Yearbook of Private International Law Volume III 2001

1-25 © Kluwer Law International & Swiss Institute of Comparative Law Printed in the Netherlands DOCTRINE ________________ JUDICIAL INTERPRETATION OF THE 1988 LUGANO CONVENTION ON JURI

YEARBOOK OF PRIVATE INTERNATIONAL LAW

YEARBOOK OF PRIVATE INTERNATIONAL LAW

PUBLISHED IN ASSOCIATION WITH

SWISS INSTITUTE OF COMPARATIVE LAW

LAUSANNE, SWITZERLAND

Sellier European Law Publishers

Sellier European Law Publishers

ISBN 978-3-935808-49-1

Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen bibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar

National-© 2001 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, Mikro- verfilmungen und die Einspeicherung und Verarbeitung in elektronischen Systemen

ANDREA BONOMI

Swiss Institute of Comparative Law Dorigny, CH – 1015 Lausanne

ENGLISH REVISION SUSAN ŠARČEVIĆ

Faculty of Law, Rijeka

TABLE OF CONTENTS

Foreword ix Abbreviations xi Doctrine

Harry DUINTJER TEBBENS

Judicial Interpretation of the 1988 Lugano Convention on

Jurisdiction and Judgments in the Light of its Brussels Matrix:

the Convergence Confirmed 1 DavidGODDARD

Rethinking the Hague Judgments Convention:

A Pacific Perspective 27 Christoph BERNASCONI

Indirectly Held Securities: A New Venture for the

Hague Conference on Private International Law 63 Bertrand ANCEL

The Brussels I Regulation: Comment 101

Private International Law Issues in World War II Era Litigation

YasuhiroOKUDA

The Law Applicable to Governmental Liability for Injuries to

Foreign Individuals during World War II: Questions of Private

International Law in the Ongoing Legal Proceedings before

Japanese Courts 115 Kent ANDERSON

Issues of Private International Law and Civil Procedure Arising

out of the U.S Civil Suits for Forced Labor during World War II:

To What Extent Do U.S Conflict and Procedural Rules Obstruct

Private Liability for Wartime Human Rights Violations? 137 Jan VON HEIN

The Law Applicable to Governmental Liability for Violations of

Human Rights in World War II: Questions of Private

International Law from a German Perspective 185

National Reports

GerhardHOHLOCH &CecilieKJELLAND

The New German Conflicts Rules for Registered Partnerships 223

News from The Hague

J.H.A VAN LOON

The Hague Conference on Private International Law –

Work in Progress (2000-2001) 237

Forum

Frank GERHARD

The Extraterritorial Judicial Penalty – New Instrument for the

Transnational Enforcement of Extraterritorial Injunctions? 245

Texts, Materials and Recent Developments

Council Regulation (EC) No 44/2001 of 22 December 2000 on

Jurisdiction and the Recognition and Enforcement of

Judgments in Civil and Commercial Matters (‘Brussels I’) 301 Council Regulation (EC) No 1206/2001 of 28 May 2001 on

Cooperation between the Courts of the Member States in the

Taking of Evidence in Civil or Commercial Matters 333

CHINESE SOCIETY OF PRIVATE INTERNATIONAL LAW:

Model Law of Private International Law of the People’s

Republic of China (Sixth Draft, 2000) 349 James A.R NAFZIGER

Oregon’s Conflicts Law Applicable to Contracts 391

Book Review

MarioGIOVANOLI (ed.),International Monetary Law, Issues for

the New Millennium (Petar ŠARČEVIĆ) 419

Books Received 427 Index 431

FOREWORD

Our main goal, as stated in the first volume, is to make the Yearbook an

international podium for the intellectual exchange of scientific and practical ideas between specialists of private international law The intention is to include contributions by scholars from all parts of the world As readers will witness in this

volume, the Yearbook is becoming more international; however, contributions

from Africa are still missing Hopefully this continent will also be represented in the near future Again we encourage contributions on new developments in private international law in countries and regions around the globe Discussions of important court decisions are particularly welcome

As earlier, we closely follow developments at the Hague Conference on Private International Law Regarded as a European institution not long ago, the Hague Conference has grown into a worldwide organization with 55 Member States and several applicant countries Although its membership has greatly expanded, this does not mean that conventions are automatically accepted and ratified on a global scale The fate of the future Judgments Convention shows that conflicting interests on crucial issues often stand in the way of progress Despite the present deadlock, the mere fact that a forum has been convened to study the problems and is attempting to reconcile differences, especially those between common law and civil law countries, is of major importance Bilateral dialogues, such as those between EU and US experts, will certainly play a role in resolving the issues at stake Whether this will be achieved now or in the near future does not diminish the value of such efforts

For the first time, the same topic – forced labor during World War II – is discussed by scholars from three different continents As the reports show, there has been much activity in this area on the judicial front in Germany, Japan and the

US The disputes have also raised a number of difficult private international law issues In light of the pending cases and new decisions, such as that of 19 October

2001 by of the California Superior Court in Orange County, it appears that, after more than 50 years, the courts will continue to be confronted with such issues National and state legislators continue to be active as well The draft Model Law of Private International Law of the People's Republic of China and Oregon’s Conflicts Law Applicable to Contracts are published in the present volume Reports on new developments in other jurisdictions will be included in future volumes As regards the situation in Europe, concurrence between EU and national legislation is still unresolved in the field of private international law One of the best examples is the new EC directive on jurisdiction and enforcement in family matters, on the one hand, and the new German conflicts rules for registered partnerships, on the other We remain committed to informing readers, promptly and accurately, about new developments that are shaping the future of private

international law This, of course, is the purpose of the Yearbook

ABBREVIATIONS

Am J Comp L American Journal of Comparative Law

Am J Int L American Journal of International Law

Clunet Journal de droit international

I.C.L.Q International and Comparative Law Quarterly

I.L.M International Legal Materials

id idem

IPRax Praxis des internationalen Privat- und

Verfahrensrechts

RabelsZ Rabels Zeitschrift für ausländisches und

internationales Privatrecht Recueil des Cours Recueil des Cours de l'Académie de la Haye de droit

international = Collected Courses of The Hague Academy of International Law

Rev crit dr int pr Revue critique de droit international privé

REDI Revista española de derecho internacional

Riv dir int priv proc Rivista di diritto internazionale privato e processuale Riv dir int Rivista di diritto internazionale

RSDIE Revue suisse de droit international et européen =

Schweizerische Zeitschrift für internationales und europäisches Recht

Yearbook of Private International Law, Volume 3 (2001), pp 1-25

© Kluwer Law International & Swiss Institute of Comparative Law

Printed in the Netherlands

DOCTRINE

JUDICIAL INTERPRETATION OF THE

1988 LUGANO CONVENTION ON JURISDICTION AND JUDGMENTS IN THE LIGHT OF ITS

BRUSSELS MATRIX:

THE CONVERGENCE CONFIRMED*

Harry DUINTJER TEBBENS **

I Introduction

A Interpretation of the Brussels Convention

B Interpretation of the Lugano Convention

C Outline of Article

II Interpretation of the Lugano Convention: The Legal Framework

A Protocol 2 on Uniform Interpretation

B Reciprocal Declarations of EU and EFTA States

III Practise of Lugano Convention Interpretation

A Courts of European Union States

2 The Peculiar Problem of lis pendens (I)

B Courts of EFTA Member States

1 General Features of Case-Law

2 Supreme Court Cases Dealing Extensively with the Parallel

** The author is Head of Division, Legal Service, European Parliament, previously Head of Unit, Research and Documentation Service, European Court of Justice, and is Member of the Netherlands Standing Government Committee on Private International Law The views expressed in this paper are purely personal and do not necessarily reflect the official position of the European Parliament

