Views
Venezuela and the Conventions of the Specialized Conferences on Private International Law (CIDIP)
written by Claudia Madrid Martínez
On 28 April 2017, the government of Nicolás Maduro deposited with the General Secretariat of the Organization of American States (OAS), a document whereby he expressed his “irrevocable decision to denounce the Charter of the Organization of American States (OAS) pursuant to Article 143 thereof, thereby initiating Venezuela’s permanent withdrawal from the Organization.”
Before the two years of the transition regime that the OAS Charter provides for cases of retirement from the Organization (art. 143), on 8 February 2019, Juan Guaidó, president of the National Assembly and interim president of the Republic, wrote to the OAS to “reiterate and formally express the decision of the Venezuelan State to annul the supposed denunciation of the OAS Charter, for Venezuela to be able to remain a member state of the Organization.”
In its session of 9 April 2019, the OAS Permanent Council accepted the representation appointed by the National Assembly of Venezuela. However, on 27 April of the same year, the Foreign Ministry, representing Nicolás Maduro, issued a statement informing that “With the denunciation of the OAS Charter made by the government of the Bolivarian Republic of Venezuela on 27 April 2017, within the framework of what is contemplated in article 143; as of this date, no instrument signed and / or issued by the OAS will have a political or legal effect on the Venezuelan State and its institutions”.
This political situation has impacted the practical application of the Inter-American Conventions issued by the Specialized Conferences on Private International Law (CIDIP, by its acronym in Spanish). Remember that within the framework of CIDIP, Venezuela has ratified fourteen instruments on bills of exchange, promissory notes and bills, international commercial arbitration, letters rogatory, taking of evidence abroad, powers of attorney to be used abroad, checks, commercial companies, extraterritorial enforcement of foreign judgments and arbitral awards, information on foreign law, general rules, international child abduction, and international contracts.
For Venezuela these conventions entered into force once the requirements for their validity established in the Constitution and the Vienna Convention on the Law of Treaties had been met. The rules of this convention are considered customary, since Venezuela has not ratified this instrument.
We must consider that the Inter-American Conventions are open conventions, which allow the accession of States not party to the OAS. Spain, for example, has accessed to conventions on letters rogatory and on information on foreign law.
Besides that, none of the Conventions has been denounced or incurred in causes of nullity or suspension, nor has there been an impossibility for performance, nor has therebeen a fundamental change in the circumstances, in the terms of articles 53, 57, 58, 60, 61, 62 of the Vienna Convention.
Although Venezuela has broken diplomatic relations with some States parties of the OAS, such relations are not indispensable for the application of Inter-American Conventions, even though in some cases cooperation is regulated through central authorities.
Another important issue is the independence of the Inter-American Conventions. Since the OAS is not an integration system, its treaties must pass the approval and ratification or accession process, because they are not covered by the characteristics of supranationality or its equivalent, such as occurs in the Andean Community or the European Union.
In any case, the situation is not clear. Article 143 of the OAS Charter provides that when “the General Secretariat receives a notice of denunciation, the present Charter shall cease to be in force with respect to the denouncing State, which shall cease to belong to the Organization after it has fulfilled the obligations arising from the present Charter”. There is no reference to the treaties approved within it.
Unfortunately, this situation has been reflected in the decisions of our courts. So far there have been two decisions of the highest court in which the Inter-American codification is set aside. In both, exequatur decisions, the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards was not applied.
“Although, our Republic has signed the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards with the Republic of Ecuador, it is no less true that, the Bolivarian Republic of Venezuela formalized its final retirement from the OAS, by letter of 27 April 2019, as a result, the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards, approved in Montevideo, Uruguay in 1979, endorsed by the Department of International Law of the Organization of American States, ceased to have its effects in our country.
The Civil Chamber of the Supreme Court of Justice issued the first one, under number 0187 on 30 May 2019 (see also here). This decided the exequatur of an Ecuadorian divorce judgment and stated:
Therefore, this exequatur will be reviewed in the light of the Private International Law Act, according to the requirements set forth in article 53 as this is the rule of Private International Law applicable in the specific case”.
In this case, the Chamber bases its decision on the fact that in the preamble of the Inter-American Convention, the States parties to the OAS are indicated as participants and that the deposit of the instrument of ratification was made before the OAS. It should be noted that neither this nor any other Inter-American Convention has been denounced by Venezuela.
In the second decision, issued by the Social Chamber of the Supreme Court under number 0416, on 5 December 2019 (see also here) on the occasion of the exequatur of a Mexican divorce judgment, there is not even an argument as to why not apply the Inter-American Convention. In it, the Social Chamber only asserted:
“In this case, it is requested that a judgment issued by a court in the United Mexican States, a country with which the Bolivarian Republic of Venezuela has not signed international treaties on the recognition and enforcement of judgments, be declared enforceable in the Bolivarian Republic of Venezuela through the exequatur procedure; for this reason, and following the priority order of the sources in the matter, the rules of Venezuelan Private International Law must be applied”.
