Conflict of Laws .net

Today, the ECJ delivered the judgment in case C-462/06 (Laboratoires Glaxosmithkline) dealing with the interpretation of Art. 6 point 1 and Section 5 of Chapter II of the Brussels I Regulation. The French Cour de Cassation had referred the following question to the ECJ for a preliminary ruling:

Does the rule of special jurisdiction stated in Article 6(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, by virtue of which a person domiciled in a Member State may be sued ‘where he is one of a number of defendants, in the courts for the place where any of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings’, apply to proceedings brought by an employee before a court of a Member State against two companies belonging to the same group, one of which, being the one which engaged that employee for the group and refused to re-employ him, is domiciled in that Member State and the other, for which the employee last worked in non-Member States and which dismissed him, in another Member State, when that applicant relies on a clause in the employment contract to claim that the two defendants were his co-employers from whom he claims compensation for his dismissal or does the rule in Article 18(1) of the regulation, by virtue of which, in matters relating to individual contracts of employment, jurisdiction is to be determined by Section 5 of Chapter II, exclude the application of Article 6(1), so that each of the two companies must be sued before the courts of the Member State where it is domiciled?

Thus, the Cour de Cassation essentially asked whether Art. 6 point 1 Brussels I Regulation in respect of co-defendants is applicable to an action brought by an employee against two companies established in different Member States which he considers to have been his joint employers.

The Court answered the question to that effect that

the rule of special jurisdiction provided for in Article 6, point 1, of the Regulation cannot be applied to a dispute falling under Section 5 of Chapter II of that regulation concerning the jurisdiction rules applicable to individual contracts of employment.

The Court states that neither a literal nor a teleological interpretation of the Regulation leads to allowing Art. 6, point 1 to apply in employment matters: Section 5 does not refer to Art. 6, point 1 - in contrast to Article 4 and Article 5, point 5, of the Regulation, the application of which is preserved expressly by Article 18(1) thereof. Thus, a literal interpretation shows that Section 5 of Chapter II precludes any recourse to Art. 6, point 1. Further, the Court emphasises that rules of special jurisdiction have to be interpreted strictly and cannot go beyond the cases expressly envisaged by the Regulation.

See for the full judgment as well as AG Maduro’s opinion the website of the ECJ.

In November 2007, the ECJ delivered its first judgment on the Brussels II bis Regulation (C-435/06, Applicant C).

Anatol Dutta (Hamburg) has now commented on this judgment in the German legal journal “Zeitschrift für das gesamte Familienrecht” (FamRZ): “Staatliches Wächteramt und europäisches Kindschaftsverfahrensrecht. Die Anwendbarkeit der Brüssel-IIa-Verordnung auf staatliche Maßnahmen zum Schutz des Kindes”, FamRZ 2008, 835 et seq.

See with regard to the reviewed case also our previous posts on the judgment and AG Kokott’s opinion.

The Commonwealth Attorney-General has recently released a Consultation Draft of the Personal Property Securities Bill 2008 and an accompanying commentary. The Bill aims to provide a national system to regulate security interests in all property other than land, and would replace over 70 Commonwealth, State and Territory enactments.

As one can imagine, the Bill contains substantial provisions relating to choice of law (Part 2 Div 7) and jurisdiction (Part 11 Div 5).

In general, Australian law will apply to security over property located in Australia (s 45), and in other circumstances the law of the place where the grantor is located will apply (s 46). Specific rules are proposed regarding foreign intellectual property (s 47), minerals (s 48), investment instruments and non-negotiable documents of title (s 49), investment entitlements (s 50), and bank accounts (s 51). Rules will also cover circumstances where property is brought into or taken out of Australia (ss 52-33), or where the grantor relocates to another jurisdiction (s 54).

The Bill appears to envisage that foreign law may govern some aspects of personal property securities that are otherwise regulated by the Bill. If foreign law applies, the Bill only picks up the relevant foreign law governing the rights, obligations and duties of debtor (or grantor of security) against the secured party in relation to collateral (i.e. the property that is subject to the security) (s 43). This would, it seems, exclude aspects of the debtor-creditor relationship unrelated to security, and may also exclude foreign choice of law rules. However, the operation of these provisions is not entirely clear.

So far as jurisdiction is concerned, the Bill is unusual among Commonwealth enactment in excluding the operation of s 39B of the Judiciary Act 1903, and the Jurisdiction of the Courts (Cross-Vesting) Act 1987. Rather, the Bill contains its own provisions investing Australian state and federal courts with jurisdiction (s 261) and providing for the transfer of proceedings between courts (s 263).