Harry Duintjer Tebbens

3 Significant Examples of Parallel Interpretation

a) The ‘Obligation in Question’ under Article 5(1)

b) Validity of Choice of Court Clause c) The Problem of lis pendens (II)

4 Possible Incongruous Results

b) Place of Pure Economic Loss c) Notion of ‘Consumer Contract’

IV The Court of Justice and the Lugano Convention

A Multistate Employment Contracts

B Discrimination in Civil Procedure

V Concluding Remarks

I Introduction

Compared to other international conventions, a well-known distinctive feature of the Brussels Convention on jurisdiction and the enforcement of judgments is that its application is subject to the harmonising, if not unifying interpretation of the European Court of Justice (ECJ) Pursuant to the Interpretation Protocol of 3 June

1971,1 at the request of national courts, the ECJ has given over one hundred preliminary rulings concerning the interpretation of the Brussels Convention

In its very first ruling on the Convention, the Court was cautious in its approach to the question whether to interpret the terms of the Convention by reference to national law (presumably the law of the court seized or the law applicable to the substance of the case), or by an independent concept to be drawn

from the scheme and purpose of the Convention itself It stated in Tessili2 that the

choice had to be made for each provision or term separately, having regard to the

need to give the optimal effet utile to the Convention

In its later case-law it becomes clear that, but for a few notable exceptions, the independent or ‘autonomous’ interpretation prevails This is particularly clear

in the 1993 judgment in Mulox,3 where the Court held that only that interpretation could ensure the uniform application of the Convention in all Member States, thus offering the necessary legal certainty to litigants

Having built up consistent case-law on numerous specific questions, the Court decided in 2001 for the first time to give a simplified ruling under its Rules

1 Official Journal of the European Communities (OJEC) 1975, L 204, p 28

2 Tessili v Dunlop [1976] ECR 1473, point 11

3 Mulox IBC v Geels [1993] ECR I-4075, points 10-11

Judicial Interpretation of the 1988 Lugano Convention

Yearbook of Private International Law, Volume 3 (2001) 3

of Procedure concerning the interpretation of the exclusive head of jurisdiction for rights in rem in immovable property.4 One might say that the national courts now have, as it were, a common annotated version of the Brussels Convention as their companion for its application

The situation is different regarding the 1988 Lugano Convention,5 which in substance reproduces the scheme for jurisdiction and enforcement of judgments of the Brussels Convention for a wider range of countries, in particular the EFTA States

No common interpretation mechanism comparable to the one attached to the Brussels Convention exists for the Lugano Convention During the negotiations, neither the European Community Member States nor those of EFTA wanted to confer jurisdiction to interpret this Convention to the European Court of Justice, though for different reasons The option to set up a distinct judicial body and entrust it with this task was equally rejected.6

Finally, the solution adopted was to add a number of protocols and declarations to the Convention with the purpose of reducing to the greatest extent possible the risk that the Lugano Convention would be interpreted and applied differently than the Brussels Convention.7

4 Order of 5 April 2001, Case C-518/99 Gaillard v Chekili, nyr, made under

Art 104(3) Rules of Procedure

5 OJEC 1988, L 319, p 9

6 See D UINTJER T EBBENS H., ‘Die einheitliche Auslegung des Übereinkommens’, in: R EICHELT G (ed.), Europäisches Kollisionsrecht - Die Konventionen

Lugano-von Brüssel, Lugano und Rom, Frankfurt am Main etc 1993, pp 49-64, at pp 49-50

7 See the Jenard/Möller Report on the Lugano Convention, OJEC 1990, C 189,

p 57, paras 111-119

Harry Duintjer Tebbens

II Interpretation of the Lugano Convention:

The Legal Framework

Set up by its drafters as a parallel instrument to the Brussels Convention, the Lugano Convention follows the scheme and drafting of that Convention as closely

as possible, as well as its judicial interpretation by the European Court of Justice.8

Upon conclusion of the Lugano Convention, a number of differences remained; however, several of them disappeared when the Brussels Convention itself was modified in 1989 for the accession of Spain and Portugal.9

The very preamble of the Lugano Convention bears witness to this close relationship by ‘taking into account the Brussels Convention’ and extending its principles to the Lugano Contracting States Moreover, Protocol 2 on the uniform interpretation of the Convention is attached to the Lugano Convention and deemed

an integral part thereof by virtue of Article 65 of the Convention The Protocol’s preamble recalls the substantial link between both Conventions, in particular the fact that the negotiations leading to the conclusion of the Lugano Convention were based on the Brussels Convention, as interpreted by the European Court up to that conclusion (on 16 September 1988)

Protocol 2 also states two aspects of the objective to achieve a uniform

interpretation: (i) as regards the Lugano Convention in and for itself, as well as (ii)

in relation to the corresponding provisions of the Brussels Convention (preamble, last paragraph)

i) As to the internal uniformity of the Lugano Convention, Protocol 2

obliges in its Article 1 the courts of all Convention States ‘to pay due

8 See the Jenard/Möller Report (note 7), para and the summary of ECJ case-law,

ibid., paras 130 et seq.; STONE P.A., ‘The Lugano Convention on Civil Jurisdiction and

Judgments’, in: Yearbook of European Law 1988, p 105 et seq.; TRUNK A., Die

Erwei-terung des EuGVÜ-Systems am Vorabend des Europäischen Binnenmarktes, Munich 1991,

p 91 et seq.; MÖLLER G., ‘The Outlook for the System for the Free Movement of Judgments

created by the Brussels Convention’, in: Civil Jurisdiction and Judgments in Europe (colloquium at the ECJ, March 1991), London etc 1992, p 215 et seq., pp 217-220;

D UINTJER T EBBENS H., ‘The European Jurisdiction and Enforcement Conventions:

interpre-tation, concurrence and prospects’ in: Netherlands International Law Review 1993, p 471 et

seq., 474-477

9 See S CHMIDT -P ARZEFALL T., Die Auslegung des Parallelübereinkommens von

Lugano, Tübingen 1995, p 21; DROZ G., ‘La Convention de San Sebastian alignant la

Convention de Bruxelles sur la Convention de Lugano’, in: Rev crit dr int pr., 1990, p 1

et seq

Judicial Interpretation of the 1988 Lugano Convention

Yearbook of Private International Law, Volume 3 (2001) 5

account to the principles laid down by any relevant decision’ delivered

by courts of the other States parties to it In order for the courts to be able to discharge this duty the Protocol makes provision for an exchange

of information concerning the relevant case-law (Article 2)

ii) The external uniformity is also addressed in Article 2, but only

indirectly, by the range of judicial decisions to which the exchange of information applies Indeed, not only are the most important cases concerning the Lugano Convention itself to be included in this exchange, but also the rulings given by the European Court on the interpretation of the Brussels Convention and the most important cases decided by national courts involving the latter Convention

A detailed examination of how this exchange of information is carried out by the Registrar of the European Court as the central body under Article 2(2) is not necessary here It suffices to mention that the relevant data are collected and selected by the Court’s Research and Documentation Service and sent periodically

in hard copy to the national authorities designated under Article 2 This includes the original text of judgments without translation but with a short keyword description in French and English The coverage started in 1992 when the Lugano Convention came initially into force between France, the Netherlands and Switzer-land As of 1997, the selected decisions are also placed on the Court’s website.10 In addition, the documentation covering the first five years has been reproduced in publications by the Swiss Institute for Comparative Law.11 This should enhance their availability, especially for those for whom the exchange of information has been primarily set up, viz the judges of national courts who are obliged to take proper notice of relevant decisions of their brethren under Article 1 of the Protocol

Attached to the Final Act of the Diplomatic Conference adopting the Lugano Convention are two Declarations that further provide body to the uniform interpretation mechanism

According to the Declaration of the Member States of the European Communities, they consider as ‘appropriate’ that, when interpreting the Brussels

10 http://www.curia.eu.int, under ‘Research and Documentation’

