Commission Proposal on the Review of Brussels I
The long awaited Commission proposal (COM(2010) 748/3) on the review of Brussels I has been published today. The proposed amendments are numerous and require more detailed study, but here are some of the highlights.
1) Abolition of the exequatur. Following the argumentation in the Green Paper on the costs, time and trouble of obtaining a declaration of enforceability in another Member State, and the abolition of the exequatur in recent specific instruments, the Commission proposal indeed provides for the abolition of the exequatur (Art. 38). However, exceptions are made for defamation cases – also excluded from Rome II – and, most interestingly, compensatory collective redress cases – at least on a transitional basis. The ‘necessary safeguards’ are: 1) a review procedure at the court of origin in exceptional cases where the defendant was not properly informed, similar to the review clause in specific instruments abolishing the exequatur; 2) an extraordinary remedy at the Member State of enforcement to contest any other procedural defects which may have infringed the defendant’s right to a fair trial; 3) a remedy in case the judgment is irreconcilable with another judgment which has been issued in the Member State of enforcement or – provided that certain conditions are fulfilled – in another country. The proposal also contains a series of standard forms which aim at facilitating the recognition or enforcement of the foreign judgment in the absence of the exequatur procedure as well as the application for a review.
2) Extension of the Regulation to defendant’s domiciled in third States. The special grounds of jurisdiction will enable businesses and citizens to sue a non EU defendant in, amongst others, the place of contractual performance, or the place where the harmful event occurred. It further aims to ensure that the protective jurisdiction rules available for consumers, employees and insured will also apply if the defendant is domiciled outside the EU. Two additional fora are created: under certain conditions a non-EU defendant can be sued at the place where moveable assets belonging to him are located, or where no other forum is available and the dispute has a sufficient connection with the Member State concerned (“forum necessitatis“). Further, the proposal introduces a discretionary lis pendens rule for disputes on the same subject matter and between the same parties which are pending before the courts in the EU and in a third country.
3) Enhanced effectiveness of choice of court clauses. Another anchor is the improvement of the effectiveness of choice of court clauses, by: a) giving priority to the chosen court to decide on its jurisdiction, regardless of whether it is first or second seised, meaning that any other court has to stay proceedings until the chosen court has established or – in case the agreement is invalid – declined jurisdiction; b) introducing a harmonised conflict of law rule on the substantive validity, referring to the law of the chosen court. As the explanatory memorandum states, both modifications reflect the solutions established in the 2005 Hague Convention on the Choice of Court Agreements, thereby facilitating a possible conclusion of this Convention by the European Union.
4) Improvement of the interface between the regulation and arbitration. One of the most controversial issues giving rise to heated debates is whether the arbitration exception should be maintained. Art. 1 of the proposal still contains the arbitration exclusion, but adds ‘save as provided for in Articles 29, paragraph 4 and 33, paragraph 3’. The proposed Article 29 includes a specific rule on the relation between arbitration and court proceedings, which obliges a court seised of a dispute to stay proceedings if its jurisdiction is contested on the basis of an arbitration agreement and an arbitral tribunal has been seised of the case or court proceedings relating to the arbitration agreement have been commenced in the Member State of the seat of the arbitration.
5) Provisional and protective measures. The proposal adds several articles concerning provisional, including protective measures. It provides that the court where proceedings on the substance are pending and the court that is addressed in relation to provisional measures, should cooperate in order to ensure that all circumstances of the case are taken into account when a provisional measure is granted. Further, the proposal provides for the free circulation of those measures which have been granted by a court having jurisdiction on the substance of the case, including – subject to certain conditions – of measures which have been granted ex parte (!). However, contrary to the Mietz decision, the proposal provides that provisional measures ordered by a court other than the one having jurisdiction on the substance cannot at all be enforced in another Member State, in view of the wide divergence of national law on this issue and to prevent the risk of abusive forum-shopping.
There are many more interesting proposed amendments. This proposal certainly is ambitious, but also controversial on some points. Let the negotiations and the scholarly debate begin!
Thank you for the information. Lots of food for thoughts.
A first and quick reaction about a technical question : it seems to me that there is an inconsistency between article 24, as recently interpreted by the Court in Bilas (C-111/09), and the proposed new article 27. If, from now on, the judge has to declare on its own motion his lack of jurisdiction in every situation (article 27 revised), then how can the sole appearance of the defendant give him jurisdiction (article 24) ? The consequence of article 24, as stated in Bilas (at least that is how I understand it), is, on the contrary that the judge is not allowed to declare that he does not have jurisdiction, unless the defendant asks him to say so, i.e : not on his own motion. Therefore, I have some problems understanding how article 24 and 27 will work together. Any ideas ?
