International_Litigation_&_Arbitration.txt

7/30/2019 International_Litigation_&_Arbitration.txt

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International litigation and arbitrationGilles CUNIBERTI

Methodology: lecture; no compulsory readings. But 4 seminars (TD) materials toread and to prepare. 1h30 instead of 3h lecture. Exam: case study (texts given).

Periodics: La revue critique de Droit international priv (every single importantcase is commented); le Journal du Droit international (articles and case comments) both available online; Rabels Zeitschrift; the Journal of Private International Law.

Books: Droit international priv, Bernard Audit, 5th ed.; Droit international priv,Marie-Laure Niboyer/Jouffre de la Pradelle; Muir Watt/Bureau (2 volumes; complicated; not up to date), Droit international priv; Pierre Mayer/Heuze (idem but very influential on private ineternational law in France and therefore in Luxembourg; copied by the Cour de Cassation; have a look at it from time to time). Les grands arrts de la jurisprudence franaise de droit international priv, Ancel/Lequette; Gaudemet-Tallon, competence et execution des jugements en Europe, 4th ed. (le

ading book in France on European Law of European Litigation; no need to buy); Adrian Briggs/Rees, Civil jurisdiction and judgments (English point of view); Europisches Zivilprozessrecht; Private International Law (summarized view of EuropeanLaw, arbitration...).

conflictoflaws.net

Introduction

ILA is private international law; international dispute settlement is about public international law. ILA is about private parties having issues, mostly commercial disputes. International criminal law and the ICC, as well as the ICJ in The

Hague, wont be discussed in this course. The WTO wont be covered as well.

ILA will cover commercial disputes between businesses/companies. Ex. Mercedes sells cars all over Europe; where can the customers sue the company?

Private international law is a huge field. There will be 4 courses (2 in French,2 in English):

Droit international priv I (choice of law; les conflits de lois; which law shoulda court apply?)

Reading assignment: plane crash (see text attached). How do you know that the person youre suing is liable (responsible)? The accident took place in Egypt, the p

assengers were French. The families are trying to get compensation. They are suing Boeing, subcontractors, ILF, Flash airlines (Egyptian airline...). Which lawis going to be applied? For example, one law can say there is strict liability;another law can say there is negligence, another system could say theres no liability at all... Which law will the French or American law apply? French, American, Egyptian law? There is no international rule to be applied...

International private law doesnt give the answer to a question. No Direct substantive answers. You have to get back to national systems. The issue is the choiceof law. It is the most complicated issue of private international law.


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Droit international priv II (additional issues of choice of law; issues of recognition of judgments)

Transnational commercial law (substantive rules of international commercial law;international conventions)

International litigation and arbitration

The aim is to answer a question: before which court can you go? Question of international jurisdiction; when can a court try a case/retain jurisdiction? Jurisdiction (en) = comptence (fr); juridiction (fr) = court (en).

The first question is which court may retain jurisdiction. To which court may the plaintiffs apply (plane crash case)?

International arbitration: it is possible for international private/commercial disputes for the parties to decide to argue their case before private judges. These private judges will be whoever they decide to appoint to decide their case. They are called arbitrators, and therefore the mode of dispute resolution is arbitration. It is a mode of resolution that can only resorted to if both parties agree to do this. If they cant agree on anything, they will go to court (national court). By contrast, if they can agree on where to litigate, on the forum (le for in French; = where the dispute will be settled; can be either a national/State co

urt or an arbitral tribunal), they can go before an arbitral tribunal.

French: Juge or Tribunal arbitral; English: not Judge but Court; Tribunal hasmeaning; it is for arbitration (everything thats not a national court).

Arbitration is adjudication. Adjudication means that the way to settle the dispute is to ask a third party to make a binding decision. Once the adjudicator hasdecided, the parties have no choice; they must abide.

Mediation is not adjudication. It is the intervention of a third party for the purpose of helping the parties to reach an agreement. The outcome of the disputeresolution mechanism is agreed by the parties.

There are two ways to adjudicate a dispute: the first way is to go before a national court, thats litigation. Litigation means adjudication in court; the other possibility is to go to arbitration. The third party is an arbitral tribunal.

Terminology: you dont litigate before an arbitral tribunal.

Arbitration is not a more friendly way of dispute resolution. Theres nothing less adversarial in arbitration than in litigation. Arbitration is not amicable.

So the course is about international private adjudication: litigation and arbitration.

PART I: INTERNATIONAL LITIGATION

It is essentially about determining the international jurisdiction of courts. It


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will also be about determining the procedural powers of courts in an international settlement.

The issue of foreign judgments is the third part of this subject, but wont be covered in this course.

What are the stakes of choosing one court over another? It is an extremely important issue. It has become the biggest issue. Flash airlines case: 10 years of litigation only to know to which court to go.

First reason to choose a court over another: substantive rules. Apply the law thats better for you.

Ex. Boeing wants to go to France; the plaintiffs want to go to the US. They might get more compensation peculiar for the US: punitive damages.

It is an issue of choice of law. There are rules determining which law to apply.These rules can vary between States. But it is widely accepted that you acceptthe same law for this kind of case (plane): the law of the place where the accident occurred.

Europe: Rome II regulation on the applicable law to non contractual regulations.

But choice of law rules can be different.

The laws of civil procedure are different. Each court applies its own rules of civil procedure. There are different rules depending on where you go to court. Many cases are won or lost on procedure issues. First, you can get provisional measures which are only meant to deal provisionally with the case ; they can be sopowerful that you win the case => ex. Mareva injuction of the British (Fr: linjonction Mareva) ; it is a freezing injunction which allows you to freeze the assets of the other party during the proceedings ; invented in 1975 by Lord Denning ;idem saisie conservatoire ; it is extraterritorial : you get worldwide Mareva injunctions in England ; there is also a disclosure order attached to it, the person must reveal his assets and where there are located. The combination of a worldwide freezing order and a disclosure order is unique in the world. It is used mainly for huge fraud cases (ex. Duvallier case). The world goes to Londo to get t

his powerful weapon.

Another practice is the rfr provision. It is a provisional order of payment when you can show that the debt is undisputable (la crance est incontestable). It can be100% of the debt and is immediately enforceable. You get the payment and thus you can stop the proceedings And the other party has to continue. This is possiblein France.

Evidence can be different depending on the country. If all you have are witnesses, there are places where witnesses are never heard. Ex: France (commercial cases). In the US or in England, they are. If you have a good witness, you should gothe US or England. If you have no witness or a bad one, you go to France.

Discovery: in most countries of the world, you should have the evidence which supports your case (dont initiate proceedings if you have no evidence). But the Common Law way is to put all the evidence that you have on the table, even if it iscontradictory. And thus you can ask the other party for every document. Ex. anagent concluded a contract in which you have a right to a commission; you dont have the contract and cant prove it, so you ask him to show the document. Or if yousell a company, you give all the documents and then theres a problem

Enforcement: the judgment has to be enforced, by the attachment of assets of thedefendant. How easy will it be with a judgment of a court to attach the assets


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wherever they are? Ex. judgment in France: how to force Boeing to pay? Domicileis typically the place where the assets are, but the judge can travel to anothercountry So nothing is assured. Theres no convention on the recognition of judgments between Europe and US. So if youre not sure to be able to enforce your judgment, you shouldnt go to this forum. Ex. Boeing: you can attach the future paymentsof the clients of the company (la crance) and order the clients to pay you instead of Boeing. So you should be aware whether judgments will circulate easily, when and where the assets are

In Europe now, judgments circulate easily.

