Introduction to Crossborder Litigation

Question 1

What is the Johnny Hallyday case about?

Answer 1

Marriage with Sylvie and one son
Affair with Nathalie and one daughter
Later marriage with Laetitia, 2 daughters
In his first will, he gave everything to his wife in Californian law.
In a second will, he gave it to a trust in a specific institution in the US appointing wife as executive of the will
Consequence is that children had nothing. Goes against fundamental principle of French law that children have a right to a part of the succession.

Children started procedure in France wanting to declare the will null and void
Another procedure in Superior Court of California against the children to transfer assets to the trust

What court has jurisdiction? Important question of Crossborder litigation. Outcome was a confidential settlement.

Question 2

What was the French Iranian case about?

Answer 2

Contract governed by French law as chosen by the parties
BRAD claim they are not allowed to deliver goods to GTT in application of US Law (Code of Federal Regulations)
GTT sues BRA in front of the French Commercial Court to get compensation by damages because breach of contract

Question 3

What is the EU law from CJIE C-184/12 Unamar about?

Answer 3

Conflict Belgian company Unamar and bulgarian company NMB
Contract governed by Bulgarian, and Bulgarian Maritime Arbitration Chamber for all litigation of the contract
But according to Belgian Law on commercial agency contracts it should be governed by Belgian nad and subject to jurisdiction of Belgian courts
Recital 29 Whats the issue?:
Art 3 and 7(2) of Rome Convention must be interpreted as meaning that law of a Member State which meets the requirement for minimum protection laid down by Dir 86/653 an which has been chosen by parties to a commercial agency contract may be disregarded by the court nbefore which the dispute has been brought, on the ground of mandatory nature, in the legal order of that Member state of the rules governing the position of self-employed commercial agents

Question 4

What are the legal risks in a International disputes?

Answer 4

Transaction risk
- Risk that the parties expectations will not be met
- Risk that governing law clause will be overridden or not applicable
- In absence of such a clause, the parties’ expectations the governing law might be defeated (public policy, overriding mandatory law)

Litigation risk
- The claimant will have to sue to ensure his rights and the defendant will have to defend proceedings
- Risk that the dispute will not be resolved in each party’s preferred forum
- Risk that it will not be effectively enforced

Question 5

How to manage the risk?

Answer 5

The lawyer’s jobs in different legal systems

Factors that bear on choosing a way to resolve dispute: Judge/fury, Evidence, Appeal, Costs, Class action and Contingency feees

Purpose as a lawyer:
Strengths, Weaknesses, Opportunities, Threats = SWOT
Discourage Litigation - Pursaude your neighboors to compromise - Abraham Lincoln

Question 6

What are the distinct elements of International Litigation?

Answer 6

One party might be foreign
Subject matter may be connected to a foreign country
Litigation involves parrallel proceedings
Litigation is subject to a foreign judgment
Assets located in different countries than the forum

Question 7

What is an example of the distinction between Forum and Applicable Law?

Answer 7

Regulation (EU) number 1259/2010 of 20 December 2010 implementing enhanced cooperation in the area of the Law applicable to Divorce and Legal Separation (Rome III)

Regulation (EU) 2019/1111 of 25 June 2019 on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility and on international child abduction (recast) or Brussels II ter

Not the same purpose. Rome III on Applicable law and Brussels Recast on International jurisdiction of courts, recognition and enforcement of judgements
Also more differences.
- Not the same member states
- To be applied successively. First Brussels, then Rome III
- Not totally the same scope. No marriage annulment in Rome III

Interactions between both Regulations. Interpretation of common notions to ensure coherence. EU vocabulary. Often convergence of Jurisdiction and Applicable law, for instance same connecting factors

Question 8

What is the difference and similarity between Art 3 in Brussels Recast, Art 5 Rome III and Art 8 Rome III?

Answer 8

They all have the same connecting factors

Brussels Recast Art 3: General jurisdiction
In matters relating to divorce, legal separation of marriage annulment, jurisdiction shall lie with the courts of the Member State…

Rome III Art 5: Choice of applicable law by the parties
The spouses may agree to designate the law applicable to divorce and legal separation provided that it is one of the following laws…

Rome III Art: Applicable law in the absence of choice by the parties
In the absence of a choice persuant by article 5, divorce and legal separation shall be subject to the law of the State…

Same connecting factor for these three: spouses habitually resident, last habitually resident, nationality of spouses, law of the forum

Question 9

How do we find the Applicable law to international issues?

Answer 9

A) The conflict of law rule
B) International substantial or material rules
C) Overriding mandatory provision

Question 10

What is the conflict of law rule?

Answer 10

Classification + Connecting factor –> Choice of law

Connecting factor = Factor which is linked to designate the state that has an interest in the issue. The factor that is considered by state in their national law the best factor to localize an issue in an international space
For instance best connecting factor for “Who owns the property”? - the law of the place of the property
Based on political views

Question 11

Give examples of two international private laws?

Answer 11

There is no common private international law
The only common private international law rules we have are in the EU. So if we are in the EU –> The judge will apply EU regulations, not national law

• US Restatement of the Law Second Conflict of Laws
  With connecting factor of contractual rights and duties is the Law of the state chosen by the parties.
  Or for residents, the state or if different states where the contract was concluded

-Swiss Federal Act on Private International Law
Law of domicile

Question 12

What is the critisicism to this system of International private law?