“Two additional fora are created: under certain conditions a non-EU defendant can be sued at the place where moveable assets belonging to him are located, or where no other forum is available and the dispute has a sufficient connection with the Member State concerned (“forum necessitatis“)”
Incredible that yet greater expansion of the boundaries of the EU re jurisdiction are being created, even post-Owusu. Great posts Xandra and Martin. Looking forward to reading more.
If the court has jurisdiction under article 24, then the court has jurisdiction under the Regulation, so proposed article 27 doesn’t apply.
Bilas simply confirms what article 24 expressly says: the court doesn’t have to have jurisdiction under some other provision of the Regulation for article 24 to apply.
In fact, article 24 is irrevelant unless no other provision gives the court jurisdiction: aside from article 24, if the court has jurisdiction then it has jurisdiction whether or not the defendant accepts that it does.
Article 24 applies if the defendant has entered an appearance other than in order to contest jurisdiction and article 22 doesn’t give exclusive jurisdiction to the courts of another member state.
Proposed article 24(2) adds the requirement that where sections 3, 4 or 5 apply (as was the case in Bilas), article 24 doesn’t give jurisdiction unless the defendant has been informed of his right to object and the consequences of entering an appearance.
Of course, to appear for the purpose of contesting jurisdiction the defendant has actually to contest it. Any subsequent declaration as to jurisdiction will not be of the court’s own motion.
So what proposed article 27 in fact requires is that where the defendant has not contested jurisdiction and the court does not aside from article 24 have jurisdiction under the Regulation, the court must of its own motion satisfy itself that article 22 does not apply and that proposed article 24(2) (if applicable) has been complied with. If either of those is not the case, then the court must declare that it has no jurisdiction.
The interesting question is what happens where the court must be satisfied that it has jurisdiction before effecting or permitting service on the defendant and only the defendant’s lack of objection under article 24 can give the court jurisdiction. I don’t think proposed article 28 answers this question. The implication must be that the court should effect or permit service and see how (or if) the defendant responds; what, otherwise, is the point of article 24?
Could anyone please inform me whether it is possible to obtain this document in other language versions than English (i.a. German?)
You can obtain other language versions by pasting the following link into your browser:
http://ec.europa.eu/justice/policies/civil/docs/com_2010_748_en.pdf
and changing ‘en’ to the two letter abbreviation for the language you need.
e.g.
http://ec.europa.eu/justice/policies/civil/docs/com_2010_748_de.pdf
for the German version
Thanks for the language tip.
It is not easy to identify a foolproof drafting solution to the challenge of giving priority to the court identified in a choice of court agreement. But the proposal put forward by the Commission (COM(2010) 748/3) is surely defective.
The essence of the Commission’s drafting for the reform to give the chosen court priority is the new Article 32(2) – Exclusive Jurisdiction
“With the exception of agreements governed by Sections 3, 4 and 5 of this Chapter, [insurance, consumer and employment contracts respectively] where an agreement referred to in Article 23 confers exclusive jurisdiction to a court or the courts of a Member State, the courts of other Member States shall have no jurisdiction over the dispute until such time as the court or courts designated in the agreement decline their jurisdiction.”
The problem is that the “agreement” to which Art 32(2) refers is an agreement to which Article 23 applies, i.e. an agreement which is essentially valid under the law of the putative forum and formally valid under Art 23(2). If the court first seized does not consider that a piece of paper put before it meets these requirements, why should it decline to proceed with the case? Rather, in those circumstances Article 29 (formerly Art 27) requires the court second seized (the chosen court) to defer to the court first seized.
As there seems to be a broad consensus of opinion in favour of these reform objectives, it would be a sad lost opportunity if the detailed implementation were to fail. It is always possible, of course, that the Court of Justice would give a purposive construction to the present drafting consistent with the objective, but at the moment the wording falls so far short that I doubt that this can be guaranteed. And in any case, a ruling by the ECJ would have to be at the expense of litigants, which can be avoided by proper drafting at this stage.
The solution to the drafting problem must lie in the notion that the first seized court should not be allowed free rein to determine whether the piece of paper put before it is or is not an “agreement” within the meaning of Article 23. On the other hand, it should be permitted to disregard a colourable fraud. Perhaps the answer is that if the party seeking to persuade the first seized court that there is an agreement to litigate before a different court produces a document which is arguably an Article 23 agreement (or some equivalent low hurdle), then the first seized court should defer to the named court.
One barrier to getting this right is that many contributors to the reform proposals seem to have in their mind a formal written contract to confer jurisdiction on a given court signed by two parties. If that is what you see as the paradigm case, it follows that a court first seized which is not the named court is understood to be acting perversely if it accepts jurisdiction. But the better paradigm to have in mind in this debate is a messy exchange of contractual correspondence with conflicting evidence as to what was sent and received.