The Recast of the Brussels I Regulation: Old and New Features of the European Regime on Jurisdiction and the Recognition of Judgments
Posted on June 27, 2013
Letters Blogatory warmly welcomes guest poster Pietro Franzina, Associate Professor at the University of Ferrara, with a post on the recast Brussels I. I think the European experience is likely to be of particular interest to American lawyers these days, with the current debates about the ratification and implementation of COCA and the renewed activity in the Hague concerning the “Judgments Project.” Welcome, Pietro! This post will be followed tomorrow by a contribution by IJA Brigade member Fanny Cornette, so stay tuned.
A body of uniform rules governing the jurisdiction of courts in cross-border cases and the recognition of judgments in civil and commercial matters has been in place in Europe since the 1970s, following the entry into force of the Brussels Convention of 27 September 1968. The Convention has subsequently been replaced by Regulation (EC) No. 44/2001 of 22 December 2000 (the Brussels I regulation), a legislative measure adopted by the European institutions pursuant to the competences that the Member States have since ceded to the European Union in the field of private international law (or ‘judicial cooperation in civil matters,’ as the discipline is officially known in the Union’s parlance).
The publication of a Green Paper in 2009 marked the beginning of the review process of the Brussels I Regulation. Following the presentation of a proposal by the European Commission in 2010, a new regulation—Regulation (EU) No. 1215/2012 (the Brussels I a regulation)—was adopted on 12 December 2012. The latter is in fact a recast of the existing provisions and is intended to replace the Brussels I Regulation altogether. It will apply as of 10 January 2015 to legal proceedings instituted (and to judgments rendered) on or after that date.
While retaining the overall structure of its predecessors, Regulation No. 1215/2012 brings about a number of innovations. The goal is to further simplify the movement of judgments from one Member State to another, to enhance legal certainty as regards the jurisdiction of Member States’ courts, and to ensure that lis pendens and other forms of transnational parallel litigation are effectively dealt with in Member States’ courts.
The purpose of this post is to provide a short account of the rules concerning jurisdiction and parallel proceedings laid down in the Brussels I a regulation. The new provisions relating to the recognition and enforcement of judgments—incidentally, the area where the most innovative amendments have been introduced—will be examined by Fanny Cornette in a separate post.
Jurisdiction Under the Brussels I a Regulation: The (Almost Unchanged) Basic Features
Regulation No. 1215/2012 has left the core features of the European regime on jurisdiction in civil and commercial matters largely unchanged.
- As for the style of the provisions on jurisdiction, the idea remains that the court or courts entitled to hear a cross-border case should be identified through hard-and-fast rules, the operation of which should be based on pre-determined connections between the forum and the cause of action. No discretion is vested in the seised court in deciding whether or not to assume the case. In keeping with the European continental tradition, the court designated by the regulation is allowed to hear the case even where the claim features a stronger connection with another country and the dispute is likely to be more conveniently decided there.Seen from a non-European point of view, this approach might seem to be overly rigid. In reality, the idea that the circumstances of the case should affect the way in which jurisdictional issues are decided is not entirely alien to the European regime. There are actually many heads of jurisdiction in Europe that provide differentiated solutions based on the features of the dispute, namely the subject matter of the claim (with special rules governing, e.g., jurisdiction in contract, tort, real estate, employment or IP matters) or the way in which the proceedings are structured (particular provisions exist dealing, e.g., with proceedings against multiple defendants and proceedings where a counterclaim is raised by the defendant against the plaintiff).
- The architecture of the European jurisdictional regime, too, retains its basic original features. The cornerstone of the Brussels I a Regulation is the principle whereby the defendant, irrespective of his nationality, may be sued before the courts of the Member State where he is domiciled (Article 4). The rule provides a basis for ‘general’ jurisdiction, since it applies to any matter falling within the material scope of application of the Regulation, save for a few exceptions.As with the Brussels Convention and the Brussels I Regulation, several provisions of the new regulation permit supplementation, and possibly derogation from, the actor sequitur forum rei rule. These may be grouped under six headings:
- Some provisions provide exclusive grounds of jurisdiction. The idea here is that a limited number of particular claims should be brought before the courts of a given Member State, to the exclusion of all other courts in Europe. For example, pursuant to Article 24(1) of the new regulation (corresponding to Article 22(1) of the Brussels I Regulation), claims regarding tenancy or rights in rem in immoveable property can be decided solely by the courts of the Member State where the property is situated.
