Council and Parliament reach agreement on the Directive on Preventive Restructuring Frameworks, Second Chance and Measures to Increase the Efficiency of Restructuring, Insolvency and Discharge Procedures

by Lukas Schmidt

Roughly two years ago the Commission presented the proposal for a Directive on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedure (see Blogpost ). After a lively debate the Council has now confirmed an agreement reached with the Parliament on the directive in December last year (see press release of 19 December 2018).

According to the press release several provisions were added or amended compared to the Council’s positions including the introduction of provisions on the duties of company directors in insolvency proceedings, an article on worker’s rights  to recall that member states should ensure that the existing rights of workers under national and Union law are not affected by the preventive restructuring procedure and provisions on the appointment of a restructuring practitioner.

The text still has to be formally adopted by the Council and Parliament. Member states will then have 2 years for implementation, although they can ask the Commission for an additional year for implementation.

UK Ratifies Hague Choice of Court and Hague Maintenance Conventions

As reported on Twitter by Pacta sunt servanda, the UK has just (on 28 December 2018) signed and ratified the 2005 Hague Convention on Choice of Court Agreements and the 2007 Hague Convention on the International Recovery of Child Support and other Forms of Family Maintenance. Both Conventions currently apply to the UK by virtue of its membership of the European Union but may cease to do so once the UK leaves the EU on 29 March 2019. (The relevant notifications by the Dutch Ministry of Foreign Affairs can be found here and here.)

Importantly, both conventions have been ratified only for the event of a Brexit scenario in which no withdrawal agreement with the EU has been reached and contain the following qualification:

In accordance with Article 29 of the 2005 Hague Convention/Article 59 of the 2007 Hague Convention, the United Kingdom is bound by the Convention by virtue of its membership of the European Union, which approved the Convention on behalf of its Member States. The United Kingdom intends to continue to participate in the 2005/2007 Hague Convention after it withdraws from the European Union.

The Government of the United Kingdom and the European Council have reached political agreement on the text of a treaty (the “Withdrawal Agreement”) on the withdrawal of the
United Kingdom from the European Union and the European Atomic Energy Community. Subject to signature, ratification and approval by the parties, the Withdrawal Agreement
will enter into force on 30 March 2019.

The Withdrawal Agreement includes provisions for a transition period to start on 30 March 2019 and end on 31 December 2020 or such later date as is agreed by the United
Kingdom and the European Union (the “transition period”). In accordance with the Withdrawal Agreement, during the transition period, European Union law, including the
2005/2007 Hague Convention, would continue to be applicable to and in the United Kingdom. The European Union and the United Kingdom have agreed that the European Union will
notify other parties to international agreements that during the transition period the United Kingdom is treated as a Member State for the purposes of international agreements concluded by the European Union, including the 2005/2007 Hague Convention.

In the event that the Withdrawal Agreement is not ratified and approved by the United Kingdom and the European Union, however, the United Kingdom wishes to ensure continuity of application of the 2005/2007 Hague Convention from the point at which it ceases to be a Member State of the European Union. The United Kingdom has therefore submitted the Instrument of Accession in accordance with Article 27(4) of the 2005 Hague Convention/Article 58(2) of the 2007 Hague Conventio only in preparation for this situation. The Instrument of Accession declares that the United Kingdom accedes to the 2005 Hague Convention in its own right with effect from 1 April 2019.

In the event that the Withdrawal Agreement is signed, ratified and approved by the United Kingdom and the European Union and enters into force on 30 March 2019, the United Kingdom will withdraw the Instrument of Accession which it has today deposited. In that case, for the duration of the transition period as provided for in the Withdrawal Agreement as stated above, the United Kingdom will be treated as a Member State of the European Union and the 2005 Hague Convention will continue to ha ve effect accordingly.

In the past, it had been questioned if the UK would be able to ratify these conventions before having left the EU (see, eg, Dickinson, ZEuP 2017, 539, 560), which, if the “No Deal” scenario became a reality, would leave a period of at least three months in which the conventions would not apply. By ratifying the Conventions now, the UK seems to have reduced this potential gap to two days as both conventions will enter into force for the UK on 1 April 2019.

Annual Survey of American Choice-of-Law Cases for 2018

Symeon Symeonides‘ Annual Survey of American Choice-of-Law Cases for 2018, now in its 32nd year, has been posted on SSRN. A summary of the contents is reproduced below. If you are interested in the Survey, you can download it by clicking here.
If you are interested in the Private International Law Bibliography for 2018, you can download it from SSRN by clicking here.

