Views
The Hague Convention on the International Protection of Adults – A position paper by experts involved in the ELI Adults’ Project
The European Law Institute (ELI) has launched in 2017 a project on The Protection of Adults in International Situations.
The adults to which the project refers are persons aged 18 or more who are not in a position to protect their interests due to an impairment or insufficiency of their personal faculties.
The project purports to elaborate on the resolution of 1 June 2017 whereby the European Parliament, among other things, called on the European Commission to submit ‘a proposal for a regulation designed to improve cooperation among the Member States and the automatic recognition and enforcement of decisions on the protection of vulnerable adults and mandates in anticipation of incapacity’.
The Commission has made known that it does not plan to submit such a proposal in the near future. At this stage, the Commission’s primary objective is rather the ratification of the Hague Convention of 13 January 2000 on the International Protection of Adults by the Member States that have not yet done so.
The ELI project builds on the idea that the Convention, which is currently in force for twelve States (ten of which are also Member States of the Union), generally provides appropriate answers to the issues raised by the protection of adults in situations with a foreign element. That said, the team of experts charged with the project has taken the view that it would be desirable for the Union to legislate on the matter, in a manner consistent with the Convention, with the aim of improving the operation of the latter among the Member States.
The ultimate goal of the project is to lay down the text of the measure(s) that the Union might take for that purpose.
While the project is still in progress, a position paper has been issued on 3 December 2018, signed by some of the members of the project team, to illustrate the main views emerged so far from the discussion.
The paper suggests that the Union should consider the adoption of measures aimed, inter alia, to:
(i) enable the adult concerned, subject to appropriate safeguards, to choose in advance, at a time when he or she is capable, the Member State whose courts should have jurisdiction over his or her protection: this should include the power to supervise guardians, persons appointed by court or by the adult (by way of a power of attorney), or having power ex lege to take care of the adult’s affairs;
(ii) enlarge the scope of the adult’s choice of law, so that he or she can also choose at least the law of the present or a future habitual residence, in addition to the choices currently permitted under Article 15 of the Hague Convention of 2000;
(iii) outline the relationship between the rules in the Hague Convention of 2000 and the rules of private international law that apply in neighbouring areas of law (such as the law of contract, maintenance, capacity, succession, protection against violence, property law, agency);
(iv) specify the requirements of formal and material validity of the choice of the law applicable to a private mandate, including the creation and exercise (and supervision by the courts) of such mandates;
(v) address the practical implications of a private mandate being submitted (by virtue of a choice of law, as the case may be) to the law of a State whose legislation fails to include provisions on the creation or supervision on such mandates, e.g. by creating a “fall-back” rule in cases of choice of the “wrong” law, which does not cover the matters addressed (or at least applying Article 15(1) of the Hague Convention of 2000);
(vi) extend the protection of third parties beyond the scope of Article 17 of the Hague Convention of 2000 to the content of the applicable law, and possibly also to lack of capacity (or clarifying that the latter question is covered by Article 13(1) or the Rome I Regulation);
(vii) make it easier for those representing and/or assisting an adult, including under a private mandate, to provide evidence of the existence and scope of their authority in a Member State other than the Member State where such authority has been granted or confirmed, by creating a European Certificate of Powers of Representation of an Adult (taking into account the experience developed with the European Certificate of Succession);
(viii) clarify and make more complete the obligations and procedures under Articles 22, 23 and 25 of the Convention in order to ensure ‘simple and rapid procedures’ for the recognition and enforcement of foreign measures; further reflection is needed to determine whether, and subject to which safeguards, the suppression of exequatur would be useful and appropriate for measures of protection issued in a Member State;
(ix) facilitate and encourage the use of mediation or conciliation.
The ELI project will form the object of a short presentation in the framework of a conference on The Cross-border Protection of Vulnerable Adults that will take place in Brussels on 5, 6 and 7 December 2018, jointly organised by the European Commission and the Permanent Bureau of the Hague Conference on Private International Law.
Blockchain Networks and European Private International Law
Written by Anton S. Zimmermann, Institute for Comparative Law, Conflict of Laws and International Business Law (Heidelberg)
Blockchain technology and its offspring have recently attracted considerable attention in both media and scholarship. Its decentralised nature raises several legal questions. Among these are, for example, the challenges that blockchain technology poses to data protection laws and the threats it creates with regard to the effective enforcement of legal claims.
