Posts Tagged Temporal scope

Von Munchausen ft. von Savigny. Szpunar AG in Nikiforidis.

Update 19 October 2016. The court held yesterday. I shall have review it soon.

Szpunar AG’s Opinion in C-135/15 Hellenic Republic v Grigorios Nikiforidis has travelled half the world with me in my briefcase. Time to tackle the blog queue…

As I had reported earlier, the Bundesarbeitsgericht has given the CJEU an opportunity to provide much needed clarity on the application of Rome I to continuing (employment) contracts, and on the Regulation (or as the case may be, the Rome convention)’s provisions on overriding mandatory law.

The Opinion (not available in English) first of all clarifies the temporal scope of Rome I. Article 28 Rome I provides that it applies to contracts concluded ‘as from 17 December 2009’ (this is the corrected format; initially Article 28 read ‘after’). When exactly a contract is ‘concluded’ needs to be determined in accordance with the putative lex causae as identified by the Regulation (an extension of Article 10(1), suggested by most if not all of relevant scholarship). What, however, about ‘continuing’ contracts’: those concluded before the temporal scope of the Regulation, continuing after, however renewed, renegotiated, amended…: do these continue to be covered by the Rome convention ad infinitum, or is there a cut-off point at which these continuing contracts become newly concluded?

I had suggested in my earlier posting that one’s intuitive assumption may be to prefer autonomous interpretation of the concept ‘concluded’. That, after all, is the standard approach of the Court. However I argued that in the current state of (lack of) harmonisation of contractual law, it is more likely that the Court will prefer an Article 10(1) type solution. Szpunar AG is of the same opinion. He first of all points out (at 33) that secondary EU  law need not necessarily include verbatim transitionary measures. In the absence of a specific regime, the general rule is that the new provisions immediately apply to future effects of situations that arose under the old regime. Rome I’s transitory regime therefore, with its reference to date of ‘conclusion’  is an exception to that general principle. Can that moment of conclusion be autonomously defined? Szpunar AG shares my intuition (at 35 ff): along the lines of Article 10’s regime (the von Munchausen or the ‘bootstrap’ principle) the lex causae has to determine the moment of conclusion. For long-term contracts, this will inevitably lead to uncertainty (at 49). Yet that does not take away the soundness of the rule.

 

Next up is the application of Article 9’s provision on overriding mandatory provisions. This is the first time the CJEU will rule on that Article (Unamar was held under the Rome Convention). The Regulation quite deliberately limited the room for manoeuvre for the court seized to apply overriding mandatory law other than that of the forum: only such laws of the country where the obligations arising out of the contract ‘have to be performed’ can come into calling. That place is likely to be Germany in the case at issue (the Regulation does not define ‘place of performance’ under Article 9(3)) – however the AG suggests differently: there are a variety of reasons to assume that Greece, too, can be that place (at 95).

Szpunar AG first of all, in his very first para, remarks that scholarly attention to ‘lois de police’ far exceeds its featuring in practice. He also notes that von Savigny himself discussed ordre public (at 68 with references) and succinctly discusses the difference between the two (at 69-70). He repeats (at 78) that scholarly attention to overriding mandatory law has been excessive. He then rejects the suggestion that Article 9(3) needs to be applied restrictively to such a degree that its application becomes pretty much near-impossible. Importantly, he rejects in the process (a la Kainz) a strict parallel between ‘performance’ in Article 9(3) Rome I and Article 7(1) Brussels I Recast, and suggest that while the latter needs strict interpretation in line with the overall interpretative rules of that Regulation, there is no such need for Article 9(3) (at 92).

I wonder whether the Court will still hold before the recess (professor Szpunar Opined in April: I did flag there is a queue of cases waiting to be reviewed…

Geert.

(Handbook of) European Private international law, 2nd ed. 2016. Chapter 2, Heading 2.2.8.3, Chapter 3, Heading 3.2.5 , heading 3.2.8.

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

On the temporal scope of Brussels I, and the notion of ‘counterclaim’ in Art.6(3) Brussels I Regulation. Kokott AG in C-185/15 Kostanjevec.

In Case C-185/15 Kostanjevec, Kokott AG (not available in English at the time of writing) advised on a number of issues in relation to a counterclaim under Article 6(3) Brussels I (now 8(3) of the Recast). At the core of the dispute lies a leasing contract and the consumer counterclaiming for restitution per unjust enrichment, of the sums she had transferred to counterparty. The counterclaim follows the annulment of the contract between the two, even though Marjan Kostanjevec had initially been ordered to pay.

