Tag Archive for: recognition

Commission’s Proposals On Matrimonial Property Regimes and Property Consequences of Registered Partnerships

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As announced in the past months, on 16 March 2011 the Commission presented the proposals for two regulations on property rights of “international” married couples and registered partnerships:

  • Proposal for a Council Regulation on jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes, COM(2011) 126 of 16 March 2011;
  • Proposal for a Council Regulation on jurisdiction, applicable law and the recognition and enforcement of decisions regarding the property consequences of registered partnerships, COM(2011) 127 of 16 March 2011.

The proposals are accompanied by a Communication from the Commission “Bringing legal clarity to property rights for international couples” –  COM(2011) 125 of 16 March 2011 – which describes the difficulties faced by international couples in the current framework of EU legislation and national rules of the 27 Member States (see also the figures presented in the press release and the related FAQs).

The origin of the initiative dates back to the early days of the “communitarisation” of the conflict of laws. According to the Explanatory Memorandum to doc. COM(2011) 126:

The adoption of European legislation on matrimonial property regimes was among the priorities identified in the 1998 Vienna Action Plan. The programme on mutual recognition of decisions in civil and commercial matters adopted by the Council on 30 November 2001 provided for the drafting of an instrument on jurisdiction and the recognition and enforcement of decisions as regards ‘rights in property arising out of a matrimonial relationship and the property consequences of the separation of an unmarried couple’. The Hague programme, which was adopted by the European Council on 4 and 5 November 2004, set the implementation of the mutual recognition programme as a top priority and called on the Commission to submit a Green Paper on ‘the conflict of laws in matters concerning matrimonial property regimes, including the question of jurisdiction and mutual recognition’, and stressed the need to adopt legislation by 2011.

A thorough research on the matter was previously carried in 2003 at an academic level, on behalf of the Commission, by the TMC Asser Instituut and the Département de droit international of the Catholic University of Leuven (UCL) (the whole study  – Final Report in French and Country Reports on the legislation of Member States – can be downloaded from the Documentation Centre of the DG Justice, Freedom and Security). The Green Paper on conflict of laws in matters concerning matrimonial property regimes, including the question of jurisdiction and mutual recognition, was published on 17 July 2006, and received nearly forty replies in the public consultation launched by the Commission.

The 2009 Stockholm Programme came back to the need of European legislation in the field, stating that mutual recognition should be extended to matrimonial property regimes and the property consequences of the separation of unmarried couples. The need was further stressed in the ‘EU Citizenship Report 2010: Dismantling the obstacles to EU citizens’ rights‘ (p. 5 ff.), adopted on 27 October 2010, where the Commission announced for 2011 an official legislative initiative. The drafting of the proposals is summarised as follows in the Explanatory memorandum:

A group of experts, PRM/III, was set up by the Commission to draw up the proposal. The group was made up of experts representing the range of professions concerned and the different European legal traditions; it met five times between 2008 and 2010. The Commission also held a public hearing on 28 September 2009 involving some hundred participants; the debates confirmed the need for an EU instrument for matrimonial property regimes that covered in particular applicable law, jurisdiction and the recognition and enforcement of decisions. A meeting with national experts was held on 23 March 2010 to discuss the thrust of the proposal being drafted.
Finally, the Commission conducted a joint impact study on the proposals for Regulations on matrimonial property regimes and the property consequences of registered partnerships. [see doc. n. SEC(2011) 327 fin. and SEC(2011)328 fin. of 16 March 2011]

Pursuant to Art. 81(3) TFEU the proposed regulations, as “measures concerning family law with cross-border implications”, are subject to a special legislative procedure: the Council shall act unanimously, after consulting the European Parliament. The second subparagraph of Art. 81(3), however, provides a “passerelle-clause”, under which “the Council, on a proposal from the Commission, may adopt a decision determining those aspects of family law with cross-border implications which may be the subject of acts adopted by the ordinary legislative procedure”. The third subparagraph of the provision grants to national Parliaments of the Member States a veto power, to be exercised within six months of the notification of the Commission’s proposal to enact the “passerelle”.

Publication: Baratta (Ed.), Dizionario di Diritto Internazionale Privato

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The Italian publishing house Giuffrè has recently published a new book in the law dictionary series Dizionari del diritto privato, directed by Prof. Natalino Irti. The volume, Diritto internazionale privato, edited by Prof. Roberto Baratta, is entirely devoted to Private International Law.

It contains more than 60 entries relating to conflict of laws and jurisdictions, authored by prominent Italian PIL scholars. A detailed TOC is available here.

Title: Diritto internazionale privato, edited by Roberto Baratta, Giuffrè (series: Dizionari del Diritto privato), Milano, 2010, VI-566 pages.

ISBN: 978-88-14-15911-4. Price: EUR 65. Available at Giuffrè.

