other Member State. However, if a child is to be placed with a parent, no consent is needed. Requirements regarding translation are also set out. The request as well as the additional documents must be accompanied by a translation into the official language of the requested Member State or another language that the requested Member State explicitly accepts. There is now a time limit for issuing the decision granting or refusing consent. That decision must be transmitted to the requesting Central Authority no later than three months following the receipt of the request. Again, as in the context of social reports under Article 80 para 4, the Regulation is somewhat imprecise in that it addresses the time limits explicitly to the Central Authorities but otherwise leaves the consent procedure to national law.61 In cases in which the Central Authority is not also the competent authority that gives consent under national law, which is the case in particular in countries with federalist systems, this results in additional work for the national legislator. In effect, the time limit under the Regulation must then be forwarded/transferred to the competent national authority. Another new provision was introduced in Article 82 under the heading of placement, and though seemingly harmless at first, may have considerable practical consequences. Article 82 para 3 allows other Member States to intervene in domestic family procedures by indicating a close connection of the child to its state. “Close” connection clearly relates to “substantial” connection in Article 10 para 1, as well as to the corresponding criterion of “particular” connection in Article 12 para 4,62 in practice effectively meaning the nationality of the child. Whereas the existing Regulation made some efforts to replace the criterion of nationality with that of habitual residence, the new provision in effect reintroduces this formerly largely abandoned criterion under the new regime. Whereas competency is still exclusively awarded to the jurisdiction of habitual residency under Chapter II of the Regulation, other Member States may now step into these domestic procedures via requests under the Regulation.63 As the reference to the Vienna Convention in Recital 84 underlines, this may result in a whole new workload for Central Authorities, which are to some extent explicitly asked henceforth to perform a sort of consular role. Unlike previously listed specific functions that are directly linked to other provisions of the Regulation, Central Authorities have a specific function in facilitating agreement between holders of parental responsibility through mediation or other means of alternative dispute resolution and facilitating cross-border cooperation to this end. This task is not, however, linked to other provisions of the Regulation. In practice, though, we will have to wait and see whether, for example,

ECJ 26 April 2012 Health Service Executive ECLI:EU:C:2012:255. See Article 82 para 7 Brussels II ter. 62 One cannot help noticing the use of three different legal terms for effectively the same issue. 63 Making the second sentence of para 3 necessary to explicitly make clear that such a request is not meant as interference with jurisdiction. 60 61

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Central Authority Cooperation under the Brussels II ter Regulation the extended possibilities for the choice of court under Article 10 generate further tasks for Central Authorities in this context. I.

Internal Communication

Brussels II ter introduces a provision on methods used by the Central Authority to communicate with other authorities within its own jurisdiction. In transmitting the application, request or information in matters of parental responsibility or international child abduction pursuant to the Brussels II ter Regulation to the court or other competent authority within that jurisdiction, the national law and procedure apply. There is now an obligation for any intermediary, court or competent authority which holds, or is competent to collect, the information required to carry out a request or an application pursuant to the Regulation, to provide that information to the requested Central Authority.64 Usage of information received under the cooperation mechanism is restricted to the purposes of the Regulation. As outlined above, however, the Regulation focuses solely on the international relationship between Member States and for this reason features Central Authorities rather prominently, e.g. by channeling information through them. However, internally within one Member State, implementing measures for cooperation between Central Authorities and national authorities are mostly left to national law, leaving some gaps for the national legislator to fill, particularly concerning time limits. This will hit especially hard those Member States where implementing provisions are non-existent or scarce and/or where the role and competencies of Central Authorities have up to now been rather limited. Brussels II ter also deals with the confidentiality of information. It obliges a Central Authority, court or competent authority to refrain from disclosing or confirming information gathered or transmitted for the purposes of cooperation actions, but only if they determine that doing so could jeopardize the health, safety or liberty of the child or another person. If a decision to that effect is made in one Member State, it should be taken into account by the Central Authorities, courts and competent authorities of the other Member States, in particular in cases of domestic violence. What is lacking under the new scheme, however, are any specific provisions on the means of communication, in particular on electronic communication. This is all the more surprising as the 2020 Strategic Foresight Report acknowledges the crucial importance of the digital transformation of public administrations and justice systems.65 Also, the data protection rules in Article 87 and 88 essentially refer only to national law, despite the existing harmonized EU law66 on this matter, so that they seem rather rudimentary. COVID-19 and the Article 87 Brussels II ter. Https://ec.europa.eu/info/strategy/priorities-2019-2024/new-push-european-demo cracy/strategicforesight/2020-strategic-foresight-report_en. 66 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC OJ L 119, 4.5.2016, p. 1-88. 64 65

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Mirela Župan/ Christian Hoehn/ Ulrike Kluth “forced” technological switch to exclusively electronic communication between Member States and Central Authorities underlines that in the course of centralizing the ways of communication via Central Authorities some additional guidance on the means of communication and data protection might have been advisable in the new Regulation. However, anyone reading the Regulation could be forgiven for presuming that electronic communication did not yet exist within the EU. Again, the details of these operational tasks are left to national law, whereas obligations in this respect are included and broadened in the Regulation. A general provision of the Brussels II ter regulation addresses the data protection issue. It implements specific requirements set out by the GDPR for the transmission and processing of personal data.67 One wonders whether this provision gives adequate consideration to the channeling of communication via Central Authorities as implemented by the Regulation.

V.

Instead of a Conclusion – Is there still some Missing Regulation on Cooperation between Central Authorities?

Brussels II ter places the system of administrative cooperation between Central Authorities at the forefront of operational functioning of cross-border child protection. The number of provisions and the substantial accretion of duties assigned to Central Authorities by the new rules confirm that a thoroughgoing change has been introduced. Many of the previous regulatory regime shortcomings have been fully or partially remedied. But the question remains: has the opportunity been missed to do more? The introduction of a strict timeframe should reduce delays in handling requests, one of the core problems of the previous regime.68 More could have been achieved if a general provision on urgency had been introduced. This could have provided the possibility for a requesting authority to indicate that the case was urgent and the obligation on the requested authority to comply with the request.69 There are situations that deviate explicitly from the timeframe because of their urgency, but the regulation provides no indication of the circumstances that would be of relevance in determining what constitutes an urgent case.70

Article 88 Brussels II ter. For possible shortcomings, see supra. 69 Proposed by T. KRUGER (note 17) p. 44. 70 V. LAZIĆ, (eds) Recommendations To Improve the Rules on Jurisdiction and on the Enforcement of Decisions in matrimonial Matters and Matters of Parental Responsibility in the European Union, final output from the project “Cross-Border Proceedings in Family Law Matters before National Courts and CJEU” 2018 https://www.asser.nl/ media/4662/m-5796-ec-justice-cross-border-proceedings-in-family-law-matters-10-publica tions-00-publications-on-asser-website-recommendations.pdf p. 46. 67 68

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Central Authority Cooperation under the Brussels II ter Regulation Rules on the transmission, receipt, and processing of applications and cases by Central Authorities are also missing from Brussels II ter.71 There is no obligation for the Central Authority to assist the applicant in complying fully with all the information and documentary requirements of the application, although this is obviously part of the daily routine of the staff. More importantly, Brussels II ter fails to address all the steps involved in transmitting and providing information on the application. Except where the Central Authority is acting in connection with a child abduction application, there is no provision obliging the requested Central Authority to acknowledge receipt of the application within a certain deadline, nor is there any further obligation to communicate the name and contact details of the person or unit responsible for responding to inquiries regarding the progress of the application, or to inform the requesting Central Authority of the status and progress of the application, nor are there any appropriate mandatory forms.72 Brussel II ter has also omitted to require Central Authorities to process a case as quickly as a proper consideration of the issues allows or to employ the most rapid and efficient means of communication at their disposal. The digitalization of contemporary legal practice seems to have been forgotten in this context, although it is at the top of the EU justice agenda.73 A very important feature that has not been addressed is the case of a possible rejection of the application and conditions governing that circumstance. A sound prototype could be found in the Maintenance Regulation, where the requested Central Authority may “refuse to process an application only if it is manifest that the requirements of this Regulation are not fulfilled.” Rejection of the application solely on the basis that additional documents or information are needed is not an option. Instead, there is an obligation to seek additional documents or information, and only if the requesting Central Authority fails to deliver these within 90 days will the requested Central Authority stop processing the application and inform the relevant parties of that decision. Each of the notices is issued on the mandatory form annexed to the Maintenance Regulation. Of course, parental responsibility is not the same thing as maintenance, and considerations and provisions appropriate to one area of law and cooperation may not be suitable for another. Maintenance primarily concerns money and may be more suited to administrative and formal solutions and provisions than the area of child protection and parental responsibility, which is per se urgent. However, it is noteworthy that while Brussels II bis could have been called imprecise and rudimentary, it was on the other hand also to some degree informal, open and flexible, with a view in particular to promoting speed. Many ways of achieving the desired effect were tolerated, and Brussels II bis was thus more similar to the Hague Convention and the rather vague role of Central Authorities stipulated therein. With the new Brussels II ter, their role has been significantly harmonized and See Article 58 of the Maintenance Regulation. See Annex VIII of the Maintenance Regulation. 73 Digitalisation of justice in the European Union. A toolbox of opportunities. Brussels, 2.12.2020. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions COM(2020)710 final. 71 72

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Mirela Župan/ Christian Hoehn/ Ulrike Kluth broadened, but international cooperation has also become more formalized. To this end, Brussels II ter tends to lean more towards other European regulations such as the one on maintenance. Nevertheless, as outlined above, some provisions included in the latter are significantly skipped – or forgotten – in the former. This is probably due to the highly controversial and lengthy revision process and is clearly a result of compromise at the political level.74 Legal practice will show whether this apparent political compromise works satisfactorily or whether some of the new provisions include too much regulation and/or whether the addition of more provisions might have been wise. In some cases the CJEU will decide. We will probably see results tending in both directions. Certainly there will at least be plenty of time and opportunity for further discussion.

74 U.P.GRUBER/ L.MÖLLER, Die Neufassung der EuEheVO, IPrax 2020, pp. 393404, at p. 404.

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A HUMANIST APPROACH TO PRIVATE INTERNATIONAL LAW AND THE INTERNET A FOCUS ON PLATFORM USERS AS WEAKER PARTIES Ilaria PRETELLI* I. II

III.

IV.

V.

Introduction Functional Sovereignty of Platforms A. Ethical Implications and Systemic Risks 1. Labour Market Distortions 2. Disinformation and Political Polarisation 3. Violence against Women and Cybercrime B. Why Private International Law Matters 1. Protecting Users by means of Private International Law 2. A Humanist Approach to Private International Law Private International Law and Platform Users A. Connecting Factors in Relationships between a User and the Platform 1. Organisation v Intermediation of Services in the Brussels I System 2. Gig Workers, Crowdworkers and the Rome I Regulation 3. Party Autonomy in Asymmetric Relationships 4. Targeting Factors as Expressions of Locus Lucri B. Connecting Factors in Relationships between Platform Users 1. Consolidation of Favor Laesi in Torts 2. Habitual Place of Work v Engaging Place of Business Forms of Digital Enforcement A. The Google v. Equustek Solutions Paradigm B. Blocking Orders to Stop Human Rights Abuses C. Online Dispute Resolution and (Reverse) Recommender Systems Conclusions A. Workers B. Victims of Online Torts C. Consumers and Locus Lucri D. Professional Users and Party Autonomy in Heteronomic Relations E. Digital Enforcement

Swiss Institute of Comparative Law. Thanks to Gian Paolo ROMANO, Marie-Elodie ANCEL, Sixto SANCHEZ LORENZO, Karen DRUCKMAN and Robert BRAY for their valuable comments on earlier drafts. The views expressed here are my sole responsibility. *

Yearbook of Private International Law, Volume 22 (2020/2021), pp. 201-243 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Ilaria Pretelli The apps and platforms that we use on a daily basis have increased the effective enjoyment of many fundamental rights enshrined in our constitutions and universal declarations. These were drafted to guarantee a fairer distribution of the benefits of human progress among the population. The present article argues that a humanist approach to private international law can bring just solutions to disputes arising from digital interactions. It analyses cases where platform users are pitted against a digital platform and cases where platform users are pitted against each other. For the first set of cases, an enhanced protection of digital platform users, as weaker parties, points to an expansion of the principle of favor laesi in tortious liability and to a restriction of the operation of party autonomy by clickwrapping, in consideration that a gross inequality of bargaining power also exists in business to platform contracts. In the second set of cases, reliable guidance is offered by the principles of effectiveness and of protection of vulnerable parties. Exploiting the global reach of the internet to improve the situation of crowdworkers worldwide is also considered as a task for the ILO to seriously commit upon. In line with the most recent achievements in human rights due diligence, protection clauses pointing to destination-based labour standards will be a welcome step forward. The principle of effectiveness justifies the enforcement of court decisions in cyberspace, which has become a political and juridical necessity.

I.

Introduction

Law and justice are intertwined with society: ubi ius ibi societas and also ubi societas ibi ius. Since Facebook was launched on the global market in 2006, social interactions started happening in digital environments, where people belong to “communities”. Initially crafted by geeks, these digital environments have assumed a global dimension and require adaptation to the current structures of the market economy. Digital platforms are now run by legal companies doing business by selling or granting to the public a personal web space – a page, sometimes called “profile”, “wall”, “workplace”, etc. – enabling any person to become a “platform user” and, in this capacity, to interact with other people by means of the platform.1 During the recent pandemics the availability of digital environments has considerably reduced the negative impacts of social isolation as a consequence of governmental restrictions. Interactions on line are not only bilateral or multilateral – as when you videocall your relatives or other groups – they have a societal dimension because posts of users in platforms may be instantly and permanently

1 On the concept of platform ecosystem see A. HEIN/ M. SCHREIECK/ T. RIASANOW/ D. SOTO SETZKE/ M. WIESCHE/ M. BÖHM & H. KRCMAR, Digital platform ecosystems, Electronic Markets, 2020; P. CONSTANTINIDES/ O. HENFRIDSSON & G.G. PARKER, Platforms and infrastructures in the digital age, Information Systems Research, 2018, p. 381-400; T. RODRIGUEZ DE LAS HERAS BALLELL, The Legal Anatomy of Electronic Platforms: A Prior Study to Assess the Need of a Law of Platforms in the EU, The Italian Law J., 2017, p. 149-176.

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A Humanist Approach to Private International Law and the Internet available to millions other users of the digital community. They are easily transmissible, and can become viral. Digital platforms deploy and govern thematic communities: conversation societies (social media), romantic/erotic ones (dating apps), digital marketplaces for working services and utilities, travel and hotel agencies, transportation services, conference and meeting services, etc. Age groups, especially teens, are attracted by specific apps to a point where physical spaces of interaction are no longer enough to provide social integration: owning a smartphone and belonging to certain communities is a must. The interface of the platform becomes the theatrical stage where a digital community develops and prospers on the basis of the appeal it exerts on the public. These communities may or may not be interfaced with each other. I may be present with a profile that has excellent reputational feedback on Airbnb – where I am rated with five stars, and considered fully reliable – whereas Vrbo gives me half of the available stars in its reviews, thus making its users less keen to interact with me. The main difference between the two modes of expressing my personality lies in the circumstance that, in real life, I am normally identified by my name, certified by public records and other personal data, in my working environment as well as in my sports club etc.; whereas in digital societies, it is normal to pick up a username and an image specific to each platform, and it is less frequent to choose to make the digital username always correspond to the real name of civil status records. Even after big techs have started obliging users to design a digital ID in order to access their services, these are (still?) limited to the specific network for which they are created. Anonymity is considered an advantage of platform ecosystems and prevents the risks of confining people in Weberian iron cages where they can be ranked according to a “social score”.2 Interactions among platform users may remain digital. I may continue to express my personality in a digital community without having to link my digital relations to real-world ones. This happens with gaming apps, but it can also happen with apps for working services to be provided on line. On the other hand, in some cases a real-world interaction between the platform users is unavoidable. Transportation services granted by the geolocalisation of users will normally lead the transportation service provider to display her real-world identity as username. Even simple search engines, such as Google, encourage the creation of a profile for easier access. 2 Max WEBER, Political Writings, Cambridge UP, 1994. See CH. MUELLERLEILE/ S.L. ROBERTSON, Digital Weberianism: Bureaucracy, Information, and the Technorationality of Neoliberal Capitalism, Indiana J. of Global Legal Studies, 2018, p. 187-216; D. CURRAN/ A. SMART, Data-Driven Governance, Smart Urbanism and Risk-Class Inequalities: Security and Social Credit in China, Urban Studies, 2018, p. 1-41. Up to now, in most of the world’s countries, accessing digital platforms does not require a publicly certified identity, and the introduction of a compelling “e-id” is confined to public services such as civil records and paying apps. Digital administrative services (such as the Italian SPID; Sistema pubblico di identità digitale), e-banking services (such as TWINT in Switzerland), or tracing apps used for alert and prevention of the spread of the pandemics, all imply a verification of the user’s real identity by reference to a smartphone or similar device.

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Ilaria Pretelli

II.

Functional Sovereignty of Platforms

The new technologies of the information society aspire to facilitate relationships among human beings and have succeeded in many important respects. The recent pandemic has shown how they can bring joy to a great number of persons and alleviate the pain of isolation. The rights of people with disabilities to participate in social and economic life are significantly more effective. Spontaneous initiatives, such as the #MeToo movement, have brought epochal changes and improved the conditions of life and work of many human beings, especially women. Thanks to the open archives and institutional repositories of many universities, scientific publications are available to anyone with access to the internet. Initially, recourse to digital technologies had also raised the hope to realise utopic anarchist values by directly sharing personal property, exchanging working services, or managing digital currencies and thus avoiding the lucrative business of private sector intermediaries. Hopefully, these experiences of collaborative economy will develop and prosper.3 However, in parallel, a limited number of digital platforms (FAMGA)4 have acquired such power, in terms of mass surveillance and governance, that they are regarded as functionally sovereign.5 Large digital platforms are able to make the rules, control their implementation and enforce them: they exercise complete control over the participation of users in the community, by authorising access, and blocking and excluding members. They are certainly governed by the laws of a certain number of states, but they also take advantage of the immateriality of their software – which can be operated from anywhere in the 3 A. GARAPON/ J. LASSÈGUE, Justice Digitale, Paris 2018, p. 276 state that if at the beginning of the last century one could say “society is the State where every man is a businessman” (TÖNNIES), today we should say that every man is either a service provider or a consumer’, since “digitalization corresponds to an extension and despecialisation of the merchant sphere”. See J. B. SCHOR/ W. ATTWOOD-CHARLES, The “sharing” economy: labor, inequality, and social connection on for-profit platforms’ Sociology Compass, 2017; R. STAGLIANÒ, Lavoretti, Così la sharing economy ci rende tutti piu poveri, 2018; E.A. ROSSI, La sharing economy nel diritto internazionale privato, 2018; I. PRETELLI, Conflict of laws in the maze of digital platforms, Schulthess 2018, and the interdisciplinary contributions therein; M. CHERRY, Beyond Misclassification: The Digital Transformation of Work, Comp. Labor L. & Policy J., 2016, on line at https://ssrn.com/abstract=2734288; J. BERG/ M.A. CHERRY & U. RANI, Digital Labour Platforms: A Need For International Regulation?, Revista de Economía Laboral, 2019, p. 104-128. 4 FAMGA is an acronym for Facebook, Apple, Microsoft, Google and Amazon. GAFA and other acronyms are also used to refer to the monopolistic positions of Big Tech (or Tech Giants, Big Five etc.). 5 A. MORELLI/ O. POLLICINO, Metaphors, Judicial Frames and Fundamental Rights in Cyberspace, Am. J. Comp. Law, 2020 (on line at https://ssrn.com/abstract=3422946), p. 26, note 66 with reference to F. PASQUALE, From Territorial to Functional Sovereignty: The Case of Amazon, Law and Political Economy, Dec. 6, 2017, (also on line at https://lpeblog.org/2017/12/06/from-territorial-to-functional-sovereignty-the-caseofamazon/). C. DEMCHAK/ P. DOMBROWSKI, Cyber Westphalia Asserting State Prerogatives in Cyberspace, Georgetown J. of Int’l Affairs, 2013, p. 29-38; A.D. MURRAY, The Regulation of Cyberspace: Control in the Online Environment, Routledge-Cavendish 2007.

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A Humanist Approach to Private International Law and the Internet world – and of the effectiveness of their power and control over their users. Because of these peculiar circumstances, digital platforms are able to minimise the impact of State regulations on their functioning, enact dumping policies and negotiate on an equal footing with nation states. Entering a digital community means accessing its services by accepting the terms and conditions that the platform has set. Terms and conditions become the law governing the reciprocal interactions between platform users within the platform’s interface. Terms and conditions include limits to the “freedom of expression” of users and allow the platform to act as a rule-keeper by blocking and releasing posts, payments, monitoring activities, and filtering and taking down content uploaded by users that potentially infringes the platform’s rules, etc. These rules, are often in sharp contrast with antitrust regulations.6 With reference to platforms running on decentralised ledgers (DLT’s), selfgovernance is presented as a logical necessity.7 The aphorism “Code is Law”, which refers to the self-executing character of the blockchain, has encouraged predictions of a future ineluctable subjection of human relations to the perfection of machines’ choices on dispute settlements.8 However, even in times when mathematical programming enables machines to extract a solution from data and provide computational justice, there is still room for the unexpected and for prevarication, as “The DAO” and other incidents have shown.9 Heteronomous rules and private international law remain needed in the absence of an amicable out-of-courtsettlement.10 E.g. the Commission Decision of 27.6.2017 relating to proceedings under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the Agreement on the European Economic Area (AT.39740 - Google Search (Shopping)) sanctioning google’s practice of self-preferencing. 7 A. GARAPON/ J. LASSÈGUE, (note 3), stigmatise the digital hubris of computational justice. 8 Mathematical predictability of the legal consequences of human behaviours has been a very appealing goal to pursue for continental lawyers, ever since the Enlightenment and the Napoleonic concept of a comprehensive code of conduct. Recently, the link between illuminism and the code has been criticised by J.-F. NIORT, Retour sur “l'esprit” du Code civil des Français, Histoire de la justice, 2009, p. 121-160. 9 DAO is an acronym for Decentralised Autonomous Organisation. The DAO is one of the first DAOs. See D. SIEGEL, Understanding The DAO Attack, https://www.coindesk. com/understanding-dao-hack-journalists. See M.A. BALZAROVA/ D.A. COHEN, The blockchain technology conundrum: Quis custodiet ipsos custodes?, Current Opinion in Environmental Sustainability, 2020, p. 42-48; S. RIVA, Decentralized Autonomous Organizations (DAOs) in the Swiss Legal Order, this Yearbook, 2019/2020. On the circumstance that pre-programmed codes and their adjustments are subject to human evaluation as regards good faith of the programmer, the investors etc. see B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(I) 03; Shair.Com Global Digital Services Ltd. v Arnold, 2018 BCSC 1512; AA v Persons unknown who demanded Bitcoin on 10th and 11th October 2019 and others, 2019 EWHC 3556 (Comm). 10 F. GUILLAUME, Aspects of private international law related to blockchain transactions, in D. KRAUS/ T. OBRIST & O. HARI (eds), Blockchains, smart contracts, decentralised autonomous organisations and the law, 2019, p. 49-82, on the law applicable to the theft of cryptocurrency; M. TRIMBLE, Targeting Factors and Conflict of Laws on the 6

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Ilaria Pretelli A proposed EU instrument, the “Digital Services Act” (DSA), identifies four types of internet service providers that may pose systemic risks for the societies in which they operate.11 The future Regulation introduces rules for mere intermediaries and hosting services providers not considered to be online platforms,12 and imposes more substantial obligations for two other categories: online platforms offering hosting services, which include online marketplaces, social networks and search engines; and “very large online platforms” also using recommender systems and online advertising.13 A.

Ethical Implications and Systemic Risks

The DSA identifies three categories of systemic risks associated with the operation of digital platforms, namely: i) dissemination of illegal content; ii) violation of fundamental rights and freedoms; iii) manipulation of the information displayed, “with a foreseeable impact on health, civic discourse, electoral processes, public security and protection of minors”.14 1.

Labour Market Distortions

Algorithms to share working services emerged with Amazon Mechanical Turk in 2005 and Uber in 2011. Their business model allows every asset of the business run by the company to be outsourced by means of the platform. All costs related to the services provided are borne by users, including all costs related to the human resources themselves, in terms of insurance policies, invalidity arrangements, holidays, etc.15 Lean platforms such as Lyft, Foodora and Deliveroo, to only name Internet, The Rev. of Litigation, 2020, p. 1 et seq. observes that the argument of a borderless internet has been overcome by technology. See also ID., The Territorial Discrepancy Between Intellectual Property Rights Infringement Claims and Remedies, Lewis & Clark L. Rev. 2019, p. 501 et seq., p. 535-538. 11 Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital Services Act) and amending Directive 2000/31/EC COM/2020/825 final. It distinguishes mere conduit services (transmission of information); caching services (temporary storage of information) and hosting services (storage of information), and considers online platforms as a “subcategory” of hosting services (Recital 13) that, in addition to storing information “disseminates that information to the public”. 12 Ibid. Whenever the dissemination to the public “is merely a minor and purely ancillary feature of another service”, as would be “the comments section in an online newspaper”, the hosting services provider will not be considered an online platform. 13 Ibid. 14 Proposal for a Digital Services Act (note 11), proposed Article 26. 15 I. DAUGAREILH/ C. DEGRYSE & P. POCHET, The platform economy and social law: Key issues in comparative perspective, ETUI 2019, denounce the “social evasion” policies of platforms (on line at https://www.etui.org/publications/working-papers/the-platformeconomy-and-social-law-key-issues-in-comparative-perspective); W.P. DE GROEN/

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A Humanist Approach to Private International Law and the Internet a few, also flourished and conquered the market thanks to an externalisation of the assets necessary to provide the services they offer.16 Cars, bikes, the hardware for the app to run, etc., all belong to the worker/user, together with the business risks. The entrepreneurial risk is transferred to the users/workers, and thus to the society in which they operate. That risk includes the workers’ health and pension rights, and is reminiscent of the disturbing images of the first industrial revolution. While then it was smallpox, measles, scarlet fever and whooping cough that killed workers’ families,17 today’s platform workers are exposed to burn-out syndromes,18 workplace violence,19 accidents and diseases linked to long-term stress exposure,20 etc. The lack of duty of care on the platform coupled with the isolation of workers increases the risks of impoverishment for workers and for the society in which they operate.21 All platform workers are affected: totally fungible workers delivering their low-skilled services in person, with an obligation to accept the work allocated by the platform; workers delivering their services in person after selecting work available on the platform according to their skills; highly skilled workers delivering their services on line following selection by the client (usually on the basis of a contest or their reputation).

Z. KILHOFFER/ K. LENAERTS & I. MANDL, Employment and working conditions of selected types of platform work, Dublin 2018, identify three types of worker: on-location platformdetermined work: low-skilled work allocated by the platform and delivered in person; onlocation skilled work delivered in person; high-skilled online work (https://www.eurofound. europa.eu/publications/report/2018/employment-and-working-conditions-ofselected-typesof-platform-work). 16 In the case of Uber, certain states – as Italy and Israel – have reacted to the dumping prices by banning certain services provided by the application. 17 F. ENGELS, Die Lage der arbeitenden Klasse in England, Leipzig 1845. 18 Constant availability may lead to an increase in stress levels and prolonged working hours. See C. DEGRYSE, Digitalisation of the Economy and Its Impact on Labour Markets, ETUI 2016.02 on line at https://doi.org/10.2139/ssrn.2730550; S.P. CHOUDARY, The architecture of digital labour platforms: Policy recommendations on platform design for worker well-being, ILO Future of Work Research Paper No 3, 2018, on line at https://www.voced.edu.au/content/ngv:81841; B. ROGERS, The Social Costs of Uber, Un. of Chicago Law Rev. Online, 2017, p. 85-102 (https://chicagounbound.uchicago.edu/ uclrev_online/vol82/iss1/6). 19 S.M. HIGNETT/ M. EDMUNDS OTTER & C. KEEN, Safety risks associated with physical interactions between patients and caregivers during treatment and care delivery in Home Care settings: a systematic review, Int’l J’ of Nursing Studies, 2016, p. 1-14. 20 C. DEGRYSE, (note 18); E. HARMON/ M.S. SILBERMAN, Rating working conditions on digital labor platforms, Computer Supported Cooperative Work, 2018, p. 1275-1324. M.T. HÜTT/ C. SCHUBERT, Economy-on-demand and the fairness of algorithms, European Labour Law J., 2019, p. 3-16; OECD, The Future of Social Protection: What Works for Non-standard Workers?, 2018, on line at https://www.oecd-ilibrary.org/social-issuesmigration-h; M.C. URZI BRANCATI/ A. PESOLE & E. FERNANDEZ MACIAS, Digital Labour Platforms in Europe: Numbers, Profiles, and Employment Status of Platform Workers, Publications Office of the European Union, Luxembourg, EUR 29810 EN, 2019. 21 A. GARAPON/ J. LASSÈGUE (note 3), p. 276.

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Disinformation and Political Polarisation

Democracy can benefit from new technologies for quite obvious reasons. The electronic vote will allow a broader participation in elections or referendums favouring people living in remote areas or disabled persons facing obstacles to casting their vote. Popular polls are constantly organised by institutional platforms to elucidate trends and urgent needs of the people. The aforementioned #MeToo movement has rapidly brought attention to the phenomenon of violence against women in specific working environments, helped identify sexual abuses, prompted legal reforms and initiatives to end street harassment and other forms of sexist behaviour. By contrast, a spontaneous coalition within the video game industry launched a series of sustained misogynistic attacks online under the hashtag #GamerGate in 2014 and 2015. A study of the incident revealed an alignment between the rationales informing the structural design of platforms such as Reddit and Twitter, their governance and administration, and the mass abuse and harassment experienced by users.22 This led IT workers and independent thinkers to voice concerns for global governance and to call for specific legal intervention to prevent platforms from provoking, even unwillingly, foreseeable social divisions.23 The propagation of hate speech in Burma has been conclusively linked to the diffusion of Facebook, that has become, in the local language, a synonym for internet. In particular, it is a consequence of the platform's targeting of the Burmese market through its Free Basics program.24 On January 8, 2021, a series of tweets posted by President Donald J. Trump were considered by Twitter contrary to the platform’s “Glorification of Violence Policy” and led to the permanent suspension of the user @realDonaldTrump from the platform’s service.25 According to the platform’s assessment, those posts and future ones “were highly likely to encourage and inspire people to replicate the criminal acts that took place at the U.S. Capitol on January 6, 2021” since – according to the platform’s findings – they “already begun proliferating on and off-Twitter, including a proposed secondary attack on the US Capitol and state capitol buildings on January 17, 2021”. Ensuring a reliable, neutral and socially bearable information is now understood as a common responsibility of states and platforms.26 M. SALTER, From geek masculinity to Gamergate: The technological rationality of online abuse, Crime Media Culture 2017, p. 1-18. 23 A. SUPIOT, La Gouvernance par les nombres. Cours au Collège de France (20122014), Paris 2015. 24 Https://developers.facebook.com/docs/internet-org/: “Free Basics makes the internet accessible to more people by providing them access to a range of free basic services like news, maternal health, travel, local jobs”. See https://www.reuters.com/ investigates/special-report/myanmar-facebook-hate/; https://www.bbc.com/news/worldasia-46105934. CH. FINK, Dangerous Speech, Anti-Muslim Violence, and Facebook in Myanmar, J. Int’l Affairs, 2018, p. 43–52. 25 See https://blog.twitter.com/en_us/topics/company/2020/suspension. 26 A. KAVADA, Engagement, bonding, and identity across multiple platforms: Avaaz on Facebook, YouTube, and MySpace, MedieKultur: J. of Media and Communication Research, 2012, p. 21 https://doi.org/10.7146/mediekultur.v28i52.5486 explains the link 22

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A Humanist Approach to Private International Law and the Internet 3.

Violence against Women and Cybercrime

Thanks to the ease of reporting and the anonymity offered by most platforms, the internet can significantly enhance the protection of women's rights. Recent experiences with the global shame to which social media have exposed sexual predators nourish our hope that workplace violence and paedophilia in clerical circles or secular humanitarian missions will eventually end. By inciting public indignation, social media can provoke changes in religious, political or other organised establishments, which are otherwise able to shield themselves behind opaque hierarchical structures. These promising improvements will continue under the impulsion of the public. At the same time, new forms of violence emerge and require, instead, specific institutional intervention and multinational cooperation. A trade in WhatsApp videos shot by gang rapists during the commission of their crimes has significantly increased violence against women in India.27 Tagging a girl in a picture close to a boy, in an Instagram post, may be tantamount to a public authorisation to rape her or kill her in subcultures characterised by archaic ideas of male “honour”. The inability of women to enforce their right to have Facebook and YouTube remove videos taken by former boyfriends has led some of these victims of image-based sexual abuse (“revenge porn”) to commit suicide.28 The

between a platform’s design and its role. A local experience that became global is that of a Vermont community that vowed to fulfil a “social promise” to its members. See A. LIPTAK, How a Vermont Social Network Became a Model for On line Communities, 2019, on line at https://www.theverge.com/2019/1/24/18129437/front-porch-forum-vermont-social-network -listserv-local-on line-community. 27 R. SRIVASTAVA, From streets to smartphones: India grapples with online rape, https://cn.reuters.com/article/us-india-women-rape-idUSKBN1DF0UN, 15 November 2017; The Whatsapp suicide, https://www.bbc.com/news/magazine-37735370. 28 Italians are still in shock over the consequences of an image-based sexual abuse that went viral, leading the woman concerned, Ms. Tiziana Cantone, to commit suicide at the age of 31. Subsequently, a specific Law (No 69/2019 aka the “red code”) has introduced the crime of “disseminating sexually explicit material without the consent of the entitled person” and other provisions for the protection of victims of domestic and gender-based violence. On revenge porn see R. JEWKES/ E. DARTNALL, More research is needed on digital technologies in violence against women, www.thelancet.com/public-health, June 2019; N. SUZOR/ M. DRAGIEWICZ/ B. HARRIS/ R. GILLETT/ J. BURGESS & T. VAN GEELEN, Human Rights by Design: The Responsibilities of Social Media Platforms to Address Gender-Based Violence Online, Policy & Internet, 2019, p. 84-103; I. LOPEZ-NEIRA/ T. PATEL/ S. PARKIN/ G. DANEZIS & L. TANCZER, “Internet of Things”: How Abuse is Getting Smarter, Safe – The Domestic Abuse Quarterly, 2019, p. 22-26 (https://ssrn.com/abstract=3350615); N. HENRY/ A. FLYNN & A. POWELL, Policing image-based sexual abuse: stakeholder perspectives, Police Practice and Research 2018, p. 565-581, at 566; B. BRAMON, Transformative technology: harnessing the power of tech to address gender-based violence in Latin America and the Caribbean, 2017 (https://blogs.state.gov/stories/2017/12/04/en/transformativetechnology-harnessing-power-tech-address-gender-based-violence); F. COLETTI, Revenge porn: the concept and practice of combatting nonconsensual sexual images in Europe, 2017, (https://repository.gchumanrights.org/handle/20.500.11825/497); A. BURRIS, Hell Hath No Fury like a Woman Porned: Revenge Porn and the Need for a Federal Nonconsensual Pornography Statute, Florida. L. Rev. 2014, p. 2325; C. HAYES, Tackling

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Ilaria Pretelli pandemics has increased the risk factors associated with gender-based interpersonal cybercrime and technology-facilitated sexual violence.29 Isolation as a consequence of smart working or quarantines has impaired the possibilities of social control, reduced women’s contacts with their habitual circles and the accessibility of institutions where to seek protection from violence. Facebook reports that it has informed the National Center for Missing and Exploited Children of dozens of millions of images and other content that breach policies on child nudity and sexual exploitation.30 The rise of child pornography is alarming. In Italy, in the last 10 years, child pornography offences have had a dramatic increase of 333%, with a clear prevalence of girls: 74% of the victims.31 In 2019, six thousand children were concerned. Even more impressive is the 700% increase over the decade of victims of the crime of possession of pornographic material.32 Some children are attracted by their predators in “innocent” games as Minecraft.33 Child trafficking, child online enticement, cyberbullying, are only examples of the many serious threats that internet represent for children, and for the social fabric as a whole. Digital civility is improving and will continue to improve, especially with the help of future legal instruments. Yet, hate speech and cybercrime seem to be rising in numbers.34

gender-based violence with technology. Case studies of mobile and internet technology interventions in developing contexts, Hong Kong 2014. 29 N. HENRY/ A. POWELL, Technology-Facilitated Sexual Violence: A Literature Review of Empirical Research, Trauma, Violence, & Abuse, 2018, p. 195-208. 30 See Facebook, Transparency report, on line at https://transparency.facebook.com. The Italian Supreme Court, 13 January 2017, No 22265 considers Article 600-quater of the criminal code, which punishes virtual pornography and deep nude fake, to also be applicable to comic representations when obtained with high quality digital technology, which makes sexual situations and activities involving minors appear to be true, even though they have no correspondence with facts in reality. 31 Data from https://terredeshommes.it/indifesa/pdf/Dossier_indifesa_2020.pdf. 32 Ibid. 33 I. SHAMIM, Child Sexual Abuse and Exploitation Online in Bangladesh: The Challenges of the Internet and Law and Legal Developments, in Sh. SHAHIDULLAH (ed.), Crime, Criminal Justice, and the Evolving Science of Criminology in South Asia, 2017, p. 145-171, presents a series of laws that the Government of Bangladesh has enacted as of 2010 “to curb and control the spread of online child sexual abuse”: the Prevention of Domestic Violence Act, the National Child Labor Elimination Policy, the Pornography Control Act, the Human Trafficking Deterrence and Suppression Act, etc. stating that innovation in technology to counteract these acts is of the essence. 34 See the 5th edition of Microsoft Digital Civility Index (February 2021): https://www.microsoft.com/en-us/online-safety/digitalcivility?activetab=dci_reports%3apri maryr3.

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Why Private International Law Matters

1.

Protecting Users by Means of Private International Law

Traditionally based on the dichotomy between personal and territorial reach of laws, private international law is now confronted with the possibility of defining the scope of laws by reference to their digital reach. In the past, individuals belonging to the same society but with different cultural roots and references have had the possibility of declaring the law under which they lived (qua lege vivis?). Also, laws identifying their scope by reference to a territory have served policies of integration and assimilation.35 BARTOLUS had suggested focusing on the inherent character of a rule in order to understand, through a meticulous analysis of its very wording and function, whether the rule was intended to have a personal or a territorial reach. In present times, societies exist not only due to the common national roots of individuals or the circumstance that individuals carry on their lives in the same spot, but also because they interact online on a given platform. Among the methods developed to ensure appropriate allocation of crossborder cases are the principle of effectiveness and party autonomy. The first affirms that the regulatory power belongs to the state capable of enforcing its own point of view.36 In the digital space, this principle inspires direct enforcement by platforms.37 The second method of allocation, party autonomy, is only viable in P2P relations: when users are asked to accept through a click-wrap agreement, an illegible series of legal clauses, including law and forum selection clauses, after scrolling through an interminable text on the screen, they are not expressing their will but fulfilling a pre-condition to access the platform.

B. ANCEL, Éléments d'histoire du droit international privé, Paris 2018, p. 70, explains that the personal character of the legal system governing the south of Europe under the rule of barbarism answered realpolitik needs. The governors were inferior in number to the governed, and ensuring that their laws and customs were applied served to make the conquered still feel at home, despite the change in power. One could view it as a means of captatio benevolentiae. 36 F. KAHN, Gesetzeskollisionen, München & Leipzig, 1928 (1891), p. 31-46, used the expression Näherberechtigung, the closest competence to recognise the position of power of the state of enforcement. The idea was then taken up by M. WOLFF, who introduced the idea of doctrinal search for the greatest proximity (der größeren Nahe), also explained by W. WENGLER. Traditionally, the principle did not seem to have any significance as regards intangible things that have no physical existence. Later, a fictitious location even for intangible property was admitted as a kind of analogy. The law of the place of enforcement presents several advantages and, above all, predictability. 37 Developed within the school of Law and Economics, private enforcement is contrasted with public enforcement in competition law, as an alternative and more efficient means of ensuring that the rules of the market are observed. Recent studies extend this approach to other legal fields, e.g. J. FINE/ T. BARTLEY, Raising the floor – New Directions in Public and Private Enforcement of Labor Standards in the United States, J. of Industrial Relations, 2019, p. 252-276, call attention to certain private regulatory initiatives based on the empowerment of “locally trusted organisations” to improve enforcement of wage and hours laws in California and Florida. 35

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Ilaria Pretelli The present rules on party autonomy limit users’ access to justice and simpler rules need to be promoted, without impairing the ability of very large online platforms to self-govern their ecosystems.38 Many states and the European Union are finding ways to ensure a fairer settlement of disputes originated by online interactions, especially as regards consumer laws.39 A wider multilateral cooperation to design uniform rules should ensue, given the global reality of the internet, and the need to protect the most vulnerable parties.40 2.

A Humanist Approach to Private International Law

Historically, humanism refers to the movement of ideas developed during the Renaissance between Florence, Urbino and other Italian city-states, as a reaction to the authoritarianism of the Middle-Ages.41 The ideal of humanitas conjugates realistic social criticism with the committed pursuit of utopian ideals. Despite the many different contexts and experiences in which humanism is employed, it has always had an anthropocentric accent.42 The Italian term umanità has a meaning of kindness, compassion, but also wisdom of the human (homo sum, nihil humani a me alienum puto).43 It values a direct experience of the human, both across time and with wisdom (bon giudicio), which consists of a mixture of culture coupled with experience.

38 See G.P. ROMANO, Droit international dit privé et droit international dit public: Eléments d’une théorie unitaire et humanisée du droit international, in press, stating: “Il convient aussi de reconnaître que si je reçois spontanément de mon débiteur ce qui m’est dû au moment où j’en ai le droit, l’effectivité de mon droit est maximale. Si je dois lui envoyer un rappel et qu’il s’exécute avec trois mois de retard, l’effectivité est un peu moindre. Si je dois le mettre aux poursuites, ce qui me coûte 100 CHF, l’effectivité est moindre. Si je dois l’assigner en justice – avancer des frais judiciaires, recruter et rémunérer un avocat – et que mon dû m’est versé après deux ans à la suite d’un jugement, mon droit subjectif menace d’être beaucoup moins effectif”. 39 See the Directive 2013/11/EU on alternative dispute resolution for consumer disputes and Regulation 524/2013 on online dispute resolution for consumer disputes (the “ODR Regulation”). 40 See also I. PRETELLI, Protecting Digital Platform Users by Means of Private International Law, Cuadernos de Derecho Transnacional, 2021, p. 574-585. 41 The Umanisti were scholars basing education on the studia humanitatis, i.e. on classical studies in times when it was still possible, in a lifetime, to apprehend the integrality of the human cultural production (mainly Latin and Greek philosophy, rhetoric, grammar, poetry etc.). Until recently, in Western culture, humanism seemed to have been irreversibly discredited by Heidegger’s assimilation of it with his negative vision of metaphysics. See, on the latter, T. ROCKMORE, On Heidegger's Nazism and Philosophy, 1991, p. 251; D. DI CESARE, Heidegger e gli ebrei. I "Quaderni neri", Torino 2014, p. 233. 42 E. PANOFSKY, Meaning in the Visual Arts: Papers in and on Art History, New York, 1955, p. 1-2. 43 Ἑαυτὸν τιμωρούμενος (I, 1, 25), comedy by Publius Terentius Afer (163 BC).

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A Humanist Approach to Private International Law and the Internet From these roots stems the idea of human dignity, an inherent attribute of all persons, a moral conquest and a social responsibility.44 Adopting a humanist approach means, in the first place, describing the reality of the present human experience, depicted as it is, “tout entier, tout nu”45 in order to acquire a sound awareness of what is going on in the physical (including digital) world. The photograph shows that the most advanced regulations on internet’s activities require highly specialised lawyers and, for that reason, may provide limited chances of success to the average internet user confronting a tech giant. In the second place, a humanist approach invites to rethink law and its implementation to counteract emerging institutional tyrannies and promoting human happiness worldwide,46 thus avoiding that the human experience of a life of joy and pleasure remains confined to an elite.47 Universal declarations assume that freedom from want, freedom from fear and freedom from violence are fundamental rights.48 Those goals of freedom guide critical analysis of the existing rules, including private international law ones.49 Focusing on the possible techniques to pacify human relations will orient legal solutions to the pursuit of values perceived, in the present era, as being of primary consideration.50 An anthropocentric perspective can ensure that the ultimate beneficiaries of the principle of international harmony of solutions are human persons, although the principle may serve legal systems, and the science itself.51 44 Pico della Mirandola, De hominis dignitate oratio, 1486. See G. TOGNON, Giovanni Pico della Mirandola, Discorso sulla dignità dell'uomo, Brescia 1987. 45 See Les Essais de Michel de Montaigne, Bordeaux, 1588, (Au lecteur) on line at https://halshs.archives-ouvertes.fr/halshs-01337873/document (24.7.2021). 46 The disparities appear clearly from the data https://www.worldometers.info. E.g. 789,806,428 People have no access to a safe drinking water source; 853,538,771 people in the world are undernourished whereas 1,713,540,007 people are overweight. 47 Sir Thomas MORE, Utopia (1516), Cambridge 1975, p. 71, “Nothing is more human (and humanity is the virtue most proper to human beings) than to relieve the misery of others, remove all sadness from their lives and restore them to enjoyment, that is, pleasure”. 48 WOMEN'S EMPOWERMENT IN THE CONTEXT OF HUMAN SECURITY, Final Communiqué Bangkok 1999, recognising that “For human security to encompass empowerment and rights, it is critical to consider three stages: survival, security and autonomy” (https://www.un.org/womenwatch/ianwge/collaboration/finalcomm1999.htm). See also UNDP, Human Development Report (New York 1996), p. 50-56 on line http://hdr.undp.org/ en/content/human-development-report-1996. 49 J. HABERMAS, Discourse Ethics: Notes on a Program of Philosophical Justification, 1983 measures the legitimacy of individual rights on their discursive foundation followed by democratic recognition. I. M. YOUNG, Justice and the Politics of Difference, 1990, 76 denounces the perverse effect of apparently neutral organisational choices, as that of adopting a bureaucratic control of working activities and of the human daily routines. In the name of efficiency, this organisation model attaches persons to the power of authorities and experts that subject them. 50 U. SCARPELLI, L’etica senza verità, 1982, L. FERRAJOLI, Diritto e ragione. Teoria del garantismo penale, 1996. 51 See A. BUCHER, La dimension sociale du droit international privé, Recueil de cours, 2011, p. 94 with reference to mainstream doctrines advocating newly theorised and

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III. Private International Law and Platform Users Initially presented as a neutral method of law selection, private international law has slowly but steadily acknowledged its political foundations. Pursuing universally shared policy goals by means of private international law has become inescapable for global governance. Consequently, blind methods of allocation have given way to connecting factors based on shared constitutional values. The most pertinent are those that favour weak parties such as consumers or maintenance creditors in the law-selection process. Weaker parties are parties that are in a position of structural subjugation to their counterparty or of greater vulnerability. In family law, children are weaker parties for being persons in fieri, and they enjoy a special protection (the principle of the best interests of the child). In the domain of contracts, specific rules protect a series of identified categories: consumers, insurees, workers. Jurisdictional and by private international law rules, such as those enshrined in Article 21 of Regulation 1215/2012 and Article 8 of Regulation 593/2008, also serve to protect these categories. We argue that platform users should be added to this list of weaker parties, that the platform economy challenges the traditional distinction between consumers and professionals and that interactions between two platform users do not necessary respond to the same logic, nor do they need the same conflict of law rules, as the legal relationships between a platform user and the platform itself. A.

Connecting Factors in Relationships between a User and the Platform

Problems arising between a platform user and the platform itself should be solved with an eye to the imbalance between the two parties, granting enhanced protection to the weaker one. Users that are domiciled in the EU need to enjoy the protection granted to whoever falls within the categories of “consumer”, “worker”, etc. Users domiciled in the European Area of freedom, security and justice enjoy the protection granted to whoever falls within the categories of “consumer”, “worker”, etc. The imbalance characterising the relationship between a user and the platform is, however, independent of any user’s characterisation as a (codified) weaker party. A platform user is by definition subject to the heteronomic power of the platform, in particular whenever the platform is a “very large online platform”. Platforms collect and control all of their users’ data: username, vital records, geographical location, IP, content uploaded, pages visited, time spent on more elegant methods of coordination between legal systems. The aspiration to achieve the exactitude of hard sciences is a constant temptation for legal scholars, and particularly in private international law. A century ago, on account of the criticism to the Begriffsjurisprudenz by HECK and JHERING, CH. FRAGISTAS, Das Anfechtungsrecht der Gläubiger im internationalen Privatrecht, RabelsZ, 1938-39, p. 455, explained that the (then) traditional method of private international law failed to address the real needs of the people, stressing that law does not deal “with the classification of abstract concepts, but needs to focus on the management of the daily relations between individuals (Regelung von Lebensverhältnissen)”.

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A Humanist Approach to Private International Law and the Internet applications, etc. This objective circumstance increases the characteristic imbalance that led to the development of consumer and labour laws. Moreover, it extends this imbalance to B2B relations, as in the case of litigation between a professional platform user and the platform itself. This imbalance is relevant in both the conflict of laws and the adjudication of jurisdiction. The need to protect weaker parties has already influenced the willingness of courts to take jurisdiction over international cases,52 and supports techniques that correct the blind mechanism of private international law through recourse to overriding mandatory provisions, content-oriented rules etc. 1.

Organisation v Intermediation of Working Services in the Brussels I System

The criteria whereby to characterise workers as employees or self-employed persons have been set by the CJEU.53 A worker is a person who “for a certain period of time, […] performs services for and under the direction of another person, in return for which he receives remuneration”, regardless of “the legal characterisation, under national law, of the relationship between the person in question and [his or her counterparty]”,54 because “the sui generis nature of the employment relationship under national law cannot have any consequence in regard to whether or not the person is a worker for the purposes of Community law”.55 The concepts 52 The CJEU, 21 May 2015, Jaouad El Majdoub v CarsOnTheWeb.Deutschland GmbH, C-322/14, EU:C:2015:334 has considered clickwrapping to fall within the definition of “communication by electronic means which provides a durable record of the agreement […] equivalent to ‘writing”’ of the Brussels system”, with reference to Article 23(2) Regulation No 44/2001, which corresponds to Article 25(2) of Regulation No 1215/2012. 53 CJEU, 3 July 1986, Deborah Lawrie-Blum v Land Baden-Württemberg. C-66/85, ECLI:EU:C:1986:284; CJEU, 23 March 2004, Brian Francis Collins and Secretary of State for Work and Pensions, Case C-138/02, ECLI:EU:C:2004:172 para 26; 14 October 2010, Union Syndicale Solidaires Isère v Premier ministre and Others, C-428/09, ECLI:EU:C:2010:612 para 29; 9 July 2015, Ender Balkaya v Kiesel Abbruch- und Recycling Technik GmbH, C-229/14, ECLI:EU:C:2015:455; 4 December 2014, FNV Kunsten Informatie en Media v Staat der Nederlanden, C-413/13, ECLI:EU:C:2014:2411; and 17 November 2016, Betriebsrat der Ruhrlandklinik gGmbH v Ruhrlandklinik gGmbH, C-216/15, ECLI:EU:C:2016:883. 54 CJEU, 17 November 2016, Betriebsrat der Ruhrlandklinik gGmbH v Ruhrlandklinik gGmbH, C-216/15, ECLI:EU:C:2016:883, p. 27-29. 55 CJEU, 20 September 2007, Sari Kiiski v Tampereen kaupunki, Case C-116/06, ECLI:EU:C:2007:536 para 26. There is no consistency as to the characterisation of gig workers at the national level. Certain legal systems (Italy, Spain and the UK) have an intermediate status between that of employee and that of independent which are sometimes used to characterise gig workers. Initially, a Spanish decision (Social Tribunal Supremo, 12 June 2012, Rec 2060/2011) denied the characterisation of platform workers as employees in the absence of administrative documents justifying that status. The same conclusion was reached by the STS, 3 September 2018, No 248/2018 on grounds that the worker could choose his working hours, route and customers, owned the means of transport and mobile phone, and was responsible for any loss or damage. Subsequently, the same court (11

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Ilaria Pretelli of under the direction and remuneration also need an autonomous interpretation.56 This notion has influenced the text of the Directive No 2019/1152 of 20 June 2019 on transparent and predictable working conditions in the European Union,57 which considers the consequences of the digital transformation of work for employees and declares itself applicable to “bogus self-employed persons”.58 The dividing line between professional users and (bogus self-employed or) employees of digital platforms has been made dependent on the decisiveness of a digital platform’s control over the service marketed by its digital environment. This criterion was tested in decisions with opposite outcomes. In Uber Spain59 the EU found Uber’s terms and conditions for accessing the digital space comparable to those of a company directly offering a service in the field of transport. The intermediation service at issue was “regarded as forming an integral part of an overall service the main component of which was a transport service February 2019 No. 53 and 25 September 2020, No 805) characterised riders as employees of the platform because the role of the platform is decisive as compared to that of other working tools (as the means of transport) and because riders use the platform’s logo. In Italy, the status of employee was refused by Tribunale di Milano, 4 July 2018, M. Elazab c. Fodinho srl., No 1853/2018 but Appello Torino, 4 February 2019, Foodora, No 26/2019 gave the intermediate status of economic dependent worker to a Foodora rider. The UK Supreme Court, Pimlico Plumbers Ltd v Smith [2018] UKSC 29, on appeal from [2017] EWCA Civ 51, also recognised the economic dependence of “gig workers” and then considered Uber drivers as working for Uber in Aslam v. Uber BV [2018] EWCA Civ 2748 and Uber BV and others v Aslam and others [2021] UKSC 5. Users of the platform Deliveroo have been considered to be independent workers in the case Independent Workers Union of Great Britain v Central Arbitration Committee [2018] EWHC 3342 (Admin). In France Uber drivers are travailleurs salariés because the platform gives instructions, controls their respect and sanctions non-compliance with instructions given (Cour de cassation, 4 March 2020, Uber BV, No 19‐13.316). See E. SIGNORINI, Il diritto del lavoro nell’economia digitale, Torino 2018; ID. New Paths of Protection in the Digital Laboratory, in I. PRETELLI (note 3), p. 325-334. 56 CJEU, 3 July 1986, Deborah Lawrie-Blum, (note 53) paras 16, 17 and 21. 57 Recital 8 Directive 2019/1152 of the European Parliament and of the Council of 20 June 2019 on transparent and predictable working conditions in the European Union states that: “domestic workers, on-demand workers, intermittent workers, voucher basedworkers, platform workers, trainees and apprentices could fall within the scope of this Directive. Genuinely self-employed persons should not fall within the scope of this Directive since they do not fulfil those criteria. […] Bogus self-employment occurs when a person is declared to be self-employed while fulfilling the conditions characteristic of an employment relationship, in order to avoid certain legal or fiscal obligations. Such persons should fall within the scope of this Directive”. 58 A. SUPIOT, Préface de l’édition “Quadrige”. Critique de la régulation ou le droit du travail saisi par la mondialisation, Critique du droit du travail, 3rd ed., Paris 2018, U. HUWS, The making of a cybertariat? Virtual work in a real world, Socialist register, 2001; S. LORUSSO, Entreprecariat. Everyone is an entrepreneur, nobody is safe, Onompatopée, 2018. 59 CJEU, 20 December 2017, Asociación Profesional Elite Taxi v Uber Systems Spain SL, C-434/15, EU:C:2017:981 and the Opinion of AG Szpunar delivered on 11 May 2017, EU:C:2017:364.

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A Humanist Approach to Private International Law and the Internet and, accordingly, had to be classified, not as an “information society service” […] but as a “service in the field of transport’”.60 To be characterised as an information society service, a transportation service needs to be limited to the matching of supply and demand. So was characterised a Rumanian digital platform, named Star Taxi, in a subsequent case.61 The CJEU found that the app did not impose prices, that drivers were not supervised and that the organisation of the service remained in their hands. These circumstances led the Court to characterise Star Taxi as an intermediary because the influence exercised on the service was not decisive.62 In Airbnb Ireland,63 Airbnb was also found to be a simple digital intermediary, since its terms and conditions seem compatible with those of a company offering an intermediation service.64 a)

Definition of Decisive Influence

Platforms are classified as intermediaries or suppliers depending on the influence they exercise over the conditions under which the service is provided. Critical voices have pointed to the risk that a different legal framework for digital platforms would weaken legal certainty and generate confusion among market operators and users. However, the principle of equal treatment also prescribes to treat differently situations which are objectively different.65 In a case concerning the scope of Directive 2003/88/EC on the organisation of working time, the Court has set four criteria on the basis of which a selfemployed independent contractor may be classified as a “worker”: i) freedom to perform the service and to accept part or all of the various tasks required by a putative employer; ii) freedom to use subcontractors or substitutes to perform the service; iii) freedom to provide similar services to other parties, including direct competitors of the putative employer; iv) freedom to fix his own hours of “work”.66 60 See also CJEU, 10 April 2018, Uber France SAS v Nabil Bensalem, C‑320/16, ECLI:EU:C:2018:221, paras 21 and 22. 61 See CJEU, 3 December 2020, Star Taxi App SRL, C-62/19, ECLI:EU:C:2020:980. 62 Ibid. See paras 52-54. 63 CJEU, 19 December 2019, Airbnb Ireland, C-390/18, EU:C:2019:1112 and the Opinion of AG Szpunar delivered on 30 April 2019, EU:C:2019:336. 64 See CJEU, 19 December 2019, Criminal Proceedings against X, interveners: YA, Airbnb Ireland UC, Hôtelière Turenne SAS, Association pour un hébergement et un tourisme professionnels (AHTOP), Valhotel, ECLI:EU:C:2019:1112, para 57 and para 68: “Airbnb Ireland does not determine, directly or indirectly, the rental price charged […] still less does it select the hosts or the accommodation put up for rent on its platform”. 65 See M. INGLESE, Regulating the Collaborative Economy in the European Union Digital Single Market, Springer 2019, p. 34 and passim. 66 CJEU, Order of 22 April 2020, B v Yodel Delivery Network Ltd, C‑692/19, on Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time. See J.A. PRASSL/ A. ALOISI/ N. COUNTOURIS & V. DE STEFANO, EU Court of Justice’s decision on employment status does not leave platforms off the hook, Regulation for Globalization, 29 aprile 2020, (http://regulatingforglobalization.com/2020/04/29/eu-court-of-justices-decision-on-

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Ilaria Pretelli The “European agenda for the collaborative economy” 67 contains a different set of criteria, which include the following: i) the imposition of a price by the platform; ii) the imposition of key contractual terms – e.g. “setting mandatory instructions for the provision of the underlying service, including any obligation to provide the service” and iii) the “ownership of key assets”.68 These criteria are not alternative nor exclusive but purely indicative: all of them offer guidance in assessing if a given platform exercises a decisive influence over the conditions under which the service is provided. b)

Consequences of Decisive Influence (for Platform Users in Particular)

In relation to gig workers, the digital platform’s role in the organisation of the service determines jurisdiction and the applicable law. A worker may benefit from the protection granted to employees by Regulation No 1215/2012 which, in addition to the forum rei, makes available as a forum the place where work is performed (or the last place where work was performed). When the employee travels for work, the special forum is in the place where the business that engaged the employee is or was situated. In sum, Article 21(1)(b)(i) gives workers the possibility of suing their employer in the EU without having to hire a lawyer in a different country, with all the difficulties of access to justice that are familiar to us all. Workers may also negotiate a choice of forum “after the dispute has arisen” or agree on a clause which gives them the option of suing their employer “in the courts for the place where or from where the employee habitually carries out his work or in the courts for the last place where he did so” (Article 23 of Regulation No 1215/2012). These options are not open to users of platforms that do not exercise a decisive influence over the conditions of the service. In that case, the platform employment-status-does-not-leave-platforms-off-the-hook/?doingwpcron=15889 27033.5229249000549316406250). 67 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, A European agenda for the collaborative economy, {SWD(2016) 184 final} Brussels, 2.6.2016, COM(2016) 356 final. See C. CAUFFMAN, The Commission’s European Agenda for the Collaborative Economy – (Too) Platform and Service Provider Friendly?, Common Market Law Rev., 2016, p. 235. 68 Ibidem. A different notion of decisive influence appears in Article 2(9) of Regulation (EU) 2019/1150 of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services (the EU Platform to Business Regulation), where it refers to the degree of control of a company over another, with textual reference to Article 3(2) of Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (the EC Merger Regulation). See F. LUBIAN, Sharing Economy Platforms and Online Trading Communities: Definitions and Protection of Weak Contractual Parties; in I. PRETELLI (ed.), (note 3), p. 111-125 in favour of extending the use of the “decisive influence” criterion; P. FRANZINA, Promoting Fairness and Transparency for Business Users of Online Platforms: The Role of Private International Law, ibid., p. 147162.; P. FAVROD-COUNE, The legal position of the weaker party in B2B relationships with online platforms in the European Union, this Yearbook, 2019/2020, p. 523-548.

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A Humanist Approach to Private International Law and the Internet offers “an information society service”, i.e. a service for which a professional is matched to a client,69 and where the client may be considered a consumer vis-à-vis the platform and enjoy the protection granted by Articles 17(1)(c), 18 and 19 of Regulation No 1215/2012. But quid of the client’s counterparty, i.e. the platform users performing working services? Crowdworkers may not fit within the definition of worker, nor that of consumer. However, given the asymmetry in the legal relationship between them and the platform, they need appropriate rules. 2.

Gig Workers, Crowdworkers and the Rome I Regulation

Article 8 of Regulation No 593/2008 and its specific escape clause – Article 8(4) – allow workers to argue their legal claims against their employer, in accordance with the lex fori. The regulation lists, as connecting factors for employees the law of the country in which or from which work is habitually performed and the law of the country where the place of business through which the employee was engaged is situated. Even though the parties may choose a different law, or be subject to it by virtue of a specific escape clause (Art. 8(4)), workers can expect the “home” labour standards to govern their relationship with their employers, when the application of these is mandatory. In a recent case, the CJEU held that “where the law governing the individual employment contract has been chosen by the parties to that contract, and that law differs from the law applicable pursuant to paragraphs 2, 3 or 4 of that article, the […] “provisions that cannot be derogated from by agreement’ under that law [apply, including, in principle] rules on the minimum wage”.70 The desired result of these rules is that the society in which workers are integrated will normally determine their rights vis-à-vis the employer. Although Regulation 593/2008 was not drafted with the peculiar characteristics of FAMGA workers in mind, in the majority of cases workers-on-demand can expect home labour standards to govern their relationship with their employers when their work – although managed on line – is performed on-ground.71 Reference to the legal order in which the worker accomplishes the work tasks assigned via the platform puts the situation of workers employed or matched with employers by digital platforms on the same footing as their competitors working in the physical market. If rights of workers do not depend on the CJEU, 3 December 2020, Star Taxi App SRL, C-62/19, ECLI:EU:C:2020:980. CJEU, 15 July 2021, DG, EH v SC Gruber Logistics SRL (C-152/20) and Sindicatul Lucrătorilor din Transporturi, DT v SC Samidani Trans SRL (C-218/20), ECLI:EU:C:2021:600 paras 24-29 and 31-32. 71 As regards the law applicable to workers in transportation services, see CJEU 15 March 2011, Heiko Koelzsch v État du Grand Duché de Luxembourg, C-29/10, ECLI:EU:C:2011:151; CJEU 15 December 2011, Jan Voogsgeerd v Navimer, C-384/10 ECLI:EU:C:2011:842, para 39 clarified that “If it is apparent […] that the place from which the employee carries out his transport tasks and also receives the instructions concerning his tasks is always the same, that place must be considered to be the place where he habitually carries out his work, within the meaning of Article 6(2)(a) [of the Rome Convention of 19 June 1980]”. 69 70

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Ilaria Pretelli applicable law, there is no room for distinguishing between: i) privileged workers, who would benefit from higher standards of health and safety protection, and ii) other workers who are exploited and deprived of some or all of these local safeguards. To attract attention on this reality, Amazon workers organised a national strike to demand fairer working conditions in Italy.72 The situation of crowdworking platforms, where the market is genuinely global, is different. The level of protection afforded by the law of the place “from which the employee habitually carries out his work in performance of the contract” may be very low, leading to social dumping and paving the way for unfair competition.73 The UN Guiding Principles on Business and Human Rights (UNGPs) require multinational companies to carry out due diligence to monitor and address their impacts on internationally recognized human rights include those of the ILO Declaration on Fundamental Principles and Rights at Work (freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation). 74 Labour law standards may be said to be a core part of the Principles. In line with the recent global evolution towards human rights due diligence, destination-based labour standards, either pointing to the market requiring the service, or pointing to the law

A. GIUFFRIDA, Italians urged to boycott Amazon to support day of strikes in Italy. The Guardian, Mon 22 Mar 2021 14.28. 73 Application of the local law resulted in denying compensation for the damage suffered by workers and their families in Das v George Weston Ltd, 2018 ONCA 1053 at 136 et seq. The Canadian-Bangladeshi case concerns garment workers victims of the collapse of the Rana Plaza building. Loblaws, Canada’s largest retailer and main purchaser of clothes manufactured in the Bangladeshi factory, had requested “social audits” on the factory operating in the Rana Plaza, but these had not identified all the dangers to which workers were exposed and, in particular, those that eventually materialised. The damage suffered by the workers was a direct consequence of the inexplicable decision of the factory’s managers to disregard the municipal order of evacuation of the building. The presence of cracks in the three pillars of the building, which eventually led to its collapse, had prompted the police and the city Officer to order workers to leave the building, but they had been subsequently ordered by their employer to return to work the day after, notwithstanding the police decision. The law applicable to the compensation of the victims was discussed in the framework of a class action brought by injured workers and the relatives of those who died against Loblaws in Canada. In conformity with the “law of the place where the damage occurred”, the determination of which required a complicated investigation, the Court dismissed the claims for compensation. 74 Ruggie’s principles (note 58). Principle 12 state that human rights are to be understood “at a minimum, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work”. See also the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration, 2017); the 2014 Protocol to the Forced Labour Convention, the 2017 Recommendation on Employment and Decent Work for Peace and Resilience and the 2016 Resolution and conclusions concerning decent work in global supply chains. 72

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A Humanist Approach to Private International Law and the Internet applicable to the intermediating platform would help ensuring fairer conditions of work.75 Backroom operations such as content moderation tasks, content-creating, editing, typesetting, call centres and a wide variety of activities that can be performed online can be outsourced to low-labour-standard countries where educated and skilled workers make themselves available at a lower cost round the clock. The conditions in which these workers operate may be invisible to the local society, in which they live, but also to the society in which the person requiring the service is based. Only the digital platform trading the service is in a position to oversee the conditions in which work is performed: the age of the worker, the time spent for performing the service, etc. For these reasons, the law of the place where the platform trading the service is based could better ensure uniform labour standards and international harmony of solutions, as compared to the local law made applicable by most private international law rules on labour law, as Regulation No 593/2008. This connecting factor is not unknown to the Rome I Regulation: Article 8(3) prescribes the application of the law of the place of business through which the employee was engaged (absent a habitual place of work). The rule was crafted for transnational workers such as international transport workers or workers based in more than one habitual location, but it could be adapted to apply to invisible global workers and generalised by avoiding reference to the absence of a habitual place of work. Aside from EU private international law, a rule protecting workers by awarding them the protection of the place of business through which they were engaged – be it the law of the place where the platform organising the service is situated or the law of the place where the user requiring the service is situated – would better counteract social dumping, which is a serious concern for the international community. The drafting of uniform rules of private international law for crowdworkers would be a welcome development. 3.

Party Autonomy in Asymmetric Relationships

a)

Significant Imbalance and Access to Justice

In a case pitting Expedia against the French Ministre de l’économie,76 French courts have affirmed their jurisdiction and characterised the French rules protecting fair competition as overriding mandatory rules. Jurisdiction was affirmed notwithstanding the existence of a forum selection clause granting jurisdiction to English courts and the choice of English law. The French courts were able to M.A. CHERRY, A Global System of Work, A Global System of Regulation?: Crowdwork and Conflicts of Law, Tulane L. Rev., 2019, Saint Louis Un. School of Law Legal Studies Research Paper No. 2019-11 (https://ssrn.com/abstract=3523303). 76 Appel Paris, 21 June 2017, No 15/18784 in partial reform of Comm. Paris, 7 May 2015, No. 201500004, Diritto del Commercio Internazionale, 2016, p. 559. The Court explicitely holds : "En l'espèce, les hôtels signataires des contrats et victimes des pratiques étant situés sur le territoire français, le lieu de survenance du dommage est la France. Les juridictions françaises sont donc compétentes". 75

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Ilaria Pretelli override party autonomy, affirm French jurisdiction, and apply French law as a result of the characterisation of the case as tortious. Article 5(3) of EU Regulation No 44/2001, was applied. As to the substance, they considered the French rules protecting fair competition to be mandatory rules. In particular, the decision notes the existence of a “significant imbalance” (désequilibre significatif) between the rights and duties of the parties.77 Such imbalance is a direct consequence of the asymmetry between the resources of the platform and those of its users. A substantial impairment of the professional user’s access to justice may ensue, whereas the platform remains able to defend its case in the countries covered by its website.78 In another case pitting a user against a platform, the Supreme Court of Canada made a reference to the gross inequality of bargaining power.79 Article 33(1) and (2, lett. u) of the Italian Consumer Code lays down a presumption iuris tantum that forum selection clauses are unfair contract terms creating a significant imbalance (significativo squilibrio) in the respective contractual rights and obligations of the parties.80 French Courts retained jurisdiction in a case pitting the platform Facebook against a user domiciled in France. Given the “practical difficulties and the cost of access to justice in California”, enforcing Facebook’s jurisdiction clause would “dissuade the consumer from bringing any action […] concerning the application of the contract and […] deprive him of any recourse against Facebook”. On the other hand, the platform “has an agency in France and has financial and human resources that enable it to ensure its representation and defence before the French courts without difficulty”.81 Clickwraps are not a genuine expression of party 77 See Article L. 442-6 I 2° of the French code de commerce holding "tout producteur, commerçant, industriel ou personne immatriculée au répertoire des métiers" liable when he subjects or tries to subject a commercial partner "à des obligations créant un déséquilibre significatif dans les droits et obligations des parties". 78 CJEU, 25 January 2018, Maximilian Schrems v Facebook Ireland Limited [ECLI:EU:C:2018:37] para 41 “activities of publishing books, lecturing, operating websites, fundraising and being assigned the claims of numerous consumers for the purpose of their enforcement do not entail the loss of a private Facebook account user’s status as a ‘consumer’ within the meaning of that article”. 79 Douez v. Facebook, Inc., 2017 SCC 33, [2017] 1 S.C.R. 751: “When considering whether it is reasonable and just to enforce an otherwise binding forum selection clause in a consumer contract, courts should take account of all the circumstances of the particular case, including public policy considerations relating to the gross inequality of bargaining power between the parties and the nature of the rights at stake”. 80 The Italian Authority for Competition and Market Regulation [Autorità Garante della Concorrenza e del Mercato, 11 may 2017, No 26596 (CV 154)] has declared Whatsapp forum selection clauses unenforceable to the extent that they prevent users from gaining effective access to justice (“are in violation of [consumer law in force in Italy] in that they identify the law of the State of California as the applicable law and the [Courts sitting in California] as the only competent courts. Those provisions exclude recourse to the Consumer Court and the consequent application of the corresponding procedural law, depriving, in fact, the user of [Whatsapp Messager] of a real entitlement to judicial protection” [the translation and adaptation are mine]. 81 Appel Paris, 12 February 2016, No. 2016-58.

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A Humanist Approach to Private International Law and the Internet autonomy but a heteronomic condition set by the platform for opening access to the public community it moderates.82 The CJEU has also recently made reference to the heteronomic character of the rules established by a digital platform as a criterion ensuring to a professional platform user the protection of consumers. 83 The concept of “consumer”, as that of “worker”, is interpreted autonomously within the EU system in order to ensure that EU rules are uniformly applied in all the Member States. The CJEU has considered that a professional poker player, who “spent on average nine hours per working day playing the game”, making a living from that activity was nevertheless protected by Article 15(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 as regards a contract “to play poker on the Internet, containing general terms and conditions determined by that company”. The Court adds a second condition for the professional user to be characterised as consumer, which could lead to excluding “economic operators” and traders from enjoying the protection granted to weaker parties. b)

Platform to Business

The existing distinction between business-to-consumer (B2C) and business-tobusiness (B2B) relationships should also be subject to the significant imbalance test.84 Ebay “power sellers” and “Airbnb landlords” are professional platform users that may be considered to have a B2B relationship with the platform, but what about the small and medium companies obliged to use the platform to survive in the market? In line with authoritative judicial precedents, the decisive factor is the difference between regular and systemic eBay traders and occasional ones.85 As put forward by the French judiciary, booking.com and Expedia “have a market power that allows them to impose structurally unbalanced contractual conditions on hoteliers, which have the object or effect of depriving the hotelier of his commercial and pricing policy, thus leading to a rise in prices to the detriment of consumers”.86 82 CH. B. PRESTON, Please Note: You Have Waived Everything: Can Notice Redeem Online Contracts?, American Un. Law Rev. 2015, p. 535, BYU Law Research Paper No. 1507, on line at https://ssrn.com/abstract=2510978, advocates a change in communication after noticing that courts enforce clauses without attaching importance to the fact that these can never possibly be read or understood by the average user. 83 CJEU, 10 December 2020, A.B., B.B. v Personal Exchange International Limited,, C-59/19, ECLI:EU:C:2020:950. 84 P. FRANZINA, (note 68), p. 147 et seq. 85 Comp. Boschetto v. Hansing, 539 F.3d 1011 [9th Cir. 2008] stating that “The sale of one automobile via the eBay website, without more, does not provide sufficient ‘minimum contacts’ to establish jurisdiction over a non-resident defendant in the forum state. Likewise, given the total absence of any evidence or allegations that the conduct here involved more than just this one sale, the district court did not abuse its discretion by refusing to allow jurisdictional discovery”. 86 Appel Paris, 21 juin 2017, RG 15/18784, 26 (the translation is mine).

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Ilaria Pretelli Booking.com asks professional users to “agree” that “this Agreement shall be exclusively governed by and construed in accordance with the laws of the Netherlands”. German courts were asked to consider if this clause, in conjunction with Booking.com’s practice to repeatedly impose unilateral modifications of the general conditions to its advantage, infringed German laws protecting fair competition.87 In line with the French Expedia judgement, the CJEU characterised the case as a matter of torts and declared Article 7(2) of Regulation 1215/2012 applicable.88 This decision fails to give relevance to the circumstance that the action concerns a harmful event that also constitutes a breach of a contractual obligation and the duty to perform the contract in good faith. In this respect, German courts would only have been able to rely on Article 7(1) of the same Regulation by declaring Booking’s forum and law selection clause invalid. Even though hotels are professional users of platforms, a significant imbalance exists between the two parties, creating similar legal needs as those that prompted the creation of the category of consumers.89 In this respect, the prohibition of clauses creating a “significant imbalance” could be aimed not only at protecting consumers in B2C contracts but also at ensuring fair competition in B2B contracts.90 4.

Targeting Factors as Expressions of Locus Lucri

In the US, presence in a jurisdiction is a sufficient connecting factor to found jurisdiction.91 A set of legal tests is usually referred to for a “presence” to be relevant (substantial, continuous, systematic).92 FAMGA are present in virtually all countries of the world, except those who enact protective policies, such as China. In light of this, it is possible to envisage that these entities come under the jurisdiction of the US, where they have a strong presence, regardless of the country in which the company has its registered seat. The EU has also adopted targeting CJEU, 24 November 2020, Wikingerhof GmbH & Co. KG v Booking.com BV, C-59/19, ECLI:EU:C:2020:950. See P. FAVROD-COUNE, (note 68), p. 523-548. In Italy, Booking.com anticompetition practices have been targeted by administrative sanctions (Autorità Garante della Concorrenza e del Mercato, 23 March 2016, No 25940 (I/779) Boll. n. 11/2016). 88 Ibid., para 38. 89 Cf. P. FRANZINA (note 68), p. 149, regretting that Regulation 2019/1150 on promoting fairness and transparency for business users of online intermediation services applicable does not contain any specific protective provisions on private international law. 90 See Appel Lyon, 18 December 2014, Spiruline sans frontières v Guillaume C., No 13/10118, which concerns an economic loss suffered as a consequence of the blocking of a Facebook page used for marketing and advertising products. The blocking had been decided further to a user's request, subsequently found to be abusive and made with the intent of interfering with the economic activity of the Facebook user and damaging his reputation. 91 Gator.com Corp. v. L.L. Bean, Inc. (9th Cir. 2003) 341 F.3d 1072, on which see D. SVANTESSON, Private International Law and the Internet, 2016, p. 428. 92 Ibidem. A. SAVIN, EU Internet Law, 2017, p. 110 et seq. 87

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A Humanist Approach to Private International Law and the Internet factors, introducing a new logic in the adjudication of jurisdiction.93 This circumstance has fuelled criticism on a pretended overexposure to personal jurisdiction and choice of law of Internet actors – in particular in the field of infringement of IP rights.94 A revised approach to targeting factors has also been suggested.95 a)

Targeting Factors

The US and other common law countries give relevance to the targeting of users by a company – be it a digital platform or a digital platform’s “power user”.96 Article § 204 of the ALI Principles on Intellectual Property97 uses “directing activities” and sets out a series of indicia that constitute evidence, namely: “shipping goods directly into the forum for sale there; filling orders from the forum; […] developing content and advertisements of interest to an audience in the forum, or use of the forum’s language, currency, or units for measuring size and volume”. The GDPR considers that EU data protection laws apply to any entity attempting to sell goods and services to EU citizens, or simply “monitoring” the digital behaviour of EU citizens. In addition, it can be liable for infringements of these laws even when it is not directly responsible for such infringements when they were carried out by entities over which it exercises a decisive control. In other subject areas it is sufficient for the extra-EU company to have branches in the EU for it to be held liable for infringing EU laws, and regulations in many other subject areas apply to “non-EU based companies”.98

M.-E. ANCEL, La compétence législative à la croisée de deux logiques, Actes du colloque annuel de la Société française de droit international Internet et le droit international, Pedone 2014, p. 181-195. 94 M. GEIST, The Shift Toward “Targeting” for Internet Jurisdiction, in A. THIERER & WAYNE CREWS (ed), Who Rules the Net?, Washington, 2003, p. 91 has suggested a restrictive approach to targeting in light of US cases (i.e. post Zippo cases). 95 M. TRIMBLE, (note 10), p. 1 et seq. 96 In an Australian case, a group used a trap purchaser to build evidence that a retailer was infringing its trademark: Ward Group Pty Ltd v Brodie & Stone Plc [2005] FCA 471; 143 FCR 479; 215 ALR 716; (2005) AIPC 92–087; 64 IPR 1 (“Of course, once the website intends to make and makes a specific use of the mark in relation to a particular person or persons in a jurisdiction there will be little difficulty in concluding that the website proprietor used the mark in that jurisdiction when the mark is downloaded.”). See also D. SVANTESSON, (note 91), p. 470; M. TRIMBLE, Res Judicata and unclaimed foreign copyright infringement, this Yearbook, infra.; T. LUTZI, Internet Cases in EU Private International Law, Int’l Comp. L. Quarterly, 2017, p. 687 et seq. 97 American Law Institute, Intellectual Property: Principles Governing Jurisdiction, Choice of Law, and Judgments in Transnational Disputes, Philadelphia 2008. 98 The EU Timber Regulation and the EU Conflict Minerals Regulation define their scope by reference to the internal market. See also the proposed Digital Services Act (note 12), the Proposal for a Regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act) COM/2020/842 final, etc. 93

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Ilaria Pretelli The EU also refers to “directing activities” as a ground for jurisdiction, but only to the extent that the dispute concerns a consumer contract (Article 17(1)c, Regulation 1215/2012). The CJEU clarifies that “directing activities” means that the trader was clearly “envisaging doing business with consumers domiciled in […] the Member State of that consumer’s domicile”.99 Instead, targeting cannot be inferred from one of the following circumstances: the mere accessibility of the trader’s or the intermediary’s website in the Member State in which the consumer is domiciled; the mention of an email address and of other contact details, nor the use of a language or a currency when these are the language and/or currency generally used in the Member State in which the trader is established. In a series of cases, related to the online market of car purchasing, the CJEU adopted a broad interpretation of the criterion. In one case, the Court has included the mere activity of advertising an offer abroad as sufficient proof of “direction of activities”, holding that the consumer/buyer would not have gone from Austria to Germany to buy a car, had the website not directed her there. 100 The reasoning was pushed forward in a subsequent case, where the consumer had crossed the German border in order to buy a car in France without knowledge of the web site advertising the activities of the French car seller in Germany.101 The consumer was able to claim damages in Germany by virtue of the objective circumstance that the defendant was directing activities to Germany. The arguments maintained by the Court seems to point at preventing consumers from having to produce evidence on a causal link between their purchase and the internet site. On another note, it can be held that the maintenance of a web site directed to a foreign market sustains the presumption that the trader has (or plans to have) sufficient knowledge of that market, to operate in it. This should include its legal order, and the ability to appear in front of the foreign judge. The solution appears fair, given the imbalance between the consumer, who is redirected to websites from his home, and the trader. What appears as the natural next step is enshrined in the proposed Article 1(1) of the future “Directive of the European Parliament and of the Council on

CJEU, 7 December 2010, Peter Pammer v Reederei Karl Schlüter GmbH & Co. KG (C-585/08) and Hotel Alpenhof GesmbH v Oliver Heller (C-144/09), ECLI:EU:C:2010:740, which also exemplify how to assess “directing activities” by referring to: “the international nature of the activity, mention of itineraries from other Member States for going to the place where the trader is established, use of a language or a currency […], mention of telephone numbers with an international code, outlay of expenditure on an internet referencing service in order to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other Member States, use of a toplevel domain name other than that of the Member State in which the trader is established, and mention of an international clientele composed of customers domiciled in various Member States”. 100 See CJEU, 6 September 2012, Daniela Mühlleitner v Ahmad Yusufi und Wadat Yusufi, C-190/11, EU:C:2012:542. 101 CJEU, 17 October 2013, Lokman Emrek v Vlado Sabranovic, C-218/12, ECLI: EU:C:2013:666. See, in particular, para 25. 99

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A Humanist Approach to Private International Law and the Internet corporate due diligence and corporate accountability”.102 In particular, the scope of the proposal includes “undertakings […] operating in the internal market”. Among the targeted undertakings are, in the first place, those “governed by the law of a Member State or established in the territory of the Union”; and also those that are “governed by the law of a third country and are not established in the territory of the Union when they operate in the internal market selling goods or providing services”. In a nutshell, the proposed directive aims at ensuring that products sold and services provided in any Member State, which are the result of a multi-layered process involving undertakings based in the EU and in third countries, have not been produced at lower costs in non-EU countries, with impairment of basic human rights. It aims at ensuring that populations that do not benefit of the protection that western countries ensure to workers have not been subject to human rights violations. b)

Locus Lucri

At present, Articles 17 to 19 of Regulation 1215/2012 allow consumers to sue the trader in their forum, provided that the trader has directed their activities thereto.103 Targeting factors are all expressions of the same principle. Regardless of existing differences in their definition and implementation in the EU, in the US, and elsewhere, the special vector of jurisdiction is to be understood as expressing the idea that a State may exercise jurisdiction over a company – e.g. a platform – that has accessed its geographical area with the plan to make profits via its services (and/or products) therein. A platform makes itself accessible in a geographical area of interest, and allows people to create a profile within its ecosystem, with the intention of realising profits.104 If a platform plans to generate a flux of money that 102 See the Proposal for a Directive of the European Parliament and of the Council on corporate due diligence and corporate accountability annexed to the European Parliament’s Resolution of 10 March 2021 with recommendations to the Commission on corporate due diligence and corporate accountability. https://oeil.secure.europarl.europa.eu/ oeil/popups/ficheprocedure.do?lang=en&reference=2020/2129(INL). 103 M.-E. ANCEL, (note 93), p. 181-195. See also CJEU 18 October 2012, Football Dataco Ltd and Others v Sportradar GmbH and Sportradar AG, (C-173/11), ECLl:EU:C:2012:642, para 45 on the Database Directive (96/9/EC) obliging Member States to provide for two separate forms of protection for databases: copyright and sui generis database right. According to the CJEU “the sending by one person, by means of a web server located in Member State A, of data previously uploaded by that person from a database protected by the sui generis right under that directive to the computer of another person located in Member State B, at that person’s request, for the purpose of storage in that computer’s memory and display on its screen, constitutes an act of “re-utilisation” of the data by the person sending it. That act takes place, at least, in Member State B, where there is evidence from which it may be concluded that the act discloses an intention on the part of the person performing the act to target members of the public in Member State B, which is for the national court to assess”. 104 ln Dedvukaj v. Maloney, 447 F. Supp. 2d 813 [E.D. Mich. 2006], the District Court, E.D., Michigan mentions regular and systemic use of the platform by the trader; a warehouse set in the targeted state to stock goods to be sold via the platform; employees

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Ilaria Pretelli will flow from the people living in a given area towards the company “operating therein”, said company or platform may be made subject to that area’s jurisdiction and applicable laws. It is possible to harmonise targeting factors under their substantive goal, by referring to the place where profit is sought and earned (locus lucri). It captures the concept underlying the idea of targeting factors, i.e. that accessing a market should include being able to comply with the legal order governing it. Targeting factors are often criticised as being too wide in the case of the internet.105 Nevertheless, the proposed EU directive on corporate due diligence and corporate accountability, and the proposed DSA Regulation, suggest that the scope of internet-specific connecting factors could be limited to platforms that have attained a certain size, or a certain importance in the market, or the activities of which are inherently dangerous as a result of the possible consequences on human rights and human dignity.106 Besides, the monopolistic position of FAMGA and its universal presence makes overexposure of online platforms to personal jurisdiction appear legitimate; their presence in a given country necessarily supposes specific commercial skills and a sound knowledge of its social fabric. This should also include such skills as are necessary to defend themselves within the legal order governing that market.107

hired to work in the warehouse; availability of a toll-free phone number for buyers; advertising and marketing materials. 105 See M. GEIST, (note 94), p. 103 and D. SVANTESSON, (note 91), p. 428, considering presence as too wide a ground for jurisdiction for the internet. For a different view, M. TRIMBLE (note 10). See also F. HEINDLER, Streaming Platforms and Copyright in Conflict of Laws, in I. PRETELLI, (note 3), p. 193 et seq. 106 The scope of the proposed directive on corporate due diligence and corporate accountability (note 61) is limited to undertakings identified by three criteria: their size (“large undertakings); their importance in the market (“publicly listed small and mediumsized undertakings”); and the hazardous nature of their activities (“as well as high-risk small and medium-sized undertakings”). Some digital platforms could also be classified as being inherently dangerous as was pointed out by the Australian eSafety commissioner: https://www.esafety.gov.au/sites/default/files/202102/The%20digital%20lives%20of%20Au ssie%20teens.pdf. A different set of criteria identifies the platforms that will be subject to the Digital Markets Act (note 98). These are listed in Article 3(1): i) their impact on the EU internal market (which must be “significant”); ii) the importance of their platform service for business users to reach end users; iii) the actual or foreseeable position in the market (which must be entrenched and durable). Article 3(6) adds the following criteria: i) the size; ii) the number of users; iii) entry barriers resulting from the provider’s collection of data or analytics capabilities; iv) the benefits for the provider (data collection); v) users lock-in; and vi) other structural characteristics. For the DSA criteria see supra (para II.A. and note 12). 107 See also U. KOHL, Jurisdiction and the Internet – Regulatory competence over Online Activity, Cambridge 2007, p. 78. J. VON HEIN, Protecting Victims of Cross-border Torts Under Article 7 No. 2 Brussels Ibis: Towards a More Differentiated and Balanced Approach, this Yearbook, 2014-2015, p. 270.

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A Humanist Approach to Private International Law and the Internet B.

Connecting Factors in Relationships between Platform Users

When litigation concerns users, traditional connecting factors do not always need an adaptation to the digital environment. The rules referring to “the place of performance”, “the place where the damage occurred” or, in conflicts of jurisdiction, the forum rei, the forum arresti, etc. may be relevant and viable.108 Activities carried out on the web do not escape to the territorial scope of national laws. Interactions by persons on digital platforms can generate conflicts that do not remain in the digital sphere. These cases involve workers on demand, social media users, online video game players, YouTubers, retailers, etc. Specific rules would help redress a pre-existing imbalance between two parties or the inherent vulnerability of individual users. 1.

Consolidation of Favor Laesi in Torts

Since globalisation and digitalisation exacerbate the consequences of damages, substantive and procedural rules, including private international law rules, more suitable to protecting the victims of torts seem necessary. a)

Jurisdiction

The 2011 eDate judgment recognises the inherent value of the principle of favor laesi when it allowed the plaintiffs to sue the defendant in multiple fora.109 The plaintiffs were seeking compensation for the alleged infringement of personality rights by content placed on line on an internet site. With its judgement, the CJEU adapted the mosaic principle set in the 1995 Shevill decision to the internet.110 The mosaic rule states that each Member State in which information placed on the network has been accessible may exercise jurisdiction, yet only in respect of the harm suffered within its boundaries. If the victim sues the tortfeasor in multiple countries, she will be able to obtain full compensation by adding up the tiles of the mosaic. The entire damage will then emerge as the image of a jigsaw puzzle. Of course, the victim always has the option of bringing the total claim before the 108 For a distinction between “uninteresting and uncontroversial connecting factors” and “uninteresting but controversial connecting factors” see D. SVANTESSON, (note 91), p. 426 et seq. 109 See CJEU, 25 October 2011, eDate Advertising, Joined Cases C-509/09 and C-161/10, ECLI:EU:C:2011:68, a case concerning a company based in Austria and operating an internet portal accessible at the address www.rainbow.at. 110 CJEU, 7 March 1995, Fiona Shevill, Ixora Trading Inc., Chequepoint SARL and Chequepoint International Ltd v Presse Alliance SA, C-68/93, ECLI:EU:C:1995:61. See CJEU, 3 October 2013, Peter Pinckney v. KDG Mediatech AG, C-170/12, ECLI:EU:C:2013:635; CJEU, 3 April 2014, Hi Hotel HCF SARL v. Uwe Spoering, C-387/12, ECLI:EU:C:2014:215 and CJEU, 22 January 2015, C-441/13, Pez Hejduk v. EnergieAgentur.NRW GmbH, ECLI:EU:C:2015:28 on which B. VAN HOUTERT Jurisdiction in Cross-Border Copyright Infringement Cases, this Yearbook, infra.

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Ilaria Pretelli courts of the defendant's domicile, i.e. the place where the poster of the harmful publication is established. Since Shevill, ubiquity has been seen more as a policy to pursue, consistent with the favor laesi principle, than as an incentive to forum shopping, a phenomenon to be countered. Indeed, special fora, additional to the forum rei, are consistent with the EU policy favouring access to justice, provided that they continue to guarantee predictability and do not impair legal certainty and foreseeability. Against this background, in applying Article 7(2) of Regulation (EU) No 1215/2012, relevance may be given to the place of establishment of the victim who is claiming damages. This was explicitly held by the CJEU in cases where the publication of incorrect information on the internet infringed personality rights. Thus, a claim for rectification and removal of unlawful information and for compensation in respect of all the damage sustained by the victim may be brought before the courts of the Member State of the victim’s centre of interests. When a Polish holocaust survivor sued in Poland a German company publishing a regional online newspaper, the Court confirmed the principle but limited it, in casu, because the information published did not seem to violate, in an objective and verifiable manner, the plaintiff’s personality rights.111 A prima facie violation of personality rights, justifying a deviation from Article 4(1), requires that the victim is “directly referred to in content placed online on the internet”, and not only indirectly, as a member of a vast group (the Polish people).112 In another case, the infringement of a registered trademark had been carried out by means of the digital search engine Google.de. A German retailer had reserved the name Wintersteiger via Google AdWords to redirect potential Wintersteiger clients to its website. The CJEU took the view that Austria was the place where the infringed trademark was registered, the place where Wintersteiger had suffered the damage and that Google.de was accessible from Austria. Thus, the defendant could equally be sued in Austria and Germany.113

111 The publication contained the false statement that the extermination camp of Treblinka was Polish, and was then rectified by precising that it was a “German Nazi extermination camp”. CJEU, 17 June 2021, Mittelbayerischer Verlag KG v SM, C‑800/19, ECLI:EU:C:2021:489, paras 35 and 32 where the Coutt recalls that Article 7(2) is based on the principle of the closest connection and “justified in the interests of the sound administration of justice and not specifically for the purposes of protecting the applicant”. 112 The judgement is based on the precedent of 17 October 2017 Bolagsupplysningen OÜ, Ingrid Ilsjan v Svensk Handel AB, C‑194/16, ECLI:EU:C:2017:766, which gave the Court the opportunity to state two quite obvious consequences of Article 7(2): the circumstance that the victim is a legal person does not affect its operation; the mosaic rule only applies to claims of compensation and not to an action for rectification and removal of information on the internet since the latter is “single and indivisible”. 113 CJEU, 19 April 2012, Wintersteiger AG v Products 4U Sondermaschinenbau GmbH, Case C‑523/10, ECLI:EU:C:2012:220, para 37.

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A Humanist Approach to Private International Law and the Internet b)

Applicable Law

It is not always possible to fix something that is broken. The best remedy for torts is to oblige the tortfeasor to restore the status quo ante. However, this is not always possible in reality, and physics reminds us that we are inexorably subject to the law of entropy. Victims of torts may suffer the consequences of a single reckless act for the rest of their lives. Damage can also entail unexpected financial burdens that further aggravate the victim’s conditions of life. Being restricted to a wheelchair or being blind not only complicates ordinary daily activities but it also requires financial means to afford the equipment necessary to overcome the obstacles created by the handicap. A car allowing the storage of a wheelchair costs significantly more than a normal car. Victims of cyber-bullying may be driven to drop out of school, change their place of residence, and even their names. Some have killed themselves under antiquated codes of honour that are still widespread. In addition to the damage and its financial consequences for the victim, there is also a damage for the society in which the victim lives. During Euro 2020, English footballers were targeted by some 2,000 abusive tweets naming their team and including scores of racist posts. The reaction of the English football community, supported by media organisations, was to boycott social media for four days to draw attention to the problem.114 Because the shock of these hateful publications impacts the community that has online access to them, sanctioning the tortfeasors is also a way to restore the order, pacify the public opinion traumatised by the disruptive event and help preventing similar antisocial behaviours.115 Besides sympathy for the victim, there is a common interest to see the rule alterum non laedere confirmed. The philosophy underlying tort law explains the evolution of private international law rules towards favor laesi and ubiquity (i.e. the Günstigkeitsprinzip) whereas traditional rules restricting the possibility for the victim to obtain compensation, as the double actionability rule, are increasingly being abandoned.116 In Germany and Italy, an optio legis allows the victim to base her claim on the law of the place where the harm is suffered, in lieu of the law of the place of the wrongful act.117 None of these rules inspired Regulation No 864/2007. Favor laesi is explicitly conceded by Article 7 only in the case of environmental damages where the law of the event causing the damage (and/or the place where the actual damage occurred) can be chosen instead of the law of the place where the wrongful act was committed. The solution comes from the 1976 case Mines de

114 Https://www.theguardian.com/football/2021/jun/27/revealed-shocking-scaletwitter-abuse-targeting-england-euro-2020. 115 C. CARMODY TILLEY, Tort Law Inside Out, The Yale L, J. 2016-2017, 1320-1405 with reference to the US but with a broader philosophical perspective. 116 J. WASS/ M. HOOK, Reform of choice of law rules for tort, New Zealand L. J., 2017, p. 24-26.; P. ROGERSON, Foreign Tort— Exception to Double Actionability, The Cambridge L. J., 1992, p. 439-441. 117 Article 40(1) EGBGB and Article 62 of the Italian Law 218/1995. See J. VON HEIN, Das Günstigkeitsprinzip im Internationalen Deliktsrecht, Tübingen, 1999.

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Ilaria Pretelli Potasse d’Alsace and the limited recognition of favor laesi may be a consequence of the EU habit of codifying CJEU’s case law.118 Recently, a specific rule designed to assist future EU legislation on human rights due diligence adopted a very broad version of favor laesi.119 A proposed Article 6a was to be introduced in the EU PIL Regulation. It would have allowed victims of corporations to choose one of the following laws: the law of the place of the damage; “the law of the country in which the event giving rise to the damage occurred”; and “law of the country in which the parent company has its domicile or, where it does not have a domicile in a Member State, the law of the country where it operates” (e.g. a corporate decision made at headquarters in country A that results in a toxic waste spill into a source of water adjacent to a factory in country X that flows down the river and causes illness in residents of country Y).120 At present, the only way to favour victims of torts (except in the case of environmental damage) is to advocate for application of the closest connection exception in Article 4(3) of Regulation 864/2007. That rule allows the victim to override the lex loci damni set out by Article 4(1).121 In cases of corporate liability as well as in digital torts, a close connection between a tort and the place where the causal behaviour took place certainly exists, at least when the damage is the direct consequence of deliberate conduct. The solution of implementing favor laesi by means of the escape clause does not equate the situation of victims of environmental damage to that of victims of human rights violations, since it does not allow the victim to choose between the two laws (as under Article 7). Handelskwekerij G.J. Bier v Mines de potasse d'Alsace, 21/76, ECLI:EU:C:1976:166. See S. SYMEONIDES, Rome II and Tort Conflicts: A Missed Opportunity, Am. J. Comp. L., 2008, p. 173, 188. 119 The Committee on Legal Affairs had adopted a legislative initiative report by Lara Wolters with recommendations to the Commission on corporate due diligence and corporate accountability on 11.2.2021 (A9-0018/2021) that included the proposal to introduce an “Article 6a” on “Business-related human rights claims”, allowing multiple choices to the victim. The European Parliament adopted the Resolution of 10 March 2021 with recommendations to the Commission on corporate due diligence and corporate accountability. The annexes prompting a reform of certain articles of Regulations 1215/2012 and 684/2007 were not put to the vote. 120 See https://www.europarl.europa.eu/doceo/document/A-9-2021-0018_EN.html: “In the context of business-related civil claims for human rights violations within the value chain of an undertaking domiciled in a Member State of the Union or operating in the Union within the scope of Directive xxx/xxxx on Corporate Due Diligence and Corporate Accountability, the law applicable to a non-contractual obligation arising out of the damage sustained shall be the law determined pursuant to Article 4(1), unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred or on the law of the country in which the parent company has its domicile or, where it does not have a domicile in a Member State, the law of the country where it operates”. The proposal also included a modification of the Brussels I Regulation with a view to introducing, for business-related civil claims 121 A. PETER/ S. GLESS/ CH. THOMALE/ M.-PH. WELLER, Business and Human Rights: Making the Legally Binding Instrument Work in Public, Private and Criminal Law, Max Planck Institute for Comp. Public Law & Int’l Law (MPIL) Research Paper No 06-2020, on line at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561482. 118

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A Humanist Approach to Private International Law and the Internet A case-by-case approach may prove useful in all cases where the right of the victim may be offset by rights of the putative tortfeasor of the same rank. For instance, in cases of defamation the rights of the victim and those of the putative tortfeasor (freedom of expression, freedom of information) may have an equally important social dimension. Consider the example of Rachel Ehrenfeld, the American citizen and resident who wrote “Funding Evil” and was subsequently sued by the Saudi tycoon Bin Makfouz for defamation.122 Twenty-three copies of her book had been purchased in the United Kingdom via the Internet and a chapter of the book, accessible from the ABCNews.com Web site, had also been available in that country. On that basis, Bin Makfouz sued her in the UK, in order to obtain the application of English law.123 According to US law – the country of residence of the defendant and the place of publication – she was exercising her right to freedom of expression, protected by the First Amendment of the US Federal Constitution. In this case, which of the two parties is in a vulnerable position and requires enhanced protection? What elements should weigh in the balance and create a significant inequality of powers (égalité des armes)? Obviously, a principle of justice cannot be abusively overturned by means of a legalistic interpretation of the rule expressing it. Private international law has effective instruments to avert unfair solutions. The public policy exception can successfully prevent a foreign law (and the recognition of foreign judgements) from causing the violation of fundamental rights and freedoms enshrined in a country’s constitution. With this caveat, a wider recognition of favor laesi in European private international law is to be welcomed. 2.

Habitual Place of Work v ‘Engaging Place of Business’

Private international law rules will rarely apply to cases involving disputes between platform users who have met as a consequence of being “matched” by a platform’s algorithm. Litigation between a passenger and an Uber driver will be normally subject to the legal order in which the service is provided.124 The analysis is different for workers available and dismissible on demand.125 Microwork platforms – platforms that offer micro-tasks ranging from translation services to homework tutoring etc – present high risks of concealing relevant Rachel Ehrenfeld v. Khalid Salim Bin Mahfouz, F.3d 542 (2d Cir. 2007). The author had been sued in England, despite having “never lived in England”, not having published her book in England, and having “never taken any steps to […] facilitate its availability [in England] through internet sources.” She refused to appear characterising the initiative a “Strategic Lawsuit Against Public Participation” (SLAPP). See G. W. PRING/ P. CANAN, Slapps: Getting Sued for Speaking Out, 1996. 124 See Sullivan v. Oracle Corp., 254 P.3d 237, 247 (Cal. 2011) stating that California labour laws govern work performed in California, regardless of the worker’s place of residence. 125 J. BERG/ M. FURRERS/ E. HARMON/ U. RANI & M. S. SILBERMAN, Digital labour platforms and the future of work, Towards decent work in the online world, ILO Office, Geneva, 2018, p. 3. 122 123

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Ilaria Pretelli human rights violations such as child labour or exploitation of workers resulting in severe illnesses.126 In this case, the digital community matching supply and demand of working services should be governed by uniform rules designed to protect vulnerable workers. The present rules do not seem sufficiently protective and are being increasingly criticised.127 Bearing in mind the risks associated with the amplification of social dumping, it seems worth considering, as the law applicable to crowdwork, the law of the place where the client requiring a given working service. This connecting factor is not unknown to the Rome I Regulation: Article 8(3) prescribes the application of the law of the place of business through which the employee was engaged, absent a habitual place of work. An amendment to this rule to the advantage of crowdworkers may have beneficial effects also for the global market. Private international law has the potential of counteracting social dumping practices and, at the same time, increasing the appeal of platform work for workers based in countries where favouring a race to the top would significantly help human progress. Placed in the context of the digital revolution, the solution may be seen as the simplest natural consequence of the digitalisation of work.

IV. Forms of Digital Enforcement Digital users create new forms of human solidarity and need to build the information society on solid legal foundations. The diffusion of smartphones has prompted individuals to act collectively and successfully to monitor human rights violations.128 Appropriate liability regimes have been crafted for internet inter-

126 See J. BERG/ M. FURRERS/ E. HARMON/ U. RANI & M. S. SILBERMAN, (note 58). See also P. ICHINO, Le conseguenze dell'innovazione tecnologica sul diritto del lavoro, https://www.pietroichino.it/wp-content/uploads/2017/09/AGI-Torino-E-15IX17.pdf. The “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework” (https://www.ohchr.org/documents/publications /guidingprinciplesbusinesshr_en.pdf) also known as “Ruggie’s principles” recommend to States to “Enforce laws that are aimed at, or have the effect of, requiring business enterprises to respect human rights, and periodically to assess the adequacy of such laws and address any gaps”, in particular with reference to the respect of workers’ rights. See in particular principles 3, 12 and 25. 127 V. DE STEFANO, Introduction: Crowdsourcing, the Gig-Economy and the Law, Comparative Labor Law & Policy J., 2016, p. 461-470. 128 See M.B. LAND, Peer producing human rights, Alberta L. Rev., 2009, p. 11151139; C. KOETTL, “The YouTube War”: Citizen videos revolutionize human rights monitoring in Syria, 2014, on line http://www.pbs.org/mediashift/2014/02/the-youtube-warcitizen-videos-revolutionize-human-rights-monitoring-in-syria; D. JOYCE, Media witnesses: Human rights in an age of digital media, Intercultural Human Rights Law Rev., 2013, p. 231-280; E. MCPHERSON, Digital Human Rights Reporting by Civilian Witnesses: Surmounting the Verification Barrier, in R.A. LIND (ed), Producing Theory in a Digital

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A Humanist Approach to Private International Law and the Internet mediaries and have led internet providers to take on a governance role.129 The EU has adopted a code of conduct on countering illegal hate speech online, while Germany and France have enacted specific laws to allow control over the taking down of hate speech in parallel with the criminalisation of hate speech.130 Very large digital platforms have the power to control the scale of digital damages perpetrated in their ecosystems and quickly react. They are increasingly assuming responsibility towards the digital community that proliferates in the ecosystem they have made available on line. However, a fear of liability encourages over-blocking and excessive recourse to private censorship.131 An institutional supervision seems unescapable for a fair regulation.132

World 2.0: The Intersection of Audiences and Production in Contemporary Theory, New York 2015, p. 193–209. 129 E.g. the permanent suspension of the @realDonaldTrump account by Twitter, (see https://blog.twitter.com/en_us/topics/company/2020/suspension.html) after the use of the platform for the mobilisation of January 2021. For a comparative overview of legal regulation see W. YU, Regulation on Internet Intermediaries’ Liabilities: Focusing on Illegal Online Hate Speech, in CH. KRÖNKE/ M.W. MÜLLER/ W. YU & W. TIAN, Paradigms of Internet Regulation in the European Union and China, p. 2018, p. 49–68, p. 55 et seq. observing that the strategy regulation in China is that “government supervises intermediaries – intermediaries supervise online activities of users and platform enterprises”. 130 See the Netzwerkdurchsetzungsgesetz vom 1. September 2017 (BGBl. I S. 3352) on which W. ECHIKSON/ O. KNODT, Germany’s NetzDG: A Key Test for Combatting Online Hate, 2018, CEPS Policy Insight, on line at https://ssrn.com/abstract=3300636. The German Law served as a model for the Loi du 24 juin 2020 visant à lutter contre les contenus haineux sur internet (loi Avia) was considered to violate freedom of expression by the French Conseil Constitutionnel n° 2020-801 DC du 18 June 2020; In the EU see the Code of conduct on countering illegal hate speech online at https://bit.ly/3i3Jzzh of 2016. 131 An example of erroneous private censorship led to Appel Paris, 12 February 2016, No 2016-58, Société Facebook c. Mr Frédéric, Michel, Jean Durand dit DurandBaïssas. See, in general, C. BAKALIS/ J. HORNLE, The Role of Social Media Companies in the Regulation of Online Hate Speech, in A. SARAT (ed), Studies in Law, Politics, and Society, 2021, p. 75-100, S.-M. LAAKSONEN/ J. HAAPOJA/ T. KINNUNEN/ M. NELIMARKKA/ R. PÖYHTÄRI, The Datafication of Hate: Expectations and Challenges in Automated Hate Speech Monitoring. Frontiers in Big Data, 2020, on line at https://www.frontiersin.org/ articles/10.3389/fdata.2020.00003/full; R.F. JØRGENSEN, L. ZULETA, Private Governance of Freedom of Expression on Social Media Platforms, Nordicom Review, 2020, p. 51-67. 132 K. HUNT, Copyright and YouTube: Pirate’s Playground or Fair Use Forum?, Michigan Telecomm. & Tech. L. Rev., 2007, p. 197. S. MACDONALD/ S. GIRO CORREIA/ A.-L. WATKIN, Regulating terrorist content on social media: automation and the rule of law, Int’l J. of Law in Context, Special Issue 2: Law, Liberty and Technology: Criminal Justice in the Context of Smart Machines, 2019, p. 183-197. F. MOSTERT, Study on Approaches to Online Trademark Infringements, WIPO/ACE/12/9 REV. 2, 2017, concluding that “the proper protection and enforcement of trademark rights online still lacks effective, joined-up enforcement measures. In a number of jurisdictions right holders can avail themselves of civil, administrative and criminal remedies, but their efficiency in the future depends on a voluntary, collaborative approach. Online trademark counterfeits are international by nature. Consequently, the existing international cooperation mechanisms, such as cooperation through mutual legal assistance agreements or international arrest or evidence warrants, are

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Ilaria Pretelli Private governance, especially when it relies on AI, needs to be placed under a more consistent rule of law. Since obtaining compensation for digital torts at a later stage is not always possible or effective, perpetuation of online damages should be hindered in a timely manner and with reference to digital, rather than judicial, time and possibly with a wise use of technology. A.

The Google v. Equustek Solutions Paradigm

Wintersteiger AG filed an action against Products 4U Sondermaschinenbau GmbH, a German retailer of its products,133 because it had reserved an adWord on Google.de that directed users searching “Wintersteiger” to its website. In this case, a court order to Google.de to block systematic direction of users to the retailer’s website would have efficiently brought the infringement to an end and prevent an aggravation of the damage suffered by the plaintiff.134 This intuition has already led to the solution of a paradigmatic Canadian case, which would otherwise have proved impossible to resolve since the defendant was doing business and infringing the plaintiff’s rights from an unknown location.135 A Canadian Court demanded that Google block certain websites so that they would not appear in any Google search results anywhere in the world and the Supreme Court of Canada upheld the order. Despite its novelty, the solution is said to be permitted by the plasticity of Common Law systems, in which “the courts must, in order to preserve the effectiveness of their judgments, adapt to new circumstances”.136 Without this solution, opposed by Google in the US,137 the plaintiff would have been exposed to a substantial denial of justice: lengthy processes and inadequate to respond to large volume, high speed and anonymous online counterfeit activities.” 133 See CJEU, 19 April 2012, Wintersteiger AG v Products 4U Sondermaschinenbau GmbH, [ECLI:EU:C:2012:220] opposing an Austrian-based trader – Wintersteiger – and a German online advertiser who had reserved an “adWord” corresponding to the trademark registered in Austria by the Austrian company. 134 In the L’Oréal case, (CJEU, 12 July 2011, L’Oréal SA et al. v eBay International AG et al., C-324/09, ECLI:EU:C:2011:474) the Court of Justice made a distinction between, “the case where the service provider plays an active role of such a kind as to give it knowledge of, or control over […] data” and the case where the service provider confines “itself to providing that service neutrally by a merely technical and automatic processing of the data provided by its customers”, para 113. However, the consequence of the different role played by the intermediary was only discussed with a view to determining the extent of its liability and not the possibility of directly ordering it to cooperate in bringing the infringement to an end. On the criteria for assessing the platform’s liability see ELI Model Rules on Online Platforms and F. MAULTZSCH, Contractual Liability of Online Platform Operators: European Proposals and Established Principles, European Review of Contract Law, 2018, p. 209. 135 Google v. Equustek 2017 SCC 34. 136 Newbury J. [Mooney v. Orr (1994), 98 B.C.L.R. (2d) 318 (S.C.)], para. 11 (the quote goes further, stating that “Such adaptability has always been, and continues to be, the genius of the common law”). 137 To avoid compliance with the Canadian Court order and prevent its recognition

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A Humanist Approach to Private International Law and the Internet “Despite court orders prohibiting the sale of inventory [the foreign company] continues to carry on its business from an unknown location, selling its impugned product on its websites to customers all over the world”.138 In light of these circumstances, it is clear that Google is the only location where the court order can possibly be enforced. In certain cases, infringements cannot be carried out outside of Google or similar platforms. The EU is considering ways of institutionalising the role of certain tech firms as gatekeepers,139 but law enforcement in the digital age may require that FAMGA be targeted by judicial orders, directly, at least in order to prevent the perpetuation of infringements.140 In a recent case, the CJEU left the measure to take to the “reasonableness” of the access provider.141 In another case, a search engine was asked to enact “measures which [would] effectively prevent or, at the very least, seriously discourage an internet user [from] gaining access [to the unlawful content]”.142 and enforcement, Google filed a case “at home” and obtained from the Northern District of California Court an Order assessing that “Equustek could not have obtained the kind of injunction it received in the Canadian courts had it filed suit in U.S. court” and that Google would suffer irreparable injury if it were forced to delink the offending sites. See Order Granting Pl. Mot. For Default Judgment and Permanent Injunctive Relief, Google LLC v. Equustek Solutions Inc., No 5:17-CV-4207-EJD, 2017 BL 450437 [N.D. Cal. Dec. 14, 2017).). As stressed by DASKAL, Google Inc. v. Equustek Solutions Inc 2017 WL 5000834, at *3 [N.D. Cal. Nov. 2, 2017), at 729, the District Court - 47 U.S.C. § 230[c)[1) [2018). Google’s legal experts attempted in vain to: i) deny Google's role in the infringement of Equustek rights through confining its role to ensuring availability of information on the web;ii) characterise the Canadian injunction as one having a potentially “worldwide effect”, thus affecting “international comity”; iii) comply with the injunction only within Canadian borders by restricting the search results for all users located in Canada [all users identified as being in Canada through their IP address, would be “geoblocked”]. In their view, “freedom of information” prevailed over protection of copyright in conformity with values protected within the jurisdiction of Google’s seat and with values characterised as inherent to a “cyberspace jurisdiction”. 138 Google v. Equustek (note 135). 139 See the proposed Digital Markets Act (note 98). 140 Tribunal de Paris, 28 November 2013, APC v. Auchan Telecom, 11/60013. 141 CJEU 27 March 2014, C-314/12, UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft ECLI:EU:C:2014:192 stating that “when [a judicial] injunction does not specify the measures which [the targeted] access provider must take […] that access provider can avoid incurring coercive penalties for breach of that injunction by showing that it has taken all reasonable measures, provided that (i) the measures taken do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available and (ii) that those measures have the effect of preventing unauthorised access to the protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right, that being a matter for the national authorities and courts to establish”]. 142 See CJEU, 24 September 2019, C-507/17 Google, LLC v Commission nationale de l’informatique et des libertés (CNIL) ECLI: EU: C: 2019: 772, in which Article 17 of the GDPR was applicable. The CJEU also stated that the controller must de-reference the

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Ilaria Pretelli B.

Blocking Orders to Stop Human Rights Abuses

The need to enforce judgments in the digital space is glaring in the case of damages to reputation occurring on digital platforms. In a case decided in Ireland, a platform user was targeted by hate speech following his wrongful identification with a person who had avoided paying a taxi fare. The targeted person sought to have the Youtube video at the origin of the incident removed. The Court finds itself powerless to do so: “One can readily understand what motivates the plaintiff to try and put a stop to it. However, this court does not have a magic wand.”143 In a subsequent decision,144 the Irish High Court ordered the social media to take all necessary steps “to achieve the total takedown which the plaintiff requires” or, failing that possibility, to take all possible steps “to achieve that objective as far as reasonably possible”.145 De-indexation by the platform or search engine concerned is necessary and sufficient to bring these unlawful acts to an end.146 In an intra-EU case, the CJEU has finally admitted that the Directive on electronic commerce147 does not preclude world-wide injunctions by Member States.148 In particular, it does not represent an unlawful content from all “national versions of [a targeted] search engine [thus excluding those] that do not correspond to the Member States”. However, it also recognised that “[w]hile the EU legislature has, in Article 17(3)(a) of Regulation 2016/679 (GDPR), struck a balance between [the] right [the protection of personal data] and [the] freedom [freedom of information of internet users] so far as the Union is concerned […] it must be found that, by contrast, it has not, to date, struck such a balance as regards the scope of a de-referencing outside the Union”. See also CJEU 24 September 2019, C-136/17, GC and Others, ECLI:EU:C:2019:773, para 59. For a comparison of French and Italian initiatives to prevent violations of online copyright infringements see O. POLLICINO/ G.M. RICCIO & M. BASSINI (eds), Copyright and Fundamental Rights in the Digital Age, 2020. 143 McKeogh v John Doe 1 (User Name Daithii4u) and others [2012] I.E.H.C. 95 [arguing that “this whole unfortunate saga has led to the most appalling stream of vile, nasty, cruel, foul, and vituperative internet chatter and comment on YouTube and on Facebook directed against this entirely innocent plaintiff, and the anonymous authors of which have chosen to believe and assume is the man who did not pay his taxi fare, and who feel free to say what they wish about him, and in language the vulgarity of which offends even the most liberal and broadminded, and which I will not repeat.”]. 144 In McKeogh v Facebook Ireland Limited et al. [2012/254P] the Irish High Court required a report from social media on the steps to be taken. 145 Ibid. See also Tribunal Gr. Inst. Paris, 6 November 2013, 11/07970; Mosley v Google Inc & Anor, [2015] EWHC 59 (QB); LG Hamburg, 24 January 2014, 324 0 264/11. 146 Blocking orders are consistent with European fundamental freedoms, as acknowledged by the CJEU 27 March 2014, UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft, C-314/12, ECLI:EU:C:2014:192. Comp. CJEU 13 May 2014, Google Spain SL and Google Inc. v Agencia Espanola PD and Mario Costeja Gonzalez, C-131/12, ECLI:EU:C:2014:317. 147 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market. 148 CJEU, 3 October 2019, Eva Glawischnig-Piesczek v Facebook Ireland Limited (C-18/18) ECLI:EU:C:2019:821, para 50.

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A Humanist Approach to Private International Law and the Internet obstacle to issuing injunctions ordering host providers – Facebook in casu – to remove information the content of which is either identical or equivalent to the content of information already declared to be unlawful. The Court explicitly states that “Directive 2000/31 does not preclude […] injunction measures from producing effects worldwide”.149 Since fast takedown cannot be an issue for large social media companies, and halting circulation of potentially “viral” content is of (literally) vital importance, states are creating ad hoc authorities with the power to order immediate takedown of hazardous content.150 C.

Online Dispute Resolution and (Reverse) Recommender Systems

The EU has successfully created a digital platform that operates as an interactive multilingual tool for the online settlement of disputes relating to relations arising from the use of the internet by consumers.151 In practice, it offers information on consumer redress and a user-friendly means to submit complaints. In its first year, the complaint life-cycle on the platform revealed that 85% of the complaints posted on the platform were closed within 30 calendar days after submission which is impressive when compared to an ADR procedure, not to mention a court settlement. In the future, traders may be compelled to direct consumers to the ODR platform on their website, instead of promoting their own dispute settlement instruments.152 The positive experience of the ODR platform153 should encourage the EU to develop a similar online dispute resolution tool dedicated to digital workers. The dissemination – beyond consumer law – of instruments similar to the ODR platform for the online settlement of legal disputes would considerably improve the implementation of justice for tens of thousands of persons, quickly and at modest cost. Another efficient initiative consists in making available for workers (reverse) recommender systems allowing them to verify if platforms trading working services are good or bad. By shaping the ecosystem in which workers operate, platforms can determine how clients are able to treat workers and fall into a 149 Ibi, para. 53. See G. PALAO MORENO, Competencia judicial internacional en supuestos de responsabilidad civil en Internet, in J. PLAZA PENADÉZ (ed), Cuestiones actuales de Derecho y Tecnologías de la Información y la Comunicación (TICs), 2006, p. 275-297. 150 E.g. the Australian eSafety commissioner see https://www.esafety.gov.au/. See, in the UK, see the Draft Online safety Bill (May 2021) (note 56). Platforms are creating their own arbitration organs as has recently done Facebook with its “oversight board”, a special semi-independent body staffed by experts on free speech and constitutional law with the authority to make decisions on what can be posted on line. See https://www.nytimes. com/2020/05/06/opinion/facebook-oversightboard.html?smid=twnytopinion&smtyp=cur. 151 Regulation (EU) No 524/2013 on online dispute resolution for consumer disputes. 152 Report from the Commission to the European Parliament and the Council on the functioning of the European ODR Platform, 13.12.2017, COM/2017/0744 final. See also https://ec.europa.eu/info/sites/default/files/odr_report_2020_clean_final.pdf. 153 Https://ec.europa.eu/info/sites/default/files/odr_report_2020_clean_final.pdf.

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Ilaria Pretelli simple, objective classification.154 Turkopticon and FairCrowdWork evaluate contractors and rate crowdwork platforms.155 They provide workers with what they need to know: what will happen if I make myself available for online working services on this platform: will I be able to rely on the income from that platform, or will I end up with insufficient income, burn out syndrome or other problems?

V.

Conclusions

Users of online digital platforms embody a new category of weaker parties requiring legal consideration and special protection, in particular via private international law rules. Most of the existing EU private international law rules can be easily adapted to the needs of online platform users, with some clarifications. These can be derived from case law – which is increasingly bringing to public attention the most vulnerable categories of online platform users – but also from recent legislative initiatives to define and regulate online platforms. The EU is considering imposing specific obligations on internet intermediaries, with a focus on online platforms offering hosting services, and especially “very large” ones. The underlying idea is that the bigger the platform, the higher the risks for users. From an opposite perspective, and reflecting on four categories of inherently vulnerable users – workers; victims of online torts; consumers; and professional traders – we have suggested improvements to the available EU private international law rules. The purpose is to redress the significantly imbalanced asymmetry between the average user and the online platform which he uses, and which may be a significant arena for such user to express her or his personality. An asymmetry may also exist in the digital relationships between users of a given platform, and private international law may offer equally relevant tools to redress it and obtain fair solutions. A.