The fundamental role of Venezuela in Inter-American codification through the work of Gonzalo Parra-Aranguren and Tatiana B. de Maekelt is not a secret to anyone. It is unfortunate that a political decision attempts to weaken the Venezuelan system of Private International Law. We insist that ignoring the Inter-American Conventions not only constitutes a breach of the obligation of the State to comply with existing treaties, but also of the internal rules that, like article 1 of the Venezuelan Private International Law Act, require the preferential application of the Public International Law rules, in particular those established in international treaties.
“Promoting Foreign Judgments: Lessons in Legal Convergence from South Africa and Nigeria” (Kluwer Law International B.V. 2019)
Pontian N. Okoli has provided the following extensive summary of the findings of his book, which is a revised version of his PhD thesis, completed at the University of Dundee.
In 2019, the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial matters came into being. It is a clear reflection of determined efforts to produce a global legal framework that can support the free movement of foreign judgments. One index of success concerning the 2019 Convention would be whether it promotes the free movement of foreign judgments in different parts of the world including Africa. Time will tell. For now, it is necessary to reduce the impediments to the free movement of foreign judgments on at least two levels: first, between African and non-African jurisdictions; and second, between African jurisdictions. The legal frameworks that concern both levels are essentially the same in most African jurisdictions. There is no African legal framework that is equivalent to the Brussels legal regime on the recognition and enforcement of foreign judgments in the European Union. Thus, litigants need to consider relevant legal frameworks in each country. Foreign judgment creditors must be conversant with appropriate laws to ensure recognition and enforcement of foreign judgments. Nigeria and South Africa are two major examples of African jurisdictions where such awareness is required.
Nigeria and South Africa are important for several reasons including their big economies and the fact that they are major political players in their respective regions and have significant influence on the African continent. They also make for interesting comparative study –Nigerian jurisprudence is based on the English common law while South African jurisprudence is mixed – based on Roman Dutch law with a significant influence of English law. Also, Nigeria is not a member of the Hague Conference on Private International Law, but South Africa has been a member since 2002. Understanding why these two jurisdictions adopt their individual approaches to the recognition and enforcement of foreign judgments is critical to unlocking the potential to have rewarding relations with Africa in this regard. It is important to understand what brings both jurisdictions together and what separates both, with a view to determining how common perspectives to foreign judgments enforcement may be attained.
There are several bases for legal convergence. Both jurisdictions have two major legal frameworks on foreign judgments – statutory law and the common law. This two-track system is common in Africa and many parts of the Commonwealth including the United Kingdom which has more than one statute (and the common law) on foreign judgments. In Nigeria, there is still significant uncertainty as to which legal framework should apply to relevant cases. Nigerian case law clearly shows that statutory law remains the most important guide for litigants. Essentially, Nigeria relies on a statute of nearly a century old (the Reciprocal Enforcement of Judgments Act 1922 — Chapter 175, Laws of the Federation and Lagos 158). Conversely, statutory law is of less practical importance in South Africa where the Enforcement of Foreign Judgments Act 32 of 1988 has been extended to Namibia only.
The comparative study finds that it is generally easier for judgment creditors to enforce foreign judgments in South Africa than in Nigeria. Although there is much to discuss concerning legal uncertainties considering the confusing legal framework in Nigeria, case law demonstrates that the South African attitude to recognition and enforcement foreign judgments is instructive. A liberal legal framework that promotes the recognition and enforcement of foreign judgments should be founded in judicial and legislative attitudes that promote the free movement of foreign judgments. In this context, the theories that underpin the recognition and enforcement of foreign judgments are critical. The theories form the common foundation to which jurisdictions around the world can relate.
The statutory frameworks on foreign judgments are relatively recent. For example, the main Nigerian statute on the subject was patterned on the 1920 UK on the Administration of Justice Act. However, foreign judgments were already being enforced in other jurisdictions as long ago as the nineteenth century through case law (such as Schibsby v Westenholz [1870] LR QB 155 and Hilton v Guyot 159 US 118 [1895]) which reflected the theories that underpin the recognition and enforcement of foreign judgments. The theories of reciprocity, obligation and comity have been applied with varying degrees of success in different jurisdictions. These theories either clearly apply to Nigerian and South African contexts (for example, through specific legislative provisions in Nigeria) or they have been discussed by the courts in both jurisdictions. The first step should be an agreement on what should drive the recognition and enforcement of foreign judgments. Each of these theories has been criticised rather substantially, and it may be difficult to build on any ‘pure theory’. It would be helpful to adopt an approach that encourages the free movement of foreign judgments subject to a consideration of State interests. Such an approach would attach some degree of obligation in the recognition and enforcement of foreign judgments subject to narrow gaps for defence. This can be illustrated through the application of public policy to frustrate the recognition and enforcement of foreign judgments. Such an obligation should be qualified. Apart from drawing on an analysis of the major theories on the subject, adopting this qualified obligation approach has the benefit of a universal standpoint that is shaped by practical and political realities. This is more pragmatic than strictly applying any traditional theory that is entirely constructed within a legal culture or legal system.
