Richard de la Tour AG in Inkreal: a controversial Opinion on ‘international’ in “private international law”, and one I do not think will be followed by the CJEU.

Richard de la tour AG opined last Thursday in C‑566/22 Inkreal aka Inkreal s. r.  v Dúha reality s. r. o..

At issue is whether the sole use of international choice of court suffices to escalate a purely internal case to the ‘international’ level, hence within the reach of the Brussels Ia Regulation. The AG opined it does not. I don’t think he is right and I suspect the CJEU will not follow him.

FD, resident in Slovakia, as the assignor, and Dúha reality s. r. o., a company domiciled in Slovakia, as the assignee, concluded two loan agreements on 29 June 2016 and 11 March 2017 respectively. By means of a voluntary assignment agreement dated 8 December 2021, FD assigned the claims arising from those loan agreements to Inkreal, a company domiciled in Slovakia. In each of those agreements, the parties agreed that ‘any ambiguities or disputes arising from the agreement and in connection therewith shall be first resolved by negotiation aimed at reaching a solution acceptable for both parties. If the parties are unable to settle such a dispute, the dispute shall be settled by a court of the Czech Republic having substantive and territorial jurisdiction, in line with the [Code of Civil Procedure], as amended’. Following non-payment, Inkreal brought an action before the Czech courts, in application of the choice of court agreement.

(31) onwards the AG sides with that part of scholarship (most of the authors he refers to wrote in French or German, just a few in English and he seems to only cite Mankowski as holding opposite views; I am not saying that French or German scholarship ought not to be cited, far from it, it ought to much more frequently in all possible EU languages; yet there is more scholarship on the issue both by English scholars and by others writing in English) and national case-law which argues against Article 25 BIa catching such choice of court, alleging lack of ‘international’ element.

He develops five main reasons (see the Opinion for more detail) with often only one source for each.

1. (32).  The mere will of the parties in a purely internal situation must not suffice: existence of an international element has to be established according to “objective criteria”. I for one do not understand how party autonomy is not an “objective criterion”.
2. (33) ff Brussels Ia cannot have the effect of eliminating any distinction between the national and international rules of jurisdiction governed by EU law.  Four arguments to the contrary of a textual or teleological nature based on A25 BIa must in the AG’s view be dismissed. First, that non-EU domiciled parties can make valid choice of law for an EU court in his view is of no value; Second, the independence of the will of the parties cannot enables parties to “call into question the scope of that regulation, which is limited to international and not purely internal situations.” ( a clear circular argument);  Third, A25’s new lex causae rule for substantive validity of choice of court cannot rescue choice of court which does not initially engage with a ‘international’ situation (again circular); Fourth, the clear movement from Brussels I onwards towards supporting choice of court does not justify authorising the parties to derogate from national rules on jurisdiction without any limit or connecting factor. 
3. (38) The AG cites CJEU Owusu, Lindner and IRnova as confirming his view that “objective criteria” are required to support an international element (Owusu and IRnova) or the foreign nationality of the defendant (Lindner).
4. (40 ff) Rome I cannot be used as a benchmark, both because purely internal situations in Rome I remain subject to mandatory national provisions (see of course VinylsItalia) and because Rome I’s DNA is party autonomy which Brussels Ia’s Article 25 it is suggested is not. (Had he not lost me already, the AG would certainly have lost me here). The AG also refers in support to the 2005 Hague Choice of Court Convention and recitals in Council Decision 2014/887 (making the EU accede to that Convention and referring to links between both and one or two Hague anchors in Brussels Ia; but nowhere near the symmetry the AG suggests), opining that A1(2) Hague Convention somehow needs to be extended to Brussels Ia: that Article reads “a case is international unless the parties are resident in the same Contracting State and the relationship of the parties and all other elements relevant to the dispute, regardless of the location of the chosen court, are connected only with that State.” Extending A1(2) Hague 2005 to Brussels Ia in my view is a massive stretch of statutory construction.
5. Finally (43) the AG somewhat backtracks and suggests factors testifying to an international element “should be assessed by the court seised on a case-by-case basis in a flexible manner or according to a broad conception.”

Finally the AG suggests (45 ff) that the CJEU should advice the referring court and ‘practice’ in general on the A25 conflit (viz the ‘international element’) mobile issue. When must the international nature of the situation be assessed: when the jurisdiction agreement is concluded or when the designated court is seised by the parties? Here he emphasises the contractual nature of the determination of jurisdiction (in direct contrast with his views above) and legal certainty rather than foreseeability, and suggests the international nature be assessed at the stage when the choice of court clause is agreed, not when the court is seised. That in my view undermines the core forum shopping intention of both Article 25 and Article 26 (voluntary appearance).

(49) the AG oddly backtracks again on this issue by suggesting that “it might be accepted that, in an internal situation with a prospect of becoming international, the parties [may] agree, when concluding their agreement, to designate a court of a Member State in sufficiently precise terms which express their intention  and provide for the exclusive jurisdiction of national courts where there is doubt as to the existence of a criterion requiring an international element.”  Rather than increasing legal certainty, that is bound to upend it IMHO.

The CJEU of course is not likely to entertain this last part of the Opinion.

In general, I believe it will have a more generous view of party autonomy and an eye on the interests of the European Judicial Area (per prof Dickinson), perhaps also as suggested by Matthew Hoyle, referring to Brussels Ia’s corrective mechanisms both for protected categories and ordre public (Article 45 BIa).