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Civil Jurisdiction and Judgments in Europe - The Brussels I Regulation, the Lugano Convention, and the Hague Choice of Court Convention by Hartley, Trevor C (20th July 2017)

Part I General and Introductory, 1 Introduction

From: Civil Jurisdiction and Judgments in Europe: The Brussels I Regulation, the Lugano Convention, and the Hague Choice of Court Convention

Trevor C Hartley

Subject(s):
EU Rules — Recognition and enforcement of foreign judgments – Brussels and Lugano Conventions — Recognition and enforcement of foreign judgments – traditional rules — Jurisdiction under the Brussels I Regulation — Jurisdiction under the Brussels II Regulation — Jurisdiction under the Lugano Convention — Jurisdiction under the traditional rules

(p. 3) Introduction

The Instruments

1.01  This is a book about three legal instruments:1

  • •  Brussels 2012: officially known as EU Regulation 1215/2012 of 12 December 2012, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters2 (sometimes also called the Brussels I Regulation Recast), it was adopted on 12 December 2012 and applies from 10 January 2015;

  • •  Lugano 2007: officially known as the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters,3 it was signed in the Swiss city of Lugano on 30 October 2007 and entered into force for the European Union and its Member States on 1 January 2010;4

  • (p. 4) •  Hague: officially known as the Convention of 30 June 2005 on Choice of Court Agreements,5 it was adopted on 30 June 2005 and entered into force on 1 October 2015.

Put together, the three instruments constitute a package governing jurisdiction and the recognition of judgments in wide areas of civil and commercial litigation.

1.02  The three instruments do not all have the same legal nature. Brussels 2012 is a regulation of the European Union—the equivalent of legislation—and it applies as such in the Member States.6 Lugano 2007 and Hague are both international agreements and consequently form part of the international legal system. However, since the European Union is a Party to them—the Member States (except Denmark) are not7—they also form part of the EU legal system.8 Under EU law, as developed by the Court of Justice of the European Union (CJEU), international agreements which are valid and effective under international law and which are binding on the European Union automatically form part of the EU legal system. EU legislation is not necessary to give them effect.9 Such instruments have direct effect in the legal systems of the Member States if they fulfil the requirements laid down by EU law.10 They prevail over conflicting provisions of Member-State law.11 Moreover, the CJEU has the final say in their interpretation, on a reference from a Member-State court.12 The result is that, within the Member States, the two Conventions have the same legal effect as an EU regulation.

(p. 5) 1.03  We will now take each of the three instruments separately and consider some of their basic characteristics.

Brussels 2012

1.04  Brussels 2012 is the latest in a line of instruments which began with the original version of the Brussels Convention, the Convention of 1968.13 This was negotiated and concluded by the original six EU (EEC) Member States. A protocol of 1971 provided for references from the courts of Contracting States to the CJEU.14 The United Kingdom became a Party when it joined the European Union (EEC),15 and so have subsequent Member States. It was amended a number of times when more countries joined the European Union. The Brussels Convention was replaced by the original Brussels Regulation, which was adopted on 22 December 2000 and came into force on 1 March 2002.16 It will be referred to in this book as Brussels 2000. It was replaced by Brussels 2012,17 and ceased to have effect once the latter became applicable.

1.05  It is an important principle of EU law that the Brussels Convention (in all its different versions), Brussels 2000, and Brussels 2012 should be regarded as evolving versions of the same instrument. This means that decisions of the CJEU on an earlier version—for example, the original Brussels Convention—are equally binding with regard to later versions—for example, Brussels 2012—unless there is a change in the wording of the text.18 As will be appreciated, this principle has wide practical implications.

Lugano 2007

1.06  The original Lugano Convention (Lugano 1988) was adopted on 16 September 1988. The Parties were the then twelve Members of the European Union (then the European Communities) and the then six members of the European Free Trade Association (EFTA): Iceland, Norway, (p. 6) Austria, Switzerland, Finland, and Sweden. (Since then, Austria, Finland, and Sweden have joined the European Union, whereupon they ceased to be EFTA States.) The original Parties were, therefore, these eighteen States; the European Union (EC) was not a Party.19

1.07  The purpose of the Convention was to extend the system under the Brussels Convention to the EFTA countries. The Lugano Convention therefore followed the Brussels model closely, and many provisions were identical, though there were some differences. Since the European Union (EC) was not a Party to the Lugano Convention, the CJEU had no jurisdiction to interpret it; however, it was recognized that it would be desirable to have a uniform interpretation of the Lugano Convention in the various Contracting States, as well as a uniform interpretation of the two Conventions insofar as they contained identical or substantially identical provisions. So a protocol was added, Protocol 2 on the Uniform Interpretation of the Convention. Article 1 of this, which applied only to the Lugano Convention, provided that the courts of each Contracting Party should, when applying or interpreting the Convention, ‘pay due account’ (sic) to the principles laid down by any relevant decision of the courts of the other Contracting Parties. In addition to this protocol, there were two Declarations annexed to the Lugano Convention. In the first, those Contracting Parties that were also EU (EC) Member States declared that it would be appropriate for the CJEU, when interpreting the Brussels Convention, to ‘pay due account’ to the case law on the Lugano Convention. In the second, the representatives of the EFTA States declared that it would be appropriate for their courts, when interpreting the Lugano Convention, to ‘pay due account’ to the case law of the CJEU and the courts of the EU (EC) States on the Brussels Convention. In this way, it was hoped to avoid divergent interpretations.

