1. CROSS-BORDER PROCEEDINGS IN CIVIL AND COMMERCIAL MATTERS IN EUROPE: INTERNATIONAL CONTRACTS AND NON-CONTRACTUAL LIABILITY
Ester di Napoli
LUMSA University, Rome
2 and 3 March 2017

2. THE “BRUSSELS SYSTEM”
Regulation (EU) n. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I bis” or “Brussels I recast”)
Regulation (EC) n. 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (“Brussels I”)
Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (“Brussels Convention”)

3. THE 1968 BRUSSELS CONVENTION
Art. 220 TEEC: «Member States shall, in so far as necessary, engage in negotiations with each other with a view to ensuring for the benefit of their nationals: - the protection of persons as well as the enjoyment and protection of rights under the conditions granted by each State to its own nationals; - the elimination of double taxation within the Community; - the mutual recognition of companies within the meaning of Article 58, second paragraph, the maintenance of their legal personality in cases where the registered office is transferred from one country to another, and the possibility for companies subject to the municipal law of different Member States to form mergers; and - the simplification of the formalities governing the reciprocal recognition and execution of judicial decisions and of arbitral awards».

4. THE 1968 BRUSSELS CONVENTION
Still applicable: - between overseas territories
- transitional cases (where recognition/enforcement is sought of a judgment given before the entry into force of Brussels I Regulation)
The preliminary rulings of the Court of Justice: the Luxembourg Protocol of 3 June 1971 (differences with article 267 TFEU)

5. THE «parallel» lugano CONVENTION(s)
The 2007 Lugano II Convention repealed the previous 1988 Lugano Convention.
The Brussels Convention is supplemented by the Lugano Convention of 20 October 2007 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
Between EC/Denmark and the EFTA countries (Norway, Iceland and Switzerland): scope of application

6. BRUSSELS I and Brussels I-bis REGULATIONs
Regulation n. 44/2001(Brussels I): outcome of the process of “Europeanization” of Private International Law
Declaration of enforceability (exequatur): “(17) By virtue of the same principle of mutual trust, the procedure for making enforceable in one Member State a judgment given in another must be efficient and rapid. To that end, the declaration that a judgment is enforceable should be issued virtually automatically after purely formal checks of the documents supplied, without there being any possibility for the court to raise of its own motion any of the grounds for non-enforcement provided for by this Regulation”.
Regulation n. 1215/2012: Brussels I bis Regulation
Articles 67 and 81 TFEU
Article 267 of the TFEU: Interpretation of the Court of Justice of the EU – after the Lisbon Treaty (first instances); function of its activity

7. BRUSSELS I BIS REGULATION
Recital 34 of the Preamble:
Continuity between the 1968 Brussels Convention, Regulation (EC) No 44/2001 and this Regulation should be ensured, and transitional provisions should be laid down to that end. The same need for continuity applies as regards the interpretation by the Court of Justice of the European Union of the 1968 Brussels Convention and of the Regulations replacing it.
Elements of continuity and discontinuity with Brussels I Regulation (CJEU case-law; third States; abolition of exequatur; strengthening of choice of court agreements).
Inter-textual interpretation

8. BRUSSELS I BIS REGULATION outline
Preamble: 41 recitals 81 articles: - Scope and definitions - Rules on jurisdiction - Rules on recognition and enforcement - Common provisions - Annexes (standard forms)

9. BRUSSELS I BIS REGULATION scope
1. Temporal scope of application (ratione temporis) 2. Personal scope of application (ratione personae) 3. Material scope of application (ratione materiae)

10. 1. Temporal scope of application (ratione temporis)
Article 66: «This Regulation shall apply only to legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded on or after 10 January Notwithstanding Article 80, Regulation (EC) No 44/2001 shall continue to apply to judgments given in legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded before 10 January 2015 which fall within the scope of that Regulation»

11. 1. Temporal scope of application (ratione temporis)
Article 81: «This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from 10 January 2015 (…). This regulation shall be binding in its entirety and directly applicable in the Member States in accordance with the Treaties»

12. 2. Personal scope of application (ratione personae)
Domicile: the principal head of jurisdiction used by the rules on jurisdiction contained in the regulation Article 4: «1. Subject to this regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State. 2. Persons who are not nationals of the Member State in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that Member State»  Ordinary forum of the defendant

13. 2. Personal scope of application (ratione personae)
Article 5 : «Persons domiciled in a Member States may be sued only by virtue of the rules set out in Sections 2 to 7 of this Chapter» Recital 15 of the Preamble: «The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few well defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction».

14. 2. Personal scope of application (ratione personae)
Article 6 : «1. If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Article 18(1), Article 21(2) and Articles 24 and 25, be determined by the law of that Member State. 2. As against such a defendant, any person domiciled in a Member State may, whatever his nationality, avail himself in that Member State of the rules of jurisdiction there in force, and in particular those of which the Member States are to notify the Commission pursuant to point (a) of Article 76(1), in the same way as nationals of that Member State». See the European e-Justice Portal for Member States’ communications to the EU Commission.

