Jurisdiction (PIL)

From Max-EuP 2012

by Martin Illmer

1. Term and function

Jurisdiction in private international law is concerned with the international jurisdiction of the courts of a state as such. Direct jurisdiction (direkte Zuständigkeit, compétence directe) refers to the jurisdiction to adjudicate whereas indirect jurisdiction (indirekte Zuständigkeit, compétence indirecte) refers to the jurisdiction of the foreign court in the context of recognition and enforcement of foreign judgments.

Jurisdiction in private international law has to be distinguished from jurisdiction in public international law (jurisdiction of domestic courts (public international law). In Germany and France there is a clear differentiation between the two concepts which is already reflected by the different terms of internationale Zuständigkeit/compétence internationale and Gerichtsbarkeit/juridiction. English common law does not clearly differentiate between the terms. The jurisdiction of the court seized comprises the power to adjudicate with respect to public and private international law issues. On the merits, however, most legal systems differentiate between issues of private international law (following mainly the concept of the closest connection, see 3. below) versus issues of public international law (facultas iurisdictionis following the concept of territoriality) in relation to the courts’ powers to adjudicate.

While jurisdiction concerns the question whether the courts of a state as such are competent to adjudicate the dispute, the local venue concerns the question which specific court of that state is (territorially) competent. In states with several legal systems within the state (eg the United Kingdom and the United States) jurisdiction issues as between those legal systems are determined by rules of interlocal jurisdiction.

Jurisdiction may be crucial for the outcome of a cross-border dispute. The competent court determines the applicable law according to its national rules of private international law and applies the lex fori to issues of evidence and procedure. Furthermore, recognition and enforcement of foreign judgments is assured in the state of origin while recognition and enforcement in a foreign state is subject to that state’s rules on recognition and enforcement of foreign judgments.

2. History and development of the Law

The formular process of Roman law applied a sophisticated system of different heads of jurisdiction. They constitute the basis for the rules of local as well as international jurisdiction of most civil law systems and of the jurisdiction regime of the Brussels I Regulation (Reg 44/2001) and the Lugano Convention (which is identical to the Brussels I Regulation and applies in relation to Switzerland, Norway and Iceland). The principle underlying the forum domicilii (cf §§ 13, 17 German Zivilprozessordnung, Art 42(1), 43 French Code de procédure civile and Art 2 Brussels I Regulation/Lugano Convention) is the Roman concept of actor sequitur forum rei. With regard to specific actions arising from a contract, Roman law provided for the competence of the courts at the place of the conclusion of a contract and the place of performance (forum contractus), and with regard to actions in delict/tort for the competence of the courts at the place where the harmful event occurred (forum delicti commissi). Today, the place of performance is widely accepted as the determining criterion for jurisdiction in contractual matters (cf Art 5 no 1 Brussels I Regulation/Lugano Convention, § 29 German ZPO, § 88 Austrian Jurisdiktionsnorm, Art 46 French CPC, Art 31(1)(b) CMR and Art 33(1) of the Montreal Convention). Likewise, the place where the harmful event occurred is nowadays the predominant criterion for jurisdiction in delict/tort (Art 5 no 3 Brussels I Regulation/ Lugano Convention, § 32 German ZPO, Art 46 French CPC; Art 129(2) Swiss Private International Law Act).

Under English common law a different approach to jurisdiction emerged which is not based on the Roman tradition. It does not provide heads of jurisdiction based on the type of claim. Instead, jurisdiction is either founded on the physical power over the parties (in personam jurisdiction) or over the subject matter of the dispute (in rem jurisdiction). Jurisdiction in personam is based primarily on service of the claim form in England or abroad (the latter regularly requiring the permission of the English courts), but may also be established by a submission to jurisdiction (ie entering an appearance) or a choice of court agreement.

Consequently, there are fundamental conceptual differences between the system of jurisdiction under the Brussels I Regulation and the civil law systems on the one hand and jurisdiction under common law on the other hand. The continental civil law systems and the Brussels I Regulation allocate jurisdiction on the basis of rigid statutory heads of jurisdiction. Positive conflicts of jurisdiction are solved by the lis pendens rule (cf Art 27 Brussels I Regulation and ECJ Case C-116/02 – Gasser [2003] ECR I-14693). The English system does not operate with clear-cut heads of jurisdiction. Rather, it rests primarily on an exorbitant jurisdiction based on the formal act of service upon the defendant. Some of the criteria of the continental heads of jurisdiction serve as grounds for allowing service out of the jurisdiction with permission of the English courts (rule 6.36 of the English Civil Procedure Rules), but permission is discretionary. Such wide jurisdiction requires a balancing corrective element. It is provided by the doctrine of forum non conveniens which takes circumstances into account other than purely formal criteria (Spiliada Maritime Corp v Consulex Ltd [1987] AC 460 (HL)). Under this doctrine, a court seized may decline jurisdiction if the courts of another country appear to be the natural forum, ie better suited to adjudicate the dispute, and if the dispute may be adjudicated justly and fairly in that country. Where there are definite conflicts of jurisdiction, English law does not apply the lis pendens rule. Proceedings involving the same cause of action between the same parties pending before another court are only one factor in determining the forum conveniens.

The discretion under the doctrine of forum non conveniens is in fundamental contrast to the rigid system of the Brussels I Regulation and the continental regimes. A court seized under a head of jurisdiction of the Brussels I Regulation cannot decline its jurisdiction based on discretionary grounds of forum non conveniens. This holds true, even if, apart from the domicile of the defendant in the Member State of the court seized, the dispute has no connection to another Member State but only to a non-Member State; see ECJ Case C-281/02 – Owusu [2005] ECR I-1383, paras 24 ff). Whereas international jurisdiction in civil and commercial matters in the EU is thus modelled after the continental systems, the matter is different with regard to jurisdiction in child law (international). The Brussels IIbis Regulation (Reg 2201/2003) combines rigid heads of jurisdiction with the concept of forum non conveniens (Art 15). One of the reasons for the different approaches is the legislative history. The initial signatory states of the Brussels I Regulation’s predecessor, the Brussels Convention, were all continental civil law countries. The respective provisions of the Brussels IIbis Regulation, however, are based on the Hague Convention on child protection of 1996, the negotiating and initial signatory states of which were partly civil law, partly common law countries.

Besides those conceptual differences, there is a systematic difference in the way national laws regulate international jurisdiction. At the beginning of the 20th century, distinct rules of jurisdiction were lacking in most national laws. Some international conventions dealing with specific areas of law contained rules on jurisdiction, but merely as an annex to the substantive law. Today, there exist two different systems: distinct rules on jurisdiction on the one hand (cf Arts 5 ff, 13(1) Belgian Private International Law Act; Art 22 Spanish Ley Orgánica del Poder Judicial; Arts 3 ff Italian Private International Law Act, Arts 18 ff Italian Codice di Procedura Civile; Arts 2 ff Swiss Private International Law Act; Arts 2 ff Dutch Wetboek van Burgerlijke Rechtsvordering; and English common law) and dual functionality of the local venue rules on the other hand (see Germany, Austria and France apart from Arts 14, 15 Code civil attaching to French nationality).

3. The criteria for allocating jurisdiction

The jurisdiction regimes of the Member States and the Brussels I and IIbis Regulations are each based on a coordinate system of criteria that reflect the partly concurring, partly conflicting interests of the parties, of the court seized and of the state the courts of which are seized.