Workers

Digital workers such as riders or Uber drivers are based in a given geographical area and enjoy the protections guaranteed to them by local laws, as made applicable in the EU by Article 8(2) of Regulation No 593/2008. However, “the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract” seems less prone to protect M.S. SILBERMAN/ B. TOMLINSON/ R. LAPLANTE/ J. ROSS/ L. IRANI & A. ZALDIVAR, Responsible research with crowds: pay crowdworkers at least minimum wage, Communications of the ACM 2018, p. 39–41. 155 J. ROSS/ I. IRANI/ S. SILBERMAN/ A. ZALDIVAR & B. TOMLINSON, Who are the Crowdworkers? Shifting Demographics in Amazon Mechanical Turk, CHI EA 2010 p. 2863-2872; L. IRANI/ M.S. SILBERMAN, Turkopticon: Interrupting worker invisibility in Amazon Mechanical Turk, Proceedings of the SIGCHI Conference on Human Factors in Computing Systems, Paris 2013, p. 611–620. 154

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A Humanist Approach to Private International Law and the Internet digital workers-on-demand. The location from which they carry out their work may be unknown and the conditions in which they operate may be invisible. Only the digital platform intermediating or organising the service is in a position to oversee the worker’s conditions: the age of the worker, the time spent performing the service, etc. The law of the place where the platform intermediating or organising the service is based could better ensure a level-playing field in the global market of crowdwork. For particularly vulnerable workers, such as workers on demand, it is worth giving courts the power to consider all or some of the laws with which the working service is connected in order to enhance his protection and neutralise social dumping.156 The drafting of uniform rules of private international law for the benefit of crowdworkers by means of private international law would be a welcome development, especially if enshrined in a multilateral instrument (ILO).157 B.

Victims of Online Torts

The digital amplification of torts requires adjustments in favour of victims. Favor laesi should be improved in the EU context. Limiting favor laesi to environmental torts makes it an inadequate rule for torts carried out on the internet. A recent attempt to create a favor laesi rule different from the one enshrined in Article 7 of Regulation 684/2007 has not progressed. Despite the unfortunate formulation of the proposal, the idea of a wider application of favor laesi in the context of gross human rights violations by corporations, as well as in global contexts such as those of online torts permitted and diffused by digital platforms, is worth reflecting upon. At present, the Günstigkeitsprinzip may only benefit victims to the extent that the exception clause of Article 4(3) is interpreted to their advantage. C.

Consumers and Locus Lucri

EU private international law regulations use a variety of connecting factors. Recent subject-matter regulations have a sectorial scope of application which introduce new connecting factors or use various declinations of targeting factors.158 156 F. POCAR, La protection de la partie faible en droit international privé, Recueil des cours, 1984, p. 339 et seq., p. 404 et seq. ; H. MUIR WATT, Integration and Diversity : The Conflict of Laws as a Regulatory Tool, in F. CAFAGGI, The Institutional Framework of European Private Law, 2006, p. 107 et seq. 157 See World Employment and Social Outlook Trends 2021 and The role of digital labour platforms in transforming the world of work, World Employment and Social Outlook 2021 by the International Labour Organization (https://www.ilo.org/global/research/globalreports/weso/trends2021/lang--en/index.htm), recommending that “self-employed platform workers enjoy the right to bargain collectively”; “that platform workers are able to access the courts of the jurisdiction in which they are located if they so choose”; that “access to independent dispute resolution mechanisms” is guaranteed, etc. 158 M.-E. ANCEL, (note 93), p. 181-195, opposing the vertical adjudication of jurisdiction to the horizontal logic of targeting factors.

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Ilaria Pretelli In general, targeting factors are criticised as leading to overexposure of internet actors, although they respond to a logic significantly described as “no gain without pain”.159 Expressed in a Latin phrase, the connecting factor pointing to the locus lucri synthesises targeting factors by focusing on the underlying idea that, if a digital platform operates in a given market, using that market to increase its profits (lucrare), it is fair to assume that it will be able to comply with the local laws and defend itself in the local forum. D.

Professional Users and Party Autonomy in Heteronomic Relations

Many business users are now forced to use specific platforms to survive. They may not always be equipped with the armoury they need to defend themselves on equal terms before the jurisdiction selected on the basis of a standard choice-of-forum clause. These clauses are imposed by the platform on the assumption that their relations with business users are peer-to-peer relations. In litigation pitting a user against the platform, invalidating party autonomy clauses may be necessary to redress the significant imbalance of powers between the digital platform and the average business person. 160 E.

Digital Enforcement

Orders directed at data controllers, search engines, digital media and, in general, to very large online platforms can significantly and efficiently end unlawful online acts. Digital enforcement offers a simple and viable solution in cases of hate speech, cyberbullying, sexual abuse, fake news, patent infringements etc. Hate speech is an abusive form of freedom of expression that still needs a legal definition,161 even though technological means of detecting and immediately removing hate speech without impairing freedom of expression already exist.162 Given that the design of a platform ecosystem influences the discourse of its users, improvements could also be ordered as a way to ensure respect and digital civility. As regards cyberbullying, sexual abuse, the diffusion of alarming fake news, and so on, suffices to recall that the implementation of the “right to be forgotten”

See also U. KOHL, (note 107), p. 78. See I. PRETELLI, Improving Social Cohesion through Connecting Factors in the Conflict of Laws of the Platform Economy, in ID. (note 3), p. 46-47; T. RODRIGUEZ DE LAS HERAS BALLELL, Rules for a Platform Economy: A Case for Harmonisation to Counter “Platform Shopping” in the Digital Economy, ibid., p. 55-79. 161 F. FALOPPA, #Odio. Manuale di resistenza alla violenza delle parole, UTET 2020; J-P. BELLON/ B. GARDETTE, Harcèlement et cyberharcèlement. Une souffrance scolaire 2.0., ESF Editeur 2014. 162 W. WARNER/ J. HIRSCHBERG, Detecting Hate Speech on the World Wide Web, Proceedings of the 2012 Workshop on Language in Social Media, 2012, p. 19-26. 159 160

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A Humanist Approach to Private International Law and the Internet requires by definition digital enforcement, and that patent infringements can largely benefit from judicial orders of taking down directed at online platforms.163 The European Union’s initiatives towards digital governance represent a welcome institutional reaction to what seemed to be, until recently, a state of nature of the digital society. The EU will create a significant amount of new administrative obligations – of transparency, social and other audits, etc. – for online digital platforms, which will undoubtedly mitigate the existing risks incurred by platform users but will also result in increased bureaucracy, correlative legal specialisation, and an arguable fragmentation. Legal history shows that the most beneficial reforms for the human family had as their impetus to simplify and rationalise pre-existing incoherent masses of rules, such as the Corpus Iuris Civilis (529-534), and the Code Napoléon (1804), or to provide clear principles of substantive justice, like the Magna Carta (1215), which inspired multilateral instruments still in force – such as the US Constitution and the Universal Declaration of Human Rights – that voice our sense of justice. Alongside EU efforts towards digital governance, new fundamental rights could be identified by means of multilateral cooperation, with a far more substantial attention to the humanist dimension of law,164 and to the impact of private international law rules on the most vulnerable categories of platform users.165

163 See A.T. v Globe24H.com 2017 FC 114. Microsoft Corp. v. United States, No 14-2985 (2d Cir. 2016) ordering the removal of content uploaded and hosted in foreign states but accessible from the forum. 164 O. POLLICINO, Judicial Protection of Fundamental Rights on the Internet, A Road Towards Digital Constitutionalism?, 2021. 165 The use of private international law for global governance was first proposed by H. MUIR WATT/ D.P. FERNÁNDEZ ARROYO (eds), Private International Law and Global Governance, 2014, passim; T. LUTZI, Private Ordering, the Platform Economy, and the Regulatory Potential of Private International Law, in I. PRETELLI, (note 3), p. 129-145; I. PRETELLI, Le droit international privé de l'Europe entre Chartes des droits et droits « à la carte », in M.-E. ANCEL et al. (eds), Le droit à l'épreuve des siècles et des frontières Mélanges en l'honneur de Bertrand Ancel, Paris/ Madrid 2018, p. 1303-1322 and G.P. ROMANO, Souveraineté "mono-nationale", relations humaines “transterritoriales” et “humanisation” du droit international privé - Libres propos, ibid., p. 1415-1438.

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“SCOPE OF JURISDICTION” – A KEY BATTLEGROUND FOR PRIVATE INTERNATIONAL LAW APPLIED TO THE INTERNET Dan Jerker B. SVANTESSON*

I. II. III. IV. V.

Introduction Private International Law and the Internet The Relevant Case Law of the CJEU The Importance of the “Scope of Jurisdiction” Question Rules for “Scope of Jurisdiction” de lege ferenda A. The Fact that Laws Vary Matters B. The Fact that the Application of Laws Varies Matters C. Legitimacy Outweighs Efficiency D. There is a Link between Scope of Jurisdiction and the Legitimacy of Claims of Jurisdiction E. There is a Link between the Strength of the Claim of Jurisdiction and the Scope of Jurisdiction F. There is a Link between the Strength of the Defendant’s Connection to the Forum and Scope of Jurisdiction

* Professor at the Faculty of Law, Bond University (Australia); Visiting Professor at Masaryk University (Czech Republic), and Associated Researcher at the Swedish Law & Informatics Research Institute, Stockholm University (Sweden). This article draws and expands on research previously presented in D. SVANTESSON, Private International Law and the Internet, 4th edn, Alphen aan den Reijn 2021; D. SVANTESSON, Jurisdiction in 3D – “scope of (remedial) jurisdiction” as a third dimension of jurisdiction, 12 Journal of Private International Law 2016, pp. 60 et seq.; D. SVANTESSON, Solving the Internet Jurisdiction Puzzle, Oxford 2017; D. SVANTESSON, European Union Claims of Jurisdiction over the Internet – an Analysis of Three Recent Key Developments, Journal of Intellectual Property, Information Technology and Electronic Commerce Law 2018, pp. 9 et seq.; D. SVANTESSON, Limitless borderless forgetfulness? Limiting the geographical reach of the “right to be forgotten”, 2 Oslo Law Review 2015, pp. 116 et seq.; D. SVANTESSON, Is International Law Ready for the (Already Ongoing) Digital Age: Perspectives from Private and Public International Law, in Preadviezen: International Law for a Digital World: Collected Papers, Leiden 2020, pp. 113 et seq.; D. SVANTESSON, Scope of jurisdiction online and the importance of messaging – lessons from Australia and the EU, 38 Computer Law & Security Review 2020, Article 105428; D. SVANTESSON, Delineating the Reach of Internet Intermediaries’ Content Blocking – “ccTLD Blocking”, “Strict Geo-location Blocking”, or a “Country Lens Approach”?, 11 SCRIPT-ed 2014, pp. 153 et seq.; and D. SVANTESSON, Grading Szpunar’s Opinion in Case C-18/18 – A Caution Against Worldwide Content Blocking As Default, 13 Masaryk University Journal of Law and Technology 2019, pp. 389 et seq.

Yearbook of Private International Law, Volume 22 (2020/2021), pp. 245-274 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Dan Jerker B. Svantesson G.

VI.

The Scope of Jurisdiction Must Be Guided by the Potential Impact on Other Countries and Persons in Other Countries H. The Scope of Jurisdiction Must Be Legitimate by Reference to the Principle of Scalability I. The Scope of Jurisdiction Must Be Legitimate by Reference to the Principles of Necessity and Proportionality J. One Size Does Not Fit All Concluding Remarks

I.

Introduction

Imagine that a court is asked to grant an order requiring the removal of certain Internet content. What are the private international law questions that then arise? The court would need to determine whether it can claim jurisdiction over the type of dispute in question (subject matter jurisdiction) and whether it can claim jurisdiction over the relevant legal or natural person (personal jurisdiction). It would consider which country’s law applies to the dispute and it would need to consider whether there are reasons to decline to exercise jurisdiction (e.g. under the doctrine of forum non conveniens or under lis alibi pendens) depending on the legal tradition of the court in question. None of this is a novelty for any reader of this excellent journal. However, since May 2015,1 I have been arguing that there is an additional private international law matter that the courts needs to consider in such a situation; namely what I have termed “scope of jurisdiction” or “scope of remedial jurisdiction” as preferred by the Court of Appeal for British Columbia in the Google Canada case.2 Scope of jurisdiction relates to the appropriate geographical scope of orders rendered by a court that has personal jurisdiction and subject matter jurisdiction. Thus, in our example, the court in question would need to decide whether to order the relevant content to be removed only in the country where the court sits, globally, or somewhere in between these extremes, e.g., within a specific region. It goes without saying that this is a key question from the perspective of Internet governance. Indeed, it is a topic that will only increase in significance over the coming years, and it is clear that a bad legal approach to scope of jurisdiction may cause an irreversible “climate change” for the Internet as we know it. Furthermore, as I will demonstrate in the below, a mishandling of scope of jurisdiction matters is an existential threat to any form of sensible application of private international law 1 D. SVANTESSON, A Third Dimension of Jurisdiction, LinkedIn, 3 May 2015, available at https://www.linkedin.com/pulse/third-dimension-jurisdiction-dan-jerker-bsvantesson, on 29.5.2021, followed by D. SVANTESSON, Jurisdiction in 3D – “scope of (remedial) jurisdiction” as a third dimension of jurisdiction, Journal of Private International Law 2016, pp. 60 et seq. 2 Equustek Solutions Inc v Google Inc [2015] BCCA 265, para 69.

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet to the online environment. Yet, it is a matter that still has received surprisingly little attention. This article builds on the rather rudimentary sketches I have provided of scope of jurisdiction previously and seeks to canvass a more comprehensive model of how we may approach this matter. In doing so, I pay particular attention to the cases on the matter that have reached the Court of Justice of the European Union as well as the important Google Canada case that was decided by the Supreme Court of Canada.3 Further, I seek to engage with the very helpful writings on the topic by Advocate General Szpunar. However, first, to set the scene, it is appropriate to say a few words about the complicated, and not always friendly, relationship between private international law and Internet.

II.

Private International Law and the Internet

For 20 years, I have been writing about private international law and the Internet. Most of what I have written has been focused on the application of private international law rules to the online environment. Lately, however, I have also had reason to consider the very relationship between the discipline of private international law and the development, and regulation, of the Internet. In doing so, it has struck me that this has not always been a particularly happy relationship. Indeed, it may be fair to say that the relationship between the discipline of private international law and the development, and regulation, of the Internet is still uneasy. First, early attitudes of the Internet community dismissed the relevance of law, including private international law.4 Second, it is still the case that the discipline of private international law treats Internet matters rather as a “side dish” with the “real” – physical – world being the preferred “main course”. We find ample proof of this merely by looking at the tables of content of leading private international law journals and books. To me, this is untenable given the role that the Internet plays in society. Indeed, during this time of a global pandemic, it is clear that the online environment works better than does our physical world. Against this background, and having the privilege of communicating in the form of a contribution in this esteemed private international law journal, I here

Google Inc v Equustek Solutions Inc [2017] SCC 34. J. BARLOW, A Declaration of the Independence of Cyberspace, Electronic Frontier Foundation (8 February 1996) available at https://www.eff.org/cyberspace-independence on 29.5.2021. Similar sentiments were expressed and debated in the academic literature. See in particular D. JOHNSON/ D. POST, Law and Borders – The Rise of Law in Cyberspace, 48 Stan L Rev 1996, p. 1367. 3 4

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Dan Jerker B. Svantesson want to repeat two message I have stressed elsewhere:5 (a) we need greater interaction between the Internet governance community and the (private) international law community, and (b) it would be to great benefit for all if more private international law scholars turned their attention to Internet matters at least as part of their répertoire. The reason I felt it important to start the discussion by these observations is that I think we would not have the issues I discuss in the below if there was a greater interaction between the Internet governance community and the private international law community.

III. The Relevant Case Law of the CJEU Article 7(2) of the Brussels I bis Regulation states that “the courts for the place where the harmful event occurred or may occur”6 have jurisdiction. This provision, and its predecessors under the Brussels I Regulation (Article 5(3)) and the Brussels Convention, has been given a rather wide interpretation in a range of cases.7 In Shevill v. Presse Alliance SA8 – a case relating to offline crossborder defamation within the European Union – the European Court of Justice concluded that: “the victim of a libel by a newspaper article distributed in several Contracting States may bring an action for damages against the publisher either before the courts of the Contracting State of the place where the publisher of the defamatory publication is established, which have jurisdiction to award damages for all the harm caused by the defamation, or before the courts of each Contracting State in which the publication was distributed and where the victim claims to have suffered injury to his reputation, which have jurisdic5 D. SVANTESSON, Is International Law Ready for the (Already Ongoing) Digital Age: Perspectives from Private and Public International Law, in Preadviezen: International Law for a Digital World: Collected Papers, Leiden 2020, pp. 113 et seq. 6 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L 351/1, 20.12.2012, Art. 7(2). 7 See primarily, ECJ, 30 November 1976, Handelskwekerij G.J. Bier B.V. and Stichtung Reinwater v Mines de Potasse d’Alsace SA, ECLI:EU:C:1976:166, [1976] ECR I01735 and ECJ, 7 March 1995, Shevill v Presse Alliance SA, ECLI:EU:C:1995:61, [1995] 2 WLR 499. 8 ECJ, 7 March 1995, Shevill v Presse Alliance SA, ECLI:EU:C:1995:61, [1995] 2 WLR 499. Note that this case was decided under the Brussels Convention. However, since Art. 7(2) is virtually the same in both the Convention and the Regulation (recast), the decision in Shevill v Presse Alliance SA is no less relevant than if decided under the Regulation.

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet tion to rule solely in respect of the harm caused in the State of the court seised [the so-called mosaic principle].”9 Importantly for the discussion to follow, there are clear indicators suggesting that the Court here, in speaking of “jurisdiction to award damages for all the harm caused by the defamation”, is only referring to such harm occurring in Member States. Most significantly, even though it could not have been excluded that the defamatory content had reached beyond the EU in the Shevill case, the only circulation discussed is that within Member States (“Contracting States”).10 In no way does the Court point to a competence as to award worldwide damages. Had it had such an expansive interpretation in mind, it would presumably have made that clear. The ECJ expanded on the direction set in Shevill in the first of a series of Internet-related cases regarding the scope of jurisdiction. The first is the joint cases of eDate Advertising GmbH v. X11 involving allegedly defamatory content about a German citizen having been placed on a website in Austria, and Olivier Martinez, Robert Martinez v. MGN Ltd12 relating to an infringement of personal rights allegedly committed by the placing of information and photographs on a website in another Member State. Advocate General Cruz Villalón’s Opinion delivered on 29 March 2011 provides valuable guidance. The Advocate General prudently highlighted the impact Internet communications have on the legal questions involved in the two cases and noted a need to expand on the noted principles from the Shevill case.13 At the same time, the Advocate General stressed that any interpretation that results in a change to the Shevill principles must be technologically neutral.14 With those considerations in mind, Advocate General Cruz Villalón suggested that, in addition to the heads of jurisdiction that flow from the Shevill principles, the victim in a situation such as those arise in the cases at hand, would be entitled to commence proceedings in the courts in the Member State where the “centre of gravity of the conflict” is found. That “centre of gravity of the conflict” is to be located by reference to the location at which the victim has her “main interests” and to the location at which the content in question is of particular

Shevill v Presse Alliance SA (note 7), 499-500. Ibidem, para 8: “On 17 October 1989 they issued a writ in the High Court of England and Wales claiming damages for libel from Presse Alliance SA in respect of the copies of France-Soir distributed in France and the other European countries including those sold in England and Wales.”. 11 C-509/09, ECLI:EU:C:2011:685, [2011] ECR I-10269. 12 Ibidem. 13 Opinion of Advocate General Cruz Villalón, 29 March 2011, paras 42-54, ECLI:EU:C:2011:192. 14 Ibidem. 9

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Dan Jerker B. Svantesson relevance.15 A court that has jurisdiction on this basis will be competent to award damages for all the harm caused.16 The ECJ largely adopted Advocate General Cruz Villalón’s reasoning and concluded that: “Article 5(3) [now 7(2)] of the Regulation must be interpreted as meaning that, in the event of an alleged infringement of personality rights by means of content placed online on an internet website, the person who considers that his rights have been infringed has the option of bringing an action for liability, in respect of all the damage caused, either before the courts of the Member State in which the publisher of that content is established or before the courts of the Member State in which the centre of his interests is based. That person may also, instead of an action for liability in respect of all the damage caused, bring his action before the courts of each Member State in the territory of which content placed online is or has been accessible. Those courts have jurisdiction only in respect of the damage caused in the territory of the Member State of the court seised.”17 It can reasonably be assumed that the Court in referring to “all the damage caused” intended to keep with the direction set in Shevill as noted above. Thus, “all” would seem to refer only to such harm occurring in Member States. Support for this interpretation can be found in the label of “mosaic principle”18 attached to this approach. If it had been the case that the Court here spoke of “all the damage caused” as referring to damages caused worldwide, then the individual “tiles” of the mosaic (i.e. “the courts of each Member State in the territory of which content placed online is or has been accessible”) would not provide a picture corresponding with the scope of damages achieved when taking action before a court competent to award “all the damage caused”. Put differently, the mosaic tiles provided by the courts of each Member State in the territory of which content placed online is or has been accessible are not enough to make the full mosaic if the phrase “all the damage caused” is read as referring to damages caused worldwide. Thus, the very

Opinion of Advocate General Cruz Villalón (note 13), para 67; and ECJ, 17 October 2017, Bolagsupplysningen OÜ Ingrid Ilsjan v Svensk Handel AB, C-194/16, ECLI:EU:C:2017:766, paras 31-34. 16 Ibidem. 17 ECJ, 25 October 2011, Martinez v MGN Limited and X v eDate Advertising, C-509/09 and C-161/10, ECLI:EU:C:2011:685, [2011] ECR I-10269, para 52 (emphasis added). 18 For a detailed and insightful analysis of the “mosaic principle” see: T. KYSELOVSKA, Critical Analysis of the “Mosaic Principle” Under Art. 7 Para 2 Brussels Ibis Regulation for Disputes Arising out of Non-Contractual Obligations on the Internet, 1 Prawo Mediów Elektronicznych 2019, pp. 36 et seq. 15

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet label of a “mosaic principle” points to “all the damage caused” as referring to damages caused in all the Member States rather than damages caused worldwide. Furthermore, even though the Court noted that “the internet reduces the usefulness of the criterion relating to distribution, in so far as the scope of the distribution of content placed online is in principle universal”,19 if the Court here had intended to widen the scope of jurisdiction from EU-wide damages to worldwide damages it would surely have made this important expansion expressly clear. Staying with the eDate case a little longer, one additional point should be made since it has been reemphasized in a later case. Referring to the eDate decision, the ECJ in Wintersteiger stressed that: “the rule of special jurisdiction laid down, by way of derogation from the principle of jurisdiction of the courts of the place of domicile of the defendant, in Article 5(3) of the regulation [now Article 7(2)] is based on the existence of a particularly close connecting factor between the dispute and the courts of the place where the harmful event occurred, which justifies the attribution of jurisdiction to those courts for reasons relating to the sound administration of justice and the efficacious conduct of proceedings[.]”20 This is clearly an observation of the utmost importance as it guides the interpretation of the special rule previously found in Article 5(3), and now in Article 7(2). Put simply, it speaks in favour of a restrictive interpretation of the phrase “all the damage caused”. The above has already painted a relatively complex, yet largely logical, picture. Things get more complicated, however, when we consider the third of the key cases on this topic. In the 2017 Bolagsupplysningen OÜ, the CJEU held that: “a legal person claiming that its personality rights have been infringed by the publication of incorrect information concerning it on the internet and by a failure to remove comments relating to that person can bring an action for rectification of that information, removal of those comments and compensation in respect of all the damage sustained before the courts of the Member State in which its centre of interests is located.”21 This conclusion must be read in the light of the CJEU’s reason that:

ECJ, Martinez v MGN Limited and X v eDate Advertising (note 17), para 46. 19 April 2012, C-523/10, ECLI:EU:C:2012:220, para 18. See also ECJ: 16 May 2013, Melzer v MF Global UK Ltd, ECLI:EU:C:2013:305, para 26; 25 October 2012, Folien Fischer AG & Fofitec AG v Ritrama SpA, ECLI:EU:C:2012:664, para 37; 3 April 2014, Hi Hotel HCF SARL v Uwe Spoering, ECLI:EU:C:2014:215, para 28. In 5 June 2014, Coty Germany GmbH v First Note Perfumes NV, ECLI:EU:C:2014:1318, para 47 and in 22 January 2015, Pez Hejduk v EnergieAgentur.NRW GmbH, ECLI:EU:C:2015:28, para 19, the CJEU instead referred to “particularly close linking factors”. 21 Bolagsupplysningen OÜ Ingrid Ilsjan v Svensk Handel AB (note 15), para 50. 19 20

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Dan Jerker B. Svantesson “in the light of the ubiquitous nature of the information and content placed online on a website and the fact that the scope of their distribution is, in principle, universal (see, to that effect, judgment of 25October 2011, eDate Advertising and Others, C-509/09 and C-161/10, EU:C:2011:685, paragraph 46), an application for the rectification of the former and the removal of the latter is a single and indivisible application and can, consequently, only be made before a court with jurisdiction to rule on the entirety of an application for compensation for damage pursuant to the case-law resulting from the judgments of 7 March 1995, Shevill and Others (C-68/93, EU:C:1995:61, paragraphs 25, 26 and 32), and of 25 October 2011, eDate Advertising and Others (C-509/09 and C-161/10, EU:C:2011:685, paragraphs 42 and 48), and not before a court that does not have jurisdiction to do so.”22 Here, several observations must be made. First, while as noted, the Shevill-eDate case-law is clearly EU-wide rather than worldwide in scope, the aim of the judgment in Bolagsupplysningen OÜ is less obvious. On the one hand, the CJEU does not expressly claim a worldwide scope of jurisdiction. Indeed, the CJEU does not even mention the consequences its decision will have outside the European Union. This might be seen to indicate that no expansion to a worldwide reach was intended. Furthermore, the court expressly invokes the Shevill-eDate case-law and is presumably adopting the scope of jurisdiction limitation of those judgments as outlined above. To this may be added that, if the Court was speaking of orders with worldwide effect, the meaning of the phrase “a court with jurisdiction to rule on the entirety of an application for compensation for damage” is certainly questionable. What would be the source of such jurisdiction? Would it take account of rules on jurisdiction under international law? On the other hand, by emphasising that an application for the rectification and/or removal of information online is “a single and indivisible application”, it could be argued that the CJEU seems to be consciously going far beyond the Shevill-eDate case-law; from a focus on EU-wide orders to worldwide orders. This is highly problematic. It either means that the CJEU in Bolagsupplysningen OÜ expanded the reach of Art. 7(2) of the Brussels I bis Regulation in a dramatic manner without at all engaging with the considerable implications that stem from such an expansion, or it means that the order in Bolagsupplysningen OÜ – if it is merely EU-wide so as to be consistent with the Shevill-eDate case-law – is in fact impossible to comply with on the CJEU’s reasoning that the rectification and/or removal of information online is “a single and indivisible application”. To this must be added a further problem, namely that of determining the applicable law or laws for deciding liability for the disputed speech. Under the Shevill approach, in which defamation cases are resolved by injured parties claiming in each Member State for the damage suffered in that jurisdiction, the applicable law for deciding liability will necessarily be the local law of that state, 22

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet or more precisely, the law or laws identified under local choice of law rules. The issue which then arises is whether that situation is modified when a Plaintiff chooses to sue a Defendant, either in the Defendant’s home state (under the general rule of Art. 2 of Brussels I bis) or in the State that is the centre of their interests (under Art. 7(3) idem), for all the damage suffered across the EU. I suggest that it should not be. It would be wholly incompatible with fundamental principles of legal certainty if the applicable law for determining a defendant’s liability in respect of statements made and causing damage in one country should be subject to retrospective change depending solely on the (later) decision of the Plaintiff as to in which of the three possible jurisdictions to sue. It necessarily follows that, even if it may be possible in certain situations for one EU national court to exercise such EU-wide jurisdiction, that does not entitle that court to dispense with consideration of other national law(s) applicable to the case. This applies equally to claims for damages as for injunctive relief. To the extent that the Court’s reference in Bolagsupplysningen OÜ to a “single and indivisible application” might be read to suggest otherwise, I would hope and expect that the Court should use its judgment in future cases to clarify that no such reading was intended. In addition to the above, I also respectfully question whether the CJEU, in deciding a case in 2017, ought to have been guided by an assessment of the state of technology made in 2011. In other words, given the speed with which technology develops, it should not have been assumed that the assessment made in eDate – i.e. that the scope of the distribution of content placed online on a website is, in principle, universal – held true at the time of Bolagsupplysningen OÜ some six years later. When assessing e.g., geo-location technology accuracy rates, it is important to be aware that they are: (i) time-specific, (ii) location-specific, and (iii) context specific. Courts must consequently make such assessments on a case-bycase basis and not be led astray by estimates made in earlier decisions, or estimates made in a different context.23 The reality is that some, but not all, of the content we access online today appears to be provided without any geographical restrictions. In relation to such content, it is arguably correct to observe, as did Advocate General Bobek in Bolagsupplysningen OÜ, that: “There is just one website. It simply cannot be rectified or deleted only “in proportion” to the harm suffered in a given territory.”24 Although that may have been correct in the case of the website Advocate-General Bobek was considering, websites can, and often do, take active steps to differentiate content based on the users’ geographical locations, making highly effective use of geo-location technologies. For example, as is common knowledge, our search results on major search engines, such as Google, are clearly affected by our geo-

23 See further D. SVANTESSON, How Does the Accuracy of Geo-location Technologies Affect the Law?, 2:1 Masaryk UJL & Tech 2008, pp. 11 et seq. 24 Opinion of Advocate General Bobek, 13 July 2017, in C-194/16, Bolagsupplysningen OÜ Ingrid Ilsjan v Svensk Handel AB, para 126.

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Dan Jerker B. Svantesson graphical location.25 Thus, the one and same website can most certainly – contrary to what Advocate General Bobek suggested in Bolagsupplysningen OÜ – differentiate content based on geography so as to make possible rectification or removal only in a given territory. The fourth, and most recent, of the key cases on the topic of jurisdiction in the context of cross-border Internet defamation under EU law, did not specifically relate to Article 7(2) of the Brussels I bis Regulation. The dispute in Case C-18/18 Glawischnig-Piesczek arose when an Austrian politician (Eva GlawischnigPiesczek) sought to have content, argued to be defamatory, removed by Facebook Ireland Limited with worldwide effect. She also sought to have possible future postings containing statements with identical wording, and/or having equivalent meaning, removed on Facebook with worldwide effect, regardless of whether such postings were made by the person responsible for the initial posting or any other current or future Facebook user. Put simply, the CJEU ruled that that the European Union’s Directive on electronic commerce does not preclude a court of a Member State from ordering a host provider (such as a social media site) to remove information it stores and block information uploaded in the future, in a range of circumstances such as where the content of the information is “equivalent” (a controversial concept in the setting of pre-emptive content blocking) to the content of information which was previously declared to be unlawful. The freedom of expression implications are far-reaching and leading scholars such as Keller have discussed them in detail.26 Here, I will limit my focus to the scope of jurisdiction aspect of the case as it is of direct relevance for the application of Article 7(2) of the Brussels I bis Regulation. Regrettably, this is a topic on which the CJEU had surprisingly little to say. Indeed, all the CJEU did in this regard was to: 1. conclude that the European Union’s Directive on electronic commerce27 does not preclude a court of a Member State from “ordering a host provider to remove information covered by the injunction or to block access to that information worldwide within the framework of the relevant international law”;28 and

25 To see that this is so, a useful illustration can be gained by searching for a generic term such as “car” and then examining how many of the search results that are specifically relevant to your location. 26 D. KELLER, Dolphins in the Net: Internet Content Filters and the Advocate General’s Glawischnig-Piesczek v Facebook Ireland Opinion, Stanford Center for Internet and Society, 4 September 2019. Available at https://cyberlaw.stanford.edu/files/Dolphins-inthe-Net-AG-Analysis.pdf. 27 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on Certain Aspects of Information Society Services, in particular electronic commerce, in the Internal Market (“Directive on Electronic Commerce”) [2000] OJ L. 28 ECJ, 3 October 2019, Eva Glawischnig-Piesczek v Facebook Ireland Limited, C-18/18, ECLI:EU:C:2019:821, para 55.

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet 2. point out that it is “up to Member States to ensure that the measures which they adopt and which produce effects worldwide take due account of those rules”.29 This has led some commentators to conclude that “this was no more than a decision about the dividing line between EU law and national law” and that the CJEU “determined that in this case the question of territoriality was outside the scope of EU law”.30 However, it may be somewhat rash to exclude the need for a deeper examination of the judgment based on such assertions. In fact, the more interesting aspect here is what the CJEU did not say. On 4th of June 2019, AG Szpunar delivered his Opinion in the case; an Opinion that – unlike the Court’s decision – addressed the scope of jurisdiction matter in detail. In that Opinion, and later in a most valuable book chapter (discussed below), AG Szpunar has made a considerable contribution towards the discussion of some of the most pressing jurisdictional matters facing the online environment today. In the below, I will, thus, devote significant attention at Szpunar’s reasoning. On the topic in focus here, AG Szpunar saw his task as clearing up the question of whether a host provider may be ordered to remove content which has been characterised as illegal under the national law of a Member State not only in that Member State but also worldwide.31 He concluded that: “As regards the territorial scope of a removal obligation imposed on a host provider in the context of an injunction, it should be considered that that obligation is not regulated either by Article 15(1) of Directive 2000/31 or by any other provision of that directive and that that provision therefore does not preclude that host provider from being ordered to remove worldwide information disseminated via a social network platform. Nor is that territorial scope regulated by EU law, since in the present case the applicant’s action is not based on EU law.”32 In the first part of this paragraph, AG Szpunar is merely stating the obvious; the Directive on electronic commerce clearly does not regulate the scope of jurisdiction issue. In contrast, his claim that the territorial scope is not regulated by EU law since the applicant’s action is not based on EU law is as surprising as it is Ibidem, para 52. G. SMITH, “Notice and Stay-down Orders and Impact on Online Platforms”, October 2019. Available at https://www.twobirds.com/en/news/articles/2019/global/noticeand-stay-down-orders-and-impact-on-online-platforms#__prclt=pzS67trR on 29.5.2021. For a particularly elaborate and misguided attempt to explain why the scope of jurisdiction matter was not a concern in the Eva Glawischnig-Piesczek v Facebook Ireland Limited case, see L. VON DANWITZ, The Contribution of EU Law to the Regulation of Online Speech, 27 Mich Tech L Rev 2020, p. 167, at 199-203. 31 Opinion of Advocate General Szpunar, 4 June 2019, in C-18/18, Eva Glawischnig-Piesczek v Facebook Ireland Limited, EU:C:2019:458, para 76. 32 Ibidem, para 109. 29 30

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Dan Jerker B. Svantesson concerning, not least given the existence, and I argue relevance, of the Brussels I bis Regulation. In setting the scene for his task, AG Szpunar correctly observed that: 1. “the EU legislature has not harmonised the material rules on harm to private life and personality rights, including defamation.”33; and 2. “the EU legislature [has not] harmonised the conflict-of-law rules [i.e. the choice of law rules] in that field.”34 Appropriately, this led him to conclude that, “when hearing actions in defamation, each court in the European Union applies the law designated as applicable under the national conflict rules.”35 As is well-known, however, it is not only customary, but logically necessary, to address the matter of jurisdiction before one enters the territory of identifying the applicable law. As also is well-known, the EU legislature has, indeed, harmonised the rules of jurisdiction when it comes to harm to private life and personality rights, including defamation, namely via the mentioned Article 7(2) of the Brussels I bis Regulation. What then can have motivated this highly skilled and systematic private international law jurist to address the question of choice of law first? The answer is perhaps found in the paragraph that follows immediately after this oddity. There, AG Szpunar relies on the applicable law being national law to distinguish Case C18/18 Glawischnig-Piesczek from Case C-507/17 (“Google France”) in relation to which he just a short period earlier reached a series of important conclusions36 that potentially could have extended in a similar manner to Case C-18/18 GlawischnigPiesczek: “That case [Case C-507/17] concerns Directive 95/46/EC,[37] […] which harmonises, at Union level, certain material rules on data protection. It was, notably, the fact that the applicable material rules are harmonised that led me to conclude that a service provider had to be required to delete the results displayed following a search carried out not only from a single Member State but from a place within the European Union.”38 In this context, AG Szpunar went on to stress that in his Opinion in Case 507/17, he “did not exclude the possibility that there might be situations in which the Ibidem, para 78. Ibidem. 35 Ibidem. 36 Opinion of Advocate General Szpunar, 10 January 2019, in C-507/17, Google LLC, successor to Google Inc. v Commission nationale de l’informatique et des libertés (CNIL) (Territorial scope of de-referencing), EU:C:2019:15. 37 Directive of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ 1995 L 281, p. 31). 38 Opinion of Advocate General Szpunar (note 31), para 79. See further K. KNOL RADOJA, Freedom of Expression on the Internet – Case 18/18 Eva Glawischnig-Piesczek v Facebook Ireland Limited, 15 Balkan Soc Sci Rev 2020, 7. 33 34

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet interest of the Union requires the application of the provisions of that directive beyond the territory of the European Union.”39 Even in the light of this latter point – with which I am entirely comfortable40 – it is noteworthy that AG Szpunar here does not further engage with the implications of the distinction between Case C-507/17 and the case at hand. As it was the fact that the relevant substantive law has been harmonised that persuaded AG Szpunar to facilitate EU-wide de-indexing in Case C-507/17 and given that the relevant substantive law has not been harmonised in Case C-18/18, the logical conclusion must presumably be that in the case of Glawischnig-Piesczek, a blocking order may not apply EU-wide. It can hardly then be reasonable to allow it to be worldwide, not least as worldwide orders per definition also are EU-wide. In other words, the practical outcome of AG Szpunar’s reasoning is that, where the relevant substantive law has been harmonised, a court has jurisdiction to issue orders that may apply EU-wide, and where no such harmonisation exists, the court has jurisdiction to issue orders that may still extend EU-wide, and indeed worldwide. Such an outcome – even if it may be a correct application of applicable law – is logically challenging and certainly puts us at risk of a “race to the bottom” and seems to undermine important safeguards provided for in EU law. The explanation for why this unfortunate situation may arise may be traced to AG Szpunar’s distinction in his Opinion between what he described as the “territorial scope of a removal obligation” (paras 88-103), as opposed to “territorial scope of the jurisdiction” (paras 82-87). In his enlightening subsequent book chapter titled “Territoriality of Union law in the era of globalisation”,41 Szpunar explains that, while territorial scope of the jurisdiction is an issue that belongs to procedural law, the matter of territorial scope of a removal obligation belongs to substantive law.42 Before analysing this distinction, it is here useful to pause and appreciate the enormous value clarifications such as this provides. Of course, when writing an academic piece such as the one just mentioned, Szpunar writes as an individual and does not speak for the Court or in his capacity as Advocate General. Nevertheless, or perhaps exactly because he writes as an individual, he can provide clarifications that help guide our understanding of what his Opinion is saying. We are all indebted to Szpunar for this, and it would be most valuable if more persons in his position, and those in similar positions, adopted such a helpful approach. Having said that, regrettably I cannot agree with Szpunar’s distinction. Elsewhere, I have provided a detailed discussion of why scope of jurisdiction is Opinion of Advocate General Szpunar (note 31), para 79. See e.g.: D. SVANTESSON, Limitless borderless forgetfulness? Limiting the geographical reach of the “right to be forgotten”, Oslo Law Review 2015/2 (2), p. 116 et seq. 41 M. SZPUNAR, Territoriality of Union law in the era of globalization, in D. PETRLÍK/ M. BOBEK/ J.M. PASSER (eds), Évolution des rapports entre les ordres juridiques de l’Union européenne, international et nationaux. Liber amicorum Jiří Malenovský, Brussels (Bruylant) 2020. 42 Ibidem, p. 159. 39 40

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Dan Jerker B. Svantesson best approached as a procedural matter.43 I will not repeat that discussion here. However, put simply, at least de lege lata, it is clear that EU law has treated what Szpunar terms “territorial scope of a removal obligation” as a procedural matter falling within the ambit of the Brussels I Regulation. To see that this is so we need only recall the ECJ’s decision in eDate: “That person may […] bring his action before the courts of each Member State in the territory of which content placed online is or has been accessible. Those courts have jurisdiction only in respect of the damage caused in the territory of the Member State of the court seised.”44 Here the Court is clearly articulating a rule of scope of jurisdiction as stemming from Brussels I bis Regulation rather than as a matter of substantive law, and while it here does so in the context of damages, Case C-194/16 Bolagsupplysningen followed the same approach in the context of the territorial scope of a removal obligation. Pointing to the CJEU’s decision in Case C-194/16 (“Bolagsupplysningen”) discussed above, AG Szpunar correctly noted that “the jurisdiction rules in Regulation No 1215/2012 [the Brussels I bis Regulation] also apply to disputes concerning the removal of defamatory content placed online.”45 In this context, AG Szpunar added the dubious observation that “only the interested parties entertain doubts as to the territorial extent of jurisdiction”.46 Making matters worse, AG Szpunar also stated that: “according to the interpretations put on that judgment [eDate] in the literature, the forum of the centre of interests may adjudicate throughout the world on the damage caused”.47 The “literature” by which he supported this statement with extraordinarily far-reaching consequences is, however, limited to two works – one by Mankowski,48 and one co-authored by Van Calster and Luks.49 These authors are, of course, leading experts. However, while I hold the views of the relevant authors – and indeed the views of AG Szpunar – in the highest regard, this is an unacceptable oversimplification of what commentators have said on this matter. Indeed, at least on my reading, one of the two works to which AG Szpunar refers (i.e., 50%) does not even adopt the view he attributes to it.50 In the light of the above, while AG Szpunar’s statements seem to suggest that CJEU case law has already conclusively settled the matter of scope of 43 D. SVANTESSON, Jurisdiction in 3D – “scope of (remedial) jurisdiction” as a third dimension of jurisdiction, Journal of Private International Law 2016/12:1, pp. 60 et seq. 44 eDate Advertising GmbH v X and Olivier Martinez and Robert Martinez v MGN Limited (note 17), para 52 (emphasis added). 45 Opinion of Advocate General Szpunar (note 31), para 83. 46 Ibidem. 47 Ibidem, fn. 42. 48 P. MANKOWSKI, in U. MAGNUS/ P. MANKOWSKI (eds), Brussels I bis Regulation – Commentary, Cologne (Otto Schmidt) 2016, Art. 7, para 364. 49 G. VAN CALSTER/ C. LUKS, Extraterritoriality and private international law, Recht in beweging – 19de VRG Alumnidag 2012, Antwerp / Apeldoorn 2012, p. 132. 50 Ibidem.

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet jurisdiction in disputes concerning the removal of defamatory content placed online, such a conclusion seems overly charitable and is hardly justified. Despite the profoundly confusing state of the relevant law, AG Szpunar contented himself with a brief discussion of Cases C-509/09 and C-161/10 and concluded that “the court of a Member State may, as a general rule, adjudicate on the removal of content outside the territory of that Member State, as the territorial extent of its jurisdiction is universal.”51 Elaborating on this in a footnote, he claims that: “It is therefore a matter here of jurisdiction known as ‘global’ or ‘general’”.52 The whole idea that, as a general rule, the courts of a Member State enjoy universal jurisdiction stands in stark contrast to public international law, and to traditional approaches to private international law. It is also a striking contrast to the sentiment expressed by the European Commission in its amicus brief filed in the controversial Microsoft Warrant case53 – heard in the Supreme Court of the United States on 27 February 2018. In its amicus brief, the Commission referred to TEU arts. 3(5),54 21(1),55 Case 52/69, Geigy v. Commission,56 Case C-366/10, Air Transport Ass’n of America v. Sec’y of State for Energy and Climate Change,57 and noted: “Any domestic law that creates cross-border obligations – whether enacted by the United States, the European Union, or another state – should be applied and interpreted in a manner that is mindful of the Opinion of Advocate General Szpunar (note 31), para 86. Ibidem, fn. 43. 53 Brief of the European Commission on Behalf of the European Union as Amicus Curiae in Support of Neither Party: 7 https://www.supremecourt.gov/DocketPDF/17/172/23655/20171213123137791_17-2%20ac%20European%20Commission%20for%20filing. pdf on 29.5.2021, p 7. 54 “In its relations with the wider world, the Union shall uphold and promote its values and interests and contribute to the protection of its citizens. It shall contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights, in particular the rights of the child, as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.” 55 “The Union’s action on the international scene shall be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law.” 56 ECLI:EU:C:1972:73, para 11. 57 ECLI:EU:C:2011:864, para 123. In this case, the Court noted amongst other things: “the European Union is to contribute to the strict observance and the development of international law. Consequently, when it adopts an act, it is bound to observe international law in its entirety, including customary international law, which is binding upon the institutions of the European Union” (para 101). 51 52

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Dan Jerker B. Svantesson restrictions of international law and considerations of international comity. The European Union’s foundational treaties and case law enshrine the principles of ‘mutual regard to the spheres of jurisdiction’ of sovereign states and of the need to interpret and apply EU legislation in a manner that is consistent with international law.”58 This proclamation is clear and taken together, the authorities referred to amount to an articulation of some of the steps taken within European Union law to prevent court orders with worldwide or extraterritorial reach. In his mentioned book chapter, Szpunar advances additional arguments for why “jurisdiction established under Regulation (EU) No 1215/2012 is, in principle, territorially unlimited.”59 Szpunar explains that, since courts having jurisdiction pursuant to Regulation (EU) No 1215/2012 decide disputes that very often concern national substantive law and not solely Union law, “any attempt to limit the territorial scope of jurisdiction would be tantamount to the limitation of the territorial scope of application of the national substantive law.”60 To this he adds that “the solution according to which the territorial scope of jurisdiction is not global would hardly work in practice”:61 “It would require that the seized court examine both its territorial scope of jurisdiction and the territorial scope of application of national substantive law. Only if the former is not narrower that the latter could the court be competent to hear the dispute. In addition, there are disputes in which the identification of places or countries where certain events occurred entails a thorough examination of the facts. The Court has confirmed in several instances that such analysis should not be done at the stage of establishing jurisdiction but should rather belong to the substance.”62 (footnote omitted) These are important observations, and they point to matters I have overlooked in my earlier writings. In this, Szpunar has, indeed, clearly pointed to significant issues that arise in any situation in which a court is provided something less than territorially unlimited, universal, jurisdiction under the Brussels I bis Regulation. What Szpunar perhaps is overlooking in all this, is the fact that the Shevill-eDateBolagsupplysningen case-law already has put us in a position where courts routinely are afforded jurisdiction that is territorially limited. We can here again return to the ECJ’s decision in eDate proclaiming that where a person brings her action before the courts of a Member State in the territory of which content placed online is or has been accessible, that court has jurisdiction “only in respect of the damage

Note 53. M. SZPUNAR (note 41), p. 160. 60 Ibidem, p. 161. 61 Ibidem. 62 Ibidem. 58 59

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet caused in the territory of the Member State of the court seised.”63 Thus, as is clear, courts in such situations do not enjoy territorially unlimited, universal, jurisdiction. Thus, presumably they are already facing the concerns identified by Szpunar. At any rate, AG Szpunar concluded that: 1. the Directive on electronic commerce does not preclude a court from ordering a host provider to remove information disseminated via a social network platform worldwide; and 2. the territorial scope is not regulated by EU law since in the present case the applicant’s action is not based on EU law.64 While the first of these conclusions may be uncontroversial, the latter certainly is not. AG Szpunar is here again relying on the distinction he has drawn between “territorial scope of a removal obligation” and “territorial scope of the jurisdiction”. However, as noted above, also the territorial scope of a removal obligation is clearly regulated by EU law in the form of the Brussels I bis Regulation. After all this, AG Szpunar – in the end – reached a largely sensible conclusion: “To conclude, it follows from the foregoing considerations that the court of a Member State may, in theory, adjudicate on the removal worldwide of information disseminated via the internet. However, owing to the differences between, on the one hand, national laws and, on the other, the protection of the private life and personality rights provided for in those laws, and in order to respect the widely recognised fundamental rights, such a court must, rather, adopt an approach of self-limitation. Therefore, in the interest of international comity, to which the Portuguese Government refers, that court should, as far as possible, limit the extraterritorial effects of its junctions concerning harm to private life and personality rights. The implementation of a removal obligation should not go beyond what is necessary to achieve the protection of the injured person. Thus, instead of removing the content, that court might, in an appropriate case, order that access to that information be disabled with the help of geo-blocking.”65 (Internal references excluded). The warnings raised against worldwide orders in this paragraph, and indeed throughout the Opinion, are crucially important and AG Szpunar deserves full credit for bringing these concerns forward. Yet, a fundamental concern here is that AG Szpunar appears to define the scope of jurisdiction under the Brussels I bis Regulation independently of international law considerations such as comity. He then introduces the comity consideration at a later stage. However, there is no 63 eDate Advertising GmbH v X and Olivier Martinez and Robert Martinez v MGN Limited (note 17), para 52 (emphasis added). 64 Opinion of Advocate General Szpunar (note 31), para 93. 65 Ibidem, para 100.

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Dan Jerker B. Svantesson doubt that EU law is bound by international law, and therefore, the Brussels I bis Regulation cannot be read independent of public international law constraints such as the doctrine of comity. This holds true whether the applicable law is EU law, is harmonised by EU law, or is purely the national law of a Member State. Before proceeding further, it is prudent to make a few more observations about the role of geo-location technologies. Above, I have already noted that the CJEU’s conclusion in Case C-194/16 is based on the notion that: “in the light of the ubiquitous nature of the information and content placed online on a website and the fact that the scope of their distribution is, in principle, universal […], an application for the rectification of the former and the removal of the latter is a single and indivisible application”.66 AG Szpunar directly, and correctly, contradicts this, both in this Opinion, and in his Opinion in Case C-507/17, by pointing to the advantages of removing content with the help of geo-location technologies – recognising the relevance of geo-location technologies necessarily contradicts the notion that an application for the rectification or removal of content is a single and indivisible application. Here, we can pause and consider Cavaliere’s astute observation about how the CJEU in Case C-18/18 Glawischnig-Piesczek approaches available technologies: “there is some bitter irony in the fact that the Court on the one hand envisaged technology as offering an escape route where there is really none at present, mistakenly deciding to rely on Al to assess the substantive equivalence of different items of information; and on the other hand it missed an opportunity to entrust a widely available technology to resort to a more narrowly construed limitation to speech. Quite evidently, this is a failure to take avail of technological development to strengthen the legal framework of online speech and provide an adequate territorial scope to the protection of personality rights. Hopefully the Court will soon have the opportunity to correct the mistake in a future decision informed by a stronger understanding of technology and its implications.”67 So where does all this leave us? As correctly observed by Szpunar in his mentioned book chapter, these are issues that “require further analysis”.68 Thus, before leaving the matter of the EU’s approach to scope of jurisdiction, I want to draw out and emphasise a number of what I see as key observations to hopefully assist such further analysis: (1) The starting point for any analysis is that, as observed by Szpunar, “the question of the territorial reach of Union law enforcement, especially in the context of the internet, cannot be resolved exclusively on the level of subBolagsupplysningen OÜ Ingrid Ilsjan v Svensk Handel AB (note 15), para 48. P. CAVALIERE, Glawischnig-Piesczek v Facebook on the Expanding Scope of Internet Service Providers' Monitoring Obligations, 5 Eur Data Prot L Rev 2019, p. 573, at 578. 68 M. SZPUNAR (note 41), p. 168. 66 67

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet stantive law. One should also look at the problem of the territorial competence of the organs responsible for the enforcement of Union legislation.”69 (2) The Brussels I bis Regulation, “replaces national rules on jurisdiction in all situations where a defendant is domiciled in a Member State”70 and in assessing its applicability “[i]t is irrelevant which substantive law governs the dispute; the claim could be based purely on national law, on national law partly harmonised at Union level or on Union law exclusively.”71 Thus, as noted by Szpunar: “In Glawischnig-Pierczek, the national court’s jurisdiction stemmed from Regulation no. 1215/2012.”72 It would have been useful if the CJEU then had engaged with the application, and impact, of Brussels I bis Regulation in its judgment. (3) The fact that a court’s jurisdiction is founded on the Brussels I bis Regulation means that the approach to scope of jurisdiction adopted e.g. in eDate is applicable. Thus, regardless of whether the claim is based purely on national law, on national law partly harmonised at Union level or on Union law exclusively, the scope of jurisdiction matter (including what AG Szpunar refers to as “territorial scope of a removal obligation”) is one of procedural law governed by the Brussels I bis Regulation. (4) While Shevill and eDate include indications that the Court did not contemplate worldwide damages, the decision in Bolagsupplysningen, is less clear on this point, although if the Court in either of those matters was indeed expanding the Shevill approach to a worldwide reach, it certainly ought to have said so expressly. At any rate, the combined effect of the ShevilleDate-Bolagsupplysningen case-law is that it remains unsettled whether the “full” jurisdiction attributed to the courts where the publisher of that content is established, and to the court of the centre of his interests, is EU-wide or worldwide. (5) It must be recognised that jurisdiction afforded under the Brussels I bis Regulation – as in the case of Glawischnig-Pierczek – comes with the significant advantage of a presumption in favour of recognition and enforcement amongst the other Member States of the European Union. This is a significant consideration, not least given the lacking harmonization of legal standards for speech and indeed of the choice of law, in such matters. (6) It must be recognised that the EU Charter of Fundamental Rights is of relevance.73 Admittedly, the Charter applies only when EU Member States adopt or apply a national law implementing an EU directive or when their authorities apply an EU regulation directly.74 However, where a claim made Ibidem, pp. 151-152. Ibidem, p. 156. 71 Ibidem. 72 Ibidem, p. 159. 73 On this topic, consider also M. KETTEMANN/ A. TIEDEKE, Welche Regeln, welches Recht?: Glawischnig Piesczek und die Gefahren nationaler Jurisdiktionskonflikte im Internet, Oct. 10, 2019, https://verfassungsblog.de/welche-regeln-welches-recht. 74 EU Charter of Fundamental Rights, Article 51(1). 69 70

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Dan Jerker B. Svantesson is based on domestic law (Austrian law in the case of GlawischnigPierczek) is met by a defence argued to be provided by EU law (in the case of Glawischnig-Pierczek, Article 15(1) of the Directive on electronic commerce), it seems an omission to not consider the EU Charter of Fundamental Rights in the assessment of whether that Article of EU law does indeed provide the protection sought. Put differently, a decision involving the assessment of whether a Directive is applicable in a manner that protects a fundamental right, in a given matter, should not be made by reference to the Directive alone, but must also involve a discussion of the EU Charter of Fundamental Rights. In most, if not all, cases, the EU Charter of Fundamental Rights may have implications for the question of scope of jurisdiction. To conclude the discussion of how to understand the application of the Brussels I bis Regulation in situations such as that of Glawischnig-Pierczek, I wholeheartedly agree with Szpunar’s plea that “we should all look for new equitable solutions and be prepared and open-minded in order to be able to reassess the existing principles pertaining to issues linked to globalisation, digitalisation and territoriality.”75 Prompted by Szpunar’s call for an open-minded pursuit of new equitable solutions, I now turn to some suggestions for how this area suitably could develop de lege ferenda. However, first I want to bring attention to just how important is the question of scope of jurisdiction.

IV. The Importance of the “Scope of Jurisdiction” Question To say that a mishandling of the scope of jurisdiction issue is an existential threat to a functioning private international law system for the Internet may seem like an exaggeration. And to then add that a mishandling of the scope of jurisdiction issue puts at risk the very foundation of the Internet may place me in the unflattering category of panic-stricken conspiracy theorists. However, these are exactly the two claims I make as to the significance of the question of scope of jurisdiction. First, broad claims of scope of jurisdiction have the power to severely undermine the proper functioning of private international law as a system. A central feature of private international law is that the need for recognition and enforcement ordinarily works to counter the impact of excessive foreign claims of jurisdiction that are contrary to an impacted country’s public policy. Put simply, it does not matter so much that state A claims jurisdiction over something affecting state B if the efficiency of the claim depends on state B’s recognition and enforcement of state A’s judgment. However, the protection and equalizing effect normally provided by the need for recognition and enforcement is circumvented by courts claiming a broad “scope of jurisdiction”. 75

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet Imagine, for example, that a Swiss citizen in Schaffhausen posts something on a US social media site such as Facebook. The posting, while perfectly legal in both the Switzerland and in the US, is seen to be offensive to the Communist Party of China and a Chinese court or authority orders its removal and the blocking of any similar future content. If Facebook complies with the order, the removal and blocking may be effective worldwide without the need for any enforcement action, neither in Switzerland nor in the US. In fact, the laws, values, and legal systems – including the public policies – of these countries do then not even feature in the equation at all. This is a serious threat to freedom of expression, not least in the case of orders requiring pre-emptive blocking or removal of content. And it is a serious threat to the proper functioning of private international law as applied to the Internet. Second, ask yourself how you would rate the usefulness of the Internet if the only content available online was that that complies with all the laws of all the countries of the world. Or looked at from a slightly different perspective; if you could only post content online if you are completely sure that you do not violate any legal rules anywhere, would you then post anything at all? All Internet use today involves a calculated risk of violating the law somewhere, and the reality is that our conduct online regularly violates laws around the world. In fact, it may be said that the only reason law does not make the operation of the Internet impossible is found in the combined effect of, on the one hand, selfimposed state restraint in not applying their laws as widely as they could and, on the other hand, more pragmatically, enforcement difficulties. Worryingly, it seems to me that the latter of these factors plays a considerably larger role presently than does the former. Where states manage to effectively impose orders with global scope of jurisdiction as the default response to violations of local law, the Internet will no longer function.

V.

Rules for “Scope of Jurisdiction” de lege ferenda

As already alluded to, the issue of scope of jurisdiction is very much a current challenge. However, it is also clear that the issue of scope of jurisdiction must always have mattered. Indeed, the concept itself, and indeed some sources of limitations to be placed on scope of jurisdiction, can perhaps be said to be hinted at in the following passage by Altamira in the Lotus case: “Of course, every sovereign State may by virtue of its sovereignty legislate as it wishes within the limits of its own territory; but it cannot, according to sound principles of law, in so doing impose its laws upon foreigners in every case and without making any distinction between the various possible circumstances as regards the place where the offence has been committed, the nature and seriousness of the offence, the special conditions under which a foreigner may happen at a given moment to be within reach of the authorities of a Yearbook of Private International Law, Volume 22 (2020/2021)

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Dan Jerker B. Svantesson foreign country on the territory of which the offence of which he has been accused was not committed, and other conditions besides.”76 Given that a broad scope of jurisdiction may significantly impact foreign countries and persons in foreign countries, a court determining the scope of jurisdiction in a particular matter is bound by both domestic (private international law rules as well as e.g., constitutional law) and international law. This is uncontroversial and indeed is frequently – but unfortunately not always77 – reflected in the judgments by courts. Building on a framework for scope of jurisdiction I have slowly, step-by-step developed, I here present 10 commandments (or at least principles) that ought to guide how courts approach scope of jurisdiction. In doing so, I particularly draw from the discussion of the CJEU’s case law above as well as from a Canadian key case on scope of jurisdiction. A.

The Fact that Laws Vary Matters

Posting a satirical message that, by any imputation, innuendo, or insinuation, directly or indirectly, defiles the sacred name of the Holy Prophet Muhammad will, for example, violate Pakistan’s strict blasphemy rules.78 Comparing the appearance of Chinese leader Xi Jinping with that of Winnie the Pooh may result in censorship in China.79 The diversity is great and the risks of unintentionally violating a foreign law can neither be predicted, nor be ignored. Courts must take account of this indisputable diversity. As noted by Louis D Brandeis: “If we desire respect for the law, we must first make the law respectable.”80 Thus, while as I have argued all along, a worldwide scope of jurisdiction can be justified in certain circumstances, it must be recognised that the legitimacy of speech-restricting laws is, as default, limited in geographical scope. B.

The Fact that the Application of Laws Varies Matters

Fundamental human rights such as the protection of expression, privacy and reputation, apply worldwide. But it must also be acknowledged that the instruments in which those important rights are articulated merely set a baseline. SS “Lotus” (France v Turkey) (1927) PCIJ Series A, No 10, 101-02. X v Twitter Inc (2017) 95 NSWLR 301. 78 Pakistan Penal Code (Act XLV of 1860), § 295-C. 79 S. MCDONELL, Why China censors banned Winnie the Pooh. BBC (2017, 17 July). Retrieved from https://www.bbc.com/news/blogs-china-blog-40627855 on 29.5.2021. 80 The quote is coming from this . 76 77

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet Different countries reconcile and balance those fundamental human rights in different manners. The lesson to be learned from this is that a court adopting a farreaching scope of jurisdiction must consider, not just the balance it has struck between competing fundamental rights, but the fact that clashes between human rights (such as clashes between the freedom of expression and the right of reputation) may be balanced differently in other states affected by the order. States should generally avoid imposing their balance of those rights on other states. C.

Legitimacy Outweighs Efficiency

In the context of fundamental human rights such as freedom of expression, the right to privacy and the right to reputation, legitimacy must always be given greater weight than is given to procedural efficiency. In fact, any situation where the court in one state is entrusted with jurisdiction to adjudicate – on a speech matter – for other states, represents fairness, accuracy and the values of the individual states being sacrificed on the altar of procedural efficiency. This point was not adequately considered e.g., by the CJEU in Case C-18/18, but ought to be so considered in any future decisions. D.

There is a Link between Scope of Jurisdiction and the Legitimacy of Claims of Jurisdiction

Whether a court ought to claim jurisdiction or not will frequently depend on what that court will do if it does claim jurisdiction. For example, if we know that a court is likely to seek to impose its will on the world at large – e.g., by ordering the global removal of certain Internet content – we may not favour that the court claims jurisdiction in the first place. This points to the question of jurisdiction and the question of scope of jurisdiction being intrinsically linked. E.

There is a Link between the Strength of the Claim of Jurisdiction and the Scope of Jurisdiction

The legitimacy of a broad scope of jurisdiction (such as a worldwide order) increases with the strength of the connection between the forum and the dispute and the parties as assessed e.g., in the analysis of in personam jurisdiction, subject matter jurisdiction and territorial competence. In general terms, a court has greater legitimacy in granting a worldwide injunction in a domestic dispute between two domestic parties than it has in making an order against a foreign party in an international dispute. This connection is not always fully appreciated. For example, the lower courts in the Google Canada case81 failed to appreciate this connection and, Fenlon J asserted: “If the order involves worldwide relief, a California court will be no 81

Google Inc v Equustek Solutions Inc (note 3).

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Dan Jerker B. Svantesson more appropriate a forum than British Columbia to make such an order.”82 But clearly, a California court (the court in the state in which Google is headquartered) has a stronger claim of personal jurisdiction over Google Inc than does British Columbia. More broadly, in the light of how the strength of the connection between the forum and the dispute and the parties impact the legitimacy of the scope of jurisdiction, it is not appropriate to “compartmentalise” the reasoning in the manner done by the lower courts in the Google Canada case. The Court found that the jurisdictional ground provided for under the relevant law were weak.83 This ought to have carried over and coloured the analysis of scope of jurisdiction. Indeed, in this context, we may seek inspiration, if not guidance, in how States approach the matter of recognition and enforcement of foreign judgments. In traditional Common Law States, for example, recognition at common law is only possible if the foreign court rendering the judgment had jurisdiction on a ground recognised by the relevant jurisdiction, and a foreign court is only regarded as of competent jurisdiction if the defendant was present or resident in the jurisdiction concerned at the time the proceedings were instituted, or in one way or another submitted to the jurisdiction of the foreign court.84 This is a clear recognition of the link between, on the one hand, the strength of the connection between the forum and the dispute and the parties and, on the other hand, the willingness to be affected by foreign decisions. F.

There is a Link between the Strength of the Defendant’s Connection to the Forum and Scope of Jurisdiction

There is a link between the strength of the defendant’s connection to the forum and scope of jurisdiction. Indeed, the lower courts in the Google Canada case alluded to the fact that there is a difference between an order against a party to the dispute and an order against a non-party. Even in a situation where all other factors point to a broad scope of jurisdiction being legitimate, an order with a broad scope may not necessarily be legitimate against a non-party even where it is legitimate against a party to the dispute. This ought to have been an important consideration in the Google Canada matter as Google was not the target of the litigation per se; rather Google was

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para 104. The Court noted that s. 10(i) of the Court Jurisdiction and Proceedings Transfer Act (CJPTA) “is not applicable” (para 25), s 10(a) of the CJPTA “may be a weak connecting factor” (para 27) and that the jurisdictional ground provided for under s 10(h) of the CJPTA is only described as “stronger” (para 28) than the weak s 10(a). 84 D. SVANTESSON, Private International Law and the Internet 3rd edn, Alphen aan den Reijn 2016, p. 218 et seq. A similar reasoning can be found in other States, such as in the US (D. SVANTESSON, Private International Law and the Internet 3rd edn, Alphen aan den Reijn 2016, p. 257 et seq). 83

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet brought into the matter as a way of seeking to make the original defendant’s business uneconomical by making sure it was not found via Google search. It is quite simply not good enough for a court to outsource its enforcement difficulties to private parties via orders with broad scope of jurisdiction such as the Supreme Court of Canada did in the Google Canada matter.85 Perhaps it may even be argued that, where an order is directed at a party that is at fault in some sense, the legitimacy of a broad scope of jurisdiction increases with the degree of fault attributable to that party. Correspondingly then, where the party at which the order is directed is not at fault it is more difficult to justify a broad scope of jurisdiction. This may perhaps justify an approach under which plaintiffs are directed to first seek removal/blocking by the original poster before being allowed to request removal/blocking by intermediaries.86 G.

The Scope of Jurisdiction Must Be Guided by the Potential Impact on Other Countries and Persons in Other Countries

The reality is that with an interconnected world – not least online – it is quite simply impossible to avoid situations where court orders in one country have an effect in other countries. In other words, some “collateral damage” may be unavoidable. However, as acknowledged e.g., by AG Szpunar and by the Court of Appeal in the Google Canada matter, any order that impacts the sovereignty of another country must be carefully assessed as to whether it is nevertheless appropriate: “[C]ourts should be very cautious in making orders that might place limits on expression in another country. Where there is a realistic possibility that an order with extraterritorial effect may offend another state’s core values, the order should not be made.”87 Thus, as already highlighted in the discussion of how 85 After a belaboured journey through the quagmire of both legal and technical misunderstandings and half-truths, the majority of the Court (McLachlin CJ and Abella, Moldaver, Karakatsanis, Wagner, Gascon, and Brown JJ) ruled in favour of Equustek concluding that: “[S]ince the interlocutory injunction is the only effective way to mitigate the harm to Equustek pending the resolution of the underlying litigation, the only way, in fact, to preserve Equustek itself pending the resolution of the underlying litigation, and since any countervailing harm to Google is minimal to non-existent, the interlocutory injunction should be upheld.” (Google Inc v Equustek Solutions Inc, 2017 SCC 34, para 53). This echoed the sentiment of the Supreme Court of British Columbia that: “Google is an innocent bystander but it is unwittingly facilitating the defendants’ ongoing breaches of this Court’s orders. There is no other practical way for the defendants’ website sales to be stopped.” (Equustek Solutions Inc. v Jack, 2014 BCSC 1063, para. 156). The last sentence in this quote is, of course, entirely incorrect. For example, sales require some form of payment method, so one other practical way for the defendants’ website sales to be stopped would be to seek to cut the payment mechanism. 86 See further: D. SVANTESSON, Limitless borderless forgetfulness? Limiting the geographical reach of the “right to be forgotten”, Oslo Law Review 2015/2 (2), p. 116 et seq. 87 Decision of the Court of Appeal of British Columbia dated June 11, 2015, para 92.

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Dan Jerker B. Svantesson we categorise different types of jurisdictions, the greater the impact on foreign countries, and persons in foreign countries, the stronger the reason to limit the scope of jurisdiction. This is particularly so where the impact relates to (1) strangers to the lawsuit and/or (2) the fundamental human rights, such as privacy, reputation and freedom of expression, of the persons in foreign countries. H.

The Scope of Jurisdiction Must Be Legitimate by Reference to the Principle of Scalability

In international law, much weight is given to state practice.88 This ought to create a strong incentive for countries to pursue scalable universal approaches given that a broad uptake of their approaches legitimates those approaches. However, scalability does not seem to have been considered much in the context of scope of jurisdiction assessments. Rather, states base their claims solely on domestic law and needs with the occasional reference to vague principles of international law. De lege ferenda, they should also take into account of what will be the effect if other countries adopt the same approach;89 that is the question of scalability. Where there is a failure to consider scalability, we end up with a widening of the harmful gap between those countries that are dominant in the online environment (typically richer more developed countries) and those that are struggling to reach their potential (typically poorer less developed countries). Another aspect of scalability relates to the position of dictatorships such as Russia and the Communist party’s China. If our standard position is global blocking based on our local laws, we in the west cannot as easily object to other states doing the same. So, when oppressive dictatorships seek global removal of content offensive to their laws, supporters of global blocking by courts in democracies cannot as convincingly protest based on the effect such removal may have in open tolerant and democratic states. The reality is that the trend of courts demanding global blocking based on local laws will inevitably lead to the destruction of a common resource – the Internet as we know it. Elsewhere, I have argued that such a scalability assessment is a part of any assessment of proportionality. For clarity and to provide emphasis, I have here rather approached it as a separate matter. On a practical level the key thing is of course to ensure that scalability is considered.

See in particular: Statute of the International Court of Justice, Article 38(1)(b). Compare to the “global south impact assessment” advocated in D. SVANTESSON, Internet & Jurisdiction Global Status Report 2019, Paris (Internet & Jurisdiction Policy Network) 2019, p. 64: “it is arguably reasonable to expect lawmakers in those countries that commonly influence policy and law developments globally to conduct what may be termed a “global south impact assessment”, assessing: (1) what impact their approaches will have in the global south, and (2) what will happen if the global south adopts their approaches.” 88 89

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet I.

The Scope of Jurisdiction Must Be Legitimate by Reference to the Principles of Necessity and Proportionality

The appropriateness of granting an order with a broad scope of jurisdiction is affected by factors such as the cost of complying with that order, whether the order is limited in time, the availability of less onerous alternative measures and the effectiveness of the order (both in an absolute sense, and as compared to alternative measures).90 Regarding the available alternative measures, the Google Canada case is illustrative. The most obvious option was the already established system for blocking that Google Inc provides and that, at the time of the appeal, had resulted in hundreds of webpages relating to the disputed content having been blocked. In this context, it is to be noted that the practice of blocking individual webpages obviously is likely to cause less “collateral damages” than will the blocking of entire websites as was requested by the plaintiff in that matter. As to the effectiveness of the order sought by the plaintiff in the Google Canada matter, I will restrict my comments to the aspects of relevance for the matter of scope of jurisdiction. In the Court’s view, extending the order globally was justified by (1) the potential that Canadians circumvent any measures implemented to block content in Canada (e.g. by visiting non-Canadian Google sites or, where geo-location technologies were applied, by using circumvention tools)91 and (2) the fact that the majority of sales of the disputed networking device allegedly are to non-Canadian buyers.92 As to the first of these, it should be noted that according to the Affidavit of Keller referred to in the Factum of the Appellant, “In Canada, approximately 95% of Google searches by users are run via www.google.ca, Google’s search engine for Canada.”93 Thus blocking on “www.google.ca” only would be highly effective on the Canadian market,94 apart from in relation to those Canadians who are (1) already aware of the disputed networking device and (2) so determined to purchase it so as to change country version of Google’s search engine to search for a website that sells that device. Extending the blocking globally on Google seems unlikely to have deterred this latter category of determined buyers as they could change search engine more 90 For this factor, I draw upon Justice Arnold’s reasoning in Cartier International AG et al. v British Sky Broadcasting Ltd et al. [2014] EWHC 3354 (Ch). 91 See, e.g., Decision of the Court of Appeal of British Columbia dated June 11, 2015, para 21. 92 See, ibid., para 25. 93 Factum of the Appellant, Google Inc dated June 13, 2016, at fn. 4. 94 It is surprising that the lower courts were not satisfied with a 95% effectiveness level in relation to Google users, when they were willing to accept granting an order against Google only – an order that only covers 70-75% of Canadian search engine users according to the market share statistics discussed by Fenlon J (Reasons for Judgment of the Honourable Justice Fenlon, dated 13 June 2014, para 152 and the Court of Appeal (Decision of the Court of Appeal of British Columbia dated June 11, 2015, para 19).

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Dan Jerker B. Svantesson easily than they can change country-version of Google search.95 Thus, it made little sense to extend the scope of jurisdiction globally for this purpose. The second reason for a worldwide order – the fact that the majority of sales of the disputed networking device allegedly were to non-Canadian buyers – deserves even closer scrutiny. Even if this amounted to an efficiency reason for granting a worldwide order, this fact has more important consequences speaking against a worldwide order. The lower courts overlooked that, in the light of the fact that the majority of sales were to non-Canadian buyers, the court was asked to order a foreign nonparty to police alleged infringements occurring in foreign countries perpetrated by defendants beyond the (effective) reach of the court. In such a situation, the connection to the forum can never be strong. In my view, de lege ferenda, even in the unlikely event that it is concluded that the connection to the forum in such a situation is strong enough to meet the “substantial connection” requirement so as to place the matter within the territorial competence of the court and to make possible a claim of in personam jurisdiction over the Appellant, it cannot be strong enough to justify the court adopting such a broad scope of jurisdiction as a worldwide order. Like it is in so many other settings, assessing the necessity and proportionality in the context of scope of jurisdiction matters is complex. Yet, there are some guidance to be had. Elsewhere, I have, for example, argued that one matter – a rule of thumb – that will be helpful in determining whether certain content justifies a broader scope of jurisdiction is whether the nature of the content is such that a reasonable person would legitimately be concerned or offended about a random third person viewing that content. The availability of the sort of negative financial information at issue in the well-known Google Spain – right to be forgotten – case96 may only legitimately trouble a reasonable person where it is accessed by either a person who knows the data subject or may enter into dealings or contact with the data subject. In contrast, a reasonable person may legitimately feel uncomfortable about so-called “revenge porn” content depicting the sexual activities of the data subject even where that content is accessed by a random third person. Similarly, the potential harm that may stem from confidential details that expose the data subject to a serious risk of fraud or theft may, of course, be a legitimate concern also where that content is accessed by a random third person. This test may also be effective in assessing whether specific defamatory content is so serious so as to justify a broader scope of jurisdiction; after all, some types of defamatory content are only of concern when they are accessed by a third person with a connection to the victim. Other types of defamatory content – such After all, as noted by the Court of Appeal: “Internet users with Canadian IP addresses – a group comprising almost all users accessing the Internet from within Canada – are, by default, redirected from ‘google.com’ to ‘google.ca’ when they perform searches” (Decision of the Court of Appeal of British Columbia dated June 11, 2015, para 21). In contrast, there is of course no function that redirects users from other search engines to Google’s search engine. 96 ECJ, 13 May 2014, Google Spain SL, Google Inc v Agencia Española de Protección de Datos, Mario Costeja González, C-131/12, ECLI:EU:C:2014:317. 95

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“Scope of Jurisdiction” – A Key Battleground for PIL Applied to the Internet as an untrue claim that a particular person is a convicted war criminal – may legitimately be a concern even where it is only accessed by random third persons. J.

One Size Does Not Fit All

When it comes to scope of jurisdiction, we cannot work on the assumption that one size fits all. Rather, appropriate solutions will be context-specific, and we need to adopt what I elsewhere have termed a “consequence focused approach”;97 that is, rather than restricting ourselves to a blind adherence to the exact wording of the law (a literal interpretation), we must seek to identify the consequences of the various possible interpretations of the law. When we do so, it is obvious that, as I have argued since 2014, “one size does not fit all”.98

VI. Concluding Remarks This article has sought to engage with what I see as the biggest current challenge in the context of private international law and the Internet. I have sought to illustrate that the issue of “scope of jurisdiction” is a crucial challenge for the proper functioning of private international law as applied to the online environment. I have also highlighted that if states manage to effectively impose orders with global scope of jurisdiction as the default response to violations of local law, the Internet will no longer function. Furthermore, a considerable portion of the article was devoted to examining in detail the relevant case law of the CJEU. I chose this focus for several reasons. Most obviously, the CJEU’s decisions on the topic of scope of jurisdiction have gained widespread global attention. And relatedly, the CJEU is no doubt one of – if not the – most influential courts in the world. Given the extent to which the EU has taken the lead on the regulation of the online environment, I am hopeful that the skilled women and men of the CJEU will steer the direction of the scope of jurisdiction matter in an appropriate direction. 97 D. SVANTESSON, “What is ‘Law’, if ‘the Law’” is Not Something That “Is”? A Modest Contribution to a Major Question, 26 Ratio Juris 2013, 456. For a useful illustration of this “consequence focused approach” being applied, see, e.g., Opinion of Advocate General Jääskinen, 25 June 2013, in C-131/12, Google Spain SL, Google Inc v Agencia Española de Protección de Datos (AEPD), paras 30-31. 98 D. SVANTESSON, Delineating the Reach of Internet Intermediaries’ Content Blocking – “ccTLD Blocking”, “Strict Geo-location Blocking”, or a “Country Lens Approach?”, SCRIPT-ed 11/2 (2014) pp. 153-170, at 168. See further: D. SVANTESSON, Internet & Jurisdiction Global Status Report 2019, Paris, Internet & Jurisdiction Policy Network 2019, pp. 151-152; J. DASKAL, Speech Across Borders, 105 Va. L. Rev. 1605, 1625 (2019).

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Dan Jerker B. Svantesson I have also used this opportunity to develop further the framework for scope of jurisdiction I have worked on for some time. Much is at stake, and we simply need to get this right as soon as possible.

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RES JUDICATA AND UNCLAIMED FOREIGN COPYRIGHT INFRINGEMENT Marketa TRIMBLE*

I. II.

IV.

Introduction Transnational Copyright Infringement A. Copyright and Multi-Place Infringements B. Copyright Infringement as a Transitory Cause of Action C. Concentration of Parallel Copyright Infringement Actions Res Judicata A. Res Judicata B. Copyright Infringement and the Scope of Res Judicata – An Illustrative Case C. Res Judicata and Unclaimed Domestic Copyright Infringement 1. Res Judicata and Factual Overlap 2. Res Judicata and Preemption 3. Res Judicata and the Separate-Accrual Rule 4. Res Judicata and Copyright Registration D. Res Judicata and Unclaimed Foreign Copyright Infringement 1. Scenarios 2. Raisability of a Foreign Copyright Infringement Claim 3. Res Judicata in the Court of the Subsequent Action 4. Res Judicata Based on a Judgment of a Foreign Court 5. Other Considerations Conclusions

I.

Introduction

III.

Enforcement of copyright through civil litigation is increasingly complicated because more and more often the enforcement is transnational.1 The transnational nature of the disputes means that copyright enforcement requires litigating against parties from foreign countries, managing evidence located in foreign countries, and arguing points of choice of law and foreign law.2 The internet has made transna*

Samuel S. Lionel Professor of Intellectual Property Law at the William S. Boyd School of Law, University of Nevada, Las Vegas. 1 When this article uses the term “copyright” in general, it refers to the rights that exist in common law countries under copyright law and in civil law countries under authors’ rights law. 2 Although private international law issues are more frequent in intellectual property law cases now than they were previously, the existence of the issues in these types of cases Yearbook of Private International Law, Volume 22 (2020/2021), pp. 275-298 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Marketa Trimble tional disputes over copyright more likely to arise because internet actors and users generally act on the internet without any territorial limits.3 Several academic projects have addressed the pressing problems of copyright and other intellectual property (“IP”) rights enforcement in a transnational context. The projects have addressed private international law issues in IP cases, including the issues that the Hague Conference on Private International Law opted not to include in its Judgments Project; the Conference countries could not agree on the jurisdictional part of the project, which proved that both jurisdiction and enforcement in transnational IP cases pose a number of controversial issues.4 To confront the complex issues, the academic projects, each with a different geographical emphasis aligned with the expertise of its leading members, produced principles to guide judges – and possibly legislators – on private international law issues in transnational IP cases. The academic projects represent significant progress in thinking about the complex issues of transnational IP rights enforcement. Some of the projects (the “Projects”), such as the American Law Institute Principles (the “ALI Principles”), the European Max Planck Group on Conflict of Laws in Intellectual Property Principles (the “CLIP Principles”), and the International Law Association Guidelines (the “ILA Guidelines”), have contributed not only principles but also extensive and valuable notes and commentaries.5 These three Projects include not only special provisions concerning the enforcement of IP rights on the internet, but also provisions on the coordination of two or more parallel proceedings conducted in different countries. is not new. For an example of an early treatment of such issues in IP cases see C.L. VON BAR, Theorie und Praxis des Internationalen Privatrechts, 2d ed., Hannover 1889, pp. 231291. 3 Although tools exist to territorially limit the scope of activities on the internet (e.g., geoblocking by a website operator), the default position remains that the activities are territorially limitless. Courts have commented on the borderless extent of activites on the internet; for example, Justice Abella of the Supreme Court of Canada remarked that “[t]he Internet has no borders – its natural habitat is global.” Google Inc. v. Equustek Solutions Inc., 2017 SCC 34, [2017] 1 SCR 824, 827. See also a reference to “the ubiquitous nature of the information and content placed online” in ECJ, 17 October 2017, Bolagsupplysningen OÜ v. Svensk Handel AB, ECLI:EU:C:2016:194, par. 48. 4 Ongoing disputes regarding anti-suit injunctions in cases concerning standardessential patents highlight some of the controversial issues in transnational IP disputes. See, e.g., Ericsson Inc. v. Samsung Electronics Co., Ltd., EDTX, 2021 WL 89980 (11 January 2021), appeal pending; J.L. CONTRERAS, The New Extraterritoriality: FRAND Royalties, Anti-Suit Injunctions and the Global Race to the Bottom in Disputes Over StandardsEssential Patents, 25 Boston University Journal of Science and Technology 2019, p. 251 et seq. 5 American Law Institute, Intellectual Property: Principles Governing Jurisdiction, Choice of Law, and Judgments in Transnational Disputes, Philadelphia 2008 (the “ALI Principles”); European Max Planck Group on Conflict of Laws in Intellectual Property, Conflict of Laws in Intellectual Property: The CLIP Principles and Commentary, Oxford 2013 (the “CLIP Principles”); International Law Association’s Guidelines on Intellectual Property and Private International Law, 12 Journal of Intellectual Property, Information Technology, and Electronic Commerce Law 2021, p. 1 et seq. (the “ILA Guidelines”).

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Res Judicata and Unclaimed Foreign Copyright Infringement Notwithstanding their detailed treatment of various private international law aspects of transnational IP cases, the Projects have devoted little attention to the doctrine of res judicata (claim preclusion).6 While this lack of deeper discussion of res judicata might be surprising given the importance of the doctrine for the harmonious co-existence of parallel legal systems (which is the focus of the Projects), the omission is understandable given the differences that exist in national laws of res judicata, including in the rules that concern the application of the doctrine in transnational cases.7 This article focuses on one discrete issue concerning the doctrine of res judicata: whether the doctrine can be expanded to cover previously unraised foreign copyright infringement claims – claims that arose under the law or laws of a foreign (non-forum) country or countries and that the plaintiff did not raise in its original litigation. The article focuses on U.S. law and considers whether such an expansion might occur given the current scope of res judicata in the United States, and if so, what the implications of the expansion would be for transnational copyright enforcement.

II.

Transnational Copyright Infringement

A.

Copyright and Multi-Place Infringements

Copyright is prone to transnational infringements because the right (the bundle of rights) is to an intangible property that easily exists in multiple countries simultaneously. Copyright vests in works that may be embodied in physical objects – such as books, canvases, films, and computer hard disks8 – but the works may be transferred intangibly, including digitally over the internet, easily, inexpensively, simultaneously, and globally. The resulting multiplicity of copyright infringements – parallel copyright infringements to identical works occurring in multiple countries – makes copyright enforcement challenging.

6 In some cases, U.S. courts have used “res judicata” as an umbrella term encompassing both res judicata (claim preclusion) and collateral estoppel (issue preclusion). See, e.g., Taylor v. Sturgell, 553 U.S. 880, 892 (2008). This article uses the term “res judicata” in a strict sense as referring only to res judicata (claim preclusion). 7 For a discussion of various theories of recognition of preclusion see, e.g., CH. KRÜGER, Europäischer Rechtskraftbegriff: Überlegungen zu Existenz, Reichweite und Erforderlichkeit, Heidelberg 2021, p. 86 et seq. 8 In some countries, such as the United States, a work must be expressed in a tangible medium of expression in order for copyright to the work to vest. However, international law does not mandate such a fixation requirement, which countries may implement at their option. Berne Convention for the Protection of Literary and Artistic Works, 9 September 1886, as amended on 28 September 1979, Article 2(2) (“Berne Convention”). When copyright law does not require fixation, the law protects even works that have not been fixed in a tangible medium of expression, such as live improvisations.

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Marketa Trimble The existence of parallel national copyrights is facilitated by the extensive copyright law harmonization that countries have achieved through several international treaties, beginning with the Berne Convention in 1886, according to which copyright vests automatically upon the creation of a work. In some countries, such as the United States, copyright requires the fixation of a work in a tangible medium of expression and copyright vests only with such fixation.9 No formalities are required for copyright to vest; the Berne Convention expressly prohibits formalities, and even in countries where some form of registration is available, the act of registration is not a condition of the existence of a copyright.10 The Berne Convention binds its 179 member countries and ensures the global nature of copyright;11 even if many differences in national copyright laws persist, the existence of copyright is almost universal.12 Though parallel copyrights to the same work exist in multiple countries, the copyrights need not be owned by the same person or entity in all of the countries. The initial copyright ownership might vest in different persons or entities in different countries; for example, in the United States, a copyright to an employeecreated work vests automatically in the employer under the work-made-for-hire doctrine, while in countries without such a doctrine, the copyright vests in the employee.13 Different choice-of-law rules that courts in different jurisdictions apply to determine copyright ownership in transnational cases may complicate the status of copyright ownership in different countries.14 And in countries where local law permits transfers of copyright, a copyright owner may transfer the ownership of a copyright, or the owner may grant an exclusive copyright license for all or 17 U.S.C. §102(a). See also supra note 8. Berne Convention, Article 5(2). 11 Parties to the Berne Convention, WIPO, https://www.wipo.int/export/sites/ www/treaties/en/documents/pdf/berne.pdf (last visited 6 May 2021). 12 Slight differences in national laws on protectability may leave some works unprotected by copyright in some countries. International copyright law allows for limited differences in protectability rules. 13 17 U.S.C. §101 and §201(b); Ennio Morricone Music Inc. v. Bixio Music Group Ltd., 936 F.3d 69, 72-73 (2d Cir. 2019). The copyright laws of some civil law countries provide that an employer exercises economic rights to a computer program created by employees. See Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs (Codified version), Article 2(3); Code de la propriété intellectuelle, Law No 92-597, 1 July 1992, as last amended, France, Article L. 113-9; Gesetz über Urheberrecht und verwandte Schutzrechte, 9 September 1965, as last amended, Germany, Article 69b; Bundesgesetz über das Urheberrecht und verwandte Schutzrechte, 9 October 1992, as last amended, Switzerland, Article 17. 14 Courts in some countries apply the law of the protecting country to determine copyright ownership; in other countries courts apply the law of the country of origin. In the United States, courts apply the law of the country with the most significant relationship. E.g., Bundesgesetz über das Internationale Privatrecht, 18 December 1987, as last amended, Switzerland, Article 110(1) (the law of the protecting country); Código Civil, No 274/1966, 25 November 1966, as last amended, Portugal, Article 48 (the law of the country of origin); ITAR-TASS Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82, 91-92 (2d Cir. 1998) (the law of the country with the most significant relationship). 9

10

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Res Judicata and Unclaimed Foreign Copyright Infringement some countries, which results in parallel copyrights being held by different parties in different countries.15 As copyrights to the same work may exist in multiple countries, so may infringements of the copyrights to the same work occur in multiple countries. Copyright infringement can be committed as a multi-place tort, where one act results in simultaneous infringements of parallel copyrights in multiple countries. The internet, in particular, makes multi-place infringements commonplace; a single act of a copyright infringer “sends” a work all over the world, resulting in a copyrightinfringing making available, distribution to the public, public performance, or public display in multiple countries. When an infringer’s act produces effects in multiple countries, the rule of lex loci protectionis governing the choice of law for copyright infringements necessitates the application of the laws of the multiple countries in which the infringements occur.16 This result makes multi-place torts different from singleplace torts; only one law applies to single-place torts. Even if depeçage results in the application of the different countries’ laws to the different issues in a singleplace tort case, the law of only one country applies to each issue. Localization challenges might arise in a single-place tort, leading to questions about what the single place is or what the single law is for any given issue, but in the end for each issue only one country’s law is selected. In copyright infringement cases courts in some countries apply a single national law to issues of copyright ownership,17 but infringement has been consistently subject to the mosaic approach of lex loci protectionis. B.

Copyright Infringement as a Transitory Cause of Action

When copyright infringement results from one act, or a set of acts, of a defendant, the natural tendency for a copyright owner or other person or entity who has standing to enforce the copyright at issue might be to seek redress in a single litigation.18 Bringing a lawsuit in a court of general jurisdiction should accomplish this goal; a court of general jurisdiction may adjudicate all claims raised against a defendant, even if the claims arose in a foreign country.19

15 On differences in national rules of copyright alienability see P. GOLDSTEIN/ P.B. HUGENHOLTZ, International Copyright: Principles, Law, and Practice, 4th ed., New York 2019, §7.6, p. 244 et seq. 16 E.g., ITAR-TASS Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82, 91 (2d Cir. 1998); 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), Recital 26 and Article 8; Bundesgesetz über das Internationale Privatrecht, 18 December 1987, as last amended, Switzerland, Article 110(1). 17 On the different approaches adopted in various countries see supra note 14. 18 In some instances a copyright owner may prefer to litigate in multiple venues. 19 E.g., Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).

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Marketa Trimble Whether a court of general jurisdiction may adjudicate infringements of copyrights arising in foreign countries (“foreign copyright infringements”) depends on whether such infringements are justiciable in the particular court, meaning whether the court considers copyright infringement to be a transitory cause of action, in which case it may adjudicate infringements of copyright that occurred in other jurisdictions. No international treaty addresses the question of justiciability of foreign copyright infringement claims, and positions on the issue vary by country. The following U.S. and U.K. court decisions illustrate approaches favoring the justiciability of foreign copyright infringements. In the United States, the question of the justiciability of foreign copyright infringement arose in London Film Productions Ltd. v. Intercontinental Communications, Inc.20 The plaintiff, a U.K. corporation, sued the defendant, a New York corporation, in New York, which was the place of the defendant’s incorporation, for infringements of copyrights in several South American countries. The court, referring to Nimmer on Copyright, a major copyright law treatise, held that “copyright infringement constitutes a transitory cause of action, … and hence may be adjudicated in the courts of a sovereign other than the one in which the cause of action arose.”21 In the United Kingdom, the U.K. Supreme Court ruled on the justiciability of foreign copyright infringement in Lucasfilm Ltd v. Ainsworth.22 The plaintiff, a U.S. corporation, sued the defendant, a U.K.-domiciled person, in a court in the United Kingdom over copyright infringement that occurred in the United States when the defendant offered allegedly copyright-infringing products online, including to customers who were located in the United States.23 The Court arrived at the “firm conclusion” that a claim of foreign copyright infringement is “one over which the English court has jurisdiction, provided that there is a basis for in personam jurisdiction over the defendant,” and such claim is therefore justiciable in U.K. courts.24 C.

Concentration of Parallel Copyright Infringement Actions

When foreign copyright infringement is justiciable in a court of general jurisdiction, copyright owners may concentrate their copyright enforcement efforts in a single lawsuit in that court. Such concentration is not possible in a court of specific jurisdiction, which is certainly a disadvantage for a copyright owner, but it might also be a disadvantage for the infringer because each party might want to resolve all of their disputes in a single litigation. Multi-place torts, such as copyright infringements on the internet, offer plaintiffs a choice of multiple courts of specific 20 London Film Productions Ltd. v. Intercontinental Communications, Inc., 580 F.Supp. 47 (SDNY 1984). 21 Id. 22 Lucasfilm Ltd & Ors v. Ainsworth & Anor [2011] UKSC 39 (27 July 2011). 23 The plaintiff unsuccessfully attempted to obtain in the United Kingdom the recognition and enforcement of a prior U.S. judgment. Id., par. 7. 24 Id., par. 106.

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Res Judicata and Unclaimed Foreign Copyright Infringement jurisdiction, and if a plaintiff files lawsuits in multiple courts, the plaintiff places the infringer in the position of having to defend itself in multiple courts.25 Conversely, an infringer might torpedo a copyright owner’s centralized enforcement effort by filing suits for declaration of non-infringement in different courts. Current practice suggests that many practical hurdles significantly mitigate the danger of a plaintiff bringing a multiplicity of enforcement actions in various countries.26 Nevertheless, the danger exists, and the Projects have tried to solve the multiplicity problem by various means, including by providing for additional courts in which multi-place infringement lawsuits could be concentrated. The ALI Principles expand the number of courts with territorially unlimited adjudicatory jurisdiction by adding courts “in any State in which [a] person has substantially acted, or taken substantial preparatory acts, to initiate or further an alleged infringement.”27 Such courts may decide “claims respecting all injuries arising out of the conduct within the State that initiates or furthers the alleged infringement, wherever the injuries occur.”28 Additionally, if a person cannot be sued in a WTO member country, the ALI Principles provide for jurisdiction of a court “in any State in which that person’s activities give rise to an infringement claim if … that person directed its activities to that State, and … that person solicits or maintains contacts, business, or an audience in that State on a regular basis, whether or not such activity initiates or furthers the infringing activity.”29 Such a court may decide about injuries without territorial limits.30 The CLIP Principles include a provision regarding the “extent of jurisdiction over infringement claims” when the “infringement [is] carried out through ubiquitous media such as the Internet.”31 This provision gives the court in the place “where the alleged infringement occurs”32 jurisdiction even over infringements that occur in any other State, “provided that the activities giving rise to the infringement have no substantial effect in the State, or any of the States, where the infringer is habitually resident … and [either] (a) substantial activities in furtherance of the infringement in its entirety have been carried out within the territory of the State in which the court is situated, or (b) the harm caused by the infringement in the State where the court is situated is substantial in relation to the infringement in its entirety.”33 25 Although courts in different countries have attempted to limit the scope of personal jurisdiction in cases concerning activities on the internet, courts in multiple jurisdictions may still find specific jurisdiction over a defendant. See, e.g., M. TRIMBLE, Targeting Factors and Conflict of Laws on the Internet, 40 The Review of Litigation 2020, p. 1 et seq. 26 M. TRIMBLE, The Multiplicity of Copyright Laws on the Internet, Fordham Intellectual Property, 25 Media & Entertainment Law Review 2015, p. 339 et seq. 27 ALI Principles, §204(1), first sentence, p. 47. 28 ALI Principles, §204(1), second sentence, p. 47. 29 ALI Principles, §204(3), pp. 47-48. 30 ALI Principles, §204(3), p. 47. 31 CLIP Principles, Article 2:203(2), p. 85. 32 CLIP Principles, Article 2:202, p. 69. 33 CLIP Principles, Article 2:203(2), p. 85.

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Marketa Trimble The ILA Guidelines follow the ALI and CLIP Principles and provide for alternatives to the court of general jurisdiction to enable concentration of litigation. The Guidelines allow copyright infringement claims without territorial limits to be brought in “the courts of the States where the infringement may have caused direct substantial harm unless it could not be anticipated that the infringement would cause that harm there.”34 All three Projects also address the question of the multiplicity of IP laws that a court must apply under the lex loci protectionis principle. The Projects make it possible to apply a single country’s law to multi-place copyright infringements but they leave a safety valve for cases in which a defendant objects to the application of a single law. The ALI Principles rule for cases of “ubiquitous infringement”35 permits a court to apply a single “law or laws of the State or States with close connections to the dispute.”36 The rule allows a party that objects the application of the law selected under the close connection test to “prove that, with respect to particular States covered by the action, the solution provided by any of those States’ laws differs from [the solution] obtained under the law(s) chosen to apply to the case as a whole.”37 According to the CLIP Principles rule for choice of applicable law in cases involving “ubiquitous infringement,”38 a court may apply “the law of the State with having the closest connection with the infringement.”39 The Principles list examples of factors that a court should take into consideration when determining the State with the closest connection.40 The Principles allow “any party [to] prove that the rules applying in a State or States covered by the dispute differ from the law applicable to the dispute in aspects which are essential for the decision.”41 According to the CLIP Principles, “[t]he court shall apply the different national laws unless this leads to inconsistent results, in which case the differences shall be taken into account in fashioning the remedy.”42 The ILA Guidelines also allow for a streamlining of multi-place copyright infringement proceedings by permitting a court to adjudicate such cases under a single country’s law. A court, in cases “in connection with the use of ubiquitous or multinational media,” may “apply to the infringement as a whole the law or laws of the State(s) having an especially close connection with the global infringement.”43 The Guidelines list some factors a court may consider when determining the particular State(s). As the ALI and CLIP Principles do, the Guidelines allow ILA Guidelines, Guideline 5(b), p. 16. ALI Principles, §321, p. 153. 36 ALI Principles, §321(1), p. 153. 37 ALI Principles, §321(2), p. 153. 38 CLIP Principles, Article 3:603, p. 314. 39 CLIP Principles, Article 3:603(1), first sentence, p. 314. 40 CLIP Principles, Article 3:603(2), p. 314. 41 CLIP Principles, Article 3:603(3), p. 314. 42 CLIP Principles, Article 3:603(3), second sentence, p. 314. 43 ILA Guidelines, Guideline 26(1), p. 58. 34 35

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Res Judicata and Unclaimed Foreign Copyright Infringement “any party [to] prove that, with respect to particular States covered by the action, the solution provided by any of those States’ law(s) chosen to apply to the case as a whole.” According to the ILA Guidelines, the court “must take into account such differences when fashioning the remedy.”44 Whether and to what extent national courts or legislatures will adopt the Projects’ suggestions is unclear.45 Recent attempts have failed to change the interpretation of existing jurisdictional rules to facilitate a concentration of multiplace copyright infringement claims in courts that are not courts of general jurisdiction. In Pinckney v. KDG Mediatech AG, the Court of Justice of the European Union refused to extend the territorial power of a court of specific jurisdiction in a copyright infringement case and ruled that in copyright infringement cases, a court of specific jurisdiction “has jurisdiction only to determine the damage caused in the [EU] Member State within which [the court] is situated.”46 In the United States, in Penguin Group (USA) Inc. v. American Buddha, the Court of Appeals of the State of New York localized an injury caused by online infringement in the place of the copyright owner, theoretically opening up the possibility that a court in that place, notwithstanding it being a court of specific jurisdiction, could adjudicate the infringement and address the full injury of the copyright owner.47 However, when the case returned to the federal court in which the case originated, the federal court dismissed the case because the plaintiff failed to satisfy one of the requirements of the jurisdictional statute.48 If the Projects’ suggestions are adopted, the increase in the number of courts that may adjudicate claims without territorial limitation increases the danger of overlapping parallel litigation. There would therefore be an even greater reason to turn the focus to the coordination of parallel lawsuits and to res judicata as the doctrine that ultimately prevents a multiplicity of judgments on the same claims.

ILA Guidelines, Guidelines 26(2), p. 58. The ALI Principles have been cited, for example, by a U.S. court in Fairchild Semiconductor Corp. v. Third Dimension (3D) Semiconductor, Inc., 589 F.Supp.2d 84, 90 (D. Maine 2008). The CLIP Principles have been cited in opinions by CJEU Advocates General. See, e.g., ECJ, 12 April 2011, Eva-Maria Painer v. Standard Verlags GmbH, ECLI:EU:C:2010:145, fn. 31. 46 ECJ, 3 October 2013, Peter Pinckney v. KDG Mediatech AG, ECLI:EU:C:2012:170. Cf. ECJ, 25 October 2011, eDate Advertising GmbH v. X, ECLI:EU:C:2011:685 (adopting a different approach for infringement of personality rights). 47 Penguin Group (USA) Inc. v. American Buddha, 16 N.Y.3d 295 (2011). 48 Penguin Group (USA), Inc. v. American Buddha, 106 U.S.P.Q.2d 1306 (SDNY 2013. 44 45

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III. Res Judicata A.

Res Judicata

Res judicata (or claim preclusion) precludes a court from hearing “repetitious suits involving the same cause of action once a court of competent jurisdiction has entered a final judgment on the merits.”49 The U.S. Supreme Court summarized the purpose of res judicata: the doctrine “protects [parties] from the expense and vexation [of] attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions.”50 Concerns about judicial resources are so significant that the U.S. Supreme Court held that courts may raise res judicata sua sponte when judicial resources have already been expended to resolve the question.51 In the United States, res judicata applies not only to claims that have previously been adjudicated but also to claims that were not previously raised but that could have been raised in the original lawsuit.52 The goal of this expanded scope of res judicata to unadjudicated claims is to “force [the litigation] into the most convenient package”; in the words of a treatise, “[r]epose is fostered by creating a zone within which accounts can be reckoned as finally settled, without the fear that new arguments may resurrect a liability or defeat entitlement.”53 Res judicata is crucial to maintaining a well-functioning legal system, as well as being important to the harmonious co-existence of parallel legal systems in different countries. Yet the Projects do not discuss the doctrine of res judicata in any significant detail; even though all three Projects include detailed provisions concerning coordination of ongoing parallel proceedings,54 they refer to the doctrine of res judicata only briefly. The ALI Principles avoid using the term “res judicata,” noting that “it has different meanings in different jurisdictions.”55 Comments to the CLIP Principles state that “the objective and subjective scope of res judicata vary across different U.S. v. Tohono O’Odham Nation, 131 S.Ct. 1723, 1730 (2011). Montana v. U.S., 440 U.S. 147, 153-154 (1979). 51 Arizona v. California, 530 U.S. 392, 412 (2000), supplemented, 531 U.S. 1 (2000). Res judicata is otherwise an affirmative defense that a party must raise in a response to a pleading. Federal Rules of Civil Procedure, Rule 8(c). 52 On a similar rule in English law see S. HARDER, The Effects of Recognized Foreign Judgments in Civil and Commercial Matters, 62 International and Comparative Law Quarterly 2013, pp. 441-462. 53 C.A. WRIGHT/ A.R. MILLER/ M.K. KANE et al., Federal Practice and Procedure, 3d. ed., Eagan 2020, §4407 (Definition of Claim or Cause of Action). See id. for a discussion of what might be perceived as a mirror-image problem of the expanded res judicata rule – compulsory joinder of claims. 54 ALI Principles, Part II, Chapter 3 (“Jurisdiction over Simplification: Coordinating Multiterritorial Actions”), pp. 91-116; CLIP Principles, Section 7 (“Coordination of Proceedings”), pp. 193-222; ILA Guidelines, Guideline 17, p. 38. 55 ALI Principles, §401, Reporters’ Note 2, p. 171. 49 50

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Res Judicata and Unclaimed Foreign Copyright Infringement legal systems,”56 and admit that the Principles “do not intend to provide a general solution to the difficulties raised by the differences between national legal systems as to the scope of res judicata or the preclusive effects of judgments.”57 All three Projects define the preclusive effects of a foreign judgment by referring to the preclusive effects that a foreign judgment has domestically in the foreign jurisdiction that issued the judgment.58 None of the Projects address res judicata effects concerning claims that were not raised in the original litigation. B.

Copyright Infringement and the Scope of Res Judicata – An Illustrative Case

The case of Computer Associates Intl., Inc. v. Altai, Inc., involving parallel litigation in the United States and in France, illustrates how res judicata concerning unraised foreign copyright infringement claims may arise in a transnational case.59 Computer Associates (“CA”) first filed a lawsuit in the United States (in August 1988 in the U.S. District Court for the Eastern District of New York), and later initiated proceedings in France (in January 1990 in the Tribunal de Commerce in Bobigny). In 1991 the District Court ruled partly in favor of CA, finding that Altai did infringe copyright to one CA computer program, but the District Court held that Altai did not infringe copyright to a second CA computer program. CA pursued its copyright infringement claims concerning the second computer program in France under French law. In 1994, Altai moved in the U.S. District Court to enjoin CA from continuing to pursue litigation in France, but after the French court decided in Altai’s favor, Altai withdrew the motion. Altai nevertheless reactivated the motion in 1995 when it learned that CA planned to appeal the French court decision in France. One of the arguments that Altai raised in support of its motion was that “[CA]’s United States action for violation of its United States copyright preclude[d], under the doctrine of res judicata, [CA’s] French action for violation of its French copyright.”60 Altai did not argue that the U.S. court judgment on infringement of the U.S. copyright disposed of the French copyright infringement claim under French law – this would clearly not be the case given the principle of territoriality, which governs in copyright law.61 Instead, Altai argued that res

P. DE MIGUEL ASENSIO, CLIP Principles, 4:102.C05, pp. 399-400 (italics omitted). Id., 4:102.C06, p. 400 (italics omitted). 58 For instance, §401(3) of the ALI Principles states that “[t]he preclusive effect given a foreign judgment shall be no greater than the preclusive effect of the judgment in the rendering state.” 59 Computer Associates Intl., Inc. V. Altai, Inc., 126 F.3d 365 (2d Cir. 1997). 60 Id., 368. 61 “Because of territoriality and the application of the lex protectionis to the merits of the case, infringement claims that refer to the protection of intellectual property in different countries refer to different territories and have to be decided under diverse laws.” P. DE MIGUEL ASENSIO, CLIP Principles, 4:102.C07, p. 400. 56 57

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Marketa Trimble judicata bared the French action because CA could have asserted its French copyright claims in its U.S. action. The facts in Computer Associates Intl., Inc. v. Altai, Inc. made the matter more complicated: CA did not become aware of the infringements in France until after it had filed its action in the United States.62 Altai argued that while CA could not have included the French copyright claims in its original complaint, it could have added the claims in its amended complaint. Ultimately, the timing issue, a difference in the parties in the two cases, and the lack of jurisdiction of the court over one of the defendants in the French action led the U.S. Court of Appeals for the Second Circuit to affirm the district court’s decision that CA was not barred from maintaining the French action based on the French copyright infringement claims. Because it disposed of the res judicata argument on different grounds, the Court of Appeals in Computer Associates Intl., Inc. v. Altai, Inc. did not address the question whether res judicata would extend to copyright infringement claims that were not raised in the original complaint and arose under foreign law. C.

Res Judicata and Unclaimed Domestic Copyright Infringement

1.

Res Judicata and Factual Overlap

The doctrine of res judicata has evolved in the United States.63 Earlier, “a plaintiff might have as many claims as there were theories of the substantive law upon which he could seek relief against the defendant.”64 With time, most courts began to expand the scope of the doctrine; as a comment to the Restatement (Second) of Judgments explains, courts now view a claim as “coterminous with the transaction regardless of the number of substantive theories, or variant forms of relief flowing from those theories…; regardless of the number of primary rights that may have been invaded; and regardless of the variations in the evidence needed to support the theories or rights.”65 The focus of courts is on the facts. In 2011, the U.S. Supreme Court stated that “[t]he now-accepted test in preclusion law for determining whether two suits involve the same claim or cause of action depends on factual overlap.”66 Some courts refer to the “transactional nucleus of facts” and analyze “whether the two See also, e.g., Howard v. City of Coos Bay, 871 F.3d 1032, 1039-1040 (9th Cir. 2017) (“[C]laim preclusion does not apply to claims that accrue after the filing of the operative complaint.”); Media Rights Technologies, Inc. v. Microsoft Corporation, 922 F.3d 1014, 1021 (9th Cir. 2019). 63 See, e.g., historical observations in C.A. WRIGHT/ A.R. MILLER/ M.K. KANE et al. (note 53). 64 Restatement (Second) of Judgments, 1981, §24, Comment a. 65 Id. 66 U.S. v. Tohono O’Odham Nation, 563 U.S. 307, 316 (2011). On the evolution of U.S. approaches to res judicata see, e.g., comments on Restatement (Second) of Judgments, 1981, §24, and the literature and caselaw listed there. 62

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Res Judicata and Unclaimed Foreign Copyright Infringement causes of action allege the same conduct and whether the two causes of action allege conduct which is contemporaneous.”67 While U.S. federal courts subscribe to this transactional theory, U.S. state courts may be adhering to a different theory.68 California state courts apply the “primary rights theory,”69 which requires the same injury to the plaintiff and the same wrong by the defendant.70 New Jersey has implemented a version of an expanded res judicata doctrine through its “entire controversy doctrine,” which imposes preclusive effects in cases where parties do not join claims that are required to be joined.71 Because under U.S. federal law the focus of a res judicata analysis is on facts rather than on particular claims, res judicata applies even if the claims in a subsequent lawsuit involve elements that differ in some respects from the elements of the claims that were raised in the prior suit. For example, in Durney v. WaveCrest Laboratories, LLC, the plaintiff attempted to litigate a new set of claims in a subsequent lawsuit, but the court dismissed the suit on the ground of res judicata even though there were “some different elements peculiar to each claim.”72 The court listed as an example the difference between unlawful conversion of property, which the plaintiff raised in the prior action, and copyright infringement, which the plaintiff raised in the subsequent action. The court explained that both of the claims concerned the same facts – the defendant allegedly used the plaintiff’s work product – and therefore “each of the cases implicate[d] the same transactional nucleus of facts.”73 2.

Res Judicata and Preemption

The scope of res judicata under U.S. federal law is not identical to the scope of preemption, which in the United States resolves overlaps of federal and state law, Durney v. WaveCrest Laboratories, LLC, 441 F.Supp.2d 1055 (N.D.Ca. 2005). On differences in preclusion laws in the United States see, e.g., H.M. ERICHSON, Interjurisdictional Preclusion, 96 Michigan Law Review 1998, pp. 945 et seq., 963-983. 69 See, e.g., Boeken v. Philip Morris USA, Inc., 48 Cal.4th 788, 797 (2010). 70 Eichman v. Fotomat Corp., 147 Cal.App.3d 1170 (1983). Bancroft-Whitney Publisher’s Editorial Staff, California Jurisprudence, 3d ed., Eagan 2021, 40A Judgments, §194. 71 Rules Governing the Courts of the State of New Jersey, §4:30A. Entire Controversy Doctrine. The rule was originally adopted in 1990 and has been amended several times since. On the application of the doctrine see R.C. DREYFUSS/ L.J. SILBERMAN, Interjurisdictional Implications of the Entire Controversy Doctrine, 28 Rutgers Law Journal 1996, p. 123 et seq., at 124. On the elimination of the mandatory party joinder from the doctrine see H.M. ERICHSON, Of Horror Stories and Happy Endings: The Rise and Fall of Preclusion-Based Compulsory Party Joinder under the New Jersey Entire Controversy Doctrine, 9 Seton Hall Constitutional Law Journal 1999, p. 757 et seq. 72 Durney v. WaveCrest Laboratories, LLC, 441 F.Supp.2d 1055, 1062 (NDCA 2005). 73 Id., 1062. 67 68

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Marketa Trimble including of claims based on federal copyright law and claims based on various state laws. Whether a claim based on federal law preempts a claim based on state law depends on whether the state law claim requires an “extra element” to be present in addition to or instead of the elements required for the federal law claim.74 In some cases federal law may preempt state law claims; for example, courts have found that certain claims under the U.S. Copyright Act preempt claims of unfair competition and misappropriation when the state claims are based solely on the copying of a plaintiff’s copyright-protected expression.75 If the state claims are preempted when they are raised in the same lawsuit, they would certainly be barred by res judicata if they were brought separately, the later claim after the earlier claim was adjudicated. But the reverse is not true; no preemption does not necessarily lead to no res judicata, and even when preemption would not bar particular claims raised in the same action, res judicata might bar one of the claims after the other claim has been adjudicated. For example, a claim of copyright infringement might not preempt a claim of trade secrets misappropriation if the trade secrets misappropriation claim involves the “extra element” of breach of duty of confidentiality;76 therefore, the two claims may be maintained in a single action. However, if a plaintiff first brings a copyright infringement claim and, after that claim has been adjudicated, the plaintiff files a new lawsuit for trade secrets misappropriation, the later action will presumably be dismissed under res judicata. 3.

Res Judicata and the Separate-Accrual Rule

An important factor for the application of res judicata is whether courts consider copyright infringement that spans a period of time to be a single continuing offense or a series of individual offenses. An example of such an infringement is when an infringer posts a pirated copy of a motion picture on the internet; the motion picture may be available for some period of time during which the infringing distribution to the public, public performance, or making available continue to occur. A trade secrets case illustrates the importance of the difference between single and continuing offenses for res judicata. In Allied Erecting and Dismantling Co., Inc. v. Genesis Equipment & Mfg., Inc., the U.S. Court of Appeals for the Sixth Circuit held that res judicata barred a claim of continued misappropriation of trade secrets where the plaintiffs alleged the same acts of misappropriation of the same trade secrets that had already been adjudicated.77 The court referred to the 74 According to the U.S. Copyright Act, “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright … in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright … are governed exclusively by this [Act].” 17 U.S.C. §301(a). 75 E.g., Walker v. Time Life Films, Inc., 784 F.2d 44, 53 (2d Cir. 1986). 76 Computer Associates Intl., Inc. v. Altai, Inc., 982 F.2d 693, 719 (2d Cir. 1992). 77 Allied Erecting and Dismantling Co., Inc. v. Genesis Equipment & Mfg., Inc., 805 F.3d 701 (6th Cir. 2015).

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Res Judicata and Unclaimed Foreign Copyright Infringement “single claim approach” under the Uniform Trade Secrets Act, according to which a misappropriation of trade secrets is not considered a continuing offense; the claim arises only once, at the time when the initial act of misappropriation takes place.78 The U.S. Supreme Court considered whether copyright infringement is a continuing offense in Petrella v. Metro-Goldwyn-Mayer, Inc.79 The case did not concern res judicata, but rather the statute of limitations and its effects on a copyright infringement claim where the infringement had started before the statute of limitations window and continued within the window. In this context, the U.S. Supreme Court clarified that the separate-accrual rule applies in U.S. copyright law, meaning that each time an infringer acts in violation of the copyright law, “the infringer commits a new wrong” and “each wrong gives rise to a discrete claim that accrue[s] at the time the wrong occurs.”80 The clarification in Petrella, when applied to res judicata, seems to produce the following result: A judgment for a continuing copyright infringement may cover only the three-year period permitted by the statute of limitations. If the infringement is a continuing infringement, the copyright owner may bring a new lawsuit to cover a new three-year statute of limitations period that does not overlap with the period covered in the previous lawsuit.81 The only exception might be a case in which the court in the prior lawsuit had awarded ongoing royalties and therefore had allowed the actions of the defendant to continue; presumably, in such a case the subsequent lawsuit could not proceed.82 After Petrella the U.S. Court of Appeals for the Ninth Circuit faced a res judicata issue involving a continuing copyright infringement in Media Rights Technologies, Inc. v. Microsoft Corporation.83 The dispute between the parties originated with allegations by Media Rights Technologies (“MRT”) that Microsoft had misappropriated MRT’s software. In 2013, MRT filed a lawsuit against Microsoft claiming infringement of MRT’s software-related patents, which resulted in the invalidation of one of their patents; the other claims in that case were dismissed with prejudice in 2016. In 2017, MRT filed a new lawsuit under new theories, this time asserting claims of copyright infringement and breach of contract. Id., p. 705. Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014). 80 Id., 671 (internal quotations omitted). 81 For example, the U.S. District Court for the District of Nevada recently ruled that a plaintiff could bring a new copyright infringement suit if the plaintiff was seeking damages that stemmed from infringements that occurred after the filing of the final complaint (in this case it was the second amended complaint) in the prior lawsuit. Rimini Street, Inc. v. Oracle International Corp., 473 F.Supp.3d 1158, 1192 (D. Nev. 2020). 82 On denials of injunctions in copyright cases in the United States see, e.g., P. SAMUELSON, Withholding Injunctions in Copyright Cases: The Impact of eBay, William & Mary Law Review, forthcoming, 2021, available at https://papers.ssrn.com/sol3/papers. cfm?abstract_id=3801254 (last visited 8 May 2021). 83 Media Rights Technologies, Inc. v. Microsoft Corporation, 922 F.3d 1014 (9th Cir. 2019). 78 79

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Marketa Trimble The court held that res judicata barred the copyright infringement claims that were based on the sale of Microsoft products that had occurred before MRT filed the first lawsuit. For the copyright infringement that pre-dated the first lawsuit, the court stated that “MRT could reasonably have discovered Microsoft’s alleged copying … and could have pursued” the claims in the prior litigation.84 The court applied the “transaction test” and determined that the two lawsuits shared a “common nucleus of operative fact.”85 Though the outcome of the transaction test was determinative, the court noted that, additionally, the copyright asserted in the later lawsuit protected a right that was at issue in the prior litigation – MRT’s exclusive right to use and sell the software.86 However, the court held that because of the separate-accrual rule, MRT could bring a suit for copyright infringement that occurred after MRT had filed the first lawsuit. The court held that “[f]or purposes of claim preclusion, the separateaccrual rule means that a new cause of action for copyright infringement accrued each time Microsoft sold an allegedly infringing product.”87 Other courts in the United States might not necessarily agree with the Ninth Circuit’s interpretation of Petrella’s effect on res judicata. In an unpublished decision the U.S. District Court for the Western District of Wisconsin rejected the argument, positing that Petrella does not affect the res judicata analysis; according to this court, “Petrella … addresses the interaction of the copyright statute of limitations and the doctrine of laches [but] says nothing about whether a claim against a downstream infringer is subject to claim preclusion.”88 In its decision the court stated that “the continued public display or distribution of previously made copies is merely an ongoing manifestation of the injury addressed” in the previous litigation.89 4.

Res Judicata and Copyright Registration

Finally, it is important to entertain the effects of copyright registration in the res judicata analysis. Because of the prohibition of formalities in the Berne Convention, U.S. law must not require copyright registration for the existence of copyright.90 Nonetheless, in order to incentivize copyright owners to register their copyrights, the U.S. Copyright Act provides for various advantages for those copyright Id., 1023-1024. Id., 1027. 86 Id., 1029. The court also held that the claims brought under the Digital Millenium Copyright Act (for which “no parallel separate-accrual rule” applies) and the breach of contract claims were subject to claim preclusion. Id., 1026. The DMCA claim was based on 17 U.S.C. §1201(a)(1)(A). 87 Id., 1023. 88 Boehm v. Svehla, 2017 WL 4326308 (W.D.Wi. 2017). Wisconsin is located in the Seventh Circuit, and the Wisconsin federal district courts are not bound by decisions in other U.S. cirucits. 89 Id., par. 7. 90 See supra note 10. 84 85

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Res Judicata and Unclaimed Foreign Copyright Infringement owners who register their copyrights. Perhaps the most important incentive is that a copyright infringement lawsuit may be filed only if the copyright at issue has been registered; without the Copyright Office-issued registration a court may not adjudicate the infringement claim and will dismiss the case.91 Because res judicata precludes claims that could have been raised in a prior action, it would seem that res judicata would not affect copyright infringement claims that were not raised in a prior action because of lack of copyright registration; such claims simply could not have been raised in a prior action. However, res judicata does not bar the subsequent action only in cases when some “legally significant” circumstances emerged after the prior action,92 meaning circumstances that created “a ‘new’ cause of action that did not exist when the prior suit[… was] brought.”93 Copyright registration is not such a “legally significant” act or occurrence, and therefore the fact that copyright had not been registered by the time the prior action was filed does not bar the application of res judicata to the unraised claim of infringement of that copyright. D.

Res Judicata and Unclaimed Foreign Copyright Infringement

1.

Scenarios

Under U.S. law, a domestic copyright infringement claim may be barred by res judicata even if the claim was not raised in a prior action, and it would seem that res judicata could also bar an earlier-unraised claim of foreign copyright infringement.94 The application of the res judicata doctrine to unclaimed foreign copyright infringements would mean that a court would refuse to adjudicate foreign copyright infringement claims if the claims were not adjudicated in a prior action, but could have been raised in the prior action. The applicability of res judicata to an earlier-unclaimed foreign copyright infringement could arise in a U.S. court only when that court was hearing a subsequent action as a court of general jurisdiction; only a court of general jurisdiction may be asked to adjudicate foreign copyright infringements, provided that the court considers a foreign copyright infringement claim to be a transitory cause of action, as the court did in London Film Productions Ltd. v. Intercontinental

91 17 U.S.C. §411(a). In 2019 the U.S. Supreme Court held that a copyright infringement suit may be commenced only after the U.S. Copyright Office has registered the copyright; the mere filing for registration is insufficient for the purpose of filing a copyright infringement lawsuit. Fourth Estate Public Benefit Corporation v. Wall-Street.com, LLC, 139 S.Ct. 881 (2019). The registration requirement applies only to “United States works” as defined in 17 U.S.C. §101. See also section III.D.2. 92 Waldman v. Village of Kiryas Joel, 207 F.3d 105, 113 (2d Cir. 2000). 93 Id., 112. 94 On the application of res judicata to unraised foreign claims in general see Ventas, Inc. v. Health Care Property Investors, Inc., 635 F.Supp.2d 612, 627 (WDKY 2009), affirmed on different grounds in Ventas, Inc. v. HCP, Inc., 647 F.3d 291 (6th Cir. 2011).

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Marketa Trimble Communications.95 The Projects would add more courts that could adjudicate copyright infringements with unlimited territorial scope, but for now, this approach has not been adopted. Under current law, several scenarios could generate a res judicata question. (a) A plaintiff brings an action in a U.S. court alleging a foreign copyright infringement, and the defendant argues that the plaintiff could have raised the foreign copyright infringement claim in a prior action that the plaintiff had filed in a U.S. court. Or, (b), in the same scenario, the prior action was filed outside the United States, in another court of general jurisdiction for infringement in that jurisdiction or for infringement in yet another, third jurisdiction.96 Or the prior action could have been filed outside the United States, in a court of specific jurisdiction for infringement only in that jurisdiction. In the scenario presented in Computer Associates Intl., Inc. v. Altai, Inc.,97 a party requesting an anti-suit injunction would argue that the U.S. court should issue an injunction to prevent litigation abroad because a foreign judgment that might result from that foreign litigation concerning foreign copyright infringement claim could have no effect in the United States, given an existing U.S. court judgment from a prior action in which the foreign copyright infringement claim was not, but could have been raised. 2.