The first relates to the temporal scope not of the Recast Brussels I Regulation viz Brussels I, but rather simply of Regulation 44/2001, in particular with respect to a Member State (Slovenia) which joined the EU on 1 May 2004. The Brussels Convention had never applied to Slovenia. The proceedings between parties  go back to 1995, prompting the EC among others to suggest that per Article 66 of the Regulation (This Regulation shall apply only to legal proceedings instituted…after the entry into force thereof) it simply does not apply. Kokott AG however suggests first of all that the new claim in restitution, followed the use of a separate means of redress under Slovenian law, instituted after the initial claim by the leasing company had been wrapped up in its entirety. Moreover, other language versions refer not to ‘proceedings’ but rather to a claim (defined in C-341/93 Danvaern Production as claims by defendants which seek the pronouncement of a separate judgment or decree. It does not apply to the situation where a defendant raises, as a pure defence, a claim which he allegedly has against the plaintiff (at 18)

Regulation 44/2001 applies therefore, in the view of the AG. I would agree that it should: this is particularly relevant where parties have a long and complex history of litigation. (Similarities here may exist with Nikiforidis, which is in my blog pile). Applying Danvaern Production however for the interpretation of Article 66 I think may be problematic. The raison d’être of Article 6(3) is to help avoid conflicting decisions in cases that are closely related. Even if, per Danvaern, they seek a separate pronouncement, they do essentially relate to reciprocal commitments which are part of the same bundle of facts. (See also Kokott AG herself, in para 44 of her Opinion with reference to the Jenard Report and to Léger AG in Danvaern). It feels a little inconsistent to call upon arguments developed viz inseparable claims (under Art.6(3): Danvaern) to support a thesis of separability (viz the application ratione temporis: they are separate claims even if they have a common history in fact and in contractual liaison).

With reference to C-297/14 Hobohm, the AG subsequently also advises that the counterclaim is covered by the Regulation’s consumer contracts title as having a ‘close link’ with the consumer contract, and, for the sake of completeness, and with reference to Profit SIM, that claims for restitution are covered by (now) Article 7(1) ‘s forum contractus even if they are grounded in a claim arguing that the contract at issue did not actually exist.

I am curious how the Court will approach the temporal application issue.

Geert.

(Handbook of) European Private International law, 2nd ed. 2016, chapter 2, Heading 2.2.11.1.a, Heading 2.2.21.3, Heading 2.1.1

 

 

, , , , , , , , , , , , , , , , , , , ,

Leave a comment

Employment, foreign mandatory rules and Greek public finance.

Postscript 21 September 2015: the case is C-135/15 Hellenic Republic v Grigorios Nikiforidis.

The German Federal Labour Court, the ‘Bundesarbeitsgericht’, has provided the ECJ with an opportunity to provide much needed clarity on the application of Rome I to continuing (employment) contracts, and on the Regulation (or as the case may be, the Rome convention)’s provisions on overriding mandatory law. The Bundesarbeitsgericht has issued a press release on the case, Giesela Rühl flagged the case in March, and Lisa Günther has more detailed input on the overall context. Claimant is a Greek, employed by the Greek State at the Greek primary school in Nuremberg (Germany). His salary was reduced in accordance with relevant Greek Saving Laws. Claimant asks for payment of the sums withheld. Is the German court bound to apply the Greek Saving Laws?

The case (which as yet to appear on the ECJ’s website) first of all seeks clarification on the temporal scope of Rome I. Article 28 Rome I provides that it applies to contracts concluded ‘as from 17 December 2009’ (this is the corrected format; initially Article 28 read ‘after’). When exactly a contract is ‘concluded’ needs to be determined in accordance with the lex causae as identified by the Regulation (an extension of Article 10(1), suggested by most if not all of relevant scholarship). There has hitherto been much less noise about the application of Article 28 to ‘continuing’ contracts’: those concluded before the temporal scope of the Regulation, continuing after, however renewed, renegotiated, amended…: do these continue to be covered by the Rome convention ad infinitum, or is there a cut-off point at which these continuing contracts become newly concluded? Any suggestion along these latter lines presumably requires determination of a threshold. For instance, adaptation of price in line with inflation presumably is not sufficient to speak of a ‘new’ contract. But would contractually foreseen price renegotiation to take account of economic cycles, lead to such a new contract?

One’s intuitive assumption may be to prefer autonomous interpretation of the concept ‘concluded’ however in the current state of (lack of) harmonisation of contractual law, it is more likely that the Court will prefer an Article 10(1) type solution.

Next up is the application of Article 9’s provision on overriding mandatory provisions. This is the first time the ECJ will rule on that Article (Unamar was held under the Rome Convention). The Regulation quite deliberately limited the room for manoeuvre for the court seized to apply overriding mandatory law other than that of the forum: only such laws of the country where the obligations arising out of the contract ‘have to be performed’ can come into calling. That place is likely to be Germany in the case at issue (the Regulation does not define ‘place of performance’ under Article 9(3)).

No doubt the ECJ will cut some corners, per judicial economy, however the case nevertheless promises to be entertaining.

Geert.

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

%d bloggers like this: