Conflict of Laws .net

With the courts of Canadian provinces willing to take jurisdiction over a “national” class claim, involving a plaintiff class which includes members located in other provinces, and with American courts willing to take jurisdiction over “international” classes, involving a plaintiff class which includes members located in Canada, Canadian courts are increasingly having to confront the issue of whether to recognize a foreign class action decision.  If a defendant settles a class claim brought in the United States which purports to bind class members in Canada, that defendant then will raise that settlement, as approved by judicial order, in response to subsequent class claims in Canada.  Given the value of class claims, the decision whether or not to recognize the foreign decision has significant economic repercussions. 

 Two relatively recent Canadian decisions on whether to recognize such judgments are Parsons v. McDonald’s Restaurants of Canada Ltd. (available here) and Currie v. McDonald’s Restaurants of Canada Ltd. (available here).  These decisions generally support recognition of such judgments, but they impose particular conditions relating to the process followed in the foreign court and the notice given to the people affected in Canada.  More recently, two Quebec decisions have addressed the recognition of foreign class action judgments.  See Lépine v. Société Canadienne des postes (available here; affirmed on appeal) and HSBC Bank Canada c. Hocking (lower court decision available here; appellate decision will be available on CanLII).  The latter decision has just been released, and the former decision has been appealed to the Supreme Court of Canada, so further guidance on these issues is likely forthcoming.

Some of these issues are addressed in Janet Walker, “Crossborder Class Actions: A View from Across the Border” (2003) Mich. St. L. Rev. 755; Debra Lyn Bassett, “U.S. Class Actions Go Global: Transnational Class Actions and Personal Jurisdiction” (2003) 72 Fordham L. Rev. 41; Ellen Snow, “Protecting Canadian Plaintiffs in International Class Actions: The Need for A Principled Approach in Light of Currie v. McDonald’s Restaurants of Canada Ltd.” (2005) 2 Can. Class Action Rev. 217; and Craig Jones & Angela Baxter, “Fumbling Toward Efficacy: Interjurisdictional Class Actions After Currie v. McDonald’s” (2006) 3 Can. Class Action Rev. 405.

Today, the ECJ delivered its judgment in case C-14/07 (Weiss und Partner).

The German Federal Supreme Court (Bundesgerichtshof) had referred the following questions to the ECJ for a preliminary ruling:

Must Article 8(1) of Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (’the Regulation’) be interpreted as meaning that an addressee does not have the right to refuse to accept a document pursuant to Article 8(1) of the Regulation if only the annexes to a document to be served are not in the language of the Member State addressed or in a language of the Member State of transmission which the addressee understands?

If the answer to the first question is in the negative:

Must Article 8(1)(b) of the Regulation be interpreted as meaning that the addressee ‘understands’ the language of a Member State of transmission within the meaning of that regulation because, in the exercise of his business activity, he agreed in a contract with the applicant that correspondence was to be conducted in the language of the Member State of transmission?

If the answer to the second question is in the negative:

Must Article 8(1) of the Regulation be interpreted as meaning that the addressee may not in any event rely on that provision in order to refuse acceptance of such annexes to a document, which are not in the language of the Member State addressed or in a language of the Member State of transmission which the addressee understands, if the addressee concludes a contract in the exercise of his business activity in which he agrees that correspondence is to be conducted in the language of the Member State of transmission and the annexes transmitted concern that correspondence and are written in the agreed language?

The Court now held in its judgment:

1. Article 8(1) of Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters is to be interpreted as meaning that the addressee of a document instituting the proceedings which is to be served does not have the right to refuse to accept that document, provided that it enables the addressee to assert his rights in legal proceedings in the Member State of transmission, where annexes are attached to that document consisting of documentary evidence which is not in the language of the Member State addressed or in a language of the Member State of transmission which the addressee understands, but which has a purely evidential function and is not necessary for understanding the subject‑matter of the claim and the cause of action.

It is for the national court to determine whether the content of the document instituting the proceedings is sufficient to enable the defendant to assert his rights or whether it is necessary for the party instituting the proceedings to remedy the fact that a necessary annex has not been translated.

2. Article 8(1)(b) of Regulation No 1348/2000 is to be interpreted as meaning that the fact that the addressee of a document served has agreed in a contract concluded with the applicant in the course of his business that correspondence is to be conducted in the language of the Member State of transmission does not give rise to a presumption of knowledge of that language, but is evidence which the court may take into account in determining whether that addressee understands the language of the Member State of transmission.

3. Article 8(1) of Regulation No 1348/2000 is to be interpreted as meaning that the addressee of a document served may not in any event rely on that provision in order to refuse acceptance of annexes to the document which are not in the language of the Member State addressed or in a language of the Member State of transmission which the addressee understands where the addressee concluded a contract in the course of his business in which he agreed that correspondence was to be conducted in the language of the Member State of transmission and the annexes concern that correspondence and are written in the agreed language.

See for the full judgment the website of the ECJ and with regard to the background of the case our previous post on the opinion of Advocate General Trstenjak which can be found here.

Australian commentators have long speculated about whether the federal Constitution contains any rule that would resolve a direct conflict between the statute law of two States. Thus far, the High Court has defused potential conflicts without the need for such a constitutional rule. In John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, the potential conflict between ACT and NSW law was resolved by a common law choice of law rule; and in Sweedman v Transport Accident Commission (2006) 226 CLR 362 a potential conflict between NSW and Victorian law was resolved by a process of statutory construction.

Most recently, in Betfair Pty Limited v Western Australia [2008] HCA 11, the High Court resolved a potential conflict between the laws of Tasmania and Western Australia by striking down the Western Australian statute because it infringed s 92 of the Constitution (which prevents protectionist burdens on interstate trade and commerce). The Court noted in passing that its conclusion about s 92 made it “unnecessary to consider whether [the WA law] is invalid by reason of the alleged direct conflict between it and  … the Tasmanian Act. This is not the occasion to consider what may be the controlling constitutional principles were there demonstrated to be such a clash of State legislation.” Since no such occasion has yet arisen in the 108 years of Australian federation, the direct conflict between State laws is perhaps a problem of greater theoretical than practical importance.

The High Court of Australia has recently addressed the Hague Convention on the Civil Aspects of International Child Abduction: MW v Director-General, Department of Community Services [2008] HCA 12. In a 3:2 decision, the Court considered that the Director-General (as State Central Authority) had not sufficiently established that the removal of a child from New Zealand to Australia was wrongful, and thus the Family Court of Australia ought not to have made an order for the return of the child.

In Australia, the Hague Convention does not apply of its own force, but is instead implemented by the Family Law Act 1975 (Cth) and the Family Law (Child Abduction Convention) Regulations 1986(Cth). The case turned on reg 16(1A)(c) of the Regulations, which provides that “the person, institution or other body seeking the child’s return had rights of custody in relation to the child under the law of the country in which the child habitually resided immediately before the child’s removal to, or retention in, Australia”. As such, the High Court was required to address difficult factual and legal questions relating to the child’s circumstances in New Zealand. At least in the case of New Zealand law, that task was eased in Australia by the Evidence and Procedure (New Zealand) Act 1994 (Cth).