11 Under the slightly unbalanced title (leaving out any reference to the Brussels

Convention) of Collection of jurisprudence of the European Court of Justice and of the

highest courts of the States Parties concerning the Lugano Convention, Vols I-V (Years

1992-1996), Zurich 1996-2000

Harry Duintjer Tebbens

Convention, the European Court of Justice pay due account to the rulings contained in the case-law of the Lugano Convention.12

In the Declaration given by the EFTA Member States, the latter invite their courts to pay due account to the case-law of the European Court, as well as that of the national courts of EC Member States, when interpreting provisions of the Brussels Convention reproduced in the Lugano Convention.13

It should be noted that these Declarations are not strictly reciprocal: When applying the Lugano Convention, the national courts of the European Union States are not required to take into account the European Court’s rulings on the inter-pretation of the Brussels Convention.14 This is probably because a statement to that effect was considered superfluous since the Court’s rulings in preliminary re-ference proceedings – in this area as in Community law proper – have a persuasive authority in the legal order of the Member States, which is also reflected in the interpretation of the Lugano Convention in those States

After this summary presentation of the legal framework for the pretation of the Lugano Convention, we turn to an assessment of the relevant judicial practice, particularly in relation to the body of existing case-law on the Brussels Convention

inter-III Practise of Lugano Convention Interpretation

Since the Lugano Convention entered into force for an initial group of three States

on 1 January 1992, a substantial number of cases applying the Convention has been decided A database kept at the European Court’s Research and Documentation Service, containing reported as well as some unreported cases, listed some 350 in

2001.15

Our main interest is directed to those decisions of superior or supreme courts that specifically and at some length deal with the parallelism between the two Conventions and its effect on interpretation

Although attention will be focused particularly on judgments of EFTA States within this category of cases, it appears useful to first summarise briefly the experiences of national courts of the European Union Member States with the phenomenon of parallelism

12 OJEC 1988, L 319, p 37

13 OJEC 1988, L 319, p 40

14 See M INOR J., ‘The Lugano Convention, some problems of interpretation’, in:

Common Market Law Review 1990, p 507 et seq, at p 512

15 Despite the fact that Protocol 2 provides that the national authorities shall transmit the relevant judgments to the central body, most cases are in fact taken from legal journals and law reports

Judicial Interpretation of the 1988 Lugano Convention

Yearbook of Private International Law, Volume 3 (2001) 7

1 Tendency towards Assimilation

The case-law on the Lugano Convention in these States gives the general impression that it is handled as if it were the Brussels Convention Often the courts briefly mention the fact that both Conventions are almost identical, or that the particular article in issue is entirely identical in either text.16 They then proceed to

‘dress up’ their judgment in the way characteristic of their jurisdiction, referring to the case-law of the Court of Justice, to domestic cases or legal writings concerning the Brussels Convention or the Lugano Convention, as the case may be

Thus the impression is one of clear convergence, even going towards complete assimilation of both Conventions There is, however, a built-in limit for national courts that may or must refer to the Court of Justice for a preliminary ruling when the interpretation of the Brussels Convention is at stake: They cannot take that course if the issue to be clarified arises under the Lugano Convention, even if the wording of the article(s) involved is completely identical.17

The tendency towards assimilation sometimes goes too far, for instance, in cases that are decided under the Lugano Convention, but upon closer scrutiny of the factual circumstances, it becomes clear that the Brussels Convention should have been applied Errors of this kind have occurred especially in EU Member States where both Conventions entered into force on the same day.18

Surely, such formal confusion of both instruments does little harm if the relevant rules are strictly identical

2 The Peculiar Problem of lis pendens (I)

The picture given above is of course a simplification, which does not apply to some of the more complex cases In one case, for example, the result reached by the court was largely due to a marked difference between the two Conventions,

relating precisely to their interpretation This case, Polly Peck International plc v

16 For a recent example, see the House of Lords, judgment of 17 February 2000,

Agnew ao v Lansförsäkringsbølagens, [2000] 1 All England Law Reports 737, [2000] 2 Weekly Law Reports 497

17 This impossibility appears to be confirmed by the ECJ ruling in: Kleinwort Benson

v City of Glasgow District Council, C-346/93 [1995] ECR I-615, concerning an

interregional jurisdiction conflict within the United Kingdom

18 E.g., Portugal Cf the judgment of the Coimbra Appeal Court of 14 December

1993, in: Colectânea de Jurisprudência XVIII (1993), t V., p 51, purporting to apply the

Lugano Convention to a German judgment

Harry Duintjer Tebbens

Citibank NA,19 decided by the English High Court, concerned a dispute between an English company, on the one hand, and United States and Swiss companies, on the other The American and Swiss defendants argued that the Swiss courts had been first seized with a claim involving the same parties and the same cause of action They invited the English court to decline jurisdiction in favour of the Swiss courts under Article 21 of the Lugano Convention However, the English plaintiff contended that the English, not the Swiss court had been seized first Thus the court had to answer the question on which date the Swiss courts had been seized of the action

The court noted that the rule on lis pendens was identical in the Brussels

and Lugano Conventions and that the English court would be bound by rulings of

the European Court concerning the lis pendens rule in the Brussels Convention,

whereas the Swiss courts were merely required, under Protocol 2 of the Lugano Convention, to pay due account to such rulings Now, the European Court has

ruled in Zelger v Salinitri (II)20 that the court first seized is the one where the requirements for proceedings to become definitively pending are first fulfilled, and that such requirements must be determined in accordance with the national law of each of the courts concerned Therefore, the English court might well have felt obliged, in the case before it, to ascertain when those requirements had been met under the relevant laws of Switzerland, in order to determine which court had been first seized

However, ‘after some hesitation’ the court came to the conclusion that it should not do so Instead, noting that the purpose of the Lugano Convention was to avoid conflicts of jurisdiction, it observed that the Swiss court would be bound, under Article 21, to decide whether it became seized of proceedings on the date

alleged by the American and Swiss companies, but it would not be bound by a

decision of an English court as to that date The English court went on to say:

‘It follows that the only way in which a possible conflict can be avoided is for the courts of this country to adjourn the application until the Swiss courts have finally decided whether the District Court

of Zurich became seized of the proceedings in that jurisdiction on

8 February, and if the Swiss courts decide that the District Court of Zurich was so seized, to decline jurisdiction …[T]he courts of this country should, I think, as a matter of comity, decline to answer a question of Swiss law if it is one which must necessarily be decided

by the Swiss courts, albeit that under the protocol the Swiss court

19 Judgment of 14 October 1993 of the High Court, Chancery Division, [1994]

International Litigation Procedure 71

20 Judgment of 7 June 1984, 129/83 [1984] ECR 2397

Judicial Interpretation of the 1988 Lugano Convention

Yearbook of Private International Law, Volume 3 (2001) 9

would have to take into account, without being bound by, the decision of this Court.’21

Besides the ‘comity’ invoked by the English court, it probably also had in mind an element of practicality or convenience which would militate against it attempting itself to come up with the correct answer under Swiss law, i.e., the English procedural tradition of hearing expert evidence by both parties concerning the content of foreign law

As a matter of fact, the question turned out to be extremely delicate, requiring an in-depth analysis of Swiss federal law relating to international civil procedure,22 as well as a particular pre-contentious conciliation procedure in the cantonal law of procedure in Zurich This question, which divided not only the parties to the dispute in Switzerland, but also academic writers in that country,23

kept the Swiss courts occupied up to the last instance

The final answer of the Swiss Federal Supreme Court came four years later24

and was to the effect that the Swiss court had been seized after the English court

As a result, after having suspended proceedings all that time, the English court found itself in the odd situation of learning that it had been under no duty to suspend pursuant to Article 21 after all

