Our blog has reported earlier on the Proposal and Report by the Committee on Legal Affairs of the European Parliament for a Resolution on corporate due diligence and corporate accountability. That proposal contained recommendations to amend the EU Regulations Brussels Ia (1215/2015) and  Rome II (864/2007). The proposals were discussed and commented on by Jan von Hein, Chris Tomale, Giesela Rühl, Eduardo Álvarez-Armas and Geert van Calster. 

On 10 March 2021 the European Parliament adopted the Resolution with a large majority. However, the annexes proposing to amend the Brussels Ia and Rome II Regulations did not survive. The Resolution calls upon the European Commission to draw up a directive to ensure that undertakings active in the EU respect human rights and the environment and that they operate good governance. The European Commission has already indicated that it will work on this.

Even if the private international law instruments are not amended, the Resolution touches private international law in several ways.

*  It specifies that the “Member States shall ensure that relevant provisions of this Directive are considered overriding mandatory provisions in line with Article 16 of Regulation (EC) No 864/2007” (Art. 20). It is a bit strange that this is left to national law and not made an overriding mandatory provision of EU law in line with the CJEU’s Ingmar judgment (on the protection of commercial agents – also a Directive). Perhaps the legislator decides otherwise.

* It proposes a broad scope rule covering undertakings “operating in the internal market” and encompassing activities of these undertakings or “those directly linked to their operations, products or services by a business relationship or in their value chains” (Art 1(1)). It thus imposes duties on undertakings to have due diligence strategies and communicate these even if the undertakings do not have their seat in an EU Member State. In this way it moves away from traditional seat theories and place of activities tests.

 

 

This post was written by Vito Bumbaca, PhD candidate/ Assistant Lecturer, University of Geneva

The EAPIL blog has also published a post on this topic, click here.

Introduction:

The Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000 (Brussels IIA Regulation) still applies to the United Kingdom in EU cross-border proceedings dealing with parental responsibility and/ or child civil abduction commenced prior to the 31 December 2020 (date when ‘Brexit’ entered into force). Moreover, the Court of Justice of the European Union (CJEU) is entitled to exercise its jurisdiction over such proceedings involving the UK.

The decision of the High Court of England and Wales (Family Division, 6 November 2020, EWHC 2971 (Fam)), received at the CJEU on 16 November 2020 for an urgent preliminary ruling (pursuant to article 19(3)(b) of the Treaty of the European Union, art. 267 of the Treaty of the Functioning of the European Union, and art. 107 of the Rules of Procedure of the Court of Justice), and the CJEU judgment (SS v. MCP, C-603/20, 24 march 2021) are taken as reference in this analysis.

Question for a CJEU urgent preliminary ruling:

‘Does Article 10 of [Regulation No 2201/2003] retain jurisdiction, without limit of time, in a Member State if a child habitually resident in that Member State was wrongfully removed to (or retained in) a non-Member State where she, following such removal (or retention), in due course became habitually resident?’

Contents of the EWHC (Family Division) judgment:

This judgment involved an Indian unmarried couple with a British daughter, born in England (2017), aged more than three (almost four at the time of the CJEU proceedings). Both parents held parental responsibility over their daughter, the father being mentioned as such in the birth certificate. The mother and the child left England for India, where the child has lived continuously since 2019. The father applied before the courts of England and Wales seeking an order for the return of the child and a ruling on access rights. The mother contested the UK jurisdiction (EWHC 2971, § 19).

The father claimed that his consent towards the child’s relocation to India was temporary for specific purposes, mainly to visit the maternal grandmother (§ 6). The mother contended that the father was abusive towards her and the child and, on that basis, they moved to India (§ 8). Consequentially, she had requested an order (Form C100 ‘permission to change jurisdiction of the child’, § 13). allowing the child’s continuous stay in India. Accordingly, the mother wanted their daughter to remain in India with her maternal grandmother, but also to spend time in England after the end of the pandemics.

In the framework of article 8, Brussels IIA, the Family Division of the Court of England and Wales held that the habitual residence assessment should be fact-based. The parental intentions are not determinative and, in many circumstances, habitual residence is established against the wishes of the persons concerned by the proceedings. The Court further maintained, as general principles, that habitual residence should be stable in nature, not permanent, to be distinguished from mere temporary presence. It concluded that, apart from British citizenship, the child did not have factual connections with the UK. Therefore, according to the Court, the child was habitually resident in India at the time of the proceedings concerning access rights initiated in England (§ 16).

The Family Division extended its analysis towards article 12(3) of the Regulation concerning the prorogation of jurisdiction in respect of child arrangements, including contact rights. For the Court, there was no express parental agreement towards the UK jurisdiction, as a prerogative for the exercise of such jurisdiction, at the time of the father’s application. It was stated that the mother’s application before the UK courts seeking the child’s habitual residence declaration in India could not be used as an element conducive to the settlement of a parental agreement (§ 32).