Raisability of a Foreign Copyright Infringement Claim

A claim of foreign copyright infringement could have been brought in a court of a prior action only if that court would have had jurisdiction to adjudicate such a claim; only a court that could have adjudicated a foreign infringement claim is a court in which that claim could have been raised. If the court hearing the prior action was a U.S. court, U.S. law dictates that it must be a court of general jurisdiction in order to adjudicate a foreign copyright infringement claim. If the court of the prior action was a foreign court, it could have been either a court of specific jurisdiction or general jurisdiction. If the claim arose outside the country of the court of the prior action, the court in the prior action would have to consider the foreign copyright infringement claim to be justiciable in order for the claim to be raised there.98 Justiciability might be difficult to ascertain for a court in a subsequent action if the court of the prior 95 London Film Productions Ltd. v. Intercontinental Communications, Inc., 580 F.Supp. 47 (SDNY 1984). The decision does not bind other courts, but other courts have referred to the decision. See, e.g., Kinon Surface Design, Inc. v. Hyatt Corporation, SDFL, 2019 WL 4731771, 29 January 2019, par. 2. For U.S. treatises arguing in favor of treating copyright infringement as a transitory cause of action see M.B. NIMMER, Nimmer on Copyright, 1963-1985, §1703; P. GOLDSTEIN, Goldstein on Copyright, 3d ed., 2020, §16.2. 96 Multiple courts of general jurisdiction might exist even under the current rules of personal jurisdiction. 97 Computer Associates Intl., Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992). See section III.B, above. 98 See section II.B, above.

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Res Judicata and Unclaimed Foreign Copyright Infringement action is in a different country; it appears that courts and/or legislatures in many countries have not yet had an opportunity to settle the issue of justiciability of foreign copyright infringements. As the discussion of U.S. law in section III.C demonstrates, national law may place limits on when copyright infringement claims could have been raised, and the law of a court of a prior action might not have allowed the raising of a foreign copyright infringement claim.99 Under U.S. law – if the prior action was in a U.S. court – and even if a foreign copyright infringement claim had required an additional, “extra element” to be present, the claim would still be considered raisable for purposes of res judicata.100 If U.S. courts are to apply the separate-accrual rule in a res judicata analysis, they would have to determine whether the rule should also apply to foreign copyright infringements.101 Rules of subject matter jurisdiction may also influence whether a claim could have been brought in a prior action. In Armdap, Inc. v. Coast Business Systems, Inc., an unpublished decision, the U.S. Court of Appeals for the Ninth Circuit held that res judicata did not apply when the prior action was filed in a state court, which “lacked jurisdictional competency to hear the copyright claims” that the plaintiff asserted in the subsequent action.102 However, even under this approach the fact that a prior action was brought in a state court would not bar unclaimed foreign copyright infringements; federal courts have exclusive jurisdiction in “any civil action arising under any Act of Congress relating to … copyrights,”103 but copyright claims arising under the laws of foreign countries are not subject to the exclusive jurisdiction of federal courts and may be brought in state courts. The fact that a prior action was filed in a state court would therefore not foreclose the raisability of a foreign copyright infringement claim in that state court. Finally, it might seem that if a prior action was filed in a U.S. court, under U.S. law the existence vel non of copyright registration should be irrelevant for the raisability of foreign copyright infringements;104 the requirement of copyright registration, even if interpreted as applicable in cases in which copyright infringement in a foreign country is claimed, does not concern non-U.S. works.105 “The local law of the [country] where the judgment was rendered determines the effect of the judgment upon the original claim or cause of action.” Restatement (Second) of Conflict of Laws, 1971, §95, comment c. 100 See also section III.C.2, above. In a transnational case, such an extra element could be a “new public” under the national law of an EU country implementing EU copyright law. 101 See also see section III.C.3, above. 102 Armdap, Inc. v. Coast Business Systems, Inc., 188 F.3d 512 (9th Cir. 1999). 103 28 U.S.C. §1338(a) (emphasis added). Most copyright law in the United States is governed by federal law, but there are minor aspects of copyright law that are governed by state law. See, e.g., M. TRIMBLE, U.S. State Copyright Laws: Challenge and Potential, 20 Stanford Technology Law Review 2017, p. 66 et seq. 104 See also section III.C.4, above. 105 The registration requirement would apply to claims arising under foreign law if the registration requirement is considered to be a procedural requirement. See Fourth Estate 99

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Marketa Trimble However, a foreign infringement claim may concern a U.S. work, and many more works than in the pre-internet days may now be U.S. works because courts may interpret their publication on the internet to be a simultaneous publication in the United States, thus making them U.S. works.106 3.

Res Judicata in the Court of the Subsequent Action

If a foreign copyright infringement claim could have been brought in a prior action, the court in a subsequent action must decide if res judicata should bar the claim in the subsequent action. In U.S. federal courts, federal-state choice-of-law questions arise concerning the rules that should apply to res judicata.107 Assuming for simplification that both the prior and the subsequent actions were brought in U.S. courts, that the courts decided the actions under federal question jurisdiction, and that U.S. federal law applies,108 res judicata requires that the prior judgment be on the merits and issued by a court of competent jurisdiction, and the parties in the prior and the subsequent action be identical or be privies to the original parties.109 Normally, both cases must also involve the same cause of action, but this requirement might not apply when res judicata is expanded to cover unraised claims. When unraised claims are at issue, the key inquiry under U.S. federal law is whether the two causes of action “allege the same conduct and whether the two causes of action allege conduct which is contemporaneous.”110 It seems that a prototypical case of copyright infringement on the internet would meet this definition of the transactional nucleus of facts: A copyright infringer commits a single act of posting a work on a webpage, which results in a copyright-infringing making available, distribution to the public, public performance, or public display in multiple countries. The conduct occurs in one place and is perceived in various countries contemporaneously. Under U.S. law, res judicata also requires the court in a prior action to have had “the power to award the full measure of relief sought in the later litigation.”111 Technically, any court of sufficient jurisdiction should have the power to award the full scope of relief in the territorial sense; a court of general jurisdiction may award

Public Benefit Corporation v. Wall-Street.com, LLC 139 S.Ct. 881, 887 (describing the copyright registration requirement as “akin to an administrative exhaustion requirement”). 106 17 U.S.C. §101 (the definition of a “United States work”). 107 On U.S. federal and state choice-of-law issues pertaining to preclusion law see, e.g., H.M. ERICHSON (note 68), pp. 945 et seq., 983-1013. For a discussion of various theories of recognition of preclusion see, e.g., Ch. KRÜGER (note 7), p. 86 et seq. 108 C.A. WRIGHT/ A.R. MILLER/ M.K. KANE et al., Federal Practice and Procedure, 2d. ed., Eagan, 2021, §4473 (Foreign Judgments); Taveras v. Taveraz, 477 F.3d 767, 783 (6th Cir. 2007). 109 E.g., In re Piper Aircraft Corp., 244 F.3d 1289, 1296 (11th Cir. 2001). 110 Durney v. WaveCrest Laboratories, LLC, 441 F.Supp.2d 1055 (N.D.Ca. 2005). See also section III.C.1, above. 111 Davidson v. Capuano, 792 F.2d 275, 278 (2d Cir. 1986).

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Res Judicata and Unclaimed Foreign Copyright Infringement relief for claims arising anywhere, and a court of specific jurisdiction may award relief for claims arising within its jurisdiction. Comparing the measure of relief that might be awarded in the courts of different countries may be problematic. This problem is absent when both the prior and the subsequent actions are before courts in the same country. But if the prior and the subsequent actions are brought in courts of different countries, it might be unclear whether the relief sought in the subsequent action could have been awarded by the court in the prior action. The answer depends on the choice-of-law rule applicable to remedies; if the court in the subsequent action applies the same law to remedies that the court in the prior action would have applied, then the measure of relief would be identical, at least as to the applicable law.112 If the court in the subsequent action applies a different law to remedies, the measure of relief sought in the subsequent action might be different.113 4.

Res Judicata Based on a Judgment of a Foreign Court

The situation is more complicated when the prior action and the subsequent action are brought before courts of different countries. The court of the subsequent action must consult its choice-of-law rules to determine which law governs res judicata. The rules might direct the court to apply its own law of res judicata (equalization of effects) or to apply the law of the country of the prior action (extension of effects).114 Or, under the Kumulationstheorie the court will apply the law of the country of the prior action, but only to the extent that the court’s own law permits the application; the effects that the court of the subsequent action will give to the judgment will not be greater than the effects that the judgment has or would have under the law of the country of the prior action, and the court will not allow the judgment to produce greater effects than a similar judgment by a court of the country of the subsequent action would have.115

112 Differences in court practices, such as in the calculation of reasonable royalties, may still produce differences in any relief awarded, even if different courts follow the same applicable law. Some countries have sought to align their courts’ approaches to the calculation of damages in the IP chapters of their free trade agreeements. See, e.g., Australia-Chile Free Trade Agreement, 2008, Article 17.36(2)(b); Central AmericaDominican Republic-United States Free Trade Agreement, 2004, Article 15.11(7)(b). 113 On choice of law for remedies in IP cases in various countries see M. TRIMBLE, The Territorial Discrepancy Between Intellectual Property Rights Infringement Claims and Remedies, 23 Lewis & Clark Law Review 2019, pp. 501 et seq., 535-538. 114 See, e.g., A. GIUSSANI, Cross Border Enforcement of Monetary Claims-Interplay of Brussels Ia Regulation and National Rules, Maribor 2018, pp. 26 and 34. 115 See, e.g., P.A. DE MIGUEL ASENSIO, Recognition and Enforcement of Judgments in Intellectual Property Litigation: The CLIP Principles, in J. BASEDOW/ T. KONO/ A. METZGER, Intellectual Property in the Global Arena, Tübingen 2010, pp. 253-254; R.A. SCHÜTZE, Das Internationale Zivilprozessrecht in der ZPO, Berlin 2008, pp. 83-84; OLG Hamm, 25 November 2019, 8 U 86/15, pars. 74, 83, and 209 et seq.

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Marketa Trimble The Proposals have adopted the Kumulationstheorie,116 which is also consistent with the U.S. position in at least some U.S. jurisdictions. Although the law does not appear to be settled across the U.S. jurisdictions, U.S. courts tend to apply the law of the country of the prior action (of the foreign judgment) to determine the preclusive effects of the foreign judgment, as long as the law of the country of the prior action “doesn’t offend a strong U.S. policy.”117 According to a comment to the Restatement (Second) of Conflict of Laws, “[a] judgment will not be given greater effect abroad than it enjoys at home.”118 If the scope of res judicata under the law of the country of a prior action is expanded to cover earlier-unraised foreign copyright infringement claims, a court in a subsequent action will have to assess whether it will recognize a res judicata effect in its expanded scope. In countries that adhere to the Kumulationstheorie, courts would apply the filter of their own law to determine whether the expanded scope is acceptable. It is debatable whether the expansion of res judicata to earlier-unclaimed foreign copyright infringement could be found to be against the public policy of the country of the subsequent action. To have res judicata effects, a prior judgment must be recognizable in the court of a subsequent action. Because the claim was of infringement that was “foreign” in the court of the prior action, the court must have been a court of general jurisdiction, the defendant must have been domiciled in the country of the prior action, and therefore it would seem that no due process concerns should arise. It is conceivable, however, that a court of a subsequent action would hesitate to accept the expanded scope of res judicata if the copyright infringement that was unclaimed in a prior action and is claimed in the subsequent action is infringement of copyright in the country of the subsequent action. This scenario might not always be the case; the subsequent action could be brought in yet another court of general jurisdiction and concern infringement of copyright in a third country. But if the subsequent action is brought in the country where the copyright infringement occurred and under whose law it is to be adjudicated, it is understandable that courts in that country might hesitate to deny a forum to a claim of such infringement; courts have a strong interest in seeing wrongs under their laws vindicated. While the court of the subsequent action might be content with a court of the prior action adjudicating such an infringement (the recognition of the judgment might not be automatic, even in copyright cases),119 the court of the subsequent action 116 B. UBERTAZZI, Recognition and Enforcement of Foreign Judgments in Intellectual Property: A Comparison for the International Law Association, 3 Journal of Intellectual Property Law and Practice 2012, p. 306, at 314. 117 U.S. v. Kashamu, 656 F.3d 679, 683 (7th Cir. 2011) (in the context of collateral estoppel). See also Panama Processes, S.A. v. Cities Service Co., 796 P.2d 276, 291-292 (1990); McCord v. Jet Spray Intern. Corp., 874 F.Supp. 436, 440 (D.Mass. 1994). Cf. Evans Cabinet Corp. v. Kitchen Intern., Inc., 593 F.3d 135, 141-142 (1st Cir. 2010). 118 Restatement (Second) of Conflict of Laws, 1971, §107, comment b. 119 For a case in which a U.S. court denied recognition of a French judgment concerning copyright infringement see Sarl Louis Feraud Intern. v. Viewfinder, Inc., 489 F.3d 474 (2d Cir. 2007). For a similar approach to foreign defamation judgments see 28 U.S.C.

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Res Judicata and Unclaimed Foreign Copyright Infringement might object to the expansion of a res judicata effect that results in no adjudication of the infringement. A denial of an expanded res judicata effect in a foreign court of a subsequent action could lead to a U.S. court issuing an anti-suit injunction; in the scenario presented in Computer Associates Intl., Inc. v. Altai, Inc.,120 the party requesting the anti-suit injunction would succeed with its request. The U.S. court would issue the requested injunction to prevent litigation abroad because res judicata would bar the recognition of a foreign judgment because of the existing U.S. judgment from a prior action in which the foreign copyright infringement claim was not, but could have been raised. 5.

Other Considerations

Even if all the requirements of res judicata are met in a case involving previously unclaimed foreign copyright infringements, important policy considerations remain. In a transnational setting, the application of res judicata seems to perform its function; it “protects [parties] from the expense and vexation [of] attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions.”121 Expanding the scope of res judicata to unraised claims is meant to “force [the litigation] into the most convenient package,” and in transnational cases it might be questioned whether foreign copyright claims, had they been raised in a prior action, might have resulted in a decision of forum non-conveniens. The forum non-conveniens argument might fail because the defendant had already defended a case that concerned the same transactional nucleus of facts and therefore proved that the forum is convenient. Also, any argument based on a hypothetical application in a prior action of forum non-conveniens should be outweighed in a subsequent action by the desirability of legal certainty. An expansion of res judicata to unclaimed foreign copyright infringement would affect prospective litigation;122 the expansion would force plaintiffs to concentrate their claims concerning multi-place copyright infringements into a single action, even when the claims arise under the laws of multiple countries.123 If plaintiffs would not raise all claims in a single action, they would forego the possibility of litigating unclaimed foreign copyright infringement claims in the future. 4101 et seq. (the Securing the Protection of Our Enduring and Established Constitutional Heritage Act – the SPEECH Act). 120 Computer Associates Intl., Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992). See section III.B, above. 121 Montana v. U.S., 440 U.S. 147, 153–154 (1979). 122 “[The] impact [of preclusion law] on litigation behavior … is not felt primarily at the forum of the subsequent action…, where the parties present their arguments on claim preclusion …. Rather, the impact is felt at the forum of the prior action …, where the parties and other participants make decisions based in part on their expectation of the preclusive effect a judgment will have.” H.M. ERICHSON (note 68), pp. 945 et seq., 947-948. 123 On the “preclusion law’s effect on litigation behavior” in general see id., pp. 945 et seq., 949-963.

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Marketa Trimble Forcing plaintiffs to add claims arising under foreign law might seem unreasonable; the raising and the litigating of claims under foreign law produce a significant burden for the plaintiff. But this burden is a similar burden to the one that plaintiffs face in single-place tort cases when the torts arise under foreign law. When both a prior action and a subsequent action are in U.S. courts, there seems to be no reason not to expect the plaintiff to concentrate its claims in a single action. But the expanded preclusive effect might be questionable when the two actions are brought in courts of different countries; the plaintiff could have important reasons to bring a copyright infringement claim in a court of the country where, and under whose law the claim arose, including easier access to local evidence and local legal expertise.

IV. Conclusions The academic projects concerning private international law in IP cases, including the ALI Principles, the CLIP Principles, and the ILA Guidelines, have sought to improve transnational IP litigation. They include carefully balanced provisions designed to streamline transnational IP litigation with the goal of achieving procedural and substantive fairness,124 fostering judicial cooperation, improving the position of the parties, and providing legal certainty and predictability.125 The Projects, approved in their respective settings and published, should not be viewed as static black-letter law; they should evolve with current practice, respond to new challenges, and expand to address additional or underdeveloped issues. The doctrine of res judicata is one of the points that deserve further elaboration, and this article examines one aspect of res judicata that could be considered in the future iterations of the Projects. The application of res judicata to earlier-unclaimed foreign copyright infringements could enhance the functioning of transnational litigation, even if its application were limited to copyright infringements on the internet or other future ubiquitous media. More than 50 years ago, von Mehren and Trautman warned against the application of “the more intricate and far-reaching applications of preclusive doctrines … in international recognition practice.”126 In the absence of international agreement on the harmonization of much of private international law, the expansion of res judicata to unclaimed copyright infringements might be best tested in a purely domestic setting, when both prior and subsequent actions are in U.S. courts.127 ALI Principles, p. 4. CLIP Principles, Preamble, p. 3. 126 A.T. VON MEHREN/ D.T. TRAUTMAN, Recognition of Foreign Adjudications: A Survey and A Suggested Approach, 81 Harvard Law Review 1968, pp. 1601 et seq., 16771680. 127 On the possibility of parties attempting to benefit from differences in the res judicata doctrines in different countries see id., pp. 1601 et seq., 1678. 124 125

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JURISDICTION IN CROSS-BORDER COPYRIGHT INFRINGEMENT CASES RETHINKING THE APPROACH OF THE COURT OF JUSTICE OF THE EUROPEAN UNION Birgit VAN HOUTERT*

I. II.

III.

IV.

V.

VI.

Introduction The CJEU’s Approach to Jurisdiction in Cross-Border Copyright Infringement Cases A. The Pinckney, Hi Hotel, Pez Hejduk Cases B. The Pinckney Doctrine Assessing the CJEU’s Approach to Jurisdiction in Cross-Border Copyright Infringement Cases A. The Assessment Framework Based on the CJEU’s Role as Law-Finder B. Assessing the Pinckey Doctrine 1. The Locus Protectionis Criterion 2. The “Likelihood of Damage” Criterion 3. The Territorially Limited Scope of a Court’s Jurisdiction Limitations Related to the Conferral of Full Jurisdiction on the Court of the Erfolgsort A. A Particularly Strong Territorial Connection between the Dispute and the Court B. The Actual Scope of the Court’s Jurisdiction in View of the Principle of International Comity Assessing Alternative Approaches A. The “Directed Activities” Approach 1. Assessing the “Directed Activities” Approach B. The “Copyright Holder’s Centre of Interests”, or Forum Actoris, Approach 1. Assessing the “Copyright Holder’s Centre of Interests”, or Forum Actoris, Approach C. The Substantial Effects-Based Approach 1. Assessing the Substantial Effects-Based Approach to Jurisdiction Conclusion

* Assistant Professor of Private International Law at the University of Maastricht (Netherlands).

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Printed in Germany

Birgit van Houtert

I.

Introduction

Between 2013 and 2015, the Court of Justice of the European Union (CJEU) established an approach to jurisdiction in cross-border copyright infringement disputes. Courts in the EU Member States can obtain jurisdiction based on the mere likelihood that the damage caused by the alleged copyright infringement occurs in the forum state. Therefore, a potential copyright infringer will often not be able to predict in which Member State it may be sued. Particularly in the case of alleged internet-related copyright infringements, the potential infringer can be sued before the courts of each Member State in which the website involved has been accessible. As a consequence of the territorially limited approach to jurisdiction, the copyright holder may have to sue the alleged infringer in multiple states to receive full redress. Multistate litigation will not only place a heavy burden on the parties involved but also on the judicial systems of the Member States. In view of the role of the CJEU as law-finder,1 the author will demonstrate the need to rethink the CJEU’s approach to jurisdiction in cross-border copyright infringement disputes.2 The main assessment will be made in light of the principles of private international law underlying the special jurisdiction rule related to torts in Article 7(2) of the Regulation (EU) No 1215/2012, also referred to as the Brussels Ibis Regulation (Brussels Ibis).3 In addition, the rethinking will involve principles of copyright law and of public international law. The influence of the Regulation (EU) No 2018/302, known as the Geo-blocking Regulation, will also be examined.4 Lastly, this article will assess alternative approaches to jurisdiction adopted by scholars, courts of EU Member States and states of the United States of America.

See infra Section III.A. note 19. This article summarises the research conducted by the author in her PhD thesis entitled: Jurisdiction in Cross-border Copyright Infringement Cases: Rethinking the Approach of the Court of Justice of the European Union, Maastricht 2020. 3 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), PB L 351, 20.12.2012. 4 Regulation (EU) No 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customer’s nationality, place of residence or place of establishment within the internal market, PB L 601, 2.03.2018. 1 2

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Rethinking the Approach of the CJEU in Copyright Infringement Cases

II.

The CJEU’s Approach to Jurisdiction in CrossBorder Copyright Infringement Cases

A.

The Pinckney, Hi Hotel, Pez Hejduk Cases

In the rulings in Pinckney, Hi Hotel and Pez Hejduk, the CJEU established an approach to jurisdiction in cross-border copyright infringement disputes.5 This approach is based on the interpretation of the special jurisdiction rule in Article 7(2) Brussels Ibis. According to this provision, “a person domiciled in a Member State may be sued in another Member State in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur.” This rule provides a ground for additional jurisdiction besides the general jurisdiction rule in Article 4 Brussels Ibis that confers jurisdiction on the courts of the Member State where the defendant is domiciled. The CJEU has provided a uniform interpretation of Article 7(2) Brussels Ibis in Pinckney, Hi Hotel and Pez Hejduk. Nonetheless, the facts of these cases will be described briefly to point out their similarities and differences. In the first case, Peter Pinckney v. KDG Mediatech (Pinckney), Mr Pinckney sued Mediatech, a company established in Austria, for copyright infringement before a French court. Mr Pinckney, domiciled in France claimed to be the author of songs that were reproduced on compacts discs by Mediatech in Austria. These compacts discs were marketed by companies, established in the United Kingdom, via various websites that had been accessible in France. Hence, this case involved several successive infringers. Advocate General Jääskinen pointed out that the request for the preliminary ruling did not provide information on the relationship between the Austrian company and the United Kingdom companies, or whether Mr Pinckney also sued the latter companies.6 The United Kingdom companies fall into the category that can be indicated as a third party. In line with Jääskinen’s Opinion, this article uses the term “third party” to denote a party that is not a defendant but did commit copyright infringing activities that allegedly caused damage in the forum state, while the defendant’s act in another state “was a condition which rendered the subsequent acts of that third party possible”.7 In the Pinckney case, the CJEU had to address the issue of whether the court of a Member State had jurisdiction to assess the copyright infringement claim against the company established in another Member State based on the online availability of alleged copyright infringing compacts discs that were offered

5 CJEU, 3 October 2013, C-170/12, Peter Pinckney v. KDG Mediatech AG, ECLI:EU:C:2013:635; CJEU, 3 April 2014, C-387/12, Hi Hotel HCF SARL v. Uwe Spoering, ECLI:EU:C:2014:215; CJEU, 22 January 2015, C-441/13, Pez Hejduk v. EnergieAgentur.NRW GmbH, ECLI:EU:C:2015:28. 6 Opinion of Advocate General N. JÄÄSKINEN, 13 June 2013, in C-170/12, Peter Pinckney v. KDG Mediatech AG, ECLI:EU:C:2013:400, para 19. 7 Ibid., paras 37-38.

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Birgit van Houtert for sale by a third party via an internet site that had also been accessible in the forum state. The second cross-border copyright infringement case, Hi Hotel HCF SARL v. Uwe Spoering (Hi Hotel), also involved a third party. In this case, Mr Spoering, a photographer domiciled in Germany, alleged that Hi Hotel infringed his copyright in photographs by passing them on to a French publishing company without his consent. Mr Spoering therefore sued Hi Hotel, established in France, before a German court. Hi Hotel contested the German court’s jurisdiction because it was not aware of the fact that the publisher had passed the photographs on to its German sister company. The latter company, which could be considered as a third party, published the photographs in an illustrated book that was for sale in German bookshops. This case thus concerned several supposed infringers who allegedly infringed copyrights protected by the forum state. The CJEU had to address the question of whether the court seised could establish jurisdiction regarding one of those infringers who did not act within the forum state. Similar to Pinckney, the third case, Pez Hejduk v. EnergieAgentur.NWR GmbH (Pez Hejduk), involved an internet-related copyright infringement dispute. Ms Hejduk, domiciled in Austria, claimed her photographs had been placed on EnergieAgentur’s website available for viewing and downloading. She therefore sued the company EnergieAgentur, established in Germany, for copyright infringement before an Austrian court. EnergieAgentur argued for dismissal of the case before the Austrian court since the website involved operated under a German toplevel domain: therefore, the alleged copyright infringing activities had not been directed at Austria and thus were not within the jurisdiction of that Austrian court. The CJEU had to focus on the question of whether the court seised had jurisdiction as a result of the accessibility of the website involving alleged protected photographs in the forum state. Advocate General Cruz Villalón emphasised that unlike the Pinckney case, this case concerned “delocalised” damage as “the mere accessibility of a photograph on the internet does not offer any indication as to the location of the damage”.8 B.

The Pinckney Doctrine

As to the interpretation of the special jurisdiction rule in Article 7(2) Brussels Ibis in Pinckney, Hi Hotel and Pez Hejduk, the CJEU first reiterated the settled dichotomoy between the place of the event giving rise to the damage, Handlungsort, and the place where the damage occurred or may occur, Erfolgsort.9 In the three cases, the CJEU focused on the interpretation of the Erfolgsort and adopted a uniform interpretation regardless of whether the alleged copyright infringing activities had been internet-related or were committed by a third party. This uniOpinion of Advocate General P. CRUZ VILLALÓN, 11 September 2014, in C-441/13, Pez Hejduk v. EnergieAgentur.NRW GmbH, ECLI:EU:C:2014:2212, paras 3, 39, 41-48. 9 The CJEU first interpreted the dichotomy between Handlungsort and Erfolgsort under Article 7(2) Brussels Ibis in 30 November 1976, C-21/76, Handelskwekerij Bier v. Mines de Potasse d’Alsace, ECLI:EU:C:1976:147, paras 24-25. 8

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Rethinking the Approach of the CJEU in Copyright Infringement Cases form interpretation, known as the Pinckney doctrine, can be divided into the following three layers. First, the copyright relied on has to be protected by the Member State of the court seised, the locus protectionis criterion.10 This criterion reflects the territorial protection of copyrights. Yet, the CJEU appears to have adopted a broad interpretation by claiming that despite the territorial protection of copyrights, “copyrights must be automatically protected, in particular by virtue of Directive 2001/29 [the Information Society Directive], in all Member States, so that they may be infringed in each one in accordance with the applicable substantive law”.11 Second, it should be likely that the damage may occur within the forum state, the “likelihood of damage” criterion.12 With respect to the alleged internetrelated copyright infringements, the mere accessibility of the website involved appears to be sufficient.13 In the context of internet-related copyright infringement disputes, the “likelihood of damage” criterion can therefore be referred to as the accessibility criterion. The rulings in Pinckney and Hi Hotel seem to indicate that the “likelihood of damage” criterion will even be satisfied when the damage is caused in the forum state by a third party without the knowledge of, or collaboration with, the defendant.14 Third, the court’s jurisdiction will be limited to the damage that occurred within the forum state.15 The CJEU therefore adheres to the mosaic approach established in Shevill v. Press Alliance.16 Because of the territorial protection of copyrights, the CJEU reasoned that the courts of each Member State will be best 10 CJEU (note 5): Peter Pinckney v. KDG Mediatech AG, para 43; Hi Hotel HCF SARL v. Uwe Spoering, para 35; Pez Hejduk v. EnergieAgentur.NRW GmbH, para 22. S.J. SCHAAFSMA points out that it would be more accurate to use the term “territorium protectionis” as the territorial protection of copyright relates to a territory instead of a place. See S.J. SCHAAFSMA, Intellectuele eigendom in het conflictenrecht: De verborgen conflictregel in het beginsel van nationale behandeling, Deventer 2009, p. 267. 11 Peter Pinckney v. KDG Mediatech AG (note 5), para 39. Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, PB L 167, 22.6.2001, also referred to as the Information Society Directive. 12 Peter Pinckney v. KDG Mediatech AG (note 5), para 43; Hi Hotel HCF SARL v. Uwe Spoering (note 5), para 35; Pez Hejduk v. EnergieAgentur.NRW GmbH (note 5), para 34. 13 Peter Pinckney v. KDG Mediatech AG (note 5), para 43; Pez Hejduk v. EnergieAgentur.NRW GmbH (note 5), para 34. 14 Peter Pinckney v. KDG Mediatech AG (note 5), paras 44, 47; Hi Hotel HCF SARL v. Uwe Spoering (note 5), para 37. 15 Peter Pinckney v. KDG Mediatech AG (note 5), para 45-46; Hi Hotel HCF SARL v. Uwe Spoering (note 5), paras 38-39; Pez Hejduk v. EnergieAgentur.NRW GmbH (note 5), paras 36-37. 16 CJEU, 7 March 1995, C-68/93, Fiona Shevill and Others v. Press Alliance SA, ECLI:EU:C:1995:61, paras 31-32. With respect to mosaic approach under Article 7(2) Brussels Ibis, see P. MANKOWSKI, Special Jurisdiction, in U. MAGNUS/ P. MANKOWSKI (eds), European Commentaries on Private International Law: Brussels Ibis Regulation, Köln 2016, p. 278.

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Birgit van Houtert placed to assess the damage in that state and whether the copyright protected by that state has been infringed.17

III. Assessing the CJEU’s Approach to Jurisdiction in Cross-Border Copyright Infringement Cases A.

The Assessment Framework Based on the CJEU’s Role as Law-Finder

In order to rethink the Pinckney doctrine, it is first of all important to assess the leeway that the CJEU generally has regarding the interpretation of the special jurisdiction rule in Article 7(2) Brussels Ibis, and in particular in cross-border copryight infringement cases.18 Based on the rule of law, democracy and human rights, it can be argued that the CJEU should fulfil the role of “law-finder”; this role has commonly been accepted by European courts.19 To find the law, scholars and courts are generally employing common methods of interpretation of law such as the textual, teleological and contextual method.20 With respect to the interpretation of Article 7(2) Brussels Ibis, the CJEU has frequently considered the text, spirit, and context of this provision.21 The application of the textual and historical method of interpretation to Article 7(2) Brussels Ibis does not provide a clear indication as to how to interpret “the place where the harmful event occurred or may occur” in cross-border copyright infringement cases.22 In view of the teleological method of interpretation, it has been advocated that the interpretation of EU law should enhance the

Peter Pinckney v. KDG Mediatech AG (note 5), paras 45-46. See B. VAN HOUTERT (note 2), chapter 4. 19 A. PITLO employs the term “law-finder” to denote the role that a judge has to fulfill in Europe. See A. PITLO, Figuratief-Nonfiguratief. Legalism-Vrije Rechtsvinding. Mededelingen van de Koninklijke Academie voor wetenschappen, Letteren en Schone Kunsten van België, Brussels 1975, p. 12-14. With respect to the method of “law-finding”, see G.J. WIARDA, Drie typen van rechtsvinding, Deventer 1999. 20 See A. BREDIMAS, Methods of Interpretation and Community Law, Amsterdam 1978; H. KUTSCHER, Methods of interpretation as seen by a judge at the Court of Justice, Court of Justice of the European Communities Judicial and Academic Conference 27-28 September 1976, Luxembourg 1976. 21 See G. BECK, The Legal Reasoning of the Court of Justice of the EU, Oxford 2012, p. 278; M. FAVALE/ M. KRETSCHMER/ P.L.C. TORREMAN, Is there an EU Copyright Jurisprudence? An Empirical Analysis of the Workings of the European Court of Justice, The Modern Law Review 2016, p. 37. See, e.g., CJEU, 5 February 1963, C-26/62, Van Gend & Loos v. Nederlandse administratie der belastingen, ECLI:EU:C:1963:1, p. 12; CJEU, 6 October 1982, C-283/81, CLIFIT v. Ministerie van Volksgezondheid, ECLI:EU:C:1982:335, para 20. 22 B. VAN HOUTERT (note 2), paras 4.2.1 and 4.2.2. 17 18

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Rethinking the Approach of the CJEU in Copyright Infringement Cases integration in the European Union.23 This pro-integrationist interpretation has been reflected in the CJEU’s policy statement of the Pinckney doctrine that “copyrights must be automatically protected, in particular by virtue of Directive 2001/29, in all Member States”.24 This policy-based approach to jurisdiction is also in line with the trend of instrumentalisation of private international law.25 From a perspective of legitimacy, as argued by several scholars, it is nonetheless important that the instrumentalisation does not undermine the principles of private international law.26 In view of “external judicial legitimacy”, the CJEU should limit itself to “interpreting and applying the law”.27 G.C. RODRÍGUEZ IGLESIAS, the former President of the CJEU, “reasserted the role of the Court as custodian of legality rather as a ‘motor of integration’, a perception of the Court which he firmly rejected”.28 Considering the teleological method of interpretation, the following four principles of private international law that underlie Article 7(2) Brussels Ibis can be discerned. First, the principle of predictability has been the main objective of the jurisdiction rules under the Brussels Ibis Regulation; it should therefore be predictable for the parties as regards which court or courts will be competent to

23 According to several scholars, the CJEU must fulfil its role as “the motor of European integration”. See T. HORSLEY, Reflections on the role of the Court of Justice as the “motor” of European Integration: Legal limits to judicial lawmaking, Common Market Law Review 2013, p. 931. Among these aforementioned scholars are, e.g., A. ARNULL, The European Union and its Court of Justice, Oxford 2006; R. DEHOUSSE, The European Court of Justice: the politics of judicial integration, London 1998. 24 See supra section II.B. 25 On the issue of instrumentalisation of private international law, see H. VAN LOON, The Global Horizon of Private International Law, in Recueil Des Cours Collected Courses of the Hague Academy of International Law, Leiden 2015, p. 9-108; V. VAN DEN EECKHOUT, The Instrumentalisation of Private International Law: Quo Vadis? Rethinking the Neutrality of Private International Law in an Era of Globalisation and Europeanisation of Private International Law 2013. Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id= 2338375 on 10.05.2021. 26 See J. MEEUSEN, Instrumentalisation of Private International Law in the European Union: Towards a European Conflicts Revolution?, European Journal of Migration and Law 2007, p. 287; V. VAN DEN EECKHOUT, Private International Law Questions that Arise in the Relation between Migration Law (in the Broad Sense of the Word) and Family law: Subjection of PIL to Policies of Migration Law?, PILAGG Presentation 2013, p. 11. The concept of legitimacy can be “explored from a legal, political, sociological or moral point of view”. See M. ADAMS/ H. WAELE/ J. MEEUSEN et al., Judging Europe’s Judges: The Legitimacy of the Case Law of the European Court of Justice, Oxford 2015, p. 4. 27 K. LENAERTS, How the ECJ Thinks: A Study on Judicial Legitimacy, Fordham International Law Journal 2013, p. 1305-1306. K. LENAERTS argues that “external and internal judicial legitimacy complement each other”. According to the same author, the concept of “internal judicial legitimacy” focuses on the soundness of the court’s legal reasoning. 28 N. FENNELLY, Legal Interpretation at the European Court of Justice, Fordham International Law Journal 1996, p. 668.

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Birgit van Houtert hear a cross-border copyright infringement case.29 Second, the principle of “a close connection between the dispute and the court” enables the court to easily assess the relevant facts of the dispute.30 This principle justifies the conferral of jurisdiction on the courts of the place where the harmful event occurred or may occur.31 It should be mentioned that Article 7(2) Brussels Ibis needs to be interpreted restrictively since it constitutes an exception to the main jurisdiction rule of the forum rei laid down in Article 4 Brussels Ibis.32 The third principle that underlies Article 7(2) Brussels Ibis is to enhance the sound administration of justice.33 In view of this principle, it is important to avoid multiple competent courts as well as a detailed assessment of the merits of the case to determine whether the court seised has jurisdiction.34 The fourth principle is the principle of balancing the procedural interests between the parties involved, also referred to as the principle of a “level playing field”.35 These four principles of private international law are part of the assessment framework to rethink the CJEU’s approach to jurisdiction in cross-border copyright infringement cases. In addition, it can be argued to include the principle of balancing the broader interests of copyright holders, and of users of information and traders.36 While the latter principle originates from the field of copyright law,37

See, e.g., CJEU, 25 October 2012, C-133/11, Folien Fischer AG v. Foltitec AG, ECLI:EU:C:2012:664, para 33. See recital 15 in the preamble to Brussels Ibis. See also J.A. PONTIER/ E. BURG, EU Principles on Jurisdiction and Recognition and Enforcement of Judgments in Civil and Commercial Matters, The Hague 2004. 30 See Handelskwekerij Bier v. Mines de Potasse d’Alsace (note 9), para 11. See recital 16 in the preamble to Brussels Ibis. 31 P. JENARD, Jenard Report on the Brussels Convention of 1968, Journal of the European Communities, 5.03.1979, C 59/22. 32 See Peter Pinckney v. KDG Mediatech AG (note 5), para 25. 33 J.A. PONTIER/ E. BURG (note 29), p. 109. See CJEU, 11 January 1990, C-220/88, Dumez France SA and Tracoba SARL v. Hessische Landesbank and Others, ECLI:EU:C:1990:8, para 18. 34 See recital 21 in the preamble to Brussels Ibis. See CJEU, 5 July 2018, C-27/17, AB flyLAL-Lithunian Airlines v. Starptautiskā lidosta Rīga VAS, ECLI:EU:C:2018:533, para 54. 35 See B. DE GROOTE, Onrechtmatige daad en Internet: Analyse van Artikel 5.3 EEX-Verordening, Brussel 2004. See also P. MANKOWSKI (note 16), p. 143; M. PERTEGÁS SENDER, Cross-border Enforcement of Patent Rights. An Analysis of the Interface between Intellectual Property and Private International Law, Oxford 2002, p. 33. 36 From a perspective of legitimacy, B. VAN HOUTERT provides various arguments that the approach to jurisdiction in cross-border copyright infringement cases should balance the interests of copyright holders on the one hand, and users of information on the other hand. See B. VAN HOUTERT (note 2), para 4.4. 37 See, e.g., the preamble to the World Intellectual Property Organisation (WIPO) Copyright Treaty signed at Geneva on 20 December 1996, entered into force on 6 March 2002, 2186 U.N.T.S. 121. 29

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Rethinking the Approach of the CJEU in Copyright Infringement Cases it is in line with the trend of using private international law as an instrument for global governance and human rights protection.38 Based on the contextual method of interpretation, the assessment framework also includes the possible impact of the Geo-blocking Regulation on the approach to jurisdiction in cross-border copyright infringement cases. The Geoblocking Regulation was enacted in 2018, thus after the Pinckney, Hi Hotel and Pez Hejduk rulings; the CJEU could therefore not have taken the effects of this Regulation into consideration. The same applies to alternative approaches to jurisdiction adopted by legal scholars and courts that were established before 2018, such as the “directed activities” approach which will be discussed in section V.A.1.39 Furthermore, it is important to scrutinise the (desirable) influence of the territorial protection of copyrights on the approach to jurisdiction in cross-border copyright infringement cases. Based on the territorial protection of copyrights, the CJEU adopted under the Pinckney doctrine the locus protectionis criterion and territorially limited approach to jurisdiction.40 In view of the principle of comity that belongs to both the field of public international law and of private international law, section IV examines the actual scope of the jurisdiction of the court of the Erfolgsort in cross-border copyright infringement cases. The following section will outline the assessment of the CJEU’s approach to jurisdiction in cross-border copyright infringement cases. Subsequently, this assessment framework will be applied to alternatieve approaches to jurisdiction in cross-border copyright infringement cases adopted by scholars and courts of European Union Member States and states of the United States of America. Although the CJEU does not frequently employ the method of comparative interpretation, this method is particularly relevant in view of the general desire to unify the jurisdiction rules related to private international law as demonstrated by the work of the Hague Conference of Private International Law.41 B.

Assessing the Pinckney Doctrine

The following paragraphs assess the three layers of the Pinckney doctrine on the basis of the assessment framework as set out in the previous section.42

See, e.g., H. MUIR-WATT, Private International Law Beyond the Schism, Transnational Legal Theory 2011, p. 437 et seq.; H. VAN LOON (note 25). 39 For a detailed assessment of the impact of the Geo-blocking Regulation on various approaches to jurisdiction in cross-border copyright infringement cases adopted by scholars and courts before the enactment of this Regulation in 2018, see B. VAN HOUTERT (note 2), chapters 6 and 7. 40 See supra section II.B. 41 See infra section V on the work of the Hague Conference of Private International Law with respect to jurisdiction in cross-border copyright infringement cases. 42 For a detailed assessment of the three layers of the Pinckney doctrine, see B. VAN HOUTERT (note 2), chapter 5. 38

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Birgit van Houtert 1.

The Locus Protectionis Criterion

Based on the territorial protection of copyrights, several scholars have argued that the locus protectionis requirement should be a prerequisite to obtain jurisdiction under Article 7(2) Brussels Ibis in cross-border copyright infringement cases.43 According to other scholars, the locus protectionis criterion is only relevant with respect to the issue of liability, the area of choice of law, or enforcement of foreign judgments.44 The CJEU’s locus protectionis criterion under the Pinckney doctrine appears to be ambiguous. Although, the CJEU ruled that the copyright relied on should be protected by the state of the court seised,45 the CJEU at the same time also stated that, despite the territorial protection of copyrights, copyrights must automatically be protected in each Member State by virtue of the Information Society Directive.46 According to the Pinckney, Hi Hotel and Pez Hejduk rulings, the CJEU appears to have adopted a broad locus protectionis criterion that considers each Member State as locus protectionis. By adopting an autonomous concept of locus protectionis, it seems that the CJEU was aware of the lack of a uniform EU copyright law. While EU law aims to harmonise copyright protection in the European Union,47 it has been considered as a “piecemeal harmonisation”.48 Copyrights therefore remain territorially protected by the national laws of Member States. Adopting the prevailing concept of locus protectionis as a criterion for jurisdiction would thus have resulted into unpredictability as regards which court or courts have jurisdiction.49 Based on the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention), copyrights will generally come into existence without any formality and can be relied on in the contracting states in a similar way as by See, e.g., S. NEUMANN, Intellectual Property Rights Infringements in European Private International Law: Meeting the Requirements of Territoriality and Private International Law, 7 Journal of Private International Law 2011, p. 592-593; S.J. SCHAAFSMA, Internationale bevoegdheid en de grensoverschrijdende inbreuk, Intellectuele Eigendom en Reclamerecht 2016, p. 399-400. 44 See, e.g., J.J. FAWCETT/ P.L.C. TORREMANS, Intellectual Property and Private International Law, Oxford 2011, p. 163; P. MANKOWSKI (note 16), p. 297; A. NUYTS, Suing at the Place of Infringement: The Application of Article 5(3) of Regulation 44/2001 to IP Matters and Internet Disputes, in A. NUYTS (ed.), International Litigation in Intellectual Property and Information Technology, Alphen aan den Rijn 2008, p. 123. 45 Peter Pinckney v. KDG Mediatech AG (note 5), para 33. 46 Peter Pinckney v. KDG Mediatech AG (note 5), para 39. 47 Currently, the EU law related to copyright consists of 11 Directives and 2 Regulations. Available at , on 10.05.2021. See, e.g., Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market, PB L 130, 17.5.2019; Regulation (EU) 2017/1128 on portability of online content services in the internal market, PB L 168, 30.6.2017. 48 A. KUR/ T. DREIER, European Intellectual Property Law. Text, Cases & Materials, Cheltenham 2013, p. 315. See also N. JÄÄSKINEN (note 6), para 49. 49 See B. VAN HOUTERT (note 2), para 5.1.2 on the divergence between the prevailing concept of locus protection according to the copyright laws of the Member States and the CJEU’s autonomous concept of locus protectionis under the Pinckney doctrine. 43

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Rethinking the Approach of the CJEU in Copyright Infringement Cases their nationals.50 Instead of incorrectly referring to the automatic protection of copyrights in the European Union, the CJEU could have made a reference to this non-formality requirement and the principle of national treatment and non-discrimination in the Berne Convention to indicate that a copyright holder can generally claim copyright protection in each Member State.51 From a perspective of private international law, the CJEU’s policy-based approach to jurisdiction is in line with the instrumentalisation of private international law. Yet, the protection of copyright holders does not seem to be in accordance with the aim of Article 7(2) Brussels Ibis to provide a procedural balance between the parties.52 Furthermore, the CJEU’s locus protectionis criterion will not guarantee a close connection between the dispute and the court as required under Article 7(2) Brussels Ibis. Moreover, this criterion will likely cause multiple competent courts which increases unpredictability as regards where a potential copyright holder may be sued and will not enhance the sound administration of justice. In sum, the CJEU’s locus protectionis criterion undermines the principles of the private international law that underlie Article 7(2) Brussels Ibis. 2.

The “Likelihood of Damage” Criterion

With regard to the localisation of the Erfolgsort in cross-border copyright infringement cases, the CJEU held that it should be likely that the damage may occur within the forum state.53 The rulings in Pinckney, Hi Hotel and Pez Hejduk demonstrate that the “likelihood of damage” criterion will easily be satisfied. Yet, the “likelihood of damage” criterion appears to undermine the principles underlying Article 7(2) Brussels Ibis.54 First of all, this criterion will generally not provide predictability to potential copyright infringers as regards before the courts of which Member State or Member States they may be sued. Due to globalisation and the internet, it is likely that the damage may occur everywhere. An alleged infringer can thus be sued before the courts of many Member States based on the mere accessibility of the website involving alleged copyright infringing products. The third party based approach to jurisdiction increases unpredictability since an alleged infringer can even be sued in Member States where a third party offered

See Articles 5(1) and 5(2) of the Berne Convention for the Protection of Literary and Artistic Works signed on 9 September 1886, entered into force 5 December 1887, lastly revised at Paris on 24 July 1971, and amended on 28 September 1979, 828 U.N.T.S. 221. Currently, the Berne Convention is in force in 179 states. 51 See B. VAN HOUTERT (note 2), para 5.1.3. 52 The CJEU has ruled that Article 7(2) Brussels Ibis does not aim to protect weaker parties. See Folien Fischer AG v. Foltitec AG (note 29), para 46. 53 Peter Pinckney v. KDG Mediatech AG (note 5), para 43; Hi Hotel HCF SARL v. Uwe Spoering (note 5), para 35; Pez Hejduk v. EnergieAgentur.NRW GmbH (note 5), para 34. 54 For a detailed assessment, see B. VAN HOUTERT (note 2), para 5.3. 50

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Birgit van Houtert products for sale, or made content accessible via the internet, without the infringer’s knowledge or collaboration.55 Second, the “likelihood of damage” criterion will not guarantee a close connection between the dispute and the court.56 The competent court will therefore not always be able to assess the relevant facts of the case. The risk of what is known as empty jurisdiction may also even exist.57 For instance, the accessibility of the website involving alleged copyright infringing content may be the only connection to the forum state. There will also not be a close connection between the dispute and the court if the alleged damage is caused in the forum state by a third party without the knowledge of, or collaboration with, the defendant.58 The “likelihood of damage” criterion will regularly provide jurisdiction to the forum actoris which has generally been rejected under the Brussels Ibis.59 In view of the principles of due process, the United States Supreme Court appears to have rejected a third party based approach to jurisdiction by stating that “the unilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with the forum State to justify an assertion of jurisdiction”.60 Third, the combination of the “likelihood of damage” criterion and the territorially limited approach to jurisdiction will often entail multiple competent 55 Peter Pinckney v. KDG Mediatech AG (note 5), para 44; Hi Hotel HCF SARL v. Uwe Spoering, para 37. For a detailed assessment of the third party based approach to jurisdiction in view of earlier rulings on the interpretation of Article 7(2) Brussels Ibis by the CJEU, see B. VAN HOUTERT (note 2), para 5.2.3.1. For instance, CJEU, 16 May 2013, C-228/11, Melzer v. MF Global UK Ltd., ECLI:EU:C:2013:305. 56 See also M. HUVOSEC, Comment on Pinckney: Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Art. 5(3) – Peter Pinckney v. KDG Mediatech AG, International Review of Intellectual Property and Competition Law 2014, p. 372; R. MATULIONYTE, Enforcing Copyright Infringements Online: In Search of Balanced International Private Law Rules, Journal of Intellectual Property, Information, Technology and E-Commerce Law 2015, p. 134. 57 See R. MATULIONYTE (note 56), p. 135; M. HUVOSEC (note 56), p. 372-373; P.L.C. TORREMANS, Jurisdiction in intellectual property cases, in P.L.C. TORREMANS (ed.) Research Handbook on Cross-border Enforcement of Intellectual Property, 2014, p. 386. 58 See also Opinion of Advocate General N. JÄÄSKINEN, 21 November 2013, in C-360/12, Coty Germany GmbH v. First Note Perfumes NV, ECLI:EU:C:2013:764, para 62. 59 Ibid., para 61. On the anti-forum actoris approach under the Brussels Ibis Regulation, see M. LEHMANN, Where Does Economic Loss Occur, 7 Journal of Private International Law 2011, p. 539. See also CJEU, 19 September 1995, C-364/93, Antonio Marinari v. Lloyds Bank plc and Zubaidi Trading Company, ECLI:EU:C:1995:289, para 13; CJEU, 10 June 2004, C-168/02, Rudolf Kronhofer v. Marianne Maier and Others, ECLI:EU:C:2004:364, para 20. 60 See Helicópteros Nacionales de Colombia S.S. v. Hall, 466 U.S. 408, 04 S. Ct. 1868 (1984), at 417. See also Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), at 475. In the case of Walden v. Fiore, the United States Supreme Court pointed out that it is relevant that the relationship of the defendant with the forum state arises “out of contacts that the “defendant himself” creates with the forum state”. Walden v. Fiore, 571 U.S. 277, 134 S. Ct. 1115 (2014).

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Rethinking the Approach of the CJEU in Copyright Infringement Cases courts, a situation which will not facilitate the sound administration of justice. Fourth, the Pinckney doctrine will not guarantee a procedural balance between the parties involved. On the one hand, the alleged copyright infringer can be unpredictably sued in many Member States. On the other hand, the copyright holder may have to sue the infringer in multiple states to receive full redress. Particularly in the case of internet-related copyright infringing activities, the balance may shift to the detriment of the copyright holder. Multistate litigation can put an unreasonable burden on the copyright holder if the infringer is located and operated in what is called a copyright haven.61 On the basis of the general jurisdiction rule in Article 4 Brussels Ibis, the copyright holder always has the option of bringing the entire case before the courts of the Member State where the infringer is domiciled.62 The court of the place of the Handlungsort also seems to have jurisdiction regarding the entire dispute.63 Yet, it will be difficult for the copyright holder to obtain full redress if the infringer is located and operated in a copyright haven. While the Berne Convention and the EU law related to copyrights yield a certain minimum level of copyright protection in the EU, copyright havens, nonetheless, do exist in the EU.64 For instance, moral rights related to copyrights are not equally protected by all Member States. From a broad perspective, the Pinckney doctrine will likely not entail a balance between the interests of copyright holders and the interests of users of information and traders. The territorially limited approach to jurisdiction will often not enhance efficient copyright protection at a procedural level, particularly not in the case of online piracy and copyright havens. Lack of efficient copyright protection may decrease innovation and knowledge. The “likelihood of damage” criterion can also negatively affect the cross-border exchange of information. To prevent getting unpredictably sued in many Member States, providers of information may limit or block access to their content for internet users in certain

A “copyright haven can be defined to mean countries or jurisdiction in which certain copyright protections are not respected or are enforced in a lax fashion”, see Y. KANG, Is Copyright Haven a True Haven: Legal and Economic Analysis of Copyright Haven, 31 Korean Journal of International and Comparative Law 2003, p. 100. 62 See Articles 62 and 63 Brussels Ibis to determine the place of domicile for natural and legal persons. 63 With respect to the interpretation of the Handlungsort in Pez Hejduk, the CJEU held that “the acts or omissions liable to constitute such an infringement may be localised only at the place where EnergieAgentur has its seat since that is where the company took and carried out the decision to place photographs online on a particular website”. See Pez Hejduk v. EnergieAgentur.NRW GmbH (note 5), paras 24-25. By analogy to the Wintersteiger ruling, the CJEU reasoned that “the activation of the process for the technical display of the photographs on that website must be regarded as the causal event”. See also CJEU, 19 April 2012, C-523/10, Wintersteiger AG v. Products 4U Sondermaschinenbau GmbH, ECLI:EU:C:2012:220, paras 34-35. The forum actus will therefore generally coincide with the forum rei. On the scope of the jurisdiction of the court of the Handlungsort in the case of infringements of intellectual property rights, see S.J. SCHAAFSMA (note 43), p. 402. 64 See B. VAN HOUTERT (note 2), para 2.2.2.2. 61

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Birgit van Houtert Member States. The latter will impede the exchange of information and can therefore have a negative effect on innovation and education. The “likelihood of damage” criterion may also impede cross-border trade since it causes unpredictability for traders as regards in which Member States they can be sued. Hence, traders might not offer their services or goods to customers in certain Member States. Nonetheless, because of the Geo-blocking Regulation, traders are generally no longer allowed to block or limit access to their websites, or apply different conditions of access to goods or services based on the customers’ nationality, place of residence or establishment in the EU.65 To prevent being sued in multiple states, especially small trading companies may therefore be reluctant to provide their goods and services online to customers in the EU. Certain services are, however, excluded from the scope of the Geo-blocking Regulation, such as audiovisual services and electronically supplied services that contain copyrighted works or content.66 Traders who offer these services may therefore block their online interfaces for customers in certain Member State, a situation which will not enhance the proper functioning of the internal market. Unlike the CJEU, most scholars do not make a distinction between the Handlungsort and the Erfolgsort with respect to copyright infringing activities.67 Based on the territorial protection of copyrights, they argue that the Handlungsort will always coincide with the Erfolgsort. According to this territorial view, a copyright infringing activity itself cannot have a cross-border character but may occur in different states and cause a separate infringement in each of these states.68 From a perspective of copyright law, the concept of “the place of damage” is not compatible with “the act-based conception of intellectual property infringements”.69 See the prohibitions in Articles 3 and 4 of the Geo-blocking Regulation. On the broad definitions with respect to a customer and a trader, see Article 1(12) and 1(18) Geoblocking Regulation. 66 Pursuant to Article 1(3) Geo-blocking Regulation, the Geo-blocking Regulation is not applicable to service activities referred to in Article 2(2) of the Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, PB L 376, 27.12.2006. In addition, Article 4(1)(b) Geo-blocking Regulation excludes from its scope electronically supplied services “the main feature of which is the provision of access to and use of copyright protected works or other protected subject matter, including the selling of copyright protected works or protected subject matter in an intangible form”. See also recitals 8 and 9 in the preamble to the Geo-blocking Regulation. In the context of the review of the latter exclusion as prescribed by Article 9 Geo-blocking Regulation, the following study was prepared, see R. PROCEE/ R. ARNOLD et al., Study on the impacts of the extension of the scope of the Geo-blocking Regulation to audiovisual and non-audiovisual services giving access to copyright protected content, EU publications 2020. 67 See A. KUR, Article 2:202 Infringement, in J. BASEDOW/ J. DREXL (eds), Conflict of Laws in Intellectual Property. The CLIP Principles and Commentary. European Max Planck Group on Conflict of Laws in Intellectual Property, Oxford 2013, p. 69-70; S. NEUMANN (note 43), p. 592-594; S.J. SCHAAFSMA (note 43), p. 399-400. 68 Ibid. 69 C. HEINZE, A Framework for International Enforcement of Territorial Rights: The CLIP Principles on Jurisdiction, in J. BASEDOW/ T. KONO/ A. METZGER (eds), Intellectual Property in the Global Arena. Jurisdiction, Applicable Law, and the Recognition of 65

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Rethinking the Approach of the CJEU in Copyright Infringement Cases The mere copyright infringing activity will be sufficient to constitute an infringement, and damage is therefore not a necessary element as in regular tort cases.70 Instead of the dichotomy between Handlungsort and Erfolgsort, the place of infringement has therefore often been preferred as a connecting factor to establish jurisdiction in cross-border copyright infringement cases.71 3.

The Territorially Limited Scope of a Court’s Jurisdiction

Based on the Pinckney doctrine, a court will only have jurisdiction to determine the damage caused in the forum state.72 The reasoning behind this territorially limited approach has been a two-step process. Because of the territorial protection of copyrights, the CJEU first held that the protection granted by the Member State of the court seised will only be applicable in that state. Second, the CJEU reasoned that the court of each Member State will be best placed to assess whether the copyrights protected by the Member State concerned have been infringed and to determine the damage caused within the forum state. Unlike the CJEU’s approach, several courts and scholars advocate for decreasing the influence of the territorial protection of copyrights on the scope of the court’s jurisdiction in cross-border copyright infringement cases.73 The reasons are, inter alia, efficient adjudication, facilitation of the economy, and the protec-

Judgments in Europe, Japan and the US, Tübingen 2010, p. 64. See B. VAN HOUTERT (note 2), para 5.2.2. 70 See J.J. FAWCETT/ P.L.C. TORREMANS (note 44), pp. 163, 174; C. HEINZE (note 69), p. 63; L. LUNDSTEDT, Jurisdiction and the principle of territoriality in intellectual property law: Has the pendulum swung too far in the other direction?, International Review of Intellectual Property and Competition Law 2001, p. 136-137. 71 A. NUYTS (note 44), p. 126; S. NEUMANN, Ubiquitous and multistate cases, in P.L.C. Torremans (ed.), Research Handbook on Cross-Border Enforcement of Intellectual Property, Cheltenham 2014, p. 511 et seq. See, e.g, the following scholarly proposals that employ the place of infringement as jurisdiction criterion: Article 2:202 Principles on Conflict of Laws in Intellectual Property (CLIP) (see infra section V.C.); Article 6 of the Draft Dreyfuss and Ginsburg Convention of 2002 on Jurisdiction and Recognition of Judgments in Intellectual Property Matters (see infra section V.B.); Article 5 of the Guidelines on Intellectual Property and Private International Law drafted by the International Law Association Committee on Intellectual Property and Private International Law (see infra section V.C.). 72 See Peter Pinckney v. KDG Mediatech AG (note 5), paras 45-46; Hi Hotel HCF SARL v. Uwe Spoering (note 5), paras 38-39; Pez Hejduk v. EnergieAgentur.NRW GmbH (note 5), paras 36-37. 73 See, e.g., G.B. DINWOODIE, Developing a Private International Intellectual Property Law: The Demise of Territoriality?, William and Mary Law Review 2009, p. 730800; M. VAN EECHOUD, Choice of Law in Copyright and Related Rights: Alternatives to the Lex Loci Protectionis, The Hague 2003, p. 221 et seq.; D.M. VICENTE, The territoriality principle in intellectual property revisited, Nederlands Internationaal Privaatrecht 2016, p. 724 et seq. Section V will refer to several proposals of scholars and case law that confer full jurisdiction on courts in cross-border copyright infringement cases.

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Birgit van Houtert tion of moral rights related to copyrights.74 Despite the territorial protection of copyrights, the courts of the Member State where the defendant is domiciled obtain jurisdiction under Article 4(1) Brussels Ibis regarding the entire copyright infringement dispute.75 Because of the territoriality principle related to copyrights, the latter court nevertheless has to assess a multistate copyright infringement dispute on the basis of multiple national copyright laws.76 With respect to crossborder trademark infringements related to the internet, the CJEU also provided full jurisdiction to the courts of the Erfolgsort.77 The second consideration of the CJEU mentioned above in favour of the mosaic approach reflects the reasoning in the Shevill ruling involving the crossborder distribution of a defamatory newspaper article.78 In view of the principle of the sound administration of justice, the CJEU held that the court of each Member State “in which the defamatory publication was distributed and in which the victim claims to have suffered injury to his reputation are territorially best placed to assess the libel committed in that State and to determine the extent of the corresponding damage”.79 From a perspective of the sound administration of justice, it is nevertheless doubtful whether the court that obtains jurisdiction on the basis of the “likelihood of damage” criterion in a cross-border copyright infringement case will be in the best position to assess the damage caused within the forum state.80 With respect to internet-related copyright infringements, it can be particularly difficult to localise and calculate the damage caused within the forum state.81 In internet-related 74 See T. KONO/ P. JURCYS, Jurisdiction over Ubiquitous Copyright Infringements: Should Right-Holders be Allowed to Sue at Home?, Kyushu University Legal Research Bulletin 2015, p. 29; A. KUR, Are there any Common European Principles of Private International Law with regard to Intellectual Property, in S. LEIBE/ A. OHLY (eds), Intellectual Property and Private International Law, Tübingen 2009, p. 6, 9. 75 S.J. SCHAAFSMA (note 43), p. 400, 402, particularly on the scope of the jurisdiction of the court of the Handlungsort in the case of intellectual property rights infringements. 76 See the lex loci protectionis rule laid down in Article 8(1) of the 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, PB L 199, 31.07.2007, known as Rome II. 77 See Wintersteiger AG v. Products 4U Sondermaschinenbau GmbH (note 63), paras 27-28. 78 See Fiona Shevill and Others v. Press Alliance SA (note 16). 79 Ibid., para 31. 80 B. VAN HOUTERT (note 2), para 5.3.1. 81 See P. CRUZ VILLALÓN (note 8), on “delocalized damage” with respect to online alleged copyright infringements. In view of the instantaneous and worldwide dissemination of online copyright infringements, the New York Court of Appeals found it “illogical” to extend the traditional tort approach that “equates a plaintiff’s injury with the place where its business is lost or threatened… to online copyright infringement cases where the place of uploading is inconsequential, and difficult, if not impossible, to correlate lost sales to a particular geographic area”. See the Court of Appeals of the State of New York, 24 March 2011, Penguin Group (USA) Inc. v. American Buddha, 16 N.Y. 3d 295 (N. Y. 2011). The New York Court of Appeals therefore conferred full jurisdiction on the court of the place of

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Rethinking the Approach of the CJEU in Copyright Infringement Cases copyright infringement disputes, the combination of the “likelihood of damage” criterion and the territorially limited approach to jurisdiction will likely entail multiple competent courts, a situation which increases the risk of parallel proceedings and irreconcilable decisions. The latter will be burdensome for both the parties and the judicial systems of the Member States. Furthermore, the territorially limited approach to jurisdiction will not often yield a procedural balance between the parties in the case of a multistate or ubiquitous copyright infringement dispute.82 On the one hand, the potential copyright infringer might simultaneously be sued in many Member States which will be time-consuming and costly. On the other hand, it may put an unreasonable burden on the copyright holder to sue the infringer in multiple states in order to receive full redress. With respect to a ubiquitous copyright infringement dispute, this burden can be unreasonable if the infringer is located and operated in a copyright haven.83 From a broad perspective, the mosaic approach will not facilitate a balance between the interests of copyright holders, and the interests of users of information and traders. Multistate litigation will not enhance efficient copyright protection, especially not in the case of online piracy and copyright havens. The latter can negatively affect creativity and innovation. Due to the fear of being sued in multiple states, providers of information may limit or block access to their information for internet users in certain Member States. Hence, the flow of information might be hampered, which can be detrimental to innovation and knowledge. The fear of multistate litigation can also impede cross-border trade. In view of the earlier mentioned prohibition of geo-blocking, small trading companies may therefore not provide their goods and services online to customers in the European Union.84 With respect to services that are excluded from the scope of the Geoblocking Regulation, traders can block their websites for customers in certain Member States, or apply different conditions to customers of Member States, to prevent being sued in these states.85 Another argument against the mosaic approach is the infeasibility of an injunction that is territorially limited in the case of online copyright infringements.86 In view of the current geo-blocking technologies, it will nonetheless genthe copryight holder’s principal place of business. See also infra section V.B. on the Penguin ruling. 82 The concept of ubiquitous is broader than internet-related as it includes dissemination of infringements via the television, radio, and even future technologies. The term ubiquitous can be denoted as “concurrent multi-territorial infringements evoked by a single act of operation”. See S. CHAEN/ T. KONO/ D. YOKOMIZO, Jurisdiction in Intellectual Property Cases: The Transparency Proposal, in J. BASEDOW/ T. KONO/ A. METZGER (eds), Intellectual Property in the Global Arena. Jurisdiction, Applicable Law and the Recognition of Judgements in Europe, Japan and the US, Tübingen 2010, p. 98. 83 See supra section III.B.2. 84 Ibid. 85 Ibid. 86 See Opinion of Advocate General M. BOBEK, 13 July 2017, in C-194/16 Bolagsupplysningen OÚ Ingrid Ilsjan v. Svensk Handel AB, ECLI:EU:C:2017:554, para 48.

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Birgit van Houtert erally be feasible to enact a territorially limited injunction. However, it will not be effective and satisfactory if the copyright infringing content is still accessible online in other states.87

IV. Limitations Related to the Conferral of Full Jurisdiction on the Court of the Erfolgsort As argued in the previous section, in multistate or ubiquitous copyright infringement cases, the combination of the “likelihood of damage” criterion and the territorially limited approach to jurisdiction will often not facilitate the sound administration of justice or balance the interests between the parties and broader interests involved. From a perspective of private international law and of public international law, this section will discuss the possible limitations related to the conferral of full jurisdiction on the court of the Erfolgsort under Article 7(2) Brussels Ibis in cross-border copyright infringement cases. A.

A Particularly Strong Territorial Connection between the Dispute and the Court

As mentioned in section III.A., the conferral of jurisdiction on the court of the Erfolgsort under Article 7(2) Brussels Ibis has been justified by a close connection between the dispute and the court. This connection facilitates the sound administration of justice and entails predictability as regards which court will be competent.88 The scope of the jurisdiction of the court of the Erfolgsort has generally been limited to assessing the damage caused within the forum state.89 From a perspective of private international law, it has nonetheless been argued that the court of the Erfolgsort could obtain full jurisdiction provided that there exists a particularly strong connection between the court and the dispute.90 With respect to cross-border patent infringements, “it has been submitted that the concentration of litigation requires a strong territorial link between the dispute and the forum”.91 The requirement of a particularly strong territorial connection between the dispute and the court can be advocated for reasons of sound admin87 See A. STROWEL Towards a European Copyright Law: Four Issues to Consider, in I.A. STAMATOUDI/ P.L.C. TORREMANS (eds), EU Copyright Law. A Commentary, Cheltenham 2014, p. 1131. 88 See recital 16 in the preamble to Brussels Ibis. 89 See supra note 16. See also CJEU, 25 October 2011, C-509/09 and C-161/10, eDate Advertising and Martinez v. MGN Limited, ECLI:EU:C:2011:685, para 51. 90 B. DE GROOTE, Jurisdiction problems regarding Internet torts: Critical remarks, Computer Law & Security Review: The International Journal of Technology and Practice 2009, p. 450-451, 453; M. PERTEGÁS SENDER (note 35), p. 276. 91 M. PERTEGÁS SENDER (note 35), p. 276.

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Rethinking the Approach of the CJEU in Copyright Infringement Cases istration of justice since it will enable the court to be in a good position to assess the entire cross-border copyright infringement dispute.92 In view of public international law, it can also be argued that the conferral of full jurisdiction to the court of the Erfolgsort requires a strong territorial connection between the dispute and the court.93 Based on the territoriality principle related to sovereignty of states, a state traditionally has jurisdiction over activities, persons or objects within the territory of the state.94 Case law indicates that it has generally been accepted to confer jurisdiction based on effects that occur within the forum state as a result of tortious activities that occurred in another state.95 According to settled case law of the CJEU, the courts of the place where the damage occurred or may occur, the Erfolgsort, can obtain jurisdiction under Article 7(2) Brussels Ibis. However, the CJEU has generally limited the jurisdiction of the court of the Erfolgsort to assess the damage caused within the forum state.96 The latter seems to reflect the traditional principle as basis for jurisdiction.97 Yet, if the court of the Erfolgsort obtains full jurisdiction, it has to assess damages caused in other states and copyright infringing activities that occured in other states. In the context of globalisation and the internet, the trend of “competing claims for jurisdiction” has emerged.98 It has therefore been argued “to adjust territorial accepted links” to establish jurisdiction.99 In light of the principle of

B. VAN HOUTERT (note 2), para 5.3.4.1. Ibid. 94 See D.W. GREIG, International Law, London 1976, p. 210; R. MICHAELS, Territorial jurisdiction after territoriality, in P.J. SLOT/ M. BULTERMAN (eds), Globalisation and Jurisdiction, Leiden 2004, p. 106-108; C. RYNGAERTS, The Concept of International Law, in A. ORAKHELASHVILI (ed), Research Handbook on Jurisdiction and Immunitites in International Law, Cheltenham 2015, p. 51. 95 Compared to the traditionally territorial-based approach to jurisdiction in the case of Pennoyer v. Neff, 95 U.S. 714 (1878), the United States Supreme Court adopted a more flexible effects-based approach to jurisdiction in the case of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, (1945). In Handelskwekerij Bier v. Mines de Potasse d’Alsace (note 9), the CJEU adopted an effects-based approach to jurisdiction under Article 7(2) Brussels Ibis. 96 See supra note 89. 97 B. VAN HOUTERT (note 2), para 2.1.2.2.2. 98 P. WAUTELET, What has international private law achieved in meeting the challenges posed by globalisation?, in P.J. SLOT/ M. BULTERMAN (eds), Globalisation and Jurisdiction, Leiden 2004, p. 60. See also U. KOHL, Jurisdiction and the Internet: Regulatory Competence over Online Activity, Cambridge 2010, p. 4-5, 22; D.J.B. SVANTESSON, Internet & Jurisdiction Global Status Report, Paris 2019, p. 51. 99 U. KOHL (note 98), p. 23. A. MILLS argues that “private international law rules on jurisdiction may recognize that certain subject matters are so closely connected with a single state that the courts of that state should have exclusive jurisdiction”. See A. MILLS, Rethinking Jurisdiction in International Law, The British Yearbook of International Law, Oxford 2014, p. 208. 92 93

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Birgit van Houtert international comity,100 a court should nevertheless not adjudicate a case “when another court is better placed to adjudicate”.101 The abovementioned requirement of a strong territorial connection between the cross-border copyright infringement case and the forum could justify the conferral of full jurisdiction on the court of the Erfolgsort under Article 7(2) Brussels Ibis “since the latter court will likely be more suitable to assess the entire dispute compared to courts in other states”.102 The strong territorial component of this requirement is in line with the territorial-based definition of states.103 B.

The Actual Scope of the Court’s Jurisdiction in View of the Principle of International Comity

In the context of private international law, the principle of international comity has first been employed to justify the use of foreign law by a competent court out of respect for the sovereignty of a state.104 Nowadays, this principle has been invoked to curtail the exercise of jurisdiction by courts that have full jurisdiction based on private international law.105 In particular when the exercise of prescriptive jurisdiction requires the competent court to apply the law of the forum that has extraterritorial effects.106 In the case of Eva Glawischnig-Piesczek v. Facebook Ireland Limited, involving online content that had allegedly been harmful to the victim’s reputation, 100 The Latin term comitas (gentium) means courtesy (of nations). The principle of international comity denotes “the respect that sovereign nations…owe each other”. See M.D. RAMSEY, Escaping International Comity, Iowa Law Review 1997-1998, p. 893. Ramsey refers to the case of Philips Med. Sys. Int’l B.V. v. Bruetman, 8 F.3d 600 (7th Cir. 1993), at 604. The principle of international comity has been employed in both the field of private international law and public international law. See B. VAN HOUTERT (note 2), para 5.3.3.1. 101 A. BRIGGS, The Principle of Comity in Private International Law, 354 Recueil des Cours. Collected Courses of the Hague Academy of International Law 2012, p. 85. See also T. SCHULTZ/ N. RIDI, Comity: the American Development of a Transnational Concept, this Yearbook, 2016/2017, p. 227 et seq. 102 B. VAN HOUTERT (note 2), para 5.3.4.1. 103 Ibid. 104 E.G. LORENZEN, Huber’s De Conflictu Legum, in Celebration Legal Essays by Various Authors To Mark the Twenty-fifth Year of Service of John H. Wigmore As Professor of Law in Northwestern University, Chicago 1919, p. 202 et seq. LORENZEN referred to the third maxim that U. HUBER laid down in the chapter “De Conflictu Legum”, Praelectiones. 105 See J.R. PAUL, The transformation of international comity, Law and Contemporary Problems 2008, p. 19; T. SCHULTZ/ N. RIDI (note 101), p. 227-233. 106 In the context of international law, the concept of jurisdiction has commonly been construed as the “jurisdiction to prescribe (i.e. to make its law applicable to activities and relations, whether by legislation, regulation or determination of a court), jurisdiction to adjudicate (i.e. to subject persons or things to process of courts), and, finally jurisdiction to enforce (i.e. to induce or compel compliance, through courts or by use of executive, administrative, etc.)”. See P. WAUTELET (note 98), p. 55.

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Rethinking the Approach of the CJEU in Copyright Infringement Cases the court of the victim’s centre of interests obtained full jurisdiction under Article 7(2) Brussels Ibis.107 With respect to the territorial scope of the injunction to remove the online infringing content, the CJEU held that this injunction could concern the alleged content worldwide provided it were be accordance with “the framework of the relevant international law”.108 In view of international law, it has been argued that the latter injunction could not have worldwide effects since “the balance between the right of reputation, on the one hand, and the freedom of information of internet users, on the other hand, is likely to vary significantly around the world.109 Furthermore, it can even be questioned whether this injunction could have effect in the European Union as there is no harmonised conflict-of-laws rule regarding infringement of personality rights.110 In the case of Google LLC v. CNIL, the CJEU held that the injunction for a search operator to de-reference based on the right to be forgotten, laid down in Article 17 of the General Data Protection Regulation,111 could not have effects outside the European Union.112 The CJEU reasoned that “numerous third States do not recognize the right to de-referencing or have a different approach to that right”.113 Furthermore, the balancing of the right to the protection of personal data against other fundamental rights will “vary significantly around the world”.114 As mentioned in section III.B.1, a universal copyright or EU copyright does not exist. Although the Berne Convention provides a certain mimimum level of copyright protection internationally, the protection of copyright has remained territorially-based. In view of the principle of international comity, it can therefore be argued that the court of the Erfolgsort that obtains full jurisdiction under Article 7(2) Brussels Ibis in a cross-border copyright infringement dispute should not be allowed to assess the damage caused worldwide or to issue an injunction to cease the infringing activities worldwide.115 Yet, the EU Member States are bound by the 107 CJEU, 3 October 2019, C-18/18, Eva Glawischnig-Piesczek v. Facebook Ireland Limited, ECLI:EU:C:2019:821. 108 Ibid., para 53. 109 D.J.B. SVANTESSON, Bad news for the Internet as Europe’s top court opens the door for global content blocking orders, 3 October 2019. Available at https://www.linkedin. com/pulse/bad-news-internet-europes-top-court-opens-door-global-svantesson, on 10.5.2021. 110 D.J.B. SVANTESSON, European Union Claims of Jurisdiction over the Internet: An Analysis of Three Recent Key Developments, Journal of Intellectual Property, Information Technology and E-Commerce Law 2018, p. 122. 111 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) PB L 119, 4.05.2016. 112 CJEU, 24 September 2019, C-507/17, Google LLC v. CNIL, ECLI:EU:C:2019:722, paras 59-73. With respect to the “right to be forgotten”, the CJEU refers to C-131/12, Google Spain and Google, ECLI:EU:C:2014:317. 113 Ibid., para 59. 114 Ibid., para 60. 115 B. VAN HOUTERT (note 2), para 5.3.3.1.

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Birgit van Houtert conflict-of-laws rule lex loci protectionis laid down in Article 8(1) Rome II. Hence, it can be argued that the court of the Erfolgsort will be allowed to assess the damage caused within the Member States and issue an injunction regarding copyright infringing activities that occurred or may occur within these states.116

V.

Assessing Alternative Approaches

As demonstrated in section III, the CJEU’s approach to jurisdiction in cross-border copyright infringement cases undermines principles of private international law and of copyright law. Based on the CJEU’s role as law-finder, it is therefore relevant to assess alternative approaches to jurisdiction. At an international level, there are several treaties that include substantive copyright law but they do not include jurisdiction rules.117 The Hague Conference on Private International Law drafted the Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters in 1999.118 Yet, this Convention failed to come into force due to irreconcilable disagreements between the Contracting States.119 In 2019, the Hague Conference on Private International Law and the World Intellectual Property Organisation jointly drafted a guide titled “When Private International

116 Ibid. With respect to the scope of the jurisdiction of EU trade mark courts in EU trademark infringement cases, Article 126 of the EU Trademark Regulation indicates that these courts can never exercise jurisdiction with respect to acts of infringement committed or threatened outside the territory of the Member States. Regulation (EU) No 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark, PB L 154, 16.06.2017. 117 S. VON LEWINSKI, International Copyright Law and Policy, New York 2008, p. 4. 118 See P. NYGH/ F. POCAR, Report on the Preliminary Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters adopted by the Special Commission on 30 October 1999, Preliminary Document No. 11 of August 2000 for the attention of the Ninetheenth Session of June 2001, Permanent Bureau of the Conference, The Hague. Available at https://www.hcch.net/en/publications-and-studies/details4/ ?pid=3494&dtid=35 on 10.05.2021. On the assessment of the approach to jurisdiction in the Draft Hague Convention in cross-border copyright infringement cases in light of the principles underlying Article 7(2) Brussels Ibis, see B. VAN HOUTERT (note 2), para 6.4.2.2. 119 See T. KONO/ P. JURCYS (note 74), p. 11; A. KUR, International Hague Convention on Jurisdiction and Foreign Judgments: a way forward for I.P.?, European Intellectual Property Review 2002, p. 175 et seq. In view of the territoriality principle, the unification of rules on private international law and intellectual property rights appears to remain a thorny issue for states. While the Hague Convention of 30 June 2004 on Choice of Courts Agreement has not excluded matters related to intellectual property, the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters did exclude these matters from its scope. See the ongoing Jurisdiction Project of the Hague Conference on Private International Law. Available at https://www. hcch.net/en/projects/legislative-projects/jurisdiction-project, on 10.05.2021.

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Rethinking the Approach of the CJEU in Copyright Infringement Cases Law Meets Intellectual Property Law: A Guide for Judges”.120 This HCCH-WIPO Guide provides a non-exhausitive overview of common law- and civil law-based approaches to jurisdiction involving cases of intellectual property. With respect to the accessibility approach to jurisdiction adopted by the CJEU in Pez Hejduk, the HCCH-WIPO Guide pointed out that “courts of other jurisdictions may reject mere accessibility as a sufficient connection and require closer links to the forum, such as targeting or actual harm”.121 Based on various scholarly proposals and case law of courts of EU Member States and states of the United States of America, the following three main approaches to jurisdiction based on effects caused by cross-border copyright infringement disputes can be distinguished: the “directed activities” approach; the “copyright holder’s centre of interests”, or forum actoris, approach; and the substantial effects-based approach.122 These three approaches will concisely be examined below and assessed in light of the assessment framework as set out in section III.A.123 A.

The “Directed Activities” Approach

Various scholars and courts of EU Member States advocate the “directed activities” approach to establish a court’s jurisdiction based on the Erfolgsort under Article 7(2) Brussels Ibis in cross-border copyright infringement cases.124 Courts of states of the United States of America have frequently employed the targeting approach to establish effects-based jurisdiction in cross-border copyright infringement cases.125 Compared to the “totality-of-the circumstances analysis” under the targeting approach, the “directed activities” approach is lesser flexible since it focuses on the objective intention of the alleged infringer.126 In view of the

120 A. BENNETT/ S. GRANATA, When Private International Law Meets Intellectual Property Law. A Guide for Judges, The Hague: Conference on Private International Law 2019; Geneva: World Intellectual Property Organisation 2019. Available at https://www. wipo.int/edocs/pubdocs/en/wipo_pub_1053.pdf, on 10.05.2021. 121 Ibid., p. 40. 122 See B. VAN HOUTERT (note 2), chapters 6 and 7 describe various approaches to jurisdiction in cross-border copyright infringement cases adopted by scholars and courts of European Union Member States and courts of the United States of America. 123 For a detailed assessment of various alternative approaches to jurisdiction in cross-border copyright infringement cases, see B. VAN HOUTERT (note 2), chapters 6 and 7. 124 See, e.g., S. DEPREEUW/ J.B. HUBIN, Of availability and accessibility: online copyright infringements and jurisdiction in the EU, Journal of Intellectual Property Law & Practice 2014, p. 764; N. JÄÄSKINEN (note 6), paras 61-71; A. KUR (note 67), p. 69-84. See also the Dutch Supreme Court, 7 December 2012, H&M v. G-Star, ECLI:NL:HR:2012:BX9018. See B. VAN HOUTERT (note 2), para 6.1. 125 See B. VAN HOUTERT (note 2), para 7.5. 126 See D.J. ILLAR Unraveling International Jurisdictional Issues on the World Wide Web, University of Detroit Mercy Law Review 2010, p. 14.

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Birgit van Houtert predictability requirement underlying Article 7(2) Brussels Ibis, the “directed activities” approach therefore seems to be more suitable.127 According to the “directed activities” approach, the court seised will obtain jurisdiction if the defendant objectively directed alleged copyright infringing activities to the residents of the forum state.128 To determine the objective intention of the alleged infringer, the court seised will have to consider all circumstances of the case.129 The factors enumerated by the CJEU in the Pammer and Alpenhof ruling can be employed to assess whether alleged online copyright infringing content or activities have been directed to a particular state.130 For example, an online alleged copyright infringing photo may be directed to residents of a certain Member State if additional content is written in the particular language of that state and the website uses the country code top-level domain of that state. The scope of the court’s jurisdiction based on the “directed activities” criterion will generally be territorially limited to assess the damage caused within the forum state.131 In Pinckney and Pez Hejduk, the CJEU explicitly rejected the adoption of the “directed activities” approach to jurisdiction under Article 7(2) Brussels Ibis with respect to alleged internet-related copyright infringing activities. According to the CJEU, Article 7(2) Brussels Ibis merely employs the criterion of “the place where the harmful event has occurred or may occur”; the identification of this place “cannot depend on criteria which are specific to the examination of the substance and which do not appear in the provision”.132 Yet, the CJEU has employed the “victim’s centre of interests” approach under Article 7(2) Brussels Ibis in the case of alleged online infringements of personality rights, even though this criterion is not stipulated in that provision.133 As to the interpretation of the Erfolgsort, the CJEU has also frequently ruled that “the circumstances specific to the case”

B. VAN HOUTERT (note 2), para 7.5.3.1. See M. VAN EECHOUD, De grensoverschrijdende inbreuk. Daad, plaats en norm na Football Dataco & Pinckney, Tijdschrift voor Auteurs-, media- & informatierecht 2013, p. 173-174. 129 Ibid. See also A. KUR (note 67), p. 75 on the “directed activities”-based escape clause in Article 2:202 CLIP (see infra section V.C.). See also CJEU, 7 December 2010, C-585/08 and C-144/09, Peter Pammer v. Reederei Karl Schlüter GmbH & Co KG and Hotel Alpenhof GesmbH v. Oliver Heller, ECLI:EU:C:2010:740, paras 80-94. 130 See N. JÄÄSKINEN (note 6), para 66. In the Pammer and Alpenhof ruling, the CJEU enumerated various factors to assess the “directed activities” approach in cross-border consumer disputes related to the Internet. Factors are, for instance, the use of a country code top-level domain, a particular language or the places of delivery. See Pammer and Alpenhof (note 129), paras 83-94. 131 See mosaic approach in note 16. See, e.g., Articles 2:202 and 2:203(1) CLIP as will be demonstrated in section V.C. 132 Peter Pinckney v. KDG Mediatech AG (note 5), para 41; Pez Hejduk v. EnergieAgentur.NRW GmbH (note 5), paras 30-33. 133 B. VAN HOUTERT (note 2), para 6.1.4. See eDate and Martinez (note 89), paras 48-52. 127 128

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Rethinking the Approach of the CJEU in Copyright Infringement Cases should be considered.134 Furthermore, scholars have argued that the assessment of the “directed activities” approach will not require “substantially more of a ‘closer look’ than any regular assessment” regarding the localisation of the Handlungsort and the Erfolgsort.135 1.

Assessing the “Directed Activities” Approach

The “directed activities” approach satisfies the principles underlying Article 7(2) Brussels Ibis unless copyright infringing activities or content has been directed to many Member States.136 First, the “directed activities” approach will provide predictability as regards which courts will have jurisdiction in cross-border copyright infringement cases. The potential copyright infringer will likely be able to predict before which court it can be sued based on to which Member State it has directed its activities. Due to the focus on the objective intention, the copyright holder will usually predict before the court of which Member State it can bring its case. In view of the principle of predictability, it has been advocated to adopt a technologically neutral-based “directed activities” approach since copyright infringing content or activities can easily be transformed to the online setting.137 Second, the “directed activities” approach will generally entail a close connection between the court and the copyright infringement dispute. The court will likely be in a good position to assess the damage within the forum state caused by the alleged copyright infringing activities that have been directed to that state. Third, the “directed activities” approach therefore seems to enhance the sound administration of justice. Furthermore, this approach will reduce the risk of jurisdiction based on overspills, empty jurisdiction, and multiple competent courts.138 However, where copyright infringing activities are directed to many Member States, multiple courts will be competent which increases the risk of forum shopping and irreconcilable decisions. Multistate litigation will be a heavy burden for the parties and the judicial systems of the Member States involved. Fourth, the “directed activities” approach will usually provide a procedural balance between the parties. On the one hand, the potential copyright infringer will likely be able to predict in which Member State it may be sued. On the other hand, 134 See CJEU, 16 June 2016, C-12/15, Universal Music Holding BV v. Michael Tétreault Schilling, ECLI:EU:C:2016:449, para 39. See also, e.g., CJEU, 12 September 2018, C-304/17, Helga Löber v. Barclays Bank plc, ECLI:EU:C:2018:701, paras 29-35. 135 See M. HUVOSEC (note 56), p. 373. See also J. VON HEIN, Protecting Victims of Cross-border Torts Under Article 7 No. 2 Brussels Ibis: Towards a More Differentiated and Balanced Approach, this Yearbook, 2014-2015, p. 270. 136 For a detailed assessment, see B. VAN HOUTERT (note 2), para 6.1.4. 137 J.-J. KUIPERS, Nieuwe ronde, nieuwe kansen? Een nieuw arrest van het HvJEU over internet, vrijheid van meningsuiting en bescherming van de persoonlijke levensfeer, HvJEU 17 oktober 2017, zaak C-194/16 Bolagsupplysinignen, Nederlands Internationaal Privaatrecht 2018, p. 543. See also Opinion of Advocate General C. CRUZ VILLALÓN, 29 March 2011, in C-509/09 and C-161/10, eDate Advertising and Martinez v. MGN Limited, ECLI:EU:C:2011:192, para 53. 138 A. KUR (note 67), p. 69; R. MATULIONYTE (note 56), p. 135.

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Birgit van Houtert the copyright holder will often have the option to sue before the courts of the Erfolgort, the forum rei or the forum actus. Yet, the “directed activities” approach will not guarantee a procedural balance between the parties where copyright infringing activities or content has been directed to many Member States, for instance, by ubiquitous media such as the internet. Multistate litigation will place a heavy burden on the alleged infringer. To receive full redress, the copyright holder will be forced to sue either in the forum rei or the forum actus, or before the courts of each Member State where the copyright infringing activities or content has been directed to. “The latter can be unreasonable in the case the infringer has been located and operated in a copyright haven;” particularly, if this infringer “directed his activities to the forum state that protects the copyright relied on and where the copyright holder has been domiciled or substantial damage has occurred”.139 Finally, in view of multistate or ubiquitous copyright infringements, the “directed activities” approach will not guarantee a balance between the broader interests of copyright holders, and of users of information and traders. Particularly in the case of online piracy and copyright havens, the territorially limited approach to jurisdiction will not enhance efficient copyright protection at a procedural level. Because of the risk of multistate litigation, users of information may be reluctant to exchange information via the internet. Providers of information might use a particular language or even block their websites for residents of certain Member States. The “directed activities” approach can thus impede the cross-border flow of information, which will have a detrimental effect on innovation and education. The risk of being sued in multiple Member States can also negatively affect cross-border trade. Traders may not be willing to provide their goods and services to residents of all Member States. Because of the Geo-blocking Regulation, traders are, however, generally no longer allowed to use unjustified geo-blocking and other forms of discrimination based on customer’s nationality, place of residence or place of establishment within the European Union.140 Yet, the Geo-blocking Regulation claims not to affect the “directed activities” approach to jurisdiction under Article 17(1) Brussels Ibis involving cross-border consumer disputes by stipulating that compliance with this Regulation shall not be construed as implying that a trader directs activities to the Member State of the consumer’s habitual residence or domicile.141 Indeed, traders can still indicate that their activities are directed to a certain Member State since they are allowed to employ general conditions of access to goods and services which differ between Member States as long as they treat their customers in a non-discriminatory manner.142 Hence, a trader can stipulate that it See B. VAN HOUTERT (note 2), para 6.1.4.3. See supra section III.B.2. With respect to the Geo-blocking Regulation in the context of private international law, see also M. CAMPO COMBA, The new Geo-blocking Regulation: general overview and private international law aspects, Nederlands Internationaal Privaatrecht 2018, p. 512-525. 141 Article 1(6) Geo-blocking Regulation even stipulates that it “shall be without prejudice to Union law concerning judicial cooperation in civil matters”. 142 See recital 27 in the preamble to the Geo-blocking Regulation. 139 140

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Rethinking the Approach of the CJEU in Copyright Infringement Cases will only deliver goods in a certain Member State as long as its condition is employed for every customer. A trader who operates online can also use a particular language or country code top-level domain to indicate that it intends to offer its goods or services only to a certain Member State.143 However, the trader’s tools to indicate “directed activities” are reduced since they are no longer allowed to block or limit access to their websites for customers of certain Member States, or employ different general conditions of access to goods and services based on a customer’s nationality or place of residence.144 Considering the risk of multistate litigation, particularly small trading companies may therefore be reluctant to offer their goods and services online to customers in the EU. Traders which provide services that are excluded from the scope of the Geo-blocking Regulation, such as audiovisual services or electronically supplied services that contain copyrighted content,145 can still block their websites for customers of certain Member States. The foregoing will not facilitate the proper functioning of the internal market. The territorially limited-based “directed activities” approach is in line with the territoriality principle related to copyright,146 and the territoriality principle related to sovereignty of states.147 Nonetheless, as argued above, this territorially limited approach to jurisdiction will often not satisfy the principles of private international law underlying Article 7(2) Brussels Ibis in the case of multi-state or ubiquitous copyright infringement disputes. While the “directed activities” approach will meet the “close connection” requirement with respect to territorially limited jurisdiction, a stronger connection seems to be desired to justify full jurisdiction.148 Copyright infringing activities may be directed to other states than the forum state and cause even more substantial damage in one or more of these states. The following paragraphs will assess the two main approaches that provide full jurisdiction in cross-border copyright infringement cases, namely the “copyright holder’s centre of interests”, or forum actoris, approach and the substantial effects-based approach. As will be demonstrated, several scholars have proposed to combine these approaches with the “directed activities” criterion.

143 The factors to indicate “directed activities” which are not exhausitive enumerated by the CJEU in the Pammer and Alpenhof ruling (note 130) will thus remain relevant. Yet, the court seised will need to examine the online use of a particular language in more detail to assess whether the trader directed its activities to certain Member States due to the prohibition on redirecting customers without their consent to a version of the trader’s online interface that employs another language. This prohibition has been laid down in Article 3(2) and recital 20 in the preamble to the Geo-blocking Regulation. 144 See B. VAN HOUTERT (note 2), paras 4.5.3 and 6.1.4.4. 145 See supra section III.B.2. 146 N. JÄÄSKINEN (note 6), para 46. 147 See B. VAN HOUTERT (note 2), paras 2.1.2.2.2 and 8.5.2. 148 Ibid., para 8.2.2.

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The “Copyright Holder’s Centre of Interests”, or Forum Actoris, Approach

Some scholars and courts have advocated adopting the “copyright holder’s centre of interests”, or forum actoris, approach under Article 7(2) Brussels Ibis in ubiquitous copyright infringement cases.149 The latter approach will confer full jurisdiction on the courts of the Member State where the copyright holder has its centre of interests or habitual residence or domicile. The “centre of interests” approach is broader than the forum actoris approach as “a person may also have the centre of his interests in a Member State in which he does not habitually resides, in so far as other factors, such as the pursuit of a professional activitiy, may establish the existence of a particularly close link with that State”.150 In view of globalisation and the internet, some scholars have proposed a “case-specific copyright holder’s centre of interests” approach for reasons of efficient adjudication and the digital economy.151 From a moral rights-based perspective of copyrights, the Swedish Supreme Court adopted the “copyright holder’s centre of interests” approach under Article 7(2) Brussels Ibis with respect to the alleged online infringement of the moral rights of copyright.152 With respect to copyrights, a distinction can be made between economic rights and moral rights.153 Unlike economic rights, moral rights cannot be transferred and will therefore remain with the original copyright holder.154 Based on the view that moral rights resemble personality rights, the Swedish Supreme Court applied the “victim’s centre of interests” approach under Article 7(2) Brussels Ibis.155 The CJEU had earlier adopted the latter approach under Article 7(2) Brussels Ibis in the eDate and Martinez ruling involving online infringements of personality rights by reasoning that the worldwide dissemination via the internet 149 See, e.g., T. KONO/ P. JURCYS (note 74); L. LUNDSTEDT, Putting Right Holders in the Centre: Bolagsupplysningen and Ilsjan (C-194/16): What Does It Mean for International Jurisdiction over Transborder Intellectual Property Infringement Disputes?, International Review of Intellectual Property and Competition Law 2018, p. 1035-1037; U. MAUNSBACH, Copyright in a Borderless Online Environment-Comments from a Swedish Horizon, in J. AXHAMN (ed.), Copyright in a Borderless Online Environment, Stockholm 2012, p. 5759. See also Swedish Supreme Court 4 July 2012, Micael Engström v. Tylden & Co AS, NJA 2012, s. 483. 150 See eDate Advertising and Martinez (note 89), para 49. 151 T. KONO/ P. JURCYS (note 74), p. 27-33. 152 Micael Engström v. Tylden & Co AS (note 149), s. 483. 153 Economic rights include the reproduction right, the distribution right, and the right of communication to the public. See P. GOLDSTEIN/ B. HUGENHOLTZ, International Copyright. Principle, Law, and Practice, Oxford 2013, p. 303-336. Moral rights are usually distinguished in four types of rights: the right of disclosure (droit de publication); the right to withdrawal (droit de repentir); the right of integrity (droit au respect); the right of attribution (droit á la paternité). See P. GOLDSTEIN/ B. HUGENHOLTZ (supra), p. 365-367; M. RUSHTON, The Moral Rights of Artists: Droit moral Droit Pécuniaire?, Journal Cultural Economics 1998, p. 16. 154 U. MAUNSBACH (note 149), p. 48. 155 Supra note 152.

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Rethinking the Approach of the CJEU in Copyright Infringement Cases complicates the assessment of the damage caused exclusively within the forum state and the nature of the harm will be serious.156 In a similar way, the New York Court of Appeals conferred jurisdiction on the court of the copyright holder’s principal place of business in an internet-related copyright infringement dispute by pointing out the “multifacted nature” of copyrights, including the “overarching «right to exclude others from using his property»”.157 In line with the Wintersteiger ruling concerning the online infringement of a national trademark,158 the CJEU made a distinction in Pinckney between infringements of personality rights, which are protected in all Member States, and infringements of intellectual property rights, which are protected only by the Member State that granted the right.159 Yet, unlike national trademarks that require registration to be protected in a certain state, copyrights, pursuant to the Berne Convention, generally come into existence without any formality. Therefore, copyrights have almost universal protection similar to personality rights.160 1.

Assessing the “Copyright Holder’s Centre of Interests”, or Forum Actoris Approach

The “copyright holder’s centre of interests”, or forum actoris, approach does not appear to satisfy the principles underlying Article 7(2) Brussels Ibis.161 There may be a lack of predictability for the potential copyright infringer in which Member States he can be sued. The potential infringer may often not know where the copyright holder has its centre of interests or will not even know the identity of the copyright holder. This unpredictability can jeopardise the procedural balance between the parties and even negatively affect the cross-border exchange of information and trade. This unpredictability could be alleviated by adding what is known as the knowledge, or intentional tort, criterion that requires that the alleged infringer has been aware of the copyright involved and the location of the

eDate Advertising and Martinez (note 89), paras 46-47. The Court of Appeals of the State of New York, 24 March 2011, Penguin Group (USA) Inc., v. American Buddha, 16 N.Y. 3d 295 (N. Y. 2011). The New York Court of Appeals referred to the case of eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), at 392. See also supra note 81 on the internet-related factor of the New York Court of Appeals’ reasoning in favour of the copyright holder’s principal place of business. 158 Wintersteiger (note 63), paras 22-25. 159 Peter Pinckney v. KDG Mediatech AG (note 5), paras 35-37. 160 On the (almost) universal character of copyrights, see G.B. DINWOODIE, Conflict and International Copyright Litigation: The Role of International Norms, in J. BASEDOW/ J. DREXL/ A. KUR/ A. METZGER (eds), Intellectual Property in the Conflict of Laws, Tübingen 2005, p. 198; M. VAN EECHOUD (note 73), p. 99. Currently, the Berne Convention is in force in 179 states. See supra note 50. 161 For a detailed assessment of approaches to jurisdiction related to the “copyright holder’s centre of interests”, see B. VAN HOUTERT (note 2), paras 6.2.4; 7.5.1.2.1; 7.5.1.3.1. 156 157

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Birgit van Houtert copyright holder’s centre of interests.162 However, the knowledge criterion can be considered as a subjective criterion that does not provide ex ante predictability.163 Furthermore, the “copyright holder’s centre of interests”, or forum actoris, approach does not guarantee a strong enough connection between the court and the dispute that could justify the conferral of jurisdiction regarding the entire copyright infringement dispute. As indicated in the previous paragraph, moral rights cannot be transferred and will therefore always be located in the state of the copyright holder’s centre of interests. Yet, economic rights can be transferred and therefore be located in another state or states. While the infringement of the moral rights of the copyright will thus occur in the state or states of the copyright holder’s centre of interests, the infringement of the economic rights of the copyright may occur in other states and cause damage there. The court will therefore not always be in a good position to assess the entire case. According to the Swedish Supreme Court, the courts of the Member State or Member States where the copyright holder’s centre of interests is located will only obtain full jurisdiction regarding the infringement of the moral rights of the copyright. Besides the issue that some Member States adhere to “the monestic conception of copyright”,164 it will not facilitate the sound administration of justice and efficient adjudication when the litigation of the infringement of economic rights has to take place in another Member State or Member States. Adding the “directed activities” criterion to the “copyright holder’s centre of interests”, or forum actoris, approach will provide more predictability to the infringer as regards in which Member States it may get sued.165 This combined approach to jurisdiction will also entail a stronger territorial connection between the dispute and the court. Yet, it can be questioned whether it will yield a strong enough connection to justify the conferral of full jurisdiction since the infringement of economic rights may be directed to other Member States and cause substantial damage there.

162 With respect to the place of the plaintiff’s domicile as a connecting factor in the conflict-of-laws rule related to torts, TH.M. DE BOER underlined the importance of predictability by requiring that the defendant knew or should have known the identity of the victim and the location of the victim’s domicile. See Th.M. DE BOER, Alternatieven voor de lex loci delicti, Deventer 1982, p. 45-47, 57. Courts of several states of the United States of America appear to have adopted the knowledge criterion in their approach to jurisdiction in cross-border copyright infringement cases, see case law B. VAN HOUTERT (note 2), paras 7.5.1.2; 7.5.1.3. 163 B. VAN HOUTERT (note 2), paras 7.5.1.2.1.3; 7.5.1.3.1.1. 164 See M. VAN EECHOUD (note 73), p. 139. For instance, Germany and Austria adhere to the monistic conception of copyright. 165 See B. VAN HOUTERT (note 2), para 6.4.3.2 on the assessment of the combination of the “intentionally directed” criterion and the forum actoris approach proposed by R.C. DREYFUSS & J. GINSBURG as laid down in Articles 6(1)(b) and 6(2) of the Draft Dreyfuss and Ginsburg Convention of 2002 on Jurisdiction and Recognition of Judgments in Intellectual Property Matters. See R.C. DREYFUSS/ J. GINSBURG, Draft Convention on Jurisdiction and Recognition of Judgments in Intellectual Property Matters, Chicago-Kent Law Review 2002, p. 1077.

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Rethinking the Approach of the CJEU in Copyright Infringement Cases C.

The Substiantial Effects-Based Approach

With respect to infringements of intellectual property such as copyrights, several scholars drafted proposals that confer jurisdiction on courts based on substantial effects that occurred in the forum state. The Proposal drafted in 2001 by the Max Planck Institute for Intellectual Property, Competition and Tax Law in Germany (MPI Proposal of 2001) employs the “commercial effects” citerion, and the “substantial impact” criterion for non-commercial infringements.166 These criteria have been combined with the “directed activities”-based escape clause that can be invoked by the alleged infringer to prevent the court seised from obtaining jurisdiction.167 Under the auspices of the International Law Assocatiation (ILA), the Committee on Intellectual Property and Private International Law drafted between 2016 and 2020 Guidelines that include an effects-based approach to jurisdiction with respect to infringements of intellectual property rights; Article 5(b) of the ILA Guidelines confer jurisdiction on “the courts of the States where the infringement may have caused direct substantial damages unless it could not be anticipated that the infringement would cause those damages”.168 While these effects-based approaches to jurisdiction provide territorially limited jurisdiction, the European Max Planck Group on Conflict of Laws in Intellectual Property (CLIP Group) drafted an effects-based approach that confers full jurisdiction based on the following combined connecting factors.169 With respect to cross-border copyright infringements, Article 2:202 CLIP confers jurisdiction on the courts of the state where the alleged infringement occurs or may occur unless the alleged infringer can invoke the “directed activities”-based escape clause that “her/his activity cannot reasonably be seen as having been directed to See Article 12a Paras 6(1)(a) and 4(2) Max Planck Institute for Intellectual Property, Competition and Tax law (MPI) Proposal of 2001. See J. DREXL/ A. KUR, Annex II MPI-Proposal, in J. DREXL/ A. KUR (eds), Intellectual Property and Private International Law Heading for the Future, Oregon 2005, p. 309-347. See also B. VAN HOUTERT (note 2), para 6.4.4.2. 167 Article 12a Para 6(2) MPI Proposal of 2001 stipulates that “Courts shall deny jurisdiction if the defendant has taken reasonable steps to avoid creating a commercial effect in, or directing activity to, that Contracting State”. 168 See Article 5(b) of the Guidelines on Intellectual Property and Private International Law (Kyoto Guidelines) adopted on 13 December 2020. See also former Article 5(b) of the Draft Guidelines on Intellectual Property and Private International Law of 22 May 2018 in the Report International Law Association Sydney Conference (2018) Intellectual Property and Private International Law; Article 5(b) of the Draft Guidelines “Intellectual Property and Private International Law” of 25 May 2016 in the Report International Law Association Johannesburg Conference (2016) Intellectual Property and Private International Law. See the Reports of the International Law Association Committee on Intellectual Property and Private International Law. Available at https://www.ilahq. org/index.php/committees, on 10.05.2021. See also B. VAN HOUTERT (note 2), para 6.4.6. 169 See the final text of the Principles on Conflict of Laws in Intellectual Property (CLIP) of 1 December 2011 drafted by the European Max Planck Group on Conflict of Laws in Intellectual Property. Available at https://www.ip.mpg.de/en/research/researchnews/principles-on-conflict-of-laws-in-intellectual-property-clip.html, on 10.05.2021. 166

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Birgit van Houtert that state”. Article 2:203(1) CLIP stipulates that the scope of the latter court will generally be territorially limited to infringements that occur or may occur within the forum state. Yet, with respect to an “infringement carried out through ubiquitous media such as the Internet”, Article 2:203(2)(b) CLIP provides jurisdiction “in respect of infringements that occur or may occur within the territory of any state” based on effects in the forum state subject to the following two conditions. First, “the activities that gave rise to the infringement did not have a substantial effect in the state(s) of the infringer’s habitual residence”. Second, the harm caused by the infringement in the forum state “has been substantial in relation to the infringement in its entirety”. 1.

Assessing the Substantial Effects-Based Approach to Jurisdiction

As a result of the “directed activities”-based escape clause, the effects-based approaches to jurisdiction mentioned above will provide a certain degree of predictability to a potential copyright infringer as regards in which states it may get sued. The copyright holder will also likely be able to predict in which state or states it can sue the infringer provided that the directed activities’ criterion focuses on the objective intention of the alleged infringer to direct its activities to the forum state. This predictability will enhance a procedural balance between the parties. However, in the case of multistate or ubiquitous copyright infringement disputes, a territorially limited approach to jurisdiction will not guarantee a procedural balance between the parties involved.170 From a broad perspective, the risk of multistate litigation may even negatively affect copyright protection, cross-border exchange of information and trade.171 The effects-based full approach to jurisdiction under Articles 2:202 and 2:203(2)(b) CLIP will likely yield a procedural balance between the parties and balance the broader interests of copyright holders, traders and users of information.172 The alleged copyright infringer can invoke the “directed activities”based escape clause of Article 2:202 CLIP if that infringer did not predict getting sued in the state where the damage has been substantial in relation to the entire damage. This predictability and the reduced risk of multistate litigation will be beneficial to the online exchange of information and trade. If the infringer is located or operated in a copyright haven, the likelihood that the copyright holder will efficiently obtain full redress before a single court will be increased because of the approach to full jurisdiction under Article 2:203(2)(b) CLIP.173 The increased copyright protection at a procedural level will be favourable to innovation and

See supra section III.B.3. See supra section V.A.1. 172 B. VAN HOUTERT (note 2), para 6.4.5.2.3. 173 A. KUR, Article 2:203: Extent of jurisdiction over infringement claims, in J. BASEDOW/ J. DREXL (eds.), Conflict of Laws in Intellectual Property. The CLIP Principles and Commentary. Europeam Max Planck Group on Conflict of Laws in Intellectual Property, Oxford 2013, p. 88. See supra note 61 on the concept of copyright haven. 170 171

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Rethinking the Approach of the CJEU in Copyright Infringement Cases education. Concentration of litigation in the case of ubiquitous copyright infringement disputes will also reduce the burden on the judicial systems. The combination of the “directed activities”-based escape clause and substantial effects-based approach to jurisdiction will generally entail a close territorial connection between the dispute and the court. However, it can be questioned whether the latter court will be in a good position to assess the entire copyright infringement dispute since substantial damage may also have been caused in other states. The “directed activities”-based effects approach under Articles 2:202 and 2:203(2)(b) CLIP will yield a particularly strong territorial connection since it includes the requirement that the harm in the forum state “has been substantial in relation to the infringement in its entirety”. The latter combined approach to jurisdiction will therefore justify the conferral of jurisdiction regarding the entire ubiquitous copyright infringement dispute.174 The competent court will generally be in a good position to assess the entire dispute. Nonetheless, the effects-based connecting factor under Article 2:203(2)(b) may require quite an extensive assessment of the facts of the case that is not in line with the prima facie assessment at the jurisdictional phase.175 First, the court seised needs to assess whether the alleged infringing activities did not cause substantial effects in the forum rei. Second, the court has to examine whether the effects in the forum state have been substantial in relation to the effects caused by the entire ubiquitous copyright infringement dispute. Since the infringement of moral rights will always occur in the state where the copyright holder is located or has its centre of interests, substantial damage caused by the infringement of moral rights will therefore occur in the latter state.176 Yet, a cross-border copyright infringement dispute might also involve the infringement of economic rights. It will not always be easly to localise and assess in which state or states the effects caused by the infringement of economic rights occur and whether they cause substantial damage there. Compared to the effects-based connecting factors of the CLIP Group mentioned above, the mere “substantial damage” criterion proposed by the ILA Committee on Intellectual Property and Private International Law will require a lesser extensive assessment of the facts of the case.177 Yet, the connection between the court and the entire dispute might not be strong enough to justify the conferral of jurisdiction since substantial damage may occur in other states than the forum state.178 The court will therefore not always be in a good position to assess the entire case.

B. VAN HOUTERT (note 2), para 6.4.5.2.2. Ibid., paras 6.4.5.2.1 and 6.4.5.2.2. 176 See supra section V.B.1. 177 See Article 5(b) of the Guidelines of 2016, 2018, 2020 drafted by the ILA Committee on Intellectual Property and Private International Law as discussed in supra section V.C. 178 B. VAN HOUTERT (note 2), para 6.6. 174 175

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VI. Conclusion From a perspective of legitimacy, the author aimed to demonstrate the need to rethink the CJEU’s approach to jurisdiction in cross-border copyright infringement cases. In view of the common role of the European courts as law-finders, the CJEU’s interpretation of Article 7(2) Brussels Ibis can be regarded as illegitimate judicial activism since it undermines the principles of private international law that underlie this provision, namely to provide predictability; a close connection between the dispute and the court; sound administration of justice; and a procedural balance between the parties. Furthermore, the CJEU’s approach to jurisdiction does not seem to balance the broader interests between copyright holders, traders and users of information. The “directed activities” approach appears to satisfy the principles underlying Article 7(2) Brussels Ibis most. “Compared to the “likelihood of damage” criterion under the Pinckney doctrine, the “directed activities” approach will be a more suitable response to the trend of competing claims of jurisdiction”.179 “Furthermore, the “directed activities” approach will likely prevent generalisation of the forum actoris that is important to maintain the forum rei as general basis for jurisdiction.”180 The “directed activities” approach will also avoid jurisdiction based merely on the damage caused by a third party in the forum state without the knowledge, or collaboration, of the defendant since the focus lies on the objective intention of the alleged infringer to direct its activities to the forum state.181 However, in the case of multistate or ubiquitous copyright infringement cases, the “directed activities” approach may yield multiple competent courts, a situation that increases the risk of forum shopping, inefficient adjudication and irreconcilable decisions. Multistate litigation will often not yield a balance between the parties involved. The risk of multistate litigation may even negatively affect the cross-border flow of information and trade. With respect to ubiquitous copyright infringement disputes, this article therefore argues that a court of a Member State to which the alleged infringing activities have objectively been directed to should obtain “full” jurisdiction under Article 7(2) Brussels Ibis if these activities cause flagrant substantial damage in the forum state in relation to the entire damage.182 The “flagrant substantial damage in relation to the entire damage” criterion seems to resemble the effects-based approach of Article 2:203(2)(b) CLIP. Yet, the proposed criterion will require a less extensive assessment of the facts of the case because the term “flagrant” indicates that it should be obvious that the damage caused in the forum state is substantial in relation to the entire damage caused by the cross-border copyright infringement dispute. Compared to the CLIP approach, this proposed criterion will therefore facilitate the sound administration of justice and provide more ex ante predictabil-

B. VAN HOUTERT (note 2), para 8.2. Ibid. 181 B. VAN HOUTERT (note 2), para 8.2.1. 182 Ibid., paras 8.3.2.2.1 and 8.4. 179 180

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Rethinking the Approach of the CJEU in Copyright Infringement Cases ity as regards which court will have jurisdiction to assess the entire ubiquitous copyright infringement dispute. In view of the principle of international comity, the combination of the “directed activities” criterion and the “flagrant substantial damage in relation to the entire damage” criterion will yield a strong territorial connection between the dispute and the court that could justify the conferral of full jurisdiction. In section IV.B, it has been argued that in light of the principle of international comity the court of the Erfolgsort should not exercise its full jurisdiction worldwide as long as a universal copyright or common conflict-of-laws rule regarding cross-border copyright infringements does not exist. Based on the EU conflict-of-laws rule in Article 8(1) Rome II, lex loci protectionis, the court of the Erfolgsort that obtains full jurisdiction under Article 7(2) Brussels Ibis should be allowed to assess the damage caused within the territory of the Member States and to issue an injunction with respect to infringing activities within these territories. Finally, the author argues for adoption of the “directed activities” approach in cross-border copyright infringement cases under the recast of the Brussels Ibis or the future EU Copyright Regulation.183 With respect to ubiquitous copyright infringement cases, the court may obtain jurisdiction regarding the entire damage caused, or infringing activities that occurred or may occur, within the EU on the basis of the “directed activities” criterion and the “flagrant substantial damage in relation to the entire damage” criterion. As the proposed approach to jurisdiction satisfies common principles of private international law and of copyright law, the proposal can also be adopted at an international level under the auspices of the Hague Conference of Private International Law or the World Intellectual Property Organisation. From a broad perspective, the suggested approach to jurisdiction will facilitate copyright protection, the cross-border exchange of information and trade, and addresses global issues such as online piracy, copyright havens and competing claims for jurisdiction.

183 On the possibility of an EU copyright title, see A. STROWEL, Towards a European Copyright Law: Four Issues to Consider, in I.A. STAMATOUDI/ P.L.C. TORREMANS (eds), EU Copyright Law: A Commentary, Cheltenham 2014, p. 1135-1136.

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NATIONAL REPORTS ________________

NEW URUGUAYAN GENERAL ACT ON PRIVATE INTERNATIONAL LAW Cecilia FRESNEDO DE AGUIRRE* I. II. III.

IV.

V.

VI. VII. VIII. *

Introduction The Structure and Contents of the Uruguayan General Act on Private International Law General Rules A. National and Conventional Private International Law Rules B. Application of Foreign Law C. International Public Policy D. Mandatory Rules E. Fraude à la loi (Evasion of Law) F. Unknown Institution G. Vested Rights H. Previous or Incidental Issues I. Harmonization J. Renvoi K. Specialty of International Commercial Law Existence, Status and Capacity of Natural Persons A. Existence (Legal Capacity) B. Status of Natural Persons C. Capacity to Act D. Protection of Disabled Persons Family Law A. Marriage B. Personal Relationships between Spouses C. Patrimonial Relationships between Spouses D. Divorce E. Non-Matrimonial Unions F. Parentage G. Alimony H. Succession Legal Entities Assets and their Distribution Legal Formalities to Be Observed in Legal Acts Professor at the University of the Republic, Uruguay. Yearbook of Private International Law, Volume 22 (2020/2021), pp. 335-352 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Cecilia Fresnedo de Aguirre IX.

XIII.

Obligations A. The Law Governing Contracts B. Law Governing Torts Powers of Attorney Prescripción (Adverse Possession and Statute of Limitations) International Jurisdiction A. General Solution B. Lis pendens C. Special Solutions D. Jurisdiction Regarding Contracts E. Exclusive Jurisdiction Conclusions

I.

Introduction

X. XI. XII.

On 17 November 2020 Uruguay adopted a new General Act on Private International Law (hereinafter, UGAPIL).1 The idea of revising and modernizing Uruguayan national (or domestic) private international law (PIL) rules started to materialize in 1994, with the initiative that Professor Dr. Didier OPERTTI BADÁN brought to the Uruguayan Institute of Private International Law at the School of Law of the University of the Republic. A working group with several Institute members was designated and commissioned to draft a General Act on PIL.2 The process, started therein more than a quarter of a century ago,3 has finally come to 1 After a long process of negotiations, the UGAPIL was finally approved on November 17, 2020, published in the Official Newspaper No 30.586 on December 16, 2020, into force since March 16, 2021. Accessible in Spanish at https://legislativo.parlamento.gub.uy/ temporales/docu3891089075598.htm (accessed February 15, 2021). There is no official English version. 2 Resolution 652/998 of the Executive Power dated August 17, 1998. The members of the group, presided by Dr. Didier OPERTTI BADÁN, were Dres. Ronald HERBERT (†), Eduardo TELLECHEA, Marcelo SOLARI (†), Berta FEDER (†), Eduardo VESCOVI, Carmen GONZÁLEZ and Cecilia FRESNEDO DE AGUIRRE. In further stages Drs. Jorge TALICE, Paul ARRIGHI and Gonzalo LORENZO joined the group. 3 Regarding the origins of PIL codification in Uruguay and in South America, the Uruguayan early PIL rules of national source and the long process towards a modernized Private International Law in Uruguay, see previous and some times more extensive comments on the UGAPIL inter alia: D. OPERTTI BADÁN/ C. FRESNEDO DE AGUIRRE, The latest trends in Latin American Law: The Uruguayan 2009 General Law on Private International Law, this Yearbook, Vol. 11, 2009, p. 305-337; D. OPERTTI BADÁN/ C. FRESNEDO DE AGUIRRE, El derecho comercial internacional en la nueva Ley General de Derecho Internacional Privado de Uruguay. Una primera aproximación, in ¿Cómo se codifica hoy el derecho comercial internacional?, D.P. FERNÁNDEZ ARROYO/ J.A. MORENO RODRÍGUEZ (eds), p. 385-411, and in Foro de Derecho Mercantil, Revista Internacional No 26, 2010, Bogotá, Colombia, p. 7-39; C. FRESNEDO DE AGUIRRE, Private International Law in Uruguay: Present and Future, National, International, Transnational, in Harmonischer

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New Uruguayan General Act on Private International Law fruition. The UGAPIL does not reflect the individual thought of any one person; on the contrary, it is the product of collaborative studies of a group of PIL experts who achieved, after hard work, consensus on the approved solutions.4 This paper provides a comprehensive overview of the UGAPIL, to inform the reader about the normative solutions adopted.5

II.

The Structure and Contents of the Uruguayan General Act on Private International Law

The UGAPIL is structured in 13 chapters and 63 Articles. The former can be grouped into three large parts: (1) the general rules (chapter I), (2) the law applicable to the legal categories under regulation (chapters II to XI), and (3) international jurisdiction (chapter XII). The final provisions are in chapter XIII.

III. General Rules A.

National and Conventional Private International Law Rules

Article 16 leaves open three fundamental questions. The first is the priority of international conventions to govern “situations connected with several legal systems”. The second is the reference to “relationships”, without qualifying them into legal or factual. Third is the rule’s elucidation of the connection between national and conventional norms of PIL. Though there was not an equivalent rule in Uruguayan national PIL system in force prior to the UGAPIL, the Inter-American Convention Dreiklang im Recht. Festschrift für Herbert Kronke Zum 70 Geburtstag, Ch. BENICKE/ S. HUBER (eds), Bielefeld, 2020, p. 87-107. For further developments, see C. FRESNEDO DE AGUIRRE, Adenda al Curso de Derecho Internacional Privado, Tomos I y II, Montevideo, FCU, 2021; C. FRESNEDO DE AGUIRRE/ G. LORENZO IDIARTE, Texto y Contexto de la Ley General de Derecho Internacional Privado, Montevideo, FCU, 2021. 4 The Working Group developed its job during several years, through different stages, and along various legislative periods, sending the first draft in 2004 and the final one in 2016. Several members of the Working Group, like Professors D. OPERTTI BADÁN, R. HERBERT, J. TALICE, C. FRESNEDO DE AGUIRRE and G. LORENZO, attended the Constitution and Legislation Commission of the Senate and of the Representatives Chamber. 5 See C. FRESNEDO DE AGUIRRE, Adenda al Curso de Derecho Internacional Privado, (note 3) and C. FRESNEDO DE AGUIRRE/ G. LORENZO IDIARTE, (note 3). 6 “Article. 1. National and conventional private international law rules. 1. The relationships referred to situations linked to various legal orders will be ruled by international conventions and, in their absence, by the rules of the present law and the other national private international laws. 2. Regarding the interpretation and integration of this and the other national private international laws, the Civil Code’s Preliminary Title shall apply and the international character of the legal relationships ruled by them shall be taken into account.”

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Cecilia Fresnedo de Aguirre on General Rules of Private International Law (hereinafter, CNG) – and its Article 1 – has been applied by national courts because of its universal or erga omnes character. Thus, this and the other rules on general theory in the UGAPIL do not change the solutions applied in Uruguay on these matters. In order to construe and to integrate eventual legal loopholes in the UGAPIL and other domestic PIL rules, Article 1.2 specifies that the Preliminary Title of the Civil Code shall apply, and emphasizes the international character of the private legal relationships dealt with in those rules. The latter is of great importance to avoid homeward interpretations. Article 1.2 must be read in accordance with Article 13 of the UGAPIL.7 B.

Application of Foreign Law

Article 2 of the UGAPIL follows the traditional solution in Uruguay and in the region,8 which is to apply foreign law ex officio in the same manner it would be enforced by the judges of the State whose law is applicable, thus recognizing the mandatory character9 of the conflicts rule. In other words, its application does not depend on the parties’ will and is obligatory for the judge. Article 3 enables the recourse to all the means of information of the foreign law that are admitted by Uruguayan law or by the law of the foreign State whose law is to be applied. Under Article 4, all the procedural resources provided for under Uruguayan law are admitted. C.

International Public Policy

Uruguayan courts are allowed to disregard the otherwise applicable foreign law only through a founded decision, when its application goes against the fundamental principles on which the Republic bases its legal individuality, manifestly, and in a serious and concrete manner (Article 5). Article 5.2 exemplifies those fundamen“Art. 13. Specialty of international commercial law. 1. International commercial law is recognized as a law with a special character. 2. The issues referred to international commercial relationships not solved in international conventions, in special laws or in the present law shall be submitted mainly to the other sources of international commercial law, through the application of the integrations’ proceedings in article 1.2. 3. In spite of the aforesaid, there are considered as sources of international commercial law, the usages on the matter, the general principles applicable to contracts and other international commercial relationships, case-law from ordinary and arbitral courts and main scholar opinions in Uruguayan and compared law. 4. Usages that are widely known and regularly observed in commercial traffic by the individuals involved, or that are generally accepted in that traffic, shall be applied when it is due to, as well as the general principles of international commercial law that are recognized by international organizations of which Uruguay is a Member State.” 8 Since 1889, when the Protocol to the Montevideo Treaties was approved. 9 B. AUDIT, Le droit international privé en quête d’universalité, Recueil des cours, t. 305, 2003, p. 229, para. 255. 7

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New Uruguayan General Act on Private International Law tal principles by referring to those incorporated in the Constitution and in the international conventions to which the Republic is a party. This rule follows the Uruguayan long-standing tradition on the international public policy exception and its restrictive scope, different from that of national public policy, which is broader and does not impede the application of foreign law.10 D.

