Class 6: Domicile and Conflict of laws

Question 1

What will you do with the matrix as a party?

Answer 1

• A judge may go through a decision this way, trying to make it somewhat logic. But if you are one of the parties → you will cherry pick the jurisdictional matrix, identify in which court you like to end up by your preference and reverse engineer your arguments to try and convince the judge that you are in fact in the right court = lots of creativity!
  
  • This is the reason for a lot of convoluted judgements to convince that you are in the right court.

Question 2

What is domicile and why is it relevant?

Answer 2

• One of the core concepts that returns all over in the regulation:
  
  • Eg. art. 4 of the regulation, Eurocontrol, Owosu
  • Also the DNA of the regulation = predictability and legal certainty + autonomous interpretation.
• Article 62 Brussels Ia: domicile for natural persons: “to determine whether a party is domiciled in the Member State whose courts are seized of a matter, the court shall apply its internal law.”
  
  • Not a lot of harmonization. Ideal situation would be an absolute rock-solid definition of domicile for use across the MS.
• Obvious first thing: when you are seized of the proceedings and are asked whether or not you have jurisdiction → as a judge, you will go through the matrix: answer the question → are you domiciled in my jurisdiction?
  
  • Article 62: if domiciled = have jurisdiction.

Question 3

Is there a harmonized approach of domicile?

Answer 3

• No, this would have been the ideal case but unfortunately, MS have too divergent approaches to what domicile means:
  
  • Some: bureaucratic = the place where you are included in the citizens’ register of your local municipality.
    
    • Not all states have strict approach to registers: eg. UK and Wales = hardly any requirement to register with your local authority.
  • Many states link domicile to intention to be affiliated with a certain jurisdiction = wish, feeling of connection - rather than a bureaucratic incident.
    
    • Eg. you might be registered somewhere for tax reasons when you are de facto a resident somewhere else = where you spent most of your time and where you feel that you are part of the community.

Question 4

What is a positive conflict wrt domicile?

Answer 4

• As a result of the fact that there is no harmonization of domicile:
• = Positive conflict: there is more than one place that might have jurisdiction over your case if it’s jurisdiction that is dependent upon the domicile of the party.

Question 5

What is article 62?

Answer 5

• Art. 62 as a whole = sign of failure to agree a common definition for domicile for natural persons.
• Article 62(1): a judge will first apply own domicile criterium.
  
  • If not -> residual rules!

Question 6

What is important to remember about the exercise of domicile?

Answer 6

Important: the exercise of deciding domicile does not stop with your own PIL rules.

• If you have decided on the basis of your own rules that there is no domicile in your MS, then you do a check of domicile in other MS → only then, you decide that this person is not domiciled in any of the MS = then you can turn to your own residual private international rules.
• This explains art. 62(2): once you have applied your own test, you’ll still have to check the domicile test of other Member States. That’s for natural persons.

Question 7

Why is there more need for art. 63 for positive conflicts

Answer 7

• There are 3 potential legs which could lead to a finding of domicile → great potential in following art. 63 for positive conflicts where more than one MS will state: “you are domiciled”.
  
  • There is going to be an important need to have a rule for when more than one court is seized and them might all conceivably have jurisdiction under art. 4 on the basis of domicile.

Question 8

What is the link between art. 6 and 62-63?

Answer 8

• Art. 6: “If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Article 18(1), Article 21(2) and Articles 24 and 25, be determined by the law of that Member State”.
  
  • → this means: “if you are not domiciled in any of the Member States, for which we have just discussed what u need to do to establish this: check your own definition, but also the definition of other Member States.

Question 9

When is domicile irrelevant?

Answer 9

• According to art. 6: domicile is entirely irrelevant, whether it is the claimant or the defendant
  
  1. Article 18 = consumers
  2. Art. 21 = employees
  3. Art. 24 = exclusive jurisdiction
  4. Art. 25 = choice of court
• Art. 6 says: if you are not in any of those 4 situations, then jurisdiction shall be determined by the law of the Member State.

Question 10

What does art. 6(2) say?

Answer 10

• This refers to excessive jurisdictional rules that grant you a right to claiming those courts, for instance on the basis of nationality.
• When it comes to defendants who are not domiciled in any of the Member States and again when none of the provisions of articles 18, 21, 24 or 25 apply, then any claimant who is domiciled in a Member State may take non-EU domiciles to court in those Member States on the basis of the same rules as a national of that Member State would be able to do.

Question 11

What is the difference between art. 6 and the exceptions of Brussels Ia?

Answer 11

• Subject matters that are excluded from the scope of application of Brussels Ia: eg. not civil and commercial or falls within the arbitration -> you cannot use anything of Brussels Ia.
• With art. 6: The jurisdictional rules of the Regulation in that case do not apply, but the judgement which comes from it, will enjoy Title 3 Recognition & Enforcement.
  