1.08  The 1988 Lugano Convention was replaced by a new Convention of the same name (Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters) on 30 October 2007. Like its predecessor, its purpose was to extend the EU system to additional European countries—in this case, Iceland, Norway, and Switzerland; so, the provisions of the Convention are mostly similar—often identical—to those of Brussels 2000, the applicable instrument in the European Union at the time. There are, however, some differences.

1.09  Since the CJEU had decided, in the Lugano Convention case,20 that the conclusion of the new Lugano Convention fell entirely within the sphere of exclusive competence of the European Union (then the European (p. 7) Community), the EU Member States (except Denmark) were not Parties to it. So the Parties were Denmark, Iceland, Norway, Switzerland, and the European Union (EC).

1.10  The fact that the EU is a Party has important consequences within the Union. As in the case of the Hague Convention, the new Lugano Convention constitutes EU law, and the CJEU has the final word on its interpretation.21 This takes place on a reference for a preliminary ruling from a court in an EU Member State. The CJEU, on the other hand, cannot interpret the Lugano Convention when the case is pending before a court in one of the non-EU Contracting States: a reference to the CJEU is not possible from a court in such a State.

1.11  In order to ensure, as far as possible, the uniform interpretation of the Convention, Article 1(1) of Protocol 2 to Lugano 2007 provides:

Any court applying and interpreting this Convention shall pay due account to the principles laid down by any relevant decision concerning the provision(s) concerned or any similar provision(s) of the 1988 Lugano Convention and the instruments referred to in Article 64(1) of the Convention rendered by the courts of the States bound by this Convention and by the Court of Justice of the European Communities.

1.12  A number of points should be made regarding this provision. It applies to any court interpreting the new Convention. These are courts in the three non-EU Parties (Iceland, Norway, and Switzerland), courts in Denmark (which is an EU State but is independently bound by the Lugano Convention), courts in the other EU Member States, and the CJEU. It applies whenever the provisions of the 2007 Lugano Convention arise for interpretation in such a court. The obligation it lays down, however, is merely to ‘pay due account’ to relevant decisions, not necessarily to follow them. The relevant decisions are judgments on the provision in question in the 2007 Lugano Convention, on similar provisions in the 1988 Lugano Convention, and on similar provisions in the instruments referred to in Article 64(1) of the Convention. These latter instruments are:

  • •  Brussels 2000;

  • •  amendments to Brussels 2000, a phrase which covers Brussels 2012;

  • •  the Brussels Convention (and the Protocol concerning its interpretation by the CJEU); and

  • •  the Convention between the European Union (EC) and Denmark, applying Brussels 2000 to that Member State.

However, the obligation will apply only where the provision in one of these instruments is the same or similar to the provision of the 2007 Lugano Convention before the court.

(p. 8) 1.13  It is expressly stated in Article 64(1) of the Lugano Convention that the Convention will not prejudice the application by EU Member States of the instruments listed in Article 64(1), including Brussels 2012. This means that in interpreting these instruments, courts in EU States (including the CJEU) are not obliged to take ‘due account’ of decisions on the Lugano Convention. Thus, under Lugano 2007, uniformity of interpretation is something of a one-way street: courts interpreting Lugano 2007 take rulings of courts on the other instruments into account, but courts interpreting Brussels 2012 do not do so.

Hague

1.14  The Hague Convention on Choice of Court Agreements was adopted on 30 June 2005. It was concluded by the European Union on behalf of its Member States (except Denmark),22 and came into force between the European Union (excluding Denmark) and Mexico on 1 October 2015.

1.15  The origins of the Convention may be traced to an American initiative for a judgment-recognition convention with European countries. Subsequently, it was decided to aim for a worldwide convention to be negotiated through the machinery of the Hague Conference on Private International Law. Negotiations began in 1996. The Europeans were not, however, enthusiastic about a convention just for the recognition and enforcement of judgments—they felt that judgments from European countries were already widely recognized in the United States under the law as it stood at the time—and they were more interested in obtaining an agreement that would limit what they regarded as the excessively wide jurisdiction assumed by American courts. They hoped that the price they could extract from the Americans for agreeing to enforce their judgments in Europe would be an undertaking not to assume jurisdiction on certain specified grounds, even when there was no question of enforcing the resulting judgment outside the United States. In asking for this, the Europeans were going too far. The Americans were unwilling to agree, and the initial phase of the project, the ‘Preliminary Draft Convention on jurisdiction and foreign judgments in civil and commercial matters’, collapsed in 2001.