Lastly, the Court referred to article 10 of Brussels IIA in the context of child abduction while dealing with the return application filed by the father. In practice, the said provision applies to cross-border proceedings involving the EU26 (excluding Denmark and the United Kingdom (for proceedings initiated after 31 December 2020)). Accordingly, article 10 governs the ‘competing jurisdiction’ between two Member States. The courts of the Member State prior to wrongful removal/ retention should decline jurisdiction over parental responsibility issues when: the change of the child’s habitual residence takes place in another Member State; there is proof of acquiescence or ultra-annual inaction of the left-behind parent, holding custody, since the awareness of the abduction. In these circumstances, the child’s return would not be ordered in principle as, otherwise provided, the original jurisdiction would be exercised indefinitely (§ 37).

In absence of jurisdiction under Brussels IIA, as well as under the Family Law Act 1986 for the purposes of inherent jurisdiction (§ 45), the High Court referred the above question to the CJEU.

CJEU reasoning:

The Luxembourg Court confirmed that article 10, Brussels IIA, governs intra-EU cross-border proceedings. The latter provision states that jurisdiction over parental responsibility issues should be transferred to the courts where the child has acquired a new habitual residence and one of the alternative conditions set out in the said provision is satisfied (SS v. MCP, C-603/20, § 39). In particular, the Court observed that article 10 provides a special ground of jurisdiction, which should operate in coordination with article 8 as a ground of general jurisdiction over parental responsibility (§ 43, 45).

According to the Court, when the child has established a new habitual residence in a third State, following abduction, by consequently abandoning his/ her former ‘EU habitual residence’, article 8 would not be applicable and article 10 should not be implemented (§ 46-50). This interpretation should also be considered in line with the coordinated activity sought between Brussels IIA and the Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children (§ 56).

Ultimately, the Court maintained that article 10 should be read in accordance with recital 12 of the Regulation, which provides that, as one of its fundamental objectives, parental responsibility issues should be decided by the courts that better suit the principle of factual proximity in the child’s best interests (§ 58). Accordingly, the courts that are closest to the child’s situation should exercise general jurisdiction over parental responsibility. To such an extent, article 10 represents a balance between the return procedure, avoiding benefits in favour of the abductor parent, and the evoked proximity principle, freezing jurisdiction at the place of habitual residence.

The Court further held that if the courts of the EU Member State were to retain jurisdiction unconditionally, in case of acquiescence and without any condition allowing for account to be taken concerning the child’s welfare, such a situation would preclude child protection measures to be implemented in respect of the proximity principle founded on the child’s best interests (§ 60). In addition, indefinite jurisdiction would also disregard the principle of prompt return advocated for in the Convention of 25 October 1980 on the Civil Aspects of International Child Abduction (§ 61).

The Court concluded that insofar as the child’s habitual residence changes to a third State, which is thus competent over parental responsibility, and article 12 of the Regulation is not applicable, the EU courts seised of the matter should apply the rules provided in the bilateral/multilateral instruments in force between the States in question or, on a subsidiary basis, the national Private International Law rules as indicated under article 14, Brussels IIA (§ 64).

Comment:

Considering the findings of fact, the CJEU reasoning and, prior to it, the EWHC judgment, are supported in that the daughter’s habitual residence at the time of the parental de facto separation (EWHC 2971, § 6-10) was in India; and remained there at the relevant date of the father’s application for return and access rights. If we assume, as implicitly reported in the decisions, that the child was aged less than one at the time of the first relocation from England to India, and that she lived more than two years (18 months between 2017-2018 and almost fully 2019-2020, (EWHC 2971, § 25)) within the maternal family environment in India, including prior to the wrongful act, her place of personal integration should be located in India at the above relevant date. Such a conclusion would respect the factual proximity principle enshrined in recital 12 of Brussels IIA, according to which habitual residence is founded on the child’s best interests. Recital 12 constitutes a fundamental objective applicable to parental responsibility, including access rights, and child abduction proceedings. As a result, the courts of the EU26 should be bound by it as a consequence of the Brussels IIA direct implementation.

