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A new HCCH Convention … almost here.
Posted for the Permanent Bureau of the Hague Conference on Private International Law:
Today, the HCCH finalised the text for a new multilateral treaty: the 2019 HCCH Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.
The 2019 HCCH Judgments Convention will be a single global framework, enabling the free circulation of judgments in civil or commercial matters across borders. It will be essential to reducing the transactional and litigation costs in cross-border dealings and to promoting international access to justice. It will provide a legal regime that further increases certainty and predictability in cross-border dealings, promotes the better management of transaction and litigation risks, and which shortens timeframes for the recognition and enforcement of a judgement in other jurisdictions.
The 2019 HCCH Judgments Convention will provide better, more effective, and cheaper justice for individuals and businesses alike – a gamechanger in international dispute resolution.
The Final Act will be signed during a ceremony which will take place tomorrow, 2 July 2019, in the Great Hall of Justice in the Peace Palace.
Follow the HCCH on this journey with #2019HCCHDS and #2019HCCHJudgments
The thing that should not be: European Enforcement Order bypassing acta jure imperii
In a dispute between two Cypriot citizens and the Republic of Turkey concerning the enforcement of a European Enforcement Order issued by a Cypriot court, the Thessaloniki CoA was confronted with the question, whether the refusal of the Thessaloniki Land Registry to register a writ of control against property of the Turkish State located in Thessaloniki was in line with the EEO Regulation.
I. THE FACTS
The dispute began in 2013, when two Cypriot citizens filed a claim for damages against the Republic of Turkey before the Nicosia Disctrict Court. The request concerned compensation for deprivation of enjoyment of their property since July 1974 in Kyrenia, a city occupied by the Turkish military forces during the 1974 invasion on the island. The Kyrenia District Court (Eparchiakó Dikastírio Kerýneias), which operates since July 1974 in Nicosia, issued in May 2014 its ruling, granting damages to the claimants in the altitude of 9 million €. Almost a year later, the latter requested the same court to issue a certificate of European Enforcement Order. The application was granted. Within the same year, the claimants filed an application before the Athens Court of first Instance for the recognition and enforcement of the Cypriot judgment. Prima facie it seems to be a useless step, however there was a rationale behind it; I will come back to the matter later on. The Athens court granted exequatur (Athens CFI 2407/2015, unreported).
Following almost a year of inactivity, the claimants decided to proceed to the execution of their title by attaching property of the Turkish State in Thessaloniki. Pursuant to domestic rules, the enforcement agent serves the distraint order to the debtor; afterwards, (s)he requests the order to be registered at the territorially competent land registry. Both actions are imperative by law. At this point, the chief officer of the land registry refused to proceed to registration, invoking Article 923 Greek Code of Civil Procedure (CCP) which reads as follows: Compulsory enforcement against a foreign State may not take place without a prior leave of the Minister of Justice. The claimants challenged the registrar’s refusal by filing an application pursuant to Article 791 CCP, which aims at the obligation of the registrar to proceed to registration by virtue of a court order. The Thessaloniki 1. Instance court dismissed the application (Thessaloniki CFI 8363/2017, unreported). The claimants appealed.
II. THE RULING
The Thessaloniki CoA dismissed the appeal, confirming the first instance ruling in its entirety. It began from the right of the land registrar to a review of legality, thus the right to examine the request beyond possible formality gaps. It then referred to Articles 6.1 ECHR, 1 of the 1. Additional Protocol to the ECHR, and Articles 2.3 (c) and 14 of the 1966 International Covenant on Civil and Political Rights, in order to support the right to enforcement against a foreign State. The appellate court continued by analyzing Article 923 CCP and its importance in the domestic legal order. It emphasized the objective of the provision, i.e. to estimate potential repercussions and to avoid possible tensions with the foreign State in case of execution. The court founded its analysis on two ECHR rulings, i.e. the judgments in the Kalogeropoulou and Others v. Greece and Germany (59021/00), and Vlastos v. Greece (28803/07) cases, adding two rulings of the Full Bench of the Greek Supreme Court from 2002. Finally, the court concluded that there has not been a violation of the EEO Regulation, stating that the process under Article 923 CCP is not to be considered as part of intermediate proceedings needed to be brought in the Member State of enforcement prior ro recognition and enforcement; hence, the rule in Article 1 of the EEO Regulation is not violated.
