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?

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

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

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

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

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

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

Related posts:

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

FACULTY OF LAW, UNIVERSITY OF JOHANNESBURG – INSTITUTE FOR PRIVATE INTERNATIONAL LAW IN AFRICA

Morning seminar on private international law Thursday 17 April 2008

• An African private international law regime (?) – conclusions and lessons from a decade of case law in thirteen African countries Mr R F Oppong (Lancaster University) foppong2000@yahoo.com
• When could a South African court be expected to apply the CISG? Ms M Wethmar-Lemmer (University of South Africa) wethmm@unisa.ac.za
• Constitutional values and the proprietary consequences of marriage in private international law – Sadiku v Sadiku (unreported) (T) Prof J L Neels (University of Johannesburg) jlneels@uj.ac.za

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.