Mandatory Rules

Article 6 innovates by incorporating an explicit rule on mandatory rules, also known as overriding mandatory provisions, and distinguishes this methodology from that of the international public policy exception. It also allows Uruguayan courts, at their discretion, to apply mandatory rules of the legal system of other States as far as that State has relevant links to the case. E.

Fraude à la loi (Evasion of Law)

Under Article 7, the fraude à la loi exception to the application of the law indicated by the conflict-of-laws rule operates when the fundamental principles of the legal order of the Republic have been artificially evaded. This rule is clearer and more pragmatic than that of Article 6 CNG. F.

Unknown Institution

This exception to the application of foreign law proceeds whenever the foreign law has institutions or procedures, which are essential for its application, and those institutions or procedures are not provided for in Uruguayan law, and only as far as Uruguayan law has no similar institutions or procedures. Article 8 introduces an additional rule to that of Article 3 of the CNG, which provides that denial of justice cannot be committed in any case. G.

Vested Rights

Article 9 follows the traditional solution regarding vested rights, though it differs from Article 9 of the CNG. The UGAPIL requires the legal relationship to be recognized in Uruguay when: (i) it has been validly established in a foreign State in accordance with the law of that State, (ii) it had a relevant connection with that

10 See the Uruguayan Declaration on the scope of public order made at the time of signature of the Inter-American Convention on General Rules of Private International Law. Available http://www.oas.org/juridico/english/sigs/b-45.html. See further developments on this topic in C. FRESNEDO DE AGUIRRE, Public Policy: Common Principles in the American States, Recueil des cours, Vol. 379, 2016, p. 73-396, particularly p. 99 et seq.

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Cecilia Fresnedo de Aguirre State at the time of its establishment, and (iii) it is not against Uruguayan principles of international public policy. H.

Previous, preliminary or Incidental Issues

Article 10 establishes as a general rule what scholars have called the “equivalence theory” (preliminary and principal questions are on equal footing). It limits – or eliminates – the possibility of turning to another solution, such as the hierarchical theory, although this effect is not expressly stated. This provision should be interpreted in conjunction with Article 11. This allows to set aside the only, and apparently rigid, criterion of Article 10 when required by the purpose of each law at stake and in order to obtain a just and fair outcome in the case under consideration. I.

Harmonization

Article 11 follows closely the wording of Article 9 of the CNG, although it refers to the “laws competent to rule the various aspects of a certain situation”, instead of “the various aspects of one and the same legal relationship”. This change is due to the fact that in practice the laws of different legal systems are applicable to each legal relationship involved in the case. The text of the CNG refers only to dépéçage cases, which are exceptional, at least in Uruguayan DIP. The provision in the UGAPIL has a broader scope of application; it dissociates the inadaptability problem from dépéçage and applies the harmonization criterion to the entire functioning of the conflicts rule, from characterization itself to previous or incidental issues up to an including renvoi. J.

Renvoi

The renvoi technique has generated controversy among Uruguayan scholars,11 resulting in the rule contained in Article 12 whereby renvoi operates as an exception but not as a general rule. Renvoi operates when there are rules that provide for a different solution, and when substantive law is incompatible with the purposes pursued by the attributive conflict rule itself. That is consistent with the conventional rule on harmonization in the CNG (Article 9), also incorporated in Article 11 of the UGAPIL. Finally, renvoi has been excluded from contractual issues (Articles 12.3 and 45.3) because it is understood that the parties’ will should be respected in a field where they are allowed to act autonomously.12

11 C. FRESNEDO DE AGUIRRE, Curso de Derecho Internacional Privado. Parte General, T. I, 2nd ed., Montevideo, 2004, p. 218-234. 12 The solution in the third paragraph arose from a transaction. Its technical nature could be criticized as far as it does not include in this category the reservations in art. 12.2 itself.

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Specialty of International Commercial Law

Article 13 makes a general and explicit reference to the specialty of commercial law. The purpose of the rule is – as was overtly stated by the working group – to highlight the different legal sources, the methodological pluralism, the general principles of this area of law, as well as the uses and practices of international commerce. Its location in the chapter on General Rules enables to separate the issues of international commercial law from those of private international law.

IV. Existence, Status and Capacity of Natural Persons A.

Existence (Legal Capacity)

Article 17 maintains the substantive formula in Article 21 of the Uruguayan Civil Code: every human being is a person. Everything regarding a person’s existence or legal capacity is governed by the law applicable to the involved category. Thus, for example, the assessment of a person’s existence in relation to a matter of succession shall be governed by the law that governs succession. B.

Status of Natural Persons

The status of natural persons is governed by the law of the person’s domicile, which is determined, in Article 14, by ranking in the first place the (A) habitual residence, followed by four subsidiary criteria: (B) the habitual residence of the family nucleus within which the person lives, (C) the main center of the person’s work or business, or (D) the simple residence or the place where the person may be. Thus, the domicile of natural persons is defined in the first place as their habitual residence. If the latter cannot be determined, the subsidiary criteria will determine where such domicile is. C.

Capacity to Act

Under Article 20, capacity to act is governed by the law of the person’s domicile, construed as its habitual residence. It adds that disabilities based on criminal reasons, race, religion, sex, nationality or opinion shall not be recognized. Change of domicile does not restrict acquired capacity. This solution does not significantly modify the former PIL national rules. D.

Protection of Disabled Persons

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Cecilia Fresnedo de Aguirre potestad, it has its domicile where her/his parents are domiciled as far as they effectively exercise their rights and obligations. Otherwise, and when the parents are domiciled in different States, disabled minors are considered domiciled where they have their habitual residence. Disabled persons under guardianship or equivalent protection mechanisms are considered to be domiciled where they have their habitual residence (Article 16). In cases of urgency, Uruguayan courts may provide territorial protection to disabled persons within the jurisdiction, with a provisional character and in accordance with Uruguayan domestic law.

V.

Family Law

A.

Marriage

Article 22 maintains the former rule of the law of the place where the marriage was celebrated to govern the capacity to get married, the form, existence and validity of the matrimonial act. Article 23 determines that the matrimonial domicile is in the State where the spouses live together or where they have their common domicile. Otherwise, each spouse has her/his own domicile, determined under Article 14. B.

Personal Relationships between Spouses

Personal relationships between spouses are governed by the law of their matrimonial domicile. If it does not exist, they are governed by the law of the State of their last matrimonial domicile, provided that one of the spouses remains there. Otherwise, the law of the domicile of any of the spouses shall apply (Article 24). C.

Patrimonial Relationships between Spouses

The agreements between spouses regarding their property are governed by the law of the place where they are formalized. In the absence of such agreements, patrimonial relationships are governed by the law of the first matrimonial domicile. If it does not exist or if it is impossible to determine it, the law of the State where both spouses had their respective domiciles by the time the marriage was celebrated shall apply. Otherwise, the law of the place where the marriage was celebrated applies (Article 25). D.

Divorce

Separation and divorce are governed by the law of the matrimonial domicile (Article 26.1), which was the former solution in the Appendix of the Civil Code. Article 26.2 incorporates what was the former jurisprudential solution: when the

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New Uruguayan General Act on Private International Law spouses are domiciled in different States, the law of any of them shall govern, at the choice of the claimant. E.

Non-Matrimonial Unions

This autonomous category is incorporated in the Uruguayan PIL national system for the first time, in Article 27. The capacity to enter into a non-matrimonial union, its form, existence and validity are governed by the law of the place where such union was registered or recognized by a competent authority. Its effects are governed by the law of the State where they are intended to be enforced; its dissolution, by the law of the common domicile of the parties, and if they have their domiciles in different States, by the law of any of them, at the choice of the claimant. F.

Parentage

The UGAPIL seeks to guarantee parentage, without making any distinction among children – i.e., children born in wedlock and out of wedlock – as former rules did. It thus fulfils the mandate of Human Rights Conventions, mainly Article 17.5 of the American Convention of Human Rights (1969), and Article 2 of the United Nations Convention on the Rights of the Child.13 Under Article 28 of the UGAPIL, parentage is governed by the law of the matrimonial domicile at the time of birth, and if it does not exist, by the law of the mother’s domicile at the time of birth. Parentage can also be determined, indistinctively, by the law of the State of the person’s habitual residence if he/she is a minor; by the law of the persons domicile if the person is of full legal age; and by the law of the State of the defendant’s domicile, or her/his last domicile if he/she has passed away. G.

Alimony

Though there is a separate draft act on PIL rules on alimony already filed in Parliament, the working group of that project considered useful to include a specific and general rule on alimony in the UGAPIL. Under Article 29, alimony obligations are governed by the law of the State of the domicile or the habitual residence of the debtor or of the creditor, at the claimant’s option. H.

Succession

Article 30 follows the former solution in the Appendix of the Civil Code. It governs everything regarding succession, either testate or ab intestato – by the law of the State where the assets of the decedent are located at the time of the decedent’s death. As for wills (or testaments), those drafted in writing in a foreign 13

See developments on this topic in C. FRESNEDO DE AGUIRRE, (note 10) p. 271 et seq.

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Cecilia Fresnedo de Aguirre country must comply with the formalities of the lex loci actus to be valid and effective in the Republic (Article 31). This solution puts an end to the doctrinal and jurisprudential divergences regarding the validity of the holographic will.

VI. Legal Entities Article 33 follows the former solution in the Appendix of the Civil Code, though with a more modern and complete drafting. It states that private legal entities shall be governed by the law of the place where they are incorporated. They are domiciled where they have the main seat of their administration. Their establishments, branches or agencies in other States are considered domiciled in the place where they act, but only regarding the acts done (or performed) there (Article 34). Those private legal entities are recognized by force of law in the Republic and may perform instrumental acts or those that are accessory to its objective, such as standing in court, and/or isolated acts within its remit (Article 36). If its objective is to be habitually performed within the jurisdiction, the foreign legal entity must set some kind of permanent representation and incorporate it under Uruguayan law (Article 37.1). If it establishes its main offices – defined as the place where the seat of the superior decision-making bodies is – or the effective seat of its administration in Uruguay, or its objective is to be performed in Uruguay, the foreign legal entity must fulfil the incorporation requirements under Uruguayan law (Article 37.2). Commercial legal entities are excluded from the UGAPIL (art. 38), since they are governed by a special Act on Commercial Companies.14 There are some differences regarding the regulation of civil and commercial private legal entities. The main one is that the Act on Commercial Companies does not require that the foreign commercial legal entity that habitually performs its activities within the jurisdiction sets some kind of permanent representation (Article 193.3 Act 16.060). States and foreign public legal entities will be recognized by the force of law in the Republic, but if they perform private activities in the Republic those activities will be governed by Uruguayan law (Article 35).

VII. Assets and their distribution Assets are governed by the lex rei sitae (Article 39), without distinction between movables, immovables, tangible, non-tangible, etc. The connecting factor must be construed under Articles 40 and 41. Distribution of assets, whatever the cause of undivided property is, is governed by the law of the place in which the distribution agreement was concluded (Article 42.1). Co-owners may agree on the distribution of all their 14

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New Uruguayan General Act on Private International Law assets, even if those assets are located in different States (Article 42.2). If it is a judicial distribution, it is governed by the lex fori (Article 42.3).

VIII. Legal Formalities to Be Observed in Legal Acts Article 43 follows, in general, the solutions in the 1940 Montevideo Treaty of International Civil Law. It states that the law applicable to legal acts – for example, a contract – also governs the formalities that the document must have for the act to be valid and efficient. Formalities of this kind may require a notarial deed by a public notary, for example. As for the way in which such document – either public or private – must be drafted, the law of the place of celebration applies. Publicity and registration are governed by the law of the State where they take place.

IX. Obligations A.

The Law Governing Contracts

Under Article 45.1 of the UGAPIL, “International contracts may be submitted by the parties to the law they choose.” In other words, the UGAPIL allows the parties to choose the law applicable to their international contracts. In the view of this author, the drafting is clear: the will of both parties is required, excluding thus the validity of unilateral clauses “choosing” the applicable law by one party only. Under Article 45, the general rule is party autonomy, though only for “international” contracts, which are those where the parties have their habitual residence or establishment in different States or the contract has relevant objective relationships with more than one State. The contract cannot be “internationalized” by the mere will of the parties (Article 44). Article 45.4 provides that “The parties’ agreement on the choice-of-law clause must be explicit or arise unmistakably from the contractual clauses on the whole. Such choice can refer to the whole contract or to a part of it”. This provision guarantees that the will and consent of both parties regarding the choice of law existed. Under Article 45.5, “the choice of law can be made or modified at any moment. If it is subsequent to the contract, it will have retroactive effect to the moment of its conclusion, without prejudice of third parties’ rights and of what was already performed under the law applicable to the contract at that moment”. Article 46 provides that the choice of the applicable law does not imply a forum selection, nor the forum selection implies a choice of the applicable law.

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Cecilia Fresnedo de Aguirre Before the UGAPIL, party autonomy was considered in a restrictive and limited way in Uruguayan private international law.15 The change leading to the solution adopted in the UGAPIL did not occur without substantial debate.16 According to the new rule, party autonomy is a part of the conflict of laws system. Therefore, it is governed by the rules, which define the overarching principles of the Uruguayan PIL system (General Theory).17 That is why chapter I on General Rules is crucial when it comes to interpreting the new solution. For example, Uruguay is a State Party of treaties that forbid party autonomy – like the 1889 and 1940 Montevideo Treaties –, and those treaties will prevail under Article 1. Naturally, international public policy, overriding mandatory rules, fraude à la loi, and harmonization, with its submission to just and fair outcome in the specific case, cannot be abrogated by means of party autonomy. In other words, party autonomy was introduced with the limits imposed by legal certainty and just and fair outcome. In addition to the referred general exceptions to party autonomy, there are several specific exclusions. Article 50 provides for a set of special rules for specific contracts which, though international, are not governed by the previous provisions (Articles 45 to 49) but by this one. These contracts are: contracts which constitute, modify or transfer rights in rem and leasing agreements on real property located in Uruguay (they shall be governed by Uruguayan law), contractual obligations regarding personal legal status, succession or testamentary issues, legal regime of marital property or others emerging from family relationships (they shall be governed by the law applicable to the corresponding category), obligations emerging from credit instruments and the capacity to enter into such obligations (they shall be governed by the law of the place where the obligation is contracted), the form of the drawing, endorsement, guarantee, intervention, acceptance of protest of a credit instrument (they shall be governed by the law of the place in which each one of those acts is performed). Should a credit instrument not specify the place in which the obligation was entered into, the obligation shall be governed by the law of the place where it is payable, and should that place not be specified, by the law of the place where it was issued. Obligations derived from the sale, transfer or commercialization of goods in stock markets, shall be governed by the law of the place where they were issued, 15 Interpreters of Article 2403 of the Appendix of the Civil Code agree that if the foreign law applicable to international legal relationships admits party autonomy, the Uruguayan legal order is necessarily submitted to such regulation. See, among others: D. OPERTTI BADÁN/ C. FRESNEDO DE AGUIRRE, Contratos Comerciales Internacionales. Últimos desarrollos teórico-positivos en el ámbito internacional, Montevideo, 1997; C. FRESNEDO DE AGUIRRE, La Autonomía de la Voluntad en la Contratación Internacional, Montevideo, 1991 and ID., La autonomía de la voluntad en la contratación internacional, in Curso de Derecho Internacional, XXXI, 2004, Comité Jurídico Interamericano, Secretaría General, OEA, p. 323-390; E. TELLECHEA BERGMAN, La Autonomía de la Voluntad en la Contratación Jusprivatista Internacional Contemporánea, Revista de Derecho Comercial y de la Empresa, 1984, No 29-30. 16 For further developments on this matter, see C. FRESNEDO DE AGUIRRE, Private International Law in Uruguay (note 3), p. 87-107. 17 See III (General Rules) above.

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New Uruguayan General Act on Private International Law without prejudice of the law chosen by the parties when it was recognized by such law, and of the provisions of special rules. Consumer contracts shall be governed by the law of the State where the goods are purchased or the services are used by the consumer; if the goods are purchased or the services used in more than one country or the above mentioned law cannot be determined for any other reason, those relationships are governed by the law of the consumer’s domicile; regarding contracts entered into from a distance or where the contract was preceded by specific offers or publicity at the consumers’ domicile, the law of the consumers’ domicile shall be applicable, as far as the consumer had consented to the contract in that State. Individual employment contracts – except in the case of distance contracts – are governed by the law of the place where work is performed or by the law of the employee’s domicile or by the law of the employer’s domicile, at the employee’s choice. Such law shall govern all the aspects of the employment relationship. Insurance contracts are governed by the Act of Insurance Contracts.18 Carriage by sea contracts are governed by the Act on Maritime Commercial Law.19 In our view, carriage of passengers must be subsumed in Article 50.E, which covers consumer contracts, regardless of the means of transport. Air carriage of goods is governed by the 1999 Montreal Convention. Regarding road transportation of goods, Article 45 is not applicable because the carriage of goods by road is documented in adhesion contracts with printed general conditions unilaterally issued by only one party, and therefore the conditions of freedom and consent by both parties are not fulfilled.20 It can be argued that since it is not included in Article 45 nor in Article 50, carriage of goods by road is governed by Article 48.C).2, which provides the traditional solution under the former Article 2399 of the Appendix of the Civil Code. These contracts may be subsumed in Article 50.E), since the consignee or recipient of the cargo uses a service – carriage – and is the final addressee, as a consumer.21 Article 51, in accordance with Article 13 and referring to it and to Article 45, states that usages and principles of international contractual law that are generally accepted and recognized by international organizations of which Uruguay is a Member State are applicable. When there is no valid choice-of-law clause under Article 45, Article 48 provides that contracts are governed by the law of the place of performance which will be construed according to the following criteria, which are exactly the same of those in the 1889 and 1940 Montevideo Treaties on International Civil Law: Contracts on identified (i.e. not fungible) goods are governed by the law of the place where they existed at the time when the contract was made. Contracts on fungible goods or goods identified by their genre are governed by the law of the No 19.678, October 26, 2018. No 19.246, August 15, 2014. 20 As G. BERLIOZ, Le contrat d’adhésion, Paris 1976, p. 13, states that in adhesion contracts the consumer’s consent is not only diminished, regarding the determination of contractual content, but absent. 21 It is worth noticing that Act 17.250 on Consumer Defense includes contracts between natural persons or between legal entities. 18 19

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Cecilia Fresnedo de Aguirre domicile of the debtor of the characteristic obligation of the contract, at the time when the contract was made. The same solution applies to contracts related to the performance of services: if the service relates to goods, the contract is governed by the law of the place where those goods existed at the time when the contract was made; if the service has to be performed in a certain place, the contract is governed by the law of the place where the contract produced (or was supposed to produce) its effects. Apart from those cases, the governing law is the law of the domicile of the debtor of the characteristic obligation of the contract, at the time when the contract was made. There is also a subsidiary criterion in Article 49, which applies when the law applicable to the contract cannot be determined under the previous rules by the time it was made. In such cases, the law of the place where the contract was made applies; if it cannot be determined, the contract shall be governed by the law of the country with the closest connections. B.

Law Governing Torts

Under the UGAPIL the general rule is the lex loci delicti or the lex loci damni, at the claimant’s option (Article 52.1). It can be said that it is a favor laesi solution. This solution is in harmony with the interpretation that Uruguayan courts have made of the former rules, stretching the lex loci delicti rule in some cases in order to allow the law of the place of the injury to apply.22 There are some statutory exceptions to the lex loci delicti or lex loci damni rule in the UGAPIL. Article 52.2 provides that “If the defendant and the claimant had their domicile in the same State, the law of that State should be applied.” This is not a new solution in Uruguay; it was incorporated in the 1995 Bilateral Agreement between Argentina and Uruguay on civil liability emerging from car accidents (Article 2), which was extended to the then four Mercosur Member States23 in 1996 through the San Luis Protocol on the same matter (Articles 3 and 4). Article 52.3 deals with a situation where the lex loci delicti rule cannot be applied: “If the fact that causes the damage occurs during navigation by air, sea, river or lake in an area which is not subject to the exclusive sovereignty of any State, it will be considered that it occurred in the State of the vessel’s flag or of the plain’s registry, without prejudice to what special rules may provide.” This solution is based on Article 27 of the 1889 Montevideo Treaty on International Civil Law. Article 52.4 provides that “Non-contractual obligations that arise from a legal provision are governed by the law applicable to the respective legal “Dionisi de Cornett, Rosa Inés c/ Banco de Montevideo y otro, Incumplimiento contractual” F. 40/2003, JLConcursos 1º, T. RODRÍGUEZ MASCARDI, Sent. 2067/2003, 11/8/2003 (Court of 1st. Instance), and TAC 3º, IUE 7-240/2003, S. KLETT –r-, J. CHALAR, B. MINVIELLE, Sent. No 82/04, de 14/4/04 (Court of Appeals). 23 Argentina, Brazil, Paraguay and Uruguay. In 2006, Venezuela became a Member of MERCOSUR. 22

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New Uruguayan General Act on Private International Law category.” This solution is based on Article 43 of the 1940 Montevideo Treaty on International Civil Law. The UGAPIL does not provide separate choice-of-law rules for different types of torts, though such possibility was discussed in the working group. The idea of including special solutions was even drafted, using as a source of inspiration the Rome II Regulation.24 However, the group finally decided not to include such detailed provisions in a “general act”.

X.

Powers of Attorney

Article 54 states that powers of attorney given abroad to be used in Uruguay shall be governed by the Inter-American Convention on the Legal Regime of Powers of Attorney to be used abroad (CIDIP-I, Panama, 1975). The Convention has been applied since its incorporation in the Uruguayan legal system, in 1975, in all cases, even if the State where the power of attorney was given is not bound to the Convention.

XI. Prescripción Regarding “adverse possession”25 (prescripción adquisitiva), Article 55 incorporates the same solution that appears in both 1889 and 1940 Montevideo Treaties on International Civil Law. It is governed by the lex rei sitae of the asset to be acquired. As for the extinction of an obligation due to the running of a statute of limitation (prescripción extintiva), Article 56 also maintains the solution in the referred Montevideo Treaties. If it is a personal obligation, the extinction shall be governed by the law that governs the correlative obligation. If it is an action in rem, the extinction shall be governed by the lex rei sitae.

24 Regulation (EC) No 864/2007 of the European Parliament and of the Council on the law applicable to non-contractual obligations. 25 Translation of prescripción adquisitiva from G. CABANELLAS DE LAS CUEVAS/ E.C. HOAGUE, Diccionario Jurídico – Law Dictionary, 2 Español – Inglés (Spanish-English), 1998, p. 609.

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XII. International Jurisdiction A.

General Solutions

Article 57 provides for a set of general criteria to determine international jurisdiction when there is no applicable international treaty, which is broader than the former one in the Appendix of the Civil Code. The main concern of the working group on this matter was to grant access to justice and due process. Those criteria, attribute jurisdiction to the Uruguayan courts – under certain conditions – in the following situations: when the defendant’s domicile or contractual domicile is within the jurisdiction; when the defendant has an establishment, agency, branch or any other kind of representation in Uruguayan territory, as far as the contract was made through it or it has intervened in the transaction/act that gives rise to the claim; when the issue that is the object of the claim is governed by Uruguayan law, under Uruguayan conflict-of-laws rules; in case of counterclaims, third party claims or third parties’ intervention; and claims that are closely connected to another one with respect to which Uruguayan courts have jurisdiction. Article 57.G) admits post litem prorogation of jurisdiction in personal actions when the defendant accepts it. Paragraph H) incorporates forum necessitatis, which is an innovation in Uruguayan PIL. It requires that the following conditions are cumulatively fulfilled: that the entertainment by the Uruguayan court is necessary in order to prevent denial of justice; that it is impossible that the cause is adjudicated in another State or it is not reasonably possible to require that the claim is filed abroad; that the case has relevant links with Uruguay; that Uruguayan courts can guarantee due process and that the judgment to be issued can be enforced internationally. Article 57.I) attributes jurisdiction to Uruguayan courts to issue provisional or protective measures, under Article 535 of the General Code of Civil Procedure,26 regardless of international jurisdiction on the merits. B.

Lis Pendens

Another innovation in the UGAPIL is Article 58 on international lis pendens. It requires identity of object, parties and cause of action to enable Uruguayan courts to suspend the proceedings, as far as it is foreseeable that the foreign court will issue a decision that could be recognized in Uruguay. C.

Special Solutions

Article 59 attributes jurisdiction to the Uruguayan courts, in addition to the general criteria in Article 57, regarding precautionary or urgent measures to protect disabled persons, when the disabled person is in Uruguayan territory; regarding child abduction or traffic of minors, to claim their return when they have their habitual 26

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New Uruguayan General Act on Private International Law residence in Uruguay; regarding matrimonial personal relationships, separation and divorce, when the claimant is domiciled in Uruguay; regarding consumer relationships, when the consumer is the claimant, as far as the contract was made in Uruguay, or when the service was rendered or the good delivered within the jurisdiction; regarding employment contracts, when the employee is the claimant and has his domicile in Uruguay. D.

Jurisdiction Regarding Contracts

Under Article 60 the parties to an international contract may choose the jurisdiction. In order to be valid, the choice of court agreement must be in writing, and the agreement must not have been obtained in a clearly abusive way, considering the specific case. The contracts excluded from that possibility are the same as regarding the choice-of-law (Article 50). The agreement can be made by the time when the contract is entered into, or during its life, or once the dispute has already arisen. In the absence of agreement, the other general solutions in chapter XII shall apply. E.

Exclusive Jurisdiction

Article 61 states that Uruguayan courts shall have exclusive jurisdiction exceptionally – therefore this provision must be construed restrictively –, and lacks ancillary jurisdiction in relation to issues that might crop up regarding the same case. Matters that are considered reserved to the exclusive jurisdiction of Uruguayan courts are, for example, those strictly concerned to in rem rights on assets located in Uruguayan territory; Uruguayan registry systems; and industrial and intellectual property protection regimes, among others.

XIII. Conclusion The UGAPIL updates Uruguayan PIL solutions regarding several matters but maintains those that, although in force as of 1889, not only retain their effect and operativity but also their technical robustness. In our view, there are three main innovations: the admission of party autonomy, an expansion of the grounds of jurisdiction, and the regulation of parentage as an autonomous category and without discriminating among children e.g. born in or out of wedlock. As for the latter, the UGAPIL fulfils the requirements of international Conventions on Human Rights, which was a pending issue in Uruguayan PIL. The broader set of criteria to ascertain jurisdiction incorporated in the UGAPIL will improve access to justice. Regarding party autonomy, the UGAPIL innovates by allowing the parties to choose the applicable law and the forum in contractual relationships – as a Yearbook of Private International Law, Volume 22 (2020/2021)

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Cecilia Fresnedo de Aguirre general rule and not exceptionally, as it was in the former system – though within the legal framework of the UGAPIL itself, including its general principles, fundamental principles, and rules of interpretation, most of them referred to therein. Courts will be the guardians of the fulfilment of these fundamental principles in each case and they will be in charge of impeding abuses from the party that is contractually stronger over the weaker one. The latter is mainly the party that cannot negotiate the content of the contract. This occurs in adhesion contracts, standard form contracts and alike, no matter whether the party is a natural person or a legal entity, civil or commercial.

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RECOGNITION AND ENFORCEMENT OF FOREIGN DECISIONS IN MERCOSUR LETTERS ROGATORY (CARTA ROGATÓRIA) AND NATIONAL CIVIL PROCEDURE Marcel ZERNIKOW*

I. II.

IV.

Introduction Letters Rogatory for the Transmission of Foreign Decisions A. Letters Rogatory – Different Concepts of Judicial Co-Operation 1. Letters Rogatory under National Civil Procedure 2. Letters Rogatory as a Mechanism for Judicial Co-Operation under International Treaties B. Letters Rogatory – The Transmission of Decisions between MERCOSUR States 1. Letters Rogatory 2. Letters Rogatory for the Recognition and Enforcement of Decisions The Law Applicable to Recognition and Enforcement Proceedings in MERCOSUR States A. National Civil Procedure in Recognition and Enforcement Proceedings 1. The lex fori Principle – A Common Principle in International Treaties 2. The lex fori Principle in the Las Leñas Protocol B. The Potential of Developing Common Procedural Principles 1. Recognition and Enforcement and EU Civil Procedure 2. Towards a Uniform Procedure in MERCOSUR? Conclusion

I.

Introduction

III.

The effect of foreign decisions is at the heart of the news.1 In this context, it might be useful to consider the different approaches to recognition and enforcement of * PhD in European and International Law at the University Paris I PanthéonSorbonne (2019), Research Associate (IRJS), Visiting Lecturer at the University of the State of Rio de Janeiro (2019-2020) and Guest at the Max Planck Institute Hamburg (2021). 1 The recent Hague Convention No 41 of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters has already been signed by Uruguay, Ukraine and Israel.

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Marcel Zernikow foreign decisions. As has recently been underlined by Cuniberti, there is a special need to revisit this topic.2 From our perspective, the most significant results in this matter have been achieved at the regional level such as in the European Union (hereinafter EU).3 This is also reflected by the fact that the EU negotiates from a common standpoint at the Hague Conference.4 Starting from this statement, our purpose is to focus on the specificities of the regulation of recognition and enforcement by international organisations at the regional level. The Brussels regime progressively introduced the possibility of recognising and enforcing decisions all over the territory of the European Economic Community, and later the EU, without any further proceedings.5 This was a decisive step because recognition and enforcement proceedings would otherwise imply the application of the national law of each requested State which would contribute to a multiplication of legal regimes. Indeed, the lex fori was considered as an obstacle to legal integration within a common market where laws continued to diverge considerably in this respect.6 Long and costly proceedings have regrettably resulted.7 In an integrated economic area, the objectives States set for themselves and the means they have implemented to achieve them help to some extent to indicate which solutions can be envisaged to resolve the difficulties raised in the Member States. Similarly, at the level of MERCOSUR, the private international law Protocols were based on Article 1 of the Treaty of Asunción which refers to legal harmonisation.8 Interestingly, some of the four founding States (Brazil, Argentina, 2 G. CUNIBERTI, Le fondement de l’effet des jugements étrangers, Recueil des Cours, Vol. 394, Leiden/ Boston 2019, No 1. 3 In this sense, A.T. VON MEHREN, Theory and Practice of Adjudicatory Authority in Private International Law: A Comparative Study of the Doctrine, Policies and Practices of Common- and Civil-Law Systems, Recueil des Cours, Vol. 295, Leiden/ Boston 2003, p. 407. For a comprehensive study, cf. H. GAUDEMET-TALLON/ M.-É. ANCEL, Compétence et exécution des jugements en Europe, Paris 2018. 4 H. MUIR WATT, Le droit international privé au service de la géopolitique: les enjeux de la nouvelle Convention de la Haye du 2 juillet 2019 sur la reconnaissance et l'exécution des jugements étrangers en matière civile ou commerciale, Rev. crit. dr. int. pr., 2020, p. 427 et seq. 5 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters of 27 September 1968 (hereinafter Brussels Convention), Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter Brussels I Regulation), Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (hereinafter Brussels Ibis Regulation). 6 G.A.L. DROZ, Compétence judiciaire et effets des jugements dans le Marché commun, Paris 1972, p. 3. 7 Ibid., p. 8. 8 A. DREYZIN DEL KLOR, El derecho internacional privado del MERCOSUR en Argentina, in L.B. SCOTTI/ L. KLEIN VIEIRA (eds), El derecho internacional privado del Mercosur en la práctica de los tribunales internos de los Estados Partes, Asunción 2020, p. 10 et seq.

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Recognition and enforcement of foreign decisions in MERCOSUR Uruguay and Paraguay) had already concluded various bilateral agreements with each other which had served as a basis for legal unification in the ambit of the establishment of a common market after 1991. However, the solutions adopted within MERCOSUR diverge from those of the EU. Differences can be explained by the doctrine under which recognition and enforcement of foreign decisions is evoked. Cuniberti recalled the necessity of studying the foundations of the reception of foreign decisions in different legal orders while he concentrates his study on an opposition between Civil Law and Common Law traditions.9 We are particularly interested in the specificities of the law of recognition and enforcement of foreign decisions in MERCOSUR. Whereas European countries base their legal regimes on the exequatur, South American countries continue to envisage these matters as belonging to judicial co-operation (also known as Rechtshilfe in German or as coopération judiciaire in French). Studying the recognition and enforcement of decisions as an aspect of civil procedure corresponds to a Romanist tradition.10 Judicial co-operation has been employed in the past for recognition and enforcement of foreign decisions in Europe which means that a foreign State organ asks those of the requested State to grant res judicata or executive force to the decision.11 In this procedure, the interested parties have a minor role. Nowadays, recognition and enforcement usually works outside the context of judicial co-operation which means that the foreign decision will produce effect after a decision by the country of destination’s organs. As Martiny underlines, recognition and enforcement in many countries is to be distinguished from judicial co-operation, in the sense that the competent judges within the requested State do not act on behalf of a foreign court.12 In several South American conventions, recognition and enforcement continue to be based on judicial co-operation. Under national laws such as Article 27 of the Brazilian Code of Civil Procedure (hereinafter CPC), judicial co-operation (cooperação jurídica internacional in Portuguese) comprises: I – service of documents; II – collection of evidence and information requests; III – recognition and enforcement of decisions; IV – granting of provisional measures; V – international judicial assistance; and VI – any other judicial measure which is not prohibited by Brazilian law. Decisions are considered as being effective only within the territory of the State where they emanate from, unless they undergo homologation (homologação)13 proceedings. This adds to the legal diversity of recognition and enforcement procedures. Starting from this Brazilian specificity, it might be interesting to analyse the regional harmonisation of recognition and enforcement proceedings in MERCOSUR. At the regional level, an important facilitation has been achieved by the introduction of letters rogatory (carta rogatória) for the transmission of foreign G. CUNIBERTI (note 2), No 3 et seq. B. AUDIT, Le droit international privé en quête d’universalité, Recueil des Cours, Vol. 305, Leiden, 2003, No 9. 11 D. MARTINY, Anerkennung ausländischer Entscheidungen nach autonomem Recht, Band III/1, Tübingen 1984, No 68. 12 Ibid. 13 Article 960 et seq. CPC. 9

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Marcel Zernikow decisions from one country to another (II). However, there is no common recognition and enforcement procedure. Therefore, recognition and enforcement of foreign decisions continues to depend on national procedural laws which might encourage us to reflect on an emerging common approach at the MERCOSUR level (III).

II.

Letters Rogatory for the Transmission of Foreign Decisions

The principle of sovereign independence of States is traditionally opposed to the fact that a judge performs an act beyond the borders of his State.14 This also explains the utility of letters rogatory as an expedient, which consists of the mandate given by a judge to another judge or authority, inviting the latter to accomplish within his jurisdiction any judicial, procedural or investigative act.15 More generally, letters rogatory are used as a mechanism for communication between two courts, which means that they can either be employed within the same jurisdiction or outside. In the latter case,16 they are facultative for the judge because the principle of territoriality would impede any obligation to execute foreign judicial acts.17 In international judicial proceedings, letters rogatory are sent from one central authority to another. This is one of the four means of transmission of letters rogatory.18 Different advantages have driven the choice of this mechanism 14 C. GAVALDA, La coopération internationale en matière de Procédure civile, Travaux et recherches de l’Institut de droit comparé, Paris, 1962, p. 327; C. TIBURCIO, The Current Practice of International Co-Operation in Civil Matters, Recueil des Cours, Vol. 393, Leiden/ Boston, 2018, p. 55 et seq. On this principle in public international law, cf. J. DELBRÜCK/ R. WOLFRUM, Völkerrecht, Berlin/ New York 1988, p. 214 et seq. 15 F. MONIER, Des commissions rogatoires en droit international, Paris, 1909, p. 6. 16 For terminological clarification, one should note that passive letters rogatory describe those which the judge receives from another jurisdiction for accomplishing the measures requested whereas active letters rogatory are those emanating from the jurisdiction itself which are sent to another one (cf. P. SCHLOSSER Jurisdiction and International Judicial and Administrative Co-Operation, Recueil des Cours, Vol. 284, Leiden/ Boston 2000, p. 31 et seq.). 17 F. MONIER (note 15), p. 7. 18 The four contemporary ways include the diplomatic or consular channel, the transmission via central authorities, the direct transmission and the transmission via postal service and others, cf. A. DE CARVALHO RAMOS, Direito Internacional Privado e seus Aspectos Processuais: A Cooperação Jurídica Internacional, in W. MENEZES/ A. DE CARVALHO RAMOS (eds), Direito Internacional Privado e a nova Cooperação Jurídica Internacional, Belo Horizonte 2015, p. 8 et seq. For a historical overview on the transmission of letters rogatory to Brazil, cf. N. DE ARAÚJO, A Convenção Interamericana sobre Cartas Rogatórias e as Conseqüências de sua Adoção para o Brasil, in P.B. CASELLA/ N. DE ARAÚJO (eds), Integração jurídica interamericana: as Convenções Interamericanas de Direito Internacional Privado (CIDIPs) e o direito brasileiro, São Paulo 1998, p. 240 et seq.

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Recognition and enforcement of foreign decisions in MERCOSUR for the transmission of decisions for recognition and enforcement within MERCOSUR. The object of the present study is to illustrate the peculiarities of letters rogatory as a mechanism for judicial co-operation (A), before explaining the use MERCOSUR makes of them for the transmission of foreign decisions (B). A.

Letters Rogatory – Different Concepts of Judicial Co-Operation

Historically, letters rogatory were used in European empires for judicial cooperation between the different States composing them. This also concerned recognition and enforcement of foreign decisions. Recognition and enforcement of foreign decisions by letters rogatory has since been progressively abolished. In Germany, for example, under the Code of Civil Procedure of 1877, enforcement by letters rogatory was replaced by a specific enforcement proceeding.19 On the South American continent, several treaties, however, still base recognition and enforcement of foreign decisions on judicial co-operation. Letters rogatory continue to be an important instrument for judicial cooperation. That is to say, they appear essentially in the context of requests for service of documents, collection of evidence and information about foreign law. Moreover, in the field of recognition and enforcement of foreign decisions, they have practical relevance. Their scope varies depending on the national civil procedure laws (1) or international treaties instituting them (2). 1.

Letters Rogatory under National Civil Procedure

Letters rogatory have been conceived for internal judicial proceedings (a). Based on theories of public international law, they appear also as a mechanism for international judicial co-operation (b). a)

Letters Rogatory in Internal Judicial Proceedings

First of all, letters rogatory can be identified as a mechanism for accomplishing investigative measures in a judicial proceeding within the same territory.20 As the competent judge may not have access to all the necessary elements within his particular jurisdiction, he or she might have to solicit a judge within another local jurisdiction. This reflects the original use of letters rogatory. Letters rogatory are said to be part of the Roman law tradition, whereas the Anglo-American culture used to express hostility towards their use for matters other than testimony.21 In the D. MARTINY (note 11), No 43 et seq. refers himself to §§ 660 and 661 of the German Zivilprozessordnung (ZPO). 20 L. CADIET/ E. JEULAND, Droit judiciaire privé, Paris, 2020, No 578 et seq. 21 E. GUERRA, La carta rogatoria o exhorto internacional ante las cortes Norteamericanas, New York 1935, p. 13 et seq. 19

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Marcel Zernikow Holy Roman Empire, recognition and enforcement requests emanating from another State of the Empire were also based on judicial co-operation. In contrast, decisions from outside the Empire were principally not recognized and enforced.22 Technically, we refer to requisitions (letters of request) by a foreign judge. This mechanism remained in force until the Reichszivilprozessordnung of 1877.23 From then on, all decisions by judges from the Empire were considered as national and thus provided with executory force.24 Originally conceived for judicial proceedings within the territory, but outside the district of the local judge, letters rogatory continue to be relevant for judicial co-operation between judges within a State. Under Brazilian law, different mechanisms exist in civil procedure for seeking the assistance of another judge with procedural acts the court cannot otherwise legitimately accomplish.25 These procedural acts are: service of documents (summons, subpoenas and notification), investigation (collection of evidence) and constriction (seisures or securities).26 Carta rogatória is exclusively used for international judicial co-operation (Articles 36, 237 II CPC). In internal judicial proceedings, measures can be requested by carta precatória (Article 237, III CPC) if the judge does not have competence to accomplish a judicial act. This mechanism is issued for practicing acts outside the territorial limits of a court, a district, a judicial section or a subsection, except in those cases provided for by law (Article 236, § 1 CPC). In other words, the principle of territorial competence of the judge limits the legitimate exercise of his jurisdiction.27 The Brazilian legislator distinguishes the latter mechanism from carta de ordem (Article 237, I CPC) which is used for requests by judges of an inferior instance. In this respect, it is irrelevant if the judge needs to practise these acts outside his territorial district or not (Article 236, § 2 CPC).28 b)

Letters Rogatory for International Judicial Co-Operation

On this basis, letters rogatory have been developed as mechanisms for the international co-operation between judges of different countries. National civil procedure D. MARTINY (note 11), No 21. Ibid., No 27. 24 Ibid., No 44. 25 D.A. ASSUMPÇÃO NEVES, Novo Código de Processo Civil Comentado, Salvador 2017, p. 400. 26 Ibid. 27 Ibid., p. 397. 28 Similarly, under French law, commissions rogatoires are used in the judicial proceeding (instance) for providing the judge seized with all the necessary facts on which will depend the judicial decision (Article 143 French CPC). F. MONIER (note 15), p. 5 et seq., who studied letters rogatory, found that they are a mechanism used within a judicial proceeding. This makes it necessary to identify a procedural link (cf. K. MEHTIYEVA, La notion de coopération judiciaire, Paris 2020, p. 33 et seq.) ou lien d’instance in French (cf. L. CADIET/ E. JEULAND (note 20), No 480 et seq.). It can be defined by its constituting elements which are the parties in a proceeding and the object. 22

23

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Recognition and enforcement of foreign decisions in MERCOSUR legislations provide for letters rogatory in the context of international civil procedure. Brazilian law disposes of different mechanisms for international judicial co-operation of which letters rogatory are an example. They are the traditional way of conducting procedural service of documents or collecting evidence, both in civil and criminal law.29 Therefore, letters rogatory can be defined as an instrument for co-operation used for the practice of acts such as service of summons (citação), subpoena (intimação), judicial notification (notificação), collection of evidence, information on foreign law and enforcement of provisional measures, whenever the foreign act constitutes a decision to be performed in Brazil.30 Therefore, in the absence of a specific treaty, measures requested by foreign authorities to the Brazilian ones and vice versa have to be made by letters rogatory.31 Active letters rogatory with a view to carrying out procedural acts abroad respond to similar formal requirements as the mechanisms for internal judicial cooperation (Article 260 CPC). They need to contain: I – the indication of the judges of origin and those needing to accomplish the act; II – the entire content of the petition, the court order and the instrument of the mandate given to the lawyer; III – the mention of the procedural act that constitutes the object; and IV – the judge’s signature. The transmission of letters rogatory is that provided in the international convention; in the absence of any treaty or convention, the letter rogatory will be dispatched through diplomatic channels.32 There is no provision for the letter rogatory to be sent directly by the interested party, unless otherwise provided by a treaty. When a lawsuit is filed before the foreign justice and measures have to be carried out in Brazil, Brazilian authorities will accomplish the measures upon a passive letter rogatory, unless a treaty between Brazil and the requesting country provides otherwise. The competent judicial authority for granting the exequatur to

29 C. TIBURCIO, Avanços em matéria de cooperação jurídica internacional, Revista do Tribunal Regional Federal da 4a Região, No 89, 2015, p. 203. 30 H. THEODORO JÚNIOR, Curso de direito processual civil, Vol. III, Rio de Janeiro 2017, p. 202 et seq. 31 C. TIBURCIO (note 29). 32 Ibid., who refers herself to STF, DJ 17 December 2001, Petição Avulsa 146.418/2001, Report Minister MARCO AURELIO: “Concerning active letters rogatory, that is, those sent by Brazilian judges to the Justice of other countries, the procedural rules do not foresee the intervention of the President of the Supreme Federal Court. They should be addressed by the national judges themselves to the Minister of Justice, who, in turn, will forward them to the Ministry of Foreign Affairs of Brazil, so that the Foreign Ministry, then, proceeds to send the letter rogatory to the Brazilian diplomatic missions located abroad, or the rule established in an international convention, if any, will be observed. The Brazilian diplomatic missions, for their part, will submit letters rogatory from Brazil to the appreciation of the competent authorities of the foreign State to which they were assigned. (...), the civil procedural legislation does not specifically provide for this procedure in terms of active letters rogatory of a civil nature. Customary practice, however, has legitimized, even in the context of active civil letters rogatory, the prior remittance of the respective instruments to the Ministry of Justice, who transmits them to the Ministry of Foreign Affairs” (translated to English).

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Marcel Zernikow letters rogatory from abroad is a centralized body.33 Since the Constitution of 1934,34 the President of the Federal Supreme Court (Supremo Tribunal Federal, STF) has been competent for granting the exequatur to letters rogatory from abroad. The Constitutional Amendment No 45/2004 transferred this competence to the Highest Court (Superior Tribunal de Justiça, STJ). The Code of Civil Procedure is silent on the granting of the exequatur. Resolution No 9 of the STJ currently regulates the procedure. Articles 12 and 17 of the Introductory Act to Brazilian Law (LINDB) contain further requirements: the foreign request should, in principle, receive the exequatur and it can only be denied in limited cases such as that of harm to public policy.35 Until 2015, letters rogatory were considered the exclusive mechanism for international judicial co-operation.36 The New Code of Civil Procedure added an alternative mechanism of judicial co-operation: direct assistance (auxílio direto), which was deemed to contribute to celerity and effectiveness of judicial co-operation. While letters rogatory are based on a decision by a foreign authority handed down in accordance with its own laws, the request for direct assistance is not based on any prior decision. Therefore, the competent Brazilian judicial authority has to decide, in accordance with Brazilian law, on the feasibility of this measure. In other words, direct assistance is based on a decision by a national authority which, in light of Brazilian law, determines the possibility of the request.37 Both types of requests are transferred via the central authority (Articles 37 and 38 CPC) and cannot offend the public policy of the requested State (Article 39 CPC). Finally, one should note that direct assistance cannot be used for enforcement (Article 40 CPC). For the latter, a letter rogatory or a decision homologating the foreign judgment is needed (article 515, VIII, IX CPC). Concerning the admission of letters rogatory, one should highlight that the Brazilian legislator reintroduced in 2015 the reciprocity requirement for the accomplishment of measures in the field of judicial co-operation (Article 26, § 1 CPC), which is not the case of the recognition of foreign decisions (§ 2). This new requirement would not apply in the presence of a bilateral or multilateral treaty such as, for example, those concluded in the ambit of MERCOSUR. In this con-

Ibid. Article 77 of the Brazilian Constitution of 1934. 35 Article 17 of the Introductory Act to Brazilian Law (LINDB), as amended by Act No 12376 of 2010 which replaces Decree-Law No 4657 of 4 September 1942 (Introductory Act to the Civil Code, LICC): Laws, acts and decisions from other countries as well as any declarations of will are not effective in Brazil when they violate national sovereignty, public policy and good morals. 36 One may note that Article 7 of the Resolution No 9 of the Presidency of the STJ already contained a provision on direct assistance. Until the project of the Law for the New Code of Civil Procedure (Article 35), letters rogatory were supposed to be the only mechanism for judicial co-operation. However, Act No 13.105/2015 instituting the New Code of Civil Procedure added direct assistance as a concurrent mechanism of judicial cooperation. On this evolution, cf. C. TIBURCIO (note 29), p. 229 et seq. 37 C. TIBURCIO (note 29), p. 229 et seq. 33 34

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Recognition and enforcement of foreign decisions in MERCOSUR text, one should remind oneself that such a requirement has been traditionally absent from the Brazilian Code of Civil Procedure. The accomplishment of the measures requested via letters rogatory gives rise to a limited litigation (contenciosidade limitada38). These proceedings endeavour to guarantee the respect of due process (Article 36 CPC, caput).39 Therefore, parties benefit from a restricted right of defence. The defence is limited to the discussion as to whether or not the requirements are met for the foreign judicial decision to take effect in the territory. In any event, the Brazilian judicial authority cannot review the merits of the foreign judicial act (Article 36, § 1 and § 2).40 Compared to cartas de ordem and cartas precatórias, one should note that letters rogatory for international judicial proceedings can be refused by the judge on different grounds. As for the scope of letters rogatory, in many legal systems such as in France,41 they are incompatible with recognition and enforcement of foreign decisions, whereas under Brazilian law, it is possible to use letters rogatory for the enforcement of certain foreign decisions. 2.

Letters Rogatory as a Mechanism for Judicial Co-Operation under International Treaties

International conventions42 are of crucial importance for the regulation of judicial co-operation. In South American treaties, letters rogatory are an important mechanism for judicial co-operation in a broad sense, covering all measures and instruments allowing a State to exercise its jurisdiction. As to the admissibility and the way in which letters rogatory are complied with, the provisions of international conventions are relevant in the first place. Only in the event that there is no international convention, the standards of the Brazilian Code of Civil Procedure apply.43 This is an exceptional case of primacy of international treaties over national (infraConstitutional) law.44 38 J. DOLINGER/ C. TIBURCIO, Direito internacional privado, Rio de Janeiro 2018, No 601 et seq. (e-book). 39 H. THEODORO JÚNIOR (note 30), p. 202. 40 Ibid., p. 203. 41 Articles 734 to 734-2 of the French CPC refer to commissions rogatoires which are destinated to a foreign jurisdiction whereas its Articles 735 to 748 concern those emanating from another jurisdiction. Concerning letters rogatory from a foreign jurisdiction, the legislation mainly focuses on the grounds for refusal. Thus, the requested judge has to refuse to accomplish the requested measure if it may attain sovereignty or public security of the French State (Article 743 of the French CPC), cf. for example, Paris 1ère ch. A, 19 January 2000, D. 2000, inf. rap. 61. As for letters rogatory destinated to a foreign jurisdiction, they are addressed either directly to foreign judicial authorities or indirectly via French diplomatic or consular authorities. In the latter case, their accomplishment requires consent by the requested judge. 42 International Protocols elaborated in the framework of MERCOSUR will be treated separately below. 43 C. TIBURCIO (note 29). 44 Ibid.

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Marcel Zernikow Whereas almost all international conventions on judicial co-operation use the mechanism of letters rogatory, their scope diverges widely in different international treaties. Letters rogatory are generally used for requesting simple measures (a), but in some conventions on the South American continent they are also common for recognition and enforcement of foreign decisions (b). a)

International Treaties on Letters Rogatory

The Hague Convention on Civil Procedure finally adopted in 189645 bases itself on the mechanism of letters rogatory.46 Its Article 5 stipulates that, in civil or commercial matters, the judicial authority of a State may, in accordance with the provisions of its legislation, address itself by letter rogatory to the competent authority of another State to ask it to accomplish judicial acts. The transmission of letters rogatory works via diplomatic channels but States Parties can expressly agree to direct communication between their authorities. The requested judicial authority needs to verify whether the document is authentic and the accomplishment of the letter rogatory falls within its competences (Article 6). In addition, enforcement could be refused if the State on whose territory it should take place, considers it likely to infringe its sovereignty or its security. The Hague Conventions of 190547 and 195448 contain respectively a Title II related to letters rogatory.49 Under these conventions, the transmission of letters rogatory is normally carried out through diplomatic or consular channels, which creates certain delays in practice. The Hague Service Convention institutes the central authority.50 “Letters of request” are further regulated by the Hague Evidence Convention.51 The latter conventions replace the diplomatic or consular channel by the more direct means of the central authority.52 However, recognition and enforcement of decisions has been reserved for a later convention which could only be adopted in 2019.53 It does not refer to letters rogatory.

45 The Hague Convention on Civil Procedure of 14 November 1896 entered into force on 25 May 1899. 46 T.M.C. ASSER, La Convention de la Haye du 14 novembre 1896 relative à la procédure civile, The Hague 1901, p. 81. 47 Convention of 17 July 1905 on Civil Procedure. 48 Convention of 1 March 1954 on Civil Procedure. 49 Cf. C. GAVALDA, Les commissions rogatoires internationale en matière civile et commerciale, Rev. crit. dr. int. pr., 1954, p. 15 et seq. 50 Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. 51 Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters. 52 G.A.L. DROZ (note 6), p. 178. 53 Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

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Recognition and enforcement of foreign decisions in MERCOSUR As far as South American regional conventions are concerned, one should note those multi- and bilateral treaties to which Brazil is a State Party.54 Among the earliest is the Inter-American Convention on Letters Rogatory55 elaborated in the framework of the Organisation of American States (OAS) and the Convention on Private International Law of Havana (Bustamante Code56). Bilateral treaties link Brazil with Argentina, such as the Treaty on the Enforcement of Letters Rogatory and its Protocol; with Bolivia, such as the Treaty on the Enforcement of Letters Rogatory; with Peru, such as the Treaty on Reciprocal Enforcement of Letters Rogatory and its Additional Treaty; with Uruguay, such as the Protocol Related to Enforcement of Letters Rogatory. It is interesting to note that letters rogatory do not systematically comprise executory letters rogatory, that is those which are related to enforceable measures. This exclusion is reiterated by the Inter-American Convention on Letters Rogatory (1975) which establishes the object of letters rogatory in its ambit (Article 2) and expressly excludes executory letters rogatory from its scope (Article 3). International conventions on letters rogatory have an important impact on national legislation in the field of judicial co-operation. By instituting central authorities or diplomatic channels for the transmission of foreign requests, they help reducing certain formalities and waiving the swearing, the authentication or any other legalisation requirement for foreign documents (Article 41 CPC). b)

Letters Rogatory for the Recognition and Enforcement of Foreign Decisions

Executory letters rogatory have a long history in South America because they have already been mentioned in the Treaty for the Establishment of Uniform Rules in Private International Law, also called the Lima Treaty of 1878.57 The latter established a single letter rogatory requirement, whether for judicial assistance and for the recognition and enforcement of foreign judgments.58 Other bilateral conventions from the same period pointed in this direction.59 One has to note, however, that this treaty never entered into force. Several treaties and conventions have been ratified by South American countries in this field. There has notably been debate on their articulation with each other and between bilateral and multilateral treaties of the regional economic

Cf. C. TIBURCIO (note 29). Inter-American Convention on Letters Rogatory of 30 January 1975 (Panama). 56 It is also known as Codigo de Derecho Internacional Privado in Spanish which was adopted in the Convention on Private International Law of Havana of 20 February 1928. 57 Tratado para establecer reglas uniformes de derecho internacional privado, Lima, 1878. 58 C. TIBURCIO (note 14), p. 85. 59 Ibid. 54 55

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Marcel Zernikow organisations such as MERCOSUR.60 For the purpose of regional integration, one might also recall some experiences made in Europe, in the sense that bilateral conventions, by establishing a multitude of rules and specific solutions, are far from contributing to a common standpoint at the level of the integrated bloc.61 In the end, it is also important to remind oneself of the rules governing the articulation between different conventions at the regional level. By virtue of Article 30 of the Vienna Convention,62 one must apply the most recent of the successive treaties relating to the same subject matter, without prejudice to possible compatibility clauses contained in treaties. Regarding the articulation of the Las Leñas Protocol with other bilateral or multilateral conventions, the former states that conventions which have been concluded before it can only be applied to the extent that they do not contradict the protocol (Article 35). Nevertheless, the Amending Protocol evokes the principle of favour according to which one must apply all those conventions concluded before which are more beneficial for international co-operation. As this protocol has never been ratified by Uruguay, it has not entered into force. Nevertheless, the Accession Treaty of Bolivia and Chile to the Las Leñas Protocol contains the same modifications (Article 33) which, since the entry into force of this same treaty, bind the States Parties except for Uruguay.63 Unless there is a more favourable procedure provided for in another treaty, the relevant treaty between MERCOSUR States is the Las Leñas Protocol.64 B.

Letters Rogatory – The Transmission of Decisions between MERCOSUR States

The Leñas Protocol on Co-operation and Legal Assistance in Civil, Commercial, Labour and Administrative Matters, signed on 27 June 1992 was the first Protocol on private international law within MERCOSUR. It has been in force in Brazil since 13 November 1996.65 In 1997, a complementary agreement comprising 60 Cf M.B. NOODT TAQUELA, Applying the Most Favourable Treaty or Domestic Rules to Facilitate Private International Law Co-Operation, Recueil des Cours, Vol. 377, Leiden/ Boston, 2016, p. 121 et seq. 61 P. MERCIER, Effets internationaux des jugements dans les Etats du Marché commun, Genève, 1965, p. 141 et seq. 62 Vienna Convention on the Law of the Treaties of 23 May 1969. 63 The Agreement on Co-operation and Legal Assistance in Civil, Commercial, Labour and Administrative Matters between the States Parties of MERCOSUR and the Republics of Bolivia and Chile was signed in Buenos Aires on 5 July 2002. It was promulgated in Brazil by Decree No 6891 of 2 July 2009. It has not entered in force in Uruguay though. 64 On the more favourable provisions in the Montevideo Treaty on International Civil Procedure Law of 1940 which applies between Uruguay, Argentina and Paraguay, cf. M.B. NOODT TAQUELA/ V. RUIZ ABOU-NIGM, The Draft Judgments Convention and its Relationship with other International Instruments, this Yearbook, 2017/2018, p. 470 et seq. 65 It was promulgated by Decree No 2.067 of 12 November 1996.

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Recognition and enforcement of foreign decisions in MERCOSUR standard forms has been adopted.66 Apart from the four founding States, these provisions also apply in relations with Chile and Bolivia. While the Las Leñas Protocol provides for letters rogatory in general (1), it is interesting to highlight the special regime of letters rogatory for the purpose of recognition and enforcement of foreign decisions (2). 1.

Letters Rogatory

The peculiarity of the regime of letters rogatory within MERCOSUR lies in the wide domain in which they can be used. More precisely, the Protocol of Las Leñas refers to letters rogatory for service of documents, taking of evidence but also recognition and enforcement of foreign decisions. The material scope of the Protocol covers civil, commercial and administrative law, labour law and even some aspects of criminal law. The transmission of letters rogatory operates via the central authorities designated by each Member State. In countries where letters rogatory have already been employed, the main facilitating aspect achieved by the Las Leñas Protocol lies in the implication of central authorities. In other words, the central authority67 of the requested State acts as the link between the requesting judge and the foreign central authority which is itself in contact with the requested judge. Thus, the central authority’s main functions are receiving and transferring requests, information or official documents between States Parties. For executing a requested measure, the Brazilian central authority receives a letter rogatory which it sends to the Highest Court for the granting of the exequatur. Among the letters rogatory in the sense of the Las Leñas Protocol, one can distinguish a “first category”68 which corresponds to those employed in many legal systems, that is for requests for service of documents and collection of evidence (Article 5). Article 2 dictates the manner in which letters rogatory are transmitted from one central authority to another. Article 5 describes the exact scope of letters rogatory for service of documents and evidence collection which comprises: (a) the accomplishment of judicial measures, such as service of process, writs, summonses, notifications and similar proceedings; and (b) the reception and production of evidence. The formal requirements are provided in Articles 6 and 7. In this context, one should give special attention to the refusal of letters rogatory which is only provided for if they contradict the public policy of the requested State (Article 8). 66 Supplementary Agreement to the Protocol on Judicial Co-operation and Mutual Assistance in Civil, Commercial, Labor and Administrative Matters, MERCOSUR/CMC/ DEC n° 5/97. 67 In Brazil, the designated central authority is the Departamento de Recuperação de Ativos e Cooperação Jurídica Internacional (DRCI) of the Ministry of Justice. 68 C. TIBURCIO, Cooperation in Civil Judicial Matters, M.T. FRANCA FILHO/ L. LIXINSKI & M.B. OLMOS GIUPPONI (eds), The Law of Mercosur, Oxford/ Portland 2010, p. 211 et seq.

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Marcel Zernikow Otherwise, letters rogatory need to be executed ex officio. For this purpose, it does not matter if the requested State would have had exclusive jurisdiction.69 As Professor Tiburcio underlines, the regime of “first category” letters rogatory is very permissive because it only allows rejection of those requests which harm the public policy of the requested State.70 2.

Letters Rogatory for the Recognition and Enforcement of Decisions

The “second category”71 of letters rogatory refers to those requests whose object is the recognition and enforcement of foreign decisions. The Las Leñas Protocol does not differentiate between recognition and enforcement of foreign decisions. Therefore, the same procedure should be applied for enabling the decision to produce res judicata or to serve as an enforcement title. Like the Bustamante Code, the rules of the Las Leñas Protocol relating to recognition and enforcement also concern arbitral awards (Article 19).72 The peculiarity of the Las Leñas Protocol, however, is that it uses letters rogatory. Furthermore, a great novelty resulting from the Las Leñas Protocol consists in entrusting requests for recognition and enforcement to the central authorities (Article 2), which communicate directly through letters rogatory (Article 19). More precisely, the foreign decision is sent by the authorities of the foreign country via letter rogatory, to those of the country in which it must be recognized and enforced. This procedure places the recognition and enforcement of foreign decisions in the context of judicial co-operation (Articles 18 to 24). Recognition and enforcement are achieved on the basis of a single notification in the context of a request addressed by the central authority of the requesting State to that of the requested State (Article 19). As it is the case of all letters rogatory, the request for recognition and enforcement is made directly to the court of origin. Thus, the letter rogatory circulates within the framework of the characteristic procedure of judicial co-operation, without the defendant being cited.73 However, this procedure was deemed too cumbersome, due to the distances in South America and the additional step of involving central authorities. Thus, Article 19 of the Amending Protocol, which also appears in the Accession Agreement of Bolivia and Chile,74 provides for the possibility given to the interested parties of presenting the foreign decision directly to the requested judge. This Agreement even provides, as an alternative, for the possibility of resorting to diplomatic channels. As the transmission of foreign decisions via central authorities guarantees authenticity to them, their free movement does not require any legalisation by the Ibid., p. 214. Ibid. 71 Ibid. 72 They must be read in the context of the Buenos Aires Protocol on International Jurisdiction in Contractual Matters of 4 May 1994, promulgated in Brazil by Decree No 2095 of 17 December 1996 which admits the validity of the arbitration clause. 73 STF, DJU 9 May 1997, AgRg CR 7613/AT, Report Minister Sepúlveda Pertence. 74 Supra. 69 70

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Recognition and enforcement of foreign decisions in MERCOSUR consulate, as long as they are transmitted by central authorities or via the diplomatic channel, which is an important facilitation.75 As Brazil only became a State Party to the Hague Apostille Convention76 in 2016, the question of the legalisation of decisions likely to be recognized or enforced in Brazil was still an issue. Since the entry into force of the aforementioned convention, legalisation has been replaced by the apostille. In fact, foreign decisions usually needed to be legalized or have an apostille affixed by the competent Brazilian consulate (article 216-C of the STJ's internal regulations, RISTJ). In summary, one may note that, under Brazilian law, there is no clear differentiation between judicial co-operation and recognition and enforcement of foreign decisions. Initially, letters rogatory have not been used for executory measures under Brazilian law.77 Eventually, MERCOSUR rules should change the practice. Therefore, the STF admitted in 1997 that foreign decisions could be received by the Brazilian authorities via letters rogatory.78 Unless an international treaty like the Las Leñas Protocol provides otherwise, executory letters rogatory are not admitted. Finally, Resolution no 9/2005 of the STJ paved the way for the concession of the exequatur to executory letters rogatory in general (Article 7). One might conclude that the Las Leñas Protocol, by instituting letters rogatory for recognition and enforcement of foreign decisions, admits the use of executory letters rogatory. The Ouro Preto Protocol on Precautionary Measures79 also concerns executory letters rogatory (Article 18). However, as Professor Tiburcio reminds us, there has not been uniformity with regard to the extent of the concept of executory letters rogatory.80 In previous decisions, the exequatur has even been denied on that basis for requests for mere collection of evidence in Brazil.81 Evolutions in the field of judicial co-operation have mainly been identified as favouring access to justice. Therefore, it has been necessary to guarantee that proceedings do not involve costs and that letters rogatory can be properly transmitted. This has been fostered by the regional integration process of MERCOSUR as an international organisation which seeks to establish a common market.

STJ, CE, 15 March 2017, SEC 14077, Report Minister Felix Fischer. Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents. 77 STF, 25 August1980, CR No 3237/AT, Report Minister Antônio Neder. 78 STF, DJU 9 May 1997, AgRg CR 7613/AT, Report Minister Sepúlveda Pertence. 79 Protocol on Precautionary Measures of 16 December 1994 (Ouro Preto). 80 C. TIBURCIO (note 29), p. 216. 81 Ibid., p. 217, who quotes STF, DJU 15 March 2002, CR 9886/FR, Report Minister Marco Aurélio. 75 76

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III. The Law Applicable to Recognition and Enforcement Proceedings in MERCOSUR States “The medieval revival of Roman law and the idea of a Holy Roman Empire favored recognition, because a judgment handed down abroad was not perceived as emanating from a ‘foreign’ legal system. A different perspective, however, emerged once the concept of territorial sovereignty began to spread”.82 This principle determines judicial co-operation until today. As judicial cooperation also comprised recognition and enforcement of decisions – and it still does in MERCOSUR – proceedings in this matter continued to be determined by national law.83 The Las Leñas Protocol which unified the transmission of foreign decisions between States Parties did not provide for neither automatic recognition and enforcement nor unified procedures. Therefore, the procedure as well as the conditions State authorities verify still depend in several aspects on the respective national legislations. After identifying a mixture of national procedural laws and potentially uniform conditions to be verified, there is an apparent need to distinguish those aspects which remain governed by national law (A) and those which evolve as uniform rules at the regional level (B). A.

National Civil Procedure in Recognition and Enforcement Proceedings

As acts of sovereign power, decisions do not usually have any effect beyond borders. Thus, foreign judgments can only produce effect in another State if the latter recognizes them or grants them enforceability. This depends on a sovereign decision by the requested State.84 However, it has been discussed by doctrine whether public international law contains an obligation to recognize or enforce foreign decisions.85 More precisely, under the doctrine of judicial co-operation, some authors defend an obligation to recognize and enforce foreign decisions.86 International treaties could also contain such an obligation.87 Judicial proceedings for recognition and enforcement, however, continue to be regulated by national law 82 F.K. JUENGER, The Recognition of Money Judgments in Civil and Commercial Matters, Am. J. Comp. L., 1988, Vol. 36, p. 5 et seq. 83 However, R. GEIMER, Internationales Zivilprozessrecht, Cologne 2020, considers that – under the current German perspective – there is no obstacle to applying foreign law to the regulation of judicial proceedings. 84 H. SCHACK, Internationales Zivilverfahrensrecht, Munich 2021, p. 335 et seq. 85 D. MARTINY (note 11), p. 74 et seq., who refers himself to some singular authors who tried to justify such an obligation. One may add that GEIMER (note 83), No 151 et seq., argues that a general obligation to recognize foreign decisions on legal status such as divorce decisions derives from Human Rights. 86 C. TIBURCIO (note 14), p. 128 et seq., with further references. 87 Ibid.

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Recognition and enforcement of foreign decisions in MERCOSUR which is also the consequence of a general principle in judicial co-operation according to which they always depend on national laws (1). The lex fori principle as a general principle has specific implications in recognition and enforcement proceedings (2). 1.

The lex fori Principle: A Common Principle in International Treaties

The multiplicity of procedural laws applicable to judicial co-operation has been identified as a challenge to judicial co-operation.88 In other words, it is relevant whether the accomplishment of the requested measure is decided according to the law of the requesting State or that of the requested State. As a result of the differences between national laws, the same applies for recognition and enforcement of decisions. Indeed, it has not been possible to find a compromise on the proceedings which should govern recognition and enforcement. Lastly, the Hague Judgments Convention refers to the national law of the requested State when it comes to recognition and enforcement proceedings (Article 13, § 1). Thus, the procedure for obtaining recognition, either a declaration of enforceability or a registration for enforcement, as well as enforcement itself are subject to national law. The convention adds that courts must act expeditiously which means that they need to follow the most rapid procedure in their national law and, if necessary, accelerate existing procedures.89 This also implies, in practice, that in States where recognition of foreign judgments is automatic, the provision which refers to national procedural law enables that recognition takes place without the intervention of a judicial or other authority.90 Since the draft convention of 2000, it has been clear that “a simplified uniform procedure for obtaining a declaration of enforceability in a worldwide Convention”91 would be impossible. Thus, a foreign decision would either have to receive an exequatur in the requested State or need to undergo a registration procedure. As the authors of the explanatory report underline, the preparation for the enforcement and the execution itself are subject to the national law of the requested State.92 Thus, for example, the Brazilian homologation procedure would continue to be necessary under the new convention.

L. D’AVOUT, L’entreprise et les conflits internationaux de lois, Recueil des Cours, Vol. 397, Leiden/ Boston 2019, No 305. 89 P. NYGH/ F. POCAR, Report on the preliminary draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters, Preliminary Document No 11, The Hague, 2000, Article 30. Available at https://assets.hcch.net/upload/wop/jdgmpd11.pdf on 10.4.2021. 90 Ibid. 91 Ibid. 92 F. GARCIMARTIN/ G. SAUMIER, Explanatory Report on the 2019 HCCH Judgments Convention, The Hague 2020, No 309. Available at https://assets.hcch.net/docs/a1b0b0fc95b1-4544-935b-b842534a120f.pdf on 10.4.2021. 88

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Marcel Zernikow Whereas the lex fori principle is enshrined in international conventions on recognition and enforcement, the context is different in the EU as an international organisation at the regional level.93 2.

The lex fori Principle in the Las Leñas Protocol

The Las Leñas Protocol contains a similar provision to that of the Hague Convention. Article 24 submits the recognition and enforcement procedure to the national law of the requested State. As national civil procedure applies before national courts, this can cause differences in the recognition and enforcement procedures (a). The Las Leñas Protocol, however, attempts to unify the conditions which should be verified (b). a)

National Civil Procedure

The procedure for recognition and enforcement of foreign decisions before national courts still depends on national law. As both the formal requirements and the competence of internal judges are determined by national law, there is naturally an interplay between the rules of the Las Leñas Protocol and national civil procedure. For example, some States give internal competence to first instance courts such as Argentina and Paraguay. Uruguay attributes this competence to the Supreme Court (Suprema Corte de Justicia). Brazil institutes the competence of the STJ.94 This also implies that in Uruguay and in Brazil, the procedure is limited to a single proceeding, exclusive of any further instance.95 The relevant civil procedure for granting executory force to letters rogatory is that of the national law. In other words, even if the Las Leñas Protocol institutes proper conditions for the verification of letters rogatory, national procedural law still governs the exequatur procedure. In Brazil, once the requirements fulfilled, the STJ will attribute the exequatur to the letter rogatory. The granting of the exequatur to the letter rogatory thereby turns it into an enforcement title (Article 515, IX CPC). Afterwards, national federal judges will enforce the decision according to national enforcement procedures.96 Given that the Las Leñas Protocol determines that letters rogatory need to receive the exequatur for recognition and enforcement, one could argue that it Infra, III. B. 1. C. TIBURCIO (note 29), p. 219 et seq. As for the competence for recognition, she explains that Brazil adopted the decentralized system: Foreign decisions originally received the “cumpra-se” from the judge who would be competent for enforcement if the decision had been taken at the national level. For being enforceable, the decision needed to comply with certain conditions (Aviso of 1 October 1847 by the Imperial Government). Act No 221 of 20 November 1894 centralized these proceedings. 95 On the Uruguayan law, cf. G. ARGERICH, Eficacia extraterritorial de las sentencias extranjeras en los procesos de integración (Análisis comparativo de las regulaciones del Mercosur y de la Comunidad Europea), JA, 1997, No III, p. 833. 96 Article 965 CPC. 93 94

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Recognition and enforcement of foreign decisions in MERCOSUR would require a specific adaptation of national civil procedure in Brazil, for example. In this country, until the Las Leñas Protocol entered into force, foreign decisions required a formal recognition (homologação) for producing res judicata or executory force. This procedure, which is called juízo de delibação,97 seeks to verify whether the foreign decision complies with basic principles of the national legal order. It is inspired by Italian law of the end of the 19th century.98 In this context, one has to remind oneself that Mancini, who influenced the Codice civile of 1865, had an important influence at that time in South America.99 Under Brazilian law, the homologation procedure requires a separate action to be taken by the parties. From this perspective, it is to be distinguished from the procedure which aims at attributing the exequatur to letters rogatory. Indeed, letters rogatory are expediated by the foreign judge to the national Brazilian judge who must control them in a limited examination for the respect of certain conditions. Litigation relating to letters rogatory (article 36 CPC) is nowadays subject to chapter II of the Code of Civil Procedure (articles 26, 27 and 37 to 41 CPC). The requirements concern the general regime of letters rogatory. The code also provides details related to the specific case of letters rogatory for the purpose of granting enforceability to foreign decisions (articles 960 to 965 CPC). Further requirements for letters rogatory can be found in the RISTJ. The various grounds for refusal for the exequatur comprise that it does not conflict with national sovereignty, the dignity of the human person or public policy.100 Particular emphasis must be placed on the interpretation of the public policy criterion which should be very restrictive under the influence of the obligation to co-operate which exists between States.101 Some authors point out that the exequatur can only be refused in serious situations. Defences can only relate to the authenticity of the documents, the intelligibility of the decision and the respect of other formal conditions provided for by the RISTJ.102 The control is reduced to the disrespect of the fundamental principles of the Brazilian legal system and to some formal requirements. In summary, the verification operated by judges is restrictive compared to that in the homologation procedure. As the purpose of the exequatur is to “order”, it is historically intended to allow the practice, on the national territory, of investigative acts such as service of documents or collection of evidence, through 97 In Italian, delibare means in the original sense to taste, to test with the tongue; in a figurative sense, it means to analyse superficially. Delibazione in the legal sense refers to the examination procedure. Outside the legal language, the term delibazione is rarely used. For these and further explanations, cf. E. RIEZLER, Internationales Zivilprozessrecht und prozessuales Fremdenrecht, Tübingen 1949, p. 585 et seq. 98 This specific procedure remained in force in Italy until 1 January 1997 when this country adapted its private international law to the Brussels Convention. 99 I. STRENGER, Teoria geral do direito internacional privado, São Paulo 1973, p. 239. 100 Article 216-P RISTJ. Comp. supra, article 14 LINDB. 101 J. DOLINGER/ C. TIBURCIO (note 38), No 601. 102 Article 216-Q, § 2 RISTJ.

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Marcel Zernikow simple procedures. For this reason, an exequatur is required as a prerequisite for the execution of measures requested by foreign authorities. Traditionally, it was not deemed sufficient, however, for giving effect to foreign decisions. Unlike for homologation proceedings, for the exequatur of letters rogatory, parties theoretically do not initiate the proceedings. Thus, the distinction between the two regimes is also characterized by the role accorded to the parties. In this context, one should remind oneself that letters rogatory are requests for judicial cooperation between jurisdictions. The party against whom the decision was rendered is summoned to present his or her defence, in the form of an impeachment (impugnação), within 15 days. It is possible to confer enforceability on letters rogatory, without hearing the parties. In addition, there is no right for the party against whom the decision was taken to respond, as it would be the case under the homologation procedure. However, the parties have the right to form an appeal in the form of an agravo. Enforcement of foreign decisions by the exequatur to letters rogatory has been widely discussed in Brazil. Executory letters rogatory for foreign provisional measures have finally been introduced into the national legislation.103 The New Code of Civil Procedure of 2015 expressly enables judges to give executory force to letters rogatory over provisional measures (Article 961, first sentence CPC). The aforementioned legislation is also the basis for the reception of letters rogatory from other MERCOSUR States in Brazil where national judges are supposed to verify letters rogatory according to the national law before granting the exequatur to them. Thus, the question of the applicable law necessarily occupies an important place when recognition and enforcement should take place by letters rogatory which, by definition, circulate as the vehicle from one country to another and, therefore, are submitted to different legislations. The law of the country of origin determines the form and modalities of transmission, while that of the country of destination provides for the modalities of reception and completion as well as for the content.104 Insofar as the letter rogatory should meet the requirements of two countries, of origin and of destination, there is a need for harmonisation of the regulations in this area. This argument initially gave impetus to the first bilateral treaties and to the Las Leñas Protocol. To summarize the main difference between the acquisition of executory force in a foreign State, under the Las Leñas Protocol, as opposed to national Brazilian law, one may note that decisions are no longer required to pass by homologation proceedings before the STJ.105 As far as the theoretical framework is 103 The Constitutional Amendment No 45 of 8 December 2004 passed the competence from the STF to the STJ for both granting the exequatur to letters rogatory and homologating foreign decisions. Under this competence has been constructed a case law giving the possibility to grant the exequatur to executory letters rogatory. 104 N. DE ARAÚJO, Direito internacional privado. Teoria e prática brasileira, São Paulo 2020, p. 239 et seq. 105 STJ, 26 February 2016, published on 15 March 2016, CR 010378, Report Minister Francisco Falcão: “Regarding the need for prior homologation of the foreign judgment, the provisions of Chapter V of the Las Lenãs Protocol, promulgated by Decree No 6,897/2009, which deals with the recognition and enforcement of judgments and arbitration awards, are enlightening. Article 19 provides that the enforcement of judgments

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Recognition and enforcement of foreign decisions in MERCOSUR concerned, one can conclude that recognition and enforcement by letters rogatory is part of judicial co-operation, on the basis of the obligation to co-operate which exists between States. b)

Conditions to Be Verified by National Judges

If one considers the recognition and enforcement of foreign decisions under a procedural light, it is also coherent to refer to the conditions to be verified by national judges in MERCOSUR States from this perspective. The foreign decision is subject to control by national judges which is based on a uniform catalogue of conditions within MERCOSUR.106 The judge of the requested State verifies these conditions on the basis of the information contained in the certified copy of the original decision.107 Whatever the formal procedure corresponds to, it aims at verifying different uniform grounds for refusal before giving res judicata or executory force to the decision within the national system. According to the Las Leñas Protocol, the decision is subject to control regarding the following grounds for refusal: a) The formal requirements of the decision according to the law of the country of origin, b) its language and translation, c) the decision needs to emanate from a competent court or arbitral tribunal according to the law of the requested State, d) it should have been regularly notified to the defendant for guaranteeing his effective rights of defence, e) it has res judicata and/or executory force in the country of origin, and f) the public policy of the requested State is respected. Some of the conditions depend on the law of the requesting State, while others are verified according to the law of the requested State. In this context, special attention should be given to the verification of the competence of the courts of the requesting State, according to the law of the requested State. Such a condition based on the lex fori possibly hinders the creation of a uniform procedural law. Interestingly, one can observe that national courts tend to apply conditions from national civil procedure. Taking the example of Brazil, the STJ refers to the provisions it is used to verify while conducting the examination for the exequatur to letters rogatory under national law. Thus, the STJ regularly verifies the absence may be achieved via letters rogatory. Thus, there is no way to require prior homologation of the decision” (translated to English)”. 106 Comp. M.B. NOODT TAQUELA/ G. ARGERICH, Dimensiones institucional y convencional de los sistemas de reconocimiento de los Estados mercosureños, in D. FERNÁDEZ ARROYO (ed), Derecho internacional privado de los Estados del Mercosur, Buenos Aires 2003, p. 462 et seq., who distinguish formal, procedural and substantive requirements. 107 Article 20 specifies that the control of points a, c, d, e and f is based on the certified copy.

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Marcel Zernikow of infringements of national sovereignty and public policy, conditions provided for in Article 216-O of its internal regulations.108 Despite the legal framework of MERCOSUR, one places oneself in a context where one needs to verify at the same time national provisions and regional protocols. B.

The Potential of Developing Common Procedural Principles

The Protocol of Las Leñas contains several grounds for refusal that are similar to those of the Brussels Ibis Regulation. To draw a parallel with the EU, one could argue that the harmonisation of the grounds for refusal can also contribute to the constitution of a uniform regional civil procedure.109 Furthermore, the restrictive, autonomous interpretation of the grounds for refusal110 has been mentioned in the context of the principle of free movement of judgments within the EU111 which itself underlies the construction of a European Civil Procedure. Once acknowledged that the lex fori principle impedes the harmonisation of recognition and enforcement procedures within MERCOSUR (2), one might compare with EU law for bringing some new perspectives (1). 1.

Recognition and Enforcement and EU Civil Procedure

The Brussels regime contains a common procedure for the recognition and enforcement of foreign decisions. It has been prepared since the adoption of the Brussels Convention providing for a limited catalogue of grounds for refusal to be verified in recognition proceedings.112 The initial declaration of enforceability was issued at the request of any interested party, without prior hearing of the debtor. Thus, the aforementioned grounds for refusal also needed to be examined by the court of the requested State for the purpose of granting enforceability. The Brussels Convention further regulated legal remedies against the issuance of an exequatur.113 In summary, the convention led to a considerable simplification of procedures and the implementation of foreign enforcement titles was promoted.114 The Brussels I Regulation established a uniform exequatur procedure.115 More precisely, the enforcement clause was issued in a standardized procedure, without prior verification of the content of the obstacles to recognition of Articles 34 and 35. The creditor only had to submit the form prescribed in Annex V, which STJ, 4 December 2006, CR 001709 – AR (2006/0067815-9), Report Minister Barros Monteiro; STJ, 26 February 2016, CR 010378, Report Minister Francisco Falcão. 109 B. HESS, Europäisches Zivilprozessrecht, Berlin/ Boston 2021, No 3.15. 110 CJEU, 2 June 1994, C-414/92, Solo Kleinmotoren v. Boch, pt. 20. 111 CJEU, 4 February 1988, C-145/86, Hoffmann v. Krieg, pt. 11. 112 Articles 27 et seq. of the Brussels Convention. 113 Articles 36 et seq. of the Brussels Convention. 114 B. HESS (note 109), No 3.16. 115 Article 41 et seq. of the Brussels I Regulation. 108

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Recognition and enforcement of foreign decisions in MERCOSUR certifies the recognition and enforceability of the foreign title.116 It is noteworthy that the requirements were checked on the basis of the form. Only in case of an appeal initiated by the debtor, the obstacles to recognition needed to be checked.117 Since 2015, the EU has achieved another step towards a European Civil Procedure by permanently deleting the exequatur procedure. From there on exists an automatic recognition and enforcement of foreign enforcement titles (Articles 39 Regulation Brussels Ibis) based on an explicative form.118 The creditor can initiate enforcement directly with the enforcement authorities by submitting the enforcement title and the accompanying form.119 Concerning the applicable law, the Brussels Ibis Regulation refers itself to the procedural law of the requested State as far as national execution proceedings are concerned.120 Furthermore, the grounds for refusal to the enforcement as determined by the requested State apply next to those of the Regulation itself, unless they contradict them.121 Only if the refusal to enforcement is not subject to the present Regulation, it is regulated by national law, which is that of the requested State.122 But the harmonisation of European civil procedure goes beyond civil and commercial matters and nowadays also concerns matrimonial matters and parental responsibility.123 This evolution has been accompanied by the institution of a European enforcement title.124 As Professor Hess observes, the procedure guaranteeing free movement of judgments is an important step towards the realisation of regional civil procedure.125 After evoking the attempt of establishing a general theory for recognition and enforcement at the regional level, one might curiously try to develop especially harmonized conditions within MERCOSUR. The aim is to identify whether there exists a potential for developing common procedures at the European level.

Article 53 et seq. of the Brussels I Regulation. Articles 43 et seq. of the Brussels I Regulation. 118 Articles 53, 60 of the Brussels Ibis Regulation. 119 Article 42 of the Brussels Ibis Regulation. 120 Article 41, § 1 of the Brussels Ibis Regulation. 121 Article 41, § 2 of the Brussels Ibis Regulation. 122 Article 47, § 2 of the Brussels Ibis Regulation. 123 Council Regulation (EU) 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 (recast) (Brussels IIter). 124 A. HUET, Titre exécutoire européen, in P. LAGARDE/ D. CARREAU & G. SYNVET (eds), Répertoire de droit international, Paris 2020, No 2, who affirms that, as a consequence, States lose the exclusive power to confer enforceability on their territory. H. GAUDEMET-TALLON/ M.-É. ANCEL (note 3), No 502 et seq., underline that execution as such, however, still depends on national law. 125 B. HESS (note 109), No 3.14. 116 117

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Marcel Zernikow 2.

Towards a Uniform Procedure in MERCOSUR?

Starting from this comparative perspective, it might be interesting to read the grounds for refusal contained in the Las Leñas Protocol in the light of those contained in the Brussels Regulations, with the ambit of developing a uniform civil procedure. It is enshrined in the Las Leñas Protocol that the decision one is seeking to recognize or enforce must have res judicata and/or executory force in the home State. This does not preclude enforcement of those decisions which are indefinite but do already have executory force (Article 20, § 1, e). Furthermore, the Las Leñas Protocol contains a ground for refusal aiming at the verification of due service of documents. The control of this condition follows the objective of guaranteeing the rights of defence of the interested party against whom recognition and enforcement is sought. This ground for refusal has been interpreted by the STJ in different decisions.126 A similar condition is contained in Article 45, § 1, b) of the Brussels Ibis Regulation which is more precise though. In the event that the decision was rendered by default, if the document instituting the proceedings or an equivalent document was not notified or served on the defendant on time and in such a way that he or she could defend himself, this condition would not be met. This ground for refusal might pave the way for a more specific regulation at EU level of the mandatory information relating to the procedure that the defendant must follow, both to appear and to bring an appeal against the decision rendered in his absence.127 In this context, one might add that the Brussels regime has been in favour of protecting procedural rights of the defendant. The Hague Convention of 2019 also refers to due service of documents as a possible ground for refusal of recognition or enforcement: the document which instituted the proceedings or an equivalent document, including a statement of the essential elements of the claim – (i) was not notified to the defendant in sufficient time and in such a way as to enable them to arrange for their defence, unless the defendant entered an appearance and presented their case without contesting notification in the court of origin, provided that the law of the State of origin permitted notification to be contested; or (ii) was notified to the defendant in the requested State in a manner that is incompatible with fundamental principles of the requested State concerning service of documents. The formulation of this common ground for refusal in the ambit of an international organisation can be interpreted as a sign of an emanating uniform civil procedure. In this context, one might refer oneself to the survey operated by Professors Von Mehren and Trautman who state that “[t]his test relies upon inherent political and social checks upon a community’s practices with respect to its own members; situations in which a community has thoroughly unfair procedures for the administration of justice for its own people will be most unusual. It may 126

For example, STJ, 26 February 2016, CR 010378, Report Minister Francisco

Falcão. 127 V. RICHARD, Le jugement par défaut dans l’espace judiciaire européen, Doctoral Thesis, Paris/ Luxemburg 2019, p. 563.

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Recognition and enforcement of foreign decisions in MERCOSUR be, however, that some problems will arise only rarely in entirely local litigation, or that the absence of a given procedure will most often work to the disadvantage of the non-resident party”.128 In the same vein, international organisations at the regional level adopt a certain approach towards procedural rights of the defendant. Another ground for refusal is commonly known as public policy (ordre public). The Las Leñas Protocol adopts a wide formulation: the principles of public policy of the requested State (Article 20, f). As Juenger observed, “not merely domestic law but most recognition treaties and conventions recognize this reservation, even though international compacts often attempt to limit its scope”.129 It was already contained in the Bustamante Code.130 The Las Leñas Protocol refers to the prerequisite that the foreign decision must clearly not contradict the principles of public policy of the requested State. Its interpretation may, however, cause any difficulties and the national judges invoke the public policy under national law. The Brussels Ibis Regulation contains a clause in its Article 45, § 1, a) where it also limits literally the public policy ground (“manifestly”). More generally, using this ground for refusal in the context of an integrated regional organisation such as the EU has been seen as problematic since its uprise.131 It has been observed that this ground for refusal could be instrumentalized for advancing other grounds for refusal which had been banned.132 Therefore, one should remind oneself of the Benelux Treaty which expressly excluded those conditions which could not be evoked through the public policy clause.133 Eventually, the Court of Justice of the European Union has proceeded to the autonomous interpretation of this ground for refusal.134 Despite the different reservations to its use for taking into A.T. VON MEHREN/ D.T. TRAUTMAN, Recognition of Foreign Adjudications: A Survey and a Suggested Approach, Harvard L. Rev., Vol. 81, 1968, p. 1662 et seq. 129 F.K. JUENGER (note 82), p. 21 et seq. 130 Article 423 of the Bustamante Code. One may also refer oneself to Article 2, h) of the Inter-American Convention on the Extraterritorial Effect of Foreign Judgments. 131 P. MERCIER (note 61), p. 101. 132 Ibid., p. 112. 133 The Benelux Treaty of 24 November 1961 […] provides, in its Article 13, § 2, that the rules relating to jurisdiction, evidence, legal action and procedure are exempt from public policy. 134 CJEU, 28 March 2000, C-7/98, Krombach, pts. 22 and 23: while the Contracting States in principle remain free to determine, according to their own conceptions, what public policy requires, the Court of Justice sets certain limits within which the courts of a Contracting State may have recourse to that concept, without determining the content of public policy. CJEU, 2 April 2009, C-394/07, Gambazzi, pts. 26 et seq., where the Court reiterates that fundamental rights, such as respect for the rights of the defence, are included by public policy but do not constitute unfettered prerogatives and may be subject to restrictions. It concerns precisely the procedural guarantees giving any third persons concerned a genuine opportunity of challenging a measure adopted by a court of the State of origin. CJEU, 28 April 2009, C-420/07, Apostolides, pt. 55, underlines the strict interpretation of public policy. While interpreting the public policy clause, national courts need to verify where there is a breach of a fundamental principle of EU law which needs to be manifest (CJEU, 16 July 2015, C-681/13, Diageo Brands, pt. 50). This also refers to a 128

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Marcel Zernikow account other grounds for refusal, one may consider the possibility of exploiting it for certain procedural rights: “[e]ven though the rendition court’s jurisdiction is beyond doubt and the judgment debtor had the opportunity to be heard, the foreign judgment may still be unjust”.135 While trying to exploit these different grounds for refusal for the construction of a regional civil procedure, one especially needs to take into account their articulation with those under national civil procedure. The grounds for refusal within MERCOSUR have not benefitted from an autonomous interpretation as it is the case of those in the European Union, which have been subject to several preliminary references before the Court of Justice of the European Union. The Permanent Revision Court of MERCOSUR as an arbitral jurisdiction136 is competent for litigation on the interpretation of the law adopted between Member States. However, it is rarely seised and only once had the opportunity to interpret a protocol on private international law, namely the Protocol of Buenos Aires on International Competence.137 As has been mentioned before, different notions such as the grounds for refusal benefit from different interpretations in Member States.138 On this argument, one has grounded the need for a European Court of Justice for preliminary rulings.139 Finally, the ground for refusal concerning the verification of the competence of the court which adopted the decision could receive a MERCOSURspecific interpretation. Article 20, c) disposes that the competence of the court which has adopted the decision is verified according to the law of the requested State. In this context, one may briefly recall that the determination of the competence of the court of origin can depend on the unilateral rules of the State of origin, on the double unilateralist solution based on the laws of the countries of origin and of reception or on the bilateral rules of the requested State.140 Whereas there are different concepts for determining the competence, one might suggest that a unibreach of a right enshrined in the Charter of Fundamental Rights of the EU (CJEU, 11 September 2014, C-112/13, A, pt. 51). In this respect, recognition and enforcement of an order issued by a court of a Member State, without a prior hearing of a third person whose rights may be affected by that order, cannot be regarded as manifestly contrary to public policy (CJEU, 25 May 2016, C-559/14, Meroni, pt. 54). 135 F.K. JUENGER (note 82), p. 21. 136 A parallel might be drawn with other conventions in this field such as the bilateral French-Italian Treaty of 3 June 1930 on the enforcement of decisions which instituted arbitration proceedings for the interpretation of the treaty. 137 TPR, 3 April 2007, Opinión consultativa, No 1/2007. Cf. D.P. FERNÁNDEZ ARROYO, La respuesta del Tribunal Permanente del Mercosur a la primera “consulta interpretativa”, Jurisprudencia Argentina, 2007, No III, p. 983 et seq. 138 F. MERCIER (note 61), p. 138, who highlights this argument in the context of the European Economic Community. 139 M. WESER, Les conflits de juridictions dans le cadre du Marché Commun. Difficultés et remèdes, Rev. crit. dr. int. pr., 1961, p. 128, O. RIESE, Une juridiction supranationale pour l’interprétation du droit unifié?, Revue internationale de droit comparé, 1961, p. 735. 140 G. ARGERICH (note 95).

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Recognition and enforcement of foreign decisions in MERCOSUR form – autonomous – interpretation of the competence would favour the regional integration. This has already been discussed for the European Economic Community before the adoption of the Brussels Convention. At that time, of all six Member States, only France and Luxembourg continued to determine the indirect competence under national law.141 This has been criticized from the perspective of the adoption of a uniform private international law of the integrated economic area.142 In the EU, under the Brussels Ibis Regulation, one must verify whether the foreign decision contradicts exclusive grounds of jurisdiction and those instituted for protecting the weaker party as based on the competences of the Brussels Ibis Regulation itself.143 There is no verification of the competence of the court of origin as such. In contrast, the Protocol of Las Leñas promotes the verification of the competence of the requesting court. However, the later adoption of two protocols for this matter, the Protocol of Buenos Aires (Article 14) and of Santa Maria (Article 12), should determine the aforementioned control.144

IV. Conclusion After presenting the recognition and enforcement of foreign decisions via the uniform mechanism of letters rogatory, one might reflect on the regional character of this private international law in comparison to that of the EU. According to some commentators, private international law made the then European Economic Community, at its beginning, a more complete international organisation which goes beyond guaranteeing the sovereignty of its Member States.145 This is also reflected in the field of judicial co-operation as far as there is less room for public policy and national sovereignty in the framework of the verification of foreign requests. Differences between the EU and MERCOSUR can also be attributed to the legislative competences.146 Moreover, the EU’s regime is based upon mutual

141 142

F. MERCIER (note 61), p. 108. H. BATIFFOL, Traité élémentaire de droit international privé, Paris, 1959,

No 756. Article 45, 1, e of the Brussels Ibis Regulation. G. ARGERICH (note 95). 145 F. MERCIER (note 61), p. 143. One must add that in both the EU and MERCOSUR, private international law is considered as contributing to the integration of the common or internal market. 146 Ibid., p. 145, who invites us to read D. SIDJANSKI, L’originalité des Communautés Européennes et la répartition de leurs pouvoirs, Revue générale de droit international public, 1961, p. 48 et seq: Alongside relations between Member States, immediate relationships are established between common bodies and nationals of Member States, as well as between nationals of various Member States. One has to underline this original character of the immediacy of the power of independent bodies, which is exercised directly over individuals, by using the term “supranational”. 143 144

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Marcel Zernikow trust.147 Therefore, interested parties directly present the judgment and the required sample to the judge of the requested State. No communication between national judges nor between State authorities is required. No instituted co-operation between State authorities or judicial authorities is needed for this matter as it would be in MERCOSUR. Nowadays, the decision will be directly enforced in the host State. Although judicial co-operation also exists in the EU, it is not currently used for the recognition and enforcement of foreign decisions.148

As Professor HESS, (note 109), No 3.16, underlines, by renouncing to control the competence of the requested State’s judges, the Brussels Convention consecrated the principle of mutual trust. The Jenard Report also referred to the latter principle (P. JENARD, Report on the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Signed at Brussels, 27 September 1968), JOCE, C 59, 5 mars 1979). Recital No 26 of Brussels Ibis also attributes the abolition of any control of the decision for recognition as well as the uniform recognition procedure to this principle. Recital No 26 Brussels Ibis justifies the simplification of enforcement proceedings. For other authors who develop this principle in the context of an emerging European civil procedure, cf. S. LEIBLE, Die Zukunft des Europäischen Zivilprozessrechts, in Festschrift für Peter Gottwald zum 70. Geburtstag, Munich 2014, p. 381. For further developments, cf. S. POILLOT-PERUZZETTO, La priorité de l’Espace de Liberté, de Sécurité et de Justice et l’élaboration d’un code européen de droit international privé, in M. FALLON/ P. LAGARDE & S. POILLOT-PERUZZETTO (eds), Quelle architecture pour un code européen de droit international privé?, Brussels 2012, p. 51; S. FRANCQ, Le droit international privé européen, entre confiance mutuelle et sécurité juridique. Les limites de l’imaginaire européen, Travaux du comité français de droit international privé, 2016-2018, Paris 2019, p. 153. Finally, one should add the emergence of a principle of free movement of decisions (Recital No 27 Brussels Ibis). 148 Cf. L. CADIET/ E. JEULAND/ S. BOLLEE & É. PATAUT (eds), Les nouvelles formes de coordination des justices étatiques, Paris 2013. 147

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THE NEW CROATIAN PRIVATE INTERNATIONAL LAW ACT SOMETHING OLD, SOMETHING NEW AND MUCH BORROWED Mirela ŽUPAN*

I. II.

III. IV.

Introductory Notes – Chronology An Overview of Provisions A. General Provisions B. Applicable Law 1. General Instruments 2. Personal Status 3. Property Law, Intellectual Property 4. The Applicable Law Governing Contractual, Tort and Succession Matters 5. Family Related Choice of Law Rules C. International Jurisdiction and Procedure D. The Recognition of Foreign Judgments Follow up – Application of the PIL Act in Practice Concluding Remarks

The new Croatian Private International Law Act of 4 October 2017 entered into force on 29 January 2019. Its adoption marked the end of the application of the 1982 PIL Act, which had not been revised in 35 years. However, new solutions have been gradually adopted, under the impetus of HCCH conventions and EU regulations. The new PIL Act introduces significant changes compared to the previous regime. Party autonomy has been enhanced. Mechanical rules have been abandoned in favor of flexible solutions such as the closest connection clause, forum necessitatis and the best interests of the child. With its nomotechnical approach, but also original solutions, the Croatian PIL Act is among the [more?] modern European codifications of private international law. Its entry into force has opened the door to a new approach to adjudication in cross-border matters. A book of many volumes is hidden in a seemingly modest act with only 81 articles.

* Mirela ŽUPAN, Full Professor, Josip Juraj Strossmayer University of Osijek, Faculty of Law Osijek.

Yearbook of Private International Law, Volume 22 (2020/2021), pp. 381-404 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Mirela Župan

I.

Introductory Notes – Chronology

The new Croatian Private International Law Act (hereinafter referred to as: “the PIL Act”) of 4th October 2017 entered into force on 29th January 2019.1 Its adoption marks the end of the application of The Law on Resolution of Conflict of Laws with Regulations of Other Countries of 1982 (hereinafter referred to as: “the 1982 PIL Act”), which was adopted from ex Yugoslavia by the Republic of Croatia in 1991.2 In addition to this primary source, legislation in respect of private international law was also dispersed throughout numerous sectoral legislations.3 Although the relevant provisions of the acts themselves have not changed for decades, changes occurred in the legal regime during that period. There have been derogations from a number of provisions by national reforms,4 and even more by international standardization as Croatia began to take over various international obligations. The most prominent examples are the result of multilateral international treaties, especially those of the Hague Conference on Private International Law,5 as well as adoption of the EU acquis communautaire. Nonetheless, the new PIL Act is a landmark shift of a legal regime that was in force for more than 35 years.6 Changes in the nature of cross-border mobility and contemporary social needs have made a number of European PIL codifications obsolete. In the past decade, codification has gained momentum in the field of private international law and has affected Central and South-Eastern Europe.7 The 1982 PIL Act shared the same experience, although in its time it was a modern codification of contempoPrivate International Law Act (PIL Act), OG 101/17. The Law on Resolution of Conflict of Laws with Regulations of Other Countries (the 1982 PIL Act), OG 53/1991 3 Maritime Code (MC), OG 181/04, 76/07, 146/08, 61/11, 56/13, 26/15, Act on Obligations and Proprietary Rights in Air Traffic, OG 132/98, 63/08, 134/09 and 94/13. 4 Articles 97-101 of the 1982 PIL Act were abrogated by the Arbitration Act of 2001, OG 88/2001. 5 The general influence on the regulation of private international law was previously exerted by international treaties in the field of applicable law with erga omnes application, which replaced the national regime. Such are, for example, the Hague Conventions on traffic accidents, product liability, the form of testamentary dispositions and child protection measures. Available at: https://www.hcch.net/. 6 Justification for a longer period of vacatio legis is twofold: a) the regime is thoughtfully altered after 3,5 decades; b) coordination with the entry into force of EU regulations had to be made. V. BOIĆ/ D. BABIĆ, Zakon o međunarodnom privatnom pravu [Private International Law Act] Pravosudna akademija Zagreb 2018. 7 A new act [only correct it all countries adopted the same, single piece of legislation, otherwise “New acts were”] was adopted in Slovenia, Bulgaria, Macedonia, Romania, Poland, Albania, the Czech Republic, Montenegro and Hungary in 1999, 2005, 2007, 2011, 2011, 2011, 2012, 2014, and 2017, respectively. J. BASEDOW et al. (eds), Encyclopaedia of Private Int’l law - “National reports”, Kluwer 2017; CH. JESSEL-HOLST, The reform of Private International Law Acts in South East Europe, with particular regard to the West Balkan Region, 18 Annals Fac. L.U. Zenica 133/2016, p. 133/146. 1 2

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The New Croatian Private International Law Act rary and even progressive solutions.8 The changes thereto have been considered for decades, and it has been marked by a long-lasting legislative procedure. In Croatia, private law issues involving a foreign element have always been the focus of the doctrine rather than the legislator or legal practice. Numerous scientific debates have questioned and criticized the appropriateness of Private International Law solutions, though they were rarely, and reluctantly, applied in practice. It is notable that the conflict-of-law rules have always undoubtedly been mandatory in nature and the obligation to apply them arose from the fundamental principle of constitutionality and legality. The need to adopt a new legal regime was primarily initiated in scientific circles.9 It was argued that the legal relations to which the 1982 PIL Act continued to apply were not adequately regulated, taking into account the context of contemporary social relations, but also the intensity and nature of crossborder transactions. The impact of fundamental rights treaties, taken in conjunction with internal and external EU competences in the field of private international law, strongly effected the notion of protection of fundamental rights in cross-border regulation.10 Often, practitioners did not know how to properly apply and delineate legal sources pertaining to national regimes, EU legislation or international treaties (multilateral and bilateral), under which certain legal relations have come to fall in the meantime11 (a matter addressed by prof. Siehr as “anarchy of sources”).12

8 P. ŠARČEVIĆ, The New Yugoslav Private International Law Act, Am. J. Comp. L. Vol. 33, 2/1985, p. 283-296; Ž. MATIĆ, Međunarodno privatno pravo - posebni dio [Private international law / special part] Zagreb 1982, p. 1-96; M. DIKA/ G. KNEŽEVIĆ & S. STOJANOVIĆ, Komentar Zakona o međunarodnom privatnom i procesnom pravu [Commentary of Private International and Procedural Law] Nomos Beograd 1990, K. SAJKO, Međunarodno privatno pravo [Private International Law] Narodne novine Zagreb 2009; D. BABIĆ, Private International Law, in T. JOSIPOVIĆ (ed), Introduction to the Law of Croatia, Alphen aan den Rijn 2014, p. 439-454; V. BOUČEK, Croatia, in J. BASEDOW/ G. RÜHL/ F. FERRARI & P.M. ASENSIO (eds), Encyclopaedia of Priv. Int’l L., p. 1990-2002. 9 In 2001, experts from the Faculty of Law in Zagreb presented the work Theses for the New Act, in K. SAJKO et al., Izvori hrvatskog i europskog međunarodnog privatnog prava - sa sudskom i arbitražnom praksom i tezama za zakon o međunarodnom privatnom pravu [Sources of Croatian and European private international law - with court and arbitration practice and theses for the law on private international law,] Informator Zagreb 2001; P. ŠARČEVIĆ/ V. TOMLJENOVIĆ, Primjedbe na Teze za Zakon o međunarodnom privatnom pravu, autora prof. dr. Krešimira Sajka, prof. dr. Hrvoja Sikirića i doc. dr. Vilima Boučeka [Remarks on the Theses for the Private International Law Act, by the authors ...], Zbornik Pravnog fakulteta Sveučilišta u Rijeci, vol. 22/ 2001, p. 655-673. 10 J. BASEDOW, Droits de l’homme et droit international privé, Annuaire de l'Institut de Droit international - Séssion de Hyderabad, vol. 78 – Délibérations 2019, p. 5-63. http://www.idi-iil.org/app/uploads/2019/06/Commission-4-Droits-de-lhomme-et-droitinternational-prive-Basedow-Travaux-La-Haye-2019.pdf; M. HIRSCHBOECK, Conceptualizing the Relationship between International Human Rights Law and Private International Law, Harvard Int’l Law J., Volume 60 2019/1, p. 187. 11 M. ŽUPAN/ I., MEDIĆ/ P. PORETTI/ N. LUCIĆ & M. DRVENTIĆ, Croatian Practice in Cross-Border Family and Successions Matters, in I. VIARENGO/ F. VILLATA (eds), Planning the future of cross-border families: a path through coordination, Hart Law Publishing 2020, p. 429-459.

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Mirela Župan A change in sector-specific legislation after three and a half decades should be reformist in nature. This character of the new PIL Act is partly diminished by “referring” provisions directing towards the existence/application of the relevant international convention or regulation.13 The adoption of the PIL Act makes essentially no difference in terms of that matter: these conventions and regulations are applied by virtue of international treaties and their advantage over national legislation stems from a higher position in the hierarchy of legal sources.14 The only difference in this part that the new PIL Act brings is of an educational nature because enumeration facilitates practical action in this sector, which is characterized by multiple sources of law.15

II.

An Overview of Provisions

From a structural point of view, the PIL Act follows its predecessor. As does the 1982 PIL Act, it normalizes general issues and institutes of private international law by rules on applicable law, international jurisdiction, the recognition of foreign judgments, and finally, relevant consular and diplomatic affairs.16 The PIL Act consists of six titles with corresponding subtitles, and has a total of 81 articles.17

K. SIEHR, General problems of Private International Law in modern codifications – de lege lata and de lege Europea ferenda, this Yearbook Vol. VII (2005), p. 23. 13 The explanatory memorandum to the Draft Act states that it follows the example of many European legislators, for example, Belgian, Dutch, Czech, Bulgarian, and Romanian PIL acts. 14 This is also confirmed by Article 2 of the PIL Act. 15 I. KUNDA, Upućivanje na propise EU u Zakonu o međunarodnom privatnom pravu [References to EU legal instruments in the Private International Law Act] in J. BARBIĆ/ H. SIKIRIĆ (eds), Međunarodno privatno pravo - interakcija međunarodnih, europskih i domaćih propisa [Private International Law Act – interaction of international, European and national rules] Hrvatska akademija znanosti i umjetnosti Zagreb 2020, p. 21-48. 16 An alternative would be the so-called Swiss model, based on the Swiss Private International Law Act of 1987, which prescribes the rules governing jurisdiction and applicable law for a particular legal issue in a particular provision. Federal Act on Private International Law of 18 December 1987 in effect as from 1st January 2017. http://www.andreasbucher-law.ch/images/stories/pil_act_1987_as_from_1_1_2017.pdf . 17 General discussion on new PIL in H. SIKIRIĆ, Zakon o međunarodnom privatnom pravu [Private International Law Act], Aktualnosti Hrvatskog zakonodavstva i pravne prakse, Organizator Godišnjak 25/2018, p. 61-138; M. ŽUPAN, Novi Zakon o međunarodnom privatnom pravu [New Private International Law Act], Hrvatska pravna revija 2018, p.1-12; J. BARBIĆ/ H. SIKIRIĆ (eds) Međunarodno privatno pravo - interakcija međunarodnih, europskih i domaćih propisa [Private International Law Act – interaction of international, european and national rules] Hrvatska akademija znanosti i umjetnosti Zagreb 2020. T. HOŠKO, Novo uređenje međunarodnog privatnog prava u Republici Hrvatskoj – Zakon o međunarodnom privatnom pravu, Zakonitost 2019/1, p. 19-31. 12

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The New Croatian Private International Law Act A.

General Provisions

The introductory provisions provide for the scope of legislation and the hierarchy within the legal system. Croatian private international law legal tradition is characterized by a holistic approach through independent codification. The introductory provision of Article 1 clearly indicates the comprehensiveness of the rules regulating private international law by virtue of the rules of applicable law, jurisdiction and procedural aspects of resolving cross-border disputes, as well as the rules of the recognition of the effects of foreign judgments and authentic instruments. The hierarchy of legal sources remains unchanged. The PIL Act applies if a particular issue is not regulated by: a) international sources, i.e. a multilateral or bilateral agreement; b) EU regulation; or c) other sectoral legislation which will take precedence over the PIL Act according to the maxim “lex specialis derogat legi generali“. In respect of the latter, in addition to the new PIL Act, the national legal framework for private international law consists of some sectoral acts18 and implementing legislation.19 If item a) is further elaborated, it primarily relates to contracted multilateral international treaties, especially those of the Hague Conference on Private International Law.20 It is notable that Croatia succeeded to most of bilateral regimes of ex-Yugoslavia, though their practical impact is negligible.21 Furthermore, mutual delimitation of the PIL Act, regulations and conventions, derives also from their compatibility clauses and respective scope of application ratione materiae, temporis, personae, territori. A major change in private international law regulation is marked by the accession of the Republic of Croatia to the EU. Namely, it should be borne in mind that not all legal areas are equally subject to EU standardization, while private international law is one of the most intensively regulated areas of private law.22 The corpus of European private international law consists of a series of regulations 18 Civil Procedure Act, OG 53/91, 91/92, 58/93, 112/99, 88/01, 117/03, 88/05, 02/07, 84/08, 123/08, 57/11, 148/11, 25/13, 89/14, Family Act, OG 116/03, 17/04, 136/04, 107/07, 57/11, 61/11, 25/13, 05/15, 103/15, Enforcement Act, OG 112/12, 25/13, 93/14, Conciliation Act, OG 18/11. Proper delimitation of internal legal sources has not been achieved by adoption of the PIL Act, but has remained only partly settled. 19 For enumeration see: Report on national implementation laws EUFam’s II Consortium, 27 February 2020 http://www2.ipr.uni-heidelberg.de/eufams/index-Dateien/ microsites/download.php?art=projektbericht&id=18 p. 3-6. 20 V. TOMLJENOVIĆ/ I. KUNDA, Conflict of Laws Conventions and their Reception in National Legal Systems: The Croatian National Report, in J. SÁNCHEZ CÓRDERO (ed), The Impact of Uniform Law on National Law. Limits and Possibilities/L'incidence du droit uniforme sur le droit national. Limites et possibilités, Mexico City: Instituto de investigationes Juridicas 2010, p. 1024-1069. 21 D. BABIĆ/ T. HOŠKO, The External Relations of Croatia, in A. DUTTA/ W. WURMNEST (eds), European Private International Law and Member State Treaties with Third States - The Case of the European Succession Regulation, Cambridge Intersentia 2019, p. 67-83. 22 I. KUNDA, Međunarodnoprivatnopravni odnosi [Private international law relations] in E. MIŠĆENIĆ/ I. KUNDA & S. PETRIĆ et al., Europsko privatno pravo – posebni dio, Školska knjiga Zagreb 2020, p. 486- 555.

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Mirela Župan and international treaties, as well as extensive relevant case law of the Court of Justice of the EU in Luxembourg (CJEU).23 In their field of application, they have an advantage over national solutions. The new PIL Act has made them an integral part of national legislation, sometimes even extending their original substantive scope of application. The role of legal practice in the EU system must not be neglected, because every judgment of the CJEU by which it interprets a certain rule becomes at the same time an integral part of the rule that is interpreted.24 The introductory provisions of the PIL Act further define the basic connecting factors: nationality, residence and habitual residence. Nationality as a connecting factor qualifies under the law of the country concerned. In the case of dual or multiple citizenship, the Croatian legislator surprisingly retains the exclusivity of domestic nationality in any situation.25 Namely, following the Garcia Avello,26 which declared it discriminatory against the EU primary legislation,27 Member States amended and harmonized their national legislations. Although the prevailing practice of the CJEU is not taken into account by the legislator, it must be effectuated by the practice. When applying the rule from Article 3(2) of the PIL Act to situations where the second, or one of multiple citizenships, is citizenship of one of the EU Member States, the principle of effective citizenship should be applied instead of the exclusivity principle. In the regulation of statelessness, the legislator partially retains the earlier solution. Thus, for a stateless person, citizenship as a connecting factor is replaced by permanent residence as a primary connecting factor. If the person in question has neither citizenship nor permanent residence, the law enforcement authority will have to find out in each individual case with which law the stateless person has the closest connection, and then apply that law. In relation to stateless persons, the new PIL Act differs not only in terms of the subordinate connecting factors, but also because it explicitly places the refugees without citizenship of any state within the scope of application of the provision. Therefore, in respect of persons enjoying international protection on the territory of the Republic of Croatia as refugees, the provisions of this Act shall apply accordingly.28 M. BOGDAN/ M. PERTEGÁS SENDER, Concise Introduction to EU Private International Law, Europa Law Publishing, 2019. 24 G. MIKELSONE, The binding force of the case law of the Court of Justice of the European Union, Jurisprudence 2013/ 20-2, p. 469-495. 25 Article 3 par. 2 of the PIL Act. 26 ECJ, 2 October 2003, Carlos Garcia Avello v Belgian State, ECLI:EU:C:2003:539. 27 Article 18 of the TFEU “Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.” 28 I. KUNDA, Utjecaj međunarodnoprivatnopravnih rješenja Europske unije na status migranata [Impact of private international law rules over the migrants' status], in J. BARBIĆ (ed), Položaj migranata u međunarodnom i europskom pravu, Hrvatska akademija znanosti i umjetnosti Zagreb 2020, p. 73-91; M. ŽUPAN et al., Croatian National Report, in The Legal Status and Protection of Internationally Displaced Persons, Refugees, Asylum Seekers and ‘Invisible’ Persons without IDs - Guide to Good Practices in Serbia, Croatia, North 23

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The New Croatian Private International Law Act The legislator resorts to defining the term permanent residence, which is deemed “the place where a person is settled with the intention to live there permanently”. The PIL Act also introduces a definition of “habitual residence”. Habitual residence is perceived as a combination of objective actual residence and subjective intention to stay; it is a place where a person “predominantly lives”.29 PIL Act explicitly states that the concept of habitual residence is not subject to prior registration or linked with the residence permit, nor is there a prescribed minimum period for actual residence to be considered “habitual”. Therefore, in each individual case, the law enforcement authority will look for the center of personal relationships by weighing and assessing the presence of these two elements. The legislator suggests that circumstances of personal or business nature that indicate factors connecting a person with the place in question or their intention to establish such connecting factors are decisive for determining a person’s habitual residence. Although the 1982 PIL Act did not recognize habitual residence as a connecting factor, it has long been part of the Croatian legal order by virtue of the Hague Conventions, and more recently through EU regulations.30 It should be borne in mind that the concept of habitual residence in the context of unified law (conventions, regulations) is interpreted autonomously. This means that in the context of the application of these instruments, national authorities will need to interpret the concept of habitual residence as established in the practice of other Contracting Parties, i.e. in terms of regulations, as interpreted by the CJEU in its corpus of judgments.31 The personal status of legal entities partially deviates from the previous act. The PIL Act defines the seat of the legal person as the place determined in its statute.32 If the statutory seat cannot be determined, the seat is determined according to the location of the actual seat of management of the legal entity in question.33 For the establishment, operation and termination of a legal person, as well as organizations without legal personality, the law of the state under which it was established is applicable.34 Macedonia and Bosnia and Herzegovina, http://www.prafak.ni.ac.rs/158-force-migrationproject-seels.html. 29 Article 5 of the PIL Act. 30 V. BOUČEK, Uobičajeno boravište u hrvatskom međunarodnom privatnom pravu [Habitual residence in the Croatian Conflict of laws], Zbornik PFZ, vol. 65 6/2015, p. 885914. 31 I. KUNDA, Uobičajeno boravište djeteta [Habitual residence of the child], in M. ŽUPAN (ed) Prekogranično kretanje djece u Europskoj uniji [Cross-border movement of a child in the European Union], Pravni fakultet Sveučilišta J. J. Strossmayera u Osijeku Osijek 2019, p. 295-316. 32 See Article 6 of PIL Act, in comparison to ex Article 16 1982 PL Act that led to application of the law of the State under whose law it was established as a primary, and the real seat as a secondary connecting factor. 33 D. BABIĆ, Private International Law of Companies in Croatia, in C. GERNERBEUERLE et al. (eds), Private International Law of Companies in Europe, Verlag C.H. Beck München 2019, p. 266-279. 34 Article 19 of the PIL Act.

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Mirela Župan B.

Applicable Law

Seven chapters with accompanying sections in Title II “Applicable law” contain a combination of autochthonous provisions and references to European and international sources. Original provisions on the fundamental institutes of private international law are a mixture of the following: a) solutions identical to the previous 1982 PIL Act (filling the gaps in legislation, non-uniform legal order), b) somewhat modified solutions of the 1982 PIL Act (determining the content of foreign law, renvoi, public policy), and c) new institutes (escape clause, overriding mandatory rules). The part dealing with the applicable law governs various statutes. Provisions either redirect to relevant European or international sources, or provide for an original solution. 1.

General Instruments

The general part of private international law remains an exception within largely codified EU law.35 Hence, Member States are free to opt for original provisions. The solution in Article 8 of the PIL Act referring to the ascertainment and application of foreign law retains the maxim iura novit curia and the ex officio obligation of the law enforcement authority to determine the content and apply foreign law as it would have been applied there. The law enforcement authority will be the court or any other authority entrusted by internal rules on jurisdiction to decide on cases that may include cross-border elements. Therefore, besides a court, the authority obliged to apply foreign law may be a notary that handles international succession proceedings, but also a registry office that registers a marital status and personal name change, or a social welfare authority within its competence to impose supervision measures, etc. Other authorities (e.g. the Ministry of Justice, which obtains foreign law with letters rogatory) or the parties themselves may come to the aid of the law enforcement authorities. Although not specified in the PIL Act, law enforcement authorities can also make use of formal and informal modes of judicial communication developed within the European Judicial Network in civil and commercial matters,36 i.e. the International Hague Network of Judges.37 In relation to the previous 1982 regime, the provision is now supplemented by a rule, which, 35 R. MICHAELS, A Global Restatement of Private International Law? in C. BENICKE/ S. HUBER (eds), National, International, Transnational: Harmonischer Dreiklang im Recht, Festschrift für Herbert Kronke zum 70. Geburtstag Bielefeld: Gieseking 2020, p. 390. 36 Council Decision No 2001/470/EC of 28 May 2001 amended by Decision No 568/2009/EC of the European Parliament and the Council of 18 June 2009. ELI: http://data.europa.eu/eli/dec/2001/470/2011-01-01. 37 International Hague Network of Judges https://www.hcch.net/en/news-archive/ details/?varevent=426 See Croatian translation of Principles for Direct Judicial Communications in specific cases including commonly accepted safeguards (Principles 6-9) as annex of PH. LORTIE, Direct Judicial Communications and the International Hague Network of Judges under the Hague 1980 Child Abduction Convention, in M. ŽUPAN (ed), Private International Law in the Jurisprudence of European Courts - Family at Focus, Pravni fakultet Osijek 2015, p. 137-159.

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The New Croatian Private International Law Act as a last resort, enables the application of Croatian law in the absence of knowledge of foreign law. It facilitates the implementation of other international obligations undertaken by the Republic of Croatia, especially within the field of the protection of fundamental human rights.38 Namely, in cross-border disputes, the European Court of Human Rights has stressed a violation of the right to a fair trial within a reasonable time due to excessive length of proceedings in which the process of obtaining foreign law led to an unreasonable delay in the proceedings.39 The legislator leaves undecided the issue as to what actions the court should take in order to obtain foreign law, as well as what period of time should be considered reasonable to obtain [proof of?] the content of foreign law through diplomacy. Practical issue of cost of translating the content of foreign law obtained by the Ministry or submitted by the parties, i.e. the form and the strength of a foreign public document is expected as well. Despite the educational and referring nature of the PIL Act, it failed to refer to the application of the relevant European Convention on Information on Foreign Law, which has been in force in the Republic of Croatia since 2013.40 New impetus has been given to the renvoi. The PIL Act has eliminated the dilemma caused by the vague wording of the obligation to “take into account” the conflict-of-law rules of foreign law adhered to by the 1982 PIL Act. Article 9 of the PIL Act in principle abandons renvoi, with the exception of issues referring to the legal and business capacity of a natural person, declaration of death for a missing person, personal name and marriage requirements in the Republic of Croatia.41 A slightly modified provision on public policy is a welcome change. The previous 1982 PIL Act formulation referred to the content of public policy incorporated into domestic constitutional values, but the doctrine extended it in order to inlcude values expressed by treaties on human rights and fundamental freedoms. The term “manifestly contrary” to public policy indicates that resort to the elimination of foreign law shall be had only in the case of the values of the highest importance, and not in the case of a mere incompatibility of foreign law with mandatory national rules. At this point, the legislator introduces a new tool into the system: a general rule on overriding mandatory rules. This legacy of modern codi38 M. ŽUPAN, 50 godina europske pravosudne suradnje u građanskim stvarima 5 godina hrvatske primjene [Fifty years of European judicial cooperation in civil matters five years of Croatian application] Godišnjak Akademije pravnih znanosti Hrvatske Vol. X/2019-1, p. 469-495. 39 M. HAZELHORST, Free Movement of Civil Judgements in the European Union and the Right to a Fair Trial, Springer 2017.; S. STUIJ, Some Aspects of the Application and Ascertainment of Foreign Law in the Light of Article 6 of the ECHR, in CH. PAULUSSEN et al. (eds), Fundamental Rights in International and European Law Springer 2015, p. 185211; P. KINSCH, Enforcement as a Fundamental Right, Law Working Paper Series No 2014/7, Université du Luxembourg, p. 1-10. 40 Act ratifying the European Convention on Information on Foreign Law, OG-IT 13/2013. 41 Although Article 9(3) refers to the application of renvoi in relation to Article 45 as well, that would not be possible because that provision relates to applicable law for maintenance obligations, and the Hague 2007 Protocol abandoned renvoi.