Answer 12

Contradictions.
Law of domicile can be the law of foreign. Can a French Court apply Spanish law if Child is in France but domicile is in Spain? No.

The law applicable to an international contract is the law chosen by the parties. For instance Chinese person and Swedish person chose English law to sell toys in Spain - a real international conflict.
What is English law? The English law on contract. Not English law specific to international issues
There is a contradiction. If international contract, it would be better to have international rules.
(International Substantial or Material Rules)

1. Not so Internationalist
   Solving international issues by domestic law is not correct. We need international rules specific to an international contract
2. Too Internationalist
   With the choice of law rule, it does not take into account the interest of the State, can lead to application of foreign law (answer to this is Overriding Mandatory provisions)

Question 13

What is International substantial or material rules?

Answer 13

• Validity of the monetary clauses
• Validity of the arbitration clause
• Ability of the State to compromise

Does the state have the facultaty to compromise in international Law? Can the state skip domestic prohibition?
“Should a rule laid down for domestic contracts also apply to international contract concluded for purpose and under conditions conforming to the usage of maritime trade?”

The conception that international matters need material international rules

Question 14

What are Overriding Mandatory Provisions? (Lois de police)

Answer 14

Rome 1 regulation on law applicable to Contractual obligations
Art 9 Overriding mandatory provisions:
Provisions regarded as crucial by a country for safeguarding its public interests such as its political, social or economic organization, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation

Question 15

Give examples of Overriding Mandatory Provisions

Answer 15

CRF 560.204 Prohibited exportation, reexportation, sale or supply of goods, technology or services to Iran
CRF 560-701 Penalties to all physical bodies having infringed the rule

Self-proclaimed Overriding Mandatory provision to fight Coronavirus in Italy
Urgent measures to support families, workers and business
Obligations arising from transport, contracts, etc affected by Coronavirus are to be considered as impossible
Para 8 proclaims: Provisions of present article constitute Overriding mandatory provisions within the meaning of EU Regulation

Question 16

What is the steps to the Conflict of Law rule?

Answer 16

1) Classification
Classification –> Connecting factor = Choice of law

2) Applying the conflict of law rule
Lex Causae Foreign law –> Duty to apply the Choice of law rule
–> Les Causae Foreign law
–> Lex Fori Law of the forum
3) Applying the designated law
Proof of foreign law –> Exclusion of Foreign law –> Consequences of exclusion of Forein law
For instance International Public policy discrimination

Question 17

What are the characteristics to the Choice of Law rule?

Answer 17

The purpose - tradtional conception of private international law: To make solution of a conflict of laws independent from the state authority (court)

Indirect rule = Does not resolve the substansive issue on which the dispute arises, but designates the law capable of resolving it, the law from which the rule for resolving the dispute will be taken (contrary to substantial/material rules)

Bilateral rule = The conflict rule may refer both to the law of the authority implementing it (law of the forum) and to foreign law
(contrary to unilaterial rule only about scope of application of law of the forum)

Neutral rule = Not only does the choice of law rule place on an equal level forum law and foreign law, but the choice of law rule is indifferent to the substantive solution that will result from its implementation
(contrary to material/substantive rules = specific result aimed at)

Question 18

Give 2 examples of Bilateral rules

Answer 18

Art 370-3 French Civil Code
The adoption of a foreign minor cannot be pronounced if his or her personal law prohibits law, unless the minor was born and habitually resides in France

EU Succession Regulation on jurisdiction, applicable law, enforcement of decisions, etc on succession
Art 21 Unless otherwise provided for in this Regulation, the law applicable to the succession as while shall be the law of the State in which the deceased had his habitual residence at the time of death
Connecting factor: The residence of the deceased (the factor for which we consider the best factor to link a situation to the place)

Question 19

Give 2 examples of Unilateral rules.

Answer 19

Art 309 French Civil Code
Divorce and separation from bed and board are governed by French law
- where both spouses are French nationality
- where both spouses have their domicile on French territory
- where no foreign law considers it should be govern where as french courts have jurisdiction to hear a case of

Art L 210-3 French Commercial Code
Companies whose registered office is located in France are subject to French law

Question 20

Give examples of a Neutral conflict of law Rule

Answer 20

Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations (Rome III)
Art 4 The law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs

Question 21

What are alternative connecting factors? Give examples

Answer 21

Sufficient if one law allows it. Either one!

Form of Wills Convention: improves the legal certainty of the will
Art 1: A testamentary shall be valid as regard form if its form complies with the international law
a) place where the testator made it, or
B) nationality possessed by the testator at time of disposition, or….

Rome I Protection of the Consumer

French Civil Code Art 311-17 Voluntary acknowledgement of paternity or maternity is valid if done in accordance with personal law of his or her, or the child’s personal law

Swiss Federal private international law
Art 44 II: Applicable law
1. conditions for marriage is governed by swiss law
2. if conditions not satisfied, if conditions of the law of the state of citizenship of bride or groom are satisfied
3. form of celebration of marriage in Switzerland shall be governed

Question 22

What is cumulative connecting factors? Give examples.

Answer 22

Two laws must allow it

Convention of 2 October on the Law applicable to maintenance obligations
Debtor may contest a request form the creditor on the ground that there is no such obligation under the la of their common nationality, or in absence of a common nationality, under the internal law of the debtor’s habitual residence

Polygamous marriage valid only if allowed by both personal law of spouses

Question 23

What is an Exception/Escape Clause?