1 General Features of Case-Law

Judicial practice in the Lugano States Parties outside the Brussels Convention

Membership is in keeping grosso modo with the interpretation of the latter

Convention, as was mentioned above in connection with the judicial practice in countries where both the Brussels and the Lugano Convention are in force.25 This can be concluded by examining the relevant decisions in the former countries,26

21 International Litigation Procedure [1994] at p 80 (para 29)

22 Federal Private International Statute of 18 December 1987, English translation in:

International Legal Materials 1990, p 1244, Article 9 (cited in full in the English

judgment)

23 See infra at III.B.3 c) for the final Swiss judgment in this litigation, citing all

relevant literature

24 Judgment of 26 September 1997, infra III.B.3 c)

25 See, e.g., J AYME E./K OHLER Ch., ‘Europäisches Kollisionsrecht 1989 – Die

Abendstunde der Staatsverträge’, in: IPRax 1999, p 401 et seq, at p 410; ID , ‘Europäisches Kollisionsrecht 2000 – Interlokales Privatrecht oder universelles Gemeinschaftsrecht?’, in:

IPRax 2000, p 454 et seq., at p 463

26 I.e., Austria, Sweden, Finland (before their transition to the Brussels Convention

at the end 1998/beginning 1999), Norway and Switzerland No Icelandic decision appears as

Harry Duintjer Tebbens

included in the exchange of information set up under Protocol 2 The period covered for the purpose of the present paper is 1992-2000

Although the scope of this paper does not permit us to mention a large number of cases, some supportive case-law materials can be found in the research done under the auspices of the Standing Committee of the Lugano Convention, set

up under Article 3 of Protocol 2 In order to better fulfil its mission to examine the functioning of the Convention and the development of the case-law reported under the exchange of information system (Article 4(1) of the Protocol), in 1998 the Standing Committee decided to have a study conducted of the case-law materials distributed through the system from 1992 through 1998 A large majority of cases examined in the Report on this case-law concerns decisions given by courts in EFTA States and thus its conclusions would appear to be relevant in the present context Focusing on the interpretation of the thorny Article 5(1) concerning an optional forum for contractual disputes, one of the conclusions of the Report stated

‘that the case-law on the Lugano Convention is developing in a similar manner to that relating to the Brussels Convention, whilst sometimes allowing greater clarification and a more in-depth research into the subject’.27

The last point brings out, rightly in our opinion, that it might very well occur that a national court could be confronted with a situation governed by the Lugano Convention but for which the corresponding case-law of the Court of Justice under the Brussels Convention offers only scant guidance.28 This would give the national courts an opportunity to further develop solutions that could be valid for both Conventions, on the basis of the initial Brussels Convention precedents These conclusions are confirmed in a second report covering decisions distributed by the central body in 1999.29

2 Supreme Court Cases Dealing Extensively with the Parallel

Brussels/Lugano Interpretation

Turning to Supreme Court decisions that give principled and extensive attention to the interpretation of the Lugano Convention, we find that almost all of them were yet to have been reported on the Lugano Convention Poland acceded to the Convention only as of 1 February 2000

27 Report on the national case-law relating to the Lugano Convention drawn up in performance of the task entrusted to the Spanish, Greek and Swiss delegations at the

5th session of the Lugano Convention’s Standing Committee (Interlaken, 18.9.1998)’, in:

IPRax 2001, p 262 et seq., at p 268

28 An example is Agnew ao v Lansförsäkringsbølagens (note 16) concerning the

duty of good faith as ‘obligation in question’ for the purpose of the contract forum in

Art 5(1) See also the Swiss judgment discussed infra, III.B.4 c)

29 Second Report on National Case-law on the Lugano Convention, by H Bull, G

Musger and F Pocar, part V (to be published in: IPRax)

Judicial Interpretation of the 1988 Lugano Convention

Yearbook of Private International Law, Volume 3 (2001) 11

handed down by the Swiss and Austrian highest courts in 1997 or 1998 Their counterparts in the Nordic countries have surely dealt with this matter too; however, in line with the more concise style of judgments prevailing in those countries, rather than setting out the guiding principles or dogmatic underpinings

of the parallel interpretation, they simply apply it.30

Not purporting to give an exhaustive review of all such cases, this chapter selects some illustrative ones In the following presentation, the cases are grouped

by topic

a) Scope of Convention: Notion of ‘Civil and Commercial Matters’

aa) In a case before the Swiss courts involving Swiss and Italian parties and the State of Paraguay, the jurisdiction of the court depended on whether or not the dispute had to be classified as a ‘civil and commercial matter’ under Article 1(1) of the Lugano Convention

In its judgment of 20 August 1998,31 the Swiss Federal Supreme Court held that the ‘context’ of the interpretation of the Lugano Convention within Article 31(2)(a) of the Vienna Convention on the Law of Treaties was formed in particular

by the Contracting Parties, acknowledging the fact that the convention was substantially linked to the Brussels Convention In this connection, it referred to the various passages in Protocol 2 and other texts (set out above, II) and to one of its earlier decisions on the Lugano Convention in the Polly Peck case.32 The Court then spelled out the preliminary rulings delivered by the ECJ (up to September 1988) on the concept of ‘civil and commercial matters’ and that Court’s insistence

on an independent construction of the concept

It continued by saying that ‘there is no reason whatsoever not to follow this line of interpretation for the purpose of applying the Lugano Convention’,33

recalling also that the main advantage of any ‘autonomous’ treaty interpretation lies in it avoiding legal uncertainty It was true that, by virtue of its basis in Community law, the Brussels Convention has a fonctionnalisme communautaire to

it and that it could happen that the concurrent application, for example, of the prohibition of discrimination on the ground of nationality in EC law, would influence the interpretation of the Brussels Convention, preventing that

30 E.g., Swedish Supreme Court 23 February 1994, Nordic Water Products /

S Håkanson, English translation in [1995] International Litigation Procedure 766, on the

scope of exclusive jurisdiction for patent claims, simply citing the relevant ruling of the ECJ

31 Banque Bruxelles Lambert (Suisse) a.o / République du Paraguay et Sezione

speciale per l’assicurazione del credito all’esportazione, BGE (Federal Court Reports)

124 III 382

32 Infra, III B.3 c)

33 At BGE 124 III 395, letter e)

Harry Duintjer Tebbens

interpretation from being adopted by non-EC States But, the Court added that such situations would be rare and that it was proper to consider the territories of all the Lugano Contracting States as a common judicial area that required the greatest uniform application possible

Thereupon the Swiss Court applied the criteria laid down by the ECJ for the notion of civil and commercial matters

bb) In an almost simultaneous judgment another chamber of the same Swiss Court tackled the same issue in a dispute on export credit insurance This judgment of 19 August 1998 34 equally adopts the approach that the Lugano Convention is to be considered as international uniform law, requiring an autonomous interpretation, which should be parallel to the Brussels Convention interpretation The Court concluded from Protocol 2 that case-law of the ECJ on that convention and preceding the conclusion of the Lugano Convention was binding authority (‘als verbindliche Entscheidungsgrundlage zu berücksichtigen’) for the interpretation of the Lugano Convention, but that subsequent case-law of the ECJ according to the

EFTA Declaration (supra, II.B.) had (only) to be duly taken into account

In fact, the court relied on such a subsequent ECJ ruling for its

interpretation of the notion of ‘civil and commercial matters’ in Sonntag v

Waidmann.35 This ruling adopted a very broad interpretation by using a narrow concept of a public authority’s exercise of its public prerogatives

Remarkably enough, this Swiss judgment does not contain a reservation concerning the possibility of the interpretation of the ECJ being too

communautaire, as distinct from the judgment mentioned under (i) The salient

point about this is that the Sonntag ruling it relied upon did in fact contain

reasoning influenced by Community law, in particular concerning the status of teachers in a public or private school.36

b) Scope of Convention: Bankruptcy Exception

Another Swiss Supreme Court judgment of 23 December 199837 confirmed its position favouring a uniform interpretation of the two Conventions The case concerned a claim for payment of commission arising out of a contract preceding the opening of insolvency proceedings concerning the debtor