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Mirela Župan fications performs a positive function aimed at protecting public policy. Overriding mandatory rules will take precedence over foreign law if the court finds them important for the protection of the public interest. Overriding mandatory rules of the state in which the obligation is to be performed may also be taken into account.42 It is notable that the provision on fraus legis has been fully abandoned. The legacy of recent codifications is certainly an escape clause. It enables a deviation from the application of law referred to in the provisions of the PIL Act if all circumstances of the case clearly indicate a weak connection to that law and a closer connection to some other law. The term “escape clause” signals an exceptional and restricted application in justified circumstances. However, the court will not be able to invoke the lack of connection between a legal relation and the applicable law if that law has been chosen by the parties. Likewise, the court cannot deviate from the applicable law referred to by the conflict-of-law rule aimed at achieving a certain result and material justice (e.g. the validity of a legal transaction).43 2.

Personal status

In the context of fundamental issues concerning the personal status of natural persons in a narrower sense (the legal and business capacity, declaration of death for a missing person, personal name), primacy of citizenship as a connecting factor of the first degree is retained.44 The [one] exception is the rule on deprivation of legal capacity and guardianship of adults. Here, the assumptions for legal capacity deprivation/restoration will depend on the law of the state of habitual residence of the person whose legal capacity is being decided, while the implementation of the guardianship scheme itself will follow the legislation of the authority conducting it. The legislator made the right decision in regulation of temporary protective measures – its urgent and provisional nature justifies reference to Croatian law.45 The PIL Act singles out the rule referring to the law applicable to child custody, which refers to the application of the 1996 Hague Convention.46 In terms of the title dealing with the personal status of natural persons, the novelty is the provision of Article 18, which fills the previous normative gap regarding one’s personal name.47 The legislator gives limited autonomy when it See Article 13 of the PIL Act. See Article 11 of the PIL Act. 44 Article 14, 17, 18 of the PIL Act. 45 Article 16 PIL Act. 46 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Cooperation in Respect of Parental Responsibility and on Measures for the Protection of Children of 19 October 1996 OG-IT 5/09. However, child custody is not a matter of personal status in the narrow sense but part of the family-related choice of law rule. Hence, the legislator refers again to the same international treaty through the provisions of Article 44. 47 I. MEDIĆ, Right to personal name and Croatian legal framework - de lege lata and de lege ferenda, in M. ŽIVKOVIĆ (ed), 4th Balkan Conference Proceedings: Personal Name 42 43

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The New Croatian Private International Law Act comes to the choice of a personal name model, both in the conclusion of marriage and in the registration of a child’s name. Accordingly, a bride and a groom, i.e. a child’s parents, can choose a personal name model of the state of which on of the parents is a citizen, or a model provided for by the law of the Republic of Croatia, if one of them is habitually resident in Croatia.48 3.

Property Law, Intellectual Property

Property rights in cross-border matters retain the predecessor PIL Act determinations, with a novelty regarding the conflit mobile wording. Ownership relations and other rights over a thing will need to be assessed primarily according to the place where the property is located (lex rei sitae), goods in transit pursuant to the law of the place of destination, and the means of transport pursuant to the law of the state where [the transporters][they] are registered.49 Another novelty is the chapter on intellectual property law, which provides for the application of lex loci protectionis to all “issues relating to the law itself”. A dispute over the intellectual property right arising from the employment relationship should be related to the law under which the employment contract in question is judged.50 4.

The Applicable Law Governing Contractual, Tort and Succession Matters

As contractual, tort and succession matters are covered by regulations and conventions, the legislator refers to each of the relevant EU instruments. Regulation No 593/2008 on the law applicable to contractual obligations (Rome I Regulation) applies to contractual obligations.51 It applies even to those contractual relations which are excluded from its substantive scope of application and not regulated by another international source. In this way, the legislator adeptly avoided the adopin International Law and Private International Law, Pravni fakultet u Nišu 2016, p. 71-89; M. ŽUPAN, Normiranje mjerodavnog prava za osobno ime - novina hrvatskog Zakona o međunarodnom privatnom pravu [Choice of law for personal name - novelty of Croatian PIL act ], in T. DESKOSKI (ed), Recent trends in European Private International Law – Challenges for the national legislations of the South East European countries, Pravni fakutet Justinijanus I Skopje 2012, p. 179-193. 48 I. MEDIĆ, Identitet i ime u prekograničnom pravnom prometu [Name and Identity in cross-border legal transit] in J. BARBIĆ/ M. ŽUPAN (eds), Identitet u prekograničnim privatnopravnim odnosima [Identity in cross-border private relations], Hrvatska akademija znanosti i umjetnosti Zagreb 2021. 49 Article 20-23 of the PIL Act. 50 Article 24 PIL Act. I. MATANOVAC–VUČKOVIĆ & I. KUNDA, Materijalnopravno i kolizijskopravno uređenje intelektualnog vlasništva nastalog u radnom odnosu [Materijalnopravno i kolizijskopravno uređenje intelektualnog vlasništva nastalog u radnom odnosu] Zbornik Pravog fakulteta u Rijeci vol. 32 1/2011, p. 75-125. 51 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations, OJ EU L 177/6, 4 July 2008.

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Mirela Župan tion of separate provisions for a few relationships that are not covered by the Regulation. The same model is used for torts, and the substantive scope of application of Regulation No 864/2007 on the law applicable to non-contractual obligations (Rome II Regulation)52 extends to all torts.53 External competence of the EU should be mentioned here.54 A compromise between the EU and the Hague Conference on respect for international obligations assumed previously by Member States has resulted in a solution according to which the Rome II Regulation does not affect international conventions to which one or more Member States were parties at the time of its adoption.55 In this way, the Regulation left room for the application of the previous Hague conventions. Hence, the new PIL Act refers to relevant rules of the Hague Convention on the Law Applicable to Traffic Accidents of 1971,56 and the Hague Convention on the Law Applicable to Products Liability of 197357 to apply in traffic car accidents and product liability respectively.58 The law applicable to succession is also covered by international sources. The PIL Act refers to the application of Regulation No 650/2012 on jurisdiction, applicable law, the recognition and enforcement of judgments and the acceptance and enforcement of authentic instruments in matters of succession,59 i.e. there is again room to apply the Hague Convention on the Conflicts of Laws Relating to

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, OJ EU L 199/40, 31 July 2007. 53 D. VRBLJANAC, Pravo mjerodavno za povrede prava osobnosti u novom ZMPP-u: je li prihvaćeno rješenje najbolje? [Law Applicable to Violations of Personality Rights in the New Croatian PIL Act: Is the Accepted Solution the Most Appropriate One?] Godišnjak Akademije pravnih znanosti Hrvatske = Croatian Academy of legal sciences yearbook, 10/2019 1, p. 409-423. 54 P. FRANZINA, The Relationship Between EU Legislation and International Instruments in the field of Private International Law, in J. VON HEIN/ E.M. KIENINGER & G. RUHL (eds), How European is European Private International Law, Intersentia 2018, p. 19-53. 55 See Recital 36, Articles 28 and 29. 56 OG-IT 4/94. For more detail, see: V. TOMLJENOVIĆ, Tumačenje kolizijskih pravila međunarodnih konvencija - primjer tumačenja kolizijskih odredbi Haaške konvencije o prometnim nezgodama [Interpretation of conflict of laws rules of international conventions the example of interpretation of conflict of laws rules of the Hague convention on the law applicable to traffic accidents] Zbornik Pravnog fakulteta Zagreb vol. 62 1-2/2012, p. 101152. 57 OG-IT 8/02. 58 T. HOŠKO/ D. ZGRABLJIĆ ROTAR, Application of the 1971 Hague convention on traffic accidents in Croatia, Pravni vjesnik 35/2019 3-4, p. 181-199. 59 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 EU L 201/107, 27 July 2012. 52

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The New Croatian Private International Law Act the Form of Testamentary Dispositions of 196160 to issues of the law applicable to the form of testamentary disposition. 5.

Family-Related Choice of Law Rules

Cross-border family relations are partly covered by international legal sources; for certain issues the legislator makes original provisions. The latter include the rules of the law applicable to the conclusion and annulment of marriage, personal and property relationships between spouses, divorce, formal and informal marriagelike relationships, establishing and disputing parentage, and adoption. In Croatia, any person with no legal obstacles to entering a marriage pursuant to the law of his or her citizenship will be able to enter into a marriage. However, the application of this choice of law rule should be eliminated if its effects violate public policy. This could happen, for example, if that foreign legislation tolerated polygamy, and marriage to a minor or consanguine marriage. A marriage contracted abroad is recognized in the Republic of Croatia if it is duly contracted there. In this section a solution is adopted, which appears awkward at first sight: a provision called “Recognition of a marriage entered into abroad” is part of the section referring to applicable law. Bearing in mind a growing number of legislations that allow same-sex marriage, the legislator resorts to an adjustment, and downgrades such a marital union, as in terms of its effects in Croatia they are equated with a life partnership.61 The introduction of the solution is to be welcomed as a novelty aimed at strengthening legal certainty and eliminating limping statuses. If a legal gap had been retained, it could possibly lead to a denial or refusal to recognize the effects of marital unions valid under foreign law as, according to the Croatian constitutional category, only individuals of the opposite sex can marry.62 Consequently, such orders could have been sanctioned before the ECHR as a violation of fundamental human rights.63 Regarding the validity of marriage, whether the provision of Article 33 aims at the substantive or formal validity of marriage is not specified. It should be accepted that it aims to achieve both since it is often the case that substantive validity is conditioned on formal validity. Not surprisingly, the validity is assessed under the law of the state in which the marriage is celebrated.64 However, the same solution was envisaged by the PIL Act a little earlier with regard to the type of marriage concluded in the Republic of Croatia, in relation to which it provides for the application of the law of the Republic of Croatia. The unilateral choice of law provision should, by analogy, apply to the type of marriage concluded in any state.

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OG-IT 4/94.

61

See Article 32 par. 2 of the PIL Act.

Article 62, Constitution of the Republic of Croatia OG 56/90, 135/97, 08/98, 113/00, 124/00, 28/01, 41/01, 55/01, 76/10, 85/10, 05/14. 63 P. KINSCH, European Courts and the obligation (partially) to recognize foreign same-sex marriages, this Yearbook 2019, p. 47-59.; ŽUPAN (note 10). 64 Article 31 para 2 of the PIL Act. 62

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Mirela Župan In terms of personal relationships between spouses, the legislator abandons the application of nationality as a connecting factor and introduces more modern solutions. These are as follows: common habitual residence; if there is none, the last common habitual residence; if there is none, common nationality as a connecting factor; and, in the last instance, Croatian law. The property of spouses should be judged pursuant to the law referred to in Regulation No 2016/1103 on jurisdiction, applicable law and the recognition and enforcement of judgments in matters of matrimonial property regimes.65 The Croatian PIL Act contains provisions with regard to the law applicable to divorce.66 The similarity with Regulation No 1259/2010 on the law applicable to divorce and legal separation (Rome III Regulation) rules is obvious.67 Mirroring the Rome III instead of acceding to it comes as a surprise, as Croatia took part in other enhanced cooperation regimes.68 Although in the section dealing with personal and property relationships between spouses the legislator fails to refer to the law applicable to maintenance obligations, while such reference is made in the relevant part of cohabitations and life partnerships, the applicable law to that matter is also determined by the provisions of the 2007 Hague Protocol.69 Another novelty is the section on the effects of cohabitation (extramarital unions), which are judged by the law of the state with which they have the closest connection. Croatian legislation shall apply to any case of the conclusion or termination of a life partnership in the Republic of Croatia. If it is necessary to assess the effects of registered same-sex partnerships concluded abroad (which may include a wide range of different unions), the legislator again uses the method of adjustment and stipulates that by their effects they will be equated with a life partnership in the Republic of Croatia if they are valid under the law of the state in which they were concluded. Regulation No 2016/1104 on jurisdiction, applicable law and the recognition and enforcement of judgments in matters of the property consequences of registered partnerships70 shall apply to property relations. In terms of establishing or disputing parentage, what is new is certainly the alternative setting of the criteria of either the law of the habitual residence or the law of nationality (of the child or the parents whose parentage is beings established Council Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes, OJ L 183, 8.7.2016, 1-29. 66 See Articles 36 and 37 of the PIL Act. 67 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, OJ L 343, 29.12.2010, 10-16. 68 V. TOMLJENOVIĆ/ I. KUNDA, Uredba Rim III: treba li Hrvatskoj? [The Rome III Regulation: Is it needed in Croatia?], in I. KUNDA (ed), Obitelj i djeca: europska očekivanja i hrvatska stvarnost, Pravni fakultet u Rijeci 2014, p. 207-224. 69 Protocol on the law applicable to maintenance obligations, OJ L 331/19, 161-165. 70 Council Regulation (EU) 2016/1104 of 24 June 2016 on the implementation of enhanced cooperation in the areas of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of property consequences of registered partnerships OJ L 183, 8.7.2016, 30-56. 65

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The New Croatian Private International Law Act or disputed), but the application of the latter is made conditional on the best interests of the child. Subjecting the alternative options to fundamental rights principles is certainly a contemporary approach.71 In relation to all parent-child relations, the legislator refers to the application of the 1996 Hague Convention.72 The structure of referral to legislation is faulty here as well, as the Croatian legislation fails to refer to the provisions of the 1980 Hague Convention on the Civil Aspects of International Child Abduction,73 in particular as regards the law applicable for assessing whether a removal or retention of a child may be qualified as wrongful. With regard to maintenance obligations, reference is made to the application of the 2007 Hague Protocol.74 The applicable law governing adoption should generally be determined using nationality as a connecting factor. Moreover, maintaining full cumulation of nationality law of adoptive parents and adoptees should ensure that the preconditions for the establishment and termination for the adoption are met as well as for its validity in both states.75 However, the prevailing practice of the ECtHR76 suggests that refusing to recognize the effects of foreign adoption could amount to a violation of the right to respect for family life under Article 8 of the European Convention on Human Rights. C.

International Jurisdiction and Procedure

In the context of jurisdiction, the former rules were based on residence and nationality. Accumulation of these two criteria often led to jurisdiction of Croatian authorities.77 Pursuant to the new PIL Act, general international jurisdiction is grounded if a person is a permanent resident of the Republic of Croatia.78 The text of the title on jurisdiction in the original part abandons residence as the basic jurisdiction criterion, often placing it in an alternative position in relation to the 71 E. BERGAMINI/ CH. RAGNI, Fundamental rights and best interests of the child in transnational families, Intersentia 2019, p. 139-170. 72 OG-IT 8/09. 73 Convention on the Civil Aspects of International Child Abduction, 1980. Editorial consolidated text. The Convention was published in the OG of the former SFRY IT 7/1991. Pursuant to the notification of succession, the Republic of Croatia became a party to the Convention on 8 October 1991. (OG-IT 4/1994). 74 OJ L 331/19. 75 T. HOŠKO, Posvojenje s međunarodnim obilježjem [Adoption with an international element], in M. ŽUPAN (ed), Prekogranično kretanje djece u Europskoj uniji, Pravni fakultet Sveučilišta J. J. Strossmayera u Osijeku Osijek 2019, p. 317-343. 76 ECHR, 28.6.2007, Wagner and J.M.W.L v. Luxembourg, App. No 76240/01. 77 In practice, it occurs very frequently due to multiple places of residence of Croatian citizens who, despite living abroad, retain their formal place of residence in the Republic of Croatia, although the position of the case law is that the certificate of residence, without filling in its contents, does not lead to jurisdiction. See the decision of the Constitutional Court of the Republic of Croatia, No: U-III-7187/2014 of 19 May 2016. 78 Cf. Article 54 of the 1982 PIL Act to Article 56 of the PIL Act.

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Mirela Župan habitual residence criterion. An alternative solution is introduced when determining jurisdiction in personal matters and adoption. The legislator per exempli enumerates the procedures in personal matters that would most typically appear, such as: granting permission to marry, deprivation or restoration of legal capacity, establishing or terminating custody, establishing or disputing parentage, establishing adoption and declaring a missing person dead.79 Maternity and paternity matters alternatively come under the jurisdiction of Croatian authorities if at least one party has his or her habitual residence in Croatia, or if a child and the person whose maternity or paternity is to be established or disputed are Croatian nationals.80 Title III of the PIL Act now largely refers to regulations and conventions to be applied to aspects of jurisdiction and proceedings involving a foreign element. For the sake of uniformity of solutions, the legislator has extended the scope of their application to situations referring to third countries or non-contracting parties, for which it would otherwise be required to provide special solutions. Appropriate reference is therefore made as follows: with regard to jurisdiction in civil and commercial matters, to the application of Regulation No 1215/2012 (Brussels I bis);81 with regard to jurisdiction in matrimonial matters and the matters of parental responsibility to the application of Regulation 2201/2003 (Brussels II bis),82 or additionally, with regard to jurisdiction in the matters of parental responsibility to the application of the 1996 Hague Convention, and, with regard to jurisdiction in matters relating to maintenance obligations, to the application of Regulation No 4/2009 on maintenance.83 The legislator has failed to refer here to the relevant rules on abduction jurisdiction of the 1980 Hague Convention.84 The new rules provide for a residual jurisdiction in terms of Article 8 and 14 of the Brussels II bis Regulation. Hence, residual jurisdiction in matrimonial matters exists when at least one spouse is a Croatian national, while in parental responsibility matters jurisdiction is grounded when a child is a Croatian national. Forum necessitatis is now integrated in national codifications and EU regulations, opening the door to justice for all those cases that would otherwise be threatened with denial of justice. The PIL Act is not an exemption, as it introduces the criterion of necessary jurisdiction into the part dealing with jurisdiction. 79 Article 47 of the PIL Act. Jurisdiction in respect of the establishment and termination of adoption is repeated in a separate provision a few articles below (see Article 52 of the PIL Act). 80 See Article 51 of the PIL Act. 81 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, OJ EU L 351/1, 20 December 2012. 82 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, OJ EU L 338/1, 23 December 2003. 83 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 EU L 7/1, 18 December 2008. 84 OG SFRY IT 7/1991, OG-IT 4/1994.

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The New Croatian Private International Law Act Consequently, the Croatian court will be able to act in disputes over which no jurisdiction can be determined by the application of the PIL Act or other international sources, and at the same time, either the proceeding cannot be carried out abroad, or it is unreasonable to expect that. The use of forum necessitatis is possible only in relation to the defendant who resides in a state that is not a Member State of the European Union, and only if the subject of the proceeding has sufficient connections with the Republic of Croatia, justifying [the reason for] carrying out the proceeding in Croatia.85 With regard to procedural rules, the regulations themselves (in the so-called European proceedings) provide for the moment when the proceeding is considered to have been initiated and lis pendens attaches in the relations between the Member States. The PIL Act now regulates lis pendens in relation to third countries, providing for the obligation to tolerate a previously initiated foreign proceeding. Pursuant to Article 60 of the PIL Act, a Croatian court suspends the proceedings until the foreign court passes a judgment, unless it can be expected that the foreign court will pass a judgment, within a reasonable time, that will be suitable for the recognition and enforcement in the Republic of Croatia. It should be emphasized here that in the European doctrine and practice, the exclusive legal nature of the rules of jurisdiction prescribed by regulations is controversial, as opposed to the possibility of taking into account the fact of the proceeding previously initiated in a third country. Furthermore, due to inconsistent practices of the Member States, when the Brussels I Regulation was revised, the European legislator introduced the rule of lis pendens in relation to third countries,86 which then takes precedence over the PIL Act. Unfortunately, the European legislator has not remained consistent, and the legal gap in this regard continues to result in inconsistent practices in relation to all other regulations, even those adopted after the Brussels I bis Regulation.87 With the necessary modifications, the PIL Act takes over the earlier regime regarding the exemption from payment of costs of proceedings.88 Granting jurisdiction over measures for the protection and insurance of persons and property in Croatian territory to Croatian authorities deviates from the previous 1982 PIL Act wording, offering a much better solution. It should be noted that an autonomous model of the cross-border freezing of bank accounts has been adopted within the EU, and Regulation No 656/2012 on the cross-border freezing of accounts is also to be applied appropriately.89

Article 58 of the PIL Act. See the rule introduced in the Brussels I bis Regulation by virtue of Article 33-34. 87 M. ŽUPAN/ M. DRVENTIĆ, Parallel proceedings, in I. VIARENGO/ F. VILLATA (eds), (note 11), p. 203-222. 88 Cf. Articles 61-63 of the PIL Act to Articles 82-84 of the 1982 PIL Act. 89 Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters, OJ L 189, 27.6.2014, 59-92. 85 86

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Mirela Župan In terms of other procedural matters, such as the taking of evidence or hearings abroad, reference should be made to the provisions of the relevant conventions and regulations,90 or national procedural law. For the first time, the PIL Act introduces a provision in respect of legislation that was or is valid in the Republic of Croatia, but has to be used before the authorities of a foreign state. Confirmation on content of Croatian law is issued by the ministry in charge of judicial affairs, stating the title of the piece of legislation, issuance and expiration dates, and the text of the relevant provisions of that piece of legislation.91 D.

The Recognition of Foreign Judgments

The heart of European judicial cooperation in civil matters is the free movement of judgments.92 This “fifth market freedom” is guaranteed by several regulations listed by the legislator. The application of this facilitated regime is reserved only for judgments of other Member States, while other foreign judgments enjoy recognition either under international treaties, which always operate on the reciprocity principle when it comes to recognition, or under the national legal regime. Here the legislator violates the referring nature of the PIL Act by failing to mention the Convention on the Protection of Children and Co-operation in Respect of Intercountry Adoption.93 The notion of a foreign judgment includes a judgement of a foreign court, a settlement reached in a court (judicial settlement), as well as a decision of another authority that is equated with a decision of the court in the country where it was rendered or with a judicial settlement. The presumptions are also in line with the earlier solution, such that a foreign judgment must meet a positive presumption regarding finality (Article 67), while it must not contain negative presumptions such as procedural irregularities (Article 68), there exists an earlier judgment on the same matter between the same parties (Article 70), manifest opposition to public policy (Article 71), and there are certain shortcomings in terms of jurisdiction. It is notable that the original part of the PIL Act contains no exclusive jurisdiction 90 Act Ratifying the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters OG 5/2009 (2.7.2009); 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, OJ L 174, 27.6.2001, p. 1-24 and OJ L 304, 14.11.2008, p. 80. 91 See Article 64 of the PIL Act. 92 I. MEDIĆ, Priznanje i ovrha na području EU – uzajamno povjerenje i zaštita temeljnih ljudskih prava [(Recognition and enforcement within the EU - mutual trust and the protection of human rights], Zbornik radova Pravnog fakulteta Split vol. 54 1/2017, p. 283-300. 93 Act on the Promulgation of the Act Ratifying of the Convention on the Protection of Children and Cooperation in Respect of Intercountry Adoption OG 5/2013; T. HOŠKO, Priznanje stranih sudskih odluka o posvojenju [Recognition of foreign decisions on adoption] in H. SIKIRIĆ, et al. (eds), Zbornik radova Zagrebačko-skopskog kolokvija, Pravni fakultet Sveučilišta u Zagrebu 2015, p. 91-110.

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The New Croatian Private International Law Act rules, that could have been reflected in the part on recognition to prevent recognition of a foreign judgement. Jurisdiction of a court of origin should be monitored in certain situations. Pursuant to the PIL Act, in a situation in which the foreign court of origin was seized on exorbitant grounds of jurisdiction, recognition can be denied.94 To some extent, the PIL Act introduces mirrored jurisdiction, such that a Croatian court will be able to reject a foreign judgment if the court that issued the judgment has established its jurisdiction contrary to the protecting jurisdiction of Brussels I bis.95 It is notable that the legislator abandoned the previous regime’s oversight of substantive law regarding the recognition of foreign personal status rulings. Hence, in the PIL Act the regime is unique, irrespective of the subject matter of the judgment subject to recognition. The reciprocity has been removed as a ground for refusal of recognition. The PIL Act provides for the following two options for conducting a procedure for the recognition of a foreign judgment: a) as an independent noncontentious proceeding, or b) as a preliminary issue of another proceeding on the merits. Territorial jurisdiction to conduct independent proceedings is granted to the court in the territory where the party against whom the recognition and enforcement are sought resides or the court in whose territory enforcement is to be carried out. The PIL Act also introduces a deadline for filing an appeal against the decision on the recognition and enforcement of a foreign judgment, i.e. within 15 days after the delivery of the decision.96 If the decision on recognition is issued with prejudice, the effects of the recognition are limited to that procedure only. Special rules now provide for legal actions taken through diplomatic and consular missions abroad.97

III. Follow up – Application of the PIL Act in Practice Adoption of PIL Act was needful, however, the harmonization of the outdated normative framework with the requirements of the present time is only a precondition for changes in the judiciary in relevant matters. The reality of the administration of justice has changed over the last few decades through massive intervention of international and supranational actors within national judicial systems. Although state-centrism has progressively been eroded, the national State remains the “master of the game” in adjudication.98 A proper practical implementaArticle 69 par. 2 “[the] court based its jurisdiction exclusively on the presence of the defendant or his/her property within the state of the court of origin, and that presence is not directly related to the subject matter”. 95 Chapter II, sections 3, 4 and 5 of the Regulation, as referred to in Article 46 par. 1 of the PIL Act. 96 See Article 72 of the PIL Act. 97 See Articles 74-77 of the PIL Act. 98 D. FERNÁNDEZ ARROYO, Denationalising Private International Law – a Law with Multiple Adjudicators and Enforcers, this Yearbook 20 (2018/2019), p. 31-46. 94

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Mirela Župan tion of unified private international law is the cornerstone of civil justice. The intensity of cross-border legal transactions requires a new approach to resolving cross-border disputes. Pressure for a proper implementation of the acquis has contributed to the importance of the subject matter in general. A new approach awaits the EU and other international organizations that monitor and report noncompliance with international standards. More importantly, a new approach is expected by citizens who, first and foremost, need legal certainty in the state of modern mobility. For decades, Croatian scholars have been elaborating the rules and, more recently, the relevant Croatian practice for: the Brussels I bis,99 the Successions Regulation,100 Rome I,101 Rome II,102 the Brussels II bis,103 the Maintenance Regulation,104 and Matrimonial Property Regimes,105 as well as the 1993 Hague Convention, the 1996 Hague Convention, and the 1980 Hague Convention. Studies

99 I. KUNDA, Croatia, in P. BEAUMONT, et al. (eds), Cross-Border Litigation in Europe, Hart Publishing Oxford 2017, p. 265-272; V. TOMLJENOVIĆ/ I. KUNDA (eds) Uredba Bruxelles I: izazovi hrvatskom pravosuđu [The Brussels I Regulation: Challenges for Croatian Judiciary], Pravni fakultet u Rijeci 2012; M. DRVENTIĆ, Zaštita radnika u prekograničnim postupcima: Nadležnost za pojedinačne ugovore o radu i upućivanje radnik [Protection of Employees in Cross-border Proceedings: Jurisdiction Rules over Individual Employment Contracts and Posting of Workers] Zbornik Pravnog fakulteta Sveučilišta u Rijeci 2021. 100

M. ŽUPAN (note 12) p. 446-450.

K. SAJKO (note 8); M. ŽUPAN, Pravo najbliže veze u hrvatskom i europskom međunarodnom privatnom ugovornom pravu [Lex connexitatis in Croatian and European Private International Contract Law], Rijeka 2007; I. KUNDA, Internationally Mandatory Rules of a Third Country in European Contract Conflict of Laws: The Rome Convention and the Proposed Rome I Regulation, Rijeka: Pravni fakultet u Rijeci, 2007. 102 D. BABIĆ/ D. ZGRABLJIC ROTAR, Croatia, in E. GUINCHARD (ed), Rome I and Rome II in Practice Intersentia, p. 131-153; I. Kunda, Uredba Rim II: ujednačena pravila o pravu mjerodavnom za izvanugovorne obveze u Europskoj uniji [The Rome II Regulation: Uniform Rules on the Law Applicable to Non-Contractual Obligations in the EU] Zbornik Pravnog fakulteta Sveučilišta u Rijeci 28/2007 – 2, p. 1269-1324. 103 I. MEDIĆ, Komentar Uredbe Bruxelles II bis u području roditeljske skrbi [Commentary on Council Regulation Bruxelles II bis in the field of parental responsibility] Pravni fakultet Sveučilišta u Osijeku, 2012; M. ŽUPAN, Međunarodna nadležnost u obiteljskopravnim stvarima – presjek pravne stečevine Europske unije [International jurisdiction in family matters – scan of EU acquis] in J. GARAŠIĆ (ed), Europsko građansko procesno pravo, Narodne novine Zagreb 2013, p. 177-198; 104 M. ŽUPAN (note 12) p. 429-459, M. ŽUPAN, Uzdržavanje u Europskoj uniji [Maintenance] in A. KORAĆ-GRAOVAC/ I. MAJSTOROVIĆ (eds), Europsko obiteljsko pravo, Zagreb Narodne Novine 2013, p. 267-289. 105 T. KOKIĆ/ I. KUNDA & M. ŽUPAN, Prekogranična pitanja bračnoimovinskih režima i režima imovine registriranih partnera [Cross-border issues of matrimonial property regimes and property consequences of registered partnerships] Pravosudna akademija Zagreb 2019; M. BUKOVAC PUVAČA et al., Croatia – report, in L. RUGGERI/ I. KUNDA & S. WINKLER (eds), Family Property and Succession in EU Member States National Reports on the Collected Data, 2019. 101

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The New Croatian Private International Law Act have been performed to detect the critical points and enable full and proper application of the PIL, which today mainly belongs to unified law.106 The practice illustrates the difficulties associated with the implementation and proper interpretation of the acquis and international treaties in the field of judicial cooperation in civil matters. 107 A very encouraging Croatian court practice can be found in the application of not only the Brussels I Regulation,108 but also the Brussels II bis Regulation and the Succession Regulation.109 The elimination of the possible gap between the ideals of global and European cross-border cooperation and its actual applications in Croatia requires bottom-up intervention. Implementing legislation that actually addresses the legal gaps and enables shift and unified procedures should be adopted. In that respect, the obsolete implementing acts on certain regulations should be upgraded. For example, due to the lack of proper implementing rules, the application of the transfer of jurisdiction raises practical and legal doubts. The implementing legislation for cross-border child abduction should serve as a prototype.110 Ultimately, the application of international legal sources is often difficult because their translations are poor, while the translations of supporting documents are generally not available at all.111 Translation of relevant guides and good practice guides is advocated. It goes without saying that continuous training of judges of all instances, as well as other authorities, is a priority.112

106 Http://www.eufams.unimi.it; http://www2.ipr.uni-heidelberg.de/eufams/index. php?lang=en; https://www.euro-family.eu. 107 I. KUNDA, Croatia, in P. BEAUMONT/ M. DANOV/ K. TRIMMINGS/ B. YÜKSEL (eds), Cross-Border Litigation in Europe, Hart Publishing, Oxford/ Portland/ Oregon, p. 265-272; M. ŽUPAN/ I. MEDIĆ/ P. PORETTI/ N. LUCIĆ & M. DRVENTIĆ, (note 11), p. 429459. 108 I. KUNDA (note 96) p. 272. 109 M. ŽUPAN (note 12). 110 The most prominent example is the Zakon o provedbi Konvencije o građanskopravnim vidovima međunarodne otmice djece NN 99/18 na snazi od 01.01.2019. with many specific rules on international child abduction, such as concentration of jurisdiction, etc. M. ŽUPAN/ M. DRVENTIĆ & TH. KRUGER, Cross-Border Removal and Retention of a Child – Croatian Practice and European Expectation, Int’l J. of Law, Policy and the Family 34 2020/1, p. 60-83. 111 I. KUNDA, Neke uobičajene pogreške u prijevodima propisa Europske unije [Some common errors in translations of the European Union legal instruments] Prevoditelj 38 /2015, 94, p.13-18. 112 M. ŽUPAN/ I. KUNDA/ P. PORETTI, Judicial Training in European family and succession matters, in Th. PFEIFFER/ Q.C. LOBACH/ T. RAPP (eds), Facilitating CrossBorder Family Life: Towards a Common European Understanding, Heidelberg University Publishing 2021.

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IV. Concluding Remarks By virtue of a set of circumstances, the once marginalized legal discipline of private international law is becoming a fundamental competence of a legal professional. The intensity of cross-border legal transactions requires new solutions, which have been gradually adopted through international treaties and EU regulations, and now they are being adopted in an original part in the new Croatian PIL Act. Moreover, the new regime acknowledges the fact that multiple legal sources are difficult to apply in practice, so it also performs an educational function by referring to relevant international and European legal sources. The implications of this approach are numerous. A seemingly modest act with merely 81 articles actually reveals itself to be a book of many volumes. Furthermore, this nomotechnical choice calls for continuous legislative activism where the legislature itself imposes the responsibility to update the PIL Act regularly and promptly. Moreover, engagement and activism are already expected: the list of sources of law referred to is not complete because the legislator has overlooked international treaties important in this area. Any new EU act or international treaty that enters into force should be integrated into the PIL Act.113 Certain gaps have remained among general instruments. The legislator has left a legal lacuna in respect of preliminary questions, adaptation, as well as the characterization.114 The solutions adopted resemble adherence to contemporary private international law trends, although with a touch of a traditional approach. As Prof. SYMEONIDES points out, modern acts on private international law are characterized by modern connecting factors (party autonomy widely accepted in almost all legal relations, habitual residence instead of citizenship and permanent residence) and legal institutes (such as an exemption clause and forum necessitatis).115 Party autonomy is a feature of the PIL Act.116 Its appearance via the EU acquis in con-

Besides overlooked treaties or EU instruments: Regulation (EU) 2016/1191 of the European Parliament and of the Council of 6 July 2016 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union and amending Regulation (EU) No 1024/2012 OJ L 200, 26.7.2016, p. 1136) and Regulation (EU) No 606/2013 of the European Parliament and of the Council of 12 June 2013 on mutual recognition of protection measures in civil matters OJ L 181, 29.6.2013, p. 4-12, the adoption of the Judgments Convention within the Hague conference could [briefly][soon] call for a reference. There is a new Council Regulation (EU) 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 ST/8214/2019/INIT OJ L 178, 2.7.2019, p. 1-115 as well. 114 H. SIKIRIĆ (note 11), p. 81. 115 S. SYMEONIDES, Codifying Choice of Law around the World. An International Comparative Analysis, Oxford University Press 2014, p. 345-351. 116 D. BABIĆ, Stranačka autonomija kao temeljno načelo međunarodnog privatnog prava? [Party autonomy as a general principle of private international law?] in J. BARBIĆ/ H. SIKIRIĆ (EDS) Međunarodno privatno pravo - interakcija međunarodnih, europskih i domaćih propisa, Hrvatska akademija znanosti i umjetnosti Zagreb 2020, p. 77-101. 113

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The New Croatian Private International Law Act tracts and tort,117 as well as successions and property regimes, has been extended to the original part of private international law as well. Applying limited party autonomy to naming issues and divorce follows contemporary trends. Another characteristic feature of the Croatian PIL Act is the application of the closest connection principle. It reveals itself in the form of an open connecting factor of the choice of law rule, as well as an escape clause. The overall feature of the contemporary private international law is the shift from mechanical to open solutions.118 A number of such examples may be found in the PIL Act, along with the above-mentioned closest connection principle. The best interest of the child stands out as an input of fundamental rights notions.119 Further on, open criteria such as forum necessitatis are used for jurisdictional purposes. The decision-making methodology in the application of these connecting factors is significantly different from the one employed with the mechanical conflict of law rules. In this respect, the role of the law enforcement authority is proactive, i.e. it needs to find the best solution for a specific case. It can also be said that the role of the “legislator” is entrusted to that of the law enforcement authority, on a case-by-case basis. Open connecting factors place the role of the “legislator” for a particular case in the hands of a judge. Methodologically, this means that the court tailors the application of the law in the context of each individual case depending on the circumstances of the case. This phenomenon can be a challenge for the Croatian legal practitioner. A bold introduction of such solutions will have to be accompanied by specialization within the courts, enhanced education, and support for publications on the subject matter. Aiming to achieve a unified euro-autonomous or convention-autonomous interpretation, it instantly indicates a constant activism of practice since the notion of uniformity is changing as well.120 If a specific subject matter deserves a closer look in the end, it is certainly personal status in a wider sense, as one of the very few oases of original solutions. In personal status matters, the PIL Act departs from nationality121 to the benefit of habitual residence. Moreover, the structure of rules follows modern trends, sacri117 H. MUIR WATT, Party Authonomy, in J. BASEDOW et al. (eds) Encyclopedia of Private International Law, Edward Elgar Publishing 2017, p. 1336-1341. 118 K. ROOSEVELT III, Certainty versus flexibility in the conflict of laws, in F. FERRARI/ F. ARROYO (ed), Private International Law. Contemporary Challenges and Continuing Relevance, Edward Elgar Publishing 2019, p. 6-26. 119 M. ŽUPAN, The best interest of the child – a guiding principle in administering cross-border child related matters?, in T. LIEFAARD/ J. SLOTH-NIELSEN (eds) The United Nations Convention on the Rights of the Child. Taking Stock after 25 Years and Looking Ahead, Brill Nijhoff Leiden 2017, p. 213-229. 120 H. MUIR WATT, The work of the HCCH and the path of the law: the politics of difference in unified private international law in T. JOHN/ R. GULATI & B. KOEHLER (eds) The Elgar Companion to the Hague Conference on Private International Law, 2020, p. 79111. 121 V. VAN DEN EECKHOUT, The Instrumentalization of Private International Law: Quo Vadis? Rethinking the “Neutrality” of Private International Law in an Era of Globalization and Europeanization of Private International Law, in J.-S. BERGÉ, et al., Boundaries of European Private International Law, Bruylant 2015, p. 399-418.

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Mirela Župan ficing conflicts justice for the benefit of a substantive result.122 Another interesting observation with respect to personal status issues is the incidence of jurisdiction criteria with applicable law. In a typical scenario of a specific subject matter, this approach resembles the well-known maxim lex fori in proprio foro. A general impression is that substantive justice has been shifted to the top of the legislators’ concern. The standardization of personal choice of law rules aims to eliminate the hitherto frequent limping statuses.123 As with pure statuses, in family matters left for original rules the main connecting factor became the habitual residence. What is again symptomatic is the structure of the primary and subsidiary connecting factors, which are often quite different alternatives. This speaks of a desire of the legislator to achieve substantive justice, and in certain instances allows giving full effect to the preservation of cultural identity.124 Another contemporary feature specific to this area is the subjecting of the alternative connecting factors to fundamental rights principles.125 The reality of the administration of justice has changed over the last few decades through massive intervention of international and supranational actors within national judicial systems. A low proportion of original provisions, in comparison to the “borrowed” or imported ones, confirms that in private international law state-centrism has eroded progressively. That said, the national State still remains the “master of the game” in adjudication, as in cross-border claims justice is served by local competent authorities. It is to be hoped that a bottom-up awareness of all the aforementioned considerations would eventually lead to the achievement of an environment where private international law is properly used for the benefit of citizens, companies, and the global community.

A. DUTTA, Personal status in J. BASEDOW et al. (eds) Encyclopedia of Private Int’l Law, Elgar 2017, p. 1348-1350. 123 M. ŽUPAN/ H. SIKIRIĆ, Osobni statut u funkciji kontinuiteta identiteta fizičkih osoba [Personal status in the function of continuity of personal identity] in J. BARBIĆ/ M. ŽUPAN (eds), Identitet u prekograničnim privatnopravnim odnosima [Identity in crossborder private relations] Hrvatska akademija znanosti i umjetnosti Zagreb 2021. 124 Y. NISHITANI, Identité culturelle en droit international privé de la famille, Recueil des cours, Vol. 401 (2019), p. 127-450. 125 E. BERGAMINI/ CH. RAGNI, (note 71), p. 139-170. 122

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COURT DECISIONS ________________

SHORT LIMITATION PERIODS IN CROSS-BORDER LIABILITY CASES NO SOLUTION YET (DE LEGE LATA) BUT FIVE OPTIONS FOR ACTION (DE LEGE FERENDA) Reflections following the ECJ judgment in the case da Silva Martins v. Dekra Claims of 31 January 2019* Thomas KADNER GRAZIANO**

I.

II. III.

Introduction A. An Everyday Occurrence in Europe B. Starting Point for the Legal Analysis Jurisdiction Applicable Law – Two Competing PIL Systems in Europe – Rome II and the 1971 Hague Convention A. Overview and Brief Critical Assessment

* Court of Justice of the European Union (6th Chamber), 31.1.2019, Agostinho da Silva Martins v. Dekra Claims Services Portugal SA, C-149/18, ECLI:EU:C:2019:84. On this case, see: C. BRIÈRE, Les lois de police à l’aune du règlement Rome II, note sous CJUE 31 janvier 2019, No C-149/18, Les Petites Affiches (PA) 2019, p. 29-31; D. BUREAU, À propos du règlement Rome II: de la règle de conflit aux lois de police en passant par la transposition des directives, Rev. crit. dr. int. priv., 2019, p. 564-571; P. MANKOWSKI, EuGH: Verjährungsregel grundsätzlich keine Eingriffsnorm, Kommentierte BGHRechtsprechung Lindenmaier-Möhring (LMK) 2019, 417905; L. PAILLER, Commentaire de CJUE, 6e ch., 31 janvier 2019, Agostinho da Silva Martins c/Dekra Claims Services Portugal SA, C-149/18, Clunet, 2019, p. 878 at p. 882-894; P. PAPADOPOULOS, Verjährungsvorschriften als Eingriffsnormen i.S.d. Art. 16 Rom II-VO bei grenzüberschreitenden Verkehrsunfällen, 2 juris Praxis Report Internationales Wirtschaftsrecht (jurisPR-IWR) 2019, Anm. 6; TH. PFEIFFER, Verjährungsregeln sind keine Eingriffsnormen, Zeitschrift für internationales Wirtschaftsrecht (IWRZ) 2019, p. 226-227; O. REMIEN, Europäische Straßenverkehrsunfälle zwischen klassischem IPR, Eingriffsnormen nach Art. 16 Rom II-Verordnung und Rechtsangleichung, in Festschrift für Christian Huber, München (C.H. Beck) 2020, p. 455-465. ** Professor and Director of the Department of Private International Law at the University of Geneva and Visiting Professor at the University of Leuven. A German language version of this contribution will be published in 3 Zeitschrift für Europäisches Privaterecht 2021.

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Thomas Kadner Graziano

VIII.

B. Intermediate Result Regarding Applicable Law Substantive Law Level – On the Inappropriateness of Short Limitation Periods in Cross-Border Cases A. Limitation Periods in National Legal Systems – A Brief Comparison B. On the Inadequacy of Short Limitation Periods Potential Solutions at the Private International Law Level (de lege lata) A. Starting Point and Relevant Issues B. Special Private International Law Rules in EU Law within the Meaning of Art. 27 of the Rome II Regulation C. Mandatory Provisions of the Law of the Forum (lex fori) – On the Interpretation of Art. 16 of the Rome II Regulation D. Violation of the Public Policy of the Forum State, Art. 26 of the Rome II Regulation Potential Solutions at the Private International Law Level (de lege ferenda) A. A Special Rule for Cross-Border Traffic Accidents in the Rome II Regulation B. A Cumulative Connection Mechanism for Limitation Periods in the Rome II Regulation Proposals for Reform at the Substantive Law Level A. A Large-Scale Solution on EU Substantive Law Level – Uniform Rules on Liability for Cross-Border Road Traffic Accidents B. A Small Scale Solution at the EU Substantive Law Level – Uniform Limitation Periods for Cross-Border Road Traffic Accidents C. The Most Modest Option – Harmonization at the National Substantive Law Level Conclusions

I.

Introduction

IV.

V.

VI.

VII.

In a judgment of 31 January 2019 in the case of da Silva Martins v. Dekra Claims, the European Court of Justice (ECJ) addressed for the first time the question of whether a longer limitation period of the lex fori can be given priority over a shorter limitation period provided by a foreign law that is applicable according to the forum’s rules on Private International Law, but under which the claim is already time-barred. A.

An Everyday Occurrence in Europe

It was a standard case as they occur every day in Europe that gave rise to the judgment of the Court of Justice of the European Union: A traffic accident occurs in Spain in which a car registered and insured in Spain hits and seriously damages a car registered in Portugal and driven by its owner. The damaged car is towed to Portugal and repaired there. The Spanish car is insured with the insurance company Segur Caixa, which is represented in Portugal by Dekra Claims. Since the 406

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Short Limitation Periods in Cross-Border Liability Cases driver of this car is solely at fault for the accident, Dekra Claims eventually pays compensation for the damage caused to the Portuguese car. The owner of the Portuguese car seeks compensation for further indirect damage, which Dekra Claims refuses. Some 15 months after the accident, the owner of the Portuguese car brings a claim for this indirect damage against Dekra Claims before the courts at his domicile in Portugal. In these proceedings, the plaintiff and the defendant insurance company are in dispute over the statute of limitations applicable to the claim. According to Art. 1968(1) of the Spanish Código civil (Civil Code), non-contractual liability claims become time-barred after one year.1 Conversely, Art. 498 of the Portuguese Código civil provides for a limitation period of three years for non-contractual liability claims.2 According to Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability3 (hereinafter: Motor Vehicles Directive), the EU Member States are required to implement compulsory third party motor liability insurance. In Portugal, this obligation has been transposed in Decreto-Lei No. 291/2007. Its Art. 11(1)(a) states that compulsory motor liability insurance covers civil liability for damage in the event of accidents in Portugal. According to Art. 11(1)(b), the same applies in the case of accidents abroad; however, if Portuguese law provides for more comprehensive cover in the case of an accident abroad than the foreign law that would otherwise be applicable, then according to Art. 11(1)(b) of the Decreto-Lei, Portuguese law shall apply instead of the foreign law.4 1 In the Spanish original: “Art. 1968. Prescriben por el transcurso de un año: […] 2. La acción para exigir la responsabilidad civil […] por las obligaciones derivadas de la culpa o negligencia de que se trata en el artículo 1902, desde que lo supo el agraviado.” In English translation: “Art. 1968. The limitation period is one year for: [...] 2. claims arising from [...] fault-based liability under Article 1902 [the basic provision of Spanish tort law], from the time when the injured party became aware of it”. 2 In the Portuguese original: “Art. 498 (Prescrição). 1. O direito de indemnização prescreve no prazo de três anos, a contar da data em que o lesado teve conhecimento do direito que lhe compete, embora com desconhecimento da pessoa do responsável e da extensão integral dos danos, sem prejuízo da prescrição ordinária se tiver decorrido o respectivo prazo a contar do facto dañoso”. […]. In the English translation used in the ECJ judgment: “Art. 498 (Limitation). 1. The right to compensation shall be subject to a limitation period of three years from the date on which the injured party becomes aware of his right, even if he does not know who the responsible person is or the full extent of the damage, without prejudice to the ordinary limitation period in the event of that period having elapsed since the harmful event”. 3 OJ L 263, 7.10.2009, p. 11. 4 In the Portuguese original: “Artigo 11 (Âmbito material). 1. O seguro de responsabilidade civil previsto no artigo 4. abrange: a) Relativamente aos acidentes ocorridos no território de Portugal a obrigação de indemnizar estabelecida na lei civil; b) Relativamente aos acidentes ocorridos nos demais territórios dos países cujos serviços nacionais de seguros tenham aderido ao Acordo entre os serviços nacionais de seguros, a obrigação de indemnizar estabelecida na lei aplicável ao acidente, a qual, nos acidentes ocorridos nos territórios onde seja aplicado o Acordo do Espaço Económico Europeu, é substituída pela lei portuguesa sempre que esta estabeleça uma cobertura superior; […]”.

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Thomas Kadner Graziano The defendant liability insurer claims that the limitation period has expired under the applicable Spanish law. The Portuguese injured party, on the other hand, argues that according to Art. 11(1)(b) of the Decreto-Lei, the Portuguese statute of limitations, which is more favourable to him, applies. B.

Starting Point for the Legal Analysis

The European legislator has created a legal infrastructure for cross-border road traffic accidents that facilitates the processing of claims and establishes a high degree of legal certainty: – The Motor Vehicles Directive provides for EU-wide compulsory motor insurance allowing the injured party to have a direct right of action against the liability insurer of the responsible party. Claims representatives and information and compensation offices in the home country of the injured party act as contact points to assist with the processing of claims and payments.5 – The Brussels I Regulation provides a forum in the injured party’s home country in the event of a dispute;6 and finally – the Rome II Regulation provides clear rules to determine which law will govern potential disputes.7 This system is indeed very successful in many respects. Difficulties remain, on the one hand, where the scope of the EU legal system reaches its limits8 and, on the In the English translation used in the ECJ judgment: “Art. 11(1) The insurance against civil liability provided for in Article 4 shall cover: (a) With regard to accidents occurring in the territory of Portugal, the obligation to pay compensation provided for in civil legislation; (b) With regard to accidents occurring in the territory of other countries whose national insurers’ bureau have acceded to the Agreement between national insurers’ bureaux, the obligation to pay compensation provided for in the law applicable to the accident, which, in the case of accidents occurring in territories in which the Agreement on the European Economic Area [of 2 May 1992 (OJ 1994 L 1, p. 3)] is applicable, shall be replaced by Portuguese law where the latter provides better cover; […]”. 5 Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability, OJ L 263, 7.10.2009, p. 11–31, Art. 3 (Compulsory insurance of vehicles), Art. 18 (Direct right of action), Art. 21 (Claims representatives), Art. 23 (Information centres), Art. 24 (Compensation bodies). 6 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 I”), OJ L 351, 20.12.2012, p. 1–32, Art. 13(2) with Art. 11(1)(b); see below II. 7 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), OJ L 199, 31.7.2007, p. 40-49, Arts. 4 et seq. 8 On the relationship with the 1971 Hague Convention and the respective scope of application of both instruments, see below III.

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Short Limitation Periods in Cross-Border Liability Cases other, when litigants encounter unpleasant surprises in the applicable foreign law.9 This includes, as the da Silva Martins case illustrates, different limitation periods with particularly short periods in the applicable foreign tort law. If the applicable foreign law provides for a particularly short limitation period and the claim is therefore time-barred, and if the liability insurer, who is usually well informed, invokes limitation, the claim for compensation will be entirely rejected. When it comes to limitation periods, it is thus often a question of all or nothing. Not least for this reason, for several decades now, different limitation periods have been one of the main motivations for parties to litigate about the applicable tort law up to the highest national courts – and now also up to the ECJ. The present case brings important clarifications in this respect. The following contribution will begin with a brief discussion of jurisdiction in cross-border traffic accidents (II.). Regarding applicable law, it is recalled that the uniformization of Private International Law rules in Europe still has an important limit; in fact, two quite different systems are competing at the choice-oflaw level in Europe (III.). The reasons for the proceedings before the ECJ were differences in the limitation periods of the two jurisdictions involved. Therefore, the next step will be to examine the problem of short limitation periods in crossborder scenarios (IV.) and outline potential solutions at different levels: three potential solutions on the level of Private International Law (and of the Rome II Regulation), one of them de lege lata (V.) and two of them de lege ferenda (VI.), as well as (de lege ferenda) two options on the level of substantive EU law and one on the national substantive law level (VII.). The contribution ends with a number of conclusions (VIII.).

II.

Jurisdiction

In all EU Member States, the party injured in a road traffic accident has a direct right of action against the liability insurer of the car that caused the accident.10 Since the ECJ’s ruling in the Odenbreit case in 2007, it has been established that victims of a road traffic accidents can bring this claim before the courts of their own domicile.11 In fact, Art. 11(1)(b) of the Brussels I Regulation provides that “in the case of actions brought by the policyholder, the insured or a beneficiary” against an insurer domiciled in a Member State, “the courts for the place where the claimant is domiciled” have jurisdiction. Art. 13(2) of the Brussels I Regulation declares that this rule establishing jurisdiction at the claimant’s domicile shall also “apply to actions brought by the injured party directly against the [liability] 9 For differences in the national tort law systems with the relevant provisions in the original language version and English translation, see Th. KADNER GRAZIANO, Comparative Tort Law – Cases, Materials, and Exercises, London/New York (Routledge) 2018, at p. 71 et seq., and (on road traffic accidents) p. 229 et seq. 10 See Art. 18 of the Motor Vehicle Directive (note 5). 11 ECJ, 13.12.2007, FBTO Schadeverzekeringen NV v. Jack Odenbreit, C-463/06, ECLI:EU:C:2007:792.

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Thomas Kadner Graziano insurer”. In the case at hand, the injured Portuguese party could therefore sue the Spanish liability insurer of the opposing party before the Portuguese courts at his own domicile. The Motor Vehicles Directive further simplifies the procedure for the injured party by providing him with an insurance company in his own home country as a contact for his direct claim against the liability insurer. In the case at hand, the action before the Portuguese courts was directed against this partner of the Spanish liability insurer, Dekra Claims Services Portugal SA.

III. Applicable Law – Two Competing PIL Systems in Europe – Rome II and the 1971 Hague Convention Once international jurisdiction has been clarified, the next question is which instrument should be applied to determine the law governing liability. A.

Overview and Brief Critical Assessment

Spain is a Contracting State to the 1971 Hague Convention on the Law Applicable to Road Traffic Accidents (as well as 20 other States, including in the EU e.g. France, Belgium, Luxembourg, the Netherlands, Austria, Poland, the Czech Republic, the Slovak Republic, Slovenia and Croatia, and outside the EU e.g. Switzerland).12 According to Art. 28(1) of the Rome II Regulation (“Relationship with existing international conventions”), the Regulation “shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict-oflaw rules relating to non-contractual obligations”. In its Contracting States, the 1971 Hague Convention therefore takes precedence over the Rome II Regulation when determining the applicable law. Had the action in the case at hand been brought before Spanish courts, they would have determined the applicable law according to the Hague Convention. Portugal signed the 1971 Hague Convention but never ratified it. Therefore, Portuguese courts apply the Rome II Regulation. This diversity at the Private International Law level is unfortunate,13 as two different systems apply to the most common category of non-contractual liability cases: in 13 EU Member States the applicable law is determined according to the 1971 Hague Convention, in 14 other Member States the Rome II Regulation applies. Both instruments have the same starting point: in principle, the law of the For an up-to-date list of Contracting States, see https://www.hcch.net/en/ instruments/conventions/status-table/?cid=81. 13 See also E. JAYME, Der Klägergerichtsstand für Direktklagen am Wohnsitz des Geschädigten (Art. 11 Abs. 2 i.V.m. Art 9 EuGVO): Ein Danaergeschenk des EuGH für die Opfer von Verkehrsunfällen, in Festschrift für Bernd von Hoffmann, Bielefeld (Gieseking) 2011, p. 656 at p. 660; A. STAUDINGER, 10 Jahre Rom II-VO und Haager Straßenverkehrsübereinkommen – Zeit für eine Bestandsanalyse im Lichte des Brexit und der angedachten EU-Erweiterung, Deutsches Autorecht (DAR) 2019, p. 669 et seq. 12

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Short Limitation Periods in Cross-Border Liability Cases place of the accident applies. However, there are significant and practically important differences between the two instruments regarding their scope of application and potential exceptions to the general rule. These differences can be briefly illustrated by a Swiss case: On a Spanish motorway, a Seat registered in Spain has an accident and is stationary at a lefthand bend. Two cars registered in Switzerland are approaching, the first driven by the son of a family living in Switzerland, the second driven by his father who also lives there. The son manages to bring his car to a halt in time, but not the father. The two vehicles of the family collide, causing serious injuries to the son who permanently loses of his earning capacity.14 The son sues the Swiss liability insurer of his father’s car for, among other issues, compensation for his long-term loss of earnings. According to Art. 3 of the Hague Convention, “the internal law of the State where the accident occurred”, i.e. Spanish law in the example, shall apply. Art. 4 makes an exception to this general rule: “Where two or more vehicles are involved in the accident”, Art. 4(b) states that if all the vehicles involved “are registered in the same State” other than the State of the accident, “the internal law of the State of registration is applicable to determine liability”. In the example, the two cars of the family, but not the Seat that was also involved in the accident, were registered in Switzerland. The son’s claim against the Swiss liability insurer of his father’s car was therefore to be assessed under Spanish law in accordance with the Hague Convention. Spanish accident law provided (and still provides) for lump-sum-compensation, particularly for the loss of earnings, which was considerably lower than the amount the insurer would have had to pay out under Swiss law. Article 4(2) of the Rome II Regulation on the other hand (much like the Swiss Private International Law Act, which the Hague Convention also overrides15) makes an exception from the application of the law of the place of the accident if “the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs” in which case “the law of that country shall apply”. Accordingly, under the Rome II Regulation the son’s claim against his father for damage suffered in the collision between the two Swiss vehicles in Spain would have had to be assessed according to Swiss law, and the Swiss liability insurer would have owed full compensation for the injured son’s loss of earnings. The case highlights a weakness of the 1971 Hague Convention when compared to the modern connecting factors of the Rome II Regulation. While the Rome II Regulation makes exceptions from the law of the place of the accident dependent on the habitual residence of the injured party and the person claimed to be liable if they are domiciled in the same country, the Hague Convention in its Art. 4(a) and (b) makes an exception if all motor vehicles involved in the accident 14 See the Swiss Federal Supreme Court (Schweizerisches Bundesgericht), 1.11.2015 (William Siegrist v. Helvetia Schweizerische Versicherungs AG), Az. 4A_413/2015. 15 Art. 133(1) of the Swiss Federal Private International Law Act, PILA (schweizerisches Bundesgesetz über das Internationale Privatrecht, IPRG); Art. 134 PILA explicitly gives priority to the 1971 Hague Convention.

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Thomas Kadner Graziano are registered in the same State, which was considered necessary at the time with respect to the interests of the insurance industry. For this and several other issues,16 the more modern Rome II Regulation is better adapted to the interests of the parties involved and clearly preferable to the 1971 Hague Convention.17 In the present case, the Rome II Regulation would have led to the application of the law of the country in which both the victim and the person claimed to be liable had their habitual residence and where they both had to live with the consequences of the accident, whereas the 1971 Hague Convention did not allow this outcome. B.

Intermediate Result Regarding Applicable Law

In the case of da Silva Martins v. Dekra Claims, the parties had their habitual residence in different States (Spain and Portugal) and the vehicles involved in the accident were registered in these States. Therefore, no exception to the place of accident rule applied, neither under the Rome II Regulation (before the Portuguese courts) nor under the Hague Convention (had the action been brought in Spain). Pursuant to Art. 4(1) of the Rome II Regulation, the law of the Spanish place of accident governed the claim before the competent Portuguese courts. This law applies, in principle, to all questions related to compensation, including limitation as expressly stated in Art. 15(h) of the Rome II Regulation. In the case at hand, the 16 Further differences concern the issues addressed by both instruments. The 1971 Hague Convention does not contain rules on party autonomy or mandatory provisions, it explicitly excludes a number of other issues in Art. 2, it is in many respects more complicated than the Rome II Regulation, and – from today’s perspective – on the whole is less adapted to the interests of victims, responsible parties, and insurers than the Rome II Regulation. Also, unlike the Rome II Regulation, it is not aligned with other European Private International Law regulations. See, with many instructive examples from recent case law: A. STAUDINGER (note 13), p. 669 at p. 672 et seq.; see further Th. KADNER GRAZIANO, Traffic accidents, in J. BASEDOW/ F. FERRARI/ P. DE MIGUEL ASENSIO & G. RÜHL (eds), Encyclopedia of Priv. Int’l Law, Cheltenham (Edgar Elgar Publishing) 2017, p. 1709 at p. 1718-1722; see, for more detail on the 1971 Hague Convention, B. LURGER/ M. MELCHER, Handbuch Internationales Privatrecht, 2nd ed., Vienna (Verlag Österreich) 2021, nos. 5/121-5/137; P. CZAPLINSKI, Das Internationale Straßenverkehrsunfallrecht nach Inkrafttreten der Rom II-VO, Jena (JWV) 2019. 17 See also A. STAUDINGER (note 13), 669 at 672 et seq. with reference to recent decisions of the Austrian Supreme Court (Oberster Gerichtshof), where the criterion of the vehicles “involved” in the accident also ran contrary to the interests of the parties, and where the Rome II Regulation with its “bipolar” approach focusing on the victim and the respponsible party takes better account of the interests of victims, tortfeasors, insurers, the legal profession, and the judiciary (der “bipolare” Ansatz der Rom II-VO berücksichtigt “die Interessen von Opfern und Tätern bzw. Versicherern sowie die Belange von Anwaltund Richterschaft besser”, at 675). Staudinger states that the Hague Convention’s connecting factors are also “far too complex from a practitioner’s point of view” (“aus Praktikersicht viel zu komplex”, at 673-674, supporting this assertion with examples from case law). He concludes that the European Commission should press for the candidate countries to make the Rome II Regulation applicable by withdrawing from the 1971 Hague Convention, which is indeed an option under international treaty law – a proposal which does have some merit.

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Short Limitation Periods in Cross-Border Liability Cases limitation period therefore had to be assessed according to Spanish law, which provided for a short limitation period of one year. This period had already expired when the claim was brought.

IV. Substantive Law Level – On the Inappropriateness of Short Limitation Periods in Cross-Border Cases A.

Limitation Periods in National Legal Systems – A Brief Comparison

The limitation period of the Spanish Código civil for claims arising from noncontractual liability is one of the shortest in Europe, with only one year “from the time when the injured party became aware” of the damaging event. Limitation periods differ considerably across national tort law systems in Europe. For one and the same situation, they range from a short limitation period of one year in Spanish law, a general limitation period of two years according to Art. 72 of the revised Turkish Code of Obligations of 2012,18 a general limitation period of five years in Art. 2947(1) of the Italian Codice civile,19 and a limitation period of ten years for non-contractual claims according to Art. 2270-1(1) of the French Code civil.20 In many other jurisdictions, three-year general limitation periods apply, such as under §§ 195 and 199 of the German BGB, § 1489 of the Austrian ABGB,21 and Art. 18 In force since 1 July 2012, see E. BÜYÜKSAGIS, The New Turkish Tort Law, Journal of European Tort Law (JETL) 2012, p. 44-100. Art. 72 of the Turkish Code of Obligations provides: “Madde 72 – Tazminat istemi, zarar görenin zararı ve tazminat yükümlüsünü ög˘rendig˘ i tarihten bas¸layarak iki yılın ve her haˆlde fiilin is¸lendig˘ i tarihten bas¸layarak on yılın geçmesiyle zamanas¸ımına ug˘rar. Ancak, tazminat ceza kanunlarının daha uzun bir zamanas¸ımı öngördüg ˘ü cezayı gerektiren bir fiilden dog˘mus¸sa, bu zamanas¸ımı uygulanır.” Translation (by E. BÜYÜKSAGIS at 96-97): “A claim for compensation becomes time-barred two years from the date on which the injured person became aware of the damage and of the identity of the person liable for it, but in any event ten years after the date on which the act was committed. However, if the action for damages is derived from an offence for which criminal law envisages a longer limitation period, that longer period applies. […]”. 19 Art. 2947(1) of the Codice civile provides: “Il diritto al risarcimento del danno derivante da fatto illecito si prescrive in cinque anni dal giorno in cui il fatto si è verificato”. Translation: “The right to compensation for damages arising from an unlawful act is subject to a limitation period of five years from the day on which the event occurred”. 20 Art. 2270-1(1) of the Code civil provides: “Les actions en responsabilité civile extracontractuelle se prescrivent par dix ans à compter de la manifestation du dommage ou de son aggravation”. Translation: “Actions arising from non-contractual liability shall become time-barred ten years after the occurrence of the damage or its aggravation”. 21 § 1489 ABGB states: “Jede Entschädigungsklage ist in drei Jahren von der Zeit an verjährt, zu welcher der Schade und die Person des Beschädigers dem Beschädigten bekannt wurden […]”. Translation: “Any action for compensation shall be time-barred after three years from the time when the damage and the person causing the damage became known to the injured party [...]”.

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Thomas Kadner Graziano 442[1] of the Polish Kodeks Cywilny.22 A three-year limitation period also applies under English law to claims for personal injury arising under the tort of negligence pursuant to Section 11 of the Limitations Act 198023 and finally – as mentioned at the outset – under Art. 498(1) of the Portuguese Código civil. In some jurisdictions, instead of the general limitation period, special short limitation periods of two years apply to claims arising from traffic accidents. This is the case e.g. in Art. 109 of the Turkish Road Traffic Act,24 Art. 83(1) of the Swiss Road Traffic Act as amended in 2012 (instead of the general three-year time limit which now applies25 under the Swiss Code of Obligations), and according to Art. 2947(2) of the Italian Codice civile (instead of the general five-year limitation period otherwise applicable to tort liability).26 If the tort is also a criminal offence, in many countries the (often longer) limitation period applicable under criminal law also extends to the civil claim. For minor victims, in some jurisdictions the limitation period does not start running until they reach the age of majority. Finally, the conditions under which the limitation period starts running and is suspended or interrupted also differ from country

22 Art. 442[1] § 1 provides: “Roszczenie o naprawienie szkody wyrządzonej czynem niedozwolonym ulega przedawnieniu z upływem lat trzech od dnia, w którym poszkodowany dowiedział się albo przy zachowaniu należytej staranności mógł się dowiedzieć o szkodzie i o osobie obowiązanej do jej naprawienia. Jednakże termin ten nie może być dłuższy niż dziesięć lat od dnia, w którym nastąpiło zdarzenie wywołujące szkodę”. Translation (by N. HENCZEL): “Claim for compensation of damage caused by tort shall be time-barred after three years from the date when the injured party learned or could have learned with due diligence about the damage and the person obliged to compensate for it. However, this period shall not be longer than ten years from the date of the event which caused the damage”. 23 Section 11 provides: “Actions in respect of wrongs causing personal injuries or death. Special time limit for actions in respect of personal injuries. (1) This section applies to any action for damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision) where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty consist of or include damages in respect of personal injuries to the plaintiff or any other person. […] (3) An action to which this section applies shall not be brought after the expiration of the period applicable in accordance with subsection (4) or (5) below. (4) Except where subsection (5) below applies, the period applicable is three years from — (a) the date on which the cause of action accrued; or (b) the date of knowledge (if later) of the person injured”. 24 Art. 109 of the Turkish Motor Traffic Act provides in English translation (by E. BÜYÜKSAGIS): “A claim for compensation becomes time-barred two years from the date on which the injured person became aware of the damage and of the identity of the person liable for it but in any event ten years after the date on which the accident was occurred”. 25 See below, VII.C. 26 Art. 2947(2) of the Codice civile states: “Per il risarcimento del danno prodotto dalla circolazione dei veicoli di ogni specie il diritto si prescrive in due anni”. Translation: “Compensation for damage caused by the use of vehicles of all kinds is time-barred after two years”.

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Short Limitation Periods in Cross-Border Liability Cases to country.27 Overall, the situation regarding limitation periods in cross-border liability cases is extremely diverse and complex. If victims who are habitually resident in jurisdictions with long limitation periods suffer accidents in jurisdictions with a short limitation period, the foreign short limitation period may turn out to be an unpleasant surprise for the injured party in proceedings for compensation that are assessed under the foreign law of the place of the accident. The problem is exacerbated by the fact that differences in limitation periods often exist between neighbouring countries, for example in the relationship between France, which applies particularly long limitation periods, and its neighbour Spain, or – as in the case at hand – Portugal (three years) in relation to Spain (one year). A multitude of published judgments on the European Private International Law of torts have their background in different limitation periods in the jurisdictions under consideration. It is not rare that it is only the different limitation periods that cause the parties to litigate the question of the applicable law up to the highest courts.28 Since its entry into force in 2009, the Rome II Regulation has resolved many uncertainties regarding applicable law. However, the problem of different limitation periods at the substantive law level still persists, as illustrated not least by the case of da Silva Martins. B.

On the Inadequacy of Short Limitation Periods

Short limitation periods in national legislations are intended for domestic situations and even there they can be extremely challenging for parties. In cross-border situations, limitation periods of one or two years are often simply inappropriate. The reason is that in cross-border cases the parties are confronted with additional challenges, both factual and legal, that do not arise in purely domestic cases. In a case such as da Silva Martins v. Dekra Claims, one of the first questions is likely to be whether the relevant national tort law system covers the costs of transport of the damaged vehicle to the country of the victim’s domicile or whether, conversely, it requires that the car be repaired at the place of the accident. The next step for the victim is to identify and contact the responsible foreign insurer and its representative in the victim’s home country and to determine their willingness to pay compensation. In case of doubt, the circumstances of the accident and any potential fault and contributory negligence must be clarified. Because of language barriers and geographical distances, this is often more difficult and time-consuming than in 27 On the manifold possibilities of shaping statutes of limitations, see R. ZIMMERDie Verjährung – von den Principles of European Contract Law bis zum Entwurf eines Gemeinsamen Europäischen Kaufrechts. Textstufen transnationaler Modellregeln, European Review of Private Law (ERPL) 2016, p. 687-726; J. KLEINSCHMIDT, Einheitliche Verjährungsregeln für Europa? Archiv für die civilistische Praxis (AcP) 2013, p. 538-571. 28 See Th. KADNER GRAZIANO, Die kumulative Anknüpfung der Verjährung “in favorem actionis” – Ein Vorschlag zum Opferschutz in grenzüberschreitenden Fällen, Recht der internationalen Wirtschaft (RIW) 2007, 336-340, with references to case law from Austria, Denmark, England, France, Germany, Italy, and the Netherlands.

MANN,

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Thomas Kadner Graziano purely domestic cases. For remaining damage not compensated by the insurer, the question of the applicable liability law must be clarified (at this point, if not earlier). Where foreign law is applicable, a qualified lawyer, and if necessary a corresponding lawyer in the foreign jurisdiction, must be found. Once this is done, it is essential to clarify the content of the foreign law regarding both the conditions and the scope of liability and to determine whether the insurer owes compensation under the applicable foreign law, including for positions it has not yet covered.29 Once this has been clarified, there will be fresh negotiations with the insurer about compensation under the applicable foreign law. If these negotiations fail, the chances of success and the potential costs of a lawsuit must be determined. At the same time, it must be carefully determined which limitation periods must be observed under the relevant foreign law and how the running of the limitation period may be interrupted if necessary. All this can be complicated by language barriers. If the victim finally decides to take legal action, it is necessary to determine the internationally (and locally) competent court. Ultimately, time is needed to prepare and file the lawsuit. In the case of da Silva Martins v. Dekra Claims, all this took about 15 months. Under Portuguese law with its three-year limitation period this would have been sufficient, but not under Spanish law with its one-year period.

V.

Potential Solutions at the Private International Law Level (de lege lata)

A.

Starting Point and Relevant Issues

For the case of da Silva Martins v. Dekra Claims, the starting point on the Private International Law level has already been outlined above: The parties involved in the accident had their habitual residence in different states (Spain and Portugal) and the case was to be decided according to the law of the Spanish place of accident, pursuant to Art. 4(1) of the Rome II Regulation. According to Art. 15(h), the starting point was that this law also applied to the question of limitation. However, a provision in Portuguese law was found that raised doubts about this result. As mentioned above, EU law requires EU Member States to implement mandatory motor third party liability insurance. Portugal has complied with this obligation through Decreto-Lei No. 291/2007.30 Its Art. 11(1) stipulates (in English translation): “The civil liability insurance provided for in Article 4 shall cover: (a) civil liability for damages in the event of accidents occurring in the territory of Portugal; (b) liability for damages in the event of accidents occurring in the territory of other States [...] in accordance 29 30

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See for the challenges this can present, E. JAYME (note 13), p. 656 at p. 657 et seq. See already above, note 4.

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Short Limitation Periods in Cross-Border Liability Cases with the law applicable to the accident, which, in the case of accidents occurring within the territorial scope of the Treaty on the European Economic Area, shall be replaced by Portuguese law if it provides for a higher level of cover; [...].” Art. 11(1)(b) of the Portuguese Decreto-Lei therefore provides that accidents occurring outside Portugal are to be assessed in application of Portuguese liability law rather than the law that would otherwise be applicable “if it provides for higher cover”.31 This provision could be understood as a principle of favourability according to which, between the law actually applicable according to the Rome II Regulation and Portuguese law, the law more favourable to the injured party ultimately applies. However, the applicable liability is determined by the Rome II Regulation. National law – including both private international law rules and substantive law rules – can only be applied where the Rome II Regulation allows for it to do so. Accordingly, in the case of da Silva Martins v. Dekra Claims there were three main issues to be addressed and resolved: 1) Does Art. 11(1)(b) of the Portuguese Decreto-Lei transpose “provisions of Community law which, in relation to particular matters, lay down conflictof-law rules relating to non-contractual obligations”? According to the opening clause in Art. 27 of the Rome II Regulation, a special choice-oflaw rule such as this could take precedence over the Rome II Regulation. 2) If this is not the case:32 Is the limitation period in Art. 498 of the Portuguese Civil Code (possibly in conjunction with Art. 11(1)(b) of the Portuguese Decreto-Lei) a mandatory provision of the lex fori, i.e. an overriding mandatory provision within the meaning of Article 16 of the Rome II Regulation? 3) And again, subsidiarily:33 Is the application of the short limitation period of Spanish law in the specific case “manifestly incompatible with the public policy (ordre public) of the forum” (i.e. Portugal), such that its application is excluded for that reason (Art. 26 of the Rome II Regulation)? The Tribunal de Relação de Lisboa, the Lisbon Court of Appeal, referred the first two questions (in substance and in reverse order) to the ECJ for a preliminary ruling under Article 267 of the Treaty on the Functioning of the European Union

31 Whether this only applies to Portuguese liability insurance under Art. 4 of the Decreto Lei or also to liability insurance under foreign law (in the case at hand, Spanish law) is a question of interpretation of Portuguese law, which first of all requires the application or Portuguese law according to the relevant Private International Law rules. See also O. REMIEN (note *), p. 455 at p. 461-462. 32 The question of overriding mandatory provisions only arises if Portuguese law is not already applicable according to EU law. 33 Rules on mandatory provisions (Art. 9 of the Rome I Regulation and Art. 16 of the Rome II Regulation) are more specific than those on public policy. If an overriding mandatory provision applies, there is no need for a result-oriented public policy review by the law of the forum, see e.g. D. MARTINY, Münchener Kommentar zum BGB, 8th ed., München (C.H. Beck) 2021, Rom I-VO, Art. 9, n. 111; A. JUNKER, Münchener Kommentar zum BGB, 8th ed., München (C.H. Beck) 2021, Rom II-VO, Art. 16, n. 32.

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Thomas Kadner Graziano (TFEU). The third question may equally arise in such scenarios and will therefore also be considered below. B.

Special Private International Law Rules in EU Law within the Meaning of Art. 27 of the Rome II Regulation

According to Art. 27 of the Rome II Regulation (“Relationship with other provisions of Community law”), this Regulation “shall not prejudice the application of provisions of Community law which, in relation to particular matters, lay down conflict-of-law rules relating to non-contractual obligations”. The sole candidate for a special provision of EU law of this type was that of the Motor Vehicles Directive 2009/103.34 More specifically, the potentially relevant provision was the opening clause in Article 28(1) of the Motor Vehicles Directive, according to which the “Member States may, in accordance with the Treaty, maintain or bring into force provisions which are more favourable to the injured parties than the provisions needed to comply with this Directive”. To implement the Motor Vehicles Directive, the Portuguese legislator introduced Decreto-Lei No. 291/2007 and its Art. 11(1)(b). This raised the question of whether the Directive allows Member States to enact more victim-friendly “conflict-of-law rules relating to non-contractual obligations” and whether these may take precedence over the Rome II Regulation according to its Art. 27. The purpose of the Motor Vehicles Directive is to ensure the smooth functioning of the internal market and the Schengen area and to ensure that EU citizens can easily cross internal borders with their vehicles for business and leisure purposes. To this end, it provides for compulsory motor insurance valid for the whole of the EU on the basis of a single premium; if provides for statutory minimum amounts of cover for these insurance policies; it prohibits systematic checks on vehicle insurance at the border by the Member States; it introduces an obligation on the Member States to set up guarantee funds to compensate victims of accidents caused by uninsured or unidentified vehicles.35 On the other hand, it is not intended to introduce special Private International Law rules in derogation from those of the Rome II Regulation. The ECJ explicitly points out in its decision that “there is nothing in the wording or the objectives of Directive 2009/103 to suggest that it is intended to lay down conflict-of-law rules” (para. 38) and that the “directive is in fact limited to requiring Member States to adopt measures guaranteeing that the victim of a road traffic accident and the owner of the vehicle involved in that accident are protected” (para. 39). The Court further holds that Article 28(1) of the Motor Vehicles Directive “concerns solely the transposition legislation of a Member State and does not concern the question of whether, in a specific case, these more favourable rules are to be applied rather than the rules of Above, note 5. See e.g. the Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/103/EC of the European Parliament and the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to ensure against such liability, COM(2018) 336 final. 34 35

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Short Limitation Periods in Cross-Border Liability Cases other Member States” (para. 40). National legislators can therefore go beyond the requirements of the Directive to protect injured parties. However, they cannot provide that these more extensive provisions take precedence over any foreign tort law regime that is applicable under the Rome II Regulation. In other words, further protection under Portuguese law within the meaning of Art. 28 of the Motor Vehicles Directive presupposes in the first place that Portuguese law is applicable under the rules of EU Private International Law. Art. 11(1)(b) of the Portuguese DecretoLei therefore does not implement an EU law requirement for the enactment of special Private International Law rules. The Court hereby ruled out Art. 27 of the Rome II Regulation as a basis for a precedence of Portuguese over Spanish limitation periods (para. 42). These statements by the ECJ deserve full approval. They are also to be welcomed for another reason:36 Should the Rome II Regulation be considered insufficiently protective of victims in certain circumstances, which is arguably the case regarding the short limitation periods applied by some jurisdictions,37 improvements should be made in the Rome II Regulation itself instead of placing this burden on the national legislators through EU directives. Otherwise, there is a risk of fragmentation to uniform European Private International Law, which would be detrimental to the high degree of legal certainty that has been achieved with the Rome II Regulation.38 C.

Mandatory Provisions of the Law of the Forum (lex fori) – On the Interpretation of Art. 16 of the Rome II Regulation

As a result, the central question that arose in the case of da Silva Martins v. Dekra Claims was whether Art. 498 of the Portuguese Código civil, which provides for a limitation period of three years for claims arising from non-contractual liability,39 36 See also Th. PFEIFFER (note *), p. 226 at p. 227; O. REMIEN (note *), p. 455 at p. 461; C. BRIÈRE (note *), p. 29 et seq.; P. PAPADOPOULOS (note *), p. 4; L. PAILLER (note *), p. 882 at p. 883-884; D. BUREAU (note *), p. 564 et seq. The latter points out that when national legislation invokes the opening clause in Art. 28(1) of the Motor Vehicle Directive to give further protection to victims, this has no effect on cross-border situations. See at p. 570-571: “le mécanisme de protection plus favorable, tel qu’autorisé par la directive (Art. 28), sera largement dépourvu de portée dans les relations internationales”. The very purpose of the provision is to apply to cross-border scenarios, but it clearly misses this purpose.. 37 See above IV. and below VI. et seq. 38 See also P. MANKOWSKI (note *), 417905, who welcomes the fact that “it is now finally and unambiguously established that [...] the applicable law is determined solely based on the Rome II Regulation. The system is clarified and the number of legal sources to be considered for determining the applicable law is reduced in principle to one: the Rome II Regulation” (translated from German). 39 Possibly in conjunction with the principle of applying the most favourable law in Art. 11(1)(b) of the Portuguese Decreto-Lei. The ECJ begins by citing both provisions (para. 32). However, the question of the mandatory nature of limitation periods also arises independent of Art. 11(1)(b) and the ECJ thus only mentions the Portuguese provision on limitation periods in the subsequent paragraphs (para. 33 et seq.).

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Thomas Kadner Graziano is a so-called “mandatory provision” of Portuguese law that necessarily claims precedence before Portuguese courts over the limitation rule of the foreign law that was actually applicable.40 According to Art. 16 of the Rome II Regulation (“Overriding mandatory provisions”), “[n]othing in this Regulation shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.”41 The Rome II Regulation does not contain a definition of the term “mandatory provision” for non-contractual liability. However, such a definition can be found in Art. 9(1) of the Regulation on the Law Applicable to Contractual Obligations (Rome I Regulation).42 In its judgment of the da Silva Martins case, the ECJ also refers to the definition in Art. 9(1) of the Rome I Regulation for the interpretation of the Rome II Regulation. The Court hereby relies on the requirement of a coherent interpretation of the Rome I, Rome II and Brussels I Regulations, according to which functionally identical terms in these Regulations are to be interpreted as harmoniously as possible. 43 Art. 9 of the Rome I Regulation provides: Overriding mandatory provisions. (1) Overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organization, to such an extent that they are

40

In the proceedings before the ECJ, this was the first question referred (paras. 23-

35). See, for example, the French Cour de Cassation case, 03.06.2004, n° de pourvoi 02-12.989, Bulletin 2004 II N° 265, p. 224. This case involved a road accident in Italy. The victim of the accident, who lived in France, was hit by a car when crossing a main road on foot at night. He was now seeking compensation. According to the 1971 Hague Convention, the law of the Italian place of accident applied. Under Italian law, the claim was excluded if the victim was predominantly at fault, unless the victim could disprove a predominant fault, which he or she did not succeed in doing. The victim now sought compensation from a French fund for the compensation of victims of accidents abroad. The Cour d’appel declared that the application of French law, which provided for a claim against the Fund, should be entirely excluded. The Cour de Cassation overturned the judgment and ruled that the victim compensation system under French law was mandatory. See D. BUREAU (note *), Rev. crit. dr. int. pr., 2004, p. 750 at p. 752, and C. BRIÈRE (note *), p. 29 at II. Since the very intention of the French fund is to fill gaps in compensation where foreign law applies, the judgment of the Cour de Cassation seems rational. 42 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 177/6, 4.7.2008. 43 Recital 7 of the Rome II Regulation. Agree with the ECJ: TH. PFEIFFER (note *), p. 226; O. REMIEN (note *), p. 455 at p. 462; A. JUNKER (note 33), Rom II-VO, Art. 16 n. 9; P. PAPADOPOULOS (note *), 2 et seq.; C. BRIÈRE (note *), p. 29 et seq.; L. PAILLER (note *), p. 882 at p. 884 et seq. The position on mandatory provisions is however not entirely identical in both Regulations, see J. KOKOTT/ W. ROSCH, Eingriffsnormen und ordre public im Lichte der Rom I-VO, der Rom II-VO, der EuGVVO und der EU-InsVO, in Festschrift für Herbert Kronke, Bielefeld (Gieseking) 2020, p. 265 at p. 266-268. 41

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Short Limitation Periods in Cross-Border Liability Cases applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation. To apply an overriding mandatory provision, Art. 9(1) of the Rome I Regulation and, following the judgment in da Silva Martins v. Dekra Claims, also Art. 16 of the Rome II Regulation assume, first, that the case under examination is to be assessed under foreign law in accordance with the relevant Private International Law rules. In the da Silva Martins case, this was the case from the perspective of the Portuguese court since Spanish law was applicable. Second, there must be a provision of national (in this case Portuguese) law that is mandatory under that law.44 In the case at hand, this was the provision of Portuguese law for claims arising from non-contractual liability in Art. 498 of the Portuguese Código civil, which provides for a three-year limitation period, and which is mandatory in Portuguese law. Third, compliance with the three-year limitation period for noncontractual claims must be so crucial for the forum state (here Portugal) “for safeguarding its public interests, such as its political, social or economic organization” that it is not only mandatory in national scenarios, but also in situations with foreign elements and “irrespective of the law otherwise applicable” in accordance with the relevant Regulation, in the case at hand: Spanish law.45 Fourthly, a sufficient connection between the facts of the case and the forum State is required.46 The ECJ emphasizes in its judgment that it is primarily up to the national court to assess these conditions based on its own national law (paras. 31, 33).47 However, for the assessment of the third of the above-mentioned conditions, the ECJ provides the national courts with guidelines that are intended to lead to a harmonized application of Art. 16 of the Rome II Regulation throughout the EU. The ECJ first refers to a contractual case on Article 9(1) of the Rome Convention (now Rome I Regulation), in which the Court ruled in 2013 that “the existence of a “mandatory rule” within the meaning of the legislation of the Member State concerned must be interpreted strictly” (para. 29).48 In the case of da See e.g. D. MARTINY (note 33), Rom I-VO, Art. 9 n. 7. See Recital 37 of the Rome I Regulation; in academic opinion D. MARTINY (note 33), Rom I-VO, Art. 9 n. 8: simple mandatory application under national law is not sufficient. The provision must also claim to be mandatory in cross-border scenarios. See A. JUNKER (note 33), Rom II-VO, Art. 16 n. 10; L. PAILLER (note *), p. 882 at p. 890. 46 D. MARTINY (note 33), Rom I-VO, Art. 9 n. 109, 124 et seq.; A. JUNKER (note 33), Rom II-VO, Art. 16 n. 20-21, both with further references. 47 See also TH. PFEIFFER (note *), p. 226, with reference to F.C. SAVIGNY. See, from a global perspective, the official commentary on the Hague Principles on Choice of Law in International Commercial Contracts (hereinafter: Hague Principles), Art. 11.17: “In every case, the law of the forum must be applied to determine (a) whether a particular provision is capable of having the effects described, and (b) whether, having regard to its terms (including its territorial application) and any relevant surrounding circumstances, it actually has those effects in the case in question”. Available at https://www.hcch.net/en/instruments/ conventions/full-text/?cid=135. 48 Para. 29 referring to the judgment of the ECJ, 17.10.2013, Unamar, C-184/12, ECLI:EU:C:2013:663, para. 49. See also ECJ, 18.10.2016, Republic of Greece v. Grigorios Nikiforidis, C-135/15, ECLI:EU:C:2016:774, para. 44. 44 45

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Thomas Kadner Graziano Silva Martins v. Dekra Claims, the Court transfers this principle of narrow interpretation to the interpretation of mandatory rules in the field of non-contractual liability under the Rome II Regulation. The decisive factor is whether the national provision in question “is of such importance in the national legal order that it justifies a departure from the applicable law, designated pursuant to Article 4 of that Regulation” (para. 31). Applying a different limitation period than that of the law applicable according to the Rome II Regulation “would require the identification of particularly important reasons, such as a manifest infringement of the right to an effective remedy and to effective judicial protection arising from the application of the law designated as applicable pursuant to Article 4 of the Rome II Regulation” (para. 34). The ECJ further points out that the legislator of the Rome II Regulation was well-aware of the problem of different limitation periods in the laws of the Member States and nevertheless expressly extended the scope of the applicable tort law to the issue of limitation periods in Art. 15(h) (para. 33).49 The ECJ concludes that a three-year limitation period in national tort law “cannot be considered to be an overriding mandatory provision, within the meaning of [Art. 16 of the Rome II Regulation] unless the [national] court hearing the case finds, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which that provision was adopted, that it is of such importance in the national legal order that it justifies a departure from the law applicable, designated pursuant to Article 4 of that regulation” (para. 35). In other words, the ECJ states in da Silva Martins v. Dekra Claims that a national court may well give priority to the limitation period of its national law in accordance with Art. 16(1) of the Rome II Regulation over a particularly short limitation period of a foreign law that would otherwise be applicable by virtue of the Rome II Regulation. However, this entails a considerable effort of justification for the national court.50 How could a national court argue to satisfy the ECJ’s requirements? The wording of the limitation rule in Art. 498 of the Portuguese Código civil51 and its systematic position in the Portuguese Civil Code do not reveal any information regarding its mandatory application in cross-border cases. It can be assumed that

49 When the Rome II Regulation was drafted, Art. 15(h) served primarily the purpose of clarifying that the limitation period is a question of substantive law and as such falls into the scope of the Rome II Regulation, and not, as in English law, a procedural question to be judged according to the lex fori. See also O. REMIEN (note *), p. 455 at p. 463. 50 In the words of P. MANKOWSKI (note *), 417905: “der EuGH [legt] die Latte hoch, die es zu überqueren gilt” (translation: the ECJ [sets] the bar high to cross); C. BRIÈRE (note *), p. 29 at II.: “Rares seront les cas dans lesquels elle devrait intervenir” (translation: There will be few cases in which it should intervene); see however also O. REMIEN (note *), p. 455 at p. 463: Dies sollte aber “nicht zu dem Schluss verleiten, Verjährungsvorschriften könnten niemals Eingriffsnormen sein” (translation: However, this should not lead to the conclusion that statutes of limitation can never be overriding mandatory provisions). 51 Original Portuguese version with English translation above, note 2.

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Short Limitation Periods in Cross-Border Liability Cases the same applies to the legislative history of this provision.52 It is therefore the purpose of the provision which is likely to be of decisive importance. Rules on limitation periods serve to speed up proceedings (in this case: the processing of extra-contractual compensation claims) and provide incentives for a timely gathering of evidence. At the same time, they are intended to give injured parties sufficient time to exercise their rights and, if necessary, to enforce them in court. The latter, as explained above,53 is considerably more complex and time-consuming in cases involving foreign elements than in purely domestic cases. If the Portuguese legislator deems a three-year limitation period necessary in purely domestic cases, it could be argued that this is all the more necessary in cases involving accidents abroad. To reduce the limitation period to only one year, especially in the more complex situation of accidents that occurred abroad, would – it could be further argued – jeopardise the state’s interest (in this case the interest of Portugal) to adequately compensate victims of road accidents domiciled in Portugal. The provision in Art. 11(1)(b) of the Decreto-Lei, which – in its scope of application – aims at ensuring that at least the compensation standards of Portuguese law can be observed, could be cited as a further indication of how important it is to the Portuguese legislator to provide adequate compensation to accident victims resident in Portugal. It might also be helpful to present empirical evidence that the interests of accident victims in Portugal, and namely their right to an effective remedy and to effective judicial protection, would be systematically prejudiced if short foreign limitation periods applied instead of the longer period under Portuguese law. With such reasoning, it seems possible, even after the ECJ’s ruling, to regard a longer limitation period of the lex fori as an “overriding mandatory provision” and apply it in accordance with Art. 16 of the Rome II Regulation instead of a particularly short period under foreign law. The Lisbon Court of Appeal did not proceed to such reasoning in the case of da Silva Martins v. Dekra Claims and, in a judgment of 26 March 2019, ultimately ruled in line with the ECJ that the threeyear limitation period of Art. 498 of the Portuguese Civil Code is not an overriding mandatory provision within the meaning of Art. 16 of the Rome II Regulation.54 The reasoning on mandatory provisions under Art. 16 of the Rome II Regulation (and Art. 9 of the Rome I Regulation) has always something generalising, pointing beyond the specific case at hand, rasing the question, for example, whether the three-year domestic limitation period regularly claims priority over shorter limitation periods of foreign laws because of a public interest (provided that there is a sufficient link between the case and the forum State). Perhaps more

52 P. MANKOWSKI (note *), 417905, rightly points to the possibility for national legislators to make clear the internationally binding character of individual national provisions already in the legislative material; see also D. MARTINY (note 33), Rom I-VO, Art. 9, n. 107. 53 See above, IV. 54 Process-nr. 22387/16.3T8PRT.L1. My sincere thanks go to Prof. D. MOURA VICENTE, University of Lisbon, for kindly sending me this (unpublished) judgment.

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Thomas Kadner Graziano appropriate for limitation periods55 is a review from the other end, focusing on the result of the application of foreign law in the specific case at hand and correcting, where necessary, on a case-by-case basis.56 This will be the subject of the following section. D.

Violation of the Public Policy of the Forum State, Art. 26 of the Rome II Regulation

According to Article 26 of Rome the II Regulation (“Public policy in the forum”), the “application of a provision of the law of any country specified by this Regulation may be refused […] if such application is manifestly incompatible with the public policy (ordre public) of the forum”. Article 26, as well as similar provisions in other EU Private International Law regulations, take as their starting point the result of the application of foreign law in a specific case. If this result is not only incompatible, but “manifestly incompatible” with the public policy of the state of the court, the application of the foreign provision can be “refused” in the individual case. Applied to the case of da Silva v. Dekra Claims, this would entail that the application of the one-year limitation period in Art. 1968 of the Spanish Código civil would not be questioned as a matter of principle in the light of the longer limitation period of the Portuguese Civil Code. Rather, it would be examined whether the short Spanish limitation period jeopardises the state interest (in this case the interest of Portugal) to adequately compensate the Portuguese accident victim and his or her right to an effective legal remedy and effective judicial protection in the specific case at hand in a way that is “manifestly incompatible” with Portuguese public policy. The Tribunal de Relação de Lisboa did not invite the ECJ to clarify the conditions of application of Art. 26 of the Rome II Regulation regarding the short limitation period of Spanish law. The reasons may be that the case concerned only damage to property, that the Portuguese partner of the Spanish liability insurer had already paid compensation to the claimant, and that the latter was now seeking compensation for further indirect (and very likely, pecuniary) damage.57 In such circumstances, a violation of public policy is indeed difficult to identify.58 In other cases of cross-border road traffic accidents, Art. 26 of the Rome II Regulation could and should however be addressed. Take, for example, the situation in the Swiss case described above, in which a young man was so seriously See also L. PAILLER (note *), p. 882 at p. 889 et seq., p. 892-893, who puts forward the view that the ECJ in its judgment actually suggests a public policy review by the national court and sets out guidelines for it. 56 For similarities (“two sides of the same coin”) and differences in the analysis of the rules on overriding mandatory provisions and those on public policy, see in a global perspective the official commentary on Art. 11 of the Hague Principles (note 47), n. 11.11; see also J. KOKOTT/ W. ROSCH (note 43), p. 265-274. 57 The judgment does not provide any details about the further damage claimed. 58 See also O. REMIEN (note *), p. 455 at p. 464. 55

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Short Limitation Periods in Cross-Border Liability Cases injured in a road traffic accident in Spain that his earning capacity was impaired for life.59 The Spanish law of the place of accident provided for lump-sum payments that were based on circumstances in Spain and covered only a fraction of the loss of earnings that the plaintiff, who lived in another country, actually suffered following the accident. This outcome clearly undermines the principle of full compensation (restitutio in integrum), a principle that is widely recognised in Europe, under which tort law fully compensates any loss, and in particular those resulting from personal injuries. Such curtailment of the rights of a foreign victim may very well be seen as a clear violation of the public policy of the state of the victim’s habitual residence.60 This curtailment may be even more damaging if a short foreign limitation period entirely prevented victims that have suffered injury to body and health from claiming compensation for their material and immaterial damage and resulting consequential damage (such as loss of earning capacity). This issue was not raised in the da Silva Martins v. Dekra Claims case and the role of Art. 26 of the Rome II Regulation in such situations still needs to be clarified. It will be interesting to see how the case law will develop in the future in this respect.

VI. Potential Solutions at the Private International Law Level (de lege ferenda) There are two options for law reform at the Private International Law level and three more options at the substantive law level that might resolve the liability issues that we currently face with regard to cross-border traffic accidents. A.

A Special Rule for Cross-Border Traffic Accidents in the Rome II Regulation

As mentioned above,61 the Odenbreit decision provides victims of accidents abroad with the option of suing the liability insurer of the responsible party at their own habitual residence. In practice, accident victims almost always prefer bringing their claim before the courts of their own habitual residence rather than suing before the courts of the defendant’s country of residence or the country where the accident occurred, much as the Portuguese claimant in the da Silva Martins v. Dekra Claims case preferred suing in Portugal rather than Spain. Plaintiffs perceive this as fair and greatly appreciate this option. In the aftermath of the Odenbreit decision, this See above, III.A. On the recourse to public policy in such cases also O. REMIEN (note *), p. 455 at p. 464; A. JUNKER (note 33), Rom II-VO, Art. 4 n. 99, Art. 26 n. 18; for more details Th. KADNER GRAZIANO, Das auf außervertragliche Schuldverhältnisse anwendbare Recht nach Inkrafttreten der Rom II-Verordnung, RabelsZ, 2009, p. 1 at p. 14-18. 61 Above II. 59 60

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Thomas Kadner Graziano forum became the main forum for cross-border tort claims in practice.62 The drawback is that, in the event of an accident abroad, Art. 4 of the Rome II Regulation requires the courts at the injured party’s place of residence to systematically apply foreign tort law, such as Spanish law in the case of da Silva Martins. Although the European tort law systems share many basic principles, they still differ in many relevant respects, including but not limited to: how compensation is assessed, in the case of personal injuries, for example, how loss of earnings is calculated; the amount of damages for pain and suffering; and the compensation of loss suffered by secondary victims. With regard to property damage, the legal systems diverge on issues such as: compensation for the costs of experts; compensation for the loss in value of damaged vehicles; loss of use; and compensation for rental car costs.63 Further important differences include: the influence of the victim’s contributory negligence;64 rules on evidence; res ipsa loquitur; and the consequences of uncertainty regarding the cause of accidents.65 Judging all this under a foreign law poses great challenges for the parties, their lawyers, and ultimately the courts. In addition, there is potential for friction between the applicable foreign liability law and domestic procedural law.66 The result of this is that the Odenbreit ruling has in practice intensified the need for comparative legal opinions and significantly increased the workload of comparative law institutes and experts, leading to higher costs and often considerable delays in the settlement of claims.67 Erik Jayme has therefore criticized the Odenbreit decision as a “Danaer gift from the ECJ for the victims of traffic accidents”.68 62 A. FUCHS, Internationale Zuständigkeit für Direktklagen, IPrax, 2008, p. 104 at p. 106-107; A. FUCHS, Zum Klägergerichtsstand bei Auslandsunfällen, in FS Kronke (note 43), p. 109 at p. 112; E. JAYME, Die gleichzeitige Anwendbarkeit divergierender Rechte und das europäische Kollisionsrecht – unter besonderer Berücksichtigung der Schadensersatzansprüche deutscher Urlauber bei Verkehrsunfällen im Ausland, in Festschrift für Christian Kohler, Bielefeld (Gieseking) 2018, p. 193 at p. 196. 63 E. JAYME (note 13), p. 656 at p. 657; E. JAYME (note 62), p. 193 at p. 194-195; on similarities and differences already Th. KADNER GRAZIANO/ Ch. OERTEL, Ein europäisches Haftungsrecht für Schäden im Straßenverkehr? – Eckpunkte de lege lata und Überlegungen de lege ferenda, Zeitschrift für Vergleichende Rechtswissenschaft (ZVglRWiss) 2008, p. 113-163. In detail and with the relevant material, TH. KADNER GRAZIANO (note 9). 64 In French and Belgian law, contributory negligence of the victim plays practically no role in road traffic accident law; in Dutch law, the same applies to 50% of the damage; in German, Swiss or English law, on the other hand, contributory negligence of the victim can lead to substantial reductions of the award; see for the relevant standards with extracts of the relevant case law (in the original version with English translation) TH. KADNER GRAZIANO (note 9), at 229, 236 et seq. 65 Vgl. E. JAYME (note 13), p. 656 at p. 658 et seq.; E. JAYME (note 62), p. 193 at p. 194 et seq.; A. STAUDINGER, Straßenverkehrsunfall, Rome II-Verordnung, Auffahrunfall und Anscheinsbeweis, Neue Juristische Wochenschrift (NJW) 2011, p. 650. 66 See e.g. E. JAYME (note 62), p. 193 at p. 196, 199-200 with further references. 67 J. BASEDOW, Eine einleitende Orientierung, in J. VON HEIN/ G. RÜHL (eds), Kohärenz im Internationalen Privat- und Verfahrensrecht der Europäischen Union, Tübingen (Mohr Siebeck) 2016, p. 3 at p. 17-18; A. FUCHS (note 42), p. 109 at p. 111; E. JAYME (note 62), 193 at 196: “Die deutschen rechtsvergleichenden Institute werden mit

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Short Limitation Periods in Cross-Border Liability Cases Academic opinion reminds us that during the preparatory works for the Rome II Regulation, the former rapporteur of the European Parliament, Diana Wallis, proposed that certain matters of cross-border road traffic accidents should be governed by the law of the injured party’s country of habitual residence.69 In view of experiences since the Regulation’s entry into force and the challenges mentioned above, a future solution could indeed be to add a special rule in the Rome II-Regulation for cross-border road traffic accidents submitting them to the law of the country of the victim’s habitual residence at the time of the accident.70 It is true that such fundamental deviation from the application of the law of the place of the accident would represent an innovation in European Private International Law. The applicable tort law would be less predictable for the tortfeasor if it were based on the injured party’s place of residence rather than the place of the accident. However, the settlement of traffic accident claims is a mass business. Motor vehicle liability insurance cover exists throughout Europe and claims are largely settled through insurers. Foreseeability of the applicable tort law is therefore less important for the tortfeasor than in other scenarios where liable parties have no insurance cover, where they may have to bear the damage themselves and where fairness therefore requires that they can foresee the applicable law before an accident occurs. A special rule that submits liability to the law of the country of the victim’s habitual residence would, in principle, lead to a synchronisation of jurisdiction and applicable law in the case of an action by the injured party at his or her place of residence (i.e. in the most frequent cases). As such, this would resolve the considerable practical difficulties mentioned above, which result from the interaction of the Odenbreit decision and the Rome II Regulation in road traffic accidents today. In the case of da Silva Martins, this would have resulted in the application of Portuguese law. B.

A Cumulative Connection Mechanism for Limitation Periods in the Rome II Regulation

For the specific problem of short limitation periods in foreign laws, which gave rise to the judgment of the ECJ in the da Silva Martins case, a second, less farreaching solution is conceivable de lege ferenda. The problem could be remedied if the question of limitation periods were submitted cumulatively to two laws in the Rome II Regulation, following the example of the rule on the form of contracts in entsprechenden Gutachtenanfragen überhäuft” (translation: The German comparative law institutes are inundated with such requests for expert opinions). 68 E. JAYME (note 13), p. 656, with the warning that this jurisdiction “entails many disadvantages for the injured party and should therefore only be chosen after careful consideration”. 69 See namely A. FUCHS (note 42), 109 at 111, with reference to the proposal by D. WALLIS (at the time rapporteur of the EU Parliament on the Rome II Regulation), Report of 27.06.2005, A6_0211/2005, Amendment 26. 70 This is also the proposal by E. JAYME (note 62), 193 at 200.

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Thomas Kadner Graziano the Rome I Regulation.71 This proposal has already been presented in detail at another occasion.72 The relevant provision could read: Art. 15bis – Limitation period. The claim for extra-contractual liability is time-barred only if it is time-barred both (i) under the law applicable to the claim and (ii) the law of the country of habitual residence of the injured party at the time when the tort was committed.73 Another option would be to include such rule in Art. 15(h) of the Rome II Regulation, which would have to be supplemented by a second sentence to this effect. If this proposal were followed, the claim in the case da Silva Martins v. Dekra Claims would only have been time-barred after three years (i.e. the longer period under Portuguese law). The claimant would have had the necessary time to proceed to all factual and legal clarifications regarding his claim under Spanish law,74 and there would have been no time pressure for negotiations with the insurer.75

VII. Proposals for Reform at the Substantive Law Level The problem could also be solved at the substantive law level instead. There are three possible options. A.

A Large-Scale Solution on the EU Substantive Law level – Uniform Rules on Liability for Cross-Border Road Traffic Accidents

A first solution at the substantive law level could be to adopt uniform European rules on liability for cross-border road traffic accidents. These rules could avoid all national particularities, following the example set by of the Principles of European Art. 11 of the Rome I Regulation. TH. KADNER GRAZIANO (note 28), p. 336 et seq.; Th. KADNER GRAZIANO (note 60), 1 at p. 68-70. 73 In French language version: “Délais de prescription. L’action en responsabilité extracontractuelle est seulement préscrite si elle est prescrite à la fois (i) en vertu de la loi applicable à la demande et (ii) en vertu de la loi du pays de la résidence habituelle de la personne lésée au moment du fait dommageable”. 74 If a short limitation period also applies under the law of the forum, this admittedly does not remedy the complications of short limitation periods in cross-border situations. However, the victim should then at least not be surprised by the foreign law’s short limitation period. 75 See R. ZIMMERMANN (note 27), p. 687 at p. 707 et seq.: “negotiations between the parties with the aim of reaching an amicable settlement [...] should not take place under the pressure of an impending limitation period” (translated from German). 71 72

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Short Limitation Periods in Cross-Border Liability Cases Contract Law (PECL), the UNIDROIT Principles for International Commercial Contracts, the Draft Common Frame of Reference (DCFR), and for non-contractual liability the Principles of European Tort Law (PETL). In the field of non-contractual liability, these national particularities include the short two- or even one-year limitation periods that gave rise to the decision of the ECJ in the case of da Silva v. Dekra Claims, but also include: the generous and very costly lump-sum payments for loss of use of vehicles under German law; the very limited lump-sum payments for loss of earnings under Spanish and Portuguese law; and the very high amounts for bereavement damages under Italian law.76 It has been set out in detail elsewhere that, from the point of view of comparative law, Europe-wide uniform compensation standards for cross-border road traffic accidents could be possible. 77 Last but not least, this would for the first time allow the establishment of a European market for motor vehicle liability insurance. B.

A Small Scale Solution at the EU Substantive Law Level – Uniform Limitation Periods for Cross-Border Road Traffic Accidents

A second, less far-reaching option would be to adopt EU minimum standards for limitation periods for claims arising from cross-border traffic accidents.78 Indeed, in 2017, the European Parliament, following a study of its research service, proposed the adoption of a uniform limitation period of four years for claims arising from cross-border road traffic accidents within the scope of the Motor Vehicles Directive.79 The Parliament considers “that no two Member States apply exactly the same basic rules of limitation“ (point A); that the “national limitation systems are […] highly complex and [that] it can often be challenging to understand which is the applicable overall limitation, when and how limitations begin to run and how See e.g. E. GALLMETZER, Hinterbliebenengeld als Grundrecht? – Einführung und neueste Entwicklungen in Italien, in Ch. HUBER/ Th. KADNER GRAZIANO/ J. LUCKEY (eds.), Hinterbliebenengeld, Baden-Baden (Nomos) 2018, p. 214-238. 77 TH. KADNER GRAZIANO/ CH. OERTEL (note 63), p. 113-163. 78 See P. PAPADOPOULOS (note *), 3 et seq.: The facts of the da Silva Martins v. Dekra Claims case “once again demonstrate to practitioners that a unification of the limitation periods in the area of motor vehicle liability is needed” (in the German original: Der Sachverhalt des Falles “führt dem Rechtsanwender einmal mehr vor Augen, dass eine Vereinheitlichung der Verjährungsfristen im Bereich der Kraftfahrzeughaftung weiterhin geboten ist”), and p. 4: “The decision of the ECJ [...] undoubtedly makes it obvious that there is an urgency to standardise the limitation periods for cross-border road traffic accidents throughout the internal market” (in the German original: “Die Entscheidung des EuGH macht […] zweifelsohne augenfällig, dass sich eine binnenmarktweite Vereinheitlichung der Verjährungsregeln bei grenzüberschreitenden Verkehrsunfällen aufdrängt”). 79 European Parliament resolution of 4 July 2017 with recommendations to the Commission on limitation periods for traffic accidents (2015/2087(INL)) with Annex: Recommendations for a Directive of the European Parliament and of the Council on Common Limitation Periods for Cross-Border Road Traffic Accidents. Available at https://www.europarl.europa.eu/doceo/document/TA-8-2017-0281_EN.html?redirect. 76

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Thomas Kadner Graziano these are suspended, interrupted or extended” (point B); that “unfamiliarity with foreign rules of limitation can lead to the loss of the right to make an otherwise valid claim” (point C); and that “a certain level of harmonisation is the only way to ensure an adequate degree of certainty, predictability and simplicity in the application of Member States’ rules of limitation in cases of cross-border traffic accidents” (point H). The Parliament reiterates “that in cross-border litigation, the length of time for investigations and negotiations is often much longer than in domestic claims” and “underscores in this context that such challenges could be exacerbated when new technologies play a role, such as in the case of driverless cars” (Recital 3). The Parliament therefore “[r]equests the Commission to submit, on the basis of Article 81(2) TFEU, a proposal for an act on limitation periods in respect of personal injury and damage to property in cross-border road traffic accidents” (Recital 10) and makes, in the Annex, a precise “Recommendation for a Directive of the European Parliament and of the Council on Common Limitation Periods for Cross-Border Road Traffic Accidents”. Article 4 of this proposal reads in extracts: Article 4. Period of limitation. 1. Member States shall ensure that a limitation period of at least four years applies to actions relating to compensation for personal injury and damage to property resulting from a cross-border road traffic accident […]. The limitation period shall begin to run from the day on which the claimant became aware, or had reasonable grounds to become aware, of the extent of the injury, loss or damage, its cause and the identity of the person liable and the insurance undertaking covering this person against civil liability or the claim representative or compensation body responsible for providing compensation and against whom the claim is to be brought. 2. Member States shall ensure that where the proper law of the claim provides for a limitation period which is longer than four years, such longer limitation period shall apply. […] The European Commission has not yet responded to this request of the Parliament.80 C.

The Most Modest Option – Harmonization at the National Substantive Law Level

Ultimately, the problem could be addressed at the domestic substantive law level if national legislators in jurisdictions that still apply particularly short limitation periods were to follow the European trend of extending limitation periods for extra-contractual claims (for all claims or only in relation to cross-border scenar80 An occasion would have been the Commission’s proposal of 24.5.2018 to amend the Motor Vehicle Directive 2009/103, COM(2018) 336 final; see P. PAPADOPOULOS (note *), 3 et seq.; see also O. REMIEN (note *), 455 at 464-465. For a critical view on the Parliament’s proposal see A. STAUDINGER (note 13), 669 at 674 note 31.

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Short Limitation Periods in Cross-Border Liability Cases ios) to (at least) three years. Recent developments in Swiss, Czech and Turkish law can be cited as examples of reforms at the national level. Pursuant to Art. 60(1) of the previous version of the Swiss Code of Obligations (CO), damage claims were time-barred after one year from the day on which the injured party became aware of the damage and the person having caused it. At this time, Swiss law therefore applied the shortest limitation period from a comparative perspective (joint with Spanish law, and previously also Czech, Slovak and Turkish law). In Switzerland, starting in 2009, a reform of this short limitation period has been on its way. Since 1 January 2020, Art. 60 CO81 now provides a general threeyear limitation period for tort claims.82 Moreover, the limitation period shall not start running or shall stand still “during the duration of settlement discussions, mediation proceedings or other proceedings for the out-of-court settlement of disputes, if the parties so agree in writing” pursuant to Art. 134 no. 8 CO. The report of the Swiss Federal Council on the amendment of the CO (rules on limitation periods) of 29 November 2013 states that “according to the prevailing opinion, some limitation periods are too short, which is also evident in comparison to the rules applied in other countries. This applies particularly for the limitation period of one year in tort law”. This statement was made primarily with respect to domestic cases, but is even more appropriate in cross-border situations.83 81 Art. 60 CO of the new version now in force reads (in translation): (1) The right to compensation or for damages for immaterial harm shall become time-barred three years after the date on which the injured party became aware of the damage and of the identity of the person liable to pay compensation or damages for immaterial harm, but in any event ten years after the date on which the harmful conduct occurred or stopped. (1bis) In the case of death of a person or bodily injury, the claim for compensation or for damages for immaterial harm shall become time-barred three years after the day on which the injured party became aware of the damage and of the person liable to pay compensation, but in any case twenty years after the day on which the harmful conduct occurred or stopped. (2) If the person liable to pay compensation has committed a criminal offence through his or her damaging conduct, the claim for compensation or damages for immaterial harm shall become timebarred, notwithstanding the preceding paragraphs, at the earliest upon the occurrence of the limitation period for prosecution under criminal law. [...]. 82 The breakthrough came with a ruling by the European Court of Human Rights, 11 March 2014, Howald Moor et al. v. Switzerland, Applications nos. 52067/10 and 41072/11. The ECHR ruled that the statute of limitations in the Swiss Code of Obligations violates the right to a fair trial and to effective access to justice for asbestos victims, and therefore Art. 6(1) of the European Convention on Human Rights. The Swiss legislator adapted the limitation periods for long-term damage and at the same time replaced the short one-year limitation period by a three-year period. 83 Swiss Federal Reporter (Bundesblatt, BBl) 2014, 235 at 236. The explanatory memorandum of the government draft contains detailed references to foreign legal systems, namely German, French, English and Danish law, as well as to the Principles of European Contract Law (PECL), the Draft Common Frame of Reference (DCFR) and the UNIDROIT Principles of International Commercial Contracts (PICC), see: 1.4. Rechtsvergleich (at 247 et seq.). The Principles of European Tort Law (PETL) do not yet contain a provision on limitation period, which explains why they have not been taken into account. See on the reform in Switzerland F. KRAUSKOPF/ R. MÄRKI, Wir haben ein neues Verjährungsrecht!

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Thomas Kadner Graziano However, according to Art. 83(1) of the Swiss Road Traffic Act (in force since 2012), claims for damages “arising from accidents with motor vehicles, bicycles and vehicle-like devices” are time-barred already “in two years from the day on which the injured party became aware of the damage and of the person liable to pay compensation [...]”. This time limit applies also to claims arising from cross-border liability cases and thus remains critically short. With the reform of the Czech Civil Code in 2012, the one-year limitation period in § 106 of the previous version of the Civil Code was replaced by a threeyear limitation period in § 629(1) of the new Code. In Turkey, the short one-year limitation periods in Art. 60 CO and Art. 109 of the Road Traffic Act (in their previous versions) were extended to two years in 2012. From a European perspective, harmonizing the national rules on limitation periods is, however, the most uncertain option to solve the problem in cross-border cases. In Spain, work on reformimg the Código civil has been underway for more than a decade and there is no reference to extending the short one-year limitation period in the official drafts. The Spanish Asociación de profesores de Derecho civil suggests in its draft reform bill extending the short limitation period to three years84 but has not yet found a receptive ear with the Spanish legislator.85

VIII. Conclusions The reasoning of the ECJ in the case of da Silva Martins v. Dekra Claims Services Portugal SA can be endorsed on all points of law. However, the issues that result from applying particularly short limitation periods to cross-border cases remain unresolved. The following conclusions can be drawn on the law as it stands (de lege lata): 1. The law applicable to non-contractual obligations is determined by the Rome II Regulation or, in its Contracting States, the 1971 Hague Convention. The Motor Vehicles Directive 2009/103/EC does not introduce or support the introduction of any Private International Law rules deviating from the Rome II Regulation as understood by Art. 27 of that Regulation. 2. The provision on mandatory rules in Art. 16 of the Rome II Regulation is to be interpreted narrowly.

Darstellung der neuen Gesetzesnormen mit Anmerkungen, Jusletter 2 juillet 2018, in www.jusletter.weblaw.ch. 84 See Propuesta de Código civil, Libros quinto y sexto, Artículo 612-1: “Plazo general de prescripción. El plazo de prescripción es de tres años, salvo para aquellas pretensiones que tengan establecido un plazo distinto”. Available at http://www.derechocivil.net/images/libros/pcc_5y6_tirantloblanch.pdf. In English translation: General limitation period. The limitation period is three years, except for claims for which a different period is specified. 85 I am very grateful to Prof. I. GONZÁLEZ PACANOWSKA, Universidad de Murcia, for this information.

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Short Limitation Periods in Cross-Border Liability Cases 3. The European legislator extended the scope of application of the Rome II Regulation in Art. 15(h) to limitation periods in full awareness of the fact that the rules on limitation periods in the national legal systems vary considerably. As such, it is only in exceptional cases that national limitation periods may be regarded as “overriding mandatory provisions”. 4. National courts may rely on Art. 16 of the Rome II Regulation (“overriding mandatory provisions”) to apply their own national law that has a longer limitation period, but must meet the strict requirements set out by the ECJ in this respect. The reasoning of the national court must carefully analyse the wording of the provision in question, as well as the system and context in which that provision originated, and in particular its purpose and the interest of the forum state in an appropriate compensation of road accident victims. Longer limitation periods of the lex fori may prevail where the right of accident victims to an effective legal remedy and effective judicial protection would not be met without application of a longer limitation period than that of the otherwise applicable foreign law. 5. Short one-year limitation periods are intended for domestic situations and can present great challenges to parties even in purely domestic scenarios. For cross-border situations they are often inappropriate. The ECJ’s decision can be endorsed on all points mentioned above (1.-4.). However, the decision does not solve the problem of short limitation periods in cross-border situations. 6. Where the application of a foreign law is manifestly incompatible with the public policy of the forum, recourse to Article 26 (public policy) of the Rome II Regulation may be considered. In some situations, it may be the case that a particularly short limitation period in foreign law leads to impairment of the right to an effective legal remedy and effective judicial protection. Beyond the case of limitation periods, recourse to Art. 26 may be considered where the applicable law only imperfectly compensates foreign victims because it provides for inadequately low lump-sum payments, in particular in cases of injury to person and health and consequential damage. There are (de lege ferenda) two options for Private International Law reform and three more options for substantive law reform that might resolve the liability issues that we currently face with regard to cross-border traffic accidents: 7. The most far-reaching reform of Private International Law would be to submit cross-border road traffic accidents in the Rome II Regulation to the law of the country of the victim’s habitual residence at the time of the accident. This would imply that injured parties not only benefit from jurisdiction at their home courts (follwing the Odenbreit decision) but also the general application of their own law, even beyond the question of limitation periods. 8. Alternatively, the problem of short limitation periods could be solved by submitting the issue of limitation cumulatively to two laws (in favorem actionis) in the Rome II Regulation, following the alternative connection mechanism applied in the Rome I Regulation for the formal validity of contracts (in favorem validitatis). Under this proposal, a non-contractual Yearbook of Private International Law, Volume 22 (2020/2021)

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Thomas Kadner Graziano claim would only be time-barred if it would be time-barred both under (i) the law applicable to the claim and (ii) the law of the country of habitual residence of the injured party. The problem that gave rise to the ECJ’s decision would hereby be resolved. 9. At the substantive EU law level, the most far-reaching option would be to establish uniform liability rules for cross-border road traffic accidents. Indeed, comparative studies have revealed this solution to be feasible. This approach would (at the same time) establish the conditions necessary for a European market for motor vehicle liability insurance and European-wide competition in this field. The current developments in autonomous driving could provide an opportunity for such a project. 10. Another less far-reaching option at the EU substantive law level would be to introduce minimum periods of three or four years for the limitation of claims arising from cross-border traffic accidents. 11. Lastly, the hope remains that particularly short limitation periods in national laws will gradually be replaced by limitation periods of at least three years. However, from a European-level perspective, this remains the most uncertain option for resolving the problem.

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THE INDIVIDUALIZATION OF THE INTERNATIONAL PUBLIC POLICY EXCEPTION A NEW PROPOSAL FOR THE RECOGNITION OF MUSLIM DIVORCES BY THE COUR DE CASSATION Guillaume KESSLER*

I. II. III. IV. V.

Introduction The Context – Systematic Refusal to Recognize Unilateral Divorces The Method – An Implicit Application of the Balance of Interests Test The Consequences – A Subjective International Public Policy Conclusion

I.

Introduction

In 1849, Friedrich von Savigny noted that the most difficult task in the notion of public policy consisted in the exact delimitation of its boundaries.1 The issue of whether foreign law may be disregarded if such application is manifestly incompatible with the forum’s values or if a foreign judgment can be denied recognition in the forum on grounds of incompatibility with public policy depends on so many factors that it is extremely difficult to accurately predict the judge’s interpretation. The intervention of the public order is thus linked to social and political evolution, to the intensity of the connection between the legal situation and the forum but also, in the European context, to the necessary respect of the fundamental rights guaranteed by the European Convention of the Human Rights and the freedoms of movement foreseen by the European treaties. This probably explains why French case law on this subject has evolved so dramatically in recent years. Increasingly focused on the protection of fundamental rights,2 influenced more and more strongly by the case law of the European courts,3 the public policy

* Associate Professor, University of Savoie Mont Blanc, Centre de recherche en droit Antoine Favre. 1 F. VON SAVIGNY, System des heutigen römischen Rechts, vol. VIII, 1849, p. 32. 2 P. HAMMJE, Droits fondamentaux et ordre public, Rev. crit. dr. int. priv. 1997, p. 1. 3 P. KINSCH, Les contours d’un ordre public européen : l’apport de la Convention européenne des droits de l’homme, in H. FULCHIRON/ CH. BIDEAUD-GARON, Vers un statut européen de la famille, Paris 2014, p. 152.

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Guillaume Kessler exception is gradually losing its national identity.4 Furthermore, the connection with the forum is no longer appreciated as it once was. In a landmark opinion issued on December 2020,5 the Cour de cassation (High Court) seems to have abandoned any reference to the Inlandsbeziehung.6 The decision, rendered on March 17, 2021, goes even further by proposing a new method for assessing the public policy exception. A woman of French and Algerian nationality and a man of Algerian nationality were married in Algeria in 1981 and established their marital home there. In 2009, the wife alone bought a building in France, in Vénissieux, in the region of Lyon. Eight years later, in 2017, the divorce of the spouses was pronounced at the request of the woman by an Algerian judge. She then initiated eviction proceedings against her ex-husband who had settled in France in her personal property. The husband then challenged the decision before the Cour de cassation arguing that the Algerian judgment was delivered under article 54 of the Algerian Family Code that enshrines the principle of divorce by compensation (Khol’a) rendered on unilateral action by the wife without the agreement of the husband. The latter not being able to oppose this form of divorce and the wife not being obliged to reveal the reasons for it, by recognizing the Algerian judgement, the Court of Appeal would have violated article 1, d), of the Franco-Algerian Convention of August 27, 1964, and article 5 of the Protocol n° 7 of November 22, 1984 to the Convention for the Protection of Human Rights and Fundamental Freedoms, which enshrines the principle of equality of spouses in the dissolution of marriage. The Cour de cassation dismissed his appeal, considering that when a divorce decision has been pronounced abroad in application of a law which does not grant one of the spouses equal access to divorce because of his or her gender, its recognition is not contrary to international public policy, provided that it is invoked by the spouse for whom the less favorable rules are provided, that the procedure followed was not vitiated by fraud and that the other spouse was able to assert his or her rights.7 The High Court also considered that any assimilation of divorce by compensation, as provided for in article 54 of the Algerian Family Code, to repudiation must be rejected. Divorce by compensation, pronounced at the initiative of the wife, is indeed subordinated to the payment of a sum of money, whereas in the In France, this is particularly apparent in the area of surrogate motherhood. Whereas, 10 years ago, the recognition of filiation resulting from surrogate motherhood carried out abroad was considered contrary to public policy, it is now automatically recognized through an automatic transcription of the birth certificate (Cass. civ. 1 18 December 2019, n° 18-11.815 et n° 18-12.327). 5 Cass. civ. 1, 16 December 2020, n° 19-20948, Droit de la famille 2021, comm. 54, note E. BONIFAY; Clunet N 2020, act. 1054, obs. H. PEROZ. 6 Spatial or personal connection with the forum. Switzerland uses the term Binnenbeziehung. 7 “Lorsqu’une décision de divorce a été prononcée à l’étranger en application d’une loi qui n’accorde pas à l’un des époux, en raison de son appartenance à l’un ou l’autre sexe, une égalité d’accès au divorce, sa reconnaissance ne heurte pas l’ordre public international, dès lors qu’elle est invoquée par celui des époux à l’égard duquel sont prévues les règles les moins favorables, que la procédure suivie n’a pas été entachée de fraude et que l’autre époux a pu faire valoir ses droits.” 4

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The International Public Policy Exception in France case of such a divorce initiated by the husband, he can be held to a pecuniary repair only in the event of recognition by the judge of an abuse of right.8 The husband having been able to put forward his defenses and not establishing the existence of fraud, the Algerian decision could not be considered as contrary to the principle of equality of the spouses in the dissolution of marriage and the Algerian judgment could thus be invoked in France.9 The French Cour de Cassation thus enshrines the idea that the intensity of public policy may vary according to the interests of the parties involved. This is an undeniable novelty in a context previously dominated by a principle of systematic refusal of foreign repudiations (II). The reasoning followed, which seems to be based on the idea of a balance of interests test (III), suggests that the public policy exception will need to be assessed in a much more individualized manner in the future (IV).