The CJEU has not dealt with specific decisive elements that, in the case under analysis, would determine the establishing of the child’s habitual residence in India at a relevant time (the seisin under art. 8 and the period before abduction under art. 10 of the Regulation). Considering the very young age (cf. CJEU, SS v. MCP, C-603/20, § 33: ‘developmentally sensitive age’) of the daughter at the time of the relocation, the child’s physical presence corresponding to the mother’s and grandmother’s one as the primary carers prior to the wrongful act (retention) and to the return application, as well as the Indian social and family environment at the time of the seisin, highlighted by the EWHC, should be considered determinative (cf. CJEU, UD v. XB, C-393/18, 17 October 2018, § 57) – the Family Division instead excluded the nationality of the child as a relevant factor. The regularity of the child’s physical presence at an appreciable period should be taken into account, not as an element of temporal permanent character, but as an indicator of factual personal stability. In this regard, the child’s presence in one Member State should not be artificially linked to a limited duration. That said, the appreciable assessment period is relevant in name of predictability and legal certainty. In particular, the child’s physical presence after the wrongful act should not be used as a factor to constitute an unlawful habitual residence (Opinion of Advocate General Rantos, 23 February 2021, § 68-69).

Again, in relation to the child’s habitual residence determination in India, the child’s best interests would also play a fundamental role. The father’s alleged abuse, prior to the relocation, and his late filing for return, following the wrongful retention, should be considered decisive elements in excluding the English family environment as suitable for the child’s best interests. This conclusion would lead us to retain India as the child-based appropriate environment for her protection both prior to the wrongful retention, for the return application, as well as at the seisin, for access rights.

In sum, we generally agree with the guidance provided by the CJEU in that factual proximity should be considered a fulfilling principle for the child’s habitual residence and best interests determination in the context of child civil abduction. In this way, the CJEU has confirmed the principle encapsulated under recital 12, Brussels IIA, overcoming the current debate, which is conversely present under the Hague Convention 1980 where the child’s best interests should not be assessed [comprehensively] for the return application (HCCH, Guide to Good Practice Child Abduction Convention: Part VI – Article 13(1)(b); a contrario, European Court of Human Rights, Michnea v. Romania, no. 10395/19, 7 October 2020). However, it is argued (partly disagreeing with the CJEU statement) that primary focus should be addressed to the mutable personal integration in a better suited social and family environment acquired within the period between the child’s birth and the return application (cf. CJEU, HR, C-512/17, 28 June 2018, § 66; L v. M, 2019, EWHC 219 (Fam), § 46). The indefinite retention of jurisdiction, following abduction, should only be a secondary element for the transfer of jurisdiction in favour of the child’s new place of settlement after the wrongful removal/ retention to a third State. In practice, it is submitted that if the child had moved to India due to forced removal/ retention by her mother, with no further personal integration established in India, or with it being maintained in England, founded on the child’s best interests, the coordinated jurisdictional framework of articles 8 and 10 (and possibly article 12.4) of the Brussels IIA Regulation might have still been retained as applicable (cf. Opinion of Advocate General Rantos, § 58-59; as a comparative practice, see also L v. M, and to some extent Cour de cassation, civile, Chambre civile 1, 17 janvier 2019, 18-23.849, 5°). That said, from now on the CJEU reasoning should be binding for the EU26 national courts. Therefore, article 10 shall only apply to intra-EU26 cross-border proceedings, unlike articles 8 and 12 governing EU26-third State scenarios.

Written by Marcus Teo (Sheridan Fellow (Incoming), National University of Singapore)

Since Foster v Driscoll [1929] 1 KB 470, common law courts have recognised that contracts made with the intention to commit a criminal offence in a foreign state are unenforceable, even if the contract contemplated an alternative mode or place of performance. However, recent developments in domestic law illegality have sparked debate on whether foreign law illegality too should be reformed in a similar light (see Ryder Industries Ltd v Chan Shui Woo [2016] 1 HKC 323, [36], [52]-[55]; cf Magdeev v Tsvetkov [2020] EWHC 887 (Comm), [331]-[332]). The debate, however, has thus far not considered whether foreign law illegality should expand to bar certain non-contractual claims – a question which the Singapore Court of Appeal’s recent decision in Jonathan Ang v Lyu Yan [2021] SGCA 12 raises.

Lyu Yan wanted to transfer money from China to Singapore. Her bank in Singapore introduced her to Joseph Lim for assistance. Joseph proposed that Lyu transfer Renminbi from Lyu’s Chinese bank account to the Chinese bank accounts of two other individuals, Jonathan Ang and Derek Lim. Jonathan and Derek would then transfer an equivalent sum in Singapore Dollars from their Singapore bank accounts to Lyu’s Singapore bank account. Lyu performed the transfer in China, but received no money in Singapore. She then sued Joseph for breach of contract; and sued Joseph, Jonathan and Derek in tort and unjust enrichment. At first instance, the Singapore High Court ruled against all three defendants. Joseph did not appeal, but Jonathan and Derek did, arguing, inter alia, that Foster barred Lyu’s non-contractual claims against them because Chinese law prohibited their transaction.

