Civil and Commercial Matters

by Anatol Dutta

1. Introduction

The distinction between private and public law is not an unknown concept in European Union law. The distinction plays, however, a less fundamental role than in some—notably continental—Member State’s laws. In particular, the competences of the Union are oriented towards subject areas and—with a few exceptions—not towards the dichotomy between private and public law. Yet also in Union law the distinction between private and public law can be traced. For example, the fundamental freedoms do not apply to certain activities which are connected to the exercise of public authority performed in order to preserve the sovereignty of the Member States (see Arts 45(4), 51(1), 62 TFEU/39(4), 45(1), 55 EC). The dichotomy, however, becomes rather obvious in connection with the legal term ‘civil and commercial matter’.

The term ‘civil and commercial matter’ is used in numerous European instruments, notably in the area of private international law in order to define the scope of the relevant instrument. On the European level, the concept ‘civil and commercial matter’ appears, for the first time, in the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments (Brussels Convention). The Brussels Convention—and today its successor, the Brussels I Regulation (Reg 44/2001)—was according to its Art 1(1)1 only applicable to civil and commercial matters although the old Art 220 of the EEC Treaty—on which the conclusion of the Brussels Convention was based—invited the Member States to conclude conventions for the mutual recognition of their judgments and was not restricted to civil matters. However, even in 1968 the term ‘civil and commercial matter’ had not been a new concept. The conventions of the Hague Conference on PIL also limit their scope to ‘civil or commercial matters’ or ‘matière civile ou commerciale’ (eg Art 1(1) of the 1965 Hague Service Convention; service of documents).

Union law reverts in almost all of the instruments based on Art 81 TFEU/61(c), 65 EC to the term ‘civil and commercial matter’, which is of no surprise bearing in mind that the competence of the European Union created by those provisions only allows measures in the field of judicial cooperation in civil matters: the term can be found apart from the Brussels I Regulation in the Evidence Regulation (Art 1(1) Reg 1206/2001; evidence (international)), the Legal Aid Directive (Art 1(2)1 Dir 2003/8; legal aid), the Enforcement Order Regulation (Art 2(1)1 Reg 805/ 2004; recognition and enforcement of foreign judgments), the Payment Procedure Regulation (Art 2(1)1 Reg 1896/2006; recognition and enforcement of foreign judgments), the Small Claims Procedure Regulation (Art 2(1)1 Reg 861/ 2007; recognition and enforcement of foreign judgments), the Rome II Regulation (Art 1(1)1 Reg 864/2007; non-contractual obligations (PIL)), the Service Regulation (Art 1(1)1 Reg 1393/2007; service of documents), and the Rome I Regulation (Art 1(1) Reg 593/2008; contractual obligations (PIL)). The cooperation through the channels of the European Judicial Network in civil and commercial matters is also—as the name of that network suggests—restricted to civil and commercial matters (see Art 1(1) Decision 2001/470). The Brussels IIbis Regulation (Art 1(1) Reg 2201/2003; European family law (PIL); child law (international)) understandably refers, as a family law instrument, only to civil matters. The Insolvency Regulation (Reg 1346/2000; insolvency (cross-border)) contains no explicit restriction to civil and commercial matters; insolvency proceedings are apparently always regarded to be of a civil and commercial nature (see recital 2). It should, however, not be overlooked that the Insolvency Regulation encompasses public law claims as well; Art 39 provides that tax and social security authorities of the Member States have the right to lodge their public law claims within the insolvency proceedings. Also not explicitly limited to civil and commercial matters is the Maintenance Regulation (Reg 4/2009; family law (international), European family law (PIL)); its scope is rather restricted to maintenance matters (see Art 1(1)) and covers also reimbursement proceedings between a public body and a maintenance debtor (see Art 64, see 3. below). Finally, the provisions on the scope of the Divorce Regulation (Reg 1259/2010) do not mention the term civil and commercial matters (see Art 1); however, Art 1(2)(c) excludes the annulment of marriage which can raise public law issues as far as state authorities can start annulment proceedings ex officio.