  • Free movement across the EU -> this is the reason that the US is critical because Europe facilitates the excessive jurisdictional rules by allowing them free movement across the EU.
  • Eg. Agent Orange litigation in France: the EU will not say that France does not have jurisdiction over a case where they have absolutely 0 links with the EU. But on top of that → massive boost by effectively obliging all the other MS to enforce it in their jurisdictions.

Question 12

What is an important consequence for art. 6?

Answer 12

• If you are company X involved in the litigation and you have any assets across any of the MS → claimant will be able to enforce that judgement against any assets you might have in the EU = important consequence for art. 6!
• This element explains why claimants from outside the EU sometimes desperately try and reach for a jurisdictional seizure in the EU or in an EU Member State because they are hoping that in some rather friendly jurisdiction they’ll get an interesting judgement and that subsequently the judgement will travel freely throughout the EU.

Question 13

What are the exclusive jurisdictional rules of art. 24(1)

Answer 13

• “in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property” = exclusive jurisdiction.
• The rules of art. 24 have to be interpreted restrictively!

Question 14

What is the reasoning behind art. 24(1)?

Answer 14

1. Practicality: eg. bv. of public registers: local affair -> local courts need to hear it because otherwise we would have problems with the reliability of the data on this ownership. Now not so relevant anymore.
2. Local judges know the applicable law: often Gleichlauf so the applicable law will be the same as the court indicated by art. 24
   
   • Prof finds this problematic because it would apply to everything within PIL.
3. Feels like the most common sense solution as the court where the property is located = best placed to judge the case!

Question 15

What are important consequences to art. 24 jurisdiction?

Answer 15

• It is at the top of the matrix! It cannot be trumped by voluntary appearance and it cannot be trumped by choice of court.
• Even if all the parties in the litigation agree that they would like to be in a different court = unable to do so:
  
  • Eg. choice of court; Eg. voluntary appearance
  • Both will not work!

Question 16

Case Reichert?

Answer 16

• Case about rights in rem, the donation of a property in France was challenged by a German bank. French court held that it had exclusive jurisdiction based on art. 24 = rights in rem in immovable property.
• Court: balance two things:
  
  1. Restrictive interpretation of art. 24 because it is an exception to art. 4.
  2. Effet utile of art. 24
• Depending on the judge -> outcome of the exercise will vary.
• Court tries to define rights in rem: content, ownership, possession and extent of immovable property. Also remainder category: “other rights in rem” = appearance of an abstract approach but not really because ownership of an immovable property = right in rem.
  
  • Not very succesful attempt here: here the actio pauliana -> only lead to an individual satisfaction of the bank.

Question 17

Case Gaillard?

Answer 17

• 2 levels of analysis:
  
  • “In proceedings which have as their object rights in rem” = causal link
  • It is not enough the right in rem features in the case → the object of the proceedings must be the right in rem or the tenancy of the immovable property.
• Case about a compromis de vente: strong enforceable law to complete te sale, which is not the case under English land law.
• This is a case where you are effectively pursuing a contract, the object of the proceedings is the completion, the performance of a contract, and not the right in rem
  
  • Rule is based on the Mozambique rule:

Question 18

What is the Mozambique rule?

Answer 18

• When it concerns concerns rights in rem on foreign land we shall not entertain the case, because comity, comitas gentium, comity suggests that we should keep our hands off litigation involving ownership in foreign land. And likewise we would expect foreign countries to keep their hands off litigation involving English land.
• The Mozambique rule had an immediate specification: does not count when the case is not about primarily about ownership in foreign land, but rather about a contract, even if that contract eventually will have an impact on the rights in rem in that foreign land or in the English land as the case may be.

Question 19

Forum shopping potential in the way that you frame your case?

Answer 19

• You might think: oh, it is a right in rem = I don’t have flexibility but that is not necessarily the case!!
• The way in which you formulate your claim has an important impact, even on subject matter included in art. 24: However:
  
  • You will not be able to hoodwink a judge if really the purpose of your action is to have your ownership over real estate established.
• It is up to the judge to decide what the real object of the proceedings is. But of course, the way in which you formulate your claim, massages the view that a judge might have on what your real goal is inside.

Question 20

Case Webb and Webb?

Answer 20

• This is a case about trust. The result of the action will lead to the property being vested in his name, but what he’s pursuing is an argument on the basis of constructive trust. Which means that the proceedings do not have as their object the right in rem.
• So art. 24 did not apply as this was a right in personam.

Question 21

Case Schmidt v Schmidt

Answer 21

• In principle, you might have split jurisdictional consequences. The action leading on the avoidance of the gift on the basis of mental incapacity would fall to a different court as would the action to have the title of ownership removed from the land register.
• Important provisio in art. 8.4: gives locus rei sitae also jurisdiction over strongly- connected contractual claims.
  
