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The Italian Supreme Court rules on the effects of the opposition to a European Order for Payment
In case of opposition to a European Order for Payment, Article 17 (1) of Regulation (EC) No 1896/2006 (latest consolidated version) states: “the proceedings shall continue before the competent courts of the Member State of origin unless the claimant has explicitly requested that the proceedings be terminated in that event. The proceedings shall continue in accordance with the rules of: (a) the European Small Claims Procedure laid down in Regulation (EC) No 861/2007, if applicable; or (b) any appropriate national civil procedure”.
Moreover: 1) the transfer to civil proceedings is governed by the law of the State where the order has been issued, 2) this law must not prejudice the claimant’s position in the subsequent proceedings, and 3) the claimant is to be informed both of the opposition and of any transfer to civil proceedings.
Recital 24 of Regulation (EC) No 1896/2006 makes it clear that the opposition leads “to an automatic transfer of the case to ordinary civil proceedings”, adding that “the concept of ordinary civil proceedings should not necessarily be interpreted within the meaning of national law”.
The effects of the opposition in the CJEU’s case-law
The CJEU in turn has consistently stressed, on the one hand, that Article 17 produces only said effects and, on the other hand, that the transfer to ordinary civil proceedings is automatic (13 June 2013, Case C-144/12, Goldbet, para. 31; see also 4 September 2014, Joined Cases C-119/13 and C-120/13, eco cosmetics, para. 38).
In Flight Refund (10 March 2016, Case C-94/14), the Court sketched a slightly different scenario when holding that “the proceedings automatically continue […] in the Member State of origin of the order […]”, but further confirming that the continuation occurs “in accordance with the rules of ordinary civil procedure […]” (para. 52; emphasis added).
No national provisions for the transfer: how to fill the gap according to the Italian Supreme Court
What seems definite from the foregoing is that, if the claimant were not to request the termination of the proceedings, the opposition triggers the transfer to ordinary national civil procedure (or to the European Small Claims Procedure) under the law of the Member State of origin.
But, what if the lex fori does not provide rules as to the transfer?
An answer comes from the Italian Supreme Court (Corte di Cassazione) in a recent judgment (31 January 2019 no 2840). Although the Corte di Cassazione has reasoned under the initial version of the Regulation (EC) No 1896/2006, it infers from this latter certain principles which may be also applied to the latest version.
The Italian Court holds, in fact, that the continuation of the proceedings is not a matter left to national law, but it is directly governed by the Regulation through the reference to the national provisions that apply to ordinary civil proceedings.
The Member State has to apply the ordinary, normal form of national proceedings which apply to the disputed claim as if the claimant resorted directly to them.
In case the national legal order lacks rules to govern the transfer and determine the specific ordinary civil proceeding triggered by the opposition, the Corte di Cassazione puts forward the following solution.
First, the judge who issued the order is entitled not only to inform the claimant of the opposition, but also to give him a term to bring the action under the ordinary procedural rules. Second, the claimant may choose, among the ordinary civil proceedings, those that better suit the claim for which he resorted to the European procedure.
The Regulation does not allow the judge to lead the transfer, especially by determining the national rules governing the ordinary proceeding.
On the contrary, a national rule in case the claimant does not comply with the term to bring the action exists whereby the proceeding is extinguished (Article 307 (3), Italian Code of Civil Procedure).
A new “choice” for the claimant
The Italian Supreme Court finds in the Regulation the ground for providing the claimant with a sort of “choice of proceedings”.
Recalling the emphasis that both the Regulation and the CJEU put on the automatism in the “continuation/transfer” to the ordinary civil proceeding, what automatically comes out from the judgment of the Corte di Cassazione seems such “choice of proceedings” rather than the very “continuation/transfer”.
Moreover, on closer inspection, since the would-be ordinary proceeding is extinguished if the claimant makes the term to bring the action expire, the real “choice” lies between the continuation or the termination of the whole proceeding.
Perhaps the “choice” is not well founded in the Regulation, but…
The Italian Supreme Court’s effort to counterweigh the lack of national provisions is certainly worthwhile. As is it that to forge the transfer regime in compliance with the Regulation.
However, just reasoning with the Regulation in mind, one may wonder whether the aforementioned “choice” is actually well founded.
According to the Italian Supreme Court, the Regulation entitles the claimant to “explicitly” choose what national proceeding is to be applied. Furthermore, even though the claimant has not explicitly requested under the Regulation to terminate the proceedings following the debtor’s opposition, he is again requested, this time under Italian law, to possibly reveal such willingness by making the term expire without bringing the action.
Where is in the Regulation the room for such “choices”? Actually, where is the room for “choices” other than that to explicitly oppose to the transfer?
These doubts increase under the latest version of the Regulation.
Pursuant to Article 7 (4), the claimant may indicate to the court “which, if any, of the procedures listed in points (a) and (b) of Article 17(1) he requests to be applied to his claim in the subsequent civil proceedings”, unless he indicates to the court that “he opposes a transfer to civil proceedings […] in the event of opposition by the defendant”.
Article 17, which gives the claimant the alternative between the European Small Claims Procedure and any appropriate national civil procedure, adds that where the claimant has not indicated one of these procedures (or he has requested the application of the European Small Claims Procedure to a claim that does not fall within the scope of Regulation (EC) No 861/2007), “the proceedings shall be transferred to the appropriate national civil procedure” (para. 2; emphasis added).
Consequently, the Appendix 2 to the Application for a European Order for Payment (form A) puts in the claimant’s hand the option to request: 1) the discontinuance of the proceedings, or 2) the continuation in accordance with the rule of the European Small Claim Procedure, if applicable, or 3) the continuation in accordance with any appropriate national civil procedure.
Once again, where is the room for “choices” other than that to explicitly oppose to the transfer, or to request that the proceedings be continued under the European Small Claim Procedure or under the appropriate national civil procedure? Moreover, may the judgment as to the “appropriateness” of the national civil procedure be left to the claimant? May it be left to him even when the request to apply the European Small Claim Procedure is ungrounded because the claim falls outside the scope of Regulation (EC) No 861/2007? Who decides about the lack of “appropriateness”? Accordingly, what happens in case the claimant brings an action for civil proceedings that are not “appropriate” or suitable for the claim he sought to satisfy through the European Order for Payment procedure?
…the “choice” logically is the best way not to prejudice the claimant
All things considered, a room in the Regulation (EC) No 1896/2006 seems to unfold more for further judge’s burdens than for further claimant’s “choices” when it comes to governing the transfer under Article 17 in absence of specific national provisions.
However, it’s worth recalling that Article 17 (3) provides that “where the claimant has pursued his claim through the European order for payment procedure, nothing under national law shall prejudice his position in subsequent civil proceedings”.
It goes without saying that the claimant is not prejudiced, but fully protected, if he may even choose the national civil proceedings after the debtor’s opposition and benefits from a second choice between continuing or terminating the whole proceeding.
What about the defendant?
Despite being inclined to safeguard the claimant, the Regulation pays close attention also to the rights of the defendant.
Therefore, it should not be underestimated, as a concluding remark, that “[i]n the European order for payment, the defendant shall be informed that […] where a statement of opposition is lodged, the proceedings shall continue before the competent courts of the Member State of origin in accordance with the rules of ordinary civil procedure […]” (Article 12 (4)(c)).
It is debatable whether, from the defendant’s standpoint, the “accordance” with the rules of ordinary civil procedure may also include – in the silence of the Regulation and in absence of national rules governing the transfer – the “accordance” with the claimant’s choice of the national procedure that the defendant may eventually undergo.
The doubts increase if one considers that, unlike the claimant, who would benefit from a series of choices, the defendant has only two means (except for the remedies) to impinge on the procedural destiny of the disputed claim (to pay the amount or to oppose the order), which both result in the European procedure’s closing.
Ultimately, the idea that the claimant may choose the national civil proceeding and profits from a second choice between continuing or terminating the whole proceeding seems to unbalance the position in which the Regulation has placed the claimant and the defendant after the order has been issued.
Admissibility of a reference for a preliminary ruling regarding the issue of a certificate under Article 53 of Regulation No 1215/2012: On the legal nature of the judgment delivered
Case C-579/17
BUAK Bauarbeiter-Urlaubs- u. Abfertigungskasse v GRADBENIŠTVO KORANA
The CJEU published last week a judgment on a request for a preliminary ruling by the Vienna Labour and Social Security Court. The facts of the case are presented under recitals 21-31. The Austrian court referred the following question to the Court:
‘Is Article 1 of Regulation … No 1215/2012 … to be interpreted as meaning that proceedings involving the assertion of claims by [BUAK] for wage supplements against employers as a result of the posting to Austria of workers without a habitual place of work in Austria for the purposes of performing work or in connection with the hiring-out of workers, or against employers established outside Austria as a result of the employment of workers with a habitual place of work in Austria, constitute “civil and commercial matters” to which the aforementioned regulation applies, even where such claims by BUAK for wage supplements concern employment relationships governed by private law and serve to cover workers’ claims to annual leave and payment in respect of annual leave, governed by private law and arising from employment relationships with employers, but nevertheless
– both the amount of the workers’ claims against BUAK for annual leave pay and that of BUAK’s claims against employers for wage supplements are determined not by contract or collective bargaining agreement but, instead, by decree of a Federal Minister,
– the wage supplements owed by employers to BUAK serve to cover not only the expenses for the payment in respect of annual leave payable to workers but also BUAK’s expenses for administrative costs, and
– in connection with the pursuit and enforcement of its claims for such wage supplements, BUAK has more extensive powers by law than a private person, in that
– employers are required to submit reports to BUAK on specific occasions as well as at monthly intervals, using communication channels set up by BUAK, to take part in and allow BUAK’s inspection measures, grant BUAK access to wage and business records and other documents, and provide information to BUAK, failing which a fine may be imposed, and
– in the event that an employer breaches its obligations to provide information, BUAK is entitled to calculate the wage supplements owed by the employer on the basis of BUAK’s own investigations, whereby, in that case, BUAK has a claim for wage supplements in the amount calculated by BUAK, irrespective of the actual circumstances of the posting or employment?’
1. The admissibility of the request
Prior to answering the question referred, the Court examined the admissibility of the request. The novelty of the matter lies on the existence or non-existence of a judicial character for the issue of a certificate under Article 53 of Brussels I bis Regulation. In other words, the question was raised after the termination of the proceedings and the publication of the judgment. It came to the surface due to the reservations of the competent Austrian body to issue the above certificate, thus labelling the case with a civil or commercial nature. The answer was given in recital 41:
Consequently, the procedure for the issue of a certificate under Article 53 of Regulation No 1215/2012, in circumstances such as those at issue in the main proceedings, is judicial in character, with the result that a national court ruling in the context of such a procedure is entitled to refer questions to the Court for a preliminary ruling.
2. On the civil or commercial nature of the dispute
Following the affirmative answer to the admissibility issue, the Court proceeded to the examination of the legal nature of the case at hand. Its analysis extends to recitals 46-64, wherefrom the following could be highlighted:
- The exercise of public powers by one of the parties excludes a case from civil and commercial matters within the meaning of Article 1(1) of Regulation No 1215/2012 [Recital 49].
- The CJEU held that the Austrian court’s powers were limited to a simple examination of the conditions for the application of Paragraph 33h (2b) of the BUAG, with the result that, if those conditions are satisfied, the court cannot carry out a detailed examination of the accuracy of the claim relied on by BUAK [Recital 57].
- In so far as Paragraph 33h (2b) of the BUAG places BUAK in a legal position which derogates from the rules of general law regulating the exercise of an action for payment, by attributing a constitutive effect to the determination by it of the claim and by excluding, according to the referring court, the possibility for the court hearing such an action to control the validity of the information on which that determination is based, it must be concluded that that body acted, in that case, under a public law prerogative of its own conferred by law [Recital 60].
- In such a case, BUAK should be considered to be acting in the exercise of State authority in the context of a dispute such as that which led to the judgment delivered on 28 April 2017, which would have a major influence over the modalities for the exercise of that procedure, and therefore over its very nature, such that that dispute does not come within the concept of ‘civil and commercial matters’ or, therefore, within the scope of application of Regulation No 1215/2012 [Recital 61].
The Court dedicated only six recitals for the concept of social security and its exclusion pursuant to Article 1(2) (c) Brussels I bis Regulation [Recitals 65-70], concluding that, on the basis of facts delivered, the case does not come within the concept of social security for the purposes of the provision aforementioned.
3. Some thoughts on the ruling
The significance of the judgment is self-explanatory: Unlike its predecessor, the certificate under Art. 53 Brussels I bis is one of the core documents needed for direct enforcement in the country of destination. The previous exequatur stage is abolished; hence, the issue on the legal nature of the case is transferred to the court which would try the application for refusal. Therefore, the decision of the Austrian court to refer the matter to the CJEU should be endorsed; the same goes for the position of the latter in regards to the admissibility issue.
The case resembles a recent judgment of the Thessaloniki Court of 1st Instance, which refused to grant exequatur to a German Notice of the National Association of Statutory Health Insurance Physicians against a doctor of Greek origin, active in the region of Rhineland-Palatinate. As in the case of the Austrian BUAK, the notice was issued ex parte, but no court proceedings ensued in the country of origin. Moreover, the German authorities issued a certificate without questioning the legal nature of the matter at hand. Given that the case fell under the scope of Brussels I Regulation, the Greek judge denied exequatur, stating that the above notice was of an administrative nature, thus falling out of the Regulation’s ambit. The case is published in its original text in: Armenopoulos 2018, pp. 812 et seq. It is also reported in a case note I prepared for the German journal Praxis des Internationalen Privat- und Verfahrensrechts, see: Nichtanwendung der EuGVVO 2001 auf den Bescheid einer deutschen kassenärztlichen Vereinigung in Griechenland – LG Thessaloniki, 19.12.2017 – 19865/2017, IPRax (forthcoming).
What Does it Mean to Submit to a Foreign Forum?
The meaning of submission was the central question, though by no means the only one, in the Supreme Court of Canada’s decision in Barer v Knight Brothers LLC, 2019 SCC 13 (available here). Knight sought enforcement of a Utah default judgment against Barer in Quebec. The issue was governed by Quebec’s law on the recognition and enforcement of foreign judgments, which is set out in various provisions of the Civil Code of Quebec (so much statutory interpretation analysis ensued). Aspects of the decision may be of interest to those in other countries that have similar provisions in their own codes.
The court held that the Utah decision was enforceable in Quebec. Seven judges (Gascon J writing the majority decision) held that Barer had submitted to the Utah court’s jurisdiction. Two judges held that he had not. One of them (Brown J) held that the Utah court had jurisdiction on another basis, and so concurred in the result, while the other (Cote J) held it did not, and so dissented.
The majority held that in his efforts to challenge the Utah’s court’s jurisdiction, Barer had presented substantive arguments going to the merits of the dispute (para 6). It analysed various possible steps in a foreign proceeding that either would or would not constitute submission (paras 59-63). It was invited by Barer to consider the “save your skin” approach to submission, which would recognize that a defendant who both challenged jurisdiction and raised substantive arguments would not be taken to have submitted. It rejected that approach (para 68). Its core concern was to protect “the plaintiff’s legitimate interest in knowing at some point in the proceedings, whether or not the defendant has submitted to the jurisdiction” (para 62). It added that “plaintiffs who invest time and resources in judicial proceedings in a jurisdiction are entitled to some certainty regarding whether or not the defendants have submitted to the court’s jurisdiction” (para 67).
The majority acknowledged that in a case in which the process of the foreign forum required the raising of a substantive argument alongside a jurisdictional challenge, this could affect the determination of whether the defendant had submitted (para 75). But this was not such a case: the defendant had not established, as a factual matter, that this was such a feature of the Utah procedure (paras 75 and 78). Accordingly, the fact that Barer had raised a defence on the merits – that a pure economic loss rule barred the claim against him – amounted to submission (para 71).
In dissent, Justice Cote finds the majority’s test for submission to be “too strict” (para 212). She urged a “more flexible approach” which would allow a defendant to raise substantive arguments alongside a jurisdictional challenge (para 213). In her view, if “a broad range of arguments may convince a Utah court that it lacks jurisdiction over a matter … A defendant must be allowed to present those arguments” (para 219). While Gascon J put the onus of showing that the Utah process required raising substantive arguments at a particular time on the defendant, Cote J put that onus on the plaintiff, the party seeking to enforce the foreign judgment (para 223).
Brown J’s concurring decision did not comment at any length on the test for submission. He held that “I agree with my colleague Cote J. that Mr. Barer has not submitted to the jurisdiction of the Utah court merely by presenting one argument pertaining to the merits of the action in his Motion to Dismiss” (para 146; emphasis in original). This is consistent with Cote J’s approach to the meaning of submission.
There is a further interesting dimension to the reasons. Cote J held, in the alternative, that even if Barer had submitted, the plaintiff also had to show a real and substantial connection between the dispute and Utah before the judgment could be enforced (para 234). This engaged her in a complex argument about the scheme and wording of the Civil Code. Having identified this additional legal requirement, she held this was a case in which the submission itself (if established) was not a sufficiently strong connection to Utah and so the decision should nonetheless not be enforced (para 268). In contrast, Brown J held that there was no separate requirement to show such a connection to Utah (paras 135 and 141-42). Showing the submission was all that was required. The majority refused to resolve this interpretive dispute (para 88), holding only that on the facts of this case Barer’s submission “clearly establishes a substantial connection between the dispute and the Utah court” (para 88).
The judges disagreed about several other aspects of the case. Put briefly and at the risk of oversimplification, Brown J relied primarily on the notion that all parties and aspects of the dispute should have been before the Utah court. Barer was sufficiently connected with various aspects of the dispute, over which Utah clearly did have jurisdiction, that its jurisdiction over him was proper (see paras 99, 154 and 161-62). Neither Cote J nor Gascon J agreed with that approach. There are also disputes about what types of evidence are proper for establishing the requirements for recognition and enforcement and what law applies to various aspects of the analysis.
In a small tangent, the majority decision criticized the “presumption of similarity” doctrine for cases in which the content of foreign law is not properly proven and it offered a more modern explanation of why forum law is applied in such cases (para 76).
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.