Yearbook of Private International Law: 1999

YEARBOOK OF PRIVATE INTERNATIONAL LAW

YEARBOOK OF PRIVATE INTERNATIONAL LAW VOLUME I – 1999

EDITORS

PETAR ŠARČEVIĆ

PAUL VOLKEN

Professor at the University of Rijeka

Professor at the University of Fribourg

PUBLISHED IN ASSOCIATION WITH SWISS INSTITUTE OF COMPARATIVE LAW LAUSANNE, SWITZERLAND

Sellier. European Law Publishers

Sellier. European Law Publishers ISBN 978-3-935808-47-7 Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar. © 1999 Kluwer Law International und Swiss Institute of Comparative Law. © für den Nachdruck 2007 Sellier. European Law Publishers GmbH und Swiss Institute of Comparative Law. Dieses Werk einschließlich aller seiner Teile ist urheberrechtlich geschützt. Jede Verwertung außerhalb der engen Grenzen des Urheberrechtsgesetzes ist ohne Zustimmung des Verlages unzulässig und strafbar. Das gilt insbesondere für Vervielfältigungen, Übersetzungen, Mikroverfilmungen und die Einspeicherung und Verarbeitung in elektronischen Systemen. Herstellung: Karina Hack, München. Druck und Bindung: AZ Druck und Datentechnik, Kempten. Gedruckt auf säurefreiem, alterungsbeständigem Papier. Printed in Germany.

ADVISORY BOARD JÜRGEN BASEDOW Hamburg GENEVIÈVE BURDEAU Paris LAWRENCE COLLINS London, Cambridge HUANG JIN Wuhan HANS VAN LOON The Hague FERENC MÁDL Budapest

RUI MANUEL GENS DE MOURA RAMOS Lissabon/Luxembourg YASUHIRO OKUDA Sapporo GONZALO E. PARRA-ARANGUREN The Hague/Caracas SYMEON C. SYMEONIDES Baton Rouge (Louisiana) PIERRE WIDMER Lausanne

ASSISTANT EDITOR AND ADRESSEE FOR MANUSCRIPTS AND CORRESPONDENCE ANDREA BONOMI Swiss Institute of Comparative Law Dorigny, CH – 1015 Lausanne

TABLE OF CONTENTS Foreword ............................................................................................................ ix Abbreviations..................................................................................................... xi Doctrine Maarit JÄNTERÄ-JAREBORG Marriage Dissolution in an Integrated Europe – The 1998 European Union Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters (Brussels II Convention) ................................................................................................... 1 Petar ŠARČEVIĆ Private International Law Aspects of Legally Regulated Forms of Non-Marital Cohabitation and Registered Partnerships ............................ 37 Hans Ulrich JESSURUN D'OLIVEIRA The Artifact of 'Sham Marriages' ................................................................... 49 Paul VOLKEN How Common are the General Principles of Private International Law? America and Europe Compared ........................................................... 85 National Reports Gonzalo E. PARRA-ARANGUREN The Venezuelan Act on Private International Law of 1998 ........................... 103 Alfred E. VON OVERBECK The Fate of Two Remarkable Provisions of the Swiss Statute on Private International Law ......................................... 119 HUANG Jin and LÜ Guomin New Developments in Chinese Private International Law............................. 135 László BURIÁN Hungarian Private International Law ............................................................. 157 Karsten OTTE The New German Conflicts Law on Parents and Children ............................ 189

News from The Hague Hans VAN LOON The Hague Conference on Private International Law – Work in Progress ........................................................................................... 205 Forum Andrea BONOMI Mandatory Rules in Private International Law – The Quest for Uniformity of Decisions in a Global Environment ........................................ 215 Vesna TOMLJENOVIĆ Maritime Torts – New Conflicts Approach: Is It Necessary? ........................ 249 Texts, Materials and Recent Developments Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters ('Brussels II Convention')............................................................................... 299 Protocol on the Interpretation by the Court of Justice of the European Communities of the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters ..................................................................................... 319 Proposal for a Council Regulation (EC) on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters and in Matters of Parental Responsibility for Joint Children ........................................................................................... 323 Venezuelan Act on Private International Law (Unofficial English Translation) .................................................................... 341 Institute of International Law, Berlin Session, 16 – 25 August 1999 Taking Foreign Private International Law to Account................................... 353 Book Review Internet: Which Court Decides? Which Law Applies? – Quel tribunal décide? Quel droit s’applique? (André LUCAS) ....................... 355 Books Received .................................................................................................. 359 Index ................................................................................................................... 365

viii

FOREWORD As we approach the new millennium, the science of private international law is about to take a new direction in its development. It is well known that the first millennium was not particularly productive as far as choice-of-law matters are concerned, even though the professio iuris of international inheritance law dating back to that time is still useful today. The interest in private international law experienced a sudden surge at the beginning of the second millennium. Currently we are at the culmination and perhaps the turning point of the scientific discussion that began in the eleventh century as a halfhearted articulation of an incomplete sentence. Ever since, the disturbing question about appropriate application of laws in space has occupied the minds of lawyers, putting them in a restless search for the truth. In the nineteenth century, the teachings of private international law were characterized by great scientific debates about the correct questions to be asked when dealing with cases with foreign elements. The twentieth century witnessed extensive codification of conflicts rules at both international and national levels, i.e., in multilateral conventions and national legislation. Already called the age of globalization, the twenty-first century is expected to experience significant progress in the unification of substantive law. This raises the question whether science has profited sufficiently from private international law so as to allow it to retire. We do not believe so. In the law of international trade and global commercial relations, there is an obvious need for uniform substantive rules throughout the world. Nonetheless, it appears that the families, ethnic groups and nations of this earth – from America to the Caucasus, from the Alps to the flatlands – are neither socially nor personally ready to accept systematic uniform treatment of their mutual relations, including both property and personal matters. This applies not only in regard to the ethnocultural differences between East and West or North and South. Even in the traditional federal States on both sides of the ocean and in our new economic unions as well, it is clear that we are not prepared to give up a certain independence in the nucleus of personal, family and property matters. Even in trade and commerce where the need for uniform law has long been undisputed, we are still faced with a great gap between the wishes for uniform law and the reality of unification. And in areas where uniform rules already exist, one must realistically admit that legislators cannot do away with the conflict of laws technique – whether it is for the purpose of filling gaps or dealing with border areas and peripheral zones. It is the hope of the editors and publishers that the present volume will lend the field of private international law a new voice that can be heard throughout the world and used as a sounding board by all. The goal of the new Yearbook is to become an international podium for the intellectual exchange of scientific and practical ideas between specialists of private international law. Here the concept of private international law is to be understood in its broadest sense, encompassing

not only traditional conflict of laws questions but also the law of international civil procedure and international cooperation between State authorities and international organizations. Of course, the scientific discussion should also include the numerous sensitive areas where efforts to unify private international law and substantive law overlap. In this sense, the new Yearbook should serve as a medium for the exchange of information and ideas between the various Spartans of our discipline and in different parts of the world. The intention is to publish reports on the theory and practice of private international law in China or Japan, as well as reports on judgments in the field of private international law from Argentina and Peru or on national and international conflicts legislation from East and West Europe. The editors and publishers hope, in this way, to contribute to a closer and better understanding in matters of international civil and trade law, an understanding that furthers scientific knowledge and facilitates the work of legislators and judges.

Petar Šarčević

Pierre Widmer

x

Paul Volken

ABBREVIATIONS Am. J. Comp. L. Am. J. Int. L. Clunet I.C.L.Q. I.L.M. id. IPRax OJ PIL RabelsZ Recueil des Cours

Rev. crit. dr. int. pr. Rev. esp. der. int. Riv. dir. int. priv. proc. Riv. dir. int. RIW RSDIE

American Journal of Comparative Law American Journal of International Law Journal de droit international International and Comparative Law Quarterly International Legal Materials idem Praxis des internationalen Privatund Verfahrensrechts Official Journal Private International Law Rabels Zeitschrift für ausländisches und internationales Privatrecht Recueil des Cours de l'Académie de la Haye de droit international = Collected Courses of The Hague Academy of International Law Revue critique de droit international privé Revista española de derecho internacional Rivista di diritto internazionale privato e processuale Rivista di diritto internazionale Recht internationaler Wirtschaft Revue suisse de droit international et européen = Schweizerische Zeitschrift für internationales und europäisches Recht

DOCTRINE ________________

MARRIAGE DISSOLUTION IN AN INTEGRATED EUROPE: The 1998 European Union Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters (Brussels II Convention) Maarit JÄNTERÄ-JAREBORG* I. II. III.

IV.

V.

VI.

VII.

VIII.

Introduction Background to the Convention Jurisdiction in Respect of Divorce, Legal Separation and Annulment of Marriage A. A Multitude of Alternative Jurisdictional Grounds B. The Risk of Forum Shopping Jurisdiction in Respect of Parental Responsibility A. The Jurisdictional Grounds B. Major Differences in Relation to Article 10 of the 1996 Hague Convention C. The Concept of Parental Responsibility D. Child Abduction Lis Pendens and Dependent Actions A. Dismissal of the Case in Favour of the Court First Seised B. When is a Court Seised? Recognition of Judgments Relating to Marriage Dissolution A. What Is Recognized? B. Automatic Recognition C. Grounds of Non-Recognition D. The Irish Declaration E. Public Policy and Differences in the Applicable Law F. Non-review as to substance Recognition and Enforcement of Judgments Relating to Parental Responsibility A. What Is Recognized? B. Automatic Recognition and Grounds of Non-Recognition C. Enforcement Relation of the Convention to Other Conventions A. An Exclusively Applicable 'Basic Convention' B. Exceptions Arising from the Transitional Provisions

* The author is professor of Private International Law and International Civil Procedure at the Uppsala University, Faculty of Law. She represented Sweden in the Working Party on the Extension of the Brussels Convention to Family Law. The author is grateful for the financial assistance received from the Bank of Sweden Tercentenary Foundation and to judge Hans Ytterberg vor valuable comments.

Jänterä-Jareborg

IX. X.

I.

C. Exceptions Caused by the Convention's Limited Material Scope D. Exceptions Caused by Declarations by Nordic Member States E. Treaties with the Holy See Interpretation by the Court of Justice Concluding Remarks A. The Prospects of the Brussels II Convention B. Should the Convention Be Supplemented by other European Instruments?

Introduction**

European integration has to a large extent been regarded as an economic affair and the legal instruments adopted have aimed primarily at securing economic freedoms. The integration has, however, also far-reaching effects for an individual and his or her family life. When people make use of free mobility, they often marry or divorce across frontiers. For the individuals concerned, it is essential that their family law status be recognized at least in all those States to which they have a connection. Presently, several Member States are unwilling to recognize foreign divorces - and subsequent new marriages - thus causing considerable legal and social inconveniences to the parties, constituting a threat to the free movement of persons within the European Union. It can be said that the demands of the market create the need to take joint action also in the field of family law. Unified private international rules are a far less controversial device than the harmonization of family law within the Union. On 28 May 1998, the Member States of the European Union signed the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters (hereafter referred to as the Brussels II Convention) and the Protocol on its interpretation by the Court of Justice of the European

** On 4 May 1999, the Commission of the European Communities presented a proposal for a Council Regulation (EC) on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility for joint children, 99/0110 (CNS): this Yearbook, pp. 323-340. The Commission has incorporated into the proposal the substance of the Brussels II Convention, save such provisions which would be incompatible with the nature of the proposed instrument and the new framework for judicial cooperation in civil matters after the entry into force of the Amsterdam Treaty on 1 May 1999. The major changes include the following: Jurisdiction need not to be conferred to the Court of Justice since the Brussel II rules are to be incorporated into a Regulation (Art. 68 of the EC Treaty). Certain provisions of the Convention referring to the United Kingdom, Ireland or Denmark have been omitted or modified to take account of the position of these States, i.e., that Title IV of the EC Treaty does not apply in the said States unless they opt for its application in the manner prescribed in the Protocol annexed to the Treaties. Furthermore, no reservations can be placed in respect of the special arrangements concerning the 1931 Nordic Agreement and the Concordats with the Holy See. Reference is made to the text of the Convention in this article. 2

Marriage Dissolution in Europe Communities.1 Although it is likely to take years before the Convention will enter into force or at least be applicable between several Member States,2 the event can be regarded as historic. It shows that family law matters are currently regarded as an essential part of European integration and that the Member States, despite considerable divergencies in their domestic and international family law, are able to agree on uniform rules dealing with cross-border situations. In a press release by the Council of the European Union, the signing of the Convention was described as a 'breakthrough - probably the most important advance since the entry into force of the Maastricht Treaty - in the creation of a European legal area for the tangible benefit of the people of Europe.'3 The Brussels II Convention is a so-called double treaty containing rules on direct jurisdiction, as well as rules on the recognition and enforcement of foreign judgments. The purpose is, firstly, to create a single jurisdictional area within the European Union in respect of proceedings relating to divorce, legal separation or marriage annulment and proceedings relating to parental responsibility initiated in connection with such matrimonial proceedings. Secondly, the Convention aims at guaranteeing within the Union the free circulation of judgments given on the occasion of these proceedings. This article is a survey of the new Convention, focusing on its structure and key provisions. It offers also background information on the Convention, drawing attention to those issues on which it was most difficult to reach agreement or where, in the author's opinon, the adopted solutions are disputable. The relation of the Convention to other Conventions will be touched upon. Finally, some tentative remarks will be made concerning how the European Community/European Union should best try to tackle family law issues connected with the internationalization of families.

II.

Background to the Convention

The Brussels II Convention is not the first attempt within the European Community/European Union to draft rules regulating family law matters. The 1968 Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (hereafter referred to as the 1968 Brussels Convention)

1 The Convention and Protocol, as well as the Explanatory Reports are published in OJ of the European Communities 1998, C-221. See also in this Yearbook, pp. 299-322. 2 In the Council Act of 28 May 1998, the Council of the European Union recommends adoption of the Convention by the Member States in accordance with their respective constitutional rules. The Convention shall enter into force only after it has been adopted by all of the present 15 Member States of the Union. Member States which have adopted the Convention may, however, declare it to be applicable 'in advance' in relation to other Member States which have made the same declaration (see Art. 47). 3 Council of the European Union, General Secretariat, Press Release, 8853/98 (Presse 167) of Justice and Home Affairs Council Meeting of 28 May 1998.

3

Jänterä-Jareborg covers proceedings relating to maintenance. Other family law proceedings were excluded due to divergencies between the laws of the Member States.4 In 1990, a Convention was signed between the Member States on the Simplification of Procedures for the Recovery of Maintenance Payments. In addition, the European Parliament has adopted a number of resolutions dealing with family law matters.5 Nonetheless, the principal and practical impact of all these measures has been limited. European integration has been regarded mainly as an economic affair and the legal instruments adopted have been designed to serve an economic purpose.6 As illustrated at the beginning of this article, family law issues are closely related to economic issues. In the early 1990s, negotiations were initiated with the aim of extending the scope of the 1968 Brussels Convention to family law proceedings, in particular to proceedings relating to the dissolution or weakening of the marriage bond7; a Working Party was set up in 1993. Soon the project was directed towards the drafting of an independent Convention dealing with matrimonial proceedings, but modelled on the 1968 Brussels Convention. In 1995, after French and Spanish initatives, it was decided that the future Convention should also cover parental responsibility in cases when such an issue arises during matrimonial proceedings between the child's parents. The legal basis for the Convention is found in Article K.3 of the Maastricht Treaty.8

4

It was feared that their inclusion would negatively affect the underlying principles of the Convention, thus making it less effective. See OJ 1979, C 59, Report by JENARD P., p. 10. 5 See MARTINY D., 'Is Unification of Family Law Feasible or Even Desirable?', in: Towards a European Civil Code, Second Revised and Expanded Edition, Nijmegen (etc.) 1998, p. 154. 6 OJ 1998, C 221, Report by BORRÁS A., p. 28. Although family law is not explicitly mentioned in the EC Treaty or in the Treaty Establishing the European Union, family issues come into play in policies of the Community/Union such as providing social protection and raising the standard of living and quality of life. In addition, there is a clear connection between family law issues and fundamental rights. Fundamental rights as guaranteed by the European Convention on Human Rights include protection of the family and must be respected by the Union. See Martiny D. (note 5), p. 158 and PINTENS W., 'Rechtvereinheitlichung und Rechtsangleichung im Familienrecht. Eine Rolle für die Europäische Union?', Zeitschrift für Europäisches Privatrecht 1998, pp. 673-674. 7 See OJ 1998, C 221, Report by BORRÁS A., pp. 30-31. The proposal put forth by Germany in 1992 to extend the 1968 Brussels Convention to certain family matters was directly connected with problems experienced in particular between France and Germany as a result of the lack of mutual recognition of their divorce decrees, thus creating the possibility of competing divorce proceedings relating to the same marriage. Brussels II: The Draft Convention on Jurisdiction, Recognition and Enforcement of Judgments in Matrimonial Matters, With Evidence, House of Lords, Select Committee on the European Communities, Session 1997-98, 5th Report, 1997, pp. 5 and 8. 8 Art. K.3 is to be seen in conjunction with Art. K.1. Point 6 of Art. K.1 of the Treaty establishes judicial co-operation in civil matters as one of the matters of common interest for the purposes of achieving the objectives of the Union, in particular the free

4

Marriage Dissolution in Europe According to EU rhetoric, a convention on matrimonial proceedings is necessary in response to requirements of European citizens and aims at 'bringing the citizen closer to the Union.' As questions put to the European Parliament illustrate, considerable inconveniences arise for all parties to 'limping marriages, i.e., where a person is considered married in one Member State and divorced in another.9 Not all Member States, however, were convinced of the necessity of the project, fearing that it could lead to a conflict of conventions or an unnecessary duplication of conventions.10 Several of the Member States which are parties to the 1970 Hague Convention on the Recognition of Divorces and Legal Separations (hereafter referred to as the 1970 Hague Convention) were initially of the opinion that that Convention already provided a sufficient tool. Problems caused by 'limping marriages' within the Union could easily be resolved if all Member States of the Union were to ratify that Convention. In view of efforts by the Hague Conference on private international law to revise the 1961 Convention Concerning the Powers of Authorities and the Law Applicable in Respect of Protection of Minors, the opinion was expressed that rules relating to parental responsibility should be left to the Hague Conference. While the new European Union Convention was still being negotiated, revision of the 1961 Hague Convention led to the adoption of a new Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children (hereafter refered to as the 1996 Hague Convention). The majority of the Member States were convinced of the advantages of a new convention in a European context covering both matrimonial proceedings and parental responsibility in such proceedings. Member States not parties to the 1970 Hague Convention also made it clear that they were not prepared to ratify that Convention.11 Nonetheless, to meet the concerns of the more sceptical Member States, the work of the Hague Conference had to be taken into account. As a result,

movement of persons. The 1968 Brussels Convention, on the other hand, is based on Art. 220 of the EC Treaty which at that time was the only legal basis available. 9 These situations often involved mixed marriages between nationals of the different Member States. See FALLON M., The Value Added by a European Union Instrument on Jurisdiction and the Enforcement of Judgments in Matrimonial Causes in the Light of Existing Conventions, Report Requested by the Commission of the European Communities, Secretariat-General, Cooperation in the Fields of Justice and Home Affairs, 31 May 1995, pp. 25-26. 10 This kind of criticism has been levelled against the 1990 Convention on the Simplification of Procedures for the Recovery Abroad of Maintenance Payments. See SUMAMPOUW M., 'The EC Convention on the Recovery of Maintenance: Necessity or Excess?', in: Law and Reality, Essays on National and International Procedural Law in Honour of Cornelis Carel Albert Voskuil, Dordrecht (etc.) 1992, pp. 315-336. 11 The following Member States are parties to the 1970 Hague Convention on the Recognition of Divorces and Legal Separations: Denmark, Finland, Italy, Luxembourg, the Netherlands, Portugal, Sweden and the United Kingdom.

5

Jänterä-Jareborg some of the provisions on which it was particularly difficult to reach agreement were finally modelled, depending on the subject matter, either on the 1970 or the 1996 Hague Convention. As is pointed out in Professor Borrás's Explanatory Report, the negotiations leading to the Brussels II Convention were lengthy and in respect of some issues very difficult. These difficulties will be touched upon in the following presentation. In December 1997, under the Luxembourg Presidency, a final political compromise was reached by the Council on the remaining controversial issues.

III. Jurisdiction in Respect of Divorce, Legal Separation and Annulment of Marriage A.

A Multitude of Alternative Jurisdictional Grounds

Like the 1968 Brussels Convention, the new Convention creates a single jurisdictional area within the European Union. The direct rules on jurisdiction, which must be respected by the courts of the Member States, are regarded as a major innovation of the Convention. As a convention on recognition, the 1970 Hague Convention falls short in this respect.12 The Brussels II Convention, on the other hand, establishes both the competent forum and guarantees the recognition of judgments delivered in another Member State. Unlike the 1968 Convention, the new Convention establishes no general forum, but contains a list of equally ranked (alternative) jurisdictional grounds. According to Article 2, paragraph 1, indent (a), jurisdiction lies with the courts of the Member State in whose territory the spouses are habitually resident, or the spouses were last habitually resident in so far as one of them still resides there, or the respondent is habitually resident or, in the event of a joint application, either of the spouses is habitually resident, or the applicant is habitually resident if he or she resided there for at least a year immediately before the application was made. The courts of the Member State where the applicant is habitually resident shall also have jurisdiction if he or she resided there for at least six months immediately before the application was made and is either a national of that Member State or is 'domiciled' there. According to indent (b), jurisdiction shall also lie with the courts of the Member State where both spouses are nationals or where both spouses have established a 'domicile' on a long term settled basis.13

12

The 1970 Hague Convention contains only indirect rules on jurisdiction. These are to be considered a condition for recognition in the other Contracting States where recognition is sought, but they do not bind the courts of the State where the judgment is given. 13 In the application of the Brussels II Convention the concept of 'domicile' is to be given the same meaning it has under the legal systems of the United Kingdom and Ireland. See Art. 2.3 and OJ 1998, C 221, Report by BORRÁS A., p. 39.

6

Marriage Dissolution in Europe Each Member State must make a choice between the application of the one or the other of these latter two criteria (Art. 2.2). According to Article 5, the competent court shall also have jurisdiction to examine a counterclaim. Article 6 grants jurisdiction to the courts of a Member State in which a judgment on legal separation was given to convert that judgment into divorce. This ground of jurisdiction constitutes an alternative to the jurisdictional grounds in Article 2. It is available only on condition that such conversion is possible under the law of the Member State in question. The grounds of jurisdiction are exclusive in the sense that the court of a Member State may found jurisdiction only on these grounds.14 When the court lacks jurisdiction, it must decline ex officio in favour of the court of another Member State having jurisdiction under the Convention.15 This means that a court lacking jurisdiction under the present Convention may not straight off found jurisdiction on its generally applicable rules but must always check whether, under the prevailing circumstances, the court of some other Member State would have jurisdiction under the rules of the Convention. The objective was to establish jurisdictional rules which would be flexible without sacrificing legal certainty. The latter requirement demands a genuine connection between at least one of the spouses and the Member State where jurisdiction can be exercised. In the Explanatory Report, Borrás describes the solution adopted in Article 2 as the result of a difficult balance.16 The content of Article 2 was, not surprisingly, one of the key issues to be settled in the political agreement of December 1997. B.

The Risk of Forum Shopping

The Member States of the European Union are far from united in their outlook on marriage dissolution. In respect of the applicable law, the differences are sharpest between Member States which apply the law of the spouses' (common) nationality and those which apply the law of the forum, irrespective of the spouses' nationality or habitual residence. There are also striking differences in the domestic (internal) laws, which in turn have repercussions on the procedure to dissolve a marriage.17

14 See OJ 1998, C 221, Report by BORRÁS A., pp. 37 and 42. The exclusive nature of the jurisdictional grounds contained in Arts. 2-6 is specified by Art. 7, according to which a spouse who (a) is habitually resident in the territory of a Member State, or (b) is a national of a Member State or has his or her 'domicile' in the territory of a Member State may be sued in another Member State only in accordance with Arts. 2-6. 15 This is explicitly stated in Art. 9 of the Convention. 16 See OJ 1998, C 221, Report by BORRÁS A., pp. 36-37. 17 Five different stages have been identified to broaden the scope for divorce, compared with the Catholic attitude which excludes divorce or the Protestant tradition which accepted only adultery and desertion as grounds for divorce: (1) the acceptance of breakdown of the marriage as a ground for divorce, in addition to different forms of 'fault'

7

Jänterä-Jareborg The multiplicity of grounds without any hierarchy between them may be particularly controversial in States with restrictive divorce policies. In many crossborder situations within the European Union, the Convention offers the spouses a choice between two or more fora. Since the Convention does not take account the divergencies between the choice of law rules applied to marriage dissolution in the Member States and between their domestic laws, it may in fact encourage a practice described as 'forum shopping', i.e. the choice of the forum on the basis of where the parties or the plaintiff considers the case to receive the most favourable outcome. The possibility of forum shopping under the Convention raises two interrelated questions. Firstly, is there reason to deem the choice of forum so objectionable in the field concerned that it lies in the interest of the European Union/European Community to take further actions to prevent it? Secondly, should measures be taken against potential abuse of the alternative jurisdictional grounds established in Article 2? The first question seems to imply that the structure and content of Article 2 must be regarded as a failure.18 Personally, I do not find this to be the case. One must bear in mind that the parties to matrimonial proceedings are ordinary people whose notions of 'proximity' and 'proper forum' may be very different from those of companies involved in commercial transactions within the European Union, to which the 1968 Brussels Convention applies. To tie spouses into a fixed hierarchy of fora where the jurisdictional grounds may be far more restrictive than the

on the part of one of the spouses; (2) the acceptance of the breakdown of marriage as the only ground for divorce, but retaining the importance of 'fault' within the breakdown framework; (3) the liberalization of the requirements for proving that the marriage has broken down permanently, e.g., by decreasing the period of separation which must precede a divorce; (4) the acceptance of unilateral divorce by regarding an application by one spouse as sufficient proof of marriage breakdown; and (5) the acceptance of unilateral divorce based on the desire of a spouse to terminate the marriage with the result that reference to marriage breakdown is superfluous. See AGELL A., 'Grounds and Procedures Reviewed', in: Economic Consequences of Divorce, The International Perspective (edited by WEITZMAN L.J. and MACLEAN M.), Oxford 1992, pp. 54-58. The situation in the European Union is at present rather chaotic since different Member States adhere to different stages of the development described above. 18 For a description of the jurisdictional grounds in Art. 2, see OJ 1998, C 221, Report by BORRÁS A., pp. 37-39. During the drafting of the Convention it was most difficult to reach agreement on the provisions which create competence based on the petitioner's habitual residence, in particular in respect of the additional conditions relating to the length of the habitual residence. In the end, the Working Party settled for a requirement of one year immediately preceding the application and, under some fortifying requirements, six months preceding the application. The latter provision could be approved only as part of the overall political compromise reached in December 1997. It was advocated especially with regard to marriages which come to an end shortly after their conclusion with the result that a spouse returns to his or her 'home state' and wants to initiate divorce proceedings there without delay.

8

Marriage Dissolution in Europe generally applicable rules, would render their access to justice more difficult and, easily undermine the Convention's legitimacy in the eyes of the public. With this in mind, the inclusion of several equally ranked jurisdictional grounds must be regarded as justified. Neither can one, in this context, disregard the diversity of laws in the Member States and the related divergences of a procedural and economic nature. The latter include factors such as the length and cost of the proceedings, whether they can be carried out by the parties themselves without employing advocates, whether both parties need to be present, etc.19 All these differences are likely to be of importance for the concerned parties and give them reason to carefully examine in which State to initiate the proceedings. It should also be pointed out that the chosen jurisdictional grounds reflect the existing fora in the Member States but preclude the most far-reaching of the prevailing rules.20 It follows that in this context the parties' choice of forum is, at least generally speaking, fully legitimate.21 Or as cited by Professor Siehr: '"Forum shopping" is a dirty word; but it is only a pejorative way of saying that, if you offer a plaintiff a choice of jurisdiction, he will naturally choose the one in which he thinks his case can be most favourably presented: this should be a matter neither for surprise nor for indignation.'22 Considering the Convention's close connection with the 1968 Brussels Convention, one may still wonder whether the Member States will find reason to

19 The procedure tends to be simple and inexpensive in a system based on the notion that an application by one spouse suffices for the granting of the divorce, and much more complicated when permanent breakdown of the marriage has to be proven. Although ancillary claims may complicate the procedure irrespective of the system applied, in many countries it is possible to first give a partial judgment dissolving the marriage, whereafter the proceedings continue in respect of the ancillary questions. 20 An example is French law according to which French jurisdiction may always be based on either the petitioner's or the respondent's French nationality. Another example is Swedish law, according to which Swedish courts have jurisdiction if the petitioner is a Swedish national and has earlier had his or her habitual residence in Sweden after reaching the age of 18. 21 More problematic are those situations where a spouse uses the existence of the concurrent fora and initiates pre-emptive proceedings for the sole purpose of preventing the other spouse from starting proceedings in another Member State. In this type of situation, considering the effects of the rules on lis pendens and dependant actions (Art.11), the Convention may well be criticized. 22 See SIEHR K., 'Scherz und Ernst im Internationalen Privatrecht. Gedanken zur Vergangenheit, Gegenwart und Zukunft des Kollisionsrechts', in: Festschrift für Imre Zajtay, Tübingen 1982, p. 435, n. 89.

9

Jänterä-Jareborg supplement the Convention with uniform choice of law rules also in this case.23 This question will be tentatively touched upon in the concluding remarks. The second question draws attention to the fact that the new Convention is based on mutual confidence between the Member States. This includes also confidence concerning their courts' ability to disclose and prevent fraud and circumvention of the Convention. From this it follows, as is also explicitly stated in Article 16, that the courts of the Member States shall be bound by the findings of fact on which the court of the Member State of origin based its jurisdiction and may not re-examine them.24 Connected with this question is, however, also the prospect of the spouses abusing the lack of uniform interpretation in the Member States as to the moment when a court is 'seised' with a case. This question will be touched upon in Part 5, infra.

IV.

Jurisdiction in Respect of Parental Responsibility

A.

The Jurisdictional Grounds

The Brussels II Convention also covers proceedings relating to parental responsibility on condition that those proceedings are directly linked to matrimonial proceedings between the child's parents. The jurisdiction of a Member State in respect of the latter is then extended to cover the former issue as well. Such double competence may be considered unproblematic in situations where the child is habitually resident in the Member State whose authorities are exercising jurisdiction in the matrimonial proceedings (Art. 3.1). The Convention grants, however, subject to certain conditions, jurisdiction also to authorities in the Member State where the matrimonial proceedings are being conducted although the child is not habitually resident in that State (Art. 3.2). Today it is widely accepted that jurisdiction over parental responsibility should be exercised by the authorities of the State where the child is habitually resident. A decision on parental responsibility must be based on the best interests of the child which, as a rule, can be established only by the authorities of that State. In many States, divorce as such is no longer considered an event requiring a decision to be taken on the custody of the children. The underlying philosophy is that the dissolution or weakening of the marriage bond between the child's parents,

23

One major reason for the adoption of the Convention on the Law Applicable to Contractual Obligations (the 1980 Rome Convention) was to make forum shopping in respect of contracts useless through unified choice of law rules. The 1968 Brussels Convention opens in many situations the possibility to choose the forum, although to a far lesser extent than the Brussels II Convention. 24 See, however, the Declaration by Ireland, to be Annexed to the Convention, which is not fully in line with the statements above. This declaration will be discussed in Part VI, infra.

10

Marriage Dissolution in Europe which is the object of the matrimonial proceedings, should not affect - at least not automatically by force of law - parental responsibility towards the child. It follows that jurisdiction over parental responsibility should be determined independently of jurisdiction in matrimonial matters. Further, all children should be subject to the same set of rules, irrespective of whether they are born in or outside a marriage.25 As a result of such concerns and the fact that a new convention dealing with parental responsibility was being negotiated at the Hague Conference, not all the Member States were enthusiastic about including parental responsibility within the scope of the Convention, and some Member States were clearly against it.26 Some other Member States, on the other hand, claimed that the exclusion of such matters would greatly undermine the practical value of the Convention since in their legal systems a decision on matrimonial proceedings must always include a decision on parental responsibility. These conflicting positions seemed to lead to a deadlock which could only be resolved after the adoption of the 1996 Hague Convention. Decisive in this respect was that the Hague Conference, after much debate and pressure from Member States of the European Union, was able to adopt a provision (Art. 10) which grants jurisdiction to authorities of the State where jurisdiction is exercised in respect of matrimonial proceedings although the child is habitually resident in another Contracting State.27 The European Union States could then agree on using Article 10 of the Hague Convention as a model for a provision in a European context. The result can be deemed very similar to Article 10 in the 1996 Hague Convention although there are also relevant differences.28 25

For such reasons, the 1931 Inter-Nordic Convention comprising private international law provisions on marriage, adoption and guardianship has been subject to criticism in the Nordic States. This Convention, which in respect of custody issues covers only children born in the marriage, will be dealt with in Part VIII, infra. It may be that the structure of the Brussels II Convention will, in fact, petrify also the 1931 Convention to 'children in the marriage'. 26 See Part II, supra. 27 For the content of Art. 10, see infra, note 28. Important in this respect is also Art. 52.2 in the 1996 Hague Convention which specifies that the Convention shall not affect the possibility for one or more Contracting States to conclude agreements which contain, in respect of children habitually resident in any of the States Parties to such agreements, provisions on matters governed by this Convention. Like Art. 10, this provision was specially drafted to meet the concerns of Member States of the European Union. See Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children, Explanatory Report by LAGARDE P., pp. 135 and 72-75. 28 Art.10 of the 1996 Hague Convention reads as follows: '(1) Without prejudice to Articles 5 to 9, the authorities of a Contracting State exercising jurisdiction to decide upon an application for divorce or legal separation of the parents of a child habitually resident in another Contracting State, or for annulment of their marriage, may, if the law of their State so provides, take measures directed to the protection of the person or property of such child if (a) at the time of commencement of the proceedings, one of his or her parents habitually resides in that State and one of them has parental responsibility in relation to the child, and

11

Jänterä-Jareborg According to the main rule of the Brussels II Convention, the courts of a Member State which, by virtue of Article 2, are exercising jurisdiction in proceedings relating to divorce, legal separation or marriage annulment, shall also have jurisdiction over a matter relating to parental responsibility over a child of both spouses, where the child is habitually resident in that Member State (Art. 3.1). As has been pointed out before, such a provision can be considered fairly unproblematic29 and it is also in line, for instance, with the underlying principles of the 1996 Hague Convention. When the child is not habitually resident in the Member State where the matrimonial proceedings are pending, the courts of that State shall have jurisdiction over such a matter if the child is habitually resident in one of the Member States and (a) at least one of the spouses has parental responsibility over the child, and (b) the jurisdiction of the courts has been accepted by the spouses and is in the best interests of the child (Art. 3.2). Presently, in many of the Member States, jurisdiction in matrimonial proceedings gives the court also the right to examine issues on parental responsibility, irrespective of the child's foreign habitual residence. In this regard, the new Convention provides an important restriction. Article 3.3 establishes the conditions under which the jurisdiction conferred by paragraphs 1 and 2 ceases. B.

Major Differences in Relation to Article 10 of the 1996 Hague Convention

A major difference between Article 10 of the 1996 Hague Convention and Article 3 of the Brussels II Convention is that the former only provides concurrent jurisdiction, applicable as an alternative to the other jurisdictional grounds in the

(b) the jurisdiction of these authorities to take such measures has been accepted by the parents, as well as by any other person who has parental responsibility in relation to the child, and is in the best interests of the child. (2) The jurisdiction provided for by paragraph 1 to take measures for the protection of the child ceases as soon as the decision allowing or refusing the application for divorce, legal separation or annulment of the marriage has become final, or the proceedings have come to an end for another reason.' 29 Irritating in the drafting of this provision is, however, that it refers to courts without meaning only courts but all authorities with jurisdiction over the matters covered; see Art.1.2 where this usage of language (modelled on the 1968 Brussels Convention) is defined. In the present context, this usage is problematic because it may imply that the same authorities in the Member State which exercise jurisdiction over the matrimonial proceedings also have jurisdiction over matters relating to parental responsibility. The intention is only to establish that authorities of the same Member State have jurisdiction over both matters, with due regard for the internal distribution of competence. Hence, the Convention takes account of the fact that in some Member States different authorities will be in charge of matrimonial proceedings and issues relating to parental responsibility, whereas in other Member States it will be the same authorities. See OJ 1998, C 221, Report by BORRÁS A., p. 40.

12

Marriage Dissolution in Europe Convention, whereas the latter provides exclusive jurisdiction for authorities in the State of the matrimonial proceedings. Article 10 of the Hague Convention does not require the authorities of the State where the matrimonial proceedings take place to exercise jurisdiction also in respect of parental responsibility. It only recognizes such jurisdiction when it exists in the internal law of that State. No such reference to the internal law of the 'divorce State' is made in Article 3.2 of the Brussels II Convention. As the provision is drafted, it seems to imply that under the conditions put forth there, such double competence shall always exist in the Member States of the European Union. Interpreted in this way, the Convention will, in fact, have a unifying effect on the internal laws of the Member States.30 The Brussels II Convention makes it explicit that it applies only to the children of both spouses.31 The 1996 Hague Convention is more vague on this point. The Brussels II Convention pays less regard to situations where another person other than a child's parent has parental responsibility. Thus, even if a third person were to have parental responsibility in addition to one or both parents, that person's consent is not required as regards jurisdiction in the State where the matrimonial proceedings take place.32 Since Article 3 is directly linked to Article 2 which establishes jurisdiction only when a spouse has a genuine connection to the 'divorce state', it was considered superfluous to require, as in the Hague Convention, that one of the parents must habitually reside in the 'divorce state'. Neither the Hague Convention nor the Brussels Convention creates perpetuatio jurisdictionis for the forum of the matrimonial proceedings. According to the Hague Convention, the jurisdiction of that forum ceases also in respect of parental responsibility as soon as the decision on the marriage has become final. The Brussels II Convention is drafted in a more flexible manner in this respect. If proceedings are still pending in respect of parental responsibility when the judgment on divorce, legal separation or marriage annulment becomes final, then the jurisdiction shall continue until the other proceedings have also led to a final judgment. In this respect, the drafting of the Brussels II Convention is clearly preferable.

30

Jayme and Kohler are, however, of the opinion that the existence or non-existence of a double competence is left for the lex fori to determine. See JAYME E./KOHLER Ch., 'Europäisches Kollisionsrecht 1998: Kulturelle Unterschiede und Parallelaktionen', IPRax 1998, p. 420. Borrás also claims that there is no contradiction between Art. 3.2 and Art. 10 of the 1996 Hague Convention: see OJ 1998, C 221, Report by BORRÁS A., p. 40. 31 It was agreed that this expression covers both biological and adopted children of the couple. It does not cover a wider category of children known as 'children of the family'. See OJ 1998, C 221, Report by BORRÁS A., p. 36. 32 On the other hand, recognition shall be refused at the request of any person claiming that the judgment infringes his or her parental responsibility, provided that it was given without such person having been given the opportunity to be heard; see Art. 15.2 (d).

13

Jänterä-Jareborg C.

The Concept of Parental Responsibility

The Working Party could not agree on a definition of the concept of parental responsibility. As a result, this term was left to be defined by the law of the Member State in which an issue relating to parental responsibility is under consideration.33 In the Explanatory Report, Professor Borrás refers to international conventions, in particular the 1996 Hague Convention, where this concept is used and states - perhaps too optimistically - that 'it does have a degree of unifying potential.'34 There is reason to fear that the omission of a definition may create problems in the practical application of the Convention, in particular in respect of recognition of judgments given in the other Member States.35 Discussions in the Working Party indicated that considerable differences exist between the laws of the Member States as to the content of this concept or its closest counterparts in domestic law such as 'parental authority'. Reference to the use of the concept in the legal system in question provides no guidance at all in the case of Sweden and Finland where no such concept is used. Also the reference to the 'unifying effect' of the 1996 Hague Convention is problematic in this connection. According to the purposes of that Convention, the term 'parental responsibility' includes parental authority or any other analogous relationship of authority determining the rights, powers and responsibilities of parents, guardians or other legal representatives in relation to the person or the property of the child.36 Since the discussions in the Working Party did not at all focus on aspects relating to the protection of the child's property, one can not claim that the intention was to include this question as well.37

33

See OJ 1998, C 221, Report by BORRÁS A., p. 36. See ibid. (note 33). 35 The scope of this concept may differ in the Member States. If a judgment on parental responsibility is given in Member State A in connection with the matrimonial proceedings in that State and later an application for the recognition and enforcement of that judgment is filed in Member State B, it seems that the latter State can refuse recognition and enforcement to the extent that the judgment exceeds Member State B's notion of parental responsibility. 36 Art. 1.2 in the 1996 Hague Convention. 37 Seeking guidance from the 1996 Hague Convention is problematic also because at present it is not possible to foresee whether the Member States of the European Union will become parties to the Convention. In order for a unifying effect to be achieved through the 1996 Hague Convention, it seems that a majority of the Member States would have to become parties to the Convention. 34

14

Marriage Dissolution in Europe D.

Child Abduction

Article 4: 'The Courts with jurisdiction within the meaning of Article 3 shall exercise their jurisdiction in conformity with the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction and in particular Articles 3 and 16 thereof.' Linking jurisdiction over the issue of parental responsibility to jurisdiction in matrimonial proceedings may have a negative effect on the return of abducted children. Article 4 aims at eliminating such risks.38 It will be of relevance in particular in those cases where the child's habitual residence has changed as a result of wrongful removal or retention, as defined in Article 3 of the Hague Convention. Although the child would now, for instance, be considered habitually resident in the Member State where the matrimonial proceedings are pending, the authorities of that State shall not decide on the merits of custody until it has been determined that the child is not to be returned under the 1980 Hague Convention.

V.

Lis Pendens and Dependent Actions

Article 11: '1. Where proceedings involving the same cause of action and between the same parties are brought before courts of different Member States, the court second seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. 2. Where the proceedings for divorce, legal separation or marriage annulment not involving the same cause of action and between the same parties are brought before courts of different Member States, the court second seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. 3. Where the jurisdiction of the court first seised is established, the court second seised shall decline jurisdiction in favour of that court.

38

It could be claimed that Art. 4, in fact, incorporates the 1980 Hague Convention into the Brussels II Convention since the reference embraces the 1980 Convention in whole. This Article was drafted with the assumption that all Member States are parties to the 1980 Hague Convention. Its application does not require that the child be abducted from another European Union State.

15

Jänterä-Jareborg In that case, the party who brought the relevant action before the court second seised may bring that action before the court first seised.' A.

Dismissal of the Case in Favour of the Court First Seised

The avoidance of concurrent proceedings through special rules on lis pendens and dependent actions has been described as an innovation which in itself would have justified the Brussels II Convention.39 As in the 1968 Brussels Convention, a twostep procedure is followed. In the first place, the court second seised shall of its own motion stay its proceedings until it is established that the court first seised has jurisdiction. Secondly, once the court first seised has established that it has jurisdiction, the court second seised shall decline jurisdiction in favour of the former. The aim is to avoid the inconveniences and expenses caused to the spouses when they have to act as parties to concurrent proceedings in different States and, in particular, to prevent contradictory rulings. The first paragraph of Article 11 contains a traditional lis pendens rule and is directly based on Article 21.1 of the 1968 Brussels Convention.40 It includes both matrimonial proceedings and proceedings relating to parental responsibility. The second paragraph relates to so-called 'dependent actions'. It has been tailored to deal with differences in legislation between the various Member States on the admissibility of proceedings for separation, divorce or marriage annulment, and in particular with the problems caused by the Swedish and Finnish legal systems. 39

See OJ 1998, C 221, Report by BORRÁS A., p. 30. It should, however, also be pointed out that the rules on lis pendens included in both the Brussels II Convention and the 1968 Brussels Convention have also been subject to much criticism and on good grounds. These rules may encourage a 'race to (a friendly) court.' Once a competent court is seised, it has exclusive jurisdiction in the case irrespective of whether another court would, in fact, be in a much better position to hear the case. See LANDO O., 'Being First. On Uses and Abuses of the Lis Pendens Under the Brussels Convention', in: Modern Issues in European Law, Nordic Perspectives, Essays in Honour of Lennart Pålsson, The Hague 1997, pp. 105-122. Such concerns were decisive also for the drafting of Art.12 in the 1970 Hague Convention, according to which proceedings for divorce or legal separation may be suspended when proceedings relating to the matrimonial status of either party to the marriage are pending in another Contracting State. See ANTON A.E., 'The Recognition of Divorces and Legal Separations', I.C.L.Q. 1969, p. 634. The Convention's rigid rules on lis pendens and dependent actions (Art. 11) can be contrasted with the more flexible approach in the doctrine of forum non conveniens followed by courts in the United Kingdom. The purpose of this doctrine is to ensure that, to the extent possible, proceedings are brought before the courts of the most appropriate country. During the drafting of the Convention, this alternative approach received very little sympathy from the leading continental Member States. 40 There are some minor terminological differences. The 1968 Convention uses the expression 'any court other than the court first seised', whereas the new Convention talks about 'the court second seised'. This difference involves no change in substance.

16

Marriage Dissolution in Europe In both Sweden and Finland, it is no longer possible to obtain legal separation or marriage annulment.41 Divorce is the only available form of marriage dissolution even in such cases where a marriage has been concluded contrary to an absolute impediment to marriage, such as an existing marriage. On the other hand, the laws of all the other Member States provide for both legal separation and marriage annulment, although the conditions may vary from Member State to Member State.42 Several Member States were initially of the opinion that the Swedish and Finnish legal systems demanded exceptions from the general rule providing that the court first seised would maintain exclusive jurisdiction. In the opinion of these States, if divorce proceedings were first initiated in Sweden or Finland, but subsequent proceedings relating to marriage annulment were initiated in another Member State, the latter proceedings should prevail since they involve a cause of action that produces the most far-reaching effects. Finland and Sweden were opposed to such a solution because it would have created uncertainty. Even more important, it would have been an infringement of the principle that the legal systems of the Member States are regarded as having equal value. The final text of paragraph 2 of Article 11 of the Convention was part of the political compromise reached in December 1997. It not only tackles the problem caused by the two Nordic legal systems, but also applies generally to situations where different causes of action are brought before courts of different Member States. In this connection, attention must also be paid to paragraph 3, in particular its second indent. The result is that if a spouse first initiates divorce proceedings in Sweden and the other spouse later initiates marriage annulment proceedings in Austria and it is established that the Swedish court has jurisdiction, then the marriage can only be dissolved by divorce in Sweden. As a result, the Austrian court must decline jurisdiction. Since Swedish courts apply forum law to marriage dissolution, the other spouse would not be helped by bringing the action for marriage annulment in the Swedish court. Similarly, if a spouse first applies for divorce in Germany whose courts have jurisdiction and the other spouse then initiates proceedings for legal separation in Austria, the German court will have exclusive jurisdiction. Considering the content of German law (including the choice of law rules), it may, however, be worthwhile for the other spouse to bring his/her action for legal separation in the German court.

41

This has been the case in Sweden since the 1973 divorce law reform, which came into force on 1 January 1974, and in Finland since a corresponding law reform in 1987. According to the private international law of both States, forum law is applied to matrimonial proceedings. 42 Even in those States, marriages are very rarely annulled.

17

Jänterä-Jareborg B.

When is a Court Seised?

Once the Brussels II Convention is in force, its application will be a daily event in the Member States of the Union. How, then, will the moment when a court is seised be determined? This question is particularly important since the national procedural laws differ significantly on this issue. In Sweden, for example, a court is considered seised when the document instituting the proceedings is filed with the court or, in the case of a joint application, when the spouses present their application to the court. In many other Member States, the relevant point of time is the date of service on the respondent. No guidance is found in the Convention or the Explanatory Report, an omission which can only be explained by the Convention's links with the 1968 Brussels Convention and a similar gap in that Convention. A revised text of the 1968 Convention is presently under preparation and according to the plans the revision will include provisions on lis pendens and related actions.43 Negotiations will very likely be initiated to adjust the Brussels II Convention to the revised text after its adoption. According to the Court of Justice, the determination of the moment when a court is seised is decided by the national law of the court in question.44 It is difficult to reconcile this position with the concurrent fora available in the Brussels II Convention. Even if one finds all these forum rules justifiable, as does the present author, and is in favour of giving the parties a choice of forum, measures need to be taken to prevent abuse of the different notions of the initiation of proceedings. Article 11 should be supplemented in this respect before the Convention comes into force. Consider, for instance, the following: H and W, a childless couple, were last habitually resident in Italy where W still resides. H, who is a Swedish citizen, has returned to Sweden and has been habitually resident there the last 12 months. W initiates divorce proceedings in Italy, but since the relevant documents for some reason fail to be served on H, the Italian court is not 'seised'. Meanwhile H, who knows about W's actions, files a summons for divorce at a Swedish court. Since this is enough to 'seise' the court under Swedish law, and the Swedish court has jurisdiction pursuant to Article 2, that court will be the 'court first seised.' Once the jurisdiction of the Swedish court has been established, the Italian court must decline jurisdiction.45 W must now take part in divorce proceedings in a foreign 43

The undergoing revision embraces also the Lugano Convention which is basically identical to the 1968 Brussels Convention. 44 See Case 129/83 Zelger v. Salinitri [1984] ECR 2397. 45 Art. 21 in the 1968 Brussels Convention has been subject to much criticism by Nordic authors because of such results. According to Pålsson, the present state of matters may 'be exploited for purposes of manipulation and cannot be justified on objective grounds, which require the race to be run on equal terms.' See PÅLSSON L., 'Lis Pendens under the Brussels and Lugano Conventions', in: Festskrift till Stig Strömholm II, Uppsala 1997, p. 720.

18

Marriage Dissolution in Europe country. Not only may the outcome on the main issue be different from what it would have been if an Italian court had heard the case, but also the outcome of all ancillary claims which the Swedish court, in accordance with its generally applicable rules, has competence to examine in connection with the divorce proceedings.

VI.

Recognition of Judgments Relating to Marriage Dissolution

A.

What Is Recognized?

In light of the 1970 Hague Convention, it was argued that the planned Convention would be superfluous.46 To judge whether such misgivings were justified, it is necessary to compare the rules on recognition in the Brussels II Convention with those of the 1970 Hague Convention. Only in two respects do the rules on recognition in the Brussels II Convention have a wider material scope of application than those in the 1970 Hague Convention.47 Firstly, judgments granting marriage annulment are also covered. Secondly, the new Convention covers ancillary claims relating to parental responsibility. In other respects, the scope is the same as in the Hague Convention. All other ancillary claims concerning, for instance, the spouses' matrimonial property relations, as well as findings of fault, fall outside the scope of the Convention.48 Another similarity to the 1970 Hague Convention is that the Brussels II Convention covers only so-called positive judgments, i.e., judgments granting divorce, legal separation or marriage annulment.49

46

See supra, Part II. This outcome can be compared with the list of shortcomings in the report prepared by Professor M. Fallon concerning the value added by a European Union instrument; see FALLON M. (note 9), pp. 1, 12 and 17. The following shortcomings were identified in the 1970 Hague Convention: The Convention's territorial scope is too limited since it has not been ratified by all the Member States of the European Union. Also its material scope is too narrow since it excludes recognition of decisions on annulment of marriage as well as decisions not to grant divorce or legal separation. Nor does it cover findings of fault or recognition of decisions given in respect of ancillary applications. Further, the Convention has no rules on direct jurisdiction. Also, the content of the Convention is criticized as being too inflexible. 48 In this respect it is easy to misconstrue the Convention's title and expressions such as 'a decision relating to divorce, legal separation or marriage annulment' as implying a wider material scope of application. 49 This solution could be adopted only after much debate in the Working Party. Considerations in its favour were the mandate of the Working Party to facilitate recognition of divorces, legal separations and marriage annulments and the necessity to take account of differences in the laws of the Member States in respect of divorce and legal separation. See OJ 1998, C 221, Report by BORRÁS A., p. 48. 47

19

Jänterä-Jareborg A negative judgment refusing the application does not prevent the spouses from applying for divorce, legal separation or marriage annulment in the court of another Member State. As regards the practical application of the Convention, the court which issued the judgment will, in the majority of the cases, have based its competence on the direct rules on jurisdiction set out in the Convention. The rules on recognition, however, go beyond this and are applicable also in situations where the court of a Member State has based its jurisdiction on its generally applicable rules. Since the jurisdiction of the court of the Member State of origin may not be reviewed,50 the Convention is more liberal in this respect than the 1970 Hague Convention. B.

Automatic Recognition

Judgments covered by the Brussels II Convention shall be recognized automatically in the other Member States without any special procedure being required (Art. 14.1). To exclude all misunderstandings in this respect, the second paragraph of Article 14 specifies that '[i]n particular ... no special procedure shall be required for up-dating the civil-status records of a Member State on the basis of a judgment relating to divorce, legal separation or marriage annulment given in another Member State, and against which no further appeal lies under the law of that Member State.' The rule providing for automatic recognition has no counterpart in the 1970 Hague Convention and is a novelty in this field for most of the Member States of the European Union.51 The rule is based on a corresponding provision in the 1968 Brussels Convention (Art. 26). As in that Convention, the new Convention also supplements the rule of automatic recognition by a provision stipulating that any

50

See in particular Art. 16.3 of the Brussels II Convention. Limitations may follow from Art. 43 concerning non-recognition and non-enforcement of judgments based on Art. 8 as a result of a Member State's undertaking in a convention with a non-Member State. 51 An exception is the Convention of 6 February 1931 between Denmark, Finland, Iceland, Norway and Sweden comprising private international law provisions on marriage, adoption and guardianship. This Convention provides automatic recognition of all decisions covered, e.g., decisions on divorce, legal separation and custody of the spouses' children. This Convention is touched upon in Part VIII, infra.

20

Marriage Dissolution in Europe interested party may in accordance with the procedures specified in the Convention 'apply for a decision that the judgment be or not be recognized.'52 This possibility brings together the main rule of automatic recognition and the existence of mandatory grounds of non-recognition in the Convention and, in situations of doubt, takes care of the party's need for legal certainty. From the point of view of a spouse, recognition of a judgment on marriage dissolution means that he or she is free to remarry. This effect was considered to be so self-evident as to make an explicit provision confirming it superfluous.53 C.

Grounds of Non-Recognition

To understand the content of automatic recognition, one also has to consider the Convention's mandatory rules on non-recognition and rules restricting the court's freedom to re-examine the judgment whose recognition is at stake. The Convention contains four grounds under which a judgment originating in a Member State must be refused recognition in another Member State.54 This is the case when: (a) such recognition is manifestly contrary to the public policy of the Member State in which recognition is sought; (b) when the judgment was given in default of appearance, if the respondent was not notified properly and in good time to arrange for his defence, unless he has accepted the judgment unequivocally; (c) if the judgment is irreconcilable with a judgment given in proceedings between the same parties in the Member State in which recognition is sought; or (d) if it is irreconcilable with an earlier judgment given in another Member State or in a non-Member State between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the Member State in which recognition is sought.

52

See Art. 14.3. In this respect, the Brussels II Convention is more flexible than the corresponding provision in Art. 26.2 of the 1968 Convention. For example, the lastmentioned Convention does not provide for a 'negative decision' on recognition. 53 Art. 11 in the 1970 Hague Convention contains a provision on this issue: 'A State which is obliged to recognize a divorce under this Convention may not preclude either spouse from remarrying on the ground that the law of another State does not recognize that divorce.' Moreover, the European Parliament was of the opinion that such a provision needed to be included in the Convention. European Parliament, Report on the draft Convention on jurisdiction, recognition and enforcement of judgments in matrimonial matters, Committee on Legal Affairs and Citizens' Rights, 16 April 1998. That the issue, in fact, is rather complicated is illustrated by ANTON A.E. (note 39), pp. 621 and 639-640. 54 These grounds are found in Art. 15.1.

21

Jänterä-Jareborg These grounds of non-recognition are mandatory which means that they must be applied ex officio by the concerned authorities.55 In other respects, there is hardly any room for refusing recognition. Firstly, the jurisdiction of the court of the Member State of origin may not be reviewed and the test of public policy, referred to above, may not be applied to the rules on jurisdiction laid down in the Convention (Art. 16). Secondly, the recognition of a judgment relating to a divorce, legal separation or marriage annulment may not be refused because the law of the Member State in which such recognition is sought would not allow divorce, legal separation or marriage annulment on the same facts (Art. 17). Thirdly, under no circumstances may a judgment be reviewed as to its substance (Art. 18). Still, one is tempted to claim that there is no rule without an exception. D.

The Irish Declaration

Annexed to the Convention is a Declaration by Ireland, which at the outset seems to be in direct contradiction to the rule that the jurisdiction of a Member State may not be re-examined. As set forth in the Declaration: 'Ireland may maintain the jurisdiction which it has to refuse to recognise a divorce obtained in another Member State where that divorce has been obtained as a result of the party, or parties, deliberately misleading a court of the State in question in relation to its jurisdictional requirements such that recognition of the divorce would not be compatible with the Constitution of Ireland.' This declaration will apply for a period of five years and will be renewable every five years. Ireland was the last Member State to introduce rules on divorce, an event that took place at the end of 1996 as a result of a referendum held a year earlier. Compared with the divorce law in most Member States, the Irish rules are very restrictive. This may be said to create the risk of spouses wanting to circumvent the jurisdiction of Irish courts.56 Considering that a basis for the Convention is the Member States' confidence in each other's courts and legal systems, the Irish Declaration can be applied only in cases where the parties have acted fraudulently, circumventing the aims of the Convention. 55

The Working Party debated long as to whether the Convention's rules on nonrecognition should be made mandatory or only facultative. Considering their content, and in particular that the respondent can influence recognition by accepting the judgment unequivocally in the cases mentioned under (b), the chosen solution is natural. An example of unequivocal acceptance is where the respondent has remarried after the judgment was given. 56 A comprehensive background to this declaration is given in OJ 1998, C 221, Report by BORRÁS A., p. 63.

22

Marriage Dissolution in Europe It is to be hoped that the courts of the Member States where the divorce proceedings are initiated discover such behaviour before ruling on the merits of the cases. If the Irish Declaration were to be used other than in some singular, extraordinary cases, there is something seriously wrong with the very foundations of the Convention.57 E.

Public Policy and Differences in the Applicable Law

A manifest contradiction to the public policy of the Member State in which recognition is sought constitutes one of the Convention's grounds of nonrecognition (see above). Although a corresponding provision in the 1968 Brussels Convention has not been of any practical significance, many Member States were convinced of its necessity in a family law convention.58 Member States with liberal divorce laws, in particular Finland and Sweden, feared on the other hand that it could be used to refuse recognition of their judgments, in particular unilateral divorces. In these States, one spouse's wish to dissolve the marriage is sufficient and no investigation need be carried out to establish a permanent breakdown of the marriage.59 The Convention tries to take account of both concerns. Public policy is included as one of the grounds of non-recognition (Art. 15.1), whereas another provision (Art. 17) stipulates that recognition may not be refused because the law of the Member State in which such recognition is sought would not allow divorce, legal separation or marriage annulment on the same facts.60 Since both provisions

57

Jayme and Kohler seem to indicate that the Irish Declaration may be in conflict with primary Community law. See JAYME E./KOHLER Ch. (note 30), p. 419. 58 See OJ 1998, C 221, Report by BORRÁS A., pp. 50-51. 59 Attempts have been made to establish a conflict between this outlook on divorce and an outlook according to which divorce falls outside the disposition rights of the parties requiring that a court must establish whether the conditions for divorce are fulfilled. The Italian Corte Suprema di Cassazione has been confronted with numerous cases where it is claimed that it would be contrary to Italian public policy to recognize a foreign divorce based on a joint application by the spouses. These cases have concerned the application of the 1970 Hague Convention. As a rule, the Court has rejected such claims by pointing out that a joint application by the spouses implies a de facto irretrievable breakdown in the marriage. See SUMAMPOUW M., Les nouvelles conventions de la Haye, leur application par les juges nationaux, Vol. V, Leyden (etc.) 1996, pp. 263-269. When applying the Brussels II Convention, the courts must be prepared to go further and respect the ideology underlying divorce judgments of other Member States. 60 This provision is essentially based on Art. 6.2 of the 1970 Hague Convention: 'The recognition of a divorce or legal separation shall not be refused (a) because the internal law of the State in which such recognition is sought would not allow divorce or, as the case may be, legal separation upon the same facts, or, (b) because a law was applied other than that applicable under the rules of private international law of that State.'

23

Jänterä-Jareborg must be taken into account at the time of recognition, the Convention can be expected to provide adequate guarantees for the exclusion of public policy even in situations where the applicable laws on marriage dissolution in the two directly concerned Member States, i.e., the State of origin and the State of recognition, are based on contrary ideologies.61 F.

Non-Review as to Substance

It goes without saying that it would contravene the notion of mutual confidence between the Member States underlying the Convention and the nature of the judgments in question if the court in which recognition is sought would be allowed to review the substance of a judgment granting divorce, legal separation or marriage annulment.62 A provision to this effect, which, of course, additionally restricts the applicability of public policy, is found in Article 18 of the Convention.

VII. Recognition and Enforcement of Judgments Relating to Parental Responsibility A.

What Is Recognized?

Only decisions on parental responsibility given in a Member State in connection with matrimonial proceedings between the child's parents are recognized - and enforceable - under the Convention.63 The decision may be given by the same authority that exercised jurisdiction in the matrimonial proceedings or by another authority in that State ('the divorce state'). The rules on recognition, however, also cover situations where the decision was given within the European Union but outside the 'divorce state', provided it was given in connection with matrimonial

61

According to Art. 10 of the 1970 Hague Convention, Contracting States may refuse to recognize a divorce or legal separation if such recognition is manifestly incompatible with their public policy. The fact that this provision follows Art. 6.2, which specifies that refusal may not be founded on differences in law (see supra note 60), seems to give the impression that Art. 10 overrides Art. 6.2. Such an interpretation of the Brussels II Convention is not possible: An important restriction to public policy as a ground of nonrecognition is found in Art. 17 of that Convention. 62 This issue is more complicated in respect of judgments on parental responsibility since these may need to be revised, e.g., when the circumstances on which the judgment was based change. See infra, Part VII. 63 Since the Member States were not able to agree on a definition of parental responsibility, there is a risk that its scope will be interpreted differently from Member State to Member State for the purpose of applying the Convention. These divergencies could in turn affect the extent to which a judgment will be recognized in another Member State. See supra, Part IV.

24

Marriage Dissolution in Europe proceedings in another State.64 As regards the application of the Convention, documents drawn up or registered as authentic instruments and settlements approved by a court in the course of the proceedings are recognized under the same conditions as judgments on parental responsibility.65 B.

Automatic Recognition and Grounds of Non-Recognition

While the Convention provides for automatic recognition, it also contains a list of mandatory grounds for refusal. As in the case of decisions on divorce, legal separation or marriage annulment, these two contradictory elements are reconciled by a provision giving any interested party the right to apply for a decision on whether the judgment is recognized or not.66 Article 15.2 contains an exhaustive list of the grounds of non-recognition. Recognition shall be refused if: (a) such recognition would be manifestly incompatible with the public policy of the Member State in which recognition is sought, taking into account the best interests of the child; (b) the judgment was given, except in the case of urgency, without the child having been given an opportunity to be heard, in violation of fundamental principles of procedure of the Member State in which recognition is sought; (c) where it was given in default of appearance, if the person in default was not notified properly and in good time to arrange for his defence, unless such person has accepted the judgment unequivocally; (d) on the request of any person claiming that the judgment infringes his or her parental responsibility, if it was given without such person having been given an opportunity to be heard; (e) if it is irreconcilable with a later judgment relating to parental responsibility given in the Member State in which recognition is sought; or

64

As in the 1968 Brussels Convention, a general characteristic of the Convention is that the Convention's rules on recognition are applicable irrespective of whether the authority of the Member State which gave the judgment based its competence on the Convention's rules on jurisdiction. 65 In respect of issues on parental responsibility, authentic instruments are a device of growing importance. For instance, as a result of a law reform in Sweden in 1998, jurisdiction over questions of custody, the child's residence and visiting rights was transferred to a large extent from the courts - which always exercise jurisdiction over divorce - to local social boards. The aim of the reform is to have the parents agree (in writing) and then have the agreement confirmed by the local social board. 66 See supra, Part VI.

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Jänterä-Jareborg (f) if it is irreconcilable with a later judgment relating to parental responsibility given in another Member State or in the non-Member State of the habitual residence of the child, provided that the later judgment fulfils the conditions necessary for its recognition in the Member State in which recognition is sought. The Member States were long divided as to the benefit of including parental responsibility within the scope of the Convention.67 Opinions were also divided as to whether the rules on recognition should be based on the 1968 Brussels Convention or be drafted with regard to the special characteristics of decisions on parental responsibility. As in the case of jurisdiction,68 the 1996 Hague Convention provided a way out of these controversies by offering a model which all the Member States could accept. Some traits of the 1968 Convention prevail, however, and may result in disputable consequences in practice. The rules of non-recognition, enumerated above, have largely been modelled on Article 23 of the Hague Convention; however, there are also important differences. One difference is that the grounds of non-recognition are optional in the application of the Hague Convention, i.e., they authorize refusal of recognition but do not impose it. A further and rather alarming difference is that under the Brussels II Convention, a judgment may under no circumstances be reviewed as to its substance (Art. 18).69 Such a rule may be well-founded in respect of commercial judgments, for instance, and even judgments granting the dissolution of a marital union; however, it is inappropriate in respect of judgments on custody or residence of the child, i.e., issues which generally form the core of 'parental responsibility'. It is difficult to combine such a general, 'hard and fast' rule with the best interests of the child. In this respect, the Hague Convention takes a more flexible approach making it possible, for instance, to adjust decisions on parental responsibility to changes in the circumstances.70 C.

Enforcement

The provisions on enforcement relate to the need for exequatur in another Member State and are directly based on the 1968 Brussels Convention. Once the exequatur is granted, i.e., the judgment given in one Member State is declared enforceable in another Member State, the actual enforcement itself will be governed by the

67

See Parts II and IV, supra. See Part IV, supra. 69 This rule in modelled on Art. 29 of the 1968 Brussels Convention. 70 See Art. 27 of the Hague Convention which provides for 'such review as is necessary' in the Convention's application. 68

26

Marriage Dissolution in Europe internal law of the latter. Although this is not explicitly stated in the Convention, no other solution would be logical and justifiable.71 Otherwise, situations could arise where judgments on parental responsibility originating in other Member States would have to be put on unequal footing with similar judgments given in the Member State of enforcement. It is unacceptable for a foreign judgment to be given a greater binding force than judgments originating in the Member State of enforcement. The only way out in situations, where, for instance, as a result of new circumstances the foreign judgment clearly no longer corresponds with the child's best interests, would be to take recourse to public policy. This could result in frequent use of the public policy instrument, which would necessarily be regarded as a failure of the Convention. Similar problems could arise when the child objects to enforcement and under the law of the Member State of enforcement has reached such age and maturity that enforcement may not take place against the child's wishes. According to Article 28 of the 1996 Hague Convention, measures taken in one Contracting State and declared enforceable in another Contracting State shall be enforced in the latter as if they had been taken by the authorities of that State. Enforcement takes place in accordance with the law of the requested State to the extent provided by such law, taking into consideration the best interests of the child. In comparison, the rules on enforcement in the Brussels II Convention must be regarded as only half-finished.72

VIII. Relation of the Convention to other Conventions A.

An Exclusively Applicable 'Basic Convention'

The general rule is that the Brussels II Convention, in respect of matters governed by it, shall supersede all bilateral and multilateral Conventions existing between

71

According to Borrás, the internal law of the Member State in which exequatur has been obtained will govern the practical measures for enforcement. See OJ 1998, C 221, p. 54. In my opinion, this statement is far too narrow and does not pay due regard to the opinions expressed in the Working Party, also in the revision of the drafts of the Explanatory Report. 72 An explanation can be found in the fact that the political compromise of December 1997 did not include issues relating to enforcement. After the compromise, the Working Party concentrated on the final drafting of the remaining provisions. At this stage, there was very little interest among the Member States to reopen a discussion on enforcement. Generally speaking, the model offered by the 1968 Convention was found appropriate, and it was not considered necessary to draft special provisions for the enforcement of decisions on parental responsibility. Whereas the majority seemed to prefer tighter rules than those of the 1996 Hague Convention in respect of enforcement as such, the latter's solution was not explicitly rejected.

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Jänterä-Jareborg the Member States.73 After the Convention has entered into force, it shall apply exclusively to the mutual relations between the Member States of the European Union. There are, however, exceptions which deserve comment. B.

Exceptions Arising from the Transitional Provisions

The first exception relates to the Convention's transitional provisions. The Convention is applicable only to legal proceedings instituted, to documents formally drawn up or registered as authentic instruments and to settlements which have been approved by a court in the course of proceedings after its entry into force in the Member State of origin and, where recognition or enforcement is sought, in the Member State addressed (Art. 37.1). If an action was initiated before the Convention's entry into force, but resulted in a judgment after that date, the Convention's rules on recognition and enforcement shall be applied subject to certain conditions relating to the jurisdiction of the court of origin. That court must have founded its jurisdiction on rules which accorded with the Convention's own rules on jurisdiction or on a convention in force between the two directly concerned Member States (Art. 37.2). These provisions correspond to those in the 1968 Brussels Convention74 but in the present context must be considered as unnecessarily restrictive. Considering the background and purposes of the Brussels II Convention, in particular the inconveniences suffered by European citizens because of the non-recognition of foreign divorces (etc.) in some Member States,75 the decision to include only judgments rendered after the Convention's entry into force can be criticized.76 In this respect it would have been much more effective to follow the main rule of the 1970 Hague Convention which provides for recognition irrespective of the date on which the divorce or legal separation was obtained.77 As the provisions are drafted, the exclusive mandatory application of the Brussels II Convention will have effect only for future judgments. All other judgments continue to be governed by the existing convention-based or general rules of the Member States. 73

See Art. 38.1. Unlike the 1968 Brussels Convention (Art. 55), this provision does not enumerate all the Conventions which exist in the area covered by the new Convention. Art. 39, on the other hand, explicitly mentions several multilateral Conventions which are in force in many of the Member States and shall be superseded by the new Convention. This provision may seem confusing considering the general rule, but is only meant as a practical statement concerning the Convention's relationship with important existing Conventions. 74 See Art. 54 in the 1968 Brussels Convention. 75 See supra, Part II. 76 Only a small minority of the Member States was in favour of applying the rules on recognition to all judgments irrespective of the date when they were given. In support of the chosen solution it was argued, i.a., that retroactive application of the Convention to earlier judgments would create legal uncertainty: Spouses who have adjusted their behaviour to the fact that their divorce is not recognized in certain Member States would suffer great confusion if the divorce were suddenly recognized in those States! 77 See Art. 24.1 of the 1970 Hague Convention.

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Marriage Dissolution in Europe C.

Exceptions Caused by the Convention's Limited Material Scope

According to its title, the Brussels II Convention is a convention on jurisdiction, recognition and enforcement of judgments in matrimonial matters. As has been demonstrated above, the material scope of the Convention is more limited than its title indicates. Except for parental responsibility, all ancillary claims relating to the full or partial dissolution of a marriage fall outside its scope, as well as findings of fault and so-called negative judgments.78 The Convention supersedes other conventions only to the extent that they concern matters falling within its scope.79 In all other matters, the latter shall continue to apply. Several Member States are parties to international conventions whose scope overlaps in part with the Brussels II Convention, in part exceeds it. In this sense, the Convention will increase the diversity of the applicable rules. Jurisdiction over parental responsibility, for instance, will be judged differently depending on whether the question arises in the course of the matrimonial proceedings or separately. D.

Exceptions Caused by Declarations by Nordic Member States

The Convention reserves for each of the Nordic Member States of the Union, i.e., Denmark, Finland and Sweden, the option to declare that, instead of the present Convention, they will apply in their mutual relations - in whole or in part - the Convention between Denmark, Finland, Iceland, Norway and Sweden comprising private international law provisions on marriage, adoption and guardianship, originally concluded in 1931. Such judgments shall be recognized in all other Member States, provided jurisdiction was founded on a ground corresponding to those of the Brussels II Convention. Since this option has been a source of confusion, an explanation is necessary. The Nordic States have a long tradition of legal co-operation which has resulted in a series of conventions and uniform laws in the field of private international law.80

78

See Part VI, supra. This limitation is repeated in several provisions, see Arts. 38.1, 39.1 and 40. 80 This system of rules covers only inter-Nordic situations, i.e., proceedings which are initiated in one Nordic State but having a certain connection, usually by the nationality of the parties, to another Nordic country. The inter-Nordic co-operation does not aim at creating uniform private international law provisions applicable to States outside Scandinavia (= Denmark, Norway, Sweden), Iceland and Finland. See PÅLSSON L., 'Rules, Problems and Trends in Family Conflict of Laws – Especially in Sweden', in Recueil des Cours, Vol. 199, 1986-IV, pp. 322-323. 79

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Jänterä-Jareborg The above-mentioned Convention of 1931 regulates jurisdiction, choice of law and recognition in matrimonial matters, including issues of custody in connection with matrimonial proceedings or after such proceedings. It is applicable only on condition that both of the spouses are Nordic citizens. If the Brussels II Convention had been made exclusively applicable in the mutual relations between all Member States, this would have broken the inter-Nordic uniformity, causing inter-Nordic relations to be governed by different sets of rules: the Brussels II Convention applying in relations between the three Member States of the Union and the special inter-Nordic rules in relations in these States having a connection with Iceland or Norway. Hence, the advantages of the special rules applicable in the inter-Nordic relations would have been lost. The prospect of such an outcome created anxiety among the Nordic States. In all five Nordic States, cross-border marriages are primarily marriages between citizens of different Nordic States or between citizens of one Nordic State who are habitually resident in another Nordic State. There is also considerable mobility of persons between these States.81 The existing uniform rules are based on close cultural ties and legal similarities between the Nordic States and are easy to apply. As a result, Denmark and Sweden put forth a working document pleading for an exception in favour of continued application of the inter-Nordic rules in mutual relations between the three Nordic Member States. The option was granted pursuant to Article K.7 of the Maastricht Treaty which permits closer co-operation between two or more Member States, in so far as such co-operation does not conflict with or impede co-operation between the Member States as designated in the Treaty.82 This option can be regarded as the recognition of inter-Nordic co-operation. On the other hand, one might also claim that the terms of the option have enabled the European Union/European Community to gain control over future inter-Nordic co-operation in which two non-Member States also participate.83 81

An important underlying factor, in addition to their geographical proximity and similarities between the concerned States and the Scandinavian languages, is that the Nordic States have a common labour market since 1955. 82 This link to Art. K.7 is explicitly stated in the Declaration which can be annexed to the Convention by any of the Nordic Member States. In this connection, regard shall also be had for Art. 38.3 of the Convention. After the Convention's entry into force, this provision will permit Member States to conclude or to apply agreements between themselves, but only to the extent that such agreements supplement or facilitate application of the Brussels II rules. 83 Of relevance in this respect is the fact that the option requires the Nordic Member States to review 'at an early date' the rules on jurisdiction in the 1931 Convention so as to bring them in line with those of the Brussels II Convention. Such a revision is not possible without the participation of Iceland and Norway. After the Brussels II Convention has entered into force, continued application of the 1931 Convention in the mutual relations between the three Nordic Member States shall be subject to restrictions. Firstly, it is required that both spouses are not only Nordic citizens (= the present condition for

30

Marriage Dissolution in Europe More important, however, is the fact that the Nordic States recognize the necessity to amend the jurisdictional rules in the 1931 Convention and also agree that the Brussels II rules offer a suitable model. Furthermore, the terms of the option permit continued application of the existing inter-Nordic rules on recognition. In August 1998, negotiations were initiated between the Nordic States to review the rules of the 1931 Convention on jurisdiction in matrimonial proceedings. E.

Treaties with the Holy See

Exceptions are made in Article 42 in favour of the application of Concordats concluded between Portugal, Italy or Spain and the Holy See. In these Concordats, ecclesiastical courts are given exclusive (Portugal) or concurrent (Italy and Spain) jurisdiction to annul a (canonical) marriage.84 Judgments annulling a marriage and taken under these Concordats shall be recognized in the other Member States in accordance with the Brussels II Convention.

IX.

Interpretation by the Court of Justice

The uniform interpretation of the 1968 Brussels Convention, as guaranteed by the rulings of the Court of Justice of the European Communities, is often regarded as the main factor contributing to the Convention's success. Thus it was natural to consider giving the Court jurisdiction to interpret the Brussels II Convention as well. A Protocol to that effect was signed by the Member States at the time of the adoption of the Convention.85 The Protocol will enter into force only after the

application) but that both are also habitually resident in the Nordic States. Secondly, jurisdiction may no longer be founded only on the nationality of a spouse in the forum State, which at present is subsidiarily permitted by Art. 7.2 of the 1931 Convention when the other spouse is also a Nordic citizen. Thirdly, the Court of Justice of the European Communities has been entrusted with the task of ensuring that the principle of nondiscrimination is respected. As the heading of the Declaration to be annexed to the Convention by any of the Nordic Member States indicates, these States need not act jointly, and it is possible that not all of the three States will find it worthwhile to make such a Declaration. It is expected that the Nordic States will be able revise the 1931 Convention before any of the Nordic Member States ratifies the Brussels II Convention. 84 Divorce and legal separation, on the other hand, are matters for the civil courts. 85 Protocol, drawn up on the basis of Art. K.3 of the Treaty of the European Union, on the interpretation by the Court of Justice of the European Communities of the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters. See also Art. 45 of the Brussels II Convention.

31

Jänterä-Jareborg Convention has been ratified by all 15 Member States and the Protocol itself by three Member States.86 The time factor is of special importance in light of the nature of the proceedings. To have to wait, let us say, 18 months for a preliminary ruling,87 especially when parental responsibility is at stake, would clearly be inappropriate and could cause considerable hardships for the parties. As a result, Member States may prefer to grant only their highest courts the right to ask for preliminary rulings and in this way limit the amount of references to the Court to a minimum.88 Various methods are presently being examined with the aim of reducing the length of the reference proceedings in the application of the Brussels II Convention.89

X.

Concluding Remarks

A.

The Prospects of the Brussels II Convention

Thus far very few comments have been published concerning the new European Union Convention, prior to or after its adoption in May 1998. Just as opinions were initially divided among the Member States as to the need for such a Convention, there is reason to believe that its reception will vary. There will be those who regard the Convention as a remarkable step forward and those who resent it, fearing that it is only the beginning for future activities by the European Union/European Community in the field of international family law.90 86

See Art. 9.3 of the Protocol. According to Beaumont and Moir, 18 months is the average length of proceedings in references for a preliminary ruling by the Court of Justice. See BEAUMONT P./MOIR G., 'Brussels Convention II: A New Private International Law Instrument in Family Matters for the European Union or the European Community?', European Law Review 1995, p. 281, note 52. 88 The Protocol (Art. 2) gives a Member State the choice between (a) granting this right only to its highest courts or (b) giving this right both to the highest courts and to other courts when they are sitting in an appellate capacity. Moreover, the fact that the Court of Justice has already issued rulings on the 1968 Brussels Convention, on which the new Convention's provisions are largely modelled, is likely to reduce the need for references to the Court. Borrás emphasizes that the identical terms used in the 1968 Brussels Convention and the new Convention should in principle be considered to mean the same thing and that the case-law of the Court must also be taken into account. See OJ 1998, C 221, Report by BORRÁS A., p. 30. 89 See the Declaration added to the minutes of the Council meeting where the Brussels II Convention was drawn up. It should be pointed out that the Court's rules on procedure make it possible to give priority to urgent cases. The urgency of a case, however, is judged on an ad hoc basis instead of the type of the cases. 90 The Treaty of Amsterdam entered into force on 1 May 1999. Since that date, Art. 65 of the EC Treaty governs co-operation within the field of private international law and the rules will be drafted as directives or regulations. As was pointed out above (see 87

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Marriage Dissolution in Europe Among the advocates of the Convention are likely to be those who prefer special rules for relations within the Union on the ground that such rules can be made 'tighter' or better 'tailored' for the needs of the Union and its citizens. They will claim that the Convention's objectives cannot be achieved by actions taken by individual Member States on their own, as a result of which the Convention passes the 'comparative efficiency test' required for both Community and Union actions.91 The Convention will promote integration. The critics, on the other hand, will emphasize the value of global cooperation as the only way of achieving rules which can embrace all international situations.92 Also those inhabitants of the Member States who have family ties to States outside the Union need to be protected. Since the enactment of special rules for the European Union means that different sets of rules will become applicable, it could be said that this is not only a waste of resources, but also creates confusion. Thus it might be argued that the

Introduction, note**), in May 1999 the European Commission submitted a proposal for a Regulation to replace the Brussels II Convention, which, however, incorporates its provisions with some exceptions. Compared to a Convention, a Regulation has the advantage of becoming directly applicable in all Member States at the same (early) date. With the purpose of maintaining and developing the Union as an area of freedom, security and justice (Art. 2 of the Maastricht Treaty), the Commission also plans to initiate a project on uniform choice of law rules on marriage dissolution. During a transitional period of five years after the Amsterdam Treaty's entry into force, rules on private international law shall be adopted unanimously by the Council after a proposal has been submitted by the Commission (or initiative taken by a Member State) and after consulting the Parliament. See Art. 67 of the EC Treaty. 91 Pintens and Du Mongh reason along such lines, emphasizing the inability of individual Member States to eliminate the harmful consequences of 'limping marriages' on their own. See PINTENS W./DU MONGH J., 'Family and Succession Law in the European Union', in: International Encyclopedia of Laws, 1997, p. 31. 92 This is the position taken by Beaumont and Moir. Although they seem to agree that the Brussels II Convention passes the 'comparative efficiency test', other aspects of the principle of subsidiarity are, in their opinion, of greater relevance in this context and speak in favour of constraining action. Firstly, there is the principle that decisions should be taken as closely as possible to the citizens of the Union, thus arguing against rules on jurisdiction in divorce matters being determined at Union-wide level. Secondly, subsidiarity should compel the Union to consider whether action could be better taken at an international rather than at a European level (so-called 'reverse subsidiarity'): 'Marriage is not an institution exclusively contracted between Community nationals.' See BEAUMONT P./MOIR G. (note 87), pp. 283-285. As the Convention is drafted, it is not restricted to marriages concluded between nationals of the Member States. According to Art. 7, jurisdiction under Arts. 2 to 6 is exclusive when the respondent is habitually resident in the territory of a Member State, or is a national of a Member State, or has his or her 'domicile' in the territory of a Member State.

33

Jänterä-Jareborg problems the Convention aims to solve could have been managed in other and better ways.93 As regards the situation at present, it is evident that the European Union States do not share the same policy and outlook on these issues. Member States in favour of generally (globally) applicable rules and liberal grounds for recognition of foreign judgments currently seem to be in the minority. As the above survey has shown, as regards rules relating to marriage dissolution, the Brussels II Convention is in many respects an improvement compared to the 1970 Hague Convention. This being the case, the 1970 Convention no longer offers a realistic alternative but has been superseded by the new European Union Convention.94 The 1996 Hague Convention has not yet been acceded to by any Member State of the Union. Being a much more comprehensive instrument than the Brussels II Convention, it will continue to be of interest even after the latter has entered into force. Hopefully the adoption of the Brussels II Convention will have no negative consequences for that Convention's future in the Member States of the European Union other than delays in the ratification procedure. B.

Should the Convention Be Supplemented by Other European Instruments?

The European Community/European Union has a strong interest in securing the free movement of workers and their families. It has been indicated that existing divergencies in central areas of family law may create an impediment to the worker's integration in another Member State, thus preventing him or her from taking advantage of the right of free mobility.95 The Brussels II Convention, in particular its rules providing for 'free circulation of judgments', can be seen as a response to such concerns. The question is whether further action needs to be taken to facilitate the integration procedure. The new Convention is modelled to a significant degree on the 1968 Brussels Convention. As is well known, the Member States found reason to supplement that Convention with uniform choice of law rules. These rules, which

93

For such criticism, see Brussels II: The Draft Convention on Jurisdiction, Recognition and Enforcement of Judgments in Matrimonial Matters. With Evidence, House th of Lords, Select Committee on the European Communities, Session 1997-98, 5 Report, 1997. 94 On the other hand, the Member States should still regard it as a supplement to the Brussels II Convention and absolutely not lose interest in an eventual future revision of the 1970 Convention. Outside the European Union, the following States are parties to the 1970 Hague Convention: Australia, Cyprus, Czech Republic, Egypt, Norway, Poland, Slovakia and Switzerland. 95 See See PINTENS W./DU MONGH J. (note 91), p. 31.

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Marriage Dissolution in Europe are found in the Convention on the Law Applicable to Contractual Obligations (the 1980 Rome Convention), are applicable in all situations involving a choice between the laws of different countries; the law specified by the Convention shall be applied irrespective of whether it is the law of a Member State.96 Should the Brussels II Convention also be supplemented by uniform choice of law rules concerning the law applicable to marriage dissolution?97 It could be claimed that the Convention's wide range of alternative jurisdictional grounds speaks in favour of such rules. The Convention may otherwise provide an incitement for a 'forum race'. Both spouses may feel the need to be the first to initiate matrimonial proceedings, being well aware that the outcome on both the main issue and the ancillary claims may depend on which Member State's court examines the issues.98 In addition, this type of 'race to court' can not be combined with the promotion of mediation and non-litigation resolution.99 These problems would be less likely to arise if uniform choice of law rules were applied to matrimonial proceedings. There are, however, also serious counter-arguments. It can be be argued that uniform rules concerning the law applicable to matrimonial proceedings by far exceed what is needed for completion of the internal market and may infringe on national sovereignty. It is also highly uncertain whether Member States would consider such rules as a matter of common interest. Having guaranteed the free circulation of judgments on marriage dissolution, the European Union/European Community should not go any further. In particular, those Member States where lex fori is always applied to marriage dissolution would be likely to oppose. Uniform choice of rules would not only lead to the application of foreign law in many cases, but by virtue of the application of the foreign law would in fact (re)introduce rules which the Member State of the forum has abolished, such as marriage annulment and legal separation in the case of Sweden and Finland, or fault-based rules. 96

See Arts. 1.1 and 2. In light of the scope of the Brussels II Convention, the same question could, of course, also be put forth in respect of proceedings relating to parental responsibility in the course of matrimonial proceedings. There is, however, hardly any need to draft such rules, if the majority of the Member States plan to ratify the 1996 Hague Convention. 98 This state of affairs is not facilitated by the fact that several Member States are parties to the 1973 Hague Convention on the Law Applicable to Maintenance Obligations. According to Art. 8 of that Convention, the law applied to a divorce shall, in a Contracting State in which the divorce is granted or recognized, govern the maintenance obligations between the divorced spouses and the revision of decisions relating to these obligations. Such a provision makes the law applicable to the divorce of utmost importance to the parties concerned. 99 This argument was put forth by witnesses to the House of Lords, Select Committee on the European Communities, in opposition to a strict lis pendens rule in the (draft) Brussels II Convention. See supra, note 7, p. 13. The Family Law Act of 1996 (not yet in force) aims at promoting mediation and non-litigation resolution. 97

35

Jänterä-Jareborg In Sweden, for instance, it is generally held that foreign rules giving effect to a spouse's fault for the dissolution of a marriage are manifestly incompatible with Swedish public policy and can not be taken into account. It would also be difficult to combine the procedural provisions of Swedish law on divorce with the application of a foreign law based, for instance, on the irretrievable breakdown of marriage. Regard should also be given to the fact that spouses are often much more concerned about the outcome on ancillary claims rather than the marriage dissolution as such. Unless the rules governing the law applicable to such claims are also unified, uniform choice of law rules in respect of matrimonial proceedings will fail to prevent a 'race to the courts'.100 The introduction of uniform choice of law rules in respect of (all?) questions relating to matrimonial proceedings would involve huge difficulties and require many compromises. Opinions would also be divided as to whether such rules should be made generally applicable or only in relations between the Member States. With these problems in mind, the European Union/European Community should refrain from further 'unifying' actions. Active participation by the Member States in global legal co-operation, for instance, at the Hague Conference on private international law, must be regarded as a method of unification superior to special rules applicable (only) in the Member States of the European Union.101

100

Even then, the spouses may still have an interest in the choice of the court, e.g., for reasons of geographical proximity or because of the 'procedural climate' in a particular Member State. 101 Unified choice of law rules will, however, always fall short of achieving uniform results if the methods used to ascertain ('prove') the content of foreign law are not improved. At present, divergent practices are followed in the Member States of the Union, all of which have shortcomings. When foreign law is applied, the judgment is far too often based on an insufficient investigation of that law's content. A survey of the various practices is given by JÄNTERÄ-JAREBORG M., Svensk domstol och utländsk rätt, Uppsala 1997, pp. 235-299. As summarized by Lando: 'So far as is known no country has managed to develop rules and procedures for the ascertainment of foreign law which are at the same time efficient, fast and inexpensive': LANDO O., 'The eternal crisis', in: Festschrift für Ulrich Drobnig, Tübingen 1998, p. 363. Further, as Martiny points out, when foreign law is to be applied, the courts are faced with serious problems in understanding and correctly applying unfamiliar foreign rules and principles. See MARTINY D. (note 5), p. 155.

36

PRIVATE INTERNATIONAL LAW ASPECTS OF LEGALLY REGULATED FORMS OF NON-MARITAL COHABITATION AND REGISTERED PARTNERSHIPS Petar ŠARČEVIĆ* I. II. III.

IV. V.

I.

Introduction National Legislation on Non-Marital Cohabitation and Registered Partnerships Private International Law Aspects of Non-Marital Cohabitation A. Choice-of-Law Rules for Non-Marital Cohabitation B. Approaches in Private International Law Scholarship C. Approaches in States Where Non-Marital Cohabitation Is Not Recognized Private International Law Aspects of Registered Partnerships Unifying Conflicts Rules in an International Multilateral Convention: Is the Time Right?

Introduction

In March 1999 family law lawyers gathered at The Hague to discuss civil law aspects of emerging forms of registered partnerships at the Fifth European Conference on Family Law, which was organized by the Council of Europe and the Ministry of Justice of the Netherlands. The subtitle of the Conference – 'Legally regulated forms of non-marital cohabitation and registered partnerships' – reveals that by now it is recognized that both institutions are in need of legal protection. Questions of private international law were deemed important enough to devote half a day to such issues at the above-mentioned Conference.1 In regard to non-marital cohabitation, which has been legally regulated by a large number of countries, comparative studies show that the legislative provisions regulating the subject matter vary significantly in their aim and scope, thus raising questions in the field of private international law: Are special choice-of-law rules needed for non-marital cohabitation? Is it premature to attempt to unify conflicts rules for cohabitation? As for registered partnerships, some States have already taken the initiative and passed legislation regulating such partnerships. The main question dealt with * Professor of Private International Law, Faculty of Law of the University of Rijeka in Croatia; current president of the International Society of Family Law; associate member of the Institute of International Law; former Ambassador of Croatia to Switzerland and Liechtenstein (1996-1999) and to the United States (1992-1996). 1 The author of this article was one of the reporters on PIL issues at the Conference.

Šarčević here is whether registered partnerships are known and recognized as a legal institution by a sufficient number of States to warrant unification attempts in the form of a private international law convention.

II.

National Legislation on Non-Marital Cohabitation and Registered Partnerships

Relations relating to non-marital heterosexual cohabitation are commonly regulated by statutory provisions and in some cases by special statutes such as the Swedish Cohabitees (Joint Home) Act 2 and the Norway Joint Household Act.3 The substantive provisions of such legislation tend to vary significantly, above all in the specific relations regulated, the cohabitees that qualify for legal rights and the conditions that must be met. For example, the Swedish Cohabitees Act governs only property rights of cohabitees, in particular those relating to the joint home and household goods.4 The scope of the Norway Joint Household Act is even more restricted in that it applies only to cohabitees with common children and childless couples who have cohabited for more than two years.5 The aim of these Nordic legislators is obviously not to equalize the institution of non-marital cohabitation with marriage, as was done, for example, by the Slovenian legislator as early as 1976. One of the first legislative provisions on non-marital cohabitation, Article 12 of the Slovenian Law on Marital and other Family Relations, which is still in force, provides that 'a man and woman who are not married but have been cohabiting for a long period of time are subject to the same legal effects provided by law as if they were married, provided there are no grounds that would render a marriage between them invalid.'6 Our purpose here is not to compare substantive provisions on non-marital cohabitation but rather to stress the significant diversity of national legislation existing on the subject matter. This has been confirmed by Folder in her excellent comparative analysis of legislation on cohabitation and registered partnerships in Europe.

2

Svensk författningssamling (hereinafter: SFS) 1987, p. 232. Act No. 45 of 4 July 1991. 4 See FOLDER C., assisted by LOMBARDO S.H., 'Civil Aspects of Emerging Forms of Registered Partnerships', Ministry of Justice of the Netherlands, Report on Sweden, The Hague 1999, p. 1. 5 See FOLDER C., assisted by LOMBARDO S.H. (note 4), Report on Norway, p. 1. 6 Published in the Official Gazette of the Socialist Republic of Slovenia, No. 15/1976. 3

38

Non-Marital Cohabitation and Registered Partnership In regard to non-marital cohabitation, Folder concludes that, of all the countries covered in her analysis, not a single one modeled its cohabitation legislation on the example of another country, thus making it necessary to identify various types of legislation in order to clarify the differences.7 Although Folder's study focuses on Denmark, Norway, Sweden, Iceland, Finland, the Netherlands, Belgium, France and Spain, her conclusion holds true in general. In this sense, it is stated in Rubellin-Devichi's Droit de la famille8 that it has been utterly impossible to agree on a single definition of non-marital cohabitation. As proof of this, Cornu once aptly described non-marital cohabitation as 'irréductiblement polymorphe.'9 While it is impossible to find a single model for non-marital cohabitation, the same is not true in regard to same-sex partnerships. Studying the partnership statutes of Denmark, Norway, Sweden, Iceland and the Netherlands, as well as draft legislation in Belgium, Finland, France, and Spain (including the Act passed in Catalonia), Folder maintains that the partnership statutes in these countries are all 'strongly similar to one another. And they all purport to place partners in a legal position which approximates as closely as possible the legal position of spouses.'10 The Dutch statute on Registered Partnerships of 199711 differs from the others in that it applies to both homosexual and heterosexual partners. Apparently the Dutch legislator has been criticized for extending the registered partnership legislation to include heterosexuals as well.12 Nonetheless, Folder concludes that the rate at which heterosexual couples have chosen to register their partnership seems to imply that registration fulfills a need for heterosexual couples wishing to regulate their relationship without being married.13 Without questioning the wisdom of the Dutch decision, it raises a fundamental question when dealing with private international law issues relating to non-marital cohabitation and registered partnerships: Are the two institutions sufficiently similar so as to warrant their being discussed together or should they be dealt with separately? As comparative law analyses show, considerable differences exist in the approaches of national legislation to non-marital cohabitation and to registered partnerships, thus making it clearly preferential to discuss the private international law aspects of these two institutions separately. 7

FOLDER C., 'Civil Aspects of Emerging Forms of Registered Partnership', Report presented at the Fifth European Conference on Family Law, The Hague 1999, p. 23. 8 RUBELLIN-DEVICHI J. (ed.), Droit de la famille, 2nd ed., Paris 1999, p. 339. 9 Ibid., cited at p. 339. 10 FOLDER C. (note 7), at p. 23. 11 Entered into force on 1 January 1998, in Staatsblad 1997, at p. 661. 12 According to Folder, 'there are quite considerable doubts in the Dutch academic world as to the reason for extending registered partnerships to heterosexual couples and as to the wisdom of the measure': see FOLDER C. (note 7), National Report on the Netherlands, p. 10. 13 Ibid.

39

Šarčević

III. Private International Law Aspects of Non-Marital Cohabitation In April 1992, the Permanent Bureau of the Hague Conference completed a study on the law applicable to unmarried couples.14 Aware of her pioneer efforts, the author wrote: 'With a free union [as she call it] we are entering into the terra incognita of private international law […] This is a field which must be approached with the greatest caution.'15 At that time there was only one statutory choice-of-law rule on non-marital cohabitation, Article 39 of the former Yugoslav Private International Law Act of 1982,16 a few court decisions in Europe and not much at all in legal scholarship.17 A.

Choice-of-Law Rules for Non-Marital Cohabitation

For outsiders it is difficult to understand how such a 'liberal' choice-of-law rule could have been adopted in the former Yugoslavia. The developments in this field have their roots in constitutional law. While the Yugoslav Federal Constitution of 197418 extended special protection to the family, it did not specify which families were entitled to protection, thus making it possible to interpret the constitutional postulate broadly, applying it to all families without distinction, hence also to families outside marriage.19 Since very different substantive provisions already existed in some of the territorial jurisdictions of former Yugoslavia, it seemed only natural to create a new category of non-marital cohabitation distinct from marriage.20 14

'Note on the Law Applicable to Unmarried Couples', drawn up by the Permanent Bureau, Preliminary Document No. 5 of April 1992, Annex II: 'The Law Applicable to Unmarried Couples' (the study was carried out by JUDELS V.), in HAGUE CONFERENCE OF PRIVATE INTERNATIONAL LAW, Proceedings of the Seventeenth Session (10-29 May 199)3, Vol. I, The Hague 1995, pp. 109-147. 15 Ibid., at p. 139. 16 ŠARČEVIĆ P., 'The New Yugoslav Private International Law Act', in 33 Am. J. Comp. L. 1985, pp. 283-296. 17 Annex II (supra, note 15), at p. 139, where it is stated that 'both statute and case law are virtually silent.' 18 Official Gazette of the Socialist Federal Republic of Yugoslavia, No. 9/1974. 19 KATIČIĆ N., 'Načela ravnopravnosti muža i žena i dobrobiti djeteta u jugoslavenskom međunarodnom porodičnom pravu' (The Principle of Equal Rights of Husband and Wife and the Well-Being of the Child in Yugoslav International Family Law), in Ogledi o međunarodnom privatnom pravu, Zagreb 1971, p. 298. 20 See ŠARČEVIĆ P., 'Cohabitation without Marriage: The Yugoslav Experience', 29 Am.J.Comp.L. 1981, pp. 315-338.

40

Non-Marital Cohabitation and Registered Partnership Article 39 of the former Yugoslav PIL Act, whose scope is restricted to property relations, has been retained in the Croatian Act on Private International Law of 1992.21 Today new proposals are pending for statutory choice-of-law provisions on cohabitation in the Netherlands, Sweden and Belgium. Reflecting developments in the field over the past two decades, the new proposals are much broader in scope than the modest Croatian provision. For example, the thoroughly elaborated Dutch Proposal of May 199822 contains 35 articles regulating various private international law aspects of registered partnerships. In accordance with the definition of registered partnership under Dutch law, the Proposal applies to heterosexual as well as to homosexual partnerships. As specified in Article 1 (scope of application), the Proposal provides choice-of-law rules for registered partnerships entered into in the Netherlands in respect of their legal rights in the Netherlands, their termination by mutual consent or dissolution by the courts. Furthermore, rules are also provided for the recognition of foreign registered partnerships (entered into abroad), for determining the competence of Dutch courts to rule on the termination or dissolution of a foreign or domestic registered partnership, and for the recognition of a termination or dissolution obtained abroad for a foreign or domestic registered partnership. To summarize the choice-of-law solutions, Dutch law is applicable to registered partnerships entered into in the Netherlands in respect of the capacity of the parties and the form of the act itself (Article 2). Dutch law also applies to the personal legal relations of the partners (Article 3); however, the partners have the right to designate the law applicable to the partnership property regime (party autonomy). Party autonomy is limited in the sense that the chosen law must have provisions regulating the institution of registered partnership (Article 4). Failing a chosen law, Dutch law shall apply (Article 5). In Sweden a comprehensive reform of international family law is pending.23 Special conflicts rules are to be proposed only for those aspects of nonmarital cohabitation that are already legally regulated by substantive provisions. Hence, they can be expected to cover jurisdiction, the applicable law, and the 21

Para. 1 of Art. 39 of the Croatian Act on Private International Law reads as follows: 'The law applicable to the property relations of persons cohabiting without formal marriage is the law of the country of which the parties are citizens.' If the cohabitees have never had the same citizenship, para. 2 designates the common residence as the subsidiary connecting factor. The choice of the common residence follows from the reasoning that, in principle, cohabitees should cohabit in the same household in order to be subject to legal consequences. Para. 3 of Art. 39 provides that 'contractual property relations between persons cohabiting without formal marriage are governed by the law which would have been applicable to their property relations at the time the contract was concluded.' 22 See Voorstel voor een aantal IPR-Gepalingen over het geregistreed partnerschap (Proposal for a number of private international law provisions as to registered partnership), in Tijdschrift voor Familie- en Jeugdrecht (Review for Family and Juvenile Law, hereinafter: FJR) 1988, Vol. 6, pp. 156-159. 23 I would like to thank Prof. M. Jäntera-Jareborg for information about this reform. Eventual errors in interpretation are solely my responsibility.

41

Šarčević recognition and enforcement of foreign decisions relating to the property regime of the cohabitees, in particular in respect of the joint home and household goods. All other questions, including a cohabitee's right to maintenance and the right to inherit the other cohabitee will be subject to the general private international law rules. Instead of drafting new conflicts rules, the conflicts rules for cohabitation are to be derived from private international family law, more precisely from the Act on International Matrimonial Property Relations.24 In Belgium, the Council of Ministers has passed a draft Proposal for a new private international law code, which, however, has not yet reached Parliament.25 In addition to choice-of-law rules for non-marital cohabitation and registered partnerships, the Proposal also contains provisions on international jurisdiction, according to which Belgian courts have jurisdiction in international cases relating to cohabitation and registered partnerships. For example, Belgian courts have jurisdiction over dissolution if one of the partners is a Belgian citizen, is domiciled or habitually resides in Belgium and the partnership is registered in Belgium. It appears that the special conflicts rules are intended to apply not only to non-marital cohabitation and same-sex partnerships but also to all other non-marital partnerships that could be regulated by foreign law, such as siblings living in the same household. At least in this phase it seems that the main idea is to apply existing conflicts rules by analogy, including conflicts rules for the validity of marriage, formalities in respect of the solemnization of marriage, the legal effects of marriage, etc. By selecting this approach, Belgian experts hope to avoid problems that could otherwise arise in the process of characterization in cases where certain family relations are not legally regulated by the applicable foreign law. B.

Comparative PIL Scholarship

Discussing the major ideas in comparative PIL scholarship on non-marital cohabitation, the author of the Note of the Permanent Bureau26 makes a distinction between the analogy and constructive theories. In connection with the analogy theory, the author cites my 1981 article in which the question is raised, as she puts it, 'whether it would be enough to apply, by analogy, the choice of law rules which derive from family law, or whether new conflict rules must be devised for cohabitees.'27 Although my proposal favors a separate method of solving international disputes in cases of cohabitation by creating a new category of cohabitation, the author of the Note still regards it as an approach based on analogy. In her opinion, the proposed connecting factors 'resemble those chosen for marriage in other West European countries: the national law of each of the partners 24

Act on Certain International Issues relating to Matrimonial Property Relations, in SFS 1990, at p. 272. 25 As I have understood it, the Proposal of the Ministry of Justice has been accepted by the Council of Ministers and is now being studied by the Conseil d'Etat. 26 Supra, note 14, at pp. 139-143. 27 Ibid., in reference to my article cited supra, note 20.