Answer 23

Presumption that whatever the actual connections of a given situation, the predetermined connecting factor will lead to the closest legal order = not always the case
In exceptional situations, there is a limit to the characteristics

Swiss federal private international law
Art 15 Exception clause
The law designated by this code shall not be applied if case only has a very limited connection with that law, and has a much closer connection with another law

Question 24

What are the first issue with the Classification?

Answer 24

Category Conflict

Choice of law method is based on categorization and the categorization will give the connecting factor

1.Categories are very general, so what is the appropriate category? Contract, tort, marriage, procedure, capacity
Ex Rule of marriage of a testator revokes a will made previously - is this marriage or wills and estates?
Ex Limitation: Period within a procedure must be brought. Procedural because concerned if remedies?(UK position) or Substantive because it wakes a right? (French position)

2.Categories in PIL are defined according to domestic categories
Ex Art 515-7 French Civil Code. Is a registered partnership about contract, property, person? Solution: French law added a rule specific. The state of the registering authority will decide the validity of that partnership.

3. Widening the categories of the forum
   Ex Polygamy. French law did not allow polymonous marriages. But what category is it? Definition of marriage was extended to polygamy. it is cooperation between spouses.
   Ex Trust. Convention on the law applicable to trusts and their recognition
   Trust - legal relationship created when assets have been placed under the control of a trustee for the beneficiary or a specified purpose
   There is not one answer to the categorization of trusts. Look at the function and classify it accordingly. It it is for transmission of a succession it is category succession

Question 25

What is the second issue with the Classification?

Answer 25

Qualification Conflicts

Both laws don’t qualify the issue equally.
Ex Marriage of a Greek orthodox man with a French lady
Lady wants divorce. French law of celebration allows civil marriage. Marriage is valid (because form conditions)
Husband says marriage is void because Greek law requires a religious marriage because husband is orthodox. Marriage is void (because substansive conditions)

Conflict of qualification: Form or substance?
On what principles to judges classify the cause of action? According to what system of Law must the category be made?
Solve issue by referring to the qualification of the tribunal.
–> Lex fori
French court –> French law. Marriage is valid.
Court decided connecting factor is law of celebration, not law of spouses (because form not substantive)

How did we decide on this?
3 ways on deciding the connecting factor
1. Object Where are the immovables?
2. Person. Nationality/place of residence
3. Source of obligation. Will of the parties, where the tort was committed.

Question 26

How does one apply the designated law? Regarding Proof of Foreign Law?

Answer 26

1. Proof of Foreign law
   Difference between Proof of Foreign law and Law of the court for which there is a presumtion that the judges knows the content of the law

Default in proof leads to denial of a claim - risk of denial of justice
Who will prove the law? Judges or parties? How will it be proved? Effect of absence of proof? Who interprets the foreign law?

In France: It’s incumbent upon the French judge who recognizes the applicability of a foreign law to investigate its content, ex officio or at request of a party to invokes it. With the assistance of the parties and if necessary to give disputed question a solution in confirmity with positive foreign law.
European Judicial Network - to improve judicial cooperation

Effect of no proof? Either dismiss the plaintiff, or apply the law of the courts as general subsidiary purpose

Who interprets foreign law? Which instance? Sovereign interpretation of judges. In France: Cour de Cassation.
Foreign law = Fact

Question 27

How does one apply the designated law? Regarding public policy?

Answer 27

Definition of public policy, by its characterists, not distinctions
It is national: neither purely international nor foreign
it is current: changes throughout the years
Principles of justice we consider universal that has to be protected fundamentally, like equality or sex, non-discrimination of race

How does one implement public policies?
Duty for the judge to look at those questions, then a result to which the application to the law leads

When does one implement public policies? 3 elements that interfere:
- Personal factor
Ex Polygamous marriage. To protect first wife the marriage is not valid because of a personal factor that leads to implementation of public policy
- Spatial factor
Ex Husband refrigerated wife which is legal under muslim law. Not valid in France because it is against public policies.
- Creation of the situation.
Ex We cannot have a polygamous marriage celebrated in France because it is against public policy and it has been created abroad

What is the consequence?
- No application of the foreign law in its provisions that are contrary to public policy
- Replacement of the substantive law of the court instead

Question 28

What are the two main questions in Private International law?

Answer 28

Which court has international jurisdiction to hear the case?
What is the applicable law to solve the dispute?

Question 29

What is the Brussels I Recast Regulation on?

Answer 29

Regulation 12/15/2012 12 Dec 2012 on jurisdiction and recognziation and enforcement in civil and commercial matters
Used to determine jurisdiction of EU members jurisdiction in courts and used to determine other Conventions, like the Hague Convention on Air transport. In specific matters, you can find answers in a specific treaty.

Question 30

What are the objectives regarding developing jurisdictional rules?

Answer 30

Forceability of jurisdiction and predictability

Question 31

How does one determinate the International application in Contractual matters?

Answer 31

Determining applicability of the Brussels I Recast
Determining court or courts having jurisdiction under the Regulation recast

Question 32

What is the Applicability of the Brussels I Recast?

Answer 32

It only governs crossborder cases. Not jurisdiction or domestic courts or purely domestic matters
Regulation preamble p.5: Art 81 of TFEU

What is a crossborder dispute? C-280-20
European court of justice: A dispute of which at least one of the parties is domiciled or habitually resident in a member state other than the one of the court seized of the dispute.
Also when a company has a registered office in another member state than the court seized

Question 33

Does the Brussels I Recast have application outside of the EU?