15. 2. Personal scope of application (ratione personae)
Recital 16: «In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen. This is important, particularly in disputes concerning non-contractual obligations arising out of violations of privacy and rights relating to personality, including defamation».  Forum shopping

16. 2. Personal scope of application (ratione personae)
Article 62 (domicile of an individual): «1. In order to determine whether a party is domiciled in the Member State whose courts are seised of a matter, the court shall apply its internal law. 2. If a party is not domiciled in the Member State whose courts are seised of the matter, then, in order to determine whether the party is domiciled in another Member State, the court shall apply the law of that Member State». The British concept of “domicile” is contained in par. 9 of Schedule 1 to the Civil Jurisdiction and Judgment Order 2001 (SI 2001/3929): an individual is domiciled in the UK if: “(a) he is resident in the United Kingdom; and (b) the nature and circumstances of his residence indicate that he has a substantial connection with the United Kingdom”.

17. 2. Personal scope of application (ratione personae)
Article 63 (autonomous definition of «domicile of a legal person»): «1. For the purposes of this Regulation, a company or other legal person or association of natural or legal persons is domiciled at the place where it has its: (a) statutory seat; (b) central administration; or (c) principal place of business. 2. For the purposes of Ireland, Cyprus and the United Kingdom, ‘statutory seat’ means the registered office or, where there is no such office anywhere, the place of incorporation or, where there is no such place anywhere, the place under the law of which the formation took place. 3. In order to determine whether a trust is domiciled in the Member State whose courts are seised of the matter, the court shall apply its rules of private international law”.

18. 3. Material scope of application (ratione materiae)
Autonomous/uniform interpretation of the expressions contained in the Regulation + express definitions given by the Regulation. Article 1 confines the scope of the Regulation to claims under private law, as distinct to public law. As The notions of private and public law differ in the MSs  CJEU: the concept of «civil and commercial matters» shall be given an autonomous meaning: «1. This Regulation shall apply in civil and commercial matters whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii)»

19. 3. Material scope of application (ratione materiae)
Matters expressly excluded from its scope of application (Article 1, par. 2): “2. This Regulation shall not apply to: (a) the status or legal capacity of natural persons, rights in property arising out of a matrimonial relationship or out of a relationship deemed by the law applicable to such relationship to have comparable effects to marriage; (b) bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings; (c) social security; (d) arbitration; (e) maintenance obligations arising from a family relationship, parentage, marriage or affinity; (f) wills and succession, including maintenance obligations arising by reason of death”.

20. 3. Material scope of application (ratione materiae)
Examples:
The Regulation does not apply to a dispute between a private person and a public authority, where the dispute arises out of acts done by the public authority in the exercise of its powers as such (LTU v. Eurocontrol, Case 26/76);
The Regulation applies to a dispute between an individual and a public authority when the relevant legal relationship between them does not involve the exercise by the State of powers going beyond those existing under the rules applicable to relations between private persons (Tiard v. Staat der Nederlanden, Case C-266/01).

21. 3. Material scope of application (ratione materiae)
Examples:
The Regulation does not apply to claims for compensation brought against a Member State, where the legal action derives from operations conducted by armed forces during the Second World War (Lechouritou v. Germany, Case C-292/05).
The Court held that «Disputes of that nature do result from the exercise of public powers by one of the parties to the case, as it exercises powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals … Since that field as such must be regarded as not falling within the scope of the Brussels Convention, the unlawfulness of such acts cannot justify a different interpretation» (paras. 34 and 43).

22. 3. Material scope of application (ratione materiae)
Examples: - Although the Regulation does not apply to criminal proceedings themselves, it does apply to a civil claim in tort, even when it is made ancillarily to a prosecution in a criminal court (Sonntag v. Waidmann, Case C-172/91).

23. RULES ON JURISDICTION In addition to the forum of the defendant:
Special/alternative jurisdiction (arts. 7-9)
Jurisdiction over the so-called «protected contracts» when a contracting party is a «weaker party» (arts )
Exclusive jurisdiction (art. 24)
Choice-of-court agreements / Prorogation of jurisdiction (arts )
Mechanisms of coordination: lis pendens and related actions (arts )

24. RULES ON JURISDICTION
Special/alternative jurisdiction: Section 2 specifies a variety of cases in which, by way of derogation from Article 5, a defendant who is domiciled in one MS may be sued in another MS: choice left to the claimant. Article 7: “A person domiciled in a Member State may be sued in another Member State: (1) (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question; (b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be: - in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered, - in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided; (c) if point (b) does not apply then point (a) applies; …”