1.16  In order to salvage something from the wreckage of what had been the most ambitious project undertaken by the Hague Conference, it was decided to aim for agreement on a more limited basis. The project proposed was a convention on choice-of-court agreements in business-to-business transactions. It was hoped that this would achieve for choice-of-court agreements what the extremely successful 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards had accomplished for arbitration agreements. Negotiations commenced on this basis at the end of 2003. They (p. 9) were successful and culminated in the adoption of the text of the Convention at a diplomatic conference in The Hague in June 2005.

Interpretation of the Instruments

1.17  As far as courts in the United Kingdom and other EU countries are concerned, the three instruments constitute EU law. The final authority on their interpretation is the CJEU. When Member-State courts interpret them, they must do so in the same way as the CJEU would: they must follow any relevant decisions of the CJEU; if there is no decision in point, they must adopt the same method of interpretation as the CJEU.23

1.18  If the interpretation of one of the instruments is relevant to proceedings before it, any court or tribunal in a Member State has the power to refer the question to the CJEU for a preliminary ruling.24 A court from which there is no judicial remedy must do so.25 It seems that the English Court of Appeal is not obliged to make a reference, even if it refuses leave to appeal; however, in such a case, the Supreme Court must grant leave to appeal and make a reference26 unless it considers that the EU point is irrelevant or has already been decided by the CJEU.27

Procedure

1.19  When a reference is made, the proceedings before the Member-State court are suspended while the CJEU considers the matter. The parties may put their arguments to the CJEU in writing and in a short oral presentation. Member States may also appear. In a reference from a court in an English-speaking country, the proceedings will be in English. Those judges who do not understand English will listen on headphones to a simultaneous translation. Most of the judges on the panel hearing the case will be from civil-law countries. For this reason, counsel should present their arguments from a European perspective, rather than from an English point of view.

(p. 10) 1.20  After the close of the oral proceedings, the Advocate General will present his Opinion. An Advocate General in the CJEU (not to be confused with an Attorney General in a common-law country) does not speak on behalf of the European Union or any other body. He or she has the same status as a judge and is entirely independent in the performance of his functions. The Advocate General’s Opinion is not binding on the CJEU, but the latter attaches great weight to it. If it is followed—which happens in most cases—it may be cited in later cases in order to explain the rather terse reasoning of the CJEU. If it is not followed, it may be used in later cases in an attempt to induce the CJEU to change its mind, something that rarely happens but is not impossible.

1.21  Once the CJEU has given its ruling, which may take two years from the date on which the reference is made, the proceedings will continue before the Member-State court which made the reference. The ruling of the CJEU, which will relate solely to the interpretation, validity, or effect of the EU provision,28 is binding on the Member-State court, though the latter may make a second reference if it wants the CJEU to clarify matters further.

1.22  The CJEU consists of one judge from each Member State. Cases are normally heard by a chamber consisting of three or five judges, though especially important cases may be heard by a Grand Chamber of fifteen judges. Where the CJEU gives a ruling on a reference from a Member-State court, there is no requirement for the panel hearing the case to include a judge from the Member State in question. Thus a reference from an English court on the question whether a principle of English procedural law is compatible with the Brussels Regulation may be heard by a panel which does not contain a judge from the United Kingdom.29

1.23  Though not formally bound to do so, the CJEU follows precedents laid down in its previous decisions in the same way as an English court. It is rare for it formally to overrule a previous decision and not common formally to distinguish it. However, it sometimes gives judgments which seem hard to reconcile with previous cases and which must be regarded as at least modifying the principles on which they were based.30

Policy

1.24  Like the English courts, the CJEU is conscious of the policy implications of its decisions. In interpreting the Brussels instruments, it tries to adopt the (p. 11) solution that best accords with the needs of transnational litigation, sometimes even if the words of the text do not fully support its interpretation. This can be illustrated by taking two cases as examples.

1.25  The first is the GAT case,31 which concerned the fourth paragraph of what is now Article 24 of Brussels 2012. In the form in which it stood at the time, this provided that the courts of the Member State in which a patent is registered have exclusive jurisdiction over proceedings concerning the validity of that patent. The case arose when two German companies became involved in litigation in Germany, in which the issue was whether something that might be done in France by one of them would constitute an infringement of a French patent held by the other.