“At the heart of this sad case, which raises questions of international and federal law under the Hague [Abduction] Convention, is a custody battle over a young girl who has not seen either of her parents in years.” That was the lead-in from Judge Jordan to the recent decision by a three-judge panel of the Third Circuit. Carrascosa v. McGuire, No. 07-1748/4130 (3rd Cir., March 20, 2008), involved a Spanish mother, once married to an American father, whose child was habitually resident in New Jersey. Upon their divorce, the couple signed a “Parenting Agreement” that established an “interim resolution” of the custody issue and prohibited either of them from traveling outside the country with their daughter. Shortly thereafter, the mother took the daughter to Spain.

A judge in New Jersey issued several orders for the daughter’s return, and when each went unanswered, issued a warrant for the mother’s arrest. In the meantime, however, purporting to follow the Hague Abduction Convention, the Spanish Courts had decided that the Parenting Agreement violated Article 19 of the Spanish Constitution (regarding the freedom to chose one’s place of residence), determined that the removal to that country was not “wrongful” within the meaning of the Convention, and ordered that the daughter remain. When the mother returned to the United States to attend to the divorce proceedings, she was arrested. She challenged her detention as “in violation of the laws and treaties of the United States” through a writ of habeas corpus. In essence, she argued that a decision of the Spanish Court that the Parenting Agreement was null and void should be afforded comity, and void the charges of contempt against her.

The Federal District Court for the District of New Jersey denied the writ, and the Third Circuit affirmed. Applying the Hague Convention and its implementing legislation, the Court recognized that “[t]here is no dispute that [the daughter’s] place of habitual residence, prior to . . . her [removal] to Spain, was the United States, in particular New Jersey.” As to whether her removal to Spain was wrongful under Article 3 of the Hague Convention, the District Court examined whether the father’s custody rights were breached by Victoria’s removal. Because, under New Jersey law, the father had custody rights by virtue of a valid Parenting Agreement, and the mother breached those rights by removing the daughter to Spain without his consent, the removal was “wrongful” within the meaning of Article 3 of the Hague Convention.

The Spanish court, however, in nullifying the Parenting Agreement, never applied New Jersey law, despite their explicit recognition that the daughter’s habitual place of residence was New Jersey. They instead based their decision on the “wrongfulness” of the removal solely on Spanish law, while paying only “lip-service” to the Convention. According to the U.S. Court, this “glaring departure . . . from the mandate of the Hague Convention”—i.e. the “total failure to determine [the father’s] rights of custody under [the law of the child’s habitual residence]”—the decision of the Spanish court was given no weight. The removal was wrongful under the Convention, and the mother’s detention was held to be not “in violation of the law or treaties of the United States.”

The Spanish Juzgado de Primera Instancia e Instrucción (Court of First Instance and Preliminary Investigations) No 5 of San Javier has referred the following questions to the European Court of Justice for a preliminary ruling on the interpretation of Reg. (EC) No 1348/2000 (Service Regulation):

1. Does the scope of Regulation (EC) No 1348/2000 extend to the service of extrajudicial documents exclusively by and on private persons using the physical and personal resources of the courts and tribunals of the European Union and the regulatory framework of European law even when no court proceedings have been commenced? Or,
2. Does Regulation (EC) No 1348/2000 on the contrary apply exclusively in the context of judicial cooperation between Member States and court proceedings in progress (Articles 61(c), 67(1) and 65 EC and recital 6 of the preamble to Regulation 1348/2000)?

The case, lodged on 14 January 2008, is pending under C-14/08 (Roda Golf & Beach Resort SL). The referred questions have been published in the OJ n. C 92 of 12 April 2008.

Today, Advocate General Sharpston has delivered her opinion in case C-353/06 (Grunkin and Paul).

The background of the case is as follows: The case concerns a child who was born in Denmark having, as well as his parents, only German nationality. The child was registered in Denmark – in accordance with Danish law – under the compound surname Grunkin-Paul combining the name of his father (Grunkin) and the name of his mother (Paul), who did not use a common married name. After moving to Germany, German authorities refused to recognise the surname of the child as it had been determined in Denmark, since according to German private international law (Art.10 EGBGB) the name of a person is subject to the law of his/her nationality, i.e. in this case German law and according to German law (§ 1617 BGB), parents who do not share a married name shall choose either the father’s or the mother’s surname to be the child’s surname.

The Local Court (Amtsgericht) Niebüll which was called to designate the parent having the right to choose the child’s surname, sought a preliminary ruling of the ECJ on the compatibility of Art.10 EGBGB with Articles 12 and 18 EC-Treaty. However, the ECJ held that it had no jurisdiction to answer the question referred since the referring court acted in an administrative rather than in a judicial capacity (judgment of 27 April 2006, C-96/04). In the following, the parents applied again - without success - to have their son registered with the surname Grunkin-Paul. The parents’ challenge to this refusal was heard, by virtue of German procedural law, by the Amtsgericht Flensburg. The Amtsgericht Flensburg held that it was precluded from instructing the registrar to register the applicants’ son under this name by German law. However, since the court had doubts as to whether it amounts to a violation of Articles 12 and 18 EC-Treaty to ask a citizen of the European Union to use different names in different Member States, the court referred with decision of 16th August 2006 (69 III 11/06) the following questions to the ECJ for a preliminary ruling:

In light of the prohibition on discrimination set out in Article 12 of the EC Treaty and having regard to the right to the freedom of movement for every citizen of the Union laid down by Article 18 of the EC Treaty, is the provision on the conflict of laws contained in Article 10 of the EGBGB valid, in so far as it provides that the right to bear a name is governed by nationality alone?

Advocate Generel Sharpston now held in her opinion that the Court should answer the question raised by the Amtsgericht Flensburg as follows:

– a choice of law rule under which a person’s name is to be determined in accordance with the law of his nationality is not in itself incompatible with Articles 12, 17 or 18 EC;

– however, any such rule must be applied in such a way as to respect the right of each citizen of the Union to move and reside freely in the territory of the Member States;

– that right is not respected if such a citizen has been registered under one name in accordance with the applicable law of his place of birth, before it becomes necessary to register his name elsewhere, and is subsequently required to register a different name in another Member State;

– consequently, the authorities of a Member State may not, when registering the name of a citizen of the Union, automatically refuse to recognise a name under which he has already been lawfully registered in accordance with the rules of another Member State, unless recognition would conflict with overriding reasons of public interest which admit of no exception.

See for the full opinion the website of the ECJ. See further on this case also our previous posts on the judgment of the Court of 27 April 2006 which can be found here as well as on the referring decision of the Amtsgericht Flensburg which can be found here.

Hoge Raad, 4 April 2008, Zuid-Chemie/Philippo’s Mineralenfabriek Nr. C06/310HR (link is to decision in Dutch).