42

Non-Marital Cohabitation and Registered Partnership for the formation of the union (including the definition of impediments to cohabitation); the joint national law, or failing that the law of the shared domicile, or failing that the law of the forum for the personal and property effects of cohabitation.'28 On the other hand, she concludes that the approach favored by Striewe29 is pure analogy in the sense 'that categories used in domestic law systems should be extended to private international law to cover, by analogy, foreign institutions which are unknown to the law of the forum.' Striewe justifies stretching the concept of marriage in this fashion because 'the concept of marriage has already been extended to cover informal marriages, polygamous unions and defective marriages.'30 The second approach mentioned in the Note is the constructive theory advanced by Prof. Lagarde.31 Regarding the nature of cohabitation as 'a straightforward factual relationship, pre-eminently based on consensus', the author concludes that Lagarde is against applying the law of the shared nationality to cohabitees 'since by definition they are striving to escape constraints, chief among these being marriage.'32 In Lagarde's opinion, the law of the place where the parties are cohabiting would be preferable, thus respecting the cohabitees' wish to have their relationship treated as a mere legal fact. C.

Approaches in States Where Non-Marital Cohabitation Is Not Recognized

An increasing number of authors have recognized the need to resolve choice-oflaw issues relating to non-marital cohabitation and other partnerships. Not surprisingly, their views depend largely on the constitutional and substantive approach taken in their national law. For instance, in countries such as Austria where non-marital cohabitation is not recognized as a family law institution, the view is held that unmarried cohabitees have property rights and that choice-of-law rules for such cases should derive from the law of obligations.33 In the most influential commentary of the Swiss Private International Law Act, P. Volken remarks that Swiss substantive law avoids applying family law solutions to nonmarital cohabitation.34 As in the constructive theory, it is reasoned that the intent of the cohabitees is to escape application of these provisions. As long as this view prevails in Swiss substantive law, Volken maintains that it will be difficult to apply 28

Ibid. STRIEWE P., Ausländisches und internationales Privatrecht der nichtehelichen Lebensgemeinschaft, Köln 1986. 30 Cited in the Note of the Permanent Bureau, Annex 2 (supra, note 14), at p.141. 31 LAGARDE P., 'Compte-rendu de l'article de P. Šarčević', in Rev. crit. dr. int. pr. 1981, p. 830. 32 Ibid. 33 See SCHWIND F., Internationales Privatrecht, Wien 1990, p. 110. 34 VOLKEN P., in IPRG Kommentar (edited by HEINI A., KELLER M., SIEHR K., VISCHER F. and VOLKEN P.), Zürich 1993, p. 378. 29

43

Šarčević the conflicts rule in Article 48 of the Swiss Private International Law Act which covers the personal effects of marriage.35 The difficulties arising during the process of characterization have made experts increasingly aware of the need to create special choice-of-law rules for non-marital cohabitation. Having the German situation in mind, Sonnenberger concludes that a final solution appears to be premature.36 (On the other hand, there has been some indication that PIL rules for cohabitees and registered partnerships are also in the early stage of preparation in Germany).

IV.

Private International Law Aspects of Registered Partnerships

In 1989 Denmark led the way by adopting the first statute on registered partnerships. Since then, Norway, Sweden, Iceland and, more recently, the Netherlands (1997) have passed substantive legislation enabling homosexual couples to register their partnership in a marriage-like fashion. Legislative activity aimed at adopting provisions regulating registered partnership is also underway in Belgium, Finland, Spain and France.37 The situation appears to be quite different outside Europe. In the United States, for example, a same-sex couple can have its relationship formally recognized only if the municipality has passed an ordinance on domestic partnership registration.38 Whereas the present registered partnership laws in Europe purport to place registered partners on equal footing with spouses to the greatest extent possible, domestic partnership ordinances in the United States do not legalize such relationships and the rights extended to the partners are very limited. According to Katz, domestic partnership acts or ordinances 'fall into two categories: those that provide a legal method for registering a partnership and those that extend employee-related benefits to partners of city employees.'39 Commenting on the future of domestic partnerships in the United States, Katz remarks: 'Until there is a resolution on the legality of same-sex marriages…, and as long as the United States does not have a national health care program, there will be demand on units of government to find legal ways of recognizing on-going… homosexual marriage-like relationships and extending health care benefits to the couples.'40 However, this could take some time if the definition of marriage in the Defense 35

Ibid. SONNENBERGER H.J., in Münchener Kommentar zum Bürgerlichen Gesetzbuch, Vol. 10, Internationales Privatrecht, 3rd ed., München 1998, p. 217. 37 FOLDER C., assisted by LOMBARDO S.H. (note 4), 'General Report', p. 7. 38 KATZ S.M., 'The United States Domestic Partnership Laws', unpublished manuscript, at pp. 14-22. See also BOWMAN C.A./CORNISH B.M., 'Notes: A More Perfect Union: A Legal and Social Analysis of Domestic Partnership Ordinances', 92 Columbia Law Review 1992, pp. 1164-1211. 39 KATZ S.M. (note 38), at p. 7. 40 KATZ S.M. (note 38), at p. 23. 36

44

Non-Marital Cohabitation and Registered Partnership Marriage Act is any indication. Enacted by the US Congress in 1996, the Act defines marriage as 'a legal union between one man and one woman as husband and wife, and the word spouse refers only to a person of the opposite sex who is a husband or a wife.'41 In view of the extensive legislative activity in Europe, it is quite normal that countries with substantive provisions on registered partnerships would like to achieve predictability in international cases by drafting special conflicts rules for registered partnerships. At present, the Dutch Proposal is the best example. As mentioned above, Belgium follows the Dutch example by proposing special choice-of-law rules and rules of international jurisdiction for both cohabitation and registered partnerships. By applying the conflicts rules for marriage by analogy to both cohabitation and registered partnerships, the Belgian Proposal attempts to unify choice-of-law rules for all forms of cohabitation. While fully accepting the analogy theory, the Belgian Proposal still recognizes cohabitation and registered partnerships as distinct categories of family law. The Swedish legislator takes a different position by making a clear distinction between non-marital cohabitation and registered partnerships. In essence, a registered partnership is 'more equivalent to marriage' under Swedish law than is non-marital cohabitation. As proof of this, the Registered Partnership Act of 199442 makes direct reference to some of the provisions of the Marriage Code (e.g., Chapter 1, sections 5 and 9; Chapter 2, section 2). The Registered Partnership Act contains a number of explicit private international law provisions. In regard to the registration of a partnership, the Act provides that the right to register a partnership is governed by Swedish law (Chapter 1, section 3). Furthermore, it stipulates that Chapter 1, sections 4-9 of the Act concerning International Legal Relationships relating to Marriage and Guardianship43 apply to international cases concerning registration (Chapter 1, section 9). Swedish courts always have jurisdiction if registration of the partnership took place under the Registered Partnership Act. In addition, all Swedish PIL provisions relating to spouses also apply to registered partners (with the exception of those on children), thus reflecting the legislator's intent to treat the partners of registered partnerships like spouses.

V.

Unifying Conflicts Rules in an International Multilateral Convention: Is the Time Right?

Back in 1981 I recommended that special rules be designed to determine the law applicable in international cases of non-marital cohabitation. In view of the commendable results achieved by the Hague Conference in its work on choice-oflaw rules for other family relations, it seemed only natural that an attempt to unify 41 Pub.L. Nos. 104-199, § 3(a), 110 Stat. 2419, 1419 (1996), cited by KATZ S.M. (note 38), at p. 7. 42 SFS 1994, at p. 1117. 43 1904:26, at p. 1.

45

Šarčević conflicts rules on cohabitation at the international level should be undertaken within the framework of the Hague Conference on Private International Law.44 Today we are in a much better position to judge whether the time is right to attempt unification in this field. In 1992, the authors of the Note of the Hague Conference on PIL on the Law Applicable to Unmarried Couples acknowledged that 'the psychological barriers to the acceptance of free unions … [had by then] eroded to a large extent in most Member States of the Conference.'45 As a result of considerable progress made in regulating positive law aspects of non-marital cohabitation, since then some authors began speaking of full acceptance of non-marital cohabitation as a legal institution. This was bound to have consequences not only in public but also in private law, making it much easier to acknowledge the need to introduce a new category for this alternate form of the family. As seen above, non-marital cohabitation is regarded in both the Dutch and Belgian proposals and in the Swedish solution as a special form of living together, hence as an institution requiring special choice-of-law rules for international cases. In view of the diversity in the substantive provisions already adopted by various countries, the question arises as to whether it would be possible to agree on uniform conflicts solutions for non-marital cohabitation. This certainly would be a challenge but not the first for the Hague Conference on Private International Law. Skepticism prevailed in particular when the delegates began working on the Trust Convention;46 however, the fact that the Convention was successfully completed illustrates that unification can be achieved in an area where national concepts, solutions and traditions differ considerably. Whereas the institution of trust was practically unknown in many European and other countries, non-marital cohabitation has become an almost universal phenomenon leading to legal consequences in at least some relations. Of course, the most difficult task would be to agree on a definition or to specify the main characteristics of the non-marital union to be regulated. By now, however, we are able to detect a minimum of common denominators, thus making it possible to identify the major characteristics of non-marital cohabitation most likely to be accepted by all States, including those where the institution is not regulated by positive law. In my opinion, if these States had the option, it is more likely that they would join an international instrument with uniform conflicts rules rather than regulate the subject matter by national legislation. Once the scope of application is defined, it would be easier to reach agreement on the applicable law since the concepts have already been proposed. Assuming that non-marital cohabitation would be accepted as an institution of family law, as is the case in the existing proposals, we would be well on the way to proposing adequate connecting factors. In regard to the question of 44 45

ŠARČEVIĆ P. (note 20), at pp. 337-338. See Note on the Law Applicable to Unmarried Couples (supra, note 14), Annex I,

at p. 111.

46

Hague Convention on the Law Applicable to Trusts and on their Recognition of 1 July 1985.

46

Non-Marital Cohabitation and Registered Partnership recognition, it suffices to say that Member States would have to have the right of reservation as it is always possible that some of the consequences agreed upon would not comply with their national laws. Moreover, the future convention would have to resort to general clauses in a number of issues, thus allowing sufficient leeway for the application of mandatory rules of national laws, such as the Swedish rules on the joint home that will always enjoy special protection. Again, this could be dealt with in several ways, for example, as in Article 16 (1) of the Trust Convention or Article 17 of the Sales Convention.47 Finally, in regard to registered partnerships, there is no doubt that it would be useful to unify the private international law aspects of such partnerships in an international convention. Moreover, in view of the similarities of existing substantive provisions on registered partnerships, it would undoubtedly be easier to reach agreement on common denominators. However, in my opinion, it is premature in this moment to consider attempting to unify conflicts rules for registered partnerships at the international level. In his paper presented at the Fifth European Conference on Family Law, W. Duncan analyzes the possibility of elaborating uniform rules for the recognition and legal effects of registered partnerships. Predicting that 'different States might want different levels of recognition', he develops a minimum effects approach, according to which an acceptable solution 'would have to be flexible enough to accommodate the different degrees to which States are likely to be prepared to offer recognition.' As he puts it: 'This points to a system in which certain minimum effects of recognition are agreed, with the possibility of individual States affording recognition above that minimum.'48 Although the Scandinavian and a few other European countries have already legally regulated registered partnerships, broad acceptance is still far away. Apparently following the model of other countries with legislation on registered partnership, the Swedish legislator is planning to revise its Registered Partnership Act 'with the aim of putting Danish, Icelandic, Norwegian and Dutch citizens on the same footing as Swedish citizens.'49 Similarly, the existing requirement for registration is to be revised. Whereas registration is now possible only if one of the partners is a Swedish citizen domiciled in Sweden, this would be changed to include cases where both partners have habitually resided in Sweden for at least two years. In my opinion, following the Swedish, Danish and Dutch approach is a good way to resolve some of the problems which might be encountered in cases of registered partnership with foreign element. However, as the fate of my 1981 proposal on non-marital cohabitation shows, new institutions require some 'digesting time' before acceptable uniform solutions can be found or before a large number of countries are even willing to discuss the subject matter at an 47 Hague Convention on the Law Applicable to Contracts for the International Sale of Goods of 22 December 1986. 48 DUNCAN W., 'Civil Aspects of Emerging Forms of Registered Partnerships: Private International Law Issues', Report presented at the Fifth European Conference on Family Law, The Hague 1999, p. 7-9. 49 See supra, part III, A, in particular note 23.

47

Šarčević international conference such as the Hague Conference on Private International Law. On the other hand, the rapid development of the institution of registered partnership in Europe surely merits a study of its international dimensions. This could also be done within the framework of the Hague Conference on Private International Law, by first monitoring recent developments and then discussing further steps. As for non-marital cohabitation, I am not alone in advocating the unification of conflict rules in this field. In her article published in January 1999, Boele-Woelki discusses the possibility of reaching an agreement on conflicts rules for non-marital cohabitation and registered partnerships. Writing in Dutch, she concludes that the Hague Conference is called upon to create order by providing international rules.50 The message is clear: The time has come to begin working on uniform conflicts rules for non-marital cohabitation. As for registered partnerships, we still need some distance and worldwide acceptance.

50

BOELE-WOELKI K., 'De wenselijkheid van een IPR-verdrag in zake samenleving buiten huwelijk', in FJR 1999, pp. 11-13.

48

THE ARTIFACT OF 'SHAM MARRIAGES'* Hans Ulrich JESSURUN D'OLIVEIRA** I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. XIV. XV. XVI.

Introduction Aliens law and 'Sham Marriages' 'Sham Marriages' and Private Law 'Sham Marriages' and Nationality Law The 'Sham Marriages Act' 'Sham Marriages' and Private International Law 'Sham Marriages' and Criminal Law 'Sham Marriages' and the European Community 'Sham Marriages' and Comparative Law 'Sham' Adoption, Recognition and Legitimation Registered 'Sham' Partnerships Law in Action: Effectiveness of the 'Sham Marriages Act' A Personal Entr'acte Concluding Remarks on 'Sham Marriages' in Dutch Law 'Sham Marriages' in the Strasbourg Court Summing Up

* List of abbreviations used in this article: BW E.K. FJR

= = =

Burgerlijk Wetboek (Dutch Civil Code) Eerste Kamer (Upper Chambre of Parliament) Tijdschrift voor Familie- en Jeugdrecht (Review for Family and Juvenile Law) HPS = Het Personeel Statuut HR = Hoge Raad (Supreme Court) MvA = Memorie van Antwoord (Memorandum of Reply) MvJ = Ministry of Justice MvT = Memorie van Toelichting (Explanatory Report) NJB = Nederlands Juristenblad (Dutch Lawyer's Weekly) NJ = Nederlandse Jurisprudentie (Dutch Case Law) NJCM-Bulletin = Bulletin of the Dutch section of the International Commission of Jurists RV = Rechtspraak Vreemdelingenrecht (Aliens Law Reports) RW = Rijkswet (Kingdom Act) Stb. = Staatsblad (Bulletin of Acts and orders) Stcrt. = Staatscourant (Government Gazette) Sr = Wetboek van Strafrecht (Dutch Penal Code) T.K. = Tweede Kamer (Lower Chambre of Parliament) Trb. = Tractatenblad (Register of Treaties) Vb. = Royal Decree implementing the Aliens Act WPNR = Weekblad voor Privaatrecht, Notarisambt en Registratie (Weekly for Private Law, Notaryship and Registration) WCH = Wet Conflictenrecht Huwelijk (Act on the Conflicts of Law of Marriage) ** Professor Emeritus, University of Amsterdam.

Jessurun d'Oliveira

I.

Introduction

This article1 is an attempt to expose the dynamics of migration law by showing how the aliens policy and legislation of the Netherlands interacts with other areas of domestic law. Instead of merely identifying elements of various branches of law that might bear the stamp of migration law, it focuses on one example: the so-called 'sham marriages'. The reason for qualifying this term as such should become clear in the course of the study. The law of aliens has a strong effect on private law, especially family law, but also on nationality law, criminal law, and so forth; in short, its impact is referred to in The Hague as 'integrated alien policy'. One of the most obvious effects of this policy can be seen in the Koppelingswet, the Act to connect data bases in order to disconnect illegal aliens from Dutch welfare arrangements: housing, schools, medical care, etc.2

II.

Aliens law and 'Sham Marriages'

Legislation adopted for the purpose of preventing 'sham marriages' entered into force at the end of 1994.3 Although it was introduced in January 1991, some aspects of the law significant for the dynamics of the interaction between branches of law were derived from the restrictive aliens policy already in place. This restrictive aliens policy had already made use of the concept of 'sham marriage' in internal guidelines of government agencies. When determining whether an alien was eligible for entry and residence in the Netherlands for the purpose of forming a family or reuniting with his family, the alien's application had to be assessed and designated as a 'real marriage'. The opposite, a so-called 'non-real marriage' is defined in a guideline laid down in 1975 as a marriage entered into 'with the obvious intention of gaining access to the Netherlands.' As stated in the guideline, this was 1

This article is based on the author's farewell lecture as Professor of Migration Law at the Law Faculty of the University of Amsterdam, held 17 June 1998: Het migratierecht en zijn dynamiek: Het artefact van het 'schijnhuwelijk', Deventer 1998. 2 See, among others, Migrantenrecht (Migration Law) special issue on the Koppelingswet, 1998, Nos. 5-6. 3 Law amending Titles 4 and 5 of Book 1 of the Dutch Civil Code (BW); Law on the Basic Administration of Personal Data (22 488) of 2 June 1993, in Stb. 1994, pp. 405, 691. See, among others, VAN ITERSON D., 'De nieuwe wettelijke maatregelen in verband met het tegengaan van schijnhuwelijken' (New Legal Measures for the Suppression of Sham Marriages), in Ars Aequi 1995, pp. 117-123; ID., 'Schijnhandelingen in het Privaatrecht' (Sham Acts in Private Law), in Grensoverschrijdend Privaatrecht, Essays Offered to J. van Rijn van Alkemade, Deventer 1993, pp. 119-133; JORDENS-COTRAN L., 'Wet voorkoming Schijnhuwelijken' (Law for the Prevention of Sham Marriages) (I), Migrantenrecht 1995, Nos. 2/3, pp. 43-49; ID., 'Wet voorkoming Schijnhuwelijken' (II), Migrantenrecht 1996, pp. 3-11; DE LANGE R., 'De schijn van het huwelijk' (The Sham of Marriage), in Recht en Kritiek 18 (1992) 3, pp. 209-219; HOEFNAGELS G.P., 'Wat is het schijnhuwelijk?' (What is Sham Marriage?), in FJR 1992-3, pp. 55-56.

50

'Sham Marriages' usually the case 'if the marriage took place at a time when the person involved could reasonably be expected to have known that he was eligible for deportation from [the Netherlands] (e.g., because he was an illegal resident).'4 It should be noted that this applied only to foreign males. Moreover, in this form, the measure can be deemed repressive in that it places an extra condition on the existing formal marriage, requiring that it be 'real', i.e., it has not been entered into solely to acquire residence in the Netherlands. Similarly, the Aliens Act contained a section that allowed the foreign wives of Dutch male nationals to reside indefinitely in the Netherlands if they satisfied the requirement of actually being part of his family.5 Thus 'living apart together' – a 'lat-relationship' as it is called in Dutch – is an indication of a 'non-real marriage' with a Dutchman. It is here that 'sham marriage' was introduced as a concept of the law of aliens in the sense of a marriage entered into with the obvious intention of obtaining entry into the Netherlands and a residence permit for either a definite or indefinite period of time. This aliens law move enjoyed little success. Getting to the heart and soul of what constitutes a real marriage had no legal basis, and that was promptly avenged in the courts.6 Expulsion orders handed down by the Ministry of Justice were regularly overturned by Royal Decree or injunction. As it turned out, the administrative courts had little desire to make a distinction between concepts of marriage in the context of civil law and the law of aliens.7 As a rule, the judge shied away from 'piercing the veil of marriage' to examine and assess the actual motives behind a marriage and what form it had, in fact, taken. Nevertheless, a judge was occasionally tempted, especially in cases where the tearing of the veil was advantageous for the alien.8 In doing so, however, he/she was treading on a slippery slope: If positive results are derived from the assessment of a marriage, it follows that sooner or later the assessment of the marriage should be accepted, even if it has negative consequences.

III. 'Sham Marriages' and Private Law According to civil law in those days, it was crystal clear that a 'marriage' was a marriage if the act of marriage had been celebrated, i.e., if the bride and groom had 4

Circular MvJ, No. AJZ 4012/E2979 A 294 d.d., 7 July 1975. Section 47b of the Royal Decree implementing the Aliens Act in connection with section 10 (2) of the Aliens Act. 6 Cf. JESSURUN D'OLIVEIRA, 'Nederlanders, wie zijn dat?' (The Dutch, who are they?), in NJB 1977, pp. 589-598 7 See, e.g., KB 30 August 1974, No. 66: 'Leaving aside the question as to whether or to what extent the motives for entering into a marriage can be taken into account in the decision concerning residence.' See also HR 28 December 1987, in NJ 1988, p. 844, with note by A.H.J.S., in a case that initially was characterized a 'sham marriage'. 8 See Pres. Den Haag, 21 January 1976, in RV 1976, No. 3. 5

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Jessurun d'Oliveira gone through the motions at the civil registrar's office. As Wiarda said in 1957: 'All that appears to be marriage is marriage, until it is annulled.'9 He criticizes a prewar judgment by the Rotterdam Court of 18 May 1934,10 which, in his opinion, was based on a misconception of marriage as a legal institution: 'A Polish woman marries a Dutchman in the Netherlands obviously with no other purpose than to acquire Dutch nationality and to prevent herself from being expelled from the country under the Aliens Act. Fourteen days after the marriage she files for divorce. The Court refuses, maintaining that no marriage exists; there is only a sham marriage. This is correct insofar as the contents of the agreement between the two parties is concerned. They had no desire to live together; they intended to ignore every legal consequence of the marriage, except for its effect on acquiring nationality […] Nevertheless I deem the marriage valid. The contents of their agreement is irrelevant. They submitted themselves to an institution regulated by the authority of the State by stating in the manner prescribed by law that they wanted to marry. By that token they have been married.'11 Technically speaking, from Wiarda's point of view, there can be no such thing as a 'sham' act when it comes to the conclusion of a marriage, since marriage has a formal legal nature. A case that came before the Dutch Supreme Court in 198212 confirmed this view. Two young people were legally married so that the young man could be deferred from compulsory military service on the grounds of having the position of a breadwinner. Initially back then, many people got married in order to pocket the separation allowance linked to compulsory military service. When this began to become too expensive for the national treasury, former Defense Secretary Vredeling decided to grant a deferral from enlistment to married conscripts across the board,13 and thus the 9

WIARDA J., in ASSER C., Handleiding tot de beoefening van het Nederlands burgerlijk recht, Vol. I-1, Naturlijke Personen en Familienrecht, 9th ed., Zwolle 1957, p. 56. As well as MELIS J.C.H., Familierechtelijke betrekkingen (Family Law Relations), Deventer 1964, pp. 1617: 'Questions are not asked regarding the inner feelings or intentions of the spouses. Therefore, whether or not their testimony was truly meant, internal factors cannot be taken into account. Those getting married have subjected themselves to the legally binding consequences of their testimony: They are married.' 10 W. 12 764, NJ 1934, 842, quashed by Appeal Court The Hague, 29 November 1934, NJ 1935, 402. 11 WIARDA J. (note 9), p. 56. 12 HR 28 May 1982, in NJ 1982, 646, with note E.A.A.L. 13 Section 16 (1) and 2(a) Dienstplichtwet (National Service Act) in connection with the Decree of the Minister of Defense of 11 May 1976, No. 25 077, in Stcrt. 178, as amended by Ministerial Decree of 25 August 1978, in Stcrt. 178.

52

'Sham Marriages' so-called Vredeling-marriage was very much in vogue.14 The couple in the case at hand also intended to have a church wedding and live together. Whether they were waiting for the young bride to graduate or to be allocated housing is not clear; anyway, they continued to live in their parental homes. Not even two months had passed when the husband meets an exciting new young lady. His new but cheated bride files for divorce with ancillary relief, including support to help offset her costs of living. In the end she appeals against the judgment handed down by the Court of Appeal not to grant maintenance on the grounds it was a 'sham marriage'. Solicitor-General Ten Kate maintains that the judgment should be quashed: 'All that is necessary for there to be a maintenance duty between spouses is for a civil marriage service to have taken place, as in this marriage. By virtue of it having been entered into, it has direct consequences between parties and third parties as well. One cannot be married... and at the same time decide that certain consequences are unacceptable. The agreement [...] to live together and begin a household at a later stage does not have any bearing on these consequences coming into effect [...] It would therefore cause insoluble problems in terms of actually defining and delineating duties, if the consequences of marriage depended on matters of fact not specified by law.'15 The Supreme Court says nothing about the point of principle, but quashes the judgment on rather narrow grounds of positive law. In his annotation Luyten argues against the idea that the Vredeling-marriage is solely a marriage on paper: 'As an institution, marriage is not subject to a mental reservation or special agreements made by the parties concerning the legal consequences arising from this institution: Marriage is completely independent from what the parties had in mind. Moreover, the validity of marriage does not depend on these intentions.'16 The same view is still held by de Ruiter in the 1992 edition of the authoritative Asser's handbook:17 'Marriage is an institution …. [that] provides a legal order to [govern] 14

The final step in this development is anyone's guess. Modern yuppie conscientious objectors must now pay a fine to the State and, in hindsight, can buy their way out. The State, which in any case has no use for them any more, receives extra money and does not have to feed them. See, e.g., De Volkskrant, 23 June 1998. 15 Supra (note 12). 16 Supra (note 12). 17 DE RUITER J./MOLTMAKER J.K., in ASSER C. (note 9), 14th ed., Zwolle 1992, p. 86 et seq.

53

Jessurun d'Oliveira the cohabitation of a man and a woman not subject to individual arbitrariness. Those who choose the institution of marriage cannot be exempt from one or more legal consequences of the marriage by virtue of any mental reservation or special agreements. Neither can, on the other hand, the validity of the marriage be called into question as a result of the same.' Commenting on the formal nature of marriage, this author says: 'For many years the love and affection spouses feel for one another was generally considered the essence of marriage. The lawmaker, however, has totally distanced himself from this notion. The validity of a marriage is irrespective of the motives involved upon its being entered into. It is solely the interplay of formal factors that makes a marriage a marriage.'18 Thus leading civil law experts have in various ways agreed that there is no such thing as a 'sham marriage' and that looking behind a formally valid marriage for motives connected with the law of aliens is unacceptable: For the past forty years there has been an unbroken communis opinio on this front. De Ruiter's views cited above have even been maintained as such by J. de Boer in the latest edition of Asser's handbook, published in 1997. De Boer adds a new section on 'sham marriages', in which he states that this concept is to be regarded as 'a special concept of the law of aliens'19 without explaining why this has found its way into the Civil Code. 'Sham marriage' is obviously considered a corpus alienum in civil law. In regard to the view taken in 1996 by the government in the debate on the Registered Partnership Act,20 it can be said that the substantive definition of registered partnership is just as brief as the uniform substantive definition of marriage in Book 1 of the Civil Code. A marriage exists if the formal requirements for marriage have been met. Accordingly, a registered partnership exists with all its consequences if all the formal requirements have been satisfied.21

18

Ibid., p. 89. See also p. 124: 'The motives of the parties leading to the marriage have no bearing on its validity as long as the formal requirements have been met. In this sense, one cannot speak of there being a sham marriage, if the marriage had been entered into with an improper purpose, e.g. to obtain a residence permit. If something is to be done about this, one has to look at the legal consequences attached to marriage as specified in the Alien Act.' See the Advice of the Permanent Commission of 25 August 1987, HPS 1988 No. 1, p. 13 et seq., and DE VRIES, in FJR 1988, p. 14 et seq. 19 DE BOER J., in ASSER C. (note 9), 15th ed., Zwolle 1997, No. 80a, p. 80; see also pp. 105 and 129. 20 See infra, Part IX. 21 T.K. 1995-1996, 23 761, No. 7, p. 14.

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'Sham Marriages' This is correct; however, it contradicts the idea of sham acts in private law and the principle underlying the 'Sham Marriages Act', adopted two years earlier (see infra, Part V).

IV.

'Sham Marriages' and Nationality Law

When the use of aliens law to attack 'sham marriages' was blocked by the courts and legal scholars, the government began some twenty years ago to put out its feelers in the field of nationality law. An initial measure taken as part of the drastic facelift and modernization of Dutch nationality law was intended to discourage parties from entering into 'sham marriages'. In taking this measure, a progressive element in the proposed legislation – the realization of equal rights for men and women - was conveniently invoked as a ground for revising the position of foreign partners of Dutch nationals, however, to the detriment of foreign wives. Previously foreign wives had enjoyed discrimination in nationality law disguised as preferential treatment. Back in 1892, they had automatically acquired the nationality of their Dutch husbands, whether they wanted it or not. Later in 1964, this annexation was replaced by an option in accordance with the New York Convention of 1957 on the Nationality of Married Women.22 When the New York Convention was enthusiastically and liberally implemented by the Netherlands in 1963, male discrimination was noted but not attributed much importance. In 1976, the right of foreign wives of Dutchmen was converted into a privileged naturalization permitted under the New York Convention, and going a step further, the position of foreign husbands of Dutch wives was made to conform to it by virtue of an amendment. In the Dutch Upper Chamber, former Minister C.H.F. Polak argued against equalizing the position of men and women in the aforementioned Haas-Berger Amendment, taking sides with the Assistant Secretary, who had objected to this equalization which, in his opinion, went beyond the aims agreed upon for the general revision of the Dutch Nationality Act. Conceding that many persons favored making men and women equal across the board under the new law, especially by granting foreign males who 'hook' a Dutch woman the right to acquire Dutch citizenship, and maintaining that he approved of equal rights between men and women - although the differences were quite dear to his heart – he nevertheless deemed the equalization inappropriate in this case. As he argued, this could have the unintended effect of making Dutch women excessively attractive for large groups of aliens on the move: 'This only encourages foreign males to marry Dutch women because they can acquire all the rights of a Dutch national, despite the fact they know nothing about the country and perhaps do not even reside here, nor 22

Cf. DE GROOT G.-R., Gelijkheid van man en vrouw in het nationaliteitsrecht, Nederlandse Vereniging voor Rechtsvergelijking (Report of the Dutch Association of Comparative Law), Vol. 25, Deventer 1977; JESSURUN D'OLIVEIRA H. U., 'Nationaliteitsrecht', in: VAN MAARSEVEEN H./PESSERS D./GUNNING M. (eds.), De betekenis van het internationale recht voor vrouwen in Nederland, Vol. 1, 1987, pp. 279-291

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Jessurun d'Oliveira intend doing so and may have no further connection with it.' Remarking that more of them had already become Dutch nationals than expected at the time the law was passed, he objected to the equalization measure on the ground 'that such marriages could become "sham marriages" for the sole purpose of obtaining Dutch nationality.'23 The fact that Dutchmen could also be regarded as being excessively attractive for foreign women exceeded the expectations of this learned politician's power of imagination. In a preliminary draft (1976) of the new nationality law, the existing right of foreign wives of Dutchmen to opt for citizenship was made gender-neutral, as a result of which foreign husbands were no longer required to follow the usual naturalization procedure. But there was a snag: Previously a unilateral act, the option was revised and transformed into a bilateral act. As a result, citizenship was not automatically granted on the grounds of marriage with a Dutch national, but also required the consent of the Minister of Justice in order to be effective (Art. 16). The consent could be refused if there was strong evidence suggesting that the marriage was a 'sham'. Moreover, the preliminary draft included a provision on the loss of nationality (Art. 18(3)). Persons who had acquired Dutch citizenship by option could lose their citizenship if the marriage ended within three years for reasons other than death. This also applied in cases where there had only been a legal separation during that period. This provision met with a great deal of resistance 'of an obviously convincing manner', according to the chronicler of the Dutch nationality law, De Groot,24 who refers not only to my article written in 1977,25 but also to his own publications and to the legal opinions of official advisory boards, such as the Standing Government Committee for International Law and the Standing Government Committee for Private International Law.26 In regard to the proposed provision in the preliminary draft, the Standing Committee for Private International Law (on my proposal) commented briefly and to the point: 'A majority of the Standing Committee considers it principally incorrect to introduce a distinction into nationality law that is alien to [Dutch] law, namely the distinction between "real" and "sham" marriages.' The opponents to the government's criticism of the proposed provision in the preliminary draft won the battle, but lost the war. The preliminary draft was revised. The bilateral requirement was deleted in the final version of the Wet op het 23

Hand. Eerste Kamer (Upper Chamber of Dutch Parliament) 7 September 1976, p.

1258. 24

DE GROOT G.-R., in Personal and Family Law, looseleaf publication, Nationaliteit RW, Art. 8-11 25 JESSURUN D'OLIVEIRA H. U. (note 6), pp. 594-597. 26 The advice of this latter body has been included in the meantime in FROHN E.N./HENNIS E. (eds.) Staatscommissie IPR – geselecteerde adviezen. Naar een afgewogen IPR, T.M.C. Asser Institute, s'Gravenhage 1995, pp. 3-12, at 10: Legal opinion of 1 May 1977.

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'Sham Marriages' Nederlanderschap (Dutch Nationality Act) of 1984; however, it was replaced by a privileged naturalization procedure for spouses. Whereas the usual precondition for naturalization requires the applicant to have resided at least five years in the Netherlands immediately prior to the submission of his/her application, this does not apply for those 'who have been the spouse of a Dutch national for at least three years.' Compared with the former bilateral option, this is an improvement insofar as the privileged naturalization procedure is construed as a right that cannot be tampered with by the State once the conditions are fulfilled. On the other hand, it was a change for the worse because the spouse had to wait three years and would often lose his/her original nationality. Moreover, new conditions could be specified at any time. No mention is made of a 'real' marriage in the 1984 law, insofar as there is no longer a requirement to live together and those legally separated remain eligible for naturalization.27 The message here seems to be that marriage is marriage.28 Apart from that, there is a requirement for unmarried partners (with same sex or heterosexual), specifying that they must cohabit with a Dutch national in the Netherlands for at least three years in order to be eligible for citizenship,29 thus making it possible to monitor such cohabitation rather effectively. For some foreigners three years in the waiting room might have had a discouraging effect; there is no evidence documenting the number of persons who decided not to marry as a result of this condition. However, the government could not resist taking action against what the Germans characteristically call Staatsangehörigkeitserschleichungsehe. The test of a 'real' marriage is now made in the framework of another condition for naturalization that applies to the partners of Dutch nationals as well, namely that 'there are no objections to their residing in the Netherlands for an indefinite period of time.' When the decision is made as to whether a residence permit will be granted or extended on the grounds of 'residence with a Dutch partner', the marriage is reviewed again, thus making it possible that the residence permit will not to be granted or extended, which in turn would render it impossible for the spouse to satisfy the residence requirement stipulated in section 8 (1) (b). Moreover, there are other requirements that foreigners must satisfy in order to be eligible for Dutch citizenship. For instance, a man married to more than one woman 27

See DE GROOT G.-R. (note 24), looseleaf publication, art. 8-13. Compare in the context of the European freedom of movement of spouses, ECJ 7 July 1992, Case C-370/90 (Surinder Singh), where during divorce proceedings the Indian husband of a British national threatened with a deportation order, successfully appealed under Arts. 48 and 52 of the Treaty, even though the marriage had been definitively dissolved after the case had been referred to the European Court of Justice and had already reached the stage of decree nisi when the proceedings commenced before the Court. 29 Strangely enough, it has never been said that this requirement hinders the European right to freedom of movement because residence elsewhere in the European Union impedes the naturalization period. Cf. JESSURUN D'OLIVEIRA, 'Nationaliteit en Europese Unie', in: Ongebogen recht. Liber amicorum amicarumque Prof. Dr. H. Meijers, The Hague (SDU) 1998, pp. 71-88. 28

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Jessurun d'Oliveira cannot be naturalized, even though he meets all the other requirements. Such a candidate would not be deemed integrated (ingeburgerd), one of the conditions for naturalization. Fortunately, Dutch citizens are monogamous by nature.30 Summing up, it can be said that foreign wives took a step backwards in the Rijkswet op het Nederlanderschap 1984 (Dutch Nationality Act); foreign husbands a step forwards; however, both are now subject to screening as a result of the devious routes of the screening provision of the former Aliens Act.31 All in all, the concept of 'sham marriage' has been concealed in the nationality law by specifying other naturalization requirements for foreign spouses besides those in section 8 on privileged naturalization for spouses. It appears that the various attacks on 'sham marriage' by the government in its opinion were insufficient to achieve its objective. In a pending proposal to amend the Dutch Nationality Act, any easing of the naturalization requirements for foreign spouses has been made more difficult by adding the condition32 that the foreign national should also 'cohabit' with his/her Dutch spouse. This is clearly a new attempt in the field of nationality law to discourage 'sham marriages'.33 In this respect, the naturalization of married spouses has been forced into the same downward spiral as that of unmarried partners.34 The xenophobia that has been gaining in strength over the past decade made the time right for frontal assaults on so-called 'sham marriages'; however, the attacks

30

See e.g. Afdeling Rechtspraak Raad van State (Council of State, Administrative Law Division), 10 November 1993, in RV 1993, No. 49, with note by H.A.A.: 'Under Dutch law, polygamy is generally not accepted. After all, polygamy is in conflict with the basic tenets of Dutch marriage law.' 31 The appeal of the ex-Dutch Surinamese male who invoked the principle of equality under the law of 1892 and who, threatened with deportation, opted for Dutch nationality, was rejected. The fact that the case was reviewed under the old law of 1892 but closed at about the time the new law was to become effective certainly had a bearing on the decision. Threatened with deportation, the man invoked the principle of equality of men and women, claiming that, like the wives of Dutch men at the time, he too should have the right to opt for Dutch nationality. The Dutch Supreme Court did not deal with the discrimination aspect and prudishly refused the appeal by ruling that it would transgress the limits of its law-making powers by allowing the appeal. The equality of men and women could be effected in other ways than by making Art. 8 of the 1892 law gender-neutral. See HR 12 October 1984, in NJ 1985, p. 230, and in Ars Aequi 1985, pp. 209-214, with note by JESSURUN D'OLIVEIRA H. U.. See also DE BOER J., in NJB 1984, pp. 1417-1420, who feared 'a deluge of options (with sham marriages) just before the new law was to come into effect.' See also BOLTEN J. J., in Nemesis, Vol. 1, No. 3, pp. 155-156; HERINGA A. W., in NJCM-Bulletin 1985, pp. 32-39. 32 Section 8 (1). 33 DE GROOT G.-R., in JESSURUN D'OLIVEIRA H. U. (ed.), Trends in het nationaliteitsrecht; nationaal en internationaal, The Hague 1998, p. 91, is sympathetic to this requirement, maintaining that paper marriages should not be exempted from the requirement of residency. See also ID., in Migrantenrecht 1998, pp. 106-116, at 111. 34 Art. 8 lid 4 Rijkswet Nederlandschap

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'Sham Marriages' on 'sham marriages' in the context of the law of aliens proved to be unsuccessful. Linking the establishment of a 'sham marriage' with the abolishment of legal effects under the nationality law was not very effective and led to an unwelcome increase in the caseload of the judiciary. As a result, it was decided that the moment had come to attack 'sham marriage' at its core, hence in civil law – in the field of family law.

V.

The 'Sham Marriages Act'

At the insistence of the CDA coalition partner (Christian Democrat Appeal) whose party platform emphasizes family values, former Deputy Secretary of Justice Kosto (Labour)35 proposed new legislation at the beginning of 1992 to amend Title 5 of Book 1 of the Dutch Civil Code, later known as the 'Sham Marriages Act'. As interim minister he was allowed to defend the draft proposal in the Upper Chamber of the Dutch Parliament several years later. As was also the case in respect of other important subject matters,36 the proposed legislation was adopted without a roll call vote.37 As stated in the preamble, the purpose of the law is to 'take legal measures to prevent and counteract 'sham marriages''. Without going into detail at this point, it suffices to repeat the prevailing view of civil law experts, i.e., it concerns something that is non-existent. In terms of family law, a 'sham marriage' cannot exist because entering into marriage is a purely formal act, and the State does not interfere with its content. In the course of the parliamentary procedure, the draft became increasingly cumbersome. At the advice of the Council of State, the definition of 'sham marriage' was narrowed. In general terms the act can be summarized as following: a marriage is a sham marriage 'if the intention of the (future) spouses, or one of them, is not to fulfill the duties of marriage prescribed by law, but to obtain admission to the Netherlands.'38 In the event of a 'sham marriage', it is mandatory for the Registrar of Births, Deaths and Marriages to refuse to issue a marriage certificate. His refusal is based on the ground that Dutch public policy, in the sense of private international law, opposes the issuance of the certificate in such case.39 The Public Prosecutor is authorized (not obliged) to block the conclusion of any marriage that qualifies as a sham act and is thus contrary to Dutch public policy.40 If it slips through the net, the 'sham marriage' can be declared void retroactively

35

As an ordinary member of parliament he had asked leading questions about 'sham marriages': see NJB 1986, p. 398; that is why VAN WALSUM S., in Grensoverschrijdingen, Utrecht 1997, p. 134, speaks of a 'crusade' and a 'witch hunt'. 36 For instance, the introduction of the Euro in May 1998 was adopted without debate by the Upper Chamber of the Dutch Parliament. 37 Hand. E.K. 31 May 1994, 34 1801. 38 See, e.g., Art. 1:71a, BW (Dutch Civil Code). 39 See Art, 1:18b (2), BW. It is possible to appeal the registrar's refusal: Art. 1:27 BW et seq. 40 Art. 50 in connection with Art. 53 Boek 1 BW

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Jessurun d'Oliveira at the request of the Public Prosecutor, even if the marriage has been dissolved in the meantime because of divorce or death.41 The Registrar of births, deaths and marriages in The Hague is authorized to refuse the registration of a foreign marriage certificate if, in his opinion, a 'sham marriage' is involved.42 Pursuant to Article 1:44 BW, a number of documents must be presented to the Registrar when registering a marriage. What is new is the requirement of a statement issued by the Chief of Police (Aliens Police).43 Although this is not mentioned in the Civil Code, the statement issued by the Chief of Police contains not only information on the residence status of the foreign national, but also any evidence that implicates the existence of a 'sham marriage'. On the basis of this evidence, the Chief of Police must state whether or not he suspects the existence of a 'sham marriage'. This obligation is set forth in a supplement to the Besluit Burgerlijke Stand (Civil Status Decree).44 The statement is regarded as a key preventive instrument. On the basis of the Chief of Police's suspicions, the Registrar must then decide whether to permit the marriage to take place. Relying on his own judgment to make the decision, the Registrar no longer has a passive role in the tradition of his predecessors.45 41

Art. 1:71a BW. Because of this, naturalization that has subsequently taken place can be annulled. See Art. 14 Rijkswet Nederlanderschap. This does not apply to the current law if the person involved would become stateless as a result. There would then be an annulled marriage, but Dutch nationality would be upheld. Art. 14 of the new bill gives reason to believe that an annulled sham marriage might well be considered one day to have been based on a 'false statement or deceit', with the consequence that the Minister could withdraw naturalization, even if this resulted in the person becoming stateless. See also DE BOER J., 'Schijnwettiging en de lex rectae rationis', in NJB 1966, pp. 1368-1369, who disagrees with the view that the annulment of a sham marriage has no consequences for the children legitimated by this marriage. He refers to the example of the Netherlands Antilles and Aruba, who 'much more sensibly' in the pending bill Nieuw-BW (New Civil Code) (drafted by himself) makes it possible for the legitimacy of children also to be withdrawn in connection with a request for nullification of a sham marriage. In my opinion, under Dutch law, the recognition and legitimacy of children are not legal acts in which the truth must be established. Moreover, they are to be considered separate from the question whether the man claiming paternity is validly married. 42 This competence also results from Art. 1:18 BW. 43 Art. 1:44 (1) (k) BW: 'The statement made to the Registrar by the chief of the local police under the Alien Act confirms that a future spouse who does not possess Dutch nationality has resident status at his/her disposal, or has applied for admission to the Netherlands, or does not intend to reside in the Netherlands […] The statement is not required if the future spouses can provide convincing proof that they both have a domicile outside the Netherlands.' In the circular dated 17 October 1994, in Stcrt. 1994, No. 202, the phrase 'domicile outside the Netherlands' has been changed to read: 'that they will have a domicile outside the Netherlands' This, of course, is an entirely different turn of phrase. 44 Besluit (Decree) 15 July 1994, in Stb. 571: see JORDENS-COTRAN L. (note 3), p. 45. 45 Cf. the Supreme Court in the case of the poet Arie Visser and his Moroccan wife: HR 27 November 1987, in NJ 1988, 341. In this case the State received an injunction order to

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'Sham Marriages' The Chief of Police's statement is also forwarded to the Registrar in The Hague whenever a foreign marriage certificate is registered.46 The statement is not required if the (future) spouses can offer convincing proof that they do not intend to reside in the Netherlands, i.e., that both have a domicile outside the Netherlands.47 This is self-evident in view of the instrumental approach taken in the law: He who does not intend to reside in the Netherlands cannot enter into a 'sham marriage'. This follows from the fact that the intention to obtain residence in the Netherlands is an essential element of the legal definition. This has no bearing on the foreign spouse's eligibility to become a Dutch national in three years, if he/she satisfies the other conditions. Admission to the Netherlands can thus be obtained in this way in the end.

VI.

'Sham Marriages' and Private International Law

In the government's view, entering into a 'sham marriage' is contrary to public policy within the meaning of private international law.48 When parliamentary groups naively remarked that they thought the mayor was responsible for public order, the government replied that the concept of openbare orde (ordre public, public policy) exists in all systems of conflicts law as well as in numerous treaties and thus is a concept of general usage. While we are prepared to take our elected representative's ignorance lightly, this is not the case in regard to the government's pedantic texts, which apparently do not fare much better. In the Netherlands it is generally accepted that the public policy clause can be invoked if the application of the foreign law designated by the conflicts rule would be unacceptable to the Dutch legal order. An exception to the normal course of events, it blocks and corrects the result of the conflicts rule in individual cases. This appears to be different when it comes to 'sham marriages'. No mention is made whatsoever of conflicts rules,49 thus raising the question whether there is any such thing as a conflicts rule for cases involving 'sham marriages'. By definition they are international cases, and the subject matter is governed by the permit a Moroccan woman, who was threatened with expulsion and taken into custody as an illegal alien on the steps of city hall, to marry a Dutchman. Immediately following the ceremony, the Moroccan woman opted for Dutch nationality pursuant to Art. 8 of Wet Nederlanderschap 1892 (Dutch Nationality Act). Their purely 'real' marriage, which the Chief of Police regarded as a sham marriage, ended ten years later, in 1997, by the death of the husband. 46 See Art. 1:25 (4) BW. 47 See Arts. 1:16 (4) and 1:44 (k) BW. 48 See e.g. MvA, 22 488, No. 5, pp. 5-6. 49 Cf. STRUYCKEN A.V.M., in WPNR 1991, No. 6025, p. 779, who at the time expected that in the announced law 'conditions would be provided with private international law rules and rules of substantive law, [...] making it clear under which law the evil of sham marriage must be judged, regardless of whether it still is to be or has been contracted in or out of the Netherlands.'

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Jessurun d'Oliveira Civil Code. Accordingly, one could expect a specific conflicts rule to have been developed. The Wet Conflictenrecht Huwelijk 198950 (WCH) (Marriage Conflicts of Law Act) specifies that a marriage can be performed if each of the future spouses meets the requirements set forth for entering into marriage by the law of the State of which they are nationals.51 If a foreigner is the national of a country with legislation similar to the Netherlands, and a marriage qualifies as a 'sham marriage' if the foreign partner (i.e. the Dutch partner) solely or primarily intends to marry in order to acquire residence, then the marriage must be celebrated according to the foreign law applicable according to Dutch international private law. This is because the foreign legislation deals with the Dutch partner and is not interested in the motives of its own citizen. The condition specified in Article 2 (b) WCH is not fulfilled only if the Dutch partner also solely wants to obtain residence status for his/her partner. It is quite obvious that we are not dealing with an ordinary application of civil law, but rather with a thinly disguised version of the law of aliens. Anyway, a foreign legal system does not usually forbid its own citizens to marry merely because they wish to acquire a residence permit elsewhere. Therefore, a marriage that satisfies the conditions laid down in Article 2 WCH can be prevented only if its 'celebration would be incompatible with public policy'52 as a defense mechanism. Now that the Dutch Civil Code constantly speaks of acts 'contrary to Dutch public policy', it follows that, if a 'sham marriage' is valid according to Dutch conflicts rules and the foreign law, but is contrary to Dutch public policy, it would have been natural to have mentioned 'sham marriage' as a ground for refusal in Article 3 of the WCH along with the other grounds stipulated there, such as child marriage, incest, polygamy etc. There may be good reasons for not having done this; however, it immediately implies that we are not dealing with public policy in its negative, i.e., defensive function, but rather with what used to be called the positive function of public policy and is now generally referred to as directly applicable rules (règles d'application immédiate).53 In its negative guise, public policy intervenes more or less forcefully depending on the degree to which the facts of the case are connected with the Netherlands. On the contrary, directly applicable rules are not subject to this condition,

50

Of 7 September 1989, in Stb. 1989, 392. Art. 2(b). JORDENS-COTRAN L. (note 3), p. 6, at first localizes the problem, in my view, injustly, in Art. 2 (a) WCH. Art. 2 (b) provides an independent alternative along the lex loci celebrationis of Art. 2 (a) WCH. The combination of these alternatives shows the favor matrimonii of the regulation. 52 Art. 3 WCH. This article provides a number of grounds on the basis of which the public policy clause can be invoked; it is non-exhaustive as far as the content of public policy is concerned. See also Art. 14 of the Haagse Huwelijksverdrag (Hague Convention on the Celebration and Recognition of Marriages) of 14 March 1978, in Trb.1987, 137; 1991, 44. 53 Cf. e.g. JESSURUN D'OLIVEIRA, 'Openbare Orde en rechtsvergelijking', in 't Exempel dwinght. Opstellen aangeboden aan Prof. Mr. I. Kisch, Zwolle 1975, pp. 239-261. 51

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'Sham Marriages' or, if so, then to a much lesser degree. Furthermore, directly applicable rules are not subject to conflicts rules and focus only on achieving the aims of one's own legal system (including, for that matter, international values), and therefore constitute a negation of the conflicts of law system. Thus it can be said that the government uses the term public policy in a pedantic and improper sense: It has nothing to do with a defense mechanism against foreign law but with enforcing one's own law.54 Yet the relevant legal provisions on 'sham marriages' are in great disorder: The Registrar must refuse to issue the marriage certificate if it is contrary to Dutch public policy (Article 16b(2)); the Public Prosecutor is empowered to block celebration (Article 50); at the request of the Public Prosecutor a marriage can be annulled (Article 71a, BW) if it appears to be a 'sham marriage'. This disorder can obviously be explained by the fact that we are dealing with an incompatible combination: directly applicable rules, on the one hand, and the principle of discretionary powers of the Public Prosecutor, on the other. The concepts and structure of Dutch private international law have been abused in order to come up with a bite-sized, ready-to-eat provision inspired by the law of aliens.

VII. 'Sham Marriages' and Criminal Law One thing leads to another. Criminal law has also tackled 'sham marriages' by penalizing, among other things, marriage brokers. The Supreme Court recently declared receiving payment for arranging marriages between illegal aliens and Dutch nationals a criminal offense under Article 197a of the Dutch Criminal Code (Sr).55 This decision must be criticized on the grounds of the general principles of construction of criminal provisions. To construe the text of the Criminal Code 'assisting to obtain entry to or residence in the Netherlands' as covering the brokering of 'sham marriages' forms a rather liberal interpretation of this Article, which was drafted primarily to combat trafficking in humans. The Supreme Court's argument that Article 197a Sr. can be traced back to Article 27 of the Schengen Implementation Agreement is weak.56 Arranging marriages is something altogether different than the 54

The same conclusion is drawn by JORDENS-COTRAN L., (note 3), p. 6. Cf. the remarks by the Minister in MvA, E.K. 1994-1995, 22 488, No. 77 C, pp. 3 and 4, where it is suggested that this concerns public policy in its negative function. 55 HR 7 April 1998, No. 106.619, NJB 1998, No. 70, pp. 873-874. See also SWART A.H.J., 'Strafrecht en vreemdelingenbeleid', in Migrantenrecht 1998, pp. 263-268. 56 Art. 27 of the Schengen Implementation Agreement reads as follows: 'The Contracting Parties undertake to impose appropriate penalties on any person who, for purposes of gain, assists or tries to assist an alien to enter or reside within the territory of one of the Contracting Parties contrary to the laws of that Contracting Party or the entry and residence of aliens.' The Schengen acquis does not concern entry for a visit of more than three months, which is usually the case with marriages. Therefore, in this sense, Art. 197aSr. certainly goes further than the Schengen Agreement. See Art. 9 ff. about visas for short visits. Cf. GOUDSMIT A./STEENBERGEN J.B.M., Het Schengenrecht voor vreemdelingen en vluchtelingen (Schengen Law for Aliens and Refugees), Utrecht 1995, p. 7.

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Jessurun d'Oliveira activities of the Schlepperorganisationen. Moreover, it should be kept in mind that, at the time Article 197a Sr. was introduced, there was no legislation on 'sham marriages' on the table and the government had repeatedly said that brokering 'sham marriages' would be dealt with by separate, special criminal provisions. Moreover, when asked which agreements had been made within the Schengen framework, the government replied in the Memorie van Antwoord of the Wet op de Schijnhuwelijken (Sham Marriages Act) that these agreements have no bearing on long term residence rights and consequently not on residence questions relating to 'sham marriages'. Furthermore, it was said that cooperation within the framework of the Schengen Agreement is general in nature and primarily concerns competence in areas dealing with the crossing of inner and outer borders, the exchange of information, and international assistance. In particular, it stated that nothing specific had been arranged with regard to police cooperation for controlling special criminal acts such as 'sham marriage'.57 In the same document mention is made of the preparation of a proposed bill, 'whereby all participation in, including assistance, instigation, and the facilitation of a 'sham marriage' in the sense referred to would be regarded as a criminal offense.'58 The government obviously did not yet regard brokering 'sham marriages' as a form of participation qualifying as a criminal offense (especially not under Article 197 a Sr.) and believed that a special criminal provision was needed to regulate such activity. In its note in response to the final report of the Lower House on the Sham Marriage Bill,59 the government expressly rejects the idea that the proposed amendment to the Criminal Code would form a lex specialis under the lex generalis of the provision on trafficking in humans. Instead it said that the prohibited acts would be regarded as a variation of illegal falsification of the civil status of persons in Article 236 Sr. Nevertheless, the Supreme Court has in the meantime seen it appropriate to apply Article 197a Sr. Here too, Article 1(2) Sr., the nulla poena principle, forms a more and more undermined dam against unbegrenzte Auslegung, i.e., against catch-ascatch-can interpretation. Other criminal judges are also confronted with the application of criminal law provisions against 'sham marriages'. For instance, a foreigner and his Dutch bride were charged with forgery by the Public Prosecutor for allegedly falsifying the so-called 'relationship statement' at the Aliens Registration Office60 in preparation for the wedding. Aware that 'its sole purpose was to provide evidence in the event of criminal proceedings', the court maintained that playing confidence tricks without warning 57

MvA, 22 488, No. 5, p. 3. Ibid., p. 18. 59 T.K. 1992-1993, 22 488, No. 9, pp. 13-14. 60 A form was developed for the relationship statement by the Alien Police Amsterdam-Amstelland in consultation with the IND, the civil registry and the Public Prosecutor, that is also used for the assessment of applications for residence permits for cohabitants and registered partnerships, WIERSMA/DOORNEKAMP/OCKERS, 'Nieuwe aanpak schijnrelaties' (New Ways of Dealing with Sham Partnerships), in Algemeen Politieblad 1998, No.9, pp. 4-5. 58

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'Sham Marriages' about the consequences of their signing such a statement which in itself had no particular significance with regard to the procedure for the celebration of marriage, was contrary to the principles of fair trial.61 The charges were dismissed on the grounds that the parties should have been informed about the consequences of signing a false declaration. In the future, those signing this relationship statement will undoubtedly be duly warned, and eventually sentenced without much ado.

VIII. 'Sham Marriages' and the European Community On the fourth and fifth of December 1997, the Council of Ministers of Justice and Home Affairs of the European Communities passed a resolution on 'sham marriage'.62 The formal basis of this resolution can be found in Article K.1(3) of the EU Treaty, where 'immigration policy and policy regarding nationals of third countries' is considered 'a matter of common interest'. The resolution, however, is of limited importance insofar as it deals only with marriages with 'a national of a third country', i.e., a non-Member State of the European Union. A number of measures are suggested that should be taken when a person desires to marry for the sole purpose of abusing the rules on entry and residence to enable the national of a third country to obtain a residence or stay permit in a Member State country.63 The Dutch Minister of Justice recently maintained that the resolution is 'not binding'. Dutch national legislation regulating this matter remains in force and, moreover, must be in accord with Article 6 of the European Convention on Human Rights (hereinafter: ECHR). In this sense the resolution does not constitute a change.64 On the other hand, the resolution provides a kind of checklist for identifying the elements constituting a 'sham marriage'.65 The Council obviously assumes that it is not worthwhile to qualify marriages between nationals of Member States as 'sham marriages'. The intention of obtaining residence is usually absent since a citizen of the Union has legitimate grounds to enter

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District Court Amsterdam, 4 December 1997, Meerv. Kamer (Three Judge Section), No. 13/081208-97. If it is accepted that the partners have committed forgery by signing the marriage certificate whenever they do not intend to allow one or more consequences of the marriage to come into effect and their aim focuses on one or more specific consequences, the Public Prosecutor will surely have a considerable caseload. From the perspective of criminal law, also outside the international context of a formal 'sham marriage', this would often or usually be the case. 62 Official Journal, C 382, 16 December 1997, also reprinted in Migrantenrecht 1998/2, p. 56. 63 According to the text of section 1. 64 T.K. 1997-1998 23 490, No. 85 (2 December 1997), p. 5. See also p. 10. 65 Among other things, the following are mentioned: absence of cohabitation, absence of an appropriate contribution to the responsibilities of the marriage (whatever that means), the spouses never having met before the marriage, the spouses not being able to speak a language the other can understand, etc.

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Jessurun d'Oliveira and reside in another Member State. A part-time job is sufficient. That does not alter the fact that the European Court explicitly stated in Surinder Singh that Community law in no way stands in the way of measures being taken against 'sham marriages'.66 This brings with it the possibility of Community law not granting the status of 'spouse' to a person who has entered into a 'sham marriage' under the applicable law of one of the Member States. Accordingly, it follows that such husband or wife would not be permitted to accompany his/her partner when the latter exercises her/his European right to freedom of movement or residence. This could certainly result in inequality. Since not all Member States have introduced legislation against 'sham marriages', this could result in a marriage that is valid in one country being blocked or annulled in another. Nonetheless, Community law remains passive in such cases, bowing to the law of the Member States, despite the fact that the Community concept of 'spouse' is said to be autonomous and to a significant degree independent of the concept of 'spouse' as defined in the laws of the Member States. Two considerations in the preamble to the resolution are obviously the result of a compromise. On the one hand, it is stated that the purpose of the resolution is not to establish systematic control over all marriages with nationals of third countries. At the same time, however, it does not exclude the possibility of a Member State inquiring about whether an intended marriage qualifies as a 'sham marriage'. Therefore, there can be a maximal (as in the Netherlands) or minimal implementation of the resolution. The central premise of the resolution is that 'officials authorized by national law'67 can only issue a residence permit if a suspect marriage has been investigated and found not to be a 'sham marriage'. If a residence permit already exists, as a rule it can be withdrawn, revoked or not extended, of course with the right to appeal by instituting court or administrative proceedings.68 It is clear that this resolution contains elements intended to widen and deepen the moat around fortress Europe. It is also clear that the concept of 'sham marriage' can be defined arbitrarily. While the Dutch definition applies to all aliens, the European resolution is limited to nationals of non-Member States, i.e., non-Union citizens. Since this distinction is not made with regard to 'spouses' in secondary Community law (such as Regulation 1612/68), in my opinion, the resolution discriminates against non-EU nationals.

66

See Case 370/90, in Proceedings, 1992, I, p. 4265 (Surinder Singh). Section 4. The term 'national authorities' means the authorities of the Member State involved, not the authorities of the country of origin of the national of a third country. 68 In the Commentary by the Permanent Commission of Experts on International Aliens, Refugee and Criminal Law of 26 November 1997, which was sent to members of the Dutch Parliament, it was pointed out that the allegation of the existence of a 'sham marriage' falls under civil rights mentioned in Art. 6 ECHR, and that therefore an independent judge must be appointed and all other guarantees accruing from Art. 6. Furthermore, both partners must have the right to appeal. This document, however, does not constitute a frontal assault on the concept of 'sham marriage' itself. 67

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'Sham Marriages'

IX.

'Sham Marriages' and Comparative Law

Marriage is not the only institution that has been distorted as a result of the influence of the law of aliens; and the Netherlands is not the only country to have enacted legislation on the matter. Without any pretense of being exhaustive, I would like to mention some examples of both phenomena. As far as 'sham marriage' is concerned, Germany preceded the Netherlands in taking legislative action. Article 23 of the Ehegesetz of 1938 declared marriages void, if they were solely or primarily entered into with the aim of enabling the wife to acquire the husband's family name or the husband's nationality, without conjugal cohabitation resulting. This same provision became effective in Austria after the Anschluss and was 'Austrianized' in 1945 by the Rechtsüberleitungsgesetz. In Austria the concept started leading a life of its own. The so-called Namensehe, a marriage that protected unwed mothers against social injustice, for example, being fired from a job, but also enabled them to acquire a title of nobility, fell into disuse, and the nationality law became gender-neutral with a lower level of protection, as in the Netherlands. In regard to Staatsbürgerschaftsehen, the question arises as to how one could enter into such a marriage when the man or woman did not automatically acquire the spouse's nationality. Furthermore, how can a law that expressly refers to women as addressees be applied to men as well? This did not bother the Austrian Supreme Court (Oberster Gerichtshof). In a decision from 1994, Article 23 of the Ehegesetz was stretched beyond recognition.69 According to the OGH, obtaining Austrian nationality is of subsidiary importance because, by virtue of their marriage, spouses in Austria have free access to the labor market and the right to a residence permit of indefinite duration. For this reason, the Court concluded that marriages entered into for the sole or primary purpose of acquiring a residence permit and access to the labor market must be subsumed under Article 23 of the Ehegesetz, even in the absence of any intent whatsoever to obtain Austrian nationality. Annotator Schwind, the Nestor of Austrian private international law, expressed his indignation and dismay: 'In Zeiten, in denen man einen Gesetzestext noch ernst genommen hat, d.h. gemäss Artikel 6 ABGB nach dem Wortlaut und der "klaren Absicht des Gesetzgebers" ausgelegt hat, […] wäre eine solche Entscheidung wohl nicht vorstellbar gewesen.'70 A bit later he speaks about a 'grundsätzliche Wandlung im herkömmlichen juristischen Denken von erschreckendem Ausmass.'71 This could also apply to the Dutch Supreme 69

Oberster Gerichtshof, 30 March 1994, IPRax 1995, p. 179 with commentary by SCHWIND F., pp. 189-191. 70 Ibid., at p. 190. 71 Ibid., at p. 190.

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Jessurun d'Oliveira Court in connection with the above-mentioned judgment in which it subsumes marriage brokering under the article on trafficking in humans. Compared to the Dutch provision, the German-Austrian variation goes a step further by providing that a marriage can be annulled if it has been entered into mainly for the motives as charged, thus giving the judge a delicate exercise in weighing the merits. Contrary to the situation in Austria, in Germany forms of repression against Staatsangehörigkeitsehen were abolished first and those against Namensehen later in 1976.72 The current German practice, which aims more at taking preventive measures, appears to be problematic in that its legal basis is questionable.73 It is tempting to go on an in-depth comparative law scouting mission; however, that would far exceed the scope of this article. Here it suffices to refer to the meticulous monk's labor performed in the International Encyclopedia of Comparative Law, where a chapter of the 1997 volume (already slightly outdated) deals with 'the formation of marriage'.74 This chapter gives the reader a fairly good idea about the many arbitrary interpretations of 'sham marriage' at the hand of the authorities. It is the government that attempts to wedge its way between the spouses like a Dritte im Bunde, making demands on them that they themselves had not quarreled about. These demands, positive and negative, are symptoms of the deprivatization of marriage. There were many examples of this in the former Soviet Union, where a marriage could be annulled if it had been entered into for the purpose of acquiring a residence permit for Moscow, or improving the couple's chances of being allotted housing (similar to the Netherlands where people got 'legally' married in order to have their names put higher on the list of candidates for housing distribution), or for the purpose of avoiding being sent to work in remote areas, or acquiring pension rights. The absence of consensus ad idem was reserved for their private relationship, whereas clashes between the interests of the partners and those of the State were resolved by the password of public policy, i.e., by characterizing various intentions of the partners as improper and defining a marriage entered into with one or more of such intentions as a 'sham marriage'. Such provisions, therefore, do not belong to the area of private law.

72

See VAN ITERSON D., 'Schijnhandelingen in het familierecht' (Sham Acts in Family Law), in Grensoverschrijdend privaatrecht, Festschrift J. van Rijn van Alkemade, Deventer 1993, pp. 119-133, at 129. See also STURM F., 'Scheinehen, ein Mittel zur Gesetzesumgehung?', in Festschrift für Murad Ferid, Frankfurt a. M. 1988. pp. 519-545. 73 VAN ITERSON D. (note 72), p. 129. 74 COESTER-WALTJEN D./COESTER M., 'Formation of Marriage', in International Encyclopedia of Comparative Law, Vol. IV, Persons and Family, 1997, especially Nos. 145150.

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X.

'Sham' Adoption, Recognition and Legitimation

Once a person has developed an eye for detecting mouse holes in the baseboard, he is not satisfied with filling in one hole but is overcome by the urge, impulse, or even passion to fill in all the cracks. The fortress must be hermetically sealed against the swelling tide of vermin. And thus it often occurs with regard to proactive provisions and regulations: Filling in one gap makes yet another appear attractive or even larger. Unexpected and undesired effects form a vast web in which one can get tangled up when attempting to weigh the pros and cons of filling such gaps. Allow me to mention a few places where the State has attempted to demarcate its territory inside and outside with legislative putty in the area of family law. One such gap has always been international adoption. Not only was the Netherlands very late (1956) in accepting and regulating this legal concept, but objections were also raised in the fields of aliens law and nationality law. Even child welfare agencies had reservations about facilitating the recognition of adoptions taking place abroad. Usually it was the 'do-it-yourselfers' who went their own way in an attempt to bypass the paternalistic institutions.75 Apart from rectifying the male bias discriminating against women in the old law, the Rijkswet Nederlanderschap 1984 (Dutch Nationality Law) marks time by granting Dutch nationality only to minors adopted in the Netherlands.76 Only very recently has the law been amended to grant nationality to children adopted in accordance with the conditions laid down in the provisions of the Hague Convention on Protection of Children and Cooperation in respect of Intercountry Adoption of 29 May 1993.77 These provisions ensure that the Hague Convention is enforced, especially the condition that the authorities of the State of origin must establish that the child is or will be authorized to enter and reside permanently in the receiving State.78 Without such authorization, the foreign authority will not approve an international adoption, as a result of which the adoption will not necessarily be recognized in the receiving country. Here too one can see a matter of private law caught in the headlock of the law of aliens: no adoption without a residence permit. It would be more correct the other way around: The adoption should provide grounds for a residence permit.79 As a 75

See JESSURUN D'OLIVEIRA H. U., 'Internationale adoptie, nationaliteit en vreemdelingenrecht', in Offerhauskring vijfentwintig jaar, Deventer 1987, pp. 105-121. 76 Art. 5. 77 Trb. 1994, 197; the Rijkswet (Kingdom Act) for the ratification of the Adoption Treaty was adopted on 14 May 1998 (in Stb. 1998, 301), and became effective on 3 June 1998. 78 Art. 5 (c); see also Art. 17 (d) of the Convention. 79 See STURM F., 'Zur Scheinadoption volljähriger Ausländer in der Bundesrepublik Deutschland und in der schweizerischen Eidgenossenschaft', in Festschrift für Karl Firsching, München 1985, pp. 309-325. This author shows how disastrously a legal system can operate as a reaction against various motives considered wrong by the government, such as swapping nobility titles and names; tax evasion; relieving persons of duties assumed in joint wills and

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Jessurun d'Oliveira matter of fact, witholding a residence permit is usually detrimental to the interests of the child. Recognition of children also comes under pressure as a result of the aliens policy. Article 4 of the current Dutch Nationality Act grants Dutch nationality by operation of law to a minor alien recognized (or legitimated) by a Dutch national. Adults legitimated by a Dutch national are excluded from automatically receiving Dutch nationality. As stated in the Explanatory Memorandum, the aim of their consent to legitimization80 is in no way connected to consequences in nationality law. Is this a normative judgment or an insight into the real motives of the person who has consented to legitimization? Granting consent or permission for other acts in the field of family law also has little to do with questions of nationality, and yet they are linked to it. For a long time it was assumed that a foreign woman's wish to marry a Dutchman implied her intention to obtain Dutch nationality. This fiction was generally accepted as a ground for automatically granting Dutch nationality to foreign wives. The real motive for not granting nationality to adult foreigners recognised by Dutch citizens is stated as well. The denial aims at preventing undesirable aliens from settling in the Netherlands as Dutch nationals. An adult who is recognized (or legitimated) by a Dutch national is eligible for privileged naturalization: He/she is exempt from the requirement in Article 8 (1) (c) of the Rijkswet Nederlanderschap, as a result of which the adult need not have been domiciled or actually resided in the Netherlands for at least five years. However, privileged naturalization has again been made more difficult by a supplementary piece of proposed legislation requiring the naturalisanda to have resided at least three years in the Netherlands. In view of the other conditions, which are rigid enough as it is, it is questionable whether this provision will make a difference.81 As far as the government is concerned, the restrictions placed on the automatic granting of nationality to minors did not go far enough. As specified in paragraph 1 of current Article 14 of the Rijkswet op het Nederlanderschap (Dutch Nationality Act), foreign minors recognized (or legitimated) by a Dutch national acquire Dutch nationality ex lege and are thereby excluded from the effects of the law of aliens, because they automatically acquire the unassailable right to residence. However, according to the Government, the practice has shown that the institution of recognition inheritance law agreements; disguising homosexual relationships; failing to provide protection against recurrent claims; to make divorce possible for Italian adults by changing nationality; aliens law motives etc. Sturm gives all these short shrift, partly with human rights arguments, which, in my opinion, are not convincing: 'um zu verhindern, dass sich Ausländer nur um in Deutschland verbleiben zu können, in sklavenähnliche Abhängigkeitsverhältnisse begeben.' Nevertheless, the most important reasons for this romantic hardliner are: Malitiis non est indulgendum and ne simulata adoptio iuvaret or: 'um nicht diejenigen zu begünstigen, die mit besonderes gerissenen Mitteln sich Aufenthalt und Arbeitserlaubnis erschleichen' (p. 324). 80 As required by Art. 1:224 BW. 81 See de Groot's critical remarks: DE GROOT G.-R. (note 33), p. 91. See the criticism of earlier proposals to neutralize 'sham legitimization': TRATNIK M., in NJB 1989, pp. 296-298 and in NJB 1993, pp. 1181-1185.

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'Sham Marriages' is frequently misused by foreign minors solely for the purpose of obtaining Dutch nationality.82 As a result, the simple recognition of minors in the proposed amendment to the Dutch Nationality Act leads to no legal consequences whatsoever in the sphere of nationality law. The proposed provision is divided into two parts. In the first part, a child under 21, who has been recognized (or legitimated) by a Dutch national, is granted the bilateral right to opt for Dutch nationality, if afterwards, but before reaching the age of eighteen, he/she has been in the care of and raised by the recognizing Dutch national for an uninterrupted period of three years. As was the case in regard to naturalization through marriage, a three-year period of cohabitation is also required here. Thus it follows that anyone who is recognized after his/her fifteenth birthday cannot fulfill the condition because it is impossible for him/her to be cared for and raised by the recognizing Dutch national for three years before reaching the age of 18. As specified in the second part of the provision, a minor legally becomes a Dutch national if the court establishes the paternity of a Dutch national.83 Establishing paternity as a basis for granting family rights and defining relationships is a new legal concept for the Netherlands, although it has existed quite some time in numerous other countries.84 By linking the acquisition of Dutch nationality ex lege to the judicial establishment of paternity (establishing that a Dutch national is the father), nationality law marches towards a stronger biologically based ius sanguinis. It should be kept in mind that annulment of the recognition could be requested, for example, by invoking the public policy clause, especially if the recognition has taken place solely with the intention of acquiring entry into the Netherlands. The dynamics are clear. Under the influence of the law of aliens, the significance of recognition has been reduced in nationality law, particularly in cases where the recognition is a constitutive legal act, the intention of which is not to be in conformity with biological facts. In Dutch domestic law, the emphasis has also shifted to recognition as an act of verifying the biological state of affairs. As a legal act, recognition has had its wings clipped with regard to its consequences. This, however, is not the end of the encroachment. At the request of the 82

T.K. 1997-1998, 25 891 (R 1609), MvT, p. 4; cf. the critical remarks by DE GROOT G.-R., in Migrantenrecht 1998, pp. 107-108, and ID. (note 33), pp. 66-74. 83 The proposed provision reads: 'A child whose fatherhood had been judicially established becomes Dutch, if, on the day of the judgment in the first instance, the child was a minor and the father was a Dutch national on the day referred to in the following sentence. The child obtains Dutch nationality on the first day after a period of two months commencing on the day of the judgment in the first instance, or, if an appeal has been lodged within this period, after a period of two months commencing on the day of the judgment on the appeal; otherwise, if an appeal in cassation has been lodged within this period, on the day of the judgment in cassation.' This provision stands out as a paradigm of clarity. 84 According to DE BOER J., 'Familierechtelijke vernieuwingen', in NJB 1998, pp. 1-8, especially at 7: 'It would appear that the Netherlands was the last country in Europe where the possibility of judicial establishment of paternity did not exist.'

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Jessurun d'Oliveira Public Prosecutor, recognition can be annulled if deemed contrary to Dutch public policy. A concept of 'sham recognition' is being introduced that can be defined as 'a recognition that has not been made with the generally accepted consequences of that recognition in mind, but solely for the purpose of gaining entry into the Netherlands.'85 Since 1970, law and legal scholarship have unambiguously viewed recognition as a legal act detached from biological facts.86 This, however, has undermined the status of the recognized child insofar as such recognition is not based on the truth. Today, establishing paternity based on biotechnological evidence (DNA!) has become so important that it has succeeded in replacing the act of recognition as the major factor linked to the ex lege acquisition of Dutch nationality. The cloak of charity embodied by social fatherhood is losing its significance in matters of nationality, thus making way for a physical scientific ius sanguinis. One could go on and on. Word has it that legislation is in the making to forbid surrogate motherhood from being performed with genetic material from foreigners if the sole aim of gestation is to gain entry of the fetus into the Netherlands. The Public Prosecutor could then request to have an abortion performed under the law of aliens…

XI.

Registered 'Sham' Partnerships

The measures used to combat 'sham marriages' are similar to those taken against 'registered sham partnerships'. The comparison, however, is by no means a perfect one. In particular, the government has shown a preference for coming to grips with the presupposed sin of 'sham partnerships' in a different way. In the original legislation proposed on 8 June 1994, a distinction was made between EU citizens with a valid residence permit (including Dutch nationals) and others. While Dutch nationals from the European part of the Kingdom enjoy permanent resident status in the Netherlands, fellow nationals from other parts (the Netherlands Antilles and Aruba) can be required to obtain visas and must therefore be dealt with differently. EU citizens can procure a valid residence permit by virtue of EU law. Others, however, are primarily subject to the regular, more restrictive aliens law and derive their right to stay in the Netherlands from that. Accordingly, it follows that, in order for them to enter into a registered partnership recognized by the State, they must have resided in the Netherlands for at least one year and possess a valid residence permit.87 By requiring non-EU Members to fulfill the cumulative conditions laid down in the law of aliens, the government hoped, among other things, to prevent 'sham partnership registrations' and what is labelled as 'sham registered partnership

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VAN DUYVENDIJK F.J./BRAND/WORTMANN S.F.M., Personen- en Familierecht, Deventer 1998, 7th ed., p. 154. By the way, judicial establishment of paternity can only take place if there is no legal father, or the legal father is deceased. 86 DE RUITER J./MOLTMAKER J.K. (note 17), p. 475. 87 Art. 80a of the proposed legislation 23 671 of 8 June 1994.

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'Sham Marriages' tourism'.88 The distinction introduced in the proposal corresponds with the one posited in the later resolution by the Justice and Home Affairs Council.89 It has been criticized by various authors, including myself,90 and questions based on that criticism were raised in the Permanent Parliamentary Commission on Justice.91 In response the government argued that the distinction emanates from one of the basic European rights, the freedom of movement of persons within the European Union.92 While conceding that EU law might not require such a distinction, the government deems it justifiable in this case to do so. In my opinion, such arguments are not persuasive. Although the government systematically opposed my point of view, it nevertheless made a concession by abolishing the 'preliminary year of mourning' for non-community partners aspiring to register as such.93 According to the government, 'the requirement of having a valid residence permit offers sufficient protection' against sham registrations and partnership tourism. The required period of residence of one year was scrapped by a government amendment.94 The effect, however, is a rather senseless division of Article 1:80a of the BW, in which paragraphs 1 and 2 have identical provisions for EU nationals and nationals of third countries.95 Despite this defect, Article 1:80a was passed by the Lower Chamber of the Dutch Parliament. The birth defect, however, did not go unnoticed by the Upper Chamber,96 nor by the Kortmann Commission, established to advise the government on matters relating to marriages between persons of the same sex. In a recommendation97 made prior to its report,98 the Commission, at the request of the Deputy Minister of Justice,99 expressed its view about the provisions in paragraphs 1 and 2 of Article 1:80a of the Civil Code. While the government attempted to rectify the bizarre pseudo-dichotomy by arguing that, under the law of aliens, EU citizens 'often had a legal position somewhat different than that of other aliens', this was not the central issue. Instead, the Commission focused its attention on the principles of equality and discrimination. If the government is serious about equalizing marriage and registered partnerships as much as possible, then, as the Kortmann Commission insisted, it must have very good 88

MvT 23 761, No. 3, p. 4. For this see supra, Part VIII. 90 JESSURUN D'OLIVEIRA H. U., 'Geregistreerd partnerschap en de Europese Unie', in NJB 1995, pp. 1566-1570. 91 T.K. 1995-1996, 22 700, No. 8, pp. 1-6 (12 February 1996). 92 Ibid., p. 6. See also T.K. 1995-1996, 23 761, No. 7, p.15. 93 Ibid. 94 T.K. 1995-1996, 23 761, No. 8. 95 The provision could now have read: 'Anyone in possession of a valid residence permit can register his or her partnership, if the requirements for registered partnership are met.' 96 E.K. 1996-1997, 23 761, No. 157d, referring to HOEVENAARS, in WPNR 1997, 6264. 97 Dated 14 May 1997. 98 Dated October 1997. 99 See E.K. 1996-1997, 23 761, No. 157c, p. 1. 89

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Jessurun d'Oliveira reasons for having enacted so many instruments aimed at preventing sham acts. Taking a stand on the issue of equal treatment, the Commission remarked: 'In light of this, the reasons cited in the documents have not convinced the Commission. Even if registered partnerships would fall outside the scope of Article 12 ECHR, that in itself is no reason to attach preconditions to registered partnerships that do not exist for marriage, if, for that matter, hardly any difference exists between entering into marriage and entering into a registered partnership. In light of this, the argument of whether or not a provision is effective has to be cast aside in favor of the argument of equal treatment. It is not clear to the Commission why a foreigner who does not possess a valid residence permit can legally marry a Dutch national, but cannot enter into a registered partnership.'100 From the Kortmann Commission's recommendation it follows that the provisions on 'sham marriage' should be adjusted to correspond to those on registered partnerships; hence, a valid residence permit should be made a precondition for entering into marriage; or conversely, the concept of 'sham partnership' should be introduced into partnership registration. For the time being, the government has remained silent.

XII. Law in Action: Effectiveness of the 'Sham Marriages Act' This brings us to the question whether the 'Sham Marriages Act' has produced the desired results. This is a difficult question. It was already difficult to establish how widespread the phenomenon was when the idea arose that some type of action should be taken to counteract it. Although parliamentarians constantly asked about this, no reliable statistics were available. Instead, the Minister of Justice repeatedly promised to present a report in Parliament on the effects of the law, after it had been in force for a period of two years. That report should have been presented at the beginning of 1997. Judging from the government's statements made in defense of the different treatment it has accorded 'sham partnerships', one can conclude that the government also has its doubts about the effectiveness of the 'Sham Marriage Act'. In my opinion, it appears that a sledgehammer is being used to crack a nut. In the period leading up to the proposed legislation, the government estimated the number of 'sham marriages' to be somewhere between 5,000 and 10,000 annually. It now seems that these figures were grossly exaggerated. Apparently the Registrar is a great deal more reserved than the Aliens Police. Even if the Registrar does make occasional use of his authority to deny celebration, a judge is quick to disregard his denial and order the registration. The Public Prosecutor is also not particularly eager to exercise his authority to block or annul a marriage. And the Registrar in The Hague is not charmed by having to screen marriages entered into in foreign countries. As is 100

Appendix 2 of the Cie-Kortmann Report, p. 26

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'Sham Marriages' generally characteristic of the implementation of preventive legal measures, it is exceedingly difficult for public agencies and services to come up with the necessary evidence. Furthermore, in my view, evasion of the law is not extremely difficult. A foreigner who wants to marry a Dutch national promises in the marriage settlement (prenuptial agreement) to pay maintenance in the amount of 500 guilders monthly, thus demonstrating his/her willingness to fulfill the duties of marriage, i.e., at least one of them. According to the legal definition, this is sufficient. With that, 'sham marriage' in its present definition is over and done with, even if the purchasing of a Dutch partner takes on the outward appearance of maintenance payments. The introduction of legislation to prevent 'sham marriages' has encouraged foreign nationals to look for alternative ways to achieve their aim. Not surprisingly, cohabiting with an unmarried Dutch partner and entering into a registered partnership with a Dutch national are now family law alternatives to entering into a 'marriage for residence purposes'. If the partners still insist on tying the knot, getting married abroad is most likely to yield excellent results, making it even more difficult to prove that the marriage is 'sham'. As for EU citizens, they can easily obtain residence in the Netherlands. Thus they need not resort to 'sham marriage'. Nonetheless, they all have to go through the treadmill of completing application form D79. Not much is left behind in the net; however, it is good for government employment! Of course, one could claim that the low number of documented 'sham marriages' is proof of the highly successful preventive measures taken by the government. This would be difficult to prove scientifically, especially because of the speculative manner in which the status quo ante has been specified. Serious monitoring can only begin after the statistics have been carefully evaluated, i.e., if reliable data is available for the evaluation.

XIII. A Personal Entr'acte Having almost reached the end of this article on 'sham marriage' and other so-called family law 'sham acts', it is time to say something about my personal interest in this subject matter. Over the years it has become increasingly clear to me that World War II and the German occupation has left an indelible mark on my life. Born in the year of the Machtsübernahme in 1933, I was almost seven when the war broke out and twelve when liberation came. The critical and sometimes even subversive position I have taken against government actions ever since I was young, in the legislative and judicial sectors as well, can be traced back to my first experiences that taught me that the government – in the form of an occupying force with collaborating domestic authorities – was out to kill me and my family. Everything one did in that situation, also in the area of the law – the falsifications, sham acts, evasions of the law, clever tricks and lies, the civil disobedience – could be considered acts of self defense against direct unlawful violation of one's person and property. I am proud to have served under and with such masters as professors Kisch and De Winter, both of whom won

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Jessurun d'Oliveira their spurs with so-called improper use of the law.101 Aux grands maux de grands remèdes ! Kisch's misuse of the unusual legal remedy of petition to overturn a rash 'sham divorce' of a mixed Jewish-Arian couple proved to be lifesaving; Mischehen, as it turned out, offered, in principle, a defense against deportation.102 Against better positive-legal judgment accepted by the righteous court, in which Gerard Langemeijer was the young court assessor, Kisch was also able to get 'at least, temporary exemption against deportation by drafting certificates – miraculously often accepted by the German authorities – with regard to eccentric nationalities.' De Winter is rightly described as the courageous dealer in counterfeit and forged passports from the neutral country of Paraguay103 and in false proof of baptism. My parents were both considered Jews. Pursuant to Article 4 of the VO 189/1940 of 22 October 1940 and in that jargon, my father had four 'fully Jewish grandparents by race', my mother 'two fully Jewish grandparents'. Moreover, she was on the said day of 9 May 1940 'married to a Jew',104 by which token she was considered a contaminated full Jewess. When my parents married in 1932, my mother lost her German citizenship and became a Dutch national. Since she had worked and lived in Germany up until that time, she was considerably less naive about nationalsocialist anti-Semitism than my father. When the registration of Jews began in 1941 in the Apollohal (in Amsterdam), she was extremely wary. As the family story goes, she had implored her German 101

T.K. (Official Reports) 12 780 (14 October 1993). See KISCH I., 'De leugen geloochend. Een herinnering aan de bezettingstijd' (The Lie Belied. A Memoir of the Occupation), in Speculum Langemeijer, 31 rechtsgeleerde opstellen, Zwolle 1973, pp. 273-286; ID., 'De Winter sous l'occupation', in Netherlands Int. Law Rev. 1972, pp. 102-106. Both papers are included in JESSURUN D'OLIVEIRA H.U. (ed.), Uitgelezen opstellen, een bloemlezing uit het werk van I. Kisch (An anthology), Zwolle 1981, pp. 353-368 and pp. 408-412, respectively, which also includes his curriculum intellectuale, from which I derive the information concerning the nationality certificates (ibid., p. 8). 103 See MOORE B., Slachtoffers en overlevenden. De nazi-vervolging van de Joden in Nederland (Victims and Survivors. Nazi Persecution of Jews in the Netherlands), 1998, p. 159: 'In this way the consuls of Paraguay, Honduras and El Salvador engaged in a lucrative trade in passports, usually without their governments knowing anything about it.' 104 Art. 4 VO 189/1940 reads: 102

'1. A Jew is anyone who is a descendant of at least three fully Jewish grandparents by race. (see also 3. here below). 2. Also regarded as a Jew is anyone descended from two fully Jewish grandparents and a. either belonging to a Jewish religious community on the 9th of May 1940 or being subsequently received into it; b. either was married to a Jew on the 9th of May 1940 or subsequently entered into marriage with a Jew. 3. A grandparent is considered a full Jew, if he/she has been a member of the Jewish religious community.

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'Sham Marriages' mother, who had become a young widow in 1923 to a Jewish husband, to undertake action. After the death of her husband, who had been a judge and later attorney and notary under Emperor Wilhelm II, her mother had been forced to work to support her three children during the depression. After completing a vocational training course, she became an insurance agent and also got involved in politics. She signed up as a member of Gustav Stresemann's Deutsche Volkspartei, was appointed a cadre member of the party office for a while and was elected, among other things, counselor in the city of Halle (Sachsen-Anhalt). Through this she gained access to the files of the local Registry Office. It appears that my mother got my grandmother to erase all traces of existence of her deceased husband. While committing the crime of falsifying civil status, the act she performed with the greatest reluctance was the denial of a happy marriage. Some time ago I found memoires, written by my German grandmother after the war. Curious about the passage about the circumstances of the steps she had taken in the Civil Registry Office in Halle, I came across the following note: 'Ein Holländischer Anwalt suchte mit mir in Kontakt zu kommen, schickte mir ein Telegramm nach Halle und bat um eine Unterredung in Berlin im Hotel Adlon […] Wir sassen zusammen im Vestibül und erwarteten den Anwalt, der auch bald kam und sich suchend umsah. Ich stand auf und trat an ihn heran und gab mich zu erkennen.... Wir sprachen von meiner Tochter Familie und er machte mir den Vorschlag, ob ich mich nicht entschliessen konnte, zu sagen, dass meine Amsterdamer Tochter ein aussereheliches Kind von einem arischen Mann sei. Das würde die Situation der Amsterdamer Familie wesentlich erleichtert haben. Ich war wie vor den Kopf geschlagen. Auf alles war ich gefasst gewesen, aber auf einen solchen Ausweg wäre ich nie verfallen. Ich sagte ihm, dass ich alles für meine Kinder tun könnte, aber meine Ehe besudeln, das könnte ich nicht...' What really happened is uncertain. Perhaps my grandmother merely removed the certificate from the files of the Civil Registry. It is also possible that my mother ventured to give a false statement at registration, hoping this would not be checked in Germany. Anyway, without proof that my mother had two Jewish grandparents, officially a mixed marriage resulted. This meant that I and my prewar brother and sister did not have three Jewish grandparents, but two, and that for the time being, we did not have to be registered as Jews. As a result, our family survived the war thanks to Ariererschleichung and much good fortune. Much has been recorded about the inventive devices used by people to survive the dance of death. When it later became known that mixed marriages would be left alone, the number of such marriages suddenly increased sharply.105 A ban on mixed 105

See MOORE B. (note 103), p. 143 et seq., with additional literature.

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Jessurun d'Oliveira marriages was the reply to this game of cat and mouse. Using the institution of abandoned children to aryanize Jewish children was also an effective measure. Non-Jewish foster parents came forward with children whom they registered as foundlings. Thanks to the perfect functioning of the Dutch Civil Registry, the Germans noticed the sudden increase in the number of abandoned children and reacted swiftly. Henceforth, they decreed that all foundlings would be regarded as Jewish by legal definition: only little Moses's in their wicker baskets.106 The scourge of 'sham foundlings' does not seem to have gotten through to the present day authorities. A measure to qualify all foundlings as foreigners is probably ineffectual since predictably it would be technically impossible to deport the children. In the end the German solution was more effective. Not surprisingly, evasion of this measure had top priority. Declaring themselves to be unwed mothers, young women came forward and registered newborn Jewish babies as their own. These women were later – sometimes much later – awarded with Yad Vashem decorations for their bravery.107 Anyone who grows up in a repressive situation, where the undermining of a system of injustice wins great praise, can never be a true believer in any legal system. Even legal systems with high marks for justice are tainted by a certain dosage of injustice. Thus the opportunistic attempt to adopt legal measures aimed at safeguarding the Netherlands (and Europe) from the arrival of foreigners, asylum seekers and others, immediately reminds me of the days when Jews, gypsies, and homosexuals were exposed to barrages of legal measures, one more brazen than the other. Today's world echoes with blatant attempts to close territorial frontiers and cleanse the territory of 'undesirables' of every persuasion. At the end of this backdrop I should add that I do not wish to distort things out of proportion. The Netherlands is not a murder machine like Nazi Germany. However, the panic to seal off Fortress Europe, and with it, the Netherlands, by instituting a policy that claims to be strict, yet just, must expect to be scrutinized with utmost suspicion. I do not overlook the fact that marriage is a vehicle capable not only of bringing about spectacular and vital improvement in the fate of foreign have-nots, but also of serving as a means for profit and exploitation by morally less principled tour operators. Nonetheless, special attention should also be focused on the legal damage caused by this preventive and repressive 'humane' aliens policy, which kicks victims of human smuggling when they are down.

XIV. Concluding Remarks on 'Sham Marriages' in Dutch Law The objective of an integrated policy on aliens implies that aliens law is the decisive 106

MOORE B., (note 103), p. 221. See, e.g., De Volkskrant of 25 June 1998, which reports the posthumous decoration of Pauline van Waasdijk who claimed the baby Ruth Michailis was her own illegitimate daughter and did not stop at that. 107

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'Sham Marriages' factor in harmonizing heterogeneous areas of law. Unfortunately, the dynamics of this integration process usually boils to subjecting other areas of law to the objectives of the aliens policy. This subjugation takes on various forms. I have attempted to expose the negative effects of the dynamics of the law of aliens by analyzing the artifact of 'sham marriage'. A problem arising in the law of aliens is served on the plate of civil law. The institution of marriage, which was previously an autonomous and formal matter, becomes an instrument in the hands of lawmakers whose task is to find ways and means of implementing the government's integrated aliens policy. By stipulating in legislation that some motives for entering into marriage are not acceptable to the State, and can even be deemed contrary to public policy, the institution of marriage has been perverted. By defining the elements constituting a 'sham marriage', the State appears to have the pretense of knowing what a real marriage is. This is not a legitimate pretense of States. Attempts by the State to punish motives for entering into marriage that it deems unacceptable for reasons which vary according to time and place cannot fail to put a strain on the general values of that legal system, as comparative law and legal history have shown. The Dutch government's position with regard to the creation of the concept of 'sham marriage' is best described as cynical. When the question arose as to whether the concept of 'sham marriage' is compatible with the system laid down in the Dutch Civil Code, the government replied affirmatively:108 'The inclusion of a non-permissible motive as a ground for refusing or annulling a marriage fits into the current system of the Civil Code. After all, it is in accordance with the statements made by future spouses entering into marriage concerning mutual obligations emanating from marriage under the law. And even if it would appear to be incompatible with the system of the Civil Code, if there is a sound reason for doing so, the system could be modified as deemed suitable by the legislator.' The government was obviously not concerned about whether the introduction of 'sham marriage' was compatible with the Civil Code. Sic volo, sic iubeo was the final offer. It is difficult to prove that a 'sham marriage' exists. High on the checklist would be the intention of the couple not to live together. Before entering into marriage it is not unusual for the promessi sposi to live separately. But what about during marriage? The same government which deems it proper to deploy the device of 'sham marriages' in the fight against undesired immigration, which implies first and foremost checking whether cohabitation takes place, established a working group to prune 'dead wood' from the rights and duties of spouses, by suggesting that the obsolete requirement of cohabitation be monitored.109 In December 1997 the Commission promptly advised the government to do away with the requirement of cohabitation, as laid down in 108

MvA, Sham Marriages Act, p. 7. T.K. 23 761, No. 7, p. 7. The working group was established within the framework of the legislation on registered partnerships. 109

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Jessurun d'Oliveira Article 1:83 (1) BW.110 Spouses already had the right to discharge a partner of the duty to cohabit. 'Living apart together' is an ordinary form of marriage. Precisely now when the government is in the process of doing away with the duty of cohabitation, living together is to be regarded as a sigillum veri for distinguishing between 'real' and 'sham' marriages. Such contradictions cause a government to fall on its own sword. As illustrated in this article, family law becomes an instrument of aliens policy under the motto of integration. The result, however, is chaos and disintegration of the legal system. Whereas the government is having a difficult time defining 'sham marriage', the dispassionate observer easily identifies the essentialia of the concept: A 'sham marriage' is a marriage that is a nuisance to the State, usually in the financial sector. But what about the negative effects of all this on the Dutch legal system? One has totally neglected to take account of the consequences and assess the damage done to the legal system by the opportunistic attempts to redefine family law institutions. If one compares 'sham marriages' and Vredeling-marriages, the latter was preferable in the eyes of the government. It not only saved money, but also helped reduce the surplus of conscripts, which, in turn, was a good argument for retaining compulsory military service. The implication is clear: the Vredeling-marriage should be upheld and even encouraged; marriages with foreigners, examined and contested.

XV. 'Sham Marriages' in the Strasbourg Court The legal definition of 'sham marriage' applies only to foreigners. They are the ones who may make the marriage a sham by marrying a person who has the legal right to reside in the country. Therefore, only the motives of a foreign partners are officially investigated. This seems to be a perfect example of indirect discrimination on the ground of nationality in the area of private law. In my opinion, Article 14 ECHR on discrimination in connection with Article 8 ECHR stands in the way of this difference of treatment which interferes with private and family life.111 In Gaygusuz, the European Court of Human Rights explicitly stated that: 'Very weighty reasons would have to be put forward before the Court could regard a difference of treatment based exclusively on the ground of nationality as compatible with the Convention.'112 110

See Rapport Commissie rechten en plichten van echtgenoten (Report of the Commission on Rights and Duties of Spouses), December 1997, p. 6. The already unenforceable obligation to live together is replaced by the presumption of living together; it is proper to scrap paragraphs 2 and 3 of Art. 1:83 BW. In this way it is hardly worth becoming judicially separated anymore. 111 Alternatively also Art. 12 ECHR. It is highly dubious as to whether Art. 8 (2) of the ECHR permits difference in treatment. 112 Gaygusuz, 16 September 1996, in RV 1996, p. 87, with note B.P.V., and in NJCM-

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'Sham Marriages' Nevertheless, in a decision of 3 December 1997, the Commission of Human Rights rejected complaints alleging unequal treatment.113 In this case, the Commission considered the fact that the Dutch-German couple had to complete a D79 form not to be a violation of their privacy under Article 8 (1) of the ECHR. Thus the Commission did not even have to discuss justification under Article 8 (2). It should be noted that it was not determined whether the Aliens Registration Office had investigated the motives of the spouses for entering into marriage. Moreover, according to the Commission's judgment, the right of the couple to get married under Article 12 ECHR had not been impugned by the Aliens Registration Office's obligation to submit a report to the Registrar pursuant to Article 1:44 (1) (k) of the BW. Finally, the couple (which in the meantime was permitted to marry) contended that their rights had been violated under Article 14 in connection with Article 12 ECHR. In its judgment the Commission maintained: '[…] that the resulting differences of treatment between Dutch nationals who wish to marry another Dutch national and Dutch nationals who wish to marry a non-Dutch national have an objective and reasonable justification. It pursues the legitimate aim of controlling immigration in a densely populated country. The Commission cannot find, in view of this aim, that requesting future spouses in such a situation to submit information as regards the immigration status of the alien future spouse constitutes a disproportional measure.' All complaints were rejected as unfounded. Boeles114 regards this decisions of the Commission as an ill omen for cases where an investigation has taken place as to the motives for getting married. I can certainly agree with his assessment. The climate is not very suitable for curbing 'prurient interests' of the authorities. It looks a great deal like immoral government behavior is being sanctioned by the Commission at the expense of the privacy of citizens, even the overwhelming majority of obedient ones. It is to be hoped that the European Court will be more critical about this method of penalizing migration.115 As Boeles remarks: 'It can be said there is a selective disgracing of the marriage of convenience since the law is only aimed at contesting marriages entered into to obtain a residence permit for foreigners. Marriages of convenience entered into for fiscal or other materialistic reasons are left alone.' Bulletin 1997, p. 461 et seq., with note GROENENDIJK C.A. This decision eases up a great deal with regard to Moustaquim v. Belgium, 18 February 1991, in ECHR, Series A, Vol. 193. 113 European Commission of Human Rights, 3 December 1997, No. 33257/96, in RV 1997, No. 22, with note BOELES P. 114 See supra, note 113. 115 Cf. SWART A.H.J., 'Criminalisering van migratie', in Recht en Kritiek 1997, p. 364.

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Jessurun d'Oliveira It is clear that the Commission does not take the 'very weighty reasons' mentioned in Gaygusuz seriously. Furthermore, it obviously still has not noticed the lack of proportion, the overkill that arises from the general obligation to investigate marriages entered into with a foreign national. The image created by (or with) public opinion that barbarian hordes are chafing at the bit at the gates has obviously been effective.

XVI. Summing Up The systematic screening of potential marriages between foreigners and Dutch nationals, with their desirable quality of having resident status, is objectionable proof of the government's interest in monitoring the vast majority of those desiring to marry; however, it is not been very effective as a dam against undesired immigration. Although the human rights dimension was considered during the drafting of the proposed legislation on 'sham marriages', as usual the legislator was not to be dissuaded from his course of action.116 When on a slippery slope, one often slides into other domains in an attempt to be as consistent as possible. Here one should keep in mind that 'jede Konsequenz zum Teufel führt'. Even criminal law is being used in the 'war on sham marriages'. Contrary to the principle of nulla poena, in construing Article 197a Sr. on trafficking in humans, the Supreme Court allowed itself excessive discretion when it ruled that the provision also covers cases where money is paid for brokering undesired marriages. Obviously it could not wait for the legislative measures that had already been announced. Other judges have provided somewhat more resistance. The whole Criminal Code is being eagerly reexamined in an attempt to detect other useful provisions that could discourage international couples from entering into marriage. Nationality law is also being recast by requiring proof not only of marriage, but also of cohabitation in cases where the foreign spouse applies for naturalization.117 At the same time, in civil law efforts are being made to abolish the cohabitation requirement as an obsolete legal consequence of marriage. Both legal scholarship and the media speak rather casually about the need to 'unmask' the 'phenomenon' of 'sham marriage' and maintain that bona fide married couples should be untainted. The public has swallowed the virtual reality of this legal artifact. What is overlooked here is that 'sham marriage' was an invention of the legislator that grossly infringed civil rights and perverted the institution of marriage. This so-called phenomenon is a legal artifact. There is no clear distinction to be drawn between bona fide and 'sham' marriages: Each and every marriage is concluded for a panoply of reasons and motives, not all of them unselfish or non-materialistic. What we have here is a case of the government chasing its own phantoms and causing a great deal of damage in the process. I never thought I would be put in the position of defending the old-fashioned concept of marriage. Not that I am terribly fond of marriage. I subscribe to what the 116 117

Cf. VAN ITERSON D. (note 3), p. 119. See supra, Part IV.

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'Sham Marriages' great thinker Groucho Marx once said about it: 'Marriage is an institution. Who wants to live in an institution?' If one must, then I prefer the institution of marriage as it was until recently, when the authority to define it did not belong to the State, but to the parties involved, who, in turn, gave their own interpretation of the institution. Interfering in the basic tenets of family law for raison d'état or state frenzy does more harm than good, and in any event damages the integrity of the law. In my opinion, it is an illusion to suppose that the witch hunt for 'sham marriages' will really make a difference. There is an expression in Spanish that says 'poner una pica en Flandes' ('to plant a lance in Flanders'), which means embarking on a hopeless and money wasting enterprise. We would do well to heed the Spanish King Philip II. Others have also regularly protested that governments, including the Dutch one, have assumed an overly ambitious role in defending Fortress Europe. Undesirable immigration is ingenious and often involves matters of vital importance for the persons in question. Displacement effects will most certainly occur. If an all out war is waged against 'sham marriages', similar undesirable phenomena are bound to appear in other relationships, such as registered partnerships and adoptions. Until now, the introduction of 'sham marriage' has had a mainly symbolic meaning. In view of the small amount of cases that have been caught in the net, this is a poor catch in relation to the damage done to the integrity and legitimacy of the legal system. Furthermore, systematic attempts to prevent inhabitants of the third world from enjoying the riches accumulated in the first world, often amassed at the cost of third world countries, is socially and ethically unacceptable, at least in the long term. As long as there is no just distribution of wealth and poverty in a global world, and this inequality is a long way from being eradicated, the rich countries, including Europe will continue to feel the pressure of immigration. In light of this, my conclusion is simple: the artifact of 'sham marriages' should be abolished. To conclude on a note of rapprochement and consensus, I might add that the legislator and I are in total agreement about 'sham marriage': we are dead against it. The only thing separating us – that much is clear – is a couple of quotation marks.

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HOW COMMON ARE THE GENERAL PRINCIPLES OF PRIVATE INTERNATIONAL LAW? AMERICA AND EUROPE COMPARED Paul VOLKEN∗ I. II. III. IV. V. VI. VII.

A Starting Point Back to the Roots The Statutists The Consequences for Europe The Effects in the Anglo-American World Story and Waechter A Provisional Balance

I.