1.26  It was argued by the putative infringer that the action would not constitute an infringement inter alia because the patent was invalid. This argument put the validity of the patent in issue, but only as an incidental question. The principal question was whether the proposed action would constitute an infringement. However, the CJEU ruled that the German courts could not consider the validity of the patent even if it arose only as an incidental question. They had to stay the proceedings before them so that the French courts could give a ruling. Once this was done, the case could continue before the German courts on the issue of infringement.

1.27  This may be contrasted with the BVG case,32 in which BVG, a public corporation in Germany, had concluded a contract with an American bank. The contract contained a choice-of-court clause designating the courts of England. When sued in England, BVG brought proceedings in Germany for a declaration that the contract was void because its organs had acted beyond their powers in approving it. It said the German courts had exclusive jurisdiction on this question by virtue of the second paragraph of what is now Article 24 of Brussels 2012, which provides that in proceedings which have as their object the validity of the decisions of organs of a corporation, the courts of the Member State in which the corporation has its seat have exclusive jurisdiction.33

1.28  The CJEU rejected this argument. It ruled that Article 24(2) applies only when a decision of an organ of a corporation is raised as the primary issue in the case, not where it is an incidental question—for example, a defence. This seemed to be contrary to the ruling in the GAT case. The CJEU tried to distinguish GAT,34 but the grounds it gave were unconvincing. The real (p. 12) reason for the difference was policy. As the CJEU pointed out, if BVG’s argument were accepted, it would be never be possible to sue a company anywhere except in the courts of its seat. All the company would have to do if sued elsewhere would be to claim that the conclusion of the contract was beyond the powers of its organs.35 In the case of a patent, on the other hand, it could be dangerous to allow any courts other than those of the State of registration to rule on validity, even if their ruling had no effect on third parties (erga omnes effect).36

1.29  Subsequently, the fourth paragraph of Article 24 was amended37 so that it now provides that the courts of the Member State of registration of an intellectual-property right have exclusive jurisdiction irrespective of whether the issue of validity is raised by way of an action or as a defence. These words do not appear in any of the other paragraphs of Article 24. This amendment proves two things: it proves that the Member States agreed with the judgment in the GAT case; it also proves that the judgment was not fully supported by the original text.

Uniform Interpretation

1.30  In interpreting the Brussels instruments (or any other EU instrument), the CJEU insists that provisions must have the same meaning in every Member State. Thus where, as sometimes happens, different language-versions of an instrument say something different, the CJEU will adopt one meaning for all the Member States.38 In doing this, it will not necessarily adopt the meaning of the text in the major European languages—in theory at least, all language-versions are equal—nor will it go by the majority. Instead it will select the meaning that best fulfils the purpose of the instrument and the objectives of the Union. In other words, it will base its decision on policy.

1.31  Even where Brussels 2012 refers to general legal concepts like a civil or commercial matter, a contract, a tort, or a court’s being seised of a case, the CJEU is reluctant to accept that, in a given case, the meaning of these concepts should depend on the law of the Member State in question.39 (p. 13) Thus the question whether a claim is a matter relating to a contract, under Brussels 2012, Article 7(1), or a tort, under Brussels 2012, Article 7(2), cannot depend—for the purpose of determining jurisdiction under the Regulation—on the law applicable in the case before the court: a uniform, EU solution must be given.40 The CJEU lays down the criteria. Once it has been decided whether the case comes under Article 7(1) or Article 7(2), the Member-State court thereby given jurisdiction can characterize the claim as it sees fit for the purpose of deciding the substance of the matter.

1.32  Another example is the question whether a claim concerns a civil or commercial matter (and thus falls within the subject-matter scope of the Regulation) or a public-law matter (and thus falls outside its scope). Again the answer cannot depend on the law of the court hearing the case.41 If it did, it could mean that a given claim might be covered by the Regulation in Member State X but not in Member State Y. It would be wrong if courts in Member State Y were required to enforce a judgment given by the courts of Member State X (because, under the law of Member State X, it was regarded as a civil or commercial matter) when a similar judgment given by the courts of Member State Y would not be enforceable under the Regulation in Member State X (because under the law of Member State Y, it was not a civil or commercial matter). For this reason the CJEU has laid down a uniform rule on the matter.42

1.33  In the early days, there were exceptions. In Tessili v. Dunlop (decided in 1976),43 the CJEU had to interpret the then-applicable provision on jurisdiction to hear claims in contract, Article 5(1) of the Brussels Convention. This gave jurisdiction to the courts for the place of performance of the obligation in question. The CJEU ruled that in order to decide where delivery is required to take place under a contract for the sale of goods, the court seised must look to the law governing the contract, as determined by its rules of choice of law. Many years later, however, it adopted a uniform rule to determine the place of delivery of goods for the purpose of deciding jurisdiction under what is now Article 7(1)(b) (first indent).44 It is likely that it would do the same with regard to all questions under Article 7(1) of Brussels 2012, the present-day equivalent of Article 5(1) of the Brussels Convention.45