On Friday 4 April, the Dutch Supreme Court (Hoge Raad) made a preliminary reference to the ECJ, with regard to the interpretation of article 5(3) of Regulation 44/2001 (jurisdiction in matters relating to tort). What follows is a short description of the facts as they emerge from the Supreme Court’s decision and a provisional translation of the referred questions.

In July 2000, Zuid-Chemie, a producer of fertilizers in Sas van Gent (NL), bought two cargoes of ‘micromix’ from HCI Chemicals Benelux in Rotterdam (NL). HCI, who were unable to produce this micromix on their own, ordered the product from Philippo’s, in Essen (Belgium), and delivered all necessary ingredients bar one at Philippo’s factory. In consultation with HCI, Philippo’s bought the missing ingredient (zinc sulphate) from a company called Poortershaven, established in Rotterdam (NL). Philippo’s produced the micromix at her factory in Essen, where Zuid-Chemie took delivery. Zuid-Chemie, subsequently, used the micromix in multiple cargoes of fertilizer-products, some of which were sold to (foreign) buyers. It has become clear since then that the zinc sulphate obtained from Poortershaven was contaminated with cadmium, as a result of which the produced fertiziler is unusable. Zuid-Chemie has claimed damages in tort from Philippo’s in the District Court (Rechtbank) in Middelburg (NL) . Philippo’s alleged delict (“onrechtmatige daad”) consists of having produced a product that has caused damage in the course of its normal use.

Philippo’s argues that the Dutch court does not have jurisdiction, because in its view the place of delivery of the contaminated micromix - in Essen (Belgium) – should be regarded as ‘the place where the harmful event occurred’ (art. 5(3) Brussels I Regulation). Zuid-Chemie argues that the place where the harmful event occurred is the place where different components (including the contaminated micromix) were mixed into the final product, which was at its factory in Sas van Gent (NL).

At first instance, the District Court noted that ‘the place where the harmful event occurred’ could be both the ‘Handlungsort’ and the ‘Erfolgsort’ (both terms used in the Dutch text, as is common in Dutch decisions), and concluded that Essen was the place where Zuid-Chemie suffered initial damage (“initiële schade”) because that was the place where the contaminated micromix was delivered ex works. The Court of Appeal in The Hague (Gerechtshof ‘s-Gravenhage) has upheld this decision, noting that the place of production of the contaminated micromix (Essen) should be regarded as the ‘Handlungsort’.

In his Opinion in the Case (of 1 February 2008), Advocate General Strikwerda, observed that the ECJ had not yet pronounced itself on the question of whether “the distinction between ‘Handlungsort’ and ‘Erfolgsort’ is limited to situations involving a tortious act which leads to physical damage to persons or property” and whether, “in the case of tortious acts which cause non-physical damage and purely economic loss no such distinction should be made, even where this damage is the direct (initial) consequence of the damage-causing act (“schadebrengende feit”)” (par. 14).

Following the suggestion of the Advocate General, the Supreme Court, in its decision of 4 April 2008, referred to the ECJ the following questions:

1. In the case of a tortious act as alleged by Zuid-Chemie, what damage should be regarded as the initial damage resulting from this act: the damage resulting from the delivery of the defective product, or the damage resulting in the course of the normal use for which this product was intended?
2. In case the latter option is correct: may the place where this damage occurs be regarded as ‘the place where the harmful event occurs’ only where the damage consists of physical damage to persons or property, or is this allowed also when (for the time being) merely economic loss has been suffered?

On 14 February 2008, the Administrative Court of the Republic of Croatia rendered the first decision that will enable the return of the nationalised property to a foreigner. The right to return of or the right to be compensated for the apartment building, located in the centre of the Croatian capital Zagreb and taken immediately after the Second World War, has been recognized to Zlata Ebenspanger, a Brazilian national, i.e. to her son who stepped into her procedural position upon her passing away. The Administrative Court annulled the first-instance administrative decision rejecting the application and along with the instructions on the proper interpretation of the Act remitted the case back for decision by the same body.

According to the initial text of the 1996 Compensation for the Taken Property during the Yugoslav Communist Government Act, former owners had no right to request the return of property or compensation for it if on the day this Act was rendered they did not have Croatian citizenship at the time the Act was rendered (Article 9). The Act further provided that the right to return/compensation does not exist in case where an international treaty has already settled that matter (Article 10). It was additionally prescribed that persons (natural and legal) not having Croatian citizenship were not eligible, except in cases where an international treaty specifically provided otherwise (Article 11). The Constitutional Court of the Republic of Croatia was asked to rule on the constitutionality of the cited provisions. In 1999, the Constitutional Court declared the limitations concerning the foreign natural (but not legal!) persons unconstitutional and the respective provisions void (Decision docket number U-I-673/96, published in Official Gazette of the Republic of Croatia 39/1999, accessible here). In its reasons the Constitutional Court stated:

Differentiating former owners on the basis of their legal bond to a certain state (i.e. on the basis of citizenship) – when at the same time some are granted the compensation (Croatian nationals) while others are not at all granted this right – is unjust and cannot be justified by the need to protect some other important constitutional or other right. All the more since to all persons, Croatian nationals and those who are not, the property was taken by the same means, at the same time and on the basis of the same legal grounds, and their property – if still preserved – remained in the Republic of Croatia owned by the state or other legal entities.

Differentiation in the volume of potential rights of Croatian nationals and foreigners is common (and not contrary to the Constitution) in cases when the legal entities are regulated under the public laws or laws concerning the commencement of the employment relation. Nonetheless, when the relations concerning the property are at stake such differentiation in such a general, wide-ranging form cannot exist and it is contrary to the Constitution.

For these reasons, by the law that will be adopted instead of the void one, the former owners who are not Croatian citizens should in principle be granted the right to compensation or return of the property, and defined the preconditions under which these persons will be granted the right to compensation. The right of foreigners to have the immovable returned to them should be regulated in accordance with the provisions of other acts on the rights of foreigners to acquire immoveable on the territory of the Republic of Croatia.

In 2002, the Croatian Parliament passed the Act Amending and Supplementing the 1996 Compensation for the Taken Property during the Yugoslav Communist Government Act (Official Gazette of the Republic of Croatia 80/2002 and 81/2002) which, amending Article 10 and deleting Article 11, on top of the part of Article 9 being deleted by the Constitutional Court, made it possible for foreign natural persons to acquire the right to be compensated for the taken property yet only if so determined by an international treaty. Until recently, the interpretation of this provision was that if the state, whose citizenship the applicant has, has not concluded an international treaty in respect to these matters with the Republic of Croatia, its citizens cannot be granted the right to compensation or return of property. A case in point is a decision of the Administrative Court of the Republic of Croatia, Us-10052/2004 of 28 April 2005, accessible via this link.