The Attorney-General is seeking public comment on the Bill as a whole, and there are also specific questions raised for discussion. Questions relating to private international law include:

• Does the common law [relating to jurisdiction of Australian courts] provide a sufficient jurisdiction for courts to act in relation to security interests?
• To what extent should the Bill implement rules consistent with the Hague Securities Convention?
• Are there any aspects of the Hague Securities Convention that should be omitted from the Bill (Australia could not adopt the Convention unless Australia’s domestic law was consistent with the convention).
• Should the Bill require a securities intermediary who, in Australia, offers investment entitlements governed by the law of another country to operate an office in that other country of the kind contemplated by the Hague Securities Convention (and to comply with any licensing and other regulatory requirements that may exist in that other country concerning the operation of offices of that kind)?

The deadline for submissions is August 15th 2008. More information can be found here.

Thomas Thiede and Katarzyna Ludwichowska (both Vienna) have written a comment (in German) on the ECJ’s judgment in case C-463/06 (FBTO Schadeverzekeringen) in the latest issue of the legal journal Versicherungsrecht (VersR 2008, 631 et seq.).

An English abstract has been kindly provided by the authors:

The authors criticise the judgment of the European Court of Justice from 13 December 2007, in which the Court ruled that the reference in Art. 11(2) of Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters to Art. 9(1)(b) of that Regulation is to be interpreted as meaning that the injured party may bring an action directly against the liability insurer of the person liable before the courts of the Member State where that injured party is domiciled. They present and counter the arguments given by the ECJ and show the possible negative consequences of the solution accepted by the Court, such as the aggravation of forum shopping or the possible multiplicity of proceedings concerning the same incident in various Member States. The authors also emphasise that – although the case decided by the ECJ concerns only motor vehicle insurance – the reference in Art. 11(2) of Regulation 44/2001 applies to all – also non-compulsory – third-party liability insurance, which means that the Court’s interpretation will have a very broad impact.

See with regard to this case also our previous posts on the judgment, the referring decision as well as an annotation on the referring decision.

The State of New York, and—recently—the United States Congress—are presently considering enacting laws that would give American authors legal recourse when they are sued abroad for defamation over literary works that would otherwise fall within the broad protections of the First Amendment to the United States Constitution.

In New York, both the Assembly and its Senate have unanimously passed a bill (dubbed the “Libel Terrorism Protection Act” (S.6687/A.9652)) that would give authors who are sued for libel abroad the right to obtain a declaration that such judgments are unenforceable because their works are protected under American law. Both the U.S. House and Senate are now considering federal legislation that would give authors the right to countersue those who have sued them for defamation in foreign courts, and obtain more than three times the amount of the libel judgment of the foreign court, if the American writer could prove the accuser was trying to intimidate the author from exercising his or her First Amendment rights.

As this article explains, the conflict between foreign judgments and the First Amendment has been brewing since 1941, when the U.S. Supreme Court starkly distinguished American protection of speech from that of England. Only recently, however, as England has become a choice venue for libel plaintiffs from around the world, has that country’s libel law come to have a disturbing impact on the First Amendment. The case against Rachel Ehrenfeld in England by Saudi banker Khalid Bin Mahfouz is illustrative. Her 2003 book named Mr. Bin Mahfouz as a possible funder of terrorism. Twenty-three copies of the book were sold in England, which led Mr. Bin Mahfouz to sue there. Ms. Ehrenfeld refused to appear before the English courts, and a judgment against her was entered in the amount of $225,000. Ms. Ehrenfeld has sought a declaratory judgment in New York determining that the English judgment was not enforceable here, and that her work was protected under American law. But the New York Court of Appeals determined that her suit could not be heard under existing state law (because the state’s long-arm statute did not authorize personal jurisdiction over Mr. Bin Mahfouz), and it was the duty of the legislature to change that law if it sees fit. See Ehrenfeld v. Bin Mahfouz, 9 N.Y.3d 501 (N.Y. App. 2007). It appears now that that some change in that direction is starting to occur. English courts, however, are not the only one’s creating this alleged conflict; consider Yahoo!’s cross-border struggle with French authorities over Nazi-era materials on its auction website. See Yahoo! Inc. v. La Ligue Contre Le Racisme et L’Antisemitisme, 433 F.3d 1199, 1204 (9th Cir. 2006).

More commentary on this pending legislation is available here.

An interesting volume, collecting the contributions presented at the Seminario de Otoño de Derecho Internacional Privado (Fall Seminar on Private International Law), hosted in October 2007 by the University Carlos III of Madrid, has been recently published by Editorial Colex, under the editorship of Prof. Alfonso Luis Calvo-Caravaca and Prof. Esperanza Castellanos Ruiz: La Unión Europea ante el Derecho de la Globalización.