Cost: the amounts can be totally different in different countries. It is ratherinexpensive to litigate on the European continent; it can be extremely expensivein England or the US because the services rendered are higher in the Common Lawworld. The lawyers will do more work. In England or the US, the proceedings aremuch longer. A typical hearing is several weeks (in France, an hour). Discoveryhas also a tremendous influence on costs: there are tons of documents. In addition, in England you pay several lawyers (Sollicitors + Barrister(s)). And if there is a Queens Council + a junior barrister The cost can get out of control. In some countries (mainly US) it is possible that lawyers take all the risks, they invest a lot of money, they come to the client, and then they take a percentage. This is an improvement for the access to justice. Ex. Vivendi, shareholders couldnt go to court in France, so went to the US (some shares in New York). So there are procedural tools which improve access to justice.

Key issue: in some countries, judges cant be trusted. They may not be impartial,they may be submitted to political pressure, and they may be biased against foreigners. Corruption is also a key issue. It is common in China or Africa for instance. You should know before you go to a given court which kind of game you wantto play there. You can play by the local rules, but these might be criminal offenses in your country if origin

Who is the adjudicator? Who is the judge? That can vary tremendously. A different can just make a different decision. England and France in commercial litigation: in France, the judges are businessmen who do that as a part-time job. No realcondition of age. In England, judges are former QC barristers called to the bench. They are extremely respected and at the highest point of their career. They

are old and experienced. So the arguing of the case can be very different.

Juries: in some countries, decisions on facts can be made by juries. You have toargue the case in front of these people. Thats why huge sums of money have beenspent on cases in the US. Some companies decided not to sell in the US because of the danger of such a system. Ex. Boeing doesnt want to appear before a US jury.Juries are laypeople, so you can impress them.

Thats why jurisdiction matters.

Chapter I: Jurisdiction over international disputes

Rules of jurisdiction are those rules which determine whether a court may settlea given dispute, the rules which determine the power of a court to entertain aspecific dispute.

There is no actual international law of jurisdiction of courts, so States are free to determine the rules of jurisdiction of their courts. This is because thereis one rule of international law which gives exclusive jurisdiction to each State to organize its own administration. Courts are one aspect of the machinery ofa State, hence the freedom of all States to determine when its courts will intervene.


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Two consequences: States determine unilaterally their own rules of jurisdiction.No State decides when the courts of another State may or may not intervene, noState will even try to tell another State that it has jurisdiction.

Courts of a given State only decide for themselves and if they decline jurisdiction, they never try to refer the case to another court. All they do is to take apersonal decision. If they conclude that they have no jurisdiction thats the end of the judgment (French judgments final statement: invite les parties mieux se pourvoir ).

Main consequence: rules of jurisdiction vary in the world. In most cases, Stateshave rather more extensive rules of jurisdictions than limited ones. Typically,the jurisdictions of several courts will overlap. Ex. Flash airlines case, bothcountries could have jurisdiction.

The only case where it gets slightly different is when States conclude international agreements on the jurisdiction of their courts and therefore unify the rules on jurisdiction of the courts of the two States. These conventions are not very frequent. Some major players of the world have never concluded any. But thereis one important set of such rules: European Law.

When European Law applies, the same law governs the jurisdiction of all courts in Europe, and is interpreted by a single court (ECJ). But there are cases where

European Law is not applicable and you have to get back to national law.

Section 1: The scope of European Law

European Law began in this field in 1968 with the so called Brussels Conventionbetween the then members of the EEC. At the time it could not have been a regulation (no competence of the authorities). But there was an article 220 of the Treaty of Rome which called for the conclusion of an international agreement between the members. The Convention dealt with rules of jurisdiction and the recognition of judgments in civil and commercial matters.

Since the start this convention could be interpreted by the ECJ. At the time the

re were only 6 parties. Later on, more members acceded and the Convention was amended.

In 1988 it was decided to extend the European Law of jurisdiction and judgmentsto other European States which were not at the time members of the European Communities but of EFTA. These States concluded the so called Lugano Convention, a sister convention to the Brussels Convention. Some details are different, but basically its the same. Almost all of Europe was subject to the same rules of jurisdiction and recognition.

Today EFTA is only 3 States (Norway, Island, Switzerland). Liechtenstein and Monaco for instance are not bound by these laws.

The Amsterdam Treaty changed all this. It turned the whole field into a competence of the European Union. Now for countries of the European Union the source will be European Regulations. All future regulations in this field will be called Brussels Regulations (Brussels I, Brussels II, Brussels IIA, Brussels III). And all conventions on choice of law will be called Rome Regulations.

The first and most important regulation is the Brussels I Regulation which replaced the Brussels Convention. It dates back to December 2000 (Regulation 44201).

Presently the source of the law will be essentially the Brussels I Regulation (d


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ownload).

EFTA countries have recently negotiated a new Lugano Convention (2007). The aimis to follow the amendments of the Brussels I Regulation.

The goal is to determine the scope of these two instruments.

1: Subject matter scope (champ dapplication matriel)

Which kind of disputes?

Definition by article 1 of each document: civil and commercial matters. This wasthe initial scope of harmonization in the seventies. In the meantime there havebeen 2 new instruments. Harmonization has been extended in two fields beyond civil and commercial matters.

The first field is insolvency. In 2000 a regulation was adopted which deals withjurisdiction as regards insolvency (1346 2000).

The second field was family law (was excluded from the first Brussels Convention). The Brussels IIA Regulation from 02/03 (2201 2003) deals with matrimonial matters but only issues of divorce and separation of couples, and parental responsibility.

Civil and commercial matters

Civil and commercial matters is a European concept and therefore interpreted autonomously by the ECJ (look at the case law).

There are two aspects in article 1. Civil and commercial matters was chosen to mean that it excluded public law. But it is complicated to define what is private and what is public law. So there was a need to ask the ECJ for the meaning of civil and commercial matters.

The Court has come with one clear criteria of what public law is. The last timewas in the Lechouritou Judgment of 2007 about whether the army of one of the mem

bers States had acted and if the losses could be civil and commercial matters. The answer of the Court was that there are 2 criteria to define what public law is: there should be a public authority acting and this public authority should make use of its public powers. So the mere fact that a public authority is actingdoes not suffice to define public law, it must be acting in a public law way i.e. exercising public powers. A public authority can thus be submitted to the Brussels Regulation.

What does civil and commercial matters mean positively?

The Regulation includes contract, torts, disputes which regard companies, consumer actions, labour actions.

Article 2 deals with exclusions: divorce (coming), matrimonial property, succession, bankruptcy (special regulation), social security, arbitration (lot of debates; the stake is court intervention when there are arbitration proceedings).

2: Territorial scope

[1st seminar: Thursday, October 14th; 10h-11h30]

Brussels I Regulation & Lugano Conventions.


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Issue: these European instruments are not of universal application; they only apply to what could be described as a European dispute. By contrast, if the dispute involves a third State (not a party to one of the conventions or the Regulation), the Regulations do not apply and therefore national law is relevant again.

The fact that there is a territorial scope is currently being reconsidered by the Commission; the Brussels I Regulation could become of universal application.

Basic principle and exceptions.

The principle

The principle is the domicile of the defendant. It is contained in Art. 2 of each of the instruments. The regulation and the conventions are applicable when thedefendant is domiciled in one of the contracted states.

For the purpose of these instruments, a European dispute by this criteria, and this criteria only. A European dispute is a dispute where the domicile of the defendant is in Europe.

Ex. If an American company sues a German company in Europe (Europe = contractingparties, not Liechtenstein or Monaco...), the Regulations are applicable. If aFrench company sues an Indian company in Luxembourg, they dont apply.

The fact that the dispute otherwise essentially concerns a third State is irrelevant.

Ex. A contractual dispute between a French company and an American company for construction work in Saudi Arabia; it doesnt matter where the contract was concluded or where the work is done.

ECJ, Owusu, 2005. A British national of Jamaican origin with a house in Jamaica.A friend uses the house, gets injured. Family decides to sue the house owner and the beach. The suit takes place in London. Question: should the Brussels I Regulation apply? The ECJ said that the defendant is domiciled in Europe, so the Regulation applies (solely applies; excludes completely English law).

If this criterion is met, if the Regulation/Convention applies, it means that one must look at the rules of the Regulation/Convention.

However, it happens to be that in the Regulation or the Conventions one of the rules of jurisdiction is precisely also the place of the domicile of the defendant. If the defendant is domiciled somewhere in Europe, you know that the relevantcourt has jurisdiction. So 2 issues: 1. Applicability and 2. If the European court has jurisdiction.

Exceptions

There are 2 categories of rules in the instruments which have particular rules of application and a particular territorial scope.

The first is provided by Art. 23 and regards jurisdiction clauses (or choice oflaw/choice of court clauses fr: clauses attributives de jurisdiction). The parties may agree on the court which will have jurisdiction. There is also a rule which tells when such a clause is valid. Art. 23 is applicable if any one of the parties is domiciled in Europe. Thats because the clause is introduced in the contract before the dispute, so it is not known who is going to be the defendant...


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The second is Art. 22: exclusive heads of jurisdiction. It refers to those caseswhere the jurisdiction of the court is considered extremely strong and its hardto think that any other court may or could retain jurisdiction.

Ex. real property (immeubles). In the field of real property it is widely acknowledged that only one court is legitimate to settle the dispute: the court of theplace where the real property is situated. The consequence of this is that it appears that it should just be the sole criterion of application.

This criterion also becomes the criterion for defining the territorial scope ofapplication of the Regulation or the Convention. If the criterion of an exclusive jurisdiction rule designates Europe, then automatically Art. 22 is applicableand the Regulation is applicable. The domicile of the parties is irrelevant.

Art. 22 is applicable irrespective of the domicile of any of the parties and itis applicable when its criteria give jurisdiction to a court in Europe.

The place of the real property triggers the applicability of European law and the jurisdiction of the court.

There are five such heads of jurisdiction in Art. 22.

Ex. Art. 22-5: enforcement, attachment of property (voies dexcution). The criterion is the place where enforcement is conducted = the place where the sheriff (hui

ssier, gerichtsvollzieher...) will actually intervene and attach the relevant property (place of physical intervention).

Each time the criterion is defining the territorial scope and giving jurisdiction to the local court.

So only 2 exceptions; the basic principle remains. The first questions is alwayswhere the domicile of the defendant is.

The territorial scope has two consequences:

it tells that European law is applicable

it tells which instrument is applicable (Brussels I or Lugano)

There is a third criterion: time. An issue is always since when the relevant instrument is in force (changes...).

If any of these criteria is not met, the consequence is that European law does not apply. Therefore, national law should apply. Usually, it is purely domestic law, but there are exceptions:

States have concluded treaties before the EU existed; in particular, there is astrong practice of concluding bilateral treaties on issued of international civi

l procedure. Ex. France has concluded many bilateral treaties with its former colonies (traits dentraide judiciaire); it also did so with some European countries. ost of these treaties are about the recognition of judgments, but from time to time, one of these treaties will actually have rules of jurisdiction between these two States. When these treaties overlap with European law, the European Regulations or Conventions will actually provide that the parties agree that Europeanlaw supersedes these treaties, that European law only applies (Art. 69 Regulation; only as regards Member States). These treaties are mostly about recognition of judgments, and do not include provisions about jurisdiction. So if European law does not apply, check is there is a treaty and if that treaty has rules on jur


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isdiction. Ex. 1967 Franco-Polish treaty on family law. That treaty is almost entirely superseded by the Brussels IIA Regulation. However the treaty has provisions on adoption, and theres no European law in this field; thus the treaty remains applicable.

Italian law: reform of the domestic Italian law on International Private Law. When European law does not apply, the decided to extend the scope of it; the criteria of the Convention also apply when the defendant is not domiciled in a contracting State. The Italians will apply the European criteria and rules even when European law is not applicable (Italian text: Brussels Convention which does not exist anymore... So all instruments that supersede or really the Convention?).

Section 2: Comparative overview of national laws

Common law of all States in Europe (Droit commun) = law that applies when thereis no other law.

The rules of jurisdiction can be freely defined by all States; they are free toorganize their administration the way they wish. So these rules are unilateral.Those rules will vary from one State to another.

Although in theory the rules may vary from one State to another, there are quitea few criteria which are used by many States. The reason is that most States determine these criteria by seeking to localise the dispute geographically. They t

ry to find where the dispute is actually localised and they will retain jurisdiction if the dispute is localised within their own territory. So they are all trying to do the same thing and it thus makes sense that they reach comparable results.

Ex. in tort matters, most courts in the world will wonder where the dispute is localised, and deduct the criteria. Most of the time, the dispute will be locatedin the place where the harmful event actually occurred. Unsurprisingly, most States in the world rely on this criterion. Thats why the rules tend to converge.

This operation of locating the dispute in dispute is something that is normallyalready done for domestic purposes, in order to know whether a local court has jurisdiction over another (ex. Diekirch or Luxembourg). So many countries have ju

st decided to use the same rules both for domestic purposes and for international purposes. Ex. France: since the Scheffel case (Cour de cassation) 1962, Oct. 13th. It was decided that domestic rules regarding territorial jurisdiction wouldbe elevated at the international level (leves au niveau international). The same rles are used for the two purposes: which court has jurisdiction in France, and if the French courts had jurisdiction in the first place. This was done because there were almost no rules on international jurisdiction. It is also the law of Luxembourg (CA 21st November 2000). Ex. Germany: same rule but presented in another way: the rules of territorial jurisdiction have a dual function. The French State and the German State can decide which court has jurisdiction in their territory; at the international level, the rules become unilateral. France can say that it has not jurisdiction, but cant say that the other country has...