Litigants should expect the enforcement of foreign judgments to be the rule rather than an exception. Fairness requires a consideration of litigant and State interests. Any approach that considers only one (or one at the expense of the other) is unlikely to be fair or acceptable to many jurisdictions including those in Africa. Already, the jurisprudence in both countries suggests that it would be fair to recover debts and there is scope to presume that foreign judgments should be enforced. This perspective of fairness has greatly influenced South African jurisprudence, and this may also partly account for why there is greater success in attempts to enforce foreign judgments even when the law is contested or may at first seem unclear. An example is Richman v Ben-Tovim 2007 (2) SA 203 where the respondent did not dispute the debt but argued that his mere presence in England was an insufficient basis for the English court to exercise jurisdiction. The South African Court of Appeal, however, considered that a ‘realistic approach’ was necessary and enforced the foreign judgment. Although some scholars may criticise this judgment for endorsing ‘mere presence’ jurisdiction as it divides common law and civil law systems, the rationale behind the decision is instructive. If a ‘realistic approach’ is to be found, then there is a need to reflect on how to reduce the technicalities that impede the free movement of foreign judgments. Efforts to attain an effective global legal framework that African countries will find useful requires a realistic approach that factors in contextual realities. This realistic approach permeates other aspects of the process that leads to the recognition and enforcement of foreign judgments in Nigeria and South Africa.
An important contextual reality is the characterisation process. How the Nigerian or South African courts characterise a foreign judgment can make a great difference in terms of recognition and enforcement. The way forward is not to create more categories, but to focus on how the foreign judgment may be enforced subject to considerations of fairness to both the litigants and the State. This perspective of ‘cosmopolitan fairness’ also facilitates the attainment of practical solutions in issues that concern jurisdictional grounds. To ensure a realistic approach, and in considering a fair approach for litigants and the State, it is critical to reflect on what ultimate end should be attained. If that end is promoting the free movement of foreign judgments, then it is reasonable to put the onus on the judgment debtor. This does not mean that foreign judgments would be enforced regardless of potential injustice or unfairness to the judgment debtor. However, placing the onus on the judgment debtor implies that the application of jurisdictional grounds should be based on promoting the free movement of foreign judgments. At least four traditional bases of jurisdiction are common to Nigeria and South Africa: mere presence, residence, domicile and submission. A new perspective to this subject may consider what purpose each jurisdictional ground should serve and the aims that should be achieved. The Nigerian legal framework, in principle, reflects this approach of considering jurisdictional grounds in a progressive and purposive manner. In Nigeria, doing business or carrying on business is a common thread that runs through all the jurisdictional grounds. There is also a patchwork of jurisprudence concerning individual grounds of jurisdiction. In South Africa, residence needs to be ascertained on a case-by-case basis as neither Nigerian nor South African statutory laws define residence.
In the context of jurisdictional grounds, the lack of interpretational certainty in both countries suggests that there is considerable scope to adopt any approach or combination of approaches that helps to solve problems in a practical way. In dealing with impediments to enforcing foreign judgments in a manner that ensures sustainable progress, there should be a clear consideration of systematic flexibility. In other words, fine demarcations in the context of traditional jurisdictional grounds may not be of practical help in efforts to facilitate the recognition and enforcement of foreign judgments. Any bias against a jurisdictional ground should be re-evaluated in a manner that factors in contextual realities. There should be a consideration of international commercial realities and in a fast-evolving global order that is driven by increasingly complex international commercial transactions. Any approach that focuses on territorial considerations vis-à-vis jurisdictional grounds does not reflect this global order in which increased movement, complex international commercial transactions and the borderless nature of the Internet are important features. This global order requires a result-oriented approach rather than a recourse to any traditional approach that is driven by technicalities. For example, the question should not be whether a judgment debtor was ‘present’ in the foreign country but what would amount to presence that is effective for the purposes of enforcing foreign judgments. This reasoning may be replicated for residence or domicile as well.
The need for a ‘realistic approach’ also extends to public policy. There are clear foundations in Nigerian and South African law that support a narrow application of public policy during legal proceedings to recognise and enforce foreign judgments. This is so although there have been significant interpretational difficulties in both jurisdictions and judgment debtors try to frustrate the enforcement of foreign judgments by relying on defences that are anchored to public policy. For example, characterising damages awarded by the foreign court as compensatory rather than punitive could help to ensure judgment creditors do not go away empty-handed. This is especially so where such judgment creditors are entitled to realising their foreign judgments.
Legal certainty and predictability cannot be driven by a purely circumstantial application of legal principles or consideration of legal issues. But it is also true that the law should not stand still. In this regard, it is instructive that Nigeria and South Africa have areas of possible legal convergence even though they operate considerably different legal cultures. However, the domestic jurisprudence of their different legal cultures does not undermine their common perceptions of fairness and the need to enforce foreign judgments. What is lacking considerably is the right attitude to ensure that the laws already in existence are interpreted progressively and purposively. This requires a robust institutional approach that is driven by the courts. Of course, clear and certain statutory laws should be in place to promote the free movement of foreign judgments. However, legal comparative analysis concerning Nigeria and South Africa demonstrates that the use of statutory laws does not necessarily guarantee legal certainty. The relative success of South Africa in enforcing foreign judgments has been driven by the courts considering the common law. Statutory law has been extended to only one African country. Any foreign legal instrument or convention (at the global or regional level) cannot function effectively without courts that are inclined to recognise and enforce foreign judgments. For example, article 10 of the 2019 Judgments Convention provides that the court addressed may refuse the recognition or enforcement of a foreign judgment if the damages do not actually compensate a judgment debtor for actual loss suffered. The role of the courts is critical to the success of such legal provisions.