This post sheds light on issues of private international law relating to blockchain networks from a European perspective.
The concept of blockchain technology and its fields of application
Blockchain technology – put simply – involves two fundamental concepts. Firstly, data is written into so-called “blocks”. Each block of data is connected to its respective predecessor using so-called “hashes” that are calculated for each individual block. Consequently, each block does not only include its own hash but also the hash of its predecessor, thereby fixating consecutive blocks to one another. The result is a chain of blocks – hence the name blockchain. Secondly, the entire blockchain is decentrally stored by the networks’ members. Whenever a transaction concerning the blockchain is requested, it isn’t processed by just one member. On the contrary: several members check the transaction and afterwards share their result with the other members in what can best be described as a voting mechanism: From among potentially different results provided by different members, the result considered correct by the majority prevails. This mechanism bears the advantage that any attempt to tamper with data contained in a blockchain is without consequence as long as only the minority of members is affected.
The potential fields of application for blockchain technology are manifold and far from being comprehensively explored. For example, blockchain technology can replace a banking system in the context of cryptocurrencies such as Bitcoin or it can be used to de-personalize monitoring and sanctioning of non-performance within a contractual relation. In short: Blockchain technology is an option whenever data is to be stored unalterably in a certain order without a (potentially costly) centralised monitoring entity.
Applicable rules of private international law
The first issue regarding blockchain technology and private international law concerns the applicable conflict rules. Blockchain technology involves a technical voting mechanism and, hence, requires a certain degree of cooperation between the members of the network. One might, therefore, be tempted to assume that blockchain networks constitute some kind of company. If this were indeed the case, the written conflict rules, especially those of the Rome I Regulation, would not be applicable (cf. Art. 1(1) lit. f) Rome I Regulation) and the unwritten conflict rules relating to international companies would claim application instead. However, this approach presupposes that the factual cooperation within a blockchain network suffices to create a company in the sense of European private international law. This is, however, not the case. The constitution of blockchain networks is only cooperative in a technical way, not in a legal one. The network is not necessarily based on a (written or unwritten) cooperation agreement and, therefore, lacks an essential prequisite of a company. Consequently, the determination of the law applicable to blockchain technology is not necessarily a question of international company law. Parties are, however, not precluded from creating a company statute that reflects the decentral structures of blockchain technology, whereas the mere decision to engage in a blockchain network does not suffice to create such a company.
Thus, the private international law of blockchain technology must also take into account the Rome I Regulation as well as the Rome II Regulation. Unfortunately, blockchain networks per se are not suitable as connecting factors: firstly, a decentralised network naturally escapes the classical European principle of territorial proximity. Secondly, the use of blockchain technology is usually not an end in itself but functionally subordinate to the purpose of another act, e.g. a contract, a company or a tort. This factor should, however, not be seen as a problem, but as a hint at a potential solution: although a superordinate act may render a blockchain network insufficient to determine the substantive law, the superordinate act itself can serve as a connecting factor.
The following two examples illustrate the proposed method of accessory connection and show that the European legal framework relating to private international law is capable to cope with several questions raised by novel phenomena such as blockchain technology. The remaining questions have to be dealt with on the basis of the principle of proximity.
First scenario: blockchain networks within centralised contracts
Blockchain technology often serves to achieve the goal of a centralised act. In this case, legal questions regarding the use, misuse and abuse of blockchain technology, e.g. access rights and permissions to write regarding data contained in a blockchain, should be governed by the substantive law governing the superordinate act.
To give an example: The parties of a supply chain decide to implement a blockchain in order to collectively store data concerning (1) when and in what quantity products arrive at their warehouse and (2) certificates of quality checks performed by them. As a result, production routes and quality control become more transparent and cost-efficient along the supply chain. Blockchain technology can thus be used e.g. to ensure the authenticity of drugs, food safety etc. The legal questions regarding the smart contract should in this scenario be governed by the substantive law governing the respective purchase agreement between the parties in question. The choice of law rules of the Rome I Regulation, hence, also determine the substantive law regarding the question how blockchain technology may or may not be used in the context of the purchase agreement. The application of blockchain technology becomes a part of the respective contract.
If one were to apply the substantive law governing the contract only to the contract itself but not to blockchain technology, one would create unjust distinctions: The applicable law should not depend on whether the parties pay an employee to regularly check on their warehouse and issue certificates in print, or whether they employ blockchain technology, achieving the same result.