The papers (in Spanish, Italian and Portuguese) cover various aspects of European Private International Law, analysing its current development in the light of issues arising from globalization. Here’s the table of contents:

• Luís de Lima Pinheiro: O direito de conflitos das obrigações extracontratuais entre a comunitarização e a globalização - uma primeira apreciação do regulamento comunitario Roma II;
• Hilda Aguilar Grieder: La voluntad de conciliación con las directivas comunitarias protectoras en la propuesta de reglamento “Roma I”;
• Alfonso Luis Calvo Caravaca and Celia M. Caamiña Domínguez: El caso Klimt;
• Javier Carrascosa González: Sociedad cooperativa europea: aspectos de derecho internacional privado;
• Esperanza Castellanos Ruiz: El convenio de Roma de 1980 ante los tribunales españoles: balance de 15 años de vigencia;
• Ma. José Castellanos Ruiz: Contencioso Airbus-Boeing;
• Ma. Pilar Diago Diago: Aproximación a la mediación familiar desde el derecho internacional privado;
• Pietro Franzina: Il regolamento “Roma II” sulla legge applicabile alle obbligazioni extracontrattuali;
• Rafael Gil Nievas and Javier Carrascosa González: Consideraciones sobre el reglamento 805/2004 de 21 abril 2004 por el que se establece un título ejecutivo europeo para créditos no impugnados;
• Dario Moura Vicente: Perspectivas de la armonización y unificación internacional del derecho privado en una época de globalización de la economía;
• Carola Ricci: Il foro della residenza abituale nel regolamento Nº 2201/2003 e nella proposta Roma III;
• Juliana Rodríguez Rodrigo: Aplicación del derecho de la competencia a los baremos de honorarios de abogados: Arduino y Cipolla;
• Stefania Serafini: Il diritto europeo della concorrenza e le risposte alla sfida della globalizzazione. Un caso esemplare: la valutazione delle concentrazioni nel Reg. CE n. 139/2004.

Title: La Unión Europea ante el Derecho de la Globalización, edited by Alfonso Luis Calvo-Caravaca and Esperanza Castellanos Ruiz, Editorial Colex, Madrid, 2008, 515 pages.

ISBN: 978-8-48-342113-0. Price: EUR 70.

(Many thanks to Pietro Franzina, University of Ferrara, for the tip-off)

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.

Prof. Rafael Arenas Garcia (Universitat Autònoma de Barcelona and Àrea de Dret Internacional Privat blog) has written an interesting article on the controversial issue of the law applicable to culpa in contrahendo, discussing the conflict rule set out in Art. 12 of the Rome II regulation: “La regulación de la responsabilidad precontractual en el Reglamento Roma II”.

The article (in Spanish) will be published in the forthcoming issue (2007) of the Anuario Español de Derecho Internacional Privado (Spanish Yearbook of Private International Law - AEDIPr.), but it can be downloaded as a .pdf file from the Àrea de Dret Internacional Privat blog.

The English abstract reads as follows:

Article 12 of Rome II Regulation governs the obligations arising out of dealings prior to the conclusion of a contract. It establishes that the law applicable to these obligations shall be the law applicable to the contract. Where it is not possible to determine such law, the second paragraph of article 12 establishes the application of the general connecting factors of Rome II Regulation. It is also possible to choose the law applicable to culpa in contrahendo.

These solutions are not problem-free. The application of the law governing the future contract is not suitable in order to forbid the breaking of negotiations, without giving to the parties the possibility to rely on the law of the country in which the party has its habitual residence to establish that he can broke off negotiations without liability. It can also be criticized that there is no provision about the cases in which a contract between the parties has been concluded in order to rule the negotiations. As a result of this lack of provision in these cases the law governing culpa in contrahendo will be the law of the future contract instead of the law of the contract that rules the negotiations.

This article analyses these problems and the difficult delimitation between contractual and non-contractual fields in matters relating to obligations arising out of dealings prior to the conclusion of a contract. It also includes de lege ferenda proposals.

The contributions presented at the 19th Journée de droit international privé, held in March 2007 at the Swiss Institute of Comparative Law (ISDC) and dedicated to the new Lugano Convention, have been published by Schulthess, under the editorship of Andrea Bonomi, Eleanor Cashin Ritaine and Gian Paolo Romano: La Convention de Lugano. Passé, présent et devenir.

