Brussels Convention and Common Market Law Review 42: Regulation 16371661, 2005. 2005 Kluwer Law International.

. Printed in the Netherlands.

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FROM THE BRUSSELS CONVENTION TO REGULATION 44/2001: CORNERSTONES OF A EUROPEAN LAW OF CIVIL PROCEDURE
ASTRID STADLER*

1. Basic parameters of European civil procedure On 1 March 2002, Council Regulation No. 44/2001/EC on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters entered into force. With the exception of Denmark, the Regulation replaces the Brussels Convention of 27 September 1968, on jurisdiction and the enforcement of judgments in civil and commercial matters, among the Member States.1 Three years after the adoption of the Regulation, it is an appropriate moment to review the impact of the Brussels Convention and that of the new instrument. The Brussels Convention is indisputably the basis upon which the European law of civil procedure has been built and its general principles are still at the heart of the great success of the Convention and subsequent developments. In 1973, when the Convention became effective, nobody would have envisaged that some thirty years later civil procedure would essentially be the spearhead of legal harmonization within the European Community. There is at present a genuine lack of attempts to harmonize the civil procedural laws in the Member States, whilst an increasing quantity of rules on European cross-border litigation are simultaneously issued. Since 2000, numerous EC regulations and directives relating to judicial cooperation in civil matters have entered into force;2 European law of civil procedure has consequently

* University of Konstanz, Germany. 1. The Convention was concluded in implementation of Art. 220 EC. For some it was primary Community law superseding national procedural law, others regarded it as a convention under international law; for details cf. Geimer and Schtze, Internationale Urteilsanerkennung, Vol. I (1983), p. 50. 2. Cf. Council Regulation (EC) No. 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters, O.J. 2000, L 160/37; 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, O.J. 2001, L 174/1, Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings, O.J. 2000, L 160/1; Council Regulation (EC) No. 44/2001 of 22 Dec. 2000 on jurisdiction and

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become an autonomous field of law. This is exemplified at national level by the recent addition of a new Chapter 11 to the German Code of Civil Procedure, entitled Judicial Cooperation in the European Community.3 Mutual judicial assistance among the Member States, for example, is no longer governed by international treaties, as was the rule for many decades previously. Furthermore, EC Regulations on the service of judicial and extra judicial documents4 and on cooperation between the Member States in the taking of evidence,5 have instigated a significant waiver of national sovereignty. In many cases this facilitates faster and more efficient cross-border litigation. Principles of international jurisdiction, recognition and enforcement of judgments have, similarly, developed continuously since the entry into force of the Brussels Convention. The new Regulation 44/2001 has practically ensured the free movement of judgments within the Member States today. The adoption of a new regulation, creating a European enforcement order for uncontested claims, coming into force in October 2005,6 will be another import step towards the uniform and EC-wide enforcement of judgments rendered in any of the Member States. The new order will permit the direct enforcement in all Member States of all judgements, where a creditor has obtained a ruling on an uncontested claim, including those rulings given by default; in such cases, the imposition of intermediate measures is thus rendered superfluous. The final objective of the EC Commission is in accordance with the 1999 resolutions of Tampere to abolish any intermediate proceedings before the execution of a judgment given in one Member State can take place in another Member State. This would result in the total abandonment of controls over foreign judgments which originate from another Member State. In particular the State in which recognition and execution is
the recognition and enforcement of judgments in civil and commercial matters, O.J. 2001, L 12/1; Council Regulation (EC) No. 1347/2000 of 29 May 2000 on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility for children of both spouses, O.J. 2000, L 160/19; Council Regulation (EC) No. 2201/ 2003 of 27 Nov. 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No. 1347/2000, O.J. 2003, L 338/1; Regulation (EC) No. 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims, O.J. 2004, L 143/15; Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding-up of credit institutions, O.J. 2001, L 125/15; Directive 2001/17/EC of the European Parliament and of the Council of 19 March 2001 on the reorganisation and winding-up of insurance undertakings, O.J. 2001, L 110/28. 3. 10671086 ZPO. 4. Council Regulation (EC) No. 1348/2000, cited supra note 2. 5. Council Regulation (EC) No. 1206/2001, cited supra note 2. 6. Regulation (EC) No. 805/2004, cited supra note 2.

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sought, would no longer be in a position to scrutinize service of process of the documents commencing litigation (Art. 34(2) Regulation 44/20017) or verify whether recognition of the judgment is manifestly contrary to public policy (Art. 34(1) Regulation 44/2001). Some critics argue that the suppression of the mutual control of judgments is premature, bearing in mind both the current and intended geographic expansion of the European Community.8 The new enforcement order instrument requires, on the one hand, a very high degree of mutual trust in the civil courts of all Member States; on the other hand, the application of the Regulation on the enforcement order is prone to error due to a multi-level review of service of process of the documents commencing litigation, and several rather general and ambiguous terms contained within the Regulation. This article will not consider these future developments any further, but instead will provide an outline of the developments under the Brussels Convention and Regulation 44/2001. This analysis will be tripartite. Firstly, the changes subsequent to the Brussels Regulation will be outlined; secondly, some questions concerning jurisdiction will be addressed; and finally, questions regarding recognition and enforcement will be discussed.

2.

Reform of the Brussels Convention Whats different under the Regulation?