Second scenario: blockchain networks within decentralised companies
The scenario described above shows that the decentralised nature of blockchain networks does not necessarily require special connecting criteria. This is a consequence of the networks’ primarily serving function to the respective superordinate entity.
Difficulties arise when parties agree on a company statute whose content reflects the decentralisation of blockchain technology. In this scenario, there is a decentral company that utilises only decentral technology as its foundation. A much-discussed case of this kind was “The DAO”, a former company based on blockchain technology. The DAO’s establishment was financed by investors providing financial resources in exchange for so-called tokens. These tokens can be described as the digital counterpart of shares and hence as an expression of the respective investor’s voting rights. Within the resulting investment community, voting rights were exercised in order to decide on investment proposals. The results of the votes were implemented automatically. The company thus consisted only of the investors and information technology but had no management body, no administrative apparatus, and no statutory seat.
Hence, the DAO did not only lack a territorial connection on the level of information technology, but also on the level of the companies’ legal constitution: it neither had an administrative seat nor a statutory seat. The connecting factors usually applied to determine the law applicable to companies were, therefore, ineffective. Because the DAO was a company, it was also exempt from the scope of the Rome I Regulation (cf. Art. 1 (2) lit. f. Rome I Regulation).
This vacuum of traditional conflict rules necessitates the development of new ones. There is no other valid connecting factor that could result in a uniform lex societatis: Especially the habitual residence or nationality of the majority of members is arbitrary as the company is built on a concept of decentralism and territorial detachment. Moreover, possible membership changes would lead to an intertemporally fluctuating statute whose current status could hardly be determined. The lack of a uniform connecting factor raises the question whether or not the ideal of a uniform lex societatiscan be upheld. The fact that members of the DAO do not provide a feasible uniform connecting factor suggests a fragmentation of the applicable law (dépeçage).
Assuming that there is no uniform lex societatis for the DAO and that the applicable substantive law has to be fragmented, acts by the company become conceivable connecting factors. One might, for example, assume that preliminary questions concerning the company, i.e. its legal capacity, are subject to the substantive law that would govern the act in question. If the DAO enters into a contract that – given its validity – is governed by German substantive law according to Art. 4 of the Rome I-Regulation, German law should also determine the legal capacity of the DAO with respect to this particular contract. One might object that the Rome I-Regulation exempts both companies and legal capacity from its scope of application. This, however, only means that the Regulation is not binding within those fields. As the conflict rules of International company law do not lead to conceivable results, the principle of proximity has to be the guiding factor in the search for a new unwritten conflict rule. As the closest territorial connections of decentral organisations are their respective acts, e.g. contracts, the principle of proximity suggests that the respective act is what determines the closest connection of the company. The resulting conflict rule states an accessory subjection of the lex societatis to the law governing the company’s respective acts. While the proposed solution does indeed lead to an indirect application of the Rome I Regulation, it nonetheless constitutes a self-reliant, unwritten conflict rule which is consequently not precluded by the catalogue of exemptions contained in the Rome I Regulation.
This fragmentation of applicable laws turns a membership in the DAO into a risky und legally uncertain endeavour, as – neglecting the tremendous practical and legal problems of the enforcement of claims – different legal orders impose different requirements for legal capacity, limitation of liability and other privileges.
Concluding thoughts
Blockchain technology is a novel phenomenon, but it does – in most cases – not necessitate new connecting factors or conflict rules. If, however, the legal entity in question mirrors the decentralised structure of a blockchain network, the legal assessment becomes more complicated.
In those cases, the usually uniformlex societatishas to be fragmented which leads to a high chance of personal liability of the members. Whether or not one accepts this fragmentation largely depends on the definition of the hierarchy of technical-economic progress and the lex lata. In my opinion, technical developments may and should act as an impetus to legislatorsfor legislative amendments but should not prevail over the existing rules of law. Those who desire legal advantages – such as a limitation of liability or even a uniform statute – must in exchange fulfil and adhere to the laws’ requirements.
This post is based on A. Zimmermann, Blockchain-Netzwerke und Internationales Privatrecht – oder: der Sitz dezentraler Rechtsverhältnisse, published in IPRax 2018, 568 ff. containing references to further literature.