Here’s the table of contents (available as a .pdf file on the ISDC’s website):

Avant-propos (Eleanor Cashin Ritaine)

Première session (Présidence: Eleanor Cashin Ritaine)

• Monique Jametti Greiner: L’espace judiciaire européen en matière civile: la nouvelle Convention de Lugano;
• Alexander R. Markus: La compétence en matière contractuelle selon le règlement 44/2001 «Bruxelles I» et la Convention de Lugano revisée à la suite de l’arrêt CJCE Color Drack;
• Eva Lein: La compétence en matière contractuelle: un regard critique sur l’article 5 § 1er de la nouvelle Convention de Lugano;
• Andrea Bonomi: Les contrats conclus par les consommateurs dans la Convention de Lugano révisée;
• Anne-Sophie Papeil: La Convention de Lugano et la protection du consommateur;
• Hélène Gaudemet-Tallon: Quelques réflexions à propos de trois arrêts récents de la Cour de cassation française sur l’art. 5-1 et de l’avis 1/03 de la Cour de justice des Communautés sur les compétences externes de la Communauté.

Deuxième session (Présidence: Andrea Bonomi)

• Jolanta Kren Kostkiewicz: Rechtshängigkeit und Konnexität;
• Anton K. Schnyder: Anerkennung und Vollstreckung ausländischer Entscheidungen;
• Valentin Rétornaz: Les limites à l’application autonome de la Convention de Lugano. Aperçu au travers de l’exequatur en Suisse des ordonnances rendues par un juge de la mise en état français;
• Gian Paolo Romano: Principe de sécurité juridique, système de Bruxelles I / Lugano et quelques arrêts récents de la CJCE.

Annex: Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

Title: La Convention de Lugano. Passé, présent et devenir. Actes de la 19^e Journée de droit international privé du 16 mars 2007 à Lausanne, edited by Andrea Bonomi, Eleanor Cashin Ritaine and Gian Paolo Romano, Schulthess (Série des publications de l’ISDC, vol. 59), Zürich, 2007, 209 pages.

ISBN: 978-3-7255-5538-3. Price: CHF 75.

(The official text of the new Lugano Convention has been published in the Official Journal of the European Union n. L 339 of 21 December 2007, attached to the Council decision on its signing on behalf of the Community. On 29 February 2008 the Commission presented a Proposal for a Council decision concerning the conclusion of the Convention - COM(2008) 116 fin.)

Anatol Dutta (Hamburg) has written an article on the German reference for a preliminary ruling in Seagon v. Deko Marty Belgium NV (Case C-339/07): Jurisdiction for insolvency-related proceedings caught between European legislation, Lloyd’s Maritime and Commercial Law Quarterly (LMCLQ) 2008, p. 88-96.

Here is the abstract:

The stock of European legislation in the area of private international law is growing steadily. The pointillist technique employed by the European legislator, however, necessarily entails friction between the different legislative acts. One illustrative example, which shall be examined in this article, concerns jurisdiction for insolvency-related proceedings. Such individual proceedings which derive directly from the bankruptcy and are closely connected to collective insolvency proceedings could be governed by different European regulations or even by national law.

See with regard to this reference also our previous post which can be found here.

The papers presented at the international conference held in March 2007 at the University Carlo Cattaneo of Castellanza (see our previous post), and a final report drafted on the basis of the discussion that arose in the colloquium, have been published by CEDAM, under the editorship of Alberto Malatesta, Stefania Bariatti and Fausto Pocar: “The External Dimension of EC Private International Law in Family and Succession Matters“.

Here’s an excerpt from the Foreword of the volume:

Under the 2005 Framework Programme for Judicial Cooperation in Civil Matters, the European Commission funded an International Research Project presented by the University Carlo Cattaneo of Castellanza on the EC harmonisation of Private International Law and the external relations in family and succession law.

A group of scholars coming from various European countries agreed to undertake the task of carrying out an in-depth analysis of the scope of the Community powers in the field of Private International Law in the above matters, with special reference to relationships connected with third States.

The focus on family and succession law was deemed crucial in the light of the many initiatives of the European Community in this field pursuant to Articles 61(c) and 65 of the EC Treaty, and of the hot debate they raised about the need itself of such measures and their content. On the other hand, in the course of the Research Project, the European Court of Justice rendered the long-awaited Lugano Opinion (Opinion No 1/03), that provided some general guidelines about the future external dimension of the Community action in the conflicts of laws and its role in the international community.

And this is the table of contents (available as a .pdf file on the publisher’s website):

Introductory Speech - Fausto Pocar: The “Communitarization” of Private International Law and its Impact on the External Relations of the European Union;

First Part - EC EXTERNAL RELATIONS AND PRIVATE INTERNATIONAL LAW

• Alberto Malatesta: The Lugano Opinion and its Consequences in Family and Succession Matters;
• Andrea Santini: The Doctrine of Implied External Powers and Private International Law Concerning Family and Succession Matters;
• David McClean: Bilateral Agreements with non-Member States after the Lugano Opinion;
• Stefania Bariatti: Bilateral Agreements with non-Member States after the Lugano Opinion: Some Procedural Issues.

