Views
Egyptian Court of Cassation on the application of the Hague Service Convention
[The author wishes to thank Justice Hossam Hesham Sadek, Vice President of the Civil and Commercial Chamber of the Court of Cassation, and reporting judge in the case at hand, for granting access to the Supreme Court’s ruling].
1. Introduction
In a recent ruling (22/05/2017), the Egyptian Court of Cassation tackled with the issue of service of process abroad. The facts of the case were the following: The claimant (and appellant) was an Egyptian Medical Equipment company, situated in Cairo. The respondents and appellees were a Chinese company, with its seat in Nanshan district, Shenzen, the Egyptian General Organization for Import and Export Control, and an Egyptian company, with its seat in Heliopolis, Cairo.
2. Facts and instance ruling
The Appellant filed a lawsuit against the Chinese Company and the Second Appellee at Cairo Court of Appeal, requesting a judgment obliging the First Appellee to pay the amount of ten million Egyptian pounds as monetary and moral compensation resulting from the contract’s termination. The Appellant asserted that it had been assigned as the sole agent of the First Appellee in Egypt, for selling ultrasonic wave devices, and that it was unexpectedly notified by the First Appellee that the contract was terminated.
The first instance court ordered that the lawsuit be dismissed for lack of proper service to the Chinese company. The Appellant claimed that service had been effected through the Public Prosecution Office, following all necessary procedures through diplomatic channels in China, pursuant to article 13 (9) of the Egyptian Civil and Commercial Code of Procedure (CCCP), and by notification of the claim to the first Appellee’s legal representative (Commercial Agent) pursuant to article 13 (5) CCCP.
Article 13 (9) CCCP states that, if no international treaty or a specific provision of law is applicable, service shall be made by delivering the documents to the public prosecutor, who then forwards them to the Minister of Foreign Affairs, to be delivered through diplomatic channels to the country of destination. Art. 13 (5) CCCP stipulates that, if service is addressed to a foreign company that has a branch or agent in Egypt, domestic service shall be effected (i.e. to the branch or agent located in Egypt).
3. The Supreme Court ruling
The Court of Cassation referred initially to Art. 13 (5) & (9) CCCP. It then mentioned Articles 3 & 14 of the Judicial Cooperation Treaty on Civil, Commercial and Criminal Matters between the Arab Republic of Egypt and The People’s Republic of China, signed on 21/4/1994, which stipulates that: “For the purposes of requesting and providing judicial assistance, parties shall communicate through their central authorities unless otherwise provided for in this Treaty. Central authorities of both parties are represented by the Ministries of Justice. Both parties shall serve judicial documents in civil and commercial matters pursuant to Hague Convention on the service Abroad of Judicial and Extrajudicial Documents in civil or Commercial Matters concluded on 15/11/1965’’.
Based on the above, the Court of Cassation decided as follows: The Hague Convention exclusively stipulates methods, means and conditions for serving judicial documents unless agreed between the Parties on other methods pursuant to Article 11 of the same Convention, and obliges the judge to stay proceedings, save when a document was served by a method prescribed by the internal law of the State addressed, or when the document was actually served to the defendant in its residence under one of the methods prescribed in the Convention in sufficient time to enable him to arrange for his defence.
Since the legislator has permitted in Article 13(5) CCCP that foreign companies may be served by delivering a copy to its branch or agent in Egypt, their existence is considered a question of fact under the exclusive competence of the court. Accordingly, the Court of Cassation confirmed the instance decision, which ruled that service made to the first Appellee through the third appellee (Trade And Importing Company in Heliopolis), ostensibly being its commercial agent and representative, was improper, since the representative of the latter denied its relation with the first Appellee.
Finally, delivering the document to the Public Prosecution in order to take necessary actions towards service by diplomatic channels is not sufficient, because notice was not delivered / served to the first Appellee.
4. Conclusion
The judgment offers a valuable insight into the practice of Egyptian courts in regards to notification of documents abroad. It is noteworthy that the Court of Cassation examined carefully all legal regimes related to the subject matter: It referred to domestic law (CCCP), the Egyptian – Chinese bilateral treaty, and the multilateral convention, to which the bilateral convention refers. The question whether service of process abroad was necessary or not was decided on a substantive level: Given that the appellant failed to demonstrate that the third appellee was the representative of the Chinese company, the court rightfully considered that service solely to the local Transmission Authority through the Prosecutor’s Office does not suffice. Hence, whenever the Hague Service Convention applies, the Court of Cassation dismisses fictitious service (remise au parquet).
