Following the formal notification of 24 July 2008 by the United Kingdom of its wish to participate in Reg. No 593/2008 (Rome I), the Commission has expressed its opinion – doc. COM 2008(730) fin. of 7 November 2008 – pursuant to the procedure set out in Art. 11a TEC (former Art. 11(3) TEC, which is made applicable to the opting-in procedure, mutatis mutandis, by Art. 4 of the Protocol on the Position of UK and Ireland). Here’s the conclusion:

The Commission welcomes the request from the United Kingdom to accept Regulation 593/2008 which is a central element of the Community acquis in the area of civil justice. It therefore gives a positive opinion on the said participation.

The Regulation should enter into force for the United Kingdom on the day of the notification to the United Kingdom of the Commission’s decision on its request. As in the case of the other Member States, it should apply from 17 December 2009, except for Article 26 which should apply from 17 June 2009.

(Many thanks to Federico Garau, Conflictus Legum blog, for the tip-off)

The Stolzenberg case will also be litigated before the European Court of Justice! Last year, the Court of Appeal of Milan, Italy, referred two questions to the ECJ on the interpretation of the public policy clause of Article 27(1) of the 1968 Brussels Convention. 

The ECJ was one of the few major courts in the western world which was missing in this judicial odyssey. It has now lasted for more than 15 years. And it is not over. 

Part 1: Canada

The case began in the early 1990s with the collapse of an investment company incorporated in Montreal, Castor Holdings. A bankruptcy was opened in 1992 in Canada. It has been presented by many as the largest ($ 1.5 billion) and the longest bankruptcy in Canadian history.

Essentially, the bankruptcy proceedings were about the auditors, Coopers & Lybrand (as they were then). In August 2008, the action against them was still pending. However, proceedings had also been initiated against the directors of the company for distributing $ 15.5 million of dividends in 1991, in the suspect period. Some of the directors settled with the bankruptcy, but five did not. In August 2008, the latter were eventually sentenced to pay $ 9.7 million. Among the five were the president of Castor, a German national named Stolzenberg, and a Swiss national named Gambazzi. 

Part 2: England

Meanwhile, however, a small group of investors had brought proceedings before English courts. In 1996, Daimler Chrysler Canada and its pension fund, CIBC Mellon Trust Co., initiated proceedings against the directors and close to forty other corporate entities. They claimed that their loss in the Castor bankruptcy was the result of wrongful conduct by the directors, including Stolzenberg and Gambazzi.

A key issue in the litigation was the jurisdiction of English courts. None of the 40 defendants had any connection with England, except Stolzenberg, who had once owned a house in London, but, it seems, did not own it anymore when the proceedings were served on the defendants. The case went all the way up the House of Lords, which held in 2000 in Canada Trust Company v. Stolzenberg, Gambazzi and others that what mattered was whether there was one defendant who was domiciled in England when the claim was issued by the English court, not when it was served on the defendants (8 months later).

Since the start of the English proceedings, the defendants had been subjected to a world wide Mareva injunction (now freezing order). As a result, they were under a variety of duties of disclosure that, they thought, were unacceptably far reaching. Some never appeared before English courts, but some did and complied for a while. At some point, however, they refused to provide any more information on their assets (which were situated abroad). They did not live in England, so there was not much the English court could do. But the Mareva injunction has been called one of the two nuclear weapons of English civil procedure. The English court pressed the nuclear button. Because they were not complying, the defendants were debarred from defending any action in England. This included the action on the merits. The English court then entered into a default judgment for close to € 400 million. There had been no trial, no assessment of the merits of the case. There was only a procedural sanction: you do not comply, your opponent will get whatever he asks for.

The Stolzenberg litigation entered into a new stage. It was not anymore about what had happened in Canada. It was about whether such a default judgment could be enforced abroad, where the defendants had assets.    Read more

Recently, the November/December issue of the German legal journal “Praxis des Internationalen Privat- und Verfahrensrechts” (IPRax) was released.