General Discussion

• Laura Tomasi: The Application of EC Law to non-Purely intra-Community Situations.

- - - - - - - - -

Second Part - GENERAL PROBLEMS OF EC PRIVATE INTERNATIONAL LAW WITH REGARD TO RELATIONS WITH THIRD STATES

Section 1: Jurisdiction, Recognition and Enforcement of Judgments and Administrative Cooperation

• Alegría Borrás: Lights and Shadows of Communitarisation of Private International Law: Jurisdiction and Enforcement in Family Matters with regard to Relations with Third States;
• Etienne Pataut: International Jurisdiction and Third States: A View from the EC in Family Matters;
• Andrea Bonomi: The Opportunity and the Modalities of the Introduction of Erga Omnes EC Rules on Jurisdiction;
• Marta Pertegás: Recognition and Enforcement of Judgments in Family and Succession Matters;
• Roberto Baratta: Short Remarks on EC Competence in Matters of Family Law;
• William Duncan: Administrative Cooperation with regard to the International Protection of Children.

General Discussion

• Carola Ricci: Habitual Residence as a Ground of Jurisdiction in Matrimonial Disputes: From Brussels II-bis to Rome III;
• Gaetano Vitellino: European Private International Law and Parallel Proceedings in Third States in Family Matters.

- - - - - - - - -

Section 2: Applicable Law

• Kurt Siehr: Connecting Factors, Party Autonomy and Renvoi;
• Peter McEleavy: Applicable Law and Relations with Third States: The Use and Application of Habitual Residence;
• Th. M. de Boer: Unwelcome Foreign Law: Public Policy and Other Means to Protect the Fundamental Values and Public Interests of the European Community;
• Johan Meeusen: Public Policy in European Private International Law: In Response to the Contribution of Professor Th. M. de Boer on “Unwelcome Foreign Law”;
• Carmen Parra Rodríguez: Characterisation and Interpretation in European Family Law Matters;
• Luigi Fumagalli: Characterization in European Private International Law: Short Notes on the Interpretation Process from Independence to Functionality and Return (to the Tradition).

General Discussion

• Cristina Mariottini: The Internal and External Dimensions in the Harmonization of European Conflict Rules on the Administration of Estates.

Final Report: Alberto Malatesta.

- - - - - - - - -

Title: The External Dimension of EC Private International Law in Family and Succession Matters, edited by Alberto Malatesta, Stefania Bariatti and Fausto Pocar, CEDAM (Studi e pubblicazioni della Rivista di diritto internazionale privato e processuale, n. 71), Padova, 2008, XIV-392 pages.

ISBN: 978-88-13-27276-0. Price: EUR 36.

(Many thanks to Gaetano Vitellino, University “Carlo Cattaneo” of Castellanza, for the tip-off)

Following our post on the release of the final text of the Rome I Regulation, an internal document by the General Secretariat of the Council to the Permanent Representatives Committee (COREPER) confirms that the new Regulation will be soon adopted by the Council (doc. n. 7689/08 of 7 April 2008):

5. The Permanent Representatives Committee is therefore asked to confirm agreement and advise the Council to:

• adopt the Regulation, as set out in PE-CONS 3691/07 JUSTCIV 334 CODEC 1401, as an “A” item at a forthcoming meeting;
• decide to enter in the minutes of that meeting the statements set out in the addendum to this note.

After being signed by the President of the European Parliament, the President of the Council and the Secretaries-General of the two institutions, the legislative act will be published in the Official Journal of the European Union.

Quite surprisingly, as regards the participation of the United Kingdom in the adoption of the Regulation, a footnote of the document states:

In accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and to the Treaty establishing the European Community, the United Kingdom and Ireland have given notice of their wish to take part in the adoption and application of this Regulation.

This is probably a mistake, since the United Kingdom has not so far officially opted in (see Recital n. 45 of the Regulation), and a consultation paper on the matter was launched last week by the Ministry of Justice (see our post here).

[UPDATE on the position of the United Kingdom: a revised version of the document has been released - doc. n. 7689/1/08 REV 1 of 9 April 2008 -, where it is clearly stated that, at present, “[i]n accordance with Articles 1 and 2 of the Protocol […] and without prejudice to Article 4 of the said Protocol, the United Kingdom is not taking part in the adoption of this Regulation and is not bound by it or subject to its application“]

Two statements are set out in the Addendum (doc. n. 7689/08 ADD 1 of 7 April 2008): one by the Council and the Commission, relating to the new conflict rule on insurance contracts (Art. 7 of the new Regulation), and one by the French delegation, on the consistency between the rule on applicable law in consumer contracts (Art. 6) and future revisions of Brussels I Regulation as regards the provisions relating to jurisdiction in the same matter (Section 4, Articles 15-17 of Brussels I Reg.). Here’s the text:

DECLARATION BY THE COUNCIL AND THE COMMISSION RELATING TO THE LAW APPLICABLE TO INSURANCE CONTRACTS

The Council and the Commission note that the rules contained in Article 7 essentially reflect the legal situation as regards applicable law as presently included in the insurance Directives. Any future substantive revision of the present regime should take place in the context of the review clause of this Regulation.