II.

The Context – Systematic Refusal to Recognize Unilateral Divorces

Repudiation of the wife, or talaq is still accepted in many modem Muslim nations, including Morocco and Algeria. In France, Moroccans and Algerians form the largest Muslim minority. As a result, France was confronted very early on with the question of the recognition of talaq. The jurisprudence was initially hesitant. The temptation to refuse to enforce the foreign judgment on the grounds of inconsistency with public policy was counterbalanced by the theory of the attenuated effect of public policy enshrined in the famous Rivière case in 1953.10 The balance was first tipped in favor of recognition in the 1983 Rohbi decision.11 The Cour de cassation considered that repudiation was not contrary to public policy because, although it was a method of dissolving a marriage left to the discretion of the husband, it was tempered by the financial guarantees that he provided to the wife. The case law then became stricter to better deal with the “talaq tourism”, scenario in which the husband repudiates his wife during a visit to the homeland. Ibrahim Article 54 of the Algerian Family Code provides that a wife may separate from her husband without his consent, in return for the payment of a sum of money as "khol'â". In case of disagreement on the amount, the judge orders the payment of a sum which cannot exceed the value of the dowry of parity "sadaq el mithl" evaluated at the date of the judgment. 9 Cass. civ. 1, 17 March 2021, Y. v. X., n° 20-14.506. Hereafter “the Y. v. X. case”. See also F. MÉLIN, Divorce prononcé à l’étranger et ordre public international: un arrêt surprenant, Dalloz 2021 online at https://www.dalloz-actualite.fr/flash/divorce-prononce-letranger-et-ordre-public-international-un-arret-surprenant#.YHPv8j86_IU. 10 Cass. civ., 17 April 1953, Rev. crit. Dr. int. 1953, 412, note H. BATIFFOL on the difference between the reaction of ordre public in the case of acquisition of a right in the forum and giving effect in the forum to a right acquired abroad without fraud. 11 Cass. civ. 1, November 3, 1983, Rev. crit. dr. int. pr. 1984, p. 336, note I. FADLALLAH. 8

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Guillaume Kessler FADLALLAH has also described this practice as “fraud at the attenuated effect of public order” (fraude à l’effet atténué de l’ordre public).12 The Court finally put an end to this practice by opting for a very firm solution in a series of rulings handed down on the same day, February 17, 2004.13 In these different decisions, the court considered that the French domicile of the spouses justified the refusal of recognition.14 The Inlandsbeziehung was used to deactivate the attenuated effect of public policy.15 Subsequent cases have been even more categorical in limiting the emphasis on the connection to the forum and in placing greater emphasis on the inconsistency of the repudiation with article 5 of the Protocol No 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms.16 The reforms carried out in Morocco and Algeria17 to better respect women's rights have not led to the slightest change.18 However, the link with the territory was again put forward in a broad way in a judgment rendered in 2018 in which the Court considered that this link should be deemed to exist if the woman concerned resided in the territory of a Contracting State of the Protocol n° 7.19 A French scholar has referred to this judgment as the emergence of a “European public order of proximity”.20 This solution is quite similar to the one enshrined in Belgium in article 57 of the Code of Private International Law. That text provides for a general principle of prohibition of recognition of a legal document drawn up abroad recording the husband’s intention to dissolve the marriage without the wife having had an equal right before mitigating the rule by establishing criteria to characterize sufficient remoteness from the territory. Paragraph 2 provides that the decision may be recognized if it has been approved by a court of the State where it was established, I. FADLALLAH, (note 11), p. 336. Cass. civ. 1, 17 February 2004, n° 02-10.755, n° 02-17.479, n° 01-11.549, n° 0211.618, n° 02-15.766: Dr. famille 2004, chron. 9, S. PRIGENT; Clunet 2004, II, 10128, H. FULCHIRON; Dalloz 2004, p. 824, F. CAVARROC; ibid. 2004, p. 815, P. COURBE; ibid. 2005, p. 1266, H. CHANTELOUP; Defrénois 2004, p. 812, J. MASSIP; Gazette du palais 2004, 567, M.-L. NIBOYET; Revue trimestrielle de droit civil. 2004, p. 367, J.-P. MARGUÉNAUD; Rev. crit. dr. int. pr. 2004, p. 423, P. HAMMJE. 14 The French nationality of one of the parties also excludes any recognition: Cass. civ. 1, 22 May 2007, n° 06-10433. 15 L. GANNAGÉ, Les méthodes du droit international privé à l’épreuve des conflits de cultures, Recueil des cours, vol. 357, 2013, p. 343. 16 Article 5 of Protocol 7 states that “Spouses shall enjoy equality of rights and responsibilities of a private law character between them, and in their relations with their children, as to marriage, during marriage and in the event of its dissolution”. 17 J.-PH. BRAS, La réforme du code de la famille au Maroc et en Algérie: quelles avancées pour la démocratie, Critique internationale 2007/4, n° 37, p. 93. 18 M.-C. NAJM, La Cour de cassation française et la répudiation musulmane – Une décennie après l’entrée en vigueur des réformes du droit de la famille au Maroc et en Algérie, Clunet 2015, doctr. 7. 19 Cass. civ. 1, 4 July 2018, n°17-16102. 20 M. FARGE, Consécration d'un ordre public européen de proximité et répudiation musulmane, Droit de la famille 2018, comm. 270. 12 13

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The International Public Policy Exception in France if neither spouse was a national of a State whose law does not recognize this form of dissolution of marriage, if neither spouse had his or her habitual residence in a State whose law does not recognize this form of dissolution of marriage, and if the wife has accepted the dissolution of the marriage in a definitive manner and without duress. The protection benefits not only Belgian women or women residing in Belgium, but, rather, all women who are residents or nationals of a State which refuses this specific form of disunion. The Inlandsbeziehung is assessed based on membership in a cultural community rather than on classic connections to the forum. While the situation seems quite clear regarding talaq, it could be more complex regarding another form of dissolution of marriage, the khol’a or khul’. While khol’a dissolves the marriage through the pronouncement of divorce by the husband, it is the wife who requests repudiation in exchange for financial consideration paid to her husband. The basis of khol’a can be found in the Quran. Sura 2, verse 229 allows for a woman to ransom herself (iftadat bihi) from a marriage if the two spouses fear that they will transgress the limits of God (hudutd allah), usually interpreted as breaching moral obligations.21 French courts are more uncomfortable with this institution, which is thought to favor women even if the last word belongs to the husband. Until now, the prevailing view has been that khol’a is contrary to the principle of equality of spouses guaranteed by Protocol 7 and thus to French international public policy.22 The requirement that the wife pay a sum that cannot exceed the value of the dowry (sadaq el mithl) may give the impression that she must buy her freedom from the husband.23 The Y. v. X case is an important clarification in this regard. It is now clearly established that the khol’a must be recognized as soon as it has taken place at the wife’s request. Even if it is subject to the payment of a sum of money, the khol’a should not be treated in the same way as the talaq, which is the result of the sole will of the husband, who is only obliged to pay a pecuniary remedy if the judge recognizes an abuse of right. This pragmatic solution seems to respond to the numerous criticisms of the automaticity of the solutions rendered since 2004. Several authors have argued that French case law does not take sufficient account of recent legislative developments. Jacques LEMONTEY, President of the Cour de cassation at the time, stated that the 2004 cases had not been able to take into consideration the developments in Morocco, and that and that the Court should not ignore these developments .24 However, as we have seen, things did not change

21 L.-M. MOLLER, No Fear of Talaq: A Reconsideration of Muslim Divorce Laws in Light of the Rome III Regulation, 10:3 J. Priv. Int'l L. 2014, p. 471. 22 CA Versailles, 25 March 2010, Droit de la famille 2010, comm. 173, note M. FARGE. See also CA Rouen, ch. famille, 29 sept. 2011, n° 11/00162. 23 CA Rennes, ch. 6, 13 January 2009, n° 07/07095. 24 J. LEMONTEY, Le volontarisme en jurisprudence: l'exemple des répudiations musulmanes devant la Cour de cassation, Tr. Com. Fr. dr. int. pr., 2004-2006, Paris 2008, p. 71.

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Guillaume Kessler much afterwards, even though Algeria has also modified its legislation25 and reforms are likely to become more commonplace.26 Modern family reforms have concentrated on a shift from extra-judicial regulation towards judicial intervention, on restrictions on the husband's power to apply talaq, and on expansion of divorces initiated by the wife.27 Until now, the French courts do not seem to have appreciated the full measure of these changes.28 Although the regime is different depending on the spouse who invokes it, the Moroccan divorce for discord (chiqaq) has been considered compatible with the French international public order on the grounds that the initiative of the procedure can be taken by either spouse (article 94 of the Moroccan Family Code).29 Until now, however, all forms of divorce based on a unilateral request have been rejected. The Cour de cassation seems to refuse to evaluate Algerian or Moroccan rights globally and to admit that specific causes of divorce can be opened to the woman in her interest, to compensate the prerogatives of the husband who alone benefits by law from the right to repudiation. This reasoning was not followed in the Y. v. X. case. Rather than analyzing the Algerian legislation in its entirety to try to understand its logic and seek to apply it in a coherent manner, the Court chose to focus on the individual interest of the wife. According to the Court, a foreign divorce judgment may be in conformity with international public policy even if it was pronounced in application of a foreign law that does not respect the equal access to divorce of the spouses, as long as it is invoked in France by the spouse for whom the less favorable rules of the foreign law are provided. Even if it may be seen as a violation of equality between spouses, and therefore a violation of a fundamental right, the recognition of a repudiation may sometimes be more female-friendly because it allows the wife to claim ancillary relief and child custody as against the husband, to which she might not otherwise be entitled in the jurisdiction where the khol’a or the talaq were obtained.30 It is an opportunity for her to free herself from a relationship in which she may feel trapped. The refusal of recognition also implies the impossibility for her to assert her rights in her country of origin or in the country where the husband lives. Currently, most Muslim countries will not recognize a divorce obtained abroad under a law other than that of their citizens' nationality. The woman will therefore not be able to claim any alimony and may be denied her parental rights. The 2021 decision can, thus, also be seen as a way to avoid the creation of a 25 S.L. CATALANO, Shari'a reforms and power maintenance: the cases of family law reforms in Morocco and Algeria, 15:4 J. of North African Studies, 2010, p. 535. 26 F. MONÉGER, Le Code de la famille marocain de 2004 devant la Cour de cassation, Rev. crit. dr. int. pr. 2014, p. 247. 27 K. ALIDADI, The Western Judicial Answer to Islamic Talaq: Peeking through the Gate of Conflict of Laws, 5 UCLA J. Islamic & Near Eastern L. 2005-2006, p. 24. 28 K. ZAHER, Plaidoyer pour la reconnaissance des divorces marocains – A propos de l'arrêt de la première chambre civile du 4 novembre 2009, Rev. crit. dr. int. pr. 2010, p. 313. 29 Cass. civ. 1, February 23, 2011, n° 10-14.760 30 I. BANTEKAS, Transnational Talaq (Divorce) in English Courts: Law Meets Culture, 9:2 J. of Islamic State Practice in Int'l L. 2013, p. 46.

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The International Public Policy Exception in France “limping situation” (statut boiteux), a situation in which a change in personal status is recognized in the country of origin, but not in the receiving state.

III. The Method – An Implicit Application of the Balance of Interests Test An individualized approach, in concreto, is the best way to avoid limping situations without having to give up the fundamental values of the forum.31 To arrive at such a result, the Cour de cassation implicitly uses the balance of interest method. The Y. v. X. case can thus be seen as a new example of the expansion of the domain of the principle of proportionality.32 The wife's individual interest in having the decision recognized was weighed against France's interest in not having it recognized. According to the High Court, when a divorce decision has been pronounced abroad in application of a law that does not grant one of the spouses equal access to divorce based on his or her gender, its recognition does not violate international public policy, if: (1) it is invoked by the spouse for whom the less favorable rules are provided (2) the procedure followed has not been vitiated by fraud (3) the other spouse has been able to assert his or her rights. If one of these conditions had not been met, the balance would have tipped the other way. Respect for fundamental values would clearly have taken precedence over the wife's individual interest in freeing herself from the marital bond and in being able to evict her husband from her property. Contrary to what seemed to emerge from previous judgments, the French, or European, conception of equality must not be imposed systematically, but must be confronted with a certain measure of relativism and the understanding of foreign rights inherent in private international law. Since the woman, a potential victim of the inequality resulting from Algerian legislation, had an interest in having the foreign decision recognized, the balance of interests test logically led to the coordination of systems and the harmony of solutions prevailing over the respect of the values of the forum: instead of reasoning in the abstract, whereby public policy would be violated in all cases where the divorce is granted by the husband, the Court relies on a concrete interpretation that will allow the wife to escape from a relationship she no longer wants. This relativistic reasoning is also followed in several neighboring countries. In Switzerland, the Tribunal fédéral stated that it was necessary to consider things in concreto, and not to reject the institution of repudiation in a general and abstract

31 M.-C. FLOBETS/ J.-Y. CARLIER, Le Code de la famille marocain. Incidences au regard du droit international privé en Europe, Bruxelles, 2005, p. 69. 32 T. MARZAL, La Cour de cassation à l’âge de la balance. Analyse critique et comparative de la proportionnalité comme forme de raisonnement, Revue trimestrielle de droit civil 2017, p. 789.

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Guillaume Kessler way33 and that it was not necessarily contrary to public policy to recognize a repudiation carried out without the presence of the wife if her consent was clearly established.34 In Belgium, the khol’a has been distinguished from the talaq and has been treated with greater understanding. It was held that this form of divorce, which takes place at the wife's initiative, is to be equated with a divorce by mutual consent and accordingly recognized.35 A precise analysis allowed the Koblenz regional court (Oberlandsgericht) to reach the same conclusion in a 2012 ruling.36 An Egyptian wife filed for divorce by khol’a which, at least according to Egyptian family law, included her waiving any rights to maintenance. However, as the husband did not have any assets and was unable to pay post-divorce maintenance anyway, the divorced wife would have had no claim to maintenance according to German law either. Hence, the court asserted that the legal effects of khol’a would not differ from the legal effects of a divorce granted in accordance with German law. The use by the Court of Cassation of a very concrete reasoning based on the principle of proportionality is not surprising insofar as this method of assessment tends more and more clearly to impose itself in Europe. In its 2007 judgment in Wagner and JMWL v Luxembourg, the ECHR held that the refusal to recognize a Peruvian adoption judgment in Luxembourg was a violation of the right to protection of family life (art 8 ECHR).37 The central holding of Wagner, i.e. that a status acquired abroad by virtue of a judgment is entitled to protection under the Convention, and that any interference with that protection due to the effect of restrictive rules of private international law needs to be justified in light of the principle of proportionality, was confirmed and extended by later cases.38 The reliance by the Greek courts on public policy to refuse to recognize an American judgment on adoption was notably disapproved of in Negrepontis-Giannisis v Greece in 2011.39 It must be said that the method is particularly well suited to this field, since public policy is necessarily subject to an assessment in concreto.40 This balancing has long been done in the context of consideration of the impact of the Inlandsbeziehung. The public order of proximity allows for a balance to be struck between the respect of the values of the forum and the respect of the cultural identities, on the one hand, and between the cohesion of the internal order and the international harmony of solutions, on the other.41 ATF 126 III 327 ATF 131 III 182. See also C. WACK, La reception du droit musulman dans l’ordre juridique suisse: la reconnaissance des mariages polygames et de la répudiation, FamPra.ch 4/2019, p. 1169. 35 K. ALIDADI, (note 27), p. 74. 36 OLG Koblenz, 19 September 2012, NJW 2013, 1377. 37 ECHR, 28 June 2007, Wagner and JMWL v Luxembourg, App. No 76240/ 01. 38 P. KINSCH, Human rights and private international law, in J. BASEDOW et al. (eds) Encyclopaedia of Priv. Int’l Law, Cheltenham, 2017, p. 882. 39 ECHR, 3 May 2011, Negrepontis-Giannisis v Greece, n° 56759/ 08. 40 P. MAYER/ V. HEUZÉ & B. RÉMY, Droit international privé, 12e ed., 2019, n° 211. 41 M.-C. NAJM, Principes directeurs du droit international privé et conflits de civilisations, Paris 2005, p. 472. 33 34

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The International Public Policy Exception in France The novelty of the Y. v. X. judgment therefore does not really lie in the method, which was already used in the assessment of proximity, but in the fact that proportionality is assessed in relation to the subjective interest of the wife. In the 2021 case, the connection to the forum was crystal clear. The wife was of French nationality even though she also had Algerian nationality. The Inlandsbeziehung was evident here. The fact that the Court chose to ignore this is far from insignificant. For the past decade, several scholars have been questioning the sustainability of the “ordre public de proximité”.42 The 2020 case mentioned above,43 had clearly abandoned any reference to public policy of proximity with respect to laws restricting the right of the child to have his or her filiation established.44 The individual interest of the child, regardless of his or her nationality or residence, was given priority, whereas previous rulings justified the exclusion of foreign law by the presence of a close connection with the forum.45 The 2021 judgment is in line with this decision. The intervention of public order no longer seems to be conditioned by the Inlandsbeziehung but rather by the values and interests at stake. This development is largely due to the importance of human rights in this field. “If the violation of the ordre public consists in the disregard of the essence of fundamental principles for the protection of human rights, it does not seem pertinent to adapt the effect of the mechanism in accordance with the Inlandsbeziehung, and in particular nationality”.46 Regarding repudiation, it is not because a woman is less integrated that she should be less protected. The principle of equality enshrined in the 1984 protocol should guarantee the protection of all spouses, not just French citizens or residents. Belgian law grants the benefit of its rules not only to Belgian women or women residing in Belgium but also to all women whose nationality or residence law prohibits repudiation.47 The balancing exercise proposed by the Cour de cassation is even more interesting insofar as it allows for a more nuanced appreciation of the exception. An Algerian woman living in Algeria but having interests in France could legitimately oppose the recognition of a repudiation, while another woman living 42 E.g. D. SINDRES, Vers la disparition de l’ordre public de proximité?, Clunet, 2012, doctr. 10; D. BODEN, Requiem pour l’Inlandsbeziehung, Rev. crit. dr. int. pr. 2018, p. 882. 43 See note 5. 44 “La loi étrangère qui ne permet pas l’établissement d’une filiation hors mariage doit être écartée comme contraire à l’ordre public international lorsqu'elle a pour effet de priver un enfant mineur du droit d’établir sa filiation” (A foreign law that does not permit the establishment of filiation outside marriage must be set aside as contrary to international public policy when it has the effect of depriving a minor child of the right to establish his filiation). 45 Cass. civ. 1, May 10, 2006, n° 05-10.299, JCP G 2006, II, 10165, note T. AZZI ; Droit de la famille 2006, comm. 177, note M. FARGE; D. 2006, p. 2890, note G. KESSLER/ G. SALAMÉ; Defrénois 2006, art. 38441, p. 54, obs. J. MASSIP. 46 A. MILLS/ I. THOMA, Public policy (ordre public), in J. BASEDOW et al. (eds) Encyclopaedia of Private International Law, Cheltenham, 2017, p. 1458. 47 Article 57 de la loi du 16 juillet 2004 portant le Code de droit international privé. Sur cette loi J.-Y. CARLIER, Le Code belge de droit international privé, Rev. crit. dr. int. pr. 2005, p. 11.

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Guillaume Kessler in France could have an interest in having it recognized. Proximity public policy is reductive. It focuses on objective location criteria and does not allow for consideration of the cultural identity of the person concerned or their personal expectations. This is where the balance of interests proposed in Y. v. X. is particularly interesting. Public policy will only be imposed in an absolute manner in cases of serious breaches of the fundamental values of the forum. The more serious the breach, the more likely and the more acceptable it becomes that public policy may be invoked against the breach.48 In this case, the lack of respect for the rights of defense of the parties, for example, will be deemed sufficiently fundamental to prevent recognition, even if this does not serve the wife's interests. As long as the hard core of public order is not affected, modulation according to individual interests is possible. If this is not the case, the exception must be used. This should not depend on the conditions of integration but only on the values to be defended.

IV. The Consequences – A Subjective International Public Policy The system proposed by the Court of Cassation requires the implementation of a holistic approach. It requires consideration of the importance of the values likely to be affected, the individual interests of the parties, and the underlying principles of private international law, uniformity of decisions, meeting the parties’ reasonable expectations or comity. The intervention of public policy will require the use of “tailor-made” reasoning which may lead to uncertainties. The discretion given to the judge could also lead to differences in assessment between jurisdictions as well as encouraging forum shopping. This balancing approach to public policy provides judges with too much discretion; the outcome could vary largely depending on the judge at hand and the weight placed on each principle. French scholar Hélène PÉROZ therefore considers that the solution established by the Y. v. Z. judgment is not satisfactory.49 For the notary, for instance, it is already very difficult to anticipate a possible invocation of the international public policy exception.50 If the assessment of public order is to be made according to the party invoking the situation, it will be almost impossible.51 In the present case, public policy would have been a clear obstacle to recognition if the wife had applied to have the Algerian decision declared unenforceable or if the husband had applied for exequatur. This kind of fluctuation is too difficult to anticipate.52 Hélène PÉROZ also criticizes this excessive individualization as leading to the A. MILLS/ I. THOMA, (note 46), p. 218. H. PÉROZ, Le notaire et l’appréciation de l’ordre public international: un exercice d’équilibriste, Clunet, N 2021, act. 364. 50 J. GUILLAUME, L’office du notaire en droit international privé, Clunet 2020, doctr. 2, No 91. 51 H. PÉROZ, (note 49). 52 Ibid. 48 49

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The International Public Policy Exception in France creation of a new public policy “in personam”, which would be added to the “conditional” public policy exception resulting from the Jarre and Colombier decisions.53 In both decisions, the French descendants of famous composers, settled in the United States for a long time, had argued that California law was contrary to public policy because it did not allow them to invoke their inheritance reserved rights. In these cases, handed down on the same day, the Court of Cassation stated that “when the foreign law normally applicable to the succession is that of a State which does not recognize the reserve portion of the estate and it has not been argued that its application would leave one or other of the heirs in a situation of economic precariousness or need, the French judge deduces exactly that there is no reason to set aside this legislation in favor of French law, since it does not offend French international public policy”. French authors qualified this system as a conditional public order insofar as the exception is intended to intervene only if the beneficiary is in a precarious situation or in need. A closer look reveals that the reasoning in Y. v. X. and in Jarre and Colombier could in fact be related to the same idea. We should probably not oppose conditional public policy and public policy in personam. These cases follow the same reasoning, basing the use of the public policy exception on a precise and individualized analysis of the situation rather than on a general analysis of the foreign law that is potentially incompatible with the values of the forum. In Y. v. X., public policy is just as conditional as in Jarre and Colombier. Only the criteria are different. In this case, public policy was conditioned on the invocation by the person for whom the rules are least favorable and on the absence of fraud in the same way as it is conditioned on the existence of a situation of precariousness or a state of need in Jarre and Colombier. The jurisprudence of the Court of Cassation may therefore be more coherent and thoughtful than it appears. This comparison may also provide a clue as to the scope of the solution. Early commentators on the decision wondered whether the reasoning was only valid from the perspective of recognition of a foreign decision or whether it could also be used when the judge had to apply the foreign law.54 In view of the Jarre and Colombier decisions and the above-mentioned 2020 decision, this is probably a general development and it should be possible to use the reasoning whether public policy is invoked in its full effect (effet plein) or in its attenuated effect (effet atténué). Regarding repudiation, this raises the question of the scope to be given to Article 10 of the 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). This article states that “where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex, the law of the forum shall apply”. Instead of allowing some flexibility using public policy, this rule systematically eliminates the application of 53 Cass. civ. 1, September 27, 2017, No 16-13.151, Colombier and No 16-17.198, Jarre: Droit de la famille 2017, comm. 230, note M. NICOD; Clunet G 2017, 1230, note C. NOURISSAT/ M. REVILLARD; Clunet 2017, 1305, note E. FONGARO. 54 H. PEROZ (note 49)/ F. MELIN ((note 9).

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Guillaume Kessler discriminatory religious or customary law.55 However, some modulation could be envisaged along the lines of that employed by the Court in the Y. v. X. judgment. German scholar Jürgen Basedow suggested interpreting this provision in a restrictive way, such that the foreign law remains applicable as long as it does not ultimately disadvantage the wife in the circumstances of the concrete case.56 This adaptation to the circumstances is ultimately quite logical given the characteristics of public policy in private international law. “The logic behind the relative operation of ordre public can be summarized as follows: while in abstract terms a foreign law provision may run counter to the principles reflected in the lex fori, its application in light of the specific circumstances of the case may nevertheless be compatible with it. Conversely, the abstract rule of a foreign legal system may be fully aligned with the fundamental values of the forum while under specific circumstances the result of its application may lead to a flagrant violation of the forum’s ordre public”.57 Varying the scope of the exception according to the status of the spouse invoking the judgment in France is therefore not very surprising. Once again, this is a pure application of the in concreto understanding of the concept. In the words of Phocion FRANCESCAKIS, it is a matter of going beyond the abstract operation of the conflict rule to seek a concretely satisfactory result.58 In accordance with a classic distinction used in French domestic law,59 the question arises as to the extent to which a distinction should not also be made in international matters between a public order of direction and a public order of protection. This distinction, which is usually used in economic matters, could be transposed to clearly distinguish between cases in which public policy can be relativized and those in which this cannot be done. The reservations made by the Cour de cassation for the modulation of public policy in matters of repudiation give an indication of how to proceed. When it comes to protecting universal values, such as the rights of defense or the protection of the best interests of the child, public policy will be applied in an absolute manner. When it is a question of defending the political and social foundations of the forum or of safeguarding a legislative policy, public order can be modulated according to the interests of the parties involved. This change in reasoning can be considered a sign of a denationalization of private international law. Although the idea of a European public policy has been defended for many years now, one may wonder to what extent its scope does not go beyond this continent alone. Public policy could be shared in a universal sense. “This is clearest where it derives from agreed international norms, such as those expressed in customary international law or widely adopted international trea-

55 Y. NISHITANI, Identité culturelle en droit international privé de la famille, Recueil des cours, vol. 401, 2019, p. 184. 56 J. BASEDOW, European Divorce Law. Comments on the Rome III Regulation, in Liber Amicorum Walter Pintens, vol. 2, Cambridge, 2012, p. 149. 57 A. MILLS/ I. THOMA, (note 46), p. 1457.  58 PH. FRANCESCAKIS, La pensée des autres en droit international privé, Thessalonique, 1985, p. 187. 59 A. GOUEZEL, Jurisclasseur Civil, fasc. 6, “Ordre public et bonnes mœurs”, No 22.

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The International Public Policy Exception in France ties”.60 It now seems possible to refer to a “transnational” or “truly international public policy”,61 which admits no exceptions. This hard core coexists with a “national” international public order, whose scope is linked to objectives that can be more easily relativized. This does not mean that a state will no longer be able to defend its own values, but simply that one will need to apply a different method depending on what is at stake.

V.

Conclusion

The Y. v. X. judgement thus marks a new stage in the renewal of the assessment of international public policy in France, initiated in recent years with the retreat of the consideration of the Inlandsbeziehung and the increasingly explicit affirmation of a European, even transnational, public order. The proposed individualization is promising, especially in the area of recognition of Muslim family institutions. Tolerance of khol’a could similarly justify granting multiple wives inheritance rights in a polygamous marriage or alimony in a forced or underage marriage, for example. The right balance will not always be easy to find. This method of interpretation will undoubtedly give rise to unfortunate discrepancies and uncertainties. As Tristan AZZI expressed it perfectly, the challenge is stated as an oxymoron: it is a question of applying universal rights in a relative manner.62 It is nonetheless worth noting insofar as it will contribute to the construction of a “humanized” private international law.63

60 A. MILLS/ I. THOMA, (note 46), p. 214. The author specifies that “the most obvious examples of norms which might be recognised in this way are norms of international human rights”. 61 M. WAHAB, Cultural Globalization and Public Policy: Exclusion of Foreign Law in the Global Village, in M. FREEMAN (ed.), Law and Sociology: Current Legal Issues, Oxford University Press, 2005, p. 360. 62 T. AZZI, (note 45). 63 G.-P. ROMANO, Souveraineté “mono-nationale”, relations humaines “transterritoriales” et “humanisation” du droit international privé. Libre propos, in Le droit à l’épreuve des siècles et des frontières, Mélanges en l’honneur du professeur Bertrand Ancel, LGDJ, Iprolex, 2018, p. 1415.

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FORUM ________________

THE LEGISLATIVE “DÉPEÇAGE” OF THE SURVIVING SPOUSE’S PATRIMONIAL STATUS IN THE LIGHT OF THE LATEST EUROPEAN UNION REGULATIONS Raphaëlle DE GOURCY*

I. II.

III.

Introduction Plurality of Laws and Issues of Characterisation A. The Characterisation Confronted with the EU Regulations B. The Characterisation of the So-Called “avantages matrimoniaux” and of the “action en retranchement” of French Law 1. Characterisation of the “avantages matrimoniaux” 2. Characterisation of the “action en retranchement” Restoring a Unity of Law after Death A. The Judicial Substitution of the Applicable Law Allowed by Article 26(3) of Regulation No 2016/1103 B. What Autonomy of the Will post mortem? 1. Overriding the Conflict of Laws Rule and the Applicable Law by Means of a “Procedural Agreement” 2. Submitting the Liquidation of the Matrimonial Regime to Another Law

I.

Introduction

While organised under domestic law, the protection of the surviving spouse is structurally disorganised in an international context.1 In domestic law, the protection of the surviving spouse2 depends primarily on the matrimonial regime and the law of successions3 – the matrimonial regime * Docteur en droit (Université Paris II Panthéon Assas), legal expert (juriste) at CRIDON, Lyon. 1 R. CRONE/ L. PERREAU-SAUSSINE, La protection du conjoint survivant dans un contexte international: l'apport des règlements européens récents, JCP N. 2016, p. 1327. 2 We limit our study to the situation of spouses, to the exclusion of partners or cohabitants. In European Union law, the term “spouse” continues to imply the existence of a

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Raphaëlle de Gourcy determines the property rights and powers of each spouse on assets, the devolution of which is governed by the law of successions after a death. In most cases, the matrimonial regime is conceived in view of the inheritance rights. In French law, the legal matrimonial regime, which is a community regime, has long compensated for the inadequacy of the surviving spouse’s inheritance rights.4 Since the spouse was entitled to half of the community property, he or she could receive little, or even nothing, from the succession. This correlation between the matrimonial regime and the inheritance rights is not specific to France. For instance, during the 2018 reform in Japan, the protection of the surviving spouse took an inheritance form because it could not take a matrimonial form: since it was not possible to substitute a community legal regime for the separatist legal regime, the Japanese legislator increased the inheritance share of the surviving spouse.5 By contrast, international law does not address the surviving spouse's property status as a whole. Under French private international law, prior to the entry into force of Regulation (EU) No 650/2012 of 4 July 2012 on successions6 and of Regulation No 2016/1103 of 24 June 2016 on matrimonial property regimes,7 matrimonial property regimes and successions were subject to separate categories.8 Since the very nature of the categories of conflict of laws consists in apprehending the legal reality per fragment in order to distribute its substance among the marriage. The Court of Justice of the European Union (CJEU) has ruled along these lines, although it was careful to formally limit the scope of its decision to the interpreted Directive 2004/38/EC. See CJEU, 5 June 2018, Coman, C-673/16, ECLI:EU:C:2018:385, cf. § 34 of the judgment: “The term ‘spouse’ used in that provision refers to a person joined to another person by the bonds of marriage”. The term spouse does not include registered partners or cohabitants. The adoption of two separate regulations, one concerning matrimonial property regimes (No 2016/1103), which presupposes a marriage, and the other concerning the property effects of registered partnerships (No 2016/1104), also calls for a distinction to be made between spouses, registered partners and cohabitants, and for the spouse’s status to be linked to the existence of a marriage. 3 The protection of the spouse also depends on social law, contract law, etc., but we will not examine these more subsidiary protections here. 4 J.-P. LEVY, Coup d'œil historique d'ensemble sur la situation patrimoniale du conjoint survivant, in Études offertes à René Rodière, Paris 1981; B. AUDIT/ L. D'AVOUT, Droit international privé, Paris 2018, No 402; P. MAYER/ V. HEUZE, Droit international privé, 12th ed., Paris 2019, No 266. 5 H. HATANO, La protection du conjoint survivant au Japon, Revue Internationale de Droit Comparé 2018, p. 261. 6 Regulation (EU) No 650/2012 of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and the acceptance and enforcement of authentic instruments in matters of succession and the creation of a European Certificate of Succession. 7 Regulation (EU) No 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law, recognition and enforcement of judgments in matrimonial matters. 8 In French private international law, matrimonial property regimes and successions have not been absorbed into personal status or real status.

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status different laws,9 their plurality necessarily exposed the patrimonial status of the surviving spouse to the risk of legislative “dépeçage” – the metaphor designating the plurality of laws applicable to the different aspects of the same situation. The same is true under Regulation No 650/2012 of 4 July 2012 on successions and Regulation No 2016/1103 of 24 June 2016 on matrimonial property regimes, which came into force respectively on 17 August 2015 and 29 January 2019: the plurality of texts, each containing different conflict of laws rules, continues to expose the patrimonial status of the spouse to the risk of “dépeçage”. In terms of conflicts of laws, coordination is not guaranteed.10 Regulation No 650/2012 on successions and Regulation No 2016/1103 on matrimonial property regimes have, admittedly, retained the same connecting factor in principle, but have added a different time-based precision. In the absence of a choice of law, Article 26(1) of the Regulation on matrimonial property regimes designates, as a principal rule, the law of the State of the first common habitual residence of the spouses after the marriage, while Article 21(1) of the Regulation on successions designates the law of the State of the last habitual residence of the deceased. It is thus sufficient for the spouses to leave the State in which they had established their first habitual residence after the marriage for the law applicable to their matrimonial property regime and the law applicable to the succession of the predeceased to be different.11 Unlike the Hague Convention of 14 March 1978 on the law applicable to matrimonial property regimes, Regulation No 2016/1103 does not provide for any automatic mutability of the law applicable to the matrimonial property regime.12 As an illustration, we can take the example of French spouses who, having lived in Switzerland after the marriage, later settle in France during their union. From the point-of-view of the States bound by the regulations, in the absence of a choice, Swiss law should govern their matrimonial regime, while French law should govern the succession of the predeceased. By application of the new con9 D. COCTEAU-SENN, Dépeçage et coordination dans le règlement des conflits de lois, Paris 2001, p. 15 et seq. In this sense, see P. LAGARDE, Le dépeçage dans le droit international privé des contrats, Riv. dir. int. priv. e proc. 1975, p. 649: “dépeçage would be a ‘necessary corollary’ of the plurality of conflict rules” [our translation]. 10 But coordination is guaranteed in terms of conflicts of jurisdiction. According to Article 4 of Regulation No 2016/1103, in the event of death, the court with jurisdiction in matters of succession under Regulation No 650/2012 also has jurisdiction in matters relating to the matrimonial property regime. The principle is that of the concentration of disputes in the hands of a single judge. 11 See A. BONOMI, The interaction among the future EU instruments on matrimonial property, registered partnerships and successions, this Yearbook, 2011, p. 217 et seq.; ID., Les propositions de règlement de 2011 sur les régimes matrimoniaux et les effets patrimoniaux des partenariats enregistrés, in A. BONOMI/ CH. SCHMID (eds), Droit international privé de la famille: Les développements récents en Suisse et en Europe, Zurich 2014, p. 60. Commenting on Regulation No 2016/1103, see A. BONOMI/ P. WAUTELET, Le droit européen des relations patrimoniales de couple, Commentaire des Règlements (UE) 2016/1103 et 2016/1104, 1st ed., Bruxelles 2021, p. 793, No 40. 12 Recital 46 of Regulation No 2016/1103 even expressly condemns it: “[...] no change of the law applicable to the matrimonial property regime should take place without the express request of the parties [...].”.

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Raphaëlle de Gourcy flict of laws rules, the patrimonial status of the surviving spouse is split between two laws. The autonomy of the will provided for by the European regulations often is presented as the means of avoiding a “dépeçage”. However, does it effectively do so? On the one hand, Article 22 of Regulation No 2016/1103 allows spouses, during the marriage, to designate the law applicable to their regime, provided that said law is that of one of their nationalities or that of one of their habitual residences. On the other hand, Article 22 of Regulation No 650/2012 allows a de cujus to designate one of his national laws to govern the inheritance of all his property. If we take the previous example, Article 22 of the Regulation on matrimonial property regimes offers spouses of French nationality the possibility to designate French law to govern their matrimonial property regime and thus to avoid a “dépeçage”. But these provisions will not always make it possible to unify the patrimonial status of the surviving spouse under a single law. The autonomy of the will, as framed by the regulations, remains limited. Contrary to Article 22 of Regulation No 2016/1103, Article 22 of Regulation No 650/2012 only allows the choice of the national law, and excludes the choice of the law of the State of the habitual residence or of the matrimonial law. Let us take the case of a Franco-German couple: the husband of French nationality, the wife of German nationality. After living in Germany with his wife, the husband returns to live in France. In the absence of a choice of law, the matrimonial regime should be subject to German law while the husband's succession should be subject to French law. Being of French nationality, the husband cannot designate German law to govern his succession: he can only designate French law. If he dies first, the surviving spouse’s property rights should be governed by German law and French law. Moreover, it is likely that the parties, if they make a choice of law, make it considering material objectives rather than to avoid a legislative “dépeçage”. For instance, a couple will designate the law applicable to the matrimonial regime, or a de cujus the law applicable to his or her succession, in order to take advantage of an opportunity or to avoid a prohibition. It will therefore be inevitable that spouses will submit their matrimonial regime and their succession to different laws, whereas the objective connections may have designated a single law. In short, the regulations have not eliminated the risk of “dépeçage”. The patrimonial situation of the surviving spouse is still likely to depend on several laws, with issues that may arise from this fact, in terms of characterisation or coordination. The plurality of applicable laws leads to a decision, at the end of a characterisation operation, on the applicability of provisions or institutions which, due to their mixed nature, are difficult to link to one or the other of the two laws. It also leads to the coordination of two laws that were not designed to be applied together. In this article, we focus only on the first category of issues regarding characterisation so as to examine in greater depth, especially in the case of two institutions of French law that have not yet given rise to any ruling by the Court of Justice of the European Union (CJEU) (II).13 13 Regarding all the difficulties caused by the plurality of applicable laws, see R. DE GOURCY, Le statut patrimonial du conjoint survivant en droit international privé, Université Paris II Panthéon-Assas 2019. More generally, this article takes up points studied in our thesis.

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status If the issues arise from the plurality of applicable laws, then the application of a single law to govern the matrimonial regime and the succession should put an end to them. As we have seen, the autonomy of the will exercised during the union and before death will not necessarily avoid “dépeçage”. After death, however, will the surviving spouse and the heirs still be required to undergo a “dépeçage”? Under Regulation No 2016/1103 on matrimonial property regimes, Article 26(3) admits a judicial substitution of the law applicable to the matrimonial property regime which could, in certain cases, allow the reunification of the patrimonial status of the spouse under a single law. But such substitution, in view of the requirements of foreseeability and proximity, is subject to limits, foremost among which is its judicial character, which reduces its ability to reunify under a single law the patrimonial rights of the spouse. Hence the interest in determining if a post-mortem agreement, under which the parties would set aside one or the other of the conflict rules prescribed by this regulation, could be lawful (III).

II.

Plurality of Laws and Issues of Characterisation

It appears, after an examination of domestic laws, that the protection of the surviving spouse is based on specific provisions regarding both the matrimonial regime and the succession. We refer here to the so-called “avantages matrimoniaux” and the “action en retranchement” of French law,14 the flat-rate adjustment provided for by Article 1371 paragraph 1 of the Bürgerliches Gesetzbuch (BGB) in favour of the surviving spouse, the continued communities of the Nordic countries, the rules governing the non-accumulation of matrimonial and inheritance rights.... Each of these institutions raises an issue of characterisation which must be resolved in order to determine the applicable law. The German flat-rate adjustment embodies the interdependence between the matrimonial regime and the succession. When the spouses were married under the German legal regime of participation in acquests and this is dissolved by death, the surviving spouse who is an heir or legatee benefits from an increase in his or her inheritance share, of one quarter, regardless of the enrichment of each spouse during the union. Instead of becoming the creditor or debtor of a participation claim, the surviving spouse is entitled to this additional quarter. The community dimension of the regime is reflected at the succession stage. In 2018, the CJEU accepted, in the Mahnkopf judgment,15 that this fixed equalisationof German law falls within the sphere of successions or, more precisely, that “Article 1(1) [of Regulation 14

Belgian law is also familiar with these institutions. CJEU, 1 March 2018, Mahnkopf, C-558/16, ECLI:EU:C:2018:138, Clunet 2018, p. 20, note I. BARRIÈRE-BROUSSE; Revue Juridique Personnes et famille 2018, p. 39, No 5, note S. GODECHOT-PATRIS; Droit de la famille (Dr. fam.) 2018, p. 46, No 5, note M. FARGE; Défrenois (Defr.) 2018, p. 5, No 12 and p. 43, No 24, chron. C. NOURISSAT ; P. LAGARDE, La qualification du Zugewinnausgleich entre BGH et CJUE, in M.-E. ANCEL et al., Le droit à l'épreuve des siècles et des frontières, Mélanges en l'honneur du Professeur Bertrand Ancel, Paris 2018, p. 1043 et seq. 15

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Raphaëlle de Gourcy No 650/2012] must be interpreted as meaning that a national provision which provides, on the death of one of the spouses, for a lump-sum distribution of acquests by increasing the inheritance share of the surviving spouse falls within the scope of that regulation”. But the court has not yet given a ruling on the aforesaid “avantages matrimoniaux” and the “action en retranchement” under French law. For some authors, matrimonial benefits and “retrenchment action” would fall under the scope of Regulation No 650/2012; for others, they would fall within the scope of Regulation No 2016/1103. It is therefore important to determine how they should be characterised and what regulations should apply to them (B). But, before doing so, it is necessary to verify to what extent the entry into force of the regulations has affected the characterisation (A). A.

The Characterisation Confronted with the EU Regulations

A conflict of laws rule is composed of both a connecting category and a connecting factor. The category (“matrimonial property regime”, “successions”, etc.) groups together a set of questions linked by material ties and which must be subject to the same law, while the connecting factor (nationality, domicile, etc.) embeds the situation in a given legal order. In French private international law, the categories of the French conflict of laws rules are the ordinary general categories of the French domestic legal order.16 Since the interpretation of a rule must, if possible, be sought from the author of the rule, the contours of the categories of French conflict rules must first be determined on the basis of national concepts and classifications. And so was the French jurisprudence when it enshrined, in 1955, the principle of a lege fori characterisation.17 As an illustration, the choice of the conflict of laws rule for successions – and, by correlation, the application of the law of successions – presupposes a question of the law of successions within the meaning of domestic law.18 With the entry into force of regulations No 650/2012 and No 2016/1103 on 17 August 2015 and 29 January 2019, there seems to have been a paradigm shift in two areas, at least from the French perspective. To characterise is to recognise, in a fact, an act, a situation or a rule of law, the essential characteristics of a pre-existing legal category and to include it in that category.19 More precisely, to characterise a fact, an act, a situation or a rule as relating to successions presupposes that the essential characteristics of the succes16

B. ANCEL, Qualification, in Répert. Dr. Int., Dalloz, Paris 1998-2009, No 38. Cass. civ., 22 June 1955, Caraslanis, in Rev. crit. dr. int. priv. 1955, p. 723, note H. BATIFFOL ; B. ANCEL/ Y. LEQUETTE, Les grands arrêts de la jurisprudence française de droit international privé, No 27. 18 But the category of domestic law can be expanded to include an institution unknown to the forum. 19 G. CORNU, Vocabulaire juridique, 13th ed., 2020, see “Qualification”; B. ANCEL, L'objet de la qualification, Clunet 1980, p. 227 et seq. B. ANCEL shows in his study how the determination of the object of the qualification raises a particular difficulty in private international law: does the conflict rule refer to facts or to rules of law? 17

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status sion category can be recognised in it. However, the CJEU no longer seeks so much to qualify with respect to synthetic and abstract categories but rather aims to determine the scope of application of the regulations at the origin of the various references for a preliminary ruling. This was seen in the Mahnkopf judgment, as cited above, which concerned the determination of the regulation applicable to the famous fixed equalisation provided for by Article 1371 paragraph 1 of the BGB in favour of the surviving spouse.20 In this judgment, the CJEU referred to Article 1 of Regulation No 650/2012 and Article 1 of Regulation No 2016/1103,21 which respectively delimit their scope of application, and to the objectives pursued by Regulation No 650/2012.22 The study of the German legal rule that gave rise to the issue and of the legal categories concerned (“matrimonial property regime”, “successions”) is very limited.23 On the other hand, the court expressly admitted that a characterisation of the share falling to the surviving spouse under a provision of national law such as Paragraph 1371(1) of the BGB as succession-related would make it possible to include the quarter due to the surviving spouse under this provision on the European Certificate of Succession (ESC) and would thus increase the effectiveness of the latter. The ESC enables an heir or legatee to assert his or her rights in a cross-border succession: it would remove obstacles to the free movement of persons and would facilitate “the proper functioning of the internal market”.24 This demonstrates how the desire to increase the useful effect of a uniform act (the ESC) and the text establishing it (Regulation No 650/2012) can influence the qualification or, rather, the determination of the scope of application of regulations.25 Undeniably, the entry into force of the above-mentioned regulations has been accompanied by a “methodological shift”.26 The characterisation has been superseded, even eclipsed, by an approach of a different type, consisting of determining the scope of application of a text on the basis of considerations that may be empirical or political instead of intellectual and legal. Moreover, if the interpretation of a rule must be requested from its author, the concepts used in the regulations should no longer be interpreted lege fori but should be interpreted according to the law of the European Union. For the institutions of the European Union, in the absence of an express reference to the domestic law of the Member States, the concepts used in the law of the Union are to be 20 P. LAGARDE (note 15), p. 1050: “[...] the question is less whether the rule of § 1371 al. 1 is intrinsically a question of succession or of matrimonial regime than to find out which of the two regulations includes it in its scope” [our translation]. 21 § 33 and 41 of the judgment. 22 § 35, 36, 42, 43 of the judgment. 23 § 39, 40 of the judgment. I. BARRIÈRE-BROUSSE (note 15) emphasises the limited place given to the lex causae. 24 Cf. recitals 7, 8 and 67 of Regulation No 650/2012. 25 A. BONOMI/ P. WAUTELET (note 11), p. 142, No 75. I. BARRIÈRE-BROUSSE (note 15) criticises this utilitarianism. 26 On this shift, see D. BUREAU/ H. MUIR WATT, Droit international privé, t. I, 4th ed., 2017, Nos 395-1 and 1165. See also J.-S. BERGE, Droit international privé et système juridique de l'Union européenne, in J.-S. BERGE/ D. PORCHERON & G. VIEIRA DA COSTA CERQUEIRA, Répert. Dr. Int., 2017, No 88.

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Raphaëlle de Gourcy interpreted autonomously.27 This is evidenced by “recital” 18 of the preamble to Regulation No 2016/1103, which reads: “For the purposes of this Regulation, the concept of 'matrimonial property regime’ should be interpreted autonomously. [...]”. Autonomous, the concepts of Union law would be subject to their own law and, therefore, free from the embrace of domestic laws. The diversity of the latter certainly hinder the retention of only one or all of them, to define the content of a concept. But, in the absence of a common European substantive law,28 it is not easy to qualify autonomously, according to European Union law and without reference to any national law,29 the concepts of substantive law found in the regulations.30 The definitions and other delimitations provided by the regulations are, indeed, often quite insufficient. To return to the situation of the surviving spouse, neither the definitions provided by Articles 3(1) a) and b) of Regulations No 650/2012 and No 2016/1103, nor the exclusions formulated by their articles 1(2) d)31 allow for a precise delimitation of what falls within the matrimonial sphere and what falls within the sphere of successions.32 For example, how can a clause in a marriage contract, which would attribute to the surviving spouse the entirety of the community property in the event of his or her death, be qualified if one remains in line with the definitions of the regulations and the case law of the CJEU? Because it produces its effect upon death, this clause could be qualified as a succession clause within the meaning of Regulation No 650/2012, although it is stipulated in a marriage contract.33 However, since it is applicable only to the dissolution of the matrimonial regime, it could also be qualified as a matrimonial one within the meaning 27

See also J.-S. BERGÉ, (note 26), No 78. Family law, extrapatrimonial and patrimonial, is not European, but national. 29 In the name of autonomous interpretation, the CJEU sometimes adopts an interpretation that is disconnected from domestic law. Cf. CJEU, 10 September 2015, Holterman Ferho, C-47/14, ECLI:EU:C:2015:574 (concerning, in the context of a conflict of jurisdiction, the qualification of the relationship between a minority manager and the company employing him), Clunet 2016, No 4, chron. 10, L. D'AVOUT; CJEU, 14 July 2016, Granarolo, C-196/15, ECLI:EU:C:2016:559 (concerning, also in the context of a jurisdictional dispute, the qualification of an action for damages following a brutal termination of a business relationship), Clunet 2017, chron. 11, L. D'AVOUT, who denounces an autonomous “autarkic” interpretation. 30 M. AUDIT, L'interprétation autonome du droit international privé communautaire, Clunet 2004, p. 789. 31 Recital 12 of Regulation No 650/2012 states that it “should not apply to matters relating to matrimonial property regimes, including matrimonial property agreements in some legal systems, where these do not deal with succession issues”, but this commentary does not provide a principled solution either. 32 In this sense, see I. BARRIERE-BROUSSE (note 15); M.-C. DE LAMBERTYEAUTRAND, La catégorie “régimes matrimoniaux” au sens du droit international privé de l'Union européenne, in M.-E. ANCEL et al., (note 15), p. 1068. 33 According to the CJEU judgment, 27 February 1997, Antonious van den Boogaard, C-220/95, ECLI:EU:C:1997:91, ECR 1997, I, p. 1147 (Rev. crit. dr. int. priv. 1998, p. 466, note G. DROZ; Clunet 1998, p. 568, note A. HUET), the existence of a marriage contract does not necessarily call a matrimonial classification. 28

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status of Regulation No 2016/1103. Consequently, the interpreter, if he or she does not allow himself or herself to be guided by empirical or opportunistic34 considerations, may well, by necessity, revert to national concepts and classifications. In short, the entry into force of the above-mentioned regulations doubly affects the principle of the lege fori characterisation that was known in French private international law. Characterisation is, in principle, an intellectual operation consisting in classifying a fact, an act, a situation or a rule, in a pre-existing category because the concrete constituent elements of one correspond to the abstract constituent elements of the other. But, because the conflict rules are set out in texts, which must be coordinated and which pursue an objective other than that traditionally attributed to the Savignian conflict rule (of facilitating the “proper functioning of the internal market”), the intellectual operation of characterisation is likely to be in competition with a more utilitarian approach. Moreover, the concepts used by the regulations should be interpreted according to the law of the Union, and no longer according to the lex fori, as was the case in French private international law, even if avoidance of the latter still seems to be difficult to achieve in the absence of a substantive law of the Union. With this in mind, it is appropriate at this stage to determine the characterisation and the Regulation applicable to the matrimonial benefits and the “action for retrenchment” under French law. B.

The Characterization of the So-Called “avantages matrimoniaux” and of the “action en retranchement” of French Law

In France, the “matrimonial benefits” are a means of protecting the surviving spouse. Included in the initial marriage contract, prior to the marriage, or in a deed of change of matrimonial regime, concluded during the union, they are very common. However, when the deceased leaves non-common children, the matrimonial benefit may be subject to a “retrenchment”. “Matrimonial benefits” and the “action for retrenchment”, being on the borderline of the matrimonial regime and the succession, give rise to a characterisation issue that casts doubt on the Regulation and, consequently, on the applicable law. In order to qualify an institution, two methods can be distinguished, as one author has shown: the first is concerned with the technical structure of the institu-

34 The CJEU already shows opportunism in matters of conflict of jurisdiction. See in this sense, CJEU, 4 October 2018, Feniks, C-337/17, ECLI:EU:C:2018:805 (concerning the contractual qualification of the paulian action), AJ contrat 2018, p. 537, note C. NOURISSAT; Dalloz 2019, p. 516, note F. JAULT-SESEKE. These two authors note the “forcing” of the contractual category by the CJEU, which wanted to include paulian action. For F. JAULTSESEKE “the concept of contractual matters seems to be interpreted in an increasingly flexible way. By relegating the principle of strict interpretation of the rules of special jurisdiction to the rank of an antiphon devoid of effectiveness, the Court would use the concept of contractual matters to reshape the system of European jurisdictional rules in order to better take into account the interests to be favoured” [our translation].

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Raphaëlle de Gourcy tion to be qualified, the second with its purpose.35 The first method, which the author calls structural characterisation, consists in seeking the nature of the legal relationship. It is an application of the Savignian directive to “assign to each legal relationship a seat determined by its nature”. The second method, which the author calls teleological characterisation, consists in considering the aim and purpose of the institution. It is “with regard to the context in which the disputed relationship is to evolve” that the purpose should be assessed.36 When it comes to qualifying substantive rules, the “context” to be considered is the systematic whole in which all substantive norms of domestic law are placed.37 The connections that can be identified between a particular rule, which is the main one, and another which is accessory to it, can reveal the purpose of the rule to be qualified. We will use both methods to identify the characterisation of the “avantages matrimoniaux” (1) and of the “action en retranchement” (2) and then attempt to determine which regulation should capture them. 1.

Characterisation of the “avantages matrimoniaux”

Any benefit resulting, for a spouse, from the operation of the matrimonial regime constitutes, in itself, a matrimonial benefit. However, only the benefit resulting from the conventional arrangement of a community regime constitutes a matrimonial benefit within the meaning of Article 1527 of the French Civil Code. The term “matrimonial benefits” covers all clauses in a marriage contract that have the effect of favouring one of the spouses, whether he or she is designated in person (Mr. or Mrs. X) or as the survivor.38 Some matrimonial benefits take effect during the marriage: for example, a clause instituting a regime of full community of property.39 Others take effect only at death: for example, a preciput clause, which grants the surviving spouse the right to take, free of charge, a common property,40 or a clause 35 S. GODECHOT-PATRIS, L'articulation du trust et du droit des successions, Paris 2004, p. 29 et seq. 36 Ibidem, p. 97. 37 B. ANCEL (note 19), p. 237. The author distinguishes between the “context of use” (in what social reality does the norm fit?) and the “context of the system” (what is its place in the legal system?). If the object of characterisation is the parties’ “project”, as proposed by B. ANCEL, the purpose should be assessed in the light of the “context of use”; if, on the other hand, the object of characterisation is the substantive rules, the purpose should be assessed in light of the “context of system”. The connection between the matrimonial property regime and the succession, on the one hand, and the option given to the parties to designate the law applicable to their matrimonial property regime or to their succession, on the other hand, suggest that the object of characterisation should be the substantive rules and, therefore, to consider the “system context”. In this sense, see P. MAYER/ V. HEUZÉ (note 4), Nos 174 and 840; and our thesis (note 13), No 35. 38 J. FLOUR/ G. CHAMPENOIS, Les régimes matrimoniaux, 2nd ed., Paris 2001, No 683 et seq. 39 Article 1526 of the Civil Code – if not specified, we refer to the provisions of the French Civil Code. 40 Articles 1515 et seq. of the Civil Code.

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status attributing to him or her the entire community.41 These benefits, producing their effect in case of death, give rise to the most marked difficulties of qualification. The French legislator has expressly excluded the characterisation of a gift, to adopt that of a “marriage agreement”.42 However, when the surviving spouse is in the presence of non-common children, Article 1527 paragraph 2 of the Civil Code subjects excessive “matrimonial benefits” to “retrenchment”, in order to protect their reserved shares. For some authors, the legal characterisation of “marriage agreement” would reveal the true, matrimonial nature of the “matrimonial benefit”, while for others it would be no more than a fiction contradicting its true, liberal nature. The hesitations that we know at the domestic level explain those that we know at the international level. If we consider its structural elements, the matrimonial benefits result, in French law at least, from the provisions of an initial or amending marriage contract. The legal regime, if it is not modified by an agreement, cannot generate any matrimonial benefit within the meaning of Article 1527 of the Civil Code. Any modification of the legal regime is based on a marriage contract. The matrimonial advantage has, as its object, a common property or a common estate.43 The preciput clause, the clause of integral attribution, can indeed relate only to a common property or a common mass. If the marriage contract grants the spouse a benefit relating to personal property, in French law, it is a gift between spouses rather than a matrimonial benefit. Finally, the matrimonial benefit necessarily benefits one of the spouses. And, if it is the surviving spouse, it does not matter whether he or she is entitled to inherit or not: the disinherited, unworthy of inheriting or renouncing spouse retains his or her matrimonial benefit, unless the marriage contract has provided otherwise. All that counts is the status of the spouse, regardless of his or her inheritance status. All the elements that structure it internally, namely its source, its object and its beneficiary, reveal the matrimonial nature of the matrimonial benefit. This is why, at the international level, it should be characterised as matrimonial and subject to the law governing the matrimonial regime.44 We should conclude from this characterisation that “matrimonial benefits” fall within the scope of Regulation No 2016/1103 concerning matrimonial property regimes.45 But, as we have seen, the CJEU no longer reasons exclusively in terms 41

Article 1524 of the Civil Code. Articles 1516, 1525 and 1527, para. 1, of the Civil Code. 43 Or a “common value”, if one accepts that the regime of participation can generate a matrimonial advantage. 44 In this sense, see G. WIEDERKEHR, Les conflits de lois en matière de régime matrimonial, Paris 1967, p. 313-314, No 265; G. COUCHEZ, Essai de délimitation du domaine de la loi applicable au régime matrimonial, 1972, p. 182, No 221; B. ANCEL, Les conflits de qualification à l'épreuve de la donation entre époux, Paris 1977, p. 404, No 425; M. REVILLARD, JCL. dr. int., fasc. 556, No 161; G. DROZ, Régimes matrimoniaux, in Répert. Dr. Int., No 179. 45 E. JACOBY, Droits du conjoint survivant et pratique notariale dans les relations franco-allemandes, Defr. 2008 and Les droits du conjoint survivant et le certificat successoral européen dans les relations franco-allemandes, JCP 2018, p. 1330; D. BOULANGER, Le renouvellement du traitement de l'anticipation successorale au travers du règlement 42

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Raphaëlle de Gourcy of characterisation: it seeks to coordinate texts and ensure that they achieve the objectives assigned to them. It therefore cannot be ruled out that the CJEU will adopt an extensive understanding of the concepts of “succession” and “contract of succession”, which would increase the scope of application of Regulation No 650/201246 and the effectiveness of the ESC established by this text. If, according to the Court, a full community attribution clause or a preciput clause were to fall within the scope of application of Regulation No 650/2012, on the pretext that they operate a transfer of property upon death, these clauses should be mentioned on the ESC, and then the latter would trace the surviving spouse's property rights in a more complete manner.47 It seems to us, however, that a reason from the Mahnkopf judgment could be used to accept that “matrimonial benefits” should fall within the scope of Regulation No 2016/1103 instead of Regulation No 650/2012. In its judgment, the CJEU found the provision having as its object “items already accounted for within the estate” to be of an inheritance nature.48 A contrario, a provision having as its object property which, if apprehended by the matrimonial regime, will not be included in the estate, would be of a matrimonial nature. A surviving spouse who has an advantage under a full attribution clause or a preciput clause receives property that will not be included in the estate of the deceased. Therefore, the criterion provided by the Mahnkopf decision would support the matrimonial characterisation previously adopted,49 at least in the case of matrimonial benefits which produce their effect upon death. 2.

Characterisation of the “action en retranchement”

Under the terms of Article 1527 paragraph 2 of the Civil Code, when the deceased leaves one or more children from other unions, the matrimonial benefit made to the surviving spouse may be cut back if it exceeds one of the three quotas specifically provided for by Article 1094-1 of the Civil Code.50 Article 1527 paragraph 2 protects non-common children: since they are not children of the surviving spouse, they are not his or her forced heirs; thus, they could be definitively deprived of

UE du 4 juillet 2012, JCP 2013, p. 1180, No 27. For these authors, matrimonial benefits should remain outside the scope of EU Regulation No 650/2012. 46 A. BONOMI/ P. WAUTELET, Le droit européen des successions, Commentaire du Règlement (UE) No 650/2012 du 4 juillet 2012, 2nd ed., Bruxelles 2016, Article 1er, No 28 and Article 68, No 39, consider the possibility of a succession qualification. See also P. WAUTELET (note 11), p. 147, No 91. 47 Assuming that one is established, which Article 62.2 of Regulation No 650/2012 does not require. 48 § 40 of the judgment. 49 I. BARRIÈRE-BROUSSE (note 15) also reaches this conclusion. 50 Article 1094-1 of the Civil Code provides, in favour of the gratified spouse, for special and more extensive quotas, in order to limit the reduction of gifts made to him or her.

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status rights with respect to property that belonged to their predeceased progenitor, whereas they would have been his or her forced heirs. If we consider its structuring elements, the “retrenchment” has as its object an excessive marital benefit. This links it to matrimonial status. But it is only a particular type of action in reduction known in the law of successions in the case of a liberality affecting the children’s reserved portion of the estate.51 The “retrenchment” of a matrimonial benefit, like the reduction of a gift, compensates, in value, for an excessive infringement of the reserved portion of the estate. The “action for retrenchment”, like the action for reduction, shall, in principle, be time-barred after five years according to the provisions of Article 921 of the Civil Code. This links it to the status of successions. The structure of the institution does not allow for a characterisation with sufficient certainty. However, if we consider the purpose of the device in its context, we can identify a teleological link with the successions category. The function of an “action for retrenchment”, like an action for reduction, is to protect, by making it effective, the non-common children’s reserved portion of the estate. There is no doubt that the reserved portion of the estate, even if it is only in value, is an institution of the law of successions:52 it benefits privileged heirs, regardless of their state of need, at least in French domestic law. The “action for retrenchment” is a “servant” institution linked to another “servant” institution: the reserved portion of the estate, which is itself linked to a “master” institution,53 the succession. Its purpose is thus related to successions. And this is why, in our opinion, the “action for retrenchment” in French law should be described as inheritance-based, notwithstanding the links it has with the matrimonial regime. Does this mean that it falls within the scope of Regulation No 650/2012? Under the terms of Article 23 h) and i) of this regulation, the law of successions is intended to govern “the disposable part of the estate, the reserved shares and other restrictions on the disposal of property upon death as well as claims which persons close to the deceased may have against the estate or the heirs”, and “any obligation to restore or account for gifts, advancements or legacies when determining the shares of the different beneficiaries.” It should therefore also govern the extent of the reconstitution of the reserved portions of the estate and, more specifically, the composition of the mass for calculating them, namely the reduction of an excessive matrimonial benefit. Therefore, it seems to us that the implementation of the regulations does not question the inheritance characterisation proposed above. The Mahnkopf decision would even reinforce it, if one considers that the quantum of the inheritance share of the heirs in competition with the spouse depends on the “retrenchment”.

51 G. BONNET, in M. GRIMALDI et al., Droit patrimonial de la famille, Paris 2017, No 152.22; B. VAREILLE, La loi du 23 juin 2006 et les régimes matrimoniaux, JCP 2007, No 26. 52 H. BATIFFOL/ P. LAGARDE, Droit international privé, t. II, 7th ed., Paris 1983, No 652. 53 If we take up the enlightening qualifiers proposed by B. ANCEL.

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Raphaëlle de Gourcy In short, matrimonial benefits would depend on the law of the matrimonial regime. But the competence of the latter should not prevent the law of successions from subjecting them to a “retrenchment” protecting the reserved shares. “Dépeçage” is a “necessary corollary” of the plurality of conflict rules;54 but difficulties of qualification are a “necessary corollary” of “dépeçage”. Hence the interest in determining whether, with the occurrence of a death, the regulations offer the parties the means of subjecting the matrimonial and succession rights of the surviving spouse to a single law.

II.

Restoring a Unity of Law after Death

According to Article 26(3) of Regulation No 2016/1103, “by way of exception”, a spouse may ask the competent judge to decide that the law of the State of the couple’s last common habitual residence will govern the matrimonial property regime instead of the law of the State of their first common habitual residence. This judicial substitution of the applicable law may have the effect of reunifying the patrimonial rights of the surviving spouse under a single law (A). But this means of legislative reunification remains limited as we shall see. Among other limitations, judicial substitution is inapplicable where the spouses had concluded either a choice-of-law agreement or a matrimonial property agreement. Regulations No 2016/1103 and No 650/2012 do not provide for any other arrangement favouring the application of a single law. It is only quite accidentally that the exception clause at Article 21(2) or the “renvoi” at Article 34 of the Regulation on successions will designate the law of the matrimonial regime to govern the succession. As for the public policy exception at Articles 35 and 31 of Regulations No 650/2012 and No 2016/1103, it implies that the conflict rule designates a law whose application would be “manifestly incompatible with the public policy of the forum”. The incompatibility required by the texts is axiological (the applicable law must conflict with the fundamental values of the forum)55 and not merely technical (the applicable law must not merely give rise to a difficulty of application). The difficulties of qualification or coordination resulting from a “dépeçage” are of a technical nature: they are therefore not so shocking as to justify setting aside one of the two competing laws in its entirety and applying the other law in full. Finally, the adaptation admitted in general terms by “recitals” 17 and 26 of Regulations No 650/2012 and No 2016/110356 seems to us to authorise one or more specific deviations from the application of the competing substantive laws rather than the full application of one of them in order to cut short any difficulty.

54

P. LAGARDE (note 9). See the examples given by A. BONOMI (note 46), Article 35, No 16 et seq. 56 These words read: “The adaptation of an unknown right in rem expressly provided for in this Regulation should not prevent other forms of adaptation in the context of the application of this Regulation.” 55

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status This raises the question of whether, in a more radical way, the surviving spouse and heirs could, once the matrimonial regime has been dissolved by death, set aside the conflict of laws rules of Regulation No 2016/1103 to submit the matrimonial regime to the law of the succession, for example (B). A.

The Judicial Substitution of the Applicable Law under Article 26(3) of Regulation No 2016/1103

In principle, in the absence of a choice of law, either the law applicable to the matrimonial property regime is fixed once and for all (this is known in French private international law as the permanence of the applicable law),57 or it is likely to change according to the situation of the spouses (this is known as “automatic mutability”).58 The authors of the Regulation have, however, succeeded in avoiding both the application of a pure and simple principle of permanence of the applicable law, which is often difficult to reconcile with the principle of proximity, and automatic mutability, which is often considered unpredictable.59 By offering a spouse the possibility of asking a judge, under certain conditions, to apply the law of the State of the last common habitual residence instead of that of the State of the first common habitual residence,60 Article 26(3) of Regulation No 2016/1103 allows a controlled change of law. For the sake of predictability, this change should in fact be admitted only exceptionally, and the requesting spouse must provide two pieces of evidence: he or she must show, on the one hand, that the spouses resided much longer in the State of their last habitual residence than in the State of their first habitual residence; he or she must show, on the other hand, that the spouses relied on the law of the State of their last habitual residence to organise or plan their property relations. Article 26(3) of the Regulation does not refer to other protagonists than the spouses and the judge: a spouse may ask a judge to substitute the law of the State of the last habitual residence for that of the State of the first habitual residence; the other spouse may oppose this request – if he or she opposes it, the substitution of law is then more limited: the substituted law will not govern all the property relations of the spouses since the date of their marriage, but only since the date on 57

As was the case in France before the entry into force of the Hague Convention of 14 March 1978 on the law applicable to matrimonial property regimes (in the absence of a choice, the law applicable to the matrimonial property regime was in principle that of the State of the first matrimonial domicile of the spouses, regardless of subsequent changes of domicile or nationality). 58 As was the case in France after the entry into force of the above-mentioned Hague Convention 1978 (see Article 7 of the Convention). Or as is the case in Switzerland under Article 55 of the Federal Law on Private International Law 1987 (SPILA). 59 The automatic mutability of the law applicable to the matrimonial property regime is particularly criticised in France, excessively so in our view, for the surprise effect it would have. 60 The provision is announced by recital 51 of Regulation No 2016/1103. A similar provision can be found in Article 26.2 of Regulation No 2016/1104 on the property effects of registered partnerships.

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Raphaëlle de Gourcy which they settled in the State of their last habitual residence. One might conclude from this that the possibility of applying to a court to get a substitution presupposes that the spouses are still alive: a spouse could thus apply for a judicial substitution of the applicable law only during the lifetime of his or her spouse; this possibility would therefore be limited to cases of dissolution by divorce, with the exclusion of cases of dissolution by death. But this is not our opinion. Under the terms of Article 26(3), the substitution of applicable law must be requested from “the judicial authority competent to rule on questions relating to the matrimonial property regime”. Under Article 27 e) of the Regulation, the law applicable to the matrimonial property regime governs “the dissolution of the matrimonial property regime, its liquidation or the division of property”. Therefore, the “matters relating to the matrimonial property regime” referred to in Article 26(3) should cover the dissolution and liquidation of the matrimonial property regime and it must be assumed, in the absence of a textual exclusion, that the provision is applicable in the event of dissolution by divorce or by death. After the death of a spouse, the surviving spouse should thus be entitled to ask a court to substitute the law of the State of the last habitual residence for that of the first habitual residence.61 It should then be accepted that the heirs of the predeceased spouse may express the opposition provided for in the text in order to avoid a dissolution by death that favours the plaintiff surviving spouse. In the absence of any choice of law, the substitution of applicable law as provided for by Article 26(3) in favour of the law of the State of the last habitual residence of the spouses should have the effect of subjecting the matrimonial and succession rights of the surviving spouse to a single law.62 The last habitual residence of the spouses will generally correspond to the last habitual residence of the deceased; and, in the absence of any professio juris, the law of the State of the last habitual residence of the deceased is the law that will govern the succession, if it does not make a “renvoi” to another law. This can be seen if we take the example above of spouses of French nationality who, after marriage, both lived in Switzerland before moving to France. After the death of one spouse, in application of the conflict of laws rules of regulations, in case of absence of choice, the matrimonial regime should be subject to Swiss law while the succession should be subject to French law. However, pursuant to Article 26(3), the surviving spouse may bring the matter before a French judge and request, if the couple lived longer in France than in Switzerland and if they relied on French law to organize or plan their property relations,63 that the matrimonial property regime shall be subject to French 61 In this respect, see H. PEROZ, Le nouveau règlement européen sur les régimes matrimoniaux, JCP 2016, p. 37, No 29; D. PORCHERON, Loi applicable au régime matrimonial à défaut de choix et mise en œuvre, JCP 2018, p. 1167, No 16; B. BOURDELOIS, Feu la convention de La Haye du 14 mars 1978, vive le règlement de l'Union européenne Régimes matrimoniaux du 24 juin 2016: de quoi se réjouir?, in M.-E. ANCEL et al., (note 15), p. 293. 62 N. JOUBERT, La dernière pierre (provisoire?) à l'édifice du droit international privé européen en matière familiale: Les règlements du 24 juin 2016 sur les régimes matrimoniaux et les effets patrimoniaux des partenariats enregistrés, Rev. crit. dr. int. priv. 2017, p. 22; A. BONOMI (note 11), p. 793, Nos 40 and 41, p. 829, No 119. 63 On the acts of organisation or planning of property that a spouse could invoke, see R. DE GOURCY (note 13), No 290.

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status law instead of Swiss law. The judicial substitution of the applicable law as provided for by Article 26(3) operates a temporal updating of the matrimonial connection, re-creating a unity, here in favour of French law. However, no judicial substitution can take place when the spouses have previously designated the law applicable to their matrimonial regime in accordance with Articles 22 and 23 of Regulation No 2016/1103. Inserted within Article 26 of the Regulation, which concerns the law applicable in the absence of choice, judicial substitution can only correct the application of the objective connection, but not that of the subjective connection. Nor can substitution take place where the spouses concluded a matrimonial property agreement before settling in the State of their last habitual residence, as follows from Article 26(3) in fine. Since its purpose is to allow the application of a close and foreseeable law, the new provision is not intended to call into question the expectations expressed by the spouses, either in terms of conflict (“choice of law agreement” according to the Regulation) or in terms of substance (“matrimonial property agreement” according to the Regulation). Moreover, Article 26(3) provides for only one case of substitution: the law of the last common habitual residence may replace the law of the first common habitual residence. By providing for a single case of substitution, the text has implicitly excluded the possibility of substituting the law of the State of the last habitual residence of the spouses for that of their common nationality64 or that of the State with which the spouses had the closest connection at the time of the marriage,65 which is to be regretted.66 The substitution option would not be so limited if it were truly based on the proximity principle.67 Since an exception clause is, in principle, the purest expression of the proximity principle, the two mechanisms should be distinguished. The controlled change of law provided for by Article 26(3) of Regulation No 2016/1103, while it may be close to an exception clause, must be distinguished from it68 because its main objective is not proximity. And this is why we prefer, to mark the sui generis nature of the mechanism, to call it “judicial substitution of the applicable law”.

64 In the event that spouses subject to their common national law, in the absence of a first habitual residence after marriage, finally establish one in the territory of the same State. 65 In the event that spouses, who did not habitually reside in the territory of the same State after the marriage, and who do not share the same nationality, finally settle in the territory of the same State. 66 B. BOURDELOIS (note 61), p. 292; A. BONOMI (note 11), p. 816, No 89f. 67 S. GODECHOT-PATRIS, Commentaire du règlement du 24 juin 2016 relatif aux régimes matrimoniaux : le changement dans la continuité, Dalloz 2016, p. 2292. 68 I. BARRIERE-BROUSSE, Le patrimoine des couples internationaux dans l'espace judiciaire européen – Les règlements européens du 24 juin 2016 relatifs aux régimes matrimoniaux et aux effets patrimoniaux des partenariats enregistrés, Clunet 2017, No 2, doctr. 6: the mechanism provided at Article 26.3 of the Regulation would be “halfway between the exception clause and the mobile conflict [...]” [our translation].

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Raphaëlle de Gourcy Finally, Article 26(3) presupposes, for its implementation, the referral to a judge, whether in an informal or contentious context.69 The text refers to “a judicial authority”. The notion of “judicial authority” is narrower than that of “jurisdiction”: the former designates a clearly identified body – a judge – and does not tolerate any functional equivalence, unlike the latter – a legal professional competent in matrimonial property regimes can be a jurisdiction within the meaning of Article 3(2) of EU Regulation No 2016/1103, if he or she acts under the control of the judicial authority. A notary is not a judicial authority and therefore should not be able to rely on Article 26(3) to apply the law of the State of the last habitual residence instead of that of the State of the first habitual residence, even if the parties agree to this.70 And there is no point demonstrating that it can be a jurisdiction within the meaning of the Regulation, in the case of judicial partition for example.71 Certainly, “recital” 39 of the Regulation seems to admit the involvement of a notary in a general way: “[t]his Regulation should not prevent the parties from settling the question of their matrimonial property regime out of court, for example before a notary, in a Member State of their choice, where the law of that Member State so permits. [...].”. However, we do not think that this makes it possible to avoid the referral required by Article 26(3): the sole purpose of this “recital” is probably to remind the parties that the statement of rules of jurisdictional competence in Chapter II of the Regulation does not have the effect of making a matter that was not a matter of judicial competence into a matter of judicial competence: in the absence of a dispute, the parties may continue to turn to a notary to have the matrimonial property regime liquidated, if this is a matter of competence devolved to notaries in the Member State concerned. In any event, since the “recitals” have less legal value, it would not be possible for a “recital” to contradict an article. As the law stands, a spouse wishing to proceed with a substitution of applicable law should not be able to avoid the referral to the competent judicial authority required by Article 26(3). In the end, Article 26(3) of Regulation No 2016/1103, while it constitutes a means of re-creating unity in favour of the law of the State of the last habitual residence of the couple and of the deceased and provides a welcome flexibility,72 nevertheless remains quite limited, in particular as long as its implementation presupposes the seizure of a judge. Could the parties – more precisely, the surviving 69

For I. BARRIÈRE-BROUSSE (note 15), “the judicial nature seems to postulate a dispute between the spouses” [our translation]. But the following reservation expressed in the text – “unless the other spouse objects” – could show, on the contrary, that the provision postulates in principle an absence of opposition and of dispute. 70 É. FONGARO/ É. FREMONT, L'entrée en application des règlements européens sur les régimes matrimoniaux et les effets patrimoniaux des partenariats enregistrés, JCP 2017, p. 30, No 48. 71 M. GORE/ R. DE GOURCY, in M. GRIMALDI et al., (note 51), No 724.41. 72 However, part of the French doctrine has rather expressed concerns or regrets: like automatic mutability, the judicial substitution of the law applicable to the regime would undermine predictability and legal certainty. In this sense, see H. PÉROZ (note 61); S. GODECHOT-PATRIS (note 67); N. JOUBERT (note 62); C. NOURISSAT/ M. REVILLARD, European Regulations of 24 June 2016 on matrimonial property regimes and the property effects of registered partnerships, Defr. 2016, p. 878, No 17.

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status spouse and the heirs – avoid these limitations by themselves designating, after the death, another law to govern the liquidation of the matrimonial regime? At this point, it is necessary to determine how much autonomy of will they have after the dissolution of the matrimonial regime. B.

What Autonomy of the Will post mortem?

Under French domestic law, the rights conferred by the matrimonial regime are unavailable until it is dissolved. In contrast, after its dissolution (by divorce or death), the rights it confers become available: the parties can renounce them; they can therefore dispose of them.73 French case law grants the parties, when their rights are available, the option of evading the conflict of laws rule and the law it designates by means of a “procedural agreement”.74 The agreement is called procedural because it is in principle part of a particular procedure. Very recently, the Court of Cassation resorted to this figure of the procedural agreement in the case of a matrimonial regime dissolved by divorce – the spouses concerned married well before the entry into force of Regulation No 2016/1103.75 According to the court, “for the rights of which they have free disposal, the parties may, by a procedural agreement which may result from concordant conclusions on this point, choose, to govern a given legal situation, the French law of the forum and oust that designated by the applicable conflict rule”. In this case, since the spouses had, in the course of the proceedings for the liquidation and division of their property interests, both concluded under the French civil code and civil procedure code, the judges of appeal and cassation deduced that they intended to submit the determination and liquidation of their matrimonial regime to French law. By reaching a procedural agreement in favour of French law, the judges purely and simply disregarded the French conflict of laws rule, without even checking which law it referred to. In doing so, they were thus able to reject the claim of the spouse who invoked – belatedly – the application of Portuguese law. Moreover, the competence of matrimonial law has a limit in French law, which is also based on the availability of the parties' rights after the dissolution of the matrimonial regime. For the Court of Cassation, “the law of the regime determines the rules under which the liquidation of this regime is carried out, except in the case where the spouses, who are capable and masters of their rights, have

73

R. DE GOURCY (note 13), No 333. The figure of the procedural agreement results from two founding decisions: Cass. 1e civ., 19 April 1988, Roho v. Caron, Rev. crit. dr. int. priv. 1989, p. 68, note H. BATIFFOL; 1e civ., 6 May 1997, Hannover International, Rev. crit. dr. int. priv. 1997, p. 514, note B. FAUVARQUE-COSSON; Clunet 1997, p. 804, note D. BUREAU; B. ANCEL/ Y. LEQUETTE, (note 17), No 84. The first judgment concerned a traffic accident; the second, a contract. 75 Cass. 1e civ., 10 February 2021, No 19-17.028, AJ Famille 2021, p. 246, note A. BOICHÉ; Dr. fam. 2021, p. 85, No 5, note A. DEVERS. 74

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Raphaëlle de Gourcy agreed, in their mutual relations, to a liquidation on different bases.”76 One might be surprised by the solution adopted: if the rules of liquidation embody the matrimonial regime, how can the regime and its liquidation be separated? But one can justify this view: the rights conferred by the matrimonial regime becoming available after its dissolution, it is possible to distinguish between the matrimonial regime and the liquidation contract and to allow the liquidation to be governed by different rules if the parties so wish. Avoidance of the matrimonial law or limitation of its substantive scope are ways of remedying a legislative “dépeçage” affecting the situation of the surviving spouse: a “procedural agreement” in favour of the law of the forum or an agreement to liquidate the matrimonial property regime “on different bases” could indeed make it possible to subject all of the spouse’s rights to the law of the succession. However, it is not certain that the application of these solutions can continue under Regulation No 2016/1103. The latter contains no provision or “recital” granting the parties the option of setting aside the law it designates to govern the matrimonial property regime (1) or to limit its scope (2), even after dissolution of the matrimonial property regime. 1.

Overriding the Conflict of Laws Rule and the Applicable Law by Means of a “Procedural Agreement”

Since a regulation is mandatory and directly applicable in the Member States,77 one could conclude that national judges are obliged to apply it, even ex officio, and that, in the absence of a provision to the contrary, the parties cannot set aside any conflict of laws rule set out by means of a “procedural agreement”.78 Regulation No 2016/1103 does not contain any provision or “recital” admitting a “procedural agreement” while, on the contrary, previous regulations (Regulation No 4/2009 of 18 December 2008 on maintenance obligations79 and Regula76

Cass. 1e civ., 3 January 1985, No 83-15386, Rev. crit. dr. int. priv. 1985, p. 652, note H. BATIFFOL; Dalloz 1986, p. 57, note J.-P. RÉMERY; Dalloz 1986, p. 57, note J.-P. RÉMERY [in this judgment, neither of the spouses contested that the regime was governed by Dutch law; but the wife invoked the existence of an agreement between them to liquidate their regime according to French law, which neither the Court of Appeal nor the Court of Cassation admitted]; 1e civ., 25 January 2005, No 02-15648, Rev. crit. dr. int. priv. 2005, p. 300, note B. ANCEL; JCP 2005, p. 1450, note D. BOULANGER; 1e civ., 23 May 2006, No 05-18385, Clunet 2007, comm. 12, p. 572, note C. CHALAS; Rev. crit. dr. int. priv. 2006, p. 841, note M. REVILLARD; 1e civ., 20 February 2008, No 06-21381; 1e civ., 4 May 2011, No 10-16086, Rev. crit. dr. int. priv. 2011, p. 853, note B. ANCEL. 77 Article 288 of the Treaty on the Functioning of the European Union. 78 B. FAUVARQUE-COSSON, L'accord procédural à l'épreuve du temps, Retour sur une notion française controversée, in P. MAYER et al., Mélanges en l'honneur de Paul Lagarde Le droit international privé: esprit et méthodes, Paris 2005, p. 271. 79 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. See Article 15 of this Regulation, referring to the Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations.

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Legislative Dépeçage of the Surviving Spouse’s Patrimonial Status tion No 1259/2010 of 20 December 2010 on divorce, known as “Rome III”)80 granted the parties the option of designating, during the proceedings, a law other than that which should have been applied. According to this reasoning, the conflict of laws rules contained in Regulation No 2016/1103 would be mandatory for the parties. The same would apply to Regulation 650/2012: in the absence of any such provision or “recital”, no “procedural agreement” derogating from the conflict rules in the Regulation should be allowed. Moreover, since this is a regulation containing conflict-of-jurisdiction rules, conflict-of-law rules and recognition rules, we think that a link between these three bodies of rules should be established. Compliance with the conflict-of-jurisdiction rules and the uniform conflict-of-law rules by the Member States justifies facilitating the circulation between Member States of authentic instruments or decisions resulting from them. Since the purpose of the “procedural agreement” is precisely to set aside the application of the uniform conflict-of-laws rules which justify ease of movement, it is difficult to accept that it can be lawful under a regulation which has not expressly admitted it. Could the procedural autonomy of the Member States be the basis for the use of the “procedural agreement”? According to the CJEU, the Member States indeed enjoy procedural autonomy. According to this principle, the Member States are free to structure and design their judicial systems and procedures. In other words, matters of procedural law are, on principle, subject to national law. The lawfulness of a “procedural agreement”, if it relates to procedural matters at all, should therefore depend on national law alone. Initially, the “procedural agreement”, based on Article 12 paragraph 3 of the French Code of Civil Procedure, was probably nothing more than a variation of the “principe dispositif” known in French procedural law, which makes the lawsuit the “thing of the parties”.81 But this is no longer the case today. The Court of Cassation having detached it from its initial legal basis82, the “procedural agreement” no longer concerns the procedure, but rather, the substance of the law: it is a choice of law agreement which is procedural only at the moment of its conclusion (it is concluded in the course of the proceedings) and in its scope (it concerns only the proceedings in progress or those closely related to it83).84 Thus, in our opinion, the procedural autonomy of the Member States does not in itself make it possible to accept the lawfulness of a “procedural agreement” which would set aside the conflict of laws rule of a regulation.

80 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. See Article 5.3 of this Regulation. 81 In civil matters, the procedure is in principle adversarial and the parties have control of the proceedings. 82 The Court of Cassation no longer refers to Article 12, para. 3, of the Code of Civil Procedure. 83 Cass. 1e civ. (note 75). 84 D. MOYA, L'autorité des règles de conflit de lois, IRJS 2020, p. 103, No 84F.

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Raphaëlle de Gourcy 2.

Submitting the Liquidation of the Matrimonial Regime to Another Law

Regulation No 2016/1103 specifically sets out the substantive area of application of the law it designates. According to Article 27 of the Regulation, the law applicable to the matrimonial property regime governs in particular “(a) the classification of the property of the two spouses or of each of them into different categories during and after the marriage; [...] (e) the dissolution of the matrimonial property regime, its liquidation or the division of property; [...]”. And, according to recital 52 of the Regulation, “the law designated as the law applicable to the matrimonial property regime should govern the regime from the classification of the property of one or both spouses into different categories during the marriage and after its dissolution, to the liquidation of the property [...]”. The law designated by the regulation to govern the matrimonial regime is intended to govern its liquidation, without any possible derogation. It is therefore no longer possible, in our view, to argue that it would be possible, after dissolution, to subject the matrimonial regime or the liquidation contract to another law.85 In conclusion, Regulation (EU) No 650/2012 on successions and Regulation (EU) No 2016/1103 on matrimonial property regimes have not eliminated the “dépeçage” situations that existed before their entry into force: the matrimonial property rights and the inheritance rights of the surviving spouse will still be able to depend on several laws, with the difficulties that this entails, particularly in terms of qualification. We have demonstrated this more specifically with regard to the “avantages matrimoniaux” and the “action en retranchement” under French law. These institutions, which are linked to both, the matrimonial and the succession spheres, give rise to a difficulty of qualification which casts doubt on the applicable regulation. Analysis of their structure or purpose has made it possible to identify a classification (related to the matrimonial regime for the former, related to the successions for the latter), but this has yet to be confirmed by the CJEU. The application of a single law would however put an end to these uncertainties. But, do the regulations give the parties the latitude that would allow them to reunify, after the death of a spouse, the patrimonial status of the surviving spouse under a single law? Article 26(3) of Regulation No 2016/1103 admits a judicial mutability of the law applicable to the matrimonial property regime which could restore a unity of applicable law – the text, even if it refers to spouses, should not be restricted to cases of dissolution by divorce in our view. The substitution, if it takes place, should reunify matrimonial and inheritance rights under the law of the State of the couple's last habitual residence. But this sui generis mechanism remains very limited. The parties could, however, free themselves from the framework it provides if it could be accepted that, with the dissolution of the matrimonial regime, the conflict rules lose their imperative character. Nevertheless, subject to the position of the CJEU, we are inclined to think that the parties do not have the option of derogating from the conflict of laws rules of Regulation No 2016/1103, contrary to what prevailed in French private international law. That is why it would be wise either to facilitate the substitution of applicable law provided at Article 26(3) of Regulation No 2016/1103, by removing the need for a 85

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But French doctrine is divided.

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RETHINKING “THE PLACE OF THE DAMAGE RULE” IN PRIVATE INTERNATIONAL LAW A CRITICAL ANALYSIS OF THE ECJ CASE LAW Hannes MEYLE*

I. II. III.

IV.

V.

Introduction Pure Economic Loss – An Attempted Definition Jurisdiction and Applicable Law in Extra-Contractual Cases – EU Legal Framework A. Jurisdiction B. Applicable Law C. Relationship between Jurisdiction and Applicable Law Jurisdiction and Applicable Law in Pure Economic Loss Cases A. ECJ Case Law on the Localisation of Pure Economic Loss 1. Kronhofer 2. Kolassa 3. DFDS Torline 4. CDC 5. Universal Music 6. Löber 7. Austro-Mechana 8. flyLAL 9. Tibor-Trans 10. VKI 11. VEB 12. Conclusion B. Practical Consequences for Jurisdiction in Pure Economic Loss Cases C. Practical Consequences with Respect to Applicable Law in Pure Economic Loss Cases D. Conclusion Rethinking the Connecting Factor in Pure Economic Loss Cases A. Jurisdiction 1. Event Giving Rise to the Damage 2. Place where the Damage Occurs 3. Specific Circumstances 4. Conclusion B. Applicable Law 1. Country in which the Damage Occurs *

Dr. iur., University of Geneva, Associate Lawyer at Walder Wyss Ltd. Zurich.

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Printed in Germany

Hannes Meyle

VII.

2. Specific Circumstances C. Conclusion Guidelines for Approaches de lege ferenda A. Tortious Action that Affects a Specific Market 1. Jurisdiction 2. Applicable Law 3. Ideal World – Collective Redress Mechanisms B. Wrongful Information and Other Pure Economic Loss Cases 1. Jurisdiction 2. Applicable Law Conclusion

I.

Introduction

VI.

In non-contractual claims, the place where the harmful event occurred is a wellestablished connecting factor for European jurisdiction, and with good reason. Accidents are the most typical examples: when two skiers, one domiciled in country A and the other in country B, collide on a slope in country C, the victim can claim damages in country C, at the place of the accident, based on Article 7 (2) Brussels I Regulation.1 The place of harmful event in this scenario is obvious, and local authorities have the option to visit the place in order to assess the tort. A similar approach is adopted with respect to applicable law: according to the lex loci delicti rule at Article 4 (1) of the Rome II Regulation,2 judges principally apply the local laws of country C, where the accident happened. In pure economic loss cases, applying this connecting factor is less straightforward, as illustrated in, for example, the VEB case:3 At an overseas oil rig operated by the British oil company BP, an accident occurred. As a consequence, the value of its shares decreased and shareholders in several countries suffered financial damages. Allegedly, the company had published misleading information, before and after the accident, regarding its safety measures and the extent of the accident. The information was available worldwide whereas BP’s shares were listed on the London, Frankfurt and New York stock exchanges. In this case, are shareholders entitled to file a claim before the courts of their respective domicile? Should it matter where the shares are listed, to which countries the public announcement was directed or where the shareholders’ bank accounts are held? 1 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L 351, 20.12.2012, hereafter: Brussels I Regulation. 2 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, OJ L 199, 31.7.2007, hereafter: Rome II Regulation. 3 ECJ, 12 May 2021, Vereniging van Effectenbezitters v BP plc, ECLI:EU:C:2021:377.

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Rethinking the Place of Damage Rule In Private International Law Should every court decide individually, based on a combination of circumstances? And which law would be applicable, once a court has declared itself competent? Questions of jurisdiction in pure economic loss cases have been provoking preliminary ruling procedures before the ECJ at ever shorter intervals. Despite this, the ECJ provides little guidance. Rather than improving legal certainty and predictability, its preliminary rulings have raised new questions. To complicate this, in multiple cases, the conclusions of the Attorney General have been different from the ECJ’s rulings. Even though legal scholars all over Europe have long been aware of the problem, a comprehensive solution has not yet been developed. The present contribution analyses the reasons behind this situation. It demonstrates that the current European provisions governing jurisdiction and applicable law are not suitable for pure non-contractual, pure economic loss claims. It is time to address this overarching problem, to rethink the place of the damage rule for pure economic loss cases, and to discuss alternatives.

II.

Pure Economic Loss – An Attempted Definition

What is pure economic loss? The ECJ regularly uses the notion of pure economic loss in relevant private international law cases, without an autonomous definition. This has already led to questionable classifications, for example in the AustroMechana4 and VKI5 cases presented below. The notion of pure economic loss derives from legal orders with a distinction between so-called absolute rights on one hand, and other legal assets on the other hand. Absolute rights typically include life, physical and mental integrity, human dignity, freedom, and property rights. Damage to these rights may lead to financial loss which must be compensated by the tortfeasor. However, this does not alter the fact that an absolute right has been violated in the first place. In contrast, pure economic loss does not occur because of damage to other legal assets. Instead, it is the wallet that is directly affected. For example, someone who is stuck in traffic behind an accident does not suffer personal or property damage. But he or she might suffer financial damage when an important business deal is missed. A simplistic, yet telling definition is that “pure economic loss strikes the victim’s wallet and nothing else.”6 Why does the category of pure economic loss exist at all? One reason typically put forward in support of pure economic loss as a category is that abso-

4 ECJ, 21 April 2016, Austro-Mechana Gesellschaft zur Wahrnehmung mechanischmusikalischer Urheberrechte Gesellschaft mbH v Amazon EU Sàrl and Others, ECLI:EU:C:2016:286. 5 ECJ, 9 July 2020, Verein für Konsumenteninformation v Volkswagen AG, ECLI:EU:C:2020:534. 6 M. BUSSANI/ A.J. SEBOK, Comparative Tort Law, Global Perspectives, Cheltenham U.K., Northampton USA 2015, p. 302.

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Hannes Meyle lute rights are more worthy of protection.7 Another justification is the supposed risk of unlimited liability: if purely economic interests were protected in the same manner as absolute rights, negligent tortfeasors might face existence-threatening liability8 in cases like the traffic jam example mentioned above. Both arguments can be criticised: first, not many people would agree that money in a bank account is necessarily less worthy of protection than property or other physical goods.9 Second, there is no empirical evidence that the danger of unlimited liability is strictly related to the compensability of pure economic loss.10 A special treatment of pure economic loss cases may therefore be described as artificial or outdated.11 Nevertheless, most legal orders are cautious about compensation for pure economic loss and only provide for compensation in exceptional cases. Therefore, the notion of pure economic loss has to be accepted. Regarding compensation, there is a great degree of variance among different legal orders.12 From a private international law perspective, three things are noteworthy: first, the category of pure economic loss exists. Second, it is difficult to define pure 7 See for example the ranking of protected interests in Art. 2:202 Priciples of European Tort Law, available at on 9.06.2021: “(1) The scope of protection of an interest depends on its nature; the higher its value, the precision of its definition and its obviousness, the more extensive is its protection. (2) Life, bodily or mental integrity, human dignity and liberty enjoy the most extensive protection. (3) Extensive protection is granted to property rights, including those in intangible property. (4) Protection of pure economic interests or contractual relationships may be more limited in scope. In such cases, due regard must be had especially to the proximity between the actor and the endangered person, or to the fact that the actor is aware of the fact that he will cause damage even though his interests are necessarily valued lower than those of the victim. […]”. 8 See H. HONSELL, Der Ersatz reiner Vermögensschäden in Rechtsgeschichte und Rechtsvergleichung, in W. LORENZ/ T. RAUSCHER/ H.-P. MANSEL (eds.), Festschrift für Werner Lorenz zum 80. Geburtstag, München 2001, p. 483-508 (484); with counterarguments G. DARI-MATTIACCI/ H.-B. SCHÄFER: The core of pure economic loss, International Review of Law and Economics 2007, p. 8-28 (9 et seq.); C. SHARKEY, Tort Liability for Pure Economic Loss: A Perspective from the United States and Some Comparative European Insights, Journal of European Tort Law 2016, p. 237-271 (246 et seq.); C. v. DAM, European Tort Law, Oxford 2013, p. 209; F. PARISI/ V.V. PALMER/ M. BUSSANI: The comparative law and economics of pure economic loss, International Review of Law and Economics 2007, p. 29-48 (31); M. BUSSANI/ A.J. SEBOK (note 6), p. 315. 9 Similarly C. v. DAM (note 8), p. 209. 10 F. PARISI et al. (note 8), p. 31 et seq.; M. BUSSANI/ A.J. SEBOK (note 6), p. 316 et seq. with further references. Similarly C. v. DAM (note 8), p. 209: “It is hard to say whether this scenario is a nightmare or reality. The best to be said, is that it is the product of a political view. There is no evidence whatsoever that compensating pure economic loss on a more general basis would lead to apocalyptic events”. 11 C. v. DAM (note 8), p. 209. 12 For an overview see T. KADNER GRAZIANO, Comparative Tort Law: Cases, Materials and Exercises, Abingdon, New York 2018, Chapter 5.

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Rethinking the Place of Damage Rule In Private International Law economic loss cases in abstract. Third, there is no common approach to pure economic loss cases in substantive law, which makes clear and predictable jurisdictional and private international law rules particularly important.

III. Jurisdiction and Applicable Law in ExtraContractual Cases – EU Legal Framework Before discussing the specific problems of European private international law in pure economic loss cases, the legal framework needs to be described. A.

Jurisdiction

The special jurisdictional rule for extra-contractual claims is contained in Article 7(2) of the Brussels I Regulation and reads as follows: “A person domiciled in a Member State may be sued in another Member State: […] (2) in matters relating to tort, delict or quasidelict, in the courts for the place where the harmful event occurred or may occur;” The purpose of the rule is to establish “a close connection between the court and the action or […] to facilitate the sound administration of justice”.13 Such justification is needed because Article 7(2) of the Brussels I Regulation is an exception from the general rule that the courts at the defendant’s domicile are competent. Depending on the circumstances of the case, “the place where the harmful event occurred” can be understood as the place of the event giving rise to the damage (“Handlungsort”), or as the place where the damage occurs (“Erfolgsort”). Since the famous environmental damages case, Bier v Mines de Potasse,14 both places are covered by the special jurisdictional rule and a victim can choose where to file a lawsuit. B.

Applicable Law

The general rule to determine the applicable law in tortious actions is set out at Article 4 of the Rome II Regulation which reads as follows: “1. Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage Recital 16 of the Brussels I Regulation. ECJ, 30 November 1976, Handelskwekerij G. J. Bier BV v Mines de potasse d’Alsace SA, ECLI:EU:C:1976:166. 13 14

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Hannes Meyle occurred and irrespective of the country or countries in which the indirect consequences of that event occur. 2. […]. 3. Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. […].” The so-called lex loci delicti rule at Article 4(1) of the Rome II Regulation is a well-established private international law principle.15 Contrary to the jurisdictional rule described above, the event giving rise to the damage is irrelevant. By contrast, only the place where the damage occurs is decisive.

C.

Relationship between Jurisdiction and Applicable Law

The place where the damage occurs is contained both in Article 7(2) Brussels I Regulation and in Article 4(1) Rome II Regulation. This parallelism raises the question of whether the notion is to be interpreted identically or whether there are differences between jurisdiction and applicable law. Consideration 7 of the Rome II Regulation provides that “The substantive scope and the provisions of this Regulation should be consistent with […] (Brussels I) and the instruments dealing with the law applicable to contractual obligations.” Despite this guiding principle of consistency, it is unclear whether, in all cases, similar notions should be interpreted in parallel. In legal literature, the predominant opinion seems to be that, where possible, a similar interpretation should be sought.16 However, there is no strict rule regarding identical interpretation.

IV. Jurisdiction and Applicable Law in Pure Economic Loss Cases The challenges of pure economic loss cases, both in terms of jurisdiction and applicable law, are best illustrated in the case-law. Given its authority for States applying the Brussels I Regulation and the parallel Lugano Convention, the caselaw of the ECJ will be described. The ECJ has interpreted Article 7(2) of the Brussels I Regulation in pure economic loss cases on several occasions. The

15 See on the whole topic Th. KADNER GRAZIANO, Gemeineuropäisches internationales Privatrecht, Tübingen 2002, p. 138 et seq. 16 See in detail H. MEYLE, Reine Vermögensschäden im Europäischen Internationalen Deliktsrecht. Zuständigkeit und anwendbares Recht, Berlin 2021, p. 44 et seq.

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Rethinking the Place of Damage Rule In Private International Law following section will illustrate the most important decisions and analyse their impact. A.

ECJ Case Law on Localisation of Pure Economic Loss

1.

Kronhofer17

Mr Kronhofer was a private investor domiciled in Vienna, Austria. A German asset management company advised him on call options for shares, which is a rather speculative investment form. As a result, Kronhofer invested money in those options and, eventually, the invested money was lost. The investor brought an action against the investment advisors personally, on a tortious basis, in the courts of his own domicile in Vienna. The advisors were domiciled in Germany which raised the question of whether the court in Vienna was competent based on Article 7(2) of the Brussels I Regulation. The ECJ decided that the special jurisdictional rule must be interpreted as it would be in the “place where the harmful event occurred”: “[This] does not refer to the place where the claimant is domiciled or where ‘his assets are concentrated’ by reason only of the fact that he has suffered financial damage there resulting from the loss of part of his assets which arose and was incurred in another Contracting State.” According to the Court, claimants should not be able to file a lawsuit in the courts of their domicile without good reason because such a forum actoris would run counter to the Brussels I Regulation.18 The Court also wanted to avoid legal uncertainty that might be caused by the connecting factor of the place where the plaintiff’s assets were concentrated.19 This meant that Mr Kronhofer could not file the lawsuit at the place of his domicile. Legal scholars predominantly endorsed the decision.20 Nevertheless, some criticism can be made: the statement that the court at the victim’s domicile is not competent “by reason only” of the fact that the victim suffered financial damage from the loss of assets elsewhere leaves the door open to affirm jurisdiction in other constellations. Furthermore, by stating that the loss of assets “arose and was incurred in another Contracting State”, the court seems to imply that those assets 17 ECJ, 10 June 2004, Rudolf Kronhofer v Marianne Maier and Others, ECLI:EU:C:2004:364. 18 Ibidem, paras. 14, 20. 19 Ibidem, para. 20. 20 See for example J. v. HEIN, Deliktischer Kapitalanlegerschutz im europäischen Zuständigkeitsrecht, Praxis des Internationalen Privat- und Verfahrensrechts 2005, p. 1723 (21); J. DIETZE/ D. SCHNICHELS, Die Rechtsprechung des EuGH zum EuGVÜ und zur EuGVVO im Jahre 2004, Europäische Zeitschrift für Wirtschaftsrecht 2005, p. 552-558 (555); T. ODENDAHL, Internationales Deliktsrecht der Rom-II-VO und die Haftung für reine Vermögensschäden, Frankfurt a. M. 2012, p. 176.

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Hannes Meyle had a location and that this fact mattered.21 As demonstrated in other decisions, this is a questionable assumption and relates to the very problem in pure economic loss cases. 2.

Kolassa22

In the Kolassa case, litigation arose from prospectus liability claims.23 The prospectus had been published by the London-based Barclays Bank, which had also issued the certificates in question. The certificates were distributed via the Austrian bank direktanlage.at, through which Mr Kolassa, domiciled in Vienna, invested. The value of the certificates depended on a portfolio managed by a German corporation, which fell into insolvency. As a result, the certificates lost their value. Mr Kolassa filed a lawsuit against the Barclays Bank at his place of residence in Vienna. He claimed that if he had been informed correctly, he would have diversified his portfolio. He argued that the financial loss had occurred at his place of residence and for this reason, the courts of Vienna were competent. The Commercial Court of Vienna stayed the proceedings until the ECJ ruled as follows: “[…] Under Article 5(3) of Regulation No 44/2001, the courts where the applicant is domiciled have jurisdiction, on the basis of the place where the loss occurred, to hear and determine such an action, particularly when the damage alleged occurred directly in the applicant’s bank account held with a bank established within the area of jurisdiction of those courts.” In other words, the combination of the victim’s domicile and an affected bank account was deemed sufficient for opening a special jurisdiction and Mr Kolassa could bring the action before the courts of his domicile. This result is difficult to reconcile with the previous Kronhofer ruling and the court does not give reasons for this differentiation. Besides, it does not explain why it would be justified to tie jurisdiction to bank accounts and how bank accounts might be localised at all. Legal scholars were even more critical and complained that insufficient consideration had been given to the peculiarities of the financial market24 and that the explanations were shockingly superficial and showed numerous deficits.25

In the same direction J. v. HEIN (note 20), p. 21. ECJ, 28 January 2015, Harald Kolassa v Barclays Bank plc, ECLI:EU:C:2015:37. 23 Prospectus liability claims are qualified as tortious claims based on special statutory provisions that sanction incomplete and incorrect prospectuses, see with further references H. MEYLE (note 16), p. 165. 24 A. STADLER/ M. KLÖPFER, EuGH-Rechtsprechung zur EuGVVO aus den Jahren 2015 und 2016, Zeitschrift für Europäisches Privatrecht 2017, p. 890-935 (905). 25 R. FREITAG, Internationale Prospekthaftung revisited – Zur Auslegung des europäischen Kollisionsrechts vor den Hintergrund der Kolassa-Entscheidung des EuGH, Zeitschrift für Wirtschafts- und Bankrecht, WM Wertpapiermitteilungen 2015, p. 1165-1173 (1167). 21 22

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Rethinking the Place of Damage Rule In Private International Law Some observed that the judgement contained indications of a drafting error26 and a tautology in the central part.27 It was stated that the decision was – at best – misleading and created more questions than it answered.28 Beyond the circumstances of the individual case, many legal scholars paid no heed to to the the Kolassa judgment29 In the subsequent judgments Universal and Löber, the ECJ indeed limited the significance of Kolassa, albeit in a very brief manner and without further justification. 3.

DFDS Torline30

The DFDS Torline case arose from strike measures that the Swedish marine trade union, SEKO, had requested against the Danish Association of Shipping Companies, DFDS. The goal of SEKO was to secure a collective agreement for a Polish crew of a cargo ship sailing for DFDS. This ship named Tor Caledonia served a route between Sweden and the UK and was registered in the Danish international ship register. Following the request of SEKO, a Swedish transport workers union announced that they would not engage in any work relating to the Tor Caledonia. This meant that the ship could not be loaded or unloaded in Swedish ports. DFDS leased a replacement ship which led to additional costs. DFDS argued that its damage occurred in Denmark, and therefore Danish courts would have jurisdiction. The Court argued that the event giving rise to the damage was the notice of industrial action by the SEKO in Sweden,31 which therefore could not justify a forum in Denmark. Regarding the place where the damage occurred, the ECJ did not take a clear position and only stated that

M. LEHMANN, Prospectus liability and private international law – assessing the landscape after the CJEU’s Kolassa ruling (Case C-375/13), Journal of Private International Law 2016, p. 318-343 (334) remarks that the notification of the project is mentioned in the reasoning of the judgment but is not mentioned in the operative part of the judgment. 27 R. FREITAG (note 25), p. 1167 with reference to para. 54 of the judgment which reads as follows: “As regards, by contrast, the place where the loss occurred, it must be held that, in circumstances such as those summarised at paragraph 51 of this judgment, the loss occurred in the place where the investor suffered it”. 28 M. HAENTJENS/ D. VERHEIJ, Finding Nemo: Locating Financial Losses after Kolassa/Barclays Bank and Profit, Journal of International Banking Law and Regulation 2016, p. 346-358. 29 P. MANKOWSKI, Anmerkung EuGH, Urt. v. 16.06.2016 – C-12/15 (Universal Music International Holding/Schilling u.a.), Europäische Zeitschrift für Wirtschaftsrecht 2016, p. 585-586 (586); P. OBERHAMMER, Deliktsgerichtsstand am Erfolgsort reiner Vermögensschäden, Juristische Blätter 2018, p. 750-768 (760 et seq.) cites the expression “hard cases make bad law”. 30 ECJ, 5 February 2004, DFDS Torline v SEKO, ECLI:EU:C:2004:74. 31 Ibidem, para. 41. 26

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Hannes Meyle “[…] Article 5(3) must be interpreted as meaning that the damage resulting from industrial action taken by a trade union in a Contracting State to which a ship registered in another Contracting State sails must not necessarily be regarded as having occurred in the flag State […].”32 Thus, it was left to the national court to decide whether the damage occurred where DFDS was established.33 The Danish court affirmed its own jurisdiction, arguing that the goal of the sympathy action request by the Swedish workers union had been to cause financial damage at the seat of the Danish DFDS. Hence, DFDS could bring an action at its own seat. This result can already be criticised with the argument that the Brussels I Regulation should prevent from a forum actoris.34 It is even more problematic that the national court is once again left with the task of localising the tort.35 This entails the danger that courts assess the place of the damage according to their own laws, the lex fori.36 Such an approach runs counter to the coherent application of the European competence rules and causes legal uncertainty. In sum, legal commentators have described the decision as a “remarkably uninformative and unhelpful judgment”.37 4.

CDC38

The CDC case involved claims for damages caused by severe antitrust violations: European chemical companies had agreed on sales prices over many years. As a result, customers in 13 Member States were harmed. They assigned their claims to the Belgian corporation, CDC, which brought the action before the Regional Court of Dortmund, Germany, as this was the seat of one of the companies involved.39 The action against this one company was later withdrawn due to a settlement, but it was upheld against the other parties involved. Therefore, it had to be clarified whether a special place of jurisdiction in tort was opened in Dortmund for the Ibidem, para. 45. Ibidem, para. 43. 34 In the same sense J. DIETZE/ D. SCHNICHELS (note 20), p. 555 et seq. 35 M. FRANZEN, Internationale Zuständigkeit beim Aufruf zum Boykott eines Seeschiffes, Praxis des Internationalen Privat- und Verfahrensrechts 2006, p. 127-129 (129). 36 Ibidem, p. 128. 37 T. HARTLEY, Jurisdiction in Tort Claims for Non-Physical Harm Under Brussels 2012, Article 7(2), International & Comparative Law Quarterly 2018, p. 987-1003 (990); M. FRANZEN (note 35), p. 129; E. PATAUT, De la juridiction compétente pour juger de la légalité d’une grève internationale, Revue critique de droit international privé 2004, p. 791-808 (807). 38 ECJ, 21 May 2015, Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Evonik Degussa GmbH and Others, ECLI:EU:C:2015:335. 39 This company therefore was treated as anchor defendant according to Art. 8 No. 1 Brussels I Regulation. 32 33

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Rethinking the Place of Damage Rule In Private International Law actions against the remaining parties. With regard to the place of the event giving rise to the antitrust violations, the Court argued that the relevant action could be determined “[…] in the abstract, as the place of the conclusion of the cartel.”40 However, since the unlawful agreements had been reached in many different constellations and locations over the years, there was no particular place that could be identified as such. Therefore, the Court gave indications for “[…] a situation in which, among several agreements that, as a whole, amounted to the unlawful cartel at issue, there was one in particular which was the sole causal event giving rise to the loss allegedly inflicted on a buyer. In that case, the courts in whose jurisdiction that particular agreement was concluded would have jurisdiction to adjudicate on the loss thereby inflicted upon that buyer.”41 How such a “particular agreement” might be determined was not further specified. Regarding the place where the damage occurred, the Court stated: [a]ccording to the settled case-law of the Court, the place where the damage occurred is the place where the alleged damage actually manifests itself […]. As for loss consisting in additional costs incurred because of artificially high prices, such as the price of the hydrogen peroxide supplied by the cartel at issue in the main proceedings, that place is identifiable only for each alleged victim taken individually and is located, in general, at that victim’s registered office.”42 Consequently, the Court concluded that: “[…] Article 5(3) of Regulation No 44/2001 must be interpreted as meaning that, in the case of an action for damages brought against defendants domiciled in various Member States as a result of a single and continuous infringement of Article 101 TFEU […], which has been established by the Commission, in which the defendants participated in several Member States, at different times and in different places, the harmful event occurred in relation to each alleged victim on an individual basis and each of the victims can, by virtue of Article 5(3), choose to bring an action before the courts of the place in which the cartel was definitively concluded or, as the case may be, the place in which one agreement in particular was concluded which is identifiable as the sole causal event giving rise to the loss allegedly suffered, or before the courts of the place where its own registered office is located.”43

40 Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Evonik Degussa GmbH and Others (note 38), para. 44. 41 Ibidem, para. 46. 42 Ibidem, para. 52. 43 Ibidem, para. 56.

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Hannes Meyle This result runs counter to the findings in Kronhofer and opens a forum actoris for the victim. It might be justified by the fact that claims based on antitrust violations have special characteristics. This differentiation between groups of cases could, in principle, be a positive development. However, the judgement is lacking any explicit justification for the difference. Not surprisingly, legal scholars have, therefore, commented on this part of the judgment in an unusually harsh manner. Some claim that the special jurisdictional rule had been interpreted with only very vague reference to procedural interests and with hardly any subsumption44 and that the quality of the decision had reached an unimaginable low.45 Others concluded that the decision created incoherent special law.46 With reference to the Kronhofer and DFDS Torline decisions, one scholar even raised the provocative question as to whether the judges were unaware, or disregarded those previous decisions.47 Legal practitioners were left guessing as to whether the judgment might be completely overturned, whether it would remain valid for antitrust cases, or whether principles might be transferable to other cases.48 5.

Universal Music49

The Universal Music case arose from a company purchase which turned out to be more expensive than planned. The Dutch Universal Music corporation, part of the Universal Music Group, was going to acquire a Czech record company. The corresponding contract was drawn up by a Czech law firm which had been instructed by the Universal Music Group. The purchase price was to be determined at a later stage on the basis of a formula included in the contract. Due to negligence on the part of the lawyers, this formula contained an error which eventually increased the purchase price by a factor of 100. This discrepancy led to arbitration proceedings in the Czech Republic between the Dutch corporation and shareholders of the 44 B. STEINRÖTTER, Internationale Zuständigkeit in kartelldeliktischen Rechtsstreitigkeiten bei innereuropäischer Beklagtenmehrheit (CDC Hydrogen Peroxide), Juris PraxisReport Internationales Wirtschaftsrecht 2015, Anm. 3, B. German original: “Unter recht losem, kaum subsumtionsfähigen Verweis auf prozessuale Interessen […]”. 45 G. MÄSCH, Blondes Have More Fun (Or Have They?) – Zur BleichmittelkartellEntscheidung des EuGH, Wirtschaft und Wettbewerb 2016, p. 285-291 (285). German original: die Entscheidung erreiche “in ihrer handwerklichen Qualität […] bisher ungeahnte Tiefen”. 46 M. WELLER/ J. WÄSCHLE, Kommentar, Cartel Damage Claims, Recht der internationalen Wirtschaft 2015, p. 603-605 (605). 47 G. MÄSCH (note 45), p. 289; German original: “Kannten die erkennenden Richter diese Urteile ihres eigenen Gerichts nicht? Wollten sie sie nicht kennen? Wollten sie nur den Einzelfall (irgendwie) über die Bühne bringen oder eine generelle Abkehr von dem bisher geltenden Prinzip einläuten?”. 48 Ibidem, p. 291. 49 ECJ, 16 June 2016, Universal Music International Holding BV v Michael Tétreault Schilling and Others, ECLI:EU:C:2016:449.

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Rethinking the Place of Damage Rule In Private International Law Czech record company. The proceedings ended with a settlement agreement for the purchase price. The amount stipulated was transferred from an account of the buyer, the Dutch Universal Music corporation. The buyer then claimed back the surcharge from the Czech law firm and eventually filed a lawsuit based on non-contractual claims50 at its seat in the Netherlands. The ECJ concluded that: “[…] the ‘place where the harmful event occurred’ may not be construed as being, failing any other connecting factors, the place in a Member State where the damage occurred, when that damage consists exclusively of financial damage which materialises directly in the bank account of the applicant and is the direct result of an unlawful act committed in another Member State.”51 In other words, the Dutch courts were not competent to decide the claim despite the domicile and the bank account of the injured party being in the Netherlands. The ECJ located the damage at the place where the settlement had been concluded because it was at that moment that “the obligation to pay placed an irreversible burden on Universal Music’s assets”.52 This was apparently a decisive argument: “[a]ccordingly, the loss of some assets53 happened in the Czech Republic, the damage having occurred there. The mere fact that, to implement the settlement agreed before the arbitration board, in the Czech Republic, Universal Music paid the financial settlement by a transfer from a bank account it held in the Netherlands, is not such as to invalidate that finding.”54 This justification is hardly convincing.55 In particular, it is questionable whether the settlement agreement can really be seen as the damaging event.56 Generalising the 50 The claim was of a tortious nature because it was not the buying company that had instructed the law firm, but its parent company, the Universal Group. 51 Universal Music International Holding BV v Michael Tétreault Schilling and Others (note 49), para. 40. 52 Ibidem, para. 31. 53 German version: “Mithin hat sich der Verlust von Vermögensbestandteilen in der Tschechischen Republik ereignet […]”; French version: „Partant, la perte d’éléments du patrimoine est intervenue en République tchèque”. 54 Universal Music International Holding BV v Michael Tétreault Schilling and Others (note 49), para. 32. 55 This is also the view of S. HUBER/ S. GEIER-THIEME, Der Deliktsgerichtsstand im europäischen Zuständigkeitsrecht bei sogenannten „unmittelbaren Vermögensschäden”, Praxis des Internationalen Privat- und Verfahrensrechts 2018, p. 155-158 (156 et seq.). 56 I. BACH, Deliktsgerichtsstand am Erfolgsort bei reinen Vermögensschäden, Neue Zeitschrift für Gesellschaftsrecht 2016, p. 794 et seq. (795) classifies the flawed contract as the decisive connecting factor; according to him, this is the element which first affected the patrimony of the victim. He draws a comparison between the settlement agreement and an arbitral award and makes the point that if the arbitration procedure had ended with an arbitral award instead of the settlement agreement, the ECJ would not have classified this award as relevant damage.

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Hannes Meyle result that settlement agreements or other such contracts constitute ‘damage’ for the purpose of determining jurisdiction would lead to serious localisation problems.57 Once more, legal practitioners were left to question which circumstances were considered decisive for the ECJ to arrive at its conclusion.58 Scholars stated that after the judgment in Universal, one could only be certain that the next preliminary ruling by the ECJ in this context would soon follow.59 6.

Löber

The next preliminary ruling was published around two years later. The Löber case involved prospectus liability claims based on similar facts as in Kolassa. Like Mr Kolassa, the investor Helga Löber, domiciled in Vienna, had purchased certificates issued by the Barclays Bank. Ms Löber also suffered financial loss due to the decreased value of the certificates and filed a lawsuit against the Barclays Bank before the Commercial Court in Vienna. The main difference with the Kolassa case was that Löber had invested in the certificates via two different securities accounts, held at banks in Graz and in Salzburg. The corresponding money came from an account at a bank at her domicile in Vienna. The ECJ eventually decided that: “Article 5(3) of Council Regulation (EC) No 44/2001 […] must be interpreted to the effect that in a situation, such as that in the main proceedings, […] the courts of that investor’s domicile, as the courts for the place where the harmful event occurred within the meaning of that provision, have jurisdiction to hear and determine that action, where the damage the investor claims to have suffered consists in financial loss which occurred directly in that investor’s bank account with a bank established within the jurisdiction of those courts and the other specific circumstances of that situation also contribute to attributing jurisdiction to those courts.” Once again, the location of the affected bank account played a central role. Just as in the Kolassa decision, the Court attributed the bank account to the branch of the bank office holding the account.60 It did not answer the question as to what extent this is supposed to facilitate the sound administration of justice. Furthermore, it Ibidem, p. 795 gives the example of distance contacts, and of a settlement agreement that is eventually reached at a trade fair in China, after long negotiations between the parties. In the same vein, see S. HUBER/ S. GEIER-THIEME (note 55), p. 157; U. MAGNUS, LMK 2016, 381538. 58 M. WILDERSPIN, Cross-border Non-contractual Disputes: The Legislative Framework and Court Practice, in: P. BEAUMONT et al., Cross-Border litigation, Hart 2017, p. 647. 59 S. HUBER/ S. GEIER-THIEME (note 55), p. 158. 60 ECJ, 12 September 2018, Helga Löber v Barclays Bank PLC, ECLI:EU:C:2018:701, para. 35: “[…] upholding as the place where the damage occurred the place where the bank is established in which the applicant possessed the bank account in which the damage occurred”. 57

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Rethinking the Place of Damage Rule In Private International Law remains unclear how to proceed when multiple accounts are affected, although this was precisely the situation in the case at hand.61 Instead, the Court introduced the criterion of the “specific circumstances” of the situation to attribute jurisdiction to the domicile of the injured party. Such a case-by-case approach is hardly in line with the wording of the special tort jurisdiction provision and does not increase predictability and legal certainty. The Vienna Commercial Court implementing the ECJ decision concluded that the several bank accounts and the connection to the Austrian provider direktanlage.at justified attributing jurisdiction to the courts at the domicile of the investor. However, it remains open how to proceed when, for example, the clearing accounts are situated in a different country than the private bank account and the domicile of the investor. 7.