(p. 14) 1.34  Similar issues arise with regard to the question when a court is seised of a case. Under the Regulation, if the same claim is brought before the courts of two different Member States, the court seised second must defer to the court seised first. In a case decided in 1984, the CJEU held that the question of when a court is seised must be determined by the law of the court in question.46 Thus if the question is whether an English court is seised before an Italian one, English law decides when the English court is seised and Italian law decides when the Italian court is seised. As may be appreciated, this could have undesirable consequences; so, a uniform rule was adopted, this time by legislation.47

General Principles of Law

1.35  The CJEU will sometimes decide cases on the basis of general principles of law.48 These may be regarded as the EU equivalent of the English common law. They are judge-made rules derived from provisions in the EU Treaties (though not laid down as such in them), from the legal systems of the Member States or even from international law. Examples are the right to a hearing and legal professional privilege. Proportionality and legitimate expectations are general principles of a more abstract nature. Where they are derived from the legal systems of the Member States, it is not necessary that they should be found in the legal system of every Member State, though they should normally be accepted in a wide range of Member States. In deciding whether to adopt such a principle, the CJEU considers whether it would help to attain the policy objectives of EU law.

1.36  It is not always easy to know whether a rule is based on a wide interpretation of a particular instrument or is derived from a general principle of law. For example, there is a rule of EU law prohibiting antisuit injunctions directed against proceedings in other Member States. As things stand at present, this rule seems to be based on a wide interpretation of the Brussels instruments. However, it is not impossible that the CJEU will one day decide to base it on a general principle of law that the courts of one Member State must not trespass on the domain of the courts of other Member States. The consequence of making such a change would be to expand the scope of the prohibition. At present, it applies only where the proceedings against which the injunction is directed fall within the subject-matter scope of Brussels 2012. If it were declared to be based on a general principle of law, it could apply to all proceedings in the courts of other Member States.49

(p. 15) Aims and Objectives

1.37  In trying to understand the instruments, it is valuable to have a clear picture of what they are trying to achieve.50 We first consider Brussels 2012 and Lugano, which have the same aims and objectives.

Brussels 2012 and Lugano

1.38  The discussion that follows will be framed in terms of Brussels 2012, but it applies equally to Lugano. The origin of both instruments may be traced to the original Brussels Convention. This was adopted to give effect to Article 220 of the EEC Treaty, which required the Member States of the European Union (then the EEC) to enter into negotiations with each other to secure for the benefit of their nationals the simplification of formalities governing the recognition and enforcement of judgments and arbitration awards. More than ten years were to pass before the Brussels Convention came into force. By that time, its objectives had changed in several ways. Arbitration was dropped—this is covered by the 1958 New York Convention; it was decided that domicile, rather than nationality, was the most appropriate criterion to indicate to which State a person belonged; and the objectives of the Convention were expanded to include that of protecting defendants from exorbitant jurisdiction, as well as ensuring the recognition and enforcement of judgments.

1.39  Conventions on the recognition and enforcement of foreign judgments usually include rules on jurisdiction, since States are unwilling to recognize foreign judgments if the court of origin took jurisdiction on exorbitant grounds. Such rules may take two forms. The most common, known as indirect jurisdiction, lays down jurisdictional rules that are applicable only at the stage of recognition. They are applied by the court asked to recognize the judgment (the ‘court addressed’), not the court of origin. The court of origin may take jurisdiction on any ground it sees fit, but the judgment will not be recognized unless it conforms to the jurisdictional rules laid down in the Convention. The court addressed has the task of ensuring that this is the case. Under this system, the jurisdictional rules laid down in the Convention have only one function: that of ensuring that judgments granted on exorbitant grounds are not recognized under the Convention.

1.40  Under the system of direct jurisdiction, on the other hand, the jurisdictional rules have the additional function of protecting the defendant from exorbitant jurisdiction. Further, the jurisdictional rules in the Convention are applied by the court of origin when it first hears the case. They apply irrespective of whether or not it is intended to enforce the judgment in (p. 16) another State. This is the system adopted in the Brussels instruments. As it operates in them, it dispenses with the need (except in a few special instances) for the court addressed to consider for itself whether the court of origin took jurisdiction on acceptable grounds. In fact, it is not even permitted to do so: it must trust the court of origin. This system also has advantages from the point of view of recognition, since it makes the process simpler and easier.

1.41  However, though the system is concerned with the protection of defendants, its concern is limited: the Brussels instruments protect defendants only if they are domiciled in another Member State of the European Union.51 If the defendant is domiciled outside the European Union,52 the jurisdictions rules in the instruments do not apply. The State of origin applies its national rules of jurisdiction. In spite of this, however, the resulting judgment is subject to recognition and enforcement under the instruments without the court addressed being entitled to impose any jurisdictional test. As may be appreciated, this puts such defendants in an unfortunate position.

