Even though the decision is not really new anymore and the case has been discussed already – at least with regard to certain aspects concerning the temporal scope of Rome II – it might still be worth mentioning since it is the first judgment of the German Federal Court of Justice (Bundesgerichtshof, BGH) applying the Rome II Regulation.

The case concerns an action brought by a registered association in terms of § 4 Unterlassungsklagengesetz, UKlaG (Injunctive Relief Act) seeking an injunction to prevent an airline established in Latvia from using a particular clause in its general terms and conditions towards consumers.

With regard to the question of international jurisdiction, the BGH held that German courts were competent to hear the case on the basis of Art. 5 No. 3 Brussels I Regulation since the use of unfair general terms of conditions constituted a “harmful event” in terms of Art. 5 No. 3 Brussels I Regulation. In this respect, the BGH referred to the ECJ’s judgment in Henkel (C-167/00) where the ECJ had held that “[t]he concept of ‘harmful event’ within the meaning of Article 5 (3) of the Brussels Convention is broad in scope […] so that, with regard to consumer protection, it covers not only situations where an individual has personally sustained damage but also, in particular, the undermining of legal stability by the use of unfair terms which is the task of associations such as […] to prevent.” (ECJ, C-167/00, para. 42).

With regard to the applicable law concerning the claim for injunctive relief against the use of unfair terms, the BGH referred to Regulation (EC) No. 864/2007 (Rome II) and held that German law – and therefore §§ 1, 2, 4a UKlaG – was applicable in this case: According to Art. 4 (1) Rome II the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country in which the indirect consequences of that event occur. In the present context, the country in which the damage occurs or is likely to occur (Art. 2 (3) b) Rome II) is, according to the court, the country where the unfair general terms were used or are likely to be used and therefore the country in which the consumers’ protected collective interests were affected or are likely to be affected. In support of this interpretation, the BGH referred to Art.6 (1) Rome II according to which the law applicable to a non-contractual obligation arising out of an act of unfair competition shall be the law of the country where the collective interests of consumers are, or are likely to be, affected. In this respect, the BGH left the question open whether Art. 6 Rome II is directly applicable in the present context, since, according to the court, the underlying rationale – namely that consumers should be protected by the law of that country where their collective interests are affected – applied in the present context as well.

With regard to the temporal scope of application of Rome II – which is contentious in view of the not unambiguous provisions of Art. 31 and Art. 32 of the Regulation (see in this respect the abstracts of the articles by Glöckner and Bücken which can be found here) – the BGH seems to adopt, as it has been pointed out already by Professor von Hein in his recent comment, the point of view according to which the Regulation entered into force on 11 January 2009. The BGH, however, did not discuss the problems surrounding Artt. 31 und 32 Rome II.

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The Supreme Court of the United States heard argument in Abbott v. Abbott this past week. Abbott is the rare family-law case before the Supreme Court involving an American child taken to Texas from his home in Chile by his mother, without his father’s consent. Under the 1980 Hague Convention on the Civil Aspects of Child Abduction, children must be automatically returned to the country from which they are taken, so long as the removal was “in breach of rights of custody.” The Supreme Court is asked to decide whether the father had a “right of custody” under the treaty, because at the time of the divorce the Chilean family court—and Chilean law as a matter of course—entered a “ne exeat” order prohibiting either parent from removing the child from the country without the consent of the other.

The transcript of the oral argument is available here, and Dahlia Lithwick has a great summary of the argument over at Slate. In her experienced view, “[l]istening to the justices argue over an international child-custody case is a bit like watching them ride the mechanical bull. They aren’t experts, but they’re ever so willing to go down trying.” Justices Ginsburg, Breyer and Roberts were especially active in the argument, positing a wide array of pointed hypotheticals to test the limits of what constitutes a ne exeat right under foreign law. For example, Justice Breyer posited early in the argument:

[What if] the woman is 100 percent entitled to every possible bit of custody and the man can see the child . . . on Christmas day at 4:00 in the morning, that’s it. Now there’s a law like Chile’s that says, you cant take the child out of the country without the permission of the of the father. . . . Are you saying that that’s custody? . . [Wouldn’t that] turn the treaty into a general: return the child, no matter what?

According to the SCOTUSBlog, another scenario itched at Justice Breyer so that he raised repeatedly during the argument: What if the custodial parent – presumably the one with whom the child would be better off – is the one who moves the child abroad and the non-custodial parent is the one requesting return? In particular, what if that non-custodial parent is akin to a “Frankenstein’s monster” whom the family-law judge denied any rights over the child? If the Convention grants such a parent custody rights, Breyer insisted he could not see the “humane purpose” behind it.

By the end of the petitioner’s argument, Chief Justice Roberts and Justices Sotomayor and Ginsburg, at least, seemed satisfied that, in such exceptional circumstances, the Convention would allow a parent to escape abroad with their child. Article 13(b) of the Convention got a bit more attention than the case—or the parties’ papers—would have envisioned.

Perhaps prodding the court to issue another Aerospatialle -style decision, Karl Hays—the attorney for the Respondent—insisted that a parent left behind could resort to the legal system of the country where the child was taken, using laws such as the Uniform Child Custody Jurisdiction and Enforcement Act in the United States, to seek enforcement of their existing rights of access or custody. Justice Scalia dismissed that argument, scoffing, “If these local remedies were effective, we wouldn’t have a treaty.”

For his part, Justice Antonin Scalia, whom Lithwick describes as the “sentinel of international law” on the Court and in keeping within his views in Olympic Airways, pointed out that most of the 81 countries that have signed the Hague treaty have agreed that a ne exeat right is also a right of custody. Here is Scalia’s exchange with counsel for respondent:

Justice Scalia: Most courts in countries signatory of the treaty have come out the other way and agree that a ne exeat right is a right of custody, and those courts include U.K., France, Germany, I believe Canada, very few come out the way you—how many come out your way?
Mr. Hays: Actually, Your Honor, the United States and Canada do, and the analysis—
Justice Scalia: Well, wait … You’re writing our opinion for us, are you?
Mr. Hays: … There have only been seven courts of last resort that have heard this issue. There are some 81 countries that belong—
Justice Scalia: Yes, but, still, in all, I mean, they include some biggies, like the House of Lords, right? And … the purpose of a treaty is to have everybody doing the same thing, and … if it’s a case of some ambiguity, we should try to go along with what seems to be the consensus in … other countries that are signatories to the treaty.
Mr. Hays: If, in fact, there were a consensus, but … there is not a consensus in this instance….

Justices Breyer and Ginsburg then entered the fray with Justice Scalia and the three start counting countries, to which Hays made “the point that . . . if you have one or two or even three countries that have gone one way and then you have other countries that have gone the other way, that there’s not a clear-cut overwhelming majority of the other jurisdictions that have ruled in favor of establishing ne exeat orders….” To which Scalia responds, “We will have to parse them out, obviously.”

As Roger Alford at Opinion Juris has pointed out:

[T]his exchange raises a great question of country-splits in treaty interpretation. Several justices appeared willing to interpret an ambiguous treaty provision consistent with the general consensus of signatory nations. But respondent argues that there is no clear consensus and only a handful of countries out of 81 signatories have even addressed the issue. So even assuming the Court takes the approach suggested by Justice Scalia in Olympic Airways and looks for signatory consensus, what’s the Court to do when there are few voices from abroad and those voices are not consistent? Is there still a role for comparative interpretive analysis in that context?

Lithwick concludes that “[t]he most interesting thing about [the] argument in Abbott v. Abbott is that it breaks down all the normal divisions on the court: left versus right, women versus men, pragmatists, internationalists, textualists, idealists … all of it flies out the big ornamental doors as the court grapples with this new problem of international child abduction at the grittiest, most practical level. It feels nice. Less an ideological smack down than a good, old-fashioned family argument. I wouldn’t get too used to it. But I enjoy it while I can.”

A decision is expected before the end of June. Previous coverage of this case on this site can be found here and here.

Yesterday, the Paris first instance court (Tribunal de grande instance) has denied an antisuit injunction in the high profile Vivendi case.

In July 2002, shareholders of Vivendi Universal brought a securities fraud class action before a U.S. Court in New York  against the company and two of its formers officers, Jean-Marie Messier and Guillaume Hannezo. Vivendi is a French company, and so are the two officers. But Messier and Hannezo moved to New York to direct corporate operations in the relevant period. It is alleged that they made financial misrepresentations while living and working in the US. Some of the shares were traded in Paris and held by French shareholders (the French press reports that they would amount to 60% of the shareholders). Some other shares were traded on the New York stock exchange and held by North-American shareholders.

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The last issue of the Dutch review of private international law (NIPR Nederlands internationaal privaatrecht) includes several articles on the Rome I Regulation, including four in English.