But none of these States have only these same rules. They will all have other rules in addition, for international relations. The special rules of internationaljurisdiction will typically pursue two goals:

protect the sovereignty and the interest of the State; it is sometimes not acceptable to give jurisdiction to another court because the stakes are too important. Ex. Rules about real property; States want solely to decide on the property located on their territory.

protect the State nationals. Foreign justice can be a danger for nationals, so a


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n alternative should be offered national courts. Ex. Art. 11-15 of the French Civil Code: special rule of international jurisdiction in France: if one of the parties is a French national, he almost always has access to French courts. He can sue a foreigner and be sued by a foreigner in French courts. This article covers almost all fields. Every State has such a rule (does not work in Europe: principle of mutual trust). In practice the main goal of bilateral treaties is to drop Art. 14-15 CC.

Jurisdictions of States will typically overlap. For most disputes, there might be several States which make their courts available.

1: Strong rules of jurisdiction

It means that there are rules of jurisdiction which appear as obvious to all States. The reason why is normally because the localisation of the dispute is veryeasy and because often the localisation of the dispute goes in pair with issuesof sovereignty. In such cases it appears to all that there is only one appropriate criterion and that any other court would be illegitimate.

Ex. Real property; easily located at one specific place and involves sovereignty, therefore courts want to retain jurisdiction over the property on their territory.

Ex. Enforcement. Issue of use of force so the State should be dealing with thisissue alone.

The consequence is that there wont be a lot of variations in comparative law. AllStates will have the same criteria.

A second consequence is that State will think that it would be illegitimate if any other court was to retain jurisdiction. They will consider that their own jurisdiction is exclusive, no other court should even attempt to retain jurisdiction. Thus:

no deference will be shown to prior proceedings initiated in another country; they wont be taken into account

if one foreign court renders a judgment, this judgment will never be recognized;it was an illegitimate court since the start

There are very few strong rules of jurisdiction. Real property and enforcement and a few others.

2: Reasonable rules of jurisdiction

They are rules of jurisdiction which try to address a more complex issue. This issue is that in most cases disputes cannot be located easily in one legal order.It is very difficult to find an obvious criterion of jurisdiction (connecting factor facteur de rattachement; the factor that is designating the right country)

for most disputes. There is no connecting factor that is so obvious that it excludes other jurisdiction. On the country, there are several possible factors.

Ex. Contract. Where is a contract located? Is it the place where a contract is performed? Different obligations in different countries... The place where the contract is concluded? So they can be 3 or 4 criteria which look reasonable.

Ex. Torts. Place where the harmful event was committed? Place where the loss wassuffered? Place where the parties live? Ex. Badcock vs Jackson. Loss suffered in Ontario but people from New-York, car registered in New York...


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In most cases, States will just pick up one connecting factor and decide that itis maybe slightly better than the others and take it. But they should know thatit is not an obvious choice and not the only one. They couldnt think about creating an exclusive jurisdiction. Indeed, they often pick up 2 and give a choice tothe plaintiff.

States should clearly know that there is nothing obvious in what theyre doing andtheres nothing unreasonable about choosing another criterion.

The possibility of parallel litigation is only logical. It should be possible for each party to choose its court. One possibility to deal with parallel litigation is deference. There should be tools to deal with these issues. The recognition of foreign judgments should not be a problem, since the foreign court was reasonable and legitimate. Doing otherwise would be arrogant and unnecessary.

Ex. (moodle). Art. 46 of the French Code of Civil Procedure: domestic rule for territorial jurisdiction in contract matters. The plaintiff may always sue at theplace where the defendant is domiciled. He may sue at the place where the goodwas actually delivered or the service provided. If the defendant actually resides in France, Art. 46 wont apply; the Brussels I Regulation will apply.

Ex. Art. 96 of the Belgian Code of Private International Law (2004) on jurisdiction in contractual matters. Belgian courts will have jurisdiction in obligation

matters if the obligation was born in Belgium or if it is to be performed in Belgium.

Ex. England. 6 possibilities: contract was made within the jurisdiction; made byor through an agent trading or residing within the jurisdiction; is governed byEnglish law; breach of contract committed within the jurisdiction; declaratoryaction... Strange British rule: only one rule of jurisdiction: the court will have jurisdiction if service occurred. If it was possible to serve the defendant,there is jurisdiction. So mix between jurisdiction and admissibility of claim. If youre served within the jurisdiction, the court has always jurisdiction. Outside the jurisdiction, requirement of permission of the court. Permission will be granted if the person falls under one of the 6 possibilities. If European law applies, the rule on service is not applicable.

So it is possible to have different criteria; all these courts will apply theserules.

Special category of rules: rules which are aimed at protecting weaker parties. In certain relationships it is considered that there is institutionally a strongparty and a weak party. The goal of these rules is to offer the weaker parties the possibility to sue at their domicile. There are typically 3 types of weaker parties:

employeesinsured

consumers

There is no universal acceptance that these parties should be protected. In somecountries there might be no provisions protecting weaker parties.

Ex. Art. 97 of the Belgian Code of Private International Law for consumers and labour contracts: the Belgian courts will have jurisdiction if the consumer has his habitual residence in Belgium (the rest is to limit the scope and define which kind of consumer deserves protection). For labour relations, the obligation will be meant to be performed in Belgium if the employee works in Belgium.


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Ex. Art. R114-1 of the French Insurance Code provides that the insured may sue at his own domicile. The French Labour Code does not provide for the jurisdictionof the court where the employee lives.

Way the court of the defendant and the court of the plaintiff are considered inEurope: often court of the domicile of the defendant. It is considered as the most legitimate place to sue (actor sequitur forum rei). The idea is the defendant, unless proven wrong, is not wrong. So he should not bear the cost of the litigation. By contrast, the opposite, forum actoris, means that the plaintiff sues at home. This is considered unacceptable. This a European view. The American viewis that if you are asking a court to rule on a case, you are making the decision to use public resources (tax payer money). The question is to know who is legitimate to use this money. A non local tax payer is not legitimate to use this money. So it is normal that an American plaintiff can go to American courts; by contrast, British people have not paid taxes in the US, so why should they be allowed to go before US courts?

3: Weak rules of jurisdiction

The weak rules of jurisdiction are rules which do not localize the dispute well.The rule uses a connecting factor that is not reasonable because its not related

to the dispute itself. In such cases, there wont be a reasonable link between the court and the dispute. The rules are typically considered exorbitant (fors exorbitant).

All countries have their own exorbitant rules. Very often these rules protect nationals; at the last resort they offer access to the local courts.

Comparative law offers three famous examples of exorbitant rules of jurisdiction:

Art. 14-15 of the French Civil Code. They are exorbitant because citizenship ismostly irrelevant. So if you are French but live in New York and enter into a contract with a Brazilian, citizenship doesnt really matter. But citizenship matter

s only in family law. Therefore the consequence that it might be considered as areasonable rule in family matters, but it is totally unreasonable in any othermatters. It is called privilge de jurisdiction by the French. An important element of these articles is that they may be waived. In particular, they will be waived if a party first sues abroad or is sued abroad an argues the case on the substance in the foreign court (if the party has accepted, even tacitly, the jurisdiction of another court).

23 of the German Civil Procedure Code (Zivilprozessordnung ZPO). It is the so called umbrella jurisdiction rule. The rule is that if you can find property in Germany, this is enough to give jurisdiction to German courts. They have jurisdiction over any dispute in any matter about any amount.