Private International Law, Labour conditions of Hungarian truck drivers, and beyond
Written by Veerle Van Den Eeckhout
On 23 November 2018 the Dutch Supreme Court referred a question for preliminary ruling to the CJEU in a case with regard to labour conditions of Hungarian truck drivers, particularly with regard to the Posting of Workers Directive, 96/71/EC (see here for the Dutch version, see here for the decision of the same day).
The preliminary question will certainly attract the attention of many who have a particular interest in the specific theme of labour conditions of mobile East European workers – a theme in which rules of Private International Law matter.
News
Summer school on Consumer’s Rights and Market Regulation in the EU invites applicants
We can feel it in the air but also in the incoming announcements – the summer is approaching. One of the great ways to spend a part of it is at a summer school. The University of Uidne (Italy) is the host to the 16th edition of the summer school Consumer’s Rights and Market Regulation in the European Union, to be held on 12-21 July 2023.
The programme addresses aspects of legal protection of consumers and market regulation, including the private international law topics, and a moot court. The full schedule is available here. The course accepts undergraduate students, graduates (who graduated no more than five years ago), PhD students from faculties of law, economics, political science or international relations., and limited amount of posts are available on the academic qualifications bases. The early bird is until 30 April 12:00 pm GMT, and the enrollment closes on 31 May 12:00 pm GMT. For details, please consult the Call for applications Udine Summer School 2023.
The summer school is organised within the Jean Monnet Module “CoRiMaR” (Consumer’s Rights and Market Regulation in the European Union) by the Department of Legal Sciences of the University of Udine (Italy), together with a consortium of European universities including University of Essex (UK), De Montfort University (UK), Universitatea de Vest din Timisoara (Romania), East Anglia University (UK), University of Belgrade (Serbia), University of Rijeka (Croatia) and University of Szeged (Hungary).
Eulogy for Professor GUO Yujun
Written by Yan WANG, Huaqiao University
It was with great sadness that we received word from her family that Professor GUO Yujun passed away at 1:50 am GMT+8 on 22 April 2023, at the age of 59.
Professor GUO was a distinguished professor of private international law, art law, and cultural heritage law at the Wuhan University International Law Institute in China. She is the Vice-President and Secretary-General of China Society of Private International Law. During her 30 years at Wuhan University, she taught and mentored hundreds of students, inspiring many of them to work under her supervision from the undergraduate to doctoral level.
She published more than 100 academic articles and works in Chinese, English and Japanese with a wide range of domestic and international influence. She had been to Hokkaido University Law Faculty as a Japanese Government (MEXT) Scholarship student from the October 1991 to April 1993. During her academic career, she went to Harvard University, Osnabrück University, and Max Planck Institute for Comparative and International Private Law as a visiting scholar.
Professor GUO earned the affection from her family, friends, colleagues, and students. A list of her representative private international law publications can be found here.
One Small Step Forward: The Mainland China Is Trying to Differentiate Inter-regional Private Cases From Those Foreign-related Ones
For quite a long time, what China had been doing for its interregional private laws was modelling their solutions on international conventions such as the Hague Service Convention, the Hague Evidence Convention and the Hague Judgments Convention etc. Normally they eventually got a slimmed-down Arrangement for the corresponding matter. This was quite different from what happed in the EU where the enhanced versions of the Hague Conventions could be seen and something extra could even be achieved. Also different from the EU where the ECJ could give answers when many questions at national law level were elevated and tested in the context of Regulations at the EU level, there has been no common court for interregional instruments within China so far. Apart from those bilateral Arrangements, all regions within China are basically treating one another as a ‘foreign country’ in terms of private laws.
The situation is, however, changing, at least from the Mainland side. Yesterday, I was invited to attend a conference which was under the support of the Supreme People’s Court of PRC and organized by the High Court of Guangdong Province that is geographically the closest one to Hong Kong and Macau. The purpose of the conference was to read the Draft Interpretation prepared by a research team of the Guangdong High Court and to be formally adopted and issued by the Supreme People’s Court later on. This Draft Interpretation is, again, an unilateral act of the Mainland China who wants to better its civil procedural rules regarding cases related to Hong Kong and Macau (possibly also Taiwan included). Indeed, different from the past experience for the past decades where inter-regional private cases were generally handled in analogy with foreign-related ones, the Mainland China is now trying to differentiate them. It wants to have more advanced and enhanced rules for interregional private cases. Keep an eye on the development of Chinese interregional private laws ……