(Many thanks to Fabrizio Marongiu Buonaiuti, Univ. of Rome “La Sapienza”, for the tip-off)

Kuwait Airways Corporation v. Iraq in the Supreme Court of Canada

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In yet another, but not the final, step in the very long-running litigation between KAC, IAC and the Republic of Iraq, the Supreme Court of Canada has held that the enforcement in Quebec of a 2008 judgment of the English Commercial Court ordering Iraq to pay CAD$84 million to KAC is not barred by soveriegn immunity (decision here).

Many on this list will be familar with the facts.  After the 1990 invasion of Kuwait, KAC sued IAC in England for conversion of several airplanes.  As part of that litigation, KAC was able to claim against Iraq for the costs of the actions that had been brought.  This claim flowed from Iraq’s having controlled and funded IAC’s defence, and it was not barred by sovereign immunity in England because it fell within the commercial activity exception.  Iraq did not defend this claim and default judgment was granted.

KAC discovered immovable property owned by Iraq in Quebec and also some undelivered airplanes Iraq was buying from Bombardier Aerospace.  It thus brought proceedings in Quebec to enforce the English judgment.  Two lower courts held the claim was barred by sovereign immunity but the Supreme Court of Canada found that it fell within the commercial activity exception.

The court applied the State Immunity Act, RSC 1985, c S-18 and held that it applied to proceedings to enforce a foreign judgment (paras. 19-20).  The English decision, which addressed the issue of sovereign immunity, was not binding in Canada and was not res judicata (since to be so it would first have to be recognized in Canada, which was the very issue before the court) (para. 22).  The application of the commercial activity exception to the facts is somewhat brief (para. 35), though there is some useful discussion of the scope of the exception in the United Kingdom, the United States and Canada (paras. 25-33).

Two other points of interest: 1. the court does not wade into the issue of whether there are any exceptions to sovereign immunity beyond those set out in the statute (para. 24), and 2. the court accepts the factual findings of the English decision as part of its analysis, prior to concluding that the decision is enforceable in Canada (para. 34).  This latter point seems somewhat hard to explain, and the court does not offer much explanation.

The Supreme Court of Canada did not determine if the English judgment is enforceable in Quebec – it only dealt with the sovereign immunity issue.  The case was therefore remanded to the court of first instance to hear the claim for enforcement.  Iraq likely has some further arguments to advance, such as that the Quebec court lacks jurisdiction over it and that the English default judgment is not entitled to recognition and enforcement (for example, due to the lack of a real and substantial connection between England and the claim advanced against Iraq).

New Articles in Canadian Publications

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Two recent publications contain several topical articles:

In the 2010 issue (volume 60) of the University of New Brunswick Law Journal are the following five articles: Catherine Walsh: “The Uses and Abuses of Party Autonomy in International Contracts”; Joshua Karton, “Party Autonomy and Choice of Law: Is International Arbitration Leading the Way or Marching to the Beat of its own Drummer?”; Stephen Pitel, “Reformulating a Real and Substantial Connection”; John McEvoy, “‘After the Storm: The Impact of the Financial Crisis on Private International Law’: Jurisdiction”; and Elizabeth Edinger, “The Problem of Parallel Actions: The Softer Alternative”.  This journal is available to subscribers, including through Westlaw.

In Jeff Berryman & Rick Bigwood, eds., The Law of Remedies: New Directions in the Common Law (Toronto: Irwin Law Inc., 2010) are four articles that relate to the conflict of laws: David Capper, “Mareva Orders in Globalized Litigation”; Scott Fairley, “Exporting Your Remedy: A Canadian Perspective on the Recognition and Enforcement of Monetary and Other Relief”; Garry Davis, “Damages in Transnational Tort Litigation: Legislative Restrictions and the Substance/Procedure Distinction in Australian Conflict of Laws”; and Russell Weaver & David Partlett, “The Globalization of Defamation”.  This collection of articles is available for purchase here.

Court of Appeal for Ontario Rejects “Fourth Defence” to Enforcement of Foreign Judgments

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The long-running litigation between the United States and a group of defendants who operated a cross-border telemarketing business selling Canadian and foreign lottery tickets to Americans has reached another mile-post with the decision of the Court of Appeal for Ontario in United States of America v. Yemec, 2010 ONCA 414 (available here).  The defendants were likely riding high before this decision, having done quite well in resisting the enforcement of the judgment of an Illinois court finding them liable for $19 million and permanently enjoining them from telemarketing any product or service to anyone in the United States.  But the tables are now turned, with the Court of Appeal for Ontario ordering enforcement of the Illinois judgment.

The most notable jurisprudential issue in the case concerns the scope of the defences at common law to an action to recognize and enforce a foreign judgment.  At common law there are three central defences: fraud, denial of natural justice, and public policy.  However, the Supreme Court of Canada indicated in Beals v. Saldanha, [2003] 3 S.C.R. 416 that this was not a closed list and in the appropriate circumstances a new defence might be created.  In Yemec the motions judge of the Superior Court of Justice hearing the case was persuaded that there was a genuine issue requiring a trial on the question of a “fourth defence”, namely “denial of a meaningful opportunity to be heard”.  The Court of Appeal has now held that there is no such defence: that concerns of this nature fall comfortably within the scope of the denial of natural justice defence.  Further, on the facts, the appellate court found that the defendants were not denied an opportunity to be heard in the courts of Illinois (paras. 26-29). 

The case is one of several in the wake of Pro Swing Inc. v. Elta Golf Inc., [2006]  2 S.C.R. 612 to enforce a foreign non-monetary order, namely the permanent injunction.  The Court of Appeal found the criteria for enforcement set out by the Supreme Court of Canada in Pro Swing were met in this case (paras. 45-53).

The case raises one other interesting issue.  The United States had, at the outset of the litigation in Illinois and Ontario, obtained a freezing order (Mareva) and a civil seizure order (Anton Piller).  These interlocutory orders were subsequently dissolved, in part for failure of the United States to make full disclosure when moving ex parte to obtain the orders.  The defendants then insisted on a damages inquiry under the undertaking in damages the United States had provided as a condition of obtaining the orders.  The plaintiff argued that such an inquiry should not proceed, given that in effect the defendants were seeking to recover lost profits from a business the Illinois court had concluded was illegal.  The Court of Appeal for Ontario held that the damages inquiry should proceed, stressing the importance of enforcing the general undertaking in damages (paras. 69-72).  It did note, though, that there was evidence that the defendants had violated both Canadian and American law (paras. 78-83) and that accordingly it would be difficult for them to establish compensable damages.  But they were entitled to try (paras 85-86).

Canadian Articles on Multijurisdictional Class Actions

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Three recent articles have been published about multijurisdictional class actions in Canada.  One of the most critical issues is whether the courts of a province will enforce a class action judgment from another province or another country approving a settlement that purports to bind plaintiffs resident in the province.  I know that similar issues are under consideration in other countries, so this literature could be of value as comparative law.

Genevieve Saumier, “Competing Class Actions Across Canada: Still at the Starting Gate after Canada Post v. Levine” (2010) 48 C.B.L.J. 462

Tanya Monestier, “Personal Jurisdiction over Non-Resident Class Members: Have We Gone Down the Wrong Road?” (2010) 45 Texas International Law Journal 537

Peter W. Hogg & S. Gordon McKee, “Are National Class Actions Constitutional?” (2010) 26 N.J.C.L. 279

These take their place alongside several other articles on this topic from the past few years.

Canadian National Class Action Judgment Not Recognized in Quebec

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The Supreme Court of Canada has confirmed the decision of the Quebec Court of Appeal in Canada Post Corp. v. Lepine (available here).  The decision flows from Canada Post’s termination, after only a year, of a lifetime internet service it sold to customers.  This led to class proceedings in Quebec and Ontario.  While aware of the proceedings in Quebec, the parties settled the class proceedings in Ontario in a judgment that purported to cover residents of Quebec.  When the Quebec proceedings continued (due to dissatifaction with what was obtained under the Ontario settlement) the defendant sought to have the Ontario judgment recognized in Quebec.

Recognition of foreign judgments in Quebec is governed by Art 3155 of the Civil Code, and so this case is very centrally concerned both with civil law (rather than common law) and with interpreting the specific provisions of the Code.  Art 3155 provides several bases for refusing to recognize a foreign judgment (see para. 22).  

The first issue is whether the Ontario court had jurisdiction to grant the judgment.  The Supreme Court of Canada devotes the most attention to this issue because it raises an interesting question within Quebec’s law on recognition.  Quebec uses the “mirror principle” for assessing jurisdiction, and so would consider whether the foreign court had taken jurisdiction in accord with Quebec’s own approach to taking jurisdiction.  That approach includes the doctrine of forum non conveniens.  So this raised the issue of whether the Quebec court could hold that, because Ontario did not stay the proceedings at least as they concerned residents of Quebec, it did not have jurisdiction in the sense contemplated by the Code (para. 27).  The Supreme Court of Canada rejects this approach: forum non conveniens issues are not to be considered in assessing the foreign court’s jurisdiction (paras. 34-37).  The Ontario court had jurisdiction.

The second issue is whether the Ontario judgment contravened fundamental principles of procedure.  Here the court holds that the class proceeding notices provided to residents of Quebec under the Ontario judgment were deficient.  On the facts, this is an understandable conclusion: there is no question that the notices could have been clearer, especially as concerned the relation between the Ontario and Quebec proceedings (para. 45).  This conclusion, in itself, is sufficient to resolve the case.

Third, Art 3155 provides a defence to recognition where essentially the same proceeding as that giving rise to the judgment is pending before the Quebec courts.  Canada Post had advanced its argument based on a somewhat technical distinction between a proceeding seeking certification for a class action and the subsequently-certified action (para. 53) but the court rejected this distinction (para. 54).  This aspect of the decision, interpreting Art 3155(4), could prove very important to the future of so-called national class actions in Canada, since it would then seem that as long as proceedings had started in Quebec, a decision from another province purporting to cover Quebec residents in the same class action would not be recognized in Quebec.  This gives residents of Quebec a protection residents of the other provinces do not have.

This is a welcome decision on the first issue, an understandable decision on the second issue, and a decision that requires more consideration on the third issue.