A Starting Point

As we all know or are supposed to know and pretend to know, Europe is the continent of written law, whereas the Anglo-American world is considered to be the homeland of case law.1 This basic distinction, which is found in every Handbook, also applies to Conflict of Laws or, as European scholars prefer to say, Private International Law. However, Oliver Wendel Holmes'2 famous statement: 'The life of the law has not been logic: it has been experience', also applies in the present context. Suddenly it becomes clear that the drafting of statutory conflicts rules is increasing in North America, whereas large parts of old Europe continue to be living under judge-made conflicts rules. As for relevant North American legislation, reference can be made to the new Private International Law Codes of Louisiana3 and Quebec4 (and Venezuela5), while the group of European case-law countries in the field of choice of law is ∗ Dr. iur., LLM (Harvard), Professor of Private International Law, and National and International Business Law, Faculty of Law, University of Fribourg (Switzerland). 1 See FORSTMOSER P./SCHLUEP W.R., Einführung in die Rechtswissenschaft, Vol. I, nd 2 ed., Bern 1998, p. 51; ZWEIGERT K./KÖTZ H., Einführung in die Rechtsvergleichung auf dem Gebiet des Privatrechts, 3rd ed., Tübingen 1996, p. 211. 2 HOLMES O.W., The Common Law, Boston 1881, p. 1. 3 Louisiana Civil Code, Act No 923 of 1991, an Act to amend and reenact Chap. 3 of the Preliminary Title of the Civil Code, Book IV, Conflict of Laws, Articles 3515 to 3549, in IPRax 1993, p. 56; KROPHOLLER J. [et al.] (eds.), Aussereuropäische IPR-Gesetze, Hamburg/Würzburg 1999, pp. 1002 to 1033. 4 Code civil du Quebec, Livre dixième: Du Droit International Privé, Articles 30833168, du 18 décembre 1991; KROPHOLLER J. [et al.] (note 3), pp. 330-395. 5 Venezuelan Act on Private International Law of 6 August 1998, in this Yearbook, pp. 341-352; see PARRA-ARANGUREN G. E., The Venezuelan Act on Private International Law of 1998, in this Yearbook, pp. 103- 117. Of course, Venezuela does not belong to the North American world of common law. We are taking advantage of this occasion to mention the most recent PIL-Codification in the Americas.

Volken headed by France,6 followed by Belgium,7 Luxemburg8 and the Netherlands,9 as well as the Nordic countries (Denmark, Finland, Iceland, Norway, Sweden).10 Moreover, the United States is again the source of interesting new theoretical messages. Here it suffices to mention Lea Brilmayer and Perry Dane. In an article under the somewhat provocative heading of 'Vestedness', Dane11 calls for a new approach to the conflict of laws in which 'the court of any forum should apply choice of law criteria that could be expected to generate the same set of substantive criteria if they were applied by any other forum in an actual jurisdiction.'12 After reading Dane, it remains unclear whether this author was familiar with the choice of law theories developed by Savigny.13 In any case, it might not be without interest to note the following statement in Savigny's treatise14 on the conflict of laws: '[I]n cases of conflict of laws, the same legal relations [i.e. similarly conceived factual situations], have to expect the same decision, whether the judgement be pronounced in this state or in that.'15 Brilmayer16 went a step further in her 1995 lecture at the Hague Academy by asking the American judiciary, when formulating choice of law rules, not only to refer to and rely on policies derived from the substantive law of the forum, but also to take account of the relevant choice of law process when framing such 6

AUDIT B., Droit international privé, 2nd ed., Paris 1997, No. 28, p. 20: In France the positive rules of Private International Law are essentially judge-made ('le droit positif [sc. en matière de droit international privé] résulte essentiellement de la jurisprudence'). 7 ERAUW J./WATTÉ M., Les sources du droit intrnational privé belge et communautaire, Bruxelles 1993. 8 SCHOCKWEILER F., Les conflits de lois et les conflits de juridictions en droit international privé luxembourgeois, Luxembourg 1990, p. 4. 9 BOELE-WOELKI K., 'IPR-Gesetzgebung in den Niederlanden', in IPRax 1990, p. 337. 10 KORKISCH H., 'Das IPR der nordischen Länder', in RabelsZ 1958, p. 599. 11 DANE P., 'Vested Rights, Vestedness, and Choice of Law', in Yale Law Journal 1987, p. 1191. 12 Ibid., p. 1191. 13 Friedrich Carl VON SAVIGNY (1779-1861), Law Professor at the faculties of Marburg (1800-1810) and Berlin (1811-1842), specialized in contemporary Roman Law (Pandectes). 14 SAVIGNY's most important publication was System of Modern Roman Law [System des heutigen Römischen Rechts], Vol. 8, Berlin 1840-1849. His contribution to Conflict of Laws is found in Vol. 8 (1849), §§ 344 to 400 under the headings: 'The Rules of Law and their Limits in Space (= Private International Law) and Time (= Intertemporary Law)', Vol. 8 had been translated into English by William GUTHRIE, Edinburgh. 15 See A Treatise on the Conflict of Laws and the Limits of their Operation in Respect of Place and Time, by F.C. von Savigny, translated by William GUTHRIE, 2nd ed., London 1880, XII, 567 pp., at 69 et seq. 16 BRILMAYER L., 'The Role of Substantive and Choice of Law Policies in the Formation and Application of Choice of Law Rules', in Recueil des Cours, Vol. 252, 1995, p. 9 et seq.

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General Principles of PIL rules.17 In this sense, Brilmayer's position is a clear reaction against the choice of law theories of American legal realism. First developed by Walter W. Cook and Ernst Lorenzen18 in the nineteen thirties, these theories were further developed in the nineteen sixties by Brainerd Currie and Albert Ehrenzweig.19 Are the new North American voices nothing but an occasional event, or do they represent a new wave with a message to renew the scientific dialogue across the Atlantic? Asking such question requires being prepared to give an answer. Some twenty years ago, I was a delegate to one of the sessions of the Hague Conference, and so was Professor Reese from Columbia Law School. At the traditional weekend excursion, which took us to the cold north of Holland in October, we had an occasion to discuss some differences voiced during the working session. After about three exhausting hours of debating renvoi and depeçage, we delegates finally realized how difficult it was to make one another understand what we meant and wanted to say. I do not know whether the recently published new American positions are an invitation to a new dialogue. If this is the case, such a discussion might focus on a fascinating number of points. For instance, answers should be given to the following questions: When and why did the respective positions of American and European conflict of laws specialists start to drift apart from one another in a way that they appear to be speaking different languages, but using the same terminology? In my opinion, this phenomenon has a lot to do with history. The following is an attempt to shed some light on the main aspects of this historical background.

II.

Back to the Roots

If one were to describe the primary purpose and function of Private International Law (or Conflict of Laws), modern writers from the Anglo-American world and Continental Europe would give different answers. English-speaking Handbooks usually ask the question: '[…] when and why do the courts of a particular jurisdiction take account of the elements of foreign law or fact patterns […] in a case pending before them?'20 Approaching the question in a more neutral, outsidethe-court manner, similar literature from continental Europe asks: How should we proceed when faced with the problem of determining the appropriate national law applicable in a case with a factual situation having relevant connecting factors with more than one national legal order?21 17

See supra note 16, p. 110. COOK W. W., The Logical and Legal Bases of the Conflict of Laws, Cambridge Mass. 1942; LORENZEN E., Selected Articles on the Conflict of Laws, 1947. 19 CURRIE B., Selected Essays on the Conflict of Laws, Durham N.C. 1963; EHRENZWEIG A., Private International Law, Leyden 1967. 20 See, e.g., SCOLES E.F./HAY P., Conflict of Laws, 3rd ed., St. Paul Minn. 1999, p. 1; SMITH R./O'BRIAN J., Conflict of Laws, 2nd ed., London 1999, p. 5. 21 See, e.g., AUDIT B., Droit International Privé, 2nd ed. Paris 1997, p. 55; FIRSCHING K./VON HOFFMANN B., Internationales Privatrecht, 5th ed., München 1997, p. 2: 18

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Volken In the course of history, two basically different theories have been developed to serve this purpose of allocation. One of these theories, called the theory of the statutists,22 had its origin in the medieval cities of Northern Italy (around 1200). The second theory was based on a scientific construction formulated in the middle of the nineteenth century by a famous German scholar named Savigny.23 The first theory attempted to identify which local statute would be empowered to govern a factual situation containing multi-state elements. The second theory, however, asked where a factual situation containing multi-state elements would have its physical center, its local situs or its natural center of gravity. In other words, the first theory inquired about the legitimate spacious reach of national or local statutes, whereas the second theory was searching for the local or national center of gravity of a factual situation containing multi-state elements. As a result, the first theory was concerned with the international reach of local statutes, the second theory with localizing or 're-nationalizing' multi-state factual situations. Or in still other words, the first theory was about exaggerating the international reach of simple domestic legislation, whereas the second theory proposed an understatement in respect of the multi-state elements of the facts. The first theory is selfish, the second altruistic. As the results of the present research might indicate, modern North America is living entirely under the first, whereas all European legislation has been based on the second theory. Both theories are of equal importance in gaining an understanding of the present situation in the science of modern Private International Law. In order to understand why it is sometimes difficult to reach a mutual understanding on both sides of the Atlantic, we have to take a look at the respective influence and further development of the two basic choice of law theories.

III. The Statutists It is generally held that the choice of law debate dates back to the theories of the statutists developed after the twelfth century by scholars in the medieval cities and market places of Northern Italy.24 The formal reason for their doing so was daily life. In order to deal with current problems arising between citizens and merchants he refers to Art. 3 (1) of the revised EGBGB (1986): The rules of the present code designate the legal order that applies to factual situations having connecting factors with the law of other countries. 22 See, e.g., SCOLES E.F./HAY P. (note 20), p. 7, § 2.2. FIRSCHING K./VON HOFFMANN B. (note 21), p. 45. 23 See supra note 15; KEGEL G., Internationales Privatrecht, 7th ed., München 1995, p. 145. Note that SCOLES E.F./HAY P. (note 20), do not mention the Savigny's theory; they had just enough space to spell his name, p. 12, under note 12! 24 See BEALE J.H., A Treatise on the Conflict of Laws, Vol. 3, New York 1935, p. 1879 et seq.; Appendix: History and Doctrines of the Conflict of Laws, § 25, p. 1886; GUTZWILLER M., 'Le développement historique du droit international privé', in Recueil des Cours, Vol. 29, 1929-IV, p. 289 et seq., at 301; STORY J., A Treatise on the Conflict of Laws, Foreign and Domestic, Boston 1834, pp. 2, 3.

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General Principles of PIL from Bologna, Modena or Florence, the respective city councils felt the need to complete, actualize and adjust some principles of the old Roman Law, which was still in force as a kind of general European common law by that time. As a consequence, new local statutes were created which provided solutions to new problems such as credit, securities and warranties, for which the old Roman Law was no longer appropriate. Since there was a rather active business exchange along the Po River and at various different marketplaces, lawyers and judges were soon faced with the question: Does our new market or city statute also apply to visitors from another place? And what about our own citizens who happen to visit other market places?25 Magister Accursius from Bologna, so it is believed, was among the very first to record written evidence explaining the reasons for choosing such a solution for the new legal problem. Accursius simply referred to what he was acquainted with, by formation, and took the very first sentence of Justinian's famous Code, by means of which the last great Emperor of the old Roman Empire had codified Roman Law in 380 AD The first sentence of this Code read as follows: We [sc. Emperor Justinian] wish that all nations under our Emperorship shall live according to the Roman religion.26 On the basis of this brief sentence, Accursius concluded: If the law laid down in the famous Code of the great Justinian applies only to his proper subjects, then our local city cannot claim wider reach. And from this Accursius reasoned: If a citizen from Bologna goes to the market at Modena, he cannot be adjudicated according to the statute of Modena of which he is not a subject.27 With his famous gloss, Accursius launched the scientific discussion about the appropriate solution for choice of law problems among his fellow contemporaries, and – with some differences in intensity and cleverness – the debate has remained actual up to the present day. By using this first theoretical approach, the medieval scholars tried to give some systematic structure to the new problem. And again, and quite naturally, recourse was made to current doctrinal strands found in good old Roman law. Since the question concerned delimiting the spacious reach of statutory rules, reference was made to a system that had been developed more than a thousand years earlier by the Roman jurist Gaius.28 According to the distinction made at that time, all legal rules had to do either with persons, things or claims. Accordingly, 25

See especially BEALE J.H. (note 24) at 1886. 'Cunctos populos quos clementiae nostrae regit imperium, in tali religione volumus versari quam… tradidisse Romanis', Codex I, 1. 27 The note (gloss) which ACCURSIUS wrote to his Codex I, 1, reads as follows: 'Argumentum quod si Bononiensis conveniatur Mutinae, non debet iudicari secundum statuta Mutinae quibus non subest, cum dicat: 'quos nostrae clementiae''; see GUTZWILLER M., Geschichte des Internationalprivatrechtes, Basel 1977, p. 17, note 26; NEUMAYER K., Die gemeinrechtliche Entwicklung des internationalen Privat- und Strafrechts bis Bartolus, 2nd Part, München 1916, p. 76. Note that the example given by BEALE J.H. (note 24), at 1887, is not in keeping with the original Latin text. 28 GAIUS, Roman Jurisconsult, lived in the second century (120-180 A.D). 26

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Volken the rules contained in the medieval city-statutes were also regarded as being either de personis, de rebus or de actionibus mixtis.29 By following the distinction borrowed from Gaius, medieval scholars succeeded in intellectually canalizing the further discussion about the spacious reach of local statutes. Although there was some dissent among medieval scholars in regard to particular details, the basic positions were settled unanimously. In fact, almost everyone agreed that the personal statutes should cover the rules on personal status given in the mere interest of persons. Such rules should accompany a person everywhere during his entire lifetime, even if the person would leave his initial homestead. Some three hundred years later, the famous French paradigm was derived from this principle: Les coutumes personnelles sont universelles. There was a similar unity characterizing real statutes that sought to cover all rules relating to movables and immovables. Such rules were regarded as applying only within the territory or jurisdiction of the situs, but they were considered applicable to all things and for all persons, including those coming from abroad and staying for a short period of time. In other words: Les coutumes réelles sont territoriales. Between the two principal groups were the so-called mixte statutes that covered legal relations and claims that could not be clearly identified as being either real or personal. In addition to accepting the tripartite distinction borrowed from Gaius (personal, real, mixed), medieval scholarship also identified the cannon of problems to be dealt with in dogmatic discussions on the conflict of laws both during their time and for six hundred years to come (1250 to 1850). In fact, during that period of time the choice of law discussion focused mainly on the following three questions: (1) What elements belong to the statutum personale, (2) what situations are covered by the statutum reale, and (3) what law should govern the statuta mixta? The policy weighing during this discussion was between giving preference to the statutum personale or, on the contrary, to the statutum reale. Between 1250 and 1850 the two positions were placed beside one another in an irreconcilable way. Each period of time and each political region used and misused the policy, weighing it according to its own needs and advantages. In this sense, there were times and regions when and/or where every legal relationship was said to be personal, and there were other times and regions where everything had to be real. Accordingly, the wide field of mixed statutes was either allocated to the personalia or the realia. The situation can be compared with the one described recently in another context by A. Struycken, who characterized the actual American and European position in conflict of laws as follows: '[L]es Américains semblent être peu enclins à s'inspirer des développements de la doctrine [en Europe] continentale. Peut-être 29

Omne autem ius, quo utimur, vel ad personas pertinet vel ad res vel ad actiones (GAIUS, Inst. I, 8).

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General Principles of PIL […], ne leur convient-il pas de se renier, un peu comme les protestants qui reconnaîtraient un mérite quelconque au pape.'30

IV.

The Consequences for Europe

Later developments in the choice of law theory are well known: What had started so modestly in the middle of the twelfth century and received its first theoretical outfit in the Italian School during the thirteenth and fourteenth centuries, was taken over by France in the fifteenth and sixteenth centuries, then proceeded to Holland in the seventeenth century where it became known as the comitas doctrine. It was under this label that the theory came to the attention of the Anglo-Saxon world and especially Joseph Story. Each of these national epochs introduced specific dogmatic accents into Private International Law. During the Italian period, the problem had been discovered, the basic questions formulated and the first dogmatic categories developed. This period was clearly in favor of the statuta personalia. Accordingly, the main connecting factor was the personal domicile and for many, if not most of the topics that were said to belong to the statuta mixta, the personal domicile of one of the parties was recommended as a connecting factor. During the French period, the antagonism between a universal (Charles Dumoulin)31 and territorial (Bertrand d'Argentré)32 reach of the regional coutumes became a focal point. In this context, it was mainly d'Argentré who defended the doctrine of territoriality (les coutumes sont territoriales). And it was d'Argentré again who modified the meaning of the statutum personale and statutum reale. Under the Italian School, the personal or real character of a rule related to the object of the rule. But under d'Argentré those terms became a local connotation. Thus, the personal statute became the local law of a person's place of domicile, whereas the term real statute indicated the local law of the place where a movable or immovable good was situated. Some three hundred years later, Joseph Story33 30

STRUYCKEN A.V.M., 'La contribution de l'Académie au développement de la science et de la pratique du droit international privé', in Recueil des Cours 1998, Vol. 271, p. 35. 31 Charles DUMOULIN (1501-1566) followed the theories developed by the Italian school. His main publication was Conclusiones de statutis et consuetudinibus localibus. He was a fervent defender of the principle of domicile and was in favor of a choice of law made by the parties. 32 Bertrand D'ARGENTRÉ (1519-1590) was from Brittany and was in favor of local Brittanian law instead of the Coutumes of Paris. His principle publication was Commentarii in patrias Britonum leges aut Consuetudines generales antiqui Ducatus Britanniae. D'Argentré was in favor of territorialism. He said: 'Things which are real or mixed (!) pertain to the situs.' 'To be personal the question must be purely about the status of persons, without any mixture (…).' See also BEALE J., supra, note 24, p. 1897 et seq. 33

STORY J. (note 24), p. 11.

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Volken characterized the new situation as follows: 'By statutes, they [sc. the civilians] mean, not the positive legislation (…), namely the acts of parliament or of other legislative bodies (…) but the whole municipal law of a particular state, from whatever source arising.' The Dutch Conflicts School of the seventeenth century was an ideal place for the theories developed by d'Argentré. This is because the Dutch were working in favor of their own nation, which consisted of legally independent provinces. This political context had a stimulating effect on the framing of appropriate principles for the solution of conflict of laws problems. And it was in this context that the time had come to ask new questions, the most important being: Why should a domestic judge apply foreign law? The first answer was given, in 1689, by Ulrich Huber34 who stated in his famous theory on comitas: (1) The laws of every empire have force only within the limits of its own government, and bind all who are subjects thereof, but not beyond those limits. (2) All persons within the limits of a government, whether their residence is permanent or temporary, are to be deemed subjects thereof. (3) The Rules of every empire from comity admit that the laws of every people in force within its own limits ought to have the same force everywhere, so far as they do not prejudice the powers or rights of other governments, or of their citizens. 35 In this particular form, i.e. with the strong territorial outlook promoted by d'Argentré and completed by the tempting political policies of Dutch scholars, the statutist theory came to England and America. This was done, in part through Dutch Universities where famous English and Scottish jurists completed their 'master's program', and in part through French and Dutch publications which were written either in generally accessible Latin or had received early translations into English.

V.

The Effects in the Anglo-American World

In the common law countries, namely in England and the United States, the particular problems raised by conflicting legal rules, each of which came from a different state, were discovered at a relatively late stage. The first conflicts cases appeared before the courts around the middle of the eighteenth century.36 Most of those early cases had to do with giving effect to personal rights acquired or legal acts performed in another jurisdiction, for example, marriages celebrated, contracts concluded or tort compensations acquired abroad. As for scientific publications, Story wrote in 1834 that 'there exists no treatise upon it [s.c. the Conflict of Laws] in the English language.'37 According to 34

HUBER U., De conflictu legum in diversis imperiis, in: Praelectiones iuris romani et hodierni – pars II, 1689. 35 English version, see STORY J. (note 24), p. 29. 36 O'BRIAN J., Conflict of Laws, 2nd ed., London 1999, p. 15; SCOLES E.F./HAY P. (note 20), pp. 11, 12. 37 See STORY J. (note 24), p. XI.

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General Principles of PIL Helma H. Kay,38 the first author to publish a book on the conflict of laws in the United States was Samuel Livermore;39 however, she immediately adds40 that Livermore's efforts were eclipsed by the success of Story's Commentaries on the Conflict of Laws, Boston, 1834.41 The English world had to wait until 1896, when the first edition of A.V. Dicey's Conflict of Laws appeared.42 In my opinion, the fact that Joseph Story had become the principal, if not the only real communicator of choice of law thinking in the English-speaking world was decisive for the subsequent Anglo-American development. Even the Englishman Dicey, who worked half a century later and lived only a stone's throw from the continental centers of conflicts learning of the nineteenth century, was fully influenced by and wholly dependent on Story's teachings. However, Story himself had professed a very particular version of the statutist theories. It was the conflicts theory in its Franco-Dutch shaping at the end of the eighteenth century. In that version, the central question as to the spacious reach of local statutes was presented in a strict territorial manner, i.e., in the form developed by d'Argentré with respect to Brittany, by Bullenois with respect to Burgundy and adapted by Rodenburg and Voet for the particular needs of Holland. In addition, the Dutch version of the statutist theory was filtrated with Ulrich Huber's comitas theory, which, in turn, was based on a strict principle of territorial sovereignty. Story's analysis of the Italian and French statutist theories in his Conflict of Laws is quite good. Nonetheless, he openly admitted that their reasoning was not very convincing. In this sense Story stated: 'The civilians of continental Europe have examined the subject in many of its bearings with a much more comprehensive philosophy [than English writers]. Their works however abound with theoretical distinctions, which serve little other purpose than to provoke idle discussion.'43 Story does not fail to give some examples to support his position. '[T]he civilians have divided statutes into three classes, personal, real and mixed',44 and then he critically explains: (1) 'By statutes, they mean, not positive legislation [i.e. acts of parliament and of other legislative bodies as in England and 38

KAY H.H., 'A Defense of Currie's Governmental Interest Analysis', in Recueil des Cours, Vol. 215, 1989-III, p. 22. 39 LIVERMORE S., Dissertations on the Questions which arise from the Contrariety of the Positive Laws of Different States, New Orleans 1828. 40 See KAY H.H. (note 38), p. 23. 41 See STORY J. (note 24). 42 DICEY A.V., Conflict of Laws, London 1896. 43 See STORY J. (note 24), p. 10. 44 Ibid., p. 11.

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Volken America], but the whole municipal law of the particular state, from whatever source arising.'45 (2) 'Personal statutes are held by them of general obligation and force everywhere [(…); they] are those which have principally for their object the person, and treat only of property incidentally.'46 (3) '[R]eal statutes are held to have no extra-territorial force or obligation; [they] are those which have principally for their object property, and which do not speak of persons, except in relation to property.'47 (4) 'Mixed statutes are those which concern at one time persons and property; in this sense almost all statutes are mixed, there being scarcely any law relative to persons, which does not at the same time relate to things. 48 And Story adds: 'In the application of this classification to particular cases, there has been no inconsiderable diversity of opinion among civilians. What particular statutes are to be deemed personal, and what real; when they may be said principally to regard persons, and when principally to regard things; these have been vexed questions, upon which much subtlety of discussion and much heat of controversy have been displayed.'49 All this leads to the following conclusion: 'It is not my design to engage in the controversy as to what constitutes the true distinction between personal statutes and real statutes, or to examine the merits of the various systems propounded by foreign jurists on this subject. … My object is rather to present the leading principles upon some of the more important topics of private international jurisprudence, and to use the works of the civilians to illustrate, confirm, and expand the doctrines of the common law.'50 Story said that he wanted to make his analysis of the conflicts theories of the European statutists available, thus enabling them to be used in building up a common law jurisprudence. In doing so, he emphasized that in all cases three 45

Ibid., p. 11. Ibid., pp. 12, 13. 47 Ibid., pp. 12, 13. 48 Ibid., p. 13. 49 Ibid., p. 14. 50 Ibid., p. 19. 46

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General Principles of PIL maxims were to be observed that would constitute a general basis for all reasoning on the subject. The three maxims were said to be sovereignty, territorial limits of sovereignty and extension of effects through recognition. In regard to the first maxim, Story said: '(...) every nation possesses an exclusive sovereignty and jurisdiction within its own territory. The direct consequence of this rule is, that the laws of every state affect and bind directly all property, whether real or personal, within its territory, and all persons who are resident within it, whether natural-born subjects or aliens, and also all contracts made and acts done within it.'51 In the context of this first principle, Story referred to the publications of the French statutist Louis Bullenois52 and the Swiss publicist Ermer Vattel.53 In the context of the second maxim on the territorial limits of sovereignty, Story referred to the Dutch scholar Rodenburg54 and explained: 'No state or nation can by its law directly affect or bind property out of its own territory, or bind persons not resident therein, whether they are natural-born subjects or others.'55 Commenting on the third maxim (extending effects through recognition), Story explained: '[W]hatever force and obligation the laws of one country have in another depends solely upon the laws and municipal regulations of the latter, that is to say, upon its own proper jurisprudence and policy, and upon its own express or tacit content'56 This latter principle was further illustrated by adding three statements: (1) 'A state may prohibit the operation of all foreign laws, and the rights growing out of them, within its own territories. It may prohibit some foreign laws, and it may admit the operation of others.' (2) 'Where its own code speaks positively on the subject, it must be obeyed by all persons who are within the reach of it. When its customary, unwritten, or common law speaks directly on the subject, it is equally to be obeyed.' (3) 'When both are silent, then, and then only, can the question properly arise, what law is to govern in the absence of any clear declaration of the sovereign will.'57

51

Ibid., p. 21. BULLENOIS L., Traité de la personnalité et de la réalité des lois, coutumes ou statuts, Paris 1766. 53 VATTEL E., Le droit des gens, Paris 1763. 54 RODENBURG Chr., Tractatus de Statuti, Leyden 1653. 55 See STORY J. (note 24), p. 22. 56 Ibid., p. 25. 57 Ibid., p. 25. 52

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Volken After presenting the three maxims, Story turned to the Italian and the French statutist theories, asking to what extent those theories would support his three common law maxims. For his taste, Story does not find sufficient support among the statutists: 'The jurists of continental Europe have, with uncommon skill and acuteness, endeavored to collect principles which ought to regulate this subject among all nations. But it is very questionable whether their success has been at all proportionate to their labor and whether their principles, if universally adopted, would be found either convenient or desirable, or even just, under all circumstances.'58 In other words, instead of stressing common points and promoting mutual understanding, Story accuses the statutists of being too far-reaching in their willingness to take account of the foreign ius personale. To prove that he was right to blame others for their naive belief in internationalism, he referred, in his typical Harvard attitude, to obvious evidence taken from the oldest Roman period of the Twelve Tables: 'Who would contend that any nation in Christendom ought to carry into effect (...) the paternal power of the ancient Romans in their early jurisprudence, extending to the life and death of their children. Or, who would now contend for that terrible power under the [Roman] law of the Twelve Tables, which enabled creditors to cut their debtor's body into pieces, and divide it among them!'59 Phew, terrible Romans! Of course, nobody would dare request that such cruel things be done. As for Story, however, the effect is there and the consequences too. If the conflicts theories of the European statutists would really produce results as awful as those in Story's examples, it was quite natural that they had become unacceptable for the common law world. Thus Story could, without any difficulty, associate himself with the reasoning of Justice Porter from Louisiana, who, in his 1827 decision in Saul v. His Creditors,60 came to a similar conclusion in regard to the European conflicts theories. In fact, Justice Porter stated: 'When so many men of great talent and learning are thus found to fail in fixing certain principles, we are forced to conclude that they have failed, not from want of ability, but because the matter was not susceptible of being settled on certain principles. They have attempted to go too far, to define and fix that which cannot, in the 58

Ibid., p. 27. Ibid., p. 27. 60 Saul v. His creditors, S. Martin (N.S.) 569 (La. 1827); see also KAY H.H. (note 38), p. 23; STORY J. (note 24), p. 29, No. 1. 59

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General Principles of PIL nature of things, be defined and fixed. They seem to have forgotten that they wrote on a question which touched the comity of nations, and that that comity is, and ever must be, uncertain.'61 With the help of the Saul case and encouraged by the reasoning from Louisiana, Story finally decided that Ulrich Huber's comity theory was the only acceptable theory. According to Story, Huber had laid down three axioms, which he deemed sufficient to solve all the intricacies of the subject: (1) 'The laws of every empire have force only within the limits of its own government, and bind all who are subjects thereof, but not beyond those limits [c.f. cunctos populos].' (2) 'All persons who are found within the limits of a government, whether their residence is permanent or temporary, are to be deemed subjects thereof [differs from cunctos populos].' (3) 'The rules of every empire from comity admit that the laws of every people in force within its own limits ought to have the same force everywhere, so far as they do not prejudice the powers or rights of other governments, or of their citizens.'62 And to this, Story added: 'Indeed his (sc. Huber's) first two maxims will in the present day scarcely be disputed by anyone; and the last seems irresistibly to flow from the right and duty of every nation to protect its own subjects against injuries resulting from the unjust and prejudicial influence of foreign laws,'63 Thus he concluded: 'There is then not only no impropriety, in the use of the phrase comity of nations, but it is the most appropriate phrase to express the true foundation and extent of the obligation of the laws of one nation within the territories of another.'64

VI.

Story and Waechter

A critical analysis of Story's 'General Maxims of International Jurisprudence'65 clearly leads to the following conclusion: Story had been working on the fundamentals of a particular version of the statutist theory. In fact, after having had a scant look at some Italian and French authors and finding their reasoning unconvincing,66 he focused on the Dutch version of the theory. This theory,

61

See STORY J. (note 24), p. 28, 29. Ibid., p. 29. 63 Ibid., p. 31. 64 Ibid., p. 35. 65 See supra, note 24, pp. 21-36. This is the title of Story's Chapter II that contains the substance of Story's theory. 66 See (note 24), p. 15, where Bartolus and his presentation of the famous 'quaestio anglica' are discussed. However, most arguments of the older writers are treated on the basis 62

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Volken however, followed a very strong territorial orientation as a result of the influence of d'Argentré (the coutumes are territorial, personal statutes are an exception), which had then been strengthened by the Dutch philosophy on national sovereignty and international comity (Huber). Even in this strongly qualified form, the statutist theory was of little influence on Story's approach to conflicts problems. In real conflict of laws cases, Story took a firm positivist stand by asking the judge to follow the rules of his own domestic law: 'When its [sc. a state's] own code or its own customary law speaks positively on the subject, it must be obeyed by all persons who are within the reach of its sovereignty.'67 It was only when both the statutory law and the customary rules 'were silent, then and then only the question: [sc. of what law is to govern the case] can properly arise.'68 It was only in this third and last hypothesis – i.e. in case of a real (Story) or a true conflict (Currie) – that Story saw room for conflicts theories and for the application of Huber's principle of comity. Story's conflict of laws approach was based on a qualified positivist theory: When a state's code speaks on the subject, it must be obeyed.69 As far as this theory is concerned, Story would have had – without knowing it – a fervent associate on the continent of Europe. I am referring to Carl Georg von Waechter.70 In legal literature Waechter is always presented as a great and brilliant critic of the statutist theories, as a scholar who was skilled in intellectually attacking other people's theories, but who himself lacked the intellectual ability to develop his own convincing choice of law theory.71 It is true that Waechter was a capable critic. This had to do with the fact that he was among the few scholars who had carefully read and analyzed the publications of their fellow contemporaries. Thus, Waechter was very skilled at discovering possible syllogisms and shedding light on the weaknesses of spurious arguments. In addition, Waechter72 had also developed a constructive personal theory on the conflict of laws. It was a highly positivist theory which – in its positivism – was very close to the ideas put forward by Story. In his analysis of conflict of laws, Waechter started with a precise question: What legal rules does a judge apply in our country when deciding issues brought of their presentation in versions of the French authors Bullenois and Froland, the Dutch scholar Rodenburg and the German writer Hert. 67 See STORY J. (note 24), p. 25. 68 Ibid. 69 Ibid. 70 Carl Georg VON WAECHTER (1797-1880), Professor at the Universities of Tübingen and Leipzig; legal drafter for Saxony. 71 See KEGEL G. (note 23), pp. 144, 145. 72 WAECHTER's principal publication on conflict of laws was a topic published in a series of articles in a Law Journal: 'Über die Collision der Privatrechtsgesetze verschiedener Länder', in Archiv für civilistische Praxis (AcP) 1841, pp. 290 to 311, and 1842, pp. 1 to 60, 161 to 200 and 361 to 619; a shortened English version was published by NADELMANN K., in Am. J. Comp. L. 1964, p. 414. The part of theoretical interest is contained in AcP 1841, pp. 236 to 270 (§§ 2 to 10).

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General Principles of PIL before him?73 In Waechter's mind this question was first and foremost about the pertinent legal source. The answer to this question – thus far there is a striking parallelism between Waechter and Story - is undoubtedly clear: The legal source can only be the statutory rules of the forum.74 However, from Waechter's point of view – and Story's as well - statutory rules include not only substantive rules but also the conflicts rules of the forum. In this sense Waechter said: 'As the first guiding principle of our doctrine, the judge must first do what the law of his country specifically provides with regard to the law to be applied. If this law decides upon the question, then every doubt is levied and the judge proceeds in the manner provided for by the law of his country.'75 A similar statement can be found in Story's Commentaries: 'When its [sc. the forum State's] own code seeks positively on the subject [i.e. on the operation of positive law], it must be obeyed by all persons who are within the reach of its sovereignty.76 Waechter continued with a second question: Which principles should the judge apply when the law of his country lacks a particular rule? Offering a brief answer, he asks whether the common (Roman) law or the rules of the Pandects would give sufficient guidance?77 Based on his careful studies of the various publications by statutist scholars, Waechter came to the conclusion that there are still too many divergences among the statutists. Thus he seriously questioned whether the common consent was strong enough to recognize the existence of a German or even a European customary law on the conflict of laws.78 As a result, it follows that the judge must search for a solution in the sense and spirit of those special laws in force in his own state, which as such cover the issue put before him.79 If it follows from the sense and spirit of the domestic statutes that it is acceptable (or unacceptable) to apply domestic rules to foreign nationals, to relations created abroad, etc., the judge shall proceed accordingly and apply (or not apply) them in cases with foreign elements. 80 The views of Story and Waechter are quite similar if not identical in the second hypothesis as well. This time, however, Story's task was easier because judge-made customary law is a generally recognized source of law in the AngloAmerican common law, whereas Waechter had to cope with the problem of identifying common opinions of legal scholars. There was, however, an important difference between Story and Waechter with respect to the third principle of solution. 73

See AcP 1841, p. 236. See WAECHTER C.G. (note 72), AcP 1841, p. 237; STORY J. (note 24), p. 21. 75 Ibid., p. 239. 76 See STORY J. (note 24), p. 25. 77 See WAECHTER C.G. (note 72), pp. 241, 242. 78 Ibid., p. 261: 'So möchte daher eine feste Praxis in der Ausdehnung, wie sie Thibaut and Kierulff behaupten, keineswegs erwiesen sein.' 79 Ibid., p. 261. 80 Ibid., p. 263: 'Der Richter hat bei jedem einzelnen Gesetz seines Landes zunächst zu untersuchen, ob es dem Sinne des Gesetzes gemäss ist, dass es angewendet werde oder nicht, und wenn er jenes findet, es unbedingt zur Anwendung zu bringen.' 74

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Volken From Waechter's point of view, the third principle can be explained as follows: If a clear answer to the question of the applicable law cannot be derived from the wording of the law of the forum (first rule) or from the sense and the spirit of that law (second rule), then the judge must adhere to the legal rules that are binding for him, that is the law of his state (the lex fori). 81 As we recall, Story was faced with the very same question in the third hypothesis; however, his answer was somewhat different: 'When both [the code as well as the customary law] are silent, then, and then only, can the question properly arise, what law is to govern in the absence of any clear declaration of the sovereign will.'82 From the above it follows that, in the third hypothesis, Waechter's discussion about the choice of law solution comes to an end. As a result, in default of any clear rule, he has to fall back on the substantive lex fori.83 This, however, is the place where Story's real choice of law debate begins. In fact, according to Story, only in this third situation, i.e. 'then, and then only', does 'the question [of how to cope with the conflict] … properly arise.'84 In other words, Huber's comity theory comes into play only in this third hypothesis, and the judge has to take into account 'that the rulers of every empire from comity admit that the laws of every people in force within its own limits ought to have the same force everywhere….'85 Story and Waechter agree that their third hypothesis essentially involves the acceptance of legal positions acquired from a foreign legal system. According to Story, such acceptance should be in keeping with Huber's comity theory,86 whereas Waechter takes a mere lex fori stand because, in his opinion, the ultimate binding rules can be derived only from the law of his own state. In cases of doubt, the judge must adhere to the rules that are binding for him.87 However, such acceptance should not take place unconditionally, hence only 'in so far as those laws do not prejudice the powers or rights of other governments or their citizens,

81

Ibid., p. 265, § 10: 'Wenn aus Richtung, Sinn und Geist des betreffenden besonderen Gesetzes eine Entscheidung über die Frage nicht mit Bestimmtheit sich entnehmen lässt: so hat der Richter im Zweifel das Recht seines Landes in Anwendung zu bringen.' 82 See STORY J. (note 24), p. 25, No. 23. 83 See supra, note 81. 84 See STORY J. (note 24), p. 25, No. 23. 85 As to HUBER U. (note 34). 86 See STORY J. (note 24), p. 31: '[Huber's] first two maxims will in the present days scarcely be disputed by anyone; and the last [maxim] seems irresistibly to flow from the right and duty of every nation to protect its own subjects against injuries resulting from the unjust and prejudicial influence of foreign laws, and to refuse its aid to carry into effect any foreign laws which are repugnant to its own interests and polity.' 87 See WAECHTER C.G. (note 72), p. 265: 'Der Richter hat die Aufgabe, das Recht im Falle des Streites und Widerstandes zu verwirklichen. Welches Recht soll er verwirklichen? Doch (…) bloss das vom Staate gesetzte oder sonst anerkannte Recht. Es liegt dies in der Natur des positiven Rechtes, und im Verhältnis des Richters zu dem positiven Recht.'

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General Principles of PIL for no nation can be justly required to yield up its own fundamental policy and institution in favor of another nation.'88

VII.

A Provisional Balance

As our comparison shows, Story's and Waechter's views were similar in regard to the precedence of the lex fori and the necessity of controlling the application of legal solutions acquired abroad. Nonetheless, their respective influence on the later development of conflict of laws doctrines was remarkably different. In Europe, only half of the scientific results of Waechter's research in the conflict of laws have found an echo. This was his famous criticism of the statutist theory.89 While his own theory on the conflict of laws awakened some interest in the USA,90 it remained practically unknown to European scholars.91 The reason for this was the timing: Shortly after his articles were published, the academic scene in Europe fell under the ban of Savigny's splendid new approach.92 The situation was quite different in the English-speaking world, where Story and his Commentaries became the leading Anglo-American authority for almost a century.93 Moreover, with his clear territorial approach and explicit reservation favoring the 'fundamental policies' of the lex fori,94 Story succeeded in implanting, as early as 1834, the nucleus on which, a hundred years later, the American legal realists (Walter W. Cook, Brainerd Currie)95 would anchor their arguments against the vested rights doctrine of Dicey, Beale96 and the first Restatement, putting forth their new theories on true and false conflicts and substantive policy-weighing. However, much more important than these formal aspects are the substantive elements lying behind these developments. In short, they can be described as follows: All conflict of laws theories developed on the North American continent during the past 150 years are based on statutist theories. They have all been theories claiming, justifying or legitimizing the (overly extended) spacious reach of certain domestic statutes. The other possible conflicts question, which asks where a given factual situation would have its natural center of gravity, does not have (and seemingly never had) much appeal in American conflicts thinking. In some respect, one gets the impression that American conflicts scholars, although they have certainly heard of and read about Friedrich Savigny, never got his basic message. 88

See STORY J. (note 24), p. 26. See FIRSCHING K./VON HOFFMANN B. (note 21), p. 51. 90 See SCOLES E.F./HAY P. (note 20), p. 10. 91 See supra, note 89. 92 See SAVIGNY F.C. (notes 14 and 15), Vol. 8, §§ 344 to 349. 93 See STORY J. (note 24), chapters I and II, pp. 1 to 39. 94 Ibid., p. 8. 95 See supra, notes 18 and 19. 96 See supra, note 24. 89

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Volken Two short examples might support this impression. The first is Perry Dane.97 In his article he defined 'vestedness' as a principle of law requiring that the court of any forum should, in selecting the criteria governing the substantive elements in an adjudication, apply choice of law criteria that could be expected to generate the same set of substantive criteria (as) if they were applied by any other forum in an actual adjudication.98 Every European conflicts specialist would unconditionally associate himself with the idea put forward by Dane. This, however, is because it basically corresponds with what we have come to regard as one of the ultimate goals of all conflicts theory. Simply, when reading Dane, I had to ask myself whether he was really unaware of his plagiarizing. Could it be that he really has never heard of Savigny's § 348 which, as stated in the introduction, reads: '[…] in case of conflict of laws, a given factual situation shall have to expect the same decision, no matter whether the judgment be given in this state or in that.'99 The second example is Lea Brilmayer100 who, in her Hague lecture of 1995, called for choice of law rules based on and interpreted in the light of choice of law policies. Again, this proposal has my fullest support. In this context I have only one question: Why does this principle need such a fervent message? Is it not selfevident? After more than fifteen years of experience in drafting conflict of laws provisions, I can confirm that European conflicts rules are nearly all drafted on the basis of clear conflicts policies. This is true for the Swiss rules, as well as for the Austrian, German, Italian and so on. And most of, if not all the conflicts rules contained in these codes are conceived in the spirit of the Savignian conflicts approach. Thus the underlying problem remains. I do not want to blame anyone for not having seen or heard or read this or that message. To come to the point: It seems that we are working in the same discipline; we are using the same terminology, but we are not speaking the same language. We are sitting in the same cinema, but we are not watching the same movie. Why? Well, probably because of history. When America became aware of conflict of laws problems, American scholars became statutists. And this happened at a moment when their European counterparts had begun shifting over to the Savignian way of looking at conflicts problems. And no one cared about the differences and their possible consequences. In my opinion, we should begin taking globalization serious by agreeing on measures for a new common language. Or do we want to wait for the management schools to take us over?

97

See DANE P. (note 11). Ibid., p. 1205. 99 See SAVIGNY F.C. (note 15), p. 27; English version prepared by GUTHRIE W., London 1880, pp. 69, 70. 100 See BRILMAYER L. (note 16), pp. 109, 110. 98

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NATIONAL REPORTS ________________

THE VENEZUELAN ACT ON PRIVATE INTERNATIONAL LAW OF 1998* Gonzalo E. PARRA-ARANGUREN** I.

VI. VII. VIII. IX. X. XI.

Historical Background A. The 1963 Draft B. The 1965 Draft C. The Codification Contents of the 1998 PIL Act General Provisions A. Determination of the Applicable Law B. Application of Foreign Law C. Renvoi D. Ordre public E. Preliminary Questions, Dépeçage and Unknown Institutions F. Fraude à la Loi and Droits Acquis G. Application of Mandatory Rules Domicile as a Connecting Factor Special Conflicts Rules A. The Law of Persons B. Family Matters C. Property Relations D. Obligations E. Succession Formalities and Proof of Acts Matters of Jurisdiction Recognition and Enforcement of Foreign Judgments Other Procedural Matters Final Provisions Conclusion

I.

Historical Background

II. III.

IV. V.

In September 1958, the Venezuelan Ministry of Justice established a Commission to prepare a draft of an Act on Private International Law. Consisting of three professors: Roberto Goldschmidt, Gonzalo Parra-Aranguren and Joaquín SánchezCovisa, the Commission completed the first preliminary Draft after just ten months of intensive work.

* An English (unofficial) translation of the Venezuelan PIL Act is published in this Yearbook, pp. 341-352. ** Judge at the International Court of Justice, The Hague.

Parra-Aranguren However, it was decided that more time was needed for reflection, as a result of which the Draft was not published until April 1963, together with an Explanatory Report. A.

The 1963 Draft

The 1963 Draft was widely disseminated and a period of discussion followed, with both Venezuelan and foreign experts invited to present their comments and recommendations. Professors Gonzalo Parra-Aranguren and Joaquín SánchezCovisa made a presentation of the Draft at the Academy of Legal and Political Sciences.1 At a Symposium at the Central University of Venezuela, the German Professor Wolfgang Müller-Freienfels discussed the conflicts rules on family matters proposed in the Draft.2 Whereas the Venezuelan legal milieu remained silent, making no recommendations whatsoever, valuable remarks were made by Professors Werner Goldschmidt3 and Rodolfo De Nova4 of Argentina and Italy, respectively. The Commission also received detailed comments from Professor Rodolfo de Nova, as well as letters from Professors Henry Battifol, Albert A. Ehrenzweig and Gerhard Kegel. B.

The 1965 Draft

The revised Draft was submitted to the Ministry of Justice in 1965. Although it was published, together with the 1963 Explanatory Report, it was not presented to Parliament. The 1965 Draft was received well abroad. The Brazilian Professor Haroldo Valladao called it an 'outstanding' instrument with an 'independent' and 'modern' approach to the subject matter.5 In 1967 the Austrian Professor Fritz von Schwind found the Draft 'remarkable', particularly the General Provisions.6 After thoroughly studying the Draft, Professor Paul Heinrich Neuhaus of Germany praised it as 1

Boletín de la Academia de Ciencias Politicas y Sociales, Vol. 28, Caracas 1964,

p. 80. 2

MÜLLER-FREIENFELS W., 'La modernas tendencias del Derecho de Familia' (Spanish translation by Professor T.B. de Maekelt), in Revista de la Facultad de Derecho de la Universidad Central de Venezuela 1964, Vol. 29, pp. 9-37. 3 GOLDSCHMIDT W., 'Avances de la Extraterritorialidad de la Ley en el Pensamiento Jurídico Iberoamericano', in Rev. esp. der. int. 1964, pp. 335-343; ID., 'El Proyecto Venezolano de Derecho Internacional Privado, in Revista del Ministerio de Justicia 1965, pp. 57-88. 4 DE NOVA R., 'Current Developments of Private International Law', in Am. J. Comp. L. 1964, p. 542. 5 VALLADÃO H., Direito Internacional Privado, 2d ed., Rio de Janeiro – San Paolo 1970, p. 162. 6 VON SCHWIND F., 'Disposiciones generales del Proyecto Venezolano y Recientes Tendencias del Derecho Internacional Privado' (Spanish translation by Professor H. Leu), in Libro-Homenaje a la Memoria de Roberto Goldschmidt, Caracas 1967, pp. 691-702.

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Venezuelan Act on Private International Law 'excellent' in 1970.7 As a result of the favorable comments, the 1965 Draft was reproduced in the third edition of Alexander N. Makarov's book Quellen des Internationalen Privatrechts. Nationale Kodificationen.8 In 1980, Professor Paul Heinrich Neuhaus analyzed the Draft again. Taking account of the most recent developments in private international law at the time, he concluded that 'it embodies a conception that will be followed by the international community.'9 As it turned out, the 1965 Draft did have an impact on the international community. For instance, Inter-American Treaties adopted after 1975 were strongly influenced by the 1965 Draft, particularly the Inter-American Convention on General Rules of Private International Law (CIDIP-II, Montevideo 1979). In regard to national law, the 1965 Draft had a substantial impact on the new Peruvian conflicts rules in Book Ten of the Civil Code of 1984.10 In addition, its influence can be detected in the 1974 Argentinean Draft on Private International Law prepared by Professor Werner Goldschmidt,11 as well as in the Preliminary Mexican Draft prepared by Professor Leonel Perez-Nieto Castro, which served as part of the travaux préparatoires for the conflicts rules incorporated into the Preliminary Title of the Mexican Civil Code, enacted in December 1987.12 Despite the Draft's widespread influence abroad, its reception in Venezuela was rather modest, even though it had been summarily presented and discussed at the Law Faculties of Venezuelan universities, mainly in Caracas. The work, however, was by no means in vain. Ten years later, the Commission nominated to prepare a Draft Code of Civil Procedure reproduced most of its rules on the Jurisdiction, Recognition and Enforcement of Foreign Judgments.13 7

NEUHAUS P.H., 'Proyecto Venezolano de Ley de Normas de Derecho Internacional Privado. Observaciones de Derecho Comparado' (Spanish translation by Professor T.B. de Maekelt) in Libro-Homenaje a la Memoria de Lorenzo Herrera Mendoza, Vol. I, Caracas 1970, pp. 55-80. 8 MAKAROV A.N., Quellen des Internationalen Privatrechts. Nationale Kodifikationen, 3d ed., published by Max-Planck-Institut für ausländisches und internationales Privatrecht (under the direction of J. KROPHOLLER, P.H. NEUHAUS and J.P. WAEHLER), Tübingen 1978, pp. 309-313. 9 NEUHAUS P.H., 'La actualidad de la Codificación del Derecho Internacional Privado' (Spanish translation by Professor T.B. de Maekelt), in Libro-Homenaje a la Memoria de Joaquín Sánchez-Covisa, Caracas 1975, pp. 245-251. 10 REVOREDO DE DEBAKEY D., 'Propuesta Sustitutoria del Proyecto de Titulo Preliminar del Código Civil', in Proyectos y Ante-Proyectos de la Reforma del Código Civil, Vol. I, Lima 1980, p. 113; 'Exposición de Motivos y Comentarios. Derecho Internacional Privado', in Código Civil peruano. Exposición de Motivos y Comentarios, Vol. VI, Lima 1985, pp. 874-875. 11 DAHL E., 'Argentina: Draft Code of Private International Law. Introductory Note and Translation', 29 I.L.M. 1985, p. 271. 12 PÉREZ-NIETO CASTRO L., 'Ante-Proyecto de Reformas al Código Civil para el Distrito Federal, en materia de Derecho Internacional Privado', in Undécimo Seminario de Derecho Internacional Privado, México 1989, pp. 19-25. 13 The Code of Civil Procedure was enacted in 1986 and entered into force on 16 March 1987.

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C.

The Codification

In July 1995 the professors of Private International Law of all Venezuelan Universities held their first meeting in Caracas, at which time they formally requested the Government to submit the 1965 Draft to Parliament. At the same time they acknowledged that some revisions were essential in order to bring the draft into line with new conventions ratified by Venezuela and changes made in Venezuelan law over the past three decades. Before taking action, the Ministry of Justice consulted with the Attorney General of the Republic (Procuraduría General de la República), who requested that the 1965 Draft be submitted to the Legal Advisory Council of the Public Administration (Consejo de Asesoría Jurídica de la Administración Pública), which consists of representatives of the Legal Departments of all Government Ministries. In the meantime, the professors of Private International Law of all Venezuelan Universities met again in April 1996. Instead of merely renewing their request, this time they made concrete proposals for revisions to the 1965 Draft. Having received a favorable opinion from the Attorney General, the Government finally presented the 1965 Draft to Parliament at the end of June 1996. The Permanent Commission of Foreign Affairs of the Senate recommended its adoption and proposed several revisions after having consulted with the Legal Department of Parliament. During the first discussion of the 1965 Draft, the Senate also made recommendations of its own, aimed especially at avoiding possible contradictions with the Bill on Commercial Arbitration, which was being reviewed at the same time.14 Thereafter, the 1996 Draft was prepared and several paragraphs added to the 1963 Explanatory Report explaining the revisions. The 1996 Draft was discussed by the Venezuelan professors of Private International Law at a Symposium held at the Academy of Social and Political Sciences in Caracas.15 The Senate finally approved the Bill at the end of November 1997.16

14 The Italian Senate encountered a similar problem when discussing the Bill 218/95 on the Riforma del sistema italiano di diritto internazionale privato. As a result, the rules on arbitration were excluded and adopted in Act No. 25, 5 January 1994, entitled Nuove disposizioni in materia di arbitrato e disciplina dell'arbitrato internazionale: see GIARDINA A., 'Les caractères généraux de la réforme', in Rev. crit. dr. int. pr. 1996, p. 5. The Venezuelan Act on Commercial Arbitration was enacted separately and entered into force on 7 April 1998 (Gaceta Oficial de la República de Venezuela, No. 36.430, 7 April 1998). The text is reproduced at the Venezuelan Supreme Court of Justice's Website: http://www.csj.gov.ve/legislacion/lac.html. 15 Their reports were published after Parliament adopted the Private International Law Act of 1998; see Proyecto de Ley de Derecho Internacional Privado (1996). Comentarios, Caracas 1998. The 1996 Draft and the amended Explanatory Report are reproduced as annexes. 16 The only substantial modification made by the Senate was the addition of Article 47 (see infra, Part VII). Special rules on the formal validity of marriages, adoptions and wills were considered unnecessary because Article 37 specifies the law applicable to the

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Venezuelan Act on Private International Law The Chamber of Deputies commenced its work by requesting its Permanent Commission of Foreign Affairs to comment on the 1996 Draft. After consulting with the Sub-Commission on Conventions, Legislation and Legal Matters, the Permanent Commission recommended its adoption. The debate in the Chamber of Deputies began early in June 1998, but was soon suspended. The 1996 Draft was then returned to the Permanent Commission of Foreign Affairs, which had the task of amending formal defects of the Report and examining the suitability of the title of the Act. As no modifications were proposed, the Chamber approved the 1996 Draft without any revisions. Thereafter, the Private International Law Act (hereinafter: 1998 PIL Act) was sent to the Executive, and on 6 August 1998 the Government celebrated the adoption of the new Act,17 which was promulgated in the Official Gazette on the same day.18

II.

Contents of the 1998 PIL Act

The 1998 PIL Act contains 64 Articles divided into twelve Chapters. Chapter I contains the General Provisions; Chapter II regulates domicile. Chapter III contains conflicts rules (mainly bilateral) for matters relating to persons; conflicts rules for family matters are set forth in Chapter IV, for property in Chapter V, for obligations in Chapter VI, for succession in Chapter VII. Chapter VIII deals with the form and proof of acts; Chapter IX with jurisdiction and competence; Chapter X regulates the recognition and enforcement of foreign judgments; Chapter XI is devoted to other procedural issues; and Chapter XII contains the final provisions.

form of juridical acts in general (see infra, Part VI). The introductory titles to the articles were also accepted in regard to Articles 1(2), 37 and 56(5). 17 Revista de la Facultad de Ciencias Jurídicas y Políticas de la Universidad Central de Venezuela 1998, Vol. 110, pp. 167-201; see also: http://www.zur2.com/fipa/ Objetivos/legislacion_y_decisiones_tribuna.html. 18 Gaceta Oficial de la República de Venezuela, No. 36.511, 6 August 1998. The Supreme Court of Justice loaded the Act in its Internet Website: http://www.csj.gov.ve/ legislacion/ldip.html.

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III. General Provisions A.

Determination of the Applicable Law

Article 1 provides that the law to be applied in cases connected with various jurisdictions shall be determined by the rules of Public International Law on the matter, with special emphasis on the treaties in force in Venezuela. In the absence thereof, Venezuelan conflicts rules shall apply; in the third place, analogy is to be used; and finally, the issue shall be decided in accordance with the general principles of Private International Law commonly accepted. The new provision largely reproduces Article 8 of the Venezuelan Code of Civil Procedure, as adopted during the reform of 1987, the only difference being that the relevant rules of Public International Law have priority over all other norms, as is commonly accepted today. B.

Application of Foreign Law

Chapter I of the 1998 PIL Act reproduces the General Provisions of the 1963 Draft. An exception is Article 2, which now only provides that foreign law shall be applied as it is in its country of origin, but with a view to realizing the objectives pursued by Venezuelan conflicts rules. Therefore, in cases where the laws of different legal systems are to be taken into account, the choice among them shall be made in accordance with the lex causae (Article 3).19 C.

Renvoi

Article 4 of the 1998 PIL Act follows the provision on renvoi in the 1963 Draft. Internal foreign law shall be applied whenever the conflicts rules of that law point to its application; if they refer back to Venezuelan law, Venezuelan internal law shall be applied. In other cases, the internal foreign law designated by the Venezuelan conflicts rules shall be applied.20 Although Venezuela ratified the Inter-American Convention on the Law Applicable to International Contracts (CIDIP-V, Mexico 1994), the 1998 PIL Act does not reproduce Article 17 of the Convention which provides that 'law' shall be understood to mean 'the law currently in force in a State, excluding its conflicts rules.'21

19

The procedural treatment of foreign law is dealt with in Arts. 60 and 61 (see infra,

Part IX). 20

The Inter-American Convention on General Rules of Private International Law (CIDIP II, Montevideo 1979), in I.L.M. 1979, pp. 1236-1238, does not regulate the problem of renvoi. The Spanish text of this Convention can be found at the Website of the Organization of American States: http://www.oas.org/EN/PROG/JURIDICO/english/ treaties.html. 21 I.L.M. 1994, p. 736.

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Venezuelan Act on Private International Law Nonetheless, the practical results are the same. Article 4 of the PIL Act regulates cases where a conflicts rule designates the applicable law in a generic way by localizing the situation geographically by means of an abstract connecting factor. Consequently, it does not apply when the Act uses a different method to determine the law applicable in cases connected with different jurisdictions, as occurs in contractual obligations where the parties have failed to make a choice of law. Pursuant to Article 30, such cases are governed by the law with which they are most closely connected, thus obliging the Judge to carefully examine all elements of the particular case in order to determine the law most closely connected with the contract.22 Once this law has been determined, the contract will be governed by it. Accordingly, it follows that the admission of an eventual renvoi would represent a manifest disobedience to the specific intent of the legislator, despite the general provisions on this matter in paragraphs 1 and 2 of Article 4.23 D.

Ordre public

The ordre public exception is very strict. Reproducing the exact wording of the 1963 Draft, Article 8 provides that provisions of foreign law that would be applicable under the present Act shall not be applied in the event their application would lead to an effect clearly incompatible with the fundamental principles of Venezuelan public policy.24 E.

Preliminary Questions, Dépeçage and Unknown Institutions

Articles 6, 7 and 9 incorporate provisions into the 1998 PIL Act similar to those of the Inter-American Convention on General Rules of Private International Law (CIDIP-II, Montevideo, 1979). Previous, preliminary or incidental questions shall not necessarily be decided in accordance with the law applicable to the principal issue (Article 6). The various laws applicable to different aspects of one and the same legal relationship shall be applied harmoniously so as to achieve all of their objectives. Eventual difficulties arising as a result of their being applied simultaneously shall be resolved by taking account of the requirements of justice in the particular case (Article 7). A foreign law shall not be applied if it has

22

See infra, Part V, D. Similar comments apply to Article 13 of the 1995 Italian Private International Law Act: PARRA-ARANGUREN G., 'El reenvío en la Ley italiana de Derecho Internacional Privado de 1995', in Revista de la Fundación de la Procuraduría, Caracas 1997, Vol. 17, pp. 32-33. 24 The wording of Article 5 of the Inter-American Convention on General Rules of Private International Law (CIDIP-II, Montevideo 1979) is slightly different: 'The law declared applicable by a convention on private international law may be refused application in the territory of a State Party that considers it manifestly contrary to the principles of its public policy (ordre public)': I.L.M. 1979, p. 1237. 23

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Parra-Aranguren institutions or procedures that are essential for its proper application but are unknown to Venezuelan law (Article 9). F.

Fraude à la Loi and Droits Acquis

Instead of reproducing the provision of the Inter-American Convention on fraude à la loi, the 1998 PIL Act adopts the wording of the 1963 Draft on legal relationships created by foreign law, which is broader than the formula adopted in the InterAmerican Convention on General Rules of Private International Law (CIDIP-II, Montevideo 1979).25 As stipulated in Article 5, legal relationships that are valid under a foreign law shall be recognized in Venezuela if the foreign law has jurisdiction in accordance with admissible international criteria, unless they are contrary to the objectives of Venezuelan conflicts rules or their subject matter falls under the exclusive jurisdiction of Venezuelan law. G.

Application of Mandatory Rules

Pursuant to Article 10, mandatory rules of Venezuelan law enacted to regulate certain sets of facts having connections with different legal systems shall always apply (Article 10), thus making it clear that only some mandatory provisions must be applied. On the other hand, it is not clear why the 1998 PIL Act says nothing about the possibility of applying the lois d'application immédiate of foreign laws, as is admissible under the Inter-American Convention on the Law Applicable to International Contracts (CIDIP-V, Mexico 1994), ratified by Venezuela.26

IV.

Domicile as a Connecting Factor

As in the 1963 Draft, the 1998 PIL Act modifies the connecting factor used to determine the law applicable to natural persons in matters relating to family and succession. Following European models, Venezuela had adopted the connecting factor of nationality in the second half of the nineteenth century. The 1998 Act, however, gives preference to domicile because of the demographic, economic and

25

Article 7 of the Convention reads as follows: 'Legal relationships validly established in a State Party in accordance with all the laws with which they are connected at the time of their establishment shall be recognized in other State Parties, provided that they are not contrary to the principles of their public policy (ordre public)': I.L.M. 1979, p. 1237. 26 Article 11 of the Convention reads: 'Notwithstanding the provisions of the preceding articles, provisions of the law of the forum shall necessarily apply when they are mandatory requirements. It shall be up to the forum to decide when to apply the mandatory provisions of the law of another State with which the contract has close ties': I.L.M. 1994, p. 735.

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Venezuelan Act on Private International Law social conditions in Venezuela, as is pointed out in the Explanatory Report.27 Therefore, it was deemed advisable to regulate the domicile of natural persons for the purpose of conflicts of laws and jurisdiction (Article 15). It is understood that the domicile of a person is not affected by reason of residence in a country as a result of a public function entrusted to the person by the State or an international organization (Article 14). In accordance with the generally accepted practice today, the domicile of a natural person is deemed to be located in the State of his/her habitual residence (Article 7). Since the notion of habitual residence is not defined, it should be interpreted in accordance with its common and ordinary meaning. The domicile of a natural person and any change therein are matters of fact to be established in light of the circumstances of the particular case, as was stated in the 1963 Explanatory Report.28 This solution was accepted by the Hague Conference on Private International Law in its most recent examination of the matter.29 A married woman can have a domicile different from that of her husband (Article 12). As stated in the 1963 Explanatory Report, this solution not only pays tribute to contemporary political and social views on the emancipation of women and equal treatment of genders but also aims to prevent frequent and gross injustice in private international law matters.30 This provision, which was already included in the 1963 Draft, also appears in the Inter-American Convention on the Domicile of Natural Persons in Private International Law (CIDIP-II, Montevideo 1979) (Article 2).31 27

Proyecto de Ley de Derecho Internacional Privado y Exposición de Motivos, Caracas 1963, p. 7. 28 Proyecto de Ley de Derecho Internacional Privado y Exposición de Motivos, Caracas 1963, p. 7. 29 Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Cooperation in respect of Parental Responsibility and Measures for the Protection of Children, 19 October 1996, see the Explanatory Report by LAGARDE P., in HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW, Proceedings of the Eighteenth Session, Vol. II, Protection of Children, The Hague 1998, No. 40, p. 553. However, it was 'accepted that a child's temporary absence from the place of his or her habitual residence for reasons of vacation, of school attendance or for the exercise of access rights, for example, does not modify the principle of the child's habitual residence.' See also the Preliminary Draft Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of the Protection of Adults, adopted by the Special Commission on 12 September 1997, in particular the Explanatory Report by LAGARDE P., Preliminary Document No. 2 to the attention of the Special Commission of a Diplomatic Character of September/October 1999 on the Protection of Adults, The Hague 1998, No. 43, p. 65. 30 Proyecto de Ley de Derecho Internacional Privado y Exposición de Motivos, Caracas 1963, p. 7-8. 31 I.L.M. 1979, p. 1235. The Convention was ratified by the Venezuelan Parliament in 1985, with the express reservation of Article 3; however, it has not been promulgated in the Official Gazette and the government has not yet deposited its instrument of ratification. Therefore, the Convention is not in force in Venezuela.

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Parra-Aranguren Article 13 provides that the domicile of minors and other persons without capacity to act is located in the State where they have their habitual residence, thus acknowledging the possibility of their having a domicile different from that of their legal representative. This rule reflects the Venezuelan position that was not accepted during preparation of the Inter-American Convention on the Domicile of Natural Persons in Private International Law (CIDIP-II, Montevideo 1979.32 It should be noted that Article 10 of the 1963 and 1965 Drafts followed the traditional doctrine. One should keep this important change in the 1998 PIL Act in mind when interpreting the relevant provisions in cases where the domicile of children and persons without capacity to act is the connecting factor determining the applicable law or for jurisdiction purposes. In such cases, it is possible that some of the rules in the 1998 PIL Act can lead to different results, although they are the same as those in the 1963 and 1965 Drafts.

V.

Special Conflicts Rules

A.

The Law of Persons

Chapter III of the 1998 Act deals with matters relating to the law of persons. The existence, status and legal capacity of natural persons are governed by the law of their domicile (Article 16); a change of domicile does not limit the capacity already acquired (Article 17). Lack of capacity according to the lex domicilii, but not to the law governing the subject matter of the transaction will not affect the capacity of natural persons as far as the particular transaction is concerned (Article 18). Article 19 lays down a special rule on public policy specifying that Venezuela shall not recognize incapacity based on differences in race, nationality, religion or class. The existence, legal capacity, operation and dissolution of legal persons are governed by the law of the State where they have their seat. The place of their seat is located in the State where all procedural and substantive legal requirements for their establishment are fulfilled. This provision reproduces the wording adopted in the Inter-American Convention on Conflicts of Law Concerning Commercial Companies (CIDIP-II, Montevideo 1979) (Article 2),33 and in the Inter-American Convention on Personality and Capacity of Legal Persons in Private International Law (CIDIP-III, La Paz 1984) (Article 2).34 B. Family Matters

32

Article 3 of the Inter-American Convention on the Domicile of Natural Persons in Private International Law (CIDIP-II, Montevideo 1979) follows the traditional solution in this matter: 'The domicile of incompetent persons is that of their legal representatives, except when they are abandoned by those representatives, in which case their former domicile shall continue': I.L.M. 1979, p. 1234. The Venezuelan Parliament made a reservation when adopting the Convention (see supra, note 32). 33 I.L.M. 1979, p. 1222. 34 I.L.M. 1985, p. 465.

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Venezuelan Act on Private International Law Family matters are regulated in Chapter IV. Capacity to marry and essential requirements of marriage are governed by the law of the domicile of each of the parties (Article 21). Personal and patrimonial effects of marriage are determined by the law of the common domicile of the spouses, or by the law of their last common domicile if it is no longer the same. However, marriage contracts valid under the lex causae shall be registered in Venezuela to have effects on rights acquired by bona fide third parties to immovable property located therein (Article 22). Divorce and legal separation are governed by the law of the domicile of the spouse filing the claim. Any change in domicile shall not take effect until one year after the person has entered the new country to establish a habitual residence therein (Article 23). When read in connection with Articles 42(1) and 52(1), it follows from this provision, which was already in the 1963 Draft, that the claim shall be filed before the competent Venezuelan court ratione materiae of the domicile of the spouse presenting it. A similar provision is found in Article 2(1)(a)(5) of the Convention of 28 May 1998 on Jurisdiction, Recognition and Enforcement of Judgments in Matrimonial Matters (Brussel II Convention), recommended to the State Members for adoption, according to their constitutional regulations, by the Council of the European Union on the basis of Article K.3 of the Maastricht Treaty.35 The reasons justifying the solution are the same in both cases. Namely, it takes account of the great mobility of persons today and attempts to resolve the problem that arises when, as a consequence of the matrimonial crisis, one of the spouses returns to the country where he/she was domiciled before entering into the marriage.36 The law of the domicile of the child governs the status of the child and the legal relations between parents and children (Article 24). Essential requirements of adoption are governed by the law of the domicile of each of the parties (Article 25). Guardianship and other institutions established to protect incompetent persons are governed by the law of their domicile (Article 26). C.

Property Relations

In Chapter V on property, Article 27 provides that the constitution, contents and extension of real rights are governed by the lex situs (Article 27). A change in the location of movable property does not affect rights validly acquired under the former law; however, they can be challenged by third parties only after satisfying the requirements prescribed by the law of the new location (Article 28).

35 36

Official Journal of the European Union (O.J.) 1998, C-221, 16 July 1998, pp. 2-3. O.J., C-221, Explanatory Report by BORRÁS A, No. 32, p. 38.

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Parra-Aranguren D.

Obligations

In Chapter VI on contracts, the principle of party autonomy is set forth in Article 29, which provides that contracts shall be governed by the law chosen by the parties (Article 29). Lacking a valid choice by the parties, the law most closely connected with the contract shall be applied, taking into account its subjective and objective elements. However, due regard shall also be given to the general principles of international commercial law accepted by international organizations (Article 30). Furthermore, when deemed appropriate, rules, customs and principles of international commercial law, as well as usages and generally accepted practices shall be applied with the aim of reaching a solution that satisfies the requirements imposed by justice and equity in the particular case (Article 31). As stated in the paragraphs added to the Explanatory Report in 1996, these revisions were made in an attempt to reflect the relevant orientations of the InterAmerican Convention on the Law Applicable to International Contracts (CIDIP-V, Mexico 1994), ratified by Venezuela, and the doctrine of highest authority, as well as requirements imposed by one of the matters with very sensitive practical repercussions in international trade law.37 However, this does not explain the reasons for deleting Article 32 of the 1965 Draft, which had made it necessary to apply mandatory rules prescribing obligations to be performed for economic and social reasons of general interest. A possible explanation for this deletion may be that Article 10 of the Act permitted the Judge, in general terms, to take account of the normes d'application immédiate of any foreign law. However, when this possibility was deleted at a later stage,38 Article 32 should have been restored. Unfortunately, this was not done for reasons that remain unknown, if there were any. Chapter VI also contains conflicts rules for non-contractual obligations. Torts are governed by the law of the place where the damage occurs; however, the victim may request application of the law of the State where the event causing the damage took place (Article 32). Negotiorum gestio, undue payment, and unjust enrichment are governed by the law of the place where the event leading to the obligation took place (Article 33). E.

Succession

As stipulated in Chapter VII, succession is governed by the law of the domicile of the deceased (Article 34). Nevertheless, descendants, ascendants, and the surviving spouse not legally separated as to property, are entitled to make effective on assets located in Venezuela their right to the lawful portion accorded to them under Venezuelan law (droit de prelèvement) (Article 35). According to another special rule of public policy in Article 36, if the law of the domicile of the de cuius provides that objects of the estate belong to the State in the event there are no heirs 37 Revista de la Facultad de Ciencias Jurídicas y Políticas de la Universidad Central de Venezuela 1998, Vol. 110, pp. 187-188. 38 See supra, Part III, G.

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Venezuelan Act on Private International Law or they are unknown, property located in Venezuela shall pass to the State of Venezuela.

VI.

Formalities and Proof of Acts

Chapter VIII deals with formalities and proof of acts. Acts are valid in regard to form if they comply either with the lex loci actus, the law governing its contents, the law of the domicile of the party taking action, or the common domicile of the parties (Article 37). Matters of proof, including onus probandi are subject to the law governing the legal relationship, without prejudice that the procedure for taking evidence is governed by the lex fori (Article 38).

VII. Matters of Jurisdiction The 1998 PIL Act also regulates matters of International Civil Procedure, jurisdiction being dealt with in Chapter IX. As stipulated in Article 39, Venezuelan courts have jurisdiction not only when the defendant is domiciled in Venezuela, but also when persons are domiciled abroad pursuant to Articles 40, 41 and 42 of the 1998 PIL Act. Claims in patrimonial matters may be heard by Venezuelan courts: (1) if they concern the disposition or tenancy of movable or immovable property located in Venezuela; (2) if the obligation is to be performed in Venezuela or if the obligation arises from a contract entered into or from an event occurring in Venezuela; (3) if the defendant was personally served in Venezuela; and (4) if the parties submit to their jurisdiction, expressly or tacitly (Article 40). Express submission must be evidenced in writing (Article 44). In regard to the plaintiff, tacit submission results from the fact that he/she has brought an action before the court. Tacit submission can be assumed on the part of the defendant if he/she personally or through an attorney performs any act other than objecting to the jurisdiction of the Venezuelan court or any provisional measure that may have been ordered (Article 45). Submission is not valid in respect of proceedings concerning the creation, modification or extinction of real rights of immovable property, unless permitted by the lex situs (Article 46). Furthermore, the parties cannot agree to exclude the jurisdiction of Venezuelan courts in favor of a foreign court or arbitration abroad: (1) if the dispute involves real rights of immovable property located in Venezuela, (2) if no transaction is permitted in respect of the subject matter of the dispute, or (3) if the fundamental principles of Venezuelan public policy are affected (Article 47). Claims relating to goods considered a universality may be heard by Venezuelan courts: (1) if Venezuelan law governs the substance of the dispute, and (2) if some of the goods constituting part of the universality are located in Venezuela (Article 41). Pursuant to Article 42, Venezuelan courts have jurisdiction over matters relating to the status of persons or family matters: (1) if Venezuelan law governs the substance of the dispute, or (2) if the parties have expressly or tacitly submitted 115

Parra-Aranguren to Venezuelan courts and the dispute has a close connection with Venezuelan territory. Thus submission is regulated in stricter terms than in Article 40(4). Even though Venezuelan courts lack jurisdiction to decide a dispute, they may order provisory measures to protect persons present in Venezuela (Article 43). In addition to specifying in which cases Venezuelan courts have jurisdiction, the 1998 PIL Act also contains provisions regulating the internal competence of Venezuelan courts ratione loci (Articles 48 - 53). These provisions intend to clarify certain matters, in particular to avoid lacunae in cases where the parties submit to Venezuelan courts without further specification (Articles 49(4) and 51(2)), or where they have jurisdiction because Venezuelan law is applicable (Articles 50(1) and 51(1).

VIII. Recognition and Enforcement of Foreign Judgments Chapter X regulates the efficacy of foreign judgments in Venezuela; foreign arbitral awards are subject to the 1998 Law on Commercial Arbitration.39 Pursuant to Article 53, foreign judgments shall be recognized and enforced: (1) if they have been rendered in civil or commercial matters, or, in general, in matters relating to private legal relationships; (2) if they are res judicata under the law of the State where rendered; (3) if they do not concern real rights of immovable property located in Venezuela or matters falling under Venezuela's exclusive jurisdiction; (4) if they have been rendered by courts having jurisdiction over the matter in accordance with the general principles on jurisdiction accepted by Venezuela; (5) if the defendant was served in due legal process, allowing sufficient time to attend the summons, and enjoyed all procedural guarantees assuring a reasonable defense; and (6) if they are not contrary to a previous judgment having the force of res judicata or have not been rendered after Venezuelan courts were seized of the same dispute between the same parties. As far as the general terms are concerned, the 1998 PIL Act follows the 1965 Draft. Therefore reciprocity is no longer required and no express reference is made to ordre public, even though Parliament added paragraph 3 to Article 53. However, partial recognition of foreign judgments is expressly admitted (Article 54), in keeping with the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (CIDIP-II, Montevideo 1979).40 Furthermore, a foreign judgment that satisfies the requirements laid down in Article 53 shall be declared enforceable in accordance with the procedure prescribed by law.

39

See supra, note 14. Article 62 expressly provides that all matters relating to international commercial arbitration are subject to special rules, with the exception of those specified in Article 47 (see supra, Part VI). 40 I.L.M. 1979, p. 1225.

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IX.

Other Procedural Matters

Chapter XI deals with other procedural matters. Here it suffices to note that competence and procedure are governed by the lex fori (Article 56). At any stage or instance of the proceedings, one of the parties to the dispute may request that the Venezuelan court be declared ex officio lacking in jurisdiction in favor of a foreign court. In such a case, the proceedings will be abated upon presentation of the request. If Venezuelan jurisdiction is established, the proceedings will resume where they left off. On the other hand, if the Venezuelan courts are denied jurisdiction, such decision must be reviewed by the Supreme Court of Justice; if the denial is upheld, the proceedings will be dismissed (Article 57). This provision was incorporated into the 1998 PIL Act in order to avoid unsatisfactory results brought about by rules already in force. Article 58 provides that the exclusive jurisdiction of Venezuelan courts shall not be prejudiced because the same or a related dispute is pending before a foreign court. Pursuant to Article 59, Venezuelan courts may address any competent foreign authority through rogatory letters as a means of summons, procedural acts relating to evidence or any other judicial activity deemed necessary in order to guarantee due process of law. Similarly, they are to promptly execute rogatory letters received from foreign courts, provided they comply with the general principles of international law applicable to that subject matter (Article 59).41 Foreign law shall be applied ex officio, even though the parties to the dispute may assist in determining its content (Article 60). The parties enjoy the same guarantees that exist for Venezuelan law, thus assuring that the foreign law is interpreted and applied correctly (Article 61).42

41 Venezuela has ratified the following multilateral treaties on judicial assistance stricto sensu: 1) Inter-American Convention on Letters Rogatory (CIDIP-I, Panama 1975) and its Additional Protocol (CIDIP-II, Montevideo 1979); 2) Inter-American Convention on the Taking of Evidence Abroad (CIDIP-I, Panama 1975); and its Additional Protocol (CIDIP-III, La Paz 1984); 3) Hague Convention of 15 November 1965 on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters; 4) Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil and Commercial Matters. Venezuela is also a Contracting State of the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalization for Foreign Public Documents. On the last three conventions, see: http://www.hcch.net. 42 The same regulation was adopted by Articles 2 and 4 of the Inter-American Convention on General Rules of Private International Law (CIDIP-II, Montevideo 1979), ratified by Venezuela; Venezuela is also a Contracting State of the Inter-American Convention on Proof and Information on Foreign Law (CIDIP-II, Montevideo 1979). See I.L.M. 1979, pp. 1231-1234.

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Parra-Aranguren

X.

Final Provisions

In regard to the final provisions in Chapter XII, Article 63 abrogates all provisions regulating the same matter, and Article 64 provides that the Act shall enter into force six months after its promulgation in the Official Gazette of the Republic of Venezuela.

XI.

Conclusion

The PIL Act entered into force on 6 February 1999, thus marking the end of an effort that began forty years earlier. As mentioned above, very little was done for almost three decades. Now, however, expectations are high. No doubt, considerable progress has been made by adapting our conflicts rules to the social, economic and human conditions in Venezuela. The final evaluation, however, will come from the courts and the results in practice, i.e., how the 1998 PIL Act is actually applied in cases having connections with different jurisdictions. This will be just a matter of time.

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THE FATE OF TWO REMARKABLE PROVISIONS OF THE SWISS STATUTE ON PRIVATE INTERNATIONAL LAW Alfred E. VON OVERBECK* I. II.

IV.

Introduction Article 19 on Special Mandatory Provisions of a Foreign Law A. Origin of the Provision and of Article 7, Paragraph 1, of the Rome Convention B. The Interpretation of Article 19 C. Swiss Case Law Relating to Special Mandatory Rules The Exception Clause in Article 15 of the PIL Statute A. Exception Clauses in Swiss Law prior to Article 15 B. Article 15 of the PIL Statute C. Swiss Case Law Relating to Article 15 Conclusion

I.

Introduction

III.

Without a doubt, two of the most remarkable and novel provisions of the Federal Statute on Private International Law1 (hereinafter: PIL Statute) are found in Articles 15 and 19. Ten years after the PIL Statute entered into force, we shall attempt to trace the fate of these two provisions by examining Swiss case law after a short description of the background and interpretation of each of the provisions. Both provisions deal with questions relating to the applicable law, not to jurisdiction, which is not dealt with here. Both are applicable in cases on all subject matters.

II.

Article 19 on Special Mandatory Provisions of a Foreign Law

A.

Origin of the Provision and of Article 7, Paragraph 1 of the Rome Convention

Special mandatory rules have been the subject of numerous controversies and discussions, particularly after a provision on this subject appeared in the drafts leading to the Convention on the Law Applicable to Contractual Obligations,

* Professor emeritus in the University of Fribourg (Switzerland); former Director of the Swiss Institute of Comparative Law; Member of the Institute of International Law. – The author is very grateful to Ms Susan Sarcevic for the thorough linguistic correction of his text. 1 Loi fédérale sur le droit international privé du 18 décembre 1987, in Recueil systématique du droit fédéral (RS) 291.

von Overbeck signed in Rome on 19 June 1980 (hereinafter: Rome Convention).2 The final text of paragraph 1 of Article 7 of the Rome Convention reads as follows: 'When applying under this Convention the law of a country, effect may be given to the mandatory rules of the law of another country with which the situation has a close connection, if and in so far as, under the law of the latter country, those rules must be applied whatever the law applicable to the contract. In considering whether to give effect to these mandatory rules, regard shall be had to their nature and purpose and to the consequences of their application or non-application.' The problem, of course, was discovered long ago. Both Savigny and Mancini recognized the mandatory nature of some international rules or rules of positive ordre public. The starting point of modern discussion is found in the writings of Ph. Franceskakis, P. Graulich, and L.I. de Winter.3 Only a few of the many recent publications are mentioned here, and we do not intend to contribute new views on the subject or take a position on questions of terminology. It suffices to mention that, in addition to the French term lois d'application immédiate, one also speaks of lois d'application nécessaire, lois de police or ordre public positif. In German, Eingriffsnormen is mostly used, the principal question being whether they should be the object of a Sonderanknüpfung. The English text of the Rome Convention adds to the confusion by using the term mandatory rule in both Article 5 on consumer contracts and in Article 7, whereas the French text uses dispositions impératives in Article 5 and lois de police in Article 7.4 It seems appropriate to use the term special mandatory rules in English.5 2 For a recent short comment see DUTOIT B., 'The Rome Convention on the Choice of Law for Contracts', in VON HOFFMANN B. (ed.), European Private International Law, Nijmegen 1998, p. 39. 3 FRANCESKAKIS Ph., La théorie du renvoi et les conflits de systèmes en droit international privé, Paris l958, p. 11; ID., 'Quelques précisions sur les lois d'application immédiate et leurs rapports avec les règles de conflits de lois', in Rev. crit. dr. int. pr. 1966 p. 1; GRAULICH P., 'Règles de conflit et règles d'application immédiate', in Mélanges Dabin, Vol. II, Paris-Bruxelles 1963, p. 629; DE WINTER L.I., 'Dwingend Recht bij Internationale Overeenkomsten', in Nederlands Tijdschrift voor Internationaal Recht 1964 pp. 329, 331. One should add that two German authors, Wengler and Zweigert, had already pleaded for a Sonderanknüpfung of special mandatory rules, but they seem to have had less influence. See WENGLER W., 'Die Anknüpfung des zwingenden Schuldrechts im internationalen Privatrecht. Eine rechtsvergleichende Studie', in Zeitschrift für vergleichende Rechtswissenschaft 1941, p. l68; ZWEIGERT K., 'Nichterfüllung auf Grund ausländischer Leistungsverbote', in RabelsZ 1942, p. 283. For a critical appraisal see VOSER N., Die Theorie der lois d'application immédiate im Internationalen Privatrecht, Untersuchung zur zwingenden Anwendung von Bestimmungen des schweizerischen Rechts gemäss Art. 18 IPRG, Basel 1993. (Contrary to the title, she also discusses theory in general and Art. 19 of the Swiss PIL Statute). 4 The same occurs in the German text. 5 NORTH P.M., 'Chapter 1', in NORTH P.M. (ed.), Contract Conflicts, AmsterdamNew York-Oxford 1982, p. 19.

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Two Provisions of the Swiss Statute on PIL The question whether special mandatory rules should be applied can arise in three situations. First, they can be part of the law designated by the conflicts rules of the forum (lex causae). In this context doubts have been raised as to whether they should be applied if they are part of public law.6 In the second situation, the special mandatory rules are part of the forum law. Here it is clear that the judge cannot ignore them even if domestic conflicts rules point to a foreign law. This principle is embodied in paragraph 2 of Article 7 of the Rome Convention and in Article 18 of the PIL Statute. In the third situation, which is clearly the most controversial, the special mandatory rules are part of a foreign law that differs from the applicable law (lex causae) designated by the ordinary conflicts rules of the forum. Our investigation is limited to such situations, which are dealt with in paragraph 1 of Article 7 of the Rome Convention and Article 19 of the PIL Statute. As stated above, only a limited number of arguments in favor and against these provisions can be presented here.7 One of the most brilliant opponents to the application of the special mandatory rules of a foreign law was the late F. A. Mann.8 He quotes several cases that could have been decided differently under paragraph 1 of Article 7 of the Rome Convention and, in his opinion, in an unfortunate sense. According to Mann, 6

The PIL Statute does not expressly deal with this question; however, Art. 13 states that a foreign provision is not inapplicable for the sole reason that it is characterized as public law. 7 See the recent comprehensive book by BONOMI A., Le norme imperative nel diritto internazionale privato, Zurich 1998, with a very complete bibliographie and a French résumé: a summary is published in this Yearbook, pp. 215-247. See also SCHWANDER I., Lois d'application immédiate, Sonderanknüpfung, IPR-Sachnormen und andere Ausnahmen von der gewöhnlichen Anknüpfung im Internationalen Privatrecht, Etudes suisses de droit international, Vol. 1, Zurich 1975, especially p. 366; SCHURIG K., 'Lois d'application immédiate und Sonderanknüpfung zwingenden Rechts: Erkenntnisfortschritt oder Mystifikation?', in HOLL W./KLINKE U. (eds.), Internationales Privatrecht –Internationales Wirtschaftsrecht, Köln (etc). 1985, p. 53; ERNE M., Vertragsgültigkeit und drittstaatliche Eingriffsnormen, Etudes suisses de droit international, Vol. 41, Zurich 1985; Mosconi F., 'Exceptions to the Operation of Choice of Law Rules', in Recueil des Cours of the Hague Academy of International Law, Vol. 217, 1989-V, p. 151; VISCHER F., 'General Course on Private International Law', in Recueil des Cours, Vol. 232, 1992-I, pp. 9, 153; VOSER N. (note 3); MAYER P., 'Les lois de police', in Travaux du Comité français de droit international privé, Journées du Cinquantenaire (1985), Paris 1988, p. 105, discussion at p. 115; PAVIC V., 'Application of the Foreign Public Law and Article 7 (1) of the Rome Convention', in The European Law Student's Association (ELSA SPEL) 1998, Vol. IX, Issue 2; STRUYCKEN A.V.M., 'La contribution de l'Académie au développement de la science et de la pratique du droit international privé', in Recueil des Cours, Vol. 271, l998, pp. 21, 44. The following two books contain interesting contradictory views on the subject: NORTH P.M. (ed.), Contract Conflicts (note 5); KLEIN F.-E. (ed.), Basle Symposium on the Role of Public Law in Private International Law, Schriftenreihe des Instituts für internationales Recht und internationale Beziehungen, Vol. 49, Basel-Frankfurt a. M. 1991. 8 MANN F.A., 'Contracts: Effects of Mandatory Laws', in LIPSTEIN K. (ed.), Harmonization of Private International Law by the EEC, London 1978, p. 31, ID., 'Sonderanknüpfung und zwingendes Recht im internationalen Privatrecht', in Festschrift für Günther Beizke, Berlin-New York 1979, p. 607.

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von Overbeck the provision leads to the scission of contracts, producing an uncertainty that constitutes a serious obstacle to international trade. He views it unjust to allow a party to request the application of a law that has not been agreed upon and maintains that invoking paragraph 1 of Article 7 could lead to abusive tactics by defaulters. To these legal arguments he adds the political one that the provision could be used as an instrument to further dirigisme. Another objection against codification of the special mandatory law principle is based on the argument that the same result could be achieved by substantive law.9 The two well known English decisions Ralli Bros v. Compania Naviera Sota y Aznar10 and Regazzoni v. Sethia11 have often been cited in this context; however, they have also been mentioned as examples by authors favorable to Article 7, paragraph 1.12 In Germany the view still seems to prevail that cases where ignorance of some foreign provision could be fatal can be resolved by applying substantive law.13 Others argue that one should give effect to the special mandatory rules of a foreign law, but it is generally held that the decision of whether to do so should be left to the judge's discretion. The main point seems to be that, in the present world, one cannot ignore certain provisions outside the lex causae that pursue a legitimate goal. One of the most typical examples is the protection of cultural property.14 At the same time, one should not forget that certain provisions are necessary in order to prevent the collapse of a country's economy or aim at safeguarding competition. On the other hand, a person should not be submitted to contradictory injunctions emanating from different legal systems. While certain provisions protecting the weaker party could also be considered special mandatory ones, the Rome Convention and the PIL Statute provide special rules for such cases. In the Dutch Alnati case of 1966, the Hoge Raad considered the possibility of applying foreign special mandatory rules in an obiter dictum, the importance of which should not be exaggerated.15 On the contrary, in the Sensor case of 1982, the Hague District Court refused to apply the American Export Administration Regulations forbidding the export of materials to the USSR for the construction of the Siberian gas pipeline.16 9 We leave aside the American theories that go much further in applying different laws to various aspects of the same contract. 10 [1920] 2 K.B. 287 /C.A.). 11 [1958] A.C. 301; [1957] 3 WLR 752; [1957] 3 All ER 286. 12 On these and other cases from common law countries, see HARTLEY T.C., 'Mandatory Rules in International Contracts: The Common Law Approach', in Recueil des Cours, Vol. 266, l976, p. 239 (English cases at pp. 356 and 388). 13 See KROPHOLLER J., Internationales Privatrecht, 3d ed., Tübingen 1997, p. 444; SCHÄFER M., 'Eingriffsnormen im deutschen Internationales Privatrecht - eine never ending story?', in Festgabe für Otto Sandrock zum 65. Geburtstag, Heidelberg 1995, p. 37. 14 On cultural property, see SIEHR K., 'Nationaler und internationaler Kulturgüterschutz – Eingriffsnormen und der internationale Kunsthandel', in Festschrift für Werner Lorenz zum 70. Geburtstag, Tübingen 1991, pp. 525, 539. 15 Hoge Raad, 12 January l966, in Nederlandse Jurisprudentie 1967, p. 3, and in Rev. crit. dr. int. pr. 1967, p. 522, note STRUYCKEN A.V.M.; see also SCHWANDER I. (note 7) p. 359. 16 District Court, The Hague, 17 September 1982, in I.L.M. 1993, p. 66; in RabelsZ 1983, p. 140, note BASEDOW J.; in Rev. crit. dr. int. pr. 1983, p. 473, pp. 401, 430 comment

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Two Provisions of the Swiss Statute on PIL Germany, Ireland, Luxembourg and the United Kingdom excluded the application of paragraph 1 of Article 7 by making the reservation permitted under Article 22 of the Convention. The advantage of such a clause is still being discussed. A similar provision can be found in the Netherlands draft statute.17 However, to our knowledge, in addition to Switzerland, only Quebec has incorporated a similar provision into a statute (Civil Code, Article 3079). B.

The Interpretation of Article 19

As we shall see, there are some differences between the authentic German, French and Italian texts. The provision can be translated into English as follows: '(1) A provision of a law other than the one designated by this Statute that is meant to be applied mandatorily may be taken into account if interests [of a party] that are according to Swiss views legitimate and clearly overriding so require and the case is closely connected to that law. (2) Whether such a provision should be taken into account depends on its policy and its consequences for a judgment that is fair according to Swiss views.'18 The influence of paragraph 1 of Article 7 of the Rome Convention on Article 19 is unmistakable; however, the Swiss text takes additional precautions. For instance, 'taken into account' (prise en considération) is more restrictive than 'effect may be given' (être donné effet). Another restriction not contained in the Rome Convention is the value judgment asking for 'a legitimate and manifestly preponderant interest' and the pleonastic double reference to 'Swiss concepts of law'. With the exception of the latter addition, paragraph 2 corresponds to the second sentence of paragraph 1 of Article 7. The idea that the foreign provision must be applicable under the legal system to which it pertains is expressed less clearly than in the Rome Convention, particularly in the German text. While the Rome Convention speaks by AUDIT B.. 17 Schets van een algemeen wet betreffende het Internationaal Privaatrecht, Ministerie van Justitie, 1992, Art. 10, p. 3. 18 Translation from KARRER P.A./ARNOLD K.W./PATOCCHI P.M., Switzerland's Private International Law Statute 1987, 2nd ed., Deventer-Boston-Zurich 1994, p. 47. On Art. 19 see BONOMI A. (note 7), p. 333 et seq.; BUCHER A., Droit international privé suisse, Vol. I/2: Partie générale – Droit applicable, Basel 1995, p. 210; DUTOIT B., Commentaire de la loi fédérale du 18 décembre 1987, 2nd ed., Basel-Frankfurt a. M. 1997, p. 58; MÄCHLER-ERNE M., in HONSELL H./VOGT N.P./SCHNYDER A.K. (eds.), Internationales Privatrecht, Basel-Frankfurt a. M. 1996; VISCHER F., in HEINI A. and others (eds.), IPRG Kommentar, Zurich 1993, p. 205, all with complete references to materials and literature. See also GIRSBERGER D. , 'Zehn Jahre IPRG', in Schweizerische Juristen-Zeitung 1999, pp. 209, 213, published after this article was completed. On the application of special mandatory rules by arbitrators, see the contradictory views of BUCHER A., Le nouvel arbitrage international en Suisse, Basel-Frankfurt a. M. 1988, pp. 87, 120, on the one side, and of LALIVE P./POUDRET J.-F./REYMOND C., Le droit de l'arbitrage interne et international en Suisse, Lausanne 1989, p. 427, on the other side.

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von Overbeck about mandatory rules, Article 19 simply says 'a provision'. The use of the singular makes it clear that the lex causae prevails, the only exception being the precise matter governed by the special mandatory rule. The phrase 'of a party', which is placed in square brackets above, appears in the German and Italian texts, but not in the French text. This raises several questions: How did such a discrepancy appear in the final text? And which text is correct? Since an incomplete draft was submitted to Parliament before the final vote, it appears that the discrepancy was a technical mistake. As for the correct text, the French text should prevail. The phrase in question had been introduced during the parliamentary debates; however, the Commission of the House (Conseil national) unanimously decided to delete it during their last debate. The discussion at the plenary session of the House was based on a paper containing the complete final text of Article 19 in French, but only a fragment of the German text in which the passage relating to interests was omitted altogether. Since there were no more debates in either the House or the Senate (Conseil des Etats), the French text should prevail. It follows that the French text expresses the intention of the Commission of experts and the Government to permit an important interest of a country other than that of the lex causae to be taken into account, even against the will of the parties. Several authors have raised doubts about this point.19 C.

Swiss Case Law Relating to Special Mandatory Rules

Compared to the enormous amount of literature and frequent lively discussions on special mandatory rules, the case material on Article 19 of the PIL Statute is disappointingly scarce.20 Of course, one could be optimistic by concluding that the new Statute has created so much certainty that lawsuits are no longer necessary. One should not forget, however, that the judiciary systems of the 25 Swiss cantons are organized differently. Moreover, there is no uniform system of publishing case materials. Even the judgments of superior courts are published very late or not at all in many cantons. As a result, some interesting examples of the application of Article 19 might sleep forever in the files of some registry. The issue of special mandatory rules is raised or could have been raised in the following six cases. (a) We shall start with an unpublished judgment of the Court of LucerneCity of 31 October 1980 in Roland Huber v. Besser AG, a case decided long before Article 19 entered into force. The plaintiff requested payment of a 5% commission for selling one of the defendant's machines to a Saudi-Arabian. The defendant, a subsidiary of an American Company, refused payment contending that it was prevented from doing so by American anti-corruption legislation, also applicable to 19

See the discussion and different views in BONOMI A. (note 7), p. 301. Even the authors who favor a restrictive interpretation recognize that, in some cases, special mandatory rules can be applied contrary to the will of the parties, see e.g. VISCHER F., 'Zwingendes Recht und Eingriffsgesetze nach dem schweizerischen IPR-Gesetz', in RabelsZ 1989, pp. 438, 453. 20 See old Swiss cases on mandatory rules in SCHWANDER I. (note 7), p. 344.

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Two Provisions of the Swiss Statute on PIL European subsidiaries. Citing two older cases of the Federal Court involving foreign public law,21 the Court refused to apply such a statute, dealing with commerce policy, that it considered not of such vital or fundamental importance as to justify its respect by a Swiss Judge. The Court's findings revealed that there was in fact no corruption, and thus the claim was upheld. This case will be cited again in connection with exception clauses. (b) In the Hilmarton case, the Court of Justice of Geneva, in a decision upheld by the Federal Court, voided an arbitral award rendered in Geneva by a single arbitrator on 19 August 1988.22 A construction company had given a mandate (contrat de courtage) to Hilmarton to promote its offer made to the Algerian authorities in a bidding for public works. The agreed commission was 4%. Swiss law was chosen by parties. The arbitrator found the contract to be contrary to an Algerian law prohibiting the engagement of any intermediaries for the conclusion of such contracts. The precise facts, however, were difficult to establish, above all because the Hilmarton files had been stolen. According to the arbitrator's findings, the major part of Hilmarton's activity was illegal and could not be considered fiscal counseling as described in the contract, but consisted of inquiries and interventions for the purpose of 'persuading' the authorities to award his client the job. This activity proved successful; however, the defendant company stopped making payments to Hilmarton after having paid approximately half of the fees. Maintaining that there was strong suspicion of bribery and other activities contrary to commercial loyalty, the arbitrator found the contract immoral pursuant to paragraph 1 of Article 20 of the Swiss Civil Code and the case law of the Federal Court relating to this provision. He thus rejected Hilmarton's claim to the remaining commission. Rendered prior to the PIL Statute, the Swiss decisions cited by the arbitrator were based on the concordat (Convention between Cantons) on arbitration, which gave the courts considerable authority to void awards. The Court of Justice and the Federal Court later found the award to be arbitrary and contrary to law. Maintaining that no undue influence had been exercised vis-à-vis the authorities, they both ruled that the contract was not immoral under Swiss law. According to the Court's reasons, the Algerian law prohibiting intermediaries went too far, aimed at preserving the State monopoly on international trade and violated the freedom of private persons to contract. This case would have been an excellent test for Article 19 of the PIL Statute. Doubts

21

Arrêts du Tribunal Federal Suisse, Recueil officiel (hereinafter: ATF) 80 II 51, 76

II 40. 22

Award, in Rivista dell'arbitrato 1992 p. 773, note GIARDINA A.; Cour de Justice de Genève, 17 novembre 1989, ibid., p. 735; Tribunal fédéral, 17 avril 1990, ibid., p. 739. – Notwithstanding the avoidance of the award in Switzerland it obtained the exequatur in France according to the provisions of the French statute which is more liberal than the New York Convention, Cour d'Appel de Paris, 19 Dezember 1991, in Rivista dell'arbitrato 1992 p. 743; Cour de Cassation, 23 mars 1994, in Clunet 1994, p. 701, note GAILLARD E. on the French and Swiss decisions.

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von Overbeck can be raised as to the correctness of the Court of Justice's decisions on the facts, which, in turn, bound the Federal Court. (c) The next case, decided by the Zurich Court of Commerce on 19 September 1991, is only marginally relevant because, as Schwander states in a note, the Court could have considered Article 19, but did not do so.23 The plaintiff purchased ten first class airline tickets in Libya and paid in dinars. He later requested the Airline to reimburse the tickets in Swiss francs or German marks. Referring to its general conditions which stipulate that tickets are to be reimbursed in the currency of purchase, the Company refused and offered payment in dinars in Libya. The plaintiff objected, arguing that this would be useless because Libyan monetary regulations prohibit the exportation of dinars. He seems to have asked the Airline to export the dinars itself, a solution the Airline seems to have refused. Applying Swiss Law, the Court dismissed the claim on the basis of the contractual clause stating that the Airline did not abuse its rights by invoking Libyan legislation prohibiting the export of dinars. (d) In G.S.A. v. V. S.p.A. et Tribunal arbitral of 28 April l992, the Federal Court voided an arbitral award because the arbitrators had refused to rule on the question whether the contract was invalid according to Article 85 of the Rome Treaty instituting the European Community.24 Since the Belgian and Italian parties had chosen Belgian law to govern their contract, Article 85, which sanctions restrictive trade practices, was applicable as part of the lex causae. Thus the case did not fall under Article 19. For our purpose it would have been more interesting if Swiss Law had been applicable! Provisions safeguarding competition are often cited as special mandatory provisions likely to be applied in connection with this provision. (e) In Banco Nacional de Cuba v. Banco Central de Chile, decided by the Federal Court on 20 July 1992, the Chilean bank had taken action to validate the attachment of the Cuban bank's funds deposited in a Swiss bank.25 Chilean law was applicable to the relations between the parties. The defendant Cuban bank opposed the action, invoking the interdiction of payment by Cuban legislation. Although it is doubtful whether the case should have been tried under the old case law or under the PIL Statute, the Court opted for the former. Nonetheless, the decision would have been the same under Article 19. Since the lawsuit concerned assets located in Switzerland, the Court ruled that the Cuban interdiction did not cause an impossibility to perform because the Cuban bank was not expected to take any action. In an obiter dictum it stated that the Cuban provisions would have been contrary to Swiss ordre public even if Cuban law had been applicable to the relations between the parties. The Court's 23

Handelsgericht des Kantons Zürich, 19 September l991, in RSDIE 1993, p. 73, note SCHWANDER I. 24 ATF 118 II 193, in RSDIE 1994, p. 108, note KNOEPFLER F.; in RabelsZ 1995, p. 309, note SCHNYDER A.K., p. 293; in Aktuelle Juristische Praxis 1993, p. 89, note SCHWANDER I. 25 ATF 118 II 348, in RSDIE 1994, p. 518, note SCHWANDER I.

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Two Provisions of the Swiss Statute on PIL refusal to apply these provisions would have been even more resolute if Article 19 had been applicable. (f) In a case decided on 18 August 1995, the Court of Appeal of Basle-City applied a provision of the Turkish Civil Code which provides that any antiquities of scientific interest that are discovered belong to the State.26 Since the Turkish Civil Code is modeled on the Swiss Civil Code, the applicable provision is very similar to a Swiss one. A person who purported to be the owner had acquired old tombstones in Turkey and Turkish law was applicable. Although the decision could hardly have been different, the Court's reasoning is somewhat unsound. Namely, the Court maintained that Article 19 should also apply to the question whether special mandatory rules of the lex causae are applicable. Schwander regrets this confusion which is due in part to a remark by Vischer in the Kommentar.27 The present writer shares Schwander's view that, in principle, the lex causae must be applied as a whole without taking account of the restrictive conditions laid down in Article 19, i.e., unless it violates Swiss ordre public.28

III. The Exception Clause in Article 15 of the PIL Statute A.

Exception Clauses in Swiss Law prior to Article 15

Exception clauses are part of the evolution of conflicts rules in continental systems (such as subjecting contracts to the law of the place of conclusion or even to the national law of the parties) towards a larger role for party autonomy and more flexible objective rules. In 1951, on the basis of pre-war preparatory materials, the Hague Conference on Private International Law drafted a Convention on International Sales of Movables (signed on 15 June 1955) containing fixed rules. In most cases, the applicable law was determined by the seller's habitual residence, and in some precisely defined cases by the buyer's habitual residence. At that time, the view prevailed that it was essential to assure predictability by establishing fixed connecting factors, even though the law so designated may have a weak connection with the contract.29 Now the weight has shifted towards solutions favoring application of the law having the closest connection with the case, even at the price of reduced predictability. The new Hague Convention on the Law Applicable to Contracts for the International Sale of Goods of 22 December 1986 contains similar connecting factors, but with an escape clause.

26

Appelationsgericht des Kantons Basel-Stadt, in Basler Juristische Mitteilungen 1996, p. 17; in RSDIE 1997 p. 492, note SCHWANDER I. 27 IPRG-Kommentar (note 18), p. 207, No. 2 ad Art. 19. 28 On the relations between Articles 13 and 19 see in detail VOSER N. (note 7), p. 77, 158; she favors the application of Art. 19 by analogy. 29 See VISCHER F., 'Methodologische Fragen bei der objektiven Anknüpfung im internationalen Vertragsrecht', in Annuaire suisse de droit international 1957, Vol. XIV, pp. 43, 57.