25. The concept of «contract»
Nothing specified in the Regulation as to the (autonomous) definition of «contractual matters»: interpretation by the CJEU given in relation to Regulation (EC) n. 44/2001 – - The notion of «contract»: an obligation freely assumed from one party towards another; - It extends to a relationship which involves close links of the same kind as those between the parties to a contract (in the strictest sense): an obligation to pay a sum of money which has its basis in the relationship esisting between an association and its members by virtue of membership are contractual matters within article 7, par. 1 (Peters v. ZNAV, Case 34/82)

26. The concept of «contract»
Pre-contracual obligations do not fall within the scope of article 7, par. 1 (Tacconi, Case C-334/00): a claim of loss caused by the unjustified breaking off of pre-contractual obligations (i.e. an obligation to make good damage caused by the unjustified breaking off of negotations, derived from breach of a rule requiring the parties to act in good faith in negotiations with a view to the formation of a contract).

27. CONTRACTS FOR SALES OF GOODS
«Goods» – tangible movables: article 7, par. 1, does not apply to sales of land or of intangible property (such as patents and copyrights); it implies the transfer of ownership of goods in return for payment of a monetary price, so it does not apply to contracts for the hire of goods. «Mixed» transactions similar to a sale of goods, such as hire-purchase, are probably included.
- The determination of the place of delivery, in case involving the carriage of the goods, has been addressed by the CJEU in the case Electrosteel (Case C-87/10). The case involved an Italian seller and a German buyer: account must be taken of all the relevant terms of the contract which are capable to clearly identifying the place of delivery, including terms which are generally recognised and applied through the usages of international trade and commerce, such as the Incoterms drawn up by the International Chamber of Commerce.

28. CONTRACTS FOR SALES OF GOODS
Incoterms in the version published in 2010 (
Examples:
Sale ex-works (EXW): means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicablethe place of delivery will be the seller’s country

29. CONTRACTS FOR SALES OF GOODS
Free on Board (FOB): means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards the place of delivery will be the port of loading.

30. CONTRACTS FOR THE PROVISION OF SERVICES
As, again, the concept of ‘provision of services’ is not defined neither in Regulation 44/2001 nor in Regulation 1215/2012:
The CJEU established that the concept of service implies, at least, that the party who provides the service carries out a particular activity in return for remuneration. Accordingly, it ruled that a contract under which the owner of an intellectual property right (such as copyright) grants its contractual partner a license to use that right in return of remuneration is not a contract for the provision of services within article 7, par. 1, let. b) first indent, since such contract does not involve an activity by the licensor, but only an obligation by the licensor not to challenge the use of the right by the licensee, and it is immaterial whether the licensee is obliged to use the right licensed (Falco v. Weller-Lindhorst, Case C-533/07);
Where services are provided in several MS: the place of the main provision of services (Wood Floor Solutions, Case C-19/09).

31. RULES ON JURISDICTION [follows] Article 7“
(2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;
(3) as regards a civil claim for damages or restitution which is based on an act giving rise to criminal proceedings, in the court seised of those proceedings, to the extent that that court has jurisdiction under its own law to entertain civil proceedings;
(4) as regards a civil claim for the recovery, based on ownership, of a cultural object as defined in point 1 of Article 1 of Directive 93/7/EEC initiated by the person claiming the right to recover such an object, in the courts for the place where the cultural object is situated at the time when the court is seised;
(5) as regards a dispute arising out of the operations of a branch, agency or other establishment, in the courts for the place where the branch, agency or other establishment is situated;
(6) as regards a dispute brought against a settlor, trustee or beneficiary of a trust created by the operation of a statute, or by a written instrument, or created orally and evidenced in writing, in the courts of the Member State in which the trust is domiciled;
(7) as regards a dispute concerning the payment of remuneration claimed in respect of the salvage of a cargo or
freight, in the court under the authority of which the cargo or freight in question:
(a) has been arrested to secure such payment; or
(b) could have been so arrested, but bail or other security has been given;
provided that this provision shall apply only if it is claimed that the defendant has an interest in the cargo or freight or had such an interest at the time of salvage.

32. matters relating to tort, delict or quasi-delict
“(2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”
Potential harmful event;
Tacconi (Case C-334/00);
Bier v. Mines de Potasse (Case 21/76): in case where the place of the happening of the event which may give rise to liability in tort and the place where the harmful event occurred are not the same: article 7, par. 2 (ex art. 5, par. 3) shall be interpreted by meaning both the courts of the place where the damage occurred and of the place of the event giving rise to it;
Shevill c. Presse Alliance (Case C-68/93): defamation and privacy through newspaper;
eDate Advertising v. X and Martìnez (joined Cases C-509/09 and C-161/10): defamation and violation of privacy by means of a publication on an Internet website: the CJEU distinguished the placing online of the content on a website from the regional distribution of media such as printed matter (due to the ubiquity of the content placed online).