The Justice Initiative Frankfurt am Main 2017
Written by Prof. Dr. Dres. h.c. Burkhard Hess, Executive Director Max Planck Institute Luxembourg for Procedural Law
Against the backdrop of Brexit, an initiative has been launched to strengthen Frankfurt as a hot spot for commercial litigation in the European Judicial Area. On March 30, 2017, the Minister of Justice of the Federal State Hessen, Ms Kühne-Hörmann, organized a conference at which the Justice Initiative was presented. More than 120 stakeholders (lawyers, judges, businesses) attended the conference. The original paper was elaborated by Professors Burkhard Hess (Luxembourg), Thomas Pfeiffer (Heidelberg), Christian Duve (Heidelberg) and Roman Poseck (President of the Frankfurt Court of Appeal). Here, we are pleased to provide an English translation of the position paper with some additional information on German procedural law for an international audience. The proposal has, as a matter of principle, been endorsed by the Minister of Justice. Its proposals are now being discussed and shall be implemented in the next months to come. The paper reads as follows: Read more
Paris, the Jurisdiction of Choice?
On January 17th, the President of the Paris Commercial Court (Tribunal de commerce) inaugurated a new international division.
The new division, which is in fact the 3rd division of the court (3ème Chambre), is to be staffed with nine judges who speak foreign languages, and will therefore be able to assess evidence written in a foreign language. For now, the languages will be English, German and Spanish, as one juge speaking Spanish and two speaking German are currently on the court.
In an interview to the Fondation de droit continental (Civil law initiative), the President of the Court explained that the point was to make French justice more competitive and attract international cases. It also made clear that France was following Germany’s lead, where several international divisions were established in 2009 in Hamburg and Cologne.
French Commercial Courts
It should be pointed out to readers unfamiliar with the French legal system that French commercial courts are not staffed with professional judges, but with members of the business community working part-time at the court (and for free). In Paris, however, many of these judges work in the legal department of their company, and are thus fine lawyers.
Also, French commercial courts (and French civil courts generally) virtually never hear witnesses, so the issue of the language in which they may address the court does not arise.
Some issues
So, the new international division will be able to read documents in several foreign languages. However, nothing suggests that parties or lawyers will be able either to speak, or to write pleadings, in any other language than French. Lawyers arguing these cases will still need to file their pleadings in French, and thus to translate them in English beforehand for their clients. Furthermore, the interview of the Court’s President seems to suggest that using a foreign language will not be a right for the parties. Quite to the contrary, it seems that it will not be possible if one of the parties disagrees, and demands documents be translated in French.
Will that be enough to attract additional commercial cases to Paris?
I wonder whether introducing class actions in French civil procedure would have been more efficient in this respect.
For the full interview of the Court’s President, see after the jump.
News
Third Issue for Journal of Private International Law for 2022
The third issue for the Journal of Private International Law for 2022 was published today. It contains the following articles:
K Takahashi, “Law Applicable to Proprietary Issues of Crypto-Assets”
Indonesian civil procedure law recognises choice of court agreements made by contracting parties. However, Indonesian courts often do not recognise the jurisdiction of the courts chosen by the parties. That is because under Indonesian civil procedure codes, the principle of actor sequitur forum rei can prevail over the parties’ choice of court. In addition, since Indonesian law does not govern the jurisdiction of foreign courts, Indonesian courts continue to exercise jurisdiction over the parties’ disputes based on Indonesian civil procedure codes, although the parties have designated foreign courts in their choice of court agreements. This article suggests that Indonesia pass into law the Bill of Indonesian Private International Law that has provisions concerning international jurisdiction of foreign courts as well as Indonesian courts, and accede to the 2005 HCCH Choice of Court Agreements Convention. This article also suggests steps to be taken to protect Indonesia’s interests.
Mohammad Aljarallah, “The Proof of Foreign Law before Kuwaiti Courts: The way forward”
The Kuwaiti Parliament issued Law No. 5/1961 on the Relations of Foreign Elements in an effort to regulate the foreign laws in Kuwait. It neither gives a hint on the nature of foreign law, nor has it been amended to adopt modern legal theories in ascertaining foreign law in civil proceedings in the past 60 years. This study provides an overview of the nature of foreign laws before Kuwaiti courts, a subject that has scarcely been researched. It also provides a critical assessment of the law, as current laws and court practices lack clarity. Furthermore, they are overwhelmed by national tendencies and inconsistencies. The study suggests new methods that will increase trust and provide justice when ascertaining foreign law in civil proceedings. Further, it suggests amendments to present laws, interference of higher courts, utilisation of new tools, reactivation of treaties, and using the assistance of international organisations to ensure effective access and proper application of foreign laws. Finally, it aims to add certainty, predictability, and uniformity to Kuwaiti court practices.