DECLARATION BY THE FRENCH DELEGATION RELATING TO ARTICLE 6 OF ROME I ON THE LAW APPLICABLE TO CONSUMERS

In view of the importance of conflict-of-law rules in international private law, and in order to achieve the objective, laid down in Article 153 of the EC Treaty, of ensuring a high level of consumer protection within the Community, France wishes to state that, in the revision of Regulation 44/2001 EC on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, the provisions relating to jurisdiction (section 4 of Brussels I) must be consistent with Article 6 of the Regulation applicable to contractual obligations (Rome I), concerning the law applicable to consumer contracts.

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.

As we noted in a previous post, the agreement reached by the European Parliament and the Council on the Rome I Regulation was transposed by the EP in its amendments at first reading to the initial Commission’s Proposal. Once revised by the lawyer-linguists, this modified version of the Regulation would have been adopted by the Council, ending the codecision procedure.

The text resulting from the legal and linguistic revision is now available in all languages of the EU in the Register of the Council (doc. PE-CONS 3691/07 of 31 March 2008). Given the heading of the document (European Parliament and the Council), it can be assumed that this is the final version of the Rome I Regulation on the law applicable to contractual obligations.

According to current schedule (see the Rome I OEIL page), the text should be approved by the JHA Council in its meeting of 17/18 April 2008. Further information will be posted as soon as it is available.

The Ministry of Justice has launched a public consultation on whether the UK should opt (back) in to the Rome I Regulation (see all Rome I entries on this site here.) The press release states:

The Rome I proposal will provide clarity over which law applies if a dispute arises over a contract made between people or businesses from different countries, allowing cross border trade to continue with confidence.  

When the European Commission first announced the proposals in 2005, the UK government took the unusual step of opting out of the proposals, as they would not have been in the interests of UK businesses. However, following intense negotiations, a substantially revised and hugely improved version has now been agreed.

Announcing the publication of the ‘Rome I - Should the UK opt in?’ consultation today, Bridget Prentice, Parliamentary Under Secretary of State said:

‘The government has always said that we will not opt into EU measures which are not in our national interest. The original proposal was clearly not right for Britain, but the new and much improved regulation will help to ensure that the rules in this very technical area are applied uniformly. This will ensure a level playing field for British business in Europe.’

Notes to editors

• The 1980 Rome Convention was implemented into UK law by the Contracts (Applicable Law) Act 1990. It applies throughout the UK.
• The original Rome I Regulation was released by the European Commission in December 2005.
• The UK exercised its right not to opt in to the proposed Regulation in May 2006 [see our news item here]. This was only the second time that the UK had opted out of a Regulation under its special arrangements on Title IV of the Treaty establishing the European Community. To opt in, it will have to seek the permission of the European Commission, and agree a timetable for implementation.
• Negotiations on the Rome I Regulation ended with political agreement among Member States in December 2007. Jurist-linguists are presently checking the text for linguistic integrity. The Regulation will be adopted at the next meeting of the Justice and Home Affairs Council in April of June. The main provisions of the Regulation will come into force 18 months later.
• The UK government negotiated on behalf of all UK jurisdictions, and the consultation paper is a joint project of the Ministry of Justice and the devolved administrations.

The conclusion in the (lengthy) consultation paper itself is that,

The Government’s assessment of the Regulation as a whole is that it would be in the national interest for the UK to apply it, subject to gaining the approval of the Commission. Not only have the initial problems with the Commission’s proposal generally been resolved, but also in some significant respects the Regulation represents an improvement on the Convention. Moreover, the maintenance of a single European instrument continues to be of benefit, as it was under the Rome Convention.

The questions posed by the consultation paper are:

• Is it in the national interest for the Government, in accordance with Article 4 of the UK’s Protocol on Title IV measures, to seek to opt in to the Regulation? If not, please explain why.
• Should the Rome I rules apply throughout the UK if the UK opts in to the Regulation? If not, please explain why.
• Do you agree with the Partial Impact Assessment at Annex A of the consultation paper? If not, please explain why.

Your responses need to be received by the UK Government no later than 25 June 2008.