Answer 33

Case Owusu (March 1st 2005)
Court applied Brussels I regulation to a dispute where the damage was suffered in Jamaica, by someone having domicile in the UK. It has to be cross-border, not necessarly in the EU

Question 34

What is the Temporal scope of Brussels I Regulations Recast?

Answer 34

Applies to actions (not contract) which are brought from the dates of its entry into force, in the country of the court seized (10 jan 2015)

Question 35

What is the Material scope of the Brussels I Regulations Recast?

Answer 35

Art 1 of Regulation. Civil and Commercial matters
It is possible for French administrative courts or criminal courts to apply this if the dispute falls within the category, the nature of the courts does not matter

List of matters not considered civil or commercial
Administrative, tax or custom matters because not fit the rules in the Regulation
Also matrimonal relationship, arbitration, bankrupsy because other EU regulation cover those.

What happens if it falls outside the material scope? If you sue in a French court, you apply French law, not the regulation.

Question 36

What is the Spatial scope of Brussels I Regulation Recast?

Answer 36

Art 4, 5 and 6 1 § of the Regulation
Art 4: Person domicile din a member state shall be sued in the courts of that member state
Art 5: Person domiciled may be sued in the court of other member states, only by virtue of the rules set out in the Regulation
So if domicile in the EU, Regulation MUST say otherwise
Art 6 If the defendant has its domicile outside of the EU, the court seized on the dispute will simply apply its own domestic rules on jurisdiction

So the domicile of the defendant is not a condition for applicability of the regulation, but for certain rules of the Regulation.
Certain rules apply independent of domicile of parties:
Art 24: Immovable property - court of the place of the immovable property (like a house)
Art 25: Choice of Courts: if parties regardless of their domicile have agreed to a court, that court has exclusive jurisdiction

How is domicile defined under Regulation?
Art 62: Defendant is a natural person - their domicile
Art 63: Defendant is a legal person - domicile of the place they have its statutory seat, central administration or principle place of business

Question 37

What are the Court or Courts having jurisdiction under the Brussels I Regulation Recast?

Answer 37

• Choice of Court Agreement (Art 25)
• The general rule under Art 4
• The optional rule under Art 7.1

Question 38

What is the Choice of Court Agreement?

Answer 38

Giving jurisdiction to one or several courts within the EU
It is the court ineach country that will apply its own law to see if the agreement is valid. If one claims that the agreement exists and designates at least one court within the EU, Art 25 applies.
EU member states are bound by the Hague Convention 2005 on choice of court agreements (also binding on Singapore and Mexico) (Does not apply when its a purely EU dispute)

Art 25 lays down conditions under which bodies may validily designate the court of a member state in international disputes

Question 39

What are the advantages to the Choice of court Agreement?

Answer 39

They ensure protectability, legal certianty, predictablitity
The optional rules trigger a rish to go to court first to be able to use advantages. With a choice of court agreement you do not need rush to court first. It does not matter if you are Claimant or Defendant.
No need to loose money and time in discussions of court

Question 40

What are the Domestic rules on International jurisdiction? What are the 4 functions?

Answer 40

Specific or material rules answering directly the question: do the domestic or national tribunals have jurisdiction in a specific situation?
Every state is the own to unilaterally fix the conditions of the international jurisdiction of his tribunals. The domestic rules have no power to dictate the jurisdiction of Foreign courts

1. Scope of application for domestic rules on international jurisdiction: When no international convention or regulation applies
2. General principle: When no specific rules –> Extension of the domestic rules on jurisdiction to the international order.
   Broadly accepted, in torts, contracts, property rights. Because of similarity between territorial issues in domestic and international law.
   Ex: Art 42 Code Procedure Civil Defendant’s domicile or residence
   Art 44 Where the real property is situated
   Art 46 Contract, tort. Place of delivery of goods, performance of services, where the harm event occured or damage was suffered
3. It could also be rules for when there is a risk of denial of justice. Like Swiss Federal Act on Private International law Art 3 II.
4. Or as subsidiary rules
   Ex French law prefers a French court over a foreign court. Rules on French Nationality of a litigant as a privilege.

Question 41

What is exclusive jurisdiction?

Answer 41

No other court may decide on the case. The aprties may not go to another court than the court of the place proper to rule the case

Ex Chinese Civil Procedure Law 9 April 1991

Question 42

What is the forum Non Conventiens?

Answer 42

Exists in China and the US
The forum has jurisdiction to hear a case, but the court is going to decline because it considered it would be inconvinient/unfair do do so –> so its better to litigate the issue in front of another court

Ex Chinese Civil Procedure Law 9 april 1991 “May rule to dismiss the case and inform the plaintiff to bring a lawsuit in a more convenient foreign court”

Question 43

Which ones are the two main EU Regulations?

Answer 43

Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgement in civil and commercial matters (Brussels I)

Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgement in civil and commercial matters (Brussels I bis- Recast Brussels I)

Question 44

Give more examples of where the crossborder scope of the Brussels I Recast appears?

Answer 44

Recital 3, Recital 16, C-280/20

Question 45

What is the definition of a judgement for the purposes of Brussels I Regulations Recast?

Answer 45

Art 2 Judgement means any judgement given by a court or tribunal of a member state, whatever the judgement may be called, including a decree, order, decision or writ of execution, as well as determination of costs or expenses by an officer of the court

Question 46

What was Case SBA v. AVME about?