Andrew Phang JCA, who delivered the Court’s judgment, dismissed Jonathan and Derek’s appeal. It was undisputed that the transaction, if performed, would have violated Chinese law (See Lyu Yan v Lim Tien Chiang [2020] SGHC 145, [15]-[16]). However, Lyu did not intend to break Chinese law – the facts at their “highest” showed that she thought the transaction contravened Singapore law rather than Chinese law (Jonathan Ang, [18], [20]). Thus, since Foster does not apply if the claimant does not intend to contravene a specific foreign law, it was inapplicable.

Of interest, though, were Phang JCA’s obiter comments: if Lyu had known the transaction contravened Chinese law, would her non-contractual claims be barred? Foster, he noted, was “not applicable in relation to non-contractual claims” ([26]). This was contrasted with the position in domestic law illegality, where an illegality affecting a contract could sometimes also bar other non-contractual claims arising from the contractual relationship ([27]-[28]). Here, Phang JCA referenced Ochroid Trading Ltd v Chua Siok Lui [2018] 1 SLR 363, where the Court of Appeal had held that claims in unjust enrichment (and, potentially, tort) arising from a contractual relationship would be barred if it stultified the policy underlying the law which rendered the contract unenforceable (Ochroid Trading [145]-[159], [168])

Phang JCA then considered whether Foster and Ochroid Trading could be “read together” (Jonathan Ang, [30]) – i.e., whether foreign and domestic law illegality, as separate doctrines, could apply on the same facts. This could only happen when Singapore law was the lex contractus, because, while Foster barred contract claims “regardless of their governing laws”, Ochroid Trading barred only claims governed by Singapore law. If indeed Foster and Ochroid Trading were “read together”, however, “possible difficulties” arose, because it would put a plaintiff with a Singapore law contract in a worse position than a plaintiff with a foreign law contract: the former would potentially have both his contractual and non-contractual claims barred, while the latter would have only his contractual claim barred ([33]). To Phang JCA, this was undesirable, because there was “no principled reason” for this distinction ([34]). While Phang JCA did not attempt to resolve these “difficulties”, he concluded by noting that for both foreign law and domestic law illegality “the concept of policy serves as a limiting factor to ensure that the illegality involved does not inflexibly defeat recovery where such recovery is justified” ([34]) – presumably, then, Phang JCA was noting tentatively that recourse to public policy arguments might help ameliorate the differences between the two classes of plaintiffs he identified.

Phang JCA’s comments in Jonathan Ang raise more questions than answers; this was of course by design, given their tentative and exploratory nature. However, with respect, the correctness of some of the assumptions Phang JCA relied on may be doubted. First, one may only conclude that there is no “principled reason” for treating plaintiffs with Singapore law contracts differently from plaintiffs with foreign law contracts if one accepts that domestic and foreign law illegality share the same “principled” basis. However, Foster’s principled basis remains shrouded in uncertainty: courts and commentators have variously called it a doctrine of public policy, comity and international jurisdiction, but only the first conception of Foster aligns it with domestic law illegality. Second, while it is true that the public policies of the forum limit both domestic and foreign law illegality, those public policies perform that function in different ways in those two contexts. In domestic law illegality, courts ask whether barring the plaintiff’s claim would give effect to the forum’s public policies; but in foreign law illegality, courts ask whether denying recognition of the relevant foreign law, and thus allowing the plaintiff’s claim, would give effect to the forum’s public policies. It follows that public policy arguments may not consistently resolve differences between the two classes of plaintiffs identified by Phang JCA.

At base, the questions posed in Jonathan Ang (and the assumptions they relied on) were only relevant because of Phang JCA’s continued acceptance of one central proposition: that foreign law illegality bars only contractual claims. Yet, this proposition is doubtful; in Brooks Exim Pte Ltd v Bhagwandas Naraindas [1995] 1 SLR(R) 543, Singapore’s Court of Appeal considered Foster in relation to a claim for “money had and received”, and found it inapplicable only because parties there did not intend to breach foreign law (Brooks Exim, [1], [14]). Moreover, the justification for limiting Foster’s rule to contractual claims remains unclear: in Jonathan Ang Phang JCA cited the English High Court’s decision in Lilly Icos LLC v 8PM Chemists Ltd [2010] FSR 4 for it, but there that proposition was simply accepted without argument (Lilly Icos, [266]). A possible justification might be that only in contract claims may parties, by virtue of their ability to choose the governing law, avoid the applicability of the (criminal) law of a foreign state objectively connected to their relationship. This, however, would be a poor justification, since parties have the autonomy to choose the governing law for various non-contractual claims as well. An expressly chosen law, for example, may govern not just parties’ contract, but also claims in unjust enrichment arising from that contractual relationship by virtue of a characterization sub-rule, and potentially also tort claims under an exception to the lex loci delicti rule (or, in Singapore’s context, the double actionability rule). If foreign law illegality exists to prevent parties from avoiding the law of a state objectively connected to their contractual relationship, it should bar all claims arising from that contractual relationship governed by parties’ chosen law, regardless of whether those claims are “contractual” or “non-contractual”.