III. COMMENTS
In general terms, one has to agree with the outcome of the case. Nevertheless, there are a number of issues to be underlined, so that the reader gets the full picture of the dispute.
- The claim before the Kyrenia District Court bears some similarities with the ruling of the ECJ in the Apostolidis/Orams case: The Court decided then that: The suspension of the application of the acquis communautaire in those areas of the Republic of Cyprus in which the Government of that Member State does not exercise effective control, provided for by Article 1(1) of Protocol No 10 on Cyprus to the Act concerning the conditions of accession [to the European Union] … does not preclude the application of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters to a judgment which is given by a Cypriot court sitting in the area of the island effectively controlled by the Cypriot Government, but concerns land situated in areas not so controlled. In both cases, the property under dispute was located in the Kyrenia district. The difference lies in the defendants: Unlike the Orams case, the respondent here was a foreign State. Article 4 Brussels I Regulation grants the right to claimants to avail themselves of domestic rules of jurisdiction, which is presumably what the claimants did in the case at hand.
- The issue of the EEO certificate seems to run contrary to Article 2.1 EEO Regulation. The matter was not examined by the Thessaloniki courts, which focused on the subject matter, i.e. the refusal of the land registrar on the grounds of Article 923 CCP.
- The exequatur proceedings in Greece seem to be superfluous, given that a EEO may be enforced without the need for a declaration of enforceability (Article 5 EEO Regulation). One reason which possibly triggered additional exequatur proceedings might have been the fact that, unlike the EEO Regulation, the acta iure imperii clause was not included in the Brussels I Regulation (see Article 1.1). Still, the matter was examined in the Lechouritou case even before the entry into force of the Brussels I bis Regulation. Hence, it would not have made a difference in the first place.
- The appellate court focused on the compatibility of Article 923 CCP with the EEO Regulation. However, the claimants carried out the execution in Greece on the grounds of the Cypriot judgment, not the EEO certificate.
Finally, two more points which should not be left without a comment.
- Throughout the proceedings, the Turkish State demonstrated buddhistic apathy. There was not a single remedy brought forward, neither in Cyprus nor in Greece. It was a victory in absentia. A reason for this stance was surely the following: The property of the Turkish state in Thessaloniki hosts one of its General Consulates in Greece. This is not just another Turkish Consulate around the globe: It is built upon the place where the father of the Turkish Republic (Mustafa Kemal Atatürk) was born. It also includes the house where he was raised.
- The Thessaloniki CoA emphasized that a potential refusal of the Greek Minister of Justice to grant leave for execution would not harm the essence of the Cypriot judgment: Enforceability and res iudicata remain untouched; hence, the claimants may seek enforcement of the judgment in the foreign country, i.e. Turkey… The argument was ‘borrowed’ by the ruling of the ECJ in the Krombach case (which is cited in the text of the decision); therefore, it is totally alien to the case at hand. Even if the claimants were to find any assets of the Turkish Republic in the EU, like the Villa Vigoni in Italy, the ruling of the ICJ in the case Germany v. Italy: Greece intervening) would serve as a tool to grant jurisdictional immunity to the Turkish state.
IV. CONCLUSION
Article 923 CCP is the first line of defence for foreign states in Greece. In the unlikely event that the Greek Minister of Justice grants leave for execution, a judgment creditor will be confronted with a second hurdle, if (s)he’s aiming at the seizure of property similar to the case discussed here: the maxim ne impediatur legatio (ad hoc see Greek Supreme Court, 29 November 2017, decision no. 1937/2017, reported in English here). Hence, the chances to capitalize on the enforceable title are close to zero.
Rethinking COMI in the Age of Multinational, Digital and Glocal Enterprises
Written by Renato Mangano, Professor of Commercial Law at the University of Palermo (Italy).
Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings failed to provide a definition of COMI (centre of main interests), either in Article 2, which was specifically devoted to definitions, or in Article 3, which regulated international jurisdiction.
For its part, Article 3(1) merely provided that “the courts of the Member State within the territory of which the centre of a debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings”. Article 3(1) further stipulated that “in the case of a company or legal person, the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary.”
Recital 13 specified that “the ‘centre of main interests’ should correspond to the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties”, but different views have been expressed as regards, in particular, the relation between the concept of ‘administration’ and the concept of ‘ascertainability by third parties’.
As a result, Article 3 of Regulation No 1346/2000 gave rise a number of disputes and was the object of several requests to the European Court of Justice (ECJ) for preliminary rulings, with Eurofood being the first case in point.
Eventually, Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (Recast) laid down new rules on COMI — a definition of COMI was introduced; the presumption aiming at better ascertaining COMI was extended to individuals as well; the judicial rule of thumb that evaluated negatively a debtor who had moved his/her/its COMI shortly before the request to open insolvency proceedings was incorporated into a mandatory rule; and eleven recitals, aiming at making this framework clearer and more easily applicable, were introduced (Recitals 25 to 34, and 53).
However, one may doubt whether these efforts have succeeded. The many disputes involving NIKI Luftfahrt GmbH are illuminating. NIKI was an insolvent company under Austrian law incorporated in Austria. However, NIKI was also a subsidiary of the Air Berlin PLC & Co. Luftverkehrs KG, better known as Air Berlin. This is a company under German law incorporated in Germany.
Therefore, the crucial question was: which Member State had jurisdiction to open main insolvency proceedings against NIKI? Did Austria or Germany have jurisdiction? The question was clear-cut but the answers to this question were various and contradictory. The NIKI dispute has at long last been settled, but the dynamic of the NIKI case is intriguing because it demonstrates that the new COMI rules still give rise to doubts as regards both the relation between the two elements constituting the COMI definition (i.e.between “the place where the debtor conducts the administration of its interests on a regular basis” and the place “which is ascertainable by third parties”), and the relation between the definition of COMI and the presumptions that are provided to make it easier to apply this definition.
Moreover, some legal counsels maintain that the new COMI rules could facilitate fraudulent COMI relocations. A company could move its registered office to another Member State which is less favourable towards its creditors; make the transfer public,e.g.by using the new address in correspondence; await the expiration of the three-month period laid down by the time limit to the presumption; and apply for a fraudulent, but a ‘legally authorized’ opening of insolvency proceedings in the new jurisdiction.
Mutatis mutandis, a similar idea is proposed as regards individuals. To our knowledge there is no evidence of cases where these proposals have facilitated fraudulent COMI relocations. However, the proposal to circumvent the new COMI rules deserves attention because it leverages some prescriptions which were conceived precisely to prevent a debtor from circumventing the COMI rules.
The problems with the new COMI rules do not end here, as I have demonstrated in a recent paper titled The Puzzle of the New European COMI Rules: Rethinking COMI in the Age of Multinational, Digital and Glocal Enterprises.
In fact, sometimes the investigation about ‘ascertainability by third parties’ could prove problematic. The more complex a business organization is, the more often this situation arises. This is because the more complex a business organization is, the easier it becomes for a firm to be split into many ‘units’ (the term is intentionally non-technical) which, on the one hand, are located in different countries and, on the other hand, are in contact with different groups of creditors: case by case, these groups of creditors may have differing perceptions as to where the firm is located.
Undoubtedly, problems of this nature may arise when insolvency occurs within a group of companies – Recital 53 of Regulation 2015/848 allows one single court to open one single set of insolvency proceedings concerning several companies belonging to the same group. But the investigation about ‘ascertainability by third parties’ could prove equally challenging when a firm conducts its relationships with suppliers and customers through digital networks, and even more so if this firm runs a business which is glocal, in the sense that it is characterized by both global and local considerations. The domain name “.com” gives no indication as to where a business is located and, even where the domain name uses a country code such as “.de” or “.fr”, there is no guarantee that the firm is established in that country, since it is relatively common practice to keep web servers geographically separated from the actual location of the enterprise.