Answer 46

The claim falls outside the scope of the Brussels I Regulation Recast because it was about Arbitration. EU regulations are not applied, so then French domestic rules are applied

Question 47

What was Case C-359/14 Ergo Insurance about?

Answer 47

The scope of Rome I and Rome II Regulations and the definitions of contractual and non-contractual obligations.
Account should not be taken only to the aim of consistency of reciprocal application of those regulations, but also in the applications of Brussels I, which draws distinction between contract and matters of tort, delict and quasi-delict (skadestånd med uppsåt och försumlighet)

Question 48

What is Case CJE 27 sep 88 C-189/87 Kalfelis about?

Answer 48

Tort and breach of obligation
Must we use autonomous definition of tort or refer to the applicable law to the issue? The concept should not be interpreted simply as refering to the national law of the one or other of the States concerned

C-26/91 Soc Jakob Handte (1992) and ECR 1-3967 (1992) on contractual obligations.

Question 49

Can you summarize the Rules on Jurisdiction?

Answer 49

What litigations are concerned by EU Regulation?
Art 4 Defendant’s domicile
Art 24 Exclusive jurisdiction in a Member State
Art 25 Choice of jurisdiction clause

General provisions:
- Art 4.1 General provision
- Art 6 What happens with the privileges? When defendent is domiciled vs not domiciled in MS?

Special jurisdiction
With consideration to domicile of defendant in MS. - Art 7 Complementary rules: Contract and cort
- Derogatory Jurisdiction. Art 17 on Consumer contracts, Art 18 on Individual contracts of employment. To ensure they are not sued in courts far from their residence

With no consideration of the domicile of the defendant = Exclusive jurisdiction
- Art 24 The following courts of a MS shall have exclusive jurisdiction of the domicile of the parties in proceedings of immovable property, validity of Constitution, validity of entries in public registers, etc etc

Question 50

What is special in The Brussel I Regulation Recast about Tort?

Answer 50

Art 4: Person’s domicile
Art 7: Another member state in matters of delict, quasi-delict in the courts for the place where the harmful event occured or may occur
Rome II Art 4: damage occured
Is there an escape clause?

• Non contractual obligation
• Matter excluded by Rome II
• Not concerned with special rules for competition, IP, product liabilty, environment

Case 350/14 Florin Lazar v. Allianz
Road traffic accident caused by unidentified vehicle
Does this constitute a a damage within the meaning of Art 4(1) of Rome II or an indirect consequence of a tort or delict within the meaning of the same article? Indirect consequence

Case Aff 21/76 Momnes de Potasse d’Alsace
Pollution of waters in France in discharge of saline waste by French company in the Rhine caused damage to horticulture firms situatede in Netherlands and Germany
Distinction made between two expressions. Rome II vs Brussels I Recast?
Defendant may be sued at either place damaged occured or place of event giving rise to it

Question 51

What is the applicability of Brussels I Regulation Recast Art 25? (The European Regime)

Answer 51

Art 25: You must designate a court in a MS of the EU
Before the recast One party had to have its domicile on the territory of a EU MS. This condition no longer exists.

What happens if you designate a Court outside the EU, like a Californian court and nonetheless a french company sues before a French court, is Art 25 applicable?
Art 25 does not apply when a clause designates a court outside the EU. Therefore you apply legal rules in French before French courts, and it will decide to give jurisdiction to foreign courts. It is possible but a different legal regime.
If EU law does not apply or does not give you solutions you apply French domestic rules

Question 52

What are the conditions said down in the Brussels I Recast Regulation about Art 25?

Answer 52

• International character of the dispute
  Must the dispute be international for the choice of court agreement to fall under Art 25?
  Cour de Cassation the Hidden defects of the Persian Cats - Brussels I if you have international situation the day of the conclusion of the contract, and if its domestic, you use Code de Procedure.
• Validity of the clause (Formal/material validity)

Formal validity: Art 25 contains all the applicable rules
In writing, in a form which accords with practises established between parties, or in international trade or commerce in accords with usage or if ought to have been aware
Case Majdoub 2015 COJ Must be a possibility to save and print contract before concluding it by click
Language of clause? No requirement that clause have to be drafted in language of country where case is brought
Case 2018 German seller. Clause was in German, no problem
Court de Cassation on Practices established between parties. Agreement was accepted becaue of relations over 15 years, payed invoices with clear reference to general terms and condiotions
Cour de Cassation on International trade usage: such trade usage is reference to national general conditions, containing a choice of court agreement
Is is sufficient under Art 25 if only stipulated in national general condition? Unclear legal question

Material
Need of a particular legal relationship (does not have to be contractual)
Case COJ 2015: Accepted that bodies to a contract could provide for the jurisdiction of the courts designated by the clause to hear actions for damages based on the violation of competition law and a distrust law.
It is perfectly possible for a choice of choice agreement to cover a tort dispute linked to a contract, but you need to expressly mention it.
Case Apel v. Bizcuss Abuse of dominant position. Application of jurisdiction clause is not excluded on the ground that that clause does not expressly refer to disputes relating to liability incurred as a result of an infringement. This affects the legal relationship
In some cases, a party with strong position imposes clause saying you can sue 1 place, but i can sue in several places, but it is an assymmetrical clause because they do not have the same rights under the clause. Common in banks. Cour de Cassation said bank cannot rely on choice of court because it was not valid.