Crucial criteria for allocating jurisdiction are a close connection to the parties (see the general jurisdiction at the defendant’s domicile), a close connection to the relevant facts (place of performance and place where the harmful event occurred in contract and delict/tort), a close connection to the applicable law and finally a close connection to future enforcement of the judgment. The exclusive jurisdiction for rights in rem is based on the closest connection to the facts and state interests. A close connection to the applicable law exists if jurisdiction and applicable law are determined according to the same connecting factor which is regularly the case in matters in rem and in delict/tort, but not in contractual matters. A concurrence of jurisdiction and applicable law in contractual matters is, however, often achieved by a combined choice of jurisdiction and applicable law. With regard to consumer contracts, such concurrence is usually already achieved by the statutory provisions. The habitual residence of the consumer as the connecting factor under Art 6(1) Rome I Regulation (Reg 593/2008) is regularly identical with the place of performance and the domicile of the consumer employed as the connecting factors under the heads of jurisdiction of Art 16 Brussels I Regulation. While such concurrence may be desirable for increasing the chance for a correct decision, most national systems as well as the Brussels I Regulation do not pursue a strict concurrence of jurisdiction and applicable law in the sense of a forum legis, ie jurisdiction of the courts of the state of the applicable law (differently, however, rule 6.20(5)(c) of the English Civil Procedure Rules with regard to contractual claims).

4. European law

Jurisdiction was, in connection with the recognition and enforcement of foreign judgments, one of the first areas covered by European civil procedure. The first step to harmonization was the Brussels Convention of 1968, replaced by the nearly identical Brussels I Regulation (see its Art 68) once legal competence of the EU was introduced by the Amsterdam Treaty in Art 81 TFEU/65 EC.

The Brussels I Regulation, the Rome I Regulation and the Rome II Regulation (Reg 864/2007) constitute an integrated, uniform system of private international law and international civil procedure in civil and commercial matters in the European Union (EU). The main aim of this system is external uniformity of decisions as between the Member States as well as a reduced appeal of abusive forum shopping. The courts of all Member States are to apply the same rules to determine jurisdiction and applicable law to achieve legal certainty and predictability of decisions.

a) Brussels I Regulation

In a cross-border context as between the Member States of the European Union (EU) (including Denmark), the national rules on jurisdiction are superseded by the Brussels I Regulation. It establishes a comprehensive and exhaustive system of jurisdiction in civil and commercial matters. Several subject matters are, however, excluded from its material scope.

According to Art 1(2)(a), the status or legal capacity of natural persons, rights in property arising out of a matrimonial relationship, wills and succession are excluded since they are covered by other existing (Brussels IIbis Regulation) or envisaged future regulations.

Bankruptcy, insolvency and analogous proceedings are excluded pursuant to Art 1(2)(b) since these proceedings are covered by the Insolvency Regulation (Reg 1346/2000). In a recent decision, the ECJ held that not only the insolvency proceedings as such but also actions deriving from and closely connected to them are excluded from the Brussels I Regulation, so that according to Art 3(1) Insolvency Regulation jurisdiction lies with the courts of the state in which the insolvency proceedings were opened regardless of the domicile of the defendant (ECJ Case C-339/07 – Deko Marty Belgium [2009] ECR I-767, para 21). The Brussels I Regulation and the Insolvency Regulation are intended to work alongside each other neatly without overlapping. Consequently, the ECJ held in Gourdain (Case 133/78 [1979] ECR 733, a case concerning the Brussels Convention) and in Deko Marty Belgium that an action to set aside a transaction by virtue of insolvency is covered by Art 3(1) Insolvency Regulation and hence excluded from the Brussels I Regulation.

Arbitration is excluded from the Regulation’s substantive scope under Art 1(2)(d). Nevertheless, it is particularly unclear whether state court proceedings in support of arbitration are covered by the Brussels I Regulation. Drawing from the few ECJ decisions on the issue, the crucial criterion appears to be whether the subject matter of the proceedings is arbitration. If that is the case, then the proceedings are excluded from the Brussels I Regulation (ECJ Case C-190/89 – Marc Rich [1991] ECR I-3855 (appointment of arbitrator outside the scope of the Brussels I Regulation); ECJ Case C-391/95 – van Uden [1998] ECR I-7091 (protective measures concerning a claim that is subject to an arbitration agreement inside the scope of the Brussels I Regulation)). Anti-suit injunctions to enforce arbitration agreements are prohibited under the Brussels I Regulation (ECJ Case C-185/07 – West Tankers [2009] ECR I-663 para 29 ff). Even if the proceedings for obtaining the anti-suit injunction were excluded from the material scope of the Brussels I Regulation, the anti-suit injunction would interfere with the right of the court seized under the Brussels I Regulation (save the arbitration agreement) to determine its jurisdiction independently which includes the preliminary issue of validity and scope of the arbitration agreement. Furthermore, anti-suit injunctions run counter to the principle of mutual trust underlying the Brussels I Regulation. In connection with the ECJ’s decision in Turner (ECJ Case C-159/02 [2004] ECR I-3565) all kinds of anti-suit injunctions are therefore prohibited within the material and territorial scope of the Brussels I Regulation. Based on an expert group’s recommendation, the Commission in its proposal for a reformed Brussels I Regulation of December 2010 (COM(2010) 748 final) suggests partially deleting the exclusion of arbitration in order to introduce a special lis pendens rule in Art 29(4) addressing the interface of arbitration and state court proceedings.

The jurisdiction regime of the Brussels I Regulation is familiar to continental lawyers. Article 2 provides for the general head of jurisdiction at the defendant’s domicile or seat. Articles 5 to 21 contain special heads of jurisdiction. For contractual claims, Art 5 no 1 provides for the place of performance (autonomously construed by the provision itself), for claims in delict/tort, Art 5 no 3 establishes jurisdiction at the place where the harmful event occurred. In contrast to the issue of the applicable law under Art 4(1) Rome II Regulation, the issue of jurisdiction is governed by the principle of ubiquity. The claimant has the choice whether to bring the claim in the country where the damage occurred or, alternatively, where the event giving rise to it took place (ECJ Case 21/76 – Mines de Potasse d’Alsace [1976] ECR 1735, paras 12 ff; ECJ Case C-68/93 – Shevill [1995] ECR I-415, para 20; ECJ Case C-168/02 – Kronhofer [2004] ECR I-6009, para 16). In matters relating to insurance, consumer contracts and individual contracts of employment, the Brussels I Regulation provides for special heads of jurisdiction which are partly mandatory in favour of the weaker party (the insured, the consumer, the employee); eg a consumer may bring a claim at his place of residence (Art 16(1)) adding an alternative to Arts 2 and 5 no 1, but may himself only be sued at his place of domicile (Art 16(2), removing potential jurisdiction under Art 2 and 5 no 1. A special additional jurisdiction aimed at procedural efficiency is provided by Art 6 in case of multiple defendants with closely connected claims, recourse claims, counter-claims and contractual claims connected with a claim for a right in rem in immovable property. Exclusive jurisdiction is provided by Art 22 in relation to proceedings concerned with rights in rem in immovable property, several claims in corporate matters and various registered rights. Respecting party autonomy, jurisdiction may also be based on choice of court agreements (Art 23) and a submission to jurisdiction (Art 24). The important issue of pending and parallel proceedings is dealt with by Arts 27 ff, providing for the lis pendens rule (prevailing even over a jurisdiction agreement (choice of court agreements), see ECJ Case C-116/02 – Gasser [2003] ECR I-14693, paras 41 ff).

Apart from jurisdiction based on an agreement, submission or exclusive heads of jurisdiction, jurisdiction under the Brussels I Regulation is dependent on the defendant’s domicile or seat in a Member State of the European Union (EU) (Art 4). Beyond that there is no connection to another Member State required; rather, a connection to any third state is sufficient (ECJ Case C-281/02 – Owusu [2005] ECR I-1383). This results in a very wide territorial reach of the Brussels I Regulation. Where a defendant’s domicile or seat is in a Member State and a cross-border element exists, a claimant may always bring a claim under the Brussels I Regulation. The Groupe Européen de droit international privé (GEDIP) has recently suggested deleting Art 4 so that the jurisdiction regime of the Brussels I Regulation would apply even to cases having links only to third countries.