The English service rule. Service within the jurisdiction is enough to grant jurisdiction to English courts. It is enough to be physically present for 10 seconds on the English soil to give jurisdiction to English courts about anything. Itis tag jurisdiction or transient jurisdiction: physical presence in the UK is enough to give jurisdiction to English courts (ex. Heathrow Airport). [check The Insider with R. Crowe].

US doing business rule. If you have done business in the jurisdiction, this givesjurisdiction to the courts for any type of business.


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Consequences of using such a rule: outside of your jurisdiction, people will consider that your proceedings are illegitimate; judgments will never be recognisedabroad (so it must be enough and satisfying to use that judgment at home; it must be possible to enforce at home; so you have to know in advance that there aresufficient assets at home).

What is the future of these weak heads of jurisdiction? They could have been under threat... But there is one fact that is militating against these rules: HumanRights. There are human rights consequences on the law of jurisdiction and it could be that these rules of jurisdiction would be regarded as contrary to fundamental procedural rights. As far as Europe is concerned, people have been expecting that the ECHR would rule that these heads of jurisdiction are contrary to Art. 6 of the ECHR and the rules on fair trial. There are two precedents:

in the US, it was held in 1945 by the Supreme Court that the due process clauseof the American Constitution, which can be regarded as the equivalent to the right of a fair trial, there should be minimum contact between the forum and the dispute (International Shoe Company vs Washington, 1945). This case is about jurisdiction of courts of different states within the US. Constitutional rights applyto everybody. So the US applies these rules even to international disputes (?).

Germany wondered in the 1990s whether 23 ZPO was constitutional. It was held by the Bundesgerichtshof (BGH) in 1991 that 23 should only be available if there isan adequate connection between Germany and the dispute. The BGH basically abroga

ted the article...

Art. 3 Brussels I explicitly says that these exorbitant rules are inapplicable.But with respect to third States, they remain applicable since Brussels I does not apply...

An alternative way forward if one wants to keep the exorbitant fora, would be togrant discretion to the courts to use it instead of making it a mandatory rulea jurisdiction.

Ex. the English view is that most rules of jurisdiction are not mandatory and that therefore the court may exercise discretion to decide whether to use the rule

or not. It may decide that even if it has jurisdiction, it wont use it because that wouldnt be fair for the defendant. The theory is the forum non conveniens doctrine. This means that the forum is not appropriate. English courts have long used this doctrine of forum non conveniens to decline to exercises jurisdiction when they find that the English court is not the appropriate forum. If you sue inEngland on an exorbitant rule of jurisdiction there is a fair chance that the English court will find it isnt fair to sue in England. It is a way to regulate theexorbitant jurisdiction.

So there is the possibility to have rules that are unfair but on the other handa rule that allows the court not to apply it. Of course, in this case, you haveto trust the court.

On the continent, jurisdiction is typically mandatory. But this hasnt prevented the Paris Court of Appeal to rule that it would be a good idea to give discretionto the French courts to exercise jurisdiction on Art. 14-15 CC. But each time,the Cour de Cassation reversed the decision.

The same question was asked to the ECJ, in the Owusu case (2005). Can you sue inEngland under Art. 2 of the Brussels Convetion (because the domicile of the defendant is in England) even if the most appropriate court is Jamaica? The Britishwanted to use forum non conveniens. The question put to the ECJ: can you have discretion when you use the rules of the Brussels I Regulation? For instance, can


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you use forum non conveniens if you are an English court. The answer was no. Rules of the Convention/Regulation are mandatory, especially Art. 2; therefore youmust exercise jurisdiction if you have it because otherwise legal certainty would be hurt. Of course this was the vision of the Civili law tradition (Kirchbergjudges...) mandatory jurisdiction. This is so because in Civil law, judges arenot to be trusted... (compared to the wisdom of the judges in England...).

Section 3: Jurisdiction under European Law

Cases where the Brussels I Regulation or the Lugano Convention apply and providefor the rules of jurisdiction of the courts of the Member States.

Of course when European Law applies, domestic law does not. The heads of jurisdiction provided by domestic law do not apply. This is provided by Art. 3 of eachinstrument. Art. 3(1): some rules are even less applicable... Those are the rules of exorbitant jurisdiction of each Member State (black list). Art. 4 providesthe a contrario rule of Art. 3: when the Regulation does not apply, the jurisdiction should be determined by virtue of national law. It was ruled that this includes the entire law of the Member States and in particular the exorbitant rules(Van Uden, 2000: exorbitant rules of jurisdiction remain applicable if you are under Art. 4). Art. 4(2): under European Law it is forbidden to discriminate on grounds of nationality; paragraph 2 provides that nationality should not be a barto actually rely on domestic rules of jurisdiction. In particular, if you are d

omiciled in one State, you should enjoy the very same rules as nationals can enjoy. Ex. Art. 14-15 CC Fr. are actually extended to people domiciled in the relevant States.

1: Overview of jurisdiction under the Regulation

The Brussels I Regulation was made on the basis of the Brussels Convention, which was made in 1968 by 6 civil law countries. So the model followed is the civillaw model.

There are 5 categories of rules.

The general rule of the Regulation

It appears in Art. 2: the court of the domicile of the defendant has jurisdiction.

This rule is not only a rule of jurisdiction but also a rule that defines the geographical scope of most of the provisions of the Regulation.

The ECJ has repeatedly held that it is the most important rule of the Regulationbecause the domicile of the defendant is to be considered as the natural rule in international litigation when you sue people (thats why it was held in Owusu that specifically for Art. 2 there couldnt be any form of discretion).

It is also the rule of principle. This rule should always be applicable when noother rule applies. So if a case does not fall in the scope of any other rule, the court under Art. 2 will always remain an available court. In practice, thesecases are very few. Art. 2 is not, in practice, so important. Typically this isbecause you try not to sue in the court of your opponent.

The special rules of the Regulation

They appear in Sect. 2 Art. 5 of the Regulation. Art. 5 provides special rules i


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n 7 cases. These special heads of jurisdiction are all additional to Art. 2. Itis possible to sue in addition to the court of the domicile of the defendant inthe courts provided in these special rules. The 7 cases mentioned are in practice the most important ones, those to which most disputes belong.

The two most important provisions of the entire Regulation:

Art. 5(1): contractual mattersArt. 5(3): torts

Other provisions include maintenance, damages, branches or agencies, trust, transport.

In contractual matters, the additional court is the place of performance of theobligation in question. This seems to mean that you should distinguish between the obligations in the contract (depending on the obligation considered, the court will change...).

In tort matters, its the place where the harmful event occurred.

Rules protecting weaker parties

These rules needed to be crafted very precisely, therefore there is a huge amoun

t of Articles. There are rules with regard to insurance (Art. 8 to 14); rules for consumer claims (Art. 15 to 17); provisions for employment disputes (Art. 18 to 21).

These provisions consider insured parties and consumers as genuine weak parties,and therefore they give ensured and consumer the right to sue at home.

By contrast, employees do not enjoy the same protection and therefore, they mustsue were their work is habitually carried out. There are some additional protections, but they do not the major protection of the ability to sue at home. Indeed employees were initially dealt with in Art. 5(1) of the Regulation, so they did not benefit from a special protection. It evolved gradually.