Question 53

When can the Choice of Court clause be considered null and void?

Answer 53

Art 25 para 1 states that the choice of court agreement has to be enforced unless the agreement is null and void as to its substantive validity under the law of that Member state

Is it valid? If you have given valid consent.
But if you have chosen a foreign court, but sometimes they an still apply french law if it is.an Overriding Mandatory provision - they override your choice of law. But possible that the foreign court would not apply a french overriding norm.

Case Monster Cable: Cour de cassation tried the question if it is possible to neutralize a choice of foreign court because is falls within the scope of an Overriding mandatory norm? The clause had to be implemented, it is useless to claim it should not be implemented because of applicable law.

Question 54

What is the effect of the Choice of Court Clause?

Answer 54

Stated in Art 25. Such jurisdiction of chosen court shall be exclusive unless the parties have agreed otherwise

EU MS courts sometimes have a claimant who sues in another court designated by the exclusive choice of court agreement - you could under Brussels I have the situation of Litis Pendens: Two proceedings before two different courts at the same time
Rule Art 31 Para 2 concern this. Any other court than in agreement shall stay the proceedings until such time as the court of choice has no jurisdiction

In same situation but no choice of court - second court must wait for decision of first court, and if the first court has jurisdiction the second court must decline jurisdiction

Question 55

What is the General rule under Art 4?

Answer 55

Only if no choice of court agreement.

1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State
2. Persons who are not nationals of the Member State in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that Member State

Art applies to all matters, disputes not covered by specific provisions.

Does not specify a specific court, only a state

Gives a predictable solution, but not necessarily the most convenient one. Maybe obliged to sue in foreign country with foreign lawyer with foreign language. Therefore we have the optional rule of Art 7.1

Question 56

What is the General rule under Art 4?

Answer 56

Only if no choice of court agreement.

Art 4
1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State
2. Persons who are not nationals of the Member State in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that Member State

Art applies to all matters, disputes not covered by specific provisions.

Does not specify a specific court, only a state

Gives a predictable solution, but not necessarily the most convenient one. Maybe obliged to sue in foreign country with foreign lawyer with foreign language. Therefore we have the optional rule of Art 7.1

Question 57

What is the optional rule under Art 7.1?

Answer 57

Art 7.1
A person domiciled may be sued in another Member State
a) in matters relating to a contract in the courts for the place of performance of the obligation in question
for the purpose of this provision and unless otherwise agreed, the place of the performance of the obligation in question shall be:
in the case of the sale of goods, the place in a Member state where under the contract the goods were delivered or should have been delivered

b)in the case of the provision of services the place in the Member state where under the contract, the services were provided or should have been provided

If point (b) does not apply, then point (a) applies

Former Art 5

Applies only to contractual matters
Case Jacob Handte (1992) That the phrase matters relating to a contract is not to be understood as covering a situation in which there is no obligation freely assumed by one party towards another
Subbuyer (not first buyer) sues the manifacturor, is this a contractual obligation? No. (another caracterisation: tort, delict)
Contractual matters does not include precontractual negotiation or the breach of those
Case Granarolo (2016) An action of damage, in a case where contractual parties have blank periods not bound by contract is not a matter of tort, but an implied contractual relationship between the parties, list of examples:
- Long established commercial relations, or
- Good faith between the parties
- Regularities of the transactions

Question 58

What are the two difficult questions of Art 7.1?

Answer 58

What is the obligation?
Where should this obligation be performed?

Question 59

How does one determine the Place of obligation in question in 7.1 a)?

Answer 59

Case de Bloos: You only look at the place of the performance of the obligation in the dispute.
Not the place of performance of the contract.

Case Bodetex: This rule can be hard to implement. COJ considered 2 obligations equivelant and the court having jurisdiction for one of the obligations but not the other. In the case it was two claims from different countries, on for payment of commission and the other compensation for the defaults
What if you want to sue in only one court? Use Art 4

Question 60

What is the difference between Art 7.1 a) and b) ?

Answer 60

Art 7.1 b) The focus is now on the contractual relationship as a whole

Sale of goods: Goods were delivered or should have been
Sale of services: Services were provided or should have been

Question 61

How does one determine what is the obligation of the performance in question? Jurisprudence about application when 7.1 and 4

Answer 61

Case Falco (2009)
Tried the question if an intellectual property rights contract in return of remination was a contract qualified as a contract for the provision of services? No because you do not only undertake to contest use made by rights of the contractor, but you accept that the party exploit those right.
Service contract. - the party providing the service performs a specific activity in return for remination
This is not a service contract, you go back to a)

Case Car Trim (2005) Goods or services?
Company supplies airbugs for cars to other framework agreements. Demands concerning quality of the goods, safety of airbugs.
COJ says Art 7.1 b retains the characteristic performance for both contracts. There is an autonomous definition and distinguision of contract of sale of goods.
If you supply the goods manifactured and then delivered - sale of goods.
If you supply goods and then delivered it is a contract of services
Exclusive distribution framework contract is neither, it falls under a) according to Cour de Cassation (Case 2007)

Case Corman-Collins C-9/12 Application of 7.1 b Services
Who provides services in a distribution contract? By the dealer who participates in the development of distribution of product
Double interest: COJ ensures the application of 7.1 b contrary to Cour de Cassation
Leads to extention of the same reasoning toother types of distribution contracts.

