International procedure

1
International procedure

• Overview of issues
• Jurisdiction of courts (incl. issue of lis
  pendens)
• Service abroad
• Specific rules for cross-border disputes (incl.
  possible use of harmonised rules of procedure)
• Application of foreign law
• Taking evidence abroad
• Recognition and enforcement of foreign judgments
  or other instruments
• Insolvency procedures

2
International procedure - sources

• Sources in general
• National law on jurisdiction, service, procedure
  incl. evidence of facts and law, insolvency
  proceedings, recognition and enforcement
• In part replaced by EU legislation (esp.
  Regulations)
• Multilateral and bilateral conventions
• NB. For immunities of jurisdiction, see Ch. 1

3
Reasons for choice

• Why does it matter ? What do you pay attention to
  when choosing a forum ?
• Proximity-familiarity of a party (or its lawyer)
  with the court gt predictability at less costs
• Procedural reasons
• different rules of procedure, incl. rules on
  taking evidence, on confidentiality
• use of language,
• costs and distribution of costs American
  rule  (each party its own costs) v. fee-shifting
  (eg English rule loser pays all, mitigated
  since 2013, as in most continental countries)
• contingency fees ? Allowed in mist US states,
  forbidden in most continental systems, in EW to
  some extent allowed. But conditional fee
  agreements or success fees usually allowed.
• trust in the judges,
• proximity of evidence (incl. presence of
  witnesses)
• trust in law firms

4
Reasons for choice

• Why does it matter ? What do you pay attention to
  when choosing a forum ?
• Substantive reasons
• applicable rules of the lex fori, esp. those
  overruling choice of law (supermandatory rules)
• Court of the country of the applicable law will
  know that law better gt more predictable
•  national  interpretation of foreign or uniform
  law
• Possible home bias (eg interpretation of
  conformity of goods)
• remedies courts in that country (can) grant (eg
  specific performance injunctions post-decision
  discovery of assets (eg NML/Argentina))
• Chances of recognition and enforcement abroad

5
International jurisdiction

• Domestic rules on international jurisdiction of
  national courts (in Belgium in Code of P.I.L.)
• often rather wide jurisdiction,
• e.g. based also on nationality of claimant
  foreign defendant found in the country, foreign
  defendant doing business in the country, etc.
• sometimes limited by  FNC  (forum non
  conveniens)
• sometimes protected by anti-suit injunctions
  against proceedings abroad (eg Gallo Winery t.
  Andina, case in US against exorbitant
  jurisdiction rule in Ecuador)
• Lis alibi pendens not always an exception or
  ground for suspension

6
International jurisdiction

• Domestic rules on international jurisdiction
  limited by
• International conventions (bilateral or
  multilateral) (no uniform interpretation
  authority)
• Hague Convention on Choice of Court Agreements
  2005 (expected to enter into force for EU
  (without Denmark), Mexico and US)
• Hague Conference preliminary negotiations (2012)
  for a Judgments Convention
• CMR art. 31
• International convenions establishing
  international or common courts (eg European
  patent Court, Benelux Court)
• EU-Regulations next slide - uniform
  interpretation by ECJ
• Lugano Convention 1988, revised 2007 EU-EFTA
  Convention (CH, N, Iceland) parallel to
  EU-Regulation 44/2001 (incl. an endeavour to
  interpret in conformity with identical rules in
  EU Regulation)

7
International jurisdiction - EU

• EU-Regulations
• Civil and commercial matters in general Reg.
  1215/2012 ( Brussels-I bis (Recast) (next
  slide)
• Separate Regulations on matrimonial matters and
  parental responsibility Brussels-II), maintenance
  obligations (alimony), on transnational
  successions (650/2012)
• Regulation on insolvency proceedings 1346/2000 (
  recast expected 2015) (s. further)
• Purpose of these rules
•  Free movement of judgments , i.e. recognition
  and enforcement of judgments from other member
  states (in the USA full faith and credit)
• To reach this, harmonisation of international
  jurisdiction is required

8
EU Brussels I Reg - Scope

• EU-Regulations - Civil and commercial matters in
  general
• originally Brussels Convention 1968, still
  relevant for overseas territories of art. 355
  TFEU
• until Jan. 10, 2015 Old Brussels-I-Reg. 44/2001.
• Now Reg. 1215/2012 ( Brussels-I bis (Recast)
• Scope ratione materiae - excluded matters
• family succession (separate Regulations),
• social security,
• jurisdiction over arbitration
• Excluded is therefore also judging the validity
  of arbitration agreements - jurisdiction rules
  left to national law
• - no recognition on the basis of Brussels-I
• - thus a judgment not recognising an
  arbitration clause is not binding in other MS as
  to the arbitration clause)
• - proceedings ancillary to arbitration also
  outside Brussels-Ibis
• Relationship with other courts common to some
  member states (EPC, Benelux Court) in art. 71a
  ff.

9
EU Brussels I Reg - Scope

• New Brussels-I-Regulation 1215/2012 (Old
  44/2001)
• Scope of application ratione personae
• Regulates only procedures where a defendant is
  domiciled in a MS otherwise national procedural
  law applies (art. 6 (old 4.2)) (s. infra Hague
  Convention on Choice of Court Agreements)
• Definition of domicile
• - of natural persons art. 62 (old 59)) gt
  national law (not autonomous) (gtltin other
  regulations, habitual residence is used, an
  autonomous concept)
• - of legal persons autonomous definition
  alternative grounds (art. 63 (old 60))
• If residence unknown, last known residence may be
  used (C-327/10, Hypotecni banka / Lindner)

10
EU Brussels I Reg - Scope

• Brussels-I-Regulation Recast 1215/2012 (in force
  Jan 10, 2015) (until then 44/2001)- Scope of
  application ratione personae
• Only  international  cases. See however
  C-478/12 Maletic when consumer can sue travel
  organisator before court of its domicile, he can
  also sue the travel intermediary with a seat
  elsewhere in his country before the first court
  (although the latter relationship viewed in
  isolation is not international)
• Extensions in Recast 1215/2012 also when
  defendant not domiciled in a MS
• Jurisdiction over consumer contracts (art. 18 I)
• Jurisdiction over individual employment contracts
  (art.21)
• Matters of exclusive jurisdiction (art. 24)
• (valid) Choice of forum of a court in a member
  state (art. 25)

11
EU Brussels I - General

• Brussels-I-Regulation 1215/2012
• General characteristics
• Hard strict rules
• Restrictive interpretation of any deviation from
  the basic rule court of the defendant (against
  a forum actoris home play)
• No doctrine of forum non conveniens (FNC) - ECJ
  in C-281/02 Owusu (British tourist in Jamaica
  tort case, sues also travel agent)
• Court examines jurisdiction ex officio (art. 27
  ff., old 25 ff.).
• No anti-suit injunction allowed ECJ in
  C-159/02 Turner (not even by court seised first)
  and in C-185/2007 West tankers (not even in
  relation to arbitration) (disputed whether the
  latter remains under the new 1215/2012
  Regulation)
• Lituanian Gazprom case pending (on recognition of
  an anti-suit order by arbitrators).
• Pending question whether damage claim is possible
  meanwhile (UKSC in Alexandros)

12
Brussels-I Excl. jurisdiction

• Brussels-I-Regulation Grounds for jurisdiction
• Some cases of exclusive jurisdiction (no choice
  of court possible)
• Real estate proprietary rights in immovable
  property tenancy in immovable property (art.
  24.1, old 22.1)
• Matters of the law of companies and other legal
  persons (24.2, old 22.2)
• Entries in public registers (24.3, old 22.3)
• Intellectual property rights (24.4, old 22.4)
• Enforcement (24.5, old 22.5)

13
Brussels I Choice of court

• Effect of choice of court agreements Art. 25
  (old 23). It must be recognised if
• 1 Old Reg. at least one party domiciled in
  a member state - no longer required in new art.
  25
• 2 consent of the parties is clear. Also in
  case of conferral in a trust instrument (art.
  25.3 with exceptions in 25.4). See next slide on
  validity
• 3 in writing (incl. e-communication) or in
  another form customary in international trade or
  according to practices between the parties
• 4 indicating a court or the courts of a member
  state.
• Disputed whether third party deriving rights
  from a contract is also bound by choice of court.
  Cass.(Fr) 4 Jan 2005 addressee in transport
  contract is not bound.

14
Brussels I Choice of court

• Problem under old Reg no priority for designated
  court. If however, a court declines juridiction
  because of forum clause, courts in other MS are
  bound (C-456/11 Gothaer allgemeine/Samskip)
• New Brussels Ibis The designated judge will
  judge (the effectiveness of) the choice of court
  agreement
• Validity of choice of court agreements
• Validity to be judged by the law of the
  designated forum (art. 25.1) , including its
  conflict of law rules (Consideration 20), thus by
  the law applicable by virtue of the conflict of
  law rules of the designated forum
• Formal validity uniform rule for all member
  states in Regulation itself see supra
• Validity of choice of court agreements to be
  assessed separately from the rest of the contract
  (art. 25.6)

15
Brussels-I Choice of court

• Exceptions to choice of court agreements
• Excluded in cases of exclusive jurisdiction (art.
  24, old 22)
• Limited in insurance, consumer and labour
  disputes (see art. 15, 19, 23) (old 13 c.q. 17
  c.q. 21)
• Overrules national restrictions (eg. Rules on
  jurisdiction in cases of Distributorship or
  Commercial Agency in belian Econiomic Law Code)
  (but see next slide for cases outside the
  Regulation)
• Some restrictions in other treaties remain (eg
  CMR Convention)
• Validity of unilateral optional forum clauses ?
  Rejected i.a. in France Cass.(Fr.) 26 Sep 2012
  accepted in the UK.
• Voluntary appearance of defendant without protest
  (art. 26, old 24) (except cases of exclusive
  jurisdiction under art. 24, old 22)

16
National law on choice of court

• Quid if designated Court is outside EU ?
• Outside the scope of Brussels-I-Reg gt national
  law (unless another Treaty applies, see next
  slide on Hague Convention)
• National restrictions thus apply, esp. in case of
  overriding mandatory provisions of substantive
  law (e.g. Agency, Distributorship)
• (See also the same question as to arbitration
  clauses)
• Explicit provisions in e.g. Belgian law Belgian
  Courts always competent for cases of termination
  of commercial agency or distributorship
• 2 Possible approaches either ex ante rejection
  of the choice of court if the foreign court is
  not obliged to apply the mandatory provisions, or
  ex post non-recognition if the foreign court has
  not done so ( stay domestic case on the basis of
  recognition prognosis)
• BGH 30 Jan 1961 recently BGH 5 Sep 2012,
  Virginia agency case ex ante rejection. Although
  American Courts would probably apply German law
  on the basis of the comparative impairment
  doctrine ( 187(2) US restatement 2nd of Conflict
  of Laws)
• English High Court in Accentuate Ltd v Asgira
  idem (arbitration clause)

17
Choice of court Hague C

• Choice of Court Agreements Hague Convention
  2005 (not in force yet, ratified by Mexico,
  ratified by EU (w/o Denmark) 4 Dec 2014, signed
  by US)
• Art. 1 defines  international cases 
• Art. 2 outside scope of application consumer
  cases, labour cases, family law, successions,
  insolvency, competition, most tort cases,
  property in land, legal persons, most
  intellectual property cases, etc.
• Art. 3 requirements
• a) where the agreement indicates a Court of a
  contracting state
• b) formal requirements (in writing or by any
  other means of communication that renders
  information accessible so as to be usable for
  subsequent reference)
• The ULC (uniform law commission) has already
  approved the Uniform Implementation Act

18
Choice of court Hague C

• Choice of Court Agreements Hague Convention 2005
  - effects
• Art. 5 Chosen court must hear the case, unless
  it finds the agreement invalid Art. 5 validity
  under the law of the chosen court
• More precisely chosen court system (state
  basis) (transfer to other court of same state
  system remains possible)
• Any not-named court must decline jurisdiction
  (unless named court has declined)
• Convention does not govern interim measures (art.
  7)
• Recognition and enforcement may only be refused
  on the grounds of art. 9 (i.a. art. 11 punitive
  damages, cfr. existing case law in Germany,
  France, Italy)

19
Brussels-I general rules

• Grounds for jurisdiction (cont.)
• Basic rule domicile of the defendant (rule
  against forum actoris) (Art. 4, old 2)
• Art. 8.1 (old 6.1.) Plurality of defendants if
  closely linked (requirement of reasonable
  foreseeability in ECJ C-145/10 Painer,
  (violation of privacy by media), taken over in
  Recast 1215/2012)
• (but for defendants outside EU, national law
  determines this)
• Art. 8.3 (old 6.3) Counterclaims same court
• Art. 8.2 (old 6.2) Third party intervention
  possible in same court

20
Brussels-I provisional measures

• Provisional measures art. 35 (old 31)
• may be demanded in the country where they
  can/must be performed/enforced
• condition is that they are provisional -
  restrictive interpretation of  provisional
  measure  only  conservatory measures  (ECJ in
  C-104/2003), incl. obtaining information or
  preserving evidence
• Does not include eg ordering the hearing of a
  witness (but a court has jurisdiction for such
  measures if asked by the court having
  jurisdiction over substance, see further Reg.
  1206/2011 on evidence)
• Territorial scope see infra recognition/enforceme
  nt