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von Overbeck Exception clauses are not very frequent in national laws.30 Article 1 of the Austrian Statute on Private International Law of 15 June 1978 may be cited as an example of a 'hidden' exception clause that was finally recognized as such by the Supreme Court.31 Article 1 provides that, in international cases, the law most closely connected with the case in question shall apply and, furthermore, that the particular rules of the Statute are to be regarded as embodying this principle. The Netherlands draft of 1992 contains a clause combining ordre public and an exception clause.32 The Swiss solution has been followed in Article 3082 of the Quebec Civil Code. If conflicts rules become as flexible as in Article 4 of the Rome Convention, which specifies that the law of the country with which the contract is most closely connected is only indicated by presumptions, an exception clause similar to the one in paragraph 5 of this Article is hardly necessary. In our opinion, a real exception clause or escape clause (clause d'exception, clause échappatoire, Ausweichklausel, Ausnahmeklausel, Berichtigungsklausel) is a provision that grants a judge discretion to set aside a more precise conflicts rule under certain conditions. There are generally two types of exception clauses: 1) those which allow the law designated by the conflicts rule to be set aside because it fails to provide an appropriate solution for the situation at hand, and 2) those which permit this to be done without taking account of the result, because another law is more closely connected with the case. We shall see that the second type was originally applied in Swiss case law, then the first one was proposed by writers; the second one finally prevailed and was incorporated into the PIL Statute. The origin of exception clauses in Switzerland can be found in the case law on contracts, more specifically in the leading case Chevalley v. Genimportex of 12 February 1952, where the Federal Court ruled that the whole contract must be governed by one law, thus preventing dépeçage of its elements.33 According to this and other cases, the law of the habitual residence of the person performing the 30 See KOKKINI-IATRIDOU D. (ed.), Les clauses d'exception en matière de conflits de lois et de conflits de juridictions – ou le principe de proximité, Dordrecht 1994; DUBLER C., Les clauses d'exception en droit international privé, Etudes suisses de droit international, Vol. 35, Genève 1983; KREUZER K., 'Berichtigungsklauseln im Internationalen Privatrecht', in Mélanges en l'honneur d'Imre Zajtay, Tübingen 1982, p. 295; ID., 'Zur Funktion von kollisionsrechtlichen Berichtigungsnormen', in Zeitschrift für Rechtsvergleichung 1992, p. 168; VON OVERBECK A.E., 'Les questions générales du droit international privé à la lumiere des codifications récentes', in Recueil des Cours, Vol. 176, 1982-II, p. 186; NADELMANN K.H., 'Choice of Law Resolved by Rules or Presumptions with an Escape Clause', in Am. J. Comp. L. 1985, p. 297; LAGARDE P., 'Le principe de proximité dans le droit international privé contemporain', in Recueil des Cours, Vol. 196, 1986-I, p. 97; ALVAREZ GONZALEZ S., 'Objecto del Derecho Internacional Privado y Especialización Normativa', in Anuario de derecho civil, Vol. XLVI, 1993, p. 1109. 31 Oberster Gerichtshof, 21 November 1989, in Zeitschrift für Rechtsvergleichung 1991, p. 305. See SCHWIND F., '§ 1 IPRG: Rechtssicherheit und Funktionalität im Licht der historischen Entwicklung', ibid. 1991, p. 255. 32 Supra note 17; see VON OVERBECK A.E., 'L'article 8 du projet néerlandais et la clause d'exception', in Nederlands internationaal privaatrecht, Speciale aflevering 1994, p. 36. 33 ATF 78 II 74.

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Two Provisions of the Swiss Statute on PIL characteristic obligation of the contract shall apply. However, another law can be applied if it has a stronger connection with the contract. Although the Court does not expressly mention exception clauses, the expression was coined by authors.34 The incorporation of a general exception clause was first proposed in 1971 by F. Vischer and again in 1973 by H. Dietzi.35 Dietzi's suggestion combined conflicts and substantive elements: justified expectations of the parties, a closer connection with another law, the avoidance of contradictory results, a result contrary to the fundamental principles of Swiss law or intolerable hardship on a party. The next stage is marked by the introduction of an exception clause in the old Statute on Private International Law of 25 June 1889 by virtue of a law revising the Civil Code of 25 June 1976, which entered into force on 1 January 1978. The connecting factors for matters relating to the recognition or disclaimer of a parent-child relationship are laid down in paragraph 1 of Article 8e as follows: The common domicile of the father, mother and child shall prevail; in the absence of a common domicile, the common nationality of all three persons; and as a last resort, Swiss Law. However, paragraph 3 of Article 8e provided that the law of another country may be applied if the case contains significant connections (rapports prépondérants) with the law of that country.36 This is clearly a clause of the second (conflicts) type. Although the clause has only been applied in a few decisions, it appears to have been understood in this sense in most of them. An exception can be found in a decision of 5 December 1977 of the Court of Appeals of Neuchâtel where the Court favored on material grounds Swiss over Italian law, the common national law of all the parties. The Court reasoned, namely, that Swiss law permitted the disavowal of childhood, which was apparently impossible under Italian law. 37

34

VISCHER F. (note 29), p. 57; SCHÖNENBERGER W./JÄGGI P., Das Obligationenrecht, Kommentar zum schweizerischen Zivilgesetzbuch, Band V/1/A, 3d ed., Zurich 1961, p. 89. This theory was applied in the unpublished Lucerne case mentioned in the second part (supra II, 3 a). 35 VISCHER F., 'Das Problem der Kodifikation des schweizerischen internationalen Privatrechts', in Zeitschrift für schweizerisches Recht l971, II, p. 74; DIETZI H., 'Zur Einführung einer generellen Ausweichklausel im schweizerischen Internationalen Privatrecht', in Festgabe zum schweizerischen Juristentag 1973, Basel – Stuttgart 1973, p. 49. 36 On this provision and the cases see VON OVERBECK A.E. (note 30), p. 202; LAGARDE P. (note 30) pp. 105, 123. 37 Tribunal cantonal, 5 December 1977, Enfant Giannecchini, in Revue de jurisprudence neuchâteloise 1977, p. 81, quoted and discussed by LAGARDE P. (note 30) p. 123. (The action was brought against the first husband of the mother who had remarried the real father).

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von Overbeck B.

Article 15 of the PIL Statute

Article 15 can be rendered in English as follows:38 '(1) The law designated by this Statute is, by way of exception, not applicable if, under all the circumstances, the case clearly has only a slight connection with the designated law, and has a much closer connection with another law. (2) This provision is not applicable where the parties have made a choice of law.' Remaining strictly on the conflicts level, this provision does not prescribe the application of a 'better law'.39 It cannot be invoked for the purpose of applying a law on the basis of material grounds. Such grounds are mentioned in several provisions of the special part, e.g., those dealing with the protection of children or consumers. The double-barreled rule requiring a weak connection with the designated law and a closer connection with another law requires a restrictive interpretation.40 Some authors are of the opinion that the provision applies only to conflicts rules based on the concept of the closest connection.41 We, however, support the view that it applies to all conflicts rules, with the exception, as stipulated in paragraph 2, of those permitting a choice of law by the parties or party. It should be noted that the later abandoned EC draft on torts contained a similar rule. The draft provision of Article 15 (Article 14 of the 1978 text) has been widely discussed. At a colloquium held in Fribourg in 1979, F.A. Mann objected to the provision, fearing that it would cause dangerous insecurity. On the contrary, G. van Hecke of Belgium and many other participants expressed a favorable opinion. Judge P. Bellet of France remarked that such a clause would be inappropriate for his country, but acceptable in Switzerland. As he put it, this is because Swiss judges are used to applying general clauses such as Article 1, paragraph 2 of the Swiss Civil Code.42 The views expressed at a colloquium at Lausanne in 1983 were 38

Translated by KARRER P.A./ARNOLD K.W./PATOCCHI P.M. (note 18), p. 45. On Art. 15 see DUTOIT B. (note 18), p. 36; KELLER M./GIRSBERGER D., in IPRG Kommentar (note 18), p. 118; MÄCHLER-ERNE M. (note 18), p. 130; BUCHER A. (note 18), p. 82; KNOEPFLER F., 'Utilité et dangers d'une clause d'exception en droit international privé', in Hommage à Raymond Jeanprêtre, Neuchâtel 1982, p. 113; SCHNYDER A.K., 'Ausweichklausel und Verbraucherschutz: Herausforderung des Schweizer Internationalprivatrechts' in SCHNYDER A.K. and others (eds.), Internationales Verbraucherschutzrecht: Referate und Diskussionsberichte des Kolloquiums zu Ehren von Fritz Reichert-Facilides, Tübingen 1995, p. 57. 40 A judgement of the Federal Court of 18 June 1981 (ATF 107 II p. 209) refusing to apply Art. 8e (3) of the old Statute was criticized as too restrictive. It would have been justified under Art. 15: see KELLER M./GIRSBERGER D. (note 39), p. 130, No. 50 ad Art. 15. 41 See in particular KREUZER K., in Lausanner Kolloquium über den deutschen und den schweizerischen Gesetzesentwurf zur Neuregelung des Internationalen Privatrechts, Publications of the Swiss Institute of Comparative Law, Vol. 1, Zurich 1983, pp. 10, 33. 42 Colloque de Fribourg relatif au projet suisse de loi fédérale sur le droit international privé, Etudes suisses de droit international, Vol. 14, Zurich 1979, pp. 11, 4, 9. 39

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Two Provisions of the Swiss Statute on PIL also divided.43 While members of the Comité français de droit international privé were against the clause, P.H. Neuhaus found it too restrictive.44 C.

Swiss Case Law Relating to Article 15

There are only a few cases in which the provision is applied; however, the courts may find some precedents in the former case law on contracts and cases relating to Article 8e, paragraph 3 of the old statute. (a) Although the PIL Statute was not applied in this case,45 the transition from the contracts principles of the former case law can be seen in a judgment of the Civil Court of Basle-City of 19 February 1990. In its reasons the Court stated that the parties had chosen Swiss law to govern their contract. In an obiter dictum it mentioned that the exception clause would have been applied if the parties had not made a choice of law. All elements of the case pointed to Switzerland, except the foreign domicile of the plaintiff, the law of which was applicable under the objective conflicts rule, but had no connection with the contract. (b) In C. Inc. v. F. Inc., X. and Y. of 17 December 1991, the Federal Court stated that the PIL Statute does not permit a reservation based on the notion of fraude à la loi against the fictive seat of a corporation.46 Neither can Article 15 lead to such a result as it purports to lead to the most appropriate law and not to prevent the fraudulent avoidance of Swiss law. (c) The first case in which the Federal Court applied Article 15 is W. v. W., a divorce case decided on 23 January 1992.47 A German married a Canadian lady in Quebec in 1960; in 1962 both became naturalized US citizens in Texas where they lived. After living in various places, the spouses finally settled in Switzerland in 1979. In 1984 the wife went to Germany, and the husband sued for divorce in Switzerland in 1986. The Cantonal Court hearing the case held that Texas Law was in principle applicable because the spouses had no common domicile in Switzerland (Article 61, paragraph 2 PIL Statute). Finding the Texas connection to be tenuous and the Swiss connection much closer, it nevertheless applied Swiss law under Article 15. After this judgment the wife returned to Switzerland but did not acquire a domicile. Although the Federal Court insists on a restrictive

43

Lausanner Kolloquium (note 41), p. 49. Finally none of the predicted disasters occurred and the clause proved useful, GIRSBERGER D. (note 18), p. 217 and note 67. 44 VON OVERBECK A.E. (note 30), p. 205. 45 RSDIE 1991, p. 268, note HEINI A. 46 ATF 117 II pp. 494, 501; in RSDIE 1993, p. 91, note SCHWANDER I.; in IPRax 1992, p. 405, note HEINI A. See also SCHNYDER A.K., 'Zehn Jahre IPR-Gesetz der Schweiz', in Zeitschrift des bernischen Juristenvereins 1998, pp. 593, 595. 47 ATF 118 II p. 79; in Rev. crit. dr. int. pr. 1992, p. 484, extensive note KNOEPFLER F., ibid., p. 488; in RSDIE 1994, p. 292, note BUCHER A. Bucher observes (p. 296) that the real problem was not the divorce, but the wife's pension, which would have been very difficult to obtain under Texas Law.

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von Overbeck interpretation of Article 15, it held that the circumstances of the case at hand merited its application. (d) In Dame P. B. v. P. B. of 7 April 1995, the Federal Court had to determine the law applicable to the divorce of two Italian citizens.48 Since only the wife was domiciled in Switzerland, Italian law, the common national law of the spouses, was applicable pursuant to paragraph 2 of Article 61 of the PIL Statute. Nonetheless, the Cantonal Court had applied Swiss law instead on the basis of Article 15. The Federal Court later reversed the decision, ruling that the case was most closely connected with Italian law, the spouses being both Italian and both domiciled in Italy when they married, and the husband being domiciled there at all times. According to the Court, the fact that the marriage took place in Geneva and the four children were born there did not establish a stronger connection with Switzerland. Furthermore, the Federal Court stated that the Italian connection was also strengthened by the fact that the wife returned to Italy after the first judgment. It is interesting to note that, contrary to proceedings in which ordinary conflicts rules are applied, the judge can also take account of events occurring after the action was brought when the exception clause is applied. (e) In a case decided on 30 June 1997 by the Superior Court of the Canton of Solothurn, a Turkish wife and her Swiss son, both having their habitual residence in Turkey, claimed maintenance pending a divorce suit in Switzerland against the Swiss father who apparently resided in Switzerland.49 The Court was correct to apply the Hague Convention on the Law Applicable to Maintenance Obligations of 2 October 1973 to the claims of both the wife and the child. Pursuant to Article 4 of the Convention, the Turkish law of the wife's habitual residence was applicable to her claim; however, by virtue of the reservation made by Switzerland according to Article 15, Swiss law governed the child's claim as the law of common nationality of the father and child.50 The Court, however, found this cleavage unsatisfactory, all the more because under Swiss law one does not necessarily distinguish between maintenance paid to the wife and to children during a divorce suit. The Court's decision to apply Swiss law to both claims is based primarily on the following reasoning: 1) the purpose of Articles 4-6 of the Hague Convention was to guarantee application of the law most favorable to the creditor, and 2) the wife herself had requested the application of Swiss law. In our opinion, the first 48

ATF 121 III p. 246; RSDIE 1996, p. 191, note BUCHER A. Obergericht Solothurn, 30 June 1997, in Solothurnische Gerichtspraxis 1997, p. 5, No. 1; in Schweizerische Juristen-Zeitung 1999, p. 31. 50 Art. 8 providing that the law applicable to a divorce shall govern maintenance between divorced spouses applies only after the final judgment and not to provisional measures during proceedings: see HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW, Proceedings of the Twelfth Session (2-21 October 1992), Vol. IV, Obligations alimentaires, Explanatory Report by VERWILGHEN M., p. 448, No. 155. 49

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Two Provisions of the Swiss Statute on PIL argument is not a valid one because the subsidiary connecting factors in Articles 56 are applicable only in cases where the law of the creditor's habitual residence designated by Article 4 does not provide for maintenance at all, they are not to be used to determine the most favorable law, which is often difficult to ascertain. The Court found that Turkish law (based on the Swiss Civil Code) provides for maintenance. Furthermore, it was not established that Swiss law is more favorable than Turkish law. On the second argument, one must stress that the Convention does not provide for a choice of law by one or both parties.51 Although it is still tempting to justify the Court's decision by reference to Article 15, it is very doubtful whether avoidance of dépeçage can be cited as a valid ground for applying this provision.52 The connections with Swiss law were certainly not much stronger in this case, and authors unanimously agree that Article 15 cannot be applied if the conflicts rule is a conventional one. The Federal Court could hardly have upheld the decision under the present law.53

IV.

Conclusion

On the basis of the cases examined and the fact that there are so few of them, it can be concluded that Articles 19 and 15 of the PIL Statute have produced none of the difficulties and uncertainties predicted by F.A. Mann and others. P. Bellet's conviction that Swiss judges would use such clauses with circumspection has proved to be correct. These two clauses are useful tools in a conflicts system, notably because some cases arise that cannot be satisfactorily resolved by ordinary conflicts rules. Articles 19 and 15 permit judges to do so in a straightforward manner based on clear grounds. In the absence of these articles, judges would be tempted to reach the same result by resorting to hidden or doubtful reasoning.

51 There are, of course, valid arguments for such a choice of law. In recognition of these arguments, the Hague Conference on Private International Law will perhaps incorporate such a provision in a new Convention currently under discussion. 52 One should also note that, contrary to the wishes of some delegates, the Hague Conference accepted that the laws applicable to the maintenance of spouses and children after divorce may be different: VERWILGHEN M. (note 50), p. 448, No. 153. 53 It is interesting to note that this decision has a counter-part in the field of conflicts of jurisdiction in a decision of the Obergericht of Zurich of 16 March 1998, in Blätter für zürcherische Rechtsprechung 1999, p. 37, No. 9). A French father domiciled outside Switzerland took action to change a divorce judgement in regard to personal relations and maintenance of the children. Both the former wife and the children resided abroad. Rightly the Court declined jurisdiction in matters dealing with personal relations on the basis of the Hague Convention on the Protection of Minors of 5 October 1961. As far as maintenance was concerned, Switzerland had jurisdiction pursuant to Art. 80 of the PIL Statute because mother and child were Swiss nationals and no party resided in Switzerland. However the Court found it preferable to judge both questions in the country of habitual residence of the child in order to take account of the child's needs in the best possible way. This seems to be a good example of the usefulness of the forum non conveniens theory, but unfortunately this theory is accepted neither in Switzerland nor generally in continental Europe.

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NEW DEVELOPMENTS IN CHINESE PRIVATE INTERNATIONAL LAW HUANG Jin* & Lü Guomin** I. II.

V. VI. VII.

Introduction Sources of Chinese Private International Law A. National Sources 1. Domestic Legislation 2. Juridical Interpretations B. International Sources 1. International Conventions 2. International Customs International Jurisdiction A. General Jurisdiction B. Special Jurisdiction C. Exclusive Jurisdiction D. Forum Selection Choice of Law in Selected Fields A. Laws Applicable to Property B. Laws Applicable to Contracts 1. Party Autonomy 2. Principle of the Closest Connection 3. Law Applicable to Torts 4. Laws Applicable to Maritime Matters 5. Laws Applicable to Negotiable Instruments 6. Laws Applicable to Civil Aviation 7. Laws Applicable to Marital and Family Matters 8. Laws Applicable to Succession The Recognition and Enforcement of Foreign Judgments and Arbitral Awards International Commercial Arbitration China's Model Law of Private International Law

I.

Introduction

III.

IV.

Today, more than twenty years after China adopted the policy of opening to the outside world in 1978, Chinese private international law is entering a stage of rapid development and great improvement.1 Numerous laws and regulations governing * Professor of Law, Wuhan University Law School, China; former Jurist, the Legislative Affairs Office of Macao Government; Vice-President, Chinese Society of Private International Law; Arbitrator, China International Economic & Trade Arbitration Commission (CIETAC); Doctor of Law, LL.M., Wuhan University; LL.B., Hubei Institute of Finance & Economics; Fulbright Scholar, Yale University Law School (1993-1994). ** Doctor of Law candidate, Wuhan University Law School. 1 Though differing greatly as regards the scope of private international law, almost all Chinese legal scholars regard conflicts rules, rules relating to jurisdiction in international civil and commercial matters as well as rules for the recognition and enforcement of foreign

Huang & Lü international civil and commercial relations have been promulgated and put into force by the legislative bodies and elaborated upon by the Supreme People's Court in the form of juridical interpretations. At the same time, the number of bilateral and multilateral treaties concluded or acceded to by China concerning private international law is also on the increase. This paper purports to present a concise survey of the new developments in Chinese private international law in recent years.

II.

Sources of Chinese Private International Law

Unlike the practice in most common law countries, China does not recognize the doctrine of stare decisis, and the decisions of Chinese courts are not treated as sources of Chinese law.2 Therefore, the sources of Chinese private international law can be conveniently divided into two categories: national sources including domestic legislation and juridical interpretation of laws, and international sources consisting of international conventions and customs. A.

National Sources

1.

Domestic Legislation

As there is no separate code of private international law in China, provisions on the subject are scattered among the following laws and regulations 3 issued by the National People's Congress and its Standing Committee: 4 Law of the People's Republic of China on Economic Contracts Involving Foreign Interest (1985) (hereinafter: Foreign Economic Contract Law),5 Succession Law of the People's judgments and arbitral awards as its indispensable components. See HAN Depei, Guoji Sifa Xinglun [A New Study on Private International Law], Wuhan (Wuhan University Press) 1997, pp. 6-9. 2 Nevertheless most Chinese scholars acknowledge that the decisions of the Supreme People's Court play an important role in Chinese private international law. See LI Shuangyuan, Zhongguo Guoji Sifa Tonglun [A General Introduction to Chinese Private International Law], Beijing (Law Publishing House) 1996, pp. 26-27. 3 A few of these laws and regulations are specifically devoted to international civil and commercial relations, while most of them only contain some rules of private international law. 4 Art. 58 of the Constitution of the People's Republic of China stipulates that 'the National People's Congress and its Standing Committee exercise the legislative power of the State.' See Laws and Regulations of the People's Republic of China Governing Foreign-Related Matters (1949-1990) (in Chinese and English), compiled by the Bureau of Legislative Affairs of the State Council of the People's Republic of China, Volume 1, Beijing (China Legal System Publishing House) 1991, p. 288. 5 See supra (note 4), pp. 484-488. This Law comprises 43 articles and has a special choice-of-law provision (Art. 5), which is regarded as the first of its kind in the legislative history of Chinese private international law. It states: 'The parties to a contract may choose the proper law applicable to the settlement of contract disputes. In the absence of such a choice by the parties, the law of the country that has the closest connection with the contract shall

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New Developments in Chinese PIL Republic of China (1985) (hereinafter: Law of Succession),6 Regulations of the People's Republic of China Concerning Diplomatic Privileges and Immunities (1986),7 General Principles of the Civil Law of the People's Republic of China (1986) (hereinafter: General Principles of Civil Law),8 Regulations of the People's Republic of China Concerning Consular Privileges and Immunities (1990),9 Law of Civil Procedure of the People's Republic of China (1991) (hereinafter: Law of Civil Procedure), 10 Law of Adoption of the People's Republic of China' (1991) (hereinafter: Law of Adoption),11 Maritime Code of the People's Republic of China (1992) (hereinafter: Maritime Code),12 Foreign Trade Law of the People's Republic of China (1994) (hereinafter: Foreign Trade Law),13 Law on Negotiable Instruments of the People's Republic of China (1995) (hereinafter: Law on Negotiable Instruments),14 Law on Civil Aviation of the People's Republic of China (1995) apply. The law of the People's Republic of China shall apply to contracts that are to be performed within the territory of the People's Republic of China, namely contracts for Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and Chinese-foreign cooperative exploration and development of natural resources. For matters that are not covered in the law of the People's Republic of China, international practice shall be followed.' 6

See supra (note 4), pp. 469-473. Ibid., pp. 405-409. 8 Ibid., pp. 331-348. General Principles of Civil Law was adopted at the 4th Session of th the 6 National People's Congress on 12 April 1986 and became effective on 1 January 1987. It has a very important chapter (Chapter 8: 'Application of the Law to Civil Law Relations with Foreign Elements') which governs the choice-of-law problems. The nine articles in this chapter serve as the most comprehensive conflict of law provisions in Chinese legislation to date, even though they are very simple and many provisions are in need of improvement. 9 See supra (note 4), pp. 410-414. 10 This Law was both adopted and entered into force on 9 April 1991 and simultaneously abrogated the Provisional Law of Civil Procedure of the People's Republic of China of 1982. See Zhonghua Renmin Gongheguo Zuigao Renmin Fayuan Gongbao [Gazette of the Supreme People's Court of the People's Republic of China], No. 3, 1991, pp. 3-28. 11 The Law of Adoption was amended at the 5th Session of the Standing Committee of the 9th National People's Congress on 4 November 1998, and the revised Law of Adoption entered into force on 1 April 1999. For the revised Law of Adoption, see Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Congress of the People's Republic of China], No. 5, 1998, pp. 526-530. 12 See Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Congress of the People's Republic of China], No. 6, 1992, pp. 3-47. 13 See Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Congress of the People's Republic of China], No. 4, 1994, pp. 3-9. 14 See Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Congress 7

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Huang & Lü (hereinafter: Law on Civil Aviation),15 Contract Law of the People's Republic of China (1999) (hereinafter: Contract Law).16 In addition to the above laws adopted by the National People's Congress and its Standing Committee, the State Council and the Ministries and Commissions under the State Council have also enacted numerous regulations concerning private international law.17 These include: Rules for the Implementation of the Law of the People's Republic of China on Foreign-Capital Enterprises, approved by the State Council on 28 October 1990 and promulgated by Decree No. 1 of the Ministry of Foreign Economic Relations and Trade on 12 December 1990;18 Measures for the Implementation of Adopting Children by Foreigners in the People's Republic of China, approved by the State Council on 3 November 1993 and promulgated by the Ministry of Justice and the Ministry of Civil Affairs on 10 November 1993,19 etc. 2.

Juridical Interpretations

According to the Basic Law of the People's Courts of the People's Republic of China (1983), the Supreme People's Court is vested with the power to issue interpretations and explanations of concrete problems arising during the application of laws and regulations in concrete cases.20 As most of the provisions on private international of the People's Republic of China], No. 4, 1995, pp. 52-66. 15 See Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Republic of China], No. 7, 1995, pp. 5-39. 16 See Renmin Ribao [People's Daily], 22 March 1999, pp. 9-12. The Contract Law was adopted at the 2nd Session of the 9th National People's Congress on 15 March 1999 and enters into force on 1 October 1999. The above-mentioned Foreign Economic Contract Law will be abrogated on the same day. There are two articles in the Contract Law relating to private international law, i.e. Arts. 126 and 129. Dealing with the laws applicable to contracts with foreign elements, Art. 126 is the transplant of Art. 5 of the Foreign Economic Contract Law.: see supra (note 5). Art. 129 provides a period of four years for the limitation of actions relating to contracts for the international sale of goods and contracts for the import and export of technology, thus complying with relevant provisions of the United Nations Convention on Contracts for the International Sale of Goods (1980), to which China is a party. 17 Art. 89 of the Constitution of the People's Republic of China (1982) empowers the State Council to 'adopt administrative measures, enact administrative rules and regulations and issue decisions and others in accordance with the Constitution and the laws.' Art. 90 (2) of the Constitution further provides that the Ministries and Commissions under the State Council are entitled to 'issue orders, directives and regulations within the jurisdiction of their respective departments and in accordance with the laws and the administrative rules and regulations, decisions and orders issued by the State Council.' See supra (note 4), pp. 293-294. 18 Ibid., pp. 492-506. 19 See Law Yearbook of China, Beijing (Press of Law Yearbook of China) 1994, pp. 452-453. 20 Art. 33 of this Law reads: 'The Supreme People's Court shall give interpretation of questions concerning specific applications of laws and decrees in judicial proceedings.” See WANG Huaian, et al., eds., Zhonghua Renmin Gongheguo Falü Quanshi [Collection of the Laws of the People's Republic of China], Changchun (Jiling People's Press) 1989, pp. 47-51.

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New Developments in Chinese PIL law enacted by Chinese legislators are very vague, abstract, and even ambiguous, the Supreme People's Court has always given a detailed interpretation and explanation of almost every important piece of legislation after its enactment. These juridical interpretations and explanations are legally binding on the courts at all levels and are regarded as a source of Chinese private international law. It should be noted that, in most cases, the interpretations and explanations of the Supreme People's Court have not only elaborated on the concrete meaning of the relevant provisions, but also laid down some new rules of private international law. In this way, they have, to some extent filled the legislative gaps by enlarging and enriching the legislation, thereby playing an important role in the development and betterment of Chinese private international law. One of the most striking examples of juridical interpretations dealing with private international law is the Supreme People's Court's Explanation of Several Questions Concerning the Application of the Foreign Economic Contract Law. Issued on 19 October 1987, it deals with six aspects of the Foreign Economic Contract Law and is divided into six sections, one of which concerns choice-of-law issues.21 It should be noted that this Explanation will be abrogated when the new Contract Law enters into force on 1 October 1999. A year later, the Supreme People's Court's Opinions on Several Matters relating to the Implementation of the General Principles of Civil Law of the People's Republic of China were issued on 2 April 1988. Section 7 (Arts. 178 to 195) of the Opinions provides a detailed elaboration of Chapter 8 of the General Principles of Civil Law: 'Application of the Law on Civil Relations with Foreign Elements' and also creates several new conflicts rules.22 On 14 July 1992 the Supreme People's Court issued its Opinions on Certain Matters relating to the Implementation of the Law of Civil Procedure of the People's Republic of China. Part 18 (Arts. 304-320) deals with questions concerning civil cases with foreign elements. Most of the articles reiterate the contents of related articles of the Law of Civil Procedure Law, with only a few of them touching on new issues not covered by that Law.23 B.

International Sources

1.

International Conventions

International conventions and treaties, both multilateral and bilateral, are commonly recognized as a source of Chinese private international law. Where there are conflicts between the treaties concluded or acceded to by China and Chinese 21 See HAN Depei [et al., eds.], Guoji Sifa Jiaoxue Cankao Ziliao Xuanbian [Selections of Teaching Materials of Private International Law], Vol. 1, Wuhan (Wuhan University Press) 1991, pp. 58-62. 22 Ibid., pp. 63-65. 23 See Zhonghua Renmin Gongheguo Zuigao Renmin Fayuan Gongbao [Gazette of the Supreme People's Court of the People's Republic of China], No. 3, 1992, pp. 70-94.

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Huang & Lü domestic law, the treaty provisions shall prevail.24 The People's Republic of China is now party to an increasing number of important multilateral treaties relating to private international law, such as the Vienna Convention on Diplomatic Relations (1961), the Vienna Convention on Consular Relations (1963), the International Convention on Civil Liability for Oil Pollution Damage (1969), the Convention on International Civil Aviation (1944), the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), the United Nations Convention on Contracts for the International Sale of Goods (1980), the Paris Industrial Property Convention (1967), the Patent Cooperation Treaty (1970), the Universal Copyright Convention (1952), the Berne Convention for the Protection of Library and Artistic Works (1886), etc. On 3 July 1987, China became a Member State of the Hague Conference on Private international Law. Since then China has been actively participating in various of its activities and has acceded to two conventions concluded under the auspices of the Hague Conference: the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (1965)25 and the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (1970).26 In addition to the above multilateral conventions, China has also signed numerous bilateral treaties or agreements on private international law, including more than twenty bilateral agreements on judicial assistance in civil, commercial and/or criminal matters.27 24

E.g., Art. 142 (2) of the General Principles of Civil Law stipulates: 'If any international treaty concluded or acceded to by the people's Republic of China contains provisions differing from those in the civil laws of the PRC, the provisions of the international treaty shall apply, unless the provisions are ones on which the PRC has made a reservation.' See supra (note 4), p. 347. Similar provisions include Art. 238 of the Civil Procedure Law (note 10), p. 25; Art. 268 (1) of the Maritime Code (note 12), p. 47; Art. 184 (1) of the Law on Civil Aviation (note 15), p. 35; Art. 96 (1) of the Law on Negotiable Instruments (note 14), p. 65. 25 Ratification took place at the 18th Session of the Standing Committee of the 7th National People's Congress on 2 March 1992 with reservations placed on Arts. 8(1) and 10 of the Convention. See Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Congress of the People's Republic of China], No. 1, 1991, p. 19. 26 Ratification took place on 3 July 1997 at the 26th Session of the Standing Committee of the 8th National People's Congress, with a reservation placed on Chapter 2 (except for Art. 15) of the Convention. See Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Congress of the People's Republic of China], see supra (note 11), No. 4, 1997, p. 551. 27 These countries include France (signed 4 May 1987 and took effect 2 August 1988), Poland (5 June 1987 and 13 February 1988), Mongolia (31 August 1989 and 29 October 1990), Romania (16 January 1991 and 22 January 1993), Russian Federation (19 June 1992 and 14 November 1993), Belarus (11 January 1993 and 29 November 1993), Spain (2 May 1992 and 1 January 1994), Ukraine (31 October 1992 and 19 January 1994), Cuba (24 November 1992 and 26 March 1994), Italy (20 May 1991 and 1 January 1995), Egypt (29 July

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New Developments in Chinese PIL 2.

International Customs

Since most Chinese legal scholars are of the opinion that no international customs exist in the fields of conflicts rules and international civil procedure,28 international customs in private international law are generally defined in China as commercial and trade customs or general usages and practices such as UCP500, INCOTERMS 1990, etc. Under Chinese law, international customs may be applied: 1) by choice of the parties, and 2) in matters not regulated by Chinese law and international treaties acceded to by China.29

III. International Jurisdiction Only four articles of the Law of Civil Procedure deal with jurisdiction in respect of civil and commercial matters in international cases.30 However, in accordance with Chinese legislation and judicial practice,31 the jurisdiction provisions for domestic civil cases are usually applied in civil cases with foreign elements as well. A.

General Jurisdiction

General jurisdiction is characterized by the doctrine of 'the plaintiff submitting to the defendant' in Chinese law. Article 22 of the Law of Civil Procedure reads as follows: 'A civil lawsuit brought against a citizen shall be under the jurisdiction of the people's court of the place where the defendant has his domicile; if the place of the defendant's domicile is different from that of his 1994 and 31 March 1995), Bulgaria (2 June 1993 and 30 June 1995), Kazahkstan (14 January 1993 and 11 July 1995), Belgium (signed 20 November 1987), Thailand (16 March 1994 and 6 July 1997), Turkey (28 September 1992 and 26 October 1995), Greece (17 October 1994 and 29 June 1996), Cyprus (25 April 1995 and 11 January 1996), Hungary ( 9 October 1995 and 21 March 1997), Morocco (signed 16 April 1996), Kyrgyzstan (4 July 1996 and 26 September 1997), Tajikistan (16 September 1996 and 2 September 1998), Singapore (signed 28 April 1997), Uzbekistan (11 December 1997 and 29 August 1998), Vietnam (signed 19 October 1998). 28 See LI Shuangyuan, Guoji Sifa [Private International Law], Beijing (Beijing University Press) 1991, p. 35. 29 E.g., Art. 142(3) of the General Principles of Civil Law stipulates that 'International customs may be applied to matters for which neither the law of the People's Republic of China nor any international treaty concluded or acceded to by the People's Republic of China has any provisions.' See supra (note 4), p. 347. Similar regulations can be found in Art. 5 (3) of the Foreign Economic Contract Law (note 4), p. 484; Art. 96 (2) of Law on Negotiable Instruments (note 14), p. 65; Art. 268(2) of the Law on Civil Aviation (note 15), p. 35. 30 The four articles are Arts. 243, 244, 245 and 246. See supra (note 10), pp. 42-43. 31 Art. 237 of the Law of Civil Procedure stipulates: 'The provisions of this Part shall be applicable to civil proceedings within the territory of the People's Republic of China in regard to cases involving foreign element. Where the provisions of this Part do not cover it, other relevant provisions of this law shall apply.' Ibid., p. 41.

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Huang & Lü habitual residence, the lawsuit shall be under the jurisdiction of the people's court of the place of his habitual residence. A civil lawsuit brought against a legal person or any other organization shall be under the jurisdiction of the people's court of the place where the defendant has his domicile.'32 Consequently, the people's courts may exercise jurisdiction in civil cases with foreign elements if the defendants' domicile or habitual residence is on Chinese territory. Article 23 of the Law of Civil Procedure lays down four exceptions to the above doctrine, specifying that jurisdiction shall be exercised by the people's court of the place of the plaintiff's domicile or habitual residence: 1) in personal status lawsuits brought against persons not residing on the territory of the People's Republic of China, 2) in personal status lawsuits concerning persons whose whereabouts are unknown or who have been declared missing, 3) in lawsuits brought against persons who are undergoing rehabilitation through labor, and 4) in lawsuits brought against imprisoned persons.33 B.

Special Jurisdiction

Special territorial jurisdiction is based on the object of the claim or the legal facts involved. According to Articles 23-33 of the Law of Civil Procedure, the people's court can exercise jurisdiction over civil cases with foreign elements if the defendant's domicile or habitual residence is not on Chinese territory whenever one of the following connecting factors refers to a place under the territorial jurisdiction of the court: 1) the place where the contract is to be performed,34 2) the place where the insured object is located,35 3) the place where the bill (of exchange) is to be paid,36 4) the place of dispatch or destination (in disputes over transport contracts),37 5) the place where the tort is committed,38 6) the place where the accident occurred or where the ship at fault is detained,39 7) the place where the salvage took place or where the salvaged ship first docked after the ship accident (in disputes concerning expenses for maritime salvage),40 8) the place where the salvaged ship first docked or where the adjustment of general average was conducted or where the voyage ended.41 Also dealing with jurisdiction at the place where the contract is performed, 32

Ibid., Art. 22, p. 5. Ibid., Art. 23, p. 5. 34 Ibid., Art. 24, p. 5. 35 Ibid., Art. 26, p. 5. 36 Ibid., Art. 27, p. 5. 37 Ibid., Art. 28, p. 5. 38 Ibid., Art. 29, p. 5. 39 Ibid., Arts. 30-31, pp. 5-6. 40 Ibid., Art. 32, p. 6. 41 Ibid., Art. 33, p. 6. 33

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New Developments in Chinese PIL Article 243 of the Law of Civil Procedure provides six additional connecting factors which authorize the people's court to exercise jurisdiction over contractual or other disputes concerning property rights and interests in cases where the defendant's domicile is not in China. These connecting factors include the place in China where the contract is signed or is to be performed, where the object of the action is located, where the defendant's distrainable property is located, where the tort is committed, and where the representative's office of the defendant is located.42 C.

Exclusive Jurisdiction

In international civil procedure, exclusive jurisdiction refers to the fact that under the law of a State certain civil cases with foreign elements are exclusively assigned to the jurisdiction of the courts of that country. Exclusive jurisdiction does not accept parallel jurisdictions and cannot be avoided by agreement between the parties. In domestic civil procedure, Article 34 of the Law of Civil Procedure confers exclusive jurisdiction upon the people's courts in cases involving certain types of actions. For example, an action arising from a real estate dispute falls under the exclusive jurisdiction of the people's court at the place where the real estate is located.43 An action lodged in connection with a dispute over the operations of a harbor falls under the exclusive jurisdiction of the people's court at the place of the harbor.44 Finally, an action relating to a dispute concerning succession falls under the jurisdiction of the people's court at the place where the deceased had his domicile at the time of death, or the place where the principal part of the estate is located.45 Moreover, the Law of Civil Procedure confers exclusive jurisdiction on the people's courts of the People's Republic of China in disputes arising from contracts between Chinese and foreign parties concerning contractual joint ventures, equity joint ventures, and cooperative exploration and development of natural resources in China.46 D.

Forum Selection

The question of forum selection is governed by two articles of the Law of Civil Procedure, which read as follows: 'The parties to a contract may agree in their written contract on the choice of the people's court of the place where the defendant has his domicile, where the contract is performed, where the contract is signed, where the plaintiff has his domicile or where the object of the action is located, to exercise jurisdiction over the case, provided that 42

Ibid., Art. 243, p. 26. Ibid., Art. 34 (1), p. 6. 44 Ibid., Art. 34 (2), p. 6. 45 Ibid., Art. 34 (3), p. 6. 46 Ibid., Art. 246, p. 26. 43

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Huang & Lü the provisions of this Law regarding jurisdiction by forum level and exclusive jurisdiction are not violated.47 Parties to a dispute over a contract with a foreign element or over property rights and interests involving foreign elements may, through written agreement, choose the court of the place which has practical connections with the dispute to exercise jurisdiction. If a people's court of the People's Republic of China is so chosen to exercise jurisdiction, the provisions of this Law on jurisdiction by forum level and on exclusive jurisdiction shall not be violated.'48 From the above two articles it follows that the parties are at liberty to select the forum, which can be either a Chinese people's court or a foreign court. Their freedom of choice, however, is limited by several requirements. First, only parties to a contractual dispute with a foreign element or a dispute over property rights and interests with a foreign element have the right to choose the forum. Secondly, the parties' choice should be made in writing. Thirdly, the court chosen by the parties must have practical connections with the dispute; and fourthly, if the choice is made in favor of a people's court of the People's Republic of China, the provisions of the Law of Civil Procedure on forum level and exclusive jurisdiction shall apply.49

IV.

Choice of Law in Selected Fields

Our discussion below will focus on areas of Chinese legislation containing provisions on private international law, especially those where China has enacted new laws in recent years. A.

Laws Applicable to Property

As regards this subject, in present Chinese legislation there is only one article regulating the law applicable to immovables. Following the maxim of the lex rei sitae, it provides that immovable property shall be governed by the law of the place where the immovable is located.50 While this provision does not make a distinction between movables and immovables and is limited to 'the property of the immovable' without reference to conflicts issues, the Supreme People's Court has issued the following interpretation: 'Land, buildings, and other structures that are attached to land and things attached to buildings are immovable. Civil relationships such as those involving the title to the immovable, and [its] sale, pledge, or 47

Ibid., Art. 25, p. 6. Ibid., Art. 244, p. 26. 49 See HAN Depei (note 1), pp. 629-630. 50 See supra (note 4), Art. 144, p. 347. 48

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New Developments in Chinese PIL use are governed by the law where the immovable is located.'51 There are no legislative provisions and no juridical interpretations on conflicts rules in respect of movables. B.

Laws Applicable to Contracts

The contracts system of Chinese private international law is quite developed and closely follows international practice. Pursuant to Article 5 of the Foreign Economic Contract Law, Article 145 of the General Principles of Civil Law, and Article 126 of the newly promulgated Contract Law, the principles of party autonomy and the closest connection dominate choice-of-law issues relating to contracts with foreign elements. 1.

Party Autonomy

The principle of party autonomy prevails in Chinese legislation governing the law applicable to contracts. The parties to a contract with a foreign element can choose either Chinese law or the law of Hong Kong, Macao or that of a foreign country to settle contractual disputes52 relating, inter alia, to the conclusion of the contract, the time at which the contract was concluded, the formation of the contract, performance and duties of any party in breach and the amendment, discharge for breach, assignment, recession or termination of the contract.53 The parties' choice of the applicable law must be made expressly and in written form at the time the contract is concluded, or after a contractual dispute has arisen, or even at any time after the Chinese people's court has accepted the files of the action but before the case is heard by the court.54 As mentioned above, the principle of party autonomy is excluded in certain contracts between Chinese and foreign parties. These include equity joint-venture contracts, contractual joint-venture contracts, and contracts on the cooperative exploration and development of natural resources in the People's Republic of China, all of which are governed exclusively by the law of the People's Republic of China. Any choice of a foreign law to govern such contracts will be null and void.55

51

See HAN Depei [et al., eds.], (note 21), Art. 186, p. 64. See Art. 2 (2) of “the Supreme People's Court's Explanation of Several Questions Concerning the Application of the Foreign Economic Contract Law (note 21), p. 59. However, Chinese law is silent on the question whether or not the law chosen by the parties should have some connection with the contract. 53 Ibid., Art. 2 (1), p. 59. 54 Ibid., Art. 2 (2, 4), p. 59. 55 Ibid., Art. 2 (3); See also Art. 5 (2) of the Foreign Economic Contract Law (note 4), p. 484; Art. 126 (2) of the New Contract Law (note 16), p. 17. 52

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Huang & Lü 2.

Principle of the Closest Connection

The closest connection is a new principle in the field of private international law that was first applied in respect of contracts and now in other areas of private international law, such as torts, intellectual property, etc. In certain countries, this principle is even considered the fundamental guiding principle in respect of all issues relating to the choice of law.56 Chinese private international law has also accepted the principle of the closest connection. All Chinese choice-of-law rules relating to contracts have provisions providing that, 'where the parties to a contract have not made a choice, the law of the country having the closest connection with the contract shall apply.'57 Under Chinese law, the criteria of the closest connection is determined mainly by the theory of characteristic performance,58 which in most cases advocates application of the law of the place of business of the party responsible for the characteristic performance of the contract. This is well illustrated by Article 2 (6) of the Supreme People's Court's Explanation of Several Questions Concerning the Application of the Foreign Economic Contract Law which designates the laws applicable to thirteen types of foreign contracts: international sale of goods; bank loan and guarantee contracts; insurance contracts; contracts for the processing of raw materials; technology transfer contracts; construction contracts; contracts for the giving of scientific or technological advice or for the making of designs; service contracts; contracts for the supply of machinery; agency contracts; contracts for the leasing, sale and mortgage of immovable property; contracts for the leasing of movable property; and storage and custody contracts.59 3.

Law Applicable to Torts

Article 146 established three principles for conflicts rules on torts which differ from the traditional theory of the lex fori as well as from the English theory of the law applicable to torts. The first principle provides for the application of the lex loci delicti commissi, according to which 'the law of the place where an infringing act is committed shall 56 See HAN Depei [et al., eds.], (note 21); Art. 1 of the Austrian Law of Private International Law, p. 228. 57 See Art. 5 of the Foreign Economic Contract Law (note 4), p. 84; Art. 145 of the General Principles of Civil Law (note 4), p. 484; Art. 126 of Contract Law (note 16), p. 10; Art. 188 of the Civil Aviation Law (note 15), p. 35; Art. 269 of the Maritime Code (note 12), p. 47. 58 About this theory, see JESSURUN D'OLIVEIRA H. U., 'Characteristic Obligation in the Draft EEC Obligation Convention', 25 Am. J. Comp. L. 1977, p. 303; LIPSTEIN K., 'Characteristic Performance – A New Concept in the Conflict of Laws in Matters of Contract for the EEC', Northwestern Journal of International Law and Business 1981, pp. 402-414; XU Guojian, Guoji Hetongfa Zhong Tezhen Lüxing Lilun Yanjiu [A Study on Characteristic Performance in International Contract Law], Faxue Pinglun [Wuhan University Law Review] 1989 (Vol. 6), pp. 39-43. 59 See HAN Depei [et al., eds.], (note 21), pp. 59-60.

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New Developments in Chinese PIL apply in handling compensation claims for any damage caused by the act.'60 As regards the meaning of the place of the tort, the Chinese Supreme People's Court has provided a detailed interpretation, taking into account both the place where the tortuous act occurs and the place where damages arising from the tort are suffered. It also specifies that, if these places are not the same, the people's court can choose to apply the law of either place.61 The second principle concerns the connecting factors of nationality and domicile, which come into play when both parties have a common nationality or domicile. In this sense, Article 146 provides that, if both parties have the same nationality or are domiciled in the same country, the law of the country of their nationality or domicile may be applied.62 Here attention must be paid to the word keyi [may be], which is to be interpreted as meaning that, even if the parties share a common nationality or domicile, this does not bar application of the rule of the lex loci delicti commissi. The third principle is supplementary and provides that action can be taken against wrongful acts committed outside Chinese territory only if they also qualify as wrongful under Chinese law.63 If this requirement is not satisfied, the Chinese people's court will not treat the act as a tort, although it qualifies as such according to the applicable law. 4.

Laws Applicable to Maritime Matters

The Maritime Code of the People's Republic of China, which was adopted at the 28th session of the Standing Committee of the 7th National People's Congress on 7 November 1992 and entered into force on 1 July 1993, contains nine articles (Articles 268 to 276) on the law applicable to maritime matters with foreign elements. Of these, Articles 268, 269 and 276 are in fact the respective copies of Articles 142, 145 and 150 of the General Principles of Civil Law. The others deal with specific issues such as the ownership of ships, mortgage of ships, maritime liens, maritime torts, general average and limitation of liability for maritime claims. In brief, these matters are governed by the following laws: a)

Acquisition, transfer and extinction of the ownership of the ship by the law of the flag state of the ship;64 b) Mortgage of the ship by the law of the flag state, however, if the mortgage is taken out before or during its bareboat charter period, the

60

See Art. 146 (1) of the General Principles of Civil Law (note 4), p. 347. See Art. 187 of 'The Supreme People's Court's Opinions to Several Questions Concerning Implementing the General Principles of Civil Law of People's Republic of China' (note 20), p. 64. 62 See Art. 146 (1) of the General Principles of Civil Law (note 4), p. 347. 63 Ibid., Art. 146 (2), p. 347. 64 See Art. 270 of the Maritime Code (note 12), p. 47. 61

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Huang & Lü law of the original country of registry of the ship shall apply;65 c) Matters pertaining to maritime liens by the law of the forum;66 d) Claims for damages arising from a collision of ships by the law of the place where the infringing act is committed; if the collision occurs on the high seas, the law of the forum hearing the case shall apply, however, if the colliding ships belong to the same country, the law of the flag state shall apply regardless of the place of the collision;67 e) Adjustment of the general average by the law where the adjustment is made;68 f) Limitation of liability for maritime claims by the law of the forum.69 5.

Laws Applicable to Negotiable Instruments

The provisions concerning the laws applicable to negotiable instruments with foreign elements are provided in Chapter 5, Articles 95 to 102 of the Law of the People's Republic of China on Negotiable Instruments, which was adopted at the 13th Session of the Standing Committee of the 8th National People's Congress on 10 May 1995 and entered into force on 1 January 1996. According to the definition laid down in Article 95 (2), a negotiable instrument contains a foreign element when one part of the acts of issue, endorsement, acceptance, guaranty and payment takes place within and another part outside the territory of the People's Republic of China.70 It is obvious that facts such as whether the parties concerned are foreign or the relevant negotiable instrument itself involves foreign elements are not taken into account. Article 96 deals with the application of international treaties to which China is a party and international customs recognized by China. It is exactly the same as that of other legislation in China.71 As regards the capacity of natural and legal persons, the provisions of Chinese private international law are rather incomplete and undeveloped. In fact, there is only one unilateral conflicts rule.72 Article 97 of the Law on Negotiable Instruments makes up for this defect by providing first that the capacity for civil conduct of the debtor of an instrument is governed by the lex patriae of the debtor. In the event the debtor has no or only limited capacity for civil conduct under his lex patriae, but qualifies for full capacity under the lex loci actus, the debtor's capacity 65

Ibid., Art. 271, p. 47. Ibid., Art. 272, p. 47. 67 Ibid., Art. 273, p. 47. 68 Ibid., Art. 274, p. 47. 69 Ibid., Art. 275, p. 47. 70 See supra (note 14), p. 65. 71 See Art. 142 of the General Principles of Civil Law (note 4), p. 347; Art. 268 of the Maritime Code (note 12), p. 47. 72 See Art. 143 of the General Principles of Civil Law (note 4), p. 347. 66

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New Developments in Chinese PIL for civil conduct is governed by the lex loci actus.73 This provision complies with the practice of most countries as well as with the provisions of the two Geneva Conventions for the settlement of conflicts of laws in connection with bills of exchange and promissory notes (1930) and cheques (1931).74 In respect of the requirements relating to the items to be specified on a negotiable instrument, Article 98 provides that the items to be specified for the issue of bills of exchange and promissory notes shall be determined by the law of the place of issue. The same law applies in regard to the issue of cheques. However, if the parties so agree, the items to be specified may be determined by the law of the place of payment.75 Pursuant to Article 99, acts relating to a negotiable instrument such as endorsement, acceptance, payment and guaranty shall be determined by the lex loci actus.76 Articles 100 and 101 deal respectively with the time limits for exercising the right of recourse and for presenting the instrument and entering protest. In respect of the former, Article 100 follows the Geneva Conventions, adopting the connecting factor of the place of issue.77 In regard to the latter, Article 101 stipulates that the time limit for presenting the instrument, the form of the protest and the time limit for entering protest shall be subject to the law of the place of payment.78 As regards the procedure for exercising the rights arising from an instrument, the Law on Negotiable Instruments also complies with the practice of most countries and international conventions by providing that, if a negotiable instrument is lost and the person who lost the instrument requests that the rights under the instrument be exercised, the laws of the place of payment shall apply.79 6.

Laws Applicable to Civil Aviation

The Law on Civil Aviation of the People's Republic of China, adopted at the 16th Session of the Standing Committee of the 8th National People's Congress on 30 October 1995 and effective since 1 March 1996, also lays down conflicts rules in seven articles of Chapter 14 'Laws Applicable to Relations Involving Foreign Elements.' Of these, Articles 184, 188 and 190 simply repeat the contents of Articles 142, 145 and 150 of the General Principles of Civil Law.80 Furthermore, Articles 185, 186 and 187 adopt the same connecting factors as those in Articles 270, 271 (1) and 272 of the Maritime Code, which deal with similar issues. For example, Articles 185 and 186 provide that the law of the place of registry of a civil aircraft shall apply to the 73

See supra (note 14), p. 65. Ibid., p. 65. 75 Ibid., p. 65. 76 Ibid., p. 65. 77 Ibid., p. 65. 78 Ibid., p. 65. 79 Ibid., p. 65. 80 See supra (note 4), p. 347. 74

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Huang & Lü acquisition, transfer and extinction of the ownership of the aircraft and the mortgage taken out on the aircraft,81 while Article 187 states that liens relating to civil aircraft shall be governed by the law of the forum.82 The conflicts rules for torts committed in connection with civil aircraft also have much in common with Article 273 (1) and (2) of the Maritime Code. Article 189 reads as follows: 'The law of the place where the infringing act is committed shall apply to claims for damages exerted on the third party on the ground by civil aircraft. The law of the forum hearing the case shall apply to claims for damages exerted on the third party on the surface of the high seas by civil aircraft.'83 7.

Laws Applicable to Marital and Family Matters

Chinese legislation on family relations with foreign elements remains, for the time being, very incomplete and unsystematic. The General Principles of Civil Law contain only two provisions dealing with marriage and with divorce and support. Pursuant to Article 147, the marriage between a Chinese national and a foreigner is governed by the law of the place where the marriage is concluded, while a divorce between a Chinese national and a foreigner is governed by the law of the forum hearing the case (lex fori).84 This article, however, does not apply to marriages and divorces between two foreigners in China. In the absence of a provision on such matters, the Supreme People's Court stated in Article 188 of the Opinions to Several Questions Concerning Implementation of the General Principles of Civil Law that, in foreign-related divorce cases, the people's courts shall apply Chinese law to the divorce and the division of property resulting from the divorce; however, the validity of the marriage is determined in accordance with the law where the marriage took place.85 As specified in Article 148, the law applicable to support disputes is determined by the principle of the closest connection. In order to clarify this vague provision, the Supreme People's Court rendered the following interpretation to assist in determining the scope of support and the place of the closest connection: '[In the case of] support that parents and children provide each other or that a husband and wife provide each other or that other persons having support relationships provide one another, the law of the country to which the person receiving the support is most closely 81

See supra (note 15), p. 35. Ibid., p. 35. 83 Ibid., p. 35. 84 See supra (note 4), p. 348. 85 See HAN Depei [et al., eds.], (note 21), p. 64. 82

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New Developments in Chinese PIL connected must be applied. The nationality or domicile of the person providing support and of the person receiving support and the location of the property which provides the support can all be considered as the closest connection of the person receiving support.'86 In addition to the above provisions in the General Principles of Civil Law, the newly revised Law of Adoption also includes a unilateral conflicts rule on the adoption of Chinese children by foreigners which specifies that Chinese law shall apply in such cases.87 8.

Laws Applicable to Succession

Succession consists of two categories, namely intestate and testamentary succession. While provisions of Chinese private international law provide complete bilateral conflicts rules for intestate succession, at present there are still no relevant provisions on testamentary succession. To determine the laws applicable in cases of intestate succession involving foreign elements, China adopted the scission system 88 establishing different connecting factors for movables and immovables. According to Article 6 of the Law of Succession and Article 149 of the General Principles of Civil Law, in cases of intestate succession, movables shall be governed by the law of the place where the deceased had his domicile at the time of his death, and immovables by the law of the place where the immovable is situated.89

V.

The Recognition and Enforcement of Foreign Judgments and Arbitral Awards

According to the Law of Civil Procedure, a litigant may apply directly to a Chinese people's court for the recognition and enforcement of a judgment rendered by a foreign court. A foreign court may also file such a request itself, either under a treaty binding the country where the court is located and the People's Republic of China or on the grounds of the principle of reciprocity or mutual benefit.90 As regards the requirements for the recognition and enforcement of a foreign judgment in China, Article 268 states: 'In the case of an application or request for recognition and enforcement of a legally effective judgment or written order of a foreign court, the people's court shall, after examining it in accordance 86

Ibid., Art.147, p. 64. See Art. 21 (1) of the Adoption Law (note 11), p. 528. 88 See HAN Depei (note 1), p. 351 89 See Art. 36 of the Succession Law (note 6), p. 473; Art. 149 of the General Principles of the Civil Law (note 4), p. 348. 90 See Art. 267 of the Civil Procedure Law (note 10), p. 28. 87

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Huang & Lü with the international treaties concluded or acceded to by the People's Republic of China or with the principle of reciprocity and arriving at the conclusion that it doesn't contradict the basic principles of the law of the People's Republic of China nor violates State sovereignty, security and social and public interest of the country, recognize the validity of the judgment or written order, and, if required, issue a writ of execution to enforce it in accordance with the relevant provisions of this Law; if the application or request contradicts the basic principles of the law of the People's Republic of China or violates State sovereignty, security and social and public interest of the country, the people's courts shall not recognize or enforce it.'91 From this article it follows that, in order to qualify for recognition and enforcement, a foreign judgment must: 1) be final and in force, and 2) it may not violate the basic principles of the law of the People's Republic of China, China's sovereignty and security and the social and public interest of China. Chinese courts examine the form rather than the substance of foreign judgments. After deciding to recognize and enforce a foreign judgment, the Chinese court issues an enforcement decree and the judgment will then be enforced in accordance with the relevant provisions on the execution of domestic judgments. The requirements and procedure for the recognition and enforcement of foreign arbitral awards are the same as those for the recognition and enforcement of foreign judgments.92 Moreover, as is stated above, China ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958 at the 18th Meeting of the Standing Committee of the 6th National People's Congress on 2 December 1986. At the time of ratification, China entered two reservations stipulating that the People's Republic of China will apply the Convention only on the basis of reciprocity (the reciprocity reservation) and only to disputes that qualify under the laws of the People's Republic of China as arising from contractual relationships or non-contractual commercial legal relations (the commercial reservation).93 On 10 April 1987, immediately prior to the landing of the New York Convention on the soil of China, the Supreme People's Court issued a juridical interpretation94 that designates the intermediate people's courts as the authoritative organs to hear applications for the recognition and enforcement of foreign arbitral awards. 95 Moreover, the phrase 'commercial relations of a contractual and non-contractual nature' is defined as 'relations concerning economic rights and

91

Ibid., Art. 268, p. 28. Ibid., Art. 269, p. 28. 93 See supra (note 10), No. 2, 1987, p. 16 94 The interpretation is entitled “the Supreme People's Court's Notice on the Implementation of China's Accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.” See supra (note 10), No. 2, 1987, pp. 16-17. 95 Ibid., Art. 3, pp. 16-17. 92

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New Developments in Chinese PIL obligations arising out of contract, tort or relevant statutory provisions.'96

VI.

International Commercial Arbitration

International commercial arbitration began in China when an arbitration commission was set up to settle foreign trade disputes in 1956. 97 In 1988, this commission was renamed the China International Economic and Trade Arbitration Commission (hereinafter: CIETAC), as it is known today. CIETAC is located in Beijing. To meet the needs of the growing arbitration activities in China, it established the Shenzhen Sub-Commission in 1989 and the Shanghai Sub-Commission in 1990. CIETAC developed both its practice and rules rapidly in the 1990s. This was necessary in order to accommodate the increasing number of cases submitted to CIETAC.98 In 1990 CIETAC was said to rank 'as the second-busiest international arbitration body in the world, just behind the long-established International Chamber of Commerce (ICC) in Paris.'99 CIETAC's rules of 1956 dropped their provisionary status in 1988. Since then they have been amended three times. Approved in 1994, the first amendments increased the number of rules from 43 to 81, making them more sophisticated and complete. In 1995, CIETAC amended its rules again with a view to aligning them with the new Chinese Arbitration Law, which was adopted on 31 August 1994 and entered into force on 1 September 1995.100 The third amendments were approved in 1998. Under the 1998 Arbitration Rules, the scope of legal issues deemed arbitrable by CIETAC has been greatly enlarged to cover disputes arising from economic and trade transactions, contractual or non-contractual, including: 1) international or foreign-related disputes; 2) disputes concerning the Hong Kong SAR, Macao or Taiwan regions; 3) disputes between enterprises with foreign investment as well as between an enterprise with foreign investment and another Chinese legal person, natural person and/ or economic organization; 4) disputes arising from project financing, invitation for tender, bidding, construction and other activities conducted 96

Ibid., Art. 2, p. 16. In China, China Maritime Arbitration Commission established on 21 November 1958 handles international maritime arbitration. 98 From 1990 to 1998, its annual caseloads are respectively: 238 (1990), 274 (1991), 267 (1992), 504 (1993), 829 (1994), 902 (1995), 778 (1996), 723 (1997), 678 (1998). 99 MOSER M. J., 'Arbitration in China', The China Business Review, September/October 1990, p. 42. Cited comments from International Chamber of Commerce. Bulletin Vol. 2, No. 1, 1990: International Arbitration in the Asia/Pacific Region, p. 9. 100 The Arbitration Law of the People's Republic of China consists of eight chapters and 80 articles. Chapter 4 on 'Special Provisions on Arbitration Involving Foreign Elements' contains the basic provisions on international commercial arbitration. See Zhonghua Renmin Gongheguo Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Gongbao [Gazette of the Standing Committee of the National People's Congress of the People's Republic of China], No. 4, 1994, pp. 3-13. 97

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Huang & Lü by Chinese legal persons, natural persons and/or other economic organizations utilizing the capital, technology or services from foreign countries, international organizations or from the Hong Kong SAR, Macao and Taiwan regions; and 5) disputes that may be referred to CIETAC in accordance with special provisions or upon special authorization by the law or administrative regulations of the People's Republic of China.101 CIETAC accepts cases on the basis of an arbitration agreement between the parties and upon written application by one of the parties.102 A valid arbitration agreement must be in writing, and it must state that the parties agree to resolve their disputes by arbitration; it must also specify the arbitration institution.103 During the course of arbitration, the parties are free to reach an amicable settlement by themselves, or they may request conciliation by the tribunal or agree to such conciliation after consultation with the tribunal.104 They are also entitled to choose languages other than Chinese,105 the place of arbitration,106 as well as rules other than those of CIETAC.107 In order to keep abreast with the international arbitration practice, CIETAC has established good relations and cooperates with international commercial arbitration institutions throughout the world.108 Nearly one-third of the CIETAC panel of arbitrators is from foreign countries, including the USA, UK, France, Italy, Russia, Switzerland, Belgium, Japan, etc.

VII. China's Model Law of Private International Law As mentioned above, China, up to now, has no separate code of private international law and the statutory rules of Chinese private international law are rather incomplete. Therefore, in 1993 the Chinese Society of Private International Law (CSPIL) began drafting a Model Law of Private International Law for the People's Republic of China. After five years of intense preparatory work and careful research, the fifth and final draft was completed on 16 November 1997. The draft Model Law symbolizes the desire of China's professional and academic circles to pursue the systematization and codification of Chinese private international law. The most distinctive feature of this draft Model Law is its structure. During the drafting process some held the view that the Model Law should consist of four 101 See Art. 2 of CIETAC's 1998 Arbitration Rules (effective as of 10 May 1998) in a booklet issued by CIETAC (in Chinese and English), pp. 28-29. 102 Ibid., Art. 3, p. 29. 103 See China International Economic and Trade Arbitration Commission Arbitration Guide (in Chinese and English), booklet issued by CIETAC, p. 11. 104 Arts. 44-50: see supra (note 101), pp. 40-42. 105 Ibid., Art. 75 (1), p. 48. 106 Ibid., Art. 35, p. 38. 107 Ibid., Art. 7, p. 30. 108 CIETAC has concluded agreements for cooperation in arbitration and/ or conciliation (medication) with arbitration centers in Sweden, France, Germany, UK, USA, Canada, Russia, Japan, Austria, Egypt, Switzerland, etc.

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New Developments in Chinese PIL chapters: General Principles, Application of Law, International Civil Procedure and Supplementary Provisions, thus following the structure of the Turkish Law of Private International Law and International Civil Procedure of 1982 109 and the Yugoslav Conflict of Laws Act of 1982.110 Others proposed that a unique system including five chapters be adopted: General Principles, Jurisdiction, Application of Law, Judicial Assistance and Supplementary Provisions. The latter proposal prevailed. The final draft Model Law of Private International Law is divided into the five chapters indicated above and contains 165 articles. Chapter One (Articles 1-18) deals with general issues such as the definition of international civil and commercial relationships, the application of international conventions and customs, renvoi, qualification, the application of laws to interpret connecting factors and the lex causae, the proof of foreign laws, evasion of law, public order, preliminary questions, etc. Chapter 2 contains 38 articles divided into five parts: general jurisdiction, special jurisdiction, exclusive jurisdiction, forum selection and other regulations relating to jurisdiction. Chapter 3 (Articles 57-150) deals with the laws applicable in certain legal issues; it contains eleven sub-chapters: nationality, domicile, habitual residence and place of business, capacity to exercise rights and to act, juristic acts and agency, prescription, personal rights, property rights, intellectual property rights, obligations, torts, unjust enrichment and voluntary service, marital and family relations, succession, and arbitration. Chapter 4 contains 12 articles regulating in detail matters relating to service abroad, the taking of evidence abroad, indirect international jurisdiction, the recognition and enforcement of foreign judgements and arbitral awards. The final three provisions in Chapter 5 deal with the validity of the Model Law and the date of its entry into force.

109 110

See HAN Depei [et al., eds.], (note 21), pp. 266-275. Ibid., pp. 238-246.

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HUNGARIAN PRIVATE INTERNATIONAL LAW László BURIÁN* I. II. III. IV.

V.

Introductory Remarks The Codification Process Some General Characteristics of the Code The Hungarian PIL Code A. General Provisions 1. Qualification 2. Renvoi 3. The Role of Reciprocity 4. Ascertainment of the Content of Foreign Law 5. Public Policy 6. Application of Mandatory (Peremptory) Norms of the Forum 7. Fraud and Optional Application of the Lex Fori Instead of the (Foreign) Lex Causae B. The Law of Contracts 1. Party Aautonomy a) Is Party Autonomy Subject toTime Limitations? b) Must the Chosen Law Have a Connection with the Contract or the Parties? c) Must the Choice of Law Be Made Expressly or Is an Implied Choice of LawAcceptable? d) Can the Parties Select More Than One Law to Govern the Contract? e) Are the Substantive Provisions of the Chosen Law Static or Dynamic? f) What are the Limits and Scope of Party Autonomy? g) Special Limitation of the Scope of the Chosen Law in Consumer Contracts 2. Choice-of-Law Rules on the Law Applicable to Contracts in the Absence of a Choice of Law by the Parties C. The Law of Torts 1. The Applicable Law Prescribed by the Code 2. A Few Words About the Court Practice in Delicts Closing Remarks

* Professor of Private International Law at the University of Budapest.

Burián

I.

Introductory Remarks

The end of a century offers an excellent opportunity to look back at the past and analyze trends of the near and not so near future. The coming year, the year 2000, is not only the last year of the century, but at the same time the end of a millennium. This double anniversary gives us lawyers, representatives of different fields of legal science, a special opportunity to review past developments, face contemporary problems, and make predictions about the future. I am sure that many studies will analyze the history of the different branches of law and attempt to say something about present and future tasks. It is probably only a coincidence that the first volume of this Yearbook on Private International Law is being published in the last year of the twentieth century. A lawyer dealing with the history, present, and future of private international law cannot review one thousand years; however, the year 1999 is not a meaningless date for a continental lawyer dealing with problems of private international law. This year we celebrate the hundred and fiftieth birthday of modern European Private International Law that began with Savigny's basic work, the 8th volume of the System des heutigen Römischen Rechts, first published in 1849. The scientific approach to Hungarian private international law – as a separate branch of law – dates back about one hundred and twenty years. The author of the first scholarly analysis of Hungarian PIL was an Austrian lawyer named Johann Vesque von Püttlingen. Written in German, his book dealt with problems of Austrian and Hungarian PIL in 1878.1 Hungarian practicing lawyers soon discovered the importance of this new branch of law, and the Hungarian Association of Lawyers gave floor to discussions and papers about PIL-related problems. The well-known lawyer Rezsö Dell`Adami presented the first serious paper on problems of Hungarian PIL in 1889 and the Association of Lawyers initiated the first book on PIL in the Hungarian language, published in 1893.2 Two other works marked the growing importance of PIL3 during the rather short period of peaceful development prior to World War I. The painful consequences of World War I for Hungary – the loss of two thirds of its territory and one third of its population – gave new impulses to the development of both public and private international law. Although the number of laws containing rules relating to private international law increased significantly by the end of the nineteenth century, as did the importance of international

1

VESQUE VON PÜTTLINGEN J., Handbuch des in Österreich-Hungarn geltenden Internationalen Privatrechts mit besonderer Berücksichtigung des Staats- und Völkerrechts, Wien 1878. 2 SZÁNTÓ M., Nemzetközi magánjog különös tekintettel hazai viszonyainkra, Budapest 1893. 3 WITMANN E., Nemzetközi és időközi magánjog, Budapest 1902, and FERENCZY A., A nemzetközi magánjog kézikönyve, Budapest 1911.

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Hungarian Private International Law agreements, PIL remained above all a judge-made law in Hungary. The development of private international law was decisively influenced by the practice of the Hungarian Supreme Court, the Curia. The Curia`s leading decisions – most of them dated prior to World War I – created the basis for choice-of-law rules in the most important fields of private international law, especially contracts and torts. For example, as early as 1903, the Curia declared that the courts should apply the lex rei sitae in legal relationships concerning the law of property.4 Only two years later it laid down the principle of party autonomy in contractual relationships;5 and in the same decision it declared the principle of lex loci delicti commissi applicable in cases concerning tortious liability.6 It soon became evident, however, that all the problems emerging in the course of everyday practice could not be resolved by the courts without a solid scientific and statutory background. Since serious efforts to create a Code on private law had proved unsuccessful between the two world wars, realistic lawyers could not seriously believe that a PIL Code would soon come into existence. In this situation the role of legal science became more important than ever. Fortunately, Hungarian legal science was then on a level comparable to other European countries. A young and ambitious professor of the Péter Pázmány University of Budapest, István Szászy – at the same time professor at the Hague Academy of International Law – developed a sophisticated system of Hungarian Private International Law with a wide comparative basis. In his famous book on Private International Law, published in 1938, he not only presented a systematic analysis of Hungarian legal practice but also developed a theoretical doctrine of Hungarian PIL based on a comparative research of all important theoretical questions, including the role of ordre public, characterization, renvoi, the role of reciprocity, etc. Aware of the difficulties in legal practice caused by the absence of an act on private international law, Szászy prepared a draft of a PIL code in 1948.7 This draft, which represented the views of its author and the level of legal science of that age, contained a general and a specific part, as well as very thorough comments by the author. It could have become the first PIL code in Hungary; however, again it was history that interfered. The communists came to power in 1948 and their ideology and views were mostly contrary to the ideas embodied in Szászy`s draft. The following years of the cold war endangered the very existence of PIL as a scientific discipline at the universities. Szászy was soon forced to retire and a new 'socialist' – in fact Marxist – era followed. Based almost entirely on the doctrine and views of Soviet legal

4

Decision No. 4726/1903 cited by SZÁSZY I., Nemzetközi Magánjog, Budapest 1938, p. 250. 5 Decision 7674/1908 cited by SZÁSZY I. (note 4), p. 243 6 Decision 7674/1908 cited by SZÁSZY I. (note 4), p. 341 7 SZÁSZY I., Magyar nemzetközi magánjog. Törvénytervezet és indokolás, Budapest 1948.

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Burián science, socialist PIL became a 'tool in the hands of socialist lawyers in the fight against the capitalist world.' For example, renvoi served as a means to enable socialist courts to use their own law in cases where their choice-of-law rules would have rendered a capitalist law applicable. Since the function of ordre public was to defend the socialist legal order, it was considered unnecessary among socialist countries since their social and economic systems were basically the same. Thus the whole construction of PIL seemed to be temporary, serving mainly the interests of the socialist countries in their foreign trade dealings with the capitalist world. Fortunately, this orthodox Marxist approach gave way to more realistic approaches in the late fifties and early sixties as confrontation was gradually replaced by peaceful co-existence. Recognizing the importance of foreign trade and the needs of international business, Hungarian politicians called, among other things, for an effective and modern private international law. A similar phenomenon could be observed in most socialist countries. As Professor Šarčević correctly observes: 'Despite the powerful influence of politics and ideology on all spheres of life, conflicts scholars were under considerably less ideological pressure than their colleagues in other fields of law.'8 This is surely true in the case of Hungary where foreign trade with western countries always played an important role in the economy. The 'forced accommodation of soviet patterns in, among others, the field of private and economic law'9 became less and less characteristic. In the early sixties, a new tendency appeared during the so-called consolidation of the Kádár regime. Developing 'slowly at first, but then more vigorously', this tendency favored 'the preservation of party autonomy, contracts and market relationships at the expense of central planning.'10 These trends, which increased in force and effect with the economic reforms of the late sixties, also had consequences for legal practice and legal science. Contacts to western countries kept lawyers open to western ideas and solutions. Again law had to become more than a simple tool in the hands of the ruling class in the struggle between political classes. Jurisprudence had to be rediscovered and restored. As Professor Ferenc Mádl, one of the representatives of this emerging legal science, said some years ago:

8

ŠARČEVIĆ P., 'The modernization of private international law after World War II', in: Perspektiven des Internationalen Privatrechts nach dem Ende der Spaltung Europas (VON BAR Ch. ed.), Köln (etc.) 1993, p. 14. 9 MÁDL F., 'Lex mercatoria, Unification of law, the Hague Conventions and Hungary', in: Conflicts et harmonisation. Mélanges en l'honneur d'Alfred E. Von Overbeck (STOFFEL W.A. and VOLKEN P. eds.), Fribourg 1990, p. 292. 10 See MÁDL F. (note 9), p. 293.

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Hungarian Private International Law 'In this climate, harmonization of certain elements of substantive law in East-West context could, and did materialize. For this to take place, the conservative rejection of comparative law had to be overcome, and theoretical justification of the 'rationality' of EastWest comparison had to be developed.... This comparative law attitude and activity [...] resulted in conditions which could successfully promote the above mentioned harmonizing effect to preserve the ius commune values of Europe in Hungary.'11 In 1960 the Civil Code of Hungary (Law No. IV/1959) came into force. This Code, which – with many modifications – is still in force, did not include rules on private international law. However, a provision did explicitly provide for the application of earlier, mainly prewar norms and customs of private international law. This situation lasted until the Code on Private International Law entered into force on 1 July 1979.

II.

The Codification Process

The codification of private international law commenced shortly after the adoption of the Civil Code. One may ask why almost two decades passed before for the PIL Code came into force. There are many reasons for this. The evolution of the Hungarian economic and legal systems was always characterized by ups and downs during the years of communist rule. The struggle between orthodox and liberal, retrograde and progressive forces did not end until the final collapse of the system at the end of the eighties. In academic circles a new generation appeared whose members were educated, had some international and comparative legal training at western universities, and were free of Marxist dogmas and preconceptions. Among others of this new generation, Ferenc Mádl concentrated his efforts on the creation of a modern code of private international law. He had some allies among young representatives of governmental circles, especially Gábor Bánrévy at the Ministry of International Trade, as well as among old and middleaged professors such as István Szászy and László Asztalos. As mentioned above, lawyers dealing with the legal aspects of foreign trade and international economic relations were under considerably less ideological and political pressures than their colleagues in domestic law, thus making it possible to overcome the obstacles. Preparing different versions of drafts based on the latest results of comparative law and the best traditions of Hungarian legal science proved less difficult than trying to influence the final political decisions at top levels of the communist party and government. Despite basic changes in the historical, political, economic, and legal situations, Hungarian lawyers emphasized the importance of legal continuity. Commenting on the history of the codification process in 1982, Ferenc Mádl 11

See MÁDL F. (note 9), p. 293.

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Burián recognized István Szászy's 1948 draft as the first draft of the PIL Code. In regard to Szászy's draft, he wrote among other things that '[the] draft was a sort of a private venture, the theoretical anticipation of the demands of later years, offering forms ripened in the scientist`s quietness to meet the demands expected.'12 This continuity, however, did not mean that the second draft had much in common with Szászy`s private draft of 1948. The differences were partly due to general changes as well as developments in the doctrine and practice of private international law between 1948 and the mid sixties. The fact that new trends were taken into consideration can be seen, for example, in the adoption of a broader concept of party autonomy. Instead of Szászy's restricted concept of party autonomy which does not permit the choice of a law outside the scope of the dispositive rules of the law applicable by the choice by the parties, the new (second) draft provided that the free choice of the parties includes not only the dispositive, but also the mandatory rules of the chosen law, thus allowing the parties to place their contract completely under the regime of the law of their choice. On the other hand, this concept of party autonomy prevailed only in the law of obligations, as a result of which the second draft no longer tolerated party autonomy in labor contracts and matrimonial relationships. Such restrictions were due to the Marxist concept of law, which strictly separates family law and labor law from civil law matters, thus preventing the parties from gaining control over their family and labor relations. Another change is the difference between the old and new concept of the law applicable to the lex personae of legal entities. The traditional approach of Hungarian PIL and the principle also embodied in Szászy's draft followed the continental model that provides for application of the law of the seat. The new concept laid down in the second draft provides that the place of incorporation shall apply. While this change was not motivated by ideology, the authors of the second draft were convinced, that '[b]oth logically, and in respect of the social and economic substance of the particular institution, in this sphere of issues the prevalence of the principle of incorporation should be considered to be the most adequate solution.'13 There are, however, a few examples that prove that the second draft followed some of the solutions of the 1948 draft. For instance, Szászy`s draft contained a much broader concept of the law of the flag than was usual in the traditional practice of the Curia. The lex bandi became a regular exception used in the law of property, in the law of contracts and in the law of torts as well, whenever the relationship in question was connected to ships and aircraft outside one's national territory. Without denying a certain continuity with the concepts in Szászy`s draft, the official view emphasized the differences rather than the similarities, particularly differences in ideology and the legal approach. In this sense, the new 12

MÁDL F., 'Introduction', in: Law Decree n° 13 of 1979 on Private International Law (Publication of Ministry of Justice of the Hungarian Peoples Republic), 1982, p. 11. 13 See MÁDL F. (note 12), p. 39.

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Hungarian Private International Law Hungarian PIL Code was said to be based on the new socialist branches of substantive law: the Family Law Code of 1952 and the Civil Code of 1959. (The Labor Code did not enter into force until 1967). According to the official reasoning, without the said system of socialist substantive law system 'the codification of private international law would have meant something like construct[ing] a roof for the top of a building which had not yet been erected.'14 In spite of this socialist characteristic, one must admit that the second draft was a progressive piece of legal draftsmanship. Like the 1948 draft, it also was the product of workshops of legal scholarship, however, one that took account of the demands of practice. The second draft was not created by a brilliant lonely scholar but was the result of team effort. The codification committee was organized within the framework of the Institute of Political and Legal Sciences of the Hungarian Academy of Sciences. As characterized by Ferenc Mádl, one of the decisive personalities of the codification committee, the second draft 'consisted of 11 Chapters and 87 fairly short sections, with comprehensive but not too elaborate regulations expressing the relatively fair harmony of the frames of principle and dogmatic definiteness.'15 Thus far the codification process seemed to be successful; however, the success achieved by reputable scholars was considerably slowed by less capable, but more influential political forces. On the surface the changes appeared to be only organizational in nature; however, in a communist country there are no pure professional questions. Codification is an important political issue. Thus the work continued under the auspices of the 'competent organ for codification, the Ministry of Justice.'16 The Ministry set up another committee and prepared the so-called official draft. Completed in 1970, the third draft contained 131 sections. Although somewhat longer, it preserved many of the values and principles embodied in the second draft. At this stage the process of codification was interrupted and nothing happening until 1977. During these seven years Hungarian lawmakers were busy with constant economic reforms. The efforts failed to bring about the expected results; however, in the late seventies no one dared to question the effectiveness of the whole system. In 1977, shortly after the completion of the most far-reaching modification of the Civil Code, the codification of private international law was again placed on the agenda. The fourth draft, drawn up by a newly created codification committee under the auspices of the Ministry of Justice, presented a new version of the planned code. Theoretically, the committee 'had to preserve the values of the earlier drafts and consider experience gathered in Hungary and abroad after the drafting of the projects, the consequences in the merits and inferences drawn from the international conventions concluded by Hungary, while endeavouring to meet the demands of life, the possible extent of the clarity of 14

See MÁDL F. (note 12), p. 12. See MÁDL F. (note 12), p. 13. 16 See MÁDL F. (note 12), p. 13. 15

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Burián economic drafting of the structure and lucidity in the text.'17 Since the text of this fourth draft did not change considerably during the following legislative activity, one can judge by reading the Code whether the above-mentioned goals and aims were achieved. Critics of the Code who had the opportunity to compare the 1970 draft and the final version of 1978 almost unanimously agree that in many respects the solutions and provisions of the final version are weaker. The radical reduction of articles from 131 to 75 meant that the provisions often fail to provide sufficient regulations for the practice, thus resulting in numerous problems of interpretation that cannot be easily resolved by the courts. Moreover, the official reasoning is often too laconic, failing to explain why certain solutions were adopted in the Code. During the past two decades since the Code entered into force on 1 July 1979, many studies have criticized its weak points, making de lege ferenda proposals. Such scholarly works have helped the courts interpret the provisions of the Code, but thus far have not influenced the legislation. The two modifications of the Code, both of which were adopted in 1997 and entered into force in 1998, concern the harmonization of the Hungarian legal system with that of the European Union. As will be shown later, these modifications did not correct the shortcomings of the Code. On the contrary, I am convinced that they have caused further problems that will soon have to be dealt with in the practice. In October 1998 the new government decided to launch a program to propose extensive revisions of the Civil Code. There is some hope that this time both the Civil Code and the PIL Code will be revised simultaneously. This, however, is only a plan that cannot be realized before 2002. Therefore, this study will analyze the actual provisions of Law No. 13/1979 on Private International Law, hereinafter referred to as the Code or the PIL Code.

III. Some General Characteristics of the Code The Hungarian PIL Code is a typical child of its age and birthplace. Prior to the political changes of the late eighties and early nineties, the Hungarian Code was usually characterized by one ephiteton ornans: it was called a socialist code. Looking back at that age, one cannot be quite sure what the adjective socialist really meant, except that it was the Code of a country having a centralized planned economy and an antidemocratic political structure with the Marxist communist party at the top. In this context socialist was never an adequate term as it was used for all totalitarian regimes in very different contexts. Using the word socialist became a habit among Hungarian (and other East and Central European) lawyers, yet it was not easy to find common characteristics of socialist laws with the exception of a few generalities. As mentioned above, there was a certain period in the fifties when Marxist scholars tried to construct a new 'socialist' private international law; however, these efforts had no real effect in the long run. Now we 17

See MÁDL F. (note 12), p. 14.

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Hungarian Private International Law tend to laugh at arguments, for example, those of socialist scholars who were convinced that Private International Law was an inadequate name for the conflict of laws in a socialist country. Instead it was suggested that Rechtsanwendungsgesetz, the name of the PIL Code in the former GDR, would perhaps be a suitable 'socialist' name. These scholars were right when they called this expression 'socialist'; namely, there was a decree of 1942 in national socialist Germany called the Rechtsanwendungsverordnung.18 I do not deny that the legal systems of the Soviet dominated countries of Central and Eastern Europe had numerous common characteristics; however, they were much more pronounced in public law than in civil law. In fact, the smallest number of common characteristics could be found in the law of conflicts. As I pointed out at a conference held in Osnabrück in 1992 on the effects of the transition on the theory of private international law and conflicts rules in Eastern Europe, the differences between the PIL systems of Eastern and Western countries were significantly smaller than most of us had thought. One of the reasons for the similarities is perhaps the common goal of private international law, i.e., the search for adequate substantive solutions for private law disputes having links to more legal systems. This goal, called der internationale Entscheidungseinklang by Savigny, was and still is the leading principle of continental systems of private international law. As I mentioned above, there are some characteristics common to the PIL systems of the former socialist countries. To start with the positive ones, it can be said that most of them were 'surprisingly well done'.19 This means that the codes were professionally made and tended to contain conservative solutions that were reliable though not really original. Friedrich Juenger, often a hard critic of continental choice-of-law systems, was right when he observed that 'in Eastern Europe the field of conflicts... conveys the impression of a fertile and well ploughed, if somewhat monotonous farmland.'20 It is true that Eastern and Central European systems, including the Hungarian Code, never did prefer 'revolutionary' approaches. Instead they chose conservative, traditional solutions, preferring legal certainty to elasticity. It is no coincidence that Hungarian and other 'socialist' scholars have perhaps always placed too much emphasis on the doctrine that courts cannot and de facto do not have any role in the process of law-making. This doctrine was a Marxist paraphrase of the roman maxim of praetor ius facere non potest. In fact, the courts – and above all the Supreme Court – did have a rather important role in the development of the legal system. Sociologically they not only applied, but also developed the law. This, however, was not characteristic of private international law after 1979. The Hungarian drafters of the Code did not

18

BURIÁN L., 'Die Konsequenzen des Umbruchs für die Theorie und für das positive Kollisionsrecht', in: Perspektiven des Internationalen Privatrechts nach dem Ende der Spaltung Europas (note 8), p. 81. 19 See ŠARČEVIĆ P. (note 8), p. 22. 20 Cited by ŠARČEVIĆ P. (note 8), p. 22.

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Burián give too much freedom to the courts in the choice-of-law process. There are only a few so-called general clauses allowing the courts real discretion in their decisionmaking. Moreover, there is no general escape clause in the Hungarian Code, thus generally preventing Hungarian courts from correcting the rigidity of traditional choice-of-law rules. Another typical feature of the Hungarian Code is the perhaps too strong 'homing instinct', a not really hidden preference for the lex fori over the application of a foreign law. Heimwärtsstreben, as Nussbaum called it, is as old as private international law. However, in my opinion and that of most Hungarian experts of private international law, the Hungarian Code favors lex fori too often and too directly. By using some institutions of the General Part such as the so-called fraudulent connection and renvoi, it endangers the final goal, i.e., application of the appropriate law. As mentioned earlier, Hungarian private international law follows the traditional continental approach set forth by Savigny. In other words – and this is again a distinctive feature of the Hungarian Code, it prefers 'conflicts justice' to 'material justice'. This means that in Hungarian PIL the function of choice-of-law rules is to determine the applicable law, without regard to the substantive content or quality of the law applied. Based on this, one could say that Hungarian PIL does not care whether the law applied as a result of this 'jurisdiction selecting' method resolves the individual case 'fairly'. However, the problem is more difficult. Hungarian PIL has always – even prior to the codification – tried to combine the two premises. According to the views of leading Hungarian scholars, conflicts justice and material justice are not entirely antagonistic notions.21 Although the task of private international law, and thus that of the Code as well, is to determine which law shall apply to a multistate legal dispute, the application of properly defined choice-of-law rules generally ensures that the applicable law leads to a fair substantive solution of the particular case. From this it follows that material justice can be achieved to some extent by the application of properly defined choice-of-law rules. The concept of the Code reflects this view. The problem, however, arises that a codified body of conflicts rules, especially one with mainly rigid solutions, can hardly react to changes in the substantive law and the concept of material justice. The mere fact that the Hungarian Code, which is now twenty years old, functioned quite well without any modifications until last year (the first modification of the Code entered into force on 1 March 1998) suggests that its choice-of-law solutions are well founded. On the other hand, it cannot be denied that by now there are many problematic parts, thus casting doubt on whether the Code can function in this form in the coming decades. The following section contains an analysis of the content of the Code and

21 VÉKÁS L., A nemzetközi magánjog elméleti alapjai, Budapest 1986, p. 89; MÁDL F., 'Values versus legal security in private international law', in: Acta Iuridica Scientiarum Hungaricae 1987, pp. 355-381.

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Hungarian Private International Law the solutions provided by its choice-of-law rules. Emphasis is placed on the problematic points of the Code and attempts to propose possible solutions.

IV.

The Hungarian PIL Code

The field of private international law is not free of paradoxes. The first paradox is that the name itself designates a branch of domestic law. This paradox, however, does not cause problems because lawyers are not misled by the name. Hungarian PIL must deal with yet another paradox: If Hungarian lawyers mention the Code, they all know that it exists in the form of a Law decree, a legal source belonging to the 'socialist' law of the past. I think that the mere existence of this legal source – whose name and nature are a contradiction – can say a lot to us about the real nature of 'socialism' in that part of Europe. Although Law decrees were adopted by a special gremium, the so-called Presidential Council of the People's Republic, they had the same force as 'normal' laws enacted by Parliament. When the system changed, this legislative body ceased to exist, as a result of which Law decrees will disappear sooner or later from the Hungarian legal system. Nonetheless, a Law decree was not an adequate form for a Code, even in the socialist past. In fact, as the title implies, Law Decree No. 13. 1979 does not claim to be a Code although it is de facto a Code. It can be designated as such because in this case it fulfills the generally acknowledged function of a Code: it regulates the respective field of law in its entirety. A.

General Provisions

The General Part (General Provisions: Articles 1-9) contains provisions on the general institutions of private international law: the purpose and the scope of the regulation, the priority of international treaties over internal conflicts regulations, characterization, renvoi, ascertainment of foreign law, reciprocity, the nonapplication of foreign law and related to this, the public policy clause, fraudulent connection and a provision not usually characteristic of a 'socialist' code: the possibility for the parties to ask the court to disregard the applicable law, which means the indirect choice of the lex fori. As far as the purpose of the Code is concerned (Art.1), the determination of the applicable law, the designation of the jurisdiction of Hungarian courts and provisions on procedural rules, there are no objections. Under the present conditions, however, the first introductory sentence may be somewhat disturbing with its unnecessary political declaration expressed in a characteristic cliché from past decades. Namely, all the above-mentioned functions are to be fulfilled 'with a view to development of peaceful international relations.' There can be no doubt that such a Code would serve peaceful purposes. On the other hand, it surely does not serve the development of all kinds of international relations in a general way. Article 2 stipulates the priority of international treaties. This provision serves clarity and is self-evident. The Hungarian Code does not mention 167

Burián international treaties in the Specific Part, as e.g. the Swiss Code does. Thus the forum must examine in every case whether there is an international treaty in force dealing with the issue in question. The priority of international treaties over the Code has also been upheld by the Hungarian Supreme Court, which ruled, inter alia, that 'since the protection of copyright is also governed by international treaty, the Law Decree on Private International Law is inapplicable by virtue of Art. 2 of the Code.'22 1.

Qualification

Most experts agree that qualification (characterization) is a problematic issue that can hardly be resolved by legislative provisions. Hungarian legal science has thoroughly analyzed the different arguments for and against the traditional and new approaches. In the Hungarian legislator`s view, the courts need the guidance of express provisions about qualification. The traditional method of using the lex fori is set forth in Article 3(1). Since application of the lex fori is not possible in cases where an institution is unknown to Hungarian Law and is difficult to apply when the institution in question differs from the Hungarian one, Article 3(2) provides that in such situations 'the foreign law governing the legal institution shall also be consulted.' The provision on qualification seems somewhat overcomplicated. One thing is sure: The process of qualification must begin with the lex fori. If the legal institution to be qualified is not known to the lex fori, qualification should be conducted according to the lex causae. This is the actual interpretation of the said rule by present theory. As far as qualification according to the lex fori is concerned, the prevailing interpretation seems to be correct. On the other hand, it is not clear whether institutions unknown to the lex fori should be qualified according to the lex causae. What if the foreign law governing the respective institution is not the lex causae but a third law? In my opinion, the third law should serve as the basis for qualification in such cases. The above provisions do not provide real guidance to Hungarian courts in regard to the problem of qualification. In simple cases such guidance is not needed, and in complicated cases it is useless. As far as court practice is concerned, on the basis of a case decided by the Budapest Municipal Court,23 I can say that the courts use the lex fori for the primary qualification and that this then leads to the lex causae. If the given institution has a different meaning in the lex causae, the courts try to correct the primary qualification according to the lex causae. Thus it seems that the courts have realized the weakness of the above provision and use their own discretion. In any case, no revision has yet been initiated on the grounds of an incorrect qualification by the court. 22 23

Decisions of the Hungarian Supreme Court (BH) 1992.631. Tebimpex v. Agraria (unreported).

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Hungarian Private International Law 2.

Renvoi

The doctrine and practice of renvoi has undergone many changes in Hungary in the course of the century. Customary PIL at the beginning of the century acknowledged renvoi, as did separate acts and international agreements ratified by Hungary (e.g., the 1930 Geneva Treaties on the Bills of Exchange and Promissory Notes). Nevertheless, the courts and other authorities did not apply renvoi in the first decades of the twentieth century. As far as theory is concerned, the majority was against renvoi prior to World War II. Arguments favoring renvoi were not accepted and the view was held that it causes uncertainty. This view changed during the Marxist period of Hungarian PIL in favor of the above-mentioned argument that non-acceptance of renvoi often results in the application of foreign law instead of the lex fori. Such approach led to the overwhelming acceptance of renvoi. Although some authors rejected renvoi in the early years of codification, they remained in the minority.24 As for the actual provisions of the Code, they tend to reflect the theoretical contradictions. Nevertheless, the final solution follows the arguments favoring renvoi only in cases where it leads to the application of the lex fori. Namely, the Code accepts renvoi but rejects reference to another legal system. This rather unique solution is an example of the 'homing instinct' referred to above. Modern Hungarian theory criticizes this solution yet remains basically in favor of renvoi,25 upholding the prevailing view that renvoi can promote uniformity in decision-making. Most representatives would welcome a modification of the present rules to permit a double reference to another legal system. I personally think that the Swiss or the Czech solution could serve as a model for Hungarian legislators. Renvoi does not play an important role in court practice. In fact, no cases of renvoi have been reported. There is, however, a non-reported case in the late seventies in which Hungarian law was applied via renvoi. This case involves real estate in Hungary owned by a French national who was born in Hungary but had lived in Paris for 30 years. Under Hungarian law, the law applicable to succession is the lex personae of the deceased. Hence, French law was applicable since the personal law is the lex patriae. According to the French choice-of-law rules, matters involving real estate are governed by the lex rei sitae of the real estate in question. Thus the French choice-of-law rules referred back to Hungarian law.26

24

See RÉZCEI L., 'A visszautalás', 25 Jogtudományi Közlöny 1970, pp. 151-160. MÁDL F./VÉKÁS L., The Law of Conflicts and of International Economic Relations (Akadémiai Kiadó), Budapest 1998, pp. 91, 92. 26 The Sándor Farkas case cited by: BURIÁN L./KECSKÉS L./VÖRÖS I., Magyar Nemzetközi Kollíziós Magánjog (VÖRÖS I. ed.), Budapest 1997, p. 22. 25

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Burián 3.

The Role of Reciprocity

Hungarian courts apply foreign law in conflicts cases whenever their own choiceof-law rules point to the application of foreign law. This raises the theoretical question why choice-of-law rules lead to the application of the law of another sovereign. As mentioned earlier, this is the only way to achieve uniformity in decision-making irrespective of the forum. The application of foreign law is not a gesture; it is not based on the comitas gentium or any kind of reciprocity. These views are clearly articulated in the general rule in Article 6(1) of the Hungarian Code that states: 'Unless otherwise provided by law, the application of foreign law does not depend on reciprocity.' If reciprocity is required by law, it is presumed to exist until the contrary is proved. There are, however, some exceptions where reciprocity cannot be presumed but has to be proved. These situations do not concern the application of foreign law, but rather procedural institutions. For example, proof of reciprocity is required for legal assistance to be provided in the absence of an international treaty (Art. 68) and for the enforcement of foreign court decisions not based on an international treaty (Art. 74). In such cases the Minister of Justice issues a declaration confirming the existence of reciprocity; such declaration is binding on the courts and other authorities. 4.

Ascertainment of the Content of Foreign Law

An important issue with serious practical consequences is the question whether foreign law is to be applied ex officio or only at the request of the parties. Another important question closely connected to the previous one concerns the proof of foreign law. Most scholars share the view that there is a close link between the applicability and the proof of foreign law. This is probably the reason why these two issues are regulated in the same provision (Art. 5) of the Code. As regards the first question, Hungary adheres to the classical continental approach: The courts and other authorities have to apply foreign law ex officio. Hungarian legal literature does not emphasize the question whether foreign law has to be treated as law or fact.27 The question, however, is answered impliedly. The application of foreign law ex officio implies that at least theoretically there is no difference between the application of foreign and domestic law. Both are laws, not facts. It has to be admitted, however, that – in the words of an English professor: '[…] even if a country regards foreign law as law, it will not necessarily treat it on a par with forum law: it is law, but law of a different kind.'28 From the point of view of the court, the most important difference between the application of domestic and foreign law concerns the ascertainment of the 27

See MÁDL F. (note 12), p. 34. See HARTLEY T. C., 'Pleading and proof of foreign law: the major European systems compared', 45 I.C.L.Q. 1996, p. 272. 28

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Hungarian Private International Law content of the law. Since domestic law belongs to the daily routine of any court, ascertaining the content of the law is usually not a complicated issue. If a court fails to apply its own law correctly, the consequence is judicial review by the appellate courts. Since the application of foreign law cannot be based on the maxim iura novit curia, as a rule, the forum has to prove the content of the foreign law. According to Hungarian PIL, the court may rely on its own knowledge of the content of the foreign law. The wording of Article 5(1): 'The court or other authority shall ascertain ex officio the foreign law unfamiliar to it [...]' implies that the court can use its own knowledge of the foreign law to be applied. This, however, is a rare exception. In most cases courts are not familiar with the content of foreign law, and thus they must prove its content. Although the task of obtaining evidence on the content of a foreign law relates to law and not to facts, as in a 'normal' lawsuit, the Code does not require the court to use certain methods or means to this end. In this regard, the Code mentions only the most common methods, such as obtaining an expert opinion, considering the evidence submitted by the parties, obtaining information from the Minister of Justice. The principles mentioned above are confirmed by the practice of the Supreme Court. For example, the Supreme Court recognized the freedom of the courts to obtain evidence on foreign law in its statement that the court of first instance 'may invite expert opinion, but may also accept any statement made or evidence presented by one of the parties and not challenged by the other party' (Pf. III. 20 No. 998 of 1996). In another decision the Supreme Court not only repeats its statement with respect to the Budapest City Court as court of first instance, but also emphasizes that it is the duty of the court to ascertain the content of the foreign law: 'The Budapest City Court, unfamiliar with Austrian law, must proceed ex officio to ascertain the foreign law, may invite expert opinion, but may also accept any statement made or evidence presented by one of the parties and not challenged by the other party' (Pf. III. 20 No. 474 of 1992).29 The possibility of obtaining information about the content of the foreign law from the Minister of Justice is mentioned in both the PIL Code and the Code of Civil Procedure (Art. 200). Obtaining information about the content of a foreign law is often a difficult task. International agreements can assist authorities in this respect. Bilateral agreements of legal assistance between Hungary and other countries, most of which were signed prior to 1990 with former socialist countries, are still in force. As far as multilateral treaties are concerned, Hungary is party to the 1968 European Convention on the Mutual Promotion of the Exchange of Legal Information. This Convention entered into force in Hungary in 1990 [adopted by Decree No. 50/1990 (III. 21) of the Council of Ministers].

29

See the citations by MÁDL F./VÉKÁS L. (note 25), p. 100.

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Burián 5.

Public Policy

Public policy (ordre public) has always been regarded in Hungarian doctrine as a means of defending the domestic legal system against obvious and offensive attacks by the applicable foreign law. Hungary has always followed the doctrine of so-called 'effective impact'. Accordingly, the view prevails that the role of public policy is to prevent the application of any foreign legal norm that in its particular effect would have the impact of violating the fundamental constitutional principles of Hungarian law. As a leading Hungarian textbook put it: 'In the adjudication of private international law cases this endeavour is expressed by the fact that the forum does not apply foreign norms offending its public policy or, more accurately, it disregards the foreign norms, which in their particular effect would violate public policy. Thus with a view to defending public policy, the law deviates if need be, from the path indicated by its conflicts rules, excluding application of the foreign law invoked by the conflicts norms where it would be at variance with its own basic principles.'30 The Hungarian Code mentions the institution of public policy (Art. 7) in the part on the non-application of foreign law. Two other institutions – fraudulent connection (Art. 8.) and a request by the parties to refrain from applying the foreign law (Art. 9) – are also dealt with here. Article 7 does not provide a definition of public policy, stating only that 'foreign law shall be disregarded where it would violate Hungarian public policy' (Art. 7(1)). Para. 2 of the same Article provides that 'the application of foreign law shall not be disregarded solely on ground that the social-economic system of a particular foreign state differs from that of Hungary.' This provision clearly expresses the Hungarian legislator's view that public policy cannot be used for discriminatory purposes. Moreover, it can be applied only in regard to certain provisions of a foreign law that violate public policy in concreto and not in regard to any provision of the legal system in general. This is also indirect proof of the relativity of public policy. Originally – prior to 1989-90 – the institution of public policy provided protection against discrimination by the legal systems of western countries. Since then it serves as a means of protecting countries without a democratic political system and free market economy. Pursuant to the doctrine and practice, violations of public policy have to be weighed by the courts in each individual case. Apart from extraordinarily strong attacks against the constitutional order of the forum, the so-called Binnenbeziehung to the constitutional order plays a decisive role. Hungarian practice and doctrine do not share the views of theorists

30

See MÁDL F./VÉKÁS L. (note 25), p. 104.

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Hungarian Private International Law who maintain that such a distinction cannot be made on the basis of the extent to which a given case is connected to the constitutional order of the forum state.31 There is no such harmony between Hungarian practice and doctrine when it comes to the question of applying the lex fori instead of the non-applicable foreign law. In this regard, the Code clearly provides in Article 7(3) that 'Hungarian law shall be applied instead of the disregarded foreign law.' As in most countries, the lex fori is applied by the courts when a foreign norm is disregarded as nonapplicable because of a violation of public policy. The provision authorizing the application of the lex fori as a subsidiary law has been criticized by some commentators. In their opinion, one should first attempt to fill the gap by the usual methods (analogy, etc.) with an eye to the foreign legal system concerned.32 If the attempt fails or the applicable foreign law is to be disregarded in its entirety, then and only then is the application of the subsidiary law admissible. As indicated above, using public policy as a defense for discrimination is inadmissible. A violation of public policy never renders the entire legal system inapplicable, just the legal provision in question. This means that theoretically a subsidiary law could hardly ever be used on the grounds of public policy. Even if the entire legal system were to be declared inapplicable, theorists do not advocate automatic application of the lex fori. Instead, they prefer to apply the rule of a legal system similar to the law in question, one that serves the same purposes and does not violate public policy. For example, instead of a French rule that violates public policy, a similar provision of Belgian law should be applied, since French and Belgian private law have much in common. Others hold that the court should try to find a subsidiary connecting factor referring to another legal system that also has a sufficiently close connection to the given case. The English version of the last edition of the leading Hungarian textbook cites the following example: 'If, for instance decision by the law of nationality is impossible, application of the law of domicile should be attempted.'33 These theories never had a great echo in practice, not even before the Code entered into force. Since then, the question awakens interest primarily among scholars. The application of the lex fori in response to a violation of public policy has almost no practical relevance whatsoever. While public policy is not a frequently applied legal institution in Hungary, the main reason for this is probably the fact that the Code operates with so-called special public policy rules in situations where a violation of public policy is most likely to occur. These rules render Hungarian law applicable.

31

SCHWANDER I., Einführung in das Internationale Privatrecht, Allgemeiner Teil, St. Gallen 1990, p. 226. 32 See MÁDL F./VÉKÁS L. (note 25), p. 108. 33 See MÁDL F./VÉKÁS L. (note 25), p. 108.

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Burián 6.