In preparation of the pending reform of the Brussels I Regulation, the European Commission asked the German professors Hess, Pfeiffer and Schlosser to prepare a report on the current application of the Brussels I Regulation with concrete reform proposals (the so-called ‘Heidelberg Report’). Based on this report, the Commission issued its own Report (COM(2009) 174 final) and a green paper (COM(2009) 175 final). During a consultation stage, more than 100 submissions were made to the Commission. In December 2010, the Commission presented its proposal for a reformed Brussels I Regulation (COM(2010) 748 final). The main areas of reform with regard to the jurisdiction regime are the operation of the Brussels I Regulation in relation to third state defendants, the lis pendens rule, particularly in relation to choice of court agreements, and the interface between the Brussels I Regulation and arbitration.

b) Further secondary law of the EU

Various European regulations contain special rules on jurisdiction in specific areas of law which prevail over the general European regime of the Brussels I Regulation (see Art 67 Brussels I Regulation).

Jurisdiction in matrimonial matters and issues of parental responsibility is governed by the Brussels IIbis Regulation, jurisdiction in maintenance matters by Reg 4/2009 (European Family Law (PIL)).

With regard to intellectual property there are specific provisions on jurisdiction in Arts 94 ff Reg 207/2009 (Community trade mark), in Arts 79 ff Reg 6/2002 (Community design) and in Art 101 ff Reg 2001/94 (plant variety protection).

5. Uniform law

A uniform law on jurisdiction has not yet reached the level of unification achieved within the EU. In particular, there is no general convention on jurisdiction (and recognition and enforcement of foreign judgments) in civil and commercial matters comparable to the Brussels I Regulation in force. Repeated attempts to agree on such a convention have failed. Even the efforts of the United States within the framework of the Hague Conference on PIL in the early 1990s did not succeed. The transatlantic differences proved irreconcilable. The United States was striving for a convention mixte, leaving large areas of international jurisdiction in favour of US claimants untouched while assuring recognition and enforcement of US judgments abroad. The European countries were aiming for the opposite with a Convention double: clear-cut uniform rules on jurisdiction (as in the Brussels I Regulation) and the possibility to decline recognition and enforcement of foreign judgments based on exorbitant heads of jurisdiction.

But as in European law, provisions on jurisdiction in specific areas of law form part of various international conventions, which equally prevail over the Brussels I Regulation (see Art 71 Brussels I Regulation). Examples are Art 1 Hague Convention on protection of infants (1961) and Arts 5 ff Hague Convention on parental responsibility and protection of children (1996) (child law (international)); with regard to carriage of goods by road Art 31 CMR (1956); with regard to railway transportation Art 52 CIV and Art 56 CIM; with regard to damages claims resulting from the carriage by air Arts 28, 32 of the Warsaw Convention (1929) and Art 33 of the Montreal Convention (1999); with regard to shipping traffic Art 34(II) Revidierte Rheinschifffahrtsakte (1868) and Arts 1, 2 of the Brussels Convention on ship collisions (1952); in nuclear energy matters Art 13 of the Paris Liability Convention (1960) and Art XI of the Vienna Liability Convention (1963).

Literature

Jan Kropholler, ‘Internationale Zuständigkeit’ in Handbuch des Internationalen Zivilverfahrensrechts, vol I (1982) ch 3; Ulrich Magnus and Peter Mankowski (eds), Brussels I Regulation (2007); Burkhard Hess, Thomas Pfeiffer and Peter Schlosser (eds), The Brussels I Regulation 44/2001. Application and Enforcement in the EU (2008); Adrian Briggs and Peter Rees, Civil Jurisdiction and Judgments (5th edn, 2009); Thomas Rauscher (ed), Europäisches Zivilprozeßrecht, vol I (3rd edn, 2010); Richard Fentiman, International Commercial Litigation (2010); Burkhard Hess, Europäisches Zivilprozessrecht (2010); Hélène Gaudemet-Tallon, Compétence et exécution des jugements en Europe (4th edn, 2010); Jan Kropholler and Jan von Hein, Europäisches Zivilprozessrecht (9th edn, 2011).

Retrieved from Jurisdiction (PIL) – Max-EuP 2012 on 02 October 2022.

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