Rules of exclusive jurisdictions

Art. 22 of the Regulation. The consequence is that the domicile disappears as arule of jurisdiction. The only court that has jurisdiction over these claims isthe court that is traditionally considered as the only one which is legitimate to retain jurisdiction.

5 heads of exclusive jurisdiction:

Immovable property (Art. 22(1))Enforcement of judgments (Art. 22(5))Registries used for private law purposes (ex. registration of patterns & tradema

rks, companies...)

One of the consequences of being a rule of exclusive jurisdiction is that the courts which retain jurisdiction get more deference from other courts in Europe.

An important aspect of Art. 22(1) has been the issue of tenancies. Tenancy is considered as real property under Art. 22(1). Problem: is this appropriate when people rent for a very short period of time from a person living in the same country? (Ex. German having property in Spain and renting to Germans...). If the tenancy is concluded for max. 6 months, another court has jurisdiction but only if t


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he owner is domiciled in the same Member State. So there is a special restrictive rule.

Prorogation of jurisdiction

Art. 23 & 24. They enable the parties to choose the court where they want to argue their case. In this section, the Regulation recognises that the will of the parties is a sufficient ground for jurisdiction.

Art. 23: choice of court. The parties can agree on a court which will be grantednormally exclusive jurisdiction to settle the case. The main use of this Article is to validate choice of court agreements or jurisdiction clauses in contracts. It is provided if not encouraged by Art. 23 to include a jurisdiction clause in contracts if you wish to create legal certainty as to which court should be used in case of a dispute. Another important aspect is that Art. 23 provides veryfew and very liberal formal requirements for the validity of choice of law agreements. There are many countries were choice of court agreements are regarded with caution, were they are considered as dangerous for the parties, as illegitimate means to strip jurisdiction from courts; for these reasons it is often the case that only some parties are allowed to conclude jurisdiction clause under extremely stringent formal requirements (ex. France: only commercial people, and it should in writing and specifically easy to be seen in the contract i.e. not the same print). Art. 23 is extremely liberal by contrast. It is not even necessary t

o have the agreement in writing.

Art. 23 has special rules of geographical application; it is only necessary thatone party has its domicile in Europe.

Some parties and some heads of jurisdiction are excluded from the scope of Art.23. The parties who are excluded are the weaker parties (because you accept whatyoure told). This means that there are special provisions on the issue whether you may include a jurisdiction clause in a contract involving a weaker party. These special provisions are Art. 21 (employment contracts), Art. 17 (consumer contracts), Art. 13 (insurance contracts). These special provisions all provide forthe same basic rule: agreements are only valid if they are posterior to the dispute. The dispute must have already arisen for such an agreement to be acceptable

.

The heads of jurisdiction which are fully excluded are Art. 22. In fields whereone court has specific jurisdiction it is not possible to derogate from that jurisdiction, so there is no possibility to agree on a court in a matter covered bysuch a specific jurisdiction.

Art. 24: rule which comes from the Common Law tradition; it is the idea of submission to jurisdiction. If a party enters an appearance before court and does notchallenge jurisdiction, it is meant to have submitted to the jurisdiction of the court, and therefore this court has jurisdiction over it. It is not possible to do that in case of specific jurisdiction (Art. 22).

What is the territorial scope of that provision? Does it apply with a conditionthat the defendant be domiciled in Europe, or does it just apply to everybody? Art. 24 says nothing while Art. 23 provides an express rule on this. Ex. submission to jurisdiction does not work in France. Is there jurisdiction if French victims sue Boeing in France? In the FA case you could argue that there was anothergood reason for the court to retain jurisdiction because Boeing had submitted tojurisdiction and Art. 24 does not include any requirement of domicile in Europe. However the Paris Court of Appeal held that it did not have jurisdiction on that ground either and declined jurisdiction. The court also admitted a negative declaration although this is illegal under French law. The Cour de Cassation reve


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rsed it but on the ground that there was no possibility of appeal in the first place...

2: Selective topics

Jurisdiction in tort matters

Art. 5(3) of the Regulation. It provides that there are two courts which have jurisdiction in tort matters:

the court of the domicile of the defendantthe court for the place where the harmful event occurred

The scope of the provision

How is the concept of tort to be defined in this context?

The basic case in this respect is the Kalfelis case (ECJ 1988). The ECJ held that the concept of tort was to be given an autonomous interpretation, meaning theconcept would be solely defined by the ECJ and national conceptions are irrelevant for this purpose.

What is this autonomous interpretation?

Two conditions to have a tort for the meaning of Art. 5(3):

the action of the plaintiff must be seeking to establish liability. There was nofurther refinement. Probably to try to have a loss compensated.the action should not relate to a contract. What is a contract for the purpose of the Regulation? It was defined in the Jakob Handte case (ECJ 1992). A contractis an obligation which is freely assumed by one party towards another. This case was concerned by the action directe: Seller Buyer Sub-buyer; action betweenthe sub-buyer and the seller: contract? Which court has jurisdiction? If contract, Art. 5(1); if tort, Art. 5(3). And thus the definition of contract (not the case here). But in France, this would be clearly a contractual action.

Each case which in national law would be contractual but there is no freely assumed obligation would be a tort action under the Regulation/European Law.

Another issue: is there a third possibility? Is it possible to have an action based on an obligation which would be neither contractual nor tortious? Answer ofthe court in Kalfelis: there is no third category; all actions which are not contractual are therefore tortious. Runion Europenne (ECJ 1998). Art. 5(3) is a residual jurisdiction and will cover all obligation claims whoch are not contractualeven if they are not strictly tortious in character. The issue is quasi-contracts. The definition of a quasi-contract is an action which is allowed by the law (licite) but which was not based on the agreement of the parties. The act that gives right to the action of the parties is legal but is not based on a prior agreement of the parties. Ex. Unjust enrichment. The person who got richer didnt do a

nything wrong and there was no contract between him and the other person, but itgives right to an action which will allow the party who his less rich to get abit of this wealth back. Unjust enrichment raises several issues of jurisdiction. There is no contract. Stake: does Art. 5(3) apply to unjust enrichment? The House of Lords in Kleinwort Benson 1999 held that the claim for restitution on theground of unjust enrichment was not tortious in nature under the Brussels Regulation. Art. 5(3) and 5(1) are not applicable, so it would be Art. 2. The decision has been criticised because it didnt respect Kalfelis (all obligation claims which are not contractual should fall under Art. 5(3) notwithstanding national definition.


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The meaning of the provision

Issue of interpretation. The places where the harmful event occured have jurisdiction.

Harmful event?

What happens if the harmful event gave rise to a damage which is located in another jurisdiction? A loss suffered in another jurisdiction?

Ex. French parties in Alsace pollute the Rhein river; this ends up hurting people in the Netherlands. The harmful event is caused by the company in France, butthe loss would be suffered in the Netherlands. Case Mines de Potasse dAlsace, 1976.

Ex. Fiona Shevill, 1955. Issue of [...] caused by a journal. A French journal sold in England, and what it says is tort that should be compensated. The loss occurred in England.

The answer of the court given first in Mines de Potasse is that the harmful event is both the event giving rise to the damage and the damage itself. This meansthat two courts may have jurisdiction under Art. 5(3). So there may be several c

ourts having jurisdiction (ex. loss suffered in many countries...).