CZ Qu, “Cross Border Assistance as a Restructuring Device for Hong Kong: The Case for its Retention”
An overwhelming majority of companies listed in Hong Kong are incorporated in Bermuda/Caribbean jurisdictions. When these firms falter, insolvency proceedings are often commenced in Hong Kong. The debtor who wishes to restructure its debts will need to have enforcement actions stayed. Hong Kong does not have a statutory moratorium structure for restructuring purposes. Between 2018 and 2021, Hong Kong’s Companies Court addressed this difficulty by granting cross-border assistance, in the form of, inter alia, a stay order, to the debtor’s offshore officeholders, whose appointment triggers a stay for restructuring purposes. The Court has recently decided to cease the use of this method. This paper assesses this decision by, inter alia, comparing the stay mechanism in the UNCITRAL Model Law on Cross Border Insolvency. It concludes that it is possible, and desirable, to continue the use of the cross-border assistance method without jeopardising the position of the affected parties.
Timeshare contracts are expressly protected as consumer contracts under Article 6(4)(c) Rome I. With the extended notion of timeshare in Directive 2008/122/EC, the question is whether timeshare-related contracts should be protected as consumer contracts. Additionally, unlike Article 6(4)(c) Rome I, Article 17 Brussels Ia does not explicitly include timeshare contracts into its material scope nor mention the concept of timeshare. It gives rise to the question whether, and if yes, how, timeshare contracts should be protected as consumer contracts under Brussels Ia. This article argues that both timeshare contracts and timeshare-related contracts should be protected as consumer contracts under EU private international law. To this end, Brussels Ia should establish a new provision, Article 17(4), which expressly includes timeshare contracts in its material scope, by referring to the timeshare notion in Directive 2008/122/EC in the same way as in Article 6(4)(c) Rome I.
Open call for abstracts: European Yearbook of International Economic Law 2023
The editors of the European Yearbook of International Economic Law (EYIEL) welcome abstracts from scholars and practitioners at all stages of their career for the EYIEL 2023. This year’s focus section will be on European and International (Public) Procurement and Competition Law. Next to this, in Part II the EYIEL will consider Current Challenges, Developments and Events in European and International Economic Law.
For the Focus Section, abstracts may cover any topic relating to (public) procurement and competition law in the field of European and international economic law, though preference is given to topics focusing on the international perspective. We particularly welcome contributions addressing the following aspects:
- the WTO (Internal) Procurement Regime,
- the UN Procurement Regime,
- the EU Procurement Regime,
- General International (Public) Procurement,
- the EU Competition Law Regime,
- the International Competition Law Regime.
For the General Section, abstracts shall address topics which are currently of relevance in the context of European and International Economic Law. Similarly, reviews of case-law or practices and developments in the context of international organisations are encouraged.
Abstracts should not exceed 500 words. They should be concise and clearly outline the significance of the proposed contribution. Abstracts together with a short bio note maybe submitted until 28 February 2023 via e-mail to eyiel@leuphana.de.
Successful applicants will be notified at the latest by 1 April 2023, that their proposal has been accepted. They are expected to send in their final contribution by 31 July 2023.
Final submissions will under go peer review prior to publication. Given that submissions are to be developed on the basis of the proposal, that review will focus on the development of the paper’s central argument.
Submissionsaddressingparticularregionalandinstitutionaldevelopmentsshould be analytical and not descriptive. Due to its character as a yearbook, the EYIEL will not publish articles which will lose their relevance quickly. Submissions should not exceed 12,000 words(including footnotes and references), though preference may be given to shorter submissions. They should include an abstract and a biographical note. Submissions need to be in conformity with the EYIEL style guidelines.
The editors of the EYIEL welcome informal enquiries about any other relevant topic in the field of international and European economic law. In case you have an idea or proposal, please submit your enquiry via e-mail to eyiel@leuphana.de.
New rules on service outside Australia for the Federal Court of Australia
The Federal Court Legislation Amendment Rules 2022 (Cth) (‘Amendment Rules’) came into force on 13 January 2023. Among other things, they amend the Federal Court Rules 2011 (Cth) (‘FCR’) by repealing division 10.4, which dealt with service outside Australia. The Amendment Rules replace the old division 10.4 with a new one, which brings the Federal Court’s approach to service outside Australia into alignment with all other Australian jurisdictions, except for Western Australia and the Northern Territory.[1]
The previous approach to service outside Australia in the Federal Court
Historically, Australia’s superior courts have not been uniform in their approach to service outside the jurisdiction and outside Australia. The Federal Court’s approach was somewhat unique. Unlike the position in some of the State Supreme Courts,[2] leave to serve outside Australia[3] was required before service (FCR r 10.43(2)). Nonetheless, if leave was not obtained beforehand, service could be confirmed after the fact if sufficiently explained (FCR r 10.43(6)–(7)).