It is highly probable that these shortcomings will result again in requests for preliminary rulings; it is also highly desirable that the ECJ provide an interpretation of the COMI rules which would prove crucial in resolving those specific issues that gave rise to such requests.
Arguably, this situation is less serious as regards the flaw affecting the rules which lay down the time limits to the applicability of the COMI presumptions – this flaw could probably be fixed by means of interpretation. However – as regards the flaw concerning the prerequisite of ‘ascertainability by third parties’– it is highly improbable that the ECJ will be able to solve this problem at the roots and, consequently, prevent subsequent litigation.
Even the most enthusiastic supporters of ECJ activism must admit that the European Court is not allowed to interpret the new COMI rules in a way that proves to be against both the letter and the spirit of the legal framework, for this power belongs to the regulator alone. To be more precise, this statement implies that the ECJ will be unable either to rule that the prerequisite ‘ascertainability by third parties’ would be unnecessary whenever this presence was de facto incompatible with that of ‘administration on a regular basis’, or to rule that the application of the COMI presumptions might disregard the COMI definition. Both rulings would infringe not only the letter of the new COMI rules but also the clearly traceable intention of the regulator.
Further, the ECJ might certainly rule that the COMI of a company X is located in a country Y by putting the COMI of that company into a system of relations with some elements which are considered as relevant to the case. However, since ascertainment of the COMI is case-sensitive and since the one-to-one relation between these factors and the debtor’s exact location cannot be established in a universal way, this ruling will not provide the interpreter with a general criterion that would hold good for any future cases.
News
AMEDIP’s upcoming webinar: child support cases between Mexico and the United States of America – 23 February 2023 (at 14:30 Mexico City time)
The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on Thursday 23 February 2023 at 14:30 (Mexico City time – CST), 21:30 (CET time). The topic of the webinar is the Right to Child Support within the international framework – Mexico and the United States of America and will be presented by Claudia Sierra Martínez of the Mexican Ministry of Foreign Affairs (SRE) (in Spanish).
By way of context, please note that Mexico is not yet a party to the 2007 HCCH Child Support Convention but the United States is. On the other hand, Mexico is a party to the Inter-American Convention on Support Obligations and the United Nations Convention on the Recovery Abroad of Maintenance but the United States is not. Faced with this conundrum and given the great number of Child Support cases between these two countries, other solutions have been made available (think for example of US domestic law / bilateral practices).
The details of the webinar are:
Link: https://us02web.zoom.us/j/87996362538?pwd=QjNuZThqNUpTVHQ3cFZaZ1BXZ0YzQT09
Meeting ID: 879 9636 2538
Password: AMEDIP
Participation is free of charge.
This event will also be streamed live: https://www.facebook.com/AmedipMX
Lex & Forum, Volume 4/2022 – A special on cross border family law
Family disputes constitute the majority of cases of cross-border nature. The free movement of people within the European judicial space and the integration of third-country nationals has created a considerable number of multinational family structures, that give rise to a significant number of legal disputes, leading to complex conflict of law issues. It is no coincidence that in the area of family disputes one could identify the most extended number of EU legislative initiatives, from Regulation 1347/2000 (Brussels II Regulation) on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility for children of both spouses, followed by the “successors”, i.e., Regulation No 2201/2003 (Brussels IIa Regulation) and Regulation 2019/1111 (Brussels IIb Regulation), Regulation 4/2009 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, Regulation 1259/2010 (Rome III Regulation) on the applicable law to divorce and legal separation, as well as and Regulations 2016/1103 and 2016/1104 on international jurisdiction, applicable law, recognition and enforcement of decisions in matters of matrimonial property regimes and, registered partners, respectively, covering the maximum scope of personal or property family disputes. It is also notable that, as concluded after examining the data kindly brought to our attention by the Thessaloniki Court of First Instance Department of Publications, out of one hundred court judgments related to international law issued in the year 2022 by the above mentioned Court, approximately 70% of them concerned family disputes in a broader sense, either within the EU, or related to third countries, demonstrating the importance of the matter in practice.