However, the interpretation of this Act has been reversed in the latest decision of 14 February 2008. According to this precedent, the requirement of an international treaty is no longer a preclusive element, although the provision actually says so. Namely, the Administrative Court did not rest solely on the linguistic interpretation, but took account of the fact that the Constitutional Court erased the part of Article 9 which set the precondition of applicant’s Croatian citizenship and concluded that right to be compensated belongs to all foreign natural persons in respect to which the issue of the taken property has not been resolved by an international treaty. This interpretation has been taken at the February 2008 session of the respective section of the Administrative Court which is available here. Whether this interpretation may be considered justified is indeed arguable, but the outcome seems to be in accordance with the principles highlighted in the Constitutional Court decision.

Christelle Chalas is a lecturer at Paris VIII Faculty of Law and the author of a book on Discretionary Exercise of Jurisdiction in Private International Law (in French).

As a moth is drawn to the light, so is a litigant to the United-States. If he can only get his case into their court, he stands to win a fortune. (Smith Kline & French Laboratories Ltd v. Bloch, Court of Appeal, 1983)

This famous statement of Lord Denning illustrates perfectly how US American judges feel when seized by a foreign plaintiff in a product liability lawsuit against a domestic defendant. Since the 1970s’ the spectre of forum shopping drove the US courts to abusively use the forum non conveniens doctrine resulting in a de facto jurisdictional immunity of domestic corporations when sued by foreign plaintiffs. In this context, court congestion and foreign nationality of the plaintiff have become the principal arguments used to justify dismissing a foreign plaintiff’s suit on the ground of forum non conveniens. Looking at the past 40 years, it is difficult to identify any important product liability case where US courts accepted to retain their jurisdiction (the Bhopal case is perhaps one of the most prominent examples).

In this case, we can suppose that the Californian courts based their forum non conveniens issue on “public interest” considerations when they declined their jurisdiction to proceed on the liability product lawsuit filed by the 281 French plaintiffs against Boeing and its subcontractors. In this particular “judicial context”, it seems to me that the French and US courts are not really displaying “judicial cooperation and mutual confidence” (as stated by the Paris Court of Appeal), but are rather engaged in a “partie de bras de fer” over the Atlantic, and this with unequal arms: As Gilles Cuniberti and Emmanuel Jeuland have explained very well in this online symposium, declaratory relief is unavailable under French civil procedure and I am also convinced that the Paris Court of Appeal ruled contra legem to enable the French plaintiffs to obtain a declaration that French courts lack jurisdiction. On the other side, I find it difficult not to support the Court’s attempts to help the French plaintiffs – for three basic reasons:

First, the US court’s decision forces the French plaintiffs into the paradoxical move of petitioning a judgment declining jurisdiction. And second, if the defendants’ strategy succeeds, we would have the startling result that not the plaintiffs, but the defendants hold the keys to choose their forum: the defendants successfully raise the forum non conveniens issue to avoid US justice and at the same time declare their readiness to submit to the French jurisdiction, which could be sufficient to establish jurisdiction (In fact, it is debated whether article 24 of the Brussels I regulation on jurisdiction and enforcement, which grounds jurisdiction on entering an appearance by the defendant, is only applicable, if the defendant is domiciled in one of the European Member States). Third and finally, it is equally startling for a continental European lawyer that the defendants’ home courts cannot be the appropriate forum while, on the contrary, the home plaintiffs’ forum is deemed to be convenient.

I am afraid that the Cour de Cassation is left with no other choice than reversing the Court of Appeal’s decision, since the French civil procedure simply does not offer to a plaintiff declaratory relief to obtain from a court a judgment declining its jurisdiction. However, it is worthwhile noticing that, after a long debate, the French jurisprudence has accepted a declaratory relief to clear uncertainties about the recognition of a foreign judgment (action en (in)opposabilité). The Court of Appeal’s decision could be the first step towards the admission of such a declaratory relief with regard to jurisdiction. In this context it should be noted that French civil procedure offers the judge the power to decline his jurisdiction ex officio (art. 92 CPC). This borne in mind, the Court of Appeal could have refused to rule on the declaratory relief action, and instead simply decline its jurisdiction ex officio (arguing that there is no ground of jurisdiction). In conclusion, the Court of Appeal did not much more than anticipate the result that it could have taken anyways (in application of art. 92 CPC). This aspect might be taken into account by the Cour de Cassation.

Related posts:

Flashairlines and judicial cooperation
Flashairlines and declaratory relief under French law
Flashairlines - Online symposium
French court declines jurisdiction to transfer dispute back to U.S. court

Patrick Wautelet is a professor of law at the University of Liège (Belgium) and a specialist of private international law.

The Flashairlines ruling of the Court of Appeals is a prime example of cross-border cooperation between courts and as such deserves to be commended. I will not comment on the holding of the Court as to the existence of jurisdiction or the possibility for claimants to obtain a declaration to the effect that the court which they seized does not have jurisdiction – both matters falling under French law – save in order to underline that the ruling is an important one for the future development of declaratory relief in Europe. The striking feature of the opinion is my view the spirit of cooperation which permeates the whole ruling. The Court indeed reviewed its jurisdiction with full knowledge of the special context in which the dispute developed. In contrast to normal practice, where, even in the context of concurrent proceedings, a court is reluctant to involve itself with what is going on before the other court, the Court of Appeal fully considered what was at stake in the ‘twin’ proceedings pending in California. In fact, the Court of Appeal considered expressly that it has been « invited » to rule on its jurisdiction by the court in California. That the Court of Appeal would read an invitation in the latter court’s ruling could in fact nicely be squared with the doctrine of comity whose operation has until now been limited to the relations between courts of English speaking countries.

Such close cooperation and openness on the part of the Court of Appeal is even more striking since, as is widely known, the doctrine of forum non conveniens is unknown and even foreign to the European continental thinking on jurisdiction. It is a testimony to the openness of the Court of Appeal that the court was willing to rule on its jurisdiction knowing that the only purpose of the exercise was (most likely) to comfort the jurisdiction of a United States court. In fact, even in specific circumstances where European regulations allow for such cooperation between courts of various countries – one thinks of the mechanism put in place by Article 15 of the Brussels IIbis Regulation – one has hardly witnessed enthusiastic reactions to the possibility of cross border judicial dialogue.

The readers of this blog will not have forgotten about the defunct Hague Judgments Convention. This ambitious scheme which attempted to replicate on a global scale the success of the 1968 Brussels Convention, provided a watered down version of the forum non conveniens doctrine. It is striking to note that the modus operandi adopted by the courts in California and France in the Flashairlines dispute comes very close to the one envisaged by the drafters of the late Convention: one court comes to the conclusion that another one is better placed and stays proceedings to allow the other one to determine whether to take up the case. Of how judicial practice on the two sides of the Atlantic has caught up with the idea of a ’silent dialogue’ between courts which seemed unrealistic only a couple of years ago…

Related posts:

Flashairlines and declaratory relief under French law
Flashairlines - Online symposium
French court declines jurisdiction to transfer dispute back to U.S. court

Emmanuel Jeuland is a professor of law at Paris I University (Panthéon-Sorbonne) and a specialist of civil procedure.