21
Alternative jurisdiction contracts

• Brussels-I-Regulation grounds for jurisdiction
  (contracts)
• Alternative grounds on which claimant can base
  jurisdiction
• art. 7.1.a. (old 5.1.a) claim based on a
  contractual obligation and other matters related
  to a contract
• place of performance of the obligation (as
  determined by the substantive law applicable to
  the obligation) (secondary obligations follow the
  principal obligation)
• Contractual obligation includes tort claims where
  the conduct complained of may be considered
  breach of contract terms (C-548/12, Brogsitter)
• art. 7.1.b (old 5.1.b) in sales and service
  contracts
• gt a more specific and autonomous rule place of
  delivery c.q. provision of service or place where
  should have been delivered/provided.
• To be determined by interpreting the contract,
  taking into account also  including terms and
  clauses which are generally recognised and
  applied through the usages of international trade
  or commerce, such as the Incoterms  (C-87/10
  Electrosteel). If that does not help, place of
  factual delivery (C-381/08 Car Trim)

22
Alternative jurisdiction torts

• Brussels-I-Regulation Alternative grounds on
  which claimant can base jurisdiction tort
• Art. 7.2 (old 5.3) Claim based on a
  non-contractual obligation from tort place where
  the harmful event occurred.
• In general, this can be the place where the event
  was caused (locus acti) or where the damage
  occurs (locus damni) (C-21/76 Bier /Mines de
  Potasse). For a defective product where it is
  produced or where damage is caused, not where it
  is merely marketed C-45/13 Kainz)
• Also possible for negative declarations on
  liability in tort (C-133/11 Folien Fischer) gt
  incentive for defendant to go to court first
• For damage to personality rights worldwide full
  jurisdiction for country where act is committed
  and country of centre of main interest of damaged
  person partial jurisdiction for other countries
  where damage is caused (C-509/09 eDate
  advertising)
• Damage to personality rights by press (C-68/93,
  Shevill) or damage to IP rights (including on
  internet) (C-523/10 Wintersteiger C-441/13
  Hejduk) full jurisdiction for country where act
  is committed partial jurisdiction for other
  countries where damage was caused.

23
Alternative jurisdiction other

• Brussels-I-Regulation grounds for jurisdiction
• Alternative grounds on which claimant can base
  jurisdiction
• 7.5. (old 5.5) Disputes arising out of the
  operations of a branch, agency or other
  establishment its location
• 10-16 (old 8-14) Insurance contracts litigation
• 17-19 (old 15-17) Consumer contracts litigation
  in 3 cases
• (a) a contract for the sale of goods on
  instalment credit terms
• (b) a contract for a loan repayable by
  instalments, or for any other
• form of credit, made to finance the sale of
  goods or
• (c) the contract has been concluded with a person
  who pursues commercial or professional activities
  in the MS of the consumer's domicile or, by any
  means, directs such activities to that MS or to
  several States including that MS (NB. no
  requirement that contract is concluded as
  distance contract C-190/11 Mühlleitner /
  Autohaus Yusufi)
• 20-23 (old 18-21) Labour contracts litigation

24
Alternative jurisdiction general

• Restrictive interpretation of alternative grounds
• eg succeeding party such as assignee,
  subrogated party cannot use the alternative
  jurisdiction (except when it personally meets the
  requirements)
• C-89/91 Shearson Lehman Hutton
• C-347/08 Vorarlberger Gebietskrankenkasse

25
Lis alibi pendens in EU

• Brussels-I-Regulation further rules on
  jurisdiction
• Lis alibi pendens in other MS (art. 29, old 27)
  Scope of application
• same claim (same cause of action) between same
  parties already before another court
• Date of seizure autonomously defined (art. 32,
  old 30) claim filed at court or claim received
  by the servicing authority (see further the rules
  on servicing abroad)
• C-452/12 Nipponkoa where there a claim for a
  declaration of non-liability is already pending,
  a recourse by the insurer of the defendant who
  has paid a third party falls within the scope of
  lis pendens.

26
Lis alibi pendens in EU

• Brussels-I-Regulation further rules on
  jurisdiction
• Lis alibi pendens in other MS (art. 29, old 27) -
  Effects
• Old regulation later court must suspend/stay
  proceedings until court first seised has decided
  (and must decline jurisdiction if first court
  decides it has jurisdiction). First court has
  Kompetenzkompetenz (even on the question whether
  there is a choice for court agreement naming
  another court) (ECJ C-116/02, Gasser).
• This is not the case when the court seised later
  has exclusive jurisdiction on the basis of Ch.
  II. S. 3 (insurance), 4 (consumer) or art. 24
  (old 22) (ECJ C-438/12 Weber/Weber)
• New rule in Brussels Ibis art. 31.2 where
  another court is seised on the basis of a choice
  of court agreement, that court has to decide
  first named court has Kompetenzkompetenz

27
Lis alibi pendens in EU

• Brussels-I-Regulation further rules on
  jurisdiction
• Lis alibi pendens and arbitration
• No suspension if there is arbitration agreement,
  even if arbitration proceedings already pending
• the wide exclusion of arbitration from the scope
  in the Recast (s. supra) also means that the fact
  that the validity of an arbitration agreement is
  already pending before one court not deprive
  other courts of jurisdiction !