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

• B. Hess: “Rechtspolitische Überlegungen zur Umsetzung von Art. 15 der Europäischen Zustellungsverordnung – VO (EG) Nr. 1393/2007” – the English abstract reads as follows:

The article deals with article 15 EC Regulation on Service of Documents as revised by Regulation (EC) No 1393/2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters. The author recommends to extend the application of cross border direct service of documents within the EU under German law and in this context makes a concrete proposal for the implementation of article 15 into a revised article 1071 German Code of Civil Procedure.

• C. Heinze: “Beweissicherung im europäischen Zivilprozessrecht” – the English abstract reads as follows:

Measures to preserve evidence for judicial proceedings are of vital importance for any claimant trying to prove facts which are outside his own sphere of influence. The procedural laws in Europe differ in their approach to such measures: while some regard them as a form of provisional relief, others consider these measures to be part of the evidentiary proceedings before the court. In European law, evidence measures lie at the intersection of three different enactments of the Community, namely Regulation (EC) No 1206/2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters, Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters and (in intellectual property disputes) Art. 7 of Directive 2004/48/EC on the enforcement of intellectual property rights. As a result of the European Court of Justice’s judgment in Case C-104/03, St. Paul Dairy Industries v. Unibel Exser BVBA, most commentators believe that evidence measures fall exclusively under the evidence regulation (EC) No 1206/2001 and not under the more general Brussels I Regulation (EC) No 44/2001. Taking into consideration the ECJ’s decision in St. Paul and the opinion of Advocate General Kokott in Case C-175/06, Alessandro Tedesco v. Tomasoni Fittings Srl and RWO Marine Equipment Ltd. (removed from register before judgment), the following article discusses the application of both regulations on measures to preserve evidence. It comes to the conclusion that measures to secure evidence fall under the evidence Regulation No 1206/2001 if they involve an act of judicial cognizance in taking evidence in another Member State which is directly relevant for the decision of the case (no fishing expedition). The article further proposes a supplementary application of the Brussels I Regulation (EC) No 44/2001 for those matters which are not covered by the evidence regulation.

Such matters firstly include the jurisdiction of the court requesting to take evidence, secondly the jurisdiction of the court where the evidence is located to secure this evidence if a party directly applies to that court without making use of the cross-border procedures of the evidence regulation, as well as the cross-border enforcement of substantive information rights without any act of judicial cognizance in the other Member State.

In those situations, it seems convincing to regard evidence measures which at least partially aim at securing evidence as a sub-category of provisional and protective measures and therefore apply the twofold system for provisional measures laid down in the van Uden judgment of the Luxembourg court (Case C-391/95, van Uden Maritime BV v. Kommanditgesellschaft in Firma Deco-Line and Another).

• U. Weinbörner: “Die Neustrukturierung und Aktualisierung des Länderteils der Rechtshilfeordnung für Zivilsachen (ZRHO)” – the English abstract reads as follows:

A statute has transferred matters of international judicial assistance in civil law to the Federal Office of Justice (BfJ) in Bonn. The BfJ is now also responsible for processing individual cases of reciprocal mutual assistance with other countries in civil, commercial and administrative matters. Accordingly, since January 1, 2007, the BfJ is also in charge of editing the foreign country section of the Civil Judicial Assistance Ordinance (ZRHO). This section is an administrative directive. It governs how reciprocity in mutual assistance proceedings takes place. The working directives of the ZRHO, which appear in a loose-leaf collection and are only updated once a year, are no longer up-to-date in many parts.

A Working Group (made up of representatives of the federal government and the German states) was established on the basis of a resolution by the 2007 Conference of Civil Representatives in Hamburg. Under the leadership of the BfJ, it has drawn up a new standardised structure for the foreign country section, which is intended to guide the user in a clear and easily understandable way and provides additional information in the explanations of the individual requests.