However it remains very important to distinguish between these two types of courts (court of the event and court(s) of the loss). Fiona Shevill: in fact both courts have jurisdiction but they have a different jurisdiction:

the first court has general jurisdiction, meaning it may award damages for the loss suffered in any other jurisdiction.the second court or courts may only award damages for the loss suffered locally.

Second question of interpretation: how to define the place where the event giving rise to the damage occurred?

Fiona Shevill case: this place is the place where the entire harmful event originates. Therefore, it has to be for journals the place where the publisher is established rather than the place where the journals are sold.

What should be done when it is actually not possible to know where this event took place?

Runion Europenne case: pears were shipped in refrigerated containers from Australia to Holland by boat, and than to France on trucks. When the containers were opened, the pears were damaged. No idea about where the event giving rise to the loss had taken place. So the only choice is to sue before the court of the place where the loss was suffered.

Third issue: what is the place where the loss was suffered? When is the loss exactly suffered? What is the concept of a loss suffered?

It is the place where the direct damage was suffered. This means that the placeswhere indirect losses were suffered should not be taken into account.

This rules out the easy argument which is that losses are always eventually suffered at the domicile of the victims; because this place will be the place which


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is the centre of their lives and where they have their assets. This is not really acceptable because it would introduce the forum actores. Therefore the domicile has been ruled out in Kronhofer 2004 (ECJ). This case was a financial case: anAustrian party invested through a German entity in London; he lost the money.

Dumez case: issue: le prejudice par ricochet. What happens if a loss is sufferedas the consequence of another loss? You suffer a loss because of the loss suffered by someone else... (ex. wife/husband). Answer of the court: you may not takeinto account le dommage par ricochet to locate the loss. If you suffer a secondloss as a result of the first loss you cannot argue that you can sue where thesecond loss occurred.

Case from the English Court of Appeal about further deterioration of health: Henderson v. Jaonen (2002). In this case an English national has a car accident inFrance where he suffers a loss. He goes back to England and realizes that he suffers additional problems during a year. But during this year he didnt go to France. It occurred in England but is considered as having taken place in France (where the first loss was suffered).

Cf. Article: it is not only about compensation; the court will have jurisdictionfor judicial measures which may prevent the loss from taking place.

Multiple defendants

Art. 6 of the Regulation.

What should happen in such cases? Jurisdiction for each of them in several courts? Or draw all before one court for the sake of judicial efficiency?

Art. 6 offers a variety of possibilities to indeed join multiple parties beforeone single court. It offers 4 possibilities.

Art. 6(3): if you have a counterclaim as a defendant you should be able to makethis counterclaim before the same court. It is possible if the counterclaim is really connected to the first claim; it should arise from the same contract or fa

ct.

Guarantee actions: Art. 6(2).

Art. 6(1): most important provision: how to group various defendants. Art. 6(1)offers the possibility to sue different parties before one single court even ifthe court has jurisdiction over one of the parties only. You may only do this iftwo conditions are met:

the jurisdiction that the court has over one of the defendants must be based onthe domicile of the defendant.there should be a close connection between your claim over this party and the claim that you have over all the other parties.

If this is the case, you may sue as many other parties as you wish before the same court.

Ex. A company wanted to sue 5 individuals and 35 companies in England, but no one had connections with England. The only connection was that one of the partieshad a house in London. If this is domicile, than one party has domicile in England and thus the parties may be brought before the English court. The English eventually ruled that they had jurisdiction over the person and thus over all the parties.


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Close connection? There is a lack of clarity in European law at the moment. Aim:avoidance of contradictory judgments. The court has not been extremely consistent nor clear in the few cases delivered on this. The most recent one is Roche Netherland from 2006 (ECJ). The court said that in order that decisions may be regarded as contradictory it is not sufficient that there be a divergence in the outcome, but from the same situation of law and fact. In this case the issue was patent infringement proceedings against different companies which belonged to thesame group. Claims were based on different facts and potentially on different contracts. The court ruled that you could not consider that there was the same situation of law and fact. The infringements were committed by separate actions and by concluding different contracts.

[28 oct. class + seminar; 2nd Nov. 17h30]

Chapter 2: Parallel litigation

Different proceedings are initiated or could well be initiated before differentcourts.

Ex. Same proceedings developed between two different courts.

Parties may have different reasons to appear before a different judge; more chan

ces before one court than before another. One party will try to go before one court, the other before another court...

Theoretical reason: the international jurisdiction of courts is typically defined very widely; in particular, there are exhorbitant fora which can be used but also in many cases there will be various legitimate courts which will retain jurisdiction.

There will be an international offer of more than one court. Parties will have the possibility to develop a strategy.

2 main doctrines exist in national jurisdiction to address the issue.

doctrine of lis pendens (civil law approach)doctrine of forum non conveniens (common law approach)

Section 1: The Civil Law tradition

The Civil Law tradition has long developed a doctrine common to all civil law countries: the doctrine of lis pendens.

This doctrine has a narrow scope of application; it is concerned with proceedings which are actually pending before two different courts. It is a doctrine concerned with proceedings which are meant to be about the same dispute. There is a d

efinition about what a dispute is for the purpose of this rule: a dispute is defined by three elements:the parties must be the samethe cause of action must be the same (cause procedure civile & non O)the remedies thought before the court should be the same (objet de laction)

If you are faced with two pending proceedings which regard the same dispute, then lis pendens provides for a solution.

The solution is that the court seized in second (the court before which the proc


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eedings were initiated in second) must decline jurisdiction.

It is a very simple rule; just look at the time of seizure.

It is very brutal; there is no way around it.

(Provisional decline possible).

It produces a race to court. It is the party which gets first to court that willget the jurisdiction it wants. It is an incentive to seize first and discuss later.

Why is it a good idea to decide that time should matter? Lis pendens is a doctrine which was developed for domestic purposes; it is not politically correct to rank national courts. A neutral criterion, considering the judges as equivalents,is better. Is Europe a single judicial market? Is a German judge the equivalent of a French judge? In this case, lis pendens makes sense. ECJ answer: there is a principle of mutual trust[ ECJ, Gasser, 2003]. So according to the ECJ, lis pendens makes sense in Europe.

Second doctrine: related actions.

Complements lis pendens and regards two cases which are related but not complete

ly identical by the criteria of lis pendens. The consequences is that it gives only discretion to the court second seized to decline jurisdiction (and no obligation).

How are these doctrines applied at the international level? The Brussels Regulation includes both lis pendens and related actions.

1: The common law of European states

The vast majority of civil law jurisdictions use lis pendens and related actionsat the international level, to address issues of parallel litigation. They typi

cally use their domestic provisions but they adapt these provisions because of the peculiarity of the international situation.

Ex. The French have adapted their doctrine of lis pendens to the international level since 1974: Mignera di Fragne case (Benichou 1999 for related actions).

Ex. The Belgian Code of Private International Law which provides in Art. 14 a provision on litispendence internationale.