28
Lis alibi pendens extra EU

• Brussels-I-Regulation further rules on
  jurisdiction
• new in Recast 1215/2012 art. 33
• Lis alibi pendens in non-EU court later EU
  court may suspend proceedings. Here the forum non
  conveniens doctrine is used.
• Decision of non-EU Court with res iudicata EU
  court will dismiss the proceedings if the non-EU
  judgment is capable of recognition (new art.
  33.3)

29
Connex case pending

• Brussels-I-Regulation further rules on
  jurisdiction
• Connexity (connected or related cases) later
  court MAY suspend or refer the case (no
  obligation) (art. 30, old 28)
• Connexity with case in non-EU court (new in
  Recast 1215/2012 art. 34)

30
US jurisdiction

• International jurisdiction of US Courts mostly
  wide rules of jurisdiction but with many or wide
  exceptions
• Grounds for jurisdiction it is sufficient that
  there is a contact in personam or in rem with the
  state concerned
• - Jurisdiction in personam very broadly
  formulated mere presence of the defendant
  (domicile, citizenship, temporary presence, doing
  business) or consent of the defendant (choice of
  court agreement). Restricted by SCotUS in Daimler
  v Bauman (Jan 14, 2014) general jurisdiction
  only in home state of defendant otherwise only
  specific jurisdiction for claims linked to the
  place
• Jurisdiction in rem dispute over property in an
  asset situated in that state.
• Exceptions / Limitations to jurisdiction
• Choice of Court Agreement (widely accepted SC 3
  Dec 2013 in Atlantic Marine Construction)
• Defendant fraudulently lured into the
  jurisdiction (invited for dinner)
• Forum non conveniens (rarely accepted !, Gilbert
  case 1947)
• Lis alibi pendens first filed rule

31
UK jurisdiction

• International jurisdiction of English Courts
  outside Brussels I-bis gt domestic law
• Common law tradition mostly wide rules of
  jurisdiction but with many or wide exceptions
• Including wide jurisdiction in personam

32
Servicing docs. abroad

• Service abroad of judicial documents
• Hague Convention 1965 on the service abroad of
  judicial and extrajudicial documents in civil and
  commercial matters cross-border service to a
  known address
• can take place via the central authorities of
  the contracting states
• a direct service abroad is possible in certain
  cases.
• EU Regulation 1393/2007 on service between member
  states next slide
• Matters outside these Conventions/Regulations
  regulated by domestic law (usually via bailiff
  postal service)

33
Servicing docs. abroad

• EU Regulation 1393/2007 on service between member
  states
• transmission via central authorities (art. 4 ff.)
  (standard forms)
• alternative forms in art. 12 ff
• direct service by officials in the MS addressed
  if this is permitted by the law of that State
  (art. 15)
• C-473/04 Plumex no hierarchy between these
  alternatives
• adressee may refuse to accept if neither in the
  official language of the place of destination nor
  in a language easily understood by defendant
  (art. 8)
• Additional rules in specific regulations (eg
  Small Claims Regulation)

34
Cross-border procedures

• National law may have specific rules of procedure
  for cross-border litigation (rare, except
  EU-Regulations mentioned infra)
• If such rules are restrictive, they may be set
  aside by EU law, e.g. the requirement of a Cautio
  iudicatum solvi for foreign claimants
• EU proposals of the Storme-Commission 1994
• Some largely uniform procedures for cross-border
  litigation introduced in the law of all EU member
  states
• Small claims Regulation (Reg. 861/2007)
• Payment order Regulation (Reg. 1896/2006)
• New Regulation on attachment of bank accounts
  (European Account Preservation Order)
• Model law by ALI/Unidroit Principles of
  transnational civil procedure (Principles Annex
  with Rules)

35
Applying foreign law

• What is the task of the judge when according to
  the conflict of law rule, foreign law must be
  applied ?
• Continental rule curia novit ius, applies also
  to the foreign law indicated by the domestic
  conflict rule. Judge may obtain information
  according to the European Convention on
  Information on Foreign Law (London 1968) (not
  frequently used). More frequent expert opinion
  on foreign law
• Anglo-American rule foreign law is a matter of
  fact that must be proven (usually by expert
  opinion, esp. affidavit by qualified foreign
  lawyer)

