An Introduction to Eu Civil Justice

AN INTRODUCTION TO EU CIVIL JUSTICE

BACKGROUND – The Rome Treaty

Article 220 of the Rome Treaty (now Article 273 of TEC) provides that “Member States shall, so far as is necessary, enter into negotiations with each other with a view to securing for the benefit of their nationals” …. “the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and of arbitration awards”

EARLY CONVENTIONS

Two conventions made under Article 220 (above) are especially noteworthy:

(a) Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1968 - the Brussels Convention).

The Convention addressed two key issues which arise in cross-border disputes, namely, which Member State’s court should have jurisdiction to rule in the matter; and, how the judgment given by that court should be recognised and enforced in other Member States.

(b) EC Convention on the Law Applicable to Contractual Obligations (1980 – the Rome Convention)

TREATY CHANGES, TAMPERE AND HAGUE PROGRAMME

(i)  Maastricht – the Treaty on European Union –the Third Pillar

In December 1991, the Heads of State and government from the Member States of the European Community met in Maastricht to negotiate the Treaty on European Union (the TEU - often referred to as the “Maastricht Treaty”[1]). The formal signing of the Treaty occurred on 7 February 1992 but the Treaty did not enter into force until 1 November 1993.[2] The Treaty is important because it formally established the European Union (EU). founded on the (then three) European Communities, supplemented by the policies and forms of co-operation established by the EU Treaty. There are thus what have come to be called the three pillars:

• the First (or Community) Pillar;

• the Second Pillar, which contains the Common Foreign and Security Policy; and

• the Third Pillar, then Justice and Home Affairs

Significantly any action relating, for example, to civil justice under the Third Pillar was inter-governmental in nature, requiring unanimity on the part of the Member States and restricting the type of legislative measures that could be adopted.[3] For example, in May 1997, the Council adopted the Convention on the service in the Member States of the European Union of judicial and extrajudicial documents in civil or commercial matters. It also recommended that the Member States adopt the Convention in accordance with their respective constitutional requirements. In fact the Convention never entered into force (see below).

(ii)  Amsterdam - Civil Justice moved into EC treaty

The Amsterdam Treaty introduced the concept of an “area of freedom, security and justice”, potentially as important a development as that of the Single Market. It included a new free movement Title in the EC Treaty and transferred some of the policy areas (e.g. asylum) previously covered by Title VI of the TEU (“Justice and Home Affairs” as then comprised the Third Pillar) into the First (Community) Pillar.[4] Those matters remaining in the Third Pillar, in particular Police and judicial co-operation in criminal matters, continue to play a key role in establishing one of the Union’s most important objectives, the creation of an area of freedom, security and justice.

Article 65 TEC, to be found in Title IV of the Treaty[5], provides for the adoption of measures “in the field of judicial co-operation in civil matters having cross-border implications” (emphasis added). A further limitation is that such measures are to be taken “in so far as necessary or the proper functioning of the internal market”. Following the Treaty of Nice such measures are taken in accordance with the co-decision procedure, with the exception of family law matters.

In October 1999 the European Council (meeting at Tampere, in Finland) adopted a wide-ranging programme aimed at to putting into practice the “area of freedom, security and justice” established by the Treaty of Amsterdam in the area of Justice and Home Affairs. Tampere set out policy objectives and ambitious objectives and a timetable for action in all relevant areas, including civil justice.[6]

The European Council identified mutual recognition as the cornerstone:

“33. Enhanced mutual recognition of judicial decisions and judgements and the necessary approximation of legislation would facilitate co-operation between authorities and the judicial protection of individual rights. The European Council therefore endorses the principle of mutual recognition which, in its view, should become the cornerstone of judicial co-operation in both civil and criminal matters within the Union. The principle should apply both to judgements and to other decisions of judicial authorities”

Tampere was followed by the Hague programme.[7] This identified priorities and laid down a programme for progress in a further five years. Part 3, entitled Strengthening Justice, deals in large part with civil law matters and includes a reference to the European contract law (see below). A new five year programme is to be settled under the Swedish presidency (the Stockholm Programme)