A very interesting volume, collecting the contributions presented by prominent European and Japanese scholars at a conference organised in 2007 by the Max Planck Institute for Private Law in Hamburg, has been recently published by Mohr Siebeck: Japanese and European Private International Law in Comparative Perspective. A presentation of the book, and the TOC, are available on the MPI’s website:

Edited by Jürgen Basedow, Harald Baum und Yuko Nishitani, this conference volume is based on a symposium of the same name that was held in March 2007 at the MPI for Private Law in Hamburg and represents the first comprehensive analysis of the new Japanese private international law in any western language.

The idea of national codification is advancing on a global scale in conflict of laws. A large number of legislative projects dealing with codifying and modernizing private international law, both on the national and the supranational level, have been launched in the past few years. Among such recent initiatives, the advances taken by the European and the Japanese legislators are particularly reflecting these developments. On January 1, 2007, the new Japanese ‘Act on General Rules for Application of Laws’ entered into force replacing the outdated conflict of laws statute of 1898. This major reform finds its parallels in the current efforts of the European Union to create a modern private international law regime for its member states.

This volume presents the first comprehensive analysis of the new Japanese private international law available in any western language and contrasts it with corresponding European developments. Most of the contributors from Japan are scholars who were actively involved in and responsible for preparing the new Act. All of them are renowned experts in the field of private international law. Leading European experts in the conflict of laws supplement the Japanese analyses with comparative contributions reflecting the pertinent discussion of parallel endeavours in the EU. To guarantee better understanding, English translations of both the present and the former Japanese statutes have been added.

Table of Contents:

I. General Introduction
Jürgen Basedow: The Recent Development of the Conflict of Laws - Trevor C Hartley: The Brussels Regulation and Non-Community States - Masato Dogauchi: Historical Development of Japanese Private International Law - Hironori Wanami: Background and Outline of the Modernization of Japanese Private International Law

II. Contractual Obligations
Yuko Nishitani: Party Autonomy and Its Restrictions by Mandatory Rules in Japanese Private International Law - Catherine Kessedjian: Party Autonomy and Characteristic Performance in the Rome Convention and the Rome I Proposal - Fausto Pocar: Protection of Weaker Parties in the Rome Convention and the Rome I Proposal

III. Assignment of Receivables
Aki Kitazawa: Law Applicable to the Assignment of Receivables in Japan (Nihon ni okeru saiken jôto no junkyo-hô) - Eva-Maria Kieninger: General Principles on the Law Applicable to the Assignment of Receivables in Europe

IV. International Company Law
Dai Yokomizo: International Company Law in Japan - Sylvaine Poillot-Peruzzetto: International Company Law in the ECJ Decisions - Daniel Zimmer: The Proposal of the Deutscher Rat für Internationales Privatrecht

V. Non-Contractual Obligations
Toshiyuki Kono: Critical and Comparative Analysis of the Rome II Regulation on Applicable Laws to Non-contractual Obligations and the New Private International Law in Japan - Thomas Kadner Graziano: General Principles of Private International Law of Tort in Europe - Marc Fallon: The Law Applicable to Specific Torts in Europe

VI. International Family Law
Yasuhiro Okuda: Divorce, Protection of Minors, and Child Abduction in Japan’s Private International Law - Maarit Jänterä-Jareborg: Jurisdiction and Applicable Law in Cross-Border Divorce Cases in Europe - Alegría Borrás: Protection of Minors and Child Abduction under the Hague Conventions and the Brussels II bis Regulation

VII. International Civil Procedure Law
Yoshihisa Hayakawa: International Adjudicative Jurisdiction in Japan - Dieter Martiny: Recognition and Enforcement of Foreign Judgments in Germany and Europe

Annex I
Major European Community Legislation in Private International Law

Annex II
Japanese Legislation in Private International Law

Title: Japanese and European Private International Law in Comparative Perspective, edited by Jürgen Basedow, Harald Baum, and Yuko Nishitani, Mohr Siebeck (Materialien zum ausländischen und internationalen Privatrecht/48), Tübingen, March 2008, XVIII + 434 pages.

ISBN: 978-3-16-149547-2. Price: euro 89.

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

The Academy of European Law (ERA) organizes a number of private international law related conferences, seminars and courses during the spring and summer of 2008:

3rd European Forum for In-house Counsel, Brussels, 24-25 Apr 2008

• Description from the ERA website: For the third consecutive year, ERA and ECLA are organising the European Forum for In-House Counsel, combining the pragmatism of an in-house lawyer association with the expertise of a first-class European training institute. The European Forum for In-House Counsel provides a forum for the exchange of practical experience, knowledge and views between all in-house counsel and other lawyers involved in business affairs. The aim is to provide in-house counsel, through expert input, with a comprehensive overview of and a practical insight into issues of European Community law with which an in-house counsel is confronted. The latest developments and the recent relevant case law of the Community courts in areas such as European competition law, European company law, European private law, as well as the topic of legal privilege, will be analysed during the forum. Interaction among participants will be encouraged through periods of discussion and case studies.