36
Evidence - problems

• Applicable law
• rules on means of proof accepted for certain
  facts, eg contracts the applicable substantive
  law
• rules on obtaining evidence domestic procedural
  law (lex fori).
• Procedural law of evidence differs a lot, e.g.
  concerning discovery (actio ad exhibendum)
• continental rule restricted to specific
  documents
• gtlt in USA much broader (fishing expeditions)
• Means of proof especially relevant in
  international trade expert examinations
  certificates or reports of control/surveillance
  organisations, etc.

37
Evidence

• Taking evidence abroad
• Unilaterally
• supposes voluntary compliance
• in some cases compliance is even forbidden (by
   blocking statutes  or by a specific court
  order) except where information is exported on
  the basis of international conventions (as the
  Hague Convention, next slide)
• Eg French Law 80-538 of 16 July 1980 (originally
  reaction against american action against shipping
  cartels) communication of economic, commercial,
  industrial, financial or technical information is
  prohibited
• - if capable of harming the sovereignty,
  security or essential economic interests of
  France or contravening public policy
• - if leading to establishment of proof in foreign
  legal proceedings.
• Eg Swiss Banking law (bank secrecy)
• That prohibition sometimes set aside by foreign
  court
• eg EWC.A. 22 Oct 2013 recourse to the Evidence
  Regulation not necessary
• SCotUS uses different tests to decide whether or
  no to respect the foreign statute and use the lex
  fori or the Hague Convention (SC 15 June 1987 in
  Aérospatiale v US)

38
Evidence

• Taking evidence abroad
• Rogatory Commissions sent abroad (for examination
  of witnesses, visit of a location abroad, etc.)
• Hague Convention on Taking Evidence Abroad 1970
  (in force 1972)
• via a central authority in the requested state
• or via personnel of the requesting state in the
  requested state in case of voluntary appearance
  of the requested persons
• - most states made a reservation for pre-trial
  discovery (based on art. 23 Convention) (even the
  UK made the reservation)
• EU-Regulation 1206/2001 on co-operation in taking
  of evidence next slide

39
Evidence EU Reg.

• EU-Regulation 1206/2001 on co-operation in taking
  of evidence
• demand directly adressed by requesting
  court  to requested court in other member
  state use of standard forms subsidiary role of
  a central body in each member state.
• Directive only facilitates taking evidence, thus
  does not forbid any measure which can be taken
  without the cooperation of the other member
  state
• - C-170/11, Lippens e.a. Court has the option,
  to summon a person residing in another Member
  State before it and hear him as a witness in
  accordance with the law of its Member State.
• - C-332/11 Prorail entrusting  to an expert a
  task of taking of evidence to be carried out in
  another Member State, can be done without this
  procedure, unless it affect the powers of the
  Member State in which it takes place, in
  particular where it is an investigation carried
  out in places connected to the exercise of such
  powers or in places to which access or other
  action is, under the law of the Member State in
  which the investigation is carried out,
  prohibited or restricted to certain persons.

40
Recognition enforcement

• Deals with so-called  Title import 
• Within federal states  Full faith and credit 
• Otherwise traditionally re-examination of the
  case in country where recognition / enforcement
  is asked, unless simplified by treaties
• Eg in Belgium simplified since 2004 (Code of PIL
  art. 25 1 abolishes re-examination and lists
  grounds for refusal)
• Eg in the UK common law rules Statutes 1920
  1933 mainly dealing with commonweelth countries
• No global convention until now (only for Choice
  of Court Agreements (supra), including rules on
  recognition and enforcement)
• CMR art. 31
• In the EU
• certain judgments from courts of other EU states
  enjoy full faith and credit (automatically
  enforceable),
• for others under Reg. 44/2001 a simplified
  procedure of  exequatur , now abolished by
  Brussels-I Recast 1215/2012

41
Recognition enforcement

• General framework Brussels-I-Regulation (
  separate regulations in family, maintenance
  obligations, successions, insolvency, etc.)
• Old rules automatic recognition of judgments /
  enforcement after obtaining an exequatur on
  unilateral request with certain formalities (art.
  41) ( title inspection )
• limited grounds for refusal in case of
  opposition/appeal (art. 34-35)
• - contrary to public policy (34.1) (interpreted
  restrictively by ECJ)
• - judgment in default and defendant not served
  in sufficient time (34.2)
• - incompatible with a judgment issued in the
  country of enforcement (34.3 4)
• - from a court having no jurisdiction in case of
  conflict with section 3,4 or 6 of Ch. II or in
  case of art. 72 (special conventions) (art. 35)
• - see also art. 61 (Recast 64 )(civil decision
  in criminal proceedings, defendant had no
  opportunity to arrange defence)
• Q is an English Scheme of Arrangement a
  judgment in the sense of art. 32 ?
• without re-examination or review of the merits
  (art. 53)
• NY Convention on arbitration takes precedence
  over the Regulation