2. Autonomous interpretation

So far, the ECJ has only interpreted the term ‘civil and commercial matter’ in the context of the Brussels Convention, the Brussels I Regulation and the Brussels IIbis Regulation. Right from the beginning, the court has held that the term ‘civil and commercial matter’ has to be interpreted autonomously (interpretation of EU law), notably, by considering on the one hand the objectives and scheme of the respective instrument and, on the other hand, the general principles which stem from the corpus of the national legal systems (see ECJ Case 29/76 – Eurocontrol [1976] ECR 1541 para 3; ECJ Case 814/79 – Rüffer [1980] ECR 3807 para 7; ECJ Case C-172/91 – Sonntag [1993] ECR I-1963 paras 18, 25; ECJ Case C-271/00 – Gemeente Steenbergen [2002] ECR I-10489 para 28; ECJ Case C-266/01 – TIARD [2003] ECR I-4867 para 20; ECJ Case C-343/04 – ČEZ [2006] ECR I-4557 para 22; ECJ Case C-292/05 – Lechouritou [2007] ECR I-1519 para 29; ECJ Case C-435/06 – C [2007] ECR I-1519 para 46; ECJ Case C-420/07 – Apostolides [2009] ECR I-3571 para 41). The requirement of an autonomous interpretation of the term ‘civil and commercial matter’ is, however, not always an easy task. The Member States’ domestic laws differ considerably as to the question whether certain proceedings can be characterized as ‘civil and commercial’. For example, the English courts have, with regard to the Hague Conventions, interpreted the term ‘civil and commercial matter’ differently than their continental colleagues would have done. In Re State of Norway’s Application [1990] 1 AC 723, 806 the House of Lords has regarded tax proceedings as a civil and commercial matter for the purposes of a domestic provision which was based on the 1970 Hague Evidence Convention (evidence (international))—a conception of civil and commercial matter which would deviate from the perspective of most continental systems where tax claims are regarded as administrative and public law matters.

3. Meaning of the term in the Brussels I regime

According to the jurisprudence of the ECJ, not all proceedings between the state and a private person fall outside the scope of the Brussels Convention or the Brussels I Regulation (ECJ Case 29/76 – Eurocontrol [1976] ECR 1541 para 4; ECJ Case 814/79 – Rüffer [1980] ECR 3807 para 8; ECJ Case C-172/91 – Sonntag [1993] ECR I-1963 para 21; ECJ Case C-271/00 – Gemeente Steenbergen [2002] ECR I-10489 para 30; ECJ Case C-266/01 – TIARD [2003] ECR I-4867 para 22; ECJ Case C-292/05 – Lechouritou [2007] ECR I-1519 para 31; ECJ Case C-420/07 – Apostolides [2009] ECR I-3571 para 43). Hence, the ECJ does not follow a subjective theory which regards proceedings already as a public law matter if one of the parties is a public authority. Rather, in interpreting the term ‘civil and commercial matter’, the ECJ stresses especially the nature of the legal relationship between the parties and the subject matter of the proceedings (ECJ Case 29/76 – Eurocontrol [1976] ECR 1541 para 4; ECJ Case 814/79 – Rüffer [1980] ECR 3807 paras 8, 14; ECJ Case C-167/00 – Henkel [2002] ECR I-8111 para 29; ECJ Case C-271/00 – Gemeente Steenbergen [2002] ECR I-10489 para 29; ECJ Case C-266/01 – TIARD [2003] ECR I-4867 paras 22 ff; ECJ Case C-343/04 – ČEZ [2006] ECR I-4557 para 22; ECJ Case C-292/05 – Lechouritou [2007] ECR I-1519 para 30; ECJ Case C-420/07 – Apostolides [2009] ECR I-3571 para 42). However, the civil and commercial nature of proceedings is not already in doubt if the proceedings result from an activity of one of the parties in the public interest, as the ECJ held in Henkel (ECJ Case C-167/00 – Henkel [2002] ECR I-8111 paras 25–31); hence, the ECJ apparently rejects Ulpians interest theory (see Ulpian D.1.1.1.2 (Ulp 1 inst): ‘Publicum ius est quod statum rei Romanae spectat, privatum, quod ad singolorum utilitatem: sunt enim quaedam publice utilia, quaedam privatim’). This public interest theory is in any event outdated as there can equally be no doubt that private law may serve public interests.

A ‘civil and commercial matter’ in the sense of the Brussels Convention and the Brussels I Regulation is rather excluded if the legal relationships between the parties and especially the subject-matter of the claim result from acts of the State in exercise of its public authority (ECJ Case 29/76 – Eurocontrol [1976] ECR 1541 para 4; ECJ Case 814/79 – Rüffer [1980] ECR 3807 para 8; ECJ Case C-172/91 – Sonntag [1993] ECR I-1963 para 20; ECJ Case C-167/00 – Henkel [2002] ECR I-8111 para 26; ECJ Case C-271/00 – Gemeente Steenbergen [2002] ECR I-10489 para 30; ECJ Case C-292/05 – Lechouritou [2007] ECR I-1519 para 31; ECJ Case C-420/07 – Apostolides [2009] ECR I-3571 para 43). Hence, none of the parties should have exercised powers going beyond those existing under the rules applicable to relations between private individuals (ECJ Case C-172/91 – Sonntag [1993] ECR I-1963 para 22; ECJ Case C-167/00 – Henkel [2002] ECR I-8111 para 30; ECJ Case C-271/00 – Gemeente Steenbergen [2002] ECR I-10489 paras 34, 36; ECJ Case C-433/01 – Freistaat Bayern [2004] ECR I-981 paras 20ff; ECJ Case C-266/01 – TIARD [2003] ECR I-4867 para 30; ECJ Case C-265/02 – Frahuil [2004] ECR I-1543 para 21; ECJ Case C-292/05 – Lechouritou [2007] ECR 2007 para 34; ECJ Case C-420/07 – Apostolides [2009] ECR I-3571 para 44). Thus, the ECJ follows a prerogative rights theory which characterizes proceedings as public law matters if the relation between the parties is determined by rules which authorize or oblige the state as a public authority—a theory which prevails, eg, also in German domestic law (eg GSoGB 10 April 1986, BGHZ 97, 312, 313 ff; GSoGB 10 July 1989, BGHZ 108, 284, 286 ff). Yet the prerogative rights theory is far from being perfect. It only re-phrases the problem but itself gives no answer. Under which circumstances the state exercises public authority is the very question the prerogative rights theory should actually answer.