The possibility of African countries such as Nigeria (that are not members of the Hague Conference) ratifying the 2019 Convention cannot be discounted. There is a growing trend of countries signing up to Hague Conventions even though they are not members of the Conference. However, both African and non-African countries require robust legal and institutional frameworks that will support the free movement of foreign judgments. Such legal frameworks should be anchored to an appropriate paradigm shift where necessary.
A strange case of recognition of foreign ecclesiastical decisions in property matters
By Nicolás Zambrana-Tévar, LLM, PhD, KIMEP University
A first instance court in Barbastro (Aragón) has ruled that a great number of valuable works of art presently on display at the museum of the Catholic diocese of Lleida (Catalonia) are the property of parishes of the diocese of Barbastro-Monzón and must be immediately returned. In its reasoning, the court has given a lot of weight to the fact that, in the decades long dispute between the two Spanish ecclesiastical entities, the diocese of Lleida had agreed to comply with a 2007 ruling of the Vatican’s Supreme Tribunal of the Apostolic Signatura, the highest administrative court in the Catholic Church, whose decisions may only be overturned by the Pope himself. This case does not only rise the issue of the recognition of “foreign” ecclesiastical decisions or, alternatively, their relevance for state courts but also how indistinguishable is the science of private international law from the study of legal pluralism, i.e. the interaction of various legal systems over the same territory, subjects and subject-matters.
Since the middle ages, a small stripe of land in the Spanish region of Aragón (La Franja de Aragón) was under the religious jurisdiction of the bishop of Lleida. Article IX of the 1953 concordat between Spain and the Holy See already manifested the intention of both parties to the treaty to revise the existing territorial ecclesiastical constituencies to avoid dioceses which did not correspond to existing state provinces. In 1995, following a decision of the Spanish bishops’ conference, the Holy See decided to transfer all the parishes in La Franja to the diocese of Barbastro. Further to this reassignment, the diocese of Barbastro requested that all the works of art which were on display at the diocesan museum of Lleida be returned to the parishes of La Franja, to which they allegedly belonged.
At the beginning of the 20th century, those works of art had been taken to Lleida from the abovementioned parishes, partly due to their state of decay. The basic legal question here was whether the long deceased bishop of Lleida, who had brokered the deal, had bought those works of art a century ago or whether they were only on deposit at the Catalan diocesan museum.
The return of those pieces of art has been a matter of regional – or national – pride for more than twenty five years. For many, this basically ecclesiastical dispute over religious property must be put in the context of recent nationalist aspirations of the Catalan government because many inhabitants of La Franja speak Catalan and this territory is sometimes perceived to be part of Catalonia in much the same way as nationalists refer to other territories in Spain, France or Italy as països catalans. What began as a bitter dispute among bishops has ended as a much bitter dispute between neighbouring regions after their autonomous governments espoused the respective claims, including street demonstrations and endless litigation before Church tribunals and state courts, both civil and administrative. The court records by now have more than 30.000 pages.
The dispute should have ended in 2007 when the Supreme Tribunal of the Apostolic Signatura heard the last possible ecclesiastical appeal against previous rulings of lower canon law courts. The text of this decisions is, of course, in Latin. Thus, the Vatican court ordered the immediate return of the art pieces. Further to this decision and probably compelled by it, the two dioceses signed an agreement in 2008, where the Catalan diocese acknowledged that the legitimate owners of the works of art were the abovementioned parishes of Aragón. Soon afterwards, however, the Lleida bishop went back on his word, apparently when more than 300 letters from the beginning of the 20th century resurfaced, allegedly showing that amounts of money had been paid by the former bishop of Lleida to the parishes of La Franja, following the removal of the art pieces to the diocesan museum of Lleida. This money was allegedly the price paid for them, so the Catalan diocese owned them.
The diocese of Barbastro nevertheless sought to have the 2007 Vatican decision recognised but, in 2010, a Spanish court ruled that the only ecclesiastical decisions which could be recognised and enforced in Spain under the new 1979 concordat were those concerning the nullity of marriages (pp. 6-8). The diocese of Barbastro and the Spanish prosecutor present at the proceedings understood that, nevertheless, the 2007 decision may be recognised under those Spanish domestic law provisions for the recognition of foreign court decisions in the absence of a treaty. The “country” of origin of the 2007 decision was, of course, the Holy See.
The Spanish court did refer to the Holy See as a subject of international law at the level of states. Furthermore, the Catholic Church’s jurisdiction and autonomy within the Spanish territory and over Spanish Catholics was recognised by the Spanish state by means of an international treaty (i.e. the concordat). Part of this autonomy was – in the eyes of the court – the jurisdiction of ecclesiastical tribunals in religious property matters. Ecclesiastical tribunals had therefore jurisdiction to adjudicate in property disputes and to enforce the ensuing decisions internally. Such jurisdiction was acknowledged and respected by the Spanish state, which should not interfere with it and, therefore, an ecclesiastical entity could not request state courts to enforce ecclesiastical decisions because this would represent such an act of interference. Ecclesiastical entities may alternatively bring their property claims before Spanish state courts in the first place, which have in the past decided similar cases applying canon law but, if the dispute had been heard and decided by a Church tribunal, state courts had to remain aloof.