With the set-up of a procedure for permanent online updating, including the IR-online database of the Ministry of Justice of North Rhine-Westphalia, the backlog in updates can be dealt with and new information can be published quickly. The online offer portrayed below is produced by the BfJ and the Ministry of Justice of North Rhine-Westphalia. It reflects the agreement already achieved between the federal government and the German states concerning the instructions for specific countries. It can be used as a basis for the administrative orders of the foreign country section as a whole. The complete update will take at least another two years. That is due to two factors: the amount of work needed for the regular update of the information, and the re-structuring of the foreign country section.

• U. P. Gruber: “Die Brüssel IIa-VO und öffentlich-rechtliche Schutzmaßnahmen”
• A. Staudinger: “Gemeinschaftsrechtlicher Erfüllungsortgerichtsstand bei grenzüberschreitender Luftbeförderung”
• P. Schlosser: “Nichtanerkennung eines Schiedsspruchs mangels gültiger Schiedsvereinbarung”
• R. Geimer: “Enge Auslegung der Ausnahmeklausel des Art. 34 Nr. 2 EuGVVO – Der EuGH marginalisiert den ‘Federstrich’ des Reformgesetzgebers”
• H. Roth: “Zur verbleibenden Bedeutung der ordnungsgemäßen Zustellung bei Art. 34 Nr. 2 EuGVVO”
• E. Jayme/C. F. Nordmeier: “Multimodaler Transport: Zur Anknüpfung an den hypothetischen Teilstreckenvertrag im Internationalen Transportrecht – Ist § 452a HGB Kollisions- oder Sachnorm?”
• T. Domej: “Negative Feststellungsklagen im Deliktsgerichtsstand”
• P. Oberhammer/M. Slonina: “Konnexität durch Kompensation?”
• T. Struycken/B. Sujecki: “Das niederländische Gesetz zur Regelung des internationalen Sachenrechts” – the English abstract reads as follows:

On 1 May 2008, the new Dutch Act on Conflict of Laws in cases of Property (Wet Conflictenrecht Goederenrecht) came into force. This Act is the latest one in a series of legislative measures in the field of Private International Law in the Netherlands. In this Act the Dutch legislator incorporated the most important Dutch case law in the field of international property law. Additionally, some principle provisions were introduced which affect the classical topics in the field of international property law. This article will give a short overview of the key issues of this new Act.

Further, this issue contains the following materials:

• Niederlande: Gesetz vom 25.2.2008 über die Regelung des Kollisionsrechts der sachenrechtlichen Verhältnisse von Sachen, Forderung, Aktien sowie den Effektengiroverkehr (Gesetz über das Kollisionsrecht des Sachenrechts) Staatsblad 2008, Nr. 70

As well as the following information:

• M. Tamm: “Tagungsbericht zum Symposium anlässlich des 65. Geburtstags von Prof. Dr. Harald Koch – Thema: `Nationale und internationale Perspektiven für ein soziales Privat- und Prozessrecht`”
• H. Krüger: “Syrien: Neues Schiedsrecht”

The French Supreme Court for Private and Criminal Matters (Cour de cassation) handled an interesting decision earlier this year on lis pendens under Regulation 2201/2003 of 27 November 2003 (Brussels IIbis).

In this case, two spouses initiated divorce proceedings in England and France the same day. The spouses were French nationals who had married in 1996 before moving to England in 2004 with their child (born in Japan). On March 24, 2005, the husband introduced an action in France under Article 3(b) of the Regulation (common nationality of the spouses). On the same day, the wife introduced an action in England under Article 3 (a) of the Regulation (habitual residence).

Which court, then, was to retain jurisdiction?

The wife provided evidence of the time when her husband was served with the English relevant documents: 12:30 pm, at his work place. French trial judges found that, by contrast, the husband was unable to provide evidence of the time when the French court had been seized.

In a judgment of 11 June 2008, the Cour de cassation held that he had the burden of proof, and that it was therefore for him to prove that the French court had been seized earlier than the foreign court on the relevant day. As a consequence, the court ruled that the English court had been seized first, and that the French court had been right to stay its proceedings.

In any case, in the meantime, the English High Court had actually ruled on the merits in a judgment of 13 July 2007. It seems that its jurisdiction was not challenged, as the defendant did not enter into appearance in England. Read more