Leave to serve turned on three conditions: the court had subject matter jurisdiction, the claim was of a kind mentioned in the rules, and the party had a prima facie case for any or all of the relief claimed: FCR r 10.43(4). Even if those elements were satisfied, the court may have refused leave to serve in exercise of a ‘residual discretion’: Tiger Yacht Management Ltd v Morris (2019) 268 FCR 548, [100].
The second element, that the claim is of a kind mentioned in the rules, directed attention to FCR r 10.42. That rule set out pigeonholes or connecting factors that are familiar grounds of direct jurisdiction. For example, service may be permitted for a proceeding based on a cause of action arising in Australia (item 1), or where the defendant has submitted to the jurisdiction (item 19).
Some of the connecting factors might be described as exorbitant. For example, service may have been permitted where the proceeding was ‘based on, or seeking the recovery of, damage suffered wholly or partly in Australia caused by a tortious act or omission (wherever occurring)’ (item 5). Reid Mortensen, Richard Garnett and Mary Keyes commented, ‘[i]n effect, [this ground of service] allows service outside Australia merely because of the plaintiff’s personal connection—usually be reason of residence—with the forum, despite the complete absence of any connection between the events or the defendant on the one hand, and the forum on the other’.[4]
Combined with Australian courts’ unique approach to forum non conveniens (see Puttick v Tenon Ltd (2008) 238 CLR 265), the FCR provided plenty of room for establishing personal jurisdiction over foreign defendants in matters with foreign elements, even where those matters had strong connections to foreign jurisdictions. That position continues under the new approach effected by the Amendment Rules in the amended FCR.
The new approach
The Amendment Rules provide in a note to the new div 10.4: ‘t]his Division contains rules that have been harmonised in accordance with the advice of the Council of Chief Justices’ Rules Harmonisation Committee’. Those rules have been in force in New South Wales and other Australian jurisdictions for some years. When the rules changed in New South Wales in late 2016, Vivienne Bath and I explained the significance for that State: Michael Douglas and Vivienne Bath, ‘A New Approach to Service Outside the Jurisdiction and Outside Australia under the Uniform Civil Procedure Rules’ (2017) 44(2) Australian Bar Review 160.
As regards the Federal Court, considering the previous approach, some of the notable changes include the following.
First, in most cases, leave is not required before service, provided that the case comes within the scope of (new) defined grounds of direct jurisdiction: FCR r 10.42.
Second, the grounds of direct jurisdiction have changed: FCR r 10.42. Many of the changes seemingly involve a simple a re-wording or a re-structure rather than anything radical, although I am sure that the case law will tease out differences of substance in coming months.
One of the new grounds is worth highlighting. The new FCR r 10.42(j) provides:
(j) if the proceeding arises under a law of the Commonwealth, a State or a Territory, and:
(i) any act or omission to which the proceeding relates was done or occurred in Australia; or
(ii) any loss or damage to which the proceeding relates was sustained in Australia; or
(iii) the law applies expressly or by implication to an act or omission that was done or occurred outside Australia in the circumstances alleged; or
(iv) the law expressly or by implication confers jurisdiction on the Court over persons outside Australia (in which case any requirements of the law relating to service must be complied with);
FCR r 10.42(j)(iii) could provide a basis for jurisdiction over subject matter with very limited connection to Australia, provided an Australian legislature has sufficiently extended the territorial operation of a statute. This pigeonhole could give rise to some more interesting questions about the proper approach to identification of the applicable law where forum statutes are involved in the Australian context.[5]
Third, even if the proceeding does not come within one of the grounds of direct jurisdiction, service outside Australia may still be permitted with leave: FCR r 10.43. Leave requires the Court to be satisfied that the proceeding has a real and substantial connection with Australia, Australia is an appropriate forum for the proceeding, and in all the circumstances the Court should exercise jurisdiction: FCR r 10.43(4)(a)–(c).
Fourth, once a person is served outside Australia, that person may apply to stay or dismiss the proceeding, or set aside service: FCR r 10.43A(1). The Court may make an order to that effect if satisfied service of was not authorised by these Rules, Australia is an inappropriate forum for the proceeding, or the claim has insufficient prospects of success to warrant putting the person served outside Australia to the time, expense and trouble of defending it: FCR r 10.43A(2)(a)–(c). This mechanism is introduced with the title, ‘Court’s discretion whether to assume jurisdiction’.