• Target audience: In-house counsel and lawyers specialised in business affairs

Cross-Border Debt Recovery, Trier, 15-16 May 2008

• Description from the ERA website: Dr Angelika Fuchs (ERA) and Professor Burkhard Hess (University of Heidelberg) are organizing a conference on Cross-Border Debt Recovery. Freezing or “attaching” a debtor’s bank account(s) is a very effective way for creditors to recover the amount owed to them. Most Member States have legislation, which provides for the attachment of bank accounts. Debtors can, however, transfer funds very quickly to other accounts that the creditor may not know about. The creditor is often not able to block such movements of funds as quickly and therefore loses a powerful weapon against recalcitrant debtors. The European Commission feels that problems of cross-border debt recovery are an obstacle to the free movement of payment orders within the European Union and to the proper functioning of the internal market. Late payment and non-payment are a risk for businesses and consumers alike. The Commission therefore proposes the creation of a European system for the attachment of bank accounts. The consultation process initiated by the Green Paper on the attachment of bank accounts has inspired a vivid debate among practitioners, governments and academics. Furthermore, a second Green Paper on measures enhancing the transparency of the debtor’s assets will be published soon.

• Target audience: Lawyers in private practice, in-house lawyers, stakeholders, representatives of national authorities and academics specialised in civil procedure and banking law

Recent Developments in Private International Law and Business Law, Trier, 5-6 Jun 2008

• Description from the ERA website: Dr Angelika Fuchs, ERA, organizes a seminar on recent developments in private international law and business law. Private international law and business law continue to be characterised by growing Europeanisation. The purpose of this seminar will be to present the latest developments in both legislation and jurisprudence in the following areas: Brussels I Regulation and anti-suit injunctions; Intellectual property and conflict of laws; New Regulation (EC) No. 1393/2007 on the service of documents; New Directive on certain aspects of mediation in civil and commercial matters; New Regulation (EC) on the law applicable to contractual obligations (“Rome I”); New Regulation (EC) No. 864/2007 on the law applicable to non?contractual obligations (“Rome II”); Trends in European company law: from Daily Mail to Sevic and Cartesio; Major decisions on cross-border insolvency.

• Target audience: Lawyers in private practice, in-house counsel in companies, associations, ministries and other public authorities, judges, notaries, academics

Summer Course: European Company Law, Trier, 18-20 Jun 2008

• Description from the ERA website: Tomasz Kramer, ERA, organizes a summer course on European company law. For the second time European company law will feature in ERA’s series of summer courses in Trier. The impact of enlargement and globalisation on the internal market creates a special context for individuals and companies that operate across borders. The European Commission has launched a wide-ranging strategy to adapt and harmonise European company law to meet these new challenges. European law has considerably influenced the shape of modern company law in EU member states. Directives and the case law of the European Court of Justice have helped to harmonise national laws and regulations have introduced new legal forms for businesses. The ‘Europeanisation’ of company law continues apace. This course will offer an introduction to the principles and framework of European company law. It will provide a comprehensive overview of subjects including the formation of different types of companies, corporate governance and management options, capital requirements, shareholders’ rights and insolvency. In addition, topics such as corporate restructuring and mobility as well as the characteristics of transnational financial vehicles will be addressed, albeit taking into consideration national particularities. The course will address current challenges and the latest legislative proposals. The analysis of ECJ case law will be an essential element of the course. Participants will have the opportunity to take a preparatory online e-learning module.

• Target audience: Young lawyers in private practice, public administration or in-house counsel, as well as advanced or postgraduate students, academics, economists or auditors seeking a detailed introduction to European company law

Summer Course: European Private Law, Trier, 30 Jun-4 Jul 2008

• Description from the ERA website: Nuno Epifânio, ERA, organizes a summer course on European private law. The purpose of this course is to introduce lawyers to European private law. Among the areas covered during the seminar will be: European Civil Procedure; Private International Law; Contract Law; Insolvency Law; Financial Services; Consumer Protection. This course should prove of particular interest to lawyers who wish to specialise in or acquire an in-depth knowledge of European private law. A general knowledge of EU law is suitable but no previous knowledge or experience in European Private Law is required to attend this course. Participants will be able to deepen their knowledge through case-studies and workshops. The course includes a visit to the European Court of Justice in Luxembourg. Participants will have the opportunity to take a preparatory onlinee-learning module.

• Target audience: Lawyers in private practice, in-house counsel, representatives of national authorities and academics