Case Brenneke You have to caracterise a contract for the provision of services compared to goods
Cases for provisions of services will include commercial agency contracts, mandate contract, etc

Case Saale Kareda (2017) International loan agreement as a service contract
Used Falco definition of service contract - one party undertakes a specific activity for remination. COJ broadened the analysis of activity to international loan agreement. Use of 7.1 b.

Question 62

Where should the obligation be performed? (Jurisprudence)

Answer 62

Case Tessili (1976) COJ: The place of performance shall be goverened in accordance with governing the obligation in question. And in accordance with rules of conflict of laws of the court seized
Use applicable law to determine place of performance of a contract

Then Rome Convention on June 1980 on applicable law to contractual obligations - laid down unified conflict of law rules.
Very rare for domestic laws to determine place of performance of the contract, now EU domestic courts use conflict of law rule for this under letter a but its too complex

Case Besix: COJ: The contractual obligation not to compete everywhere with no geographical limitation - Art 4

Case 1980: COJ accepted that when you have the indication within the contract the place of performance, it will be the basis for Art 7.1 a. Even if no choice of court agreement, no exclusive jurisdictioning to a court, only optional solution.

Case Les Gravières rhénanes (1997) No link between place designated within the contract and the actual place of performance in question - such clause would be a hidden choice of court agreement. Art 25 on choice of court agreement

The place of performance under b, much easier - just read the provisions. You don’t need conflict of law rules because place indicated
B only applies when the place of performance is within the EU. If an agent has to perform his obligation on the territory of a party outside the EU, go back to Art 4

Case Car Trim. Delivery is an autonomous notion under EU law: The place of the physical handover

Case Peter Rehder v. Air Baltic. Air transport between two EUMS - passenger claimed compensation for damage for delay of flight. Airline company provices services both place at departure and arrival. –> Choice of both places under Art 7. Forum Actoris - allows claimant to sue in front of own courts

Case Wood Floor (2010) COJ on Agency contract. The court extended the reasoning adopted in the Sale of Goods-case to this contract and provision of services. Follow 3 steps:
1. Place of performance in accordance with terms of the contract
2. If not possible, the court will characterise the place predominantely embodies the activity of the agents (if not contrary to wills of the parties)
3. If you have identified such a place,COJ will locate the principal place for the provision of srevices at the place where the agent is domicile
Predictable solution, not not really in line with Art 7 because Forum Actoris

Case Saale Kareda: Loan agreement. Theplace of performance of services in the loan agreement is where the lending credit institution, bank, has its head office

Case Saye Home & Garden (2018)Commercial concesation contracts. COJ: This is an exclusive distribution contract and the rule is the closest connection court - the place of the main supply of services
If not possible, actual place of performance, and if none its the domicile of the service provided

Question 63

How does one designate the Law applicable to the contract?

Answer 63

Case American Trading (1910) International maritime contract for transport between Fr and US.
Is the contract subject tot the state where it was concluded? Or was it possible for parties to choose the law governing the agreement? Cour de Cassation: Chosen law or law at the place of the contract

It is still in force, but today the applicable law is determined mostly under International Treaties or EU Regulations.

3 main treaties
- The Hague Convention 1955 on the law applicable to International sales of Goods.
- The Hague Convention of 1978 on the law applicable to Agency contracts and Representation
- The Rome Convention of 19th June 1980 on the law applicable to Contractual Obligations

1 main Regulation (transformed into an EU regulation)
- Rome I Regulation 17th June 2008 on the law applicable to Contractual Obligations
It only applies when Hague ones don’t apply:

Question 64

When does the Rome I Regulation apply?

Answer 64

Rome I Regulation Art 1 determine the scope of application
The material scope: conflict of laws of contractual obligations in civil and contractual matters. It excludes administrative matters, customs and revenue
Does not define the notion of international contract, but do have a list of exclusions

Question 65

In the Rome I Regulation, what is the main rule about the applicable law?

Answer 65

Art 3 Freedom of choice
Allows parties to international law to chose the applicable law to govern their contract
“The parties can select the law applicable to the whole or to part of the contract”

Art 3 Para 2: You can choose a law at any time, and at any time change it. Should not prejudice the formal validity of the contract or the adversity effect right of the parties.

Art 3 Para 1 should be made expressly, usually in a form of contract clause or demonstrated in the terms of the contract, or circumstance of the case

If french courts have exclusive jurisdiction, doe sthis mean french law should be applicable? Opinions favorable to this and against.

Question 66

What is the limit to the Rome I Regulation rule on freedom of choice?

Answer 66

Parties only have the option to use state law, not international treaty or Lex mercadoria (law of merchant in international business disputes)
Recital 13 of Regulation: Does not preclude bodies from incorporating into their contract a non state body of law or international convention. This means that if french law considers non state law not valid, french law will govern.

Case Lieb of Arab States (2021) Cour de Cassation. Denied international treaty as a applicable law

When you have connecting factors only with one party and you choose a foreign law, its possible BUT this choice shall not prejudice the application of provisions of the law of that other country which cannot be derogated from court agreement
When no mandatory provision it is possible to apply foreign law

Modalities:
Art 3 Para 3 Contracts linked to only one country - haslimits with one country nonetheless theyuse foreign law
The choice of party shall not prejudice the application of the law of that other country which cannot be derogated from the agreement
Mandatory rules of only country having links to the contract will be applicable
Case 2019: Loan agreement between french company and bank which decided to have Singapore law. Valid contract because as long as you dont have mandatory provisions, the law chosen is applicable

Art 3 Para 4
2 EU MS choose Canadian law
Your choice is possible, but:
Your choice of law shall not prejudice the application of provisions of community law, EU law, where appropriate as implemented in the MS of the Forum
–> So when there is a purely EU contract - Mandatory provision of EU law should prevail over the chosen law

Question 66

What is the limit to the Rome I Regulation rule on freedom of choice?