Application of Mandatory (Peremptory) Norms of the Forum

Although the Code does not contain any provision on the application of mandatory norms of the forum, Hungarian doctrine clearly differentiates between the use of the public policy clause as a negative defense of the basic principles of the lex fori and as a positive defense used to invoke the application of mandatory norms of the forum. Mandatory norms are substantive rules of law of the lex fori that require absolute unconditional application by the forum. While such rules are also found in branches of classical private law (civil law, family law, labor law), most of them are in administrative and finance law (e.g., foreign exchange regulations, export and import controls, etc.). The defense of public policy by mandatory norms is regarded as positive because, instead of simply preventing the application of foreign norms likely to be contrary to public policy, they go a step further and require their own unconditional application. Hungarian doctrine has not paid much attention to the operation of mandatory norms. Generally speaking, the application of mandatory norms of the forum is regarded as a mechanism that blocks the system of choiceof-law rules. The foreign law that would otherwise be applicable according to the choice-of-law rules must be superseded by mandatory norms of the forum. Thus the value-order of the lex fori is protected not only negatively by not allowing the foreign legal norm be applied, but also positively by requiring the mandatory norm of the forum to be applied. At the same time this means that no subsidiary law is needed. Hungarian doctrine and practice have not yet been confronted with the problem of applying mandatory norms that are neither part of the lex fori nor of the lex causae. However, as a result of efforts to harmonize (voluntary adaptation)34 Hungarian choice-of-law rules with those of the EU, this problem will soon emerge in Hungary as well. 7.

Fraud and Optional Application of the Lex Fori instead of the (Foreign) Lex Causae

A special reason for the non-application of foreign law is the concept of fraud in Hungarian PIL. Article 8(1) of the Code states: 'The foreign law shall not be applied where a foreign element is artificially or fraudulently created by the parties (fraud), with a view to avoiding the otherwise applicable law.' According to para. 2 of the same Article, fraude à la loi is sanctioned by restoring application of the

34 BURIÁN L., 'Voluntary Adaptation to Community Law in Fields Not Covered by the Europe Agreement', in: On the State of the EU Integration Process – Enlargement and Institutional Reforms (MÁDL F. ed.), Budapest 1997, pp. 342-346.

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Hungarian Private International Law original applicable law: 'In the event of fraud the controlling law shall be that which is otherwise applicable under this Law-Decree.' Although not all private international law systems sanction fraud in the conflict of laws, no objections can be made to this institution in general.35 As for the Hungarian regulation of the fraudulent connection, it is not particularly successful. From the practical point of view, the problem of proof arises: How can one prove intentional evasion of the applicable law? Surely it is not easy to determine whether a change in the parties' domicile has occurred with the intention of evading the applicable law. Another problematic point concerns sanctioning fraud by the parties. Fraud will be sanctioned only when a connection to a foreign law has been created fraudulently (artificially). In such cases, the law shall be applied that otherwise would have been applied had the fraud not occurred. Theoretically this can be either the lex fori or a foreign law. But why are fraudulent connections to Hungarian law not sanctioned? The answer is probably not a theoretical one: the (not so much) hidden tendency of the homing instinct appears as a way of 'sanctioning' fraude à la loi. This sanctioning seems not only to be one-sided but also unnecessary. Parties wishing to avoid the application of an applicable foreign law by a Hungarian forum can – pursuant to Article 9 – request by agreement to disregard the foreign law applicable under the Law decree.36 If the parties submit such a request, the Hungarian court will apply the lex fori. In view of this the question arises why parties choose the more difficult way of artificially creating a connection to Hungarian law or pretending that such a connection exists if they can simply request the court not to apply the applicable law. Such inconsistencies should be avoided in a comprehensive Code. One last thought about the parties' option to request that the (foreign) applicable law be disregarded. Instead of simply providing that the applicable foreign law shall be disregarded, Article 9 stipulates that '[the governing law] shall be Hungarian law or in choice of law situations the law selected by the parties.' In my opinion, the parties' option to request the court to disregard the foreign applicable law (and practically to apply the lex fori instead), which positively formulated amounts to an optional application of the lex fori, has much in common with the institution of party autonomy. When party autonomy exists (only in contractual relationships under Hungarian law), the parties may select the applicable law. Accordingly, they have the positive right not only to disregard the applicable law but also to select another law instead. The selected law may be either foreign or Hungarian. Fortunately, the imprecise mentioning of the two 35

In Hungarian theory Szászy expressed the view, that there is no need for the separate treatment of the fraud, since this problem can be solved by the public policy clause. See SZÁSZY I., Nemzetközi Magánjog, Budapest 1938, p. 140. 36 According to the view of Šarčević, Art. 9 is a unique solution among socialist laws. See ŠARČEVIĆ P. (note 8), p. 23.

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Burián different institutions in Article 9 does not cause problems in legal practice, it only disturbs theoretical clarity. At the end of our analysis of the general institutions regulated by the Code it can be said that there are surely some problematic issues, such as the unfortunate solutions with respect to renvoi and fraud in the conflict of laws. As a whole, however, the general provisions serve the legal practice in a positive way. The next part of the study focuses on some problematic issues in the specific part: the provisions on contracts and torts. B.

The Law of Contracts

1.

Party Autonomy

As stated earlier, the approach to contractual relationships underwent considerable changes in the years which elapsed between the publication of Szászy's draft and the second draft of the mid sixties. Changes such as the acceptance of the party autonomy in its 'conflicts' sense instead of the 'substantive' approach are not reflected in the provisions of the Code. This in itself would not cause problems since theory and practice unanimously follow the 'conflicts' concept. On the other hand, problems arise mainly because the provision on party autonomy is too laconic: It fails to provide any orientation about the possibilities and limitations with respect to the choice of the applicable law. The Code contains only one sentence on party autonomy in Article 24: 'The law chosen by the parties at the time of contracting or later shall be applied to their contract.' This left numerous questions to be answered by legal scholars in an attempt to provide adequate orientation for court practice. These questions are dealt with below. a) Is Party Autonomy Subject to Time Limitations? The wording of the Code is imprecise as regards when and how long the parties are free to exercise their right to select the law to govern a contract. As far as the first possible moment of selecting the governing law is concerned, no one denies that the parties are free to agree on the law to govern their contractual relationship pro futuro. Hungarian theory treats the choice of law itself as an agreement. Consequently, the parties may agree on the governing law prior to entering into the actual contractual relationship. Similarly, the provision says nothing about the last possible moment the parties can exercise their choice of law. The wording 'at the time of contracting or later' gives way to different interpretations. Earlier editions of the leading Hungarian textbook expressed the view that the parties may exercise their right of party autonomy up until the beginning of court proceedings.37 In my opinion, the 37

See MÁDL F./VÉKÁS L., Nemzetközi magánjog és nemzetközi gazdasági kapcsolatok joga, 3d revised ed., Budapest 1993, p. 419.

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Hungarian Private International Law choice of law can also be made during the proceedings, however, prior to the closing of the taking of evidence in first instance. The court practice goes even further. The Supreme Court has not only permitted the choice of law during first instance proceedings (Pf. VI.22046/1993) but also in appellate proceedings (Pf. III.20895/1992).38 b)

Must the Chosen Law Have a Connection with the Contract or the Parties?

Although the Code does not answer this question at all, it is obvious that the parties may stipulate a law having no bearing on the concrete transaction. It often happens in Hungarian practice that the parties choose a 'neutral' law well known by both parties, as a result of which neither party has the advantage of applying of its own law. c)

Must the Choice of Law Be Made Expressly or Is an Implied Choice of Law Acceptable?

Again the Code does not contain any provision on this matter.39 Both theory and practice agree, however, that an implied choice is also possible. In theory this goes back to the above-mentioned concept that choosing a law is in itself a contract of the parties (a so-called Verweisungsvertrag). In theory it is clear that contracts can be concluded not only by express provision or agreement but also impliedly by factum concludens. Thus it follows that the possibility of an implied choice of law by the parties cannot be denied. In practice, however, an implied choice of law is a rare exception. Direct provisions in the Code specifying the conditions for qualifying a choice of law as implied would encourage more frequent use of this legal institution. d)

Can the Parties Select More Than One Law to Govern the Contract?

This question raises two different questions, neither of which is answered by the Code. The first and perhaps less complicated question is whether more laws operate one after the other. In other words, can the parties specify that the contract shall be governed by one law up to a certain point and thereafter by another law? The answer here is clearly affirmative. Namely, such situation can be deemed a modification of the contract with respect to the chosen law. Since a contract can always be modified with the consent of the parties, such a modification of the chosen law has to be admissible. In this context, it is important to note that there are certain limitations in regard to modification of the original choice of law

38

Cited by MÁDL F./VÉKÁS L. (note 25), p. 372. A thorough analysis of these questions see MÁDL F., 'Die Parteiautonomie im ungarischen internationalen Privatrecht', Acta Iuridica Scientiarum Hungaricae 1989, p. 293. 39

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Burián (protection of third parties' interests and protection of the formal validity of the contract). The second and more complicated question is whether more than one law can be selected to govern the contract at the same time. In other words, is a scission of the contract (depeçage) possible? This problem has not yet arisen in practice. Generally speaking, theory is not against scission of the contract. This positive approach is based on an analogy of the choice-of-law rules provided by the Code for situations where there is no choice of law by the parties.40 In this respect, the Code provides in Article 30 that more than one law can be applied to different institutions of the contractual relationship. If it is possible to apply more than one law in the absence of a choice of law, it follows that it should also be possible for the parties to designate more than one governing law when making their choice of law. There are, however, certain risks involved with depeçage. e)

Are the Substantive Provisions of the Chosen Law Static or Dynamic?

As regards the application of the substantive provisions of the chosen law, the question arises as to which provisions are to be applied: those in force at the time the choice of law was made or those in force when the court decides the dispute. Theory and practice agree that, as a rule, the choice of law cannot 'freeze in' the law at the time of the choice. The parties select the law as a constantly changing mechanism of rules and legal practice. Though there is nothing said about this problem in the Code, the view prevails that the freedom of choice also includes the possibility not to take account of changes occurring in the chosen law after the time of the choice. This, however is a rare exception not used in practice. f)

What Are the Limits and Scope of Party Autonomy?

This question has several aspects, some of which are answered directly or indirectly by the Code, while others remain uncertain. The first important limitation follows from the structure of the Code that treats party autonomy as a valid institution only in regard to contracts in the field of the law of obligations. It does not extend to non-contractual relationships, labor contracts, matrimonial property regime, inheritance, etc. Following tradition, preliminary questions such as the legal and disposing capacity of the parties are not covered by party autonomy. The Code contains no express provisions on the application of renvoi in connection with contractual relationships. Although several authors abroad contend that the absolute freedom of the parties in choosing the governing law calls for the acceptance of renvoi in matters involving choice of law by the parties, Hungarian theory and practice agree that party autonomy excludes the application 40

See MÁDL F. (note 39), p. 296.

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Hungarian Private International Law of renvoi. It would be useful, however, to clarify this issue by an express provision in the Code. g)

Special Limitation of the Scope of the Chosen Law in Consumer Contracts

A new and not very successful limitation of party autonomy appeared as a consequence of the 1997 modification of the Code in respect of consumer contracts. It can be deemed unsuccessful because it limits party autonomy in such a way that the relevant provision of the Code (Art. 24) formally remained entirely in effect.41 The limitation is not laid down in the Code, but in Law No. CXLIX of 1977 containing provisions on the modification of the Civil Code with respect to certain provisions on contracts, above all those relating to general conditions. The said Law contains the following provision: 'If the parties have chosen according to the rules of Hungarian private international law a foreign law to govern their consumer contract, in spite of the choice of the foreign law the regulations of the Hungarian law on protection of consumer contracts shall be applied, provided that the application of Art. 28/A of the Law Decree No.13. 1979 on private international law – in lack of a choice of law by the parties – would lead to the application of Hungarian law.' With this one-sided conflicts rule the Hungarian law limits the parties' freedom to choose the governing law in cases where the consumer's domicile or habitual residence is in Hungary at the time of the conclusion of the contract. This is namely the precondition for the application of Hungarian law in the absence of a choice of law by the parties. The provision can be regarded as one-sided because it does not limit the scope of the chosen law in cases where Hungarian law would not apply in the absence of a choice of law by the parties. The solution chosen by the Hungarian legislator is not in harmony with the one adopted by the Rome Convention. The ideal way of limiting the scope of party autonomy in consumer contracts would have been to limit the chosen law, regardless whether it is foreign or Hungarian, in favor of the consumer protection provisions of the law of the country of the consumer's domicile or habitual residence in cases where the contract is closely connected to that law. This would have required modifying the provisions of the Code on party autonomy, as well as restructuring the provisions on the law applicable to contracts, modeled on the structure adopted by the Rome Convention. Instead of modifying the entire chapter on contracts, the Hungarian legislator simply incorporated a new article (28/A) containing a special rule on the law governing consumer contracts in the absence of a choice of law by the parties. 41

See BURIÁN L., 'A fogyasztóvédelem az új nemzetközi magánjog szerzödési szabályok tükrében', 44 Magyar Jog 1999, p. 11.

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Burián 2.

Choice-of-Law Rules on the Law Applicable to Contracts in the Absence of a Choice of Law by the Parties

The Code introduced new rules for determining the law applicable to contracts in cases where the parties have failed to make a choice of law (so-called rules of 'the otherwise applicable law'). According to the old practice of the Curia, the courts applied either the lex loci contractus or the lex loci solutionis. Having devoted a large part of his research to the analysis of this particular topic, Szászy complained in 1938 that '[o]ur private international law does not have another area characterised by so many contradictions and so little consequence, than just this field of the law.'42 The Code adopted in essence the approach of the 'characteristic performance'. The following view is expressed in the leading Hungarian textbook in regard to the approach taken in the Code: 'In determining the connecting factors the Hungarian law bases itself on the general need to have a legal relationship determined by the law within whose jurisdiction its economically, socially and legally most characteristic element is realized....'43 Unfortunately this approach resulted in a set of rigid rules. Instead of using the general rule of the 'closest connection' as in the Rome Convention, the Code provides a catalogue of types of contracts (Art. 25, litt. a-m) designating the law governing each type as the law of the party delivering the characteristic performance. For example, the law governing a sales contract is the law of the country where the seller had its domicile or habitual residence at the time of contracting; the law governing a contract of lease or tenancy is the law of the country where the lessor had its domicile or habitual residence etc. Thus the Code renders only one governing law for contracts of sale, lease, tenancy, contracts for the exploitation of rights under copyright protection, contracts for the exploitation of industrial property rights, contracts of deposit, agency, commission, commercial representation, carriage and forwarding, banking and credit transactions, insurance contracts, loan contracts, and contracts of donation (gift). Since neither the law of contracts nor the general provisions of the Code provide for an escape clause, the court must apply the designated governing law in all cases, even if the circumstances of the case indicate the application of another law. The above solution prefers security to elasticity. Not all types of contracts are subject to the rule of characteristic performance. For instance, the Code departs from the rigidly applied principle of the characteristic performance in contracts of construction and contracts of maintenance. In addition to certain types of contracts, the exceptions also include contracts connected with special objects such as real estate contracts which are governed by the lex situs and contracts entered into on a stock exchange, in public tender negotiations and sales by auction, all of which are governed by the lex loci 42 43

See SZÁSZY I. (note 35), p. 310. See MÁDL F./VÉKÁS L. (note 25), p. 374.

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Hungarian Private International Law contractus. The exceptions also include company contracts, obligations based on securities, bonds etc. The newest exception is the law governing consumer contracts in the absence of a choice of law by the parties. As mentioned above, this exception is an adaptation of the respective provisions of the Rome Convention. Since the provision limiting the parties' choice of law with respect to consumer contracts is not incorporated into the Code, the precise circle of the consumer contracts affected by the exception is defined here, not in connection with limitation of the choice of law. No case law has yet been reported as the new limitation entered into force on 1 March 1998. When determining the law governing such contracts, the closest connection of the contact to a certain law (e.g., the close connection of real estate contracts to the lex rei sitae) outweighs the importance of other connecting factors such as the domicile or habitual residence of the party delivering the characteristic performance. Practically speaking, when applying the rules of the Code, the courts must first determine whether the contract falls under one of the exceptions. If so, the exceptional rule shall apply in determining the governing law. If not, the court shall determine whether the contract is listed in the catalogue of contract types in Article 25. If it is mentioned there (e.g., a 'normal' sales contract), the court shall apply the law specified by that article (e.g., in the case of a simple sales contract, the law of the seller's domicile or habitual residence). While applying the above-mentioned rules of the Code (usually referred to as the first two steps), the court has practically no discretion to take account of the strength of the connection to the otherwise applicable law. When applying the rules of the third step to determine the law governing atypical contracts (contracts with characteristic performances by both or all parties, if there are more), the court must establish whose performance is the most characteristic and apply the law of the country where that party has its domicile, seat or habitual residence (Art. 29, first sentence). There are situations where the governing law cannot be determined by either of the aforesaid methods (e.g., a contract of exchange of goods where the performance of both parties is equally characteristic). In this case, and only in this case can the court apply the law deemed to have the closest connection with the particular contract. Having reviewed the provisions of the Code on contractual relationships, it seems rather obvious that some are imprecise, others too detailed and rigid. In particular, the provision on the freedom of choice is imprecise, the provisions on the governing law in the absence of a choice by the parties too detailed and rigid. The court must go through all the 'steps' and has practically no discretion to honor special circumstances. The new provisions on consumer contracts have created new contradictions. While there is no express limitation of the parties' freedom of choice in the Code, the practically one-sided limitation in favor of consumers having a domicile or 181

Burián habitual residence in Hungary is set forth in a separate law. As a result the Code no longer regulates the entire body of conflicts provisions. The only way out of this unfortunate situation would be to undertake a systematic recodification of all conflicts provisions. C.

The Law of Torts

The provisions of the Code on the choice-of-law rules relating to non-contractual liability are no less problematic than those on contracts. Before commencing with our analysis of the present provisions and practice, let us take a look at the past.44 Prior to World War II, the practice of the Curia emphasized the application of the lex loci delicti. The only exception occurred in claims brought by foreign nationals against Hungarian tortfeasors on the basis of a foreign law. The maximum remedies in such cases could not exceed the damages prescribed by Hungarian law. Although Szászy did not agree with the above limitation, he proposed a similar solution in his draft. The only exception to the lex loci delicti rule in Szászy's draft is in the case of torts committed on board of registered aircraft and ships. Here he proposed application of the law of the flag. During the period of codification important new elements were introduced in theoretical discussions about the law applicable to torts. While the conservative wing preferred the traditional choice-of-law rule of the lex loci delicti, others – above all Ferenc Mádl – proposed new solutions that were more elastic.45 Mádl, who wrote a series of important studies during the second half of the sixties, proposed basic reforms of traditional private international law favoring a 'better law' solution.46 In his opinion, the traditional rule of the lex loci delicti did not function well because it made the applicable law to a great extent dependent on coincidence. For instance, accidents are typical torts of the twentieth century and the place of an accident is fortuitous. Thus fortune or misfortune plays a large role in determining the applicable law and consequently the adequate compensation for damages arising from the accident. Since achieving adequate compensation is the main goal of tort law, Mádl reasoned that it is much too important to be dependent on such circumstance. Therefore, he proposed application of the law that could guarantee adequate compensation for the injured party.

44

For a detailed analysis of the conflicts of law of torts in Hungary see BURIÁN L., 'A deliktuális felelösség a magyar nemzetközi magánjogban', 45 Jogtudományi Közlöny 1990, pp. 150-159. 45 See MÁDL F., 'Új szakasz a magyar nemzetközi magánjogban?', 9 Állam és Jogtudomány 1968, pp. 285-317. 46 See MÁDL F., 'Vívódás a valósággal a magyar nemzetközi magánjogban', 10 Állam és Jogtudomány 1969, pp. 65-94.

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Hungarian Private International Law According to Mádl's proposal, the applicable law was to be selected by the court from the laws connected to the tort. The selection was to be made on the basis of the above considerations. His proposal, however, was only a theoretical model without concrete proposals for the text of a choice-of-law rule. Others went even further and proposed application of the law of the tortfeasor or the law of the injured party. The choice between the two would depend on which law would grant more compensation to the injured party.47 1.

The Applicable Law Prescribed by the Code

The choice-of-law rules adopted by the Code do not really reflect the theoretical debates of the sixties and early seventies. Following the conservative solution, the main rule provides that the law of the place where the tort occurred shall be applied (Art. 32(1)). I am convinced that the possibility to apply the law of the place where the damages occurred instead of the law of the place where the tortious act was committed, when the former is more favorable for the injured party (Art. 32(2)), is not really an exception. The only exception, namely the application of the law of the common domicile of the tortfeasor and the injured party (Art. 32(3)), does not in itself guarantee the required elasticity. Not all lawyers dealing with conflicts aspects of torts find the solutions adopted by the Code inadequate. The English version of the leading Hungarian textbook says the following: 'The Hungarian regulation may be considered to offer a modern but moderate solution: while following the... trend of development instead of the rigidity and exclusivity of the lex loci delicti commissi, it seeks legal certainty by determining the alternative forms of solution in the Code itself. Room is left, of course, for judicial consideration but the law defines its scope, thus giving a more predictable answer to those looking for the applicable law.'48 Application of the lex loci delicti with the only exception being the law of the common domicile surely provides more predictability than those of systems applying flexible solutions. No one would prefer an American type of 'non-rule' based solely on the court's interpretation of the circumstances. On the other hand, the present provisions are not satisfactory either. Some European conflicts rules, such as the Swiss, offer an optimal solution based on different types of torts, applying the most adequate substantive law to 47

See VÖRÖS I., 'A kétoldalú jogegységesítés jelene és perspektívái', 11 Állam és Jogtudomány 1970, p. 536. 48 See MÁDL F./VÉKÁS L. (note 25), p. 389.

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Burián each type. In the event of a new codification, the Hungarian legislator should consider incorporating flexible choice-of-law rules such as these. The introduction of a limited party autonomy in cases involving non-contractual liability should not be excluded either. The application of the rigid and often inadequate lex loci delicti rule to almost all kinds of torts is not the only weakness of the present Hungarian choiceof-law rules on tortious liability. As mentioned earlier, the lex fori played an important role in prewar court practice, limiting compensation in cases where the tort occurred abroad and the tortfeasor was a Hungarian national. This solution was the Hungarian version of Article 12 of the German EGBGB, the so-called privilegium germanicum. Although criticized by almost all theorists, it remained part of the Hungarian court practice and was also adopted by Szászy in his 1948 draft. Representatives of the Marxist theory vehemently criticized the above rule,49 although they preferred the application of the lex fori to an even greater extent. This goes back to the doctrine of the Soviet theory advocated by Pereterskij who said the following about the role of the Soviet lex fori: 'If damages caused abroad are claimed in a lawsuit, the foreign law (the lex loci delicti) can be applied only when the act of the defendant is unlawful according to Soviet law too. It would be contrary to the socialist principles if a Soviet court would find the plaintiff liable for an act which is not unlawful according to Soviet law.'50 The above standpoint was accepted by the postwar Hungarian doctrine. According to this concept, a successful claim for damages based on a foreign law presupposes that the act is unlawful under Hungarian law. Hungarian lawyers extended the above doctrine to include even the legal consequences (amount and types of damages). The contradiction is obvious. Marxist doctrine condemned special treatment of the Hungarian tortfeasor when the tortious act was committed abroad and the lex fori was Hungarian law, while at the same time favoring an even stronger privileged lex fori over a foreign lex loci delicti. The ideological background, however, was different. The main aim of the original preference for the lex fori was to protect the Hungarian tortfeasor against claims unknown to Hungarian law or unproportional according to the standards of Hungarian law. The Marxist preference for the lex fori resulted in the application of the law of the forum not only in the above situation, but also in all cases where the lex fori and the lex loci delicti were different. The lex fori had to be applied and the lex loci delicti ignored in cases where both the tortfeasor and the injured party were foreigners and the 49 50

RÉCZEI L., Nemzetközi magánjog, 3d ed, Budapest 1961, p. 274. Cited by RÉCZEI L. (note 49), p. 275.

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Hungarian Private International Law case had no connection to Hungarian law except that the tort was committed in Hungary. Such a weak connection to the forum law does not rectify special application of the ordre public in most cases (e.g., traffic accidents). This raises the question why there was such an overwhelming preference for the lex fori. The Soviet views about lawfulness and just compensation might have been a rational explanation for the application of the Soviet lex fori. In many aspects the Soviet legal system followed substantially different ideals and goals than all other legal systems of the world. But the same attitude can hardly be justified more than half a century later in Hungary. Why did the Hungarian Code adopt the same model, and why does it still favor the lex fori in the same manner today? The answer to the first question is simple. The second draft contained the traditional provision favoring a Hungarian tortfeasor in cases involving a foreign lex loci delicti. Article 50(2) of the 1968 draft read as follows: 'If the tortfeasor is a Hungarian national, the measure of its liability cannot be more serious than it would be according to Hungarian law.' This provision was modified by the third draft in 1970. The modified version cited below became part of the Code in 1979: Article 34(1): 'A Hungarian court shall not establish liability for conduct not considered unlawful under Hungarian law.' Article 34(2): 'A Hungarian court shall not, on the ground of liability for damages, establish legal consequences unknown to Hungarian law.' As stated above, the third draft was prepared by the Ministry of Justice. Thus it can be assumed that the reasons for the modification were clearly political: It was imperative to follow the Soviet model. The main point of contention was the recognition of non-physical (moral) damages. While prewar Hungarian court practice knew and recognized non-physical damages, the orthodox Marxist ideology rejected them. The authors of the 1970 draft intended to exclude the recognition of non-physical damages based on a foreign lex loci delicti in all cases. The outcome, however, is a paradox: The 1978 modification of the Civil Code recognized non-physical damages once again, as a result of which they were not excluded by the Hungarian lex fori after 1 March 1978. Somehow the drafters of the PIL Code forgot about the consequences. When the Code entered into force 15 months later, it contained (and still does to date) the obsolete preference for the lex fori. In my opinion, the institution of public policy suffices to guarantee proper protection against excessive sanctions of a foreign lex loci delicti (e.g., punitive damages). Hungarian private international law should no longer provide special protection by resorting to compulsory application of the lex fori.

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Burián 2.

A Few Words About the Court Practice in Delicts

Since very few cases have been reported and none of them involves delicts, the following analysis is based partly on the latest Hungarian textbook by Ferenc Mádl and Lajos Vékás, partly on my own analysis of the practice in the eighties. Mádl and Vékás draw a basically positive picture, maintaining that 'the general rules, including the lex loci delicti commissi, are followed by Hungarian judicial practice (both old and new) without problems.'51 My own research about ten years ago52 showed that in most cases Hungarian courts apply the lex loci delicti rule when the tort was committed in Hungary. It follows that application of the lex loci delicti automatically means application of the lex fori. However, when the tort was committed abroad, the courts often simply ignore the lex loci delicti rule without even invoking the 'more favorable' law as the ground for the application of Hungarian law. My analysis included 25 cases adjudicated in first instance between 1985-1988 at the Budapest Central District Court. The Court invoked the conflicts rules only in two cases, one of which was based on the main rule of the Code, the other on the Hungarian – East German treaty on legal assistance. In 19 cases the court applied Hungarian law in traffic accidents that occurred in Hungary, however, without invoking the choice-of-law rules. Thus the result might have been correct, but it is uncertain whether the Court was actually aware of the necessity to apply the Code. This fear seems not to be without grounds, since the same Court that applied Hungarian law 'automatically' in tort cases where the tort was committed in Hungary also applied Hungarian law in cases where the torts were committed abroad. In three cases where the torts were committed in former Yugoslavia, the Court applied Hungarian law, although the application of the lex loci delicti rule would have required the application of Croatian law since the torts occurred in Dalmatia. The above picture shows that Hungarian Courts do not apply the 'simple' lex loci delicti rule correctly, not to mention the more difficult provisions. Of course, the conclusion of the above analysis cannot be that we need more sophisticated rules. As we have seen, the courts have problems even with the simple ones. There are initiatives calling for thorough reform of that part of the choice-of-law rules too. At present, it remains unclear when the proposals will be able to be materialized. It seems that the recodification cannot be postponed in the long run. And since the new millenium is knocking at our door, we can be sure that the old Code will accompany us for awhile in the first years of the next century as well.

V.

Closing Remarks

The above study could not deal with all the current problems in Hungarian private international law. Attempting to draw a general picture, it presented the historical 51 52

See MÁDL F./VÉKÁS L. (note 25), p. 391. See BURIÁN L. (note 44) p. 156.

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Hungarian Private International Law background and analyzed some of the important problems of the PIL Code in force today. We have reviewed the General Part but could necessarily touch only upon a limited number of important questions arising in the Specific Part. Numerous open questions remain that will have to be answered in the next few years, i.e., at the beginning of the next century.

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THE NEW GERMAN CONFLICTS LAW ON PARENTS AND CHILDREN Karsten OTTE* I.

II. III. IV. V. VI.

Law Governing Origin A. Legal Situation Prior to 1 July 1998 B. Legal Situation After 1 July 1998 1. Scope of the rule 2. Establishing paternity a) Priority of establishment b) Different fathers at the time of birth 3. Establishing maternity Contesting Origin Legal Effects of Parent-Child Relations Foreign Legitimization from the German Point of View Law Governing the Right to Bear a Name Conclusions

In force since 1 July 1998, the new German Law on Parents and Children1 has brought about fundamental changes in German substantive family law. Similarly, Articles 19-21 of the Introductory Law to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch, hereinafter: EGBGB), dealing with conflicts matters relating to parents and children, have been modified in the provisions governing origin, contesting origin, legal effects of parent-child relations and the right to bear a name.

I.

Law Governing Origin of the Child

A.

Legal Situation Prior to 1 July 1998

To understand the new approach it is necessary to explain the former law. Prior to the reform, conflict of laws questions relating to origin were regulated in Articles 19 and 20 of the EGBGB o.v.,2 which made a distinction between legitimate and illegitimate children. In order to determine the law applicable to questions of origin, one had to know whether the mother was married. Thus, this was the preliminary question determining whether Article 19 on the origin of legitimate children (Abstammung ehelicher Kinder) or Article 20 on the origin of illegitimate children (Abstammung nichtehelicher Kinder) would apply.3 The wording of the *

Privatdozent, Dr. iur., M.C.J., Institut für Internationales und Ausländisches Privatrecht, University of Köln. 1 Kindschaftsrechtsreformgesetz, 16 December 1997, in Bundesgesetzblatt 2942. 2 O.v. = old version. 3 Not extra-marital cohabitation, HELDRICH A., in PALANDT O., Bürgerliches Gesetzbuch, 58th ed., München 1999, Art. 19 EGBGB, No. 5; but see KLINKHARDT H., in

Otte provision has always caused a problem because the decisive criterion (ehelich = legitimate) was not legitimacy or illegitimacy but the fact that a child was born in or out of wedlock.4 The validity of a marriage was and still is governed by the law designated by the conflicts rule in Article 13 EGBGB,5 which refers to the marriage law of the state to which each spouse ‘belongs’, i.e. the law of the spouse’s nationality.6 In cases where the marriage was valid, paragraph 1 of Article 19 EGBGB o.v. provided that the question of legitimate origin was subject to the law governing the legal effects of such marriage designated in paragraph 1 of Article 14 EGBGB. This was and still is primarily the law of the state of the common nationality of both spouses at the time the question arises; secondly, the law of the state of the former common nationality of both spouses, if one of the spouses still falls under that law (Article 14 (1) No.1 EGBGB); thirdly, the law of the habitual residence of both spouses at the time the question arises (Article 14 (1) No.2 EGBGB); or fourthly, the law of the state with which both spouses are most closely connected (Article 14(1) No.3 EGBGB). A choice of law was not allowed.7 If the parents were nationals of the same state, legitimate origin was governed by the law of that state. If the parents were nationals of different states, the child was considered legitimate if the requirements of legitimacy were fulfilled under the law of either state (Article 19(1) sentence 2 EGBGB o.v.). Thus, legitimate origin was given priority over illegitimate origin, even if the imposed legitimacy could inconvenience the child in some other respect.8 The law determined in the above manner also applied to questions of paternity: acknowledgment of paternity by a third person (e.g., the biological father), establishment of paternity, the biological father's obligations towards the mother (Article 20(1) sentence 2 EGBGB o.v.). Subsidiarily, paternity could be established by the law of the state of the father’s nationality or by the law of the state where the child had its habitual residence. These various connecting factors should determine the paternity of an illegitimate child.9 The child's habitual residence was mentioned in Article 20(1) sentence 3 EGBGB o.v. as a means of favoring legitimacy. Subject to the exception specified in Article 20(1) sentence 3, as an alternative connecting factor, the origin of an illegitimate child was usually determined by the law of the state of the mother’s nationality at the time the child Münchener Kommentar zum Bürgerliches Gesetzbuch, Vol. 10, Internationales Privatrecht, 3rd ed., München 1998, Art. 19 EGBGB, No. 41. 4 VON BAR Ch., Internationales Privatrecht, Vol. II, München 1991, pp. 208 et seq. 5 In Entscheidungen des Bundesgerichtshofes in Zivilsachen (BGHZ), Vol. 43, pp. 214, 218, 227; KEGEL G., Internationales Privatrecht, 7th ed., München 1993, p. 683. 6

If the person has more than one nationality or is stateless, the applicable law is determined pursuant to Art. 5 EGBGB (Personalstatut). 7 LÜDERITZ A., Internationales Privatrecht, 2nd ed., Frankfurt a.M. 1992, p. 179; HELDRICH A. (note 3), Art. 19 EGBGB, No. 5. 8 LÜDERITZ A. (note 7), pp. 179, 180. 9 KROPHOLLER J., Internationales Privatrecht, 2nd ed., Tübingen 1994, p. 359.

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New German Conflicts Law on Parents and Child was born, hence by a connecting factor that could not be changed10 (Articles 19(1) and 20(1) sentence 1 EGBGB o.v.). Renvoi was not allowed if it reduced the number of potentially applicable laws. B.

Legal Situation After 1 July 1998

No distinction is made between legitimate and illegitimate origin in either the new conflicts law or the new substantive law. Accordingly, legitimacy or illegitimacy is no longer a factor to be considered when determining a child's status. The special conflicts rule on the legitimization of illegitimate children in Article 21 EGBGB o.v. has also been deleted. The new provision of Article 19(1) EGBGB governs the establishment of origin by birth and by recognition, irrespective of the marital status of the mother. Article 20(1) EGBGB governs rescission and Article 21 EGBGB the legal effects of parent-child relations. The main connecting factor determining the law governing origin is no longer the law governing the legal effects of the marriage (Article 14) or the nationality of the parents, but the habitual residence of the child, which is independent of the parent's residence (Art. 19(1) sentence 1 EGBGB). In a certain respect, however, the old distinction survives: If the mother is married at the time of birth, Article 19(1) sentence 2 EGBGB alternatively allows the law of the nationality of the parents to be applied and sentence 3 the law governing the legal effects of marriage, thus preserving the conflict of laws regime of the former law. If the marriage is terminated by the death of one of the spouses, the time of death is significant for determining the child's origin. Examining the marriage is a preliminary question decided separately for conflict of laws matters. On the other hand, Article 19(2) EGBGB seems to be misplaced: Obligations of the father towards the unmarried mother are governed ex nunc by the law of the state where the mother habitually resides, hence by a connecting factor that is subject to change. In essence, Article 19 of the new EGBGB replaces Articles 19 and 20 of the old law. By providing for the application of the law of the child’s habitual residence, harmony is achieved with the conflicts rule on the law applicable to maintenance in Article 18 EGBGB and with the rules of the Hague Convention on the Law Applicable to Maintenance Obligations of 2 October 1973.11 Here too, habitual residence is the connecting factor. In addition, Article 19(1) sentence 1 EGBGB is in line with the Hague Convention on the Protection of Minors and with Article 21 EGBGB. Thus, habitual residence is established as a kind of general connecting factor that results in Germany in widespread application of German substantive law, whereas the nationality of the parents had determined the applicable law in the past.

10 FIRSCHING K./VON HOFFMANN B., Internationales Privatrecht, 5th ed., München 1995, p. 335, No. 131. 11 Bundestags-Drucksache No. 13/4899, p. 137.

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Otte The new connecting factor based on habitual residence is not bound to the time of birth. Hence, it is subject to change12 in accordance with the exception specified in Article 19(1) sentence 3 dealing with birth and death. By moving across state borders, a new origin can be acquired and the previously established origin can be canceled or limited to the state of first residence, provided the alternative connecting factors permit a different law to be applied that produces different results. As in the old law, renvoi is not excluded but it does not reduce the number of applicable laws after one of the connecting factors designated in sentences 2 and 3 of Article 19(1) has been applied.13 1.

Scope of the rule

Art. 19 EGBGB designates the law governing origin irrespective of legitimacy. However, it can occur that the law governing origin makes some distinctions in this respect. German public policy (ordre public) is not violated by such a result. The applicable law specifies the requirements for the recognition of paternity and maternity and for the judicial establishment of origin, designates the presumptions of paternity and cohabitation, and governs questions relating to the time of conception and the legal effects of recognition of legitimacy.14 2.

Establishing paternity

The new statute has a shortcoming in that it fails to designate which law shall prevail in cases where different applicable laws produce different results.15 This is a crucial question requiring a distinction to be made between various situations. a)

Priority of establishment

In cases where there are competing legal systems, priority is given to the law that was previously applied – also on the basis of a presumption – and has already resulted in an official or judicial establishment of the child’s origin. A foreign official establishment of origin must be recognized pursuant to § 328 of the German Code of Civil Procedure (ZPO). Paternity can be recognized under a new legal regime only if the establishment of origin under the other law has been successfully rescinded. 12

HELDRICH A. (note 3), Art. 19 EGBGB, No. 4. HELDRICH A. (note 3), Art. 19 EGBGB, No. 2, Art. 4 EGBGB, No. 7; KLINKHARDT H. (note 3), Art. 19 EGBGB, No. 20. 14 KLINKHARDT H. (note 3), Art. 19, No. 23; HELDRICH A. (note 3), Art. 19, No. 7. 15 See HENRICH D., 'Das Kollisionsrecht im Kindschaftsrechtsreformgesetz', in Das Standesamt 1998, pp. 1, 3; GAAZ B., 'Ausgewählte Probleme des neuen Eheschließungs- und Kindschaftsrechts', ibid., p. 249. 13

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New German Conflicts Law on Parents and Child Priority of establishment is the decisive criterion.16 This should be so even if one man acknowledges paternity before the child is born and the mother marries another man before birth. In such a case, the presumption of paternity in favor of the husband should not be triggered by the applicable law (e.g., § 1592 BGB); however, precise wording in this respect is missing.17 b)

Different fathers at the time of birth

The criterion of priority will not work if alternatively applicable laws recognize the paternity of different fathers at the time of the child's birth. The wording of Article 19(1) EGBGB in no way suggests that the general connecting factor of habitual residence should be given priority (Regelanknüpfung).18 Without any indication as to the priority of the respective connecting factors, the consequences can be quite unusual as the following example reveals: Example No. 1: A married Italian couple (E and F) has its habitual residence in Germany. The spouses live separately. 310 days after the judicial establishment of separation (omologazione della separazione consensuale) F gives birth to a child. The Italian citizen L, F’s partner and biological father of the child, would like to recognize the child. The general connecting factor of Article 19(1) EGBGB establishes the paternity of E, while the connecting factor in sentence 2 of the same Article recognizes the paternity of L. Which one should be registered as the father? The problem concerns the concurrent application of different connecting factors. The purpose of alternative connecting factors is to facilitate the establishment of at least one father. Hence, priority may be accorded to the connecting factor that establishes at least one father, thus avoiding the situation of a fatherless childhood. In cases where alternative connecting factors lead to different fathers, their relationship has to be scrutinized more closely. One solution would be to give priority to the general connecting factor of habitual residence because it helps establish the paternity of a father. As a result, the other connecting factors would simply be dropped. This solution would always lead to the application of German law if the child resides in Germany. However, allowing the application of different connecting factors should promote the best interest of the child. Accordingly, the factors should be applied alternatively, not

16 HELDRICH A. (note 3), Art. 19 EGBGB, No. 6; HENRICH D. (note 15), p. 4; GAAZ B. (note 15), p. 250 et seq. 17 D. HENRICH’s suggestion. (note 15), p. 4. 18 But this seems to be D. HENRICH’s view. (note 15), p. 1.

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Otte subsidiarily.19 In order to do so, it is necessary to develop criteria for determining the prevailing factor. aa)

No cryptic privilege of legitimate origin

§ 1592 (1) BGB presumes that the father of a child is the man to whom the mother is married at the time of birth. As long as paternity is not contested successfully, acknowledgement of paternity by another person is not possible. Thus, the law seems to favor legitimate origin. On the other hand, the law has openly dropped the distinction between legitimacy and illegitimacy. Moreover, the strict privilege of legitimate (marital) origin could prevent the biological father from acknowledging his child, thus preventing the solution in the child's interest best. bb)

Protecting family life and the child's best interest

The biological father is not permitted to contest presumed paternity as this would be deemed endangering the well being of the family.20 Similarly, an acknowledgement of paternity by the biological father could threaten the mother’s marriage and family life, the latter of which enjoys special protection under Article 6 of the German Constitution (Grundgesetz).21 Protecting the family and marriage promotes the best interest of the child. These principles formulated by the German Constitutional Court (Bundesverfassungsgericht) may provide guidance in determining how to apply the alternative connecting factors in Article 19(1) EGBGB and, consequently, how to determine the law applicable to the question of origin. If the applicable law would allow the marriage and family to be threatened, it should not be applied although it would be an easy method of establishing paternity. Example No. 2: A French mother living in Germany does not want her husband registered as the father. This is possible under French law, which recognizes the mother-child relationship as a so-called possession d'état.22 19 KLINKHARDT H. (note 3), Art. 19 No. 14; HENRICH D., 'Änderungen der internationalen Vorschriften im Regierungsentwurf zur Reform des Kindschaftsrechts', in Das Standesamt 1996, pp. 353, 354, 355; GAAZ B. (note 15), pp. 241, 250. 20 'Wohl der sozialen Familie', Bundestags-Drucksache No. 13/4899, p. 55, 57 f.; critical SCHWENZER I., 'Empfiehlt es sich, das Kindschaftsrecht neu zu regeln?' (Gutachten A), in Verhandlungen des 59. Deutschen Juristentages, München 1992, p. 36 et seq.; cf. also HELMS T., 'Vaterschaftsanfechtung durch den Erzeuger des Kindes', in Zeitschrift für das gesamte Familienrecht 1997, pp. 913-918. 21 Entscheidungen des Bundesverfassungsgerichts, Vol. 35, p. 384; Vol. 42, p. 143; Vol. 56, p. 246 (Schädigungsverbot); Vol. 53, p. 224, 245 et seq. (Institutsgarantie). 22 HÜBNER U./CONSTANTINESCO V., Einführung in das französische Recht, 3rd ed. München 1994, p. 198.

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New German Conflicts Law on Parents and Child As a result of such limited possession d’état, the presumption of the husband's paternity is dropped and the cohabiting partner and biological father of the child can acknowledge paternity. However, the application of French law would threaten the marriage and family life. Preventing the husband from registering as the father before the paternity of another man has been established is not acceptable.23 Instead, German law presumes that the father of a child born in wedlock is the husband (§ 1592(1) No. 1 BGB), even if the spouses live separately. Recognition of paternity of a child born in wedlock is impossible (§ 1594 BGB). This origin can only be contested; in this case the presumption of paternity must be rebutted. On the other hand, origin should not be based on a general legal presumption. Example No. 3: All parties reside in Germany. The child is born after the mother is divorced. The mother’s present partner wants to acknowledge the child, which was born within 300 days after the divorce. Turkish law, the applicable law of the father’s nationality (Article 19(1) sentence 2 EGBGB), favors the divorced husband in cases of presumed paternity.24 Paternity will have to be contested and rescinded before the biological father can acknowledge the child. Reference to the law governing the marriage (Article 19(1) sentence 3) is no longer possible after divorce; however, reference to the law of the child’s habitual residence still remains a possibility. German law, however, does not recognize the presumption of origin after divorce (§ 1592 No. 1 BGB). Thus, acknowledgement of paternity is possible. Since a dissolved marriage does not need protection, the connecting factor deemed to promote the well being of the child should be applied (most favorable result: Günstigkeitsprinzip). Such result will usually not be achieved simply by attributing the child to a legal father irrespective of real origin, but by recognition of the biological father by deliberate recognition or judicial decision. The careful wording of Article 19(1) EGBGB suggests a possible conflict between the connecting factors: The question of origin is subject to (unterliegt) the law of the state of habitual residence. Origin can be determined (kann [...] bestimmt werden) by the law of the nationality of the parents. The choice between these two laws depends on how the child's interest can be best promoted.25 Similarly, the test of the child’s best interest should be applied in the following example: 23

HENRICH D. (note 15), p. 4. Art. 241 Civil Code of Turkey. To the same effect, Art. 116 Civil Code of Spain: ADOMEIT K./FRÜHBECK G., Einführung in das spanische Recht, München 1993, p. 55. 25 Insofar, I would not – like HENRICH D. (note 15), p. 2, does – speak about a regular connecting factor (Regelanknüpfung). 24

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Otte

Example No. 4: Italian law establishes paternity by recognition, a right conflicting with the German presumption of paternity that favors the husband at the time of birth (§ 1592 No. 1 BGB, preventing recognition, § 1594 (2) BGB). cc)

Exception

On the contrary, the test of the child’s best interest cannot be applied if paternity has already been established ex lege, for example, according to the legal presumption favoring the mother's husband, as long as acknowledgement by another male has not taken place. In the Turkish example above (No. 3), either Turkish or German law applies. However, § 1594 (2) BGB does not permit the recognition of paternity until the presumption favoring the former husband is rescinded. The law governing this preliminary question (Vorfrage) must be determined separately (selbständige Anknüpfung) and leads to German conflicts law (Art. 19(1) EGBGB). In this case, the result is the same when the conflicts rule of the law governing the main question applies (unselbständige Anknüpfung), i.e., whether a third person can efficaciously acknowledge paternity. The result is German conflicts law, which in both instances alternatively leads to Turkish and German law. Under Turkish law the former husband is the presumed father. Thus, § 1594(2) BGB hinders the recognition of paternity by a third person. The test of the child’s best interest will not automatically favor recognition by a third person if a father already exists. This is quite obvious if there is no biological parent willing to acknowledge paternity. In this case, the preliminary question produces results favoring the former husband, a result that was supposed to be abolished by the new law. Here, however, § 1599(2) BGB provides a solution: A child born after a divorce is pending can be recognized with the former husband’s consent since the presumption of paternity will no longer apply after the res judicata of the divorce.26 dd)

Solution of example No. 1

German law provides for presumed paternity of the husband. Italian law drops the presumption of paternity when the child is born more than 300 days after separation.27 Thus, in example No. 1, L could acknowledge his paternity. The marriage was not divorced, neither under German nor Italian law. On the other hand, separation loosens marital ties, as a result of which the protection of marriage and the family becomes less important. Promoting the child's best interest by recognizing the biological father would not conflict with other constitutional principles. Thus, Italian law should be applied (Article 19(1) sentence 2 EGBGB). 26 GAAZ B. (note 15), p. 251, who suggests analogous application for the entire time the presumption of paternity is valid. 27 GRUNSKY W., Italienisches Familienrecht, 2nd ed., Frankfurt a.M. 1978, p. 135.

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New German Conflicts Law on Parents and Child ee)

Change of connecting factor

The wording of Article 19(1) EGBGB permits the application of an alternative connecting factor. As a result, a child can lose its former legal father in the new legal environment or it can have different fathers under different legal orders: Example No. 5: A Spanish couple (E and F) gets divorced. F is pregnant and gives birth to a child 290 days after the divorce. The biological father is the Spanish citizen L. L and F move to Germany where they both habitually reside. L can successfully acknowledge the child if German law is applicable because of the connecting factor of habitual residence. German law does not recognize the presumption of origin after divorce; however, at the time of birth Spanish law was applicable. Spanish law has a presumption of legitimate origin if the child is born no later than 300 days after divorce (Art. 116 CC), thus making the former husband the legal father. Since the child has moved to another country, changing the connecting factor leads to a new applicable law that results in the 'loss' of the legal father. This result has been strongly criticized.28 Example No. 6: A child is born within three months after the divorce of its Turkish parents in Turkey at the place of habitual residence. A year later, the mother marries the biological father living in Germany and moves to Germany together with the child. All connecting factors at the time of birth point to the application of a foreign law that recognizes the presumption of paternity. However, Article 19 EGBGB makes no reference to the time of birth but to the habitual residence at the time the decision on origin was made. Since the action is brought before a German court, German law applies. Under German law, there is no presumption of paternity favoring the former husband after divorce. Thus, under the law of the new habitual residence (Germany), the child can (!) lose its foreign father. This approach has been criticized by Henrich, who reminds us that the old conflicts rules provided for the application of the parent's or mother's law of nationality at the time of the child’s birth. On the other hand, the law of the habitual residence, which is subject to change, applied only to cases where an existing presumption of paternity was contested or an uncertain paternity was established. In his opinion, a change of the applicable law makes more sense in the latter cases than in those where a formerly acquired status is lost simply by crossing a border.29 28 29

HENRICH D. (note 15), pp. 1, 2; GAAZ B. (note 15), pp. 241, 249 f. HENRICH D. (note 15), p. 2.

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Otte Moreover, the German conflicts law is modeled on the Swiss PIL Statute, which states that the time of birth is significant for establishing paternity (Article 69). In cases of judicial establishment or contested presumption, the time the action is filed is relevant if the result is in the best interest of the child (Article 69(2), Swiss PIL Statute). Therefore, Henrich draws the conclusion that the German conflicts rule is faulty.30 On the other hand, the variety of connecting factors in Article 19 EGBGB helps prevent the loss of paternity. Applying foreign law makes the child of E and F legitimate, whereas applying German law recognizes the biological father L, which seems to be in the best interest of the child. Moreover, the child does not lose its legal father randomly. Instead, the German authorities will have to decide again whether the application of German or foreign law is in the child's best interest. This decision should work ex nunc only! The loss of a father as a result of a change of habitual residence could be deemed acceptable if it is tied to the establishment of a new paternity within a reasonable period of time after birth. 3.

Establishing maternity

Methods of artificial insemination and surrogate motherhood can trigger the question of maternity. Example No. 7: Two Californian couples A and B live in Germany. Couple A has no children because the wife cannot carry to term. Therefore, couple A asks the wife of couple B to carry a child for them. Valuable consideration is neither promised nor granted. The embryo produced by cells of couple A is implanted in the womb of wife B. Who are the parents of the child born and living in Germany? Article 19(1) sentence 1 EGBGB designates German law as applicable. Major German scholars have recognized the delivering woman as the mother of the child.31 Some scholars give the delivering mother the right to contest maternity. In 30

In Henrich's view, Art. 20 phrase 2 EGBGB makes sense only if the right to contest origin is governed by the law of habitual residence at birth because Art. 20 sentence 1 – together with Art. 19(1) sentence 1 EGBGB – provides that the right to contest origin is governed by the law of habitual residence anyway: see HENRICH D. (note 15), p. 3. In my opinion, this is not correct. Origin can be established by the law of the nationality of the parent concerned (Art. 19(1) sentence 2) or by the law governing the legal effects of marriage (Art. 19(1) sentence 3). In such cases, Art. 20 sentence 2 increases the possibilities to contest origin. 31 LÜDERITZ A., Familienrecht, 27th ed., München 1999, Nos. 628 et seq., 697; GERNHUBER J./COESTER-WALTJEN D., Lehrbuch des Familienrechts, 4th ed., München 1994, pp. 756 seq.

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New German Conflicts Law on Parents and Child this case, the child should be the legitimate child of the genetic parents;32 however, after the reform § 1591 BGB recognizes the delivering woman as the mother of the child. While the genetic mother cannot challenge this status,33 her husband is regarded as the father pursuant to § 1592 BGB. The Statute on the Protection of Embryos (Embryonenschutzgesetz) prohibits surrogate motherhood in general. Related contracts are void (§ 134 BGB).34 A renvoi of US law to the law of domicile of both parents is not possible because it reduces the number of potential applicable laws. Thus, US law remains applicable. The question of surrogate motherhood is not regulated in all US states. In most states it is not prohibited; Californian law permits surrogate motherhood and recognizes the genetic parents as the legal parents.35 However, surrogate motherhood for valuable consideration is considered contrary to public policy.36 The different substantive results make it necessary to decide which law should apply. Applying the law of the nationality of the genetic parents collides with the German Statute on the Protection of Embryos and thus with German ordre public. Furthermore, it probably would not be in the best interest of the child. Motherhood should not be split; and the delivering mother has the closest physical, psychological and social relationship with the child.37 In terms of conflict of laws, a rule favoring the delivering mother is preferable. The husband of the delivering mother is presumed to be the father (§ 1592 No. 2 BGB). The genetic father can acknowledge paternity after having successfully contested the parentage of the surrogate parents. Otherwise, the genetic parents have only the possibility of adoption.

II.

Contesting Origin

Article 20 of the new EGBGB permits the origin of a child to be contested and rescinded; this applies to the origin of a child established by any law providing for the contest of origin. The contesting person can choose one of the possible laws.38 The child is permitted to contest its origin under the law of the state where it habitually resides. The applicable law may change if the connecting factor changes. Article 20 EGBGB also applies to children born before 1 July 1998. 32

HARDER M., 'Wer sind Vater und Mutter?', in Juristische Schulung (JuS) 1986, pp. 505, 510. 33 Bundestags-Drucksache No. 13/4899, pp. 82 et seq. 34 SCHWAB D., Familienrecht, 9th ed., München 1999, No. 451, pp. 487-491; LÜDERITZ, A. (note 31), No. 628, pp. 692-697; LÜDERITZ A., in Münchener Kommentar zum Bürgerliches Gesetzbuch, Vol. 8, Familienrecht II, 3rd ed. 1995, § 1752 Anh., No. 16. 35 Johnson v. Calvert, 851 P.2d 776, 19 Cal. Rptr. 2d 494 (Cal., 5 May 1993). 36 GOELDEL A., Leihmutterschaft – eine rechtsvergleichende Studie, Frankfurt a.M. – Berlin 1993, pp. 88, 91. 37 Bundestags-Drucksache No. 13/4899, pp. 82 seq. 38 KLINKHARDT H. (note 3), Art. 19, No. 3; HELDRICH A. (note 3), Art. 20, No. 2.

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Otte Article 20 EGBGB regulates the right to contest origin in general. The former distinction between contesting legitimacy under former Article 19(1) sentence 4 EGBGB o.v. and recognizing illegitimate paternity under former Article 20(1) has been abrogated. The new law makes no distinction between children born to married and unmarried parents.

III. Legal Effects of Parent-Child Relations Similarly, the criterion of legitimacy is no longer used as a connecting factor for determining the law applicable to the legal effects of parent-child relations. Instead, the law of the state of the child's habitual residence dominates (Article 21 EGBGB). It is subject to change and applies to questions of parental custody. Thus, the law usually applicable is that of the state where the necessity to act is generated. The law governing any preliminary questions to be resolved prior to determining origin must be determined separately.

IV.

Foreign Legitimization from the German Point of View39

Another difficulty that may arise under the new German conflicts law – the language of which is well in line with the substantive law – has to do with the fact that the new legislation radically dropped the distinction between legitimate and illegitimate children, whereas foreign legal systems still preserve such distinction. Thus, German courts might still be faced with that distinction, however, without former Article 21 EGBGB and its language, they no longer have the statutory tools to deal with it. As a preliminary question in foreign law, legitimization is governed by the law designated by the conflicts rules of a foreign law (unselbständige Anknüpfung). Previously the German Supreme Court (Bundesgerichtshof) had determined the law applicable to such a preliminary question by applying German conflicts rules (selbständige Anknüpfung). This is no longer possible. Having dropped the substantive distinction between legitimate and illegitimate children, German law has also lost the appropriate conflicts rule to determine the law applicable to legitimization. From the conflicts point of view, German law is no longer interested in controlling such status. In the future, the conflicts rule of a foreign law that recognizes the distinction will be applied. If such foreign law refers by renvoi to German law, the latter can simply make use of its general notion of a child's status without making the old distinction. However, it is uncertain whether foreign law would refer to a legal system that no longer recognizes the distinction, thereby compromising the distinction as a change in the quality of status.

39

HEPTING R., 'Ausländische Legitimation im deutschen Geburtenbuch', in Das Standesamt 1999, pp. 97-102; HENRICH D. (note 15), pp. 5 et seq.

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New German Conflicts Law on Parents and Child If such a case would arise, it is suggested that the foreign law divide its notion of legitimacy into paternity, maternity, and marriage, and use its own separate conflicts statutes.40 The indifference of the new German conflicts law towards foreign legitimization cases creates another problem: Does a change of status in the foreign personal law of the child have to be registered in the German Register of Civil Status (Personenstandsregister)? The provision of § 31 of the Statute governing the Registration of Birth, Death and Marriages (Personenstandsgesetz), which regulated the registration of legitimization, has been repealed. The views of legal scholars are divided on this issue. Henrich points out that registration will be required only if a change in status has taken place (§ 30 Personenstandsgesetz).41 The old registration will not be wrong if the parents of the child marry.42 In such a case, paternity was not established at the time of birth but later. At that time a special note to that effect was recorded together with the former registration of birth. It is possible that the parents were not married at the time of birth; however, by no means is legitimization to be registered under the new German law. Accordingly, the former provisions governing the recording of marginal notes in the Register of Civil Status (§§ 289 to 292a) have been deleted from the Ordinance for Registration (DA). On the other hand, Hepting suggests that such registration should take place by annotating the names of the parents and their marriage (Beischreibung, Randvermerk) without using the word legitimate (ehelich or legitim).43 In his opinion, many foreign legal institutions had to be qualified according to German law in the past and recorded as required by the registration procedure (Personenstandsverfahren). Although such distinction has been dropped from German substantive law, the view prevails that the task of registering a valid change in foreign civil status (§ 30 Personenstandsgesetz) requires a special conflicts rule to determine which law governs the question of validity of the change in status. Swiss law has also adopted this approach by repealing the substantive provisions on legitimization in 1989 but has kept the relevant conflicts rule in Articles 73 and 74 of the PIL Statute. Rumanian law has a similar solution in Article 27 of its PIL Statute of 199244 and Portuguese scholars suggest a similar treatment.45 The problem only affects foreigners. Hepting suggests that an unwritten conflicts principle be developed by using the connecting factor of the nationality or domicile of the parents, thus leading to a foreign law which recognizes legitimization. In marriages where the partners are of different nationalities, the 40

HEPTING R. (note 39), p. 98. HEPTING R. (note 39), pp. 98 et seq., 101, 102. 42 HENRICH D. (note 15), pp. 5, 6. 43 HEPTING R. (note 39), p. 98 et seq., 99 et seq., 102. 44 Art. 63 of the Family Law of 1953 provides equal treatment for legitimate and illegitimate children. 45 GALVAÕ G., 'Rückverweisung in deutsch-portugiesischen Legitimationsfällen?', in IPRax 1984, pp. 257 et seq. 41

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Otte law of the spouse having a genuine interest in legitimization should prevail. In my opinion, legitimizing the child's status improves not only the child’s relationship with the father, whereas marriage allegedly does not change the quality of the child-mother relationship.46 Since the mother can also have an interest in legitimization, it is not always the law of the nationality of the father but rather the law of the nationality of either parent that favors legitimization.

V.

Law Governing the Right to Bear a Name

The question of origin influences the law of names, having an effect on the right to bear a name. Former paragraphs 3 and 4 of Article 10 EGBGB have been consolidated. Paragraph 3 now specifies that the person having custody over a child can bestow the family name on the child, irrespective of legitimacy, according to one of the following laws: '(1) according to the law of the state to which one parent belongs, notwithstanding Article 5(1) EGBGB; (2) according to German law, if one of the parents has his/her habitual residence in Germany; or (3) according to the law of the state, to which the person bestowing the name belongs. Declarations given after registration of birth must be officially recorded.' The new rule drops the former time limitation (registration of birth) for the right to determine the child's name. More important, however, is the effect on children born to unmarried parents. The child can now acquire its name according to the law of the state of the child’s nationality or one of the parent’s nationality and – this is new – according to the law of the state where one parent habitually resides (Article 3(3) No. 2). This wider scope of choice can lead to conflicting uses of names: An unmarried foreign mother with residence in Germany can always give her own name to the (foreign) child, whereas the law of the state recognizing the paternity of the foreign partner bestows the name of the father. Moreover, Article 21 EGBGB designates German law as applicable to custody in cases where the mother can have sole custody if common custody is not declared together with the father (§ 1626a BGB). Things get more complicated if the foreign parents marry and adopt the name of the husband and father as the family name. In this case, foreign law legitimates the child and specifies that the child shall acquire the father’s name.47 Here, the indifference of German conflicts law in regard to the child’s status (legitimacy or illegitimacy) comes into play: Article 10(1) EGBGB provides for the application of the law of the State of the child's nationality. This law may bring 46 47

HEPTING R. (note 39), pp. 97, 101. See HENRICH D. (note 15), p. 5.

202

New German Conflicts Law on Parents and Child about a change of status (legitimacy) and – as a consequence – a change of name. No change of name occurs if the mother has made use of Article 10(3) EGBGB before marriage. The child retains the mother's name if the name has not been changed within one month after common custody has been declared.

VI.

Conclusions

Using habitual residence as a connecting factor in cases involving foreign children living in Germany makes it easier for German officials (Standesbeamte) to apply German law in keeping with the conflicts rules in international conventions. If paternity is established according to one law only, then that law should be applied to determine the child’s origin. If the child’s origin is governed by different laws, the habitual residence of the child is not necessarily the prevailing connecting factor. Alternative connecting factors are specified by the new law with the intent of promoting the child's best interest. Child’s legitimate origin should be preferred if the mother is married and the family is provided special protection under the Constitution. In cases where the mother is not married, the child's best interest should be carefully evaluated. When establishing paternity, the child's well being should be the dominant factor. The applicable law designated by Article 19 EGBGB may change as a result of a change in the connecting factor, for example, a change in the child's habitual residence. As to establishing maternity, the law favoring the delivering mother should apply because of the closer physical, psychological and social relationship between child and mother. If the applicable foreign law distinguishes between legitimacy and illegitimacy, the question arises as to whether a change in the civil status of a foreign child should be taken into account and registered in official German records. In my opinion, this question should be governed by the law of the nationality of the parent having the greatest interest in legitimization. The change in the foreign child’s civil status should be recorded in German registration documents.

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NEWS FROM THE HAGUE ________________

THE HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW WORK IN PROGRESS Hans VAN LOON* I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII.

Eighteenth Session – October 1996 Judgments – Special Commissions of June 1997, March 1998, November 1998 and June 1999 Protection of Adults – Working Group of April 1997 and Special Commissions of September 1997 and September/October 1999 Child Abduction – Special Commission of March 1997; Dyer Colloquium; Database Seminar for Judges on International Child Protection, 22-25 June 1998 Working Group on Receivables Financing (18-20 May 1998) Maintenance Obligations – Special Commission of April 1999 Internet – Pelichet Colloquium Utrecht 1997 and Round Table Geneva, September 1999 Osnabrück Colloquium: Islamic Law and its Reception by Courts in the West Membership of the Hague Conference Renewal of the Legal Staff of the Permanent Bureau Relations with Other International Organisations Hague Conference Website

As is known, the activities of the Hague Conference follow a specific pattern, with Diplomatic Sessions being held every four years to adopt the results of the negotiations of the previous cycle on one or more multilateral Conventions and to take decisions on the work programme for the next cycle. Written after about two thirds of the current cycle 1996-2000 has passed, this report looks back to the Eighteenth Session (October 1996) and forward to the Nineteenth Session (October 2000), and describes, in summary form, some of the highlights of this period as the work of the Conference continues to expand.

I.

Eighteenth Session – October 1996

The Conference's Eighteenth Session, which met for three weeks from 30 September to 19 October 1996, completed the important work of revising the 1961 Convention on the Protection of Minors, which had been prepared during three meetings of a Special Commission held in 1994 and 1995. On 19 October 1996 the Final Act was signed containing the text of the Convention on Jurisdiction, * Secretary General at the Hague Conference on Private International Law.

van Loon Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children. The scope of this Convention is unprecedented in that it takes account of the principles of the United Nations Convention on the Rights of the Child, adopted on 20 November 1989, while providing rules of private international law and a co-operative framework among Contracting States, matters not dealt with directly in the United Nations Convention. In regard to its breadth and innovative approaches to social and legal problems, the 1996 Convention may, in a number of respects, be said to inaugurate a new era in the Conference's work. It was signed immediately by Morocco, thus giving it the date of 19 October 1996, and the first country to ratify it was Monaco on 14 May 1997. It has subsequently been signed by the Netherlands, the Czech Republic and Slovakia. The Explanatory Report by Professor Paul Lagarde, translated into English by Adair Dyer of the Permanent Bureau, was first published in a provisional bilingual edition in the spring of 1997. The final edition was incorporated into the bound volume of the Conference's Proceedings concerning the 1996 Convention, published in December 1998, and will also be issued in an off-print edition, together with the text of the Convention. The Eighteenth Session also adopted a series of decisions relating to the Conference’s work. It decided in particular: (a)

to include in the Agenda of the Nineteenth Session the question of jurisdiction, and recognition and enforcement of foreign judgments in civil and commercial matters;

(b)

that the work on a convention on the protection of adults should be pursued following the adoption of the Convention on the Protection of Children to institute a Special Commission for that purpose; and that the draft Convention to be drawn up by a Special Commission of a diplomatic character should be embodied in a Final Act to be submitted for signature by the Delegates participating in such Commission;

(c)

to retain in addition in the Agenda for the work programme of the Conference the question of the conflict of jurisdictions, applicable law and international judicial and administrative co-operation in respect of civil liability for environmental damage.

In addition, the Eighteenth Session decided to retain or include in the Agenda of the Conference, but without priority: (a)

jurisdiction, and recognition and enforcement of decisions in matters of succession upon death;

(b)

the problems of private international law raised by 206

Hague Conference on Private International Law – –

electronic data interchange, and protection of privacy in connection with transfrontier data flows;

(c)

jurisdiction, applicable law, and recognition and enforcement of judgments in respect of unmarried couples;

(d)

the law applicable to unfair competition;

(e)

the law applicable to assignment of receivables.

Finally, the Secretary General was requested:

II.

(a)

to convene a Special Commission on the operation of the Convention of 25 October 1980 on the Civil Aspects of International Child Abduction;

(b)

to convene a Special Commission on the operation of the Convention of 29 May 1993 on Protection of Children and Cooperation in Respect of Intercountry Adoption;

(c)

to convene, before the Nineteenth Session, a Special Commission instructed: – to examine the operation of the Hague Conventions on maintenance obligations and the New York Convention of 20 June 1956 on the Recovery Abroad of Maintenance, and – to examine, on the occasion of that meeting, the desirability of revising those Hague Conventions and including rules on judicial and administrative co-operation in a new instrument.

Judgments – Special Commissions of June 1997, March 1998, November 1998 and June 1999

In preparation for the work on the main topic of the Nineteenth Session, the Permanent Bureau issued a broad-ranging and incisive Report by Deputy Secretary General Catherine Kessedjian on the topic of 'International jurisdiction and foreign judgments in civil and commercial matters.' The Report served as the reference document and main source of information for the Special Commission that met for the first time in June 1997. The two-week Special Commission meetings held in June 1997, March 1998, November 1998 and June 1999 were chaired by Mr T.B. Smith, Q.C. of Canada. The Special Commission has two Co-Reporters, Professors P.E. Nygh of Australia and Fausto Pocar of Italy, and four Vice-Chairmen: Messrs Dogauchi of Japan, Siqueiros of Mexico, Pfund of the United States of America and Bucher of 207

van Loon Switzerland. The Chairman of the Drafting Committee is Justice Gustaf Möller of Finland. In addition to her initial Report, Ms Kessedjian prepared various other notes to assist the Special Commission in its work, including a note on provisional and protective measures in private international law and comparative law, issued in October 1998. On 18 June 1999, the Special Commission was able to provisionally adopt a preliminary draft Convention. This will be finalized in October 1999 so as to be presented to the Governments, along with the Explanatory Report by the Reporters, well in advance of the Nineteenth Session to be held in October 2000. The aim is to prepare a Convention that will assist litigants, lawyers and judges by increasing predictability and certainty of solutions for legal problems with an international element. Just as important, if not more, is the elimination of duplication resulting from the involvement of more than one legal system. Because it will be global, it will take into account all the major legal systems and provide recourse for litigants that are consistent with those systems. The Convention will bring about an integrated single result in cases involving civil and commercial matters. It will benefit individuals, small and medium sized firms, as well as large world traders.

III. Protection of Adults – Working Group of April 1997 and Special Commissions of September 1997 and September/October 1999 The Seventeenth Session of the Conference (1993) had already requested that the question be pursued as to whether the principles of the revised 1961 Convention on the protection of minors (which ultimately became the 1996 Convention on the protection of children) might be extended to the protection of adults. This work could only be begun in earnest after the principles of the Convention on the protection of children were finally fixed in October 1996. In April 1997 a Working Group on the protection of adults met to pursue this mandate, which had been reiterated and elaborated by the Eighteenth Session. It found that there were a number of different considerations to be taken into account. Using a draft submitted by the Swiss Government as a point of reference, the Working Group commissioned a small drafting team to draw up a text for consideration by a Special Commission that later met in September 1997. It was hoped that, at one meeting, this Special Commission would be able to adopt a preliminary draft Convention on the protection of adults. Fortunately, this hope was fulfilled. Under the chairmanship of Dr Eric Clive (United Kingdom), the Special Commission succeeded in adopting a preliminary draft, which was published in 1998 together with the Explanatory Report, drawn up by Professor Paul Lagarde and translated by William Duncan of the Permanent Bureau with the assistance of Adair Dyer. The draft Convention is to be considered for adoption by a Special Diplomatic Commission in September 1999. Most appropriately, this will occur 208

Hague Conference on Private International Law during the year designated by the General Assembly of the United Nations as the International Year of Older Persons. Indeed, the ageing of the world’s population, combined with greater international mobility, has created the need to provide improved international protection for vulnerable adults in the form of legal regulation and international co-operation. There is, for example, an increasing tendency for retired persons to move to warmer countries, leaving the bulk of their property in their countries of nationality or former residence, sometimes acquiring a home in the new country of residence and sometimes making prior arrangements for their future care or representation in the event of incapacity. In these circumstances, it is vital to have clear rules specifying the authorities authorized to take necessary measures to protect the person or property of the adult and designating the appropriate law to be applied, as well as rules on the recognition and enforcement of any measures abroad.

IV.

Child Abduction – Special Commission of March 1997; Dyer Colloquium; Database

At a meeting of the Special Commission responsible for monitoring the operation of the Convention on Civil Aspects of International Child Abduction, it became evident that some growing pains had been experienced as a result of the relatively rapid expansion of this Convention, now in force in fifty-six States. However, the discussions revealed a broad appreciation of the objectives of the Treaty, confirming that such meetings had helped achieve uniformity in its application and encourage the creation of a network of co-operation among the Central Authorities designated by the Contracting States to carry out their obligations under the Convention. The Report of this Special Commission was prepared by the Permanent Bureau and published in a bilingual edition in the summer of 1997, with the assistance of Dr Sharon Detrick who served as temporary legal assistant at the Permanent Bureau during 1997. On 15 September 1997, Mr Adair Dyer took his retirement after almost 25 years of service. A colloquium was held in his honour at the Academy Building of the Peace Palace on Saturday 13 September 1997 on the theme of globalisation of child law: the role of the Hague Conventions. The colloquium, which was organized jointly by Sharon Detrick and Professor Paul Vlaardingerbroek of the Faculty of Law of Tilburg University and the International Society of Family Law, featured presentations by a number of experts, including the former Minister of Justice of the Netherlands, Professor Ernst Hirsch Ballin, and Mrs M. Sardenberg, member of the United Nations Committee on the Rights of the Child. Around one hundred experts from more than twenty countries participated in the discussions, which were followed by a reception organized in honour of Mr Dyer and hosted by the Ambassador of the United States at The Hague. The colloquium proceedings were published in a book entitled Globalisation of Child Law: The Role of the Hague Conventions. 209

van Loon The Permanent Bureau is in the process of establishing a database of judicial decisions taken under the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction, which will be made available on the Hague Conference’s website. Concerning the application of this Convention, the Permanent Bureau is aware of approximately 1500 judicial decisions rendered in more than thirty countries, many of which are only partially accessible. The aim of the project is to provide summaries of these decisions in English and French, which would be made available, together with the full texts in the original language, to all those interested in case law relating to this very important Convention.

V.

Seminar for Judges on International Child Protection, 22 – 25 June 1998

In June 1998, the Hague Conference organized another meeting to discuss, among other things, the 1980 Hague Child Abduction Convention. This meeting; however, was the first of its kind: a seminar for judges on international child protection. Thanks to a grant from the Grotius programme of the European Union, the three-day seminar took place at a conference centre near ’s-Hertogenbosch in the south of the Netherlands. In addition to judges from Member countries that were Parties to, or had signed, the Hague Child Abduction Convention of 1980, the meeting was also attended by a small group of experts, including representatives from the Council of Europe and International Social Service. In preparation for the meeting extensive documentation was drawn up by the Permanent Bureau based on a questionnaire to which thirty countries had replied. Following introductions summarizing the work of the Hague Conference in the field of international child protection and the specific conventions on this subject-matter, numerous relevant international issues were discussed in small groups on the basis of practical cases. The participants were enthusiastic and there was a general feeling that, if possible, such a meeting should be organized again in three or four years.

VI.

Working Group on Receivables Financing (18 – 20 May 1998)

In May 1998, the Hague Conference, in co-operation with (UNCITRAL), convened a Working Group on the law applicable to assignment and receivables financing. The Hague Conference and UNCITRAL have had a long association; however, this was the first time a joint meeting was held, the main topic of which was a draft drawn up by UNCITRAL providing uniform rules on the assignment of receivables financing. This draft also included a number of articles dealing with 210

Hague Conference on Private International Law issues of applicable law, in part because it had not been possible to achieve agreement on substantive questions. Chaired by Professor A.V.M. Struycken, Chairman of the Netherlands Standing Government Committee on Private International Law, the Working Group went through the draft articles and came up with a number of proposals for improving the text that will be studied by UNCITRAL at its next session in Vienna this fall. For several experts who regularly represent their States at UNCITRAL, this was their first introduction to the Hague Conference. The meeting was generally deemed very useful.

VII. Maintenance Obligations – Special Commission of April 1999 A meeting of the Special Commission took place in April 1999 to examine the operation of the four Hague Conventions on maintenance obligations and the New York Convention of the United Nations of 20 June 1956 on the Recovery Abroad of Maintenance. Acknowledging the contribution of the Permanent Bureau in its monitoring role, the Member States requested the Permanent Bureau to monitor not only the Hague Conventions on maintenance obligations, but also the New York Convention on the Recovery Abroad of Maintenance, which was drawn up by the United Nations. The Special Commission was chaired by Mr Pocar of Italy and was provided with a preparatory note drawn up by William Duncan, First Secretary. The Special Commission recommended that the Hague Conference draw up a new instrument on maintenance obligations during its next cycle from 2000 to 2004.

VIII. Internet – Pelichet Colloquium Utrecht 1997 and Round Table Geneva, September 1999 On 30 June 1997, Mr Michel Pelichet took his retirement after almost thirty years of service. A colloquium was held in his honour at the Faculty of Law of the University of Utrecht on 28 June. Organized jointly by Professor Katherina BoeleWoelki of the University of Utrecht and Deputy Secretary General Catherine Kessedjian, the colloquium featured presentations by a number of experts on the topic: 'Internet, which court decides, which law applies?' Around 100 experts from more than twenty countries participated in the lively discussions, which ended with personal recollections of Mr Pelichet's life and career at The Hague. The proceedings were published in a book entitled Internet: Which Court Decides? Which Law Applies? Quel tribunal décide ? Quel droit s’applique? Another meeting on private international law questions raised by the use of the Internet and, more specifically, by electronic commerce is scheduled for 2 - 4 September 1999 in Geneva. This conference, organized by the Permanent Bureau in collaboration with the University of Geneva, will bring together, among others, governmental experts and industry representatives, operators and users. Their task 211

van Loon is to make an inventory of legal needs and prepare recommendations that will then be examined by the competent authorities of the Conference in connection with its future work.

IX.

Osnabrück Colloquium: Islamic Law and its Reception by Courts in the West

It was the third time that the Institute for Private International Law and Comparative Law of the University of Osnabrück organized a colloquium together with the Hague Conference. Held 22-24 October 1998, the colloquium dealt with an important topic: Islamic law and its application by courts in non-Islamic countries. The major issues touched upon include the fundamentals and variations of Islamic law, religious and secular law, the application of Islamic law by courts in the West in cases involving the family and succession, Islamic law and international commerce. The proceedings are to be published in the summer of 1999.

X.

Membership of the Hague Conference

In the course of 1996, the Republic of Korea was proposed for membership by the Netherlands Government and was elected to membership, following the six-month voting period laid down in the Statute of the Hague Conference on Private International Law. Having deposited its instrument of acceptance of the Conference’s Statute on 20 August 1997, the Republic of Korea participated in the Special Commission of March 1998 in its capacity as a full Member of the Conference. Elected to membership on 4 August 1997, the Republic of Estonia deposited its instrument of acceptance of the Conference’s Statute on 13 May 1998. On 22 April 1999, the Republic of Bulgaria deposited its instrument of acceptance of the Conference’s Statute, thus bringing the number of Member States to 47. In December 1998, the Ukraine was proposed for membership by the Netherlands Government. With the vote completed on 30 June 1998, the Ukraine was admitted as a Member of the Hague Conference. Its membership will become effective upon acceptance of the Statute. In March 1999, the Netherlands Government proposed Peru for membership. In the summer of 1999, Peru’s election to membership was still pending; the vote is to be completed in September 1999. In addition, a number of States have informally indicated to the Permanent Bureau that they are actively considering applying for membership.

XI.

Renewal of the Legal Staff of the Permanent Bureau

After having no vacancy for eighteen years, the legal staff of the Permanent Bureau underwent several changes commencing in June 1996. On 30 June 1996, 212

Hague Conference on Private International Law Mr Georges A.L. Droz retired as Secretary General and was succeeded by Mr Hans van Loon. On 1 September 1996, Professor Catherine Kessedjian joined the Permanent Bureau and was later designated Deputy Secretary General effective as of 1 July 1997, following the retirement of Mr Michel Pelichet on 30 June 1997. Dr Christophe Bernasconi joined the Permanent Bureau as Secretary on 1 September 1997. On 15 October 1997, Mr Adair Dyer retired as Deputy Secretary General and was replaced by Professor William Duncan, First Secretary, effective as of 15 December 1997.

XII. Relations with Other International Organisations The Permanent Bureau continues to work closely with other international organisations, both governmental and non-governmental. The Conference collaborates actively with UNCITRAL, inter alia on receivables financing, and with Unidroit with the intention of adopting an international convention on security interests in mobile equipment. The Permanent Bureau also continues to follow the work of the Council of Europe in the fields of data protection, international contacts between parents and children and the protection of adults. Moreover, it participated in a joint conference with the Council of Europe and the International Commission on Civil Status on the sensitive subject of registered partnerships – the Fifth European Conference on Family Law – which took place at the Peace Palace in The Hague in March 1997. Furthermore, with the support of the Government of Chile, the InterAmerican Children’s Institute in Montevideo, an organ of the Organization of American States, organized a conference in March 1999 on the protection of children in the context of intercountry adoption. The Hague Convention of 1993 was given a prominent place in this conference, which was prepared in close cooperation with the Permanent Bureau. Liaison has also been maintained with the Commonwealth Secretariat and the International Commission on Civil Status (CIEC). The European Bank for Reconstruction and Development (EBRD) attended a Conference meeting for the first time in June of 1999. The 1996 Convention on the protection of children is the first Convention drawn up by the Hague Conference that expressly mentions refugees (Article 6). This reflects the continuing close co-operation with the Office of the United Nations High Commissioner for Refugees (UNHCR), which commenced during the preparatory work on the 1993 Convention on intercountry adoption. The Permanent Bureau and the Chairman of the Netherlands Standing Government Committee have continuous liaison with the Presidency of the European Union. Co-ordination meetings were held in Dublin under the Irish presidency, in Luxembourg under the Luxembourg presidency and in Brussels under the Netherlands, United Kingdom, Austrian and German presidencies. In addition, the Permanent Bureau acted as an observer in the negotiations leading to

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van Loon the revision of the Brussels and Lugano Conventions on jurisdiction and recognition and enforcement of judgments in civil and commercial matters. The European Parliament was represented for the first time at a Hague Conference meeting at the Special Commission of March 1997 on the operation of the Child Abduction Convention. The Council, the Commission, the Parliament and the European Court of Justice were regularly represented during the Special Commission meetings on the worldwide judgments Convention, the subject matter of which is related to the Brussels and Lugano Conventions on jurisdiction and the enforcement of judgments in civil and commercial matters. The Permanent Bureau has continued to intensify its connections with many non-governmental organisations of professional and interest groups, including the International Bar Association, the International Union of Latin Notaries and many others. The spread of privatisation in much of the world tends to increase both the number and the influence of interested INGO's. The Permanent Bureau is trying to respond to these changes by devoting increased attention to their concerns.

XIII. Hague Conference Website On 8 October 1998, the Hague Conference on private international law launched its own website: http://www.hcch.net. This entirely bilingual English/French site, which is updated on a daily basis, contains general information on the Hague Conference and more detailed information on the Hague Conventions. Apart from the Convention texts, full status reports on all Conventions are included, as well as a selected bibliography, some explanatory reports (more are to follow), Central Authority details, a list of Hague Conference publications, a list of Member States of the Organisation indicating the Conventions they have signed, ratified or acceded to, etc. In the near future, web pages on current Hague Conference projects will be added, these being, inter alia, the protection of adults, maintenance obligations and jurisdiction and the effects of judgments in civil and commercial matters.

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FORUM* ________________

MANDATORY RULES IN PRIVATE INTERNATIONAL LAW** The quest for uniformity of decisions in a global environment I.

II.

III.

General Remarks A. The Development of Private International Law in Europe B. Mandatory Rules in Private International Law 1. Mandatory Rules of the Forum 2. Foreign Mandatory Rules The Concept of Mandatory Rules in Conflict of Laws A. Mandatory and 'Internationally Mandatory' Rules B. The Function of Internationally Mandatory Rules in the Framework of a Private International Law System C. Relationship Between Internationally Mandatory Rules and Bilateral Choice-of-Law Rules 1. Internationally Mandatory Rules Do Not Replace Bilateral Choiceof-Law Rules 2. Internationally Mandatory Rules Do Not Influence the Functioning of Bilateral Choice-of-Law Rules D. Distinction Between Internationally Mandatory Rules and Ordre Public E. Criteria for the Determination of Internationally Mandatory Rules: Functional Approach and Suggestion of a 'Rule of Reason' 1. Internationally Mandatory Rules, 'Self-Limited Rules' and Functional Approach 2. Attempts to Define Internationally Mandatory Rules with A Priori Criteria 3. Suggestion of a 'Rule of Reason' Based on the Principle of Proportionality Foreign Mandatory Rules A. General Remarks B. Interest Analysis 1. Parties' Interests 2. Interests of the Foreign State 3. Interests of the Forum State 4. Multistate Interests: the Quest for Uniformity and International Harmony of Decisions a) Actual Role of Uniformity of Decisions b) Future Potential of Uniformity of Decisions

* This section contains summaries of books recently published by young authors in languages other than English. ** This article summarizes some of the ideas expressed in Andrea BONOMI's book Le norme imperative nel diritto internazionale privato. Considerazioni sulla Convenzione europea sulla legge applicabile alle obbligazioni contrattuali del 19 giugno 1980 nonché sulle leggi italiana e svizzera di diritto internazionale privato, Publications of the Swiss Institute of Comparative Law, Vol. 33, Zurich [Schulthess] 1998 (pp. XXVI-426).

Bonomi C.

Conditions for the Application of Foreign Mandatory Rules 1. Existence of a Specific Provision 2. Areas of Law Where the Application of Foreign Mandatory Rules Raises Particular Difficulties 3. Requirements for the Application of Foreign Mandatory Rules According to Article 7 (1) of the Rome Convention a) Internationally Mandatory Character of the Foreign Rule b) Close Connection Between the Situation and the Foreign State c) Discretionary Decision of the Court

I.

General Remarks

A.

The Development of Private International Law in Europe

Under the traditional European approach to conflicts problems, courts have to determine the applicable law on the basis of bilateral choice-of-law rules. These rules refer to a certain legal relationship and select the governing law by using a particular connecting factor. The choice of the connecting factor depends on various considerations. According to Savigny, it was possible to determine the natural seat of each legal relationship by analysing its intimate nature.1 The Italian school of private international law, under the influence of Pasquale Stanislao Mancini,2 attributed a paramount importance to the principle of nationality, and this idea inspired the first codified system of conflict-of-law rules, included in the Italian civil code of 1865.3 In common law jurisdictions, courts have been deeply influenced by the theory of vested rights, developed in England by A. V. Dicey4 and in the United States by J. H. Beale.5 These various approaches had one thing in common: they were at the origin of a set of rigid, 'jurisdiction-selecting'6 rules, which the court had to follow, without questioning if they were able to further the just solution of the particular case. Moreover, the law designated by the conflict rule had to be applied 1

SAVIGNY F. K., System des heutigen römischen Rechts, Berlin 1840-1851, reprinted in Darmstadt 1961, Vol. VIII, p. 108. 2 MANCINI P. S., “De l'utilité de rendre obligatoires pour tous les Etats, sous la forme d'un ou de plusieurs traités internationaux, un certain nombre de règles générales du Droit international privé, pour assurer la décision uniforme des conflits entre les différentes législations civiles et criminelles”, in Clunet 1874, pp. 221-239 and 285-304; JAYME, E., Pasquale Stanislao Mancini. Il diritto internazionale privato tra Risorgimento e attività forense (translated by RUINI A.), Padova 1988. 3 Articles 6-12 of the preliminary provisions. 4 The first edition of Dicey’s The Conflict of Laws was published in 1896. 5 The theory of “vested rights” influenced the (First) Restatement on Conflict of Laws, adopted by the American Law Institute in 1934: refer to SCOLES E.F./HAY P., Conflict of Laws, St. Paul, Minnesota 1984, p. 13 et seq. 6 This expression reflects the terminology adopted by modern American writers: see CAVERS, D., “A Critique of the Choice-of-Law Problem”, 47 Harvard Law Rev. 1933-1934, pp. 173-208.

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Mandatory Rules in Private International Law irrespective of the content of its substantive rules: the only tolerated exception to this 'Sprung ins Dunkel' has traditionally been the exclusion of foreign law on grounds of public policy (ordre public). The validity of this aprioristic approach was seriously challenged during this century. In the United States, the great merit of the so called 'conflict-of-laws revolution' was to make clear, on the one hand, that hard-and-fast rules can lead to very casual and unsatisfactory results in the particular case and, on the other hand, that the policies of domestic rules should not be disregarded in the choice-of-law process. In Europe, the most tangible effects of these arguments have been a certain 'relativization' of the role of the classical choice-of-law methodology and the adoption of a 'pluralistic' or 'syncretistic' approach. The methodology based on bilateral choice-of-law rules is still prevailing in most national codifications of private international law as well as in the Hague Conventions, but it has undergone a process of refinement and adaptation to the peculiar needs of each field of private law relationships. Thus, in some countries and in some areas, choice-of-law rules are now designed to achieve a certain substantive result, which reflects the policy of the domestic rules of the forum. Different techniques serve this purpose: alternative connections are used in order to uphold the formal validity of a contract or other acts,7 to facilitate the establishment of a status (e.g. the status of filial legitimacy)8 or to promote the interest of a creditor (e.g. the maintenance creditor);9 optional rules allow one person (e.g. the victim of an accident) to choose, between two or more competing laws, the one that he considers more advantageous.10 In other areas, rigid choice-of-law rules have been replaced by flexible ones that provide for the application of the law of the country to which the situation is 'most closely connected'. These rules are the expression of what has been called the 'principle of proximity';11 the most widely-known is Article 4 (1) of the Rome Convention on the Law Applicable to Contractual Obligations of 19 June 1980 (hereinafter referred to as 'the Rome Convention'),12 but similar rules are to be 7

See for instance: Art. 11 EGBGB; Art. 124 of the Swiss PIL Statute; Art. 9 of the Rome Convention on the Law Applicable to Contractual Obligations of 1980. 8 Articles 33 to 35 of the Italian PIL Statute; Article 19 EGBGB as modified by the new statute on the law of kinship (BGBl. 1997 I 2942); Art. 72 of the Swiss PIL Statute. 9 Articles 4 to 6 of the Hague Convention on the Law Applicable to Maintenance Obligations; Article 311-16 and 311-17 of the French civil code, as modified in 1972. 10 Articles 133, 135, 138 and 139 of the Swiss PIL Statute; Articles 62 and 63 of the Italian PIL Statute. 11 LAGARDE, P., 'Le principe de proximité dans le droit international privé contemporain', in Recueil des Cours, Vol. 196, 1986-I, pp. 9-238, especially p. 25 et seq. 12 Under Article 4 (1) of the Convention, in the absence of a choice made by the parties, the contract is governed by the law of the country with which it is most closely connected. This is presumed to be the country where the party who is to effect the performance that is characteristic of the contract has his habitual residence or, in the case of a body corporate or incorporate, its central administration (paragraph 2). Under paragraph 5, however, this presumption shall be disregarded 'if it appears from the circumstances as a whole that the contract is more closely connected with another country.'

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Bonomi found in various conventions and national statutes, not only with regard to contracts but also in other fields, such as torts13 or matrimonial relationships.14 In some texts, it is even possible to find a general 'escape clause', allowing courts to displace rigid choice-of-law rules when it appears that, in the particular circumstances of the case, the situation is more closely connected to a different country.15 B.

Mandatory Rules in Private International Law

1.

Mandatory Rules of the Forum

Policy-oriented as well as flexible choice-of-law rules constitute an important innovation in the European landscape of private international law, but they still reflect the traditional approach to conflicts, according to which each relationship is governed by a single, identifiable legal system. Dépeçage is admitted only for some special issues (such as form or capacity) or under exceptional circumstances.16 Since long ago, however, commentators and courts recognise the existence of a category of rules that do not fit in this abstract model: we refer to those mandatory rules that demand to be applied irrespective of the law designated by the choice-of-law rules of the forum. These rules are called 'lois de police' or 'lois d’application immédiate' in France,17 'Eingriffsnormen' (i.e., rules which 'intervene' – 'eingreifen' – in a private 13

See for instance section 12 of the English Private International Law (Miscellaneous Provisions) Act 1995, according to which the lex loci delicti commissi, which is normally applicable to tort issues, can be displaced 'if it appears, in all the circumstances […] that it is substantially more appropriate for the applicable law for determining the issues arising in the case, or any of those issues, to be the law of the other country.' 14 See for instance Art. 29 of the Italian PIL Statute, according to which personal relations between spouses having different nationalities or multiple common nationalities shall be governed by the law of the State where the matrimonial life is mainly located. 15 It is the case of Article 15 of the Swiss PIL Statute (see infra, note 47) and of Article 3082 of the Quebec civil code: for a general analysis, refer to Exception clauses in conflicts of laws and conflicts of jurisdictions – or the principle of proximity, XIVth InternationalCongress of Comparative Law (ed. by KOKKINI-IATRIDOU, D.), DordrechtBoston [etc.] 1994. According to an author, Article 1 of the Austrian PIL Statute also has the function of an escape clause: SCHWIND, F., Internationales Privatrecht, Wien 1990, p. 14. 16 Thus, under Article 4 (1) of the Rome Convention '[…] a severable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country' (emphasis added). 17 FRANCESCAKIS Ph., 'Quelques précisions sur les 'lois d’application immédiate' et leurs rapports avec les règles de conflits de lois', in Rev. crit. dr. int. pr. 1966, pp. 1-18; ID., 'Conflits de lois (principes généraux)', in Répertoire Dalloz, Droit international, Vol. 1, Paris 1968, pp. 470-497; GRAULICH P., 'Règles de conflit et règles d’application immédiate', in Mélanges en l’honneur de Jean Dabin, Vol. 2, Bruxelles-Paris 1963, pp. 629-664; MAYER P., 'Les lois de police étrangères', in Clunet 1981, pp. 277-345; ID., 'Les lois de police', in Travaux du Comité français, Journée du cinquantenaire 1988, pp. 105-114.

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Mandatory Rules in Private International Law law relationship) in Germany,18 'norme di applicazione necessaria' in Italy19 and in Spain20, 'lois de police' ou 'lois d’application' in Belgium.21 In English, it is difficult to find an expression, because this concept was not very common before the entry into force of the Rome Convention, on the 1st of April 1991.22 Among the various expressions that have been suggested by commentators,23 we shall adopt in this article the expression 'internationally mandatory rules',24 as it seems to best reflect the peculiar nature of these rules. These rules require a different approach to choice-of-law issues, because the judge does not have to determine 'which law is applicable' to a certain legal relationship, but whether the object and the purpose or, in other word, the policy of the domestic rule commands its application in the particular case.25 This methodology has a certain similarity to the policy-oriented approach adopted in the United States under the influence of Brainerd Currie but, on the contrary, it is limited to cases where a very important interest of the forum is at stake.26

18

Refer for instance to: NEUHAUS P., Die Grundbegriffe des internationalen Privatrechts, 2nd ed., Tübingen 1976, p. 33 et seq.; SCHULTE D., Die Anknüpfung von Eingriffsnormen, insbesondere wirtschaftsrechtlicher Art, im internationalen Vertragsrecht, Bielefeld 1975; DROBNIG, U., 'Die Beachtung von ausländischen Eingriffsgesetzen – eine Interessenanalyse', in Festschrift für Gerhard Kegel, Stuttgart (etc.) 1987, pp. 95-179; SIEHR, K., 'Ausländische Eingriffsgesetze im inländischen Wirtschaftskollisionsrecht', in RabelsZ 1988, pp. 41-103. 19 Article 17 of the Italian PIL Statute. The term was first used by SPERDUTI, G., 'Sulla capacità in diritto internazionale privato, con particolare riguardo alla capacità d’obbligarsi per fatto illecito', in Rivista italiana per le scienze giuridiche 1950, pp. 282316, at 224; ID., 'Norme di applicazione necessaria e ordine pubblico', in Riv. dir. int. 1976, pp. 469-490. 20 MARIN LOPEZ, A., Las normas de aplicación necesaria en derecho internacional privado, in Rev. esp. der. int. 1970, pp. 19-41. 21 VANDER ELST R., Les lois de police et de sûreté en droit international privé français et belge, Paris-Bruxelles 1956-1963; RIGAUX, F., Droit international privé, 2nd ed., Vol. 1, Bruxelles 1987, p. 187 et seq.; FALLON, M., 'Les règles d’applicabilité en droit international privé', in Mélanges offerts à Raymond Vander Elst, Vol. 1, Bruxelles 1986, pp. 285-322. 22 The Convention was implemented in the United Kingdom by the Contracts (Applicable Law) Act 1990. 23 Such as 'overriding statutes' or 'conflicts-mandatory rules': refer infra, notes 35 and 36. 24 HARTLEY, T. C., 'Mandatory Rules in International Contracts: the Common Law Approach', in Recueil des Cours 1997, Vol. 266, p. 337 et seq., especially p. 365. 25 Using German terminology, one can say that the solution of the conflict-of-laws issue should be found 'vom Gesetze aus' and not 'vom Sachverhalt her': refer to NEUHAUS, P. (note 18), p. 29. 26 A very deep analysis of the relations between European internationally mandatory rules and American 'functionalism' has been carried out by GUEDJ, T. G., 'The Theory of the Lois de Police, A Functional Trend In Continental Private International Law – A Comparative Analysis With Modern American Theories', in Am. J. Comp. L. 1991, pp. 661697, particularly p. 681 et seq.

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Bonomi During the last two decades, the existence of such rules has been expressly recognised in several statutory or conventional texts. The most widely-known is Article 7 of the Rome Convention. According to Article 7 (2) of the Convention: 'Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract.' Similar rules are to be found in other international conventions and in some national private international law statutes. So, according to its own Article 16 (1), the Hague Convention on the Law Applicable to Trusts and to their Recognition of 1 July 1985 (hereinafter: 'Hague Convention on Trusts'): '[…] does not prevent the application of those provisions of the law of the forum which must be applied even to international situations, irrespective of rules of conflict of laws.' Article 18 of the Swiss Statute on Private International Law of 18 December 1987 (hereinafter: 'Swiss PIL Statute') states that the choice-of-law rules included in that statute are '[…] subject to those mandatory provisions of Swiss law which, by reason of their particular purpose, are applicable regardless of the law designated by this statute.' One should also mention Article 17 of the Italian Statute on Private International Law of 31 May 1995 (hereinafter: 'Italian PIL Statute')27 as well as Article 3076 of the new Civil Code of Quebec.28 It is interesting to note that internationally mandatory rules are now mentioned even in an English domestic statute. The Private International Law (Miscellaneous Provisions) Act 1995 provides, in its section 14 (4), that the choiceof-law rules included in Part III of the Act are applicable '[…] without prejudice to the operation of any rule of law which either has effect notwithstanding the rules of private international law applicable in the particular circumstances or modifies the rules of private international law that would otherwise be so applicable' (emphasis added).

27

Act No. 218 of 31.5.1995, published in Gazzetta Ufficiale, Supplemento Ordinario No. 128 of 3.6.1995. An English translation appears at 35 I.L.M. 760 (1996), with an Introductory Note by GIARDINA A. Article 17 states: 'The following dispositions do not prejudice those provisions of Italian law which, because of their objective and purpose, are applicable irrespective to the reference made to foreign law.' 28 'The rules contained in this Book apply subject to those rules of law in force in Quebec which are applicable by reason of their particular object.'

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Mandatory Rules in Private International Law All these texts are rather laconic: they do not explain what is an internationally mandatory rule and give no guidance for the classification of such rules. This is one of the most difficult tasks, because not all mandatory rules expressly indicate that they derogate from ordinary choice-of-law rules. From this point of view, internationally mandatory rules are very similar to the ordre-public exception, although all the texts we have mentioned above clearly distinguish between these two concepts. 2.

Foreign Mandatory Rules

Some texts also regulate the question of whether the mandatory rules of a foreign country have to be applied under some circumstances, although they are not part of the law designated by the choice-of-law rules of the forum. This very controversial issue is regulated, in the field of contractual obligations, by Article 7 (1) of the Rome Convention, which reads as follows: ''When applying under this Convention the law of a country, effect may be given to the mandatory rules of another country with which the situation has a close connection, if and in so far as, under the law of the latter country, those rules must be applied whatever the law applicable to the contract. In considering whether to give effect to these mandatory rules, regard shall be had to their nature and purpose and to the consequences of their application or nonapplication. ' Many criticisms have been levelled at this provision. Some of the opponents object to the concept itself, because they consider that a contract should be governed by one legal system, to the exclusion of mandatory rules emanating from another country. Others argue that the formulation of Article 7 (1) is too vague and that this provision supplies no clear guidance to courts as to when the mandatory rules of a foreign State should be applied. Because of these objections, the contracting States were permitted by Article 22 (1) (a) to reserve the right not to apply this provision. Such a reservation was entered by Germany, Ireland, Luxembourg, Portugal and the United Kingdom. Similar rules are included in other international conventions and in some domestic private international law statutes. According to Article 16 of the Hague Convention on the Law Applicable to Agency of 1978: 'In the application of this Convention, effect may be given to the mandatory rules of any State with which the situation has a significant connection, if and in so far as, under the law of that State, those rules must be applied whatever the law specified by its choiceof-law rules.'

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Bonomi Similarly, Article 16 (2) of the Hague Convention on Trusts provides that, if a foreign State has a sufficiently close connection with a case then, in exceptional circumstances, effect may also be given to rules of that State which must be applied irrespective of conflict of laws rules. The application of mandatory rules of a foreign law is also admissible under Article 11 of the Inter-American Convention on the Law Applicable to International Contracts (CIDIP-V, Mexico 1994): '[…] It shall be up to the forum to decide when to apply the mandatory provisions of the law of another State with which the contract has close ties.' A rule governing this issue is contained in Article 19 of the Swiss PIL Statute.29 It is important to note that this provision is not limited to some fields of law, but has a general scope of application: 'If, according to Swiss legal concepts, legitimate and manifestly preponderant interests [of a party] so require, a mandatory provision of a law other than that designated by this statute may be taken into account if the situation is closely connected with that law. In deciding whether such a provision must be taken into account, its purpose and the consequences of its application are to be considered in order to get to an adequate decision under Swiss concepts of law.' This provision directly influenced Article 3079 of the Civil Code of Quebec.30 Curiously enough a similar rule has also been included in the English Private International Law (Miscellaneous Provisions) Act 1995, although the United Kingdom entered a reservation with regard to Article 7 (1) of the Rome Convention. As a matter of fact, section 14 (4) of the Act – which we have quoted above – permits the application of internationally mandatory rules even if they belong to a foreign legal system. This rule is even less precise than Article 7 (1) of the Rome Convention, because it does not require that the situation have a close connection with the foreign country from which the mandatory rule emanates.31 All these rules give some guidance on when foreign mandatory rules should be taken into account, but these criteria are very general and vague. Many questions are open. It must be noted that, in some other countries, the issue of whether courts should apply foreign mandatory rules irrespective of the conflict-of29 On the origin and the application of this provision see the article by Prof. VON OVERBECK A.E., 'The Fate of Two Remarkable Provisions of the Swiss Statute on Private International Law', in this Yearbook, pp. 119-133. 30 'Where legitimate and manifestly preponderant interests so require, effect may be given to a mandatory provision of the law of another country with which the situation is closely connected. In deciding whether to do so, consideration is given to the purpose of the provision and the consequences of its application.' 31 For criticism see: MORSE C. G. J., 'Torts in Private International Law: a New Statutory Framework', in I.C.L.Q. 1995, p. 901.

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Mandatory Rules in Private International Law laws rules has been widely discussed, notwithstanding the absence of specific statutory provisions.32 We will come back to this issue (see infra, Part III).

II.

The Concept of Mandatory Rules in Conflict of Laws

A.

Mandatory and 'Internationally Mandatory' Rules

By adopting for the purpose of this article the expression 'internationally mandatory rules' we have already determined the first element of the definition of these rules. As a matter of fact, it is generally accepted that the rules we are examining are mandatory (impératives, zwingend), i. e., they cannot be derogated from by contract. The reason is self-evident: if a rule of law can be excluded or limited by party autonomy, it can hardly be regarded as the expression of a fundamental policy of the forum; there are therefore no grounds why it should prevail over the applicable foreign law, designated by bilateral choice-of-law rules. This is confirmed by some of the written provisions we have mentioned above, which expressly refer to 'mandatory rules' (e.g. Art. 7 of the Rome Convention, Art. 19 of the Swiss PIL Statute), but the same conclusion is valid also when the statutory provisions do not make any reference to the mandatory nature of these rules (e.g. Art. 17 of the Italian PIL Statute, section 14 [4] of the English 1995 Act). It is not always easy to establish whether a rule of law is mandatory or not: it is a matter of construction and interpretation which has to be decided on a purely domestic level, by considering the content of that rule and the underlying policy.33 From an international point of view, the issue is even more complicated, because not all mandatory rules command their application irrespective to the law applicable to the legal relationship. In other words, not all rules of law that are regarded as being mandatory in purely domestic cases ('domestically mandatory' rules), are also 'internationally mandatory'. To better understand this distinction, one has to consider that, in principle, mandatory rules of the forum are only applicable when the legal relationship is governed by the lex fori, not when it is governed by the law of a foreign country. 32

So in Germany: MARTINY D., 'Der deutsche Vorbehalt gegen Art. 7 Abs. 1 des EG-Schuldvertragsübereinkommens vom 19.6.1980 – seine Folgen für die Anwendung ausländischen zwingenden Rechts', in IPRax 1987, pp. 277-280; ANDEREGG K., Ausländische Eingriffsnormen im internationalen Wirtschaftsrecht, Tübingen 1989; BUSSE D., 'Die Berücksichtigung ausländischer 'Eingriffsnormen' durch die deutsche Rechtsprechung', in Zeitschrift für vergl. Rechtswiss. 1996, pp. 387-418. Controversial in England is the question of whether the rule elaborated in the case Regazzoni v. Sethia, [1957] 3 All England Reports 286 is still applicable after the entry into force of the Rome Convention. Under that rule, it is contrary to public policy to enforce a contract if that would require the doing of an act in a foreign country which is illegal by the law of that country: refer to HARTLEY T. C. (note 24), p. 403. 33 It is interesting to note that in some European countries the classification of mandatory rules is controversial even in domestic cases: for Italian law, refer to DE NOVA G., 'Il contratto contrario a norme imperative', in Rivista critica del diritto privato 1985, pp. 435-453.