However, last week, the same court which in 2010 had refused to recognise the 2007 Vatican decision has now ruled in favour of the return of the works of art to the parishes of Aragón. The Barbastro court explains (p. 17) that the ecclesiastical rulings were not enough in themselves, as evidence of the property rights of the Aragonese parishes. However, such rulings may in fact be evidence of the testimony provided by the parties to the dispute. Additionally, the settlement agreement made by the two dioceses, further to the Vatican ruling of 2007, should indeed be taken as an admission by the diocese of Lleida that the works of art belong in Aragón. Thus, indirectly, the Vatican decision was being respected.
This use made of a “foreign” ecclesiastical court ruling presents some similarities to the theory of vested rights and estoppel per res iudicattam in a common law context, whereby foreign court decisions may not be recognised as such but their content may be evidence of a new cause of action in new proceedings commenced in the country where recognition is sought. Even though the Spanish court in 2010 and 2019 was equally unwilling to recognise the effects of the ecclesiastical decision because it had been issued by an ecclesiastical tribunal whose autonomy and jurisdiction would be jeopardised if the Spanish court enforced its contents, the first instance court of Barbastro was now in a position to give a lot of weight at least to the declarations that the parties had made during the proceedings at the Vatican, as well as to the settlement agreement that the Vatican decision had brought about.
The Spanish court also made direct use of canon law as evidence of property rights when it found that, for the transfer of ecclesiastical property to have been valid, a special permit from the Holy See would have been needed, which was never sought nor obtained. That Spanish state courts apply canon law is relatively common in, for instance, employment cases – as a way of demonstrating that the relationship between a priest and a bishop is not of an employment nature – or in clergy sex abuse litigation – in order to demonstrate the degree of organizational or supervisory authority of bishops over priests and parishes.
News
The European Parliament’s last plenary session & Private International Law
This post was written by Begüm Kilimcio?lu (PhD researcher), Thalia Kruger (Professor) and Tine Van Hof (Guest professor and postdoctoral researcher), all of the University of Antwerp.
During the last plenary meeting of the current composition of the European Parliament (before the elections of June 2024), which took place from Monday 22 until Thursday 24 April, several proposals relevant to private international law were put to a vote (see the full agenda of votes and debates). All of the regulations discussed here still have to be formally approved by the Council of the European Union before they become binding law, in accordance with the ordinary legislative procedure.
It is interesting to note that, while many pieces of new legislation have a clear cross-border impact in civil matters, not all of them explicitly address private international law. While readers of this blog are probably used to the discrepancies this has led to in various fields of the law, it is still worth our consideration.
First, the European Parliament voted on and adopted the proposal for a Directive on Corporate Sustainability Due Diligence (CSDDD) with 374 votes in favour, 235 against and 19 abstentions (see also the European Parliament’s Press Release). The text adopted is the result of fierce battles between the Commission, Parliament and the Council and also other stakeholders such as civil society, academics and practitioners. This necessitated compromise and resulted in a watered-down version of the Commission’s initial proposal of 23 February 2022 and does not go as far as envisaged in the European Parliament’s Resolution of 10 March 2021 (see also earlier blog pieces by Jan von Hein, Chris Tomale, Giesela Rühl, Eduardo Álvarez-Armas and Geert van Calster).
The Directive is one of the few instruments worldwide that put legally-binding obligations on multinational enterprises. It lays down obligations for companies regarding their adverse actual and potential human rights and environmental impacts, with respect to their own operation, the operations of their subsidiaries, and the operations carried out by their business partners in the chains of activities. The Directive further stipulates specific measures that companies have to take to prevent, mitigate or bring an end to their actual or potential adverse human rights impacts. Besides national supervisory authorities for the oversight of the implementation of the obligations, the Directive enacts civil liability for victims of corporate harm.
The adopted Directive is more or less silent on private international law. The closest it gets to addressing our field of the law is Article 29(7), placing the duty on Member States to ensure the mandatory nature of civil remedies:
Member States shall ensure that the provisions of national law transposing this Article are of overriding mandatory application in cases where the law applicable to claims to that effect is not the national law of a Member State.
and Recital 90, which is more general:
In order to ensure that victims of human rights and environmental harm can bring an action for damages and claim compensation for damage caused when the company intentionally or negligently failed to comply with the due diligence obligations stemming from this Directive, this Directive should require Member States to ensure that the provisions of national law transposing the civil liability regime provided for in this Directive are of overriding mandatory application in cases where the law applicable to such claims is not the national law of a Member State, as could for instance be the case in accordance with international private law rules when the damage occurs in a third country. This means that the Member States should also ensure that the requirements in respect of which natural or legal persons can bring the claim, the statute of limitations and the disclosure of evidence are of overriding mandatory application. When transposing the civil liability regime provided for in this Directive and choosing the methods to achieve such results, Member States should also be able to take into account all related national rules to the extent they are necessary to ensure the protection of victims and crucial for safeguarding the Member States’ public interests, such as its political, social or economic organisation.
While the text contains references to numerous existing Regulations, Brussels I and Rome I are not among them; not even a precursory or confusing reference as in Recital 147 of the GDRP.