1.42  For example, Article 14 of the French Civil Code, as interpreted by the French courts, gives jurisdiction to the French courts in a wide range of cases on the basis of the French nationality of the claimant. Thus if a French citizen domiciled in Bolivia concludes a contract with a Bolivian to be performed in Bolivia, the Frenchman can sue the Bolivian in France. This ground of jurisdiction is prohibited by the Brussels instruments where the defendant is domiciled in another Member State;53 nevertheless, if a French court takes jurisdiction on this basis against a person domiciled in Bolivia, the judgment must be recognized and enforced in the other Member States. The jurisdiction of the French courts cannot be questioned by the court addressed.54

1.43  It will be seen from what has been said that although the instruments have several objectives, the beneficiaries of their concern are limited. Thus, the policy of curbing exorbitant jurisdiction is for the benefit only of persons domiciled in the European Union. On the other hand, the policy of facilitating the recognition and enforcement of judgments does not depend on the domicile of the parties but on the location of the court of origin. Only judgments from Member States55 are subject to recognition, but it does not matter where the claimant and defendant are domiciled. In the negotiations leading up to Brussels 2012, a move was made to extend the system to judgments from outside the European Union,56 but this was (p. 17) unsuccessful.57 For this reason, it might be said that the system is concerned with the interests of the Member State of origin, rather than those of the judgment creditor.

1.44  An important policy pursued by the instruments is that of giving special protection to parties regarded as economically weak.58 This applies to both claimants and defendants. The persons covered are people taking out insurance, consumers, and employees. Here again, the instruments protect such persons only if they are domiciled in a Member State.59

1.45  Upholding exclusive jurisdiction is another policy objective. In most countries, there are some matters regarded as so important to the country concerned that it claims exclusive jurisdiction over them. Property rights in land are an example.60 Exclusive jurisdiction over such matters is upheld in the instruments, but only when the State claiming it is a Member State:61 there is no provision in the instruments protecting the exclusive jurisdiction of non-member States.62 Domicile is irrelevant: the rules on exclusive jurisdiction apply irrespective of the domicile of the claimant or defendant. This indicates that they apply in the interests of the Member State entitled to exclusive jurisdiction, rather than those of the defendant.

1.46  Under Brussels 2012, the same applies to choice-of-court agreements. The relevant provisions apply only to choice-of-court agreements designating a court in a Member State.63 However, they apply irrespective of the domicile of the parties.64 Thus, for example, if a choice-of-court agreement designates the courts of Belgium, an English court is forbidden to hear the case, even if it would otherwise have had jurisdiction and even if one party is domiciled in Peru and the other in Vietnam.

1.47  The same is true with regard to lis pendens. Under the instruments, if two courts are seised of the same claim, the one seised second must decline jurisdiction in favour of the one seised first. Until Brussels 2012 came into force, this applied only if the court seised first was in a Member State, thus indicating that the rule was intended to uphold the interests of other Member States. The domicile of the parties was irrelevant. Now, however, (p. 18) a small exception has been made: if the court seised first is in a non-member State, a court of a Member State is permitted, but not required, to decline jurisdiction, provided certain requirements are satisfied.65

1.48  Table 1.1 sets out these points in concise form.

Table 1.1  Principal aims and objectives of Brussels 2012

Policy

Whose interest?

Scope

Prohibit exorbitant jurisdiction

Defendants

Only applies to defendants domiciled in a Member State of the European Union

Protect economically weaker parties (insurance, consumers, employment)

Economically weaker parties

Only applies to economically weaker parties domiciled in a Member State of the European Union

Uphold State sovereignty over matters of special concern—for example, rights in rem in land

States

Only applies to Member States of the European Union (domicile of parties irrelevant)

Prevent conflicts between courts in different countries

States

Only applies to courts in a Member State of the European Union (domicile of parties irrelevant)

Uphold choice-of-court agreements

States

Only applies where designated court is in a Member State of the European Union (domicile of parties irrelevant under Brussels 2012)

Enforce judgments

States

Only applies to judgments from Member States of the European Union (domicile of parties irrelevant)

Hague

1.49  The Hague Choice of Court Convention applies only when the designated court is in a Contracting State. For this reason it could again be said that its prime concern is to protect the interests of States Parties. The domicile of the parties is relevant only when Hague and another instrument—for example, Brussels 2012 or Lugano—are both applicable. Then domicile applies to determine which instrument prevails. For example, if the designated court is in Mexico, there will be no other relevant instrument; so, domicile will be irrelevant. If the designated court is in England, Hague will apply (rather than Brussels 2012) if either of the parties is domiciled in Mexico (or another State Party that is not an EU or Lugano State). If none of the parties is domiciled in such a State, Brussels or Lugano will apply.