33. EXCLUSIVE JURISDICTION
Article 24: «The following courts of a Member State shall have exclusive jurisdiction, regardless of the domicile of the parties: (1) in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Member State in which the property is situated. However, in proceedings which have as their object tenancies of immovable property concluded for temporary private use for a maximum period of six consecutive months, the courts of the Member State in which the defendant is domiciled shall also have jurisdiction, provided that the tenant is a natural person and that the landlord and the tenant are domiciled in the same Member State; (2) in proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat. In order to determine that seat, the court shall apply its rules of private international law;

34. EXCLUSIVE JURISDICTION
(3) in proceedings which have as their object the validity of entries in public registers, the courts of the Member State in which the register is kept; (4) in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, irrespective of whether the issue is raised by way of an action or as a defence, the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of an instrument of the Union or an international convention deemed to have taken place. … (5) in proceedings concerned with the enforcement of judgments, the courts of the Member State in which the judgment has been or is to be enforced”.

35. (express) CHOICE-OF-COURT AGREEMENTS (prorogation of jurisdiction)
Trend, in EU PIL instruments, aimed at strenghthening the will of the parties (see also the Council decision 2014/887/EU of 4 December 2014, on the approval, on behalf of the European Union, of the Hague Convention of 30 June 2005 on Choice of Court Agreements). Article 25 regulates express prorogation of jurisdiction, regulating both the formal and essential validity of jurisdiction clauses. Article 26 regulates tacit prorogation of jurisdiction (the defendant, sued before a court, which is not in the place of his/her domicile’s one, enters into appearance without contesting its jurisdiction). Specific precautions in case of «protected contracts» (article 26, par. 2).

36. (express) CHOICE-OF-COURT AGREEMENTS (prorogation of jurisdiction)
Article 25 establishes that “1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either: (a) in writing or evidenced in writing; (b) in a form which accords with practices which the parties have established between themselves; or (c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned. 2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to ‘writing’. … 5. An agreement conferring jurisdiction which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. The validity of the agreement conferring jurisdiction cannot be contested solely on the ground that the contract is not valid.

37. (express) CHOICE-OF-COURT AGREEMENTS (prorogation of jurisdiction)
Contractual clauses
Autonomous choice-of-court agreements
 Parties can choose any court located in the territory of a Member State competent to decide over any present or future dispute arising from their contractual relationship (Benincasa, Case C-269/95)
No reference neither to a third-country court nor to arbitration (recital 12 of the Preamble)
Choice-of-court agreements prevail over the ordinary/general forum of the defendant’s domicile and the special/alternative rules on jurisdiction; they do not exclude exclusive rules on jurisdiction
asymmetrical choice-of-court agreements

38. Practical case
Facts: José, a Cuban citizen, has been living in Italy for 25 years. He works and has a family in Rome. On 10 January 2015, on his way back from London, where he had a business meeting, he remains blocked for more than 4 hours at Gatwick Airport: his Ryanair flight is delayed «due to reasons of force majeure». Therefore, he lands at Fiumicino Airport 3 hours and a half behind the scheduled time of arrival. José knows that, according to Regulation (EC) n. 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, he is entitled to a compensation of 250,00 euro. He duly fills in and submits the compensation claim through the Ryanair website, but receives no answer.

39. Practical case
Questions: Jose’s attorneys: explain how you would organize your strategy: Where can he sue Ryanair? Explain your logical steps Ryanair’s attorneys: respond to José’s proceedings

40. Practical case Steps: Which EU PIL instrument applies?
- temporal scope?
- personal scope?
- material scope? does the action for compensation and assistance to passengers in the event of denied boarding (…) fall within the scope of Regulation (EU) n /2012?

41. solution Case C-204/08, Peter Rehder v. Air Baltic Corporation:
“The second indent of Article 5(1)(b) of Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that, in the case of air transport of passengers from one Member State to another Member State, carried out on the basis of a contract with only one airline, which is the operating carrier, the court having jurisdiction to deal with a claim for compensation founded on that transport contract and on Regulation No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights (…), is that, at the applicant’s choice, which has territorial jurisdiction over the place of departure or place of arrival of the aircraft, as those places are agreed in that contract”.

42. solution
However: see Ryanair’s General Terms & Conditions of Carriage:
Article 2.4: “Governing law and jurisdiction
Except as otherwise provided by the Convention or applicable law, your contract of carriage with us, these Terms & Conditions of Carriage and our Regulations shall be governed by and interpreted in accordance with the laws of Ireland and any dispute arising out of or in connection with this contract shall be subject to the jurisdiction of the Irish Courts”.
so-called click-wrap agreement (see decision of the High Court of Ireland, 26 February 2010)
Does the choice oh court agreement between Ryanair and José meet the formal and substantial conditions set out in article 25 of Brussels I bis Regulation?