The second ground, that Australia is an inappropriate forum, turns on application of the ‘clearly inappropriate forum’ test of the Australian forum non conveniens doctrine: Chandrasekaran v Navaratnem [2022] NSWSC 346, [5]–[8]; Sapphire Group Pty Ltd v Luxotico HK Ltd [2021] NSWSC 589, [77]–[80]; Studorp Ltd v Robinson [2012] NSWCA 382, [5], [62].
Fifth, if service on a person outside Australia in accordance with the new provisions was not successful, the party may apply to serve the person substituting another method of service: FCR r 10.49(a). This may prove particularly useful for applicants chasing rogues who have absconded overseas. It might allow for service on a person outside Australia by email or even social media, contrary to historical practice: see Yemini v Twitter International Company [2022] FCA 318, [5].
Comment
I expect that the Amendment Rules will be welcomed by litigators who frequent the Federal Court of Australia. Doing away with the need to seek leave in advance will increase efficiency and save some costs. Lawyers on the east and south coasts may appreciate not having to be across substantive differences as regards long-arm jurisdiction between the Federal Court and State Supreme Courts. (Those in glorious Western Australia continue to be in a different / superior position.)
Private international law scholars may be less enthusiastic. Writing on the 2016 equivalent reforms in New South Wales, Andrew Dickinson lamented the tenuous connection that could justify long-arm jurisdiction under the amended Uniform Civil Procedure Rules 2005 (NSW). Among other things, he noted that the ‘service without leave’ approach means that considerations of forum non conveniens might only arise if an application is brought by a person served contesting jurisdiction (under the equivalent of the new FCR r 10.43A(1)), costing them time and cost with respect to a matter with minimal connection to the forum.[6] That would be a fair objection to the new position in the Federal Court. I would argue, however, that the Federal Court’s new approach to long-arm service is a sensible innovation to better equip the Court to deal with the realities of modern commercial life (see Abela v Baadarani [2013] 1 WLR 2043, [53]). Australian courts are increasingly called on to deal with matters with a foreign element—their rules should adapt accordingly.
One of the more significant impacts of the Amendment Rules will concern a case that is currently before the High Court of Australia: Facebook Inc v Australian Information Commissioner & Anor (Case S 137/2022). Jeanne Huang and I previously blogged other decisions that have ultimately led to this appeal. Among other things, the American company behind Facebook (now Meta Platforms Inc) is challenging its service outside Australia in a proceeding brought by Australia’s privacy regulator in the wake of the Cambridge Analytica scandal. The rules on which the appeal depends are no longer in force. If the High Court’s previous grant of special leave to appeal is maintained, the forthcoming decision will be a new leading authority on long-arm jurisdiction in Australia.
Dr Michael Douglas is a Senior Lecturer at the University of Western Australia and a Consultant at Bennett, a litigation firm in Western Australia
[1] Civil Procedure Rules 2006 (ACT) div 6.8.9; Supreme Court Rules 2000 (Tas) div 10; Supreme Court Civil Rules 2006 (SA) pt 4 div 2; Supreme Court (General Civil Proceedings) Rules 2015 (Vic) O 7 pt 1; Uniform Civil Procedure Rules 1999 (Qld) pt 7 div 1; Uniform Civil Procedure Rules 2005 (NSW) pt 11, sch 6.
[2] Leave to serve is still required in the Supreme Court of Western Australia. See Rules of the Supreme Court 1971 (WA) Order 10. See further M Davies, AS Bell, PLG Brereton and M Douglas, Nygh’s Conflict of Laws in Australia (LexisNexis Butterworths, 20th ed, 2020) ch 3.
[3] Except with respect to service in New Zealand. See Trans-Tasman Proceedings Act 2010 (Cth).
[4] Reid Mortensen, Richard Garnett and Mary Keyes, Private International Law in Australia (LexisNexis Butterworths, 4th ed, 2019) 63–4.
[5] See Michael Douglas, ‘Does Choice of Law Matter?’ (2023) Australian International Law Journal (forthcoming).
[6] Andrew Dickinson, ‘In Absentia: The Evolution and Reform of Australian Rules of Adjudicatory Jurisdiction’ in Michael Douglas, Vivienne Bath, Mary Keyes and Andrew Dickinson (eds), Commercial Issues in Private International Law (Hart, 2019) 13, 42.