  • Mortgages, financial claims, security issues.
• Because of the close connection connection between the claims it might well be that the article 24, one court would also be entitled to hear the contractual claim, in the case at issue of course the gift being considered a contract. That also shows you by the way again the limits to which private international law may harmonize because not all member states consider a gift to be a contract. And not all member states consider gifts to be contracts in all situations.
• The court suggested here that art. 24 court could also hear the contractual claim ont he gift issue, but not the other way around. For the voidance of the gift and then bring in the writing ram claim that is that that you can’t do but because of Article 4 you can do the reverse.

Question 22

Case Weber v. Weber?

Answer 22

• The reason this case is important because CJEU acknowledges, in spite of Gaillard and Reichtert, it is clear that there is not much European ius comune on what rights in rem are.
• Case was about a right of 1st refusal. They both own a share in a flat in Munich and if one of them sell → a right of 1st refusal to buy if of me. One of the sisters had ignored it for someone in Milan.
• It is only because on the German law, a right of first refusal in the purchase of an an immovable property, when properly registered in register XY and Z it’s a right in rem, that the Court of Justice says well in that case article 24 one is triggered.
  
  • Not based on some European ius commune but based on German law.
• This is an example = limits to how far the Court can harmonize EU private law through EU private international law.

Question 23

Why does the CJEU want their “autonomous interpretation”?

Answer 23

• Otherwise no predictability but they keep bumping into the borders of what they are able to do with the harmonization effort.
• Ideally, the postmaster makes the same qualification in the 28 MS. For the EU to accomplish this: requires the EU to harmonize private law. But to do this, you have to harmonize people’s intuition about private law categories.
  
  • They can do this for hardcore topics like real estate → right in rem in all of jurisdictions. But, you cannot do it for many other things.

Question 24

What is the exception of tenancy?

Answer 24

• Typical case: people who will go to their travel agent: short term rental for holidays. Landlord would have been in the same country.
• In this case: more than one:
  
  1. Court of locus rei sitae
  2. Court of the domicile of the defendant
• “This exclusive jurisdictional rule does not apply when you have a tenancy concluded for temporary use – no more than 6 consecutive months-. Moreover, that use has to be private. So if there is a commercial use, the exception will not apply. And if the tenant is a natural person and landlord and tenant are domiciled in the same member state. In those cases, the court of the member state in which the defendant is domiciled shall also have jurisdiction.”
• → from the moment you have a problem with a tenancy, you will have to go to the court of the locus rei sitae, at least of the member state, but internally typically they would give that also jurisdictionally to the locus rei sitae.

Question 25

Case Hacker

Answer 25

• All in holidy = multiple services, not just the rental but also the trasport, accomodation -> type of contract had to be excluded from art. 24(1)
  
  • Everything was German so it did not make sense to have the case in the Netherlands = not the main reason because clash with Lidner.
• Article 24(1): tenancy rule is a strict rule: But what the court stresses here is that it only applies to tenancies. So it doesn’t apply when the contract first of all would be something like a lease or a gift or even a usufruct (the right of use) without it being a tenancy. It has to be a tenancy.
  
  • If you have more = article 24 does not longer apply: eg. picking up from airport,…
  • The corporations are not always aware of this: from the moment art. 24 is cancelled out, you as a consumer have a much wider range of jurisdictional options at your disposal. As we will discuss when we get to the consumer section.

Question 26

Case Klein

Answer 26

• Timeshare= In this case: no right to reside in the same property every year = not a right in rem to stay in house 24, just a right to stay at the property.
• Court of justice: the link of the contract and a specific part of the real estate is just not there → it is just a contractual link, a right to stay on site for x months per year. Not a link between you and a specific part of the real estate → does not fall under art. 24(1).
  
  • Which again for the claim at issue opened up a whole range of jurisdictional issues which they wouldn’t have had, had it fallen within article 24.

Question 27

What is art. 24(2)?

Answer 27

• Article 24(2): ““In proceedings which have as their object the validity of the constitution, nullity of dissolution of companies or (…) or the validity of the decisions of their organs.”
• = corporate exclusive jurisdictional rule.
• Slide 8: Rapport Genard made clear that we do not have divergent decisions on the life and death of companies and the existence of decisions of the bodies of companies. You let the home of the corporation decide whether this corporation is alive or death and whether some of the decisions of its bodies are valid or not.
  
  • Has this corporation been validly established, seized to exist because someone has acquired it?
  • Case BVG

Question 28

What is the case Norwegian son?

Answer 28

• Norwegian woman, testament where she stated: “my son gets these bank accounts”, but 2 years later, she moved the money to English accounts → here you can shut out your children out of your inheritance.
• The son tried to requalify: her husband had passed away in 1976 in Norway, she had applied for the application of Norwegian statute, which meant that she would have the user fruct of the whole estate and upon her death, it would lead to the son and half to the heirs of the husband.
• The son suggested by applying this Norwegian law in 1976 she actually created a contractual duty to pass on a part from the estate to all the heirs. Including therefore me. And if not a contractual duty then a duty in trust. Which could even be duty on the English law.