34 Dresdner Forfaitierungs AG / Sezione Speciale per l’Assicurazione del Credito

all’Esportazione (SACE), BGE 124 III 436

35 Judgment of 21 April 1993, C-172/91 [1993] ECR I-1963

36 See para 24 of Sonntag (previous note), citing the judgment of 3 July 1986, 66/85 [1986] ECR 2120, Lawrie-Blum/Land Baden-Württemberg, points 26-28

37 Sorelec SA / Saleh Radwan, BGE 125 III 108

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Yearbook of Private International Law, Volume 3 (2001) 13

Although the Court did mention that taking over the ECJ’s interpretation of the bankruptcy exception could result in an undesirable influence of Community law, it flatly dismissed this possibility without further explanation in the present case

The only ECJ case involving the meaning of the phrase on bankruptcy and analogous proceedings in Article 1, paragraph 2(2) of the Brussels Convention,

Gourdain v Nadler,38 had not resorted to any consideration of Community law proper and, moreover, had not covered exactly the same issue as was before the Swiss Court

c) Notion of ‘Maintenance Obligation’

The Austrian Supreme Court 39 dealt with the issue whether an action by a woman

against her father seeking payment of a dowry (Heiratsgut) could be brought by

invoking the notion of ‘maintenance obligation’ in Article 5(2) of the Lugano Convention Citing Protocol 2 and the Declarations referred to earlier, the Court affirmed – by apparently deducing from Article 1 of Protocol 2 – that courts of the Lugano Contracting States are obliged to find, on their own motion and take into account the important decisions handed down in other Contracting States, i.e., only the decisions reported to the national authorities under the exchange of information system It added that the courts would have to discuss the merits of such decisions – as regards the Convention’s interpretation – if they intended to deviate from their

essential reasoning, but that obiter dicta did not matter in this respect

Having regard to the EFTA Declaration, the Court noted that ECJ case-law dating from after the signature of the Lugano Convention merely had to be taken into consideration, as opposed to pre-1988 case-law that constituted an ‘authentic interpretation’ of Lugano provisions insofar as they were identical to Brussels Convention provisions

Turning to the notion of ‘maintenance obligation’, the Court found that there were no national decisions or rulings of the ECJ on Article 5(2) of the Conventions Thus it took it upon itself to develop an independent interpretation of that notion Apparently, the two preliminary rulings given by the ECJ some months before on that very notion40 had not come to the Court’s attention in time to be considered in the judgment

In any event, after carefully analysing the history of Article 5(2) of the Brussels Convention and insisting that an autonomous notion was preferable over

38 Judgment of 22 February 1979, 133/78 [1979] ECR 733

39 Judgment of 28 August 1997, Nr 3 Nd 506/97, in: Zeitschrift für

Rechtsver-gleichung, internationales Privatrecht und Europarecht 1998, p 39

40 Judgments of 27 February 1997, C-220/95 [1997] ECR I-1147, Van den Boogaard

v Laumen, and of 20 March 1997, C-295/95 [1997] ECR I-1683, Farrell v Long

Harry Duintjer Tebbens

one derived from national law, even if that would cause friction with the systematic structure of the forum’s national law, the Court arrived at a broad interpretation of

‘maintenance obligation’ Although the Austrian provisions on dowry are found in the chapter on marriage contracts, it was clear that they did not pertain to matri-monial property

This result appears to fully comply with the interpretation given by the European Court Moreover, the independent interpretation of the Austrian Court allowed it to overcome certain dogmatic constraints inherent in its domestic law

d) Conditions for Recognition and Enforcement

The Austrian Supreme Court’s judgment of 24 June 199841 also reveals that the Court’s intention was to arrive at parallel interpretations of the Conventions to the greatest extent possible

The issue before it was whether the prohibition to review a foreign ment as to its substance (Articles 29 and 34(3) of the Conventions) extended to situations where the court in the State addressed was asked to check whether the person against whom enforcement is sought is the same as the judgment debtor The Court developed the same reasoning as in its judgment of 28 August

judg-1997 (cited supra, under c) favouring an international and parallel approach and

stressing the importance of consulting national and ECJ decisions communicated under Protocol 2 However, as it found none of these decisions helpful in resolving the issue at stake, the Court held that it could also consider other decisions not (yet)

so communicated, provided that:

1) they arrive at a uniform interpretation of the Convention,

2) they are accessible to the national courts, without particular difficulty, through sources other than the exchange of information scheme, and 3) there are no convincing substantive grounds not to adopt the essential reasons of those decisions

Applying these criteria, the Court then reviewed some German superior court judgments in which the Brussels Convention was applied and cited German and Austrian legal writers Therefore, it appears that the accessibility referred to under (ii) had a linguistic flavour, thus raising the question whether research of French or English language sources (let alone other languages of Lugano States) would have been conducted with the same thoroughness

Finally, the Court checked that the German case-law and scholarly literature

on this point corresponded to the prevailing view in Austrian law on the enforcement of judgments This being so, it affirmed the possibility to verify the identity of the respondent to the application for an enforcement order

41 Case Nr 3 0b 129/98m, in: Juristische Blätter 1998, p 729

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3 Significant Examples of Parallel Interpretation

Some of the cases applying the uniform interpretation approach deserve attention

because of the result achieved, more so than because of their treatment of

principles underlying that interpretation A few of these cases are outlined below

a) The ‘Obligation in Question’ under Article 5(1)

Ever since the well-known judgment of the ECJ in De Bloos,42 the question of which obligation should be taken into account for the purpose of identifying the forum having jurisdiction under Article 5(1) has reappeared in the context of commercial agency contracts

The question arose in a dispute before the Swiss Supreme Court between a Danish principal and his Swiss agent.43 After the principal started to sell his products through other Swiss merchants as well, the agent maintained that the contract was a sole distributorship and claimed damages on that basis The issue at stake was whether the principal’s obligation to respect the distributorship agreement was the sole obligation in question or whether the obligation to supply the agent in Switzerland with products also came into play

The court deemed itself bound by the pre-1988 case-law of the ECJ,

including the judgment in Shenavai,44

which had refused, in case of a plurality of obligations forming the basis of the action, to allow a single localisation at the place of performance of the characteristic obligation (which in the present case would point to Switzerland where the agent performed his sales activities)

Moreover, the Court took due account of the post-1988 ECJ judgment in Stawa,45

where the European Court had explicitly confirmed its earlier case-law to the effect that in principle each obligation is to be treated separately for the purpose of Article 5(1)

However, the Court then cited at some length criticism in scholarly literature, as well as Advocate General Lenz’s suggestion to change the established case-law (but rejected by the ECJ) Although it conceded that this criticism

appeared worthy of consideration (beachtlich) in certain circumstances, the Court

noted that it did not feel compelled to interpret the notion of ‘obligation’ in Article 5(1) of the Lugano Convention differently than the European Court In doing so, it

took into account the Stawa judgment and the need to ensure parallelism between

the Brussels and Lugano Conventions

42 Judgment of 6 October 1976, 14/76 [1076] ECR 1497, De Bloos v Bouyer

43 Judgment of 9 March 1998, A AG / B., BGE 124 III 188

44 Judgment of 15 January 1987, 266/85 [1987] ECR 239, Shenavai v Kreischer

45 Judgment of 29 June 1994, Custom Made Commercial v Stawa Metallbau, 288/92 [1994] ECR I-2913

C-Harry Duintjer Tebbens

As for the substance, the Supreme Court maintained that the obligation linked to the distributorship (not to the ensuing sales contracts) was the only relevant obligation of the defendant principal and had to be performed at the seat in Denmark

b) Validity of Choice of Court Clause

A judgment rendered on 23 February 1998 by the Austrian Supreme Court is a good illustration of the uniform interpretation approach.46 The case concerned a transport contract between an Austrian company and a Turkish road carrier for transport from Berlin to Uzbekistan The Austrian plaintiff relied on a choice of court clause for Vienna, thus raising the question whether the validity of the clause was to be judged by Article 17 of the Lugano Convention or by Austrian national law