Austro-Mechana62

Whether the Austro-Mechana case is a pure economic loss case is subject to dispute.63 Nevertheless, the ECJ treated it as such, and the case illustrates the problems resulting from payment localisation. Austro-Mechana is a society that collects the “fair remuneration” provided for in Paragraph 42b(1) of the Austrian Copyright Act. This is compensation for copyright holders since protected works can be copied by devices like copiers, scanners or flash drives. The payment is owed by manufacturers, importers and dealers of such devices. In the case at hand, Austro-Mechana claimed that Amazon EU had not paid the compensation that was due to Austrian copyright holders and brought an action in Austria. The registered seat of Amazon EU was in Luxembourg; in addition, affiliated German corporations were on the defendants’ side. The ECJ stated that the harmful event was Amazon “failing to comply with the obligation to pay the remuneration.”64 The question of how to localise this harmful event was left to the national court: “[i]t follows that, if the harmful event at issue in the main proceedings occurred or may occur in Austria, which is for the national court to ascertain, the courts of that Member [S]tate have jurisdiction to entertain Austro-Mechana’s claim.”65

61 The court does distinguish between the “personal bank account” of the investor, which was held at a Bank in Vienna, and “the clearing accounts specifically intended for the execution of that transaction” (para. 32 of the judgment) which were administered by banks in Graz and Salzburg (see para. 10 of the judgment). However, the reasons and consequences of this differentiation are not explained. 62 Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte Gesellschaft mbH v Amazon EU Sàrl and Others (note 4); implementation by OGH Wien, 24 May 2016, 4Ob112/16y. 63 H. MEYLE (note 16), p. 291 et seq. 64 Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte Gesellschaft mbH v Amazon EU Sàrl and Others (note 4), para. 49. 65 Ibidem, para. 52.

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Hannes Meyle This led the Austrian Supreme court to analyse the location of the payment obligation: “The place of the harmful conduct is where the payment obligation would have had to be fulfilled. […] Thus – as in the scope of application of Article 5 number 1 lit a EuGVVO (C-533/07, Falco Privatstiftung […]) – the law applicable in the specific case must be taken into account. The fact that this is Austrian law is not disputed by any of the parties.”66 In other words, the approach of the special contractual jurisdiction rule – a substantive law analysis of the payment obligation – was applied to define the place of the event giving rise to the damage for the non-contractual jurisdiction rule. To make things even more complex, the legal situation had changed during the period in question. Payment obligations for devices sold before 16 March 2013 were qualified as obligations to send (“qualifizierte Schickschulden”).67 The corresponding place of performance was located at the debtor’s domicile, in the case at hand, at the registered seats in Luxembourg and Germany. More recent payment obligations were debts to be discharged at the creditors domicile (Bringschuld):68 Austria in the case at hand. This meant that the Austrian court considered itself competent only for parts of the claim when relying on the place of the event giving rise to the damage. Therefore, in addition, it analysed the place where the damage occurred: “[...](b) In the present case, the defendants would have been obliged under § 905 (2) ABGB [old version] to «pass on» the amount owed to the plaintiff at their risk and expense. They were therefore obliged to act at their respective domicile, but the plaintiff’s assets would only have increased at its own domicile. Thus, in the opinion of the ECJ, ‘the damage’ giving rise to liability – namely the absence of asset growth - only occurred there, and only at that moment ‘all the elements of liability’ were realised (C-168/02, Kronhofer, para. 18). The place of performance within the meaning of Article 5(3) of the Regulation was therefore the plaintiff’s domicile in the given context. (c) Therefore, jurisdiction under Article 5(3) of the Brussels Regulation results, insofar as the place of the event giving rise to the damage is not in Austria anyway (5.1. above), from the fact that the 66 OGH Wien (note 62), para. 5.1, German original: “Der Ort des schädigenden Verhaltens liegt dort, wo die Zahlungspflicht zu erfüllen gewesen wäre. Dazu enthält weder das Unionsrecht noch das österreichische Urheberrechtsgesetz eine Regelung. Damit ist – wie im Anwendungsbereich von Artikel 5 Nummer 1 lit a EuGVVO (C-533/07, Falco Privatstiftung, 4 Ob 90/09b, F.-Privatstiftung, SZ 2009/119) – auf das im konkreten Fall anwendbare Recht abzustellen. Dass es sich dabei um österreichisches Recht handelt, wird von keiner Partei in Zweifel gezogen”. 67 See sec. 905 para. 2 of the Austrian Civil Code (ABGB), old version. 68 See sec. 907a (1) ABGB, new version.

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Rethinking the Place of Damage Rule In Private International Law damage ultimately occurred as the plaintiff did not receive the (allegedly) payable amounts in Austria. Jurisdiction is therefore also given for the part of the claim relating to devices that were put on the market before 16 March 2013.”69 First, it is questionable whether the breach of a contractual payment obligation can be considered as an event giving rise to the damage in the context of noncontractual claims.70 The challenges and criticism related to the localisation of a payment obligation are well-known in the context of the special contractual jurisdiction rule.71 Transferring those challenges to the non-contractual jurisdiction rule should be avoided. Second, with regard to the place where the damage occurred, the reasoning of the Austrian Supreme Court and especially the reference to Kronhofer are not convincing. Considering the very different set of facts, it is already questionable whether the Kronhofer case is comparable to the Austro-Mechana case at all. Even if both cases were comparable, the reasoning in Kronhofer does not entirely support the findings in Austro-Mechana.72

OGH Wien (note 62), para. 5.2. (c), German original: “Die Zuständigkeit nach Artikel 5 Nummer 3 EuGVVO ergibt sich daher, soweit der Handlungsort nicht ohnehin in Österreich liegt (oben 5.1.), daraus, dass der schädigende Erfolg letztlich erst durch das unterbliebene Einlangen der (angeblich) zu zahlenden Beträge bei der Klägerin in Österreich eingetreten ist. Sie ist daher auch für jenen Teil des Anspruchs zu bejahen, der sich auf Trägermaterial bezieht, das vor dem 16. März 2013 in Verkehr gebracht wurde”. 70 If this was a general rule, the creditor of a contractual payment could rely on the special jurisdiction for non-contractual damages, see also H.-E. RASMUSSEN-BONNE/ M. SERVATIUS, Ein besonderer Gerichtsstand für urheberrechtliche Vergütungsansprüche, Europäisches Wirtschafts- und Stuerrecht 2016, p. 275-278 (276); A. STADLER/ M. KLÖPFER (note 24), p. 915. 71 See for all T. KADNER GRAZIANO, Der Gerichtsstand des Erfüllungsortes in Art. 7 Nr. 1 EuGVVO n. F. – Zur Entkoppelung des international-zivilprozessualen vom materiellrechtlichen Erfüllungsort – eine Analyse der Rechtsprechung des EuGH sowie Vorschläge de lege lata und de lege ferenda, Recht der Internationalen Wirtschaft 2016, p. 14-34. In the context of pure economic loss cases, in particular, the following arguments are noteworthy: the examination of the applicable law within the jurisdiction provision is complex; if foreign law is applicable, it may be difficult to correctly determine the place of performance at all; the fact that the place of performance may differ depending on the applicable law runs counter to an autonomous and uniform application of the jurisdiction rules; in any case, it is not evident why the substantive place of performance should have an influence on the determination of jurisdiction. 72 In Rudolf Kronhofer v Marianne Maier and Others (note 17), para. 18 the Court stated that there was no justification to confer “jurisdiction to the courts of a Contracting State other than that on whose territory the event which resulted in the damage occurred and the damage was sustained, that is to say all of the elements which give rise to liability”. Whether, in the Austro-Mechana case, all the elements which give rise to liability were to be localised in Austria was part of the question. Furthermore, the underlying ratio in the Kronhofer case was to limit the special jurisdictional rule to places where a forum is justified for procedural reasons. Why it should be justified to open a forum at the place where the creditor is domiciled is not answered in the Austro-Mechana decision. 69

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Hannes Meyle In sum, the ECJ ruling and the subsequent Austrian decision are advantageous for collecting societies because they enable the enforcement of compensation claims in their home jurisdiction. However, it would be highly problematic to transfer the justification to other constellations.73 8.

flyLAL74

The claims in the flyLAL case were based on alleged violations of antitrust law. Unlike the CDC case, the defendants were accused not only of concluding agreements restricting competition,75 but also of abusing a dominant market position.76 The plaintiff flyLAL, a Lithuanian airline, had once been the main provider for flights to and from the airport in Vilnius, Lithuania. This changed when the Latvian airline, Air Baltic, offered the same flights at predatory prices. As a result, flyLAL was forced out of the market and fell into insolvency. Such predatory pricing was only possible because Air Baltic received 80% discounts on airport services from the operator of the airport in Riga, Latvia. The Competition Authority in Latvia qualified this conduct as a violation of Article 102(2)(c) TFEU. In liquidation, flyLAL, then brought an action against Latvian Air Baltic and against the Riga airport operator before the Vilnius Regional Court, Lithuania. The Court of Appeal initiated the preliminary ruling procedure in order to clarify in particular77 whether the event giving rise to the damage or the place where the damage occurred, was in Vilnius. With regard to the place of the event giving rise to the damage (“Handlungsort”), the ECJ took up the distinction between Articles 101 and 102 TFEU: “[i]n those particularly complex circumstances, the practical determination of the place of the event giving rise to the damage thus depends, inter alia, on whether the alleged anticompetitive conduct constitutes an anticompetitive agreement under Article 101 TFEU and/or an abuse of a dominant position under Article 102 TFEU.”78

73 H.-E. RASMUSSEN-BONNE/ M. SERVATIUS (note 70), p. 278 come to a similar conclusion. 74 ECJ, 5 July 2018, AB “flyLAL-Lithunian Airlines” v Starptautiskā lidosta “Rīga” VAS and “Air Baltic Corporation” AS, ECLI:EU:C:2018:533. 75 See Art. 101 TFEU. 76 See Art. 102 TFEU. 77 Apart from the questions treated in the present contribution, the Court also clarified “that loss of income consisting, inter alia, in loss of sales incurred as a result of anticompetitive conduct […] may be regarded as «damage» for the purposes of applying Article 5(3) of Regulation No 44/2001 […]”, see para. 36. The Court also discussed questions concerning the notion “operations of a branch” within the meaning of Article 5(5) of Regulation No 44/2001, see paras. 25, 58 et seq. 78 AB “flyLAL-Lithunian Airlines” v Starptautiskā lidosta “Rīga” VAS and “Air Baltic Corporation” AS (note 74), para. 48.

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Rethinking the Place of Damage Rule In Private International Law The ECJ left it to the national court to decide whether Air Baltic and the Riga airport operator had concluded an anticompetitive agreement and/or abused a dominant market position. Where conduct interacted, the court would have to identify the causal event as well: “[i]f it were to be established that the events giving rise to the main proceedings were part of a common strategy intended to oust flyLAL from the market of flights to and from Vilnius Airport and that those events all contributed to giving rise to the damage alleged, it would be for the referring court to identify the event of most importance in implementing such a strategy out of the chain of events at issue in the main proceedings.”79 This makes it very difficult for lawyers and courts to determine the place of the event giving rise to the damage in practice, which undermines legal certainty.80 With regard to the place where the damage occurred, the ECJ argued that: “[…] Article 5(3) of Regulation No 44/2001 must be interpreted as meaning that, in the context of an action seeking compensation for damage caused by anticompetitive conduct, the ‘place where the harmful event occurred’ covers, in a situation such as that at issue in the main proceedings, inter alia, the place where the loss of income consisting in loss of sales occurred, that is to say, the place of the market which is affected by that conduct and on which the victim claims to have suffered those losses.”81 The reference to the affected market in the context of pure economic loss cases is promising. However, lacking any reference to the previous antitrust case, CDC, it is unclear to what extent the flyLAL ruling was intended to bring a real change in case-law.82

Ibidem, para. 53. Sceptical with regard to legal certainty, see also H.-P. MANSEL/ K. THORN/ R. WAGNER, Europäisches Kollisionsrecht 2018: Endspurt!, Praxis des Internationalen Privat- und Verfahrensrechts 2019, p. 85-119 (101). 81 Note 74, para. 43. 82 C. KRÜGER, Zur internationalen Zuständigkeit für Klage wegen Schäden aus wettbewerbsbeschränkender Vereinbarung (“flyLAL”), Entscheidungen zum Wirtschaftsrecht 2018, p. 637-638 (638); J. GROTHAUS/ G. HAAS, Zivilprozessrecht: Zur Bestimmung des Deliktsgerichtsstands am Erfolgsort in Kartellschadenersatzverfahren – Anmerkung, Europäische Zeitschrift für Wirtschaftsrecht 2019, p. 794-796 (795); N. BRÜGGEMANN/ S. PATZER, Die Rechtsprechung des EuGH zum Deliktsgerichtsstand bei Kartellschadensersatzklagen, Neue Zeitschrift für Kartellrecht 2019, p. 538-543 (541) call the judgment a relativisation and correction of the CDC decision. Against the background of the subsequent Tibor-Trans case, this has turned out to be correct. 79 80

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Hannes Meyle 9.

Tibor-Trans83

Some of those ambiguities were clarified in the subsequent antitrust case, TiborTrans. The Dutch truck producer, DAF Trucks, had concluded collusive price agreements together with other truck manufacturers over several years. The European Commission found that this constituted an antitrust violation in the form of an illegal horizontal price agreement and imposed record fines on DAF and the other cartel participants.84 One of the customers affected by the illegal price agreements was the Hungarian freight transport company Tibor-Trans which had purchased trucks through authorised dealers established in Hungary.85 These trucks were not DAF trucks, but rather trucks from other manufacturers involved in the cartel. TiborTrans claimed damages from DAF on a non-contractual basis, due to the distorted sales price of the trucks, and brought an action before the court at its registered office in Győr, Hungary. Like in the CDC and flyLAL decisions, the ECJ categorised the collusive arrangements as causal events giving rise to the alleged damage.86 None of those agreements had been concluded in Hungary, thus jurisdiction of the Hungarian court could not be based on the event giving rise to the damage. Regarding the place where the damage occurred, the ECJ stated that the infringement had an effect on the competition of the entire EU market, hence also on Hungary.87 The fact that the plaintiff had not purchased any trucks from the defendant DAF did not call into question those findings because the cartel participants were jointly and severally liable.88 Consequently, the Court came to the conclusion that the place where the harmful event occurred “[…] covers, in a situation such as that at issue in the main proceedings, the place where the market which is affected by that infringement is located, that is to say, the place where the market prices were distorted and in which the victim claims to have suffered that damage, even where the action is directed against a participant in the cartel at issue with whom that victim had not established contractual relations.”89

ECJ, 29 July 2019, Tibor-Trans Fuvarozó és Kereskedelmi Kft. v DAF Trucks N.V., ECLI:EU:C:2019:635. 84 See the different stages of the case before the European Commission, available at https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39824 on 9.06.2021. 85 Tibor-Trans concluded financial leasing agreements and became usually owner of the vehicles upon expiry of the leasing agreement, see Tibor-Trans Fuvarozó és Kereskedelmi Kft. v DAF Trucks N.V. (note 83), para. 12. 86 Ibidem, para. 26. 87 Ibidem, para. 32. 88 Ibidem, para. 36. 89 Ibidem, para. 37. 83

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Rethinking the Place of Damage Rule In Private International Law Thus, the courts at Tibor-Trans’ registered office in Hungary were competent. In contrast to flyLAL, the ECJ does not refer to the registered office of the injured party, but to the market concerned and the alleged damage. The Tibor-Trans decision might therefore be a further step away from the CDC ruling. However, whether such a move was intended, and for which reasons, is not explicitly clarified in the reasoning.90 10.

VKI91

The Austrian consumer association VKI represented buyers of VW cars after the diesel emissions scandal. VKI claimed that the German manufacturer VW had acted immorally by equipping cars with defeat devices that lowered their value. As a result, buyers of those cars suffered economic loss. Because the Austrian customers had acquired the cars from dealers or private persons and not directly from VW, they claimed damages on a non-contractual basis. The VKI organised the claims in the form of a class action (Sammelklage) and brought the action before a court in Vienna where it had its registered office. This resulted in the following preliminary question: “[i]s point 2 of Article 7 […] to be interpreted as meaning that, in a situation such as that in the main proceedings, the ‘place where the harmful event occurred’ may be construed as the place in a Member State where the damage occurred, when that damage consists exclusively of financial damage that is the direct result of an unlawful act committed in another Member State?”92 The ECJ affirmed jurisdiction of the Austrian courts but at the same time stated that the damages suffered by consumers did not constitute pure economic loss because the damage affected the vehicles as material goods.93 This is hardly convincing in light of the fact that the defeat devices did not affect the material substance of the vehicles.94 Regardless, the ECJ made a statement about the place where the damage occurred: This remark was also made by J. GROTHAUS/ G. HAAS (note 82), p. 795. Verein für Konsumenteninformation v Volkswagen AG (note 5). 92 Ibidem, para. 17. 93 Ibidem, para. 32 et seq. 94 By contrast, not only the Attorney General (C. SÁNCHEZ-BORDONA, 2 April 2020, Verein für Konsumenteninformation v Volkswagen AG, ECLI:EU:C:2020:253, para. 31 et seq.), but also the prevailing opinion in the legal literature saw the case as a pure economic loss case, see C. THOMALE, Herstellerhaftungsklagen – Internationaler Deliktsgerichtsstand und anwendbares Recht bei reinen Vermögensschäden wegen versteckter Produktmängel, Zeitschrift für vergleichende Rechtswissenschaft 2020, p. 59-110 (59 et seq.); P. OBERHAMMER (note 29), p. 750 et seq.; T. BACHMEIER/ M. FREYTAG, Neues zum europäischen Deliktsgerichtsstand bei reinen Vermögensschäden im internationalen Warenverkehr, Recht der Internationalen Wirtschaft 2020, p. 337-342 (339 et seq.); T. KLICKA, Die Anwendung des Deliktsgerichtsstands nach Art. 7 Nr. 2 EuGVVO auf reine Vermögensschäden eines Fahrzeugkäufers, Juristische Blätter 2019, p. 337-345 (337 et seq.). 90 91

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Hannes Meyle “[p]oint 2 of Article 7 […] must be interpreted as meaning that, where a manufacturer in a Member State has unlawfully equipped its vehicles with software that manipulates data relating to exhaust gas emissions before those vehicles are purchased from a third party in another Member State, the place where the damage occurs is in that latter Member State.” The Court explained that it is foreseeable for the manufacturer to be sued in a State whose market is affected,95 in the case at hand the Austrian market. According to the Court, the damage occurred at the moment of purchase by the final buyer.96 However, this leaves open the question as to which of the Austrian courts would be internally competent. There is truth to the following statement: the “Volkswagen ruling has many loose ends and will need distinguishing, with intention to defraud the consumer arguably a relevant criterion for distinction given the Court’s finding in paragraph 36. It is to be feared that many national judges will fail to see the need for distinguishing, adding to the ever expanding ripple effect of locus damni following the Court’s epic Bier judgment.”97 11.

VEB98

The most recent preliminary ruling by the ECJ on the topic has been mentioned in the introduction and is worth a closer look as well. The plaintiff, VEB, a Dutch association that represents the interests of security holders, represented shareholders of the international oil and gas company BP plc, registered in London. BP shares were listed on the London, Frankfurt, and New York stock exchanges. In 2010, an explosion occurred on the oil drilling platform, Deepwater Horizon, located in the Gulf of Mexico and leased by BP. As a result, the value of BP shares decreased. VEB claimed that BP had made incorrect statements to its shareholders, prior to the accident, about its safety and maintenance programmes, as well as after the accident, regarding the extent of the oil spill and its own responsibilities. The information was available worldwide through press releases, reports published on the BP website, annual accounts and reports as well as public statements by directors. VEB claimed that Dutch courts were competent for recovery claims by shareholders that had acquired BP shares through investment accounts, banks, or

Verein für Konsumenteninformation v Volkswagen AG (note 5), para. 36 et seq. Ibidem, para. 30: “the view must be taken that the damage asserted occurred only when those vehicles were purchased […]”; idem, para. 35: “[…] the damage suffered by the final purchaser […] occurs when such a vehicle is purchased from a third party”. 97 G. v. CALSTER, available at https://gavclaw.com/2020/07/10/the-ECJs-locusdamni-determination-in-volkswagen-dismisses-a-us-style-minimum-contacts-rule-like-thepassat-it-risks-picking-up-suits-and-landing-them-almost-anywhere, on 9.06.2021. See also M. LEHMANN, available at https://eapil.org/2020/08/26/remaining-questions-about-ECJjudgment-in-vki-v-volkswagen on 9.06.2021. 98 Vereniging van Effectenbezitters v BP plc (note 3). 95 96

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Rethinking the Place of Damage Rule In Private International Law investment firms established in the Netherlands. The ECJ did not follow this point of view and decided: “Article 7(2) […] must be interpreted as meaning that the direct occurrence in an investment account of purely financial loss resulting from investment decisions taken as a result of information which is easily accessible worldwide but inaccurate, incomplete or misleading from an international listed company does not allow the attribution of international jurisdiction, on the basis of the place of the occurrence of the damage, to a court of the Member State in which the bank or investment firm in which the account is held has its registered office, where that firm was not subject to statutory reporting obligations in that Member State.” The Court’s main argument was the lack of foreseeability for the defendant if jurisdiction were opened in countries where the defendant is not subject to statutory reporting obligations.99 The domicile of the parties was seen as less relevant, especially in cases of a collective action.100 In other words, according to the decision, in cases of listed financial instruments, it is crucial where the financial instruments are listed. This result is to be endorsed as a further turn towards a market principle. Moreover, it can lead to a parallel treatment of statutory information and civil liability provisions.101 However, this result is hardly compatible with the two connecting factors initially contained in Article 7 (2) Brussels I Regulation – the place of the event giving rise to the damage and the place where the damage occurred.102 Characterising the place of non-compliance with statutory reporting obligations as the “place where the alleged damage actually manifests itself”103 can only be described as “considerable tongue twisting”.104 The reasoning is to be welcomed in the sense that the court did not affirm jurisdiction of the Dutch courts. However, the underlying problem – the Bier rule with all its shortcomings in pure economic loss cases – is not solved. 12.

Conclusion

Whereas the results of the ECJ decisions seem acceptable, the corresponding reasoning is criticised by legal scholars. Looking at pure economic loss cases Ibidem, para. 34. Ibidem, para. 36. 101 See, on this subject, H. MEYLE (note 16), p. 221. 102 See also M. LEHMANN (note 97): “While the decision of the ECJ is thus satisfying from a policy point of view, it is hard to reconcile with the option offered in the Bier case between the ‘place where the damage occurred’ and the ‘place of the event which gives rise to and is at the origin of that damage’”. 103 Vereniging van Effectenbezitters v BP plc (note 3), para. 31 with reference to the formula established in the Löber decision. 104 M. LEHMANN, (note 97). 99

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Hannes Meyle altogether shows that this is not due to particularities of single cases. Rather, it confirms that pure economic loss cases are generally problematic from a private international law perspective. Formally, the rule of the place of the damage is being upheld, but in reality, the ECJ has adopted a case-by-case analysis. By allowing this, the fundamental actor sequitur forum rei principle has been softened. For certain cases, the market seems to play an increasingly important role. However, this development is not addressed explicitly which has left a lot of room for misunderstanding. B.

Practical Consequences for Jurisdiction in Pure Economic Loss Cases

For practitioners it is difficult to determine whether a ruling is meant to be an individual decision or of general scope. It is even less clear how to proceed in constellations that have not yet been addressed. Further analyses of national court decisions have led to the same results.105 This means that a claimant’s lawyer might not be able to tell his or her client where to file a lawsuit. For a defendant’s lawyer, this situation opens many possibilities to delay a decision. Pure economic loss cases often involve high stakes which is why legal proceedings can still be worthwhile. However, the result is often a frustrating extension of the litigation process, and eventually a highly discretionary court decision. C.

Practical Consequences with respect to Applicable Law in Pure Economic Loss Cases

So far, commentators of pure economic loss cases have mainly focused on jurisdictional questions, as have most court rulings. Nevertheless, searching the place where the damage occurred within the meaning of Article 4 (1) of the Rome II Regulation can raise problems similar to those raised with respect to Article 7 (2) of the Brussels I Regulation. The degree to which the interpretation in the context of jurisdiction is transferable to applicable law is already unclear. The lack of foreseeability is made worse by the scarcity of decisions and commentary about applicable law in pure economic loss cases. Where legal scholars do draw conclusions on applicable law, they mostly affirm that the legal situation is problematic.106 In this context, one important difference between jurisdiction and applicable law must be noted: it is not necessarily problematic to grant different options to the victim as to where to file a claim. Rather, it should only be one law that governs a tortious claim, even where the elements of the case are scattered. Any other result would lead to severe complications. Therefore, a clear and uniform connecting factor is even more important to determine applicable law than to determine jurisdiction. 105

See in detail H. MEYLE (note 16), p. 73 et seq., 147 et seq., 209 et seq., 298 et

seq. 106 See for example M. LEHMANN (note 26), p. 337: “If Kolassa is bad for jurisdiction, it is a real nightmare when applied to applicable law”.

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Rethinking the Place of Damage Rule In Private International Law D.

Conclusion

“On the preliminary issue of the place where the tort was committed, the judicial authorities are not consistent. They show that the relevant place may be either the place where the defendant committed the tortious act; or where the plaintiff acted on it; or where the loss was incurred; […] and finally the place which, looking at all those factors together, has the closest connection with the tort. […] this branch of the law requires clearing up […].” This statement was made by the plaintiff’s representative in the proceedings leading to the English decision Diamond v Bank of London and Montreal.107 Now, 45 years later, the statement is still topical for cases before European courts despite numerous preliminary rulings by the ECJ and even more national court decisions. The case-by-case approach adopted by the ECJ has proven to be a dead end because it constantly provokes new preliminary rulings. Looking at one case at a time, it is easy to get caught up in the attempt to find the best connecting factor for the case at hand. Only an overall view of all relevant decisions demonstrates the overarching problem: the connecting factor for non-contractual claims is generally problematic when applied to pure economic loss cases.

V.

Rethinking the Connecting Factor in Pure Economic Loss Cases

Can the current legal uncertainty be overcome by a different interpretation of the law? The following section examines whether the notion of the “place where the harmful event occurred” could be interpreted in a way that allows for a predictable jurisdiction in pure economic loss cases. The results are then discussed with respect to applicable law. A.

Jurisdiction

According to the Bier ruling, the place where the harmful event occurred has two prongs: first, the event giving rise to the damage, and second, the place where the damage occurs.

107 Court of Appeal, 07 November 1978, Diamond v Bank of London & Montreal, 1979, Q.B. 333 = All ER 561.

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Event Giving Rise to the Damage

a)

What is the Event Giving Rise to the Damage?

In pure economic loss cases, the event giving rise to the damage can generally be described as a communicative act, for example an agreement or certain information. In Kronhofer this was the investment advice given over the phone; in Kolassa and Löber, it was the publication of a prospectus, in VEB, it was the allegedly misleading statements, and in the antitrust cases, CDC, flyLAL and TiborTrans, it was the conclusion of anti-competitive agreements. b)

Localisation

Frequently, communication or composing information takes place at the tortfeasors seat or domicile. In such situations, the action can be pinpointed easily but the special jurisdictional rule does not have an independent meaning.108 Where the tortfeasor has acted elsewhere, the situation is less obvious. First, it might be difficult for the claimant to know such facts. This is particularly true in conspiracy cases or cases of wrongful information where a whole chain of decisions leads to pure economic loss. Second, even where the facts are known, it can be difficult to determine the decisive event giving rise to the damage. An illustrative example is the CDC case where it could not be established when and where the anticompetitive agreement was concluded. Against that background, the ECJ developed the criterion of the so-called “specific agreement”. It is unlikely that claimants will ever be able to rely on this criterion because a causal connection between a specific agreement and a specific damage might be hard to prove. The difficulty of defining the event giving rise to the damage is not theoretical. It can be confirmed through an analysis of national court decisions: the English High Court described the event giving rise to the damage where several persons were involved as “chain of reliance”.109 The Supreme Court simply attributed a conspiracy to one location, even though the lower courts established that there had been several communications over the phone, via email and during personal meetings at different places and many persons involved.110 108 See Art. 7(2) Brussels I Regulation at the beginning: “A person domiciled in a Member State may be sued in another Member State: […] in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur; […]”. 109 High Court of Justice, Queen’s Bench Division, 24 November 1999, Raiffeisen Zentral Bank Österreich AG v Alexander Tranos, 2001, I.L.Pr. 85 (89): “In this case there was in one sense a chain of reliance since Mr. Paseau in Greece, Mr. Winkelbauer in London and the board of the bank in Austria all relied on the representations before the credit facility was granted. That of itself shows the difficulty in equating the suffering of the loss with any particular reliance.” In the end, the question of the event giving rise to the damage had not to be answered conclusively because the court could refer to the place where the damage occurred. 110 Supreme Court, 21 March 2018, JSC BTA Bank v Khrapunov, 2018, UKSC 19. See, in particular, the preceding decision of England and Wales Court of Appeal, 2 February

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Rethinking the Place of Damage Rule In Private International Law c)

No Procedural Justification

Even where the event giving rise to the damage is known and can be located, the connecting factor is not convincing in pure economic loss cases. Whether it be by phone call, messenger applications, or email, decisions can be taken everywhere, and information transferred from any place in the world. For example, wrongful information can be given on a business journey, and a prospectus can be drawn up by people working together all over the world. The location is irrelevant for the content of such communication. Therefore, granting jurisdiction at the place where information has been sent or received does not increase proximity to facts or evidence of the case. By contrast, it leads to arbitrary jurisdiction, which runs counter to the principle that special jurisdiction should be limited, predictable, and justified for procedural reasons. Similar arguments apply to physical meetings. Conversations can happen on neutral ground, at trade fairs, or business meetings. Illegal agreements are reached at places where no proof will be left. Furthermore, a tortfeasor’s considerations for choosing a meeting location might simply be accessibility or leisure facilities.111 Again, in such situations, jurisdiction at the place of the event giving rise to the damage does not bring any procedural advantage. Admittedly, there might be cases where it is beneficial to be able to claim an additional place of jurisdiction. An increased number of options can improve legal protection in certain situations. However, a crucial disadvantage of such an additional forum is the legal uncertainty that comes with it: claimants cannot rely on a forum when they cannot be certain that the forum is eventually granted. Besides, the special jurisdictional rule for non-contractual claims has not been developed in order to protect the claimant, as the ECJ itself has underlined on several occasions.112 Therefore, protective considerations should not play a role. In

2017, JSC BTA Bank v Khrapunov, 2017, EWCA Civ 40, para. 76: “In my view, so far as concerns Mr Khrapunov, the relevant event giving rise to the damage in question is that which is the legal foundation for the Bank’s claim against him, namely the alleged agreement between him and Mr Ablyazov made in about 2009, in all probability (on the available evidence) in England, either at one or more personal meetings here or by Mr Khrapunov communicating to Mr Ablyazov in England (by telephone or email) his assent to a proposal by Mr Ablyazov that he should help him to remove assets located abroad covered by the worldwide freezing order from the reach of the Bank in seeking to execute its judgments against Mr Ablyazov.” The Supreme Court followed this reasoning and backed it up by referring to the CDC decision, see ibidem JSC BTA Bank, para. 39 in fine. 111 J. WÄSCHLE, Die internationale Zuständigkeit für Schadensersatzklagen gegen Weltkartelle: Koordination der Gerichtspflichtigkeit in Europa und den USA, Tübingen 2017, p. 84 describes a cartel where the participants met regularly over 10 years at different places. The locations had no connection with the content of the agreements or their implementation. Rather, the participants chose meeting places that were easily accessible and that offered good infrastructure for playing golf. 112 ECJ, 25 October 2012, Folien Fischer AG and Fofitec AG v Ritrama SpA, ECLI:EU:C:2012:664, para. 46; ECJ, 16 January 2014, Andreas Kainz v Pantherwerke AG, ECLI:EU:C:2014:7, para. 31.

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Hannes Meyle sum, the event giving rise to the damage is not convincing as a jurisdictional connecting factor in pure economic loss cases. 2.

Place where the Damage Occurs

a)

What is the Damage?

This very first question can be difficult and complex to answer. Over the years, courts and legal scholars have discussed and applied different approaches. One possibility is to refer to the impairment of the victim’s will, as did the German Reichsgericht in an early decision.113 Similarly, the English Court of Appeal has referred to the place where the “information has been received and acted upon”.114 It could also be argued that an investor suffers the damage at the moment of the investment decision.115 In Universal Music, where carelessness resulted in a flawed contract, the ECJ chose the subsequent settlement agreement as damage. These examples show that “damage” can be interpreted very differently in different cases. Therefore, it is no surprise that many court decisions consider financial loss as relevant damage.116 This is the common feature of pure economic loss cases and it also corresponds mostly closely to the victim’s perspective. b)

Localisation

Provided that financial loss is the relevant damage within the meaning of Article 7(2) of the Brussels I Regulation, it remains to be determined how to localise the damage. Payments in cash will soon be a thing of the past and financial loss only visible on a bank statement. Account credit is a subjective contractual right that does not refer to a physical object. One simplifying solution might be to open jurisdiction at the bank office holding the account. Within the Single Euro Payments Area, this is easily identifiable by means of the Bank Identifier Code (BIC). However, this solution does not apply to clearing accounts. More importantly, tying non-contractual jurisdiction to the bank branch holding an affected account would create new problems. Even for private persons, it is not uncommon to hold several bank accounts, possibly in different countries. Thus, linking jurisdiction to branches of bank offices results in a possible multiplication of competent courts. Such multiplication is admitted in other branches of private international law and is not to be rejected from the outset. However, it raises a question known from the context of personality rights violations: should every court have jurisdiction for the entire damage or only for parts of the damage that occurred within its jurisdiction? The first scenario would offer the claimant a

Reichsgericht, 23 September 1887, II 127/87, RGZ 19, 382 (383). Diamond v Bank of London & Montreal (note 107), 346. 115 H. MEYLE (note 16), p. 121 with further references. 116 Ibidem, p. 79 et seq. 113 114

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Rethinking the Place of Damage Rule In Private International Law possibly large number of courts to choose from. The second scenario would significantly increase complexity. The problem becomes even more complex in the context of Bitcoin, Ether, or other cryptocurrencies still to come. It is open to what extent state currencies will be replaced, but it is safe to admit that the significance of cryptocurrencies will increase. One key feature of those cryptocurrencies is that they are based on decentralised ledgers, so-called blockchains. Every transaction is constituted by computer operations that are carried out on several computers simultaneously. It is therefore, by definition, impossible to pinpoint cryptocurrency credit or cryptocurrency transactions to a certain location. c)

No Procedural Justification

An oversupply of courts is a departure from the actor sequitur forum rei principle which needs to be justified for procedural reasons. Ideally, additional courts in non-contractual cases increase proximity to facts and evidence. However, it is questionable how such a procedural advantage can ever be achieved in pure economic loss cases: normally, all information relating to financial damage is in the sphere of the injured party and can be collected easily by the injured party, for example by retrieving the bank statements. In legal proceedings those documents can be forwarded to the court electronically or on paper. Thus, for the courts at the place of an affected bank account to have jurisdiction does not increase procedural efficiency. Likewise, in an accident – the most typical case for the use of the special jurisdictional rule – the tortfeasor and victim meet for the first time. In such cases, Article 7(2) of the Brussels I Regulation provides the victim with a forum at the fortuitous, but also neutral place of the accident. By contrast, in pure economic loss cases, the parties typically know each other and it is more reasonable to expect the victim to bring an action before the tortfeasor’s domicile. In other words, a neutral place of jurisdiction is not necessary. d)

No Predictability

Finally, a fundamental argument speaks decisively against the bank account holding branch as the connecting factor: for a potential tortfeasor, jurisdiction is not predictable. When services are provided or information is given out, the parties’ identity – and therefore their domicile and general place of jurisdiction – is typically communicated to the other party. By contrast, the bank account used might only be identifiable at a later stage. This creates a risk of abuse because the potential victim could choose to open or use a bank account in the most favourable jurisdiction – an argument that also the ECJ brought up in the Universal case.117

117 Universal Music International Holding BV v Michael Tétreault Schilling and Others (note 49), para. 38.

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Specific Circumstances

Admittedly, even the ECJ does not simply refer to an affected bank account but takes into account the financial damage as one element among others in order to justify jurisdiction. In Löber, the Court explained that “specific circumstances of that situation also contribute to attributing jurisdiction to those courts”. In Universal Music, the Court denied jurisdiction of the Dutch courts because the only connecting factor present was the bank account and the case was “failing other connecting factors”. The obvious problem with a case-by-case approach is its lack of predictability. Considering the diversity of pure economic loss cases,118 it cannot be expected that courts establish a workable list of criteria or elements to determine the place where the damage occurs. Typically, when pure economic loss cases do get before courts, the value of the claim is important and both sides invest in legal representation. As soon as there is a doubt regarding jurisdiction, there is potential for an appeal. Where European provisions are involved, national courts can introduce a preliminary procedure before the ECJ which further delays the very first question of jurisdiction. Moreover, as the analysis above demonstrates, many ECJ decisions offer only limited guidance, leaving questions open or raising new questions. 4.

Conclusion

In pure economic loss cases, the event giving rise to the damage can typically be described as a communicative act. Knowing where the tortfeasor has committed such an act requires extensive knowledge of the facts of a case, which a victim typically does not have at the beginning of proceedings. Even where those facts are known, the result is often arbitrary. With regard to the place where the damage occurs, problems are even more obvious. Already the question of what constitutes the damage from an international law perspective is answered differently in different cases. Focusing on the financial damage that each individual victim suffered raises an additional issue: pecuniary assets do not have a physical location. For normal bank accounts the auxiliary criterion of the branch location can be applied; for cryptocurrencies this is not possible. The results are arbitrary and do not increase proximity to facts or evidence. The additional criterion that the ECJ introduced – the specific circumstances of the case – is one main reason for the legal uncertainty that currently prevails in European law. New situations and groups of cases will appear, but the basic problem remains the same: financial damage suffered by the individual victim cannot be located. Adding the criterion of specific circumstances neither increases legal certainty nor establishes proximity to facts and evidence. The case-by-case analysis that dominates European case law seems to be a dead end.

118

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See H. MEYLE (note 16), p. 68, 285 et seq.

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Rethinking the Place of Damage Rule In Private International Law B.

Applicable Law

Much less attention is paid to the parallel problems that exist in the context of applicable law. 1.

Country in which the Damage Occurs

According to Article 4(1) of the Rome II Regulation, the principal connecting factor to determine applicable law is the country in which the damage occurs, the event giving rise to the damage being explicitly excluded. Therefore, the considerations above regarding the place where the damage occurs can principally be transferred, with some particularities. Compared to jurisdiction, on the one hand, less precision is necessary: it will suffice to attribute the damage to a certain country rather to pinpoint a certain location. On the other hand, more precision is needed because the damage should be attributed only to one country. Otherwise, when several countries are affected, according to Article 4(1) of the Rome II Regulation, multiple laws might be applied. Such a depeçage is to be avoided. 2.

Specific Circumstances

Contrary to the non-contractual jurisdiction rule, Article 4(3)1 of the Rome II Regulation explicitly allows for a deviation from the country of the damage rule, but only “(w)here it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2 […].” Considering the ECJ’s approach for determining jurisdiction, national courts would probably not hesitate to apply Article 4(3)1 of the Rome II Regulation and refer to the specific circumstances of the case; however, both the wording and the historical analysis of the rule demonstrate that the provision is to be narrowly interpreted.119 Legal certainty issues aside, it is not a solution to apply Article 4(3)1 of the Rome II Regulation extensively to the whole family of pure economic loss cases. C.

Conclusion

An abstract analysis of the place where the damage occurs in non-contractual claims elucidates the many weaknesses of the ECJ case-law: financial loss cannot be located. Referring to affected bank accounts is not a sustainable solution because it leads to arbitrary results and increases the risk of abuse. Adding a criterion of specific circumstances of the case, as the ECJ’s strategy demonstrates, is detrimental for predictability and legal certainty. These findings are valid both with respect to jurisdiction and applicable law. The event giving rise to the damage as it is contained in the special jurisdictional rule is not a convincing connecting 119

Ibidem, p. 136 et seq., 141.

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Hannes Meyle factor for pure economic loss cases either: communicative acts or preparatory actions can be carried out from anywhere in the world. Therefore, provided that such places can be determined, they are often arbitrary and do not have a connection to the tortious act. In sum, it is time to rethink altogether the connecting factor for pure economic loss cases and discuss alternatives.

VI. Guidelines for Approaches de lege ferenda

120

The diversity of pure economic loss constellations suggests that it is not promising to search for a connecting factor which is adapted to each tortious act. Nevertheless, a fundamental distinction can be made between pure economic loss cases involving wrongful information in business relations between specific parties, on the one hand, and pure economic loss cases where the tortious act affects a whole market, on the other. The reflections above show that emphasis should be on the central purposes of private international law: clarity and predictability, in other words legal certainty. A.

Tortious Act that Affects a Specific Market

ECJ examples for tortious acts that affect a market are antitrust cases such as CDC, flyLAL and Tibor-Trans; prospectus liability cases such as Kolassa and Löber; manufacturer’s liability claims as in the VKI case, and cases concerning investment information obligations on a primary market as in the VEB case. More groups of cases, such as, for example, liability of rating agencies,121 or liability for providing financial services without necessary authorisation,122 can be identified when analysing national case-law. If a connecting factor reflected whether a tortfeasor had directed actions toward a specific market, this would strengthen predictability of private international law. In addition, both from a jurisdictional and an applicable law perspective, a market approach would ensure a minimum level of proximity. 1.

Jurisdiction

The ECJ has already considered the affected market as criteria in some cases, for example in flyLAL and Tibor-Trans. Leaving aside the question of whether this is

120 For concrete suggestions for amending the Brussels I and Rome II Regulation, see H. MEYLE (note 16), p. 332 et seq. 121 Ibidem, p. 224 et seq. 122 Ibidem, p. 206 et seq.

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Rethinking the Place of Damage Rule In Private International Law compatible with Article 7(2) of the Brussels I Regulation de lege lata,123 such an approach is, in any case, to be supported de lege ferenda, for several reasons. Where a tortious act has an impact on a certain market, a forum within the same market corresponds to the expectations of the claimant and the victim. Substantive law approaches also provide a starting point to narrow down the market: – antitrust law protects the market, and defining a market is necessary in order to assess liability;124 – where financial instruments require a prospectus, this prospectus must be published, and possibly notified in the targeted countries;125 – where regulatory information obligations have been violated, it is crucial to know the countries in which an issuer had to fulfil such obligations.126 – in manufacturer’s liability cases, the country to which a manufacturer actively distributes its products can be determined.127 However, if the special jurisdictional rule in such cases were limited to a market approach, two problems would remain: first, as typically the market extends beyond national borders, there would still be an excessive number of competent courts without sufficient justification. The possibilities for forum shopping could be endless. Second, a mere market approach does not allow for any conclusions regarding internal competence. In order to limit the number of competent courts, further criteria are necessary. As the foregoing analysis demonstrates, the location where decisions have been taken or communication has been made is not convincing; neither is the place of account holding bank branches. This leaves the domicile or registered seat of the injured party as the connecting factor. On its own, this connecting factor bears the risk of an unjustified forum actoris. However, together with the market criterion, it is a useful additional connecting factor to limit jurisdiction and pinpoint it to one particular location. Since there are explicit rules and existing case-law regarding the domicile and registered seat, this connecting factor is manageable. For a tortfeasor that directs his actions toward a certain market, it does not matter before which court of that market he is sued. By contrast, where the domicile of the injured party is not within an affected market, it is not foreseeable for the tortfeasor to be sued at the domicile of the claimant. In such cases, it would be justified for the victim to be referred to the general jurisdictional rule and to bring an action before the domicile of the tortfeasor. The results achieved with this approach are in many cases similar to the result achieved by the ECJ. The difference is that the solution proposed here is The main argument for this view is that Art. 7(2) Brussels I Regulation points to a place of the damage for an individual victim, and not a certain area. Therefore, a whole market can hardly be a place in that sense. Besides, the affected market regularly extends beyond national borders. See in detail H. MEYLE (note 16), p. 181 et seq. 124 Ibidem, p. 269 with further references. 125 Ibidem, p. 180 et seq., 194 et seq. 126 See for example the VEB case. 127 With this argument, in the VKI case, this could have easily been affirmed for Austria, against the background of official dealerships 123

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Hannes Meyle easier to apply, it does not need to be harmonised with the notion of the place of the damage, and it is possible to transfer it to other constellations. 2.

Applicable Law

These considerations can be transferred to the applicable law: the combination of an affected market and the seat or domicile of the victim allows victims to apply the law of their domicile, provided that it is located within the affected market. For any kind of commercial activity, it can be expected that the tortfeasor will consider the law of the countries where he wants to market its products. When there are regulatory requirements, this would have the additional benefit that regulatory law and civil liability law are parallel. However, subsidiary rules are needed for cases where the victims’ domicile is not located within the affected market. For the sake of simplicity, in such cases the law of the court which is seized should be applied. Consequently, jurisdiction and applicable law can be synchronised as much as possible in order to simplify the work of the court. 3.

Ideal World – Collective Redress Mechanisms

The proposals above refer to single claims, in line with the system of the Brussels I Regulation. However, tortious acts affecting a whole market typically harm a great number of people – be it in antitrust cases such as CDC, flyLAL and Tibor-Trans; prospectus liability cases such as Kolassa or Löber; manufacturer’s liability cases such as VKI, or in cases of liability for public statements, such as VEB. Especially VKI and VEB illustrate how difficult it is to harmonise the Brussels I Regulation with the interests of a collective group of customers: the VKI case demonstrates the problem of mass litigation that overloads the courts all over Europe. The VEB case demonstrates difficulties in argumentation when the interpretation of the special jurisdictional rule – designed for individual claims – is intertwined with a collective action. In all of these cases, the most efficient solution would be a Europewide collective redress mechanism including jurisdiction and enforcement rules specifically designed for collective actions. In such cases, protecting the victims of mass torts on a procedural level would be justified and even desirable. B.

Wrongful Information and Other Pure Economic Loss Cases

Admittedly, a market approach cannot be the only solution for pure economic loss cases because it disregards a large group of other cases. Where the tortious act directly affects an individual or a defined number of individuals, it is not helpful to define a market. Examples from ECJ case-law are DFDS Torline or Universal Music. National case-law offers many more examples: cases of wrongful infor-

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Rethinking the Place of Damage Rule In Private International Law mation,128 embezzlement,129 inducement to breach of contract,130 breach of jurisdiction agreements,131 conspiracy cases132 and others.133 1.

Jurisdiction

With regard to wrongful information and other such cases, and against the background of the findings above, it is worth recalling consideration 15 of the Brussels I Regulation: “(15) The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subjectmatter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.” Hence, exceptions from the basic actor sequitur forum rei principle must be justified for procedural reasons. Outside consumer contract relationships, jurisdictional rules are not designed to protect the victim, but rather to provide a neutral forum. A connecting factor that fulfils these criteria is not conceivable in pure economic loss cases, except with market related torts, as described above. Therefore, the only remaining solution, which is consistent with the current system of the Brussels I Regulation, is radical: to exclude the remaining pure economic loss cases from the special jurisdictional rule in Article 7(2) of the Brussels I Regulation. The advantages of such a change would be legal certainty and predictability. Further preliminary rulings on the localisation of pure economic loss cases – which only continue the list of bogus criteria or consolidate the unpredictable caseby-case analysis – are avoided. Admittedly, this means that the claimant loses a forum that might be justified in some cases. However, against the background of its legal uncertainty, this is not a great loss.

H. MEYLE (note 16), p. 73 et seq. Ibidem, p. 147 et seq. 130 Ibidem, p. 299 et seq. 131 Ibidem, p. 301 et seq. 132 Ibidem, p. 303 et seq. 133 Ibidem, p. 306 et seq. with further examples. 128 129

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Applicable Law

With regard to the applicable law, choosing the domicile of the defendant is less convincing because it entails a risk of manipulation: by choosing the domicile or seat, potential tortfeasors might have an influence on the applicable tort law. Again, a radical solution is worth discussing: applying the victim’s home law. Referring to the domicile of the victim brings legal certainty as well as other advantages. Firstly, it can be argued that a tort related to wrongful information has the closest connection to the law of the state in which the financial interests are ultimately affected. Secondly, when choosing the domicile or seat of the victim, there is no danger of manipulation. Such an approach would also mean that the subjective economic rights of all persons domiciled within the same State are treated in the same way. Thirdly, it would have immense practical advantages to apply the local laws at the domicile of the victim: the victim could instruct a local lawyer in order to assess the legal situation in advance, without language barriers and additional cost. On this basis, it could be examined whether the effort of legal proceedings in another country is worthwhile. If the chances of success are poor, proceedings might be avoided; if the chances are good, the decision-making process would be accelerated. Most importantly, where the applicable law is not in dispute, out-of-court dispute settlement is significantly simplified. In addition to the practical advantages for each individual victim, the judicial system would be relieved. Unlike in a jurisdiction where a forum actoris runs against fundamental principles and requires special justification, there are no fundamental principles that stand against this proposal in applicable law rules.

VII. Conclusion The analysis of the ECJ case-law exemplifies the legal uncertainty that currently prevails in cross-border pure economic loss claims. The underlying problem is that the current connecting factors for non-contractual claims are not suitable for pure economic loss cases. Neither the event giving rise to the damage nor the damage itself can be localised in a reliable manner. As no place imposes itself for procedural reasons, the focus for jurisdiction should be on predictability. Where a tortious act affects a certain market, a market rule in connection with the domicile of the injured party fulfils this requirement. Where a tortious act is committed toward a specific person, it is suggested that the special jurisdictional rule should not apply and that a forum at the defendant’s domicile or registered seat should be open. Where possible, courts should be able to apply their lex fori. For tortious acts affecting a market, this can be achieved by a market rule as well. For other torts, practical reasons speak in favour of applying the law of the country where the victim is domiciled. These suggestions are not compatible with the current private international law rules. However, given that pure economic loss cases have, for a long time, caused problems, and that ECJ case-law is at a dead end in this context, it is time

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Rethinking the Place of Damage Rule In Private International Law to rethink the place of the damage rule and to discuss revisions of the Brussels I and Rome II Regulations for pure economic loss cases.

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FROM MIRAGES TO ASPIRATIONS – THE PERIPHERY OF “MATTERS RELATING TO A CONTRACT” IN REGULATION (EU) NO 1215/2012 Michiel POESEN*

I.

II.

III.

IV.

V.

Introduction – Context, Problem, Argument A. Context B. Problem C. Argument Competition between a Broad and Narrow Delineation A. Unpacking the Process of Characterisation B. The “Natural Forum” and “Ring-fencing” Theories C. Effect on the Characterisation of Peripheral Claims 1. Third Parties 2. Concurrent Liabilities D. Why Theory Matters Reading Back the Underlying Assumptions A. Aspiration Meets Regulatory Design – The Natural Forum Theory 1. Proximity 2. Mechanisms to Coordinate Concurrent Jurisdiction 3. The Slippery Slope Effect 4. Misguided Aspirations, Problematic Fall-out B. Idealism’s Pitfall – The Ring-fencing Theory C. How to Relax the Deadlock Suggesting an Alternative Way Forward A. The Contract Jurisdiction as a Counterweight to the Default Rule B. Consequences for the Characterisation of Claims in the Periphery of Contract 1. Third Parties 2. Concurrent Liabilities C. Interim Conclusion Conclusion

* PhD; Institute of Private International Law, KU Leuven, Belgium; [email protected]. This article builds on a paper presented at the Journal of Private International Law Conference held at the LMU in Munich, Germany in September 2019. It is part of a doctoral dissertation on the topic of jurisdiction over contracts more broadly. I would like to thank everyone who gave feedback on this paper for sharing their insights. Any errors remain my own.

Yearbook of Private International Law, Volume 22 (2020/2021), pp. 511-545 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Michiel Poesen

I.

Introduction – Context, Problem, Argument

A.

Context

For long, private law has been struggling to distinguish contract from tort, delict, or other categories of non-contractual obligations. Unsurprisingly, the EU law of conflicts of jurisdiction also grapples with delineating contractual and noncontractual relationships. This article tells the complex but fascinating tale of demarcating the periphery of “contract” in Regulation No 1215/2012 (hereinafter “Brussels Ia Regulation” or “the Regulation”).1 The topic is important because it touches upon the balance between the interests of the litigants and the efficacy of transnational court proceedings. To grasp the challenge, one must keep in mind the matrix of jurisdictional rules created by the Brussels Ia Regulation that determine which member states’ courts have jurisdiction to settle private disputes. As a general principle, the defendant has a home advantage. Article 4 requires the claimant to commence proceedings in the member state where the defendant is domiciled. This is the “default rule”. Over and above the default rule, Article 7 allows a claimant to pursue an action in another court if disputes relate to certain subject matters. The first two paragraphs of this provision are relevant to the present discussion. Article 7(1) provides a ground of jurisdiction “in matters relating to a contract”, colloquially called “the contract jurisdiction”.2 “In matters relating to a contract”, the court of the “place of performance of the obligation in question” (the forum solutionis contractus or forum contractus) has jurisdiction.3 Article 7(2) is the contract jurisdiction’s pendant: the “tort jurisdiction”. It allocates jurisdiction “in matters relating to tort, delict or quasi-delict” to the court of the “place where the harmful event occurred”, which is both the place where the damage occurred and the place of the event giving rise to the damage.4 Deciding whether the contract or tort jurisdiction applies requires an exercise of “characterisation”, i.e. labelling an action as either a “matter relating to a contract” or a “matter relating to tort, delict, or quasi-delict”. This is where the trouble begins. Characterisation has been a cause of headache for many decades. This should come as no surprise. Delineating the concepts of contract and tort puzzles even the most developed legal systems. Despite the clear difficulty, the Regulation does not spell out how the exercise of characterisation should be conducted. The question has been left to be hammered out by the Court of Justice 1 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L351/1, 20.12.2012. 2 Art 7(1) Brussels Ia. 3 Which is objectively defined in Art 7(1)(b) for sale-of-goods and provision-ofservices contracts. For other contracts, jurisdiction is with the court of the place of performance of the obligation on which a claim is based: ECJ, 6 October 1976, De Bloos v Bouyer, ECLI:EU:C:1976:134, para. 13; ECJ, 6 October 1976, Tessili v Dunlop, ECLI:EU:C:1976:133, para. 13. 4 ECJ, 30 November 1976, Bier v Mines de potasse, ECLI:EU:C:1976:166, para. 19.

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 of the European Union (“CJEU”) ever since the efforts of the European Community, as it then was, to harmonise the law of jurisdiction began in the late 1960’s. B.

Problem

The first series of CJEU decisions clarified that “contract” and “tort” are to be understood autonomously from national law in order to promote the uniform application of the Regulation throughout the EU. The Kalfelis decision provided that “the concept of «matters relating to tort, delict and quasi-delict» covers all actions which seek to establish the liability of a defendant and which are not related to a «contract»”.5 Hence, the tort jurisdiction’s scope of applicability is residual to that of the contract jurisdiction. Nonetheless, the contract and tort jurisdictions do not dovetail: actions that are not “matters relating to a contract” but do not seek to “establish the liability of the defendant” are subject to neither the contract nor the tort jurisdiction.6 In turn, the Handte decision provided that the concept of “matters relating to a contract” “is not to be understood as covering a situation in which there is no obligation freely assumed by one party towards another”.7 A subsequent series of decisions then fleshed out when an obligation can be considered as freely assumed.8 Overall, what crystallised here was a hardcore definition of contract: an undertaking freely assumed by one person towards another.9 The 2010’s witnessed the emergence of a second series of decisions that highlighted a novel issue in delineating the contract jurisdiction’s scope of applicability. The decisions raised the question how a claim should be linked to (or “related to”) a contract to be characterised as a “matter relating to a contract”.10 This question arose in the context where claims are in the “periphery”11 of a contract, ECJ, 27 September 1988, Kalfelis v Bankhaus Schröder, Hengst and Co. aors, ECLI:EU:C:1988:459, para. 19 (emphasis added). 6 T. LUTZI, Die Qualifikation des Anspruchs auf Zahlung einer Privatkopievergütung und das Merkmal der “Schadenshaftung” im Rahmen des Art. 5 Nr. 3 EuGVVO 2001 (Art. 7 Abs. 2 EuGVVO), IPRax 2016, p. 552-553. 7 ECJ, 27 June 1992, Handte v TMCS, ECLI:EU:C:1992:268, para. 15. 8 ECJ, 8 May 2019, Kerr v Postnov aor, ECLI:EU:C:2019:376, para. 30; ECJ, 14 July 2016, Granarolo v Ambrosi, ECLI:EU:C:2016:559, paras 26-27; ECJ, 14 March 2013, Česká spořitelna v Feichter, ECLI:EU:C:2013:165, paras 48-51; ECJ, 20 January 2005, Engler v Janus Versand GmbH, ECLI:EU:C:2005:33, para. 50; ECJ, 22 March 1983, Martin Peters v Zuid Nederlandse Aannemers Vereniging, ECLI:EU:C:1983:87, para. 15. 9 See M. MCPARLAND, The Rome I Regulation on the Law Applicable to Contractual Obligations, Oxford 2015, para. 6.44. On its further development, see T. HARTLEY, Recent Developments under the Brussels I Regulation, I.C.L.Q. 2020, p. 984. 10 A. GALIČ, International Jurisdiction over Individual Contracts of Employment, in G.G. SANDER/ V. TOMLJENOVIĆ/ N. BODIROGA-VUKOBRAT (eds), Transnational, European, and National Labour Relations: Flexicurity and New Economy, Cham 2018, p. 113. 11 A. BRIGGS, The Conflict of Laws, Oxford 2019, p. 71. P. Mankowski speaks of third party relationship in the “sphere”/”surroundings” (Umfeld) of a contract: P. MANKOWSKI, Erfüllungsortsgerichtsstand für Gläubigeranfechtungsklage auf Unwirk5

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Michiel Poesen meaning that they are linked ambivalently to said contract. It emerged in two discrete strands of CJEU cases. The first strand encompasses disputes between litigants who are not privy to a contract, so-called “third parties”.12 As AG Jacobs observed, “[most] legal systems have a rule to the effect that a contract cannot confer rights or impose obligations on persons who are not parties to the contract, except in limited circumstances”.13 In turn, most legal systems admit to varying degrees that a contract’s effects extend beyond the contracting parties.14 The question then is: can disputes concerning a contract’s third party effects be sufficiently linked to a contract to be characterised as “matters relating to a contract”, or should they be confined to the tort jurisdiction or the default rule? The second strand concerns the characterisation of concurrent liabilities. Concurrent liabilities occur when the same wrongful behaviour gives rise to contractual and non-contractual causes of action.15 Such a situation typically involves contracting parties who seek to rely on a non-contractual cause of action.16 It regularly arises under German law and English law, for example.17 Should a claim based on concurrent liabilities be characterised as a “matter relating to a contract” or as a “matter relating to tort”? Unfortunately, the case law of the CJEU has been slow to develop robust principles to address these questions, causing scholarship and national courts to get lost in the nitty-gritty of delineating the contract jurisdiction’s scope of applicability.18 Moreover, the jurisprudential evolution has not been analysed systematically in literature. This article will therefore map, contextualise, and evaluate the linkage samerklärung einer für eine vertragliche Forderung nachteiligen Handlung (“Feniks”), Entscheidungen zum Wirtschaftsrecht (EWiR) 2018, para. 3.3. 12 S. LAVAL, Third Party and Contract in the Conflict of Laws, this Yearbook 2016/17, p. 522; E. LEIN, The New Rome I/Rome II/Brussels I Synergy, this Yearbook 2008, p. 177. 13

Opinion of AG Jacobs, 8 April 1992, Handte v TMCS, ECLI:EU:C:1992:176,

para. 17. I. PRETELLI, Droit international privé et situations juridiques trilatérales, in F. GUILLAUME/ I. PRETELLI (eds), Les nouveautés en matière de faillite transfrontalière et Les banques et les assurances face aux tiers, Zürich 2016, p. 88; H. MUIR WATT, Governing Networks: A Global Challenge for Private International Law, Maastricht Journal of European and Comparative Law (MaastrichtJEur&CompL) 2015, p. 357-358. 14

Opinion of AG Saugmandsgaard Øe, 24 January 2019, Bosworth aor v Arcado aors, ECLI:EU:C:2019:65, para. 68. 16 L. COLLINS, Interaction between Contract and Tort in the Conflict of Laws, I.C.L.Q. 1967, p. 105-106. See M.J. WHINCOP/ M. KEYES, The Market Tort in Private International Law, Northwestern Journal of International Law and Business 1999, p. 215216. 17 R. DE GRAAFF, Concurrent Claims in Contract and Tort: A Comparative Perspective, European Review of Private Law 2017, p. 701. 18 A. BRIGGS, The Conflict of Laws, Oxford 2019, p. 72; Z. TANG, Cross-Border Contract Litigation in the EU, in P. BEAUMONT/ M. DANOV/ K. TRIMMINGS/ B. YÜKSEL (eds), Cross-Border Litigation in Europe, Oxford 2017, p. 631-632; J. VON HEIN/ H. DITTMERS, Germany, in P. BEAUMONT et al. (ibid.), p. 146. A recent preliminary reference to the CJEU by the cour d'appel of Brussels further illustrates the topicality of the issue: AB, AB-CD v Z EF, C-265/21, OJ L C 263/10, 5 July 2021. 15

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 that is required between a claim and a contract for the contract jurisdiction to apply. C.

Argument

My proposition is that the difficulty we face in delineating the contractual periphery is to do with conflicting ideals about the contract jurisdiction’s role in the Brussels Ia Regulation. I will conceptualise these ideals below in order to make the issue we face more palpable (II.). Then, I will unpack the assumptions underlying these ideals and question their fit with the regulatory design of the Brussels Ia Regulation (III.). With “regulatory design”, I mean the premises and limitations that are embedded in the Regulation’s functioning. In turn, I will expound a proposal that mitigates the conflicting ideals about the contract jurisdiction’s role, and illustrate how this novel proposition offers a way forward (IV.). It is hoped that, overall, this analysis will inform future decision-making by offering an account of the tension in the process of characterising claims that arise in the periphery of contracts.

II.

Competition between a Broad and Narrow Delineation

Delineating the periphery of “matters relating to a contract” puts the process of characterisation through its paces. In this section, I will first unpack this process in order to gain a clearer understanding of the different approaches (A.). Then, I will identify two conflicting viewpoints on the contract jurisdiction’s role in the Brussels Ia Regulation (B.). I will demonstrate how these viewpoints were translated into diverging approaches to characterising claims that arise in the contractual periphery (C.). A.

Unpacking the Process of Characterisation

As characterisation is often considered an opaque process, it is useful to unpack it according to the following scheme:19

19 The scheme represents a “Toulmin model of argument”, see S.E. TOULMIN, The Uses of Argument, Cambridge 2003.

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The “claim” – as formulated by the claimant – encompasses multiple elements, such as the legal basis pleaded by the claimant, the dispute out of which the claim arose, and the relationship between the litigants.20 But how does a court go from a “claim” to a “characterisation”? For that purpose, it relies on a “test for characterisation”. A “test for characterisation” elevates an element of a claim as decisive for characterisation. In the case of jurisdiction over “matters relating to a contract”, a test then provides what linkage this element should have to a contract for the contract jurisdiction to apply.21 More fundamentally, a “test for characterisation” expresses a view on the purpose of the contract jurisdiction, which is called a “theory”.22 This scheme will be helpful in understanding why delineating the periphery of “matters relating to a contract” is so difficult. It provides a structure for reading the relevant judgments and other secondary sources, and discovering patterns that are engrained in them. B.

The “Natural Forum” and “Ring-fencing” Theories

There are two competing theories of contract jurisdiction. While these theories lead to identical characterisations of those claims that are unequivocally linked to contract,23 they inform different outcomes when applied to claims that are in the periphery of a contract. One theory can be characterised as giving a broad role to 20 J. HILL/ M. NÍ SHÚILLEABHÁIN, Clarkson & Hill’s Conflict of Laws, Oxford 2016; M. MINOIS, Recherche sur la qualification en droit international privé des obligations. Pour une unité de la qualification, Revue internationale de droit d’Assas 2018, p. 231; C. FORSYTH, Characterisation Revisited: An Essay in the Theory and Practice of the English Conflict of Laws, Law Quarterly Review 1998, p. 141-161. 21 M. POESEN, Concurrent Liabilities and Jurisdiction over Individual Contracts of Employment under the Brussels Ia Regulation, Journal of Private International Law (JPrivIntlL) 2020, p. 322-323. 22 H. MUIR WATT, Theorizing Private International Law, in A. ORFORD/ F. HOFFMANN (eds), The Oxford Handbook of the Theory of International Law, Oxford 2016, p. 867; A. BRYMAN, Social Research Methods, Oxford 2004, p. 5; ibid. 23 For example claims aimed at obtaining damages for breach of contract or aimed at having a contract declared invalid.

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 the contract jurisdiction, whereas the other comparatively narrows it down. According to the first view, the court of the contractual place of performance is a natural forum for all disputes with a linkage to contract.24 This is what I will call the “Natural Forum Theory”. Overall, this theory assumes that the general contract jurisdiction should encompass all claims with a linkage to a contract. This assumption is based on a two-pronged view on the general contract jurisdiction’s function within the Brussels Ia Regulation. Firstly, the court of the contractual place of performance (i.e. the competent court under the general contract jurisdiction) is most appropriate to judge claims related to contract.25 The court’s appropriateness follows from its close geographical link with the contract, which places it in the best position to gather and understand the relevant evidence.26 Secondly, the Natural Forum Theory rests on the assumption that the contract jurisdiction should absorb all controversies related to contract in the contractual forum for the sake of the sound administration of justice. For such an absorption reduces the risk of conflicting judgments relating to the same contract.27 By contrast, another theory devises a narrower role for the contract jurisdiction.28 This approach to construing the general contract jurisdiction’s periphery is the “Ring-fencing Theory”. It assumes that the general contract jurisdiction’s scope of applicability should be strictly delineated (or “ring-fenced”) for two reasons. Firstly, a narrow, easily applicable delineation will allow “a normally wellinformed defendant reasonably to predict before which courts, other than those of

A. BRIGGS, Civil Jurisdiction and Judgments, Oxford/New York 2015, para. 2.184; J.S. QUEGUINER, Qualification et détermination de la compétence spéciale. L’exemple de la matière contractuelle, doctoral thesis, Université Jean Moulin (Lyon 3) 2012, para. 476. 25 Recital 16 Brussels Ia; ECJ, 4 October 2018, Feniks v Azteca, ECLI:EU:C:2018:805, para. 45; Opinion of AG Tanchev, 3 April 2019, Reitbauer aors v Enrico Casamassima, ECLI:EU:C:2019:285, para. 96; Opinion of AG Bot, 4 July 2018, Hellenische Republik v Leo Kuhn, ECLI:EU:C:2018:528, para. 82; A. DICKINSON, Legal Certainty and the Brussels Convention - Too Much of a Good Thing?, in P. DE VAREILLESSOMMIÈRES (ed), Forum Shopping in the European Judicial Area, Oxford 2007, fn 14; T. LUTZI, “Feniks” aus der Asche: internationale Zuständigkeit für die Actio pauliana nach der EuGVVO, Recht der Internationalen Wirtschaft (RIW) 2019, p. 256; J. HALPERN, “Exorbitant Jurisdiction” and the Brussels Convention: Toward a Theory of Restraint, Yale Journal of International Law 1983, p. 6. 26 ECJ, 27 September 2001, Besix v WABAG, ECLI:EU:C:2002:99, para. 31 (emphasis added). 27 Ibid., para. 27: “… it is essential to avoid, so far as possible, creating a situation in which a number of courts have jurisdiction in respect of one and the same contract, in order to preclude the risk of irreconcilable decisions and to facilitate the recognition and enforcement of judgments in States other than those in which they were delivered.” See i.a. ECJ, Feniks (note 25), para. 44; ECJ, 15 June 2017, Kareda v Benkö, ECLI:EU:C:2017:472, para. 31; A. BRIGGS, The Brussels Convention, Yearbook of European Law 1988, p. 276. 28 L. AVOUT et al., Droit international privé de l’Union Européenne (2018), Clunet 2019, p. 1439-1440; S. CLAVEL/ F. JAULT-SESEKE, Droit international privé, Recueil Dalloz 2019, p. 1016. 24

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Michiel Poesen the State in which he is domiciled, he may be sued”.29 Secondly, the contract jurisdiction’s scope of applicability should be interpreted strictly because it is an exception to the “default rule” of jurisdiction featuring in the Regulation, which accords jurisdiction to the courts of the defendant’s domicile.30 Although space is too limited to expound this point, the theories identified above can be read as expressing different views on the problem the contract jurisdiction addresses. According to the Natural Forum Theory, its main aim is to coordinate transnational judicial process by allocating jurisdiction by standards of appropriateness of the forum and expedience of trial.31 The Ring-fencing Theory places the emphasis on arbitrating private expectations by reigning in the forum contractus’ reach, thus elevating the default rule of jurisdiction to a “quasiconstitutional status”.32 By now, it has become clear that the Natural Forum Theory and the Ringfencing Theory represent mutually exclusive ideals about the role of the contract jurisdiction. This tension results from the fact that the theories’ are construed with similar tools: teleological and systematic principles of interpretation. These principles are on equal footing, in that they are all rooted in either the legislature’s motivation to enact the contract jurisdictions (proximity, legal certainty) or the broader aim of the Brussels Ia Regulation (protecting the defendant, avoiding concurrent proceedings). Objectively, the competing theories therefore have an equal appeal, because they both claim to strike an acceptable balance between these principles of interpretation.33 However, due to a lack of hierarchy among the interpretational principles, it is impossible to prioritise one theory over the other.34 As a result, each theory can refute the other theory’s viewpoint in a dialectic way.35 For example, Recital 15 Brussels Ia; ECJ, Handte (note 7), para. 19; Z. TANG, The Interrelationship of European Jurisdiction and Choice of Law in Contract, JPrivIntlL 2008, p. 39. 30 H. GAUDEMET-TALLON, ECJ, 17 June 1992, Jakob Handte v TMCS, ECLI:EU:C:1992:268 (case note), Rev. crit. dr. int. pr. 1992, p. 735. 31 I. PRETELLI, La bonne foi dans la pondération de la proximité et la fonction résiduelle du for spécial en “matière contractuelle” dans le Règlement Bruxelles I – à propos de l’arrêt Feniks, Rev. crit. dr. int. pr. 2020, para. containing fn 71; A. MILLS, The Identities of Private International Law: Lessons from the U.S. and EU Revolutions, Duke Journal of Comparative and International Law 2012, p. 464. 32 R. MICHAELS, Two Paradigms of Jurisdiction, Michigan Journal of International Law 2006, p. 1021; R. BRAND, Tort Jurisdiction in a Multilateral Convention: The Lessons of the Due Process Clause and the Brussels Convention, Brooklyn Journal of International Law 1998, p. 147. 33 A. TRENT/ J. CHO, Interpretation Strategies: Appropriate Concepts, in P. LEAVY (ed), The Oxford Handbook of Qualitative Research, Oxford 2014, p. 640-641. 34 The choice for one theory over the other may be described the result of “a complex balancing exercise” or simly “looking for answers”: K. LENAERTS/ J.A. GUTIERREZ-FONS, To Say What the Law of the EU Is: Methods of Interpretation and the European Court of Justice, Columbia Journal of European Law 2014, para. 61; A. BRIGGS, Wikingerhof: A View from Oxford (EAPIL, 2020), available at https://eapil.org/2020/12/07/briggs-on-wikingerhof, on 11.1.2021. 35 Structuralist analysis provides the background for this observation: H. MUIR WATT, A Semiotics of Private International Law Argument, this Yearbook 2013, p. 51-70; 29

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 from the viewpoint of the Ring-fencing Theory, the Natural Forum Theory accords too broad a role to the contract jurisdiction. This would run counter to the default rule of Article 4 Brussels Ia, according to the Ring-fencing Theory. Yet a defender of the Natural Forum Theory would retort that it is desirable to avoid having multiple grounds of jurisdiction for disputes relating to the same contract: the contract jurisdiction should amass these disputes.36 In defence, the Ring-fencing Theorist would rephrase her initial argument: it is true that having multiple grounds of jurisdiction is undesirable, but that is why Article 4 Brussels Ia was created; to allow claimants to concentrate their claims in the defendant’s domicile. Therefore, there is no need to give an excessive scope of applicability to the contract jurisdiction.37 In turn, the Natural Forum Theorist would argue that the legislature intended for the contract jurisdiction to create the most appropriate forum for disputes that are related to a contract, over and above the default rule. Consequently, she would conclude that there is nothing excessive about her perception of the contract jurisdiction as a broad jurisdiction rule that attracts claims arising in the periphery of a contract.38 This brief simulated interaction between the Natural Forum Theory and the Ring-fencing Theory demonstrates that both theories are capable of refuting each other’s competing positions. Below, I will demonstrate that these theories informed competing tests for characterisation that translate the theories’ assumptions into practice. C

Effect on the Characterisation of Peripheral Claims

The tension in the characterisation of claims arising in a contract’s periphery mirrors the tension between the Natural Forum and Ring-fencing Theories. Below, I will trace the competing tests for characterisation that have been applied in the case law of the CJEU and link them to their theoretical underpinning. 1.

Third Parties

Whether disputes between third parties are “matters relating to a contract” depends on the theory one adheres to. The case law of the CJEU traditionally restricted the applicability of the contract jurisdiction to proceedings between parties who were

D. KENNEDY, A Semiotics of Legal Argument, Collected Courses of the Academy of European Law 1994, p. 327 et seq. 36 B. HAFTEL, Here Lies the Late Brogsitter Ruling (EAPIL, 2020), available at https://eapil.org/2020/12/14/here-lies-the-late-brogsitter-ruling, on 12.1.2021. 37 Opinion of AG Saugmandsgaard Øe, Bosworth (note 15), para. 85; A. DICKINSON, Restitution and the Conflict of Laws in the House of Lords, Restitution Law Review 1998, p. 114. 38 I. PRETELLI (note 31), final paragraph.

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Michiel Poesen either privy to a concluded contract, or privy to a unilateral promise by one party towards the other.39 This was due to the use of what I will dub the “Privity Test”: “an action […] does not constitute a «matter relating to a contract» except where there is an agreement freely entered into, not as between the plaintiff and a third party or between the defendant and a third party, but between the plaintiff and the defendant […]”40 The application of the Privity Test was informed by the Ring-fencing Theory, since it was deemed to give effect to the principles of strict interpretation of the contract jurisdiction as well as legal certainty.41 By contrast, the Natural Forum Theory informed a broader approach that extends the contract jurisdiction’s scope of applicability to proceedings between parties who are not privy to a freely assumed obligation. For the contractual forum was deemed to be most suitably positioned to adjudicate on claims that are based on contract.42 The test applied in light of the Natural Forum Theory was the “Cause of Action Test”, according to which the nature of a claim’s legal basis (and not the existence of privity to contract between the litigants) is decisive for the contractual nature of a claim. Hence, if a claim’s legal basis is a freely assumed, contractual obligation, then the contract jurisdiction applies.43 Below, I will discuss a selection of decisions of the CJEU with two aims in mind. Firstly, to illustrate how the tests for characterisation operate in concrete cases. Secondly, to demonstrate that the case law is unable to prefer consistently one theory to the other, despite the fact that this choice is not trivial because entails markedly different characterisations in similar situations. Two cases illustrate the Privity Test. The first one is Handte v TMCS.44 Handte, the final purchaser of a defective good (incorporated in Germany) sued TMCS (the French manufacturer) instead of the intermediary seller of the good. The cause of action relied on was the action directe provided in French law: an implicit assignment to the sub-buyer of the contractual warranties owned by the

The contract may be concluded by an agent or representative (ECJ, 5 February 2004, Frahuil v Assitalia, ECLI:EU:C:2004:77, para. 25) or may be concluded tacitly (ECJ, Granarolo (note 8), paras 24-26). 40 Opinion of AG Cosmas, 5 February 1998, Réunion européenne v Spliethoff’s Bevrachtingskantoor BV aors, ECLI:EU:C:1998:45, para. 24. Also T. HARTLEY (note 9), p. 980. See also ECJ, 1 October 2002, VKI v Henkel, ECLI:EU:C:2002:555, para. 39; A. BRIGGS (note 24), p. 212; M. LEHMANN, Art 7, in A. DICKINSON/ E. LEIN (eds), The Brussels I Regulation Recast, Oxford 2015, para. 4.37; H. GAUDEMET-TALLON, ECJ, 27 October 1998, Réunion Européenne SA v Spliethoff’s Bevrachtingskantoor BV aor, ECLI:EU:C:1998:50 (case note), Rev. crit. dr. int. pr. 1999, p. 336. 41 ECJ, Handte (note 7), para. 19; P. MANKOWSKI, Art. 7, in U. MAGNUS/ P. MANKOWSKI (eds), Brussels Ibis Regulation, Munich 2016, para. 43. 42 ECJ, Feniks (note 25), para. 45; ECJ, Kareda (note 27), para. 31. 43 ECJ, Feniks (note 25), para. 39; ECJ, Kareda (note 27), paras 29-30. 44 (Note 7). 39

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 manufacturer to the intermediary seller.45 The CJEU held that the final buyer could not rely on the contract jurisdiction, since the manufacturer did not freely assume obligations toward the final buyer and hence could not reasonably foresee that the contract jurisdiction would be applicable.46 Consequently, claims by a member of a chain of purchase contracts against another member who is further upstream the chain are not in the realm of the contract jurisdiction.47 Although the Handte ruling – surprisingly – is silent on this point, literature acknowledged that as a result, the action directe is to be seen as a matter relating to tort.48 The second decision applied the Privity Test in a watered-down form. In Ceska Sporitelna v Feichter, Mr Feichter issued a blank promissory note in favour of Česká spořitelna in which he committed to cover the debts of the Feichter Company.49 Together with the note, he made a contract with Česká spořitelna that specified how the blank note had to be filled out, specifying the amount of the note, the date payable and the place of payment.50 The Court held that Česká spořitelna’s claim for payment against Mr Feichter was a contractual matter, since Mr Feichter freely assumed the obligation to cover the Feichter Company’s debts.51 Consequently, Mr Feichter and Česká spořitelna were privy to an obligation voluntarily assumed by the former towards the latter.52 The ruling took a more relaxed approach to the privity test, as it recognised that the contract jurisdiction also applied to disputes between parties who are only privy to a unilaterally assumed obligation, and not to a fully-fledged contract. Nonetheless, it was firmly rooted in the Ring-fencing Theory’s aim to demarcate strictly the contract jurisdiction’s scope of applicability.53 (Note 13), para. 33; M.E. STORME, A Civilian Perspective on Network Contracts and Privity, George Washington Law Review 2017, p. 1762. 46 (Note 7), paras 15-16, 18-19. Cf Antwerp commercial court (rechtbank van koophandel), Hasselt division, judgment of 8 October 2014, Rechtspraak Antwerpen Brussel Gent (RABG) 2014, 897; B. VOLDERS, De Rechtstreekse Vordering in Het Internationaal Privaatrecht, RABG 2015, paras 4-5. 47 For recent applications: Iveco SpA & Anor v Magna Electronics SRL [2015] EWHC 2887, paras 24-25; Impala Warehousing and Logistics (Shanghai) Co. Ltd v Wanxiang Resources (Singapore) Pte. Ltd [2015] EWHC 811 (Comm), paras 74-75. 48 J. BAUERREIS, Le rétablissement de l’équilibre pécuniaire entre les maillons extrêmes d’une chaîne de contrats: l’action directe contractuelle exercée par le sousacquéreur a l’encontre du vendeur initial de la chose non-conforme, Rev. crit. dr. int. pr. 2000, p. 343; H. GAUDEMET-TALLON (note 31), p. 737. 49 (Note 8). 50 Ibid., paras 11-12. 51 Ibid., paras 48-51. See also G. MAHER, Unilateral Obligations and International Private Law, Juridical Review 2002, p. 322. 52 A similar conclusion was reached in ECJ, Engler (note 8), paras 51-56, which spoke to b2c price notifications as a unilateral obligation assumed by a company towards an addressee-consumer. 53 ECJ, Česká spořitelna (note 8), para. 46, referring i.a. to ECJ, 27 October 1998, Réunion européenne, ECLI:EU:C:1998:509 which in turn cited ECJ, Handte (note 7); Opinion of AG Sharpston, Česká spořitelna v Feichter, ECLI:EU:C:2012:586, para. 44. 45

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Michiel Poesen Going forward, two more recent cases illustrate the Cause of Action Test. The first decision is Kareda v Benkö.54 Mr Kareda, an Austrian resident, brought a recourse action against Ms Benkö, an Estonian resident, who was jointly and severely liable together with Mr Kareda to pay instalments to a bank under a loan contract. Mr Kareda, having paid all instalments, sued Ms Benkö to obtain reimbursement. Since Mr Kareda’s claim relied on Ms Benkö’s contractual obligation to pay instalments to the bank, the Court held that the recourse action’s legal basis was a matter relating to a contract.55 Consequently, the first debtor was allowed to sue the second in the place of performance of the loan contract (Austria), being the place where the bank who provided the loan was incorporated.56 The ruling was informed by the natural forum theory’s aim of concentrating jurisdiction in the contractual forum.57 The second illustration is Feniks v Azteca.58 Feniks was a Polish investor who had contracted Coliseum, another Polish company, to perform construction works. When Coliseum failed to fulfil its debts towards it sub-contractors, Feniks was required to pay the debt under Polish law, being the investor who had made the principal contract with Coliseum. Coliseum hence owed the full amount thus paid to its creditors to Feniks. However, Coliseum conveyed real estate it owned in Spain to Azteca, a Spanish company, allegedly with the aim of shielding the property from Feniks. Upon discovering this transaction, Feniks brought a socalled Paulian action (actio pauliana) against Azteca in a Polish court. The Paulian action refers to “a series of techniques for granting protection to creditors in cases where the debtor diminishes his seizable assets to avoid paying his debts.”59 In Feniks, the action was aimed at having the transfer of property avoided to protect Feniks’s right to enforce its contractual claims on Coliseum. In an earlier case, the Court had ruled out applying the tort jurisdiction to the Paulian action, because it did not aim at establishing the defendant’s liability.60 In Feniks, the Court held that the Paulian action was a matter relating to a contract because it intended to protect

(Note 27). Ibid., para. 31. 56 Ibid., paras 42-44. 57 Ibid., para. 31: “To decide otherwise could have the effect of multiplying the heads of jurisdiction for claims based on a single agreement.” (emphasis added). Highlighting the idea that recourse actions are “matters relating to a contract” against the background of the Natural Forum Theory, the decision (ibid., para. 32) refers to Art 16 Rome I Regulation (EC) No 593/2008, according to which the relationship between codebtors is subjected to the law of the debtors’ obligation toward the creditor. This provision is aimed at avoiding a multiplication of applicable laws to claims relating to the same contract – a motive that is analogous to the Natural Forum Theory’s ambition to avoid the multiplication of fora in respect of claims arising out of the same contractual relationship. 58 (Note 27). 59 I. PRETELLI, Cross-Border Credit Protection against Fraudulent Transfers of Assets – Actio Pauliana in the Conflict of Laws, this Yearbook 2011, p. 590. 60 ECJ, 26 March 1992, Reichert aors v Dresdner Bank AG, ECLI:EU:C:1992:149, paras 19-20. 54 55

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 Feniks’ contractual rights.61 Therefore, the court of the place of performance of the protected provision-of-services contract (Poland) was allowed to take jurisdiction.62 The main reason for reaching this conclusion is emblematic for the natural forum theory’s assumption that the court of the place of contractual performance is best place to judge due to a close connection to the contract.63 Could it be that the choice for a theory and corresponding test for characterisation in disputes involving third parties is case-specific? After all, the decisions that were discussed until now concerned different situations and causes of action. If so, deciding whether a dispute between third parties is a “matter relating to a contract” comes down to understanding which theory and corresponding test befits a given scenario. However, the case law of the CJEU is not indicative of such a meta-principle of choice.64 To the contrary, it has proven unable to explain why it prefers one theory to the other. Two instances illustrate this. Firstly, in Feniks v Azteca – which was discussed above – the Advocate General opined among others things that the dispute was not contractual in nature since the relationship between the litigants did not meet “the requirement of ‘obligation freely assumed by one party towards another’, that is by the Defendant towards the Applicant”.65 This argument was based on an older decision that, informed by the Ring-fencing Theory, applied the Privity Test. However, the ruling of the CJEU put the Advocate General’s observation aside without providing an explanation.66 It proceeded on the basis that disputes between third parties are “matters relating to a contract” insofar as they are based on contractual obligations. 61 (Note 27), para. 14. Cf Antwerp court of appeal (hof van beroep), judgment of 9 May 2019, case 2016/AR/1478, unpublished (annotation forthcoming in Tijdschrift voor Belgisch Burgerlijk recht/ Revue Générale de Droit Civil). 62 ECJ, Feniks (note 25), para. 46. 63 Ibid., para. 45. Confirmed in ECJ, 10 July 2019, Reitbauer aors v Enrico Casamassima, ECLI:EU:C:2019:577. 64 It is sometimes argued that the choice is made in function of protecting one of the litigants: A.A.H. VAN HOEK, Feniks – over ficties in het bevoegdheidsrecht, Ars Aequi 2020, p. 85; F. JAULT-SESEKE, L’action paulienne est de nature contractuelle, qualification de circonstance Ou évolution de la notion de la matière contractuelle?, Recueil Dalloz 2019, p. 516, paragraph containing fn 42; P. MANKOWSKI, Zur internationalen Zuständigkeit für Prozess zwischen den Gesamtschuldnern eines mit einem Kreditinstitut geschlossenen Kreditvertrags (“Kareda”), EWiR 2017, para. 3.1 (alluding to the fact that the defendant did not have a known domicile); M. MCPARLAND, Jurisdiction in Construction Disputes Involving Cross-Border Fraudulent Transfers of Assets, 2019, available https://www.39 essex.com/jurisdiction-in-construction-disputes-involving-cross-border-fraudulent-transfersof-assets, on 5.2.2021. While it cannot be excluded that such a variable is at play, entertaining its plausibility would require the application of research methods that go beyond doctrinal methods. As a matter of legal principle, however, the contract jurisdiction of Art 7(1) Brussels Ia must not be interpreted to favour one of the litigants: ECJ, 16 January 2014, Andreas Kainz v Pantherwerke AG, ECLI:EU:C:2014:7, para. 31; ECJ, 25 October 2012, Folien Fischer AG v Ritrama SpA, ECLI:EU:C:2012:664, para. 46. 65 Opinion of AG Bobek, 21 Juni 2018, Feniks v Azteca, ECLI:EU:C:2018:487, para. 68; P. MANKOWSKI (note 11), para. 3.3. 66 ECJ, Feniks (note 25), para. 48.

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Michiel Poesen Secondly, the case law of the CJEU prefers different theoretical views in highly similar scenarios.67 This is illustrated by two decision about sub-contractors who perform contracts to which they are not privy are contractual or noncontractual in nature. The decision in Réunion européenne construed the contract jurisdiction in light of the Ring-fencing Theory, and hence applied the Privity Test.68 Here, a company incorporated in France consigned fruits for maritime transport to the port of Rotterdam and then for final delivery by road to France. Upon arrival in France, the fruits appeared to have perished during the transport. The French company’s insurer, being subrogated into the company’s right of redress, sued the charterer of the vessel on board of which the fruits were carried and the vessel’s captain, both domiciled in the Netherlands. The Court held that the contract jurisdiction was not applicable for lack of a direct contractual linkage between the consignee of the goods and the vessel’s captain and French company.69 Therefore, the tort jurisdiction was applicable. However, it did not locate the place of the harmful event in France, but in “the place where the actual maritime carrier was to deliver the goods”, being Rotterdam.70 Decades later, the decision in flightright adopted a contrasting solution by applying the Cause of Action Test, informed by the Natural Forum Theory.71 Here, several passengers sued an operating airline for either delays or denied boarding. The operating airline performed the flights on behalf of the contracting airline, that is, the airline that received the booking from the passengers. Therefore, the passengers had no direct contractual linkage with the operating airline. However, the Court held that they could rely on the contract jurisdiction to sue the operating airline, since the latter’s obligation to carry the passengers originated in the contract between the passengers and the contracting airline.72 The fact that the operating airline was not privy to the contracting airline’s obligation to carry the passengers was irrelevant: the nature of the cause of action was decisive.73 As a result, the passenger were allowed to sue the operating airline in the courts of the place of departure and the final destination. In conclusion, the case law of the CJEU concerning disputes between third parties illustrates the tension between the Ring-fencing Theory and the Natural Forum Theory. Against the backdrop of the former, disputes involving third parties must not be characterised as “matters relating to a contract” for lack of a direct contractual relationship. I called this approach to characterisation the “Privity Test”. In contrast, the Natural Forum Theory informs an accommodating approach, 67 See J.F. HOFFMANN, Gläubigeranfechtungsklagen und Zuständigkeit nach Maßgabe der EuGVVO, Zeitschrift für das Privatrecht der Europäischen Union (GPR) 2019, p. 170; J. BAUERREIS (note 48), p. 347. 68 (Note 53). 69 Ibid., paras 17-20. 70 Ibid., para. 35. 71 ECJ, 7 March 2018, flightright, ECLI:EU:C:2018:160. Confirmed in ECJ, 26 March 2020, Libuše Králová v Primera Air Scandinavia A/S, ECLI:EU:C:2020:235, paras 43-52. Similarly Antwerp commercial court (note 46); B. VOLDERS (note 46). 72 ECJ, flightright (note 71), paras 62-63. 73 Ibid., paras 59-64.

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 according to which disputes between third parties can be “matters relating to a contract” insofar as they are based on a contractual cause of action. I dubbed this approach the “Cause of Action Test”. 2.

Concurrent Liabilities

The case law of the CJEU concerning concurrent liabilities is indicative of a similar tension between the Ring-fencing Theory and the Natural Forum Theory. Below, I will discuss three judgments; the first two illustrate the conflicting characterisations that can be reached under these theories’ impulse, the last one speaks to the efforts undertaken to reconcile the conflict. In Kalfelis v Bankhaus Schroeder, Mr Kalfelis, a German national, acquired spot and futures stock-exchange transactions in silver bullion from Bankhaus Schroeder, incorporated in Luxembourg.74 The futures transactions resulted in a total loss. Consequently, Mr Schroeder commenced proceedings in Germany against Bankhaus Schroeder based on contractual liability for breach of the obligation to provide information, on tort for conduct contra bonos mores, and on unjust enrichment. The German court, which appeared to have tort jurisdiction over the claims in tort and unjust enrichment, inquired whether they also had jurisdiction to entertain the claim based on the contractual information duty. The CJEU held that the claim did not fall under the tort jurisdiction because it was based on contract.75 In reaching this conclusion, it applied the Cause of Action Test, which focusses on the nature of the legal basis to determine whether a claim can be characterised as contractual, as explained above. This test for characterising concurrent liabilities is inspired by the Ring-fencing Theory: the decision expressly observed that the claimant should start proceedings in the defendant’s domicile should she wish to concentrate all claims in one forum.76 However, achieving such a concentration of claims was not the role of the special jurisdiction rules of Article 7 Brussels Ia Regulation. The characterisation of concurrent liabilities resurfaced in Brogsitter v Fabrication des Montres Normandes.77 Here, the matter was treated differently than in Kalfelis.78 The case involved Fabrication des Montres Normandes (“Fabrication”), a French manufacturer of watch mechanisms, who furnished mechanism to Brogsitter, a German watch assembler, under an exclusivity contract. After conclusion of the contract, Fabrication decided to enter the market of watch assembly, too. Consequently, Brogsitter sued Fabrication in Germany, the contractual place of delivery. His claim relied on German tort law, more particularly a breach (Note 5). Ibid., para. 19. 76 Ibid. 77 ECJ, 13 March 2014, ECLI:EU:C:2014:148. 78 In fact, the decision did not mention any of the relevant decisions of the CJEU: A. DICKINSON, Towards an Agreement on the Concept of “Contract” in EU Private International Law?, Lloyd's Maritime and Commercial Law Quarterly (LMCLQ) 2016, p. 470. 74 75

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Michiel Poesen of business confidentiality, disruption of his business, fraud, and breach of trust. The Court developed what I will call the “Factual Breach Test”, because the object of characterisation is the defendant’s allegedly wrongful behaviour as opposed to the legal basis relied on.79 According to this test, the contract jurisdiction will apply if the harmful behaviour can reasonably be considered a breach of contract, which will be the case if the interpretation of the contract is indispensable.80 The application of the test was deferred to the referring court, which concluded that the claims were related to contract.81 Although the Brogsitter decision did not address the Factual Breach Test’s theoretical foundations, domestic case law strongly suggests it is informed by the Natural Forum Theory. The German Bundesgerichtshof, which adopted the test even before the Brogsitter ruling, clarified the test’s theoretical foundation by referring to Advocate General Jacobs’ opinion in Kalfelis.82 The Advocate General opined that the contract jurisdiction applied to all claims that arise out of disputes concerning the performance of the contract, since the court of the place of performance has a close connection to the contract and therefore is best placed to judge.83 This justification backs the hypothesis that the Factual Breach Test is informed by the Natural Forum Theory. Moreover, this hypothesis is confirmed by the test’s effect. By elevating the nature of the wrongful behaviour as decisive for characterisation, the Factual Breach Test bundles all claims relating to the performance of a contract under the contract jurisdiction regardless of the nature of the legal basis. This can be seen as an attempt to concentrate jurisdiction to avoid conflicting judgments on disputes relating to the same contract.84 So far, the Kalfelis and Brogsitter decisions mirrored the tension between the Ring-fencing Theory and the Natural Forum Theory. While Kalfelis’ Cause of Action Test intended to narrow “matters relating to a contract” down to claims that are based on a contract, Brogsitter’s Factual Breach Test attempted to extend it to all claims based on behaviour that can be considered as a breach of contract. A third and final decision, Wikingerhof v Booking.com, confronted this tension and Opinion of AG Saugmandsgaard Øe, Bosworth (note 15), para. 78. ECJ, Brogsitter (note 77), paras 24-26. See also ECJ, 10 September 2015, Holterman BV aors v Spies von Büllesheim, ECLI:EU:C:2015:574. 81 Landesgericht Krefeld, judgment of 26.8.2014, case 12 O 28/12, Beck Rechtsprechung (BeckRS) 2014, 16997. 82 Bundesgerichtshof, 13.5.2010, judgment XI ZR 28/09, NJW-RR 2011 197, para. 24. 83 Opinion of AG Jacobs, 15 June 1988, Kalfelis v Bankhaus Schröder, Hengst and Co. aors, ECLI:EU:C:1988:312, paras 27, 28-29. See also: A. BRIGGS, The Conflict of Laws (note 18), p. 72. 84 J.D. LÜTTRINGHAUS, Article 1, in F. FERRARI (ed), Concise Commentary on the Rome I Regulation, Cambridge 2020, para. 23; T.W. DORNIS, Von Kalfelis zu Brogsitter künftig enge Grenzen der Annexkompetenz im europäischen Vertrags- und Deliktsgerichtsstand, GPR 2014, p. 353; A. NUYTS/ H. BOULARBAH, Chroniques droit international privé européen, Journal de droit européen (JDE) 2014, para. 353; S. ZOGG, Accumulation of Contractual and Tortious Causes of Action under the Judgments Regulation, JPrivIntlL 2013, p. 58-59; A. SPICKHOFF, Anspruchskonkurrenzen, internationale Zuständigkeit und internationales Privatrecht, IPRax 2009, p. 131-133. 79 80

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 attempted to mediate it by integrating the approaches.85 In Wikingerhof, a hotel sued an online platform for the violation of competition law, which consisted among other things in an abuse of dominant position by unilaterally changing the contract terms. In line with the Cause of Action Test, the decision provided that a claim is a “matter relating to a contract” insofar as it is based on a contractual legal basis. It then held that a legal basis must be considered contractual if the interpretation of the contract is indispensable.86 This expression stems from Brogsitter, where the indispensability to interpret the contract indicated that the claim was based on behaviour that constituted a breach of contract. By isolating this snippet from Brogsitter’s Factual Breach Test and inserting it into the Cause of Action Test, the Wikingerhof decision attempted to settle the tension between these two tests.87 The conclusion can therefore be drawn that deciding whether concurrent liabilities are “matters relating to a contract” is complicated by the tension between the Ring-fencing Theory and the Natural Forum Theory. The former favoured a test for characterisation such as the Cause of Action Test, which draws a clear line in the sand. In contrast, the latter inspired a test for characterisation such as the Factual Breach Test, which aims at absorbing all claims based on behaviour that can be considered as a breach of contract. D

Why Theory Matters

This section demonstrated that for each reason to characterise a claim that arises in a contract’s periphery as a “matter relating to a contract”, there was a reason to exclude it. What reason one experiences to be acceptable depends on what theory of contract jurisdiction one adheres to. In turn, what theory one adheres to turned out to be a matter of more or less arbitrarily picking a standpoint from which one rejects the other theory’s point of view.88 This seems to create an inescapable deadlock where claims can be characterised differently with an equally valid justification.89 ECJ, 24 November 2020, ECLI:EU:C:2020:950. Ibid., paras 31-36. For a more detailed analysis, see M. POESEN, Regressing into the Right Direction: Non-contractual Claims in Proceedings between Contracting Parties under Article 7 of the Brussels Ia Regulation, MaastrichtJEur&CompL 2021, 390-398. 87 B. HAFTEL (note 37). 88 See V. HEUZÉ, De quelques infirmités congénitales du droit uniforme: l’exemple de l’article 5.1 de la Convention de Bruxelles du 27 septembre 1968, Rev. crit. dr. int. pr. 2000, para. 14. 89 Unfortunately, this deadlock cannot be resolved by “peeking over the wall”, i.e. borrowing from the conflict of contract and tort laws laid down in the Rome I Regulation (EC) No 593/2008 and Rome II Regulation (EC) No 864/2007 (cf T. AZZI, Bruxelles I, Rome I, Rome II: regard sur la qualification en droit international privé communautaire, Recueil Dalloz 2009, p. 1621 et seq.). If anything, the conflict of laws reproduces the difficulty we face in characterising obligations that sit between contract and tort. For example, the Paulian action can be understood as concerning “the extent of liability, including the determination of persons who may be held liable for acts performed by them” that is subject 85 86

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III. Reading Back the Underlying Assumptions In this section, I will entertain the following question: which assumptions made by the two theories of contract jurisdiction can be upheld against the backdrop of the premises and limitations that are embedded in the Brussels Ia Regulation? With this, I aim to evaluate the assumptions underlying the Natural Forum Theory (A) and the Ring-fencing Theory (B).90 A.

Aspiration Meets Regulatory Design – The Natural Forum Theory

The Natural Forum Theory’s assumptions that the contract jurisdiction creates a natural forum for contractual disputes begs three questions. Firstly, is the jurisdiction rule for general contracts able to create a natural forum contractus with a close geographical connection to disputes relating to contracts? (1.) Since this assumption is a crucial tenet of the Natural Forum Theory, it is important to assess whether it corresponds to reality. Secondly, does the Natural Forum Theory rightly assume that part of the general contract jurisdiction’s role is to avoid concurrent jurisdiction? (2.) Thirdly, how does the Natural Forum Theory’s emphasis on creating an all-encompassing forum contractus play out in terms of foreseeability? (3.) Entertaining these questions will allow us to appreciate that the Natural Forum Theory is not an appropriate theoretical foundation on which to construe the periphery of “matters relating to a contract”. 1.

Proximity

A brief analysis of the cases discussed above will demonstrate that the contract jurisdiction rarely points towards the court that is most appropriately placed to judge due to a close geographical link to the contract. Disputes between parties who are not privy to a contract are often unconnected to the place of performance. To illustrate, the Paulian action brought in Feniks had no close link to the place of performance of the protected contract (Poland). If anything, the action was linked to the defendant’s home jurisdiction (Spain), because the action among other

to the law of tort according to Art 15(a) Rome II, or as an issue of “performance” subject to the law of contract pursuant to Art 12(1)(b) Rome I (cf H. SONNENBERGER, Grenzen der Verweisung durch europäisches internationales Privatrecht, IPRax 2011, p. 329). Similarly, as far as acts of unfair competition between contracting parties are concerned, which was the case in Wikingerhof v Booking.com (note 85), Art 6 Rome II – which governs “unfair competition and acts restricting free competition” – only applies to those acts that give rise to “non-contractual obligations”. This reproduces that question as to whether acts of unfair competition involving contracting parties can also give rise to contractual obligations. 90 This part is written in the knowledge that at every turn of the argument, a counterargument is lurking. This was the thrust of section II, and what follows in this paper is not immune to it.

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 things pivoted on the defendant’s “awareness of the alleged fraudulent intent”.91 The flightright case is characterised by a similar lack of linkage between the claims and the place of performance (i.e. the place of departure and arrival of the flight). As mentioned above, flightright involved two groups of claimants. The first group suffered an economic loss due to a delayed flight. This loss had no geographical connection to the contractual place of performance, as it had no obvious territorial footprint.92 Second, the passengers suffered loss due to denied boarding. Here, the dispute concerned the airline’s complete failure to perform the contract. Such a dispute is widely regarded as having no connection to the place of (intended) performance.93 The same can be said about concurrent liabilities. The contract’s place of performance is not linked more forcibly to the dispute than the place where the harmful event occurred or the defendant’s domicile, putting these two grounds of jurisdiction on equal footing at best.94 Therefore, the interim conclusion can be drawn that the contract jurisdiction often fails to give jurisdiction to the court that is most appropriately placed to judge. But why is this so? When devising the contract jurisdiction, the legislature did not intend to ensure that individual disputes are judged by the most appropriate court. As Ralf Michaels observed, the Brussels Ia Regulation relies on the “us or them paradigm”,95 one aspect of which is that the Regulation’s jurisdictional rules aim to allocate jurisdiction to the courts of a member state that has the “closest” connection to an abstract category of disputes (such as “matters relating to a contract”) compared to the other member states.96 It does did not take into account the connection between the court and the individual case. This is demonstrated by the Regulation’s drafting history. The choice for the connecting factor “in matters relating to a contract”, i.e. the court of the place of performance, was not aimed at establishing jurisdiction in the court that has a close geographical connection to individual disputes. It was only a compromise between the connecting factors in contractual matters that existed in the original EEC member states’ legal systems

91

Opinion of AG Bobek, Feniks (note 65), para. 93; J.F. HOFFMANN (note 69),

p. 168. See Opinion of AG Campos Sánchez-Bordona, 2 April 2020, VKI v Volkswagen AG ECLI:EU:C:2020:253, para. 72; Opinion of AG Szpunar, 10 March 2016, Universal Music v Michael Tétreault Schilling, ECLI:EU:C:2016:161, para. 41. 93 U. GRUŠIĆ, Jurisdiction in Complex Contracts under the Brussels I Regulation, JPrivIntlL 2011, p. 321 et seq.; J. HILL, Jurisdiction in Matters Relating to a Contract under the Brussels Convention, I.C.L.Q. 1995, p. 591 et seq. 94 (Note 15), para. 85. 95 R. MICHAELS (note 33), p. 1045. 96 Opinion of AG Lenz, 8 March 1994, Custom Made Commercial, ECLI:EU:C:1994:86, para. 20; A. BURROWS, English Private Law, Oxford 2013, para. 20.54; R. MICHAELS, Re-placements. Jurisdiction for Contracts and Torts under the Brussels I Regulation When Arts. 5(1) and (3) Do Not Designate a Place in a Member State, in A. NUYTS/ N. WATTÉ (eds), International Civil Litigation in Europe and Relations with Third States, Brussels 2005, p. 152; R. MICHAELS (note 33), p. 1045-1046. 92

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Michiel Poesen when the Brussels Convention,97 the Regulation’s predecessor, was negotiated.98 The place of performance prevailed as the connecting factor over, for example, the place where the obligations arose or the place where the contract was concluded.99 Ratifying the “us or them” paradigm, the CJEU went as far as to admit that the court of the place of performance of the contract still has jurisdiction, even if the dispute had “no connection” at all to the place of performance.100 If the contract jurisdiction were geared at allocating jurisdiction to the court that is most closely connected to concrete cases, the logical solution would have been to deny jurisdiction to the court of the place of performance if that court had no connection to a particular case.101 In conclusion, the assumption made by the Natural Forum Theory that the contract jurisdiction gives jurisdiction to the most appropriate court requires considerably qualification. It therefore is inconsequential to construe the contract jurisdiction’s scope of applicability broadly on the premise that the court of the place of performance is best placed to judge on all claims linked to contract. 2.

Mechanisms to Coordinate Concurrent Jurisdiction

The second question is how the Natural Forum Theory fits in the Regulation’s jurisdictional system. By assuming that the contract jurisdiction’s function is to avoid conflicting judgments in disputes related to the same contract, the Natural Forum Theory upsets the balance that the Regulation struck between the claimant’s and defendant’s interests. The Regulation already contains a natural forum where all controversies regarding a contract can be bundled: the member state where the defendant is domiciled.102 Therefore, there is no reason to construe the contract jurisdiction as a broadly applicable rule. To the contrary, the claimant should seek out the defendant if it wants to bundle multiple claims in one court, possibly joining in other defendants to related claims using the anchor defendant mechanism of Article 8(1) Brussels Ia. If it chooses to rely on the contract jurisdiction, it assumes the risk that the court of the forum contractus will not have jurisdiction over all claims that are related to a contract. For example, in a case involving 97 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, OJ L 299/32, 31.12.1972. 98 Report on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (“Jenard Report”), OJ C59/1, 5.3.1979, p. 23; Opinion of AG Lenz, Custom Made Commercial (note 96), para. 20. 99 Jenard Report (note 98), p. 23; R. MICHAELS (note 33), p. 1045. 100 ECJ, 29 June 1994, Custom Made Commercial, ECLI:EU:C:1994:268, paras 1820; P. MANKOWSKI (note 41), para. 2. 101 Opinion of AG Bobek, Feniks (note 65), para. 97; J. HARRIS, Understanding the English Response to the Europeanisation of Private International Law, JPrivIntlL 2008, p. 352-353; J. HILL, Jurisdiction in Civil and Commercial Matters: Is There a Third Way?, Current Legal Problems 2001, p. 444. 102 Art 4 Brussels Ia; Opinion of AG Bobek, Feniks (note 65), para. 93 (“key connecting factor”); S. ZOGG (note 85), p. 60.

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 concurrent liabilities, a splintering of contractual and tortuous claims over multiple courts may occur. In turn, national judges should coordinate these different proceedings using the lis pendens or related actions provisions.103 The contract jurisdiction, by contrast, is not intended as a tool for avoiding conflicting judgments. 3.

The Slippery Slope Effect

The Natural Forum Theory is not only problematic for its assumption that the forum contractus is the most appropriate venue for all disputes that are linked to a contract, as the previous two sections demonstrated. It also has a negative fall-out. The broad, absorbent tests for characterisation that the Natural Forum Theory informed compromise legal certainty. This is due to what I will call the Natural Forum Theory’s “slippery slope effect”: in a bid to absorb all claims that are related to a contract, foreseeing what type of disputes are “matters relating to a contract” becomes increasingly difficult. a)

Disputes Involving Third Parties: a Broad “Legal Basis” Concept

The application of the Cause of Action Test – informed by the Natural Forum Theory – to disputes involving third parties has led to legal uncertainty. The issue is that legal bases that do not have a unequivocal relation to an underlying contract have been characterised as contractual in nature. As a result, determining whether disputes involving third parties are “matters relating to a contract” has fallen victim to doubt.104 The origin of this issue is clear: against the backdrop of the Natural Forum Theory, a broad array of legal bases ought to be considered as “contractual” in nature. However, some preliminary caution is appropriate before turning to problematize further this tendency. In many instances, the Cause of Action Test does not lead to unpredictability because the claimant’s action is clearly based on a contractual obligation.105 Consider the following three illustrations. Firstly, in flightright, which was outlined above, the sub-contracting airline could not credibly argue that it was unaware of the obligations arising under the main contract between the passengers and the contracting airline.106 Consequently, it could rea(Note 5), para. 20; A. DICKINSON (note 38), p. 114. M.-E. ANCEL, Chronique espace judiciaire européen en matière civile – règlements “Bruxelles I” et “Bruxelles I Bis”: la matière contractuelle, une mue inachevée, Revue trimestrielle de droit européen 2020, para. 5; R. JAFFERALI, Commentaires arrêt “Feniks”: action paulienne et compétence internationale à la lumière du règlement Bruxelles I Bis, JDE 2019, para. 7; T. Lutzi (note 25), p. 256; M. POESEN, Internationale bevoegdheid over de Peeters/Gatzen-vordering is onderworpen aan de Brussel I Verordening, niet de insolventieverordening: gevolgen voor internationale bevoegdheid? Tijdschrift voor Belgisch Handelsrecht/ Revue de Droit Commercial Belge 2019, p. 534-535. 105 J. BAUERREIS (note 48), p. 345. 106 Opinion of AG Bobek, 7 March 2018, flightright, ECLI:EU:C:2017:787, paras 82-84; B. HAFTEL, Revirement et extension du champ de la “matière contractuelle” dans les 103 104

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Michiel Poesen sonably foresee being sued in the place of performance of the main contractual relationship. Secondly, in Benatti v WPP, WPP 2005, an English corporation, argued that Mr Benatti, a consultant for the WPP Group, breached an obligation to report a conflict of interests under the consultancy contract it made with WPP Group. WPP 2005 relied on said obligation, as it alleged that it was made by Mr Benatti and WPP Group to WPP 2005’s benefit (and therefore enforceable per the Contracts (Rights of Third Parties) Act 1999 as a matter of English law). Despite the absence of privity, the English Court of Appeals held that the claim was subject to the contract jurisdiction because it was based on an obligation voluntarily assumed by Mr Benatti.107 Here, there was no risk of unpredictability. It is beyond doubt that a party who freely made a promise to a third party’s benefit can foresee being sued in the place of performance of this promise. Thirdly, in Kareda, Ms Benkö evidently could expect being sued for redress by Mr Kareda in the place of performance of the loan agreement, since Ms Benkö freely entered into the loan agreement including the obligation to pay instalments to the bank.108 However, the Feniks decision is indicative of a particular understanding of the “legal basis” concept that blurred the lined between contractual legal bases and non-contractual legal bases to such an extent that it compromised legal certainty. In Feniks, the Paulian action was characterised as a contractual matter because it was “based on” the protected contract.109 However, in reality the Paulian action is not based on this contract.110 It is a statutory remedy that enables the creditor to safeguard her rights, contractual or otherwise, by tackling a fraudulent transfer of assets by its debtor to a third party. The action’s only contractual aspect is its potential contextual link to two contracts: the contract the Paulian action aims to protect, and the contract from which the claimant seeks protection.111 Therefore, the Paulian action is contextually linked to more than one contract, without being more forcibly linked to one contract than to the other. Feniks raises the broader question whether all liability claims that are contextually linked to a contract are “matters

relations à trois personnes, Revue des contrats 2019, p. 85; L. AVOUT et al. (note 29), p. 1443. See also A. BRIGGS, Claims against Sea Carriers and the Brussels Convention, LMCLQ 1999, p. 334. 107 Benatti v WPP Holdings Italy SRL aors [2007] EWCA Civ 263, paras 53-54. 108 ECJ, Kareda (note 27), para. 43; Opinion of AG Bot, 26 April 2017, Kareda v Benkö, ECLI:EU:C:2017:305, para. 33. 109 Feniks (note 25), para. 40. See para. 44 (“brought on the basis of” the protected contract). 110 F. JAULT-SESEKE (note 64), para. containing fn 41. 111 ECJ, Feniks (note 25), paras 57, 62-71; U. GÖRANSON, Actio Pauliana Outside Bankruptcy and the Brussels Convention, in M. SUMAMPOUW/ L.A.N.M. BARNHOORN/ J.A. FREEDBERG-SWARTZBURG et al. (eds), Law and Reality: Essays on National and International Procedural Law in Honour of Cornelis Carrel Albert Voskuil, Dordrecht 1992, p. 95; I. PRETELLI (note 31), para. containing fn 72; M.-E. ANCEL (note 104), para. 701; P. MANKOWSKI (note 11), p. 701; H.L.E. VERHAGEN/ P.M. VEDER, De “pauliana” in het Nederlandse internationaal privaatrecht, Nederlands Internationaal Privaatrecht (NIPR) 2000, p. 9-10.

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 relating to a contract”.112 Answering this question in the affirmative risks opening the floodgates, because it would entail that a potentially unforeseeable number of actions by or against third parties might be characterised as contractual in nature.113 Putting the question simply: how should one determine which types of liabilities that arise in the contractual periphery are sufficiently closely linked to a contract?114 While this risk might appear limited to specific situations such as Feniks, two examples illustrate that it is real. The first illustration is a claim based on the English tort of wrongful interference.115 This cause of action is available to a contracting party against a third party who induced a breach of contract.116 In light of Feniks, such an action might constitute a matter relating to a contract. For it is aimed at shielding the claimant’s interest in the performance of a contract from a third party’s alleged wrongful interference, and hence “legally based” on said contract. However, this assumes a generous understanding of what a contractual legal basis is, and a third party might argue that the wrongful interference action is not based on the obligations arising under the protected contract.117 The second illustration is NK v BNP Paribas Fortis.118 Here, the bankruptcy administrator of a Dutch insolvent sued the insolvent’s bank, BNP Paribas, for bank transfers wrongfully allowed during insolvency from the insolvent’s Dutch account to its Belgian account. The cause of action relied on was the so-called Peeters/Gatzen action, which is a cause of action in Dutch tort law that allows a bankruptcy administrator to obtain damages from a third party who knowingly caused damage to the insolvent’s creditors.119 Against the backdrop of Feniks, this cause of action might be contractual in nature insofar as it was aimed at protecting the contractual creditors’ rights.120 However, the P. MANKOWSKI, Ein eigener Vertragsbegriff für das Europäische Internationale Verbraucherprozessrecht?, GPR 2020, p. 282; T. LUTZI (note 25), p. 257-258; M. POESEN, Once More unto the Breach : The Actio Pauliana Is a Matter Relating to a Contract in EU Private International Law, European Review of Contract Law 2019, p. 65. 113 Opinion of AG Tanchev, Reitbauer aor v Casamassima (note 25), para. 77; P. MANKOWSKI (note 11), p. 702. 114 A. BRIGGS, The Brussels Convention, Yearbook of European Law 1992, p. 671672. 115 Tesam Distribution Limited v Schuh Mode Team GmbH [1989] EWCA, (1990) IL Pr 149; M. MARTÍN-CASALS, The borderlines of tort law: interactions with contract law, in M. MARTÍN-CASALS (ed), The Borderlines of Tort Law – Comparative Report, Cambridge 2019, para. 199. 116 J. CHITTY/ H.G. BEALE, Chitty on Contracts: General Principles, London 2012, paras 1-192; K. ZWEIGERT/ H. KÖTZ, An Introduction to Comparative Law, Oxford 1998, p. 622-623. See also Art VI.–2:211 DCFR. 117 J. FAWCETT/ J. HARRIS/ M. BRIDGE, International Sale of Goods in Conflict of Laws, Oxford 2005, para. 6.131; L. VAN BOCHOVE, Purely Economic Loss in Conflict of Laws: the Case of Tortious Interference with Contract, NIPR 2016, p. 460. 118 ECJ, 6 February 2019, ECLI:EU:C:2019:96. 119 T.M. BOS, Kwalificatie van de Peeters/Gatzen-Vordering, Weekblad voor Privaatrecht, Notariaat en Registratie 2018, p. 201. 120 M. POESEN (note 105), p. 533. 112

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Michiel Poesen Dutch Supreme Court held that it is a matter relating to a tort, which illustrates the issue we are facing.121 These examples illustrate the slippery slope effect the Natural Forum Theory has in the context of disputes involving third parties. The effect is caused by admitting that the contract jurisdiction might apply to causes of action that are not based on a freely assumed, contractual obligation but are only “on the orbit”122 of a contract, with the aim of amassing all claims that are linked to contract to their supposedly natural contractual forum. b)

Concurrent Liabilities – The Application of a Hypothetical Test

The slippery slope effect is also present in the Factual Breach Test applied to characterise concurrent liabilties. Essentially, the Factual Breach Test requires a court to conduct a hypothetical assessment: could the claim brought before me have been pleaded as a breach of contract, even though the claimant relied on a non-contractual cause of action, which will be the case if the interpretation of the contract is indispensable?123 All this work has to be done for purpose of concentrating claims that are potentially related to a contract under the general contract jurisdiction, as required by the Natural Forum Theory. This exercise undermines the foreseeable assessment of jurisdiction due to its “potentially unacceptable width”.124 To decide whether a contractual cause of action is available is a difficult, highly indeterminate exercise due to its hypothetical nature. By what (or whose) standard should one decide whether behaviour can “reasonably be considered” a breach of contract?125 Further, the Factual Breach Test forces courts to take into account whether the claim can be judged without interpreting the contract.126 Ascertaining the indispensability to interpret the contract is unlikely to promote foreseeability. Two examples illustrate this backlash on legal certainty. Firstly, consider the English case of Source v TÜV Rheinland.127 Source, an English company, engaged TÜV Rheinland, a Germany quality control company, Hoge Raad 3 July 2020, ECLI:NL:HR:2020:1223, para. 51. Opinion of AG Bobek, flightright (note 106), para. 69. 123 S. GRÄF, Geschäftsführerhaftung und Arbeitnehmer- Begriff im internationalen Zivilprozessrecht, GPR 2016, p. 151; T. PFEIFFER, Deliktsrechtliche Ansprüche als Vertragsansprüche im Brüsseler Zuständigkeitsrecht – vorfragenakzessorische Qualifikation der Hauptfrage?, IPRax 2016, p. 113-114; B. HAFTEL, Absorption du délictuel par le contractuel, application du Règlement (CE) N° 44/2001 à une action en responsabilité délictuelle, Rev. crit. dr. int. pr. 2014, p. 863; B. SUJECKI, EuGVVO: gerichtliche Zuständigkeit für Klagen aus deliktsrechtlichen Ansprüchen zwischen Vertragspartnern, Europäische Zeitschrift für Wirtschaftsrecht 2014, p. 385. 124 Bosworth aor v Arcadia Petroleum Ltd aors [2016] EWCA Civ 818, para. 64.i. 125 Opinion of AG Saugmandsgaard Øe, Bosworth (note 79), paras 87-88; P. MANKOWSKI, Gerichtsstand des Erfüllungsorts für aus Vertragsverstoß Folgendem Deliktischen Anspruch, EWiR 2017, para. 3.3; A. DICKINSON (note 79), p. 471. 126 A. BRIGGS (note 24), p. 217. 127 [1997] EWCA Civ 1270. 121 122

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 to perform quality checks on imported goods. It sued TÜV concurrently for breach of the contract and a non-contractual duty the exercise reasonable care in performing quality controls. Applying the Factual Breach Test would be complicated in a scenario like Source. Can Source’s claim based on TÜV’s non-contractual duty of care be considered a breach of contract, which will be the case if the interpretation of the contract is indispensable? Athough it could be argued that TÜV’s negligence reasonably can be considered a breach of contract, it may not be clear from the outset whether the interpretation of the contract is indispensable to judge on the duty of care claim. The contract may turn out to be only contextually relevant, as the duty of care is laid down in tort law. The Factual Breach Test hence offers “succour to all”, without providing a clear path forward.128 Secondly, consider the example of the German Academic Conditions case.129 Here, the claimant alleged an abusive of market power consisting of the refusal of its long term IT service provider (with whom it made a framework agreement concerning IT services) to offer software at a special price rate for universities. Can this allegedly anti-competitive behaviour be regarded as a breach of contract? It is difficult to make a reasonable prediction about how this question should be answered with the tools provided by the Factual Breach Test.130 4.

Misguided Aspirations, Problematic Fall-Out

The conclusion can therefore be drawn that the Natural Forum Theory pursues the unachievable. Firstly, the contract jurisdiction performs poorly at allocating jurisdiction to the court that has the closest connection to a contract. Hence, it makes little sense to argue that all claims that are remotely linked to a contract should be characterised as “matters relating to a contract” for reasons of proximity of the forum to the dispute. Secondly, the aim of avoiding concurrent proceedings concerning the same contract is misguided. The Brussels Ia Regulation already addresses the risk of concurrent proceedings on two other fronts: by allowing all claims to be brought in the court of the defendant’s domicile state and by a stay of proceedings. Thirdly, the Natural Forum Theory loses sight of legal certainty, thus creating a slippery slope. Going forward, does this mean the Ring-fencing Theory should be preferred to the Natural Forum Theory? I will argue it does not.