- Some other provisions set forth special grounds of jurisdiction. These refer to claims falling within well-defined classes of matters and provide the claimant with a concurrent basis of jurisdiction, allowing him to sue the defendant in a Member State other than the State where the latter is domiciled. Thus, e.g., under Article 7(2) of the Brussels I a Regulation, formerly Article 5(3) of the Brussels I Regulation, litigation in respect of ‘tort, delict or quasi-delict’ may take place, at the claimant’s option, either in the country where the defendant is domiciled, or ‘in the courts for the place where the harmful event occurred or may occur.’
- Provisions create protective jurisdictional regimes for litigation involving ‘weaker parties.’ Basically, their purpose is to enable consumers, employees, and parties to insurance contracts to access justice in an easy and cost-effective way whether or not a transnational element is present. E.g., under Article 21 of the Brussels I a Regulation (largely corresponding to Article 19 of the Brussels I Regulation), the employee has the option to sue the employer before the courts of the Member State in which the latter is domiciled or, in another Member State, in the courts for the place where the employee habitually carries out his work or in the courts for the last place where he did so. By contrast, the employer may bring proceedings only in the courts of the Member State in which the employee is domiciled.
- The Regulation further governs prorogation of jurisdiction. This may occur in two ways, viz. tacitly or through an express choice-of-court agreement. Tacit prorogation is the legal device whereby ‘a court of a Member State before which a defendant enters an appearance’ has jurisdiction even where jurisdiction would otherwise be lacking in the circumstances—in practice, where the defendant fails to raise the issue of jurisdiction in his first defense, the seised court ‘becomes’ competent by virtue of the appearance of the defendant (Article 26(1) of the new regulation, almost identical to Article 24 of the Brussels I Regulation). Express prorogation, on the contrary, reflects the European legislator’s traditional policy in favor of party autonomy. Article 25 of the Brussels I a Regulation, largely corresponding to Article 23 of the previous text, sets forth the formal requirements under which a the parties may enter into a choice-of-court agreement, so as to confer jurisdiction to the designated court(s) and to exclude (at least as long as the parties have not agreed otherwise) the jurisdiction of all others.
- Along with the rules aimed at conferring jurisdiction, the European regime includes a number of ancillary provisions, determining inter alia the procedure whereby the issue of jurisdiction is examined and decided by the seised court (Article 27 and Article 28(1) of the Brussels I a Regulation, corresponding to Article 25 and Article 26(1) of the Brussels I Regulation), and the moment in time at which the court of a Member State is deemed to be seised for the purpose of the Regulation (Article 32, corresponding to Article 30 of Regulation No. 44/2001).
- The new regulation, like its predecessors, is further concerned with the jurisdiction to issue provisional, including protective, measures. An application for these measures, as may be available under the law of that Member State of the seised court, may be made ‘even if the courts of another Member State have jurisdiction as to the substance of the matter’ (Article 35, corresponding to Article 31 of the previous text).
- Concerning the criteria of applicability of the European jurisdictional regime, a lively debate has taken place during the review process. This eventually resulted, however, in nothing more than a few minor changes.For the drafters of the Brussels Convention, back in the 1960s, the creation of a body of uniform rules governing the jurisdiction of courts in transnational cases was essentially regarded as a means to enhance legal certainty for litigants within Europe and to prevent individuals and businesses based in a Member State from being subjected to the ‘exorbitant’ heads of jurisdiction provided for by the domestic provisions of other Member States.
The situation of defendants domiciled outside the ‘European Judicial Area’ was not regarded as a topic requiring immediate action at European level. As a matter of fact, the rules laid down in the Brussels Convention—and, later, those of the Brussels I regulation—were intended to provide uniform heads of jurisdiction only with respect to proceedings instituted against European domiciliaries. The jurisdiction of Member States courts in respect of non-European domiciliaries continued to be governed by the domestic provisions of the forum. Thus, nothing in the Brussels Convention or in the Brussels I Regulation prevented the courts of a Member State from asserting their jurisdiction against a US company or an individual resident in Japan on the ground of the ‘exorbitant’ heads of jurisdiction existing under the law of the forum, in spite of the fact that the use of those same heads of jurisdiction was formally proscribed by both the Convention and the Regulation as against European domiciliaries.
In reality, according to an opinion rendered by the European Court of Justice in 2006 (opinion 1/03, para. 148), the issue of jurisdiction vis-à-vis third country defendants could not be regarded as falling outside the scope of the Brussels I Regulation: the Regulation was indeed concerned with proceedings instituted against non-European domiciliaries ‘in civil and commercial matters,’ but jurisdiction in respect of those domiciliaries was regulated at the European level merely by way of a reference, i.e., through a referral to domestic, non-uniform, rules. The latter rules, in other words, were applicable to third-country domiciliaries not by their own force, but only because the regulation so provided.
The European Commission, with the support of scholars and stakeholders, proposed to change the existing state of affairs in this connection on the occasion of the recast. In the Commission’s view, national rules should no longer be allowed to play a role regarding the jurisdiction of Member States’ courts: the regulation’s provisions should apply irrespective of the domicile of the defendant.
A differentiation, however, should remain in this area: the Commission’s proposal suggested that special—but uniform—set of rules should be introduced, providing the Member States’ courts with a supplementary opportunity to hear cases involving non-European domiciliaries. Specifically, the Commission suggested that: (1) jurisdiction should lie with the courts of the Member State where property belonging to the defendant is located, provided that the value of the property is not disproportionate to the value of the claim and the dispute has a sufficient connection with the Member State of the court seised (Article 25 of the proposal); (2) the courts of a Member State should be allowed, ‘on an exceptional basis,’ to hear a claim against a person domiciled in a third country ‘if the right to a fair trial or the right to access to justice so requires,’ in particular if proceedings cannot reasonably be brought or conducted or would be impossible in a third State with which the dispute is closely connected, or if a judgment given on the claim in a third State would not be entitled to recognition and enforcement in the Member State of the court seised under the law of that State and such recognition and enforcement is necessary to ensure that the rights of the claimant are satisfied (Article 26 of the proposal).
This part of the proposal was eventually abandoned. The European Parliament and the majority of the Member States were of the opinion that the time had not yet come for a complete unification of the rules on jurisdiction, and that further developments in this respect should be rather pursued by negotiating a global regime on jurisdiction and the recognition of judgments, along the lines of the (unsuccessful, but recently revived) Judgments Project of the Hague Conference on Private International Law.
In the end, regulation No. 1215/2012, following the pattern of the Brussels Convention and the Brussels I Regulation, confines itself to ‘positively’ regulating jurisdiction in proceedings instituted against European domiciliaries. When non-European domiciliaries are involved, it is still for the domestic provisions of the Member State of the forum (including the rules providing for ‘exorbitant’ heads of jurisdiction) to decide whether or not the seised court is entitled to hear the case.
Some minor innovations in this respect have nevertheless been brought about. As mentioned before, both the Brussels Convention and Regulation No. 44/2001 did in fact govern jurisdiction vis-à-vis third-country domiciliaries in some exceptional cases. These exceptions have not only been confirmed by the new regulation: their scope has actually grown.
The situation is now as follows: (a) exclusive heads of jurisdiction still apply regardless whether the domicile of the defendant is situated in Europe or not (Article 24 of the new text); (b) the uniform rules governing express prorogation of jurisdiction, previously applicable where any of the parties was domiciled in the European Judicial Area, will extend—under the new regulation—to cases where none of the parties is a European domiciliary (Article 25); (c) the heads of jurisdiction available to consumers and employees under the relevant ‘protective’ jurisdictional regimes will apply in cases involving both European and non-European defendants (Article 18(1) and Article 21(2) of the new regulation); (d) as before, the insured and the policyholder, the consumers and the employee will be entitled to rely fully on the relevant ‘protective’ regimes as against a defendant domiciled outside Europe if the latter has a ‘branch, agency or other establishment in one of the Member States’ and the dispute concerns the operation of such branch, agency or other establishment (Article 11(2), Article 17(2), Article 20(2)).
Jurisdiction Under the Brussels I a Regulation: Some Improvements Affecting Specific Provisions
On the occasion of the recast of the Brussels I Regulation, the European legislator adjusted the wording of several provisions relating to jurisdiction and modified the operation of a few others, and it introduced some brand-new rules. Two of these innovations will be briefly considered here.
- A new head of jurisdiction (a ‘special’ one, concurring with the ‘general’ head of jurisdiction at the defendant’s domicile) has been introduced with the purpose of facilitating the recovery of stolen or illegally removed works of art or similar items of historic, archaeological or cultural value.Pursuant to Article 7(3) of Regulation No. 1215/2012, ‘a civil claim for the recovery, based on ownership, of a cultural object’ may be brought ‘in the courts for the place where the cultural object is situated at the time when the court is seised.’ The provision, largely inspired by Article 8 of the Unidroit Convention of 24 June 1995 on the recovery of stolen or illegally exported cultural objects, corroborates the European Union’s efforts for the protection of cultural heritage, supplementing the provisions that may be found in Directive 93/7/EEC of 15 March 1993 on the return of cultural objects unlawfully removed from the territory of a Member State. The new rule should in fact ease the recovery of cultural objects, inter alia, by allowing the court seised of an application for a provisional measure (e.g., an order relating to the seizure of a work of art about to be sold at a auction) to decide also the merits of the dispute (i.e., whether the claimant’s assertion as to the ownership of the good in question is well-founded or not).
- Tacit prorogation of jurisdiction may sometimes occur at the detriment of ‘weaker’ parties due to the lack of appropriate legal information available to them. To avoid this risk, the Brussels I a Regulation includes a new provision whereby, in matters relating to insurance or to consumer and employment contracts, ‘where the policyholder, the insured, a beneficiary of the insurance contract, the injured party, the consumer or the employee is the defendant, the court shall, before assuming jurisdiction [on the ground of tacit prorogation], ensure that the defendant is informed of his right to contest the jurisdiction of the court and of the consequences of entering or not entering an appearance.’ The provision reflects a wider strategy of the European legislator aimed at ensuring that all actors in the internal market—including those possessing a reduced bargaining power and limited access to legal expertise—enjoy friendly and cost-effective access to justice in transnational cases, thereby fully enjoying the advantages of an supranational and integrated legal and economic area.
The Rules On Parallel Proceedings: Countering the Misuse of the Temporal Priority Rule and Taking a Look at What Happens Beyond the Borders of Europe
Where one and the same cause of action is litigated between the same parties before the courts of two or more States, the risk exists that conflicting judgments will be rendered in respect of the substantive situation in question. The Brussels Convention, and later the Brussels I Regulation, unsurprisingly fought this risk: within an integrated judicial area, built upon the principle of mutual recognition of judgments, conflicting decisions represent a fatal danger. In order to prevent this risk, and to increase legal security, both the Convention and the Regulation required any court other than the first-seised court to stay the proceedings before them and to dismiss the claim as soon as the first-seised court’s jurisdiction is established (Article 27 of regulation No. 44/2201).
This mechanism, applicable with some variations in the case of ‘related’ (as opposed to ‘identical’) actions (Article 28 of the Brussels I regulation), featured two basic characteristics: on the one hand, the ‘temporal’ rule at the heart of the rule was designed in such a way as to apply ‘mechanically,’ with the first-seised court being systematically given priority regardless of the drawbacks that this might have triggered in particular circumstances (in Gasser, a 2003 judgment, the European Court of Justice refused to allow any flexibility in this respect); on the other hand, the operation of the lis alibi pendens rules was limited to situations involving the courts of two or more Member States, with the remaining cases of parallel proceedings being left to the domestic rules in force in the forum.
- As regards the first aspect, the point was frequently made that the lis alibi pendens provision, as originally drafted, could in fact allow a mala fide claimant to preempt his opponent by pre-emptively seising the courts of a Member State where civil proceedings take particularly long to conclude, and where the issue of jurisdiction itself is likely to be decided only months, or years, after the proceedings themselves have been commenced. In this scenario, the claimant may even decide to seise a court manifestly lacking jurisdiction, since—under the rules indicated above, and provided that the seised court is slow and inefficient—his initiative would still have the consequence of freezing all parallel proceedings brought elsewhere in Europe.As a means to counter such abuses, Regulation No. 1215/2012 introduces an exception to the priority rule. According to 31(2) of the regulation, where a court of a Member State on which a choice-of-court agreement confers exclusive jurisdiction is seised, ‘any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement.’ Article 31(3) further provides that where the court designated in the agreement has established jurisdiction in accordance with the agreement, any court of another Member State shall decline jurisdiction in favor of that court.
In practice, the lis pendens rule may still be abused, but in one case—the practically important case where the claimant seeks to circumvent a choice-of-court agreement—the abuse may, in principle, be countered, or at least mitigated.
- As far as the limited ‘geographical’ scope of the lis pendens rule is concerned, the drafters of the Brussels I a Regulation devised a set of provisions allowing the courts of a Member State to take into account the existence of an identical (or a related) action in a third country, and to make the appropriate arrangements aimed at preventing the risk that two or more conflicting judgments could be rendered. In particular, under Article 33(1), where the court of a Member State is seised of a matter and possesses jurisdiction on the ground of certain rules of the regulation (including the rule on ‘general’ jurisdiction provided by Article 4), and proceedings ‘involving the same cause of action and between the same parties’ are pending before a court of a third State at the time when the court of such Member State is seised, the latter court may stay the proceedings. To apply this provision, certain requirements must be met. In particular, a stay is allowed when it is expected that the court of the third State will give a judgment capable of recognition and, where applicable, of enforcement in that Member State, provided that the court of the Member State is satisfied that a stay is necessary for the proper administration of justice. Article 33(3) provides that the court of the Member State must dismiss the proceedings if the proceedings in the court of the third State are concluded and have resulted in a judgment capable of recognition and, where applicable, of enforcement in that Member State.This scheme departs from the ‘intra-community’ regime relating to lis pendens in various significant respects, showing that the mutual trust on which the existing regime is built cannot be deemed to exist (or to be just as strong) where the courts of a third country are involved, and that a full coordination between parallel proceedings is impossible if such proceedings are not subject to (even partially) uniform rules. It is against this background that most of the differences between the two regimes may be understood, namely the fact that the stay is the object, here, of a mere faculty, not an obligation, and the fact that the proceedings instituted in the Member State may be resumed as soon as certain situations arise (viz., the proceedings in the court of the third State are themselves stayed or discontinued, the proceedings in the court of the third State are unlikely to be concluded within a reasonable time etc.).
The recast of the Brussels I Regulation, as far as the rules on jurisdiction and parallel proceedings are concerned, has resulted in a limited number of amendments. Different explanations exist for the caution displayed by the European legislator in this respect:
- Over the years, the European regime has proved to work rather well; while the operation of some provisions could be improved in several respects, the European institutions felt that it was better, at this stage, to ensure the proper implementation of the uniform rules by Member States’ courts; for this, a certain degree of stability was regarded as necessary; radical changes would in fact jeopardize legal security, possibly affecting what should be regarded as the key to the success of the European regime on jurisdiction and the recognition of judgments, namely the interpretive work carried out by the European Court of Justice over the last thirty-five years (some of the very first judgments rendered by the Court with respect to the Brussels Convention, back in the 1970s, are still a fundamental guide).
- Some of the proposed, but eventually abandoned, innovations concerned the ‘external’ dimension of the European Union’s action in the field of ‘judicial cooperation in civil matters,’ i.e. the relationship between Europe and the rest of the world in the area of civil justice: this is a politically sensitive area, and it is not unreasonable to think that the relevant issues would better be discussed with interested third countries, rather than regulated unilaterally through European legislation.
- I is true that the Brussels I Regulation has undergone few changes, if considered in isolation; the picture, however, is different once the regulation is seen in its context: the Brussels Convention was an almost stand-alone legal instrument, while the Brussels I and the Brussels I a regulations are part of wide and ever-growing body of rules, the single components of which can only be fully appreciated in light of each other; in fact, the Brussels I Regulation has evolved more than the recast suggests on its face; the way its rules work in practice reflect the changed normative landscape surrounding it: the material scope of the Brussels I and Brussels I a regulations is being progressively defined by the other legal texts adopted by the European institutions over the last years, regarding neighboring areas of law (such as insolvency or maintenance obligations); the practical implications of the rules on jurisdiction can only be assessed by taking into account the ‘parallel’ operation of the uniform conflict-of-laws rules that the European legislator has elaborated in the meanwhile (namely the Rome I and Rome II Regulations on the law applicable to contractual and non-contractual obligations); the rules on the recognition of judgments have gradually been supplemented by uniform legal instruments aimed at further facilitating the cross-border recovery of debts through the creation of specific ‘European enforcement orders,’ such as those provided for by Regulation (EC) No. 805/2004 creating a European enforcement order for uncontested claims, Regulation (EC) No. 1896/2006 instituting a European order for payment procedure, and Regulation (EC) No. 861/2007 instituting a European small claims procedure.