Symeon sends his best wishes for the New Year, and I concur.

Table of Contents


I. The Extraterritorial Reach of Federal Law

A. The Alien Tort Statute

B. The Fourth and Fifth Amendments and Cross-Border Shootings

C.-M. Other Federal Statutes

II. Choice of Law

A. Proof of Foreign Law

B. Anti-Foreign Law Amendments

C. Choice-of-Law Methodology

D. Contracts

1. Contracts with Choice-of-Law Clauses

a. Choice of Procedural or Conflicts Law

b. Choice-of-Law Clauses and Statutes of Limitation

c. Plain Choice-of-Law Clauses

d. Choice-of-Law and Forum-Selection Clauses

e. Choice-of-Law and Arbitration Clauses

2. Contracts without Choice-of-Law Clauses

E. Torts

1. Common Domicile Cases

2. Cross-Border Unfair Trade Practices

3. Other Torts

F. Products Liability

G. Statutes of Limitation

H. Insurance Conflicts

I. Nazi-Looted Art

J. Domestic Relations

1. Marriage and Divorce

2. Marital Property

3. Adoption and Succession

4. Child Custody and the Hague Convention

III. Recognition of Foreign Judgments and Awards

A. Foreign-Country Judgments

B. Sister-State Judgments

C. Foreign Arbitral Awards





Conflict of Laws Panel at the AALS Conference in New Orleans, Jan 4, 2019

The American Association of Law Schools will hold its annual conference in New Orleans this year, from January 2-6. In this conference, the meeting of the Conflict of Laws Interest Group will be on Friday January 4, 8:30-10:15. (Yes, early.) The topic is the new Hague Judgments Convention (the draft Convention is here.) Speakers will include Louise Ellen Teitz (Rhode Island University) with a view from the Hague, Trey Childress (Pepperdine/State Dept) with a view from the State Department, and John Coyle (UNC) with a view from academia. I will chair. The remarks will be published later in the Duke Journal of Comparative and International Law, but if you are at the AALS Conference, please do come and discuss there!

Luxemburg, 22 January 2019: Conference on Third-Party Effects of Assignments of Claims

On 22 January 2019, the Arendt House (Luxembourg) will host a conference organised by The Luxembourg Association of Law Graudates of the University of Louvain (UCL) and the Law Review Le droit des affaires – Het ondernemingsrecht (DAOR) on the Proposal for a Regulation of the European Parliament and of the Council on the law applicable to the third-party effects of assignments of claims.

The conference will be chaired by Prof. Marie-Elodie Angel (University Paris Est Créteil, UPEC). Speakers, who will discuss assignment of claims, security rights and securitisation, include Prof. Denis Philippe (Philippe & Partners; University of Louvai), Grégory Minne (Arendt & Medernach; University of Luxembourg) and Jean-Paul Spang (Kleyr Grasso; University of Luxembourg).

The conference will be in French without translation into English.

Details are available here.

Draft Guide to Good Practice on the Use of Video-Link under the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters is available on the HCCH website

The Draft Guide to Good Practice on the Use of Video-Link under the Evidence Convention has been submitted for the approval of the HCCH governance body (i.e. the Council on General Affairs and Policy of the Hague Conference on Private International Law), which will meet in March 2019.

This Guide analyses developments in relation to the use of video-link in the taking of evidence under the Evidence Convention, including references to internal law and other international agreements. It also outlines good practices to be followed and reflects additional information provided by Contracting Parties in their respective Country Profiles.

In my personal opinion, the most striking conclusion was that responding States to the Country Profiles are almost evenly divided as to whether evidence may be taken directly by video-link by means of a Letter of Request (under Chapter I of the Evidence Convention). In other words, there is no clear consensus on whether the requesting court can take evidence directly in the Requested State by video-link under Chapter I of the Evidence Convention (e.g. take testimony from a witness by videoconference). Some see legal obstacles whereas others do not. The Convention was after all negotiated in the late sixties. A question may arise as to whether an international treaty is needed to address particularly this issue and include the necessary safeguards for video-link taking of evidence.

Ontario Court Holds Law of Bangladesh Applies to Rana Plaza Collapse Claim

The Court of Appeal for Ontario has upheld a decision of the Superior Court of Justice dismissing a $2 billion claim against Loblaws relating to the 2013 collapse of the Rana Plaza building in Savar, Bangladesh.  In Das v George Weston Limited, 2018 ONCA 1053 (available here) the court concluded that the claims were governed by the law of Bangladesh (not Ontario).  It went on to conclude that most of the claims were statute barred under the Bangladeshi limitation period and that it was “plain and obvious” that the remaining claims would fail under Bangladeshi tort law.