Second, the European Parliament voted on two other proposals that build on and implement the objectives of the European Green Deal and the EU Circular Economy Action Plan. The first is a proposal for a Regulation establishing a framework for setting eco-design requirements for sustainable products with 455 votes in favour, 99 against and 54 abstentions (see also the European Parliament’s Press Release). The Regulation aims to reduce the negative life cycle environmental impacts of products by improving the products’ durability, reusability, upgradability, reparability etc. It sets design requirements for products that will be placed on the market, and establishes a digital product certificate to inform consumers.
This Regulation does not contain a private-international-law type connecting factor for contracts or products. Neither does it expressly elevate its provisions to overriding rules of mandatory law (to at least give us some private international law clue). Its scope is determined by the EU’s internal market. All products that enter the European market have to be in conformity with the requirements of both regulations, also those that are produced in third countries and subsequently imported on the European market (Art. 3(1)). “Products that enter the market” is the connecting factor, or the basis for applying the Regulation as overriding mandatory law. The Regulation is silent on products that exit the market. Hopefully the result will not be that products that were still in the production cycle at the time of entry into force will simply be exported out of the EU.
The third adopted proposal is the Regulation on packaging and packaging waste with 476 votes in favour, 129 against and 24 abstentions (see also the European Parliament’s Press Release). This Regulation aims to reduce the amount of packaging placed on the Union market, ensuring the environmental sustainability of the packaging that is placed on the market, preventing the generation of packaging waste, and the collection and treatment of packaging waste that has been generated. To reach these aims, the regulation’s key measures include phasing out certain single-use plastics by 2030, minimizing so called “forever chemicals” chemicals in food packaging, promoting reuse and refill options, and implementing separate collection and recycling systems for beverage containers by 2029.
Like the Eco-design Regulation, no word on Private International Law, no references. The Regulation refers to packaging “placed on the market” in various provisions (most notably Art. 4(1)) and recitals (e.g. Recitals 10 and 14).
Lastly, the European Parliament approved the proposal for a regulation on prohibiting products made with forced labour on the Union market with an overwhelming majority of 555 votes in favour, 6 against and 45 abstentions (see also the European Parliament’s Press Release). The purpose of this Regulation is to improve the functioning of the internal market while also contributing to the fight against forced labour (including forced child labour). Economic operators are to eliminate forced labour from their operations through the pre-existing due diligence obligations under Union law. It introduces responsible authorities and a database of forced labour risk areas or products.
Just as is the case for the other Regulations, this Regulation does not contain references to private international law instruments, and no explicit reference to instruments in this field, even though the implementation of the Regulation requires vigilance throughout the value chain. It would be correct to assume that this provides overriding mandatory law, as the ban on forced labour is generally accepted to be jus cogens even though the extent of this ban is contentious (see Franklin).
Other proposals that are more clearly in the domain of private international law have not (yet?) reached the finish line. First, in the procedure on the dual proposals in the field of the protection of adults of 31 May 2023, the European Parliament could either adopt them or introduce amendments at first reading. However, these proposals have not reached the plenary level before the end of term and it will thus be for the Conference of Presidents to decide at the beginning of the new parliamentary term whether the consideration of this ‘unfinished business’ can be resumed or continued (Art. 240 Rules of Procedure of the European Parliament).
In the second file, the proposal for a Regulation in matters of parenthood and on the creation of a European Certificate of Parenthood of 7 December 2022 the European Parliament was already consulted and submitted its opinion in a Resolution of 14 December 2023. It is now up to the Council of the European Union to decide unanimously (according to the procedure in Art. 81(3) of the Treaty on the Functioning of the European Union). It can either adopt the amended proposal or amend the proposal once again. In the latter case the Council has to notify or consult (in case of substantial amendments) the European Parliament again.
Ficticious service still active outside Europe
With the EU Service Regulation being active for more than 20 years, and the Hague Service Convention being ratified by almost all European countries, there is little space for practicing fictitious service of proceedings in Europe. However, for service to third countries outside Europe, and especially to continents, such as Africa, Asia, and the Middle East, remise au parquet is still the ground rule for many European countries. A recent judgment issued by the Piraeus Court of Appeal provides a clear picture of how the mechanism operates in Greece [Piraeus Court of Appeal, judgment nr. 142/2024, available here].
I. THE FACTS:
The parties are two companies active in the international maritime sector. The claimant, a Greek company with its seat in Piraeus, filed an action before the Piraeus Court of First Instance, seeking the award of the total sum of $29,163,200. The defendant, an Iranian company with its seat in Tehran, did not appear in the hearing. The action was upheld as being well founded in substance by the Piraeus Court of 1st Instance. The defendant was ordered to pay the equivalent of $28. 663,200.
Both the action and the first instance judgment were duly served on the Piraeus District Attorney, in accordance with the provisions of Articles 134 §§ 1 and 2, and 136 § 1 Code of Greek Civil Procedure (henceforth CCP), due to the defendant’s domicile in a non-member state of the European Union, thus excluding the application of EU law, and because Iran has not acceded to the Hague Convention of 15 November 1965, which requires actual service of documents by one of the methods provided for therein. Finally, the court underlined the absence of a bilateral agreement between Iran and Greece, which would possibly regulate the issues of service in a different manner.