Footnotes:

1  For a general discussion of EU law in this area, see Briggs (Adrian), Private International Law in English Courts (Oxford University Press, Oxford, 2014), Chapter 2.

2  OJ 2012, L 351/1.

3  OJ 2009, L 147/5.

4  It entered into force in Denmark (a separate signatory of the Convention) and Norway on the same date; it entered into force in Switzerland on 1 January 2011 and in Iceland on 1 May 2011: see http://www.ejpd.admin.ch/content/ejpd/en/home/themen/wirtschaft/ref_internationales_privatrecht/ref_lugue2007.html (Swiss Federal Department of Justice and Police). Switzerland is the Depository of the Convention: Article 69(2) of the Convention. For the conclusion of the Convention by the European Union, see Council Decision 2009/430/EC, OJ 2009, L 147/1.

5  For the text, see the website of the Hague Conference on Private International Law, http://www.hcch.net/index_en.php?act=conventions.listing.

6  Article 288 Treaty on the Functioning of the European Union (TFEU). Section 2(1) of the European Communities Act 1972 provides that provisions of EU law which, under EU law, have direct effect in the legal systems of the Member States are to be given effect in the United Kingdom. Under EU law (and under the European Communities Act), directly effective provisions of EU law prevail over Member-State law in the event of a conflict.

7  The special position of Denmark is discussed below: see para. 2.11.

8  For a general discussion of international agreements in the EU legal system, see Hartley (T. C.), The Foundations of European Union Law (8th edn, Oxford University Press, Oxford, 2014) (‘Foundations’), Chapter 6.

9  All that is needed is a decision by the Council that the Union will ratify the convention. For Lugano 2007, see the Council Decision of 27 November 2008, 2009/430/EC, OJ 2009, L 147/1; for Hague, see Council Decision of 4 December 2014 on the approval, on behalf of the European Union, of the Hague Convention of 30 June 2005 on Choice of Court Agreements, Decision 2014/887/EU, OJ 2014, L 353/5.

This approach, sometimes referred to as the monist approach to international law, contrasts with that adopted in the United Kingdom (sometimes called the dualist approach), under which legislation is necessary.

10  Foundations, pp. 240–3.

11  Ibid.

12  Foundations, Chapter 9, especially pp. 285–7. The position in non-EU States is of course entirely different.

13  Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 27 September 1968. The original text may be found in OJ 1972, L 299/32 (the English version is in OJ 1978, L 304/77). It came into force for the original Contracting States on 1 February 1973; it came into force in the United Kingdom on 1 January 1987. For later versions (amended by subsequent instruments), see OJ 1982, L 388/1; OJ 1989, L 285/1; and OJ 1997, C 15/1. For a consolidated text, see OJ 1998, C 27/1.

14  OJ 1978, L 304/50.

15  1978 Convention of Adhesion, OJ 1978, L 304/1. UK legislation was necessary to bring it into force in the United Kingdom. The relevant provision is the Civil Jurisdiction and Judgments Act 1982, section 2(1).

16  Regulation 44/2001, OJ 2001, L 12/1. For the position of Denmark, see para. 2.11, below.

17  OJ 2012, L 351/1.

18  Brussels 2000, Recital 19; Brussels 2012, Recital 34; German Graphics Graphische Maschinen, Case C-292/08, ECLI:EU:C:2009:544, [2009] ECR I-8421, paragraph 27; Realchemie Nederland v. Bayer CropScience, Case C-406/09, ECLI:EU:C:2011:668, [2011] ECR I-9773, paragraph 38 (Grand Chamber). The position regarding the Lugano Convention is slightly different: see paras 1.06 et seq. below.

19  Since the European Union was not a Party, legislation was needed to bring it into force in the United Kingdom. This was done through an amendment to the Civil Jurisdiction and Judgments Act 1982.

20  Opinion 1/03, ECLI:EU:C:2006:81; [2006] ECR I-1145.

21  Lugano 2007, Protocol 2, Recital 3; TNT Express Nederland BV v. AXA Versicherung AG, Case C-533/08, ECLI:EU:C:2010:243, [2010] ECR I-41074, paragraphs 59 and 60 of the judgment.

22  Denmark concluded it separately.

23  In the United Kingdom, it is provided by the European Communities Act 1972, section 3(1), that the meaning or effect of any EU instrument must, if not referred to the CJEU, be determined in accordance with the principles laid down by, and any relevant decision of, the CJEU.

24  Article 267 TFEU. The CJEU has held that this covers international agreements concluded by the European Union: Haegeman v. Belgian State, Case C-181/73, ECLI:EU:C:1974:41, [1974] ECR 449. For a discussion of this and subsequent cases, see Foundations, pp. 285–7.