BUILDING OF EC CIVIL JUSTICE ACQUIS

(i)  Conversion of Conventions into Regulations

As mentioned, the Treaty of Amsterdam changed the legal basis for judicial cooperation in civil matters (see now Article 65 TEC) and made such measures subject to different legal instruments and procedures. The Commission therefore proposed that a number of Conventions be transposed into Community regulations (as opposed to directives) so as to ensure their speedy implementation and to obtain for citizens the practical benefits more quickly.[8]

(a) Brussels I and II Regulations

Regulation 44/2001 replaced the Brussels Convention (Convention on jurisdiction and the enforcement of judgments in civil and commercial matters 1968).

Regulation 1347/2000[9] replaced the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters (signed by the Member States on 28 May 1998). Regulation 1347/2000 (commonly referred to as the "Brussels II" Regulation) was adopted in May 2000 and entered into force on 1 March 2001. The "Brussels II" Regulation applied to civil proceedings relating to divorce, legal separation or marriage annulment. It also applied to decisions on parental responsibility for the children of both spouses if these decisions were rendered at the occasion of a procedure on divorce, legal separation or marriage annulment. As explained below, Regulation 1347/2000 was replaced by a new and more extensive Brussels II Regulation in November 2003.[10]

(b)  Insolvency Regulation

Regulation (EC) No 1346/2000[11] replaced the European Union Convention on Insolvency Proceedings 1995, which had been intended to complement the Brussels Convention on jurisdiction and the enforcement of judgments (see above).

The Regulation applies to cross-border insolvency proceedings where the centre of the debtor's main interests is located in the EU. The Regulation provides jurisdictional rules for the opening of “main insolvency proceedings” with universal scope (the Member State where the debtor has the centre of his main interests). It also permits secondary local insolvency proceedings in another Member State (if the debtor has an establishment there). The Regulation specifies the information which the court or the liquidator is required to provide to the creditors and the rules for lodging claims.

(c)  Contract – Rome I

The 1980 Rome Convention on the law applicable to contractual obligations harmonised certain rules of conflict of laws applicable to contracts. It was replaced in 2008 by the Rome I Regulation[12] which converted the Convention into a Community instrument, at the same time modernising it. The new Regulation retains the main principle of the Convention, namely that the freedom of parties to choose[13] the applicable law (Article 3). The Regulation, however, goes further than the Convention in providing a detailed set of rules to determine the applicable law where the parties have not reached such agreement (Article 4)[14]. Special rules apply to particular types of contact: contracts of carriage, consumer contracts, insurance contracts and individual employment contracts are dealt with in Articles 5-8 respectively.

Rome I contains a number of exceptions (so-called “overriding mandatory provisions”, or mandatory rules) to the application of the choice of law provisions. The application of provisions regarded as ‘crucial by a country for safeguarding its public interests, such as its political, social or economic organisation’ shall not be restricted by anything in the Regulation (Article 9 (2)). Effect may be given to such provisions where the overriding mandatory provisions render the performance of the contract unlawful’ (Article 9(3)). Further, application of the law of a country specified by the rules in Rome I may be refused where such application is ‘manifestly incompatible with the public policy (ordre public) of the forum’ (Article 21).[15]

Among the new provisions (not in the Convention) are rules on voluntary assignment, subrogation and set-off (Articles 14, 15 and 17).

(d)  Service of documents

Regulation 1348/2000[16] replaced the Convention on the service in the Member States of the European Union of judicial and extrajudicial documents in civil or commercial matters (adopted by Member States on 26 May 1997).