Unlike some of the recent cases in this area, this was not a case about a Canadian parent corporation and the operations of its own foreign subsidiary.  It was a case about a contractual supply relationship.  Loblaws bought clothes (to sell in its Canadian retail stores) from corporations whose workers manufactured the clothes in Rana Plaza.

The key conflict of laws point was the choice of law issue.  The rule in Ontario is that tort claims are governed by the law of the place of the tort: Tolofson v Jensen, [1994] 3 SCR 1022.  The plaintiffs had argued that they were suing Loblaws for negligent conduct that exposed those working in Rana Plaza to harm.  They argued that Loblaws had, by adopting corporate social responsibility policies and hiring Bureau Veritas to conduct periodic “social audits” of the workplace, assumed a degree of responsibility for the safety of the workplace in Bangladesh (para 20).  They argued that the key steps and decisions by Loblaws took place in Ontario rather than in Bangladesh and therefore Ontario was the place of the tort (para 80).  The court rejected these arguments.  It held that the place where the alleged wrongful activity occurred was Bangladesh (para 85), that the alleged duty was owed to people in Bangladesh (para 87) and that the injury suffered in Bangladesh “crystallized the alleged wrong” (para 90).

The court also refused to apply Tolofson‘s narrow exception to the place of the tort rule.  One reason the plaintiffs raised for triggering the exception was the lack of punitive damages under the law of Bangladesh.  The court noted that the lower court’s decision had suggested such damages might actually be available under that law, but in any case “the absence of the availability of punitive damages is not the type of issue that offends Canadian fundamental values” (para 95).  The court raised no basis on which to disagree with this analysis.

Because the applicable law was that of Bangladesh, and because some of the claims were not statute-barred, the court was required to do a detailed analysis of Bangladeshi tort law on the duty of care issue in order to determine whether those claims were to be dismissed as not viable.  This aspect of the decision may be the most disquieting, since there was little if any on-point authority in the Bangladeshi jurisprudence (para 130).  The court had to rely on experts who were relying on a considerable volume of Indian and English cases and then debating the extent to which these would impact the issue if determined by a Bangladeshi court.  Ultimately the court concluded that under Bangladeshi law the claims could not succeed.

Grand Chamber judgment: case of Molla Sali v. Greece (application no. 20452/14)

In a much anticipated outcome, the Grand Chamber of the European Court of Human Rights held unanimously that there had been a violation of Article 14 (prohibition of discrimination) of the European Convention on Human Rights, read in conjunction with Article 1 of Protocol No. 1 (protection of property) to the Convention.

The case concerned the application by the domestic courts of Islamic religious law (Sharia) to an inheritance dispute between Greek nationals belonging to the Muslim minority, contrary to the will of the testator (a Greek belonging to the Muslim minority, Ms Molla Sali’s deceased husband), who had bequeathed his whole estate to his wife under a will drawn up in accordance with Greek civil law.

The full text of the decision may be found here. 

The press release of the Court is available here.

For the recent amendments in pertinent Greek legislation, see here.


Conclusions of the EC-HCCH Joint Conference on the Cross-border Protection of Vulnerable Adults are now available

The conclusions of the EC-HCCH Joint Conference on the Cross-border Protection of Vulnerable Adults are now available here.

See also related post by Pietro Franzina here.


Diplomat Lawyer (Secretary) Vacancy at the Permanent Bureau of the HCCH

The Permanent Bureau of the Hague Conference on Private International Law (HCCH) is seeking to fill a Diplomat Lawyer (Secretary) position. The deadline for applications is 31 December 2018 (12.00 a.m. CET). For more information, click here.

Given diversity of geographic representation and of legal expertise requirements as set out in the HCCH Statute, candidates should preferably not have (exclusively) Swiss, Canadian, Italian, Portuguese, or Singaporean nationality. Currently, there are Diplomat Lawyers of those nationalities at the HCCH.

As announced, “[t]he main priorities for this position currently include the ongoing parentage/surrogacy project and the work relating to the HCCH Convention of 29 May 1993 on Protection of Children and Co-operation in Respect of Intercountry Adoption. This said, the successful candidate will be expected to work on any other project or file that the work programme of the HCCH and related resource allocation may require (be it in relation to post-Convention services or the development of legislative projects).”