The defendant lodged an appeal. The appeal was however untimely filed, because it was brought after the expiry of the sixty [60] days period following service of the judgment, provided for in Article 518 § 1 CCP, which began with the fictitious service of the judgment on the Public Prosecutor, to be sent to the Minister of Foreign Affairs, in order to be transmitted through diplomatic channels to the addressee, as provided for by Article 134 §§ 1 and 3 CCP.
The Iranian company acknowledged that the time-limit had expired without effect. For this reason, it filed a request for restitutio in integrum in accordance with Article 152 CCP, requesting that the appeal be considered as timely lodged, claiming that the delay in lodging the appeal was due to force majeure. In particular, it is asserted that the Iranian company did not receive notification of both the claim, which resulted in a default judgment without its participation in the trial at first instance, and of the judgment given in default of appearance, due to the service method selected, i.e., ficticious service to the Public Prosecutor, which sets the time-limit for the appeal. Secondly, the appellant asserts that that it acted within the time-limit laid down in Article 153 CCP, that is to say, immediately after real service.
The appellant invokes the delay caused by the Piraeus Prosecutor’s Office and the diplomatic services of the Country, which did not take care to complete service within two months. In other words, it relies on the omission of third parties, which it could not prevent, and which prevented the appellant from being aware of the fictitious service and the commencement of the time-limit for lodging an appeal in Greece.
II.THE JUDGMENT OF THE PIRAEUS COURT OF APPEAL
The appellate court ruled as follows: The lawsuit was forwarded by the Piraeus Prosecutor’s Office to the Minister of Foreign Affairs, in order to be served at the defendant’s headquarters in Tehran. The diplomatic authorities of Greece did indeed send and their counterparts in Iran did receive and forward the statement of claim to its addressee. However, the Iranian company’s agents, namely the secretariat and the clerk in the Legal Affairs Department, refused to receive it. This is evident from the “Letter of confirmation for declaration of received documents from foreign countries” issued by the International Affairs Department of the Judiciary of the Islamic Republic of Iran. This document states that the defendant, through its aforementioned nominees, refused to receive the disputed “document”.
The reason for that refusal is not specified. However, from the document of the Consular Office of the Embassy of Greece in Iran, and the attached document of the Ministry of Foreign Affairs of the Islamic Republic of Iran, it can be inferred that the refusal was made because the document to be served was not accompanied by an official translation into Farsi. Iranian law does indeed appear to permit refusal to accept service of a foreigner’s statement of claim against an Iranian national on that ground (a legal opinion of Mr., a lawyer at the Central Iranian Bar Association was submitted to the CoA by the appellant). Still, domestic Greek law does not make the validity of service of an action dependent on the attachment of a translated copy of the action in the language of the State of destination. Therefore, service of the action, if it had been completed, would always be valid under Greek law.
In addition, the mere attempt to serve the action made it clear to the defendant in any event, irrespective of whether it had been aware of its content from the outset, that a claim has being brought against it in a Greek court and triggered its obligation under Article 116 CCP to monitor the progress of the proceedings from that time onwards, even if it chose not to participate in the proceedings, which the defendant was able to do, by behaving in a prudent and diligent manner, and by following the fate of the action brought in Greece.
To that end, it was sufficient simply to appoint a lawyer in Greece, who would arrange for the translation of the documents, and would attend the ongoing proceedings at first instance. Such an action was made by the appellant only after actual service of the judgment.
Similarly, the applicant does not explain the reason why it did not act by appointing a lawyer in Greece, after the refusal to receive the summons of the claimant, even though it was also sent to it accompanied by a translation of the summons in English. That omission gives the impression that the refusal to receive the summons was made in order to prolong the proceedings, and to prepare for the lodging of the appeal and the application for restitutio in integrum, which on the whole is considered to be abusive.
Consequently, the application for restitutio in integrum was dismissed as unfounded and the appeal, which was nevertheless brought out of time, was dismissed as inadmissible.
III. COMMENT
The judgment of the Piraeus CoA is interesting because it goes a step further in the examination of fictitious service: It did not simply reiterate the wording of the domestic rules; moreover, it scrutinized the facts, and avoided a stringent application of Article 134 CCP. Due process and right to be heard were included in the court’s analysis. Finally, the court dismissed the legal remedies of the appellant due to its reluctance to demonstrate proactivity, and its intention to bring the Greek proceedings to a stalemate.
[Out Now!] New Open Access Book on Corruption and Investment Arbitration: Nobumichi Teramura, Luke Nottage and Bruno Jetin (eds), Corruption and Illegality in Asian Investment Arbitration (Springer, 2024)
Nobumichi TERAMURA (Assistant Professor, Universiti Brunei Darussalam; Affiliate, Centre for Asian and Pacific Law in the University of Sydney), Luke Nottage (Professor of Comparative and Transnational Business Law, Sydney Law School) and Bruno Jetin (Associate Professor of Economics, Universiti Brunei Darussalam) published an edited volume entitled “Corruption and Illegality in Asian Investment Arbitration” from Springer on 20 April 2024. The book is an open access title, so it is freely available to any states and organisations, including less well-resourced institutions in transitioning economies. Corrupt behaviour by foreign investors, like bribery to local government officials, faces wide condemnation in any society. Nevertheless, there remains a paucity of research appraising the consequences of corruption and illegality affecting international investment in Asia, especially investment arbitration involving East and South Asian jurisdictions. This book intends to fill the gap from an interdisciplinary (legal-economic) perspective.