In this post, I would like to offer some brief thoughts on the Paris Court of appeal’s judgment of the 6th of March 2008. It is my opinion that the legal foundation of the judgement as far as victims’ right to sue is concerned is questionable and is not consistent with the French procedural system.

The court of appeal held:

le juge français n’est pas saisi par voie d’exception de sa compétence internationale mais par voie d’action ce qui rend inopérant le disposition de l’article 75 CPC… l’action ayant pour objet l’obtention d’une décision sur la compétence internationale française est inséparable du contexte judiciaire dans lequel la demande s’insère et qu’elle n’est pas contradictoire avec la saisine du juge pour qu’il se prononce …

le juge français ne peut être le seul à être exclu du débat sur sa compétence internationale dès lors que la question s’inscrit dans un contexte de confiance mutuelle qui appelle à une coopération et une coordination des systèmes judiciaires …

les victimes ont un intérêt légitime et actuel à obtenir une décision française sur la compétence internationale en raison de la décision du juge californien .

This statement means that the issue of international jurisdiction in Flash Airlines is not referred to the French judge by way of defence but by way of action, so that article 75 CPC which deals with the defence of lack of jurisdiction is not applicable. Article 75 states that “where it is alleged that the court seized lacks jurisdiction, the party who shall proffer the plea shall have, under penalty of it otherwise being inadmissible, to provide reasons thereof and to indicate, at all event, court before which the matter should be brought”.

Nevertheless the Cour de cassation has held that an action claiming that the court lacks jurisdiction is not admissible since article 75 CPC indicates that the lack of jurisdiction is a matter of defence, not of action:

les exceptions d’incompétence figurant au nombre des moyens de défense, le demandeur n’est pas recevable à contester la compétence territoriale de la juridiction qu’il a lui-même saisie (Cass. 2° Civ., 7 December 2000, Bull. n°163).

This sentence means that the issue of jurisdiction is a means of defence, therefore the claimant is not admissible to challenge the territorial jurisdiction of the court to which he submitted his case. The international jurisdiction is so close to the territorial jurisdiction, that rules of territorial jurisdiction are usually extended to international matter in French international litigation.

This case of the 7th of December 2000 is not a formalistic decision. The code of civil procedure is consistent. There are actions and defences. An action is defined by article 30: “an action is the right, in relation to the originator of a claim, to be heard on the merits of the same in order that the judge shall pronounce it well or ill-founded”. An action deals with the main issue on the merits whereas the defences may be on the merits, on admissibility or on jurisdiction. Several scholars and judges wrote the code of procedural law with great attention (Motulsky, Cornu, Parodi, etc.). A defence of lack of jurisdiction has to be argued in limine litis (before the claim of non admissibility and before the defences on the merits).

An action is admissible if the claimant has a legitimate and present interest. It is why the declaratory action is not admissible, in principle, under French law. There are some rare exceptions especially in private international law but on the merits of the case not on procedural grounds. But the court of appeal does not consider that it is a declaratory judgment. The victim has a legitimate and present interest to sue. This interest to sue is the likeliness to obtain damages for the victims. Yet they don’t claim damages, they submit a case to a judge in order to obtain from this judge that he refuses the case. The court of appeal indicates that there is no contradiction to declare admissible an action seeking that the court has no jurisdiction. It seems to me that it is not sufficient to say that there is no contradiction to avoid the contradiction (it looks like a “Competenz Competenz” rule or a preliminary reference to the French court). The risk is that lawyers try too often to use this new tool to determine jurisdiction. Courts would become on this point legal consultants.

The word “legitimate interest” is rarely used in case law. It used to be applied to prevent concubine to seek damages when her concubine had been killed in a traffic accident. This case law was reversed in 1970. The condition of legitimate interest is a moral condition. In fact the court of appeal takes perhaps into account the victims’ interest to bring their action in California (because of discovery, punitive damages etc.). The equilibrium, the consistency and the integrity of French civil procedure is endangered by the court of appeal judgment.

The mutual trust and international cooperation is invoked by the court of appeal to justify its decision. But good willing does not make good decision. As a matter of fact the court of appeal does not like to be excluded of the debate concerning its own jurisdiction but that is a feeling, not a rule. There are other fields where the international cooperation and trust have not been taken into account (e. g. evidence matter in application of the Hague convention of 1970 in American and French case law etc.). The court of appeal’s judgment is more or less a unilateral disarmament. There is a need for an international convention which may be the new Lugano convention of the 30th October 2007 (JOUE n° L. 339, 21 déc. 2007, p. 3 ; Procédures 2008, n° 43, obs. Nourissat) which may be ratified by non European countries ! (nevertheless this convention is a copy of the Brussel regulation and so a European text).

Related posts:

Flashairlines - Online symposium
French court declines jurisdiction to transfer dispute back to U.S. court

In a recent post, I reported how the Paris Court of appeal accepted to decline jurisdiction in order to meet the jurisdictional criteria of a U.S. court and enable plaintiffs, most of whom were French, to get back to California and resume proceedings there.

The Flashairlines litigation raises many fascinating issues. Here are just a few of them: were each of the courts calling for or even engaging into international judicial cooperation? Where does this case, that none of the courts initially wanted, belong? Should French (and more generally civil law) civil procedure be twisted in some of its most basic principles (availability of declaratory relief, conveniens analysis) in order to reach jurisdictional purposes, and which one?

In the days to come, Conflictoflaws would like to organise an online symposium on the case. We hope that many European and American scholars will want to share with us their thoughts on the issues it raises. If you are interested in participating, feel free to post comments or to contact us.

Related posts:

French court declines jurisdiction to transfer dispute back to U.S. court

On March 6th 2008, the Paris Court of Appeal agreed to decline jurisdiction in order to enable the plaintiffs to go back to California and resume the proceedings that they had initiated there. The U.S. Court had (almost) declined jurisdiction on the ground of forum non conveniens, but had fortunately made its decision conditional upon French courts retaining jurisdiction. Under French law, however, French courts did not have jurisdiction over the dispute, but it was hard to see how they could rule so without being petitioned by the defendants, who had no interest to do so. It seemed logical that the plaintiffs would apply to French courts for a declaration of lack of jurisdiction, but declaratory relief is traditionnally unavailable under French civil procedure.

The dispute arose after a Boeing 737-300 crashed in the Red Sea a few minutes after leaving Egypt for Paris. All 135 passengers, most of whom were French (and who included leading arbitration scholar Philippe Fouchard and many members of his family), and the 13 crew members, died. This was on January 4th, 2004.

The airline (Flash airlines) was Egyptian, and so was its insurer. The aircraft was owned by Californian corporation International Lease Finance. The manufacturer of the aircraft was obviously American (Boeing), and so were a variety of its subcontractors: Honeywell International, Parker Hannifin.