The Court noted first that the issue raised a disputed question in German and Austrian legal literature: Does Article 17 (of both Conventions) require that, in order to be applicable, the case must have a connection with a second Contracting State, in addition to the forum state, such as, in particular, the fact that one of the parties is domiciled in another Contracting State or that the choice of court clause ousts the jurisdiction of a court or courts in such State However, it added that legal doctrine was not the only criterion; the principle of international harmony was inherent in the interpretation of multilateral conventions and against that back-ground one had to consider Protocol 2 and the relevant Declarations

The Court recalled its earlier views47

on the duty of courts in Lugano

Contracting States to examine ex officio pertinent decisions from other Contracting

States and to cite objective reasons for not following such decisions

As to the issue before it, the Court found that the ECJ had not given any ruling on it, but it cited three national decisions in point, all involving the Brussels Convention Only one of them had fully discussed the issue;48 another one had

taken a position implicitly, and the third had done so by way of obiter dictum

However, all three pointed towards requiring a connection with a second Contracting State

This convergence led the Supreme Court to prefer that solution for the sake

of avoiding any possible divergence in the Lugano and Brussels Contracting States, despite the fact that two of the three precedents had not engaged in a full discussion of the arguments representing the other approach to the question

46 3 Ob 380/97x, in: Juristische Blätter 1998, p 726, and in: Zeitschrift für

Rechts-vergleichung, internationales Privatrecht und Europarecht 1998, p 159

47 Supra, III B 2 c)

48 Oberlandesgericht Munich, 20 September 1989, in: IPRax 1991, p 46, and in:

Europäische Zeitschrift für Wirtschaftsrecht 1991, p 59

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The striking feature of this judgment is that, instead of making its own assessment of the best solution having regard for the substance of the issue, it candidly prefers to follow the concurring available precedents Hence, it favours interpretative harmony over individual (procedural) justice Between the lines of its judgment, the Austrian Court seems to suggest that the other courts should have examined the relevant views in scholarly literature in greater detail This is rather ironical in view of the fact that it itself did not discuss the merits of those views

Moreover, the Court favoured the solution of a mere dictum in one of the decisions

in point, yet it had stated before that dicta were not pertinent

c) The Problem of lis pendens (II)

In the above-mentioned litigation involving Polly Peck,49 the Swiss and English courts were both seized with proceedings concerning the same dispute The Swiss proceedings turned on the question which procedural act was to be regarded as bringing about the seizing of the Swiss court under Article 21 of the Lugano Convention At stake was whether the answer to that question should be derived

from a recently adopted rule of Swiss law or from the ruling of the ECJ in Zelger v

It referred to the directives for interpretation laid down in Protocol 2 of the Convention and highlighted the binding character of the pre-1988 case-law of the ECJ on the Brussels Convention

Turning to the question of the date of the seizing of a court for the purpose

of Article 21 of the Lugano Convention, the Court discussed extensively the ECJ

judgment in Zelger v Salinitri (II), the lis pendens rule recently introduced in the

Swiss federal Private International Law Act (Article 9), as well as some national case-law on Article 21 of the Brussels Convention It decided not to follow the

opinion of a part of Swiss legal doctrine, according to which the Zelger judgment

is interpreted as implying that the question when a court is ‘definitively’ seized is

to be resolved entirely in accordance with the domestic law of that court Instead it held that the ECJ had given a partial autonomous interpretation in that judgment, requiring a minimal commitment of the plaintiff to proceed with his action Since the Swiss federal rule did not require such a commitment in order for the court to

49 Supra, III.A.2

50 Supra, note 20

51 BGE 123 III 414

Harry Duintjer Tebbens

be definitively seized, that rule had to be discarded in favour of the interpretation adopted in the ECJ judgment

The Court thus came to the conclusion that the later of the two possible dates of seizing of the Zurich court was decisive for the application of Article 21 and that the English court had been seized earlier

This judgment shows that the Court was willing to let the international

interpretation of lis pendens prevail over a more restricted harmonisation of

cantonal laws of procedure, which the Swiss federal statute attempted to achieve at the national level

4 Possible Incongruous Results

The various rulings presented above bear ample witness that the Swiss and Austrian Supreme Courts attempted to achieve the greatest possible uniform interpretation of both Conventions by following the body of rulings of the ECJ and, lacking such guidance, the prevailing views expressed in national case-law.52

However, this approach does not always lead to the desired result A few rulings of national courts of last instance might not entirely correspond to the ECJ’s actual or presumed position As was observed,53 such discordance may not

be attributable to the specific nature of the Lugano Convention and could have arisen in the context of the Brussels Convention as well It should be added, however, that in the framework of the Brussels Convention, the preliminary reference mechanism could have ironed out the differences

Three such ‘non aligned’ cases may be cited as examples

a) Commercial or Bankruptcy Action

The Norwegian Supreme Court54 had to rule on the scope of the exception in Article 1(2) concerning bankruptcy, winding-up of insolvent companies and analogous proceedings A Norwegian supplier filed a claim for the remaining debt arising out of contracts it had performed before the defendant buyer, an Italian

52 On the Swiss jurisprudence, see D ONZALLAZ , Y., ‘L’interprétation de la

Convention de Lugano (CL) par le Tribunal fédéral: étude de jurisprudence’, in: Revue de

droit suisse, 1999, I.1, p 22 et seq., who (with dislike) calls the Swiss Federal Court a model

pupil of the ECJ’s case-law

53 ‘Report on the national case-law relating to the Lugano Convention drawn up in performance of the task entrusted to the Spanish, Greek and Swiss delegations at the 5th

session of the Lugano Convention’s Standing Committee (Interlaken, 18.9.1998)’, in: IPRax

2001, p 262 et seq., at p 268

54 Judgment of 18 January 1996, Norsk Hydro / Alumix s.p.a., in: Norsk Retstidende

1996, 25, English summary in: [1996] International Litigation Procedure 461

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state-owned company (and others belonging to the same State enterprise), had been ordered by a Italian decree to wind-up and not to pay its debts

The Court simply stated that the relevant provision was identical in both

Conventions and, citing the Jenard Report and the ECJ ruling in Gourdain v

Nadler,55 concluded that the purpose behind the bankruptcy exception was to have proceedings concentrated in the country where the insolvency was opened and that accordingly, in the present case, the Norwegian courts should not interfere with the Italian proceedings This was a majority decision, the minority being of the opinion that the claim itself did not relate to bankruptcy and could be decided under the contract forum of Article 5(1), albeit that eventually – at the enforcement stage –

an Italian court might not accept the applicability of the Lugano Convention However, a future Norwegian judgment should possibly be open to enforcement in other Contracting States

In our submission, the minority opinion sits better with the prevailing view

in national case-law and legal literature, according to which only typical

bankruptcy actions – like the one brought by the liquidator in Gourdain – come

under the exception, while ordinary commercial claims would not.56

b) Place of Pure Economic Loss

A second example is an Austrian decision of 24 February 199857

concerning the place where an economic tort is committed for the purpose of identifying the competent court under Article 5(3) of the Conventions The Austrian plaintiff brought action against the general manager of a German company, whose malversations had left the plaintiff unpaid for goods sold and delivered to Germany and resold there despite a retention of title clause The Austrian courts would have jurisdiction only if the tort could be considered to have been committed in Austria The Supreme Court referred to the authentic interpretation of the Lugano Convention offered by the ‘methodical principles’ contained in the case-law of the ECJ Under the established case-law, the plaintiff had the option to sue either at the place where the damage occurred or at the place of the event giving rise to that

damage The defendant relied on the Marinari judgment of the ECJ58 to show that the realisation of a pure economic loss in the patrimony of the plaintiff was not