The volume’s description reads as follows:
This open access book explores Asian approaches towards investment arbitration—a transnational procedure to resolve disputes between a foreign investor and a host state—setting it in the wider political economy and within domestic law contexts. It considers the extent to which significant states in Asia are, or could become, “rule makers” rather than “rule takers” regarding corruption and serious illegality in investor-state arbitration. Corruption and illegality in international investment are widely condemned in any society, but there remains a lack of consensus on the consequences, especially in investment arbitration. A core issue addressed is whether a foreign investor violating a host state’s law should be awarded protection of its investment, as per its contract with the host state and/or the applicable investment or trade agreement between the home state and the host state. Some suggest such protection would be unnecessary as the investor committed a crime in the host state, while others attempt to establish an equilibrium between the investor and the host state. Others claim to protect investment, invoking the sanctity of promises made. The book starts with a deep dive into economic and legal issues in corruption and investment arbitration and then explores the situation and issues in major countries in the region in detail. It is a useful reference point for lawyers, economists, investors, and government officials who are seeking comprehensive and up-to-date information on anti-bribery rules in Asian investment treaties. It is of particular interest to students and researchers in economics, finance, and law, who are undertaking new research relating to the multifaceted impacts of corruption.
The book’s table of contents is as follows:
Chapter 1 – “Bribery and Other Serious Investor Misconduct in Asian International Arbitration” by Nobumichi Teramura, Luke Nottage and Bruno Jetin;
Chapter 2 – “Does Corruption Hinder Foreign Direct Investment and Growth in Asia and Beyond? The Grabbing Versus the Helping Hand Revisited” by Ahmed M Khalid (Professor of Economics, Universiti Brunei Darussalam);
Chapter 3 – “The Effect of Corruption on Foreign Direct Investment at the Regional Level: A Positive or Negative Relationship?” By Bruno Jetin, Jamel Saadaoui (Senior Lecturer of Economics, The University of Strasbourg), Haingo Ratiarison (The University of Strasbourg);
Chapter 4 – “Anti-Corruption Laws and Investment Treaty Arbitration: An Asian Perspective” by Anselmo Reyes (International Judge, Singapore International Commercial Court) and Till Haechler (Associate, Lenz & Staehelin);
Chapter 5 – “Multi-Tiered International Anti-Corruption Cooperation in Asia: A Review of Treaties and Prospects” by Yueming Yan (Assistant Professor, Chinese University of Hong Kong) and Tianyu Liu (ADR Case Manager, Hong Kong International Arbitration Centre);
Chapter 6 – “Corruption in International Investment Arbitration” by Michael Hwang SC (Arbitrator, Michael Hwang Chambers) and Aloysius Chang (Michael Hwang Chambers);
Chapter 7 – “Rebalancing Asymmetries Between Host States and Investors in Asian Investor–State Dispute Settlement: An Exception for Systemic Corruption” by Martin Jarrett (Senior Research Fellow, Max Planck Institute for Comparative Public Law and International Law);
Chapter 8 – “Foreign Investment, Investment Treaties and Corruption in China and Hong Kong” by Vivienne Bath (Professor of Chinese Law, Sydney Law School) and Tianqi Gu (Sydney Law School);
Chapter 9 – “Corruption and Investment Treaty Arbitration in India” by Prabhash Ranjan (Professor and Vice Dean, Jindal Global Law School);
Chapter 10 – “Corruption and Illegality in Asian Investment Disputes: Indonesia” by Simon Butt (Professor of Indonesian Law, Sydney Law School), Antony Crockett (Partner, Herbert Smith Freehills Hong Kong) and Tim Lindsey (Malcolm Smith Chair of Asian Law and Redmond Barry Distinguished Professor, Melbourne Law School);
Chapter 11 – “Foreign Investment, Treaties, Arbitration and Corruption: Comparing Japan” by Luke Nottage and Nobumichi Teramura;
Chapter 12 – “Corruption and Investment Arbitration in the Lao People’s Democratic Republic: Corruptio Incognito” by Romesh Weeramantry (Special Counsel, Clifford Chance Perth) and Uma Sharma (Associate, Jones Day Singapore);
Chapter 13 – “Corruption and Illegality in Asian Investment Arbitration: The Philippines” by Thomas Elliot A Mondez (Faculty Member, De La Salle University, Philippines) and Jocelyn P Cruz (Associate Professor, De La Salle University, Philippines);
Chapter 14 – “Investment Arbitration, Corruption and Illegality: South Korea” by Joongi Kim (Professor Yonsei Law School);
Chapter 15 – “Foreign Investment, Corruption, Investment Treaties and Arbitration in Thailand” by Sirilaksana Khoman (Professor, Thammasat University, Thailand), Luke Nottage and Sakda Thanitcul (Professor, Chulalongkorn University); and
Chapter 16 – “Towards a More Harmonised Asian Approach to Corruption and Illegality in Investment Arbitration” by Nobumichi Teramura, Luke Nottage and Bruno Jetin.