SOME ELEMENTS OF THE ACQUIS

(i)  Brussels 1 and Brussels II - jurisdiction and recognition and enforcement of judgments

Brussels I Regulation - civil and commercial matters

Regulation 44/2001[17] lays down rules governing the jurisdiction of Member States’ courts[18] in civil and commercial matters.[19] The basic rule is that jurisdiction is to be exercised by the Member State in which the defendant is domiciled,[20] regardless of his or her nationality (Article 2). There are, as might be expected, exceptions to the general rules. So, the Regulation also lays down special rules, where the defendants may be sued in a court other that of the State in which he or she is domiciled. So, matters relating to a contract may be dealt with by the courts for the place of performance of the obligation (Article 5 (1)). Claims in tort or delict may be brought in the courts of the place where the harmful event occurred or may occur (Article 5 (3)). The Regulation also sets out special rules applicable to insurance (Articles 8-14), consumer contracts (Articles 15-17 ) and individual contracts of employment (Articles 18-21). Further, the Regulation provides for exclusive jurisdiction in certain cases: rights in rem in immovable property or tenancies of immovable property; the validity of the constitution, the nullity or the dissolution of companies; the validity of entries in public registers (Article 22). For example, a dispute over the ownership of immoveable property must be determined in the courts of the Member State in which the property is situated.

The Regulation also recognises and respects “choice of court” clauses. If the parties, one or more of whom is domiciled in the Community, have concluded a choice of jurisdiction clause, the agreed court will have jurisdiction. The Regulation does, however, stipulate certain formal requirements for such clauses (Article 23).

The Regulation also provides a mechanism to handle cases pending elsewhere (lis pendens) and related actions (Article 27). Where proceedings involving the same cause of action and between the same parties are brought before courts of different Member States, the second and any other court seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. Where the jurisdiction of the court first seised is established, the other court(s) seised shall decline jurisdiction in favour of that court. The operation of this lis pendens rule has given rise to some controversy, in particular in relation to choice of court agreements and where proceedings are started in one court (e.g. for negative declaratory relief) in order to forestall legitimate infringement/liability proceedings in another member State (the so-called “torpedo”)

As regards recognition and enforcement the Regulation provides that a judgment[21] given in a Member State is to be recognised automatically, no special proceedings being necessary unless recognition is actually contested (Article 33). A declaration that a foreign judgment is enforceable is to be issued after formal checks of the documents supplied. The Regulation lists grounds for non-enforcement (public policy, defective service, irreconcilability with proceedings or judgment in receiving court, want of jurisdiction under the Regulation), but courts are not to raise these of their own motion (Articles 34-35). A foreign judgment may not be reviewed as to its substance (Article 36).

A court 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 (Article 37). A judgment is to be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there (Article 38). The parties may appeal against a decision on an application for a declaration of enforceability (see Articles 43-46).

Brussels II Regulation – matrimonial matters

Regulation 2201/2003 (Brussels II) [22] applies to civil proceedings relating to divorce, legal separation and annulment of marriage, and matters concerning parental responsibility for children.

Jurisdiction in matters relating to divorce, legal separation or annulment of marriage is determined according to the country of residence of one or both spouses or according to their nationality.[23] To avoid conflicts of jurisdiction between Member States, there is, as under Brussels I, a strict lis pendens rule: Brussels II applies a 'first come, first served' rule to actions between the same parties raised in two Member States.[24]. However, the second court seised may in urgent cases take provisional or protective measures.

The original Brussels II Regulation only dealt with matters of parental responsibility in the context of matrimonial proceedings between the parents. Regulation 2001/2003 now extends the Community rules of jurisdiction to matters of parental responsibility generally. It covers cases of attribution, exercise, delegation, restriction or termination of parental responsibility (Article 1). The Regulation expressly extends to rights of custody and rights of access, guardianship, curatorship and similar institutions, the designation and functions of any person or body having charge of the child's person or property, representing or assisting the child, the placement of the child in a foster family or in institutional care, and measures for the protection of the child relating to the administration, conservation or disposal of the child's property.[25] The basic rule is that the courts of a Member State have jurisdiction in respect of a child who is habitually resident in that State (Article 8).[26] There are special rules dealing with the children who move lawfully from one Member State to another (Article 9).[27]