55 See note 38

56 See G AUDEMET -T ALLON H., Les Conventions de Bruxelles et de Lugano, Paris

1996, p 27, and cited case-law; D YER A., ‘Remarks on Bankruptcies and Money Judgments:

The Practice under the [Brussels] Convention’, in: Contemporary International Law Issues:

Conflicts and Convergence, The Hague 1996, p 125 et seq., at p 131

57 1 0b 319/97m, in: Juristische Blätter 1998, p 517, and in: Zeitschrift für

Rechts-verleichung, internationales Privatrecht und Europarecht 1998, p 170

58 Judgment of 19 September 1995, C-364/93 [1995] ECR I-2719, Marinari v

Lloyd’s Bank

Harry Duintjer Tebbens

sufficient to establish jurisdiction of the court at the latter’s domicile in Austria However, the Supreme Court rejected this reasoning and considered that the initial loss, as distinct from further consequences occurring in a different state, had indeed

been suffered at the plaintiff’s domicile In its view, the Marinari case did not solve the question before the court because it did not concern pure economic loss

When concluding that the courts of the place where the loss was suffered have jurisdiction, the Court noted that the same solution had emerged in certain English and Italian cases in which the Brussels Convention is applied.59

Although this Austrian decision appears to comply with the parallel

interpretation method, there may be a basic flaw in its treatment of the Marinari

case In fact, one could argue that the loss was caused by the unauthorised reselling

of the goods in Germany, and that the diminution of the plaintiff’s patrimony was

the further consequence of the initial loss of property In this analysis, the Marinari

judgment would be pertinent and should have directed the court to apply the restrictive approach adopted in that judgment, viz., that only the place of the initial damage is material for the purpose of Article 5(3) of the Conventions

c) Notion of ‘Consumer Contract’

One of the first Lugano decisions of the Swiss Federal Supreme Court dealt with the notion of ‘consumer contract’.60 A stamp collector domiciled in England was sued in Switzerland for the balance due resulting from a long-standing relationship; the claimant (a Swiss company) sold the defendant’s stamps at auctions and advanced the expected price; the excess advance payments were periodically reimbursed by the defendant A complication arose because the defendant himself was also a professional stamp dealer, but ran his business separately from his private collection

The Federal Supreme Court noted at the outset that the Lugano Convention had to be interpreted by taking into account the principles of international treaty law, as well as foreign legal scholarship and foreign judicial decisions on the Lugano and the Brussels Convention

After conducting an extensive survey of the concept of consumer contract

by consulting various legal sources, it finally held that the relationship between the parties could be classified as such a contract In so doing, the court had some doubts because of certain particularities of the sales offers made on behalf of the defendant; however, it decided to give the benefit of the doubt to the alleged consumer

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Yearbook of Private International Law, Volume 3 (2001) 21

This judgment is a good example of the efforts made by courts in Lugano States when confronted with a novel question, for which the ECJ case-law offered

no solid guidance at the time From this point of view, the judgment should by no means be criticised because of its result, although, of course, commentators may chose to dissent.61

However, at the time the Swiss Court had to answer this question, certain rulings of the ECJ did point towards a restrictive interpretation of the special

jurisdiction rules in Articles 13 et seq of the Brussels Convention In particular, in

Shearson Lehmann Hutton,62 it considered that the protective role of those provisions implies that their application should not be extended to persons for whom such protection is not justified, and that the Convention appears clearly hostile towards conferring jurisdiction to the courts of the plaintiff’s domicile.63

Also, it is doubtful whether the collector in the case at hand had really been acting

‘for a purpose which can be regarded as being outside his trade or profession’ under Article 13(1) of the Lugano Convention

Finally, the restrictive approach taken by the ECJ in respect of the scope of special consumer jurisdiction was subsequently confirmed in its judgment in

Benincasa v Dentalkit.64 Accordingly, though admittedly a posteriori, it appears

that the Swiss judgment is not completely in harmony with the interpretation given

to the same notion in the Brussels Convention

IV The Court of Justice and the Lugano Convention

Because of the lack of interpretative jurisdiction for the Lugano Convention

(supra, I.B.), the Court of Justice may only indirectly consider that Convention

Rather soon after the conclusion of the Convention and well before its entry into force, the ECJ had to interpret Article 5(1) of the Brussels Convention in an employment dispute.65 A deputy project manager residing in France worked for a

61 Cf the comment by VOLKEN P., in: Schweizerische Zeitschrift für internationales

und europäisches Recht 1996, p 84 et seq

62 Judgment of 19 January 1993, C-09/91 [1993] ECR I-139, Shearson Lehmann

Hutton v TVB

63 Ibid., para 22

64 Judgment of 3 July 1997, C-269/95 [1997] ECR I-3767

65 Judgment of 15 February 1989, 32/88, [1989] ECR 341, Six Constructions /

Humbert

Harry Duintjer Tebbens

contractor’s enterprise having an office in Belgium His duties were exclusively performed in several African and Middle-East countries The dispute turned on the question how to apply the criterion of the characteristic obligation laid down in earlier ECJ case-law (i.e., to perform the work) when the employee performs all his work outside EC territory

In the version of the Brussels Convention relevant to the case, there was no provision on labour contracts and the above-mentioned judge-made criterion did not offer a solution either However, the Lugano Convention innovated on this point by providing a subsidiary rule conferring jurisdiction on the courts at the place where the business engaging the employee was situated.66 This would make the Belgian courts competent and, in fact, several Member States intervening in the preliminary reference proceedings invited the Court to adopt that solution

The ECJ declined to follow this approach, which, in their view, would not take due account of the need to protect the weaker party, i.e., the employee; namely, if the employer were the plaintiff, the forum provided under the Lugano

Convention would amount to an undesired forum actoris Having ruled out

resorting to this solution, the Court had no choice but to conclude that the optional forum of Article 5(1) was not available in any Convention State and that only the general forum of the defendant’s domicile remained (Since this was in a Middle-East country in the present case, jurisdiction would under Article 4 not be governed

by the Convention at all, but by national law)

Therefore, somewhat paradoxically, the ECJ approach may lead to less

employee protection in cases where the employer had engaged the employee at a place where it would be convenient for the latter to file a suit, in fact more convenient than the employer’s domicile or principal establishment

The Court’s rejection of the solution in the new rule of the Lugano Convention may have been influenced not only by the judges’ concern for employee protection, but also by the squarely negative position taken by the Advocate General in this case In his view, it was out of the question that the Lugano Convention and the annexed Declaration directed at the European Court (which he found ‘surprising’) should directly influence the interpretation of the Brussels Convention.67

Surely, the Court was not obliged to follow the subsidiary rule of the Lugano Convention: The Declaration only refers to case-law concerning that Convention, which of course did not yet exist before its entry into force

Nevertheless, the Court could have adopted the connecting factor of Article 5(1), in

fine, of the Lugano Convention; and yet, as a means of protecting the consumer,

could have confined its application to actions brought by, but not against, the employee This balanced solution was actually adopted in the Accession

66 Art 5, first para., in fine

67 Opinion of Advocate General Tesauro, paras 7-8, [1989] ECR at p 351

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Yearbook of Private International Law, Volume 3 (2001) 23

Convention for Spain and Portugal to the Brussels Convention68 a few months after

the Six judgment

Another opportunity for the Court to consider not so much the case-law concerning the Lugano Convention but simply its existence – regarded as an ‘extension of the principles of [the Brussels] Convention’, as it is called in the preamble of the Lugano Convention – arose in a preliminary reference made under the EC Treaty involving the scope of the prohibition of discrimination on grounds of nationality (see Article 7, now Article 12 of the Treaty)