 

 

I am coordinating together with other African private international law experts (Richard Frimpong Oppong, Anthony Kennedy, and Pontian Okoli) an extended and in-depth version of this blog post and more topics, titled “Investing in English-speaking Africa: A private international law toolkit”, which will be the topic of an online Master Class at TMC Asser Institute on June 24-25, 2021.

 

Introduction

In  the year 2020, the Nigerian Court of Appeal delivered at least three decisions on foreign choice of court agreements.[1] I discussed two of those cases in this blog here and here. In the first two decisions delivered in the year 2020, the Nigerian Court of Appeal gave full contractual effect to the parties’ foreign choice of court agreement.[2] In other words, the Nigerian Court of Appeal interpreted the parties’ foreign choice of court agreement strictly according to is terms as it would do to a contractual document between commercial parties.

In November 30 2020, the Nigerian Court of Appeal delivered a third decision where it declined to enforce a Commonwealth of Virginia (in USA) Choice of Court Agreement.[3] In this connection, the author is of the view that the Court of Appeal’s decision was delivered per incuriam. This is the focus of this comment.

 

Facts

In this case, the claimant/respondent commenced action at the Kaduna High Court with a writ of summons and statement of claim dated the 18th December, 2018 wherein it claimed against the defendant/appellant, the sum of $18,103.00 (USD) being due and unpaid software licensing fee owed by them by virtue of the agreement between the parties dated 12th day of June, 2013.

The defendant/appellant filed a conditional appearance along with a Statement of defence and counter affidavit. Its argument, inter alia, was that by virtue of Article 12 and 13 of their agreement, the Nigerian court had no jurisdiction in this case. The relevant portion of their agreement reads as follows:

“ARTICLE 12
GOVERNING LAW: The Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, USA without regard to the principle of conflicts of any jurisdiction.”
“ARTICLE 13
With the exception of an action or suit for the Licensee’s failure to make any payment required hereunder when there was no suit or action arising under this Agreement may be brought more than one (1) year following the occurrence giving rise thereto. All suits and actions arising under this Agreement shall be brought in the Commonwealth of Virginia, USA and License hereby submits to the jurisdiction of the Courts of the Commonwealth of Virginia and the United States District Courts Sitting in Virginia.”

By a ruling delivered on the 11th December, 2019, the trial High Court entered judgment in favour of the claimant/respondent. The defendant/appellant appealed to the Nigerian Court of Appeal.

 

Decision

Though the Court of Appeal (Hussaini JCA) was of the view that the choice of court agreement in favour of the Commonwealth of Virginia (in USA) was clear and unambiguous and did not have any vitiating circumstances surrounding it (such as fraud), it unanimously held that it would not apply the principle of pacta sunt servanda (agreements between parties should be respected) in this case. It followed the obiter dictum of Oputa JSC which reads as follows:

“[Nigerian] Courts should not be too eager to divest themselves of jurisdiction conferred on them by the Constitution and by other laws simply because parties in their private contracts chose a foreign forum … Courts guard rather jealously their jurisdiction and even where there is an ouster clause of that jurisdiction by Statute it should be by clear and unequivocal words. If that is so, as is indeed it is, how much less can parties by their private acts remove the jurisdiction properly and legally vested in our Courts ? Our courts should be in charge of their own proceedings. When it is said that parties make their own contracts and that the courts will only give effect to their intention as expressed in and by the contract, that should generally be understood to mean and imply a contract which does not rob the Court of its jurisdiction in favour of another foreign forum.”[4]

In applying this obiter dictum to the facts of the case, Hussaini JCA held as follows:

“By reason of Section 6(1)(2)(6)(b) of the Constitution of FRN, 1999 (as amended)  the judicial powers vested in the Courts “extend to all matters between persons or between Government or authority and to any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person”. Consequently, no person or group of persons by their own private treaty or arrangements can agree to oust the jurisdiction and provisions vested in the Courts by the Constitution. Even where such clauses are put in place in or as a contract with international flavour to rob the Courts of the land of jurisdiction in favour of another foreign forum, the Courts of the land are obliged to apply the blue pencil rule to severe those clauses from the contract or ignore same by virtue of the Constitutional provision which confer on the Court, the jurisdiction and power to entertain those cases.
Talking about the jurisdiction of the Courts, the Court below, by virtue of Section 272 of the Constitution of Federal Republic of Nigeria, 1999 (as amended) has jurisdiction to entertain cases such as recovery of debts, as in the instant case on appeal. It is for this reason that clauses in the likes of Articles 12 and 13 in the Article of the Agreement should be ignored when determining the rights and liabilities between the parties herein in matters such as this and the trial Court took the right approach when it discountenanced same to reach the conclusion that it did.
In any case, is it for the recovery of the sum of $18,103, (USD) only claimed by the Respondents, that parties herein are required, by that contract or agreement to submit themselves to a foreign forum in Virginia, USA for adjudication of their case, without consideration of the concomitant procedural difficulties attendant thereto, as for instance, of having to return the case to Nigeria, the place where the contract was concluded initially, to register the judgment obtained at that foreign forum, in Virginia, USA, to be enforced in Nigeria? I think the Courts in Nigeria, fully seized of the case, will in the exercise of its discretion refuse the request to refer the case to a foreign forum for adjudication. It is for all the reasons already expressed in this discourse that I hold the firm view that the trial Court was competent or is competent when it entertained and adjudicated over the recovery suit or action filed by the Respondent against the Appellant.”[5]

 

Comments

There are five comments that could be made about the Court of Appeal’s decision (Hussaini JCA) in A.B.U. v VTLS.[6] First, the Court of Appeal (Hussaini JCA) in A.B.U. v VTLS[7] followed Oputa JSC’s obiter dictum in Sonnar (Nig) Ltd v Partenreedri MS Norwind.[8] It should be stressed that Oputa JSC’s obiter dictum is not binding on lower courts according to the Nigerian common law doctrine of stare decisis. In addition, Oputa JSC’s obiter dictum was a concurring judgment. Indeed, the Supreme Court in Sonnar (supra) had unanimously given preference to the enforcement of a foreign jurisdiction clause except where strong cause is advanced to the contrary.[9] The majority of the Supreme Court did not treat it as an ouster clause. It is incongruous to hold, on the one hand, that the Nigerian court would hold parties to their bargain in enforcing a foreign jurisdiction clause except where strong cause is shown to the contrary, and on the other hand, treat a foreign jurisdiction clause as if it were an ouster clause. In Sonnar, the choice of court agreement was not enforced because strong cause was shown to the contrary – the proceedings would be time-barred in a foreign forum, and the claimant would not have access to justice.

Furthermore, the Nigerian Supreme Court in another case held that where a plaintiff sues in Nigeria in breach of a foreign jurisdiction clause, Nigerian law “requires such discretion to be exercised by granting a stay unless strong cause for not doing so is shown. The burden of showing such strong cause for not granting the application lies on the doorsteps of…the plaintiff.”[10] The Supreme Court in this case enforced the choice of court agreement and stayed the proceedings in Nigeria because the plaintiff did not file a counter affidavit to demonstrate strong reasons why the proceedings should not be heard in a foreign forum chosen by the parties.[11]

If the ratio decidendi in the Supreme Court cases in Sonar and Nika are applied to the recent Court of Appeal’s decision in A.B.U. v VTLS (supra), it is clear that the Court of Appeal (Hussaini JCA) reached its decision per incuriam. There was nothing in the judgment to demonstrate that the plaintiff provided strong reasons (such as time bar in a foreign forum) why the choice of court agreement in favour of the Commonwealth of Virginia (in USA) should not be enforced. The argument that the choice of court agreement is an ouster clause without more is not a strong reason not to enforce the choice of court agreement.

Second, a foreign choice of court agreement does not mean the Nigerian court’s jurisdiction no longer exists (without jurisdiction) under the Nigerian Constitution, as the Court of Appeal (Hussaini JCA) held in this case. Such jurisdiction exists, but it is up to the Nigerian court in exercise of its jurisdiction to decide whether or not to stay proceedings. This view is consistent with the Nigerian Supreme Court’s decisions in Sonar and Nika. The fact that such proceedings are stayed and not dismissed means that a Nigerian court’s jurisdiction is not ousted.

Third, some Nigerian judges confuse choice of court with choice of law. The Court of Appeal (Hussaini JCA) also fell into this error. The choice of the law of the Commonwealth of Virginia is not the same thing as choosing the courts of the Commonwealth of Virginia. For example, the Nigerian courts could assume jurisdiction and apply the law of the Commonwealth of Virginia.

Fourth, looking at the bigger picture, I generally acknowledge that the principle of pacta sunt servanda in enforcing choice of court agreements are aimed at enhancing the efficacy of business transactions and, legal certainty and predictability in international commercial litigation. However, I must point out that despite the Nigerian Supreme Court decisions on the point that hold that choice of court agreements should be enforced except there are strong reasons to the contrary, I am generally not in favour of Nigerian courts declining jurisdiction in international commercial litigation. It ultimate hurts the Nigerian economy (e.g. less job for Nigerian lawyers), hampers access to Nigerian justice, and does not help Nigerian judges in strengthening our legal system. What is the solution? I suggest that in the future the Nigerian Supreme Court should apply the test of “interest of justice” in determining whether or not it will enforce a choice of court agreement. The burden of proof should rest on the claimant to manifestly demonstrate that taking into account all the relevant circumstances of the case, the interest of justice will not be served if the foreign choice of court agreement is enforced. I also suggest that in such cases where a foreign choice of court agreement is enforced in Nigeria, a stay should be granted. In addition, if it is sufficiently demonstrated that the chosen foreign forum later becomes inaccessible or impracticable for the claimant to sue, the Nigerian court in the interest of justice should retain jurisdiction to handle such claims.

Fifth, Nigeria should consider ratifying the Hague Choice of Court Convention, 2005. This Convention will work better in Nigerian courts if litigation is made attractive for international commercial actors, so they can designate Nigerian courts as the chosen forum. Speed, efficiency, legal aid for poor and weaker parties, and integrity of the Nigeria’s system are some of the issues that can be taken into account in enhancing Nigeria’s status as an attractive forum for international commercial litigation.

 

Conclusion

The Nigerian Court of Appeal has delivered three reported decisions on choice of court agreements in the year 2020. The recent Court of Appeal’s decision in A.B.U. v VTLS (supra) was reached per incuriam because it is inconsistent with Nigerian Supreme Court decisions that hold that a choice of court agreement should be enforced except there are strong reasons to the contrary.

The Nigerian Supreme Court in the future should rise to the occasion to create new tests for determining if a choice of court agreement should be enforced in Nigeria. These tests should reconcile the needs of access to Nigerian justice on the one hand, and respecting the contractual agreements of parties to designate a foreign forum.

The Nigerian government should create the necessary infrastructure and requirements that will enable Nigeria effectively ratify and implement the Hague Convention on Choice of Court agreements, 2005.

[1] Kashamu v UBN Plc (2020) 15 NWLR (Pt. 1746) 90; Damac Star Properties LLC v Profitel Limited (2020) LPELR-50699(CA); A.B.U. v VTLS (2020) LPELR-52142 (CA).

[2] Kashamu v UBN Plc (2020) 15 NWLR (Pt. 1746) 90; Damac Star Properties LLC v Profitel Limited (2020) LPELR-50699(CA).

[3] A.B.U. v VTLS (2020) LPELR-52142 (CA).

[4](1987) 4 NWLR 520, 544 – 45, approving Lord Denning’s statement in The Fehmarn [ 1958 ] 1 All ER 333 , 335 . Cf. Conoil Plc v Vitol SA (2018) 9 NWLR 463, 489 (Nweze JSC) – “our courts will only interrogate contracts which are designed to rob Nigerian courts of their jurisdiction in favour of foreign fora or where, by their acts, they are minded to remove the jurisdiction, properly and legally, vested in Nigerian courts.” See also LAC v AAN Ltd (2006) 2 NWLR 49, 81 (Ogunbiyi JCA as she then was).

[5]A.B.U. v VTLS (2020) LPELR-52142 (CA) 15 – 18.

[6] (2020) LPELR-52142 (CA),

[7] (2020) LPELR-52142 (CA),

[8](1987) 4 NWLR 520, 544 – 45

[9] Even Oputa JSC held thus: ‘Where a domestic forum is asked to stay proceedings because parties in their contract chose a foreign Court … it should be very clearly understood by our courts that the power to stay proceedings on that score is not mandatory. Rather it is discretionary which in the ordinary way, and in the absence of strong reasons to the contrary will be exercised both judiciously and judicially bearing in mind each parties right to justice ’ –Sonnar (supra) at 545 (emphasis added).

[10] Nika Fishing Company Ltd v Lavina Corporation (2008) 16 NWLR 509, 535 (Mohammed JSC, as he then was).

[11] Conoil Plc v Vitol SA (2018) 9 NWLR 463, 489 (Nweze JSC), 500-1 (Okoro JSC), 502 (Eko JSC).

On 5 March 2021, the Conclusions & Decisions of the HCCH governing body, the Council on General Affairs and Policy (CGAP), were released. Click here for the English version and here for the French version.

Although there is a wide range of topics discussed, I would like to focus on three aspects: gender issues, the Jurisdiction Project and future meetings.

1) Today is International Women’s Day and there are important conclusions on gender issues. The Conclusions & Decisions No 52-54 read as follows:

“G. Geographic Representation

“52. Reaffirming the principles of universality and inclusiveness, CGAP reiterated its commitment to ensuring appropriate geographic representation at the HCCH. Recognising the importance of this issue, CGAP agreed to maintain this item on the agenda for its 2022 meeting. CGAP invited the  PB  to facilitate,  within  existing  resources,  informal  consultations  ahead  of  the  2022 meeting of CGAP,  through in-person meetings, while ensuring the opportunity for any HCCH Member to participate.

53. In the context of this discussion, CGAP also recalled the importance of ensuring appropriate gender representation.

54. CGAP requested the  PB  to  provide  a  historical  overview  of  geographic  and  gender  representation in the key bodies and groups of the Organisation ahead of the 2022 meeting of CGAP.” (our emphasis)

Awareness of gender representation is always a victory for everyone!

2) As you may know, a spin-off from the Judgments Project was the establishment of the Experts’ Group on the Jurisdiction Project. The purpose of this Group was to continue its discussions on “matters relating to direct jurisdiction (including exorbitant grounds and lis pendens / declining jurisdiction)”, “with a view to preparing an additional instrument”. It met 5 times.

A report of the Experts’ Group was presented to the CGAP. It includes an aide-mémoire of the Chair (Annex I) and a Summary of the Responses to the Questionnaire on Parallel Proceedings and Related Actions in Court-to-Court Cases (Annex II). See here the Report on the Jurisdiction Project.

Interestingly, three options on the possible types of future instrument(s) were discussed by the Experts’ Group but views were divided: [Option A] Binding instrument on direct jurisdiction, including on parallel proceedings; [Option B] Binding instrument on parallel proceedings, and a binding additional protocol on direct jurisdiction; [Option C] Binding instrument on parallel proceedings, and a non-binding instrument (e.g., model law, guiding principles, etc.) on direct jurisdiction (see page 5).

A clear and strong preference was expressed for Options A and C (experts were divided).

In my personal opinion Option C seems to be the more sensible option. As expressed by the experts favoring this option: “[…] with  a  common  consideration being that diverse legal backgrounds and jurisdictional rules from around the world would  make  a  binding  instrument  on  direct  jurisdiction  difficult  to  conclude  and  to  implement.  These experts also noted that Option A may not be feasible due to existing differences in opinion of experts and considering past similar attempts. In this context, they considered it more useful to develop  a  soft  law  instrument  on  direct  jurisdiction  and  were  open  to  considering  the  viability  of  different  types  of  soft  law  instruments  such  as  a  model  law,  principles,  or  guidelines.  Given  the  need  to  deal  with  parallel  proceedings  in  practice,  they  expressed  a  preference  for  developing  a  binding instrument on parallel proceedings.”

Following the conclusion of the work of the Experts’ Group on the Jurisdiction Project, a new Working Group on matters related to jurisdiction in transnational civil or commercial litigation was established, and Professor Keisuke Takeshita (Japan) was invited to chair the Working Group.

The Conclusion & Decision No 9 of the CGAP reads:

“9. In continuation of the mandate on the basis of which the Experts’ Group had worked, CGAP mandated:

a. The Working Group to develop draft provisions on matters related to jurisdiction in civil or commercial matters,  including  rules  for  concurrent  proceedings,  to  further  inform  policy  considerations  and  decisions  in  relation  to  the  scope  and  type  of  any  new  instrument.

b. The Working Group to proceed in an inclusive and holistic manner, with an initial focus on developing binding  rules  for  concurrent  proceedings  (parallel  proceedings  and  related  actions  or  claims),  and  acknowledging  the  primary  role  of  both  jurisdictional  rules  and  the  doctrine  of  forum  non  conveniens,  notwithstanding  other  possible  factors, in developing such rules.

c. The Working Group to explore how flexible mechanisms for judicial coordination and cooperation can support  the  operation  of  any  future  instrument  on  concurrent  proceedings and jurisdiction in transnational civil or commercial litigation.

d. The PB to  make  arrangements  for  two  Working  Group  meetings  before the 2022 meeting of CGAP, with intersessional work, so as to maintain momentum. If possible, one meeting will be held after the northern hemisphere summer of 2021, and another in early 2022, with a preference, where possible, for hosting in-person meetings” (our emphasis).

3) With regard to future meetings, there are a few meetings in the pipeline, among them:

Special Commission meetings (SC – basically, a global meeting of experts)

• Special Commission on the practical  operation  of  the  2007  Child  Support  Convention  and  its  Protocol – postponed to March-June 2022
• Special Commission on the Apostille Convention + 12th e-APP Forum – to be held online in October 2021
• Special Commission on the practical  operation  of  the  1993  Adoption  Convention – postponed to July 2022

Edition  2021  of  HCCH  a|Bridged will focus  on  the  2005 Choice  of  Court  Convention (incl. and “subject  to  available  resources,  the  circulation  of  a  brief  questionnaire  to  elicit  reasons  as  to  why  more  States  have  not  become  party  to  the  Convention”).