A. DICKINSON (note 79), p. 472-473. Oberlandesgericht Munich, judgment of 23 November 2017, case 29 U 142/17 Kart, Wettbewerd in Recht und Praxis 2018, 629. 130 G. VAN CALSTER, The EU Rules on Jurisdiction for and the Law Applicable to, Follow-on, and Stand-Alone Damages Following Competition Infringement, Journal of European Competition Law & Practice 2020, p. 154; T. BRAND/ F. GEHANN, Zwischen Vertrag und Delikt: der Konditionenmissbrauch und die Zuständigkeit Deutscher Gerichte, Neue Zeitschrift für Kartellrecht 2019, p. 374-375; T. DORNIS (note 85), p. 354; A. BRIGGS (note 34). 128 129

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Idealism’s Pitfall – The Ring-Fencing Theory

The Ring-fencing Theory is not immune to criticism either. This theory is problematic for its emphasis on strictness of interpretation. In and of itself, this principle of interpretation confirms the balance struck by the Brussels Ia Regulation. According to the default rule of jurisdiction, claimants must commence proceedings in the court of the Member State in which their defendants are domiciled, unless when provided otherwise by the Regulation.131 It is evident this balance intends to protect the defendant by creating the right to be sued in the courts of her own Member State. What the Ring-fencing Theory infers from this is more problematic: “the jurisdictional rules which derogate from that general principle must not lead to an interpretation going beyond the situations envisaged”132 by the Brussels Ia Regulation. However, such a principle of strict interpretation has little intrinsic value. For how is one to decide what test for characterisation delineates the contract jurisdiction “narrowly” or “strictly” enough so as to cover only those “situations envisaged by the Brussels Ia Regulation”? Is figuring out which “situations are envisaged” not the exact problem we are trying to solve? Making this call is even more difficult when a claim is on the periphery of a contract. One could argue that strictness of interpretation should derive its concrete meaning from the aim of legal certainty: “matters relating to a contract” should be given such an interpretation that defendants can reasonable foresee when they can be sued outside of their domicile.133 Yet, the Ring-fencing Theory and the corresponding tests for characterisation certainly do not reflect such an approach. To the contrary, the Ring-fencing Theory has informed tests that narrow down the concept of “matters relating to a contract” arbitrarily, going beyond what was necessary to warrant legal certainty.134 I will use the Handte and Wikingerhof decisions as illustrations. In Handte, applying the contract jurisdiction would not have created legal uncertainty. For the action was based on an obligation to which the defendant had freely consented, albeit not directly towards the claimant.135 Yet the Ring-fencing Theory led the CJEU to reject the applicability of the contract jurisdiction due to a lack of a direct contractual relationship between the litigants. In turn, the Wikingerhof decision provided that “matters relating to a contract” should not encompass causes of action whose adjudication does not necessitate the interpretation of the contract. It suggested that such a strict test for characterisation ensures that the case can be brought in the place of tort under Article 7(2) Brussels Art 5(1) Brussels Ia. ECJ, Handte (note 7), para. 14. 133 See A. DICKINSON (note 25), p. 118-119. 134 A. BRIGGS (note 24), p. 211; I. PRETELLI (note 31), paragraph containing fn 59; Z. TANG (note 30), p. 40; T.C. HARTLEY, Unnecessary Europeanisation under the Brussels Jurisdiction and Judgments Convention: The Case of the Dissatisfied Sub-Purchaser, European Law Review 1993, p. 516; A. BRIGGS (note 114), p. 670. 135 J. BAUERREIS (note 48), p. 347; Ph. DELEBECQUE, Condamnation de la theorie des groupes de contrats par la Cour de justice des Communautés européennes, Revue du droit rural 1999, p. 33-34; A. BRIGGS (note 114), p. 670-672. 131 132

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 Ia Regulation, as the court of this location is most appropriately positioned to judge.136 Yet by what standard can we decide that such an interpretation of the contractual forum is strict and hence appropriate? If anything, it restricts the notion of “matters to a contract” to only those claims that are based on an express term of contract.137 The conclusion can be drawn that the Ring-fencing Theory’s aim of interpreting “matters relating to a contract” strictly is well-meant idealism at best. At worst, it draws an arbitrarily narrow border around the contract jurisdiction. C.

How to Relax the Deadlock

By now, it has become clear that the Natural Forum and Ring-fencing Theories are misguided views on the role of the contract jurisdiction in the Brussels Ia Regulation. How to proceed from here? Below, I will first suggest an alternative theoretical underpinning of the contract jurisdiction’s purpose. Then, I will reconsider the tests for characterisation as applied above against the background of this underpinning.

IV. Suggesting an Alternative Way Forward In this section, I will try to formulate a possible role for the contract jurisdictions that avoids the drawbacks that were identified above (A.). I will argue that the contract jurisdiction must be treated as an additional forum that supplements the default forum of Article 4(1) Brussels Ia in those instances where the parties can reasonably foresee that their disputes relate to a contract. Then, I will consider how the theory thus composed affects the delineation of the periphery of “matters relating to a contract” (B.). A.

The Contract Jurisdiction as a Counterweight to the Default Rule

I advance that the contract jurisdiction’s role is to offer a “counterweight”138 to the default rule of jurisdiction by allowing a claimant to start proceedings in another place than the defendant’s domicile.139 As such, it balances out the default rule of ECJ, Wikingerhof (note 85), para. 37. B. SUJECKI, Europees proces- en privaatrecht - Jurisprudentie, Tijdschrift voor Procespraktijk 2021, p. 38; A. BRIGGS (note 34). 138 Opinion of AG Lenz, Custom Made Commercial (note 96), para. 18. 139 Boss Group Ltd v Boss France SA [1996] 4 All E.R. 970, 977; Opinion of AG Saugmandsgaard Øe, Bosworth (note 15), para. 85; Opinion of AG Saugmandsgaard Øe, 10 September 2020, Wikingerhof v Booking.com, ECLI:EU:C:2020:688, para. 87; G. VAN CALSTER, De Europese IPR regels inzake bevoegdheid en toepasselijk recht bij schadeloosstelling na mededinging beperkende gedragingen, in D. ARTS/ R. FOQUÉ/ 136 137

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Michiel Poesen jurisdiction which gives the defendant a home advantage. Seen from this viewpoint, the contract jurisdiction is based on the fact that the defendant has agreed to perform contractual obligations in a forum, thereby accepting that forum’s jurisdiction.140 Should the parties not accept this alternative forum, they can modify or exclude it, for example by concluding a choice of court agreement or by agreeing on a place of performance.141 However, the proposed way forward is not to give the claimant a free pass to start proceedings in the forum contractus. The contract jurisdiction’s scope of applicability must be construed “to reinforce the legal protection available to persons established in the [European Union] by, at the same time, allowing the plaintiff easily to identify the court before which he may bring an action and the defendant reasonably to foresee the court before which he may be sued.”142 This requirement entails that defendants are adequately protected if they are able to foresee with a reasonable degree of certainty that a claim can be characterised as a “matter relating to a contract”. Hence, it does not follow that the protection of persons established in the EU necessitates a strict, let alone restrictive interpretation of the expression “matters relating to a contract”.143 Thus, claims that are in the periphery of a contract can be characterised as contractual in nature, conditional on this characterisation resulting from a reasonably foreseeable test for characterisation. Another element of legal certainty is efficiency; determining whether the contract jurisdiction applies should not require a court to investigate the merits or engage in an extensive taking of evidence.144 Therefore, delineating the periphery of “matters relating to a contract” should be as simple as possible. In other words, offering the claimant a counterweight to the default rule of jurisdiction should not come at the cost of efficiency. For convenience, I will refer to this view on the contract jurisdiction’s role as the “Counterweight Theory”. Below, I will explore the new perspective the Counterweight Theory opens on delineating the periphery of “matters relating to a contract”.

W. DEVROE et al. (eds), Liber Amicorum Jacques Steenbergen, mundi et Europae civis, Brussels 2014, p. 544; R. MICHAELS (note 33), p. 1046. 140 F.C. VON SAVIGNY, A Treatise on the Conflicts of Laws, and the Limits of Their Operation in Respect of Place and Time, Edinburgh 1869, §370, p. 152. 141 P. STONE, Problems with the Forum Loci Solutions, Anglo-American Law Review 1983, p. 60. 142 See ECJ, Besix (note 26), para. 26; ECJ, Handte (note 7), para. 18; A. DICKINSON, Background and Introduction to the Regulation, in A. DICKINSON/ E. LEIN (eds), The Brussels I Regulation Recast, Oxford 2015, para. 1.65. 143 P. MANKOWSKI (note 42), para. 26. 144 ECJ, 28 January 2015, Kolassa v Barclays Bank, ECLI:EU:C:2015:37, para. 61; ECJ, Custom Made Commercial (note 100), para. 20.

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 B.

Consequences for the Characterisation of Claims in the Periphery of Contract

This section will explore how the Counterweight Theory allows us to overcome the issues posed by the Natural Forum and Ring-fencing Theories. 1.

Third Parties

Under what conditions can disputes involving third parties be characterised as “matters relating to a contract” against the background of the Counterweight Theory? Firstly, the Privity Test loses all of its appeal, since it categorically excludes third parties from relying on the contract jurisdiction without justification from a legal certainty perspective. Going forward, the Cause of Action Test offers a better starting point, since it provides a clear reference point for characterisation by focussing on the nature of the legal basis relied on. However, it is crucial that we gain a clearer understanding of when a claim can be considered to be based on contract.145 If not, we risk perpetuating the slippery slope effect that was discussed in section III above. With this in mind, let us start by considering what distinguishes the legal bases in Feniks, Tesam Distribution and NK (“cohort 1”) from those in flightright, Kareda, and Benatti (“cohort 2”). Understanding the distinction between these cohorts will facilitate devising a way forward. In “cohort 1”, the linkage between the claims’ “legal basis” and the contracts was circumstantial. The claims relied on a statutory technique aimed at protecting the claimant’s contractual rights against a third party’s behaviour.146 They were not based on contract. By contrast, the claims in “cohort 2” were based either on contractual obligations voluntarily assumed by the defendant or on statutory causes of action that would not exist but for the defendant’s agreement. For example, the airline passengers in flightright effectively aimed at upholding contractual rights against the operating airline who voluntarily sub-contracted to execute these rights.147 And in Kareda, Mr Kareda’s recourse action against Ms Benkö arose out of the latter’s contractual obligation to pay instalments to the bank under the loan agreement.148 Therefore, the “legal basis” in the two cohorts of case law is fundamentally different. The claims in “cohort 2” are based on obligations voluntarily assumed by the defendant, whereas those in “cohort 1” are based on causes of action that extend a contract’s effect towards a defendant who is not privy to this contract.149 I suggest inferring a general rule from this distinction. The contract jurisdiction should apply to claims involving third parties only if a claim is based on contrac-

In this sense B. HAFTEL (note 106), concluding paragraph. J.F. HOFFMANN (note 68), p. 168. 147 Opinion of AG Bobek, flightright (note 106), paras 58-59; B. HAFTEL (note 106), paragraph containing fn 19. 148 P. MANKOWSKI (note 65), para. 3.2. 149 M. POESEN (note 112), p. 63. 145 146

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Michiel Poesen tual obligations voluntarily assumed by the defendant.150 This rule avoids applying the contract jurisdiction to claims that relate to contract merely as a matter of context such as those in “cohort 1” (which may be subject to the tort jurisdiction151 and in any case the default rule). Thereby, it promotes a reasonably foreseeable delineation of the contract jurisdiction’s scope of applicability. In turn, the proposed approach allows the contract jurisdiction to apply to claims like those made in “cohort 2”, allowing the contract jurisdiction to fulfil its counterweight function. Here, the defendant created a “substantive-law relationship” vis-à-vis the claimant, for example by agreeing to perform obligations arising under a contract to which it was not privy.152 Therefore, a defendant can reasonably foresee that claims based on the obligations to which it consented are matters relating to a contract, to be judge by the court of the obligations’ place of performance. In conclusion, the Cause of Action Test should only lead to characterising claims involving third parties as “matters relating to a contract” if these claims are based on an obligation freely assumed by the defendant. Applying the proposed approach is more complicated when a legal basis arose out of statutory or case law, as opposed to an express provision in a contract. On the face of it, the case law of the CJEU has not excluded such causes of action from the contract jurisdiction’s scope of applicability.153 A principled analysis is that such legal bases are contractual, if: “…the underlying, original source of the rights and obligations which are being disputed and the reason that claim is being brought against the specific defendant follow from a contract”.154 By contrast, if a contract is “merely background”155 or only of “tangential relevance”156 to the legal basis, the legal basis is not contractual. The contract should

Opinion of AG Bobek, flightright (note 106), para. 55, opining that the contract jurisdiction applies “… provided that there is a contractual basis under which a third party may claim, or may be held liable, for the discharge of obligations that were subscribed to contractually by, or in favour of, that third person”. 151 See concerning the location of the “place where the harmful event occurred” in respect of wrongful interference: Dolphin Maritime & Aviation Services Ltd v Sveriges Angartygs [2009] EWHC 716. 152 Opinion of AG Bobek, Feniks (note 65), para. 68. 153 Opinion of AG Bobek, flightright (note 106), para. 59. 154 Ibid., para. 54. See also G. VAN CALSTER, European Private International Law, Oxford 2016, p. 207; M. POESEN, Jurisdiction over “Matters Relating to a Contract” under the Brussels I (Recast) Regulation: No Direct Contractual Relationship Required, MaastrichtJEur&CompL 2018, p. 523; C. WENDELSTEIN, Wechselseitige Begrenzung von Vertrags- und Deliktsgerichtsstand im Rahmen des europäischen Zuständigkeitsrechts, Zeitschrift für Europäisches Privatrecht 2015, p. 632. 155 Engdiv v Trenthal 1990 SLT (SC) 617, 621. 156 Opinion of AG Bobek, Feniks (note 65), para. 65. 150

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 be more than “a stepping stone to the ultimate liability”157 of the defendant. Two examples illustrate the operation of this criterion. Committeri v Club Med offers an excellent first illustration of a statutory legal basis that is contractual in nature.158 Mr Committeri, an Englishman, sued Club Med for injuries suffered in Spain on a holiday, booked by the man’s employer, during a climbing activity. The legal basis relied upon was a statutory provision in the French Tourism Code imposing strict liability on holiday organisers towards their guests. Despite the absence of a direct contractual linkage between Mr Committeri and Club Med, the legal basis of his claim was found to be contractual in nature since it arose out of Club Med’s freely assumed obligation to safely organise leisure activities for Mr Committeri.159 The second illustration concerns the Vertrag mit Schutzwirkung zugunsten Dritter (“contract with protective effect for third parties”), a cause of action developed in Austrian and German case law. This cause of action allows a third party to rely on a contract, amongst other things to recover economic loss it suffered due to the faulty performance of the contract.160 In an Austrian case, an Austrian claimant invested 6.200 euro in precious metals sold by a company incorporate in Salzburg, Austria. In making the investment, the claimant relied on a report drawn up by a Swiss notary, who certified the conformity of the precious metals sold by the Salzburg company. Afterwards, the certificate appeared to be erroneous. The claimant sued the notary in Austria based on the protective third party effect of the notary’s contractual duty to exercise care in providing certification services to the Salzburg company. Applying the Privity Test, the Austrian Oberste Gerichtshof held that the action was not a matter relating to a contract but a matter relating to tort, due to the absence of privity between the litigants.161 However, the approach proposed above suggests that the action would be a contractual matter: the cause of action, although jurisprudential in nature, would not exist but for the defendant’s voluntarily assumed certification obligation.162 Admittedly, the proposed approach is open-textured in that it usually will not allow hard-and-fast decisions about the contractual nature of statutory legal bases. But determining whether such legal bases are contractual in nature inevitaXL Insurance Company SE v Axa Corporate Solutions Assurance [2015] EWHC 3431 (Comm), para. 28. 158 [2018] EWCA Civ 1889. 159 Ibid., para. 53. 160 B. MARKESINIS/ H. UNBERATH/ A. JOHNSTON, The German Law of Contract: A Comparative Treatise, London 2006, p. 204 et seq.; K. ZWEIGERT/ H. KÖTZ (note 116), p. 461-462. 161 Oberste Gerichtshof, judgment of 28 March 2019, case 9 Ob 8/19w, ECLI:AT:OGH0002:2019:0090OB00008.19W.0328.000. See also A. DUTTA, Das Statut der Haftung aus Vertrag mit Schutswirkung für Dritte, IPRax 2009, p. 294-297; A. BRIGGS (note 114), p. 671. Similarly concerning an airworthiness certificate: London Helicopters Ltd v Heliportugal LDA-INAC [2006] EWHC 108 (QB). 162 P. GOTTWALD, Internationales Zivilprozessrecht, in P. GOTTWALD/ H. NAGEL (eds), Internationale Zuständigkeit in Zivil- und Handelssachen, Krugzell 2020, para. 3.68; A. BRIGGS (note 24), p. 218. 157

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Michiel Poesen bly begs a contextual, open-ended analysis. The alternative would be to resort to a rigid test for characterisation such as the Privity Test, which would be undesirable as noted above. Therefore, the sensible way forward is to embed an approach to assessing the contractual nature of a “legal basis” in explicit, open-textured criteria. Although hard cases will continue to arise due the complexity of legal practice, the combination of these criteria provides articulate guidelines for determining the contractual nature of statutory legal bases. In conclusion, the suggested approach emphasises that disputes involving third parties to a contract can (only) be considered to be “based” on a contract if the legal basis relied on follows from a contract. 2.

Concurrent Liabilities

In view of the problems caused by it seen from the perspective of the Counterweight Theory, the Factual Breach Test as advance by the CJEU in Brogsitter should not be used for the characterisation of concurrent liabilities. Its puts a premium on interpreting “matters relating to a contract” broadly at the expense of legal certainty. Instead of maintaining the Factual Breach Test, I argue that the better approach would be to characterise concurrent liabilities using the Cause of Action Test as applied in Kalfelis. Concretely, claims would only be “matters relating to a contract” if they were based on a freely assumed, contractual obligation.163 Using the “cause of action test” for characterising concurrent liabilities provides a clear touchstone (the nature of the legal basis) instead of a broad, hypothetical one (the question whether the facts underlying the claim can be reasonably considered as a breach of contract, making the interpretation of the contract indispensable).164 The proposition to apply the Cause of Action Test requires two further qualifications in light of the Counterweight Theory. Firstly, we must reject the attempt the CJEU made in Wikingerhof to integrate the Factual Breach Test into the Cause of Action Test. Secondly, we must be sensitive to the risk of forum shopping, which I here understand as contorting a claim so as to trigger an advantageous forum. I will consider these qualifications in turn. Firstly, determining whether a legal basis that is non-contractual (statutory, fiduciary, tortious, equitable…) in substantive law is contractual (i.e. freely assumed) in the context of Brussels Ia must not depend on “the indispensability to interpret the contract”.165 Although such dependence was the thrust of Wikingerhof, it should be resisted because it creates an issue of legal uncertainty; by what standard should we decide whether it is “indispensable” to interpret the contact to judge a claim? Moreover, the issue this formula tries to solve can be settled more simply. If a claim is based on “an obligation [that] is ‘imposed’ by law, albeit to give effect to the parties obvious unexpressed intentions and/or business

Opinion of AG Saugmandsgaard Øe, Bosworth (note 15), para. 88. Ibid., paras 87-88. 165 See more elaborately M. POESEN (note 86). 163 164

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 efficacy”,166 and if such obligation “is predicated on the parties’ free consent to the circumstances giving rise to it”,167 then it must be regarded as contractual regardless of its nature in substantive law.168 This approach offers a clear way forward by which courts and parties alike can discriminate between “matters relating to a contract” and “matters relating to tort”. Secondly, I should acknowledge that the Cause of Action Test elevates the nature of the legal basis as the object of characterisation. At first sight, one might therefore be inclined to conclude that a claimant can formulate the legal basis solely for forum shopping purposes, for example by pursuing a claim for breach of contract on a non-contractual legal basis.169 However, this merits a two-fold response. Firstly, a claimant has little incentive to formulate a claim with forum selection in mind exclusively, since the formulation of a claim’s legal basis primarily sways the cause of action’s chances of success on the merits.170 Secondly, the Cause of Action Test does not defer to the nature of the legal basis in substantive law. It characterises the legal basis against an autonomous definition of “contract”, defined as a voluntarily assumed obligation.171 As outlined above, this definition also encompass legal bases that national law would not consider as contractual, such as fiduciary, statutory, or tortious duties, provided that they exist because the litigants made a contract.172 Therefore, all the Cause of Action Test does is to elevate the legal basis as the object of characterisation. The characterisation of the legal basis is then conducted against an autonomous benchmark. The conclusion therefore is that the Cause of Action Test is a foreseeable and readily applicable test for characterising concurrent liabilities, which dispenses with the complications related to the Factual Breach Test.

See Base Metal Trading Ltd v Shamurin [2004] EWCA Civ 1316, para. 25. Pan Oceanic Chartering Inc v UNIPEC UK Co. Limited, UNIPEC Asia Co. Limited [2016] EWHC 2774 (Comm), para. 181 (concerning an “implied in law promise”). 168 Deutsche Bank AG London Branch v Petromena ASA [2013] EWHC 3065 (Comm), para. 37; A. BRIGGS (note 24), para. 58; A. SCOTT, The Scope of Non-Contractual Obligations, in J. AHERN/ W. BINCHY (eds), The Rome II Regulation on the Law Applicable to Non-Contractual Obligations: A New International Litigation Regime, Leiden 2009, p. 58; S. ZOGG (note 85), p. 44; A. BRIGGS (note 114), p. 671. Cf Bundesgerichtshof, judgment of 27 May 2008, case VI ZR 69/07, RIW 2008 711, para. 12: a doctor’s liability for medical malpractice was characterised as non-contractual, since the doctor’s duty of care existed independently from contract. 169 G. CUNIBERTI, Freedom of Choice in Wikingerhof (EAPIL, 2020), available , on 12.1.2021. 166 167

Opinion of AG Saugmandsgaard Øe, Wikingerhof v Booking.com (note 139), para. 88; A. BURROWS, Understanding the Law of Obligations: Essays on Contract, Tort and Restitution, Oxford 1998, p. 18. 171 Opinion of AG Saugmandsgaard Øe, Bosworth (note 15), para. 74. 172 (Notes 166-168). 170

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Interim Conclusion

This section offered an alternative theory of contract jurisdiction, which acknowledges the limits the contract jurisdiction faces and instead tries to value it as a counterweight to the default rule of jurisdiction. The discussion then turned to consider the tests for characterising claims arising in the periphery of “matters relating to a contact” that the theory might inform. What transpired was that the alternative theory allowed us to discriminate between suitable and unsuitable tests. Overall, the Cause of Action Test prevailed as the most suitable way forward against the theory’s backdrop.

V.

Conclusion

This contribution started by observing that delineating the scope of applicability of jurisdiction in “matters relating to a contract” can be a challenging task, because claims might not be related unequivocally to a contract. The paper identified two such claims that are in the periphery of contract. Firstly, claims between third parties. Secondly, claims based on concurrent liabilities in contract and tort. The contribution then rationalised why it is so difficult to decide whether these peripheral claims are “matters relating to a contract”. In making this decision, two mutually exclusive views on the contract jurisdiction’s role in the Brussels Ia Regulation compete with one another. The first view provides that all claims that are remotely linked to a contract are “matters relating to a contract”, since the contractual forum is most appropriately positioned to judge these claims. I dubbed this the “natural forum theory”. In contrast, the second view advances that “matters relating to a contract” should be interpreted narrowly, since the courts of the Member State where the defendant is domiciled is the default forum. I called this the “ringfencing theory”. The paper then considered how each theory informed different tests for characterisation, which included or excluded claims that arise in the periphery of a contract according to the theory through which one perceives the role of the contract jurisdiction. Going forward, the contribution problematized both theories. It transpired that their core assumptions are misguided, because they either appear to be unachievable in practice or upset the design of the Brussels Ia Regulation. The Natural Forum Theory among other things fails to recognise that the contract jurisdiction does a poor job at allocating jurisdiction to the most appropriately positioned court. In turn, the Ring-fencing Theory fails to indicate what a “narrow” interpretation of “matters relating to a contract” entails. These defects were mirrored by the approaches to characterising claims in the contractual periphery that the theories had informed. Following these observations, the contribution suggested that the contract jurisdiction’s role could be construed as offering the claimant a counterweight to the default rule of jurisdiction. However, the claimant’s possibility to rely on the contract jurisdiction is not unlimited: it should not lead to unpredictability. Seeing the contract jurisdiction as a counterweight to the default rule opened a new per544

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Periphery of “Matters relating to a Contract” in Regulation (EU) No 1215/2012 spective on the tests for characterisation used to determine whether claims are arising in a contract’s periphery are “matters relating to a contract”. In respect of the strand of case law pertaining to third parties, it informed an approach that focussed on the nature of the cause of action. From this viewpoint, a claim that is based on a contractual obligation assumed by the defendant would be a “matter relating to a contract”. However, causes of action that are only contextually related to a contract must not be qualified as “matters relating to a contract”. As far as concurrent liabilities were concerned, it supported the case for using a simple test for characterisation that directed the attention to the nature of the cause of action pleaded by the claimant. Claims based on those causes of action that would not exist but for the contract would then be “matters relating to a contract”, regardless of their characterisation in substantive law. None of these suggestions pretends to settle all issues or to be beyond controversy. Nevertheless, they may inform a more reflective approach to delineating the periphery of “matters relating to a contract” that trades misguided mirages for attainable aspirations.

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DEFERENCE OF STATE COURTS TO ARBITRAL AWARDS IN VACATUR AND ENFORCEMENT PROCEEDINGS Eolos S. RIGOPOULOS*

I. II.

III.

Introduction Deference by State Courts to International Commercial Arbitral Awards in Vacatur Proceedings A. Introductory Comments and Notion of International Arbitral Award in Vacatur Proceedings B. Deference by State Courts to the International Arbitral Award under Challenge 1. Introductory Comments 2. Deference to a Decision of the Arbitral Tribunal on Jurisdiction 3. Deference to a Decision of the Arbitral Tribunal on the Scope of its Jurisdiction 4. Deference to a Decision of the Arbitral Tribunal on the Dispute’s Arbitrability 5. Deference to an Institutional Ruling on an Arbitrator’s Lack of Independence and/or Impartiality 6. Deference to a Decision of the Arbitral Tribunal on an Issue of Public Policy 7. Deference to a Decision of the Arbitral Tribunal on the Merits Deference by State Courts to Foreign or Non-Domestic Commercial Arbitral Awards in Enforcement Proceedings A. Importance of the New York Convention B. Notion of Foreign or Non-Domestic Arbitral Award in Enforcement Proceedings under the New York Convention C. Deference by Enforcing State Courts to the Arbitral Award that Is Being Enforced 1. Introductory Comments 2. Deference to a Decision of the Arbitral Tribunal on the Validity of the Arbitration Agreement 3. Deference to a Decision of the Arbitral Tribunal on the Scope of its Jurisdiction

Attorney-at-law (admitted to the Geneva and New York bars), Associate at LÉVY KAUFMANN-KOHLER (Geneva); LL.M. (2019-2020) in International Business Regulation, Litigation and Arbitration, NEW YORK UNIVERSITY SCHOOL OF LAW. This contribution is based on research conducted by the Author during his LL.M. studies at NYU. Many thanks to Professors ANDREA BONOMI and FRANCO FERRARI for their suggestions and insights, and CAITLIN HALL-SWAN for her help and support. The views expressed in this contribution are those of the Author alone, and do not necessarily represent the views of LÉVY KAUFMANNKOHLER. *

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Printed in Germany

Eolos S. Rigopoulos 4. 5.

Deference to a Decision of the Arbitral Tribunal on the Dispute’s Arbitrability Deference to a Decision of the Arbitral Tribunal on an Issue of Public Policy Deference to a Decision of the Arbitral Tribunal on a Claim of Fraud Deference to a Decision of the Arbitral Tribunal on the Merits

IV.

6. 7. Conclusion

I.

Introduction

The degree of deference by state courts to international commercial arbitral awards in vacatur proceedings is often rather high. Most jurisdictions around the world favor an extended deference to the arbitrators’ decisions for various reasons.1 The most important justification for this trend is that such deference preserves the finality of international arbitral awards.2 One of the cornerstones and reasons for the success of international arbitration is the belief that in most cases, an international arbitral award will be final. If parties did not have such belief, they would be more likely to follow the path of state court litigation, which provides for multiple opportunities to challenge a lower court’s judgment. Instead, parties choose arbitration for a more expeditious way of resolving their disputes. National arbitration laws and practices reflect the high degree of deference frequently given by state courts to an arbitrator’s decision. Most jurisdictions provide for limited grounds to annul international arbitral awards. These grounds typically concern issues of procedural irregularity, independence and/or impartiality of the arbitrator, lack of reasons, excess of authority, public policy, jurisdiction of the arbitrator and sometimes errors on points of law.3 It is usually very difficult for a party dissatisfied with the arbitral award to prove that one of these issues presented itself in the making of the award; consequently, state courts are very limited in their decision-making over the righteousness of international arbitral awards and have to defer to the arbitrator’s decision in a majority of cases.4 G.B. BORN, International Arbitration: Law and Practice, Biggleswade 2015, 2nd ed., Chap. 16 paras 1-2. 2 See e.g., L. DIMATTEO/ M. INFANTINO & N. M-P POTIN (eds), The Cambridge Handbook of Judicial Control of Arbitral Awards, Cambridge 2021, p. 53-54, 66, 337, 412, 414, 441 (these passages of the book analyzing practices in various jurisdictions confirm that finality is considered a cornerstone of international arbitration all over the world); A. MOURRE/ L. RADICATI DI BROZOLO, Towards Finality of Arbitral Awards: Two Steps Forward and One Step Back, 23 J. of Int’l. Arb. 2006, p. 171-172. 3 M. RUBINO-SAMMARTANO, International Arbitration Law and Practice, Huntington 2014, 3rd ed., para 31.5. 4 See F. DASSER/ P. WÓJTOWICZ, Challenges of Swiss Arbitral Awards. Updated Statistical Data as of 2017, 36 ASA Bull. 274, 2017 (approximately 7% of annulment applications for commercial arbitration cases in Swiss courts succeeded between 1989 and 2017); S. CRÉPIN, Le contrôle des sentences arbitrales par la Cour d’appel de Paris depuis les reformes de 1980 et de 1981, Revue de l’arbitrage 1991, p. 521 (only two awards 1

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Deference of State Courts to Arbitral Awards In recognition and enforcement proceedings, the pattern is very similar: state courts tend to defer to the arbitrator’s decisions for the same reasons, i.e. mainly to preserve the finality of international arbitral awards.5 The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention,6 is in force in more than 160 countries and provides acceptable grounds for refusing recognition and enforcement of an international arbitral award. These grounds are almost identical to those proffered in most jurisdictions as acceptable grounds to annul an award; indeed, most jurisdictions have modelled their arbitration laws on the New York Convention specifically to provide similar grounds for both challenging and opposing the enforcement of an award.7 Such practice aims at avoiding contradictory decisions between vacatur and enforcement proceedings.8 It would indeed be problematic if, for instance, it often occurred in a jurisdiction that an award is first confirmed in an annulment procedure, but later not enforced in an enforcement procedure. While this scenario seems unrealistic within a single jurisdiction, if countries had not made unification efforts, it is very likely that there would be many contradictory decisions between courts of different jurisdictions. For example, it could be that a court in country A annuls the award rendered in the same country, and that later, the enforcement court in country B enforces that same award that was annulled in country A, because country B has different standards for judging an arbitral award’s validity. While there remain differences in the way jurisdictions understand these concepts, there is some uniformity in the solutions chosen, which results in an increasingly coherent and predictable international system. For example, most jurisdictions provide that lack of jurisdiction of the arbitral tribunal (sometimes framed as invalidity of the arbitration agreement or incapacity of the parties to conclude said agreement) is a ground for annulment of an award, while Article V(1)(a) New York Convention provides the same at the enforcement stage.9 Most annulled by French courts in the 46 challenges on public policy grounds); J. PAULSSON, Arbitration-Friendliness: Promises of Principle and Realities of Practice, Arb. Int’l 2007, vol. 23, p. 477- 498 (between 2002 and 2004, less than 5% of annulment proceedings in English courts were successful). 5 See e.g., L. DIMATTEO/ M. INFANTINO/ N. M-P POTIN (note 2), p. 53, 195, 410; A. MOURRE/ L. RADICATI DI BROZOLO (note 2) p. 171-172. 6 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, available at https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/ new-york-convention-e.pdf on 17.04.2021 [hereinafter New York Convention]. 7 See e.g., G.B. BORN (note 1), at Chap. 16, paras 3, 9 (the grounds for challenging an international arbitral award in the UNCITRAL Model Law, the American Federal Arbitration Act and the Swiss Private International Law Act all parallel the grounds of Article V New York Convention for the refusal of recognition and enforcement of the award). 8 See G.B. BORN, International Commercial Arbitration, Alphen aan den Rijn 2021, 3rd ed., p.131 et seq. 9 See e.g., Article 34(2)(a)(i) of the UNCITRAL Model Law on International Commercial Arbitration, available at https://uncitral.un.org/sites/uncitral.un.org/files/mediadocuments/uncitral/en/19-09955_e_ebook.pdf on 17.04.2021 [hereinafter UNCITRAL Model Law]; Article 190(2)(b) of the Swiss Private International Law Act, available at

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Eolos S. Rigopoulos jurisdictions also provide that excess of authority of the arbitral tribunal is a ground for annulment, while Article V(1)(c) New York Convention provides the same at the enforcement stage.10 And the list goes on with respect to each of the grounds provided in Article V New York Convention: they are almost always found in national arbitration laws, sometimes with a few minor variations as it pertains to the wording, but almost always with a very similar, if not identical, meaning. This article attempts to determine the degree of deference accorded by state courts to international awards in both vacatur and enforcement proceedings. To do that, this paper presents the practices of different jurisdictions related to the grounds and issues that may arise when a party is trying either to request the annulment of an award or to resist its enforcement. The following analysis focuses only on precedent in which the relevant issues were dealt with both in the arbitration and in the following annulment or enforcement proceedings, as this is the only scenario in which state courts can make a choice as to whether to defer to the arbitral tribunal’s decision. This analysis shows in which contexts state courts of different jurisdictions are more keen on deferring to the arbitral tribunal’s judgment and when they do not think that deference is appropriate. It becomes clear that, depending on the examined issue and the stage of the proceedings (annulment or enforcement), state courts make different choices motivated by different policies. Finally, this article does not directly address situations where the parties have (validly) waived their right to challenge the award (but only indirectly through the discussion of other issues); in jurisdictions where this is allowed,11 such a waiver prevents the state courts from reviewing an award, which could also (arguably) be seen as a kind of deference.

II. Deference by State Courts to International Commercial Arbitral Awards in Vacatur Proceedings A.

Introductory Comments and Notion of International Arbitral Award in Vacatur Proceedings

The notion of an international award in vacatur proceedings depends on the relevant jurisdiction’s international arbitration law. It is the jurisdiction’s law that usuhttps://www.fedlex.admin.ch/eli/cc/1988/1776_1776_1776/fr on 17.04.2021 (original version), available at https://www.swissarbitration.org/files/34/Swiss%20International%20 Arbitration%20Law/IPRG_english.pdf on 17.04.2021 (English translation); Article 1520(1) of the French Code of Civil Procedure, available at https://www.legifrance.gouv.fr/ codes/texte_lc/LEGITEXT000006070716/ on 17.04.2021. 10 See e.g., Article 34(2)(a)(iii) of the UNCITRAL Model Law; Article 190(2)(c) of the Swiss Private International Law Act; U.S. Federal Arbitration Act, 9 U.S.C. §10(a)(4), https://www.law.cornell.edu/uscode/text/9 on 17.04.2021 [hereinafter FAA]. 11 See e.g., Article 192 of the Swiss Private International Law Act.

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Deference of State Courts to Arbitral Awards ally determines whether an arbitration is international, and thus whether the resulting award is international. Practices are not universal, but there are some found in a majority of legal systems. In many systems, the domicile of the parties to the arbitration agreement is determinative as to the international versus domestic characterization of an award. For instance, in Singapore12 and Switzerland,13 if one of the parties to the arbitration agreement has its domicile outside of the country, the arbitration (and its resulting award) is international. In England, the prospective Section 85 of the English Arbitration Act14 concerning the distinction between domestic and international arbitration, read a contrario, also has the same domicile requirement (although the term used is “habitual residence”), but further provides that if one of the parties to the arbitration agreement is not an English national, the arbitration (and its resulting award) is also international. Other approaches are encountered, for instance, in pure Model Law jurisdictions and in France. Model Law jurisdictions apply a very extensive alternative approach to the determination of the award’s internationality; they typically consider that the arbitration (and its resulting award) is international if any of these elements can be located outside of the jurisdiction’s territory: the parties’ place of business, the nature of the parties’ relationship, or the seat of the arbitration.15 In France, courts follow a so-called “objective” internationality test, according to which the arbitration is international if its subject matter is international, without regard to the parties’ domicile and nationality, the law applicable to the contract or to the arbitration, and the place of the arbitration. According to the Cour de Cassation, it is enough that the transaction from which the dispute arises caused a transfer of goods, services or funds across borders, for the arbitration to be international.16 The international nature of the award may have consequences as to the grounds that a party may invoke in a challenge. This is the case, for example, in Singapore, Switzerland, France, and many Model Law jurisdictions, where different rules and grounds apply in domestic and international arbitration.17 Conversely, J. CHOONG, Legal Framework for Arbitration in Singapore, in J. CHOONG/ M. MANGAN/ N. LINGARD (eds), A Guide to the SIAC Arbitration Rules, Oxford 2018, para 2.09. 13 See Article 176(1) of the Swiss Private International Law Act; see also P.M. PATOCCHI, National Report for Switzerland (2018 through 2020) in L. BOSMAN (ed.), ICCA International Handbook on Commercial Arbitration, 2020, p. 4-5. 14 English Arbitration Act of 1996, c. 23 (Eng., Wales, N. Ir.), available at http://www.legislation.gov.uk/ukpga/1996/23/contents on 17.04.2021 [hereinafter English Arbitration Act]. 15 G.B. BORN, (note 8), Chap. 22, para [2][i]. 16 J.-L. DELVOLVÉ/ J. ROUCHE/ G. POINTON, French Arbitration Law and Practice: A Dynamic Civil Law Approach to International Arbitration, 2nd ed., Alphen aan den Rin 2009, p. 29-31. 17 In Singapore, grounds for the challenge of an international arbitral award are provided in Article 34 of the UNCITRAL Model Law on International Commercial Arbitration of 1985 and Article 24 of the International Arbitration Act, available at https://sso.agc.gov.sg/Act/IAA1994 on 18.04.2021 [hereinafter Singaporean International Arbitration Act]). In Switzerland, these grounds are provided in Article 190(2) of the Swiss 12

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Eolos S. Rigopoulos the grounds for challenging an award under the English Arbitration Act are the same whether the award is domestic or international.18 This paper only examines international arbitration and thus only considers the grounds invoked to challenge international arbitral awards. B.

Deference by State Courts to the International Arbitral Award under Challenge

1.

Introductory Comments

This section deals with the degree of deference by state courts to international awards in vacatur proceedings depending on the issues raised in the challenge of the award. Under this chapter, the analysis focuses on the following appeal grounds or issues that are common to most jurisdictions: lack of jurisdiction (including invalidity of the arbitration agreement), excess of authority of the arbitral tribunal, lack of independence and/or impartiality of the arbitrators, non-arbitrability of the dispute, violation of public policy, and wrongful application of substantive law. Once each issue is briefly presented in an introductory subsection, the following subsections examine national practices and case law to determine the extent to which courts defer to the arbitrators’ decisions in relation to the specific issue. The purpose of the analysis is to determine whether courts are more or less keen on deferring when particular issues are at stake. 2.

Deference to a Decision of the Arbitral Tribunal on Jurisdiction

a)

“Lack of Jurisdiction” as a Ground for Appeal

Lack of jurisdiction of the arbitral tribunal is a ground that is found in virtually all countries’ arbitration laws.19 For instance, this issue can arise in the simple case where the parties did not conclude an arbitration agreement, but one of them nevertheless refers their dispute to arbitration. Lack of jurisdiction can also be raised in more complex situations where, for example, the validity of the arbitration agreement is challenged; in effect, if the arbitration agreement is found to be invalid, the parties cannot refer their dispute to an arbitral tribunal. Another situation where the ground can be raised is when one of the parties to the arbitration agreement lacks capacity to conclude said agreement.20 Private International Law Act. In France, they are provided in Article 1520 of the French Code of Civil Procedure. 18 See Sections 67, 68 and 69 of the English Arbitration Act; see also K. NAIRN, National Report for England and Wales (2019 through 2020) in LISE BOSMAN (ed.) (note 13), p. 2. 19 M. RUBINO-SAMMARTANO (note 3), p. 1298. 20 See N. BLACKABY/ C. PARTASIDES/ M. HUNTER et al., Redfern and Hunter on International Arbitration, Oxford 2015, 6th ed., p. 583-584.

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Deference of State Courts to Arbitral Awards b)

Kompetenz-Kompetenz Doctrine

According to the Kompetenz-Kompetenz doctrine or principle (also referred to as competence-competence), arbitral tribunals have the right to rule on their own jurisdiction.21 Today, this doctrine is accepted in a very wide majority of legal systems and is not subject to any type of controversy as it pertains to the doctrine itself. However, there are controversies among the different legal systems as to the effects of the Kompetenz-Kompetenz principle, and more specifically on the deference that must be given by reviewing state courts in annulment proceedings to a prior jurisdictional ruling of an arbitral tribunal.22 The next subsection focuses on the issues and rules related to the Kompetenz-Kompetenz principle that are typically dealt with in annulment proceedings. Many of the concepts that will be discussed in the following paragraphs will also be relevant when discussing the deference given by state courts in enforcement proceedings to jurisdictional rulings of an arbitral tribunal. c)

Preclusive Effect of a Prior Decision on Jurisdiction?

(1)

In General

Most arbitration laws do not provide any substantial guidance on the potential preclusive effect of a prior ruling of the arbitral tribunal on a jurisdictional issue. It is thus through case law that we can determine whether such a ruling on jurisdiction may or may not be deemed to have a preclusive effect on the annulment court’s judgment.23 Although it is not a universal view, there are courts treating cases differently where the arbitral tribunal accepted jurisdiction from cases where it denied jurisdiction.24 A good example is the German Federal Court of Justice’s (narrow) interpretation of §1059(2) of the German Code of Civil Procedure25 that provides the grounds for the annulment of international awards: because an erroneous negative ruling on jurisdiction is not specifically included as a ground for annulment in §1059(2), an annulment court in Germany may not review the arbitral award under such a ground and must therefore fully defer to the arbitral tribunal’s negative ruling on jurisdiction.26 Given the importance accorded to decisions of the German Federal Court of Justice internationally, it is also interesting to point out N. BLACKABY/ C. PARTASIDES/ M/ HUNTER et al., (note 20) p. 583. See D. GIRSBERGER/ N. VOSER, International Arbitration: Comparative and Swiss Perspectives, Zürich 2016, 3rd ed., p. 134; G.B. BORN, (note 8), p. 1141-1144. 23 G.B. BORN, (note 8), p. 3471-3472. 24 G.B. BORN, (note 8), p. 3472-3479. 25 ZIVILPROZESSORDNUNG [hereinafter ZPO or German Code of Civil Procedure], available at https://www.gesetze-im-internet.de/zpo/BJNR005330950.html on 18.04.2021 (original version), available at https://www.gesetze-im-internet.de/englisch_zpo/englisch_ zpo.html on 18.04.2021 (English translation). 26 BGH Jun. 6, 2002, Zeitschrift für Schiedsverfahren [SchiedsVZ] 39, 2003 (Ger.). 21 22

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Eolos S. Rigopoulos that §1059(2) is almost identical to Article 34(2) UNCITRAL Model Law; one could thus speculate that the interpretation of §1059(2) by the German Federal Court of Justice could influence the practice of some UNCITRAL Model Law jurisdictions.27 There is, however, not yet any such precedent. Other jurisdictions, like the United States and Switzerland, have, on the contrary, treated both cases the same, i.e. by giving the same non-preclusive effect to the prior jurisdictional ruling of the arbitral tribunal, whether it is positive or negative. In these jurisdictions, state courts generally perform a de novo review of the tribunal’s decision on jurisdiction.28 However, this de novo review is usually limited to legal findings; when it comes to factual findings, state courts tend to defer to the arbitrator’s judgment. According to the Swiss Federal Tribunal, for instance, it is necessary that the de novo review be limited to legal findings of the arbitral tribunal in order to preserve the efficiency of international arbitration.29 This type of review limited to legal findings is especially relevant when, for instance, the arbitral tribunal had made determinations on witnesses’ credibility, or when it had specialized knowledge in a particular industry; moreover, this type of review also makes a lot of sense when the tribunal was well versed in a particular law relevant to the dispute.30 In summary, Swiss (and U.S.) courts defer to the arbitral tribunal’s factual findings in its prior jurisdictional ruling, but review the legal aspects of the case de novo, unless foreign law is applicable and the tribunal had deep knowledge of that law. In England, things are a little different as courts tend to review jurisdictional challenges to international arbitral awards extensively, following a broader de novo approach. English courts have indeed held that jurisdictional challenges require “a complete rehearing including new argument and evidence.”31 Contrary to the Swiss approach, English courts do not distinguish between legal and factual findings of the arbitral tribunal’s decision and apply de novo review to all aspects of the prior jurisdictional ruling of the tribunal.32 In an English case concerning a series of six contracts, all containing arbitration clauses, the issue of jurisdiction of the arbitral tribunal was raised based on the allegation that the contracts and their arbitration clauses were never concluded. After an extensive review of the law and the facts, the court found that the various documents forming the contracts had never been signed or returned. As a result, it held that the parties never concluded the contracts and reversed the decision of the arbitral tribunal, based on its (the

See G.B. BORN (note 8), p. 3477. G.B. BORN (note 8), p. 3477-3478. 29 TF Sept. 2, 1993, ATF 119 II 383 (Switz.). 30 G.B. BORN (note 8), p. 3476; see also F. ROSENFELD, The Shared Control of Arbitral Awards in L. DIMATTEO/ M. INFANTINO/ N. M-P POTIN (eds) (note 2), p. 449. 31 S.R. SHACKLETON, Annual Review of English Judicial Decisions on Arbitration 2011 lxxxiii, Oxford 2011, (citing AES Ust-Kamenogorsk Hydropower Plant LLC v. UstKamenogorsk Hydropower Plant JSC [2013] UKSC 35 (Eng.)). 32 G.B. BORN (note 8), p. 3474 (citing People’s Ins. Co. of China, Hebei Branch v. Vysanthi Shipping Co. [2003] EWHC (QB) 617, [25] (Eng.)). 27 28

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Deference of State Courts to Arbitral Awards court’s) review of the case’s factual findings.33 English courts therefore do not defer at all to the arbitral tribunal’s prior jurisdictional ruling. (2)

Parties’ Agreement to Finally Resolve Jurisdictional Disputes in the Arbitration

In a few jurisdictions, an agreement by the parties that all jurisdictional disputes be finally resolved by arbitration is valid. This is the case in the United States, England, Canada, and most of the UNCITRAL Model Law jurisdictions.34 Other jurisdictions like Germany do not approve of this practice.35 In jurisdictions where such agreements are enforced, an arbitral tribunal’s decision on jurisdiction will be final or subject to the most deferential standard of review applicable.36 In the United States, for instance, the issue of the validity of an agreement to have jurisdictional disputes finally resolved by arbitration was decided in First Options,37 where the U.S. Supreme Court held that there must be “clear and unmistakable evidence” that the parties concluded said agreement.38 According to some U.S. precedents, there is “clear and unmistakable evidence” if there is a manifestation of intent to submit jurisdictional disputes to arbitration without the possibility of a later judicial review.39 According to these U.S. precedents, a broadly worded arbitration clause can implicitly create said agreement to have jurisdictional disputes finally resolved by means of arbitration.40 Some U.S. decisions even considered that the mere reference to some institutional rules (that provide for an automatic waiver of the parties’ right to judicial review) suffices to conclude that the parties wished to have their jurisdictional disputes finally resolved by arbitration.41 The U.S. practice from lower courts does not find unanimous support in commentary. According to one author, the requirements applied by U.S. lower courts do not actually meet the “clear and unmistakable evidence” test of First Options. The same author argues that in order to consider that the parties have agreed to waive their right to a judicial review of the arbitral tribunal’s jurisdictional ruling, (1) there must be a specific and express agreement to that effect, and (2) the parties must not have challenged the validity of such agreement during the arbitration proceedings. It is only then that a court should consider that there is Pacific Inter-Link v. EFKO Food Ingredients [2011] EWHC 923 (Comm.) (Eng.). G.B. BORN (note 8), p. 3479. 35 See e.g., BGH Jan. 13, 2005, (Ger.); Judgment of 13 January 2005, III ZR 265/03 33 34

(Ger.). G.B. BORN (note 8), p. 3479-3482. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. S.Ct. 1995) (U.S.). 38 G.B. BORN (note 8), p. 3479-3482. 39 See G.B. BORN (note 8), p. 3480; First Options, 514 U.S. at 945-46 (U.S.). 40 See e.g., Bechtel do Brasil Construções Ltda v. UEG Araucária Ltda, 638 F.3d 150 (2d Cir. 2011) (U.S.); John Hancock Life Ins. Co. v. Wilson, 254 F.3d 48 (2d Cir. 2001) (U.S.). 41 See e.g., Article 35(6) of the ICC Rules. 36 37

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Eolos S. Rigopoulos “clear and unmistakable evidence” that the parties agreed to have their jurisdictional disputes finally resolved by arbitration.42 U.S. courts have made a further distinction between cases where the validity of the arbitration agreement is challenged and cases where its very existence is challenged. In the former, annulment courts must apply the test from First Options and if they come to the conclusion that there is “clear and unmistakable evidence” of an agreement to have jurisdictional disputes resolved by arbitration, they must fully defer to the arbitrators’ decision. In the latter, however, U.S. courts have come to a different conclusion: since the existence of the arbitration agreement is being challenged, there cannot be “clear and unmistakable evidence” that the parties wished to have jurisdictional disputes resolved in arbitration, and thus annulment courts must apply a de novo standard of review when reviewing the arbitral tribunal’s decision on jurisdiction. Most U.S. courts logically reach the same result when the existence of the underlying contract (and not merely of its arbitration clause) is being challenged by a party.43 3.

Deference to a Decision of the Arbitral Tribunal on the Scope of its Jurisdiction

a)

“Excess of Jurisdiction” as a Ground for Appeal

Most jurisdictions provide that a party may challenge an international award on the ground that the tribunal went beyond its authority when making the award.44 The tribunal’s authority is usually determined by the parties’ arbitration agreement and the parties’ pleadings in the proceedings.45 Excess of jurisdiction must not be confused with lack of jurisdiction: under a ground of excess of jurisdiction, the annulment court does not deal with the question of whether the tribunal had jurisdiction; the answer to this question has supposedly already been answered in the affirmative. Under the ground of excess of jurisdiction, the annulment court has to determine whether a competent tribunal was authorized by the parties through their arbitration agreement to decide specific matters.46 Furthermore, this ground must not be confused with a ground pertaining to the merits of the tribunal’s decision.47 Indeed, the annulment state court will not examine whether the tribunal made a correct decision on substantive law issues, but rather analyze whether the tribunal had the right, according to the parties’ arbitration agreement, to decide a given substantive law issue.

See G.B. BORN (note 8), p. 1266-1267, 3480-3482. G.B. BORN (note 8), p. 3481-3482. 44 See, e.g., Article 32(2)(a)(iii) of the UNCITRAL Model Law; Section 68(2)(b) of the English Arbitration Act; Article 190(2)(c) of the Swiss Private International Law Act; U.S. FAA, 9 U.S.C. §10(a)(4). 45 M. RUBINO-SAMMARTANO (note 3), p. 1290. 46 See G.B. BORN (note 8), p. 3575. 47 G.B. BORN (note 8), p. 3588. 42 43

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Deference of State Courts to Arbitral Awards b)

Preclusive Effect of a Prior Decision on the Scope of the Arbitral Tribunal’s Jurisdiction?

Annulment courts of different jurisdictions have come to different conclusions regarding the scope of an arbitral tribunal’s jurisdiction.48 There are jurisdictions where courts do not fully defer to the tribunal’s decision on the scope of its jurisdiction. For instance, the Ontario Court of Appeal in a decision in 2011 decided to apply a de novo standard of review to the tribunal’s decision regarding the scope of its jurisdiction, seemingly without any deference to the arbitrators ruling.49 Although the Court did not defer to the tribunal’s ruling, it stated that it owed the tribunal’s determination some consideration (but not deference) and that an annulment court should only rarely intervene in the tribunal’s decision.50 In the United States, annulment courts are more deferential. If the parties have agreed to have jurisdictional issues finally decided in arbitration, U.S. Courts treat the arbitrators’ decision on the scope of their jurisdiction with broad deference, as they would treat any other decision on the merits.51 In a 2010 decision, the U.S. 9th Circuit illustrated this practice by saying: “once a court independently determines the parties agreed to arbitrate an issue, it should give ‘extreme deference’ to an arbitrator’s decision regarding the scope of that issue.”52 Even where the parties did not expressly agree to have jurisdictional issues resolved by arbitration, U.S. Courts have come to the conclusion that since the parties decided to have the underlying contract submitted to the tribunal, it is also the latter’s prerogative to decide the scope of its jurisdiction. It is only when the tribunal’s decision on the scope of its jurisdiction appears to be completely unreasonable that an annulment court has the right to intervene.53 Courts from UNCITRAL Model Law jurisdictions reason similarly to the U.S. courts on this matter, i.e. they give high deference to the arbitrators’ judgment regarding the scope of the tribunal’s jurisdiction.54

G.B. BORN (note 8), p. 3586-3588. United Mexican States v. Cargill, Inc., [2011] ONCA 622 (Can.). 50 United Mexican States v. Cargill, Inc. (note 49). 51 See e.g., Schoenduve Corp. v. Lucent Techs., Inc., 442 F.3d 727, 733 (9th Cir. 2006) (U.S.); Foulger-Pratt Residential Contracting, LLC v. Madrigal Condominiums, LLC, 779 F.Supp.2d 100, 118 (D.D.C. 2011) (U.S.). 52 Burlington N. & Santa Fe Railway Co. v. Public Serv. Co. of Okla., 636 F.3d 562, 568 (10th Cir. 2010) (U.S.). 53 See e.g., Rain CII Carbon, LLC v. ConocoPhillips Co., 674 F.3d 469, 472 (5th Cir. 2012) (U.S.); HCC Aviation Ins. Group, Inc. v. Employers Reins. Corp., 243 F.Appx. 838, 842 (5th Cir. 2007) (U.S.). 54 See Quintette Coal Ltd v. Nippon Steel Corp., [1990] B.C.J. No. 2241 (B.C. Ct. App.) (Can.). 48 49

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Deference to a Decision of the Arbitral Tribunal on the Dispute’s Arbitrability

a)

“Non-Arbitrability of the Dispute” as a Ground for Appeal

Arbitration laws generally provide that there are certain matters that are not capable of being settled by arbitration. This notion of non-arbitrability serves the purpose of ensuring that the parties do not resort to international arbitration to avoid the application of mandatory laws of a certain jurisdiction (generally the mandatory laws of the seat of the arbitration and forum of the annulment proceedings). When the issue of arbitrability arises, the reviewing court may be required to look at many different laws, including the law governing the arbitration agreement, the law of the seat of the arbitration, the law of the place where enforcement will likely be sought, or the law of the place of the annulment court.55 Most often, arbitration laws provide that a dispute is not arbitrable when its subject-matter may not be subject to arbitration under the law of the forum of the annulment court. It is thus according to the mandatory laws of the state where the annulment is sought that the arbitrability of the dispute will most often be determined.56 b)

Preclusive Effect of a Decision on the Dispute’s Arbitrability?

In the arbitration preceding the annulment proceedings, it is often the case that the arbitral tribunal makes a decision on the dispute’s arbitrability, at the very least implicitly, by deciding the merits of the case. The question then arises as to whether the reviewing state courts ought to show any deference to the tribunal’s determination on arbitrability. Many arbitration laws provide that non-arbitrability objections can be raised ex officio by the annulment court.57 This means that even if the parties do not raise them, the court can do it. Although this does not impose a de novo review by the court, it does increase the probability that an arbitrator’s decision on arbitrability will be scrutinized at the annulment level. This stricter approach is usually justified by the fact that the notion of arbitrability or lack thereof has to do with mandatory laws of the forum of the annulment court and is thus more sensitive than other issues and very particular to each jurisdiction.

See N. BLACKABY/ C. PARTASIDES/ M/ HUNTER et al., (note 20), p. 111. See G.B. BORN (note 8), p. 3599-3601. 57 See e.g., Article 34(2)(b) of the UNCITRAL Model Law; § 1059(2)(2)(a) of the 55 56

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Deference of State Courts to Arbitral Awards 5.

Deference to an Institutional Ruling on an Arbitrator’s Lack of Independence and/or Impartiality

a)

“Lack of Independence and/or Impartiality of an Arbitrator” as a Ground for Appeal

Most arbitration laws provide that the members of an arbitral tribunal must show certain qualities including independence and impartiality. Lack thereof is a ground for challenge of the award. There are jurisdictions, like the United States, where the arbitration law makes specific reference to “lack of independence or impartiality of an arbitrator” as a ground for appeal.58 This is not the case under all arbitration laws, as is evidenced by the UNCITRAL Model Law and the Swiss Private International Law Act that do not make a specific reference to this ground.59 However, even without a specific reference, it has consistently been held by courts that lack of independence or impartiality must be considered as an implicit ground for appeal under one of the other grounds provided by the applicable arbitration law (very often under the ground of improper composition of the tribunal).60 “Lack of independence and/or impartiality” is also often specifically mentioned in institutional arbitration rules as a ground to challenge an arbitrator’s decision.61 In this context, these rules usually provide that a challenge to an arbitrator must first be made “internally,” through a procedure described in the institutional rules.62 After this challenge is made and provided that the parties have not waived their right to judicial review, the parties can, in certain jurisdictions, appeal the institutional ruling in annulment courts.63 However, this is not allowed everywhere: in jurisdictions like Switzerland64 and the United States,65 for instance, these

G.B. BORN ( note 8), p. 3562-3563. See Article 34(2) of the UNCITRAL Model Law and Article 190(2) of the Swiss Private International Law Act. 60 G.B. BORN ( note 8), p. 3562-3563. For instance, Article 190(2) of the Swiss Private International Law Act does not make specific reference to the arbitrator’s lack of independence or impartiality as a ground for appeal but refers to the improper composition of the tribunal (Article 190(2)(a)), which implicitly includes the ground of lack of independence and impartiality as evidenced in the Swiss Federal Tribunal’s case law (see e.g., TF, 29 Oct., 2010, ATF 136 III 605, para. 3.2.1; TF, 18 Aug., 1992, ATF 118 II 359, para. 3b); on this same issue, see also P. M. PATOCCHI (note 13), p. 80. 61 See e.g., Article 10.1 of the LCIA Rules. 62 Article 10.1 of the LCIA Rules. 63 See e.g., Article 13(3) of the UNCITRAL Model Law; §1037(3) of the German Code of Civil Procedure. See also, M. L. MOSES, International Commercial Arbitration, Cambridge 2017, 3rd ed., p. 154. 64 See TF, 2 May 2012, ATF 138 III 270, para 2.2.1 (Switz.): interestingly, the situation is even more limitative in ad hoc arbitrations, where the decision on the arbitrator’s challenge made by the Swiss juge d’appui cannot be reviewed at all by the Swiss Federal Tribunal because of its strict application of Article 180(3) of the Swiss Private International Law Act; see also TF, 27 June 2012, 4A_54/2012, para 2.1 (Switz.) and TF, 6 January 2010, 4A_348/2009, para 3.1 (Switz.). 58 59

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Eolos S. Rigopoulos institutional rulings cannot be directly appealed; they can only be challenged indirectly together with the final award on the merits. Furthermore, institutional rules do not treat rulings on a challenge to an arbitrator the same. Under some of them, like the LCIA Rules66 or the ICC Rules,67 the institutional ruling on the arbitrator’s independence and impartiality is considered final. Under other rules, like the AAA Commercial Rules,68 the institutional ruling is generally not considered final (as per the relevant case law, despite the wording of Article 18 AAA Commercial Rules which seems to indicate the opposite).69 These different rules and practices raise the question of the potential preclusive effect of an institutional ruling on independence and impartiality in subsequent state court vacatur proceedings. For the sake of clarity, it must be emphasized that in this section, contrary to all other sections of this paper, the decision examined is one made by the arbitral institution and not by the arbitral tribunal. b)

Preclusive Effect of an Institutional Ruling on an Arbitrator’s Lack of Independence and/or Impartiality?

In most jurisdictions, a prior institutional ruling on the composition of the arbitral tribunal does not bear any prejudicial effect on the annulment courts’ determination.70 On the one hand, this practice seems rather logical when the institutional ruling is not final according to the applicable institutional rules. On the other hand, it certainly makes less sense, as pointed out by one author,71 when the institutional ruling is supposed to be final according to the rules chosen by the parties, as it is a generally accepted principle that the parties may waive their right to challenge an arbitrator. Nevertheless, there are many examples of state courts refusing to recognize a preclusive effect to an institutional decision supposed to be final according to the relevant institutional rules; for instance, the Swiss Federal Tribunal held, in 65 See Larry’s United Super, Inc. v. Werries, 253 F.3d 1083, 1085 (8th Cir. 2001); Florasynth, Inc. v. Pickholz, 750 F.2d 171, 174 (2d Cir. 1984). 66 London Court of International Arbitration [LCIA] Arbitration Rules, Article 29, available at https://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2014. aspx on 18.04.2021 [hereinafter LCIA Rules]. 67 International Chamber of Commerce [ICC] Arbitration Rules, Article 35, available at https://iccwbo.org/content/uploads/sites/3/2017/01/ICC-2017-Arbitration-and2014-Mediation-Rules-english-version.pdf.pdf on 18.04.2021 [hereinafter ICC Rules]. 68 American Arbitration Association [AAA] Commercial Arbitration Rules and Mediation Procedures, Article 18, available at https://adr.org/sites/default/files/Commercial %20Rules.pdf, on 18.04.2021 [hereinafter AAA Commercial Rules]. 69 See Beebe Med. Ctr, Inc. V. InSight Health Servs. Corp., 751 A.2d 426, 440 (Del. Ch. 1999). 70 See F. ROSENFELD (note 30), at 450-451; G.B. BORN (note 8), p. 3572 (citing to AT&T v. Saudi Cable Co. [2000] 2 Lloyd’s Rep. 127, 137 (English Ct. App.)). 71 G.B. BORN (note 8), p. 3573.

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Deference of State Courts to Arbitral Awards an annulment procedure against a final award rendered under the ICC Rules (which provide that the institutional decision shall be final), that it was free to extensively review the prior institutional ruling because the institutional decision was not subject to a direct appeal before state courts under Swiss law.72 American precedents generally follow the same logic,73 but have left open the possibility that an institutional ruling have a preclusive effect in the event that the parties expressly provide so in their arbitration agreement; the argument there is to say that an express provision in the arbitration agreement is a stronger indication of the parties’ intent compared to the mere reference to a set of rules that provides for the same solution.74 On the other side of the spectrum, there are also decisions going the other way; for instance, a German court held, in an ICC case where there had been an unsuccessful challenge to an arbitrator, that unless evident bias is shown, there is no justification to review the institutional ruling.75 These decisions appear, however to be less frequent in practice as more courts follow the opposite view outlined above. 6.

Deference to a Decision of the Arbitral Tribunal on an Issue of Public Policy

a)

“Violation of Public Policy” as a Ground for Appeal

Most arbitration laws provide that an international award may be annulled by the reviewing court if it violates public policy.76 While there is no absolute international consensus on what constitutes a violation of public policy, it is usually said that there must be a violation of a legal principle that is fundamental to a legal system or that protects important moral rights of a certain community. From this starting point, jurisdictions vary with respect to the importance of certain principles or types of laws.77 Although not universally, the public policy ground for appeal usually makes reference to the public policy of the state where the award was made and the annulment is sought.78 72 TF Jan. 6, 2010, 4A_348/2009 (Switz.); for other examples of similar court rulings, see San Carlo Opera Co. V. Conley, 72 F.Supp. 825, 833 (S.D.N.Y. 1946) (U.S.); Boyhan v. Maguire, 693 So.2d 659, 662 (Fla. 4th DCA 1997) (U.S.). 73 See Azteca Construction, Inc., v. ADR Consulting, Inc., 18 Cal.Rptr.3d 142 (Cal. Ct. App. 2004). 74 See Beebe Med. Ctr, Inc. V. InSight Health Servs. Corp., 751 A.2d 426, 440 (Del. Ch. 1999). 75 OLG Schleswig, Jun. 24, 1999, XXIX Yearbook Commercial Arbitration [Y.B. Comm. Arb.] 687, 694 (Ger.). 76 M. RUBINO-SAMMARTANO (note 3), p. 1293. 77 See N. BLACKABY/ C. PARTASIDES/ M. HUNTER et al (note 20), p. 597-598. 78 See N. BLACKABY/ C. PARTASIDES/ M. HUNTER et al (note 20), p. 597-598; see also J.D.M. LEW/ L.A. MISTELIS/ S. KRÖLL, Comparative International Commercial Arbitration, 2003, p. 676.

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Preclusive Effect of a Prior Decision on Public Policy?

While slightly uncommon, it sometimes happens that arbitral tribunals have already dealt with an issue of public policy before the issue is invoked in a challenge of the award by a party. Practices with respect to the degree of deference owed to the tribunal’s determination on the issue of public policy vary from court to court and from jurisdiction to jurisdiction. There are, for instance, courts that apply a de novo approach, requiring that the annulment court does not defer at all to the tribunal’s decision on the issue of public policy.79 This practice is often motivated by the argument that it is not for an arbitral tribunal to decide matters of a sovereign state’s public policy. Where this approach is followed, it is clear that the annulment court must not defer to the arbitrators’ determinations on legal issues of public policy. Even in this context, however, it is often held that the annulment court must defer to the findings of fact of the award, even if these facts concern the issue of public policy that is being examined.80 In other words, the annulment state court will, based on the facts retained by the tribunal, decide whether there has been a violation of public policy. Other courts have opted for a different approach, basically deferring to the arbitrators’ decision on public policy unless there is a potentially extreme violation of a particularly important and sensitive mandatory law of the annulment court’s jurisdiction.81 According to scholars, although a majority of courts seem to prefer a de novo review on questions of public policy, this second more liberal approach should be the preferred view, in line with the general principle of safeguarding the finality of international awards.82 7.

Deference to a Decision of the Arbitral Tribunal on the Merits

a)

“Error on a Point of Law” as a Ground for Appeal

Some jurisdictions allow parties to challenge an international award on the ground that the tribunal did not apply the law correctly. Many distinctions are made between the different systems, as they do not all refer to the same concepts and do not all allow courts to review the merits of a case in an identical manner. For instance, the English Arbitration Act’s Section 69 provides that an international award may be reviewed by English courts for substantive errors of English law that are of public significance or where the award is obviously wrong.83 See e.g., AJU v. AJT, [2011] SGCA 41, §62 (Singapore Ct. App.) (Sing.). See e.g., Bhd of Locomotive Eng’rs & Trainmen v. Union Pac. R. R. Co., 882 F.Supp2d 1032, 1042 (N.D. III. 2012) (U.S.) and Dickenson-Russel Coal Co. v. Int’l Union, Mine Workers of Am., 840 F.Supp.2d 961 (W.D. Va. 2012) (U.S.). 81 See e.g., CA Paris (Nov. 26, 2009), Sarah A. v. Moussa R. (Fr.); CA Paris (Dec. 17, 2009), Société Gothaer Finanzholding AG v. Liquidators of ICD (Fr.). 82 A. MOURRE/ L. RADICATI DI BROZOLO (note 2), p. 178. 83 See A. TWEEDDALE/ K. TWEEDDALE, Arbitration of Commercial Disputes International and English Law and Practice, Oxford 2005, para12.45; K. NAIRN (note 18), p. 2. 79 80

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Deference of State Courts to Arbitral Awards The United States has a slightly different approach, allowing challenges to international awards on grounds of “manifest disregard of the law.” Although there is no consensus among U.S. courts, the general view is that to conclude that an award was rendered under “manifest disregard of the law,” it is required that the arbitrators knew a well-defined legal principle and deliberately decided not to apply it.84 Despite a few recent decisions questioning its relevancy, the “manifest disregard of the law” doctrine is probably still the applicable standard in the United States.85 Other examples of jurisdictions permitting challenges on points of law are Ireland, China, Abu Dhabi, Libya, Saudi Arabia, Argentina, and Egypt.86 Singapore is also in the process of adopting a similar regime.87 As will be shown below, in these jurisdictions where parties can bring challenges on points of law, the bar for the challenge to be admissible is set rather high. These jurisdictions are, however, the exception to the rule. Indeed, in most legal systems, errors on points of law are not a ground for the challenge of an international award.88 This is, for instance, the case in unamended UNCITRAL Model Law jurisdictions. Switzerland and France are two other examples of jurisdictions that do not allow challenges to international awards on the merits. Despite the desired clarity, the subsection below will show that courts in some of these jurisdictions that do not permit challenges on points of law sometimes use questionable ways to review international awards on the merits. For example, it happens that they “disguise” a challenge on the merits as a violation of public policy or an excess of the tribunal’s jurisdiction.89 b)

Preclusive Effect of a Decision on the Merits?

(1)

In Jurisdictions that Allow Challenges to International Awards on Points of Law

In jurisdictions where judicial review of an international award on the merits is allowed (in limited circumstances), there is a general tendency of annulment courts 84 M. RUBINO-SAMMARTANO (note 3), para 31.5, at 1293. For an example in case law, see Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396, 408 (2d Cir. 2009) (applying this two-pronged test to determine whether the arbitral tribunal decided in “manifest disregard of the law”). 85 See L. DIMATTEO, Judicial Control of Arbitral Awards in the United States in L. DIMATTEO/ M. INFANTINO/ N. M-P POTIN (eds) (note 2), p. 409; See N. BLACKABY/ C. PARTASIDES/ M/ HUNTER et al (note 20), p. 594. 86 G.B. BORN (note 8), p. 3633-3634. 87 Written answer by Minister for Law, Kasiviswanathan Shanmugam, to Parliamentary Question on the [Singaporean] International Arbitration Act (Apr. 1, 2019), https://app.mlaw.gov.sg/news/parliamentary-speeches/written-answer-parliamentary-ques tion-international-arbitration-act. 88 See A. MOURRE/ L. RADICATI DI BROZOLO (note 2) p. 172; J.-F. POUDRET/ S. BESSON, Droit comparé de l’arbitrage international, Bruxelles/ Zürich/ Paris 2002, p. 991. 89 G.B. BORN (note 8), p. 3645-3650.

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Eolos S. Rigopoulos strongly deferring to the arbitrators’ decision on the merits, with a few exceptional cases where courts consider that the wrong application of the law by the arbitral tribunal is so egregious that it must be corrected.90 In the United States, where courts usually apply the “manifest disregard of the law” standard to determine whether there is room for an annulment of the award based on a wrong application of the law, it is necessary that the tribunal has knowingly not applied or wrongly applied a clear legal principle for the annulment court to legitimately annul the award.91 It is, however, not sufficient that the tribunal wrongfully applied the law. Rather, there must have been a very serious violation of substantive law for this ground to be invokable, which makes the analysis of this ground very similar to that of a violation of public policy.92 Furthermore, the “manifest disregard of the law” doctrine only concerns issues of U.S. law and is not applicable to issues of fact, contractual interpretation (including interpretation of the arbitration agreement), or foreign law.93 Moreover, it is not clear whether agreements to waive the right to judicial review under the “manifest disregard of the law” doctrine are enforceable before U.S. courts, as there are decisions going both ways.94 Thus, although U.S. court decisions do not draw a general principle as to how appeals to international arbitral awards on points of law should be treated, it can at least be said that such appeals are rarely successful in practice as the options available to parties in this regard are rather limited.95 In England, courts follow a similar approach. According to Section 69 English Arbitration Act, appeals to international awards on points of law are only admissible if the appealing party shows that the award contains substantive errors of English law that are of public significance or that cause the award to be obviously wrong. Although this wording is different from the U.S. standard, its meaning is very similar and makes a challenge on a point of law available only in very limited cases. According to English precedents, annulment courts should generally respect the tribunal’s decision on the merits and only in exceptional cases intervene and substitute their reading of substantive law to the tribunal’s analysis.96 Thus, the English approach to appeals to awards on points of law is also rather

See A. TETLEY, Judicial Control of Arbitral Awards in the United Kingdom in L. DIMATTEO/ M. INFANTINO/ N. M-P POTIN (eds.) (note 2), p. 376; L. DIMATTEO (note 85), p. 408. 91 See Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396, 408 (2d Cir. 2009) (U.S.). 92 See L. DIMATTEO (note 85), at 409-10 (citing to Schwarz v. Merrill Lynch & Co., 665 F. 3d 444, 451 (2d Cir. 2011) (U.S.); Matter of Roffler v. Spears, Leeds & Kellogg, 13 A.D. 3d 308, 310 (1st Dept. 2004) (U.S.); Wien & Malkin LLP v. Helmsley-Spear, Inc., 6 NY 3d 471, 479-80 (2006) (U.S.)). 93 G.B. BORN (note 8), p. 3640-3641. 94 G.B. BORN (note 8), p. 3642-3643. 95 See L. DIMATTEO (note 85), p. 408-410; G.B. BORN (note 8), p. 3634-3643. 96 See e.g., Lesotho Highlands Development Authority v. Impregilo SpA and others, [2005] UKHL 43 (Eng.); Surefire Sys. v. Guardian ECL Europe Ltd [2005] EWHC 1860 (QB) (Eng.); Egmatra AG v. Marco Trading Corp. [1999] EWHC 862 (QB) (Eng.). 90

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Deference of State Courts to Arbitral Awards restrictive and only allows for successful claims of error of law in exceptionally egregious cases. In summary, in the United States and England, although a wrongful application of substantive law is formally a ground for appeal of an international award, annulment courts are very deferential to the tribunal’s decision on the merits. (2)

In Jurisdictions that Do Not Allow Challenges to International Awards on Points of Law

In jurisdictions where no judicial review is allowed on the merits of an international award, the general principle and starting point of the analysis is that annulment courts must completely defer to the tribunal’s decision on the merits. Canadian courts, as courts of a UNCITRAL Model Law jurisdiction, strictly apply their arbitration law and simply do not allow challenges on points of law.97 In effect, Canadian courts grant complete deference to the tribunal’s decision on the merits. There are, however, jurisdictions where courts have sometimes probably drifted away from the applicable rule that there cannot be a challenge to an international award on an issue of substantive law. In Switzerland and France for instance, although the law seems to be clear in that no challenge can be made on grounds that the tribunal did not apply the law correctly, there have been decisions “requalifying” some legal principles as part of the jurisdiction’s or even international public policy. Under this seemingly artificial new designation, these legal principles may constitute the basis for an appeal against an international award.98 For example, in a decision of 2010, the Swiss Federal Tribunal held that the general contract law principle “pacta sunt servanda” is part of Swiss public policy and that, as a result, a court should be able to annul an award on the ground that a tribunal may not apply a contractual clause that it has considered as not binding, or refuse to apply a clause that it has admitted to be binding on the parties.99 In the same vein, a French decision held that the general contract law principle that contractual obligations ought to be performed in good faith is part of international public policy, thus allowing a party to raise it as a ground for appeal against an international award.100 Swiss and French courts thus defer to a very large extent to the tribunal’s decision on the merits, unless they consider that an erroneous application of the law by the tribunal is so substantial that it must be considered as a violation of public policy, in which case there is an admissible ground for the annulment of the 97 G.B. BORN (note 8), p. 3645-3646 (referring to United Mexican States v. Cargill, Inc. [2011] ONCA 622 (Can.); Canada (Attorney Gen.) v. S.D. Myers Inc. [2004] 3 Federal Court [F.C.] 38 (Can.). 98 See G.B. BORN (note 8), p. 3649-3650; see also for a Swiss law perspective on this: P. LANDOLT, Judicial Control of Arbitral Awards in Switzerland in L. DIMATTEO/ M. INFANTINO/ N. M-P POTIN (eds.) (note 2), at 349 (citing to TF Apr. 19, 1994, ATF 120 II 155 to say that “[p]ublic policy remains […] a fluid concept” under Swiss law). 99 TF Jan. 6, 2010, 4A_260/2009 (Switz.). 100 CA Paris (Jan. 12, 1993), République de Côte-d'Ivoire et autre v. Société Norbert Beyrard (Fr.).

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Eolos S. Rigopoulos award. One could certainly argue that this practice is not very different from that of England and the United States, two jurisdictions that “ingenuously” allow challenges to international awards on the merits in very specific and restrictive cases.101

III. Deference by State Courts to Foreign or NonDomestic Commercial Arbitral Awards in Enforcement Proceedings A.

Importance of the New York Convention

The New York Convention counts more than 160 state signatories.102 It is the “universal” standard in terms of recognition and enforcement of foreign arbitral awards and arbitration agreements and thus applies in most countries’ recognition and enforcement proceedings.103 B.

Notion of Foreign or Non-Domestic Arbitral Award in Enforcement Proceedings under the New York Convention

The New York Convention is applicable when recognition and enforcement of a foreign or non-domestic arbitral award are sought in a signatory state. There are two categories of awards that are dealt with in the New York Convention under Article I(1): (i) awards made in the territory of a country other than the one where recognition and enforcement are sought (“foreign” awards), and (ii) awards made in the country where recognition and enforcement are sought but that are not domestic under that country’s laws (“non-domestic” awards).104 These definitions are complex and there are many different interpretations as to what constitutes a foreign versus a non-domestic award. There is no need to go in detail about these concepts here, as this is not the subject of this paper. Regardless of characterization under the New York Convention, it is clear that there must be an element of internationality, whether it is, for instance, the place of the arbitration differing from the country where enforcement is sought, the parties having their domiciles in different countries, or the law applicable to the merits or the arbitration agreement differing from the law of the enforcing court.105

See G.B. BORN (note 8), p. 3649-3650. Status of the New York Convention, available at https://uncitral.un.org/en/texts/ arbitration/conventions/foreign_arbitral_awards/status2 on 19.04.2021. 103 See New York Convention Guide, available at https://newyorkconvention1958. org/index.php?lvl=cmspage&pageid=7&id_news=1019 on 19.04.2021. 104 M. RUBINO-SAMMARTANO (note 3), para 35.1.3, p. 1422. 105 See G.B. BORN (note 8), p. 3188 et seq. 101 102

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Deference of State Courts to Arbitral Awards In Switzerland, for example, the situation is rather clear as, according to the relevant provisions of the Swiss Private International Law Act106 and the case law of the Swiss Federal Tribunal,107 the New York Convention only applies to awards that were rendered outside of Switzerland; conversely, the enforcement of awards rendered in Switzerland is always governed by Swiss law.108 In the United States, the approach is not as clear, as the requirement for the New York Convention to be applicable is that there needs to be a “foreign element.”109 This “definition” is indeed rather vague. For instance, it has been held that an award rendered in New York in a dispute between two American parties regarding a contract whose performance was to take place in Poland, is a foreign award in the meaning of Article I(1) New York Convention.110 U.S. courts have also supported the view that an award rendered outside the United States in an arbitration between two U.S. parties about a purely U.S. matter is not considered a foreign or non-domestic award in the meaning of the New York Convention.111 There are thus very different approaches between jurisdictions as to the requirements for the New York Convention to apply to the recognition and enforcement of an arbitral award. C.

Deference by Enforcing State Courts to the Arbitral Award that Is Being Enforced

1.

Introductory Comments

Article V New York Convention provides limited grounds allowing an enforcing state court, to the request of a party and provided that that party proves the alleged circumstances, to refuse recognition and enforcement of a foreign or non-domestic arbitral award. As explained above, when examining the degree of deference by state courts to arbitral awards, it only makes sense to examine issues that were discussed and were the subject of a decision at the stage of the arbitration. Furthermore, the below paragraphs only deal with the deference accorded by enforcing courts to an arbitral tribunal’s decisions, and not to decisions made by an annul-

106 See Article 194 of the Swiss Private International Law Act; see also P.M. PATOCCHI (note 13), p. 72, 78. 107 See TF Dec. 9, 2008, 135 ATF III 139 (Switz.). 108 Swiss Private International Law Act or Swiss Code of Civil Procedure depending on whether the award is domestic or international as per the definition of Article 176(1) of the Swiss Private International Law Act; see supra 223. 109 See Sigval Bergesen, as Owner of the M/T Sydfonn and others v. Joseph Muller A.G., IX Y.B. Comm. Arb. 487-94 (2nd Cir. 1983) (U.S.). 110 Lander Co. Inc. v. MMP Investments Inc., 107, F.3d 476 (7th Cir. 1997) (U.S.). 111 See e.g., Jones v. Sea Tow Servs. Freeport NY, Inc., 30 F.3d 360, 365-66 (2d Cir. 1994) (U.S.); Ensco Offshore Co. v. Titan Marine LLC, 370 F.Supp.2d 594, 598-601 (S.D. Tex. 2005) (U.S.).

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Eolos S. Rigopoulos ment court on an issue first decided by the arbitral tribunal when rendering the award.112 The following sections explore the degree of deference by state courts to foreign and non-domestic arbitral awards by comparing the ways in which enforcing courts defer to the arbitrators’ decisions depending on the examined issues. More specifically, the analysis focuses on the following grounds/issues: invalidity of the arbitration agreement (lack of jurisdiction), excess of authority by the arbitral tribunal, non-arbitrability of the dispute, violation of public policy, and fraud in the arbitral proceedings. In addition, a final point examines what happens when a party claims that the tribunal was wrong on the merits. Similarly to how national arbitration laws deal with this matter, the New York Convention does not address the question of the deference owed by enforcing courts to the tribunal’s determinations. This point is for the different jurisdictions to determine. The only element that can clearly be drawn from the New York Convention is that it does not exclude the possibility of a judicial review of the tribunal’s decision.113 Thus, the analysis is once again mainly based on case-law from different jurisdictions, as well as legal commentary. 2.

Deference to a Decision of the Arbitral Tribunal on the Validity of the Arbitration Agreement

a)

“Invalidity of the Arbitration Agreement” as a Ground to Resist Enforcement

According to Article V(1)(a) New York Convention, if the arbitration agreement is invalid, the enforcing court may deny a foreign or non-domestic arbitral award enforcement based on the tribunal’s lack of jurisdiction. Validity is usually to be established under the law chosen by the parties to apply to the arbitration agreement, or, in the absence thereof, the law of the seat of the arbitration (where the award was made).114 b)

Preclusive Effect of a Prior Decision on the Validity of the Arbitration Agreement?

(1)

In General

Generally, enforcing courts do not owe the tribunal’s determination on the validity of the arbitration agreement any deference and must proceed to its review de novo. This interpretation is mainly based on the wording of Article V(1)(a) New York Convention, which requires enforcing courts to determine whether the agreement to arbitrate is valid, without further specifications. A de novo review is also justi112 In other words, the following paragraphs do not deal with the deference accorded by enforcing courts to determinations made by annulment courts. 113 See Articles V(1)a and V(1)(c) of the New York Convention. 114 M. RUBINO-SAMMARTANO (note 3), p. 1441.

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Deference of State Courts to Arbitral Awards fied by the fact that parties must be bound by a valid arbitration agreement before they are bound by an arbitral award.115 English courts, for instance, similarly to their approach of not deferring to jurisdictional rulings of tribunals in annulment proceedings, conclude most of the time that the same is to be said at the enforcement stage, i.e. that the enforcing court should make its own determination on the validity of the arbitration agreement without regard to the tribunal’s findings.116 Other enforcing courts have accorded some deference to the tribunal’s decision on the validity of the arbitration agreement. Apart from England, however, there are no clear geographical tendencies on this matter, as courts from the same countries have reached different solutions.117 Furthermore, similarly to the practice of annulment courts confronted with jurisdictional rulings made by tribunals, most enforcing courts tend to defer to the arbitrators’ factual findings or application of foreign law. This trend is particularly evidenced where the determination of the validity of the arbitration agreement at issue involves matters pertaining to a specific industry or commercial sector, or laws that the arbitrators were clearly more familiar with than was the enforcing court.118 There are very few examples of enforcing courts rejecting the expertise of the arbitrators in such circumstances, but it happened, for instance, in the highly criticized Dallah decision. In Dallah, the U.K. Supreme Court denied recognition of a tribunal’s determination of the arbitration agreement’s validity. In its decision, the Court criticized the way the French arbitrators, two of whom were prominent French lawyers, applied French law.119 Unsurprisingly, when French courts later dealt with the award in another procedure, they did not follow the U.K. Supreme Court’s application of French law.120 (2)

Parties’ Agreement to Finally Resolve Jurisdictional Disputes in the Arbitration

As mentioned above, certain jurisdictions allow parties to agree to have any jurisdictional disputes, including validity of the arbitration agreement, finally resolved by arbitration. In these jurisdictions, including the United States, England and Canada, there is no doubt that such an agreement obliges enforcing courts to defer to the arbitrators’ decision on the validity of the arbitration agreement. The only matter before the court, then, is whether that agreement (to have jurisdictional disputes finally resolved by arbitration) fulfills the legal requirements of each jurisG.B. BORN (note 8), p. 3797-3798. See e.g., Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs, Gov’t of Pakistan [2010] UKSC 46 (Eng.); Gulf Azov Shipping Co. v. Baltic Shipping Co. [1999] EWHC (Comm) 68 (Eng.). 117 See G.B. BORN (note 8), p. 3798-3799 (citing multiple cases). 118 G.B. BORN (note 8), p. 3802-3803; see also FRIEDRICH ROSENFELD (note 30), at 449. 119 See Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs, Gov’t of Pakistan [2010] UKSC 46 (Eng.). 120 See CA Paris (Feb. 17, 2011), Gouvernement du Pakistan, Ministere des Affaires Religieuses v. Société Dallah Real Estate & Tourism Holding Company (Fr.). 115 116

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Eolos S. Rigopoulos diction (for example, such an agreement would need to pass the “clear and unmistakable evidence” test in a U.S. court).121 As discussed, there are also jurisdictions that do not allow the parties to agree to waive their right to judicial review on matters of jurisdiction. According to one author, although such practice is not necessarily without merit in an annulment context, it cannot be replicated in an enforcement context where the agreement to arbitrate jurisdictional disputes should be recognized like any other arbitration agreement under Article II New York Convention. In this author’s view, an agreement by the parties to have jurisdictional disputes finally resolved by an arbitrator should be recognized and enforced even in states that do not allow parties to waive their right to judicial review when it comes to jurisdictional disputes, as the New York Convention commands. The situation is different, however, if one of the parties denies the existence of a valid agreement; in such a case, there is not clear enough evidence that both parties wish to have their jurisdictional disputes finally resolved by arbitration, and the enforcing court should review de novo.122 3.

Deference to a Decision of the Arbitral Tribunal on the Scope of its Jurisdiction

a)

“Excess of Authority” as a Ground to Resist Enforcement

There is general consensus that an award made by an arbitral tribunal exceeding the scope of its jurisdiction may be denied enforcement under Article V(1)(c) New York Convention. The scope of the tribunal’s jurisdiction is to be determined according to the parties’ arbitration agreement.123 As mentioned in the annulment context, this ground must be distinguished from the grounds of “lack of jurisdiction” and “wrongful application of substantive law.”124 b)

Preclusive Effect of a Prior Decision on the Scope of the Arbitral Tribunal’s Jurisdiction?

There is a very clear tendency of enforcing courts to defer to the tribunal’s decisions regarding the scope of its own jurisdiction. In other words, enforcing courts usually do not reexamine the question of whether the claims brought are within the scope of the arbitration agreement.125 The main reason for this approach is that most jurisdictions like to favor a more centralized resolution of related disputes. In G.B. BORN (note 8), p. 3804-3805. G.B. BORN (note 8), p. 3805-3807. 123 See J.D.M. LEW/ L.A. MISTELIS & S. KRÖLL, (note 78), p. 713-714; M.L. MOSES, (note 63), p. 235. 124 See supra 227. 125 See e.g., Ministry of Defense of the Islamic Repub. of Iran v. Gould Inc., 969 F.2d 764, 771 (9th Cir. 1992) (U.S.); OLG Karlsruhe, Sept. 14, 2007, XXXIII Y.B. Comm. Arb. 541 (Ger.); OLG Schleswig, Jun. 24, 1999, XXIX Y.B. Comm. Arb. 687 (Ger.). 121 122

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Deference of State Courts to Arbitral Awards order to achieve this centralization, courts interpret arbitration agreements broadly so that, unless the arbitration agreement clearly states otherwise, said arbitration agreement encompasses most, if not all, disputes that may arise from the relationship contemplated in the underlying contract. Because of this “pro-arbitration” approach, present in most legal systems, enforcing courts tend to give the tribunal’s determination on the scope of its own jurisdiction very high deference.126 4.

Deference to a Decision of the Arbitral Tribunal on the Dispute’s Arbitrability

a)

“Non-Arbitrability of the Dispute” as a Ground to Resist Enforcement

Where the enforcing court finds that a dispute is not capable of settlement by arbitration according to its own law, it may refuse recognition and enforcement of an award.127 The non-arbitrability defense is available to a party that wishes to resist the enforcement of an award or an arbitration agreement. There is no formal international consensus on what areas of the law are not capable of settlement by arbitration. However, there are some similarities between the laws of different jurisdictions; typically, the following matters are not arbitrable: “criminal matters, domestic relations and succession, bankruptcy, trade sanctions, certain competition claims, consumer claims, labor or employment grievances, and certain intellectual property matters.”128 b)

Preclusive Effect of a Prior Decision on the Dispute’s Arbitrability?

Although a rare case, it is possible that, in the absence of annulment proceedings, an enforcing state court is directly confronted with an award where the tribunal made determinations on the arbitrability of the dispute. In such a case, it is reasonable to think that the enforcing court would examine the arbitrability issue de novo.129 Furthermore, although there is not a lot of case law on the issue, it is also reasonable to think that in jurisdictions where it is allowed for parties to agree to have arbitrability disputes finally resolved by arbitration, enforcing courts would defer to the tribunal’s findings on arbitrability. However, this is not the case everywhere, and certainly not on all arbitrability issues; for example, there are no jurisdictions allowing parties to conclude such agreements to arbitrate criminal matters.130 See G.B. BORN (note 8), p. 3886-3892. See Article V(2)(a) New York Convention; see also M. RUBINO-SAMMARTANO (note 3), p. 1450. 128 G.B. BORN (note 8), p. 4058. 129 G.B. BORN (note 8), p. 4064-4065; see also JLM Indus., Inc. v. Stolt-Nielsen SA, 387 F.3d 163 (2d Cir. 2004) (U.S.). 130 See G.B. BORN (note 8), p. 4065-4066. 126 127

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Eolos S. Rigopoulos 5.

Deference to a Decision of the Arbitral Tribunal on an Issue of Public Policy

a)

“Violation of Public Policy” as a Ground to Resist Enforcement

The violation of public policy is a very frequently invoked ground to challenge the enforcement of an international award. As mentioned, the notion of public policy is not universal, as every jurisdiction shows more or less sensitivity to certain legal issues. In the recognition context, and under Article V(2)(b) New York Convention, the resisting party has to invoke a violation of the public policy of the country where enforcement is sought. When reviewing an award under Article V(2)(b) New York Convention, an enforcement court must consider its jurisdiction’s public policy, but must also remain compliant with the New York Convention’s goals. As in the annulment context, approaches toward public policy in enforcement proceedings also vary between jurisdictions as to what public policy entails and as to the ways in which domestic considerations of public policy change once they become international (some jurisdictions go as far as to consider a “transnational” public policy).131 b)

Preclusive Effect of a Prior Decision on Public Policy?

In the enforcement context, the potential deference accorded by courts to a tribunal’s determination on an issue of public policy is considered a little differently, as the issue has usually already been raised in annulment proceedings. Therefore, there is not much precedent from enforcing courts regarding decisions made by arbitral tribunals on public policy issues. However, in the available precedent, the same principles that apply in the annulment context apply in the enforcement context, i.e. the enforcing court is generally bound by the tribunal’s factual findings, and applies a de novo standard of review to legal findings pertaining to an issue of public policy of the enforcing state.132

131 G.B. BORN (note 8), at 4007-4009. For more details on the notion of “transnational public policy” (followed by a rather limited number of jurisdictions), see L. DOSSIOS & J.-B. RACINE, L’arbitre, le juge des parties et/ou régulateur?, Revue internationale de droit économique 2019, p.105-122, p. 113 et seq.; J.D.M. LEW, Transnational Public Policy: Its Application and Effect by International Arbitration Tribunals, Conferencia Hugo Grocio, CEU Ed. 2018, p. 17 et seq.; M.L. MOSES, Chapter 11: Public Policy under the New York Convention: National, International, and Transnational, in K.F. GOMEZ/ A.M. LOPEZ-RODRIGUEZ (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, p. 169-184, p. 179 et seq.; L.E. TRAKMAN, Aligning State Sovereignty with Transnational Public Policy, Tul. L. Rev. 2018, vol. 93, p. 207, UNSWLRS No. 18-89. 132 See e.g., Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 288 (5th Cir. 2004) (U.S.); Global Bldg Prods. Ltd v. Chemco, Inc., 2012 WL 5183629, at 8 (U.S.); AJU v. AJT, [2011] SGCA 41, para 69 (Sing.).

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Deference of State Courts to Arbitral Awards 6.

Deference to a Decision of the Arbitral Tribunal on a Claim of Fraud

a)

“Fraud” as a Ground to Resist Enforcement

Although not a ground provided by Article V New York Convention, there seems to be international consensus that a party should not be denied the possibility to resist the enforcement of an award if it can prove that there was material fraud in the arbitral proceedings, provided that evidence of such material fraud was not or could not have been presented to the tribunal. Classic examples of fraud that could possibly lead to the non-recognition of an international award are, for instance, the use of forged documents or perjured witness statements in the making of the award.133 b)

Preclusive Effect of a Prior Decision on a Claim of Fraud?

Generally, an enforcing court must defer to the tribunal’s findings on claims of fraud. This conclusion was reached in one case by an enforcing English court that set the bar very high for the reviewing court to depart from the tribunal’s findings on the claim of fraud.134 Indeed, the Court stated that for English courts to be permitted to review an award on grounds of fraud, the evidence supporting the claim must first “be likely to have materially influenced the arbitrators’ conclusion had it been advanced at the hearing”, and second not have been available at either the arbitration hearing or any annulment proceedings that may have followed. Although this case is relevant to the present analysis of enforcement proceedings, it must be mentioned that the Swiss annulment proceedings that preceded the English court’s review came to the same conclusion.135 It is thus very possible that the conclusion reached by the Swiss Federal Tribunal on the matter may have influenced the enforcing English court in its judgment. U.S. Courts also generally request that the party bringing the fraud claim reach a very high standard of proof for all relevant elements to its fraud claim, thus making it very difficult for the enforcing court not to defer to the tribunal’s decision on the fraud claim.136 In Forsythe International, the court rejected the claim that the award was procured by fraud precisely because the tribunal had already examined fraud-related allegations; the enforcing court thus deferred to the tribunal’s determinations on the matter.137 133 134

G.B. BORN (note 8), p. 4067-4068. Westacre Invs. Inc. v. Jugoimport-SDPR Holdings Co. [1998] EWHC (QB) 570

(Eng.). TF Dec. 30, 1994, 4P.115/1994 (Switz.). See e.g., Forsythe Int’l, SA v. Gibbs Oil Co., 915 F.2d 1017 (5th Cir. 1990) (U.S.); Europcar Italia, SpA v. Maiellano Tours, Inc., 156 F. 3d 310, 315 (2d Cir. 1998) (U.S.); Belmont Partners v. Mina Mar Group, Inc., 741 F.Supp.2d 743, 753-54 (W.D. Va. 2010) (U.S.). 137 Forsythe Int’l, SA v. Gibbs Oil Co., 915 F.2d 1017, 1022-23 (5th Cir. 1990) (U.S.). 135 136

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Eolos S. Rigopoulos 7.

Deference to a Decision of the Arbitral Tribunal on the Merits

It is a well-established principle in international commercial arbitration that enforcement and recognition of an award cannot be denied on the grounds of an erroneous application of substantive law by the tribunal. This is the case under most domestic laws and international conventions on the recognition and enforcement of foreign and non-domestic arbitral awards, and in particular under the New York Convention, whose Article V does not provide that an erroneous application of substantive law is a ground for non-recognition. Thus, in most jurisdictions, enforcing courts have a duty to give high deference to the tribunal’s decision on the merits.138 Despite the apparent clarity on this, there have been decisions from certain jurisdictions, including Turkey, Indonesia, China, and Russia, in which the enforcing court wrongfully used the public policy or excess of jurisdiction grounds to deny enforcement to an award, when in reality the enforcing court only disagreed with the application of the law made by the tribunal. Furthermore, there are also a few lower U.S. enforcing courts that have mistakenly used the “manifest disregard of the law” doctrine that is normally applicable in annulment proceedings to deny international awards recognition and enforcement. According to one author, such practice is incorrect and goes against U.S. law and case law.139

IV. Conclusion The foregoing presentation demonstrates that state courts do not accord the same degree of deference to arbitral awards in all situations. Depending on the issue at stake, or the stage of the proceedings, state courts indeed come to different conclusions with regard to the deference that is owed to the arbitrators’ decision. In vacatur proceedings, when the issue under review is the tribunal’s lack of jurisdiction, the arbitrators’ lack of independence and/or impartiality, the dispute’s arbitrability, or a violation of public policy, courts generally do not defer to the tribunal’s decision, at least as it pertains to its legal findings. However, there seems to be relatively wide acceptance of the viewpoint that the tribunal’s factual findings are to be given high deference, especially when they involve fields in which the tribunal has a particular expertise and in which the court lacks specific knowledge, such as certain commercial sectors. On the aforementioned issues, annulment courts also generally defer to the arbitrators where the arbitrators made determinations on a specific law of which it appears that they had better knowledge than the annulment court. In slight contrast, when confronted with the issues of the scope of the tribunal’s jurisdiction or the application of substantive law, annulment courts tend

138 139

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A. MOURRE/ L. RADICATI DI BROZOLO (note 2) p. 172. G.B. BORN (note 8), p. 4074-4075, 4079-4081.

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Deference of State Courts to Arbitral Awards to grant high deference to all aspects of the tribunal’s ruling, without making any distinction between legal and factual findings (or foreign law). Courts also generally defer to all aspects of the tribunal’s decision when the parties have agreed to have certain issues, on which no deference is usually accorded (e.g. lack of jurisdiction or lack of independence of the arbitrators), finally resolved in the arbitration or at the institutional level (in those jurisdictions where such possibility exists). In the enforcement context, courts generally do not defer to the tribunal’s decision when the issue under review is the invalidity of the arbitration agreement, the dispute’s arbitrability, or a violation of public policy. Again, this non-deference usually concerns the tribunal’s legal findings, as opposed to its factual findings and determinations on foreign law that are often accorded high deference, similarly to what is seen in the annulment context. When reviewing the issues of the scope of the tribunal’s authority, fraud in the arbitral proceedings, or the application of substantive law, enforcing courts are usually deferential to the tribunal on all aspects of its decision, without distinguishing legal from factual findings (or determinations on foreign law). Moreover, just as in the annulment context, enforcing courts tend to also defer to all aspects of the tribunal’s decision on an issue, on which deference is usually not given, if the parties agreed to have this issue finally resolved by arbitration (in jurisdictions where this is possible). This is often the case with respect to disputes about jurisdiction, and sometimes arbitrability (although agreements regarding arbitrability are less frequently enforceable). Although clear lines cannot be drawn, there seem to be two main scenarios in which annulment or enforcing courts tend to defer to the arbitral award. The first is where there is an agreement of the parties to that effect, i.e. an agreement indicating that the parties wished to have certain issues finally decided by the arbitrators. The most prominent example of such an agreement is the parties’ arbitration agreement giving the arbitrators the right to decide the merits of the case; indeed, courts are very deferential when reviewing the tribunal’s application of substantive law and only rarely interfere with its decision. Another example of such an agreement by the parties is an agreement to have certain issues (other than the merits), that would usually not be given deference when decided by an arbitrator (e.g. lack of jurisdiction), finally resolved in the arbitration. There again, the parties express their wish that specific issues be dealt with only by the arbitral tribunal. In this context, there are sometimes issues that the parties cannot agree to have finally resolved by arbitration, usually when interests considered “more important” are at stake (e.g. public policy issues). Unless the parties try to have this kind of “more important” issues finally decided by the tribunal (which state courts would generally not accept), any other agreement to that effect is generally given deference, or, at the very least, important consideration by courts (in those countries that know this approach). The second scenario where courts generally defer to an award is when they review factual findings or determinations on foreign law, and especially when it appears that the members of the tribunal had specialized knowledge that the judges lack. Here, the reason for the deference seems to be more practical, as it would probably be a waste of time and resources for courts to go over all of the facts Yearbook of Private International Law, Volume 22 (2020/2021)

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Eolos S. Rigopoulos already found by the tribunal, or its determinations on foreign law. Naturally, this is even moreso the case when the members of the court are not experts in a field that has been dealt with by the arbitrators who, to the contrary, have mastered the subject. As mentioned throughout this paper, the debate of whether state courts should defer to international arbitral awards is centered around one of the cornerstones of international arbitration: the finality of awards. It almost goes without saying that, to preserve that finality, state courts must defer to arbitral awards as much as possible, which is, most of the time, what happens in practice. That being said, in the limited cases where state courts can review an award (either at the annulment or at the enforcement stage), this paper reveals that, unless there is (valid) express agreement from the parties to the contrary, or if practical considerations such as expeditiousness of the procedure or cost reduction come into play, courts tend not to defer to the tribunal’s decisions. As discussed above, state courts’ decisions not to defer to the arbitrators’ decision on a given matter are often motivated by valid considerations, usually related either to core requirements for a valid arbitration (e.g. the tribunal’s jurisdiction or the independence of the arbitrators), or to the relevant state’s sovereign right to have a specific approach to certain “more sensitive” issues (e.g. when the examined issue is public policy or arbitrability). This “reasonable” approach, however, only represents what the majority of courts do and there are still jurisdictions where courts have a tendency to overcontrol arbitral proceedings by, often enough, failing to defer to arbitral tribunals’ decisions in situations where they probably should (e.g. when a public policy exception is facially relied upon to annul or not enforce an award and it appears that the reviewing court, in reality, only disagreed with the application of substantive law made by the tribunal). These discrepancies between the different jurisdictions’ practices are the reason why parties and their lawyers should always be informed as to whether and to what extent a certain jurisdiction has a tradition of deferring to the arbitral tribunal’s decision on a given issue in an annulment or an enforcement context. Depending on their interests in a transaction or dispute, parties and their lawyers can then make strategic decisions, such as which law to choose to govern an arbitration agreement or its underlying contract, where to place the seat of the arbitration, whether to choose certain institutional rules to apply, etc. Indeed, a good knowledge of the deference usually accorded in the relevant jurisdictions may give an edge to one party over another.

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INDEX __________ Abductions and Brussels II-ter Regulation 107 (also see “Child abductions”) Abolition of exequatur 155-182 and Brussels II-ter Regulation 112, 118, 135, 149, 155 Actio pauliana 522 Action directe 521 Action en retranchement 453 et seq. Actor sequitur forum rei 501 (also see “Domicile”) Administrative cooperation between Central Authorities 198 (also see “Central Authorities”) Agreements in parental responsibility issues and their recognition under Brussels II-ter Regulation 102 Aguirre Zárraga 113, 129 AirBnB and private international law 203 ALDRICUS 42 Algerian Family Code 436 ALI Principles on Intellectual Property 225, 276, 281 Alimony under Uruguayan Act on Private International Law 343 (also see “Maintenance”) Alpenhof 324 Annulment of arbitral awards 548, 553 Annulment of marriage under the Family Law Act 1986 (UK) 84-85 Antitrust violations 482 Arbitration 548 et seq. and customary divorces in Ghana 86 Arbitration agreement invalidity of 549 Arblade 70 Area of freedom, security and justice 5, 29, 123 and Brussels II-ter Regulation 156

Australia and the Hague Convention on the Recognition of Divorces and Legal Separations (1970) 83 Austromechana 474 et seq. Authentic instruments and the recognition under Brussels II-ter Regulation 156 et seq. in matrimonial property issues 469 Autonomy of the parties Brussels II-ter Regulation 104 Autonomy of the will 452 (also see “Party autonomy”) Bankruptcy 533 BARTOLUS 211 Belgium and its attitude towards talaq 443 Bern Convention (Copyright) 278, 308 Best interests of the child and Brussels II-ter Regulation 105, 139 and the principle of proximity 105 BODIN 44 Bolagsupplysningen 251, 253 Bosphorus case 113 Brazil bilateral treaties with Argentina, Bolivia, Peru, Uruguay 363 and judicial co-operation 355 Breach of jurisdiction agreements 507 Brogsitter 525 Brussels I Regulation and internet cases 248 et seq. tort v. contract dichotomy 512 tort issues 474 et seq. Brussels II-ter Regulation 95-111 and recognition and enforcement of judgments 373 and the recognition of divorces 85 and Brexit 77 Bustamante Code recognition of foreign judgments 377

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Printed in Germany

Index Capacity to act under the Uruguayan Act on Private International Law 341 Capacity to marry and the Uruguayan Act on Private International Law 342 Carriage of passengers 347 Cassis de Dijon 17 CDC 480 et seq. Center of interests and copyright infringement within the EU 326 Central authorities and Brussels II-ter Regulation 132, 183, 187, 191 and letters rogatory in the Mercosur 362 et seq. Characteristic obligation and the Uruguayan Act on Private International Law 346 Characterisation succession v. matrimonial property regime 454 lege fori 456 under the Croatian Private International Law Act (2017) 402 tort v. contracts under Brussels Ia Regulation 525 Child abduction 175 and Brussels II-ter Regulation 107, 110, 132 and mediation 110 Child custody under the Croatian Private International Law Act (2017) 390 Choice of court consumer contracts 222 in parental responsibility 145 under Brussels II-ter 104 Choice of forum divorce proceedings 125 Choice of law 3 (see “Party autonomy”) Citizenship Union citizenship 1 Civil status and freedom of movement 1-33 continuity of 4  Claim preclusion in infringement tort cases 286 CLIP Principles 276 Collaborative economy 204 Collective redress 506

578

Colombier and public policy 445 Coman 13, 14, 123 Comity 261 and copyright infringement 318 Concurrent jurisdiction contract and tort under Brussels Ia Regulation 530 Conflit mobile under the Croatian Private International Law Act (2017) 391 Conspiracy and jurisdiction 507 Consumer contracts and economic loss 507 and the Uruguayan Act on Private International Law 347 Consumer protection and digital platforms 214 et seq. and locus lucri 242 Contracts and the Uruguayan Act on Private International Law 341, 345 under the Croatian Private International Law Act (2017) 391 Contractual vs. tortious issues 488 Convention on Private International Law of Havana 363 Copyright holder and his or her center of interest as a basis for jurisdiction 326 Copyright infringement and jurisdiction within the EU 299 and res judicata 275 COVID-19 and international contracts 65-76 Croatia and the Private International Law Act (2017) 381 et seq. Cross-border freezing injunctions 397 Cross-border mobility within the EU 1-33 Cross-border placement of children Brussels II-ter Regulation 151 Crowdworkers and employment contracts 219 Cybercrime 209 Da Silva Martins 409 et seq. Damages 474 et seq. (also see “Torts” and “Place of harmful event”) Defamation 233 (also see “Shevill”) Dépeçage 449 et seq.

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Index DFDS Torline 481 Digital Services Act 206 Direct judicial communication and Brussels II-ter Regulation 115 Directing activities principle and copyright infringement within the EU 226, 321, 331 Disabled persons and the Uruguayan Act on Private International Law 341 Divorce jurisdiction under Brussels II-ter Regulation 124 and the Uruguayan Act on Private International Law 342 in Muslim countries 435 also see “Private divorce” and “Recognition” Domestic violence 132, 182 Domicile and copyright infringement 304, 311 and Family Law Act 1986 (UK) 85 in tort cases 480 of victim in pure economic loss cases 506 as a basis for jurisdiction in Uruguay 350 Dowry 439 Dual citizenship under the Croatian Private International Law Act (2017) 386 eDate 229, 249, 252 Effects-bases approach and copyright infringement within the EU 330 Effet atténué de l’ordre public 445 Ehrenfeld v. Bin Mahkfouz 233 Electronic commerce EU Directive 254 Employment contracts 233 and the Uruguayan Act on Private International Law 347 Employment relationships and digital platforms 215 et seq. Enforcement of arbitral awards 548 et seq. of judgments in Mercosur 353 et seq. and Brussels II-ter Regulation 142 English Arbitration Act 551 Equality between spouses 436

Erfolgsort and copyright infringement within the EU 312, 316, 317 Error on a point of law as a ground for non-recognition 563 European Judicial Network and Central Authorities 189 under Croatian Private International Law Act (2017) 388 European Union Withdrawal Act 2018 and UK courts 88 Eurostar divorces 80 Evasion of law and the Uruguayan Act on Private International Law 339 Event giving rise to the damage in pure economic loss cases 498 Evidence Regulation and hearing of the child 147 Exclusive jurisdiction and the Uruguayan Act on Private International Law 351 Facebook 202, 210, 222, 239, 254 FAMGA 204, 228, 235 Family Law Act 1986 84 Favor laesi 229 et seq. Feniks 522, 528 Finality of arbitration awards 548 et seq. Force majeure international contracts 67 Foreign law ascertainement of under the Croatian PIL Act 388 Forum actoris 299 in pure economic loss claims 525 Forum arresti 229 Forum contractus 512, 528 Forum necessitatis 350, 402, 430 under the Croatian Private International Law Act (2017) 396 and Brussels II-ter Regulation 145 Forum non conveniens 246 and the consequences of Brexit 78 in divorce proceedings in the UK 78, 79 Forum rei 229 and copyright infringement 304 (also see “Actor sequitur forum rei” and “Domicile”) Forum shopping 444 in divorce cases in the UK 80

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Index Forum solutionis 512 Fragmentation of public international law 62 French private divorces 97, 120, 161 Franco-Algerian Convention of August 27, 1964 436 Fraude à l’ordre public 438 Fraude à la loi and the Uruguayan Act on Private International Law 339 Freedom of movement 1-33 Frustration and international contracts 74 Garcia Avello 9, 10 and dual citizenship issues 386 GDPR 225 and copyright infringement within the EU 319 Geo-blocking and internet tort cases 261 Geoblocking Regulation 300, 307, 312, 315, 324, 325 Global v. local damages in internet tort cases 259 in copyright infringement 281 Google 203, 236 Google Canada case 246 et seq. Google Spain 272 Greece and private divorces 161 GROTIUS 44 Grunkin Paul 9 Habitual place of work 233 and law applicable to employment contracts 221 Habitual residence 402, 462 in road accidents liability cases 411 and Brussels II-ter Regulation 141 before UK courts after Brexit 88 of children following Brexit 78 under the Croatian Private International Law Act (2017) 387 Habitual residence of spouses 451 Habitual residence v. citizenship 402 Hague Apostille Convention (1961) and Brazil 367 Hague Child Abduction Convention (1980) 176 (also see “Child Abduction” and “Brussels II-ter Regulation”) Hague Children Convention (1996) 140, 400

580

and the Croatian Private International Law Act (2017) 390 and cooperation between Central Authorities 184, 191 Hague Convention on Civil Procedure (1905) and letters rogatory 362 Hague Convention on Civil Procedure (1896) and letters rogatory 362 Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions (1961) 392 Hague Convention on the Law Applicable to Matrimonial Property (1978) 451 Hague Convention on the Law Applicable to Products Liability (1973) 392 Hague Convention on the Law Applicable to Road Traffic Accidents (1971) 392, 410 Hague Convention on the Recognition of Divorces and Legal Separations (1970) 82 Hague Evidence Convention (1970) 362 Hague Inter-Country Adoption Convention (1993) 398 Hague Protocol on Law Applicable to Maintenance Obligations (2007) 157, 394 Hague Service Convention (1965) 362 Handte 513 et seq. Harmful event 474 et seq. Harmony of solutions 3 HCCP-WIPO Guide for Judges 321 Hearing of the child 129, 146 and recognition of authentic instruments 167 Hi Hotel 299 et seq. History of private international law 40-43 Humanist approach to private international law 212 et seq. ICJ and private international law 49 ILA Guidelines 276 ILO Declaration of Fundamental Principles and Rights at Work 220 Incadat 182 Injunctions in internet cases 201 et seq., 246 et seq., 318 Inlandsbeziehung 436, 438

Yearbook of Private International Law, Volume 22 (2020/2021)

Index Instagram 209 Insurance contracts and the Uruguayan Act on Private International Law 347 Inter-American Convention on General Rules on Private International Law 338 Inter-American Convention on Letters Rogatory 363 International child abduction and Brussels II-ter Regulation 175 International comity 333 (also see “Comity”) International harmony of solutions 213-214, 221 Internet and private international law 201 et seq. Invalidity of arbitration agreements 549 Investment arbitration 52 Italy and private divorces 97, 120 161 and limitation period for road accidents claims 414 Iura novit curia under the Croatian Private International Law Act (2017) 388 JARRE 445 JESSUP 47 Judicial co-operation 353 Jurisdiction copyright infringement cases 299 Jurisdiction agreements and Brussels II-ter Regulation 106 and Brussels II-ter Regulation 143 and divorce proceedings under Brussels II-ter Regulation 125 and pure economic loss cases 473 scope of in internet tort cases 259 under the Uruguayan Act on Private International Law 350 et seq. Jus gentium 40 and jus civile 42 Kafalah 150 Kalfelis 512 et seq. Khol’a in Muslim countries 436 Kolassa 480 Kompetenz-Kompetenz 553 Kronhofer 479

Lack of independence as a ground for non-recognition 559 Lack of jurisdiction as a ground for non-recognition 552 Legal capacity and the Uruguayan Act on Private International Law 341 Legal certainty 518 Legal entities under the Croatian Private International Law Act (2017) 387 Lege fori characterization 456 Letters rogatory in Mercosur 356 and their for transmission of foreign decisions 357 Lex loci damni and the Uruguayan Act on Private International Law 348 Lex loci delicti 478 and the Uruguayan Act on Private International Law 348 Lex loci protectionis 279, 282 under the Croatian Private International Law Act (2017) 391 Lex rei sitae and the Uruguayan Act on Private International Law 345 Likelihood of damage criterion and copyright infringement within the EU 309, 311 Limitation, statute of in torts 405 et seq. Limping situations in civil status 7 and the Croatian Private International Law Act (2017) 393 Lis pendens 80, 246 and the race to the court 79 and the consequences of Brexit 79 and Brussels II-ter Regulation 193 and cooperation between Central Authorities 193 and the Uruguayan Act on Private International Law 350 and the Croatian Private International Law Act (2017) 397 Löber 486 Locus lucri and consumer protection 242

Yearbook of Private International Law, Volume 22 (2020/2021)

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Index Locus protectionis 299 Lotus case 265 Lugano Convention 478 Mahnkopf 453 Maintenance Regulation 156, 157, 401 and cooperation between Central Authorities 188, 199 and jurisdiction with respect to divorces 125 Mandatory rules and the Uruguayan Act on Private International Law 339 Manufacturer’s liability 505 Marriage under the Croatian Private International Law Act (2017) 393 Martinez 249 Matrimonial domicile and the Uruguayan Act on Private International Law 343 Matrimonial Property Regulation 156, 450 and jurisdiction with respect to divorces 125 Matters relating to contract notion of under Brussels Ia Regulation 511 Mediation and Brussels II-ter Regulation 107 and divorce cases 80 and domestic violence 132 Mercosur and recognition and enforcement of judgments 353 et seq. MeToo movement 204, 208 Montevideo Treaty on International Civil Law 348 Montreal Convention 347 Motor Vehicles Directive 407 et seq. Mutual trust and abolition of exequatur 158 and Brussels II-ter Regulation 137, 180 within the EU 90 Name 9-24 Nationality and dual nationality issues in Croatian private international law 386 Natural forum 517 et seq. Negoziazione assistita 161 New York Convention on Foreign Arbitral Awards (1958) 549, 550

582

Non-marital unions and the Uruguayan Act on Private International Law 344 and the Uruguayan Act on Private International Law 338 Notaries and private divorces 159 Odenbreit 425 Online Dispute Resolution 239 Online torts 227, 241 Ordre public see “Public policy” Ordre public de proximité 443 Overriding mandatory provisions 69 Rome II Regulation 420 Owusu and the consequences of Brexit 79 Pammer 324 Parallel copyright infringement actions 280 Parentage and the Uruguayan Act on Private International Law 343 Parental responsibility and Brussels II-ter Regulation 126 and cooperation between Central Authorities 192 Party autonomy 211, 403, 452 in international contracts 66 and the Uruguayan Act on Private International Law 345 Patrimonial relationships between spouses and the Uruguayan Act on Private International Law 342 Permanent residence under the Croatian Private International Law Act (2017) 387 Personal relationships between spouses and the Uruguayan Act on Private International Law 342 Personal status under the Croatian Private International Law Act (2017) 390 Petrella 289 Pez Hejduk 299 et seq. Pinckney 299 et seq., 302 Place of business and employment contracts 333 Place of damage and copyright infringement within the EU 312, 316

Yearbook of Private International Law, Volume 22 (2020/2021)

Index Place of harmful event 474 et seq. and copyright infringement within the EU 304 Place of performance as a basis for jurisdiction 512 Placement of children and Brussels II-ter Regulation 151 Portugal limitation period for road accidents claims 424 and private divorces 160 Povse 177, 178 Powers of attorney and the Uruguayan Act on Private International Law 347 Predictability in copyright infringement 309 Preliminary questions and the Uruguayan Act on Private International Law 340 Private divorces 97, 159 Privity of contracts 512 et seq. Procedural agreement 468 Product liability 505 Professio juris 464 Property under the Croatian Private International Law Act (2017) 391 Prospectus liability claims 480 Protection measures and Brussels II-ter Regulation 151 Protection Measures Regulation 156 Proximity 518 et seq., 528 Public international law and private international law 35-63 Public law and private law 36 Public policy 233, 424, 435, and the Hague Convention on the Recognition of Divorces and Legal Separations 83 and limitation period for road accidents claims 417 and the Uruguayan Act on Private International Law 338 arbitration 552, 561 as an obstacle to freedom of movement 18, 19 in succession matters 462 as a ground to refuse recognition and enforcement in Mercosur 373 under the Croatian Private International Law Act (2017) 389

Public prosecutor in parental responsibility matters 161 Pure economic loss 474 et seq. Purrucker I and cooperation between Central Authorities 193 Rana plaza tragedy 220 Reciprocity under the Croatian Private International Law Act (2017) 399 Recognition of judgments in Mercosur 353 et seq. of judgments under the Croatian Private International Law Act (2017) 399 in matters of parental responsibility 130 of arbitral awards 548 et seq. of authentic instruments under Brussels II-ter Regulation 100 of foreign divorces in the UK 84 Hague Convention on the Recognition of Divorces and Legal Separations 82, 83, 84 of defective divorces 86 of marriages under the Croatian Private International Law Act (2017) 393 of agreements under Brussels II-ter Regulation 100 of divorces in the UK after Brexit 82 and public policy in the UK 87 and Brussels II-ter Regulation 158 et seq. Relocation and Brussels II-ter Regulation 137 Renvoi under the Uruguayan Act on Private International Law 340 under the Croatian Private International Law Act (2017) 389 Repudiation 165 and Brussels II-ter Regulation 161 of the wife by the husband 437 (also see “Talaq”) Res judicata 275 et seq. as a precondition for recognition of judgments in Mercosur 373 in Mercosur 355 et seq.

Yearbook of Private International Law, Volume 22 (2020/2021)

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Index Reserved share 461 Réunion europénne 524 Right to be heard of children 129, 146 Road traffic accidents and private international law issues 405 et seq. Rome I Regulation 400 and employment contracts 219 and mandatory provisions 69 Rome II Regulation 392, 400, 405 et seq., 445, 474 et seq. Sahyouni 98, 121, 165 Same sex marriage recognition within the EU 13, 20 and public policy 21 and Brussels II-ter Regulation 123 under the Croatian Private International Law Act (2017) 393 SAVIGNY, Friedrich von 43, 435 Sayn Wittgenstein 10, 22, 23 Scalability principle of in internet tort cases 271 Serbian and Brazilian Loans case 49 Service of documents and the notion of judicial cooperation in Mercosur 362, 368 Shevill 229, 248, 252, 302 Social media and private international law 203 Spain and private divorce 97, 121, 161 limitation period for road accidents claims 413 Spiliada 81 Statelessness under the Croatian Private International Law Act (2017) 386 Status of natural persons and the Uruguayan Act on Private International Law 341 Statute of limitation in torts 405 et seq. STORY, Joseph 62 Subject matter jurisdiction and internet cases 246 Substantive justice v. conflicts justice 404 Succession and the rights of the surviving spouse 449

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Succession and the Uruguayan Act on Private International Law 343, 345 under the Croatian Private International Law Act (2017) 392 Succession Regulation 156, 400, 450 et seq., 525 Switzerland and repudiation 442 limitation period for road accidents claims 414 Talaq 437 and the concept of divorce in the UK 85 (also see “Repudiation”) Territoriality and jurisdiction in internet tort cases 260 and copyright infringement within the EU 310, 315, 317 The Lenas Protocol on Co-operation and Legal Assistance in Civil, Commercial, Labour and Administrative Matters (1992) 362 Tort v. contract 512 et seq. Torts 474 and jurisdiction in internet cases 259 and party autonomy 232 and favor laesi 232 and the Uruguayan Act on Private International Law 348 Turkey limitation period for road accidents claims 414 Twitter 208 Uber 206 Uber Spain 217 UK and international family law after Brexit 77-94 UN Convention on Maintenance Recovery (1956) and cooperation between Central Authorities 184 UN Convention on the Rights of the Child 140, 147 and the rights to contacts 107 UN Guiding Principles of Business and Human Rights 220 Unaccompanied minors and Brussels II-ter Regulation 144 UNCITRAL Model Law (Arbitration) 554 et seq.

Yearbook of Private International Law, Volume 22 (2020/2021)

Index UNIDROIT Principles of International Commercial Contracts 54 Urgent measures and the Uruguayan Act on Private International Law 350 Uruguay and the New Act on Private International Law 336 US Copyright Act 288, 290 Vacatur proceedings 550 Vested rights and the Uruguayan Act on Private International Law 339

Violence against women 209 VKI 493 Wagner v. Luxembourg 442 Westphalian state and globalisation 37 WhatsApp 209 Wills and the Uruguayan Act on Private International Law 346 (also see “Succession”) Wintersteiger 230, 236 Youtube 209

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