Michael Bogdan (Lund University): The Rome I Regulation on the law applicable to contractual obligations and the choice of law by the parties

 The Rome Convention of 19 June 1980 on the Law Applicable to Contratual Obligations (in the following ‘the Rome Convention’) will be replaced on 17 December 2009, in all Member States of the European Union except Denmark, by the EC Regulation No 593/2008 on the Law Applicable to Contractual Obligations (the Rome I Regulation) although only in relation to contracts concluded after that date. The Commission’s proposal of 2005 (in the following ‘The Commission’s proposal’), which led to the adoption of the Rome I Regulation after a number of amendments, stated that it did not set out to establish a new set of conflict rules but rather convert an existing convention into a Community law instrument. Nevertheless, the Regulation brings about several important changes in comparison with the Rome Convention.

Luc Strikwerda (Advocate-General, Dutch Supreme Court): Toepasselijk recht bij gebreke van rechtskeuze; Artikel 4 Rome I-Verordening

If contractual parties have not availed themselves of the possibility to choose the law applicable to their contract (Art. 3, Rome I), the applicable law will be determined according to rules laid down in Article 4, Rome I. Similar to the equivalent provision of the 1980 Rome Convention, Article 4, Rome I is based upon the doctrine of the characteristic performance. Nonetheless, a new structure with respect to the concretization of this doctrine has been adopted, ensuring that the characteristic performance no longer functions as a presumption. Instead, Article 4 lays down the law applicable in a number of pre-determined categories (Art. 4(1)(a)-(h), Rome I). For the majority of these categories the law of the habitual residence of the party who performs the characteristic performance will be applied. These pre-determined categories form the basic structure and content of this contribution. The obvious disadvantage that this new structure leads to issues of characterisation will also be discussed.

Teun Struycken (Utrecht University and Nauta Dutilh, Amsterdam) and Bart Bierman (Nauta Dutilh, Amsterdam): Rome I on contracts concluded in multilateral systems.

One of the novelties of the Rome I Regulation is the special provision in Article 4(1)(h) on the law applicable to a contract entered into within a regulated market or a multilateral trading facility in the absence of a choice of a law by the contracting parties.

The authors analyse the practical significance of this provision and the relevant contracts which come into existence within a trading system. In the authors’ view, the concept of contract used in Article 4(1)(h) of Rome I, encompasses transactions within a trading system that may not be true agreements under the substantive law of the Netherlands. Furthermore, many of the relevant contractual arrangements, in particular those relating to the clearing and the settlement of securities transactions on a regulated market or multilateral trading facility, fall within the scope of the special PIL provision for designated settlement finality systems pursuant to the Settlement Finality Directive.

According to the authors, legal certainty requires that all transactions on a particular trading system be subject to the same law, regardless of the nature of the parties involved. They take the view that there should be no room for a choice of a law other than the law governing the trading system. The rule in Article 4(1)(h) should in their view become applicable to each contract concluded within a multilateral trading system. The law designated by that provision should prevail over the law chosen by the parties to a transaction: such transactions should always be governed by the law governing the system.

Maarten Claringbould (Leiden University and Van Traa Advocaten, Rotterdam): Artikel 5 Rome I en vervoerovereenkomsten 

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The forthcoming ERA conference on cross-border successions is designed to cover the recent developments in the drafting and negotiating the Proposal for a Regulation on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession. There are interesting topics which arise out of the differences between the national legal conceptions, such as the issues of clawback and the international competence of courts or non-judicial authorities, including notaries. The automatic recognition of the proposed European Certificate of Succession seems to be equally worthy of debate.

The speakers at the conference are:

Ms Mari Aalto, Legal Officer, DG Justice, Freedom and Security, European Commission, Brussels
Professor Andrea Bonomi, University of Lausanne
Dr Anatol Dutta, Max Planck Institute for Comparative and International Private Law, Hamburg
Professor Sjef van Erp, University of Maastricht
Mr Rafael Gil Nievas, Permanent Representation of Spain to the EU, Brussels
Professor Jonathan Harris, Barrister, Serle Court, London; University of Birmingham
Mr Christian Hertel, Notary, Weilheim
Dr Marius Kohler, Director, Federal Chamber of German Civil Notaries, Brussels
Mr Kurt Lechner, MEP, European Parliament, Brussels/Strasbourg
Mr Hugues Letellier, Managing Partner, Hohl & Associés, Paris
Professor Paul Matthews, Consultant, Withers LLP; King’s College, London
Ms Michaela Navrátilová, JUDr Zden?k Hromádka Law Firm, Zlín
Ms Salla Saastamoinen, Head of Unit, Civil Justice, DG Justice, Freedom and Security, European Commission, Brussels.

The conference is scheduled for 18 and 19 February 2010 and will take place at the ERA Congress Centre in Trier, Germany. Detailed information on the conference is available here, and the registration details here.