The case, Mund & Fester,69 concerned a rule of German civil procedure which required that certain conditions be met for authorising conservatory seizure

of assets if the subsequent judgment had to be enforced in Germany, but which deemed these conditions fulfilled if enforcement was to take place in another country,70 thus making it easier to obtain seizure against foreign debtors than against debtors residing in the country The ECJ held that this rule was indeed discriminatory against debtors residing in other EC Member States In its reasons the ECJ emphasised that all Member States were parties to the Brussels Convention and could thus be regarded as forming a single entity for matters covered by the Convention As a result, the conditions for enforcing judgments were substantially the same in all Member States

Therefore, applying the discriminatory rule to secure claims against debtors

in other EC States was not justified, whereas it was justified if the ensuing judgment would have to be enforced in a third country

In so holding, the ECJ was silent on the fact that the Lugano Convention, which had come into force by then, created substantially the same regime of recognition and enforcement as contained in the Brussels Convention The Court could therefore very well have made a reservation for third countries belonging to the Lugano Convention group Although this was not strictly necessary, a note to that effect would certainly have been supportive of the spirit of parallelism between the two Conventions

And indeed, a broader perspective than the mere dichotomy of Member States and other States was adopted by national legislators who took account of the

impact of the Mund & Fester judgment Several of those legislators in EC Member States, inter alia, Germany, Netherlands and Austria, adapted their legislation that

68 Convention of 26 May 1989, OJEC L 285, p 1, Art 4

69 Judgment of 10 February 1994, C-398/92 [1994] ECR I-467, Mund & Fester v

Hatrex Internationaal Transport

70 § 917(2) of the Zivilprozessordnung (text prior to the modifying Act of 6 August

1998)

Harry Duintjer Tebbens

was found incompatible with the judgment, with a view to excluding the discrimination of debtors not only in other Member States, but also in other States parties to the Lugano Convention

V Concluding Remarks

The preceding presentation shows that by and large the Brussels and Lugano Conventions are interpreted uniformly and with due regard to the parallelism existing between them In current practice, judgments applying the Lugano Convention frequently cite rulings of the European Court on the Brussels Convention, as well as views of legal writers on that Convention Sometimes decisions of national superior or supreme courts are referred to as well, when no guidance can be drawn from the ECJ Citations in the other direction are less frequent, but this may well be explained by the much larger body of case-law involving the Brussels Convention.71

Protocol 2 of the Lugano Convention and the Declarations on uniform interpretation have been implemented by the courts of EFTA States in a very constructive manner The particular focus placed on the Swiss and Austrian supreme courts in this paper warrants special mention of their consistent approach favouring a uniform interpretation of both Conventions In some cases they seem

to have followed ECJ precedents even contre-coeur72 or preferred uniformity over

a choice based on a substantive assessment of the options.73

Though some have expressed less enthusiasm about this convergent trend,74

our conclusion is positive, recalling the scepticism with which the second-best tools for uniform interpretation were received when the Convention was concluded.75 Of course, there have been some instances where doubts can be entertained about whether a Lugano Convention interpretation follows the line laid down by the ECJ for the Brussels Convention.76 However, no clear-cut and

71 The database kept at the ECJ shows a ratio of roughly 5:1 for Brussels and Lugano Convention decisions registered per year

72 Supra, III.B.3 a)

73 Supra, III.B.3 b)

74 See D ONZALLAZ Y (note 52), at p 29

75 See S TONE P.A (note 8), at p 117; P ELLIS L., ‘All roads lead to Brussels: Towards

a Uniform European Civil Procedure’, in: Netherlands International Law Review 1990,

pp 372 et seq., at p 395; MC C AFFREY E.M., ‘The Lugano and San Sebastian Conventions:

General Effects’, in: Civil Justice Quarterly 1992, p 12 et seq., at p 25 For more optimistic

views see, e.g., M ÖLLER G., (note 8), at p 220; W AHL N., The Lugano Convention and

Legal Integration, Stockholm 1991, at p 76; DUINTJER T EBBENS H., (note 6), at pp 60-61

76 Supra, III.B.4

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Yearbook of Private International Law, Volume 3 (2001) 25

deliberate deviation from that case-law by courts of non-EU States was detected,

not even where a ruling of the ECJ was supported, inter alia, by arguments drawn

from European Community law.77

The EFTA States have lived up to the criterion for a successful uniform interpretation, which Droz aptly summarised as reciprocal esteem and good will of the various courts involved.78

The national courts in EU-Member States have contributed to this success

As for the European Court of Justice, it has not yet had the opportunity to draw inspiration from solutions developed in the case-law on the Lugano Convention for problems that had not yet arisen under the Brussels Convention On the other hand,

at one or two occasions, the Court could have been somewhat more receptive to the existence of an emerging judicial area for civil and commercial disputes larger than the one coinciding with the membership of the European Union This would have been welcome, if only as a sign of encouragement for the courts of EFTA countries

in their efforts to ensure a convergent interpretation

In the not-too-distant future the European Court will have to acknowledge this wider dimension Under Article 65 of the European Community Treaty and following the transformation of the Brussels Convention into a Community Regulation,79 a revised Lugano Convention is to be concluded by the Community and/or the Member States, having regard to the special position of Denmark, with a view to aligning it to that Regulation on the basis of the joint revision operation undertaken in 1998-1999.80 This new Lugano Convention will become part of Community law by virtue of Article 300(7) of the Treaty As such, it will fall within the general interpretative mission of the European Court under Article 234 (ex-Article 177) of the Treaty, or, possibly, the more restricted scope of its intervention in regard to measures within Title IV (Article 68)

The Court can then build on the solid basis of convergent case-law already

in existence

77 See the Sonntag judgment, supra III.B.2 a)

78 D ROZ G., ‘La Convention de Lugano parallèle à la Convention de Bruxelles, concernant la compétence judiciaire et l’exécution des décisions en matière civile et

commerciale’, in: Rev crit dr int pr 1989, p 1, at p 12

79 Regulation (EC) Nr 44/2001 of the Council of 22 December 2000 on jurisdiction

and the enforcement of judgments in civil and commercial matters, in: OJEC 2001, L 12,

p 1 (‘Brussels I Regulation’)

80 Recital No 5 of Regulation No 44/2001 (previous note)

Yearbook of Private International Law, Volume 3 (2001), pp 27-62

© Kluwer Law International & Swiss Institute of Comparative Law

Printed in the Netherlands

RETHINKING THE HAGUE JUDGMENTS

CONVENTION: A PACIFIC PERSPECTIVE

David GODDARD *

I Taking Stock

A Clarifying the Goals of the Judgments Convention

B Identifying the Core of the Convention

C Drafting Provisions to Address the Core Issues

D The Process for Completing the Convention

II Whence a ‘Pacific Perspective’?

A Elements of a Pacific Perspective

B The Emphasis of a Pacific Perspective

C New Rules Should Not Increase the Risks and Costs of Cross-Border E-Commerce

D The Importance of Widespread Ratification by the Region’s Trading

Partners

III Priority Issues for the Judgments Convention

A Key Benefits from the Judgments Convention – Reducing Barriers to Trade

B Contract Disputes

1 The Benefit of Addressing Contract Disputes

2 Giving Effect to Forum Clauses

3 Default Jurisdiction in a Defendant’s Home Jurisdiction

4 Default Jurisdiction Based on Place of Performance, or Activity?

5 Summary – Contract Disputes

C B2C and C2C Contracting

D Tort Claims and Other ‘Imposed Obligation’ Claims

E The Risk of Addressing Jurisdiction in ‘Stranger’ Claims

F Restitution Claims

G Trusts

H The Black List

IV The Core of the Convention