42
Recognition enforcement

• General framework Brussels-I-Regulation
• Old rules (44/2001)
• Automatic enforceability without exequatur in
  case of
• European Enforcement order for uncontested claims
  (Reg. 805/2004) awarded in a procedure according
  to domestic law of a member state
• European Payment Orders (supra)
• Decisions in European Small Claims Procedures
  (supra)

43
Recognition enforcement

• General framework Brussels-I-Regulation
• New rules (Recast 1215/2012)
• automatic recognition and enforcement without
  obtaining an exequatur, on presentation of
  judgment certificate with summary (and possibly
  translations). Enforcement requires prior serving
  of certificate to that person.
• Same limited grounds for refusal in case of
  opposition/appeal
• - contrary to public policy (45.1a)
  (interpreted restrictively by ECJ)
• - judgment in default and defendant not served
  in sufficient time (45.1b)
• - incompatible with a judgment issued in the
  country of enforcement (45.1c d)
• - from a court having no jurisdiction (45.1e)
• - see also art. 64 civil decision in criminal
  proceedings, defendant had no opportunity to
  arrange defence
• NY Convention on arbitration takes precedence
  over the Regulation

44
Recognition enforcement

• Automatic recognition and enforcement applies
  under the Recast 1215/2012 also to
• Authentic instruments (as notarial deeds) (58.1)
• Court settlements (58.2)
• Extraterritorial effect of provisional measures
• by court having jurisdiction over substance
  measure enforceable in the EU (if unilateral
  procedure, then only after service of decision to
  the defendant)
• by court not having jurisdiction over substance
  jurisdiction for protective measures (supra), but
  effect confined to territory of that MS

45
Insolvency proceedings

• Types of insolvency proceedings usually found
  abroad
• Liquidation proceedings, such as bankruptcy
• Reorganisation and composition proceedings, such
  as
• judiciary reorganisation,
• collective agreement with creditors (suspension
  of the execution by creditors in order to
  reorganise the business)
• In all these proceedings the control over the
  assets of the debtor is granted to an
  administrator and the claims of the creditors are
  dealt with collectively (instead of individually)
• Not an  insolvency proceeding  English Scheme
  of Arrangement under part 26 Companies Act

46
Insolvency proceedings

• International insolvency two conflicting
  solutions / principles
• universalism (single bankruptcy extended to all
  countries where debtor has assets) (eg Belgian
  law, US law)
• Moderate territorialism insolvency proceedings
  in each country relate only to assets in that
  country.
• radical territorialism insolvency proceedings in
  each country relating to assets in that country
  that are  ring-fenced  the product is used
  first for debts incurred in that country
• Universalism only works insofar as the
  proceedings are recognised in other countries
  where assets lie.
• EU-Regulation 1346/2000 on insolvency proceedings
  has chosen a compromise solution

47
EU Insolvency regulation

• EU-Regulation 1346/2000 (Recast proposed in 2013,
  agreed Dec. 2014)
• Scope of application only where debtor has its
   centre of main interest  (COMI) in a Member
  State no limited to cases where at least 2
  member states are involved (C-328/12, Schmid /
  Hertel)
• Presumption that the seat of a legal person is
  its COMI (art. 3 id. recast).
• Definition of insolvency proceedings to which it
  applies (art. 1.1
• collective proceedings,
• based on insolvency,
• which entail the partial or total divestment of a
  debtor,
• and the appointment of a liquidator
• (a list is found in the Annex A to the
  Regulation)
• Thus not applicable where  debtor in
  possession . Proposed Recast would make it
  possible to include them (new Art. 1)
• Not covered by the Insolvency Regulation, but by
  separate Directives financial institutions
  (WUDB, Winding up Directive for Banks 2001/24)
  and insurance companies (WUDI-Directive).
• No uniform rules regarding investment companies
  yet