Answer 66

Parties only have the option to use state law, not international treaty or Lex mercadoria (law of merchant in international business disputes)
Recital 13 of Regulation: Does not preclude bodies from incorporating into their contract a non state body of law or international convention. This means that if french law considers non state law not valid, french law will govern.

Case Lieb of Arab States (2021) Cour de Cassation. Denied international treaty as a applicable law

When you have connecting factors only with one party and you choose a foreign law, its possible BUT this choice shall not prejudice the application of provisions of the law of that other country which cannot be derogated from court agreement
When no mandatory provision it is possible to apply foreign law

Modalities:
Art 3 Para 3 Contracts linked to only one country - has limits with one country nonetheless they use foreign law
The choice of party shall not prejudice the application of the law of that other country which cannot be derogated from the agreement
Mandatory rules of only country having links to the contract will be applicable
Case 2019: Loan agreement between french company and bank which decided to have Singapore law. Valid contract because as long as you dont have mandatory provisions, the law chosen is applicable

Art 3 Para 4
2 EU MS choose Canadian law
Your choice is possible, but:
Your choice of law shall not prejudice the application of provisions of community law, EU law, where appropriate as implemented in the MS of the Forum
–> So when there is a purely EU contract - Mandatory provision of EU law should prevail over the chosen law

Question 67

What are the three levels of internationality?

Answer 67

1. Purely domestic contract
2. Purely European contract
3. Purely International contract

Question 68

What happens if absence of choice?

Answer 68

If no choice or not valid choice, look at the applicable law based on objective criteria

Rome I Regulation
Art 4: Applicable law in the absence of choice
A list of contracts with the designation of the applicable law to each type of contract:
a) A contract for sale of goods shall be governed by the law of the country where the seller has its habitual residence.

Find the connecting factor, the characteristic performance of service provided, The Habitual Residence of the service provided, and then use the applicable law.
French law will not apply this provision because France is bound by the Hague Convention sale of goods.

b) Same thing for services
e) Franchice contract. Where the franchisee has its habitual residence
f) Distribution contract, where the distributor had his habitual residence

Question 69

How does the connecting factors, links, to a country determine the applicable law?

Answer 69

So in Art 4 para 2 no the place of performance that matters. What country has links, connecting factors, to the contract?

Art 3 expressed the idea that it is possbiel for EU MS court to apply anothe law than the one, if it is clear that the contract is manifestly more connected to another country

Case 2016 Loan agreement between Italian Bank and Italian Borrower, guarantee agreement with French resident. No choice of law.
Cour de Cassation: Guarantee agreement had more connecting factors to Italy

Art 4 para 4 When the law cannot be determined according to para 1 or 2, the contract should be goverened by the law of the country to which it is msot closely connected
For instance you do not know the partys habitual residence during the contract

Question 70

What is the Rome I Convention’s solution to overriding mandatory norms?

Answer 70

Ex French law has provision that France considers must be implemented when the contract is performed in France - overriding mandatory norm that will displace the provision of the foreign law

Rome Convention Art 7 Lois de Police
Para 1 Foreign mandatory norm from the point of the court seized
Case Viol (2010) Cour de Cassation: Court of Appel should have checked in weather the foreign law has an overriding mandatory norm

Para 2 adresses the mandatory norm of the forum of the court seized of the dispute
Case Agintis (2007) Cour de Cassation: A provision protecting the subcontractor was a mandatory norm within the meaning. Because it was protected in german law but french law applied.

Question 71

What is Rome I Regulation’s solution to overriding mandatory norms?

Answer 71

Foreign overriding mandatory norm, it could come from any state, no restriction
In comparison to Rome Convention, the provision is slightly different

Art 9 Definition and function of Overriding Mandatory norms
Art 9 Para 1 Provisions the respect for which is regarded as crucial by a country for safeguarding its public interest such as its political, social or economic organisation
to such an extent that they are applicable to any situation failing iwhtin their scope irrespective of the law otherwise applicable to the contract under this Regulation
Para 2 Exactly the same provision found in Art 7 Rome Convention
Court has to apply domestic mandatory provision, but how about foreign mandatory norms?
Idea to limit possibility to invoke a foreign, because it is hardly predictable. Now they allowed only for application of norms of the place of the performance, and only certain rules.

Case Unummar (2013) About directive on Commercial Agents. Some states protected them more than directive.
Parties chose Belgian law and Belgian court were seized. Is it possible to apply provision of Belgian law as a mandatory rule even if applicable law is a transposition of that same directive? Yes

Case Ingmar (2017) COJ: Directive is an overiding mandatory norm. Parties chose law of california, and it is not possible to displace the implementation of a directive when the contract is performed in territory of an EU MS.

Case New Valamr (2016) COJ: Possible for a belgian court to apply belgian law as overriding mandatory provision of the foreign when contract is subject to italian law? Yes. But refused implementation because restriction on intra eu trade prohibited by TFEU.