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Bonomi There are only a few exceptions to this general rule. So, in the field of contract, Article 3 (3) of the Rome Convention states that 'The fact that the parties have chosen a foreign law, whether or not accompanied by the choice of a foreign tribunal, shall not, where all the other elements relevant to the situation at the time of the choice are connected with one country only, prejudice the application of rules of the law of that country which cannot be derogated from by contract.' By virtue of this rule, mandatory rules can prevail over the law designated by the parties if the contract is connected with only one country, i.e., if it is a purely 'domestic' contract. Other exceptions are provided for by Article 5 (2) and 6 (1) of the Rome Convention. According to these provisions a choice of law made by the parties to a consumer or employment contract cannot deprive, respectively, the consumer or the employee of the protection afforded to them by mandatory rules of the law which would be applicable in the absence of choice. If the contract is neither a consumer nor an employment contract and if it has connections to more than one country, the only exception to bilateral choiceof-law rules is represented by internationally mandatory rules. These are a 'subcategory' inside the wider category of mandatory rules,34 because they have a further distinguishing characteristic: they are applicable even if the legal relationship is governed by a foreign law.35 They derogate thus from the bilateral choice-of-law rules or, more correctly, they 'override' them.36 This characteristic is well underlined by most written provisions we have mentioned above: thus, Article 7 (2) of the Rome Convention refers to those rules of the lex fori which are 'mandatory irrespective of the law otherwise applicable to the contract'; Article 18 of the Swiss PIL Statute refers to 'those mandatory provisions of Swiss law which, by reason of their particular purpose, are applicable regardless of the law designated' by the statute itself; Article 17 of the Italian PIL

34

These expressions are used by HARTLEY T. C. (note 24), p. 345. It must be noted, however, that this author makes a further, in our opinion unnecessary distinction between internationally mandatory rules and mandatory rules 'in a narrow sense'. 35 In an English commentary on the Rome Convention, they are described as 'conflicts-mandatory' as opposed to 'contracts-mandatory' rules: KAYE P., The New Private International Law of Contract of the European Community, Aldershot (etc.) 1993, pp. 160 and 242 et seq. This author, however, makes a further, very complicated and rather confusing distinction between “half-conflicts-mandatory”, “full-conflicts-mandatory” and “full-conflicts-mandatory-plus” (sic!). In our opinion, the Rome Convention only requires a distinction between mandatory and internationally mandatory rules, which is already complicated enough. 36 The expression 'overriding statutes' has been used by the authors of two wellknown English commentaries: DICEY A.V./MORRIS J.H.C., The Conflict of Laws, 12th ed. (edited by COLLINS L., and others), London 1993, p. 21 et seq., especially p. 1240; CHESHIRE G.C./NORTH P.M., Private International Law, 11th ed. (edited by NORTH P.M. and FAWCETT J.J.), London 1993, pp. 455, 466.

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Mandatory Rules in Private International Law Statute to 'those provisions of Italian law which, because of their object and purpose, are applicable irrespective of the reference made to a foreign law.' B.

The Function of Internationally Mandatory Rules in the Framework of a Private International Law System

Why can internationally mandatory rules prevail over the ordinary choice-of-law rules? What function do they fulfil in the framework of a private international law system? In the field of contracts, as in other areas of private international law where the parties have the right to choose the applicable law, international mandatory rules have the effect of restricting the parties' right of choosing the applicable law. From this point of view, internationally mandatory rules have, on a transnational scale, the same function that 'domestically' mandatory rules fulfil in the framework of a national legal system. In the European context, the importance of this function is self-evident if one considers that the Rome Convention allows party autonomy very broadly. This is well illustrated by a comparison between Article 3 of the Convention and section 187 of the US Restatement (Second) on Conflict of Laws.37 The latter states the right of the parties to choose the law applicable to their contractual rights and duties. There are no limits to party autonomy when the particular issue is one which the parties could have resolved by an explicit provision in their agreement. If this is not the case (i.e., if the particular issue is regulated by mandatory rules), the choice is allowed, unless '[…] either (a) the chosen State has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or (b) application of the law of the chosen State would be contrary to a fundamental policy of a State which has a materially greater interest than the chosen State in the determination of the particular issue and which, under the rule of § 188, would be the State of the applicable law in the absence of an effective choice of law by the parties.' (emphasis added) Contrary to the Restatement, Article 3 (3) of the Rome Convention only restraints party autonomy when the contract is wholly connected with only one country, but does not contain any other anti-evasion limitation. So, the parties to a transnational contract may designate the law of a State with which the contract is completely unrelated, even if they do not have any other reasonable basis for that choice. Moreover, the Convention does not require that the choice of law should be bona fide, as was deemed necessary in England before the ratification of the Convention38 and, in our opinion, it does not allow annulment of the choice on the 37

AMERICAN LAW INSTITUTE, Restatement of the Law (Second), The Conflict of Laws, St. Paul Minnesota 1971. 38 Refer to the much quoted decision of the Privy Council in Vita Food Products Inc. v. Unus Shipping Co. Ltd., [1939] 1 All England Reports 513.

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Bonomi ground that it was fraudulent.39 In this framework, mandatory rules and public policy are the only limitations on party autonomy. So important as this function of internationally mandatory rules may be, it should not overshadow the fact that such rules prevail over the law governing the relationship, even if the latter has to be determined on the basis of an objective test. As a matter of fact, Article 7 of the Rome Convention is applicable even in the absence of a choice by the parties. Moreover, the mandatory rules referred to in the national statutes mentioned above (Swiss and Italian), are also applicable in those areas of private international law where party autonomy is not accepted as a connecting factor (for instance, in the field of family relations). If one takes these situations into account, it is evident that internationally mandatory rules not only restrict party autonomy, but have the much broader function of correcting the results of bilateral choice-of-law rules whenever a fundamental policy of the forum is at stake. From this point of view, their role is similar to that of ordre public, because they represent a general exception to ordinary choice-of-law rules. C.

Relationship Between Internationally Mandatory Rules and Bilateral Choice-of-Law Rules

1.

Internationally Mandatory Rules Do Not Replace Bilateral Choice-ofLaw Rules

The way this exception to bilateral choice-of-law rules operates reveals another common feature between internationally mandatory rules and the doctrine of public policy (ordre public). Like ordre public, internationally mandatory rules do not replace bilateral, jurisdiction-selecting rules, but interact with them.40 To understand this essential point, one has to consider that, according to continental European understanding, choice-of-law rules do not regulate a specific issue, but determine the law applicable to the legal relationship as a whole. In the field of contracts, for instance, the law designated by choice-of-law rules (the lex contractus or, according to English terminology, 'the proper law of the contract') governs the existence and material validity of the contract, its interpretation, the performance and the other ways of extinguishing contractual obligations as well as 39

This point is controversial since, according to some French commentators, the silence of the Convention does not prevent courts from applying the general remedy against fraud: GAUDEMET-TALLON H., 'Le nouveau droit international privé européen', in Revue trimestrielle de droit européen 1981, p. 242; MAYER P., Droit international privé, 5th ed., Paris 1994, p. 468. On the contrary, we share the opinion of PLENDER R., The European Contracts Convention – The Rome Convention on the Choice of Law for Contracts, London 1991, p. 90: according to this writer, 'subject to the effect of Article 7' the law chosen by the parties is applicable 'even if it was selected for the purpose of circumvening statutory provisions which would otherwise apply to the situation.' In the same sense: AUDIT B., 'La fraude à la loi', in Juris-Classeur, Droit international, No. 535, p. 12. 40 GUEDJ T. G. (note 26), p. 675.

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Mandatory Rules in Private International Law the consequences of breach.41 In other words, once the parties or the court have selected the applicable law, (almost) all issues arising from the contract will be governed by the chosen law. There are of course some exceptions to this principle, but the cases where dépeçage is admitted are quite limited.42 This approach is different from the one prevailing in the United States, where courts have to determine the governing law with respect to each particular issue. In the field of contracts, for instance, section 188 of the Restatement (Second) on Conflict of Laws, clearly states that 'The rights and duties of the parties with respect to an issue in contract are determined by the local law of the State which, with respect of that issue, has the most significant relationship to the transaction and the parties' (emphasis added). As it is pointed out in the comment to this section, 'each issue is to receive separate consideration.' As a result of this 'issue-by-issue approach', different issues in contract can be governed by the laws of different States: the legal relationship splits and depeçage is regarded as the normal result of private international law.43 Internationally mandatory rules also require an issue-by-issue approach. As a matter of fact, each mandatory rule only regulates a very specific issue and it is only with respect to that issue that it is possible to decide whether the rule should be applied irrespective of the bilateral choice-of-law rules. On the contrary, internationally mandatory rules normally do not regulate the entire legal relationship in an exhaustive and exclusive way; therefore, they do not purport to replace bilateral choice-of-law rules. Since the latter have the function of selecting the law governing the legal relationship as a whole (lex causae), the law they designate is applicable even if one or more specific issues are regulated by internationally mandatory rules of the forum. As a result, the rules of the lex causae and the internationally mandatory rules of the forum co-exist, they are simultaneously and cumulatively applicable. This can be illustrated by an example. Let us assume that, in a sales contract, the seller has delivered goods which do not conform to the contract. According to the foreign lex contractus, the buyer has to give notice to the seller specifying the lack of conformity within a reasonable time after he has discovered 41 Refer to Articles 8 and 10 of the Rome Convention. According to Art. 10 (1) (e) the law applicable to the contract also governs 'the consequences of nullity', but Art. 22 (1) (b) permits contracting States to reserve the right not to apply that provision. 42 The most common exceptions are made with respect to capacity and formal validity: refer to Articles 9 and 11 of the Rome Convention. 43 SCOLES E.F./HAY P. (note 5), p. 36. This consequence has been criticized by JUENGER F., Conflicts of Laws: A Critique of Interests Analysis, in Am. J. Comp. L. 1984, pp. 1-50, at 42: 'dépeçage is the price that any issue oriented approach inevitably exacts.' The 'issue-by-issue approach' is also reflected in Article 3537 of the Louisiana Law on Private International Law of 1991, a provision which could lead to the application of mandatory rules of a foreign law: '[…] an issue of conventional obligation is governed by the law of the State whose policy would b most seriously impaired if its law were not applied to that issue.'

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Bonomi it; no special formality is prescribed for the notice. On the contrary, the law of the forum requires a written notice and states that it must be given within a period of six months after delivery. If this deadline is regarded in the forum as an internationally mandatory requirement, it will apply irrespective to the foreign law. The same cannot be said of the written form: therefore, this issue will be governed by the foreign lex causae and, as a result, an oral notice will suffice. As is shown by this example, the fact that a particular issue is governed by an internationally mandatory rule of the forum does not exclude the application of the foreign law designated by the bilateral choice-of-law rules to other issues arising from the same situation. The rules of law of the forum and those of the foreign law are to be applied cumulatively. It can happen of course that the same issue is regulated both by a rule of the lex causae and by an internationally mandatory rule of the forum (in our example, the deadline for the notice). If these rules are incompatible, the domestic rule shall prevail. Only in this case does the internationally mandatory rule of the forum have the effect of excluding the application of the foreign rule of law. 2.

Internationally Mandatory Rules Do Not Influence the Functioning of Bilateral Choice-of-Law Rules

From the preceding considerations, it appears that internationally mandatory rules do not exclude a priori the application of bilateral choice-of-law rules. At the same time, we think that the internationally mandatory character of domestic rules should not influence the determination of the law applicable to the legal relationship as a whole. This is self-evident, on the one hand, when the choice of the governing law is made by the parties and, on the other hand, when it is the result of a rigid, hardand-fast rule: for instance, when a contract is governed by the law of the place of performance. In both these situations, courts have to apply the law selected and have no possibility of altering this choice because of the mandatory nature of one of the competing substantive rules. At first sight, the situation might be different when the governing law is to be determined through a flexible test, as is the case, for instance, under Article 4 of the Rome Convention.44 As a matter of fact, according to one commentator, the presumption established by Article 4 (2) of the Convention can be rebutted when one or more rules of the law of another country are mandatory.45 This interpretation, however, is not compatible with the scheme of the Convention.

44

See supra note 12. JAFFEY A. J. E., 'The English Proper Law Doctrine and the EEC Convention', in I.C.L.Q. 1984, pp. 531-557, at 554 et seq.: 'When the issue before the court is the applicability of a mandatory rule […] this can be achieved by holding the contract to be more closely connected with the country in question.' It is not clear however whether, in the opinion of this author, the proper law should be displaced with respect to the contract as whole or only with respect to the particular issue regulated by the mandatory rule. In any case, in the opinion of JAFFEY, recourse to Article 4 (5) is only necessary because United Kingdom has made use of the reservation to Article 7 (1) of the Convention. 45

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Mandatory Rules in Private International Law In our opinion, the closest connection test is intended to select the law of the country whose application corresponds to the parties' expectations;46 it should not be used as an improper way to take into account States' interests. The fact that one or more rules of the forum (or of a third country) reflect a State’s fundamental policy is not a sufficient reason for displacing the law designated to govern the contract as a whole. If that rule can be regarded as internationally mandatory (and only in this case), it shall be applicable as such by virtue of Article 7 of the Convention and shall prevail over incompatible rules of the lex contractus, without influencing the selection of the latter. This conclusion is also valid outside the field of contracts, whenever flexible choice-of-law rules are used to determine the law applicable to a relationship as a whole. Thus, in the Swiss PIL Statute, the fact that a mandatory rule of the forum (or that of a foreign country) must be applied irrespective of the proper law, does not justify the application of the general escape clause of Article 1547 and a modification of the governing law. The internationally mandatory rule can only prevail over the lex causae by virtue of Articles 18 and 19. In our opinion, there should be no confusion between bilateral choice-oflaw rules and (unilateral) mandatory rules. Both approaches coexist in the framework of the same private international law system, but they fulfil different functions. This methodological pluralism is presently one of the features that distinguish the European from the US-American approach to conflict of laws. D.

Distinction Between Internationally Mandatory Rules and Ordre Public

Since internationally mandatory rules are designed to correct the results of bilateral choice-of-law rules when a fundamental interest of the forum is at stake, their function is very close to the traditional ordre public exception. According to a wide-spread opinion, the difference between these two devices lays in the fact that ordre public is only a defensive measure against certain effects of the application of the foreign law designated by the bilateral choice-oflaw rules, whereas rules of necessary application are to be applied irrespective of the content of foreign law. The first operates after the governing law has been selected, whereas the latter are applicable 'prior to any choice of law designation.'48 In reality, this difference is not so clear. As we have illustrated above, internationally mandatory rules do not paralyse the functioning of bilateral choiceof-law rules, and they do not displace the foreign law designated by those rules. 46

According to LAGARDE P., “Le nouveau droit international privé des contrats après l’entrée en vigueur de la Convention de Rome du 19 juin 1980”, in Rev. crit. dr. int. pr. 1991, pp. 287-340, at 308, the presumption of Art. 4 (2) furthers parties' expectations. On the role of parties' expectations as a 'choice influencing consideration', see NYGH P.E., 'The Reasonable Expectations of the Parties as a Guide to the Choice of Law in Contract and in Tort', in Recueil des Cours 1995, Vol. 251, pp. 269-400. 47 According to Art. 15: 'The law designated by this Code shall not be applied in those exceptional situations where, in light of all the circumstances, it is manifest that the case has only a very limited connection with that law and has a much closer connection with another law.' 48 GUEDJ, T. G. (note 26), p. 680.

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Bonomi The first, normal effect of an internationally mandatory rule is that it has to be applied together with the rules of the foreign law designated by choice-of-law rules. Only in case of incompatibility does a true conflict arise and lead to the exclusion of the foreign rule. However, this can only be decided after the lex causae has been selected, because only at this moment a comparison between the foreign and the domestic rules takes place. In other words, the exclusion of a foreign rule of law is only possible a posteriori, exactly as happens in the case of ordre public. The real difference between the two mechanisms is more subtle and lies in the fact that rules of necessary application are rules of law that determine in an autonomous way their effect and the conditions to be applied, whereas ordre public consists of general principles of the lex fori, which can oppose incompatible foreign rules, but are not susceptible of being directly applied. This distinction is reflected in the fact that, in the case of ordre public, it is not clear how to fill the gap engendered by the exclusion of foreign law. As a matter of fact, replacement of the foreign law by the lex fori is not always necessary, since alternative solutions can be found either in a different, more general rule of law of the foreign lex causae,49 or in the rules of another foreign law designated by a subsidiary choice-of-law rule.50 In some cases, it may also happen that the exclusion of the foreign rule which was the basis for the lawsuit simply leads to the dismissal of the action.51 These uncertainties have no reason to exist when the exclusion of a foreign rule is the result of the mandatory application of a domestic rule of law, because in this case there is no gap to be filled. E.

Criteria for the Determination of Internationally Mandatory Rules: Functional Approach and Suggestion of a 'Rule of Reason'

Until now, we have evaded the fundamental question that is raised by internationally mandatory rules. Under which circumstances and on what grounds is a mandatory rule of the forum required to be applied irrespective of the foreign law designated by the bilateral choice-of-law rules? In other words, what are the criteria that qualify a rule as 'internationally mandatory' and distinguish it from other (simply 'domestically') mandatory rules?

49 This is the case when the foreign rule which is contrary to ordre public is a special rule, that itself derogates from a more general rule of the lex causae. 50 This solution has been adopted by the Italian PIL Statute of 1995. According to Article 16 (2), when foreign law has been excluded as incompatible with ordre public, 'the applicable law shall be determined on the basis of other connecting factors possibly provided for with respect to the same matter.' Only in the absence of such subsidiary connecting factors will Italian law apply as a last resort. 51 MOSCONI F., Diritto internazionale privato e processuale, Vol. 1, Torino 1997, p. 133.

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Mandatory Rules in Private International Law 1.

Internationally Mandatory Rules, 'Self-Limiting Rules' and Functional Approach

It sometimes happens that a mandatory rule of the forum expressly delimits its own spatial reach, and makes clear that its application is independent of bilateral choice-of-law rules.52 More often such an express indication is lacking. Then, the spatial reach of the domestic rule as well as its capacity of overriding bilateral conflict rules must be inferred from its content and purpose, by way of construction and interpretation. This is expressly stated by some of the texts mentioned above: Article 17 of the Italian PIL Statute, for instance, defines the rules of necessary application as those rules that are applicable irrespective of foreign law, 'because of their object and purpose'; Article 18 of the Swiss PIL Statute makes reference to the 'particular purpose' of the rule. This 'functional' approach is the most important common feature between the doctrine of internationally mandatory rules and modern American methodologies based on policy analysis. It must be stressed, however, that internationally mandatory rules represent only a 'limited application of functionalism'53 since, as we have seen, they coexist with bilateral conflict rules and do not purport to replace them. Thanks to this pluralistic approach, courts can rely, in the majority of cases, on bilateral choice-of-law rules and are not bound to ascertain the intended scope of application of any domestic rule. This is an important advantage, because it is very difficult to infer from the policy of a particular rule its intended scope of application, as is well illustrated by the criticism raised in the United States against Currie’s interest analysis.54 European courts have to perform this difficult task only when a domestic rule reflects a fundamental policy of the forum. This advantage is compensated by an additional difficulty, since the only partial application of functionalism makes it necessary to distinguish between the 52 It must be noted, however, that even the fact that a rule contains an express delimitation of its spatial reach does not automatically mean that this rule purports to 'override' bilateral choice-of-law rules. It is possible that the rule in question (which can be called a 'self-limiting' rule) only intends to apply if the legal system to which it belongs governs the legal relationship according to bilateral conflict rules. It is a matter of interpretation. The difference between internationally mandatory rules and self-limiting rules has been stressed by MANN F. A., 'Unfair Contract Terms Act 1977 and the Conflict of Laws', in I.C.L.Q. 1978, pp. 661-664, and by GUEDJ, T. G. (note 26), p. 667 et seq. Selflimiting rules have been analysed by: MORRIS J.H.C., 'The Choice of Law Clauses in Statutes', in Law Quart. Rev. 1946, pp. 170-185; DE NOVA R., 'I conflitti di leggi e le norme sostanziali funzionalmente limitate', in Riv. dir. int. priv. proc. 1967, pp. 699-706; LIPSTEIN K., 'Inherent Limitations in Statutes and the Conflict of Laws', in I.C.L.Q. 1977, pp. 884902. 53 GUEDJ T. G. (note 26), p. 694. 54 According to some critics of interest analysis this task is vain, because generally 'legislatures have no actual intent on territorial reach': so BRILMEYER L., 'Interest Analysis and the Myth of Legislative Intent', in 78 Michigan Law Rev. 1980, pp. 392-431, at 393. Refer also to SYMEONIDES S. C., 'Revolution and Counter-Revolution in American Conflicts Law: Is There a Middle Ground ?', in Ohio State Law Journal 1985, pp. 549-568, at 555.

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Bonomi substantial rules that (even if mandatory) are subject to the bilateral conflict rules and those that override them. 2.

Attempts to Define Internationally Mandatory Rules on the Basis of A Priori Criteria

No small degree of academic effort has been expended on an attempt at drawing the line between these two categories of norms, but not one of the criteria that have been suggested is entirely satisfactory. Although it is quite clear that internationally mandatory rules are designed to further goals of public interest, it cannot be affirmed that they belong to the field of public law, whatever one means by 'public law'.55 As a matter of fact, our analysis is only concerned with rules of law that are applicable in private law cases pending before civil or commercial courts. Only in this kind of situation are courts sometimes required to apply the rules of law of a foreign country: therefore, it is in these situations that raise the question of whether a domestic rule must be applied irrespective of the designated foreign law. It appears then that, even if they rely on public policy reason, internationally mandatory rules are private law rules, which directly affect private law relationships. According to other definitions, a rule is internationally mandatory (more correctly: 'immediately applicable', d’application immédiate) when 'its observance is necessary in order to safeguard the political, economic or social organisation of the country',56 when it fulfils a role of 'social guaranty'57 or when it purports to further economic or political objectives of the State.58 In our opinion, none of these definitions is acceptable, insofar as they have the effect of denying internationally mandatory character to those rules that are intended to protect the interests of certain categories of individuals because of their weak position. Such rules exist not only in the field of contractual relations (e.g. statutory provisions designated to 55

According to DICEY A.V./MORRIS J.H.C. (note 36), p. 103 et seq., all those rules 'which are enforced as an assertion of the authority of central or local government' belong to 'public policy'. English courts have no jurisdiction to entertain an action for the enforcement of public law of a foreign State. 56 FRANCESCAKIS Ph., 'Conflits de lois (principes généraux)' (note 17), p. 480. 57 International Court of Justice, in the 'Boll' judgment of 28 November 1958, in International Court of Justice Reports 1958, p. 55 et seq. In the Italian case law, see Tribunale per i minorenni Torino, 23 febbraio 1973, in Dir. fam. pers. 1973, p. 780. 58 This definition is currently used by all those German authors who are willing to recognise internationally mandatory character only to Eingriffsnormen, i.e., to those rules that 'intervene' (eingreifen) in private law relationships in order to further State’s interests: VON BAR Ch., Internationales Privatrecht, t. I, Munich 1987, p. 231; SCHUBERT M., 'Internationale Verträge und Eingriffsrecht – Ein Beitrag zur Methode des Wirtschaftskollisionsrechts', in Recht internationaler Wirtschaft 1987, pp. 729-746, at 730 s.; SONNENBERGER H. J., 'Internationales Privatrecht/Internationales Öffentliches Recht', in Festschrift für Kurt Rebmann, Munich 1989, pp. 819-838, at 822; MANKOWSKI P., 'Wichtige Klärungen im Internationalen Arbeitsrecht', in IPRax, 1994, pp. 88-98; ID., 'Art. 34 EGBGB erfaßt § 138 BGB nicht!', in Recht internationaler Wirtschaft 1996, pp. 8-12.

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Mandatory Rules in Private International Law protect workers, consumers, investors, tenants, or weaker parties in some commercial contracts: agents, franchisees etc.), but also in family law (e.g. protection of children). Even if it would be wrong to affirm that all these rules are internationally mandatory, it cannot be excluded a priori that they belong to this category. This is also true in those areas where bilateral choice-of-law rules are designed to protect the weak party. So, in the framework of the Rome Convention, the existence of special rules for consumer and employment contracts (Articles 5 and 6) does not exclude that internationally mandatory rules of the forum (or of a third country: Art. 7 [1]) can be used, under certain circumstances, to complete the mechanism of protection.59 None of the attempts that have been made to define a priori the category of internationally mandatory rules are entirely consistent with the very essential feature of these rules, which are based on a functional approach. This implies that it is only having regard to the content and the purpose of a concrete rule of law that one may infer whether it has to apply irrespective of the law designated by the bilateral conflict rules. 3.

Suggestion of a 'Rule of Reason' Based on the Principle of Proportionality

It is not easy to determine which criteria should apply to this test. Even case law analysis is not very profitable, since courts rarely specify the grounds upon which a domestic rule is deemed to be internationally mandatory. In our opinion, European law offers a useful paradigm in order to describe the logical operation that courts are bound to perform. As is well known, Article 30 of the EC Treaty prohibits all measures having equivalent effect to quantitative restrictions on imports and exports. This prohibition can be derogated from on several grounds, in order to protect certain important values of society. Some of these justificatory grounds are expressly mentioned in Article 36 of the EEC Treaty.60 Others – the so called 'mandatory requirements' – have been formulated in some decisions of the European Court of Justice.61 In any case, a domestic 59

Refer to the judgment of the German Federal Court of 26 October 1993, in IPRax 1994, p. 449. Among commentators refer to: VON HOFFMANN B., 'Inländische Sachnormen mit zwingendem internationalem Anwendungsbereich', in IPRax 1989, pp. 261-271, at 268; ROTH W.-H., 'Zum Verhältnis von Art. 7 Abs. 2 und Art. 5 der Römer Schuldvertragskonvention', in Festschrift für Fritz Reichert-Facilides, Tübingen 1995, pp. 35-51; LAGARDE P. (note 46), p. 316, note 76. 60 '[…] public morality, public policy, public security; protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; the protection of industrial and commercial property […].' 61 E.g.: the effectiveness of fiscal supervision, consumer protection, the prevention of unfair competition, the improvement of working conditions, the protection of the environment. Refer to OLIVER P., Free movement of goods in the European Community, London 1996, p. 181. It should be noted that the concept of 'mandatory requirements' has been used by the European Court of Justice also in the case-law concerning the free movement of persons: see WOUTERS J., 'European Citizenship and the Case-Law of the Court of Justice of the European Communities on the Free Movement of Persons', in

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Bonomi restrictive measure is only allowed when it is established that the restriction is necessary in order to further an imperative public interest, that this imperative is not already satisfied by the rules of the State of origin of the goods or the services, and that the same result cannot be attained by less restrictive measures.62 It is submitted that this 'rule of reason' elaborated by the European Court of Justice can be taken as a model for the internationally mandatory application of domestic rules. The derogation from a bilateral choice-of-law rule is only justified if the domestic rule is the expression of an essential interest of the forum State, but this is not sufficient. Under the principle of proportionality, courts also have to ascertain whether the mandatory application of an internal rule in an international situation is the necessary and most effective way to promote the underlying policy. This means that the domestic rule does not need to be applied when the same result can be achieved under the rules of the foreign lex causae.63

III. Foreign Mandatory Rules A.

General Remarks

It goes without saying that a mandatory rule of the forum, which is the expression of a fundamental domestic policy, can derogate from bilateral choice-of-law rules, according to the principle lex specialis derogat generali. The situation is entirely different when a court is confronted with a foreign mandatory rule that does not belong to the legal system designated by the choice-of-law rules of the forum. Even if that rule is regarded as internationally mandatory in the country where it is in force, it cannot override as such the choice-of-law rules of the forum. This does not mean that it is irrelevant. In some instances, the simple existence of that rule entails some effects according to the substantive rules of the lex causae. So, for instance, a foreign prohibition against importing or exporting certain goods, can make it impossible to perform a contractual obligation. In other instances, the intentional violation of a foreign rule makes the contract immoral or illegal (and thus void) according to a substantive rule of the lex causae.64 In such cases, however, the foreign mandatory rule is not applied as such, but only taken into consideration 'as a datum'65 to which the law designated by the choice-of-law rules attaches some substantive effects. MARIAS E. A. (ed.), European Citizenship, European Institute of Public Administration, Maastricht 1994, pp. 25-61, at 37. 62 Refer to EMILIOU N., The Principle of Proportionality in European Law. A Comparative Study, London-The Hague-Boston 1996, p. 168. 63 One could also say that, in this case, the conflict of laws turns out to be a “false” or “apparent” conflict. 64 Thus, in Germany the courts have sometimes inferred the immorality (Sittenwidrigkeit) of a contract on the basis of § 138 BGB from the fact that it violated a foreign mandatory rule: refer to KREUZER K., Ausländisches Wirtschaftsrecht vor deutschen Gerichten, Heidelberg 1986. 65 This expression has been first used by EHRENZWEIG A., 'Local and Moral Data in the Conflict of Laws: Terra Incognita', in Buffalo Law Rev. 1966, p. 55. See also: JAYME E., 'Ausländische Rechtsregeln und Tatbestand inländischer Sachnormen', in Gedächtnisschrift

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Mandatory Rules in Private International Law This approach formally preserves the unity of the applicable law, but permits a court in reality to give effect to some provisions of the law of a third country. Its main shortcoming is that the effect of the foreign rules entirely depends upon the substantive rules of the lex causae, even if the latter is a foreign law. Thus, the decision whether to give effect to the rules of a third country is shifted from the lex fori to a foreign law, which is not entirely justified. In recent times, however, some international conventions and domestic statutes have expressly recognised that, under some circumstances, foreign internationally mandatory rules can be directly applied, even if they are not part of the lex causae (see supra, Part I, B, 2). By virtue of these provisions it will be possible to go beyond the traditional dichotomy between lex fori and lex causae which is one of the traditional features of European private international law. After determining the law governing a legal relationship, courts will have to take into consideration mandatory rules belonging to the legal system of a 'third' State and to decide whether or not they are applicable in the particular case. This evolution is strongly opposed by some authors,66 who stick to the traditional idea that each legal relationship should be governed by only one legal order. According to the prevailing opinion, however, there are sometimes good reason for applying mandatory rules of a foreign country, even if they do not belong to the governing legal system. B.

Interest Analysis

It is submitted that only an interest analysis can reveal the circumstances under which courts should apply a foreign mandatory rule. This reference to interests is expressly provided for by Article 19 of the Swiss PIL Statute, which allows the application of a foreign mandatory rule only if 'some legitimate and manifestly preponderant interests so require.' Even in other countries, however, it is often admitted that this difficult issue can only be decided through a balancing of concurrent interests.67 The interests that are relevant to this issue can be classified into the following categories: interests of the parties; interests of the foreign State which has enacted the mandatory rules; interests of the forum State. In our opinion, however, the application of a foreign mandatory rule can only be justified by 'multistate interests', i.e., by such interests that 'stem from the für Albert A. Ehrenzweig, Karlsruhe-Heidelberg 1976, pp. 35-49; MÜLBERT P.O., 'Ausländische Eingriffsnormen als Datum', in IPRax 1986, pp. 140-142. 66 MANN F. A., 'Contracts: Effects of Mandatory Rules', in Harmonization of Private International Law by the EEC (edited by LIPSTEIN K.), London 1978, pp. 31-37; ID., 'Sonderanknüpfung und zwingendes Recht im internationalen Privatrecht', in Festschrift für Günther Beitzke, Berlin-New York 1979, pp. 607-624; STURM F., 'Allgemeine Grundsätze im IPR-Gesetz', in Festschrift für Rudolf Moser, Zurich 1987, pp. 3-23, at 21; RADTKE M., 'Schuldstatut und Eingriffsrecht', in Zeitschrift für vergleichende Rechtswissenschaft 1985, pp. 325-357, at 356. 67 See for instance DROBNIG U., 'Die Beachtung von ausländischen Eingriffsgesetzen – eine Interessenanalyse', in Festschrift für K. H. Neumayer, Baden-Baden 1985, pp. 159-179. This reflects a widely held opinion.

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Bonomi State’s membership in a broader community of States.'68 A fundamental role is played by the quest for uniformity and international harmony of decisions. 1.

Parties' Interests

It goes without saying that one of the parties to a dispute can be interested in the application of a foreign mandatory rule. In a contractual relationship, for instance, the debtor that refuses to perform its obligation is interested in the application of a foreign rule which makes the contract illegal and void. It is submitted, however, that this interest, which is only based on the material contents of that particular rule, cannot have an influence on the choice-of-law process. On the contrary, it is widely admitted that parties' expectations of the application of a certain legal system as a whole are an important consideration influencing choice-of-law. This is particularly evident when the choice-of-law rule is a flexible one and is designed to select the law of the country to which the situation is most closely connected. As a matter of fact, such rules are based on an idea of proximity. In other word, they purport to determine the law to which the parties (or at least one of them) feel most closely linked and which they relied upon; this is normally the national law or the law of the domicile, or of the habitual residence, of one of the parties. Since the parties to a bilateral or multilateral legal relationship (such as a contractual relationship) often have different, conflicting expectations, it is necessary to weigh their interests and to decide which one deserves protection. On the basis of this balance of interests, one can come to the conclusion that, for instance, a contract should be governed by the law of the place of residence of the party who has to perform the most complex obligation (the 'characteristic performance')69 or that of the weaker party (e.g. the consumer); or that a tort dispute, should be governed by the law of the residence of the victim. Once this choice has been made, however, it seems that parties' expectations cannot be taken into account a second time in order to justify the displacement of the lex causae and the application of the mandatory rule of a third country. In other words: parties' expectations should be taken into account in order to determine the law applicable to the legal relationship as a whole, but they cannot justify the application of a particular substantive rule belonging to a different legal system.

68

This definition is given by SYMEONIDES S. (note 54), p. 562. On this idea is based the presumption established by Art. 4 (2) of the Rome Convention: VON HOFFMANN B., 'General Report on Contractual Obligations', in European Private International Law of Obligations, Tübingen 1975, p. 12; LANDO O., 'The EEC Convention on the law applicable to contractual obligations', in Common Market Law Rev. 1987, pp. 159-214, at 203: 'the duties of the party performing that obligation are more detailed, more complicated and more regulated by law than are the duties of the other party'; JAFFEY A. J. E. (note 45), p. 547; MAGAGNI M., La prestazione caratteristica nella Convenzione di Roma del 19 giugno 1980, Milano 1989, p. 233 et seq.; VON BAR Ch., Internationales Privatrecht, Vol. 2, Munich 1987, p. 1456. 69

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Mandatory Rules in Private International Law 2.

Interests of the Foreign State

The importance of State interests for the solution of conflicts of laws has been particularly emphasised by American scholars. That particular choice-of-law methodology which is known as 'governmental interest analysis' is based on the idea that each State has an interest in the application of its own rules, in order to further the law’s underlying policies. This postulate as been criticised by many authors, who maintain that a State generally has no direct interest in the application of its own rule in a private law dispute. Some critics have pointed out that, if such an interest exists, it is not possible to understand why states often allow the parties to choose the applicable law.70 We can add that, if the application of domestic rules were so important for each State, it would be impossible to explain why recognition and enforcement of foreign judgements is normally admitted, even if they are based on the application of foreign rules of law. These objections, however, are not justified with respect to internationally mandatory rules, since the special regime of these rules, in particular their potential to derogate from bilateral choice-of-law rules, clearly shows that the State which has enacted them does have an interest in their application.71 Nevertheless, we don’t think that the interest of a foreign State can justify as such the application of foreign mandatory rules. As a matter of fact, there is no reason why courts should give priority to a foreign State's interest over the law designated by the choice-of-law rules of the forum. To this effect, there must be an interest of the forum or a multistate interest. 3.

Interests of the Forum State

In some instances, the interests of the forum are opposed to the application of foreign mandatory rules. This is the case when the foreign rule is directed against the interests of the forum: it is obvious, for instance, that courts do not have to apply an embargo decided by the foreign State against the forum. That the courts should apply the foreign mandatory rules is then obviously excluded. It can be the same when the choice-of-law rule of the forum designates the lex fori as governing law on grounds that express the sovereignty of the forum State: for instance, because the forum is interested in applying its own property law to immovables situated in its territory, or its family or succession law to all its 70

JUENGER F., 'General Course on Private International Law (1983)', in Recueil des Cours 1985-IV, Vol. 193, p. 239: 'Like other unilateralists, Currie started from the dubious assumption that private laws are imbued with a volonté d'application. He believed that governments have a deep-seated concern in the implementation of their rules, and that the vindication of that concern is an important attribute of sovereignty […] But if a State is indeed vitally concerned with its rules of private law, why are private parties allowed to defy that concern by stipulating the law that governs their bargains and the forum, judicial or arbitral, that decides their disputes?.' 71 On the relationship between the mandatory rules and the principle of sovereignty see the recent book by PATAUT E., Principe de souveraineté et conflits de juridictions, Paris 1999, p. 60.

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Bonomi citizens, even if they live abroad.72 In such cases, the application of the lex fori reflects an interest of the forum State: therefore, it cannot be set aside in order to give priority to a foreign rule, even if mandatory. The application of the foreign rule is excluded a fortiori when the concrete issue is regulated by an internationally mandatory rule of the forum: in this case, the domestic rule expresses a fundamental interest of the forum and should thus prevail over all foreign rules. It is more difficult to determine whether, in some cases, the forum's interests require the application of foreign mandatory rules. We shall examine three possible grounds for applying these rules: comity, reciprocity and co-operation with the foreign State. In the anglo-american literature it is possible to find the idea that the application of a mandatory rule of a foreign State is sometimes imposed by comity.73 This idea is reflected by those English decisions that have considered a contract as being illegal and void because it violated the law 'of a foreign and friendly country.'74 In our opinion, concern for the foreign relations of the forum State cannot justify the application of foreign mandatory rules, because this would undermine the fundamental principle of the separation of powers: in continental Europe it is not conceivable that a court would motivate a decision on political grounds, since this function is reserved to the executive and to the legislature, whereas the judiciary only has the task of applying the law. More interesting is the idea of reciprocity. As experience shows, a liberal attitude of the forum State with respect to foreign law can further, in equivalent cases, the application of domestic rules by foreign courts. As has been observed:75 'Enforcing foreign law in some cases only may (advance the domestic policies) […] better than always enforcing forum law because it invites reciprocal action that advances forum policies in cases brought elsewhere […] From a purely selfish and parochial standpoint, then, it may still be advantageous to the forum to defer to foreign law in order to encourage other states to do the same.' This argument can also apply to foreign mandatory rules. Another reason for applying such rules can be provided by a willingness to co-operate with the foreign State in order to further some policies, if these are shared by the forum. This is the case when the foreign rule is in harmony with a common interest of the international community of States (e.g. the fight against drug traffic or bribery, or the protection of cultural property) or when the forum agrees with the policy of the foreign country; this is the case, in particular, when the lex fori contains similar rules which, however, are not applicable in 72

Refer to BATIFFOL H./LAGARDE P., Traité de droit international privé, Vol. 1, 8th ed., Paris 1993, p. 450; LAGARDE P. (note 11), p. 52 et seq.. 73 Refer to HARTLEY T. C. (note 24), p. 365. 74 For instance: Regazzoni v. Sethia, [1957] 3 All England Reports 286. 75 KRAMER L., 'Return to the Renvoi', in New York Univ. Law Rev. 1991, pp. 9791044, at 1016.

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Mandatory Rules in Private International Law international situations. Under these circumstances, the foreign mandatory rule is the expression of 'shared values' that the forum country 'is itself willing to protect.'76 This reasoning can justify its application. 4.

Multistate Interests: the Quest for Uniformity and International Harmony of Decisions

In our opinion, however, the fundamental reason for applying the mandatory rules of a foreign country under certain conditions, is the quest for uniformity of decisions ('Internationaler Entscheidungseinklang'). This purpose not only corresponds to the interests of the parties, but should be regarded as a fundamental multistate interest and one of the founding principles of private international law.77 As a matter of fact, their interest in furthering uniform solutions is one of the main reasons why sovereign States are willing to apply foreign law under certain circumstances, notwithstanding the absence of any obligation stemming from public international law.78 Since this purpose is endangered by the mandatory application of some national rules by the courts of the forum, the quest for uniformity justifies the application of such rules by the courts of other States. According to a wide-spread opinion, harmony of decisions is no more then an idealistic objective of private international law, that has been only very imperfectly achieved and cannot have a real influence on the solution of concrete conflicts issues.79 In our opinion, this pessimistic attitude underestimates the actual role of that principle as well as its future potential. a)

Actual Role of Uniformity of Decisions

On the one hand, one has to consider that the quest for uniformity is not only one of the grounds for the application of foreign law, but is also reflected in all those rules of private international law which serve the purpose of improving the coordination between different legal systems: among others, the admission of renvoi, which is still accepted to a more or less substantial extent in several European countries,80 the rules on lis alibi pendens and above all, the recognition and 76 GROßFELD B./ROGERS C.P., 'A Shared Values Approach to Jurisdictional Conflicts in International Economic Law', in I.C.L.Q. 1983, p. 931 et seq., especially p. 939. 77 SAVIGNY F. K. (note 1), p. 27; WENGLER W., 'Die allgemeinen Rechtsgrundsätze des internationalen Privatrechts und ihre Kollisionen', in Zeitschrift für öffentliches Recht 1943/44, p. 473 et seq.; NEUHAUS P. (note 18), p. 49 et seq. 78 VAREILLES-SOMMIÈRES P., La compétence internationale de l’Etat en matière de droit privé, Paris 1997, p. 151 et seq. 79 MÜLLER-FREIENFELS W., 'Übernationales Ziel und nationale Kodifikation des internationalen Privatrechts heute', in Festschrift für Frank Vischer, Zurich 1983, pp. 223255, at 229. 80 In Europe, Germany admits renvoi very broadly, but only on condition that it does not contradict the rationale of the choice-of-law rules of the forum (Art. 3 EGBGB). Renvoi has been introduced in the Italian conflict system by Art. 13 of the PIL Statute of 1995. It is true, however, that in other recent codifications renvoi is either rejected (so in Quebec) or

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Bonomi enforcement of foreign decisions.81 The willingness of many legal systems to give effect to foreign judgements (even in the absence of reciprocity) is, in our opinion, a very strong argument in favour of the application of foreign mandatory rules irrespective of the lex causae: as a matter of fact, it does not seem very sensible to exclude the direct application of such rules, when one considers that they could have effect indirectly in the forum through the recognition of a decision handed down in the foreign country. The importance of uniform decisions is even greater in those regional areas and fields of law where private international law rules have been harmonised by way of international conventions. This is particularly evident inside the European Community. By virtue of the Brussels Convention, a proceeding pending before the courts of a contracting State makes it impossible to pursue the same cause of action in another State,82 and the judgment handed down in one State is almost automatically recognised in all other contracting States.83 Thus, speed in bringing the lawsuit can be decisive for the outcome of litigation. This situation is very similar to that created in the United States by the courts' interpretation of the 'full faith and credit' and the 'due process' clauses of the Federal Constitution.84 In this context, it is not reasonable - and it can be very unjust – to ignore the mandatory rules of another contracting State where, under the same circumstances, the proceedings could have taken place. In the field of contracts, this conclusion is reinforced by the fact that the Rome Convention has introduced uniform choice-of-law rules which are designed to ensure that the dispute is decided in all contracting States by application of the substantive rules of the same legal system. If this machinery works as it is supposed to, uniformity of decisions can be hindered only by the mandatory application of some domestic rules of a contracting State. In order to counterbalance this possibility, it is sensible to accord to the courts of other contracting States the possibility of applying these mandatory rules: thus, uniformity can be achieved on a different level. Another argument for the application of mandatory rules promulgated by another member State of the European Community can be deduced from European law itself, since the purported creation of an internal market can only be furthered by harmony of judicial decisions. In order to achieve this objective, member States have a duty of cooperation according to Article 5 of the EC Treaty; therefore they are required to admitted only as a rare exception (Switzerland, Netherlands): for an overview, refer to MÄSCH G., 'Der Renvoi – Plädoyer für die Begrenzung einer überflüssigen Rechtsfigur', in RabelsZ. 1997, pp. 285-312. 81 The importance of international uniformity of decision in this area is stressed by MARTINY D., 'Anerkennung ausländischer Entscheidungen nach autonomen Recht', in Handbuch des Internationalen Zivilverfahrensrechts, Vol. III/1, Tübingen 1984, p. 52 et seq. 82 Lis alibi pendens is regulated by article 21 of the Brussels Convention. 83 Refer to articles 26 et seq. of the Brussels Convention. 84 REIMANN M., Conflict of Laws In Western Europe. A Guide Through The Jungle, New York 1995, p. 146.

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Mandatory Rules in Private International Law reduce as far as possible the risk of conflicts and frictions due to the coexistence of separated national legal systems.85 Similar, though admittedly weaker, arguments are valid whenever an international convention has introduced, in a certain area of law, uniform rules on recognition and enforcement of foreign judgements, uniform choice-of-law rules or uniform substantive rules. The Lugano Convention, for instance, has the same impact on conflict of laws problems as the Brussels Convention, but on a broader scale. A similar framework would be created on a world-wide basis if the travaux préparatoires of the Hague Conference which aim at a Convention dealing with jurisdiction and recognition of foreign judgments were brought to a successful conclusion.86 It should also be noted that several other Hague Conventions are designed to avoid the creation of limping status in family matters (e.g. the Hague Convention on intercountry adoptions): it is evident that this policy would be furthered if each contracting State were willing to apply (or to take into account) internationally mandatory rules of other contracting States. Finally, the uniform law texts also provide arguments for the application of foreign mandatory rules. The Vienna Convention on contracts for the international sale of goods, for instance, does not regulate “the validity of the contract or of any of its provisions”, so that this issue is still governed by domestic rules (which are often mandatory), even if the contract is subject to the uniform rules of the Convention. It is evident that the application of such rules by foreign courts would further the goals of the Convention – i.e., the 'removal of barriers' and 'the development of international trade.' The same argument may be derived from the UNIDROIT Principles of International Commercial Contracts, since Article 1.4 states that 'Nothing in these Principles shall restrict the application of mandatory rules, whether of national, international or supranational origin, which are applicable in accordance with the relevant rules of private international law.' b)

Future Potential of Uniformity of Decisions

The preceding considerations show that current systems of private international law are heavily influenced by the objective of harmony of decisions. Even more relevant is, in our opinion, the role that the quest for co-ordination and uniformity could have in the evolution of private international law. It is difficult to make a prognosis on the future of conflict of laws, but it is likely that its development will be deeply influenced by some essential features of the socio-economic context. 85

Refer now to VON WILMOWSKY P., 'EG-Vertrag und kollisionsrechtliche Rechtswahlfreiheit', in RabelsZ 1998, pp. 1-37, at 25 et seq. 86 See the article by VAN LOON H., 'The Hague Conference on Private International Law – Work in Progress', in this Yearbook, at pp. 207-208.

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Bonomi From this point of view, it is commonplace to note that the world scene is dominated by two somewhat contradictory, but coexisting trends: globalisation, on the one side, and the constitution of regional, more or less integrated communities, on the other side. Both these developments make it necessary to rethink the traditional approach to conflict issues. It seems not too hazardous a prognosis that the creation of more integrated regional entities (such as NAFTA, MERCOSUR, APEC etc.) will require a more intensive co-ordination of the domestic legal system of the member States.87 As is well illustrated by the experience of the European Community, this process will probably not lead – at least initially – to a complete harmonisation of substantive rules, but will it make necessary to create a common system of recognition and enforcement of foreign judgements and to unify choice-of-law rules, at least in those areas of law that are most closely related to economic activities. Together with the need for uniformity will grow the willingness to take into account mandatory rules stemming from other member States. Similar effects could be produced by the process of globalisation in the longer term. This process leads to an increasing integration of the production of goods and services, and of ideas, culture and communication on a world-wide scale. It represents a major transformation in the territorial organisation of economic activity. At the same time, in the absence of global political leadership, national States (or quasi-federal entities such as the European Union) still need to exercise a fundamental regulatory and controlling function. Under these circumstances, however, it can be very easy to evade domestic mandatory rules, even if they emanate from a country to which the situation is closely connected. The only ways of ensuring the effectiveness of economic regulations are interstate co-operation and the co-ordination of national legal systems. In this context, the traditional idea of Savigny, according to which each relationship has its own 'seat' and is subject to only one legal system, needs to be reconsidered. This does not mean that 'localising' choice-of-law rules have to be abandoned: they are very useful so far as no fundamental State policy is at stake. At the same time, however, choice-of-law rules should not hinder the application of those domestic rules that are an expression of fundamental interests of a State to which the situation is closely connected. C.

Conditions for the Application of Foreign Mandatory Rules

Once we admit that the quest for uniformity can justify the application of foreign mandatory rules, it is important to specify the conditions under which this application should take place. Many different considerations can have an influence on that issue. 87

On conflict-of-laws developments in the MERCOSUR, refer to: FERNANDEZ ARROYO D., 'El DIP en el Mercosur - ¿Hacia un sistema institucional ?', in El DIP interamericano en el umbral del siglo XXI, Madrid 1997, pp. 153-194; SAMTLEBEN J., 'Das Internationale Prozeß- und Privatrecht des MERCOSUR – Ein Überblick', in RabelsZ 1999, pp. 1-69.

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Mandatory Rules in Private International Law 1.

Existence of a Specific Provision

The very first condition is the existence of a provision allowing derogation from the bilateral choice-of-law rules. This provision can be express or implied. In those countries where conflict issues are regulated by codified rules, it is not clear whether a derogation from the solutions they provide is possible in the absence of an explicit provision. In Germany, for instance, this question has been positively answered by some authors, although that country has entered a reservation to Article 7 (1) of the Rome Convention.88 In Italy, some commentators on the 1995 PIL Statute have expressed the opinion that Article 7 (1) should be applied by analogy to matters falling outside the scope of application of the Rome Convention.89 The only countries in which this issue is governed by a general rule are Switzerland and Quebec. 2.

Areas of Law Where the Application of Foreign Mandatory Rules Raises Particular difficulties

The desirability of a general rule is not uncontroversial. One should not forget that each area of private international law has its own features and peculiarities which can require different solutions. As a matter of fact, the weight of the various interests we have considered above differ according to the subject-matter. The choice-of-law rules existing in each field reflect a certain hierarchy of interests settled by the legislator and should not be disregarded by courts when deciding on the application of foreign mandatory rules. In some areas, by way of exemple, the choice-of-law rules are a direct expression of the sovereignty of the State.90 The application of the lex situs to immovable property rights and, in some countries (for instance, in France), even to succession in respect of immovables, reflects the interest of the State in controlling immovables as a part of the State territory. It can also be argued that the application of the national law to issues relating to personal status, family relations and successions reflects the State's claim to apply domestic law to its own citizens, even if they are domiciled and resident abroad. In both cases, the connecting factor is the expression of a strong State interest: it is therefore more difficult to admit that the existence of a foreign mandatory rule can justify a derogation from the bilateral choice-of-law rule. Similar arguments apply when the choice-of-law rule is designed to further a certain substantive result (e.g. the establishment of the status of legitimate child): in this case the application of foreign mandatory rules should be excluded unless it furthers the achievement of the underlying policy. 88

Refer to MARTINY D., (note 32). Refer to TREVES T., in Riv. dir. int. priv. proc. 1995, p. 988; BOSCHIERO N., in Nuove leggi civili commentate 1996, p. 1070. 90 See supra, note 71. On the role of the principle of sovereignty in modern conflict of laws, see also PATAUT E. (note 71). 89

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Bonomi The situation is completely different in those areas where the choice-of-law rule are inspired by the idea of proximity. In such cases, the conflict rules do not reflect an important interest of the forum State, but are designated to further uniformity by respecting parties' expectations. The choice of the applicable law is not imposed by imperative considerations, but is rather the result of a compromise and a balancing of various interests. There is therefore no reason why the chosen law should claim exclusive application. In this context, it is entirely acceptable for the results of the choice-of-law process to be 'adjusted' through the application of a foreign mandatory rule, if this is necessary to further the uniformity of solutions. This is also valid whenever the applicable law is designated by the parties. Party autonomy is a very important principle, but there can be no doubt that it is subject to restrictions when public interests are at stake. 3.

Requirements for the Application of Foreign Mandatory Rules According to Art 7 (1) of the Rome Convention

Even in those areas of private international law where the application of a foreign mandatory rule can be envisaged, the quest for uniformity is subject to certain conditions, as is well illustrated by Article 7 (1) of the Rome Convention. According to this provision the application of foreign mandatory rules irrespective of the lex causae is only possible if it emanates from a country “with which the situation has a close connection” and if, under the law of the foreign country, that rule “must be applied whatever the law applicable to the contract”. Furthermore, this provision does not oblige courts to apply the foreign rules, but only allows them to do so: it is a rule of discretion. We will now briefly examine how these conditions should be dealt with in the practice. a)

Internationally Mandatory Character of the Foreign Rule

It is first necessary that the foreign rule be regarded as internationally mandatory under the law of the foreign country that has enacted it. The rationale of this requirement is clear. A rule which is not internationally mandatory cannot derogate from the bilateral choice-of-law rules of the foreign country from which it emanates: there is therefore no reason why it should prevail over the conflict rules of the forum. The quest for uniformity cannot justify such a derogation. b)

Close Connection Between the Situation and the Foreign State

The requirement of a close connection is more difficult to define, because it is designed to pursue various goals at the same time. On the one hand, it is linked to the quest for uniformity of decisions. As a matter of fact, the application of mandatory rules of a foreign country is only justified, from the point of view of uniformity, if the courts or, generally speaking, the authorities of that country have jurisdiction over the relationship in controversy. However, this requirement is not very significant since, in most cases, 244

Mandatory Rules in Private International Law the authorities of the State from which an internationally mandatory rule emanates have jurisdiction over the situations that are included in the spatial reach of that rule. In other words, 'jurisdiction to adjudicate' goes together with 'jurisdiction to prescribe'. Admittedly, this is not always the case when jurisdiction of civil courts is at stake, because the latter is regulated by general rules that are not directly influenced by the policy of mandatory rules of the forum. But one has also to consider that internationally mandatory rules are often closely linked to public law regulations (e.g. antitrust rules) the application of which is entrusted to administrative authorities: in such instances, the jurisdiction of the latter normally corresponds to the spatial reach of the mandatory rule.91 On the other hand, the requirement of a close connection purports to assure a control over the legitimacy of the foreign State’s claim to impose the mandatory application of its own rules in international cases. As a matter of fact, the quest for uniformity cannot justify the application of a foreign rule whose spatial reach is exorbitant: this would be contrary to the interest of the forum State, which is not willing to give in to the arrogant claims of foreign States. This is also important in the interest of the parties, whose expectations would be deceived if courts would apply the rule of a country with which the situation has no significant link. It is however not easy to judge whether the scope of application of the foreign rule is exorbitant. Unfortunately public international law offers no reliable guidance. Indeed, the existence of international law limits upon legislative jurisdiction is mostly controversial.92 In the absence of international standard, the criteria have to be found in domestic and comparative law. Thus, in our opinion, courts cannot consider the spatial reach of a foreign rule as exorbitant if the lex fori contains similar mandatory rules and these adopt the same connecting factor. This reference to domestic criteria is similar to that used, in the field of recognition and enforcement of foreign judgements, in order to verify if the rendering court had jurisdiction to adjudicate: in that case, in the absence of recognised international standards, the jurisdiction of the foreign State is often appreciated on the basis of a “bilateralisation” of the connecting factor employed by the equivalent jurisdictional rule of the forum.93 91

Thus, the spatial reach of the European antitrust regulation corresponds to the jurisdiction of the European antitrusts authorities. 92 MANN F. A., 'The Doctrine of International Jurisdiction', in Recueil des Cours, Vol. 111, 1964-I, pp. 1-162, at 46; ID., 'The Doctrine of International Jurisdiction Revisited After Twenty Years', ibid., Vol. 186, 1984-III, pp. 9-116, at 26 et seq.; HABSCHEID W. J./RUDOLF W., 'Territoriale Grenzen der staatlichen Rechtsetzung', in Berichte der Deutschen Gesellschaft für Völkerrecht, Vol. 11, Heidelberg 1973; LOWENFELD A., 'Public Law in the International Arena - Conflict of Laws, International Law, and Some Suggestions for Their Interactions', in Recueil des Cours, Vol. 163, 1979-II, pp. 311-436; STERN B., 'Quelques observations sur les règles internationales relatives à l'application extraterritoriale du droit', in Annuaire français de droit international 1986, pp. 7-52. 93 The 'bilateralisation' of domestic rules on judicial jurisdiction is expressly provided by Art. 328 (1) (1) of the German code of civil procedure, by Art. 26 litt. a of the Swiss PIL Statute and by Art. 64 litt. a of the Italian PIL Statute. On the contrary, this

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Bonomi If the foreign rule does not have any domestic equivalent, or if it adopts a different connecting factor, it is necessary to have recourse to comparative law criteria: thus, the foreign mandatory rule will not be considered as exorbitant, if its purported spatial reach corresponds to a widely recognised comparative standard. If it is impossible to determine such comparative standards, the application of the foreign mandatory rule should be rejected. c)

Discretionary Decision of the Court

After having verified that the foreign mandatory rule meets all the prescribed conditions (i.e., internationally mandatory character and close connection), the court should make use of the discretionary power accorded by Article 7 (1) of the Rome Convention. At this stage, the court will have to balance the various interests we have described above (see supra, Part III, B). In some instances, the interest in uniformity has such an outstanding importance that the application of the foreign rule will appear as the normal solution. This is the case in relations between the countries of the European Community, where the existence of uniform rules on choice-of-law and on recognition of foreign judgments, on the one hand, and the purpose of creating an integrated market, on the other hand, normally weigh heavier than other interests. In this context, it is submitted that the application of an internationally mandatory rule promulgated by another member State with which the situation is closely connected can be refused only under exceptional circumstances. This could be the case, for instance, if the foreign rule were contrary to the interests of the forum State or to the purpose of European integration (e.g. a rule which limits the free movement of goods), or if the application of that rule would lead to a decision which is manifestly unjust to one of the parties. In the relation to other States, since the uniformity goal is less important, the application of a foreign mandatory rule will also depend upon the weight of other interests, which can be influenced by many circumstances. First, the need for uniformity depends on the probability that the forum's decision will come into a real conflict with the foreign mandatory rule. This is most likely if it appears that the decision will have to be executed in the foreign country from which the mandatory rule emanates. Secondly, the application of the foreign rule can lead to an unjust result in the particular case if the party that is opposed to it did (and could) not know the existence of that rule, or if it was forced to accept the stipulation detracting from the mandatory rule because of the stronger contractual power of the other party. Last but not least, the interest of the forum in co-operation with the foreign State and in creation of the condition for reciprocity is stronger, as we have already mentioned, if the policy underlying the foreign rule is an expression of values

criterion has been abandoned in England and in France: see the decisions of the House of Lords in the case Indyka v. Indyka, in 2 All England Reports 1967, p. 689, and of the Cour de cassation in the case Simitch, in Rev. crit. dr. int. pr. 1985, p. 369.

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Mandatory Rules in Private International Law shared by the forum, i.e., if it reflects a common interest of the international community of States or if it corresponds to similar rules of the lex fori. The decision on whether to apply the foreign rule should be the result of balancing all of these interests and considerations. Andrea BONOMI**

** Staff legal advser of the Swiss Institute of Comparative Law, Lausanne; Lecturer on Private International Law and on European Law at the University of Trieste. The author is grateful to Martin Sychold for the linguistic correction of his text. 247

MARITIME TORTS* New Conflicts Approach: Is It Necessary? I. Introductory Remarks A. International Character of Maritime Relations B. Importance of Private International Law in a Maritime Context – Maritime Private International Law C. Why Maritime Torts? D. Maritime Torts – Maritime Accidents and Other Events Constituting NonContractual Liability for Damages II. Development of a General Conflicts Law for Torts: Lex Loci Delicti – From a Generally Accepted to the Most Disputed Conflicts Rule A. Mitigation of the Inadequacy of the Lex Loci Delicti 1. Lex Loci Delicti – An Alternative, Subsidiary Conflicts Rule a) Lex Communis Nationalis / Domicilii b) Accessory Choice of Law c) The Common Enterprise Exception – the Law of the Group d) Escape Clause e) Party Autonomy 2. Use of Other Rules and Methods in lieu of the Lex Loci Delicti Commissi B. Summarizing the State of Tort Conflicts III. The Law of the Ship Nationality: Lex Bandi A. The Concept of Ship Nationality and its Purpose as a Connecting Factor B. Flags of Convenience (FOC) C. Bareboat Charter D. Bareboat Charter Registration: 'Real Rights Register' and 'Charter (Flag) Register' E. How the Flag of Convenience and Bareboat Charter Affect the Law of the Ship Nationality IV. Collisions A. Conflict of Laws in Collisions 1. Basic Choice-of-Law Rules a) Collisions in Territorial Waters b) Collisions on the High Seas 2. Exceptions to the Application of Basic Conflicts Rules: The Law of the Closest Connection – A Closed Escape Clause a) Lex communis nationalis b) Lex communis bandierae c) Application of the Same Rules of Different Laws of the Nationalities of the Ships

* This article summarizes some of the ideas expressed in Vesna TOMLJENOVIĆ's book Pomorsko međunarodno privatno pravo – izvanugovorna odgovornost za štetu i problem izbora jerodavnog prava (Maritime Private International Law – Extra-Contractual Liability for Damages and Problem of Applicable Law), Rijeka (Library of the Law Faculty University of Rijeka) 1998, pp. XXIII + 479.

Tomljenović

VII.

Is There Room for Other General Exceptions to the Lex Loci Delicti Commissi or the Lex Bandi? a) Party Autonomy b) Open Escape Clauses; the Most Significant Relationship; the Proper Law of Torts Personal Injuries and the Death of Seamen A. Personal Injuries and the Death of Seamen: Lex Bandi as the Governing Law B. Reaction of the Doctrine and Judicature to Application of the Lex Bandi C. De Lege Ferenda Solutions 1. Party Autonomy 2. Accessory Choice of Law 3. The Law Most Closely Connected with the Dispute – the Escape Clause Vessel Source Pollution A. Judicature and Conflict of Laws in Pollution Cases B. De Lege Ferenda Conflicts Solutions for Pollution Caused by a Vessel 1. Lex Loci Delicti – Elective Cumulation 2. Lex Autonomiae 3. The Escape Clause – the Law with the Closest Connection Concluding Remarks

I.

Introductory Remarks

A.

International Character of Maritime Relations

3.

V.

VI.

'Put a finger into a sea and you will be connected with entire world.' This old saying used by seamen clearly expresses the very nature of maritime transactions, their internationalism. Maritime transactions involve subjects of different nationalities and from different countries. Moreover, maritime relations take on an international character as a result of the regime in which a particular maritime transaction is performed – within the framework of different countries and their legal systems, or within an area where no State has jurisdiction. Consequently, the perfect legal solution for maritime disputes would be the application of universal or general maritime law. However, such general maritime law – lex maritimae – does not exist as a complete corpus of law, although the courts of some countries refer to it.1 The term lex maritimae defines uniform maritime rules, international customs and usages applied in maritime transactions. Despite the rather wide range of matters covered by international conventions2 and other uniform rules, 1

The concept of general maritime law can be understood only within the context of the internationalization of shipping and continuous attempts to achieve international unification of maritime law. See more about general maritime law in conflict of laws infra, Part IV, 2. 2 Despite the impressive list of international conventions, the unification of maritime law is a continuing process (regarding subject matter and status of ratification see The Ratification of Maritime Conventions, Lloyd's Shipping Law Library, London 1990). On the incompleteness of unified maritime law, see VILARD A., 'Sisyphe et l'unification internationale du droit maritime', in Droit Maritime Français (hereafter: D.M.F.) 1999, pp. 213-222.

250

Maritime Torts and the fact that the corpus of these rules enlarges every day, international maritime law does not exist as a unique and organized legal system. Although the international nature of maritime relations has enabled a considerable degree of uniformity to be achieved, the differences in national maritime laws are a reality that cannot be disregarded. Consequently, where uniform maritime law does not apply in maritime disputes,3 a decision on the merits depends on which national law applies. The applicable law is determined in accordance with private international law rules (conflicts rules). B.

Importance of Private International Law in a Maritime Context – Maritime Private International Law

In view of the practical importance of private international law for the regulation of maritime transactions, numerous special maritime conflicts rules have been adopted.4 Depending on the type of codification, those rules can be found in maritime,5 commercial,6 private international law,7 and maritime private international8 acts.

3 Even in cases falling under the scope of international conventions, conflicts rules must sometimes be applied to characterize some conventional terms. See JAPISKE R., 'The interpretation of International Maritime Conventions in Civil Law and Common Law', in Netherlands Reports to the Thirteenth International Congress of Comparative Law (Montreal 1990), The Hague 1990, p. 303. 4 On factors indicating the need for specific maritime conflicts rules see SCERNI M., Il diritto internazionale privato marittimo ed aeronautico, Padova 1963, p. 5; SIESBY E., Soreltige loukonflikkter, Kobenhaven 1965, pp. 374-377; BRÆKHUS S., 'Choice of Law Problems in International Shipping (Recent Developments)', in Recueil des Cours, Vol. 64, 1979-III, pp. 261262. 5 Maritime conflicts rules are codified in Maritime Acts in Italy (Art. 4-14 of the Introductory provisions of the Maritime Code of 1942, amended in 1990); Denmark (Art. 169 of the Maritime Act, 1974); Poland (Art. 7-11 of the Introductory provisions of the Maritime Act, 1961); China (Chapter XIV – Application of Law relating to Foreign-Related Matters of the Maritime Act, 1993); Croatia (Art. 990-1009 of the Maritime Act, 1994); Bulgaria (Part IIof the Maritime Commercial Code, 1970); Panama (§ 8, Rules of Private International Law of the Maritime Law, 1982) etc. 6 Maritime conflicts rules could be found in Commercial Acts in Portugal (Arts. 24, 674 etc. of the Commercial Act); Spain (Art. 10 of the Civil Code, 1889). 7 E.g. in Rumania (Chapter X of the PIL Act, 1992); Hungary (Arts. 23 and 33 of the PIL Act, 1979). 8 In the Netherlands maritime conflicts rules were codified by a special law of 18 March 1993 – Wet van 18 maart 1993, houdende enige bepalingen van internationaal privaatrecht met betrekking tot het zeerecht en het binnenvaartrecht (hereafter: Maritime PIL Rules Act), see TETLEY W., International Conflict of Laws (Common, Civil and Maritime), Montreal 1994, pp. 1069-1072.

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Tomljenović One of the reasons for codifying maritime conflicts rules is the special nature of maritime relations, as a result of which general conflicts rules cannot be appropriately applied, or sometimes even applied at all. According to the maxim lex specialis derogat legi generali, it is supposed that, in principle, a special maritime conflicts regulation excludes a general one. Nevertheless, in some situations those rules, general and maritime, interfere with supplementary or replacement rules. In both cases, the purpose and operation of maritime conflicts rules can be understood only in the context of general private international law. C.

Why Maritime Torts?

The interrelation between general and maritime conflicts rules is present especially in maritime torts where the general conflicts rule for torts – lex loci delicti commissi – and the special conflicts rule governing the law of the ship nationality – lex bandi – apply. The general conflicts rule lex loci delicti applies to maritime torts where one or more vessels are damaged in territorial waters. The law of the ship nationality applies in maritime torts if application of the lex loci delicti is not possible (torts on high seas) or appropriate (if the damage does not involve a vessel and therefore does not affect a coastal State), or if the vessels involved have the same nationality. Both of the conflicts rules have been considered inappropriate because of their exclusivity and rigidity. Although the lex loci delicti commissi still has the status of a general conflicts rule, new codifications of private international law, as well as proposals for de lege ferenda solutions, have introduced new ideas that enable flexibility in its application. It our opinion, a similar need for flexibility exists in respect of the application of the law of the ship nationality. This is because the flag of convenience and bareboat charters, inseparable aspects of modern shipping, considerably diminish the significance of the ship nationality as a connecting factor. Due to these developments, questions arise as to whether flexible solutions could be applied as exceptions to the application of the lex loci delicti in maritime torts as well? Would these exceptions be acceptable in respect of the application of the lex bandi? The answers to these questions will show whether the special maritime conflicts regulation follows new trends of general PIL, as it should.

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Maritime Torts D.

Maritime Torts – Maritime Accidents and Other Events Constituting Non-Contractual Liability for Damages

The diversity of harmful maritime events enables us to determine precisely the content of the frequently used term maritime torts. The situations that potentially cause noncontractual liability within the context of maritime relations are numerous and differ substantially. Consequently, it is impossible to cover all maritime torts within the scope of this article. Therefore, we will focus only on selected situations that differ from the perspective of private international law. These include collisions (IV), personal injuries and the death of seamen (V), and finally, pollution of the sea caused by a vessel (VI). First, however, some comments will be presented on contemporary conflicts rules for torts in general (II) and on the special maritime conflicts rule governing the law of the ship nationality (III).

II.

Development of a General Conflicts Law for Torts: Lex Loci Delicti – From a Generally Accepted to the Most Disputed Conflicts Rule

Guaranteeing easy determination of the applicable law, and thus uniformity and predictability,9 the lex loci delicti commissi has traditionally and exclusively governed tort liability.10 Nonetheless, the principle of the lex loci delicti has been subjected to strong criticism since the middle of this century. Formulated for classical forms of individual extracontractual liability (where most relevant substantive delictual elements have been manifested within one legal system), lex loci delicti functioned as an appropriate conflicts rule until modern technology brought about new and complex tort situations where the locus delicti is fortuitous, where damages are transnational and where individual liability has been replaced by enterprise liability.11 As one scholar pointed out, the lex loci delicti has become an old solution for new delictual situations. The consideration of other 9

Other arguments supporting application of the lex loci delicti include the natural connection existing between the harmful event and the law of the State where the event occurred (BALLARINO T., Diritto internazionale privato, 3rd ed., with the collaboration of BONOMI A., Padova 1999, p. 718), the principle of territorial sovereignty, balancing of interests and protection of justified expectation, above all a principle of social utility. See MORSE C.G.J., Torts in Private International Law, Amsterdam 1978, p. 13; RABEL E., The Conflict of Laws, A Comparative Study, Ann Arbor 1960, Vol. II, pp. 251-252; KAHN-FREUND O., 'Delictual Liability and Conflict of Laws', in Recueil des Cours, Vol. 124, 1968-II, pp. 43-46. 10 MORSE C.G.J., 'A Choice of Law in Tort: A Comparative Survey', in Am. J. Comp. L. 1984, pp. 51-97; BALLARINO T. (note 9), p. 690; DROZ G.A.L., 'Regard sur le droit international privé comparé', in Recueil des Cours, Vol. 229, 1991-IV, p. 282. 11 TUNC A., 'Torts', in International Encyclopedia of International Law, Vol. XI-1, pp. 1-6; KLARIĆ P., Odštetno pravo, Zagreb 1991, pp. 13-16.

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Tomljenović potentially applicable laws has been excluded by the rigidity of locus delicti as the only connecting factor. The rigidity and exclusivity of lex loci delicti has resulted in those cases in a more mechanical than rational determination of the applicable law. After long and intensive doctrinal debates on how to overcome the deficiencies of the lex loci delicti, a 'softer' and more elastic approach to tort conflicts has been incorporated into contemporary codifications of private international law (Switzerland,12 Romania,13 Turkey,14 Italy,15 the United Kingdom,16 Germany17). The same line of reasoning is followed in proposed legislation for tort conflicts in the Netherlands.18 This elastic approach has been used in several attempts to unify international conflicts rules for non-contractual liability, which, however, failed to lead to significant results.19 On the other hand, the unification of special conflicts rules for 12

Swiss Federal Statute on Private International Law of 18 December 1987 (hereafter: Swiss PIL Act). 13 Rumanian Law on Private International Law No. 105 of 22 September 1992 (hereafter: Rumanian PIL Act). 14 Turkish Law on Private International and Procedural Law No. 2675 of 22 May 1982 (hereafter: Turkish PIL Act). 15 Italian Law No. 218 of 31 May 1995 on Reform of the Italian System of Private International Law (hereafter: Italian PIL Act). 16 Private International Law (Miscellaneous Provisions) Act 1995 (Commencement Order) 1996, in Statutory Instruments 1996, No. 995 (hereafter: UK PIL Act). 17 Law for the Completion of the Introductory Provisions of the Civil Code (EGBGB), Gesetz zum Internationalen Privatrecht für ausserverträgliche Schuldverhältnisse und Sachen of 21 May 1999, in BGBl., I, p. 1026 (hereafter: new German PIL for torts). 18 In 1992 the Netherlands Committee for Private Law Legislation of the Ministry of Justice published the Outline of a General Statute of Private International Law Legislation considered as the basis for a discussion on possible codification. Arts. 94-97 of the Outline contained conflicts rules for torts: see Nederlands Internationaal Privaatrecht 1992, pp. 452476; DUINTJER TEBBENS H., 'Netherlands Judicial Decisions Involving Questions of Private International Law – Choice of Law in Tort', in Netherlands Int. L. Rev. 1994, p. 364). In a letter of 23 December 1996, the Dutch State Committee on PIL sent a Proposal to the Ministry of Justice for an Act on the Law Applicable to Torts (hereafter: Proposal for the Law Applicable to Torts Act (1996)) published in DE BOER Th. M. (ed.), Vijftig jaar lex loci delicti: van Dubbinks proefschrift tot een Wet conflictenrecht onrechtmatige daad, 1998. 19 The Resolution on Delictual Obligations in Private International Law was adopted in 1969 by the Institute of International Law. Although not obligatory, it gave new directions for delictual conflicts solutions for judicature and doctrine by formulating the most appropriate conflicts solutions for delicts. See INSTITUTE OF INTERNATIONAL LAW, Yearbook 1969, Vol. 53-I, pp. 293-546; Yearbook 1969, Vol. 53-II, p. 386. In 1951 the Benelux countries adopted the Convention on the Unification of Rules of Private International Law, which was amended in 1969 (hereafter: Benelux Uniform Law). See more in NADELMANN K.H., 'The Benelux Law on Private International Law', in Am. J. Comp. L., 1970, p. 406. However, the revision of 1971 did not succeed and in 1975 the whole project was abandoned; see DE BOER Th. M., Beyond lex loci delicti – Conflict Methodology and Multistate Torts in American Case Law, Amsterdam 1987, p. 25.

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Maritime Torts traffic accidents and product liability were successful as a result of accepted diversification of conflicts rules for non-contractual liability. 20 A.

Mitigation of the Inadequacy of the Lex Loci Delicti

Softening of the rigidity of the lex loci delicti has changed its status from an exclusive to an alternative or subsidiary conflicts rule. Such a role of the lex loci delicti is recognized in most European countries today. American courts have adopted more radical solutions that replace the lex loci delicti with the new conflicts rule of the most significant relationship21 or with policy-oriented methods, a completely new approach to conflicts of laws.

In the European Community the unification of conflicts rules for obligations also included conflicts rules for torts at the beginning: EEC Preliminary Draft Convention on the Law Applicable to Contractual and Non-Contractual Obligations 1972 (hereafter: EEC Draft/72). However, only the unification of conflicts rules for contracts was achieved by the Rome Convention on the Law Applicable to Contracts (1980). Recent attempts to unify conflicts rules for torts in the European Union were initiated by the informal European Group for Private International Law (see more in Netherlands Int. L. Rev. 1998, p. 157). See the Proposal for a European Convention on the Law Applicable to Non-Contractual Obligations (hereafter: Proposal for the Rome II Convention), in Netherlands Int. L. Rev. 1998, pp. 465-471. Unification of conflicts rules for torts was successful in Latin America where the Code of Private International Law (hereafter: Codigo Bustamante) was adopted in Havana on 20 February 1928, and the Montevideo Treaties on Civil, Procedural and Commercial Navigation Law (hereafter: the Montevideo Treaty) concluded in 1889 and amended in 1940. 20 Two important conventions have been adopted within the framework of the Hague Conference: Convention on the Law Applicable to Traffic Accidents concluded on 4 May 1971 and Convention on the Law Applicable to Product Liability concluded on 2 October 1973. Diversification of conflict of laws is present in national legislation as well. Special conflicts rules have been adopted for traffic accidents (e.g., Art. 134 of the Swiss PIL Act), product liability (Art. 135 of the Swiss PIL Act; Arts. 114 –116 of the Rumanian PIL Act; Art. 63 of the Italian PIL Act), invasion of privacy (Art. 139.1 of the Swiss PIL Act), unfair competition (Art. 117 of the Rumanian PIL Act; Art. 136.1 of the Swiss PIL Act). 21 In his well-known article ('The Proper Law of Tort', in 64 Harvard Law Review 1951) Morris suggested replacing the lex loci delicti with the conflicts principle of the proper law of tort. At that time the proper law principle was applied for contractual relations, and stands for the law with the closest actual connection with the disputed issue. Morris' suggestion has influenced American doctrine and judicature. The Restatement (Second) of the Conflict of Laws (1971) (hereafter: Restatement II), replaced the lex loci delicti with the most significant relationship principle (section 145).

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Tomljenović 1.

Lex Loci Delicti – An Alternative, Subsidiary Conflicts Rule

Without intending to give a detailed framework and survey of the rules limiting the application of the lex loci delicti, the most important are enumerated below: a)

Lex Communis Nationalis / Domicilii

Numerous countries accept departing from the application of the lex loci delicti commissi in favor of the law common to the parties. In cases where the parties have a common nationality and/or domicile, this law is usually regarded as the law common to the parties. The law common to the parties is the law most closely connected with the non-contractual obligation. Such a solution was advocated in older,22 as well as in modern doctrine.23 Therefore it can be found in older codifications of private international law (Poland,24 Hungary25) and new ones (Switzerland,26 Italy,27 China,28 and Germany29) and is present in de lege ferenda proposals.30 22

WEISS A., Traité theorique et pratique de droit international privé, Vol. IV, Paris 1913, p. 415; FIORE P., Le droit internationale privé, 1907, Vol. III, Paris 1906, § 1266. 23 DUTOIT B., Commentaire de la loi fédérale du 18 décembre 1987, Basel-Frankfurt a.M. 1996, p. 355; DROZ G.A.L. (note 10), pp. 281-282. 24 Polish Act on Private International Law of 12 November 1965 (hereafter: Polish PIL Act) provides departure from lex loci in favor of the common law only if the parties have a common domicile in the country of their nationality (Art. 31.2). 25 Hungarian Law-Decree on Private International Law No. 13 of 1979 (hereafter: Hungarian PIL Act) provides departure from lex loci delicti in favor of lex communis: 'If the person who inflicted the injury and the injured party are residents of the same State, the law of this State shall apply.' 26 The Swiss PIL Act gives priority to the lex communis (Art. 131.1) if all parties have their habitual residence in a State other than that where the delict occurs. 27 The Italian PIL Act specifies that, if all parties are nationals of the same State in which they reside, the law of that State shall prevail over lex loci delicti (Art. 62.2). 28 Art. 146.2 of the Civil Code (1986) provides that, if all interested parties have a common nationality or reside in same country, the law common to the parties shall apply and not lex loci delicti. 29 Art. 40.2 of the new German PIL for torts provides that, in cases where the injured person and the tortfeasor have their habitual residence in the same State at the time the harmful event occurs, the law of that State shall apply. In cases where the parties are legal persons, the relevant connecting factor is the base of operation or the place of management of the legal person. 30 Dutch Proposal of the Law Applicable to Tort Act (1996) proposes that, in cases where the parties have a common habitual residence, that law shall apply (Art. 1.3). The Proposal for the Rome II Convention designates the law of the State of the common habitual residence of the parties at the time of the event as the law most closely connected with the non-contractual obligation. The exception to the law of common residence is formulated as a closed escape clause.

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Maritime Torts b)

Accessory Choice of Law

In addition to a factual connection, a legal one existing between the parties at the time of the harmful event could also be relevant for choice-of-law purposes. In such a case, the lex causae of a previously established legal relation derogates from the application of the lex loci delicti,31 and the law common to the parties is the law governing the previously existing legal relationship between them. An accessory choice of law is fully justified in situations where the delict occurs within the framework of an already existing contractual relationship between the parties (transport contract, labor contract, etc.).32 Although favored in legal scholarship,33 the use of an accessory conflicts rule as an exception to the lex loci delicti is found in the Swiss PIL Act34 and the Quebec Civil Code.35 In the new German PIL for torts, the accessory choice of law is covered by an escape clause.36 The Dutch Proposal of the Law Applicable to Torts Act (1996)37 and the Proposal for the Rome II Convention38 both provide for an accessory choice of law.

31

The lex causae of a previously established relation derogates from lex loci delicti commissi only when the pre-existing legal relationship prevails over extra-contractual liability: see English and Scottish Law Commission, Working Paper on the Reform of the Choice of Law Rules, No. 87, 1984 (hereafter: Law Commission Working Paper 1984), p. 142. A connection must exist between the extra-contractual and pre-existing legal relationship; moreover, the harmful event must be characterized as a delict and as a violation of obligation arising out of that pre-existing relationship. Only in such cases (where a double violation is established) is the harmful event integrated into the legal sphere of the prevailing relationship to such a degree that the lex causae of the latter absorbs the legal effects of the delict as well: see BUCHER A, 'Les actes illicites dans le nouveau droit international privé suisse', in Le nouveau droit international privé suisse, Lausanne 1988, p. 120. 32 There is no prevailing view in legal scholarship on the precise boundaries of the accessory choice of law. Some doubts exist as to whether family relations can be regarded as such pre-existing relationship: AUDIT B., Droit international privé, Paris 1991, p. 156. 33 See NYGH P., Autonomy in International Contracts, Oxford 1999, pp. 240-242. 34 Art. 133.3. 35 Book Ten, Art. 3127, see NYGH P. (note 33), pp. 242-243. 36 According to Art. 41.2 of the new German PIL for torts, the accessory choice of law is covered by the principle of the closest connection. 37 Note the wording of Art. 3, according to which the lex causae of the pre-existing legal relationship 'may' be applied, thus indicating that the accessory choice-of-law rule is facultative. 38 Art. 7.5.

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Tomljenović c)

The Common Enterprise Exception – the Law of the Group

An accessory choice of law must be distinguished from situations which are referred to in legal scholarship as 'common enterprise exception' or the 'law of the group'. When damage is caused during a common enterprise of the parties that started (and must be completed) in a State other than the one where the damage occurred or within a so-called isolated environment, the law of that socially isolated environment prevails over the lex loci delicti.39 The exception of the law of the group differs from that of an accessory choice of law in that the parties constituting the isolated group must not be legally connected in the sense that some legal relation exists between them. Instead, it is important that the parties 'are carrying on some activity with a common purpose which is being pursued together, not separately.'40 An example clearly illustrating derogation from the lex loci delicti commissi in favor of the law of common enterprise is the application of the law of the ship nationality in torts, the consequences of which do not concern the vessel. The members of the crew represent such an isolated environment, and consequently the lex bandi, here as the law of the group, derogates the lex loci delicti. d)

Escape Clause

Another exception to the application of the lex loci delicti can be formulated as an escape clause. Abstract conflicts rules sometimes lead to solutions which contradict the purpose of the conflicts rule itself, and what is more important, the purpose of substantive law. The escape clause was first accepted by scholars and thereafter in some legislation41 as a rule that allows the courts to avoid application of the generally applicable law in order to apply some other law that is more closely connected with the disputed issue.42

39

Kahn-Freund advocates the law of the group as a displacement rule when a social environment (isolated environment) of delict is detached from its geographical environment: KAHN-FREUND O. (note 9), p. 152. However, in legal scholarship it is pointed out that the mere existence of an isolated environment is not sufficient to justify the derogation of lex loci delicti by the law of the isolated group: see Law Commission Working Paper 1984 (note 31), p. 146; VITTA E., Diritto internazionale privato, Vol. III, Torino 1975, p. 521. 40 Such as cases of common travelling, common publishing, etc.: see the Law Commission Working Paper 1984 (note 31), pp. 144-145. 41 A general escape clause is introduced in Art. 15 of the Swiss PIL Act and Art. 3082 of the Quebec Civil Code. Both provisions emphasize that their application is an exception. On the other hand, the view exists that the general escape clause should not be used as a means of obtaining a more favorable law for one of the parties involved: see DUTOIT B. (note 23), p. 40. 42 VON OVERBECK A.E., 'Les questions générales du droit international privé à la lumière des codifications et projets récents', in Recueil des Cours, Vol. 176, 1982-III, p. 187.

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Maritime Torts The escape clause can be a perfect remedy43 in torts, achieving justice in those cases when it could not be achieved by applying the rigid conflicts rule of the lex loci delicti commissi.44 One aspect already mentioned is an escape clause applying the law common to the parties. Here, a so-called open escape clause45 could be considered, thus leaving it up to the court to determine the law most closely connected with the dispute at hand. The Austrian PIL Act46 and the Turkish PIL Act47 contain an open escape clause specifically formulated for torts. The new German PIL for torts48 also provides for an open escape clause. An interesting solution, which in fact is a combination of open and closed escape clauses, is found in the Proposal for the Rome II Convention.49 Contrary to the Netherlands Draft, the Proposal of the Law Applicable to Torts Act (1996) omits escape clauses.50 e)

Party Autonomy

Until recently, the principle of party autonomy was unknown in tort conflicts. Anticipated by unilateral choice of law recognized to the injured person,51 party 43 Some authors are skeptical about applying the escape clause as a displacement rule for alternative conflicts rules where the alternative phrasing favors one of the parties. In other words, it should not be used as a means of securing the application of substantive solutions the court wants to apply or the application of the lex fori: see VON OVERBECK A.E. (note 42), p. 187. 44 The first special escape clause for torts was introduced by the Benelux Uniform Law. However, its significance is diminished by the fact that it never came into force (Art. 14). The escape clause was also incorporated into Draft EEC/72 (Art. 14.2). 45 KOKKINI-IATRIDOU D., 'Les clauses d'exception en matière de conflits de lois et de conflits de jurisdictions (general report)', in Les clauses d'exceptions en matière de conflits de loi et de conflits de jurisdiction – ou le principe de proximité, Dordrecht 1994, pp. 11-12. 46 Art. 48 47 Art. 25.3. 48 Art. 40.1. of the new German PIL for torts contains an open escape clause with an additional definition of the law of the closest connection in paragraph 2 of the same Article. 49 In the absence of a choice of law by the parties, Art. 3.1 provides that a noncontractual obligation arising from a harmful event shall be governed by the law of the country with which it is most closely connected (Art. 3.1). The closest connection is presumed to be the common habitual residence of the tortfeasor and victim at the time of the event (Art. 3.2). If the parties have their habitual residence in different countries and the harmful event occurs in one of them, this country is deemed most closely connected with the obligation (Art. 3.3). Both presumptions, however, shall be disregarded if the circumstances as a whole refer to some other country as being most closely connected with the obligation (Art. 3.4). The latter is an open escape clause. 50 Art. 1.3 functions as a closed escape clause with the presumption of a common habitual residence. 51 BOUREL P., 'Du rattachement de quelques délits spéciaux en droit international privé', in Recueil des Cours, Vol. 214, 1989-II, p. 284. A victim who is able to choose, mostly between lex loci actus or lex damni, is regarded as having a unilateral choice of law (e.g., Art. 138 of the

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Tomljenović autonomy is gaining more attention in non-contractual obligations. Today scholars are inclined to apply the lex autonomiae in tort cases,52 and such solution is accepted with enthusiasm by the courts of some countries.53 For a long time, the Swiss PIL Act was the only codification recognizing party autonomy as a displacement rule. As specified in Article 132, the parties' choice of law is limited, on the one hand, by the time at which the choice can be made and, on the other, by the laws the parties can choose. Thus, the parties' choice of law is valid only if it is made after the harmful event has occurred and if it leads to the application of Swiss law. Today party autonomy in tort cases is also recognized by the new German PIL for torts.54 The positive attitude of scholars towards the principle of party autonomy in tort cases has influenced the preparatory work on the codification of PIL in the Netherlands55 and in the European Union.56

Swiss PIL Act concerning emissions or Art. 6 of the Hague Convention on the Law Applicable for Product Liability). 52 See NYGH P., 'The Reasonable Expectations of the Parties as a Guide to the Choice of Law in Contract and in Tort', in Recueil des Cours, Vol. 251, 1995-I, p. 269; DE BOER Th. M., 'Facultative Choice of Law, the Procedural Status of Choice of Law Rules and Foreign Law', in Recueil des Cours, Vol. 257, 1996, p. 333; ID., Choice of Law in Contract and Torts in the Netherlands, Hague-Zagreb-Ghent Essays (ed. by Voskuil C.C.A. and Wade J.A.) 1991, p. 52; Law Commission Working Paper 1984 (note 31), p. 93. 53 In the well-known case Handelskwekerij G.J. Bier B.V. et al. v Mines de Potasse d'Alsace S.A. (District Court of Rotterdam, 8 January 1979, in Nederlandse Jurisprudentie 1979, 113), the Rotterdam Court accepted a 'subsequent choice of law' as a choice favoring the law of the Netherlands. See DUINTJER TEBBENS H. (note 18), pp. 365-366. The lower courts also accepted party autonomy, however, only if the choice was made after the harmful event occurred, see Netherlands Int. L. Rew. 1981, p. 63. An interesting decision in this respect was rendered by the French Cour de Cassation in Roho c. Caron et al. in 1988 (in Rev. crit. dr. int. pr. 1989, p. 71). In the case involving a traffic accident that occurred in Djibouti, the French Court applied French law although it was not applicable under the Hague Convention on the Law Applicable to Traffic Accidents. The application of French law was justified by a tacit agreement between the parties on the application of French law: '[…] regarding the claims with which the parties can freely dispose, the parties can agree upon a governing law different from the law which is applicable according to the conflict of law provisions of an international convention.' 54 Art. 42 of the new German PIL for torts provides for party autonomy. The parties have the right to choose the applicable law, however, only after the harmful event occurs. Moreover, the chosen law may not affect rights of third parties. 55 According to Art. 4 of the Proposal for the Law Applicable to Tort Act (1996), the parties may choose the applicable law. The choice must be explicit or proven with reasonable certainty (Art. 4.2). 56 According to the Proposal for the Rome II Convention (Art. 8), the parties may choose the applicable law if the choice is made after the dispute has arisen, and if it is express. As in the German provision, the choice of law should not affect the rights of third persons.

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Maritime Torts 2.

Use of Other Rules and Methods in lieu of the Lex Loci Delicti Commissi

In the United States, the application of the lex loci delicti was first rejected by the courts57 and replaced by the open-ended rule of the law of the most significant relationship, later adopted by the Restatement (Second) on the Conflict of Laws,58 or by policy-oriented methods (governmental interest analysis).59 The number of States applying the most significant relationship test is considerable;60 while policy-oriented methods are applied in only a few.61 However, the lex loci delicti is still recognized as the basic rule in the remaining U.S. States, mainly because the uniformity, legal security and predictability it provides are lacking when open-ended conflicts rules and policy-oriented methods are applied. Thus it is not surprising that the revival of a fixed, but more elastic conflicts rule for torts has again found favor in the U.S. judicature and legal doctrine.62 B.

Summarizing the State of Tort Conflicts

The brief survey of PIL rules applied in tort cases generally shows that, although criticized, the lex loci delicti has kept its status as the basic conflicts rule.63 The 57

The process of reform in tort conflict of laws was revolutionary, as evidenced in legal scholarship, and it started with the decision of the New York Court of Appeal in Babcock v. Jackson 191, N.E. 2d 579 (N.Y. 1963). 58 Restatement II, section 145. 59 Some scholars have advocated complete rejection of the lex loci delicti rule and of the traditional conflict of laws approach in general. In particular, Brainerd Currie formulated a special method for the choice of law: governmental interest analysis. See CURRIE B., Selected Essays on the Conflict of Laws, Durham 1963; DE BOER Th. M. (note 19). 60 According to SYMEONIDES S.C., 'Choice of Law in American Courts in 1993 and in Six Previous Years', in Am. J. Comp. L. 1994, pp. 599-655, this rule has been accepted in more than 22 States because of the positive view in legal scholarship where it is regarded as 'the most comfortable option'; refer also to BORCHERS P.J., 'Choice of Law in American Courts in 1992: Observations and Reflections', in Am. J. Comp. L. 1994, pp. 124-146. See the map with the status of tort conflicts in SYMEONIDES S.C./PERUDE W.C./VON MEHREN A.T., Conflict of Laws: American, Comparative, International, St. Paul Minn. 1998, p. 284. 61 E.g., New York, California, Nevada, Pennsylvania; see SYMEONIDES S.C./PERUDE W.C./VON MEHREN A.T. (note 60), p. 284; SYMENONIDS S.C. (note 60), p. 611. 62 Having rejected the application of lex loci delicti in Babcock, Judge Fuld later in his dissenting opinion in Tooker v. Lopez (24 N.Y. 2d 569, 249 N.E. 2d 394, 301) advocated the application of fix, but complex conflicts rules; see REES W., 'Choice of Law in Torts and Contracts and Directions for the Future', in Columbia Journal of Transnational Law 1977, p. 9. 63 In this respect it is interesting to mention the decisions of the Supreme Court of Canada in joined cases Tolofson v. Jensen and Lucas (Litigation guardian of) v. Gagnon of 15 December 1994 (see Riv. dir. int. priv. proc. 1995, pp. 820-837), in which the Supreme Court abolished the traditionally applied common law choice-of-law rule of 'double actionability'. With these decisions the Supreme Court introduced the application of lex loci delicti commissi without

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Tomljenović introduction of various displacement rules has achieved a certain balance between the desire for certainty and predictability inherent to the application of the lex loci delicti and the quest for justice in each particular case. Thus, lex loci delicti commissi has become one of the few alternative or subsidiary conflicts rules (as is the case in the Swiss PIL Act and the new German PIL for torts). Additional rules for torts such as the use of escape clauses (closed or open), accessory choice of law, and party autonomy have eliminated the rigidity of the lex loci delicti, limiting its application to cases where it is the law most closely connected with the particular non-contractual obligation. As previously mentioned, lex loci delicti also applies in the context of maritime torts. Therefore, it will be interesting to see whether this development in general tort conflicts has implications for this area as well. The same can be said in connection with the application of the law of the ship nationality, which, in fact, operates within maritime torts as a substitute rule for the application of the lex loci delicti commissi.

III. The Law of the Ship Nationality: Lex Bandi 'Perhaps the most venerable and universal rule of maritime law is that which gives cardinal importance to the law of the flag.'64 This frequently cited sentence from the Supreme Court's well-known decision in Lauritzen v. Larsen expresses the significance of the ship nationality as a connecting factor in the judicature and legal doctrine at the time the decision was taken. Even today the law of the ship nationality, usually called the law of the flag, i.e., lex bandi,65 has a central position in the system of maritime PIL. The wide scope of its application, which encompasses various maritime relations (real rights, torts, captain's rights and duties, labor relations, limitation of liability, liens, etc.) is defined in numerous national laws66 and by the courts of countries without codified maritime exceptions, explaining that 'there is little to gain and much to lose in creating an exception to the lex loci delicti.' 64 Lauritzen v. Larsen, 345 U.S., 1953, 571. 65 The law of the ship nationality is called the law of the flag (loi du pavillon, lex bandierae) because the flag is regarded as the formal symbol of the ship nationality. 66 The Italian Maritime Code of 1942 provided for the application of lex bandi in cases relating to real rights (Art. 6), shipowner liability and its limitation (Art. 7), captain's rights and duties (Art. 8), labor relations of seamen (Art. 9), contracts in the absence of a choice of law by the parties (Art. 10), etc. A similar system was adopted by the Polish Maritime Act (1964) which designates lex bandi as applicable in cases involving real rights (Art. 7), events on board a vessel on the high seas (Art. 8), collisions between vessels of the same nationality (Art. 10.1.), salvage (Art. 10.2). The Bulgarian Maritime Commercial Law (1970) provides for the application of lex bamdi in cases involving real rights (Art. 10), labor relations of seamen (Art. 12), events on board a vessel on the high seas (Art. 13), collisions between vessels of the same nationality (Art. 14.3), charter contract (Art. 20), etc. According the Panamanian Maritime Act, the law of the ship nationality governs real rights (Art. 26.2), the internal organization, and relations between captain, shipper and seamen (Art. 26.6). The law of the ship nationality is accepted as applicable to real rights, maritime torts, and labor relations by PIL Acts in Rumania (Arts. 139, 140, 141.1),

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Maritime Torts conflicts rules.67 Once considered a dogma of maritime PIL,68 the application of the lex bandi has been frequently criticized in contemporary legal scholarship and case law. As a fixed and exclusive connecting factor, the ship nationality does not necessarily refer to the law most closely connected with the dispute in cases involving complex maritime relations. This is especially true in cases where vessels fly flags of convenience or are manned by a bareboat charter.

Hungary (Arts.23.1., 33.2), Austria (Art. 33.1), Albania (Arts. 16.2, 20.2). According to the Greek Law on Maritime Private Law (Art. 9) and the Spanish Civil Code (Arts. 9., 11.1), the law of the ship nationality governs real rights concerning vessels. The Netherlands Maritime PIL Rules Act (1993) designates the law of the ship nationality as applicable in collisions (Art. 7.4) and real rights (Art. 2); the Chinese Maritime Act (1993) in real rights (Art. 270), mortgage (Art. 271), and collisions (Art. 273.3). Paragraph 275 of the Canadian Shipping Act (R.S.C., 1985, c. S-9, § 275) provides for application of the law of the ship nationality in cases involving vessels or persons on board a vessel, etc. 67 The law of the ship nationality applies in France in cases involving real rights, acts committed on board a vessel on the high seas or in territorial waters and collisions between ships of the same nationality, see BATIFFOL P./LAGARDE P., Droit international privé, Vol. II, Paris 1983, pp. 164 –165; MAYER P., Droit international privé, 5th ed., Paris 1994, pp. 447-448. In English judicature lex bandi has been applied even in cases involving contracts (Lloyd v. Guibert (1865) L.R. 1 Q.B. 115). See SINCLAIR A., 'Conflict of Law Problems in Admiralty', in Southwestern Law Journal 1961, p. 235. However, it has not been applied in non-contractual liability cases if the harmful event occurred on board a vessel in territorial waters when lex loci delicti and lex fori apply cumulatively (COLLIER J.G., Conflict of Laws, Cambridge 1994, p. 235; MORRIS J.H.C., The Conflict of Laws, London 1993, p. 295). Section 10 of the UK PIL Act of 1995 abolished common law choice-of-law rules for the cumulative application of lex loci delicti and lex fori. However, the new statutory rules apply only to situations falling under the scope of the abolished rule. Since maritime torts committed on the high seas were not governed by common law choice-of-law rules, it follows that the new statutory provisions do not apply to them. Therefore it will be interesting to follow new developments in this field. See MORSE C.G.J., 'Torts in Private International Law: A New Statutory Framework', in I.C.L.Q. 1996, p. 889; DICEY & MORRIS, The Conflict of Laws, Fourth Cumulative Supplement to the 12th ed., London 1997, p. 226. Older decisions of the U.S. Supreme Court gave a dominant position to the law of the ship nationality (Wildenhaous', 1885; The Scotland, 1881, Belgeland, 1885): see GLIATTA S., 'Keeping up with the Jons Act: the Effect of U.S. Based Stock Ownership on the Applicability of the Jons Act to Foreign Seamen', in New York University Journal of International Law and Politics 1982-1983, p. 144; HANCOCK M., Torts in the Conflict of Laws, Chicago (1942) 1982, p. 271. 68 GIULIANO M., 'La nazionalità della nave come criterio di collegamento nel diritto internazionale privato italiano', in Riv. dir. int. priv. proc. 1965, p. 422; SCERNI M. (note 4), pp. 11-23, RIPERT G., Droit maritime, Vol. I, Paris 1950, pp. 323-324.

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Tomljenović Should this special maritime conflicts rule be replaced by a new one or should it be 'softened' by additional conflicts rules, the same way the lex loci delicti has been? Furthermore, could the additional rules applying for torts in general be applied to maritime torts as well? Answering these questions requires some comments on the concept of ship nationality and its purpose as a connecting factor. A.

The Concept of Ship Nationality and its Purpose as a Connecting Factor

Ship nationality is in fact a twofold notion embodying the conditions defining the character of the vessel- State relationship and the legal consequences attributed to it by international or national law. According to international law,69 every State has the exclusive right to stipulate the conditions a vessel must fulfill in order to obtain its nationality and fly its flag. Accordingly, other States are obliged to respect the ship nationality of each and every State. The only condition imposed by international law is that a genuine link exist between ship and State, meaning that the ' State must effectively exercise its jurisdiction and control in administrative, technical and social matters over a ship flying its flag.'70 The problem of the genuine link is not in its definition (because it is defined by each State), but in the degree to which the State actually exercises its jurisdiction and control over the vessel.71 The genuine link is, in fact, a test of the effectiveness of a State's jurisdictional control over vessels having its nationality.72 Granting nationality to a vessel is, among others, a mechanism for providing protection and guaranteeing control over a vessel (especially while it is on the high seas). Therefore, the use of the ship nationality as a connecting factor defines the sphere of the State's competence, having in mind the efficiency of the State in exercising its jurisdiction over the vessel.73 The ship nationality is the most convenient connecting factor for maritime relations as long as the flag State 'effectively' exercises complete jurisdiction and control over vessels flying its flag. Assuming that this is a precondition for the proper functioning of ship nationality as a connecting factor, the question arises as to whether this criterion could be justifiably used when there is no effective jurisdiction or when the State of the ship nationality cannot or is not interested in exercising control over its vessel. The latter situation concerns vessels flying flags of convenience or bareboat chartered vessels. 69

Art. 5.1. of the Convention on High Seas of 1958 (hereafter: CHS); Art. 91.1. of the United Nations Convention on the Law of the Sea of 1982 (hereafter: CLOS). 70 Art. 5.1. of the CHS; Art. 91.1. of the CLOS. 71 TACHE S., 'The Nationality of the Ship: the Definitional Controversy and Enforcement of Genuine Link', in International Lawyer, 1982, p. 302. 72 TACHE S. (note 71), p. 305. 73 LUCCHINI L., 'Le navire et les navires', in Le navire en droit international, 1992, p. 29; LEANZA U., 'Nazionalitá della nave, bandiere ombra e progetto di Convenzione di UNCTAD', in Diritto marittimo 1984, p. 30.

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Maritime Torts B.

Flags of Convenience (FOC)

A flag of convenience74 is the flag of a State that grants registration to foreign vessels under conditions that are economically, politically, or financially convenient for both the shipowners and the registry State.75 By registering vessels in a State with an open register, shipowners avoid harsh provisions of their home State, allowing them to become more competitive on the international shipping market.76 To prevent a national fleet from escaping to open registers, some States have established special national77 or international registers,78 as well as bareboat charter registers.79

74

On FOC see BOCZEK B., Flags of Convenience, 1962; HERMAN L., 'Flags of Convenience – New Dimension to an Old Problem', in McGill Law Journal 1978, pp. 1-28; OSIEKE E., 'Flags of Convenience Vessels: Recent Developments', in Am. J. Int. L. 1979, pp. 604627; PONTAVICE E.., 'Les pavillons de complaisance', in D.M.F. 1977, pp. 505-512, 567-582. 75 PONTAVICE E. (note 74), p. 506. 76 DEMPSEY P./HELLING L., 'Oil Pollution by Ocean Vessels – An Environmental Tragedy: The Legal Regime of Flags of Convenience. Multilateral Conventions and Coastal States', in Journal of International Law and Policy 1980, p. 40. 77 In regard to the ship register at Port aux Français and French Decree of 1987 permitting French vessels (except tankers) to be registered at the Kerguelen Islands see RÈMONDGOUILLOUD M., Droit maritime, Paris 1993, p. 70; CHAUMETTE P., 'Le statut des marins naviguant sur un navire immatriculé aux Iles Kerguelen, ou la République des manchots', in Droit social 1987, p. 115. Recently Luxembourg's new ship register was structured to offer an alternative convenient register for European fleet. See FALTZ R./OOSTVOGELS S., 'The Grand Duchy of Luxembourg Offers as an Alternative European Registry', in European Transport Law 1991, pp. 469-483. 78 In addition to traditional registers, some other States have established more convenient international registers for national and foreign vessels, e.g., Norway (Norwegian International Shipping Register), Great Britain, and recently Italy. 79 Bareboat registers were recently established in Italy and the Netherlands. A bareboat register was introduced in Italy in 1989 (Law No. 234 of 14 June 1989 on amendments of Arts. 145 and 146 of the Maritime Code concerning granting and temporally suspension of flying of Italian flag (D.P.R. No. 66 of 21 February 1990). However, the new Law No. 30 of 27 February 1998, which established the international register, requires vessels under bareboat charter to be registered in the international register (Art. 1. paragraph 2.e). Bareboat charter registration was introduced in Dutch law with the Act on Nationality of Seagoing Vessels under Bareboat Charter of October 1992, amended in December 1997: see VAN LEEUWEN M., 'The Dutch Bareboat Registry', in International Maritime Law 1998, pp. 320-322.

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Tomljenović On the international level, a new UN Convention on Conditions for Registration of Ships was adopted in Geneva in 1968 (hereafter: Registration Convention),80 which, however, is not the correct answer to the FOC problem because it is doubtful whether the Convention will enter into force.81 As a reaction to open registers, an interesting project of the EUROS register was presented to the European Parliament of the European Community,82 however, without significant result. C.

Bareboat Charter

In addition to the FOC, the significance of the ship nationality is declining in private international law due to the frequent use of a bareboat or demise charter. Under a bareboat or demise charter, the shipowner places an unmanned or partially manned vessel at the disposal of a charterer for a fixed period of time. The shipowner transfers the navigation, management, employment and agency of the ship to the charterer. Thus, and for most purposes, the charterer is treated as the owner of the vessel.83 As a result of this factual pattern, the ownership becomes less important than aspects of the ship's everyday management. Consequently, the law of the ship nationality is not the law most closely connected with the navigation or manning of the

80

United Nation Convention on Conditions for Registration of Ships (7 February 1986), see 26 I.L.M. 1229 (1987). See detail in STURMEY S.G., 'The United Nations Convention on Conditions for Registration of Ships', in Lloyd's Maritime and Commercial Law Quarterly 1987, pp. 80-100. The main purpose of the Registration Convention was to fill a gap in international law by providing a definition of the genuine link. The heart of the Convention is in Arts. 8, 9 and 10 where a definition of the notion of genuine link is given indirectly, providing that nationals of the register State should be involved in the property or managing of the vessel. Only then can it be said that an economical connection exists between the vessel and State of its nationality. 81 Very strict conditions are laid down by the same Convention for its entering into force. According to Art. 19, no less than 40 States, the combined tonnage of which amounts to at least 25 per cent of world tonnage, have to ratify the Convention. In view of the fact that the largest percentage of world tonnage belongs to States with open registers, it is obvious that the Registration Convention will not enter into force. 82 One of the 'positive measures' before the European Parliament in 1989 was the idea to create a EUROS register for physical and legal persons having some connection with the European Community. The idea was not to establish a EURO flag since the States would still have the exclusive right to define registration conditions. The aim was to provide the same benefits to vessels registered in the Euro register. HELDRING G B., 'The EUROS flag and Related Issues', in European Transport Law 1993, pp. 389-399; CHURCHILL R.R., 'European Community Law and the Nationality of Ships and Crews', in European Transport Law 1991, pp. 591-617. 83 PAVLIHA M., Implied Terms of Voyage Charters, Ljubljana 1993, p. 7.

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Maritime Torts vessel, regardless whether contractual or non-contractual relations are involved. The connection is even weaker in cases where a bareboat or demise charterer places all or part of a fully equipped and manned ship at the disposal of a voyage charterer for the carriage of cargo for one or more voyages. In such relations the ship nationality is not a relevant factor. Therefore, in its function as a connecting factor, it should be replaced by some other relevant circumstance, such as the charterer's nationality or place of business.84 D.

Bareboat Charter Registration: 'Real Rights Register' and 'Charter (Flag) Register'

As a response to the frequent use of bareboat charter, some States allow a vessel with foreign nationality to be temporarily registered in their national charter register (bareboat charter-in) or a national vessel to be registered in a foreign charter register (bareboat charter-out).85 Recent examples are the Italian86 and Dutch bareboat charter registers.87 The Registration Convention also provides for charter register.88 If a vessel is registered in the charter registry of one of its Member States, the law of the flag is the law of the States of the charter register, and not the law of the ship nationality.89

84

BRÆKHUS S. (note 4), pp. 285-286; CARBONE S.M., 'Navigazione', in Enciclopedia del diritto, Vol. XXVII, Milano 1977, p. 700; CALIENDO C., 'Osservazioni in tema di "bareboat charter registration" nazionalità e bandiera della nave nella legge 14 giugno 1989, n. 234', in Diritto marittimo 1989, p. 384. 85 On countries where parallel registers are allowed see KRÖGER B.D., 'The Bareboat Charter Registry in Operation: The German Experience', in ICC Conference on Bareboat Charter Registration, Paris October 5 – 6, 1987; POLIĆ-ČURČIĆ V., 'Registration of Ships under Bareboat Charter with Particular Reference to Dual Registration', in Diritto marittimo 1989, pp. 415-427. 86 See supra, note 79; see also CALIENDO C. (note 84); SISTO L./VALENTI G., 'L'internazionalita della flotta mercantile italiana: la "bareboat charter registration"', in Diritto marittimo 1996, pp. 909-960. 87 Act on Nationality of Seagoing Vessels under Bareboat Charter of October 1992, amended in December 1997, see: VAN LEEUWEN M. (note 79), pp. 320-322. 88 Art. 12 .19 provides that 'a State may grant registration and the right to fly its flag to a ship bareboat charter-in by a charterer in that State, for the period of that charter.' The right to fly the flag of a State where a bareboat charter is registered does not have any effect on the original register, which remains open. 89 According to Art. 12.1, a Member State permits registration of a foreign vessel manned by domestic charterer, and the vessel can fly the flag of that State. In such cases, the 'charterer will be considered to be the owner. This Convention however, does not have the effect of providing for any ownership rights in the chartered ship other than those stipulated in the particular charter contract' (Art. 12.2).

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Tomljenović The registration of a chartered foreign vessel is only temporary, existing only for the period of the charter.90 Italian Law expressly provides for this principle. When registered in the Italian Charter Register, a vessel has the right to fly the Italian flag for the period of the charter. During that time the ship does not loose its foreign nationality, however, the acts and events on board are considered Italian. A similar provision is found in the Dutch Act on the Nationality of Seagoing Vessels under Bareboat Charter of 1992.91 When a vessel is registered in a charter register, its flag and nationality refer to different national laws. As mentioned previously, international law recognizes the right of a vessel to fly the flag of the State of its nationality.92 Accordingly, other States are obliged to recognize that flag; however, only if a vessel sails under the flag of one State only.93 This principle, however, is violated in real life by parallel registrations, where a vessel with the nationality of State X flies the flag of State Y if registered in 'charter register' of State Y. The separation of a vessel's flag from its nationality creates a problem, forcing one to choose which of these two relevant factors will serve as the connecting factor to determine the applicable law, for example, in cases of maritime torts. In order to solve this problem, the Italian legislator introduced changes into the Maritime Code, specifying in which cases the law of nationality applies and, conversely, the law of the (temporary) flag.94 Making a distinction between the vessel's nationality and its flag creates legal insecurity where traditional conflicts rules designate the application of the law of ship nationality. If the law of the ship nationality differs from that of its temporary flag, the question arises as to which law would be applicable. When the ship is bareboat chartered or flies the flag of a State under a charter register, the law of the ship nationality is not the law most closely connected with most of the relations involving the ship. By granting the right to foreign ships to fly its national flag during charter 90

Art. 12.11 of the Registration Convention provides that 'the right to fly the flag of State bareboat charter-in, exists only for the period of the charter.' 91 VAN LEEUWEN M. (note 79), p. 320. 92 Art. 91(1) of the CLOS provides that 'ships have the nationality of the State whose flag they are entitled to fly.' 93 Article 92 (2) of the United Nation Convention on the Law of Sea (1982) provides that a ship which sails under the flags of two or more States, using them according to convenience, may not claim any of the nationalities in question with respect to any other State, and may be assimilated to a ship without nationality. 94 Art. 8.1.a of the Law of 1990 (see: supra, note 79) provides that, during the duration of its temporary right to fly the Italian flag, a foreign vessel shall be deemed Italian for the purpose of Art. 4 of the Maritime Code; for the purpose of Arts. 5, 7, 8, 9, 10, 11, 12 and 13 of the Maritime Code, the law of the ship nationality shall be deemed Italian law (Art. 8.1.b); and for the purpose of Art. 6 of the Maritime Code, the law of the ship nationality shall be deemed to be the law of the State where the ownership (sottostante) register is located (Art. 8.1.c.). See supra note 66.

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Maritime Torts (i.e., when a vessel is chartered to a national company), a State expresses its readiness to exercise control and jurisdiction over the vessel. Therefore, it is logical that the law of the charter registry or, in the absence of it, the charterer's place of operation should be considered more appropriate as connecting factors than the ship nationality. However, some doubts are expressed in legal scholarship about the suitability of using the flag as a connecting factor due to its temporary character.95 E.

How the Flag of Convenience and Bareboat Charter Affect the Law of the Ship Nationality

As was pointed out, application of the ship nationality is logical only when it represents a real genuine link between the ship and the State of its nationality, i.e., when the State can and is willing to control the vessel having its nationality. In situations involving FOC or bareboat chartered vessels, the ship nationality does not represent such a link, because States having such registers do not exercise control over their vessels. Some of them have no necessary technical or administrative means to do so, and some have no interest in doing such things. Consequently, a conflicts rule referring to the law of the ship nationality does not achieve its purpose since the State of the ship nationality has no control over the vessel. In such cases, the law of that State is not the law most closely connected with the disputed issue. Despite numerous theoretical and practical factors supporting exclusive application of the law of the ship nationality,96 it is obvious that in cases where a vessel flies a flag of convenience or is bareboat chartered, the law of the ship nationality is not the law most closely connected with the disputed issue. How can this factual situation be reconciled with the de lege lata conflicts regulation that provides for the exclusive application of the lex bandi? Answering this question requires us to take a look at some typical maritime noncontractual situations and their respective conflicts solutions, such as collisions, personal injury and death of seamen and pollution of the maritime environment.

95

TETLEY W. (note 8), p. 217. Application of lex bandi guarantees unity and continuity of the applicable law regardless of where the ship is located and which forum discusses the issue (LUCCHINI L. [note 73], p. 29; BRÆKHUS S. [note 4], p. 268), and therefore legal security and predictability. Predictability of the applicable law is achieved because it is easy to determine the law of the ship nationality. The ship usually has the nationality of the State where it is registered, and this is not easily changed: RIPERT G. (note 68), p. 320; RODIÈRE R./PONTAVICE E., Droit Maritime, Paris 1991, p. 51. And finally, the ship nationality has a practical value in that it replaces general territorial connecting factors that cannot be applied in a maritime context: see RÈMONDGOULLOUD M. (note 77), p. 77; BRÆKHUS S. (note 4), pp. 275-276; GIULIANO M. (note 68), p. 425. 96

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IV.

Collisions

A collision is traditionally considered the biggest risk in maritime navigation and thus a generator of non-contractual liability. Since collisions usually occur between vessels of different nationalities, it is not surprising that unifying collision laws was one of the priorities in the process of international unification. Although several conventions unify certain procedural and substantive aspects of collisions in this area,97 this has not eliminated conflicts problems. For example, the International Convention for the Unification of Certain Rules of Law with Respect to Collisions between Vessels of 1910 (hereafter: Collision Convention) is in force in numerous countries.98 Nonetheless, it is not binding for important maritime States that have sustained from ratifying the Convention (e.g., Panama, the U.S., Liberia etc.). On the other hand, conflicts issues arise even in cases where the Collision Convention applies. This is because important issues are not covered by the rules of the Convention.99 Since differences in national collision laws still exist,100 an additional degree of uniformity was intended to be achieved by the unification of conflicts rules.101 At the suggestion of the Comité Maritime International (hereinafter: CMI) and in co-operation with the ILA, the Draft of the Convention for the Unification of Certain Rules concerning Civil Jurisdiction, Choice of Law and Recognition and Enforcement of Judgments in Matters of Collision was adopted in Rio de Janeiro (hereafter: Rio de Janeiro Rules).102

97

See Lloyd's Shipping Law Library, The Ratification of Maritime Conventions, RMC – Service Issue, No. 11 – 12 June 1996. 98 The Collision Convention has been ratified by more than 80 States, see supra note 97, pp. I.3-79-82. 99 The Collision Convention does not regulate compensation of damages, effects of contractual clauses concerning limitation of liability of the shipper towards persons on the vessel, limitation of liability etc. As stated in the Collision Convention, these issues are governed by the national law of the forum (including the conflicts provisions of the forum). 100 A detailed analysis of the differences in national collision laws falls outside the scope of this article. See SMITH J.C., 'Comparative Aspects of Commonwealth and U.S. Law Since the Collision Convention', in Tulane Law Review 1982-1983, pp. 1092-1138; TETLEY W., 'Collision and Loss to Cargo', in Yearbook Maritime Law, Vol. III, 1986-1987, pp. 31-48; HEALLY N./ SWEENEY C., 'Basic Principles of the Law of Collision', in Journal of Maritime Law and Commerce 1991, pp. 362-413. 101 Conflicts rules for collisions have been unified only at regional level. The Codigo Bustamante and Montevideo Treaty provide solutions for conflict of laws issues in collision cases. 102 Draft Convention for the Unification of Certain Rules Concerning Civil Jurisdiction, Choice of Law and Recognition and Enforcement of Judgments in Matters of Collision, adopted in Rio de Janeiro in 1977, in Materials of Intergovernmental Maritime Consultative Organization, LEG XXXIV/6(c) Add.1, 15 February 1978; XXXIst International Conference of the CMI, Rio de Janeiro, CMI Documentation I, p. 6.

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Maritime Torts It appears that the CMI and the ILA were perhaps too ambitious by attempting to unify not only conflicts rules, but also rules on international jurisdiction and on the recognition of foreign judgments as well. Namely, this was one of the reasons why the Rio de Janeiro Rules have never become a final Convention. A.

Conflict of Laws in Collisions

1.

Basic Choice-of-Law Rules

Numerous maritime conflicts rules lay down two basic choice-of-law rules: (a) lex loci delicti, which applies to collisions in inland waterways and territorial waters, and (b) lex fori, which applies to collisions on the high seas. a)

Collisions in Territorial Waters

Traditionally, the general conflicts rule of the lex loci delicti commissi applies to collisions in inland waterways and territorial waters. This is 'the most particular and oldest application' because 'the universally settled rule calls for the application of the law of the State to which the waters belong.'103 Application of the lex loci delicti is unanimously supported by legislation104 and the courts.105 In English case law on collisions, the common law conflicts rule of

103

RABEL E. (note 9), Vol. III, p. 343; CHOLET C., Competence et conflit des lois en matière d'abordage international, Paris 1897, p. 171; RIPERT G., Droit maritime, Vol. III, Paris 1953, pp. 87-88. 104 Art. 606 of the Argentine Maritime Commercial Act; Art. 14(1) of the Bulgarian Maritime Commercial Act; Art. 273 of the Chinese Maritime Act; Art. 7(2) of the Netherlands Maritime PIL Rules Act; § 26 Art. 9 of the Panamanian Maritime Act; Art. 10 of the Polish Maritime Act; Art. 674 of the Portuguese Commercial Act; Art. 10 of the Spanish Civil Code; Art. 141(1) of the Rumanian PIL Act. 105 French courts apply French law in cases involving collisions occurring in French territorial waters: see RIPERT G. (note 103), pp. 17-19; BATIFFOL H./LAGARDE P. (note 67), pp. 237-238; LOUSSOUARN Y./BOUREL P., Droit international privé, Paris 1993, p. 166. Lex loci delicti is accepted by German courts for collisions in German territorial waters, and for collisions in foreign territorial waters only if the vessels involved are not German. This complies with the general conflicts rules for torts in Art. 12 EGBGB, see ROTH G./ PLETT K., 'Schiffszusammenstösse im Deutschen Internationalen Privatrecht', in RabelsZ 1978, p. 670. American courts also accepted the application of lex loci delict: 'The collision having taken place in the port of Liverpool, the rights of the parties depend upon the provisions of the British statutes then in force; and if doubt exists as to their true construction, we must of course adopt that which is sanctioned by their own courts' (Smith v. Condray [1843]): see HANCOCK M. (note 67), p. 268; SUNDSTRÖM G.O.Z., The Effects of Foreign Elements in Collision Litigation in the United States, Helsinki 1965, p. 18.

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Tomljenović 'double actionability' has generally been applied in tort cases.106 The same solution is laid down in the Codigo Bustamante107 and the Montevideo Treaty108 and is proposed by the Rio de Janeiro Rules.109 b)

Collisions on the High Seas

The principle of the lex loci delicti cannot be applied to collisions on the high seas. In order to avoid the complicated method of cumulatively applying two different laws110 or favoring the law of one of vessels involved,111 the lex fori applies in many countries.

106

In collision cases English courts applied lex fori and lex loci delicti cumulatively: The Halley (1968) L.R. 2 P.C. 193, The M.Moxham (1876) i P.D. 107 (C.A.) The Arum (1921) P. 12; The Wazirstan (1953) 1 W.L.R. 1446; see MORRIS J.H.C. (note 67), p. 295; SMITH J.C. (note 100), p. 1124; CHESHIRE G.C./NORTH P.M., Private International Law, London 1992, p. 558. 107 Arts. 290 and 291. 108 109

Art. 5.

Art. 4. 110 The cumulative application of the different lex bandi can be considered fair in that it reflects the reciprocal relations between the vessels. On the other hand, it creates a practical problem by making it necessary to reconcile the different solutions provided by those national laws. In this regard, Art. 294 of the Codigo Bustamante provides that each vessel bear one half of the sum total of the damages apportioned in accordance with the law of one of the States, and the other half apportioned in accordance with the law of the other. The distributive cumulative application of different lex bandi (liability of each vessel determined in accordance with the law of its own nationality) was advocated by older scholars (DIENA G., Principi del diritto internazionale privato marittimo, Roma 1937, p. 73), and is provided by the Montevideo Treaty (Art. 7), the Portuguese Commercial Act (Art. 674.3), and the Argentine Maritime Commercial Act (Art. 606). See other possibilities in BOUREL P., Les conflict de loi en matiere de obligations extracontractuelle, Paris 1961, p. 99; FERRARI BRAVO L., Responsabilità civile e diritto internazionale privato, Napoli 1973, pp. 109-110. The German Federal Court has changed its position on conflict of laws issues several times in cases involving collisions of vessels of different nationalities on the high seas. In the famous Casablanca case the Court finally applied the law most favorable for the claimant. See ROTH G./PLETT K. (note 105), p. 671. 111 If only one of the laws of the ship nationalities can be applied, the question arises as to which law should prevail? Should it be the law of the ship causing the collision, or the other one? It is deemed a just solution to apply the law of the ship causing the collision: BOUREL P. (note 110), p. 101; CHOLET C. (note 103), p. 91. On the other hand, applying the law of the vessel without fault would be more convenient as this approach complies with the principle of favoring the victim: CHOLET C. (note 103), pp. 92-93; BOUREL P. (note 110), p. 100. Although present in comparative law (Codigo Bustamante, Art. 293; Montevideo Treaty, Art. 12; Bulgarian Maritime Act, Art. 189; Portuguese Maritime Act, Art. 674), this conflicts solution has its disadvantage. Namely, it presupposes that it has already been established which vessel caused the collision, which is a problem of characterization. Furthermore, it cannot be applied in cases of contributory negligence where both vessels are at fault.

272

Maritime Torts The application of the lex fori has been accepted in legal scholarship as a neutral conflicts rule providing the most pragmatic solution for collisions on the high seas.112 As most contemporary scholars point out, application of the lex fori is allowed only when no other law can be rationally applied.113 Namely, the lex fori is the only logical solution in situations where no other logical and objective connecting factor could be applied.114 As Rodière emphasized, the lex fori is applied not because of its appropriateness but primarily because there is no better solution.115 As a result, application of the lex fori in collisions between vessels of different nationalities on the high seas is widely accepted in comparative legislation116 and case law.117 A special aspect of the application of the lex fori involves doctrinal issues concerning general maritime law. In common law countries, general maritime law is the 'normal' conflicts solution for collisions on the high seas.118 This concept defines principles derived from old maritime laws,119 as well as customs and usages common to all maritime nations, namely universal maritime law.120 Despite the fact that general maritime law defines 'a body of law which is universally recognized as binding on all nations in respect of acts occurring at sea',121 in legal scholarship it is agreed that such universal maritime law does not exist. What general maritime law represents is quite the opposite of universal maritime law. Namely, it conceals the hidden application of the lex fori.122

112

VITTA E. (note 39), p. 530. BOUREL P. (note 110), p. 98; 114 BATIFFOL H./LAGARDE P. (note 67), p. 245.; MAYER P., Droit international privé, 3rd ed., Paris 1987, p. 414; 115 RODIERE R., Traité géneral de droit maritime, Evénements de mer, Paris 1972, p. 116. 116 Art. 12 of the Italian Maritime Code; Art. 7(2) of the Dutch Maritime PIL Rules Act; Art. 14(2) of the Bulgarian Maritime Act; Art. 10(1) of the Polish Maritime Act; Art. 9(iii) of the Panamanian Maritime Act; Art. 273(2) of the Chinese Maritime Act; Art. 1000(1)-2 of the Croatian Maritime Act. 117 In the French judicature see Lenten c. Vigouroux, Cour de Cassation (1966), in Rev. crit. dr. int. pr., 1966, p. 636. 118 BOUREL P. (note 110), p. 94. 119 SUNDSTRÖM G.O.Z. (note 105), p. 7. 120 HANCOCK M. (note 67), p. 259. 121 CHESHIRE G.C./NORTH P.M. (note 106), p. 559. 122 Gulf v. The Trujillo [(1954) A.M.C. 233 (2d.Cir)], see SUNDSTRÖM G.O.Z., (note 105), pp. 10-11. 113

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Tomljenović English doctrine defines general maritime law as part of English law.123 It is 'the law which the English Court of Admiralty either by Act of Parliament or by reiterated decisions and traditions and principles has adopted as the English maritime law.'124 2.

Exceptions to the Application of Basic Conflicts Rules: The Law of the Closest Connection – A Closed Escape Clause

In view of what was said about exceptions to the application of the lex loci delicti in general, it is interesting to note that, in collision cases, some of the exceptions apply that also exist in tort conflicts in general. Three exceptions to the basic rules of the lex loci delicti and the lex fori are recognized, all of which refer to the law common to the parties or the law of the closest connection. In other words, these exceptions could be regarded as closed escape clauses. As a matter of fact, in collision cases, the conflicts principle of the closest connection is not formulated as an open escape clause but as a closed escape clause based on three presumptions: (a) common nationality of the parties, (b) common nationality of the vessels, and (c) the existence of the same provisions in different laws. a)

Lex Communis Nationalis

Applying the law of common nationality as an exemption to the lex loci delicti in collision cases was introduced by the Collision Convention. Although it is contrary to the purpose of Convention itself, the Convention gives priority to the law common to the parties over provisions of the Convention. Article 12 of the Collision Convention permits Member States to depart from the application of solutions provided by the Convention whenever all interested parties are nationals of the forum State. b)

Lex Communis Bandierae

The law common to the parties or the law most closely connected with the dispute presumes that the ships involved have the same nationality. Therefore, if a collision occurs between vessels of same nationality, the law of the nationality of the ships prevails over the lex loci delicti and the lex fori.

123

CHESHIRE G.C./NORTH P.M. (note 106), pp. 291-292. Explaining the concept of general maritime law, Judge Willes stated in his decision in Lloyd v. Guilbert (1865): 'We can understand this term in the sense of general maritime law as administrated in the English courts, that being in truth nothing more than English law.' See Law Commission Working Paper 1984 (note 31), p. 68; see WINTER D., 'Maritime Torts: The Choice of Principles', in I.C.L.Q. 1954, p. 122. 124

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Maritime Torts Although the common nationality of the ships was not considered an appropriate connecting factor in older doctrine,125 the priority of the lex communis bandierae is recognized by numerous countries.126 Exceptions to the application of the lex loci delicti in collision cases in favor of the lex communis bandierae is accepted in France127 and the U.S.128 A different solution is applied in English judicature where the law of the ship nationality has no importance,129 and in German judicature where the courts accept the lex communis bandierae only if the collision involves German vessels.130 In regard to collisions on the high seas involving vessels of the same nationality, the common nationality of the vessels is undoubtedly the main factor determining the governing law. It identifies the law most closely connected with the dispute, and what is more important, it is the only objective connecting factor designating the applicable law.131 Consequently, numerous countries accept the application of the lex communis bandierae in collisions on the high seas.132 This brings us to the question whether the application of the lex communis bandierae could be considered appropriate in collisions of vessels flying flags of 125

The dominance of lex loci delicti in collision cases is derived not only from the principle of territoriality but also from the fact that, in addition to shipowners and shippers, there is likely to be a wide variety of third parties involved in the proceedings: passengers, cargo owners, insurers etc.: RABEL E. (note 9), p. 346; DIENA G. (note 110), p. 71. 126 Argentina (Art. 606 of the Maritime Commercial Act); Bulgaria (Art. 15.3 of the Maritime Act); China (Art. 273.3 of the Maritime Act); Croatia (Art. 1000.2 of the Maritime Act); Italy (Art. 12 of the Introductory provisions of the Maritime Code); the Netherlands (Art. 7.4 of the Maritime PIL Rules Act); Poland (Art. 10.2 of the Maritime Act). At the international level, such a solution is accepted by the Codigo Bustamante but only for fortuitous collisions (Art. 289). It was proposed by the Rio de Janeiro Rules (Art. 4.1). 127 REMOND-GOUILLOUD M. (note 77), p. 75; RODIERE R./PONTAVICE E. (note 96), p. 356. 128 SCHOENBAUM T.J., Admiralty and Maritime Law, St. Paul Minn. 1987, p. 478; SUNDSTRÖM G.O.Z. (note 105), p. 105. 129 MORRIS J.H.C. (note 67), p. 295; Law Commission Working Paper 1984 (note 31), p. 70. 130 Applying the law of the ship nationality (or law of the flag) where the vessels are German is in keeping with the application of lex fori, as provided by Art. 1 of the Act of 1942, since the compensation of damages caused by Germans abroad must be decided according to German law. On the other hand, in collision cases involving foreign vessels in German territorial waters, German courts also apply German law, although this practice has been criticized. See ROTH G./PLETT K. (note 105), p. 670. 131 BERLINGIERI F., 'Jurisdiction and Choice of Law in Collision Cases and an Overview of the Concept of Fault and its Apportionment', in Tulane Law Review 1977, p. 871. 132 Art. 12 of the Italian Maritime Code; Art. 10(1) of the Polish Maritime Act; Art. 14(3) of the Bulgarian Maritime Act; Art. 674(2) of the Portuguese Commercial Act; Art. 141(2) of the Rumanian PIL Act; § 9(1) of the Panamanian Maritime Act; Art. 7(3) of the Dutch Maritime PIL Rules Act; Art. 273(3) of the Chinese Maritime Act.

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Tomljenović convenience or in bareboat charter? Is the lex communis bandierae the law most closely connected with the dispute in such cases? In addition to the common nationality of the vessels, would it be appropriate to use other presumptions already present in torts in general to establish the law most closely connected with the dispute, such as the common domicile or common habitual residence of the parties, or the common place of operation of the charterers of the vessels involved in the collision? c)

Application of the Same Rules of Different Laws of the Nationalities of the Ships

If all the vessels involved have no common nationality or flag, but the laws of their nationalities contain the same rules, the application of these rules will prevail over the lex loci delicti. This occurs in situations known as 'false conflicts'. Application of the same or similar laws (better to say: rules) is rarely expressly provided for in comparative law. The Dutch Maritime PIL Rules Act133 and the Croatian Maritime Act134 are among the national statutes containing such a solution. Application of the same rules was proposed by the Rio de Janeiro Rules135 with the aim of enlarging the scope of application of conventional law, since the Court seized will apply uniform provisions of the Convention even if the Convention is not binding in the forum State. However, such a solution does not completely eliminate conflicts of laws because the question of the applicable law remains unanswered in matters regulated differently in the respective laws of the nationalities of the vessels. 3.

Is There Room for Other General Exceptions to the Lex Loci Delicti Commissi or the Lex Bandi?

As far as torts in general are concerned, application of the lex loci delicti is restricted by other exceptions such as (a) party autonomy and (b) open escape clauses. On the other hand, in some U.S. States, torts are governed by the law of the most significant relationship or policy-oriented methods. Is there room in collision cases for some of these exceptions and rules? Are they necessary at all?

133

Art. 7.3 reads as follows: 'When ships involved in a collision are connected with different States which are parties to the same convention relating to the liability for collision, or when the law of those States is in accordance with the principles of such convention, then the provisions of that convention or, as the case may be, the corresponding provisions of the law of such State, shall apply.' 134 Art. 1000(2)-2 of the Maritime Act (1994). 135 Art. 4(2) reads: '[…] provided, however, that in cases involving vessels registered or otherwise documented in, or, if not registered or otherwise documented, owned by different States, the Court seized of the case shall apply any Convention to which all of such States have given effect.'

276

Maritime Torts a)

Party Autonomy

Would it be appropriate to introduce the use of party autonomy in collision disputes? Although there are no specific conflicts rules in this respect, there are indications that such solution is acceptable. Namely, the view of the drafters of the Rio de Janeiro Rules was positive as regards the use of party autonomy in collision disputes. Although they are only proposals for discussion, Article 4.1 of the Rio de Janeiro Rules recognizes party autonomy as a displacement rule for the basic conflicts rules (lex loci delicti and lex fori).136 The Dutch Maritime PIL Rules Act, whose provisions closely resemble those of the Rio de Janeiro Rules, does not expressly recognize the parties' right to choose the governing law. However, in the comment on the mentioned Act, the silence of the Act towards party autonomy is not interpreted as a prohibition.137 This view does not surprise us, since the Dutch doctrine as well as judicature advocates party autonomy when torts are concerned. The recognition of party autonomy in collision cases could be considered an appropriate solution even in the context of the parties' right to choose uniform rules. In an attempt to reduce conflicts problems, the CMI formulated the so-called Lisboa Rules that provide uniform criteria for determining damages and compensation in collision cases.138 Like autonomous international maritime law, the Lisboa Rules apply only if the parties have agreed to apply them. According to the mentioned Rules, the parties' choice of law is valid only if it is made after the collision occurs. If parties can choose the Lisboa Rules, there is no reason to prevent them from choosing the applicable law. Permitting party autonomy in collision disputes would make the decision-making process more efficient. b)

Open Escape Clauses; the Most Significant Relationship; the Proper Law of Torts

Another question that arises is whether an open escape clause would be an appropriate displacement rule in collisions. It is interesting to see that even in the American judicature, where the lex loci delicti has been completely replaced by the most significant relationship rule, the latter rule has not been applied very often in collision cases. In collision disputes, U.S. courts consistently apply the lex loci delicti and the lex

136

'Unless the parties otherwise agree, when a collision occurs in the internal waters or territorial sea of a State, the law of that State shall apply, and when a collision occurs in waters beyond the territorial sea, the law of the Court seized of the case shall apply, except that when all the vessels involved are registered or otherwise documented or, if not registered or otherwise documented, owned in the same State, the law of that State shall apply […]' 137 SCHULTSZ J.C., 'Choice of Maritime Law – a Dutch Venture', in Internationales Recht auf See und Binnengewässern, Festschrift für Walter Müller, Zürich 1993, p. 338. 138 The Lisboa Rules 1987 in Journal of Maritime Law and Comm. 1987, pp. 577-582.

277

Tomljenović bandi as basic principles. There are, however, some decisions where a more elastic approach was applied to the choice of law.139 On the other hand, the fact that the courts regard lex loci delicti as a general rule for collisions does not mean that they would not, in view of specific circumstances, retreat from the basic rules and apply the law most closely or significantly connected with the disputed issues.140 English courts have resolved conflicts problems in collision cases by applying the common law conflicts rule of 'double actionability', with the exception of the proper law of torts (Phillips v. Eyre and Boys v. Chaplin). However, in practice, the proper law of torts has not been applied.141 It is obvious that the courts do not regard the open escape clause as an appropriate conflicts solution.

V.

Personal Injuries and the Death of Seamen

Another segment of delictual liability in maritime law concerns personal injuries and the death of persons on board a vessel. Since crewmembers are the most important category of persons involved in maritime navigation, conflicts of laws relating to delictual liability arising from personal injuries and the death of seamen will be discussed later. Seamen frequently suffer personal injuries and death as a result of labor accidents on board a vessel. At the time of the accident a contractual (labor) relation already exists between the seaman and shipper, thus causing a conflict between contractual and extra-contractual (delictual) liability. Since the law governing the contractual relationship and the law governing the delictual liability do not have to be the same, it is necessary to characterize the claim (contractual or delictual) in order to determine the applicable law. A.

Personal Injuries and the Death of Seamen: Lex Bandi as the Governing Law

Liability for personal injuries and death is characterized differently in comparative law, for example, as contractual liability,142 delictual liability,143 or the injured person may 139

VENDO Int'l v. M/T Frances Hamner, see in SMITH J.C. (note 100), p. 1129. SCHOENBAUM T.J. (note 128), p. 478. 141 As regards collisions between vessels of the same nationality, English court have not departed from the application of lex fori and lex loci delicti, even when lex communis bandierae could have been interpreted as the proper law of tort. 142 French law views liability for injuries and death caused by work accidents mostly as contractual, and French courts follow this standpoint: see Markos Drizos Pagodius et autres c. Commandant du navire Diamond, Canapus Shipping, Villosa, Compania Naviera, in D.M.F. 1992, p. 517; ibid. 1993, pp. 660-664. 143 According to the American common and statutory maritime law, a shipper's liability for damages caused by the personal injury and death of a seaman is considered to be delictual: MARAIST F.L., Admiralty in a Nutshell, St.Paul Minn. 1988, pp. 178, 185, 196-197; NORRIS M.J., The Law of the Seamen, Vol. II, New York 1970, § 550, p. 29. The Merchant Marine Act (1920), 140

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Maritime Torts have the right to opt for the liability regime most favorable to him (cumulation of claims in the sense that the victim can opt for one of those regimes).144 In general, choice-of-law solutions in labor accidents would depend primarily on the characterization of the specific liability. However, when seamen are concerned, liability for injury or death is discussed under the law of the ship nationality. As was already mentioned, general territorial connecting factors such as locus delicti and locus laboris are replaced by the ship nationality because of the specificum of maritime relations. Lex bandi has always been regarded as the most appropriate governing law for issues concerning the status of seamen. Since this profession has historically been reserved for nationals,145 States have always been interested in its regulation. Numerous public and private law provisions regulate the status of seamen, and they are mostly deemed immediately applicable. Consequently, provisions regulating labor relations of seamen generally contain a unilateral rule specifying that the legislation applies to seamen on board a domestic vessel.146 In other countries lex bandi applies as a result of a unilateral conflicts rule providing for the application of lex bandi only for domestic vessels,147 or as a result of a bilateral conflicts rule designating application of lex bandi in general.148

known as the Jons Act, recognizes the right of a seaman to claim compensation of damages on the ground of delictual liability in accidents caused by employer negligence. Liability is imposed '[...] by tort law as an incident to the relationship of a seaman to the vessel': MARAIST F.L. (see supra), p. 196. See more in GLIATTA S., 'Keeping up with the Jons Act: the Effect of U.S. Based Stock Ownership on the Applicability of the Jons Act to Foreign Seamen', in New York Univ. Journal of Internat. Law and Politics 1982-1983, p. 143. Consequently, claims for damages are decided in accordance with the law governing torts. 144 English law recognizes the right of an injured employee to choose between a contractual and non-contractual liability regime, especially when the accident is caused by employer negligence. See Coupland v. Arabian Gulf Oil Co. [1983] 1 WLR 1136, 1153: 'The plaintiff can advance his claim as he wishes, either in contract or in tort; and no doubt he will, acting on advice, advance his claim on the basis which is most advantageous to him.'; cited in NORTH P, 'Reform, but not revolution, General Course on PIL', in Recueil des Cours, Vol. 220, 1990-I, pp. 224-225. 145 CHAUMETTE P., 'L'internationalisation du travail maritime – L'impossible encadrement', in D.M.F. 1994, p. 675. 146 Belgian Act on Seamen Employment (Art. 17.2); French Act on Maritime Employment (Arts. 5, 119); Greek Maritime Commercial Act (Art. 83.9); the Norwegian Seamen's Act (1975) Art. §1 (1); Norwegian Laws (etc.), Oslo 1980, p. 427. See GAMILLSCHEG F., 'Labour Contracts', in International Encyclopedia of Comparative Law, Vol. III, Chapter 28, p. 4. 147 As was the case under Art. 9 (1) of the Italian Maritime Code. 148 Bulgarian Maritime Commercial Act, Art. 12; Rumanian PIL Act, Art. 140; Hungarian Act on PIL, Art. 52(3); Croatian Maritime Act, Art. 993.

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Tomljenović It was already explained that the law of the ship nationality is not the law most closely connected with the disputed issued when FOC or bareboat charter vessels are involved. Similar to the lex loci delicti, lex bandi has become an old solution for new situations. This raises the question how the inadequacy of the lex bandi can be corrected in personal injury cases involving seamen or in maritime torts committed on board a vessel in general. B.

Reaction of the Doctrine and Judicature to Application of the Lex Bandi

Inadequacy of the lex bandi, especially in disputes involving seamen on FOC and bareboat charter vessels, has been discussed and some solutions suggested.149 In order to overcome the negative consequences of the rigidity of the lex bandi, some authors have tried to narrow the scope of its application (rationae materiae) to issues involving the strict internal organization on board a vessel.150 Therefore, the individual status of seamen (including appropriate economic and legal protection) falls outside the scope of its application. As regards private international law aspects, those issues should have been treated separately and subjected to the law most closely connected with seamen, especially if the latter's provisions are favorable to the particular seaman.151 Lex bandi should be regarded as a subsidiary applicable law if there is no other law more closely connected with the disputed issue. According to Carbone, the subsidiary character of lex bandi conforms with the contemporary system of private international law, where special connecting factors may exclude a general one only when application of the latter fails to lead to an adequate choice of the applicable law, i.e., the law most closely connected with the issues at stake.152 This view of the application of the lex bandi153 can be seen in some recent decisions of Italian courts where lex bandi is regarded only as a subsidiary conflicts

149

CARBONE S., 'Conflitti di leggi e diritto marittimo nell'ordinamento italiano: alcune proposte', in Diritto marittimo 1983, pp. 78-79; BENTIVOGLIO L., 'Appunti per una riforma delle norme di diritto internazionale privato del Codice della navigazione', in Studi in onore di Giorgio Balladore Pallieri, Vol. 2, Milano 1978, pp. 63-89. 150 CARBONE S.M. (note 149), pp. 78-79. 151 Such a solution is in accordance with two principles: favor laboris and favor laesi. Both of those principles justify derogation from lex bandi in favor of the application of some other law (not necessarily domestic law) considered favorable for seamen: CARBONE S.M. (note 149), p. 79; BENTIVOGLIO L. (note 149), p. 82. 152 CARBONE S.M. (note 84), p. 703. 153 In disputes involving personal injuries to seamen, the courts have not hesitated to apply Italian law, even when the only factor referring to Italian law was the Italian nationality of the seaman. In such cases, the courts have emphasized the fact that Italian law is much more favorable for Italian seamen than foreign flag law: CARBONE S.M., Legge della bandiera e ordinamento italiano, Milano 1970, p. 153 et seq.

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Maritime Torts rule.154 Such approach was upheld by the Supreme Court in Squillace c. Simoncini.155 The primary application of general conflicts rules in issues deriving from seamen's employment relations was confirmed after the Rome Convention on the Law Applicable to Contractual Obligations of 1980 (hereafter: Rome Convention) entered into force. Namely, its provision on the law applicable to labor contracts (Article 6) derogated the special maritime conflicts rule of lex bandi of Article 9 of the Italian Maritime Code.156 The tendency to avoid application of the lex bandi when FOC or bareboat vessels are concerned is present in other jurisdictions as well. Article 83(9) of the Greek Private Maritime Act provides that provisions concerning crewmembers apply only to seamen on Greek vessels. However, while deciding claims of Greek seamen on board a foreign vessel, Greek courts have applied Greek law if the vessel was under Greek control.157 Grounds supporting the extraterritorial application of Greek law are found in the very nature of those provisions, which are considered to be rules of immediate application that apply regardless of the applicable law. According to views in the doctrine, the significant link between the disputed issues and Greek public interest justifies the immediate application of such rules even in cases where the foreign flag law should be applied.158 Extended application of domestic rules in lieu of the foreign flag law is also present in Scandinavian countries in cases involving seamen on foreign vessels. The legislation of some Scandinavian countries expressly provides that domestic provisions that apply only to seamen on domestic vessels could also be applied in cases involving seamen on foreign ships.159 An interesting development in the choice of law for personal injuries and death of seamen is found in U.S. case law.160 Maritime torts occurring on board a vessel, 154

Georgios Liberis c. Ministero Marina Mercantile, Tribunale di Firenze, 17 May 1990, in Diritto Marittimo 1992, pp. 725-729. 155 Squillace c. Simoncini, Corte di Cassazione, 18 October 1993 No. 10293, in Diritto Marittimo 1994, p. 785. See QUERIOLO I., 'La "residualità" della nazionalità della nave nelle norme di conflitto in campo marittimo', in Diritto Marittimo 1994, p. 785. 156 See BERLINGIERI F., 'Istituzione del registro internazionale e nuove norme in tema di requisiti di nazionalità e dismissione della bandiera', in Diritto marittimo 1998, p. 542. 157 ANTAPASSIS A., Le droit applicable en matière d'accidents du travail maritime, Athens 1989, p. 73. 158 ANTAPASSIS A. (note 157), p. 97. 159 Art. 60 of the Swedish Seamen Act (1973) authorizes the government, under certain conditions, to extend the application of domestic provisions to seamen on foreign vessels flying FOC. 160 The American courts must resolve numerous disputes involving seamen. This was appropriately illustrated in one of the decisions: 'As a moth drawn to the light so is the litigant drawn to the United States': Nicol v. Gulf Fleet Supply Vessels, Inc., 743, F.2d. 289, 1985, cited in SCHOENBAUM T.J. (note 128), §§ 5-8, p. 188. Seamen, especially foreigners, have always been attracted to American courts because of very liberal statutes (Jons Act § 20 of La Follette

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Tomljenović especially personal injuries of seamen have traditionally been governed by the law of ship nationality. However, at the same time the rigid conflicts rule of the lex loci delicti was replaced by the elastic conflicts rule of the most significant relationship, lex bandi was replaced by the substantial contact test. The substantial contact test was formulated by the Supreme Court in a trilogy of cases: Lauritzen v. Larsen,161 Romero v. International Terminal Operating Co.,162 and Hellenic Lines Ltd. v. Rhoditis.163 What is the substantial contact test? Originally the substantial contact test consisted of seven factors, all or some of which relate to the applicable law. These factors include: 1) locus delicti; 2) ship nationality; 3) the allegiance or domicile of a seaman; 4) the allegiance of a ship owner; 5) locus contractus; 6) the accessibility of foreign forum; 7) the law of the forum. The significance of each factor for determining the applicable law has to be evaluated ad hoc in each individual case, depending on the forum's interest. Thus, the substantial contact test resembles the conflicts solution in § 145 of the Restatement Second, i.e., the most significant relationship. Although originally formulated to define the scope of application of the Jons Act in disputes involving seamen, it was later applied in other maritime disputes having no connection with seamen.164 In Lauritzen the Supreme Court applied the substantial contact test to determine whether the Jons Act was applicable. The Jons Act applies when there is a close connection between the dispute and American law. Applying the seven factors, the Court identified the most significant factors as the ship nationality and the allegiance of plaintiff and defendant. The ship flew the Danish flag and both the seaman and shipowner were Danish nationals. The injury occurred on board the vessel while in Cuba. The only factor connected with American law was the place where the contract was concluded (Larsen concluded the employment contract in New York), which was not relevant for the Court. Attributing the most importance to the ship nationality, the Court concluded that Danish law was applicable.

Seamen's Act [1915] amended by the Merchant Marine Act [1920]), common maritime law, and high compensations awarded in general. 161 Lauritzen v. Larsen, 345 U.S. 571 (1953). 162 Romero v. International Terminal Operating Co, 358 U.S. 354 (1959). 163 Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970). 164 E.g., claims of ownership on a seized ship: Arochem v. Wilomi (1992) 962 F.2d 496 (5th Cir.); and contractual disputes: Gulf Trading and Transporting Co. v. Vessel Hoegh Shield (1981) 685 F.2d 363 (5th Cir.); SABINO A.M., 'An Arresting Choice of Law', in Lloyd's Maritime and Commercial Law Quarterly 1993, pp. 154, 155; GILMORE G./BLACK C.I., The Law of Admiralty, 11th ed., New York 1975, Chapter VI, p. 472.

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Maritime Torts The Supreme Court upheld its decision two years later in Romero, the facts of which closely resemble those of Lauritzen. The contact test was applied in Romero to determine whether American law was applicable in its entirety (not only the Jons Act). In Hellenic Lines v. Rhoditis the Supreme Court examined the significance of the ship nationality as a connecting factor in cases involving FOC vessels. Rhoditis, a Greek seaman, concluded a contract in New York with the defendant, a Greek shipper and employer. The contract contained a clause on jurisdiction (establishing the competence of Greek courts) and a choice-of-law clause designating Greek law as applicable. The injury occurred while a vessel flying the Greek flag was in the port of New Orleans. If the substantial contact test had been applied as in Lauritzen and Romero, Greek law would have been applicable.165 Here, however, the Supreme Court modified the seven contact test by adding an eighth factor – the base of operation – to be applied in lieu of the ship nationality when the vessel flies FOC. While the foreign plaintiff and shipowner were Greek and the vessel flew a Greek flag, 95% of the shares of the shipping company were owned by a Greek national who, since 1945, had had his domicile and base of operation in New York and New Orleans from where he manned and controlled a vessel. Formally, the defendant was a foreign shipping company based and operated in the U.S. Hence, the foreign flag and foreign corporation were used only as a foreign veil enabling the shipowner to evade the application of rigid and harsh American maritime law. According to the Supreme Court, it is necessary to reject mechanical application of the ship nationality when the vessel's flag is FOC. Ship nationality cannot function as an appropriate connecting factor when it is not relevant to the circumstances characterizing the disputed relation. This is especially true when other circumstances point to the existence of a substantial connection between the dispute and American law.166 In the case of a FOC vessel, such circumstance is the shipper's base of operation.167 As an elastic, open-ended conflicts rule, the substantial contact test enables the courts to determine the law most closely connected with the dispute in each individual case. However, the Supreme Court's effort to achieve uniformity by applying the substantial contact test has proved to be unsuccessful. Namely, courts balance the test factors according to their own notion of justice. This occurs especially in regard to the interpretation of the notion 'base of operation'. The most relevant factor for determining the applicable law, the base of operation has been interpreted differently in cases where the ownership is not clear or in cases where the part in ownership is not decisive.

165

Four of the seven factors referred to Greek law: ship nationality, allegiance of plaintiff and defendant, and the accessibility of a foreign court. 166 STEIN H.D., 'Interest Analysis and Maritime Choice of Law', in Lawyer of the Americas 1981, p. 551. 167 See ALBITRATION J., 'Choice of Law in Maritime Personal Injury Setting. The Domestic Jurisprudence', in Louisiana Law Review 1983, pp. 886-887.

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Tomljenović Courts of the Second Circuit have taken a liberal approach, applying American law if U.S. citizens own the capital of the defendant,168 whereby the percentage of ownership was irrelevant.169 On the other hand, other courts have taken a more restrictive approach, according to which the mere fact that the defendant is completely owned by Americans did not suffice for the application of American law.170 An interesting practice in this regard can be found in Croatia. Faced with many disputes involving personal injuries to seamen occurring on board vessels having FOC or a bareboat charter, Croatian courts have avoided application of a foreign lex bandi.171 In these cases the law of the ship nationality had no connection at all with the disputed issues. Instead of applying the lex bandi, the courts have applied Croatian law, although Article 993 of the Maritime Act (1994) designates the law of the ship nationality as applicable in relations between seamen and shipowner. The application of Croatian law is in keeping with the application of a general conflicts rule for torts172 designating the law of the State where the harmful event has occurred as applicable, or the law of the State where the consequences arising from the harmful event are suffered, whichever is more favorable for the injured person. Since the seamen involved have been domiciled in Croatia, the courts have concluded that the consequences have been manifested in this country, and therefore Croatian law has been applied as the more favorable law. However, a new trend in the court's reasoning can be detected in a recent decision of the High Commercial Court of 1999 where the foreign lex bandi was not applied. In this case Croatian seamen were injured on board a vessel flying the St. Vincent & Grenadines flag (chartered to a foreign shipper that was 100% owned by a Croatian beneficial shipowner). The plaintiff seamen claimed damages from the Croatian beneficial shipowner. The Court of first instance applied Croatian law instead of the law of St. Vincent & Grenadines, which, in fact, should have been applied under Article 993 of the Maritime Act. The decision was upheld by the High Commercial Court of the Republic of Croatia on the grounds that, in this specific case, the ship

168 Bartholomew v. Universe Tank Ship. Inc. 263 F2d 437 (2d. Cir. 1959); Mattes v. National Hellenic American Line S.A. 427 F.Supp. 619 (S.D.N.Y. 1977). 169 Antypas v. San Basilio, 541 F.2d 307 (2d Cir. 1976). 170 The Court maintained that the application of American law is justified only when a substantial and genuine economic link exists between the maritime transaction and American law. American ownership is deemed a sufficient indicator of the existence of such connection: see De Mateos v. Texaco Inc., 562 F 2d. 895 (3d. Cir. 1977). 171 Barić v. Flanonia Shipping Ltd. St. Vincent, Commercial Court Rijeka, III P-2384-41 of 7 March 1995; Taglić v. Creswell Navigation Monrovia – Liberia V. Ships – Monte Carlo, Commercial Court Rijeka, III P-6731/92-28 of 17 January 1996; Gulin v. Taty One Limited, Malta, Commercial Court Rijeka, III P-4723/93-45 of 25 June 1997. 172 Art. 28 of the PIL Act of 1982 (introduced into the Croatian legal system in 1991, in Official Gazette 53/91).

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Maritime Torts nationality did not represent a genuine link between the vessel and the State of its registry and should thus be disregarded.173 C.

De Lege Ferenda Solutions

The small number of random examples cited above illustrating the application of the law of the ship nationality in seamen personal injury cases are far from sufficient to lead to a comprehensive conclusion. Nevertheless, it is obvious that the courts have avoided application of the lex bandi, applying mostly forum law as the law more favorable to seamen, however, on different grounds. To prevent arbitrary evasion of the lex bandi and provide legal security and predictability, it is necessary to formulate a solution that will enable the courts to disregard the lex bandi whenever the latter is not the law most closely connected with the dispute. We share the view in legal scholarship that complete rejection of the lex bandi is not necessary. In cases where the ship nationality represents a real and genuine connection between State and vessel, the law of the ship nationality is an adequate solution for conflicts of laws. Special supplementary conflicts rules should be formulated for other cases. A seaman's claim for damages should be subject to the law governing the employer-employee relation in general. Accordingly, the conflicts solutions of the Rome Convention (Article 6) relating to individual labor contracts should be applied. As was mentioned earlier, such a solution is accepted in Italian law. French courts deciding claims for damages caused by the injury and death of a seaman apply the law that is the lex cause of the employment contract,174 applying solutions of the Rome Convention even in cases that do not fall within the scope of the Convention.175 There are views in legal scholarship favoring the application of the lex cause of the labor contract rather than the lex bandi. Application of the lex causae is deemed more justified when FOC vessels are involved.176

173

Ćosić v. Tankerska plovidba, XV Pž-3907/98-2, 2 March 1999, pp. 5-6: 'The conflicts rule in Art. 993 has its justification and reasoning in the fact that a flag State exercises its sovereignty over a vessel … in that it controls, among others, whether the shipowner, according to the appropriate rules, exercises its obligations towards crew members. Rigid and mechanical application of this conflicts rule could lead to difficulties in regard to the legal protection of crewmembers. The provision of Art. 993 presupposes the existence of a connection between a vessel and the State of its nationality. In this specific case it is obvious that St. Vincent & Grenadines as a State has no real connection with the vessel Nin, except that the vessel is registered in that State.' 174 Court of Appeal Rouen, 5 December 1991, in D.M.F. 1992, pp. 377-382; ibid. 1994, pp. 660-664; CHAUMET P., 'Marin étranger. Accident du travail maritime', ibid. 1992, p. 378. 175 Markos Drizos Pagodius et autres c. Commandant du navire Diamond, Conopus Shipping, Villosa Compania Naviera (note 142), p. 663. 176 ANTAPASSIS (note 157), p. 105.

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Tomljenović 1.

Party Autonomy

If the solution provided in Article 6 of the Rome Convention is applied by analogy in seamen injury cases, this means that party autonomy should be considered. Applying party autonomy in such cases is above all a practical solution, since seamen employment contracts often contain a choice-of-law clause. Theoretically, as shown in this article (see supra, Part II, A, 1, e), the principle of party autonomy has found its place in non-contractual obligations, and its application is advocated in legal scholarship.177 However, the parties' right to choose the applicable law should be considerably more restricted in seamen injury cases. Namely, the parties should agree on the applicable law only after the accident occurs. Moreover, when party autonomy is permitted in labor accidents, one has to take account of the fact that the parties' choice of law is frequently mostly illusory. A choice-of-law clause in seamen employment contracts should not be regarded as expressing the true intention of the parties. Seamen contracts are mostly written in advance and, as the economically weaker party, the seaman cannot change the contractual clauses formulated by the shipowner. Consequently, the law chosen by the parties, most frequently lex bandi, can be unfavorable for the seaman. Therefore, the parties' choice of law should be interpreted in a sense that never derogates the application of mandatory rules of the law of the closest connection, thus guaranteeing the minimum protection seamen are entitled to, i.e., the provisions of collective agreements in force in the country of the seaman's nationality. The Rome Convention itself guarantees minimum protection for employees by providing for immediate application of the mandatory rules of the law with the closest connection (Article 6.1, 7). As far as seamen are concerned, this minimum protection is required in injury cases. 2.

Accessory Choice of Law

Application of the lex autonomiae or subsidiary application of the lex cause of the employment contract could be defended in seamen injury cases by the principle of accessory choice of law, which, as mentioned earlier, has been introduced as a general exception to the lex loci delicti (see supra, Part II, A, 1, b). Such a solution is advocated for situations where contractual and delictual liability interact,178 as is the case in labor accidents. Another view supported by some scholars maintains that all issues arising from labor relations should be governed by one regime of liability, and

177

The recently adopted German PIL for torts recognizes party autonomy as a displacement rule for lex loci delicti. The same line of reasoning can be seen in the Rome II Convention, as well as in the Dutch Proposal for the Act on the Law Applicable to Torts (Art. 4.2). 178 NYGH P. (note 33), p. 235.

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Maritime Torts consequently by the same conflicts solutions regardless of whether those issues are contractual or non-contractual in nature.179 3.

The Law Most Closely Connected with the Dispute – the Escape Clause

In the absence of a choice of law by the parties, which law should apply? Would it be the lex bandi or some other law? As mentioned earlier, lex bandi is deemed appropriate only when a genuine link exists between vessel and State. An escape clause should be formulated for other situations. As an exception to the application of the lex bandi, the law of the closest connection can be formulated as an open or closed escape clause when the law of the closest connection is indicated by special factors. Here again we are reminded of the general exception to the lex loci delicti, which refers to the law common to the parties, thus indicating whether there is some factual or legal connection between them (see supra, Part II, A, 1, a).

VI.

Vessel Source Pollution

Due to the extent of its damage, vessel source pollution often results in an environmental catastrophe.180 The explosion of the Piper Alfa oil rig in the North Sea and oil pollution by the tankers Torrey Canyon, Amoco Cadiz and Exxon Valdes are examples of such unfortunate catastrophes. These accidents, mostly of international181 and transnational182 character, alarmed the international community so greatly that immediate action was taken to unify international rules on the prevention and reparation of environmental damage. Although the process of unification started quite late, a high degree of international unification has already been achieved.183 Unfortunately, as in other areas of maritime law, conventional law has not eliminated conflicts problems relating to sea pollution.

179

COLLINS L., 'Interaction between Contract and Torts in Conflict of Laws', in I.C.L.Q., 1967, p. 104. 180 BALLARINO T., 'Questions de droit international privé et dommages catastrophiques', in Recueil des Cours, Vol. 220, 1990-I, pp. 302-303. 181 Damages are international when the harmful event occurs in one country and the harm is manifested in another. 182 Transnational damages occur in one State, however, the 'transboundary element has a mere "juridical" nature, since there is no polluting or harmful substance which crosses the border…. The possibility of exporting risks arises from the very structure of transnational corporations', SCOVAZZI T., 'Gli incidenti industriali e il "velo" delle società transnazionali', in L'unificazione del diritto internazionale privato e processuale, Studi in memoria di M. Giuliano, Padova 1989, pp. 839-867. 183 On international conventions in the field of vessel source pollution, see Lloyd's Shipping Law Library, The Ratification of Maritime Conventions, London 1990; KISS A./SHELTON D., Manual of European Environmental Law, Cambridge 1993.

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Tomljenović At present, special conflicts rules for sea pollution184 exist neither at the national nor at the international level.185 According to legal scholarship, such a non-profiled status is generally a good starting point for the preparation and acceptance of a general convention on conflict of laws for environmental pollution. Some proposals were discussed and formulated as conclusions at the colloquy organized by the Hague Conference in Osnabrück under the title 'Ten points of Osnabrück'186 which will be dealt with later. A.

Judicature and Conflict of Laws in Pollution Cases

When ruling on compensation claims for damages caused by sea pollution,187 the courts apply rules on international jurisdiction and conflicts rules for torts in general. On the other hand, in some cases conflicts issues have been ignored and the law of the forum applied directly without considering the question of the applicable law. Namely, strong interests in protecting the environment have forced States to adopt national legislation for the prevention, reparation and compensation of environmental damage. In view of their importance, most of these provisions fall into the category of provisions of immediate application.188 The famous Amoco Cadiz case of 1984189 is one of the rare cases where choice-of-law issues have been raised. Amoco Cadiz illustrates that the mere fact that a convention with a mechanism for determining compensation exists does not necessarily mean that it will automatically be applied. In Amoco Cadiz all conditions were fulfilled for the application of the International Convention on Civil 184 A special conflicts provision is contained in Art. 138 of the Swiss PIL Act relating to emissions. Art. 138 provides that claims resulting from injurious emissions emanating from an immovable are governed, at the choice of the injured party, by the law of the State where the immovable is located or by the law of the State where the result of such emission occurred. 185 The process of international unification has led to comprehensive substantive provisions on pollution, and not conflicts rules. The existing conventions regulate the same conflicts issues such as international jurisdiction and the recognition of foreign judgments in cases covered by conventional rules. Thus, the Convention on Civil Liability for Oil Pollution Damage of 1969 contains provisions on international jurisdiction and the recognition of foreign judgments. However, it applies only to pollution caused by oil transported as goods. 186 'Environment – Dommage – Droit international privé', in Rev. crit. dr. int. pr. 1994, pp. 853-854. 187 In pollution cases, disputes are frequently settled on the basis of amiable compositeur or out-of-court settlements: BALLARINO T. (note 180), p. 341. 188 National legislation on the prevention and reparation of harmful consequences of sea pollution adopted by coastal States also applies to foreign vessels. This includes U.S. federal statues such as Ports and Waterway Safety Act (1972), Port Tanker Safety Act (1978), and Oil Pollution Act (1990). 189 U.S. District Court, Northern District of Illinois Eastern Division, 18 Apr. 1984, in Oil spill by the Amoco Cadiz off the Coast of France on 16 March 1978, Lloyd's Law Reports (1984) Vol. 2, pp. 304-339.

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Maritime Torts Liability for Oil Pollution Damage of 1969 (hereafter: CLC/69). The pollution was caused by an oil spill from the tanker Amoco Cadiz that occurred in France. France and Liberia (State of the ship nationality) were members of CLC/69. The plaintiffs, however, instituted proceedings in the U.S. with the aim of avoiding the CLC/69 and ensuring the application of U.S. law.190 Despite the automatic compensation mechanism of CLC/69, U.S. law was more attractive for the plaintiffs because of the limitation of liability issue,191 the canalization of liability,192 more favorable procedural rules, and finally because the additional problem of recognizing and enforcing a foreign judgment was eliminated by instituting proceedings in the U.S. Since the U.S. was not a member of CLC/69, it was necessary to determine the applicable law. In view of the fact that the harmful event occurred in France, the Court ruled that French law was applicable. In the decision,193 however, it is impossible to see which conflicts rule was applied by the Court, the lex loci delicti or the most significant relationship rule.194 Most probably it was the former since the Court stressed the territorial aspect (the damage occurred in French territorial waters). Considering all relevant circumstances of the case, it would be difficult to designate French law as applicable on the basis of the rule of the most significant relationship. Although French law was designated as applicable, it was not applied because the plaintiffs did not prove it to be different than U.S. law. This was understandable because the plaintiffs had instituted proceedings in the U.S. in order to avoid the application of French law.

190

FONTAINE E., 'Les sinistres de l'Amoco Cadiz et Tanio – Comparaison de deux expériences', in D.M.F. 1993, p. 281. 191 PONTAVICE E., 'Affaire "Droit de l'environment" versus "droit maritime" ou la décision rendue le 18 avril 1984 concernant l'Amoco Cadiz', in Clunet 1986, p. 15. 192 According to the CLC/69, the claim could be directed only against the shipowner. It would have been completely inefficient to sue Amoco Transport because the actual liability was borne by Standard Oil of Indiana, the beneficial owner of Amoco Cadiz and mother company of Amoco Transport. 193 'Any damages sustained by the claimants in this case were sustained in French territorial waters or on the coast of France; the substantive law applicable to such claims would therefore have been French law if it had been proved different from that of the United States. However, it was not proved different. Claimants Cotes du Nord, in Open Court, stipulated that United States law applied, and claimants Bretagne-Angleterre-Irelande, et al. (Bretagne) made no objection. The claims will be decided in accordance with United States law': The Amoco Cadiz (note 189), p. 336. 194 It is interesting to note that Illinois courts have replaced the principle of the lex loci delicti by the most significant relationship rule: SYMEONIDES S.C. (note 60), p. 607.

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Tomljenović In its final decision195 the Court ruled on the applicable law once again, this time in regard to the issue of damages and compensation. Again it was very clear that French law should have been applied. The Court, however, presumed it to be the same as U.S. law and applied U.S. law, justifying such choice by the fact that the principle of French law which says that indemnification presupposes the proof of proximate causation196 is, in fact, a general principle of civilized nations. A very important part of the decision in Amoco Cadiz concerns the ruling on liable persons. In addition to the formal shipowner, the Liberian company Amoco Transport, the Court found the American International Oil Company (AIOC) and Standard Oil of Indiana (SOI), both American companies, jointly liable for the damage caused by the oil spill. The question whether AIOC and SOI could be sued was determined according to U.S. law197 although the defendants pleaded the application of French law, namely, the relevant provisions of CLC/69. As regards this issue, the Court ruled that, even if CLC/69 should have been applied,198 AIOC and SOI could be sued since application of CLC/69 does not exclude the right of victims to claim damages against persons who are not shipowners. The Court ruled that Amoco Transport as well as AIOC and SOI were liable for damages, despite the fact that AIOC and SOI were not formal shipowners or persons who formally owned Amoco Cadiz. The Court found that a substantial connection existed between those companies on the grounds that, within Standard's group of corporations, the decisions concerning activities of all Standard's affiliations were made by the same persons. The most important decisions, among them the one to build Amoco Cadiz, needed Standard's approval. Although the subsidiaries were legally and financially independent corporations, the center of their decision-making was based at Standard. This was the

195

In Re: Oil Spill by the Amoco Cadiz off the Coast of France on 16 March 1978, U. S. Court of Appeal, 1 January 1988, in Diritto marittimo 1989, pp. 879-881; SCOVAZZI T. (note 182), p. 421. 196 'In applying, as this Court must, the law of France on the subject of damages, the Court observes initially that the law of damages in France is substantially identical to the law of the United States. The exigencies of civilized life and the reason and logic common to all man dictate that the laws of all nations including France and the United States, result in favoring the victim, who is entitled to indemnification only upon meeting his or her burden of proof of proximate causation': United States Court of Appeal, 11 November 1988, in Re: Oil Spill by the Amoco Cadiz off the coast of France on 16 March 1978, in Diritto marittimo 1989, pp. 878-891. 197 The Amoco Cadiz (note 189), p. 337. 198 CLC/69 canalizes liability towards the formal shipowner, and not the beneficial owner or some other persons using the vessel.

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Maritime Torts main argument of the Court supporting its decisions on international jurisdiction199 and the liability of AIOC200 and SOI.201 Piercing the corporate veil is just another side of the same medallion – FOC. If the courts are ready to pierce the veil of the formal shipowner to identify the beneficial owners,202 there is no reason to prevent it from piercing the veil of ship nationality and applying connecting factors that would lead to the law most closely connected with the specific maritime tort. As mentioned earlier, the courts can decide pollution cases without entering into a discussion on the applicable law. In this context, it is interesting to take a look at a decision of the French Court of Appeals at Bastia203 known as the bouées rouges case. Montedison, an Italian company with two vessels, Scarlino I and II, spilled dangerous substances needed for the production of biocide titan on the high seas (70 km from Toscana). Prud'Homme des Pêcheurs sued Montedison for damages caused by the spill 199

In Re: Oil Spill by the Amoco Cadiz off the coast of France on 16 March 1978, Federal Court of Appeal (7. Cir, 699 F2d. 909) on appeal by Astilleros Espanoles S.A. of 2 February 1983. 200 'As the party which exercised complete control over the operation, maintenance and repair of Amoco Cadiz and the selection and training of its crew, AIOC had a duty to ensure that the vessel was seaworthy and adequately maintained and repaired, and that the crew was properly trained. AIOC negligently performed its duty to ensure that Amoco Cadiz in general and its steering gear in particular were seaworthy, adequately maintained and proper repair': The Amoco Cadiz (note 189), paras. 22 –23, pp. 337-338. 201 'As an integrated multinational corporation which is engaged through a system of subsidiaries in the exploration, production, refining, transportation and sale of petroleum product through the world, Standard is responsible for the tortious act of its whole owned subsidiaries and instrumentalities AIOC and Amoco Transport. Standard exercised such a control over its subsidiaries AIOC and Transport, that those entities would be considered to be mere instrumenatlities of Standard. Furthermore, Standard itself was initially involved in and controlled design, construction and operation, management of Amoco Cadiz and treated the vessel as if it were its own. Standard is therefore liable for its negligence and the negligence of AIOC and Transport with the respect to the design, operation, maintenance, repair and crew training of Amoco Cadiz': The Amoco Cadiz (note 189), p. 338. 202 In some countries courts do not refrain from lifting the corporate veil, e.g., in France (Thenamari Maritime, Veastseas Shipping Ltd. v. La Concorde [vessel El Jumbro], Court of Appeal Paris 1989, in D.M.F. 1989, pp. 642-649; Maritime Transports Overseas GmbH v. Brave Mother Shipping Ltd. of 1989, in D.M.F. 1989, pp. 649-655) and in the Netherlands: DEROGÉEVAN Roosmalen E., 'Piercing or lifting of the corporate veil in relation to the arrest of ships in the Netherlands', in Diritto Marittimo 1994, pp. 559-565. On the other hand, the decision of the European Court is interesting in Angklage Myndigheden v. Poulsen, Diva Navigation Corp. (vessel Onkel Sam), of 24 November 1992, C-286/90, where the Court upheld the significance of the ship nationality as a criterion for delimiting international jurisdiction and the applicable law, despite the fact that the vessel in question flew a flag of convenience (Panama). See comment on the decision by MUNARI F, in Diritto marittimo 1993, pp. 824-845. 203 Soc. Montedison c. Département de la Haute Corse, Prud'Hommes des Pêcheurs de Bastia, in Riv. dir. int. priv. proc. 1978, pp. 189-192.

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Tomljenović at the Tribunal de grande instance. The Court applied French law without even raising the issue of the applicable law. The fact that the law of the forum enjoyed immediate application could be due to the nature of the provisions applied or, on the other hand, the parties may not have requested the application of foreign law. Another example of the immediate application of the law of the forum is found in Wenzhou v. Pavillon de Panama et. al., decided by the Maritime Court of Shanghai in 1987.204 The Panamanian vessel, Fontaine d'Or owned by a Chinese company was damaged in a collision with another Panamanian vessel. The damaged Chinese vessel spilled oil and other chemical substances into the sea. The Association of fishermen from Shanghai sued for damages. Chinese law was applied since the damage occurred in the Chinese Sea. The Court applied the Environmental Protection Act (1982), which regulates all maritime activities within Chinese territorial waters and their consequences. In this case, dangerous substances had been spilled on the high seas but the consequences occurred within Chinese territorial waters. The provisions of this Act apply as rules of immediate application. Therefore, it would have been applied regardless of choice-of-law rules. B.

De Lege Ferenda Conflicts Solutions for Pollution Caused by a Vessel

At its 1997 session in Strasbourg on Responsibility and Liability under International Law for Environmental Damage, the Institute of International Law proposed that 'in cases having multinational aspects, environmental regimes should take into consideration existing rules on jurisdiction and choice of law, and if necessary, provide for such rules.'205 This raises the question of whether general conflicts provisions for torts should be applied in disputes involving vessel source pollution or whether the specific and complex circumstances of pollution cases require diversification, i.e., special conflicts solutions. The choice of law in liability cases involving damages caused by a vessel to the environment is conditioned by the specific legal regime of the sea where the damage occurs.206 Because of a ship's mobility and the fact that damage caused to a sea by a vessel are difficult to localize, it is sometimes impossible to apply the general conflicts solution of the lex loci delicti.

204

Wenzhou v. Pavillon de Panama et al., Maritime Court Shanghai, October 1987, in Clunet 1994, pp. 178-180. 205 Art. 32 of the Resolution on Basic Distinctions in the Field of Responsibility and Liability under International Law for Environmental Damages, in INSTITUTE OF INTERNATIONAL LAW, Session of Strasbourg, 1997, in Yearbook, Vol. 67, Part II, p. 513. 206 Compensation could not be recovered for damages caused to the high seas. State jurisdiction over that area exists only for its nationals and its vessels, RÈMOND-GOUILLOUD M., 'Compensating Victims of Pollution Caused by Activities at Sea', in Compensation for Pollution Damage, Paris 1981, OECD, p. 208.

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Maritime Torts Moreover, environmental catastrophes caused by a vessel can be of enormous proportion, as a result of which numerous parties are involved in the compensation proceedings. Such accidents can be characterized as so-called mass torts.207 Because of the complexity of such disputes, other conflicts rules should be taken into account in addition to the lex loci delicti. These additional rules contain solutions that function as exceptions to the lex loci delicti in general. What would be an appropriate conflicts solution for vessel source pollution? 1.

Lex Loci Delicti – Elective Cumulation

When pollution is caused in territorial waters and is not of catastrophic proportion, the most appropriate solution would be in principle lex loci delicti commissi.208 The same conclusion is reached in the 'Ten Points of Osnabrück' (p. 4). In the United States where application of the lex loci delicti has been abandoned by many State courts, eminent scholars advocate the application of the lex loci delicti rule when mass torts are concerned.209 Even American courts seem to be inclined to favor this solution.210 In this context, it is interesting to mention French Law No. 881093 of 1 December 1988, which provides that, in the absence of an agreement with the foreign State where the accident occurs, the highest amount of limitation of liability for damages caused by a French nuclear (public) vessel in foreign territorial waters shall be determined by the law of that State. The liability is unlimited if so provided by the foreign lex loci delicti.211

207

JUENGER F., 'Mass Disasters and the Conflict of Laws', in University of Illinois Law Review 1989, pp. 105-128. 208 'L'inclusion, admise par tous, de la responsabilité pour les dommages à l'environnement dans la catégorie des délits confère indéniablement au lieu du commission du fait dommageable un rôle prépondérant': BOUREL P., 'Un nouveau champ d'exploration pour le droit international privé conventionel: les dommages causés à l'environnement', in Mélanges en l'honneur de Yvon Loussouran, Paris 1994, p. 104. 209 'One begins to wonder whether reverting to a hard and fast rule would not be preferable […] Apart from ease of application, the lex loci delicti rule also assures equal treatment of victims who perish in common disaster': JUENGER F. (note 207), p. 110. Proposing a conflicts solution, Juenger suggests that the court examine each issue in a mass disaster case, taking into account the law of the place where the tortfeaser acts, the place of injury, and the home State of each party. From these laws the court must then select the one most suitable for rendering the decision. 210 In Re: DES (789 F.Supp. 548, E.D.N.Y. 1992), judge Weinstein prefers application of the one fix rule (common law of the parties as an exception to lex loci delicti) instead of an elastic approach; Piper Aircraft Co. v. Reyno (454 U.S. 235, 260, 1981) where application of the lex loci delicti seems to be appropriate for airplane accidents; In RE: Union Carbide Corporation Gas Plant Disaster at Bhopal, India, in December 1984, in I.L.M. 1986, pp. 771-802. 211 Law No. 88-1093, amendments to the Law on Liability of Nuclear Vessel Operator of 1965, in Journal Officiel, 3 December 1988. See also: Rev. crit. dr. int. pr. 1989, pp. 141-142.

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Tomljenović Application of the lex loci delicti depends, however, on the ability to correctly localize the locus delicti. In vessel pollution cases, the place where the harmful event occurs frequently does not coincide with the place where the consequences are suffered. In cases where the damage occurs in a State other than the one where the tortfeasor acts, a choice between lex damni and lex loci actus is accepted in comparative law.212 In regard to environmental damage, the law where the consequences occur is often more convenient for the victim. Application of the lex damni is considered to be protective for a victim, since the damage often occurs in the State where the victim has his habitual residence.213 Moreover, damages arising from pollution can be manifested in forms other than personal injury and damage to property, thus further justifying the application of the lex damni. Here, environmental damages are very common, and the State where the damage occurs has a special interest in its reparation. Since all States are highly concerned about protecting their environment, it follows that they prefer to apply their own criteria in cases requiring the reparation of pollution. Should a unilateral choice of law by the victim depend on the predictability for the tortfeasor of the law chosen by the plaintiff?214 In pollution cases there is no need to protect the tortfeasor. Since his activities are dangerous for the environment, he should take all necessary precautions to prevent damage. This applies particularly to shipowners and others who control and maintain a vessel. Because of the ship's mobility, damage can occur in any country along the vessel's route. However, a unilateral choice of law must be limited to legal systems connected with the dispute.215 The need to protect the environment and the victims of pollution damage is another reason for favoring cumulative election in pollution cases.216

212

Thus Art. 61.1 of the Italian PIL Act, Art. 25.2 of the Turkish PIL Act, Art. 28 of the Croatian PIL Act, Art. 133.2 of the Swiss PIL Act; see JESSURUN D'OLIVEIRA H.U., Class Action in Relation to Cross-Border Pollution, The Hague-Zagreb-Ghent Colloquium, Session IX, 1991, p. 50; BALLARINO T. (note 180), p. 375. 213 JESSURUN DE OLIVEIRA H.U., 'La pollution du Rhin et le droit international privé', in HUETING R./VAN DER VEEN C/KISS H./JESSURUN DE OLIVEIRA H.U., Rhine Pollution: Legal, Economic and Technical Aspects, Zwolle 1978, p. 10. 214 Predictability protecting the tortfeasor from the application of a law he could not reasonably foresee is provided for in Art. 133.2 of the Swiss PIL Act or Art. 7 of the Hague Convention on the Law Applicable to Product Liability. 215 SCOVAZZI T. (note 182), p. 426. 216 DUTOIT B. (note 23), p. 378.

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Maritime Torts 2.

Lex Autonomiae

If lex autonomiae is considered an appropriate conflicts solution for torts in general, there is no reason why it should not be acceptable in pollution cases. The principle of party autonomy was applied in the well-known river pollution case Mines de Potasse d'Alsace, decided by Dutch courts.217 The Dutch plaintiffs opted for Dutch law and the French defendants did not object to the choice. The Court of first instance in Rotterdam accepted a retroactive choice of law and the Court of Appeals, as well as the Hoge Raad, upheld the ruling on the applicable law although there was no objection in that respect.218 Moreover, as in collision cases, party autonomy should be permitted in the sense that the parties have the right to chose uniform autonomous rules such as the CMI Guidelines on Oil Pollution Damages219 (which lay down standards of liability, assessment of damages and compensation). If chosen by the parties, the Guidelines can be of considerable assistance in deciding issues relating to the compensation of damages. Namely, national laws have not yet developed environmental law as a specific branch of law. Consequently, environmental damage and its compensation are often regulated in accordance with the general principles of torts law.220 Therefore, it is easy to understand why some authors are in favor of the application of lex autonomiae in pollution cases.221 Here again, the timing of a choice of law by the parties should be taken into account (after the harmful event occurs) and the laws which the parties can choose. In our opinion, the parties can choose the law of the forum222 or any law that is connected with the disputed issue. 3.

The Escape Clause – the Law with the Closest Connection

What if the parties fail to agree on an applicable law or uniform rules? The application of lex loci delicti is deemed convenient only in pollution cases without catastrophic proportion. However, in factually and legally complex cases, such as Amoco Cadez, the lex loci delicti can be applied only if no other law is deemed more closely connected with the disputed issues. These include, above all, situations involving transnational

217

Supra note 53. Court of Appeal The Hague, 10 September 1986, in Netherlands Yearbook of International Law 1988, pp. 496-503; Hoge Raad, 23 September 1988, ibid. 1990, pp. 434-440; JESSURUN DE OLIVEIRA H.U. (note 212), p. 47. 219 Guidelines on Oil Pollution Damages were adopted at the 35th International Conference of CMI in Sydney held 2 –8 October 1995. 220 'Admissibility and Assessment of Claims for Pollution Damage', Report of the Chairman of the International Sub-Committee (CMI), in Diritto marittimo 1994, pp. 298-359. 221 BETLEM G., Civil Liability for Transfrontier Pollution – Dutch Environmental Tort Law in International Cases in the Light of Community Law, London 1993, pp. 168-169. 222 BOUREL P. (note 208), p. 104. 218

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Tomljenović damages where the actual tortfeasor is hidden behind a veil of foreign corporations (piercing-the-veil situations). These situations are common in maritime transactions where shipowners do business through offshore companies according to the principle one ship one company. Therefore, in our opinion, an open escape clause would be the best solution in pollution cases as a displacement rule for the application of the lex loci delicti commissi.223

VII. Concluding Remarks In maritime torts two conflicts principles apply: lex loci delicti commissii as a general rule and lex bandi as a special conflicts rule. The above analysis of conflicts solutions for typical cases of non-contractual liability – collisions, personal injury and death of seamen, and vessel source pollution – shows that some corrections are necessary. The mechanical application of the lex loci delicti could be prevented in contemporary conflict of laws for torts in general by applying additional rules such as the escape clause (closed and open) and/or party autonomy. There is no reason why these exceptions to the application of the lex loci delicti should not be taken into account in the context of specific and complex maritime torts. These correction rules could be applied in cases where the law of the ship nationality applies, especially in situations involving vessels flying FOC and in bareboat charters. On the other hand, complex and elastic general solutions for torts could cover various situations of noncontractual liability in maritime law. Therefore, there is no need for a diversification of conflicts rules in this area. As exceptions to the application of lex loci delicti, closed and open escape clauses and the rule of party autonomy are acceptable in maritime torts as well. A closed escape clause already exists, especially for collisions where a common nationality or common ship nationality is presumed, but should be enlarged to include other presumptions already accepted in comparative law (common domicile, habitual residence, accessory choice). The question whether an open escape clause should be used to determine the law most closely connected with a dispute depends on the type of maritime non-contractual situation. Such situations differ in their liability regime and the relations between the interested parties.

223

The principle of the closest connection has been applied by Dutch courts in sea pollution cases, however, as a closed escape clause. Atlantic Steam Navigation v. Staat (Hof Den Haag, 12 February 1988), and Staat v. Gorthon Lines, Rb.(Hof Den Haag, 7 March 1990), see BETLEM G. (note 54), pp. 157-177.

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Maritime Torts Party autonomy, which has come to be accepted for torts in general, is recommended for maritime torts. If the parties have made a choice of law, this avoids eventual complications in respect of the applicable law and foreign law. Furthermore, the parties would be free to choose uniform maritime rules or rules of international maritime conventions, which, in view of the internationalism of maritime transactions, provide more suitable solutions than national laws. Vesna TOMLJENOVIĆ**

** Docent (Associate Professor) of Private International Law at the Faculty of Law of the University of Rijeka, Croatia.

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TEXTS, MATERIALS AND RECENT DEVELOPMENTS ________________

CONVENTION ON JURISDICTION AND THE RECOGNITION AND ENFORCEMENT OF JUDGMENTS IN MATRIMONIAL MATTERS ('BRUSSELS II CONVENTION') (drawn up on the basis of Article K.3 of the Treaty on European Union, published in Official Journal of the European Union, 16 July 1998, C 221) THE HIGH CONTRACTING PARTIES to this Convention, Member States of the European Union, REFERRING to the Council Act of 28 May 1998 drawing up, on the basis of Article K.3 of the Treaty on European Union, the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters, DESIROUS of laying down rules determining the jurisdiction of Member States' courts with regard to proceedings relating to divorce, legal separation and marriage annulment, AWARE of the importance of laying down rules of jurisdiction concerning parental responsibility over the children of both spouses on the occasion of proceedings to dissolve or loosen the marriage bond, WISHING to ensure simplification of the formalities governing the recognition and enforcement of such judgments in the European area, BEARING IN MIND the principles on which the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, signed in Brussels on 27 September 1968, is based, WHEREAS Article K.3(2)(c) of the Treaty on European Union provides that conventions drawn up on the basis of Article K.3 of that Treaty may stipulate that the Court of Justice of the European Communities shall have jurisdiction to interpret their provisions, in accordance with such arrangements as they may lay down, HAVE AGREED ON THE FOLLOWING PROVISIONS:

Texts, Materials and Recent Developments

TITLE I

SCOPE Article 1 1. This Convention shall apply to: (a) civil proceedings relating to divorce, legal separation or marriage annulment; (b) civil proceedings relating to parental responsibility for the children of both spouses on the occasion of the matrimonial proceedings referred to in (a). 2. Other proceedings officially recognised in a Member State shall be regarded as equivalent to judicial proceedings. The term 'court' shall cover all the authorities with jurisdiction in these matters in the Member States.

TITLE II JURISDICTION SECTION 1 GENERAL PROVISIONS Article 2 Divorce, legal separation and marriage annulment 1. In matters relating to divorce, legal separation or marriage annulment, jurisdiction shall lie with the courts of the Member State: (a) in whose territory: - the spouses are habitually resident, or - the spouses were last habitually resident, in so far as one of them still resides there, or - the respondent is habitually resident, or - in the event of a joint application, either of the spouses is habitually resident, or - the applicant is habitually resident if he or she resided there for at least a year immediately before the application was made, or - the applicant is habitually resident if he or she resided there for at least six months immediately before the application was made and is either a national of the Member State in question or is 'domiciled' there; b) of nationality of both spouses or of 'domicile of both spouses' established on a long-term settled basis. 2. Each Member State shall stipulate in a declaration made when giving the notification referred to in Article 47(2) whether it will be applying the criterion of nationality or of 'domicile' referred to in paragraph 1. 3. For the purpose of this Convention, 'domicile' shall have the same meaning as it has under the legal systems of the United Kingdom and Ireland.

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Brussels II Convention Article 3 Parental responsibility 1. The Courts of a Member State exercising jurisdiction by virtue of Article 2 on an application for divorce, legal separation or marriage annulment shall have jurisdiction in a matter relating to parental responsibility over a child of both spouses where the child is habitually resident in that Member State. 2. Where the child is not habitually resident in the Member State referred to in paragraph 1, the courts of that State shall have jurisdiction in such a matter if the child is habitually resident in one of the Member States and (a) at least one of the spouses has parental responsibility in relation to the child and, (b) the jurisdiction of the courts has been accepted by the spouses and is in the best interests of the child. 3. The jurisdiction conferred by paragraphs 1 and 2 shall cease as soon as: (a) the judgment allowing or refusing the application for divorce, legal separation or marriage annulment has become final, or (b) in those cases where proceedings in relation to parental responsibility are still pending on the date referred to in (a), a judgment in these proceedings has become final, or (c) the proceedings referred to in (a) and (b) have come to an end for another reason. Article 4 Child abduction The courts with jurisdiction within the meaning of Article 3 shall exercise their jurisdiction in conformity with the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction, and in particular Articles 3 and 16 thereof. Article 5 Counterclaim The court in which proceedings are pending on the basis of Articles 2 to 4 shall also have jurisdiction to examine a counterclaim, in so far as the latter comes within the scope of this Convention. Article 6 Conversion of legal separation into divorce Without prejudice to Article 2, a court of a Member State which has given a judgment on a legal separation shall also have jurisdiction for converting that judgment into a divorce, if the law of that Member State so provides.

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Texts, Materials and Recent Developments Article 7 Exclusive nature of jurisdiction under Articles 2 to 6 A spouse who: (a) is habitually resident in the territory of a Member State; or (b) is a national of a Member State or who has his or her 'domicile' in the territory of a Member State within the meaning of Article 2(2), may be sued in another Member State only in accordance with Articles 2 to 6. Article 8 Residual jurisdiction 1. Where no court of a Member State has jurisdiction pursuant to Articles 2 to 6, jurisdiction shall be determined, in each Member State, by the laws of that State. 2. As against a respondent who is not habitually resident and is not either a national or does not have his 'domicile' within the territory of a Member State within the meaning of Article 2(2), any national of a Member State who is habitually resident within the territory of another Member State may, like the nationals of that State, avail himself of the rules of jurisdiction applicable in that State. SECTION 2 EXAMINATION AS TO JURISDICTION AND ADMISSIBILITY Article 9 Examination as to jurisdiction Where a court of a Member State is seised of a case over which it has no jurisdiction under this Convention and over which a court of another Member State has jurisdiction by virtue of this Convention, it shall declare of its own motion that it has no jurisdiction. Article 10 Examination as to admissibility 1. Where a respondent does not enter an appearance, the court with jurisdiction shall stay the proceedings so long as it is not shown that the respondent has been able to receive the document instituting the proceedings or an equivalent document in sufficient time to enable him to arrange for his defence, or that all necessary steps have been taken to this end. 2. The provisions of Article 19 of the Convention of 26 May 1997 on the Service in the Member States of the European Union of Judicial and Extrajudicial Documents in Civil or Commercial Matters shall be applied instead of the provisions in paragraph 1 if the document instituting the proceedings had to be transmitted abroad in accordance with that Convention.

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Brussels II Convention SECTION 3 LIS PENDENS AND DEPENDENT ACTIONS Article 11 1. Where proceedings involving the same cause of action and between the same parties are brought before courts of different Member States, the court second seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. 2. Where proceedings for divorce, legal separation or marriage annulment not involving the same cause of action and between the same parties are brought before courts of different Member States, the court second seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. 3. Where the jurisdiction of the court first seised is established, the court second seised shall decline jurisdiction in favour of that court. In that case, the party who brought the relevant action before the court second seised may bring that action before the court first seised. SECTION 4 PROVISIONAL AND PROTECTIVE MEASURES Article 12 In urgent cases, the provisions of this Convention shall not prevent the courts of a Member State from taking such provisional, including protective, measures in respect of persons or assets in that State as may be available under the law of that Member State, even if, under this Convention, the court of another Member State has jurisdiction as to the substance of the matter.

TITLE III RECOGNITION AND ENFORCEMENT Article 13 Meaning of judgment 1. For the purposes of this Convention, 'judgment' means a divorce, legal separation or marriage annulment pronounced by a court of a Member State, as well as a judgment relating to the parental responsibility of the spouses given on the occasion of such matrimonial proceedings, whatever the judgment may be called, including a decree, order or decision. 2. The provisions of this Title shall also apply to the determination of the amount of costs and expenses of proceedings under this Convention and to the enforcement of any order concerning such costs and expenses. 3. For the purposes of implementing this Convention, documents which have been formally drawn up or registered as authentic instruments and are enforceable in 303

Texts, Materials and Recent Developments one Member State and also settlements which have been approved by a court in the course of proceedings and are enforceable in the Member State in which they were concluded shall be recognised and declared enforceable under the same conditions as the judgments referred to in paragraph 1. SECTION 1 RECOGNITION Article 14 Recognition of a judgment 1. A judgment given in a Member State shall be recognised in the other Member States without any special procedure being required. 2. In particular, and without prejudice to paragraph 3, no special procedure shall be required for up-dating the civil-status records of a Member State on the basis of a judgment relating to divorce, legal separation or marriage annulment given in another Member State, and against which no further appeal lies under the law of that Member State. 3. Any interested party may, in accordance with the procedures provided for in Sections 2 and 3 of this Title, apply for a decision that the judgment be or not be recognised. 4. Where the recognition of a judgment is raised as an incidental question in a court of a Member State, that court may determine that issue. Article 15 Grounds of non-recognition 1. A judgment relating to a divorce, legal separation or marriage annulment shall not be recognised: (a) if such recognition is manifestly contrary to the public policy of the Member State in which recognition is sought; (b) where it was given in default of appearance, if the respondent was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable the respondent to arrange for his or her defence unless it is determined that the respondent has accepted the judgment unequivocally; (c) if it is irreconcilable with a judgment given in proceedings between the same parties in the Member State in which recognition is sought; (d) if it is irreconcilable with an earlier judgment given in another Member State or in a non-Member State between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the Member State in which recognition is sought. 2. A judgment relating to the parental responsibility of the spouses given on the occasion of matrimonial proceedings as referred to in Article 13 shall not be recognised: 304

Brussels II Convention (a) if such recognition is manifestly contrary to the public policy of the Member State in which recognition is sought taking into account the best interests of the child; (b) if it was given, except in case of urgency, without the child having been given an opportunity to be heard, in violation of fundamental principles of procedure of the Member State in which recognition is sought; (c) where it was given in default of appearance, if the person in default was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable that person to arrange for his or her defence unless it is determined that such person has accepted the judgment unequivocally; (d) on the request of any person claiming that the judgment infringes his or her parental responsibility, if it was given without such person having been given an opportunity to be heard; (e) if it is irreconcilable with a later judgment relating to parental responsibility given in the Member State in which recognition is sought; or (f) if it is irreconcilable with a later judgment relating to parental responsibility given in another Member State or in the non-Member State of the habitual residence of the child provided that the later judgment fulfils the conditions necessary for its recognition in the Member State in which recognition is sought. Article 16 Non-recognition and findings of fact 1. Moreover, a judgment shall not be recognised in a case provided for in Article 43. 2. In its examination of the grounds of jurisdiction in the case referred to in paragraph 1, the court applied to shall be bound by the findings of fact on which the court of the Member State of origin based its jurisdiction. 3. Without prejudice to paragraph 1, the jurisdiction of the court of the Member State of origin may not be reviewed. The test of public policy referred to in Article 15(1)(a) and (2)(a) may not be applied to the rules relating to jurisdiction set out in Articles 2 to 8. Article 17 Differences in applicable law The recognition of a judgment relating to a divorce, legal separation or a marriage annulment may not be refused because the law of the Member State in which such recognition is sought would not allow divorce, legal separation or marriage annulment on the same facts. Article 18 Non-review as to substance Under no circumstances may a judgment be reviewed as to its substance.

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Texts, Materials and Recent Developments Article 19 Stay of proceedings 1. A court of a Member State in which recognition is sought of a judgment given in another Member State may stay the proceedings if an ordinary appeal against the judgment has been lodged. 2. A court of a Member State in which recognition is sought of a judgment given in Ireland or the United Kingdom may stay the proceedings if enforcement is suspended in the Member State of origin by reason of an appeal. SECTION 2 ENFORCEMENT Article 20 Enforceable judgments 1. A judgment on the exercise of parental responsibility in respect of a child of both parties given in a Member State and enforceable in that Member State shall be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there. 2. However, in the United Kingdom, such a judgment shall be enforced in England and Wales, in Scotland or in Northern Ireland when, on the application of any interested party, it has been registered for enforcement in that part of the United Kingdom. Article 21 Jurisdiction of local courts 1. The application shall be submitted: - in Belgium, to the 'Tribunal de première instance' or the 'Rechtbank van eerste aanleg' or the 'erstinstanzliche Gericht', - in Denmark, to the 'byret (fogedret)', - in the Federal Republic of Germany, to the 'Familiengericht', - in Greece, to the 'Μοζομελές Πρωτοδικείο', - in Spain, to the 'Juzgado de Primera Instancia', - in France, to the presiding Judge of the 'Tribunal de grande instance', - in Ireland, to the High Court, - in Italy, to the 'Corte d'apello', - in Luxembourg, to the presiding Judge of the 'Tribunal d'arrondissement', - in the Netherlands, to the presiding Judge of the 'arrondissementsrechtbank', - in Austria, to the 'Bezirksgericht', - in Portugal, to the 'Tribunal de Comarca' or 'Tribunal de Família', - in Finland, to the 'käräjäoikeus/tingsrätt', - in Sweden, to the 'Svea hovrätt', - in the United Kingdom, (a) in England and Wales, to the High Court of Justice; 306

Brussels II Convention (b) in Scotland, to the Court of Session; (c) in Northern Ireland, to the High Court of Justice. 2. (a) The jurisdiction of local courts in relation to an application for enforcement shall be determined by reference to the place of the habitual residence of the person against whom enforcement is sought or by reference to the place of habitual residence of any child to whom the application relates; (b) Where neither of the places referred to in (a) can be found in the Member State where enforcement is sought, the jurisdiction of local courts is determined by reference to the place of enforcement. 3. In relation to procedures referred to in Article 14(3), the jurisdiction of local courts shall be determined by the internal law of the Member State in which proceedings for recognition or non-recognition are brought. Article 22 Procedure for enforcement 1. The procedure for making the application shall be governed by the law of the Member State in which enforcement is sought. 2. The applicant must give an address for service within the area of jurisdiction of the court applied to. However, if the law of the Member State in which enforcement is sought does not provide for the furnishing of such an address, the applicant shall appoint a representative ad litem. 3. The documents referred to in Articles 33 and 34 shall be attached to the application. Article 23 Decision of the court 1. The court applied to shall give its decision without delay. The person against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application. 2. The application may be refused only for one of the reasons specified in Articles 15 and 16. 3. Under no circumstances may a judgment be reviewed as to its substance. Article 24 Notice of the decision The appropriate officer of the court shall without delay bring to the notice of the applicant the decision given on the application in accordance with the procedure laid down by the law of the Member State in which enforcement is sought. Article 25 Appeal against the enforcement decision 1. If enforcement is authorised, the person against whom enforcement is sought may appeal against the decision within one month of service thereof. 307

Texts, Materials and Recent Developments 2. If that person is habitually resident in a Member State other than that in which the decision authorising enforcement was given, the time for appealing shall be two months and shall run from the date of service, either on him or at his residence. No extension of time may be granted on account of distance. Article 26 Courts of appeal and means of contest 1. An appeal against the judgment authorising enforcement shall be lodged, in accordance with the rules governing procedure in contradictory matters: - in Belgium, with the 'Tribunal de première instance' or the 'Rechtbank van eerste aanleg' or the 'erstinstanzliche Gericht', - in Denmark, with the 'landsret', - in the Federal Republic of Germany, with the 'Oberlandesgericht', - in Greece, with the 'Εφετείο', - in Spain, with the 'Audiencia Provincial', - in France, with the 'Cour d'appel', - in Ireland, with the High Court, - in Italy, with the 'Corte d'appello', - in Luxembourg, with the 'Cour d'appel', - in the Netherlands, with the 'arrondissementsrechtbank', - in Austria, with the 'Bezirksgericht', - in Portugal, with the 'Tribunal da Relação', - in Finland, with the 'Hovioikeus/Hovrätt', - in Sweden, with the 'Svea hovrätt', - in the United Kingdom, (a) in England and Wales, with the High Court of Justice; (b) in Scotland, with the Court of Session; (c) in Northern Ireland, with the High Court of Justice. 2. The judgment given on appeal may be contested only: - in Belgium, Greece, Spain, France, Italy, Luxembourg and in the Netherlands by an appeal in cassation, - in Denmark, by an appeal to the 'Højesteret', with leave of the 'Procesbevillingsnævnet', - in the Federal Republic of Germany, by a 'Rechtsbeschwerde', - in Ireland, by an appeal on a point of law to the Supreme Court, - in Austria, by a 'Revisionsrekurs', - in Portugal, by a 'recurso restrito à matéria de direito', - in Finland, by an appeal to 'Korkein oikeus/högsta domstolen', - in Sweden, by an appeal to the 'Högsta domstolen', - in the United Kingdom, by a single further appeal on a point of law.

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Brussels II Convention Article 27 Stay of proceedings 1. The court with which the appeal is lodged may, on the application of the appellant, stay the proceedings if an ordinary appeal has been lodged against the judgment in the Member State of origin or if the time for such appeal has not yet expired. In the latter case, the court may specify the time within which an appeal is to be lodged. 2. Where the judgment was given in Ireland or the United Kingdom, any form of appeal available in the Member State of origin shall be treated as an ordinary appeal for the purposes of paragraph 1. Article 28 Court of appeal against a judgment refusing enforcement 1. If the application for enforcement is refused, the applicant may appeal: - in Belgium, to the 'Cour d'appel' or the 'hof van beroep', - in Denmark, to the 'Landsret', - in the Federal Republic of Germany, to the 'Oberlandesgericht', - in Greece, to the 'Εφετείο', - in Spain, to the 'Audiencia Provincial', - in France, to the 'Cour d'appel', - in Ireland, to the High Court, - in Italy, to the 'Corte d'appello', - in Luxembourg, to the 'Cour d'appel', - in the Netherlands, to the 'gerechtshof', - in Austria, to the 'Bezirksgericht', - in Portugal, to the 'Tribunal da Relação', - in Finland, to 'Hovioikeus/Hovrätten', - in Sweden, to the 'Svea hovrätt', - in the United Kingdom, (a) in England and Wales, to the High Court of Justice; (b) in Scotland, to the Court of Session; (c) in Northern Ireland, to the High Court of Justice. 2. The person against whom enforcement is sought shall be summoned to appear before the appellate court. If such person fails to appear, the provisions of Article 10 shall apply. Article 29 Contest of the appeal decision A judgment given on appeal provided for in Article 28 may be contested only: - in Belgium, Greece, Spain, France, Italy, Luxembourg and in the Netherlands, by an appeal in cassation, - in Denmark, by an appeal to the 'Højesteret' with leave of the 'Procesbevillingsnævnet', 309

Texts, Materials and Recent Developments - in the Federal Republic of Germany, by a 'Rechtsbeschwerde', - in Ireland, by an appeal on a point of law to the Supreme Court, - in Austria, by a 'Revisionsrekurs', - in Portugal, by a 'recurso restrito à matéria de direito', - in Finland, by an appeal to the 'Korkein oikeus/högsta domstolen', - in Sweden, by an appeal to the 'Högsta Domstolen', - in the United Kingdom, by a single further appeal on a point of law. Article 30 Partial enforcement 1. Where a judgment has been given in respect of several matters and enforcement cannot be authorised for all of them, the court shall authorise enforcement for one or more of them. 2. An applicant may request partial enforcement of a judgment. Article 31 Legal aid 1. An applicant who, in the Member State of origin, has benefited from complete or partial legal aid or exemption from costs or expenses shall be entitled, in the procedures provided for in Articles 21 to 24, to benefit from the most favourable legal aid or the most extensive exemption from costs and expenses provided for by the law of the Member State addressed. 2. An applicant who requests the enforcement of a judgment given by an administrative authority in Denmark may, in the Member State addressed, be eligible for the provisions of paragraph 1 if he presents a statement from the Danish Ministry of Justice to the effect that he fulfils the economic requirements to qualify for the grant of complete or partial legal aid or exemption from costs or expenses. Article 32 Security, bond or deposit No security, bond or deposit, however described, shall be required of a party who in one Member State applies for enforcement of a judgment given in another Member State on the ground that he or she is a foreign national or that he or she is not 'domiciled' or habitually resident in the Member State in which enforcement is sought.

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Brussels II Convention SECTION 3 COMMON PROVISIONS Article 33 Documents 1. A party seeking or contesting recognition or applying for enforcement of a judgment shall produce: (a) a copy of the judgment which satisfies the conditions necessary to establish its authenticity; (b) where appropriate, a document showing that the applicant is in receipt of legal aid in the Member State of origin. 2. In addition, in the case of a judgment given in default, the party seeking recognition or applying for enforcement shall produce: (a) the original or certified true copy of the document which establishes that the defaulting party was served with the document instituting the proceedings or with an equivalent document; or (b) any document indicating that the defendant has accepted the judgment unequivocally. 3. A person requiring the updating of the civil-status records of a Member State, as referred to in Article 14(2), shall also produce a document indicating that the judgment is no longer subject to a further appeal under the law of the Member State where the judgment was given. Article 34 Other documents A party applying for enforcement shall also produce documents of whatever nature which establish that, according to the law of the Member State of origin, the judgment is enforceable and has been served. Article 35 Absence of documents 1. If the documents specified in Article 33(1)(b) or (2) are not produced, the court may specify a time for their production, accept equivalent documents or, if it considers that it has sufficient information before it, dispense with their production. 2. If the Court so requires, a translation of such documents shall be furnished. The translation shall be certified by a person qualified to do so in one of the Member States.

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Texts, Materials and Recent Developments Article 36 Legalisation or other similar formality No legalisation or other similar formality shall be required in respect of the documents referred to in Articles 33, 34 and 35(2) or in respect of a document appointing a representative ad litem.

TITLE IV TRANSITIONAL PROVISIONS Article 37 1. The provisions of this Convention shall apply only to legal proceedings instituted, to documents formally drawn up or registered as authentic instruments and to settlements which have been approved by a court in the course of proceedings after its entry into force in the Member State of origin and, where recognition or enforcement of a judgment or authentic instruments is sought, in the Member State addressed. 2. However, judgments given after the date of entry into force of this Convention between the Member State of origin and the Member State addressed in proceedings instituted before that date shall be recognised and enforced in accordance with the provisions of Title III if jurisdiction was founded on rules which accorded with those provided for either in Title II of this Convention or in a convention concluded between the Member State of origin and the Member State addressed which was in force when the proceedings were instituted.

TITLE V GENERAL PROVISIONS Article 38 Relation with other Conventions 1. Subject to the provisions of Articles 37, 40 and paragraph 2 of this Article, this Convention shall, for the Member States which are parties to it, supersede conventions existing at the time of entry into force of this Convention which have been concluded between two or more Member States and relate to matters governed by this Convention. 2. (a) At the time of the notification referred to in Article 47, Denmark, Finland and Sweden shall have the option of declaring that the Convention of 6 February 1931 between Denmark, Finland, Iceland, Norway and Sweden comprising international private law provisions on marriage, adoption and guardianship, together with the Final Protocol thereto, will apply, in whole or in part, in their mutual relations, in place of the rules of this Convention. This declaration may be withdrawn, in whole or in part, at any moment; 312

Brussels II Convention (b) the principle of non-discrimination on the grounds of nationality between citizens of the Union shall be respected and monitored by the Court of Justice, in accordance with the procedures laid down in the Protocol on the interpretation by the Court of Justice of this Convention; (c) the rules of jurisdiction in any future Agreement to be concluded between the Member States referred to in (a) and which relate to matters governed by this Convention shall be in line with those laid down in this Convention; (d) judgments handed down in any of the Nordic States which have made the declaration provided for in (a) under a forum of jurisdiction corresponding to one of those laid down in Title II of this Convention, shall be recognised and enforced in the other Member States under the rules laid down in Title III thereof. 3. After entry into force of this Convention, Member States may not conclude or apply agreements between themselves except in order to supplement the provisions of the Convention or to facilitate application of the principles contained therein. 4. Member States shall send to the depositary of this Convention: (a) a copy of the agreements and uniform laws implementing these agreements referred to in paragraphs 2(a) and (c) and 3; (b) any denunciations of, or amendments to, those agreements or uniform laws. Article 39 Relation with certain multilateral conventions In relations between the Member States which are parties to it, this Convention shall take precedence over the following Conventions in so far as they concern matters governed by this Convention: - the Hague Convention of 5 October 1961 concerning the Powers of Authorities and the Law Applicable in respect of the Protection of Minors, - the Luxembourg Convention of 8 September 1967 on the Recognition of Decisions Relating to the Validity of Marriages, - the Hague Convention of 1 June 1970 on the Recognition of Divorces and Legal Separations, - the European Convention of 20 May 1980 on Recognition and Enforcement of Decisions concerning Custody of Children and on Restoration of Custody of Children, - the Hague Convention of 19 October 1996 on Jurisdiction, Applicable law, Recognition, Enforcement and Cooperation in Respect of Parental Responsibility and Measures for the Protection of Children, provided that the child concerned is habitually resident in a Member State. Article 40 Extent of effects 1. The agreements and conventions referred to in Articles 38 and 39 shall continue to have effect in relation to matters to which this Convention does not apply. 313

Texts, Materials and Recent Developments 2. They shall continue to have effect in respect of judgments given and documents formally drawn up or registered as authentic before the entry into force of this Convention. Article 41 Agreements between Member States Without prejudice to the grounds for non-recognition provided for in Title III, judgments given pursuant to the agreements referred to in Article 38(3) shall be recognised and enforced in Member States which are not parties to those agreements provided that those judgments were given in a forum consistent with a forum provided for in Title II. Article 42 Treaties with the Holy See 1. This Convention shall apply without prejudice to the International Treaty (Concordat) between The Holy See and the Portuguese Republic, signed at Vatican City on 7 May 1940. 2. Any decision as to the invalidity of a marriage taken under the Treaty referred to in paragraph 1 shall be recognised in the Member States on the conditions laid down in Title III of this Convention. 3. The provisions laid down in paragraphs 1 and 2 shall also apply to the following International Treaties (Concordats) with the Holy See: - Concordato lateranense of 11 February 1929 between the Italian Republic and the Holy See, modified by the agreement, with additional Protocol signed in Rome on 18 February 1984, - Agreement between the Holy See and the Spanish State on legal affairs of 3 January 1979. 4. Member States shall send to the depositary of this Convention: (a) a copy of the Treaties referred to in paragraphs 1 and 3; (b) any denunciations of or amendments to those Treaties. Article 43 Non-recognition and non-enforcement of judgments based on Article 8 This Convention shall not prevent a Member State from assuming, in a convention on the recognition and enforcement of judgments, an obligation towards a nonMember State not to recognise a judgment given in another Member State where, in cases provided for in Article 8, the judgment could only be founded on grounds of jurisdiction other than those specified in Articles 2 to 7. Article 44 Member States with two or more legal systems

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Brussels II Convention With regard to a Member State in which two or more systems of law or sets of rules concerning matters governed by this Convention apply in different territorial units: (a) any reference to habitual residence in that Member State shall refer to habitual residence in a territorial unit; (b) any reference to nationality shall refer to the territorial unit designated by the law of that State; (c) any reference to the authority of a Member State having received an application for divorce or legal separation or for marriage annulment shall refer to the authority of a territorial unit which has received such an application; (d) any reference to the rules of the requested Member State shall refer to the rules of the territorial unit in which jurisdiction, recognition or enforcement is invoked.

TITLE VI COURT OF JUSTICE Article 45 The Court of Justice of the European Communities shall have jurisdiction to give rulings on the interpretation of this Convention, in accordance with the provisions of the Protocol drawn up by the Council Act of 28 May 1998.

TITLE VII FINAL PROVISIONS Article 46 Declarations and reservations 1. Without prejudice to Article 38(2) and 42, this Convention may not be subject to any reservation. 2. Notwithstanding paragraph 1, this Convention shall operate subject to the declarations made by Ireland and Italy annexed to this Convention. 3. The Member State concerned may at any moment withdraw such a declaration in whole or in part. Any such declaration shall cease to have effect 90 days after the notification to the depositary of the withdrawal. Article 47 Adoption and entry into force 1. This Convention shall be subject to adoption by the Member States in accordance with their respective constitutional rules. 2. Member States shall notify the depositary of the completion of the constitutional rules for the adoption of this Convention. 3. This Convention and any amendment to it referred to in Article 49(2) shall enter into force 90 days after the notification referred to in paragraph 2 by the State 315

Texts, Materials and Recent Developments which, being a member of the European Union at the time the Council adopts the Act drawing up this Convention, is the last to complete that formality. 4. Until this Convention enters into force, any Member State, may, when giving the notification referred to in paragraph 2 or at any later date, declare that as far as it is concerned the Convention, with the exception of Article 45, shall apply to its relations with Member States that have made the same declaration. Such declarations shall apply 90 days after the date of deposit. Article 48 Accession 1. This Convention shall be open to accession by any State that becomes a member of the European Union. 2. The text of this Convention in the language or languages of the acceding Member State, as drawn up by the Council, shall be authentic. 3. The instruments of accession shall be deposited with the depositary. 4. This Convention shall enter into force with respect to any Member State that accedes to it 90 days after the deposit of its instrument of accession or on the date of entry into force of the Convention if it has not already entered into force at the time of expiry of the said period of 90 days. 5. Where this Convention is not in force at the time of the deposit of their instrument of accession, Article 47(4) shall apply to acceding Member States. Article 49 Amendments 1. Amendments to this Convention may be proposed by any Member State or by the Commission. Any proposal for amendment shall be forwarded to the depositary, who shall communicate it to the Council. 2. Amendments shall be drawn up by the Council, which shall recommend their adoption by the Member States in accordance with their respective constitutional rules. Amendments thus adopted shall enter into force in accordance with Article 47(3). 3. However, at the request of the Member State concerned, the naming of the courts or means of appeal referred to in Articles 21(1), 26(1) and (2), 28(1) and 29 may be amended by decision of the Council. Article 50 Depositary and publication 1. The Secretary-General of the Council shall act as depositary of this Convention. 2. The depositary shall publish in the Official Journal of the European Communities: (a) the adoptions and accessions; (b) the date on which the Convention enters into force;

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Brussels II Convention (c) declarations referred to in Articles 2(2), 38(2), 46, 47(4) and 48(5), as well as the modifications or withdrawals of such declarations; (d) amendments to this Convention referred to in Article 49(2) and (3). In witness whereof, the undersigned Plenipotentiaries have signed this Convention […] DECLARATION BY IRELAND, TO BE ANNEXED TO THE CONVENTION Notwithstanding the provisions of this Convention, Ireland may maintain the jurisdiction which it has to refuse to recognise a divorce obtained in another Member State where that divorce has been obtained as a result of the party, or parties, deliberately misleading a court of the State in question in relation to its jurisdictional requirements such that recognition of the divorce would not be compatible with the Constitution of Ireland. This declaration will apply for a period of five years. It will be renewable every five years. DECLARATION, TO BE ANNEXED TO THE CONVENTION BY ANY OF THE NORDIC MEMBER STATES ENTITLED TO MAKE A DECLARATION WITHIN THE MEANING OF ARTICLE 38(2) The application of the Convention of 6 February 1931 between Denmark, Finland, Iceland, Norway and Sweden comprising international private law provisions on marriage, adoption and guardianship, together with the Final Protocol thereto, is in line with Article K.7 of the Treaty in that the Convention does not prevent the establishment of closer cooperation between two or more Member States in so far as such cooperation does not conflict with, or impede, that provided for in the Convention. They undertake no longer to apply Article 7(2) of the 1931 Nordic Agreement in their mutual relations and to review at an early date the rules of jurisdiction applicable in the framework of that Agreement in the light of the principle set out in Article 38(2)(b) of the Convention. The grounds for refusal used in the context of the uniform laws are in practice applied in a manner consistent with those laid down in Title III of this Convention. DECLARATION BY THE ITALIAN DELEGATION, TO BE ANNEXED TO THE CONVENTION With regard to Article 42 of the Convention, Italy reserves the right, in respect of judgments by Portuguese ecclesiastical courts, to adopt the procedures and carry out the checks provided for in its own legal system in respect of similar judgments by ecclesiastical courts, on the basis of the agreements it has concluded with the Holy See. 317

Texts, Materials and Recent Developments DECLARATION ANNEXED TO THE MINUTES OF THE COUNCIL, ADOPTED DURING THE JUSTICE AND HOME AFFAIRS COUNCIL ON 28 AND 29 MAY 1998 WHEN DRAWING UP THE CONVENTION ON JURISDICTION AND THE RECOGNITION AND ENFORCEMENT OF JUDGMENTS IN MATRIMONIAL MATTERS (98/C 221/02) The Council, conscious of the adverse effect which the length of proceedings on requests before the Court of Justice of the European Communities might have in the field of family law, stresses the need for an examination as soon as possible of possible ways of reducing the length of such proceedings; the Council proposes that this examination be carried out by the Competent body within the Council, together with the Court of Justice.

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PROTOCOL ON THE INTERPRETATION BY THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES OF THE CONVENTION ON JURISDICTION AND THE RECOGNITION AND ENFORCEMENT OF JUDGMENTS IN MATRIMONIAL MATTERS (drawn up on the basis of Article K.3 of the Treaty on European Union, published in Official Journal of the European Union, 16 July 1998, C 221) THE HIGH CONTRACTING PARTIES to this Protocol, Member States of the European Union, REFERRING to the Council Act of 28 May 1998 drawing up, on the basis of Article K.3 of the Treaty on European Union, the Protocol on the Interpretation by the Court of Justice of the European Communities of the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters, REFERRING to Article 45 of the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters, which provides that the Court of Justice of the European Communities shall have jurisdiction to give rulings on the interpretation of that Convention and this Protocol, WISHING to regulate the conditions under which the Court of Justice of the European Communities shall have jurisdiction to give rulings on questions of interpretation of the Convention and this Protocol, HAVE AGREED UPON THE FOLLOWING PROVISIONS: Article 1 In accordance with Article 45 of the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters, hereinafter referred to as 'the Convention', the Court of Justice of the European Communities shall have jurisdiction, under the conditions laid down in this Protocol, to give rulings on the interpretation of the Convention and this Protocol. Article 2 1. At the time of the notification referred to in Article 9(2), each Member State shall indicate which courts may request the Court of Justice to give preliminary rulings on questions of interpretation. 2. The courts to which this right may be granted shall be either: a) the highest courts of Member States listed in Article 3, or b) the highest courts listed in Article 3 and the other courts of the Member States where they are sitting in an appellate capacity.

Texts, Materials and Recent Developments Article 3 1. For the purposes of applying this Protocol, the highest courts of Member States are those listed below: - in Belgium: the 'Cour de Cassation' or the 'Hof van Cassatie' and the 'Conseil d'Etat' or the 'Raad van State', - in Denmark: the 'Højesteret', - in Germany: the 'Obersten Gerichtshöfe des Bundes', - in Greece: 'Аνωτατο Ειδικο Δικαστηριο', 'Аρειος Πογος', 'Σζμβοζλιο Επικρατειας', 'Ελεγκτικο Σζνεδριο', - in Spain: the 'Tribunal Supremo', - in France: the 'Cour de Cassation' and the 'Conseil d'Etat', - in Ireland: the Supreme Court, - in Italy: the 'Corte Suprema di Cassazione', - in Luxembourg: the 'Cour supérieure de justice' sitting as a Cassation Court, - in the Netherlands: the 'Hoge Raad', - in Austria: the 'Oberste Gerichtshof', the 'Verwaltungsgerichtshof' and the 'Verfassungsgerichtshof', - in Portugal: the 'Supremo Tribunal de Justiça', - in Finland: 'korkein oikeus/högsta domstolen' and 'korkein hallinto-oikeus/högsta förvaltningsdomstolen', - in Sweden: 'Högsta domstolen and Regerings´rtten', - in the United Kingdom: the Judicial Committee of the House of Lords. 2. At the request of the Member State concerned, the list of Member States' highest courts referred to in paragraph 1 may be amended by a decision of the Council. Article 4 1. Where a question of interpretation is raised in a case pending before one of the highest courts listed in Article 3(1), that court shall, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon. 2. Where such a question is raised before a court sitting in an appellate capacity, that court may, under the conditions laid down in paragraph 1, request the Court of Justice to give a ruling thereon. Article 5 The Council, the Commission and the Member States shall have the right to submit to the Court statements of cases or written observations in cases brought before it under Article 1.

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Protocol on the Interpretation of the Brussels II Convention Article 6 1. The competent authority of a Member State may request the Court of Justice to give a ruling on a question of interpretation if judgments given by courts of that State conflict with the interpretation given either by the Court of Justice or in a judgment of one of the courts of another Member State referred to in Article 2, if that Member State is a Party to this Protocol. The provisions of this paragraph shall apply only to judgments which have become res judicata. 2. The interpretation given by the Court of Justice in response to such a request shall not affect the judgments which gave rise to the request for interpretation. 3. The Procurators-General of the Courts of Cassation of the Member States, or any other authority designated by a Member State, shall be entitled to request the Court of Justice for a ruling on interpretation in accordance with paragraph 1. 4. The Registrar of the Court of Justice shall give notice of the request to the Member States, to the Commission and to the Council. They shall then be entitled within two months of the notification to submit statements of case or written observations to the Court. 5. No fees shall be levied or any costs or expenses awarded in respect of the proceedings provided for in this Article. Article 7 The Protocol on the Statute of the Court of Justice of the European Community and the Rules of Procedure of that Court shall apply. Article 8 This Protocol may not be subject to any reservation. Article 9 1. This Protocol shall be subject to adoption by the Member States in accordance with their respective constitutional rules. 2. Member States shall notify the depositary of the completion of their respective constitutional requirements for the adoption of this Protocol. 3. This Protocol shall enter into force 90 days after the notification referred to in paragraph 2 by the third State which, being a member of the European Union at the time the Council adopts the act drawing up this Protocol, completes that formality. However, it shall at the earliest enter into force at the same time as the Convention.

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Texts, Materials and Recent Developments Article 10 1. This Protocol shall be open to accession by any State that becomes a member of the European Union. 2. Instruments of accession shall be deposited with the depositary. 3. When depositing its instruments of accession, the acceding Member State shall indicate in a declaration: a) the conditions for the application of Article 2 with respect to it; b) which of its highest Courts has, or shall have, the right to ask the Court of Justice to give preliminary rulings on questions of interpretation in accordance with Article 3(1). 4. Before the date on which this Protocol enters into force in respect of the acceding Member State, the Council shall adopt, in accordance with Article 3(2), amendments to the list of highest Courts in Article 3(1). 5. The text of this Protocol in the language or languages of the acceding Member State, as drawn up by the Council, shall be authentic. 6. This Protocol shall enter into force with respect to any Member State that accedes to it 90 days after the date of deposit of its instrument of accession or on the date of entry into force of this Protocol if it has not already entered into force at the time of expiry of the said period of 90 days. Article 11 1. Without prejudice to Article 3(2) and Article 10(4), amendments to this Protocol may be proposed by any Member State party to this Protocol or by the Commission. Any proposal for an amendment shall be sent to the depositary, who shall forward it to the Council. 2. Amendments shall be drawn up by the Council, which shall recommend that they be adopted by the Member States in accordance with their respective constitutional rules. 3. Amendments thus adopted shall enter into force in accordance with the provisions of Article 9. Article 12 1. The Secretary-General of the Council shall act as depositary of this Protocol. 2. The depositary shall publish in the Official Journal of the European Communities the notifications, instruments or communications concerning this Protocol. In witness whereof, the undersigned Plenipotentiaries have signed this Protocol […]

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PROPOSAL FOR A COUNCIL REGULATION (EC) ON JURISDICTION AND THE RECOGNITION AND ENFORCEMENT OF JUDGMENTS IN MATRIMONIAL MATTERS AND IN MATTERS OF PARENTAL RESPONSIBILITY FOR JOINT CHILDREN (presented by the Commission on 4 May 1999, COM/99/0220 final - CNS 99/0110) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular point (c) of Article 61 thereof, Having regard to the proposal from the Commission […], Having regard to the Opinion of the European Parliament […], (Having regard to the Opinion of the Economic and Social Committee […], (1) Whereas the Member States have set themselves the objective of maintaining and developing the Union as an area of freedom, security and justice, in which the free movement of persons is assured; whereas to establish such an area the Community is to adopt, among others, the measures relating to judicial cooperation in civil matters needed for the sound operation of the internal market; (2) Whereas the sound operation of the internal market entails the need to improve and expedite the free movement of judgments in civil matters; (3) Whereas this is a subject now falling within the ambit of Article 65 of the Treaty; (4) Whereas differences between national rules governing jurisdiction and enforcement hamper the free movement of persons and the sound operation of the internal market; whereas there are accordingly grounds for enacting provisions to unify the rules of conflict of jurisdiction in matrimonial matters and in matters of parental responsibility so as to simplify the formalities for rapid and automatic recognition and enforcement of judgments; (5) Whereas, in accordance with the principles of subsidiarity and proportionality as set out in Article 5 of the Treaty, the objectives of this Regulation cannot be sufficiently achieved by the Member States and can therefore be better achieved by the Community; whereas this Regulation confines itself to the minimum required in order to achieve those objectives and does not go beyond what is necessary for that purpose; (6) Whereas the Council, by Act dated 28 May 1998 (OJ C 221, 16.7.1998, p. 1), concluded a Convention on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and recommended it for adoption by the Member States in accordance with their respective constitutional requirements; whereas continuity in the results of the negotiations for conclusion of the Convention should be ensured; whereas the content of this Regulation is substantially taken over from it; (7) Whereas, in order to attain the objective of free movement of judgments in matrimonial matters and in matters of parental responsibility within the Community, it is necessary and appropriate that the cross-border recognition of

Texts, Materials and Recent Developments jurisdiction and judgments in relation to the dissolution of matrimonial ties and to responsibility for the children of both spouses be governed by a mandatory, and directly applicable, Community legal instrument; (8) Whereas the scope of this Regulation should include civil proceedings and other non-judicial proceedings occurring in matrimonial matters in certain States, and excludes purely religious procedures; whereas it should therefore be provided that the reference to 'courts' includes all the authorities, judicial or otherwise, with jurisdiction in matrimonial matters; (9) Whereas this Regulation should be confined to proceedings relating to the dissolution or annulment of matrimonial ties as such; whereas the recognition of divorce and annulment rulings affects only the dissolution of matrimonial ties; whereas, despite the fact that they may be interrelated, the Regulation does not affect issues such as the fault of the spouses, property consequences of the marriage, the maintenance obligation or any other ancillary measures; (10) Whereas the Regulation covers parental responsibility issues that are closely linked to proceedings for divorce, separation or annulment; whereas the concept of 'parental responsibility' has to be defined by the legal system of the Member State in which responsibility is under consideration, but it will apply only to children of both spouses; (11) Whereas the grounds for jurisdiction accepted in this Regulation are based on the rule that there must be a real link between the party concerned and the Member State exercising jurisdiction; whereas the decision to include certain grounds corresponds to the fact that they exist in different national legal systems and are accepted by the other Member States; (12) Whereas one of the risks to be considered in relation to the protection of the children of both spouses in a marital crisis is that one of the parents will move the child internationally; whereas the lawful habitual residence is accordingly maintained as the criterion for jurisdiction in cases where, because the child has been moved or has not been returned without lawful reason, there has been a de facto change in the habitual residence; (13) Whereas the word 'judgment' refers only to positive decisions, that is to say those that lead to divorce, legal separation or marriage annulment; whereas those documents which have been formally drawn up or registered as authentic instruments and are enforceable in one Member State are treated as equivalent to such 'judgments'; (14) Whereas the recognition and enforcement of judgments given in a Member State are based on the principle of mutual trust; whereas the grounds for nonrecognition are kept to the minimum required; whereas, nonetheless, means of redress should be available in order to ensure observance of public policy in the State addressed and to safeguard the rights of the defence and those of the parties, so as to withhold recognition of irreconcilable judgments; (15) Whereas the State addressed should review neither the jurisdiction of the State of origin nor the findings of fact;

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Proposal for a Council Regulation (16) Whereas no procedures may be required for the updating of civil-status documents in one Member State where a final judgment has been given in another Member State; (17) Whereas the Convention concluded by the Nordic States in 1931 should be capable of application within the limits set by this Regulation; (18) Whereas Spain, Italy and Portugal had concluded Concordats before these matters were brought within the ambit of the Treaty; whereas it is necessary to ensure that these States do not breach their international commitments in relation to the Holy See; (19) Whereas the Member States should remain free to agree among themselves on practical measures for the application of the Regulation so long as no Community measures have been taken to that end; (20) Whereas the Council reserves the power to decide on changes to the list of courts enjoying jurisdiction, at the request of the relevant Member State; (21) Whereas, no later than five years after the date of the entry into force of this Regulation, the Commission must review its application and propose such amendments as may appear necessary; (22) Whereas, in accordance with Articles 1 and 2 of the Protocols on the position of the United Kingdom and Ireland and on the position of Denmark, those Member States are not participating in the adoption of this Regulation; whereas this Regulation is accordingly not binding on the United Kingdom, Ireland or Denmark, nor is it applicable in their regard, HAS ADOPTED THIS REGULATION:

CHAPTER I SCOPE Article 1 1. This Regulation shall apply to: (a) civil proceedings relating to divorce, legal separation or marriage annulment; (b) civil proceedings relating to parental responsibility for the children of both spouses on the occasion of the matrimonial proceedings referred to in (a). 2. Other proceedings officially recognised in a Member State shall be regarded as equivalent to judicial proceedings. The term 'court' shall cover all the authorities with jurisdiction in these matters in the Member States.

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CHAPTER II JURISDICTION SECTION 1 GENERAL PROVISIONS Article 2 Divorce, legal separation and marriage annulment In matters relating to divorce, legal separation or marriage annulment, jurisdiction shall lie with the courts of the Member State: (a) in whose territory: - the spouses are habitually resident, or - the spouses were last habitually resident, in so far as one of them still resides there, or - the respondent is habitually resident, or - in the event of a joint application, either of the spouses is habitually resident, or - the applicant is habitually resident if he or she resided there for at least a year immediately before the application was made, or - the applicant is habitually resident if he or she resided there for at least six months immediately before the application was made and is a national of the Member State in question; (b) of nationality of both spouses. Article 3 Parental responsibility 1. The Courts of a Member State exercising jurisdiction by virtue of Article 2 on an application for divorce, legal separation or marriage annulment shall have jurisdiction in a matter relating to parental responsibility over a child of both spouses where the child is habitually resident in that Member State. 2. Where the child is not habitually resident in the Member State referred to in paragraph 1, the courts of that State shall have jurisdiction in such a matter if the child is habitually resident in one of the Member States and: (a) at least one of the spouses has parental responsibility in relation to the child, and (b) the jurisdiction of the courts has been accepted by the spouses and is in the best interests of the child. 3. The jurisdiction conferred by paragraphs 1 and 2 shall cease as soon as: (a) the judgment allowing or refusing the application for divorce, legal separation or marriage annulment has become final, or

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Proposal for a Council Regulation (b) in those cases where proceedings in relation to parental responsibility are still pending on the date referred to in (a), a judgment in these proceedings has become final, or (c) the proceedings referred to in (a) and (b) have come to an end for another reason. Article 4 Child abduction The courts with jurisdiction within the meaning of Article 3 shall exercise their jurisdiction in conformity with the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction, and in particular Articles 3 and 16 thereof. Article 5 Counterclaim The court in which proceedings are pending on the basis of Articles 2 to 4 shall also have jurisdiction to examine a counterclaim, in so far as the latter comes within the scope of this Regulation. Article 6 Conversion of legal separation into divorce Without prejudice to Article 2, a court of a Member State which has given a judgment on a legal separation shall also have jurisdiction for converting that judgment into a divorce, if the law of that Member State so provides. Article 7 Exclusive nature of jurisdiction under Articles 2 to 6 A spouse who: (a) is habitually resident in the territory of a Member State; or (b) is a national of a Member State, may be sued in another Member State only in accordance with Articles 2 to 6. Article 8 Residual jurisdiction 1. Where no court of a Member State has jurisdiction pursuant to Articles 2 to 6, jurisdiction shall be determined, in each Member State, by the laws of that State. 2. As against a respondent who is not habitually resident and is not a national of a Member State, any national of a Member State who is habitually resident within the territory of another Member State may, like the nationals of that State, avail himself of the rules of jurisdiction applicable in that State.

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Texts, Materials and Recent Developments SECTION 2 EXAMINATION AS TO JURISDICTION AND ADMISSIBILITY Article 9 Examination as to jurisdiction Where a court of a Member State is seised of a case over which it has no jurisdiction under this Regulation and over which a court of another Member State has jurisdiction by virtue of this Regulation, it shall declare of its own motion that it has no jurisdiction. Article 10 Examination as to admissibility 1. Where a respondent does not enter an appearance, the court with jurisdiction shall stay the proceedings so long as it is not shown that the respondent has been able to receive the document instituting the proceedings or an equivalent document in sufficient time to enable him to arrange for his defence, or that all necessary steps have been taken to this end. 2. The national provisions transposing Council Directive …/EC of .... 19.. on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (34) shall apply in lieu of the provisions of paragraph 1 if the document commencing the action has had to be transmitted abroad pursuant to that Directive. (34) OJ L Until the national provisions transposing that Directive enter into force, the provisions of the Convention of the Hague of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters shall apply if the document commencing the action has had to be transmitted abroad pursuant to that Convention. SECTION 3 LIS PENDENS AND DEPENDENT ACTIONS Article 11 1. Where proceedings involving the same cause of action and between the same parties are brought before courts of different Member States, the court second seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. 2. Where proceedings involving the same cause of action and between the same parties are brought before courts of different Member States, the court second seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

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Proposal for a Council Regulation 3. Where the jurisdiction of the court first seised is established, the court second seised shall decline jurisdiction in favour of that court. In that case, the party who brought the relevant action before the court second seised may bring that action before the court first seised.

SECTION 4 PROVISIONAL AND PROTECTIVE MEASURES Article 12 In urgent cases, the provisions of this Regulation shall not prevent the courts of a Member State from taking such provisional, including protective, measures in respect of persons or assets in that State as may be available under the law of that Member State, even if, under this Regulation, the court of another Member State has jurisdiction as to the substance of the matter.

CHAPTER III RECOGNITION AND ENFORCEMENT Article 13 Meaning of "judgment" 1. For the purposes of this Regulation, 'judgment' means a divorce, legal separation or marriage annulment pronounced by a court of a Member State, as well as a judgment relating to the parental responsibility of the spouses given on the occasion of such matrimonial proceedings, whatever the judgment may be called, including a decree, order or decision. 2. The provisions of this Chapter shall also apply to the determination of the amount of costs and expenses of proceedings under this Regulation and to the enforcement of any order concerning such costs and expenses. 3. For the purposes of implementing this Regulation, documents which have been formally drawn up or registered as authentic instruments and are enforceable in one Member State and also settlements which have been approved by a court in the course of proceedings and are enforceable in the Member State in which they were concluded shall be recognised and declared enforceable under the same conditions as the judgments referred to in paragraph 1.

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Texts, Materials and Recent Developments SECTION 1 RECOGNITION Article 14 Recognition of a judgment 1. A judgment given in a Member State shall be recognised in the other Member States without any special procedure being required. 2. In particular, and without prejudice to paragraph 3, no special procedure shall be required for up-dating the civil-status records of a Member State on the basis of a judgment relating to divorce, legal separation or marriage annulment given in another Member State, and against which no further appeal lies under the law of that Member State. 3. Any interested party may, in accordance with the procedures provided for in Sections 2 and 3 of this Chapter, apply for a decision that the judgment be or not be recognised. 4. Where the recognition of a judgment is raised as an incidental question in a court of a Member State, that court may determine that issue. Article 15 Grounds of non-recognition 1. A judgment relating to a divorce, legal separation or marriage annulment shall not be recognised: (a) if such recognition is manifestly contrary to the public policy of the Member State in which recognition is sought; (b) where it was given in default of appearance, if the respondent was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable the respondent to arrange for his or her defence unless it is determined that the respondent has accepted the judgment unequivocally; (c) if it is irreconcilable with a judgment given in proceedings between the same parties in the Member State in which recognition is sought; (d) if it is irreconcilable with an earlier judgment given in another Member State or in a non-member country between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the Member State in which recognition is sought. 2. A judgment relating to the parental responsibility of the spouses given on the occasion of matrimonial proceedings as referred to in Article 13 shall not be recognised: (a) if such recognition is manifestly contrary to the public policy of the Member State in which recognition is sought taking into account the best interests of the child; (b) if it was given, except in case of urgency, without the child having been given an opportunity to be heard, in violation of fundamental principles of procedure of the Member State in which recognition is sought; 330

Proposal for a Council Regulation (c) if the person in default was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable that person to arrange for his or her defence unless it is determined that such person has accepted the judgment unequivocally; (d) on the request of any person claiming that the judgment infringes his or her parental responsibility, if it was given without such person having been given an opportunity to be heard; (e) if it is irreconcilable with a later judgment relating to parental responsibility given in the Member State in which recognition is sought; or (f) if it is irreconcilable with a later judgment relating to parental responsibility given in another Member State or in the non-member country of the habitual residence of the child provided that the later judgment fulfils the conditions necessary for its recognition in the Member State in which recognition is sought. Article 16 Prohibition of review of jurisdiction of court of origin The jurisdiction of the court of the Member State of origin may not be reviewed. The test of public policy referred to in Article 15(1)(a) and (2)(a) may not be applied to the rules relating to jurisdiction set out in Articles 2 to 8. Article 17 Differences in applicable law The recognition of a judgment relating to a divorce, legal separation or a marriage annulment may not be refused because the law of the Member State in which such recognition is sought would not allow divorce, legal separation or marriage annulment on the same facts. Article 18 Non-review as to substance Under no circumstances may a judgment be reviewed as to its substance. Article 19 Stay of proceedings A court of a Member State in which recognition is sought of a judgment given in another Member State may stay the proceedings if an ordinary appeal against the judgment has been lodged.

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Texts, Materials and Recent Developments SECTION 2 ENFORCEMENT Article 20 Enforceable judgments A judgment on the exercise of parental responsibility in respect of a child of both parties given in a Member State and enforceable in that Member State shall be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there. Article 21 Jurisdiction of local courts 1. The application shall be submitted to the local courts having jurisdiction, as follows: – in Belgium, the 'Tribunal de première instance' or the 'Rechtbank van eerste aanleg' or the 'erstinstanzliche Gericht', – in the Federal Republic of Germany, the 'Familiengericht', – in Greece, the 'Μοζομελές Πρωτοδικείο', – in Spain, the 'Juzgado de Primera Instancia', – in France, the presiding Judge of the 'Tribunal de grande instance', – in Italy, the 'Corte d'apello', – in Luxembourg, the presiding Judge of the 'Tribunal d'arrondissement', – in the Netherlands, the presiding Judge of the 'arrondissementsrechtbank', – in Austria, the 'Bezirksgericht', – in Portugal, the 'Tribunal de Comarca' or 'Tribunal de Família', – in Finland, the 'käräjäoikeus/tingsrätt', – in Sweden, the 'Svea hovrätt'. 2. The jurisdiction of local courts in relation to an application for enforcement shall be determined by reference to the place of the habitual residence of the person against whom enforcement is sought or by reference to the place of habitual residence of any child to whom the application relates. Where neither of the places referred to in the first subparagraph can be found in the Member State where enforcement is sought, the jurisdiction of local courts is determined by reference to the place of enforcement. 3. In relation to procedures referred to in Article 14(3), the jurisdiction of local courts shall be determined by the internal law of the Member State in which proceedings for recognition or non-recognition are brought. Article 22 Procedure for enforcement 1. The procedure for making the application shall be governed by the law of the Member State in which enforcement is sought.

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Proposal for a Council Regulation 2. The applicant must give an address for service within the area of jurisdiction of the court applied to. However, if the law of the Member State in which enforcement is sought does not provide for the furnishing of such an address, the applicant shall appoint a representative ad litem. 3. The documents referred to in Articles 33 and 34 shall be attached to the application. Article 23 Decision of the court 1. The court applied to shall give its decision without delay. The person against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application. 2. The application may be refused only for one of the reasons specified in Articles 15 and 16. 3. Under no circumstances may a judgment be reviewed as to its substance. Article 24 Notice of the decision The appropriate officer of the court shall without delay bring to the notice of the applicant the decision given on the application in accordance with the procedure laid down by the law of the Member State in which enforcement is sought. Article 25 Appeal against the enforcement decision 1. If enforcement is authorised, the person against whom enforcement is sought may appeal against the decision within one month of service thereof. 2. If that person is habitually resident in a Member State other than that in which the decision authorising enforcement was given, the time for appealing shall be two months and shall run from the date of service, either on him or at his residence. No extension of time may be granted on account of distance. Article 26 Courts of appeal and means of contest 1. An appeal against the judgment authorising enforcement shall be lodged, in accordance with the rules governing procedure in contradictory matters, with the courts listed below: – in Belgium, the 'Tribunal de première instance' or the 'Rechtbank van eerste aanleg' or the 'erstinstanzliche Gericht', – in the Federal Republic of Germany, the 'Oberlandesgericht', – in Greece, the 'Εφετείο', – in Spain, the 'Audiencia Provincial', – in France, the 'Cour d'appel', – in Italy, the 'Corte d'appello', 333

Texts, Materials and Recent Developments – in Luxembourg, the 'Cour d'appel', – in the Netherlands, the 'arrondissementsrechtbank', – in Austria, the 'Bezirksgericht', – in Portugal, the 'Tribunal da Relação', – in Finland, the 'Hovioikeus/Hovrätt', – in Sweden, the 'Svea hovrätt'. 2. The judgment given on appeal may be contested only: – in Belgium, Greece, Spain, France, Italy, Luxembourg and in the Netherlands, by an appeal in cassation, – in the Federal Republic of Germany, by a 'Rechtsbeschwerde', – in Austria, by a 'Revisionsrekurs', – in Portugal, by a 'recurso restrito à matéria de direito', – in Finland, by an appeal to 'Korkein oikeus/högsta domstolen', – in Sweden, by an appeal to the 'Högsta domstolen'. Article 27 Stay of proceedings The court with which the appeal is lodged may, on the application of the appellant, stay the proceedings if an ordinary appeal has been lodged against the judgment in the Member State of origin or if the time for such appeal has not yet expired. In the latter case, the court may specify the time within which an appeal is to be lodged. Article 28 Court of appeal against a judgment refusing enforcement 1. If the application for enforcement is refused, the applicant may appeal to the courts listed below: – in Belgium, the 'Tribunal de première instance' or the 'Rechtbank van eerste aanleg' or the 'erstinstanzliche Gericht', – in the Federal Republic of Germany, the 'Oberlandesgericht', – in Greece, the 'Εφετείο', – in Spain, the 'Audiencia Provincial', – in France, the 'Cour d'appel', – in Italy, the 'Corte d'appello', – in Luxembourg, the 'Cour d'appel', – in the Netherlands, the 'gerechtshof', – in Austria, the 'Bezirksgericht', – in Portugal, the 'Tribunal da Relação', – in Finland, the 'Hovioikeus/Hovrätt', – in Sweden, the 'Svea hovrätt'. 2. The person against whom enforcement is sought shall be summoned to appear before the appellate court. If such person fails to appear, the provisions of Article 10 shall apply.

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Proposal for a Council Regulation Article 29 Contest of the appeal decision A judgment given on appeal provided for in Article 28 may be contested only: – in Belgium, Greece, Spain, France, Italy, Luxembourg and in the Netherlands, by an appeal in cassation, – in the Federal Republic of Germany, by a 'Rechtsbeschwerde', – in Austria, by a 'Revisionsrekurs', – in Portugal, by a 'recurso restrito à matéria de direito', – in Finland, by an appeal to 'Korkein oikeus/högsta domstolen', – in Sweden, by an appeal to the 'Högsta domstolen'.

Article 30 Partial enforcement 1. Where a judgment has been given in respect of several matters and enforcement cannot be authorised for all of them, the court shall authorise enforcement for one or more of them. 2. An applicant may request partial enforcement of a judgment.

Article 31 Legal aid An applicant who, in the Member State of origin, has benefited from complete or partial legal aid or exemption from costs or expenses shall be entitled, in the procedures provided for in Articles 21 to 24, to benefit from the most favourable legal aid or the most extensive exemption from costs and expenses provided for by the law of the Member State addressed.

Article 32 Security, bond or deposit No security, bond or deposit, however described, shall be required of a party who in one Member State applies for enforcement of a judgment given in another Member State on the ground that he or she is a foreign national or that he or she is not habitually resident in the Member State in which enforcement is sought.

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Texts, Materials and Recent Developments SECTION 3 COMMON PROVISIONS Article 33 Documents 1. A party seeking or contesting recognition or applying for enforcement of a judgment shall produce: (a) a copy of the judgment which satisfies the conditions necessary to establish its authenticity; (b) where appropriate, a document showing that the applicant is in receipt of legal aid in the Member State of origin. 2. In addition, in the case of a judgment given in default, the party seeking recognition or applying for enforcement shall produce: (a) the original or certified true copy of the document which establishes that the defaulting party was served with the document instituting the proceedings or with an equivalent document; or (b) any document indicating that the defendant has accepted the judgment unequivocally. 3. A person requiring the updating of the civil-status records of a Member State, as referred to in Article 14(2), shall also produce a document indicating that the judgment is no longer subject to a further appeal under the law of the Member State where the judgment was given. Article 34 Other documents A party applying for enforcement shall produce, besides the documents referred to in Article 33, documents of whatever nature which establish that, according to the law of the Member State of origin, the judgment is enforceable and has been served. Article 35 Absence of documents 1. If the documents specified in Article 33(1)(b) or (2) are not produced, the court may specify a time for their production, accept equivalent documents or, if it considers that it has sufficient information before it, dispense with their production. 2. If the Court so requires, a translation of such documents shall be furnished. The translation shall be certified by a person qualified to do so in one of the Member States.

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Proposal for a Council Regulation Article 36 Legalisation or other similar formality No legalisation or other similar formality shall be required in respect of the documents referred to in Articles 33, 34 and 35(2) or in respect of a document appointing a representative ad litem.

CHAPTER IV TRANSITIONAL PROVISIONS Article 37 1. The provisions of this Regulation shall apply only to legal proceedings instituted, to documents formally drawn up or registered as authentic instruments and to settlements which have been approved by a court in the course of proceedings after its entry into force. 2. Judgments given after the date of entry into force of this Regulation in proceedings instituted before that date shall be recognised and enforced in accordance with the provisions of Chapter III if jurisdiction was founded on rules which accorded with those provided for either in Chapter II of this Regulation or in a convention concluded between the Member State of origin and the Member State addressed which was in force when the proceedings were instituted.

CHAPTER V GENERAL PROVISIONS Article 38 Relation with other Conventions 1. Subject to the provisions of Articles 37, 40 and paragraph 2 of this Article, this Regulation shall, for the Member States which are parties to it, supersede conventions existing at the time of entry into force of this Regulation which have been concluded between two or more Member States and relate to matters governed by this Regulation. 2. Finland and Sweden shall have the option of declaring that the Convention of 6 February 1931 between Denmark, Finland, Iceland, Norway and Sweden comprising international private law provisions on marriage, adoption and guardianship, together with the Final Protocol thereto, will apply, in whole or in part, in their mutual relations, in place of the rules of this Regulation. Such declarations shall be annexed to this Regulation and published in the Official Journal of the European Communities. They may be withdrawn, in whole or in part, at any moment by the said Member States. The principle of non-discrimination on the grounds of nationality between citizens of the Union shall be respected.

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Texts, Materials and Recent Developments The rules of jurisdiction in any future Agreement to be concluded between the Member States referred to in the first subparagraph which relate to matters governed by this Regulation shall be in line with those laid down in this Regulation. Judgments handed down in any of the Nordic States which have made the declaration provided for in the first subparagraph under a forum of jurisdiction corresponding to one of those laid down in Chapter II, shall be recognised and enforced in the other Member States under the rules laid down in Chapter III thereof. 3. Member States shall send to the Commission: (a) a copy of the agreements and uniform laws implementing these agreements referred to in the first and third subparagraphs of paragraph 2; (b) any denunciations of, or amendments to, those agreements or uniform laws. Article 39 Relation with certain multilateral conventions In relations between the Member States which are parties to it, this Regulation shall take precedence over the following Conventions in so far as they concern matters governed by this Regulation: - the Hague Convention of 5 October 1961 concerning the Powers of Authorities and the Law Applicable in respect of the Protection of Minors, - the Luxembourg Convention of 8 September 1967 on the Recognition of Decisions Relating to the Validity of Marriages, - the Hague Convention of 1 June 1970 on the Recognition of Divorces and Legal Separations, - the European Convention of 20 May 1980 on Recognition and Enforcement of Decisions concerning Custody of Children and on Restoration of Custody of Children, - the Hague Convention of 19 October 1996 on Jurisdiction, Applicable law, Recognition, Enforcement and Cooperation in Respect of Parental Responsibility and Measures for the Protection of Children, provided that the child concerned is habitually resident in a Member State. Article 40 Extent of effects 1. The agreements and conventions referred to in Articles 38(1) and 39 shall continue to have effect in relation to matters to which this Regulation does not apply. 2. They shall continue to have effect in respect of judgments given and documents formally drawn up or registered as authentic before the entry into force of this Regulation.

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Proposal for a Council Regulation Article 41 Agreements between Member States 1. Two or more Member States may conclude agreements or arrangements to amplify this Regulation or to facilitate its application. Member States shall send to the Commission: (a) a copy of the draft agreements; and (b) any denunciations of, or amendments to, these agreements. 2. In no circumstances may the agreements or arrangements derogate from Chapters II or III. Article 42 Treaties with the Holy See 1. This Regulation shall apply without prejudice to the International Treaty (Concordat) between the Holy See and Portugal, signed at the Vatican City on 7 May 1940. 2. Any decision as to the invalidity of a marriage taken under the Treaty referred to in paragraph 1 shall be recognised in the Member States on the conditions laid down in Chapter III. 3. The provisions laid down in paragraphs 1 and 2 shall also apply to the following International Treaties (Concordats) with the Holy See: - Concordato lateranense of 11 February 1929 between Italy and the Holy See, modified by the agreement, with additional Protocol signed in Rome on 18 February 1984, - Agreement between the Holy See and Spain on legal affairs of 3 January 1979. 4. Member States shall send to the Commission: (a) a copy of the Treaties referred to in paragraphs 1 and 3; (b) any denunciations of or amendments to those Treaties. Article 43 Member States with two or more legal systems With regard to a Member State in which two or more systems of law or sets of rules concerning matters governed by this Regulation apply in different territorial units: (a) any reference to habitual residence in that Member State shall refer to habitual residence in a territorial unit; (b) any reference to nationality shall refer to the territorial unit designated by the law of that State; (c) any reference to the authority of a Member State having received an application for divorce or legal separation or for marriage annulment shall refer to the authority of a territorial unit which has received such an application; (d) any reference to the rules of the requested Member State shall refer to the rules of the territorial unit in which jurisdiction, recognition or enforcement is invoked.

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CHAPTER VI FINAL PROVISIONS Article 44 Review No later than five years after the date of the entry into force of this Regulation, and every five years thereafter, the Commission shall present to the European Parliament, the Council and the Economic and Social Committee a report on the application of this Regulation, and in particular Articles 38, 41, 42 and 44 thereof. The report shall be accompanied if need be by proposals for adaptations. Article 45 Amendment of lists of courts and redress procedures The lists of courts and redress procedures in Articles 21(1), 26(1) and (2) and 29 may be amended by decision of the Council. Article 46 Entry into force This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels […]

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VENEZUELAN ACT ON PRIVATE INTERNATIONAL LAW (Unofficial translation; the Act is published in Gaceta Oficial de la República de Venezuela, No. 36.511, 6 August 1998; see also the Internet site of the The Supreme Court of Justice of Venezuela at the address: http://www.csj.gov.ve/legislacion/ldip.html )

CHAPTER I GENERAL PROVISIONS Article 1 Factual situations related to foreign legal systems shall be governed by the rules of Public International Law on the matter at issue, in particular those established in the international treaties in force in Venezuela; in lack thereof, the rules of Venezuelan Private International Law shall apply; in lack thereof, analogy shall be employed and, finally, generally accepted principles of Private International Law shall govern. Article 2 The competent foreign law shall be applied in accordance with the principles governing in the respective foreign country, so as to allow for the realization of the objectives pursued by the Venezuelan conflicts rules. Article 3 When different legal systems coexist in the competent foreign law, the conflict of laws arising between those systems shall be resolved in accordance with the principles in effect in the corresponding foreign law. Article 4 When the competent foreign law declares that the law of a third State is applicable, and the law of this third State, in turn, declares its own competence, the domestic law of this third State shall be applicable. When the foreign law declares that Venezuelan law is applicable, this law shall be applied. In cases not provided for in the preceding paragraphs, the domestic law of the State which is declared competent pursuant to the Venezuelan conflicts rule shall be applicable.

Venezuelan PIL Act

Article 5 Juridical situations created in conformity with a competent foreign law in accordance with internationally admissible criteria shall be effective in the Republic, unless they contradict the objectives of Venezuelan conflicts rules, or Venezuelan law claims exclusive competence over the respective matter, or they are manifestly incompatible with essential principles of Venezuelan public policy (ordre public). Article 6 Previous, preliminary or incidental questions that may arise from a principal question need not necessarily be resolved in accordance with the law that governs the principal question. Article 7 The different laws that may be competent to govern various aspects of one and the same juridical relationship shall be applied in a harmonious manner, in order to realize the purposes pursued by each of such laws. Any difficulties that may arise due to their simultaneous application shall be resolved in light of the requirements of equity in each specific case. Article 8 The rules of foreign law applicable in accordance with this Act shall be excluded only when their application would produce results manifestly incompatible with the essential principles of Venezuelan public policy (ordre public). Article 9 Whenever the applicable foreign law establishes institutions or procedures which are essential for its adequate application that are not contemplated by the Venezuelan legal system, said foreign law may be denied application provided that Venezuelan law does not provide for analogous institutions or procedures. Article 10 Notwithstanding the provisions of this Act, the mandatory rules of Venezuelan law which have been enacted to regulate factual situations connected with several legal systems shall necessarily apply.

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CHAPTER II ON DOMICILE Article 11 The domicile of a natural person is in the territory of the State where he/she has his/her habitual residence. Article 12 A married woman has a domicile of her own distinct from that of her husband if it has been established in accordance with the provisions of the preceding article. Article 13 The domicile of minors and incapacitated persons subject to parental power, guardianship or curatorship, is in the territory of the State where they have their habitual residence. Article 14 When the habitual residence in the territory of a State is the exclusive result of functions conferred by a national, foreign or international public entity, such habitual residence shall not produce the effects provided for in the preceding articles. Article 15 The provisions of this chapter are applicable whenever this Act refers to the domicile of a natural person and, generally, when the domicile constitutes a means of determining the applicable law or the jurisdiction of the courts.

CHAPTER III ON PERSONS Article 16 The existence, status and capacity of persons are governed by the law of their domicile. Article 17 The change of domicile does not restrict any acquired capacity.

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Venezuelan PIL Act

Article 18 A person subject to incapacity under the provisions of the preceding articles acts validly if he/she is deemed capable by the law governing the substance of the act. Article 19 Limitations on capacity, established by the law of the domicile, which are based upon differences of race, nationality, religion or class shall not be effective in Venezuela. Article 20 The existence, capacity, operation and dissolution of juridical persons of a private nature are governed by the law of the place where they are constituted. By the place where they are constituted it is meant the place where the formal and substantive requirements for the establishment of such juridical persons are fulfilled.

CHAPTER IV ON THE FAMILY Article 21 The capacity to marry and the substantive requirements of marriage are governed, for each spouse, by the law of his/her respective domicile. Article 22 The personal and property effects of marriage are governed by the law of the common domicile of the spouses. If they have different domiciles, the law of the last common domicile shall apply. Marriage contracts valid under a competent foreign law may be recorded at any time with the appropriate Venezuelan Main Public Registry Office, when they are to be made effective vis-à-vis bona fide third persons over immovable property located in the territory of the Republic. Article 23 Divorce and separation are governed by the law of the domicile of the spouse who files for divorce. The change of domicile of the spouse filing for divorce becomes effective only one year after he/she has entered the territory of a State with the purpose of establishing habitual residence therein.

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Texts, Materials and Recent Developments Article 24 The establishment of filiation, as well as the relationship between parents and their children are governed by the law of the domicile of the child. Article 25 The law of the respective domicile of the adopting parent and the adopted child shall apply in what relates to the necessary substantive requirements for the validity of the adoption. Article 26 Guardianship and other institutions for the protection of incapacitated persons are governed by the law of the domicile of the incapacitated person.

CHAPTER V ON PROPERTY Article 27 The creation, content, and extent of rights in rem over property are governed by the law of the place where the property is situated. Article 28 The transfer of movable property has no effect on the rights validly vested under the command of the previously applicable law. Such rights, however, may only be enforced against third parties after fulfillment of the requirements provided, in such respect, by the law of the new situs.

CHAPTER VI ON OBLIGATIONS Article 29 Contractual obligations are governed by the law indicated by the parties. Article 30 In the absence of a valid indication, contractual obligations are governed by the law with which they are most directly connected. The court shall take into account all the objective and subjective elements of the contract in order to determine such law. It shall also take into account the general principles of International Commercial Law recognized by international organizations.

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Venezuelan PIL Act Article 31 In addition to the provisions in the previous articles, the guidelines, customs and principles of International Commercial Law, as well as commercial usage and practices generally accepted shall apply in order to discharge the requirements of justice and equity in each particular case. Article 32 Torts are governed by the law of the place where their effects have been produced. The victim, however, may request the application of the law of the State in which the cause generating the tort was produced. Article 33 Management of affairs (negotiorum gestio), payment of what is not due (solutio indebiti) and unjustified enrichment are governed by the law of the place where the event giving rise to the obligation occurred.

CHAPTER VII ON SUCCESSIONS Article 34 Successions are governed by the law of the domicile of the deceased. Article 35 Descendants, ascendants and the surviving spouse not legally separated as to property, may in any event enforce over property located in the Republic the right to the mandatory inheritance portion (legítima) accorded to them by Venezuelan law. Article 36 In the event that, under the competent law, the property of the estate belongs to the State, or if heirs do not exist or are unknown, property located in the Republic shall pass to the patrimony of the Venezuelan Nation.

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CHAPTER VIII ON THE FORM AND PROOF OF ACTS Article 37 Juridical acts are valid, as to form, if they meet the requirements prescribed by any of the following legal systems: 1.

that of the place where the act is made;

2.

that governing the substance of the act; or

3.

that of the domicile of the maker or the law of the common domicile of the makers. Article 38

The means of evidence, their efficacy, and the determination of the burden of proof are governed by the law that governs the corresponding juridical relationship, without prejudice to the conformity of their procedural materialization to the law of the court or officer before whom the proceeding takes place.

CHAPTER IX ON JURISDICTION AND COMPETENCE Article 39 In addition to the jurisdiction vested by law in Venezuelan courts on actions instituted against persons domiciled in the national territory, the courts of the Republic shall have jurisdiction on actions instituted against persons domiciled abroad in the cases contemplated in articles 40, 4 1, and 42 of this Act. Article 40 Venezuelan courts shall have jurisdiction to try cases arising from actions concerning claims involving economic interest: 1.

When actions relating to the disposal or holding of movable or immovable property situated in the territory of the Republic are involved;

2.

When actions relating to obligations which have to be performed within the territory of the Republic, or which derive from contracts entered into or events that have occurred in the said territory, are involved;

3.

When the defendant has been personally served with process within the 347

Venezuelan PIL Act territory of the Republic; 4.

When the parties submit, expressly or tacitly, to their jurisdiction. Article 41

Venezuelan courts shall have jurisdiction to try cases arising from actions relating to estates (universitas iuris): 1.

When, under the provisions of this Act, Venezuelan law is competent to govern the substance of the litigation;

2.

When property forming an integral part of the estate is situated in the territory of the Republic. Article 42

Venezuelan courts shall have jurisdiction to try cases arising from actions relating to the status of persons or family relationships: 1.

When, under the provisions of this Act, Venezuelan law is competent to govern the substance of the litigation;

2.

When the parties submit, expressly or tacitly, to their jurisdiction, provided that the case has an effective connection with the territory of the Republic. Article 43

Venezuelan courts shall have jurisdiction to adopt provisional measures for the protection of persons located within the territory of the Republic, even when in want of jurisdiction over the substance of the litigation. Article 44 Express submission shall be evidenced in writing. Article 45 Tacit submission shall result, for the plaintiff, from the filing of the complaint and, for the defendant, from the performance during the trial, either personally or through an attorney-in- fact, of any action other than moving for dismissal for want of jurisdiction or objecting to a preventive measure. Article 46 Submission is invalid with respect to actions which affect the creation, modification or extinction of rights in rem on immovable property, unless permitted under the law of the situs of such property.

348

Texts, Materials and Recent Developments Article 47 The jurisdiction vested in Venezuelan courts under the preceding provisions may not be contractually derogated in favor of foreign courts or arbitrators conducting the process abroad, in those cases in which the issue refers to disputes relating to rights in rem on immovable property situated in the territory of the Republic, or when they involve matters that do not allow settlement or matters that affect essential principles of Venezuelan public policy. Article 48 Whenever Venezuelan courts have jurisdiction under the provisions of this Chapter, domestic competence ratione loci shall be governed by the provisions in articles 49, 50, and 51 of this Act. Article 49 The competent court to try cases arising from actions concerning claims involving economic interest shall be: 1.

When actions related to the disposal or holding of movable or immovable property situated in the territory of the Republic are involved, the court of the place where the property is located;

2.

When actions related to obligations to be performed in the territory of the Republic or arising from contracts entered into or events occurred in the said territory are involved, the court of the place where the obligation is to be performed or where the contract was made or where the event giving rise to the obligation occurred;

3.

When the defendant has been personally served in the territory of the Republic, the court of the place where service was performed;

4.

When the parties have expressly and generically submitted to the courts of the Republic the court which is competent by virtue of any of the criteria indicated in the three preceding paragraphs and, by default, the court of the capital of the Republic. Article 50

The competent court to try cases arising from actions related to estates (universitas iuris) shall be: 1. When, under the provisions of this Act, Venezuelan law is competent to govern the substance of the litigation, the court of the place where the person by virtue of whom Venezuelan law governs is domiciled; 2. When property forming an integral part of an estate (universitas iuris) is

349

Venezuelan PIL Act situated in the territory of the Republic, the court of the place where most of the estate's property is situated. Article 51 The competent court to try cases arising from actions related to the status of persons or to family relationships shall be: 1) When, under the provisions of this Act, Venezuelan law is competent to govern the substance of the litigation, the court of the place where the person by virtue of whom Venezuelan law governs is domiciled; 2) When the parties expressly or tacitly submit to its jurisdiction, the court of the place with which the case is linked to the territory of the Republic. Article 52 The provisions set forth in Articles 49, 50, and 51 do not exclude the competence of other courts when such competence is vested in them by other laws of the Republic.

CHAPTER X ON THE EFFICACY OF FOREIGN JUDGMENTS Article 53 Foreign judgments shall be effective in Venezuela, provided that they meet the following requirements: 1. That they have been rendered on civil or commercial matters, or, in general, on matters related to private juridical relationships; 2.

That they have the force of res judicata under the law of the State where they were rendered;

3. That they are not related to rights in rem on immovable property situated in the Republic or that Venezuelan courts have not been ousted of exclusive jurisdiction to try the case; 4.

That the courts of the State issuing the judgment have jurisdiction to try the case, under the general principles on jurisdiction established in Chapter IX of this Act;

5. That the defendant has been duly served, with sufficient time to appear, and that he/she has been afforded, in general, the procedural guarantees which ensure a reasonable possibility of defense; 6.

That they are not incompatible with a prior judgment having authority of res judicata; and that no trial on the same matter and between the same parties, 350

Texts, Materials and Recent Developments instituted prior to the date when the foreign judgment was rendered, is pending before Venezuelan courts. Article 54 If a foreign judgment is unable to produce effects in its entirety, it may be allowed to do so in part. Article 55 In order for a foreign judgement to be enforced, it has to be declared executory in accordance with the procedure prescribed by the law, after previous ascertainment that it meets the requirements of Article 53 of this Act.

CHAPTER XI ON PROCEDURE Article 56 The competence and form of the proceeding shall be governed by the Law of the officer before whom it is conducted. Article 57 The lack of jurisdiction of a Venezuelan judge vis-à-vis a foreign judge shall be declared ex officio, or at the request of party, at any stage or instance of the process. The motion for a ruling on jurisdiction suspends the proceeding until the respective ruling has been issued. In the event that the jurisdiction of Venezuelan courts is upheld, the suit shall continue as from the stage where it was at the time when the ruling was issued; however, the decision to deny jurisdiction shall be subject to the review of the Political and Administrative Chamber of the Supreme Court of Justice, for which purpose the court record shall be forthwith forwarded thereto, and if such ruling is upheld, the court record shall be filed and the action shall be dismissed. Article 58 Exclusive Venezuelan jurisdiction is not preempted by the litispendence before a foreign judge of the same cause of action or another linked to it. Article 59 The courts of the Republic may request any competent foreign authority, by means of letters rogatory, to perform service of process, procedural acts relating to evidence, or any other judicial act necessary for the proper development of the 351

Venezuelan PIL Act process. They shall also execute, as promptly as possible, the letters rogatory issued by foreign courts in conformity with the principles of International Law applicable to the matter. Article 60 Foreign law shall be applied ex officio. The parties may provide information regarding the applicable foreign law and the courts and authorities may issue orders aiming at a better knowledge thereof. Article 61 Appeals and other recourses provided by law shall be admissible, regardless of the law that has been applied in the decision against which the appeals are made. Article 62 Except for the provision in Article 47 of this Act, all issues concerning international commercial arbitration shall be governed by the special statutory provisions regulating this matter.

CHAPTER XII FINAL PROVISIONS Article 63 All the statutory provisions regulating the subject matter of this Act are hereby abrogated. Article 64 This Act shall enter into force six months after its publication in the Official Gazette of the Republic of Venezuela.

352

INSTITUTE OF INTERNATIONAL LAW Berlin Session, 16 – 25 August 1999

TAKING FOREIGN PRIVATE INTERNATIONAL LAW TO ACCOUNT (Fourth Commission)

FINAL RESOLUTION 'The Institute of International law, Considering that the task of private international law is the search for the legal rules most appropriate to be applied in the individual case; Considering that the legal rules most appropriate to be applied in the individual case are those which promote justice, legal certainty, effectiveness, uniformity or compliance with the common intention or justified expectations of the parties; Considering that legal certainty may be advanced by reliance on the same law in respect of situations created and transactions concluded; Considering that effectiveness may be advanced by paying special regard to the law which exercises factual control; Considering that uniformity of decision is only achieved if the relevant choice of law rules of the countries concerned either contain identical choice of law rules interpreted uniformly or if one of different connecting factors is accorded precedence; Considering that even if total uniformity of decision cannot be achieved, a degree of uniformity may be achieved in the individual case if the referring court takes foreign private international law into consideration; Considering that the interest of justice may be advanced by taking foreign private international law into account;

Texts, Materials and Recent Developments Considering that these aims can be furthered best if in some situations not only foreign domestic law but also foreign private international law is taken into account, Adopts the following Resolution: Taking foreign private international law to account 1.

Should not be excluded altogether, irrespective of whether it involves a reference back or on;

2.

Should not be restricted to situations where uniformity is desired;

3.

Should be considered:

4.

(a)

if the validity or the effectiveness of an act or a transaction is regarded as desirable and assured thereby; or

(b)

if a uniform treatment of an act or a transaction is desirable and can be achieved, or

(c)

if the parties enjoy a choice of law, have exercised it, and have included private international law; or

(d)

if the validity of an act or transaction concluded according to the choice of law rules of the law applicable at the time when the act or transaction was concluded is questioned in later proceedings; and or

(e)

if, when deciding an incidental question, the validity of an act would be ensured either by application of the conflict rules of the law governing the main question or of the conflict rules of the law governing the incidental question;

Ought not to be considered, (a)

if the law of the forum contains alternative choice of law rules operating on an equal footing;

(b)

if the parties enjoy a choice of law, have exercised it, and have not included private international law. (23 August 1999)

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BOOK REVIEW ________________

Internet: Which Court Decides? Which Law Applies?/Quel tribunal décide? Quel droit s'applique? – Proceedings of the international colloquium in honour of Michel Pelichet, organized by the Molengraaff Institute of Private Law, University of Utrecht, and the Hague Conference on Private International Law, edited by Katharina BOELE-WOELKI and Catherine KESSEDJIAN, Kluwer Law International, The Hague/London/Boston 1998, XXV-179 pages. The present book contains the proceedings of a symposium organized in honor of Michel Pelichet, a Swiss specialist in private international law, on the topic 'Internet: Which Court Decides? Which Law Applies?'. The first of its kind, the book is welcome indeed, and it is easy to predict that others will follow. The issue of private international law on the Internet is becoming crucial. This is not surprising because considerable interests are at stake: electronic commerce in general, freedom of expression, intellectual property. It is a good idea to have several authors discuss the same subject (in French and English) as different opinions are needed on such controversial matters. The stage is set by Pierre Sirinelli (Paris) and Matthew Burnstein (Nashville). The former shows that law is essential if we want the system to work, that the 'transnationality of the net' may compromise the effectiveness of the law, that technical answers are limited in their effectiveness, and hence that it is necessary to achieve at least a 'minimal legal harmonization'. Before more in-depth improvements can be made (as progress in the Information Age has shown, this cannot take place at the same place), we must start by establishing 'interoperable' systems, which is precisely the purpose of private international law. In his aptly titled contribution 'A Global Network in a Compartmentalized Legal Environment', Matthew Burnstein stresses the impossibility of implementing current private international law rules based on an outdated national borders approach ('on the Internet, "place" matters less and less'). To determine the applicable law, he proposes that a choice be made between three solutions: 1) unifying conflicts rules, 2) unifying substantive law, for instance, by agreeing to apply the rules of an international instrument such as the Vienna Convention of 1980 on the International Sale of Goods; or 3) if one wants to be more ambitious (he views this as a solution for the future), taking the cases to 'cyber' courts. In his opinion, the parties must in any event be free to choose the law to govern a contract, which, as a matter of fact, will be imposed by Internet service providers (ISPs) and chosen by the user by clicking the desired option. These 'click-wrap contracts' would correspond to the 'shrink-wrap contracts' well known to software users. However, as the author critically admits, the European directive for

Book Review consumer protection in arm's length contracts has formal requirements ('written confirmation') that exclude the use of such a method. Willem Grosheide (Utrecht) focuses his analysis on intellectual property in the context of the enthusiastic international cooperation that prevailed at the adoption of the Paris (1883) and Bern (1886) conventions, respectively on industrial property and on copyright. Nevertheless, he points out that the original agreement was to create only substantive rules; conflicts rules were excluded because of the territoriality dogma. For instance, the fundamental principle of national treatment does not focus on relationships with foreign elements and does not help determine the applicable law. Thus intellectual property law and private international law have gone their own ways ('the twain never met'). The author recommends that they be brought together in order to solve problems raised by the Internet. François Dessemontet (Lausanne) goes further and provides a general set of choice-of-law rules with respect to intellectual property: the lex protectionis (with the inconvenient result of the potential application of 200 laws), the law of the country where a communication originates (which traditionally plays a certain role, but whose significance is not as clear on the Internet), the law of the country where the acts are performed, the law of the country where the communication ends. In his opinion, the applicable law should be the law of the country that delivered the title (in the case of trademarks and patents); otherwise, it should be the law of the country of the victim's residence if the damage was predictable or, if not, the law of the country of the author of the act. As for moral rights, he proposes the law of the country where the effect occurs, which will most often coincide with the domicile or residence of the person whose rights have been violated. Herbert Kronke (Heidelberg) discusses general issues pertaining to the law applicable to torts and contracts in cyberspace. After enumerating all the innovations the Internet breeds (number and role of intermediaries, transfer protocols, links between sites, etc.), he shows that traditional solutions for the breach of privacy cannot easily be carried out on the Internet, again because of the number of laws that could be applied. With respect to liability for the supply of goods, such as computer goods, he comes to the conclusion that the application of The Hague Convention of 1973 is impossible. In regard to contracts, he predicts that it will be increasingly difficult to apply the notion of the most significant relationship found in Article 4 of the Rome Convention of 1980 on the Law Applicable to Contractual Obligations. He believes that consumer protection should benefit the passive rather than the active consumer and proposes that the parties be given a larger role in determining the applicable law. In any event, he concludes that efforts should be undertaken to create a uniform substantive law, however long that might take. Gabrielle Kaufmann-Kohler (Geneva) talks about conflicts of jurisdictions. After reviewing the rules of the Brussels Convention of 1968 and American law principles, she says that the aim of conflicts of jurisdictions rules must be to ensure a balance between the parties (the plaintiff has an effective right of access to justice, but the defendant should not be tried before an unfair court). Criticizing Fiona Shevill, a case decided by the European Court of Justice, she shows that 356

Book Review division of the infringement is an artificial solution except in intellectual property cases where the decision cannot be based on the territoriality of rights. Coming back to consumers again, she clearly believes they must be protected. Finally, she rejects the distinction made between passive and active consumers, which, in her opinion, is difficult to apply and may deprive the interested party of his right of access to justice. Catherine Kessedjan (The Hague) notes in her general report that there is no legal vacuum, but rather an excess of law (always because of the large number of national laws that could apply). We should be grateful to the Internet for strengthening and updating private international law. The point is that powerful operators mistrust state regulation. Still, states must play their part. Whatever might be said, arbitration is not advisable in small disputes and in conflicts where the parties have unequal bargaining power. Self-regulation is no remedy, contrary to what some may say. On the subject of the applicable law, it can be said without hesitation that operators who want to supply worldwide services should comply with the most restrictive provisions of criminal and tort law. This solution may seem drastic, but as long as technology cannot differentiate between accesses on the basis of the user's country, it cannot be otherwise. As for contracts, the will of the parties can generally come into play; if that will is not explicit, the law of the party who 'performs the main obligation of the contract, without which the contract would not exist' must be applied, a solution which implies an increasingly precise and uniform, and thus even more predictable international public order. This general review hardly exhausts the remarkable resources of the present book. Taking a look at specific issues, one should note the analyses of the concept of territoriality. The fact that many meanings can be ascribed to this word should lead to circumspection. The territoriality of private international law is frequently contrasted with the Internet's transnational character, thus showing that national borders are now outdated. This is Matthew Burnstein's assumption; however, François Dessemontet makes it clear that this is not the prevailing view. After all, as he points out, the Internet is not all that virtual; whatever the time or place, there is a 'contact between virtuality and reality'. For instance, the user finally purchases a product; a picture is emitted, causing damage to a person, etc. Disagreeing with the idea that localization is no longer possible on the Internet, Catherine Kessedjan insists that problems arise 'when there is a collision between virtuality and reality'. This does not mean that the digital environment does not change anything. It is true that localization based on technical criteria tends to be very artificial, given that the loading place and transfer conditions can be easily manipulated. In this respect, one should agree with François Dessemontet who maintains that the notion of the country of origin does not make sense when something is emitted for the first time on the web. Nevertheless, the damage can still be localized, for example, in the country where the person responsible for putting the information on the web is domiciled, or where the person suffering the damage resides, which are some of Matthew Burstein's proposals. One can also agree with the assertion by the same author that flexible rules, like the ones proposed in the Second Restatement of the American Law Institute 357

Book Review highlighting the notion of the 'most significant relationship', are too uncertain to comfort Internet actors. Several authors favor the idea of a new substantive law based on the model of the lex mercatoria. The decisive question, however, is raised by François Dessemontet: 'Would lex mercatoria be different from lex americana?' One can share his criticism of the unilateralism of the American Uniform Commercial Code, as well as that of the European directives on consumer protection. Nonetheless, one must recognize, together with Catherine Kessedjan, that states are playing their role by attempting to impose certain rules on worldwide operators, by granting consumers a minimum level of protection, or, as Gabrielle KaufmanKohler says, by imposing a proper balance between the interests of plaintiff and defendant with regard to the jurisdiction of the courts. The alternative, proposed by Matthew Burnstein, of a single law imposed by Internet service providers would bring no progress in this respect. Nevertheless, Herbert Kronke accurately points out that this solution would be of limited use, given the role of the privity of contract expressed in the saying res inter alios acta aliis necque nocere necque prodesse potest. The debate still continues. It is a healthy one. WIPO contributed to it when it organized a three-day symposium in mid-December 1998 on conflicts of laws and jurisdictions in regard to copyright and related rights. In Willem Grosheide's view, this marks the beginning of a solution, by means of which all the benefits of private international law would, in a very timely manner, be incorporated into intellectual property. More generally, one must acknowledge the intrinsic importance of this area of law at the dawn of the Information Age. In addition to the legal questions raised here, economic and political issues remain to be discussed. André LUCAS*

* Professor of Law, University of Nantes. 358

BOOKS RECEIVED ________________ BALLARINO Tito, Diritto internazionale privato, 3rd ed., Padova (Cedam) 1999. BONELL Michael Joachim, UNILEX – International Case Law & Bibliography on the UN Convention on Contracts for the International Sale of Goods (with the assistance of LIGUORI F., VENEZIANO A. et al.), New York (Transnational Publishers) 1998. BRANDES Frank, Der gemeinsame Gerichtsstand: die Zuständigkeit im europäischen Mehrparteienprozess nach Art. 6 Nr. 1 EuGVÜ/LÜ, Europäische Hochschulschriften, Bern [etc.] (P. Lang/Europäischer Verlag der Wissenschaften) 1998, pp. 198. BROCKMEIER Dirk, Punitive damages, multiple damages und deutscher ordre public: unter besonderer Berücksichtigung des RICO-Act, Tübingen (Mohr Siebeck) 1999, pp. XXIII-229. BUCHER Andreas, Droit international privé suisse, Tome 1/1, Partie générale – Conflits de juridictions, Bâle [etc.] (Helbing & Lichtenhahn) 1998, pp. 310. BUCHNER Benedikt, Kläger- und Beklagtenschutz im Recht der internationalen Zuständigkeit: Lösungsansätze für eine zukünftige Gerichtsstands- und Vollstreckungskonvention, Studien zum ausländischen und internationalen Privatrecht, Vol. 60, Tübingen (Mohr Siebeck) 1998, pp. XVI-170. CARO GANDARA Rocío, La competencia judicial internacional en materia de regimen interno de sociedades en el espacio jurídico europeo, Madrid (Civitas) 1999. CASELLA Paulo B./DE ARAUJO Nadia (eds.), Integração jurídica Interamericana: as Convenções Interamericanas de Direito Internacional Privado (CIDIPs) e o direito brasileiro, São Paulo ( LTr) 1998, pp. 662. COESTER-WALTJEN Dagmar/KRONKE Herbert/KOKOTT Juliane, Die Wirkungskraft der Grundrechte bei Fällen mit Auslandsbezug (The effects of fundamental rights in cases with foreign elements), Berichte der Deutschen Gesellschaft für Völkerrecht, Vol. 38, Heidelberg (C.F. Müller) 1998, pp. 154. COIPEL-CORDONNIER Nathalie, Les conventions d'arbitrage et d'élection de for en droit international privé, Paris (L.G.D.J.) 1999, pp. XII-431. DANTHE François-Jérôme, Le droit international privé suisse de la concurrence déloyale, Genève (Libr. Droz) 1998, pp. 323.

Books Received DOWNES Noemí, Los contratos internacionales de timesharing: un enfoque internacionalprivatista de la comercialización transfronteriza de la utilización de inmuebles en régimen de tiempo compartido, Colección estudios internacionales, Vol.28, Madrid (Eurolex) 1998, pp. 438. EPSTEIN David/SNYDER Jeffrey L./BALDWIN Charles S. IV, International Litigation, A Guide to Jurisdiction, Practice, and Strategy, 3rd ed., New York (Transnational Publishers) 1998. FAWCETT James J./TORREMANS Paul, Intellectual Property and Private International Law, Oxford Monographs in Private International Law, Oxford (Clarendon Press) 1998, pp. 824. FENTIMAN Richard, Foreign Law in English Courts, Oxford Monographs in Private International Law, Oxford (Clarendon Press) 1998, pp. 368. FLETCHER Ian, Insolvency in Private International Law, Oxford Monographs in Private International Law, Oxford (Clarendon Press) 1998, pp. 450. FRADA

DE SOUSA Antonio, Conflito de clausulados e consenso nos contratos internacionais, Porto (Universidade Cátolica) 1999, pp. 379.

GARDEÑES SANTIAGO Miguel, La aplicación de la regla de reconocimiento mutuo y su incidencia en el comercio de mercancías y servicios en el ámbito comunitario e internacional, Madrid (Eurolex) 1999, pp. 432. GLEICHAUF Jürgen, Das postmortale Persönlichkeitsrecht im internationalen Privatrecht: unter besonderer Berücksichtigung des französischen Rechts, Europäische Hochschulschriften, Bern [etc.] (P. Lang) 1999, pp. 469. HEIN Jan von, Das Günstigkeitsprinzip im internationalen Deliktsrecht, Tübingen (Mohr Siebeck) 1999, pp. XXII-473. HERTZ Ketilbjorn, Jurisdiction in Tort and Contract under the Brussels Convention, Copenhague (DJOF Publishing) 1998, pp. 317. HESS Burkhard, Intertemporales Privatrecht, Tübingen (Mohr Siebeck) 1998, pp. XIV-614. HILL Jonathan, The law relating to international commercial disputes, 2nd ed., London-Hong Kong (LLP) 1998, pp. LXX-801. HOPPE

Jeannine, Die Entsendung von Arbeitnehmern ins Ausland: kollisionsrechtliche Probleme und internationale Zuständigkeit: eine Untersuchung anhand praktischer Vertragsgestaltungen, Berlin (Duncker & Humblot) 1999, pp. 284.

JAMETTI GREINER Monique, Der Begriff der Entscheidung im schweizerischen Zivilverfahrensrecht, Basel-Frankfurt a.M. (Helbing & Lichtenhahn) 1998, pp. XLVIII-364.

360

Books Received KANNENGIESSER Matthias N., Die Aufrechnung im internationalen Privat- und Verfahrensrecht: mit vergleichender Darstellung ausgewählter europäischer Aufrechnungsrechte, Studien zum ausländischen und internationalen Privatrecht, Vol. 63, Tübingen (Mohr Siebeck) 1998, pp. XVII-232. KANNENGIEßER Matthias N., Die Aufrechnung im internationalen Privat- und Verfahrensrech, mit vergleichender Darstellung ausgewählter europäischer Aufrechnungsrechte, Beiträge zum ausländischen und internationalen Privatrecht, Tübingen (Mohr Siebeck) 1998, pp. XVII-232. KRAFFT Jean-Philippe, 'Exorbitante' Gerichtsstände im internationalen Zivilprozessrecht der Schweiz: insbesondere nach dem Lugano Übereinkommen, Entlebuch (Huber) 1999, pp. XXXVII-379. KROPHOLLER Jan, Europäisches Zivilprozeßrecht, Kommentar zu EuGVÜ und Lugano-Übereinkommen, 6th ed., Heidelberg (Verlag Recht und Wirtschaft) 1998, pp. 629. KUHN Hans, Der Renvoi im internationalen Erbrecht der Schweiz. Eine Analyse internationaler Erbfälle im Verhältnis der Schweiz zu Deutschland, Frankreich, Italien, Österreich, dem Fürstentum Liechtenstein, Griechenland, England und den Niederlanden, Zürich (Schulthess) 1998, pp. L-405. LEVANTE Marco, Wohnsitz und gewöhnlicher Aufenthalt im internationalen Privat- und Zivilprozessrecht der Schweiz, St. Gallen/Lachen (Dike Verlag) 1998, pp. XXXVI-29. MARQUES DOS SANTOS António, Defesa e ilustraçao do direito internacional privado, Lisboa (Coimbra Editora) 1998, pp. 226. MÄRKL Petra, Schiedsgerichtsbarkeit in Rußland, Internationale und nationale Schiedsgerichtsbarkeit in der Russischen Föderation und Fragen des anwendbaren Rechts, Heidelberg (Verlag Recht und Wirtschaft) 1998. MISTELIS Loukas A, Charakterisierungen und Qualifikation im internationalen Privatrecht: zur Lehre einer parteispezifischen Qualifikation im Kollisionsrecht der privaten Wirtschaft, Studien zum ausländischen und internationalen Privatrecht, Vol. 73, Tübingen (Mohr Siebeck) 1999, pp. XXV-311. NITZINGER Elisabeth, Das Betreuungsrecht im internationalen Privatrecht, Europäische Hochschulschriften, Bern [etc.] (P. Lang) 1998, pp. 184. NYGH Peter, Autonomy in International Contracts, Oxford Monographs in Private International Law, Oxford (Clarendon Press) 1998, pp. 300.

361

Books Received ONTIVEROS PAOLINI Gerardo, Derecho internacional privado, Caracas (Marga Ed.) 1998, pp. 418. PANKOWSKA-LIER Beata, Schiedsgerichtsbarkeit in Polen, Heidelberg (Verlag Recht und Wirtschaft) 1998. PATAUT Etienne, Principe de souveraineté et conflits de juridictions (étude de droit international privé), Paris (L.G.D.J.) 1999, pp. VIII-517. PICONE Paolo, La riforma italiana del diritto internazionale privato, Padova (Cedam) 1998, pp. 697. PIKÓ Rita, Schiedsgerichtsbarkeit in Ungarn, Heidelberg (Verlag Recht und Wirtschaft) 1998. RACINE Jean-Baptiste, L'arbitrage commercial international et l'ordre public, Paris (L.G.D.J.) 1999, pp. XV-623. SCHRÖDER Jochen, Internationales Vertragsrecht: das Kollisionsrecht der transnationalen Wirtschaftsverträge, 2nd ed., Köln (RWS Verl. Kommunikationsforum) 1998, pp. XXXIV-203. SCHÜTT Heinrich, Deliktstyp und internationales Privatrecht: dargestellt an grenzüberschreitenden Problemen der Arzthaftung, Bern [etc.] (P. Lang) 1998. SCHÜTZE Rolf A., Rechtsverfolgung im Ausland, 2nd ed., Heidelberg (Verlag Recht und Wirtschaft) 1998, pp. 376. SOURJIKOVA-GIEBNER Valentina, Schiedsgerichtsbarkeit in der Ukraine, Internationale und nationale Schiedsgerichte, Heidelberg (Verlag Recht und Wirtschaft) 1998. SPAHLINGER Andreas, Sekundäre Insolvenzverfahren bei grenzüberschreitenden Insolvenzen: eine vergleichende Untersuchung zum deutschen, USamerikanischen, schweizerischen und europäischen Recht, Studien zum ausländischen und internationalen Privatrecht, Vol. 64, Tübingen (Mohr Siebeck) 1998, pp. 393. SYMEONIDES Symeon C./COLLINS PERDUE Wendy/VON MEHREN Arthur, Conflict of Laws: American, Comparative, International, St. Paul Minn. )West Publishing) 1998, pp. 940. TRUNK Alexander, Internationales Insolvenzrecht: systematische Darstellung des deutschen Rechts mit rechtsvergleichenden Bezügen, Tübingen (Mohr Siebeck) 1998, pp. XXV-463. UDE Lojze/WEDAM-LUKIĆ Dragica, Schiedsgerichtsbarkeit in der Republik Slowenien, Nationale und internationale Schiedsgerichte, Heidelberg (Verlag Recht und Wirtschaft) 1998.

362

Books Received VERNY Arsène, Schiedsgerichtsbarkeit in der Tschechischen Republik, Heidelberg (Verlag Recht und Wirtschaft) 1998. WEINBERG DE ROCA Inés Mónica, Derecho internacional privado, Buenos Aires (Depalma) 1997, pp. XVIII-293. ZIEGEL Jacob S. (ed.), New developments in International Commercial and Consumer Law (Proceedings of the 8th Biennial Conference of the International Academy of Commercial and Consumer Law), Oxford (Hart) 1998.

363

INDEX ________________

Accessory choice of law 257, 286–287 Actor sequitur forum rei China 141 Adoption 69, 71, 207, 241 Adults, protection of – Hague Conference 206, 208–209 Aliens law and 'sham marriages' 50–51 Amoco Cadiz (case) 288–291 Amsterdam Treaty 2 (note **), 32 (note 90) Analogy 42–43 Annulment of marriage jurisdiction 6–10 recognition of judgments 19 Anti-trust legislation Swiss courts 126 Arbitral awards (Foreign) recognition in Venezuela 115 (note 39) recognition in China 152–153 Arbitration Venezuela 106 international commercial – 153 Chinese Arbitration Law 153 Argentina Draft Statute on PIL 105 Assignment of receivables Hague Conference 207, 211 UNCITRAL 210 Austria non-marital cohabitation (PIL aspects) 43 'sham marriages' 67 escape clause 127– 128 torts 259 Aviation Chinese PIL 150 Bareboat charters 242, 266–267, 280 – registration 267–269 Belgium new PIL code 42

non-marital cohabitation (PIL aspects) 42 Better law approach 129 Bribery legislation against – 124, 125, 238 Brussels Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (27 September 1968) 3, 4, 6, 240 lis pendens 16, 18 automatic recognition 20 Internet 356 Brussels II Convention 1–36, 113, 299–318 entry into force 3 (note 2) negotiations 4 relationship to other conventions 27 – 31 transitional provisions 28 material scope 29 protocol on the interpretation by the European Court of Justice 31–32, 319–322 proposal for a Council Regulation (EC) 2 (note **), 323–340 Bulgaria Hague Conference on PIL 212 Capacity Venezuelan PIL Act 112 Change of connecting factor 197 Characteristic performance 236 Swiss courts 128 Chinese PIL 146 Hungarian PIL 180 Characterization 42, 43, 272, 279 Hungarian PIL 168–169 Child Abduction 15, 207, 209–210 Children Venezuelan PIL Act 113 German PIL 189–203

Index Consumer protection 122, 232, 233 Contestation of the child's origin German PIL 199 Contracts Venezuelan PIL Act 113 Chinese PIL 137 (note 5), 145–147 Hungarian PIL 176–182 on Internet 356, 357 Convention on the Simplification of Procedures for the Recovery Abroad of Maintenance Payments 5 (note 10) Court of Justice of the European Communities 66, 357 Brussels Convention 18 Brussels II Convention 31–32, 319–322 principle of proportionality 233 Croatia maritime torts 276, 284–285 Cultural property protection 122, 238 Currie, Brainerd 231, 237 (note 70) Dépeçage 128, 132, 218, 227 Venezuelan PIL Act 109 Hungarian PIL 178 Dependent actions Brussels II Convention 15, 16 Discretionary decision of the court and foreign mandatory rules 246–247 Discrimination on ground of nationality European Convention on Human Rights 80–82 Dissolution of Marriage see 'Divorce' Divorce jurisdiction (Brussels II Convention) 6–10 law applicable 7–8, 33 (note 90), 35, 36 (note 101) domestic legislation 8 recognition of foreign judgments 19–24 divorce of a sham marriage 53 Venezuelan PIL Act 112 Swiss PIL 131 Chinese PIL 150 Domicile

interest of – 194–195, 199 Hague Conference 205, 210 see also 'Parental responsibility' China courts 138–139 arbitration (CIETAC) 153, 154 maritime torts 147–148, 292 Chinese PIL 135–156 sources 136–141 domestic legislation on PIL 136–138 case law 138–139 international conventions 140 international customs 141 model law 155–156 Choice of forum 144 Choice of Law Hungarian PIL 176–180 implied – 177 see also 'Party autonomy' Choice-of-law rules bilateral – 217, 226–229 Close connection foreign mandatory rules 244–246 Closest connection 229 Venezuelan PIL Act 113 Austrian PIL Statute 127–128 Chinese PIL 146, 147 Rome convention 180 maritime torts 269, 275, 281, 287, 296 Codification of PIL Hungary 161–164 Venezuela 103–117 Codigo Bustamente 255 (note 19), 272 (note 110) Cohabitation, see 'Non-Marital Cohabitation' Collisions (between vessels) 270–278 in territorial waters 271–272 on high seas 272–274 Comity, theory of – 92, 93, 96, 238 Common enterprise (in torts) 258 Common nationality or domicile of the parties 256, 274 of ships (collision) 275 Consumer contracts 224, 233 Hungarian PIL 179 on Internet 356, 370

366

Index duty of co-operation 240 European Parliament relationship with the Hague Conference on PIL 214 European Union family law issues 1–36 Council resolution on 'sham marriages' 65–66 application of foreign mandatory rules 240, 246 conflicts rules for torts 255 (note 19), 259 (note 49), 260 (note 56) Euros register (draft) 266 European Union Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters see 'Brussel II Convention' Exception clause see 'Escape clause' Exchange control Swiss courts 126 Exclusive jurisdiction Brussel II Convention 7, 13, 16 (note 39), 17 Venezuelan courts 116 Chinese courts 143 Expectations of the parties 229, 236, 244 Family Matters EU 1–36 Venezuelan PIL Act 112 Chinese PIL 150–151 Flag of convenience (FOC) 252, 265– 266, 280, 281, 282, 291 Flag, law of the – see 'Lex bandi' Flexibility in conflict of laws 252, 358 Foreign judgments see 'Recognition and enforcement of – ' Foreign law proof of – 36 (note 101), 170– 171 application of – 108, 117 Venezuelan PIL Act 117 Foreign PIL Institute of International Law 353–354 Form of acts Venezuelan PIL Act 114

– of spouses 6 Venezuelan PIL Act 110–112 Double actionability rule English torts 272, 278 Droits acquis Venezuelan PIL Act 109, 110 Eingriffsnormen 120, 219 see also 'Mandatory rules' Electronic commerce 355 Electronic data interchange Hague Conference 207 Employment contracts 224, 233, 281, 286–287 Enforcement of foreign judgments see 'Recognition and enforcement of foreign judgments' England mandatory rules 220, 222 torts 254 maritime torts 263 (note 67), 271, 275 Entscheidungseinklang 239–242 Environmental damage 206, 288 Equality of men and women Dutch nationality law 58 (note 31) Escape clause 166, 174, 218, 229 comparative law 127, 128 Swiss PIL 127–130 , 258 (note 41), 259 (note 49) Swiss case law 130–132 torts 257, 258, 260 maritime torts 277–278, 287, 295–296 Estonia Hague Conference on PIL 212 EU Convention on the Simplification of Procedures for the Recovery Abroad of Maintenance Payments (1990) 4, 5 (note 10) European Convention on Human Rights discrimination on ground of nationality 80–82 European law principle of subsidiarity 33 (note 92) free movement of persons 34, 73 principle of proportionality 233–234

367

Index Hague Convention on the Recognition of Divorces and Legal Separations (1 June 1970) 5, 16 (note 39), 19, 20, 23 (note 60), 34 Member States 5 (note 11) Hague Convention on the Law Applicable to Traffic Accidents (4 May 1971) 255 (note 20), 260 (note 53) Hague Convention on the Law Applicable to Product Liability (2 October 1973) 255 (note 20) Hague Convention on the Law Applicable to Maintenance Obligations (2 October 1973) 35 (note 98), 132, 191 revision 207, 211 Hague Convention on the Law Applicable to Agency (12 March 1978) 221 Hague Convention on the Civil Aspects of International Child Abduction (25 October 1980) 15, 219, 209–210 database 210 Hague Convention on the Law Applicable to Trusts and to their Recognition (1 July 1985) 46 mandatory rules 47, 220 Hague Convention on the Law Applicable to Contracts for the International Sale of Goods (22 December 1986) 46, 127 Hague Convention on Protection of Children and Co-operation in respect with Intercountry Adoption (29 May 1993) 69, 207, 241 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children (16 October 1996) 5, 11–14, 26, 27, 34, 205 Harmony of decisions 239–242 Heimwärtsstreben 166 History of PIL 87–102

Forum non conveniens 16 (note 39), 133 (note 53) Forum shopping Brussel II Convention 7–10 France torts 260 (note 53) maritime torts 263 (note 67), 271 (note 105), 291 Fraude à la loi Venezuelan PIL Act 109 Swiss PIL 131 Hungarian PIL 175 Free movement of persons under EC law 34, 73 Freedom of expression (Internet) 355 Functional approach in PIL 231 General Principles of PIL 85 –102 Germany new conflicts rules on parents and child 189–203 new conflicts rules on torts 254, 259 (note 48), 260 case law on maritime torts 271 (note 105), 275 'sham marriages' 67 Globalisation 102, 209, 242, 355 Greece maritime torts 281 Habitual residence of spouses (Brussels II Convention) 6, 8 (note 18) of a child (German PIL) 191 Hague Conference on Private International Law recent developments 205–214 membership 212–213 website 214 parental responsibility 11 unmarried couples 37, 40, 45–46 Hague Convention on International Sales of Movables (15 June 1955) 27 Hague Convention concerning the Powers of Authorities and the Law Applicable in respect of the Protection of Minors (5 October 1961) 132 (note 53), 191, 205, 535

368

Index (CIDIP-II, Montevideo 1979) 117 (note 42) Inter-American Convention on the Domicile of Natural Persons in PIL (CIDIP-II, Montevideo 1979) 111 Inter-American Convention on the Law Applicable to International Contracts (CIDIP-V, Mexico 1994) 108 (note 20), 125 mandatory rules 110, 222 Interest analysis 231, 235–242 governmental interest analysis 237, 261 interests of the parties 236 States' interests 237–239 International Jurisdiction see 'Jurisdiction' Internet PIL Aspects 211–212, 355–358 Inter-Nordic Convention comprising private international law provisions on marriage, adoption and guardianship (1931) 20 (note 51), 29 Interpretation Brussels II Convention 2–3 (note 1), 31–32, 319–322 Ireland recognition of foreign divorces 22–23 Islamic law 212 Issue-by-issue approach 227 Italian PIL mandatory rules 220 (note 27) torts 254, 256 (note 27) maritime torts 280–281 Jurisdiction divorce, separation, annulment of judgments (Brussel II Convention) 6–10 parental responsibility (Brussel II Convention) 10–15 termination or dissolution of registered partnership (Netherlands) 41 Venezuelan PIL Act 114, 115 China 141–144

Savigny, Friedrich Carl von 86, 88, 101, 102, 216 Statutists, theory of the – 88–91 French school (Dumoulin, D'Argentré) 91 Dutch School (Huber) 92 Story, Joseph 92–101 Waechter, C. G. von 97–101 Holy See treaties with the – 31 Homosexual couples 44 Hungarian PIL 157–187 historic development 158–161 codification process 161–164 maritime torts 254 Hungarian Supreme Court 159 Immorality of the contract 234 Incorporation principle of – (Hungary) 162 Institute of International Law torts 254 (note 19) environmental damages 292 foreign private international law 353–354 Intellectual property Internet 355, 356 Inter-American Children's Institute 213 Inter-American Convention on Conflicts of Law Concerning Commercial Companies (CIDIP-II, Montevideo 1979) 112 Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (CIDIP-II, Montevideo 1979) 116 Inter-American Convention on General Rules of Private International Law (CIDIP-II, Montevideo 1979) 105, 108 (note 20), 117 (note 42) Inter-American Convention on Personality and Legal Capacity of Legal Persons in PIL (CIDIPII, Montevideo 1979) 112 Inter-American Convention on Proof and Information on Foreign Law

369

Index rules against 'sham marriages' 62–63 rules protecting seamen 281 environmental law 288, 292 see also 'Mandatory rules' Lois de police 120, 218 see also 'Mandatory rules', 'Lois d'application immédiate' Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (16 September 1988) 241 Maastricht Treaty 3 Maintenance obligations 191 Swiss PIL 132 Chinese PIL 150, 151 Hague Conference 207, 211 Mancini, Pasquale Stanislao 216 Mandatory rules 215–247 of the forum (Hungarian PIL) 162, 174, 218– 220 foreign 119–127, 221–222, 234– 247 Swiss PIL Statute 119–127 internationally mandatory rules, concept 223– 234 Venezuelan PIL Act 110 arbitration 123 (note 18) Interamerican Convention on the Law Applicable to International Contracts 110, 222 rules against 'sham marriages' 62–63 Swedish rules on the joint home 47 collective labor agreement 286 see also 'Lois d'application immédiate' Maritime law general or uniform maritime law 250, 251, 273–274 maritime PIL 251–252 Chinese PIL 147–148 Maritime torts 249–297, 252, 253, 262 Marriage 'sham marriages' 49–83 institution of – 51–55, 79–80 Dutch Conflicts of Law Act 62

Jurisdiction in civil and commercial matters Hague Conference 206, 207–208, 241 Jurisdiction to prescribe in public international law 245 Korea Hague Conference on PIL 212 Labor accidents (on vessels) 279 Labor contracts see 'Employment contracts' Law of the group (in torts) 258 Legal Persons Venezuelan PIL Act 112 Hungarian PIL 162 Legitimacy of children 190 Legitimization of children and Dutch nationality law 70 foreign legitimization in German PIL 200–201 Lex bandi 252, 278–285 see also 'Ship nationality' Lex fori Hungarian PIL 166, 184, 185 mandatory rules 218–221 collisions on high seas 272–274 Lex loci delicti commissi Chinese PIL 147 Hungarian PIL 159, 182, 183 as connecting factor for torts in general 253–255 alternatives to – 255–261 collisions between vessels 271 sea pollution 293–294 Lex maritimae 250 Lex mercatoria 358 Lex rei sitae Hungarian PIL 159 Limping family relations 5, 241 Lis alibi pendens 239 in matrimonial proceedings (Brussel II Convention) 15–19 initiation of proceedings 18 Brussels Convention (1968) 16, 18 Lisboa Rules 277 Lois d'application immédiate 120, 218 Venezuelan PIL Act 114

370

Index New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 152 New York Convention on the Recovery Abroad of Maintenance (20 June 1956) 207, 211 Non-Marital Cohabitation PIL Aspects 37–48, 40–44, 46–48 national legislation 38 Nordic Member States of the EU declaration to the Brussels II Convention 29– 31 Norme di applicazione necessaria 219 see 'Mandatory rules' Norway non-marital cohabitation 38 Obligations Venezuelan PIL Act 113 Ordre public 120 'sham marriages' 61–62, 79 'sham' recognition of a child 71–72 Venezuelan PIL Act 109 Hungarian PIL 159, 160, 172, 185 German PIL 192 surrogate matherhood 199 and mandatory rules 229–230 see also 'Public Policy' Origin of the child see 'Paternity' and 'Maternity' Overriding statutes 219 (note 23), 224 (note 36) Parental responsibility procedural aspects 4, 5, 25 (note 65) concept of – 14 jurisdiction 10–15 recognition and enforcement of foreign judgments 24–27 Parent-child relationship German PIL 200 Partnership, see 'Registered partnership' Party autonomy registered partnership 41 Venezuelan PIL Act 113 Chinese PIL 136 (note 5), 145–147

Venezuelan PIL Act 112 Chinese PIL 150 as a preliminary question 189–190 Marriage dissolution 1–36 see also 'Brussel II Convention', 'Divorce' Marxist approach to PIL 160 Maternity establishment of – 198–199 Matrimonial property relations Sweden 42 Mexico Civil Code 105 Model Law on PIL China 154, 155 Most significant relationship 255, 261, 277, 282, 358 Name of a child German PIL 202–203 Nationality law and 'sham marriages' 55–59, 71 and international adoption 68 recognition and legitimization of children 70–72 registered partnerships 72–74 New York Convention on the Nationality of Married women (1957) 55 Nationality, – of the ship see 'Ship nationality' Negotiable Instruments Chinese PIL 148 Negotiorum gestio Venezuelan PIL Act 114 Netherlands registered partnership (PIL aspects) 41 marriages PIL Act 62 'sham marriages' 49–83 aliens law 50–51 nationality law 55–59, 69–71 conflicts rules for torts (proposal of 1996) 256 (note 30), 259 maritime torts 260 (note 53), 276, 277, 295 New York Convention on the Nationality of Married Women (1957) 55

371

Index Public International Law and PIL 141, 239, 245 Public policy recognition of foreign divorces 23 Hungarian PIL 172–174, 186 See also 'Ordre public' Quebec (Code civil) escape clause 257, 258 (note 41) mandatory rules 220 Real estate jurisdiction (China) 143 Reciprocity 238 Venezuela PIL 115 Chinese PIL 152 Hungarian PIL 159, 170 Recognition and enforcement of foreign judgments 239, 240 termination or dissolution of registered partnership (Netherlands) 41 marriage dissolution (Brussels II Convention) 19–24 parental responsibility 19, 24–27 automatic recognition 20–21, 25 grounds of non-recognition (Brussel II Convention) 21–22, 25–26 public policy 23 non-review as to substance 24, 26 Venezuelan PIL Act 115, 116 China 152–153 Hague Conference 206, 207–208, 240 Recognition of children and Dutch nationality law 70 Refugees 214 Registered partnership national legislation 38 PIL aspects 37–48 , 41, 44–45, 47–48 recognition of foreign registered partnerships 41 Dutch legislation 54, 72–74, 75 registered 'sham' partnerships 72–74 Hague Conference 213 Renvoi 239

Hungarian PIL 159, 162, 176–180 Rome Convention 224, 225 Restatement (Second) on Conflict of Laws 225 torts 259–260 maritime torts 277, 286, 295 contracts on Internet 355, 357 see also 'Choice of law' Paternity recognition of – 190, 192–198 judicial establishment of – 71, 190, 191, 192–198 Persons Venezuelan PIL Act 112 Peru conflicts rules 105 Hague Conference on PIL 213 Piercing the corporate veil 290–291 Poligamous marriage Dutch nationality law 58 Pollution vessel source – 288–296 Preliminary question Venezuelan PIL Act 109 valid marriage as a – 189–190 Principles of International Commercial Law Venezuelan PIL Act 113 UNIDROIT Principles 241 Privacy, protection of – Hague Conference 207 Private International Law (Miscellaneous Provisions) Act 1995 torts 254 mandatory rules 220, 222 Privilegium germanicum 184 Proof of Acts Venezuelan PIL Act 114 Proof of Foreign Law Venezuelan PIL Act 117 Proper law of torts 278 Property Venezuelan PIL Act 113 Chinese PIL 145 Proportionality principle of – 233–234 Proximity principle of – 217, 236, 244

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Index PIL aspects 61–63 criminal law 63–65 European Community 65–66 comparative law 67–68 Ship nationality as a connecting factor 252, 262–270 concept 264–265 accidents on vessels 278–285 see also 'Lex bandi' Slovenia non-marital cohabitation 38 Sonderanknüpfung 120 see also 'Mandatory rules' Sources of conflicts rules 85–86 Venezuela 107 China 136–141 Soviet Union 'sham marriage' 67 Statutes on PIL 85–86 Venezuela PIL Statute 103–117 Swiss Statute 119–133 Chinese Model Law 166 Hungarian PIL Code 157–187 Italian Statute 220 (note 27), 254, 256 (note 27) Statutists 88–91, 102 Submission Venezuelan PIL Act 115 See also 'Choice of forum' Subsidiarity principle of – 33 (note 92) Substantial contact test 282–283 Succession Venezuelan PIL Act 114 Chinese PIL 143, 151 Hague Conference 207 Supreme People's Court (China) 139 Surrogate matherhood 199 Sweden non-marital cohabitation 38 PIL aspects 41 reform of international family law 41–42 registered partnership (PIL aspects) 45, 47 Swiss PIL Statute 119–133 mandatory rules 119–127, 220, 221

Venezuelan PIL Act 108 Hungarian PIL 159, 160, 169–170, 179 German PIL (filiation) 191, 192 Restatement (Second) on Conflict of Laws (1971) 357 contracts 225, 227 torts 255 (note 21), 261 Rio de Janeiro Rules 277 Rogatory letters Venezuelan PIL Act 116 Rome Convention on the Law Applicable to Contractual Obligations (19 June 1980) 10 (note 23), 35, 240 closest connection 128, 180, 217, 228–229 mandatory rules 220, 221, 244–247 party autonomy 224, 225 consumer contracts 180, 181, 224, 233, 281 employment contracts 224, 233, 281, 286–287 scope of the applicable law 227 (note 41) mandatory rules 219, 221, 244–247, 286 contracts on the Internet 356 Rome II Convention on the law applicable to torts (proposal) 255 (note 19), 256 (note 30), 259 (note 49), 260 (note 56) Rumanian PIL Statute 254 Sea pollution see 'Pollution' Seamen, injuries or death of – 278–287 Self-limiting rules 231 Separation of spouses Brussels II Convention 6–7, 12, 17 jurisdiction 6–10 recognition of judgments 19 Venezuelan PIL Act 112 'Sham marriages' 49–83 and (Dutch) aliens law 50-51 and (Dutch) nationality 55–59 Dutch 'Sham Marriages Act' 59–61, 74–75

373

Index Unfair competition Hague Conference on PIL 207 UNIDROIT Principles 241 Venezuela PIL Act 113 Uniformity of decisions 239–242 Unilateral choice of law torts 294 United Nations Convention on the Law of the Sea (1982) 264 (note 69), 268 (note 93) United Nations Convention for Registration of Ships (7 February 1986) 266 United Nations Convention on the Rights of the Child (20 November 1989) 205 United States torts 261 maritime torts 263 (note 67), 271 (note 105), 279 (note 143), 281–284 Unjust Enrichment Venezuelan PIL Act 114 Unmarried couples Dutch nationality law 58 Hague Conference 207 see 'Non-Marital Cohabitation', 'Registered Partnership' Venezuela PIL Act 103–117, 341–352 arbitration 106 Vested rights 86, 102, 216

escape clause 127–133, 229, 258 torts 254, 256, 260 288 (note 184) Territoriality doctrine of – 91, 98 and Internet 357 Torts Venezuelan PIL Act 114 Chinese PIL 147 Hungarian PIL 182–187 general conflicts rules 253–262 lex loci delicti commissi 253–255 alternatives to lex loci delicti commissi 255–261 maritime torts 249–297 Internet 356, 357 Transitional provisions Brussels and Brussels II Conventions 28 Tronc commun (application of the same rules of different laws) 276 Turkish PIL Act torts 259 Ukraine Hague Conference on PIL 212 UNCITRAL assignment of receivables 210 relations with the Hague Conference on PIL 213 Undue Payment Venezuelan PIL Act 114

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