2 peculiarities when this doctrine is used at the international level:

when lis pendens is used at the international level, it stops to be automatic; the court gets discretion to decline jurisdiction if it is seized second. There a

re so many different kinds of foreign courts which could be involved, and it would not be a good idea to force a national to go before a foreign court (appliesto courts of third states; thus the possibility to retain jurisdiction if the foreign court is not to be trusted).

you take into account whether the judgment of the foreign court could be recognized and declared enforceable in the forum. Cf. Art. 14 Belgian CPIL; Mignera diFragne 1974.

The issue of parallel litigation is essentially perceived in the civil law tradi


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tion as a way to avoid conflicting decisions.

What are the conditions to have conflicting decisions?

There is only a conflict of decisions if the two decisions meet. The only placewhere they can meet is in a national legal order. The two decisions deciding thesame dispute shouldnt end up in the same legal order; if they end up in different legal orders, thats ok = they will not meet for the purpose of enforcement. Enforcement will be conducted by an officer from a single legal order.

The consequence is that if you are a court, you know that if you make a decision, it is going to be in your own legal order; so you check if a foreign decisionwould also come into the same legal order.

This is why the whole issue is whether the foreign judgment would be recognize and enforced in the forum. If not, there would be no problem (in the forum; outside, lots of problems...).

If the second court was to decline jurisdiction and if the foreign judgment is not recognized; then in the second jurisdiction there is no valid judgment... Consequence: no judgment, and the purpose remains unsettled...

So wait to be sure if the judgment will be recognized in order to decline jurisd

iction.

2: European Law

Provisions of the Brussels I Regulation.

It includes two provisions on parallel litigation: one on lis pendens and one onrelated actions. They appear in Art. 27 to 30 of the Regulation.

These doctrines work differently at the European level (but similar to domesticjurisdictions).

For lis pendens, the court seized second has an obligation to decline jurisdiction. This shows that we are in a federal environment where parallel litigation is not accepted. This obligation is critical for building strategies in Europe. If you use the lis pendens doctrine, it is possible to force the opponent to litigate before the court you choose. The opponent will not be able to develop parallellitigation elsewhere.

Related actions by contrast remain discretionary. They do not give any obligation to the second court to decline jurisdiction.

The second peculiarity of European Law is that there is no condition that the foreign judgment is enforceable in the forum. The reason is that the entire Regulation is built to facilitate the recognition of foreign judgments.


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SEMINAR 1

Jurisdiction under the Brussels I Regulation

[exam]

Contracts: which court has jurisdiction over a dispute related to a contract?

Always one court available: domicile of the defendant.

Discussions: other court(s) which might be available.

Art. 5(1) Brussels I Regulation.

in question did not appear in the first draft of the Convention; it was added in the 70s. The point was to take into account what the ECJ had held in its first case on Art. 5(1), De Bloos[ ECJ, De Bloos, 1976].

2 possibilities: all contractual disputes will go before the same court. Thats not the choice made by the Court in De Bloos. The Court distinguished between the


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obligations; one has to rely on the obligation which forms the basis of the action. Identification of a particular provision which has been breached. The courtwhich has jurisdiction is the court of the place where the obligation is to be performed. Need to identify the obligation which is the cause of the action; thecourt of the place where this obligation is performed has to be performed.

Ex. If goods are defective: obligation of delivery; if goods have to be delivered in Germany; German court has jurisdiction.

Additional issue: how to define the place of performance? Ex. payment of money;the buyer doesnt pay the price. Which is the court where you should sue? One possibility is that the contract defines the place of payment. However, often the contract says nothing... ECJ, Tessili, 1976: Court decided that it would be for national law to say where the place of performance of the obligation in question was. Which national law? = the law which governs the obligation (not the law which governs procedure). Which law governs the obligation? The court (national) must determine what is the applicable law and then apply it in order to find the place of performance. Application of the choice of law rule of the forum.

Choice of law in contracts at the European level has been harmonized Rome I Regulation. 2 basic principles under Rome I:

parties may choose the applicable law if they have chosen, thats the law applicab

le to the contract and thus to the obligation.if the law is not chosen (former rule under Rome Convention: the law of the habitual residence of the party which provides the characteristic performance of thecontract; rule comes from Switzerland: 1 party provides an obligation which makes this contract special, and 1 party pays), place of characteristic performance.

Ex. contract of sale and action for the payment of the price (French seller, Dutch buyer didnt pay). Laws of the various MS: payment occurs at the domicile of the creditor or debtor (paiement qurable ou paiement portable). Under French law, it is for the creditor to got to the domicile of the debtor and ask for it. So Dutch court.

Ex. Oasis must play at a Rock Festival in Germany; price agreed; but only one ofthe brothers goes to Germany. Germans pay only half of the price. Oasis companypays in England to get payment of the price. Germany: domicile of the defendant, so German court has jurisdiction. English courts? Obligation in question: payment of the price. Where is the payment due? Look at English law.

all this before 2000

What happens if there are 2 obligations in question?

Leathertex case[ ECJ, Leathertex, 1999, C-420/97]. Before, it has been ruled that if one obligation is accessory to the other, you should litigate before the Court of the principal obligation.

Leathertex: two equivalent obligations (equal importance). Agency contract; commissions to be paid; compensation. Consequence: there are two obligations with two different places of performance and thus two different courts... Case criticized. You should not end up before two different courts.

Art. 5(1) Brussels I Regulation (new law)

Addition of paragraphs (b) and (c). Defines the place of performance for all obligations in sale of goods. It is not anymore necessary to know the obligation in


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question. Also defines the place of performance for the provision of services.

no need to determine the obligation in questionif in presence of sale of goods or provisions of services, no more issues aboutequal or accessory obligations.

(c): if para. (b) doesnt apply, (a) applies place of performance of the obligation in question for all contracts which are not sale of goods or provision of services (so application of the old law for any contract which is not a sale of goods or a provision of services; Tessili & De Bloos remain applicable).

How to define sales of goods and provision of services?

Falco case[ ECJ, Falco Privatstiftung, 2009, C-533/07]:

What are the policy issues at stake? Should we have wide or narrow categories? Wide categories might harmonize more; reform meant to make the law better; one way to make it simpler is to easily define the court (b). There should be just sale of goods and provisions of services. Second argument: consistent law etc...

ECJ: Falco. Licence contract: Q: provision of service? Court: no. No particular activity in return of remuneration, so no service. Meaning of words argument.

Wide or narrow interpretation? Art. 42 & 43. Cant give too much scope to (b) beca

use that would rule out a correct application of (a) and (c)... (a) has not beendeleted and must be kept effective and meaningful.

Consequence: there will still be contracts subject to 5(1)(a)...

French cases (before Falco Privatstiftung).

Waeco:

Which courts? CCass said the contract was neither a sale of goods nor a provision of services. Concession exclusive is a contrat cadre.

Stake: exclusivity of distribution.

French Court decided Art. 5(1)(a).

Consistent with Falco.

Meridien:

Shows that distinguishing between 5(1)(b)-1 and (b)-2 is not always easy. Problem: under 5(1)(b), no need to distinguish between obligations... But sometimes, issue: elements for sale of goods AND provision of services (Meridien). So singlecontractual operation with provision of goods and provisions of services. Option: determine the main obligation; distinguish (different courts...); solution ofthe French Supreme Court: all this was a unique operation (in complex contracts

, should find one characterisation). Decides that it was services provided in London.


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Documents

International_Litigation_&_Arbitration.txt