Therefore, it is necessary to have a closer look at the case law in which the EJC has assumed a ‘civil and commercial matter’—all the more so as the Brussels Convention and the Brussels I Regulation give little assistance in interpreting that term; Art 1(1)2 Brussels Convention/Brussels I Regulation only states that revenue, customs or administrative matters are not ‘civil and commercial matters’. As to Art 1(1)1 Brussels Convention, the court has, eg, in Eurocontrol not found a ‘civil and commercial matter’ where a private party is obliged to pay fees to a public authority for services which are compulsory and have been fixed unilaterally (ECJ Case 29/76 – Eurocontrol [1976] ECR 1541). Furthermore, in Rüffer, proceedings brought by a state authority for the reimbursement of costs incurred by the removal of a danger to public security which had been created by the defendant have not been characterized as a ‘civil and commercial matter’ because the state exercised public authority when ordering the removal (ECJ Case 814/79 – Rüffer [1980] ECR 3807). On the other hand, the ECJ has in TIARD regarded proceedings based on a guarantee granted by a private guarantor in favour of the state for the payment of customs fees payable by a third party as a ‘civil and commercial matter’: the guarantee remains an instrument of private law notwithstanding the secured claim’s being based on public law; the secured public law claim did not form, according to the court, the subject-matter of the proceedings even where the guarantor denies the existence of the public law claim and, as a consequence, his own accessory liability (ECJ Case C-266/01 – TIARD [2003] ECR I-4867 paras 41 ff). Likewise, the redress of a customs guarantor who had been called upon by the state for payment of the customs of a third party and now seeks compensation from the third party was characterized in Frahuil as a ‘civil and commercial matter’ by the court (ECJ Case C-265/02 – Frahuil [2004] ECR I-1543)—a decision which leads to surprise because the guarantor based his redress on a cessio legis, subrogation, of the custom claim and, thus, the action was mainly based on an act of public authority, ie the customs order. However, the ECJ appears to hold that the customs claim of the state loses its public nature by the subrogation; it only survives as a private redress claim in the person of the guarantor. Furthermore, the ECJ in Gemeente Steenbergen and in Freistaat Bayern characterized the maintenance redress of the state against a maintenance debtor for payment of maintenance to the maintenance creditor instead of the debtor as a ‘civil and commercial matter’ (ECJ Case C-271/00 – Gemeente Steenbergen [2002] ECR I-10489 paras 32 ff; ECJ Case C-433/01 – Freistaat Bayern [2004] ECR I-981 paras 20 ff—see now also Art 64 Maintenance Regulation (Reg 4/2009), and 1. above). In those cases as well the private maintenance claim was regarded as remaining existent; public law only transfers the maintenance claim to the state, but does not change the nature of the claim against the maintenance debtor. As a consequence, proceedings between private parties on certain property rights in immovables which had been in the past object of expropriation are also considered to constitute ‘civil and commercial matters’ (ECJ Case C-420/07 – Apostolides [2009] ECR I-3571 paras 40 ff): claims based on ownership keep their private law character even if ownership was changed by an act falling under public law.

Unclear at first sight, though, is the characterization of the public liability of the state. In the Sonntag case (ECJ Case C-172/91 – Sonntag [1993] ECR I-1963) the ECJ had decided that claims against a teacher—a public servant in Germany—based on a violation of his duties of supervision could form a ‘civil and commercial matter’ although such claims are conceived in some Member States as a public law liability. The court argued that not only teachers who are public servants are subject to duties of supervision but also teachers at private schools; the teacher would, hence, not be treated as a public authority. As a consequence of Sonntag, not all claims against the state for public wrongs fall outside the scope of the Brussels regime. Rather, only liability claims against the state with regard to its acta iure imperii cannot be characterized as ‘civil and commercial matters’ (eg Austrian Supreme Court of Justice, OGH 14 May 2001, SZ 74/86; Grovit v De Nederlandsche Bank [2006] 1 Lloyd’s Rep 636, QB); the term ‘acta iure imperii’ has in that context, as a matter of course, to be interpreted autonomously. The exclusion of liability for acta iure imperii is now confirmed by the new European instruments using the term ‘civil and commercial matter’. Here, liability for acta iure imperii is often explicitly excluded (eg Art 2(1)2 of the Enforcement Order Regulation and of the Payment Procedure Regulation recognition and enforcement of foreign judgments; Art 1(1)2 of the Rome II Regulation non-contractual obligations (PIL)). Furthermore, the ECJ has in the meantime confirmed in Lechouritou (ECJ Case C-292/05 – Lechouritou [2007] ECR I-1519) that claims based on the operations of German armed forces during World War II are not ‘civil and commercial matters’. In contrast to Sonntag, such military operations are—although committed on foreign soil (AG Ruiz-Jarabo Colomer, Opinion in ECJ Case C-292/05 – Lechouritou [2007] ECR I-1519 paras 68 ff)—acta iure imperii not only under domestic law but also from a European perspective because they are by necessity based on the exercise of public authority.

4. Uniform meaning in all European instruments?

The jurisprudence of the ECJ outlined in the previous section concerned exclusively the interpretation of the term ‘civil and commercial matter’ in the context of the Brussels Convention and the Brussels I Regulation. In principle, that case law can be drawn upon also for the interpretation of that term as far as it is used in other European instruments (see 1. above). The ECJ itself (in ECJ Case C-292/05 – Lechouritou [2007] ECR I-1519 para 45) has consulted other instruments when interpreting Art 1(1)1 Brussels Convention and appears to presuppose a uniform meaning for the term ‘civil and commercial matter’ in secondary Union law. Furthermore, the ECJ shows systematic thinking even beyond those instruments of secondary Union law. For example, in Sonntag (ECJ Case C-172/91 – Sonntag [1993] ECR I-1963 para 24) the court reverted to its own jurisprudence in the area of the fundamental freedoms. Vice versa, the court uses its interpretation of the term ‘civil and commercial matters’ in other areas of Union law, for example, as to the scope of European competition law (see ECJ Case C-364/92 – SAT Fluggesellschaft [1994] ECR I-43 para 28).

However, the elaborated jurisprudence of the ECJ concerning the term ‘civil and commercial matter’ should not be transferred, sight unseen, to other instruments which use that term. This relates notably to present and future instruments in the area of family law where private and public law often interrelate; otherwise, strongly linked issues could be torn apart if the European instrument was only applicable to the private law aspects. That problem has arisen in the context of international child law and the Brussels IIbis Regulation. The ECJ has implicitly held in the C case (ECJ Case C-435/06 – C [2007] ECR I-10141)—as previously explicitly articulated by AG Juliane Kokott in her opinion (in ECJ Case C-435/06 – C [2007] ECR I-10141 para 38)—that the term ‘civil matter’ in Art 1(1) of the Brussels IIbis Regulation is subject to its own rules: the autonomous interpretation of the European instruments has to take into account the objectives, scheme and history of the particular instrument and the particularly pertinent general principles which stem from the corpus of the national legal systems. Against this background the ECJ has held in C that the taking into care and placement of children outside their family forms a ‘civil matter’ for purposes of Art 1(1) of the Brussels IIbis Regulation. Nonetheless, such protective measures are clearly undertaken by the state in exercise of its public authority and could be characterized according to the criteria for the Brussels Convention and Brussels I Regulation (see 3. above) as ‘non-civil matters’. The state exercises powers going beyond those existing under the rules applicable to relations between private individuals.

Literature

Burkhard Heß, ‘Amtshaftung als ‘Zivilsache’ im Sinne von Art 1 Abs. 1 EuGVÜ’ [1994] IPRax 10; Ulrich Soltész, Der Begriff der Zivilsache im Europäischen Zivilprozeßrecht (1998); Reinhold Geimer, ‘Öffentlich-rechtliche Streitgegenstände’ [2003] IPRax 512; Jürgen Basedow, ‘Civil and Commercial Matters—A New Key Concept of Community Law’ in Rett og toleranse, festskrift til Helge Johan Thue, 70 år (2007) 151; Anatol Dutta, ‘Staatliches Wächteramt und europäisches Kindschaftsverfahrensrecht’ [2008] Zeitschrift für das gesamte Familienrecht (FamRZ) 835; Horatia Muir Watt and Etienne Pataut, ‘Les actes jure imperii et le Règlement Bruxelles 1, A propos de l’affaire Lechouritou’ (2008) 97 Rev crit dr int priv 61.