25  A ‘judicial remedy’ would normally take the form of a right of appeal.

26  Lyckeskog, Case C-99/00, ECLI:EU:C:2002:329, [2002] ECR I-4839. For discussion of the point, see Foundations, pp. 295–7.

27  CILFIT v. Ministero della Sanità, Case C-283/81, ECLI:EU:C:1982:335, [1982] ECR 3415. For a fuller discussion of the circumstances in which a final court of appeal is not obliged to make a reference, see Foundations, pp. 295–9.

28  The application of the EU provision to the facts of the case is a matter for the Member-State court; however, the dividing line between interpretation and application is not always clear, and in some cases, the CJEU gives rulings which seem to cross that line: see Foundations, pp. 311–12.

29  For example, Owusu v. Jackson, Case C-281/02, ECLI:EU:C:2005:120, [2005] ECR I-1383, a reference from an English court, was heard by a Grand Chamber of the CJEU consisting of nine judges, none of whom was from the United Kingdom.

30  See Foundations, pp. 71–2.

31  Gesellschaft für Antriebstechnik mbH & Co. KG (GAT) v. Lamellen und Kupplungsbau Beteiligungs KG (LuK), Case C-4/03, ECLI:EU:C:2006:457, [2006] ECR I-6509.

32  Berliner Verkehrsbetriebe (BVG) v. J P Morgan Chase Bank, Case C-144/10, ECLI:EU:C:2011:300, [2011] ECR I-3961.

33  If Article 24(2) did not apply, the German courts would have had to dismiss the proceedings because the English courts had been seised first. The argument based on Article 24(2) was thus crucial to BVG’s attempt to get the case heard in Germany rather than England.

34  At paragraphs 45 and 46 of the judgment.

35  Paragraph 34 of the judgment.

36  Under Hague, on the other hand, a court hearing a claim of infringement can consider a defence based on invalidity, though its ruling on the latter issue is not subject to recognition under the Convention. See Hague, Articles 2(3) and 10(3). This is understandable in view of the fact that infringement will be covered by a choice-of-court agreement only in special circumstances.

37  This was done when Brussels 2012 was adopted: Brussels 2000, Article 22(4), did not contain the additional words.

38  See, for example, Stauder v. City of Ulm, Case C-29/69, ECLI:EU:C:1969:57, [1969] ECR 419. See also Berliner Verkehrsbetriebe v. J P Morgan Chase Bank (above) at paragraphs 28 and 29 of the judgment.

39  See, for example, Melzer v. MF Global UK Ltd, Case C-228/11, ECLI:EU:C:2013:305, where the CJEU said, ‘The use of national legal concepts in the context of [Brussels 2000] would give [rise] to different outcomes among the Member States liable to compromise the aim of unifying the rules of jurisdiction pursued by that regulation …’ (paragraph 34 of the judgment).

40  Handte v. TMCS, Case C-26/91, ECLI:EU:C:1992:268, [1992] ECR I-3967.

41  LTU v. Eurocontrol, Case C-29/76, ECLI:EU:C:1976:137, [1976] ECR 1541.

42  This is discussed in Chapter 4.

43  Case C-12/76, ECLI:EU:C:1976:133, [1976] ECR 1473.

44  Car Trim v. KeySafety Systems, Case C-381/08, ECLI:EU:C:2010:90, [2010] ECR 1255.

45  Cf. per Advocate General Jääskinen in Refcomp SpA v. Axa Corporate Solutions Assurance SA, Case C-543/10, ECLI:EU:C:2012:637, at paragraph 37.

46  Zelger v. Salinitri (No. 2), Case C-129/83, ECLI:EU:C:1984:215, [1984] ECR 2397.

47  See now Brussels 2012, Article 32.

48  For a general discussion, see Foundations, Chapter 5.

49  See paras 21.53–21.55, below.

50  See, in general, Weller, ‘Mutual Trust: In Search of the Future of European Private International Law’ (2015) 11 JPIL 64.

51  Under Lugano, this protection is extended to defendants domiciled in a Lugano State.

52  Or the Lugano area.

53  Or the Lugano State.

54  Recital 27 of Brussels 2012.

55  Or Lugano States.

56  It was not envisaged that this would depend on reciprocity.

57  For this reason, the recognition of judgments from outside the European Union (and Lugano area) is still based on Member-State law.

58  Recital 18 of Brussels 2012.

59  Or a Lugano State.

60  Two other such matters have already been mentioned: certain questions concerning the creation, dissolution, and operation of corporations; and the validity of registered intellectual-property rights.

61  Or a Lugano State.

62  Or non-Lugano States.

63  Under Lugano, this is extended to Lugano States.

64  Under Lugano, they apply irrespective of domicile in so far as they deprive other courts of jurisdiction, but not in so far as they confer jurisdiction on the court designated: this depends on national law. This was also the position under Brussels 2000.

65  There is no similar provision in Lugano.