Cross-border family disputes are the Focus of the current issue and were examined in an online conference of Lex and Forum (8.12.2022), under the Presidency of the Supreme Court Judge, Ms. Evdoxia Kiouptsidou-Stratoudaki. The topics of the conference concern the international jurisdiction on matrimonial and child custody disputes according to Regulation No 2019/1111, by Ioannis Delikostopoulos, Professor at the Faculty of Law of the University of Athens; the practical problems of the application of the Regulations for family disputes and parental custody disputes, by Ms. Aikaterini Karaindrou, Judge at the First Instance Court; the agreements on the exercise of parental care according to Regulation No 2019/1111 and their relationship with Greek law, by Aikaterini Fundedaki, Professor at the Law Faculty of the University of Thessaloniki; Law No 4800/2021 and the harmonization of the Greek legal provisions with international law, by Ioannis Valmantonis, Judge at the Court of Appeal, and the new Hague Convention for the protection of adults, by Dr. Vasileios Sarigiannidis, Head of the Private International Law Department at the Hellenic Ministry of Justice.
The present issue also contains case comments on the CJEU judgment, 15.11.2022, Senatsverwaltung/TB, on the recognition of dissolution of marriage from another member state, by Dr. Apostolos Anthimos; the CJEU judgments, 15.11 .2021, ??/FA and 10.2.2022, OE/VY, on the concept of habitual residence and, respectively, the importance of the length of residence of the claimant in a member state for the establishment of international jurisdiction under the Brussels IIa/b Regulation, by Paris Arvanitakis, Professor at the University of Thessaloniki, and . Stefania Kapaktsi, Judge at the Court of First Instance; the Greek Supreme Court judgment No 30/2021 on the declaration of enforceability of a foreign decision on the distribution of the spouses’ common property, by Dr. Apostolos Anthimos; the Greek Supreme Court cases No 48/2021 and 54/2021 on international child abduction, by Ioannis Valmantonis, Judge at the Court of Appeal; the judgment of the Thessaloniki First Instance Court No 1285/2022, on the temporary regulation of contact rights according to the Brussels IIb Regulation and the 1996 HAGUE Convention, by Professor Delikostopoulos, and the German Supreme Court judgment dated from 29.9. 2021, on the non-opposition to public order of a marriage performed by a proxy, with a note by Dr. Anthimos. The jurisprudence section also contains the CJEU decisions, 22.4.2022, Volvo/RM, regarding the temporal scope of the Directive No 2014/104 and their incorporation into substantive or procedural EU law, accompanied by the Opinion of the Advocate General, Mr. Athanassios Rantos, with a case comment by Dr. Stefanos Karameros, PhD, and the Court of First Instance case No 13535/2019, on the possibility of implicit prorogation of jurisdiction in case of provisional measures in the Brussels Ia Regulation, despite a contrary agreement, with a case comment by Ioanna Pissina, PhD Candidate.
The issue is completed with the Praefatio by Vassilios Christianos, Emeritus Professor at University of Athens, and former Director of the Center of International and European Economic Law, regarding the contribution of the comparative method to EU procedural law; the expert opinion by Dimitrios Tsikrikas, Professor at the Athens Faculty of Law, on the scope of application of choice-of-court agreements in bond loans and interest rate contracts; and finally, the analysis of practical issues on the recognition of foreign divorce decrees, focusing on the difficulties of the applicants to prove the finality of the foreign decision (L&F Praxis), by Dr. Anthimos.
[editorial prepared by Professor Paris Arvanitakis, scientific director of Lex & Forum]
Virtual Workshop on March 7: Dário Moura Vicente on Investment Arbitration
On Tuesday, March 7, 2023, the Hamburg Max Planck Institute will host its 31st monthly virtual workshop Current Research in Private International Law at 11:00 a.m. – 12:30 p.m. (CET). Dário Moura Vicente (University of Lisbon) will speak, in English, about the topic
Investment Arbitration – Lost in the Bermuda Triangle of EU Law, Public International Law and Private International Law?
The presentation will be followed by open discussion. All are welcome. More information and sign-up here.
If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de.