48
EU Insolvency regulation - jurisdiction

• EU-Regulation 1346/2000 - Basic solution
  possible procedures
• Art. 3.1. main proceedings possible (only) in
  country of  centre of main interest  of the
  debtor ( COMI ). In principle universal
  jurisdiction, unless limited by a territorial
  procedure. Proposed recast would 1 define COMI
  and 2 also cover jurisdiction over avoidance
  actions (art. 3a)
• Result forum shopping (insolvency tourism) by
  moving the COMI.
• Art. 3.2. a territorial insolvency can be opened
  in other MS where the debtor has an
  establishment. When there is a main proceeding,
  the territorial one is called  secondary 
• it is territorial with respect to assets,
• but universal with respect to creditors (all
  creditors may file, not only for debts incurred
  in that country no ring-fencing).
• It is in principle always a liquidation
  procedure, subject to duty to cooperate in case
  main proceedings are not liquidating (C-116/11
  Bank Handlowy)
• A territorial procedure can be requested only by
  local creditors, a secondary by any creditor
  (C-327/13 Burgo Group)

49
EU Insolvency regulation - jurisdiction

• EU-Regulation 1346/2000 - Basic solution
  possible procedures
• Proposed Recast would limit possibility of such
  secondary procedures a bit more (see i.a. art. 36
  recast)
• Where no secondary procedure is opened no
  enforcement proceedings possible except those
  permitted by the law of the state of the main
  proceedings (ECJ in C-444/07)
• EU-Regulation 1346/2000, art. 3 Scope of
  jurisdiction
• jurisdiction includes actions derived directly
  from the insolvency proceedings and closely
  connected with them, e.g. actions to se a
  detrimental transaction aside (pauliana), even
  where the defendant resides outside the EU
  C-328/12, Schmid / Hertel.

50
EU Insolvency Regulation

• EU-Regulation 1346/2000 Effects abroad of
  procedures
• opening of proceedings can be published in other
  MS (art. 21-22, recast 28-29)
• main insolvency must be recognised in other MS
  (art. 16, recast 19) has in principle the same
  effects as if it were opened in that state (art.
  17, recast 20) except where manifestly contrary
  to public order (art. 26) (e.g. fundamental
  rights) or insofar as it is a matter for a
  secondary procedure effectively opened
• further rules on coordination
• effect on pending lawsuits depends on lex fori of
  that lawsuit (art. 15)
• Recast
• internet register for insolvency proceedings
  (art. 25 ff recast)
• duty to cooperate incl. exploring possibility
  of restructuring (see art. 41 ff recast).
• Ch. on insolvency of members of a group of
  companies (56 ff.)

51
EU Insolvency Regulation applicable law

• The lex concursus (i.e. the lex fori of the place
  of opening of the insolvency) determines
  according to Art. 4 (7 recast) i.a.
• the procedural aspects of the insolvency which
  assets are in principle administered how they
  are administered (powers of the administrator,
  the court, the debtor) formalities to be
  fulfilled by creditors how sale and distribution
  proceedings are organised distribution of the
  product in the absence of property rights
• effect on later disposition of assets, other than
  assets subject to registration
• effect of insolvency on current contracts (art.
  4.2.e)
• Except individual execution right of creditor
  with proprietary right (lex rei sitae) (eg in
  many countries creditor with mortgage) to be
  decided by the lex rei sitae

52
EU Insolvency Regulation applicable law

• As to existing property rights on assets which
  fall under the insolvent estate
• it is in principle the lex rei sitae (place of
  the asset) which determines the property rights
  on the asset (art. 5 (8 recast), for reservation
  of title art. 7 (10 recast), incl. Enoforcement
  rights
• surplus must go in the insolvent estate (lex
  concursus)
• Recast art. 2 (9) will clarify the lex rei sitae
  in respect to certain assets, such as
• registered shares located in the registered
  office of the company
• book entry securities (dematerialised) where
  the account is maintained
• account money (cash in accounts) member state
  indicated by the IBAN
• other rights to performance (claims) COMI of the
  debtor

53
EU Insolvency Regulation applicable law

• (Cont.)
• Whether detrimental acts are voidable/defeasable
  lex concursus, unless undefeasable according to
  lex causae (art. 4.2.m (recast 7.2.m) art. 13
  (recast 16))
• in the US  preference action  (payee was
  unduly preferred)
• The corresponding art. 30 in the WUDB was
  interpreted extensively in E-28/13 (EFTA Court),
  LBI v Merrill Lynch
• Set-off important differences between national
  laws on effect after insolvency. Art. 6 (recast
  9) Reg. set-off is effective if either effective
  under the lex concursus or under the lex causae
  of the passive claim (claim of the insolvent
  debtor used by the creditor to get paid).
• Effect on labour contracts governed by lex
  contractus (art. 10, Recast 13)