Hundreds of plaintiffs decided to bring legal proceedings. A first group of 646 plaintiffs sued Flash Airlines and its insurer before French courts. A second group of 281 plaintiffs, some of whom also belong to the first group, sued the American parties before the U.S. District Court of the Central District of California.

In a judgment of 28 June 2005, the U.S. Court declared itself forum non conveniens. It held, however, that it would only decline jurisdiction if either the defendants were to agree to submit to the jurisdiction of French courts, or if French courts were to retain jurisdiction over the dispute.

The second group of plaintiffs decided to petition French courts to obtain a judgment declining jurisdiction. But this is a kind of declaratory relief that has traditionnally been unavailable under French civil procedure. If you want a court not to retain jurisdiction, the received wisdom goes, you do not petition it in the first place. So the French first instance court held in a judgment of 27 June 2006 that the action was inadmissible.

The plaintiffs appealed to the Paris Court of Appeal which agreed to rule on its jurisdiction.

It first ruled on the admissibility of the action and held that, because of the context of the action, an action seeking declaratory relief was admissible. The traditional rule is that parties may not ask courts to rule on issues if it is not immediately necessary for the resolution of the dispute. However, as the point of the action was to secure the jurisdiction of a foreign court which had made it conditional upon the decision of the French court, knowing whether French courts had jurisdiction was immediately necessary for the resolution of the dispute.

The Court went on to rule that it did not have jurisdiction over the dispute between the second group of plaintiffs and the American defendants. As the defendants were US based, the European law of jurisdiction did not apply and submitting to the jurisdiction of French courts was irrelevant, as it is only a head of jurisdiction under European law. The French common law of jurisdiction provides that French courts have jurisdiction in tort cases when either the domicile of the defendant or the accident took place in France, which was not the case here. Finally, article 14 of the Civil code provides that French courts have jurisdiction over disputes involving French plaintiffs, but this jurisdictional priviledge can be waived by suing abroad and failing to challenge the jurisdiction of the foreign court, which is what had happened (indeed, the French plaintiffs had initiated the American proceedings and argued that U.S. courts had jurisdiction).

Interestingly enough, in an obiter dictum, the French court insists that the American court was the most appropriate court, as some of the witnesses reside “mostly” in the U.S., the evidence related to the plane is to be found in the U.S., and pre-trial discovery is available under U.S. civil procedure. The substance of the dictum might be questionable. But the mere fact that the judgment discusses which court is the most appropriate is truly remarkable, because the jurisdiction of French courts is mandatory. French courts have no discretion in this respect, and whether the foreign court is the forum conveniens is meant to be irrelevant for the purpose of retaining or declining jurisdiction. Well, not completely irrelevant it seems.

On March 5, 2008, the French supreme court for private matters (Cour de cassation) confirmed its previous case law characterizing exclusive distribution agreements as contracts which are neither sales nor provisions of services for the purposes of article 5(1) of the Brussels I Regulation.

In this case, German company Wolman had awarded French company Cecil the exclusive distribution of its products (wood) in France. After Wolman terminated the contract in 2002, Cecil sued before a French commercial court in Isère.

The Court of Appeal of Grenoble ruled in a judgment of November 16, 2006 that French courts had jurisdiction over the dispute, as the distribution contract ought to be characterized as a provision of service, which had taken place in France.

The Cour de cassation reversed. It held that it was no provision of service for the purpose of article 5, and that the lower courts ought to have identified the obligation in question and found where it was meant to be performed according to the law governing the contract.

As usual, no reasons are given by the Cour de cassation in support of its solution.

Related posts:
French Judgment on Article 5(1) of the Brussels I Regulation, Part I
French Judgment on Article 5(1) of the Brussels I Regulation, Part II
French Judgment on Article 5(1) of the Brussels I Regulation, Part III

Recently, the March issue of “Praxis des Internationalen Privat- und Verfahrensrechts” (IPRax) was released.

It contains the following articles/case notes (including the reviewed decisions):

• R. Wagner/B. Timm on the German ministerial draft bill on the law applicable to companies, juristic persons and associations (”Der Referentenentwurf eines Gesetzes zum Internationalen Privatrecht der Gesellschaften, Vereine und juristischen Personen”). The English abstract reads as follows:

Companies that operate across borders need clarity with regard to which respective national law applies to them. There are some decisions of the European Court of Justice on the right of settlement according to the Treaty which touch this matter. However, no uniform picture has yet emerged in the European Union. A uniform European regulation would be desirable, but the EU-Commission has not taken up this question yet. In order to promote legal certainty, the German Federal Ministry of Justice has therefore presented a ministerial draft bill on the law applicable to companies, juristic persons and associations. The bill might later on serve as the basis for work on a European regulation. As a general rule, the ministerial draft bill provides for the “law of establishment”, i.e. the law at the place of registration, as the law applicable to companies, legal persons and associations. For non-registered companies, legal persons and associations, the applicable law is to be that under which they are organised. Furthermore, the proposed bill clarifies the scope of “the law of establishment” and contains regulations regarding the law applicable to cross-border reorganisations, the change of applicable law and other aspects of cross-border cases.

• J. Fingerhuth/J. Rumpf on the consequences of the German MoMiG for cross-border relocations of German entities (”MoMiG und die grenzüberschreitende Sitzverlegung - Die Sitztheorie ein (lebendes) Fossil?”). Here is the English abstract:

The German government rendered a top-to-bottom reform of the German Law on Limited Liability Companies (‘GmbHG’) with the governmental draft of the MoMiG dated 23 May 2007. The reform also covers the German law on Stock Corporations (‘AktG’) and general corporate law matters. It is intended by the reform to abandon the required concurrence of statutory seat and seat of the head office of a company and, therefore, to allow German GmbHs and AGs to move their head office to another country (cross-border relocation). Both GmbH and AG will have the same opportunities as entities from countries, where the incorporation theory is applicable. The article discusses the consequences of the MoMiG for cross-border relocations of German entities. In particular, by using the example of the GmbH & Co KG, the authors illustrate problems arising from the intentions of the MoMiG and the ‘real seat’ theory as it is currently applied in Germany. Furthermore, the authors discuss the need for German entities to completely apply the incorporation theory in Germany. The article comes to the conclusion that the ‘real seat’ theory will be entirely abandoned by the MoMiG becoming effective. The authors finally encourage the legislator to express this consequence literally within the reasoning of the MoMiG.

• A.-K. Bitter on the interpretative connection between the Brussels I Regulation and the (future) Rome I Regulation (”Auslegungszusammenhang zwischen der Brüssel I-Verordnung und der künftigen Rom I-Verordnung”)

• A. Kampf on the implications of the European directive on services on PIL (”EU-Dienstleistungsrichtlinie und Kollisionsrecht”). The abstract reads:

On 28 December 2006, after a period of almost three years of debate and political manoeuvring, the European directive on services (2006/123/EC) came into force. It will have to be implemented by the Member States by 28 December 2009 at the latest. The directive applies to a wide range of service activities based upon the case law of the European Court of Justice relating to the freedom of establishment and the free movement of services. In order to make it easier for businesses to set up in other Member States or to provide services across-border on a temporary basis, each Member State shall set up Points of Single Contact. These shall ensure that providers have access to all necessary information and can complete the formalities necessary for doing business in other Member States. Moreover regulatory and authorization bodies across the EU are meant to cooperate more effectively. The directive is expected to engender consumer confidence in cross-border services through access to information. Restrictive legislation and practices shall be abolished after having been screened. A rather neglected aspect in public discussion are the directive’s implications on private international law. Nevertheless they should be examined for both practical and systematic reasons.

• A. Fuchs on the question of international jurisdiction for direct actions against the insurer in the courts of the Member State where the injured party is domiciled (”Internationale Zuständigkeit für Direktklagen”), (ECJ, 13.12.2007, C-463/06 (FBTO Schadeverzekeringen N.V. v. Jack Odenbreit); Higher Regional Court Karlsruhe, 7.9.2007 - 14 W 31/07; Local Court Bremen, 6.2.2007 - 4 C 251/06). This is the English abstract:

The injured party may bring an action directly against the insurer in the courts of the place in a Member State where the injured party is domiciled, provided that such a direct action is permitted and the insurer is domiciled in a Member State. This follows, according to the judgment of the ECJ, from the reference in Article 11 (2) of the Brussels I Regulation to Article 9 (1) (b). The previous judgment of the first instance court in Bremen was based on the same argument. However, according to a judgment of the court of appeal in Karlsruhe, courts at the place of domicile of the injured party lack international jurisdiction under the Lugano Convention. Fuchs argues that neither the wording nor the historic interpretation support the assumption of jurisdiction of the courts in the state where the injured party is domiciled. This situation has not been altered in the course of the transfer of the Brussels Convention into a regulation. The main argument in favour of admitting direct claims before the courts of the injured party’s domicile can be drawn from the systematic interpretation. However, this additional place of jurisdiction will have undesirable consequences such as forum shopping and race to the court. In case of Article 11 (3), it will lead to unforeseeable results for the policyholder or the insured. Furthermore, it may have a negative economic impact for drivers in relatively poor Member States. The author criticizes the European legislator for not having discussed these issues openly in the context of the Brussels I Regulation.

• A. Staudinger on a decision of the German Federal Supreme Court on the scope of the head of jurisdiction of Art. 15 (2) Brussels I Regulation (”Reichweite des Verbrauchergerichtsstandes nach Art. 15 Abs. 2 EuGVVO”), (Federal Supreme Court, 12.6.2007 - XI ZR 290/06)

• E. Eichenhofer on a decision of the Higher Labour Court Frankfurt (Main) dealing with the question of international jurisdiction regarding contribution claims of German social security benefits offices against employers having their seat in another EU Member State (”Internationale Zuständigkeit für Beitragsforderungen deutscher tariflicher Sozialkassen gegen Arbeitgeber mit Sitz in anderen EU-Staaten”), (Higher Labour Court Frankfurt (Main), 12.2.2007 - 16 Sa 1366/06)

• J. von Hein on the concentration of jurisdiction regarding appeals in cross-border cases according to § 119 (1) No. 1 lit. b GVG (”Die Zuständigkeitskonzentration für die Berufung in Auslandssachen nach § 119 Abs. 1 Nr. 1 lit. b GVG - ein gescheitertes Experiment?”), (Federal Supreme Court, 19.6.2007 - VI ZB 3/07 and 27.6.2007 - XII ZB 114/06)

• D. Henrich on the question of renvoi in PIL of names occurring due to a different qualification by foreign law (”Rückverweisung aufgrund abweichender Qualifikation im internationalen Namensrecht”), (Federal Supreme Court, 20.6.2007 - XII ZB 17/04)

• B. König on the requirements of due information as well as the scope of application of the Regulation creating a European Enforcement Order for uncontested claims (”EuVTVO: Belehrungserfordernisse und Anwendungsbereich”), (Regional Court Wels, 5.6.2006 - 1 Cg 159/06m, Higher Regional Court Linz, 4.7.2007 - 1 R 124/07x)

• A. Laptew/S. Kopylov on the requirement of reciprocity with regard to the enforcement of foreign judgments between the Russian Federation and Germany (Yukos Oil Company) (”Zum Erfordernis der Gegenseitgkeit bei der Vollstreckung ausländischer Urteile zwischen der Russischen Föderation und der Bundesrepublick Deutschland (Fall Yukos Oil Company)”), (Federal Commercial District Court Moscow, 2.3.2006 - KG-A40/698-06P)

• H. Krüger on the recognition and enforcement of foreign titels in Cameroon (”Zur Anerkennung und Vollstreckung ausländischer Titel in Kamerun”)

• A. Jahn on PIL questions in the context of withdrawals of wills due to marriage in anglo-american legal systems (”Kollisionsrechtliche Fragen des Widerrufs eines Testamentes durch Heirat in anglo-amerikanischen Rechtsordnungen”)

• C. Jessel-Holst on the Statute of Private International Law of the Republic of Macedonia (”Zum Gesetzbuch über internationales Privatrecht der Republik Mazedonien”)

Further, this issue contains the following materials:

• Statute of Private International Law of the Republic of Macedonia of 4 July 2007 (”Gesetz über internationales Privatrecht - Gesetz der Republik Mazedonien vom 4.7.2007″)

• Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Railway Rolling Stock - signed in Luxembourg on 23 February 2007 (”Protokoll von Luxemburg zum Übereinkommen über internationale Sicherungsrechte an beweglicher Ausrüstung betreffend Besonderheiten des rollenden Eisenbahnmaterials - unterzeichnet in Luxemburg am 23.2.2007″)

As well as the following information:

• H.-G. Bollweg/K. Kreuzer on the Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Railway Rolling Stock (”Das Luxemburger Eisenbahnprotokoll – „Protokoll zum Übereinkommen über internationale Sicherungsrechte an beweglicher Ausrüstung betreffend Besonderheiten des rollenden Eisenbahnmaterials“ vom 23. 2. 2007″)

• E. Jayme on the (critical) debate in France about the Community’s competence in PIL which was made public by French PIL professors by means of open letters on this issue (”Frankreich: Professorenstreit zum Europäischen IPR – einige Betrachtungen”)

• E. Jayme on the convention of the Ludwig-Boltzmann-Institutes in Vienna (”Kodifikation des IPR, des grenzüberschreitenden Zivilrechts und Zivilverfahrensrechts in der Europäischen Union – Tagung der Ludwig-Boltzmann-Institute in Wien”)

• C. Gross: report on the 40th UNCITRAL session (”Bericht über die 40. Sitzung der Kommission der Vereinten Nationen zum internationalen Handelsrecht (UNCITRAL)”)

For recent information on PIL see also the website of the Institute for Private International Law, Cologne.

(Many thanks to Prof. Dr. Heinz-Peter Mansel, editor of the journal (University of Cologne) for providing the English abstracts.)

In Vogler v. Szendroi (available here) the plaintiff, resident in Nova Scotia, was injured in a car accident in Wyoming.  Three years later he issued legal process in Nova Scotia.  This was inside the four-year Wyoming limitation period, which applied as part of the substantive law applicable to the claim (under the place of the tort rule in Tolofson v. Jensen).  However, he did not serve the defendant for another three years. 

Under Wyoming law, an action is commenced by filing process with the court (the same is true in Nova Scotia), but if service is not made within 60 days of filing, the action is not considered to have been commenced until the date of service (Nova Scotia has no similar provision). 

The issue therefore was whether the specific rule of Wyoming law focusing on the date of service was substantive, and so applied in the Nova Scotia litigation, or procedural, and so did not apply.  The lower court held that the rule was “integral” to the Wyoming limitations rule and was therefore substantive.  But the Court of Appeal reversed and characterized it as procedural.

The court’s analysis is quite lengthy - longer than necessary for this issue.  But it does contain some useful comments about the substance-procedure distinction (at paras. 17-22 and 26).  It also relies on a useful academic source on this specific issue by Professor Janet Walker (at paras. 37-39).  Ultimately the court concludes the Wyoming rule is not bound up in its limitations rule, and is rather a separate procedural rule.

Can attachments reach foreign bank accounts? For the French, the answer had always been clearly negative, until the French supreme court for private matters (Cour de cassation) held in a judgment of 14 February 2008 that a French attachment could reach a bank account in Monte Carlo.

In this case, a creditor had carried out an attachment on the bank account of its debtor, Société Exsymol. The account had been opened at the Monte Carlo branch of French bank BNP Paribas, but the creditor chose to carry out the attachment in Paris. The issue arose as to whether the attachment had reached the Monte Carlo account. The Cour de cassation held that it had.

French saisies attribution

The attachment was a saisie attribution. It is only available to creditors who have enforcement titles such as judgments or arbitral awards declared enforceable. Such attachments purport to transfer the property of the monies from the debtor to the creditor. They thus clearly belong to the enforcement of decisions. They are no freezing orders.

It should also be underlined that they are available to judgment creditors without any judicial intervention or even leave. Any French judgment creditor may directly hire an enforcement officer (huissier de justice) who will carry out the attachment on his behalf.

Scope of the rule

The Court insisted that the French saisie had reached the foreign account because it was held by a branch of the bank. It is ruled that the rationale of the solution is that saisies reach all assets owned by the corporate entity, irrespective of their location. It seems clear thus, that they would not reach assets held by a foreign subsidiary of the bank. But it also seems to follow that whether the bank had its headquarters in France is irrelevant.

Was European law relevant?

The judgment does not mention the Brussels I Regulation. Was it indeed irrelevant? I think so. I would argue that the regulation governs the jurisdiction of courts, not the power (jurisdiction?) of other state bodies such as enforcement officers to act internationally.

Additionally, Monte Carlo does not belong to the European Union. In enforcement matters, wouldn’t the regulation apply only to the enforcement on the territories of member states? Would the enforcement here be the action of the French huissier in Paris or the transfer of ownership of the assets, thus taking place outside of the EU?

Is enforcement strictly territorial?

BNP Paribas is The bank for a Changing World. Changing it is indeed! In French legal circles, enforcement had always been regarded as strictly territorial. It was argued that it would be an infringment of the sovereignty of the foreign state to carry out enforcement on assets situated on its territory. It seems that the Cour de cassation is not convinced anymore.

All comments welcome! I would also love to hear from similar experiences in other jurisdictions.

The Sixth Circuit Court of Appeals recently issued an interesting conflicts decision on the competing applicability of COGSA rules or Hague-Visby Rules. According to Judge Karen Nelson Moore, writing for the panel:

This case requires us to consider whether COGSA or the Hague-Visby Rules or both apply as a matter of law to the ocean voyage between Le Havre, France and Montreal, Canada, [where the goods would then travel by land to inland cities in the United States]. . . . The case presents an intellectual puzzle that we must resolve without direct precedent as guidance, and our analysis should be understood as a default rule around which cargo owners and carriers can contract.

After a thorough introduction of the issue, and the genesis of the competing laws, the panel determined that:

an intermediary stop en route pursuant to a multimodal maritime contract with an ultimate destination in the United States, regardless of whether the stop is during the sea stage of transport or between the sea and land legs, should not prevent the application of COGSA liability rules as a matter of federal common law. Our decision effectuates Congress’s intent when it passed COGSA in 1936 to promote uniformity in shipping. We think that applying COGSA’s liability rules to all carriage of goods by sea, in contracts for transportation with ultimate destinations in the United States, effectuates Congress’s intent in a context that Congress could never have predicted: one in which containerized transport and “through” bills of lading prevail.

The decision in Royal Insurance Co. of Am. v. Ford Motor Co., No. 06-1199 (6th Cir., January 30, 2008) is an interesting read, both for the substantive rule of maritime law and the conflicts analysis. The slip opinion is available here.

Following the cases of Applicant C and Sundelind Lopez, a third reference for a preliminary ruling on Brussels II bis has been referred to the ECJ – again (as Applicant C) by the Finnish Korkein Hallinto-oikeus (Case C-523/07, Applicant A).

The present case concerns children who have their habitual residence in Sweden, live transitionally in Finland and became Swedish citizens during the proceedings. Since the Finnish court had doubts whether it can exercise international jurisdiction under the Brussels II bis Regulation to take measures in connection with child protection due to the childrens’ alleged permanent residence in Sweden, the court has referred the following questions to the ECJ for a preliminary ruling:

1(a) Does Council Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, (the Brussels IIa Regulation) apply to the enforcement, such as in the present case, of a public-law decision made in connection with child protection, as a single decision, concerning the immediate taking into care of a child and his or her placement outside the home, in its entirety,

(b) or, having regard to the provision in Article 1(2)(d) of the regulation, only to the part of the decision relating to the placement outside the home?

2 How is the concept of habitual residence in Article 8(1) of the regulation, like the associated Article 13(1), to be interpreted in Community law, bearing in mind in particular the situation in which a child has a permanent residence in one Member State but is staying in another Member State, carrying on a peripatetic life there?

3(a) If it is considered that the child’s habitual residence is not in the latter Member State, on what conditions may an urgent measure (taking into care) nevertheless be taken in that Member State on the basis of Article 20(1) of the regulation?

(b) Is a protective measure within the meaning of Article 20(1) of the regulation solely a measure which can be taken under national law, and are the provisions of national law concerning that measure binding when the article is applied?

(c) Must the case, after the taking of the protective measure, be transferred of the court’s own motion to the court of the Member State with jurisdiction?

4 If the court of a Member State has no jurisdiction at all, must it dismiss the case as inadmissible or transfer it to the court of the other Member State?

In the meantime, after this new reference has been lodged on 23 November 2007, the Court already had to deal with the iss