To a large extent the Regulation adopts the text of the Brussels Convention. In the second Chapter, on Jurisdiction, there are only minor changes. Apart from Article 5(1) which will be addressed in detail below (section 3.2) the most significant alteration affects Article 15. Articles 1517 of the Regulation deal with the jurisdiction over consumer contracts; Article 15 defines consumer contracts and Article 16(2) lays down that jurisdiction for proceedings against a consumer is with the courts of the Member State in which
7. This is already true with the entry into force of the Regulation on the European enforcement order for uncontested claims, which is also applicable to judgments by default. 8. Kohler, in Reichelt and Rechberger (Eds.), Europisches Kollisionsrecht (Vienna, 2004), p. 63 et seq.; Kohler, in Baur and Mansel (Eds.), Systemwechsel im europischen Kollisionsrecht (Munich, 2002), p. 146 et seq.; Stadler, Das Europische Zivilprozessrecht Wie viel Beschleunigung vertrgt Europa? Kritisches zur Verordnung ber den Europischen Vollstreckungstitel und ihrer Grundidee, (2004) IPRax, 2 et seq.; Wagner, Vom Brsseler bereinkommen ber die Brssel I-Verordnung zum Europischen Vollstreckungstitel, (2002) IPRax, 75, 89 et seq.; Stadler, Kritische Anmerkungen zum Europischen Vollstreckungstitel, (2004) RIW, 801 et seq.; cf. as well, with a special focus on constitutional issues Becker, Grundrechtsschutz bei der Anerkennung und Vollstreckbarerklrung im europischen Zivilverfahrensrecht, Diss. 2004, p. 237 et seq.

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the consumer is domiciled. In doing so, Article 16(2) confers exclusive jurisdiction on the Member State court where the consumer is domiciled if an action is brought against a consumer. As Article 15 of the Regulation extends the scope of consumer contracts, Article 16(2) gains in importance too. Previously, Article 13 of the Brussels Convention offered special jurisdiction for contracts concerning the supply of goods or services only when (i) in the State of the consumers domicile the conclusion of the contract was preceded by a specific invitation to him or by advertising and (ii) he took in this State the steps necessary for the conclusion of the contract.9 Thus, a consumer could rely on the protection offered by Article 13 of the Convention only if he was active in concluding a contract within his home country by making an offer or an acceptance of the contract. Whenever all steps necessary for the conclusion of the contract were taken outside his home country, the Conventions rules on special jurisdiction over consumer contracts did not apply. This corresponded to the idea that consumer protection should be awarded only if the consumer, when taking legal steps, maintains a sufficient link to his domicile. Article 15(1)(c) of the Regulation now submits vendors and other contract partners of a consumer, substantially, to the jurisdiction of the Member State where the consumer is domiciled; this new rule encompasses all contracts which have been concluded with a person who pursues commercial or professional activities in the Member State of the consumers domicile or, by any means, directs such activities to that Member State .... It is no longer a prerequisite that in addition to the activities of the contractual partner extending to the State where the consumer is domiciled the consumer himself takes any steps to offer or accept a contract within this state. This has particularly important consequences for all contracts entered into via Internet. Each contractor offering goods or services via Internet directs [commercial or professional] activities worldwide, in the terms of Article 15(1)(c). For instance, even a consumer domiciled in Germany, who never took note of a particular Internet offer while he was in Germany is now protected by Article 15(1)(c) if he orders goods via a so-called active website during his annual vacation in France. If a lawsuit arises out of this contract the consumer must be sued in a court in Germany no matter where the other contracting party is domiciled. The fact that the vendor did pursue commercial Internet activities which were in principle available in Germany, just as anywhere else in the world, meets the requirements of Article 15(1)(c).

9. Art. 13(3)(a) and (b) Brussels Convention. Contracts for the sale of goods on instalment credit terms and contracts for a loan repayable by instalments were covered by Art. 13(1) and (2) of the Brussels Convention.

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This new approach has been criticized as overprotecting consumers and discriminating against small and medium-sized dot.coms, which must, under the new regulation, be prepared to bring actions against their customers throughout the EC.10 Nevertheless, this argument is misconceived, because it does not take into consideration that a party tendering goods or services via Internet takes the benefits of a world-wide market opened up by the Internet and, therefore, must at the same time put up with the disadvantages of a global business. Nevertheless, it is undisputed that the accessibility of a merely passive website, which does not offer the possibility to the consumer to order goods directly, does not fall under Article 15(1)(c) of the Regulation.11 Most other provisions of the Brussels Convention have been retained without change, even where there was previous ambiguity surrounding their wording and interpretation.12 This applies, for example, to Article 24 of the Brussels Convention, governing the scope of the Convention with regard to provisional measures. The courts of the Contracting States had jurisdiction to issue provisional, including protective, measures available under their procedural law, even if under the Convention the courts of another State had jurisdiction as to the substance of the matter. As some of the Contracting States allow provisional measures on a very liberal basis and with far-reaching consequences, Article 24 of the Convention could be misused to issue injunctions and provisional court orders in proceedings parallel to a litigation as to the substance of the matter in another State.13
10. Kohler, Revision des EuGV, Verffentlichungen der Wissenschaftlichen Vereinigung fr Internationales Verfahrensrecht e.V., vol. 11 (2000), p. 33. 11. This has been settled by a joint declaration of the Commission and the Council, see Materialien, Rat der EU: Erklrungen zur Brssel I-Verordnung, (2001) IPRax, 259; for further details cf. Moritz, Quo vadis elektronischer Geschftsverkehr?, (2000) Computer und Recht, 6172. 12. Another step of the reform, worth being mentioned, refers to the rules avoiding parallel proceedings (Arts. 2123 of the Brussels Convention, now Arts. 2730 of the Regulation 44/ 2001/EC). The case law of the ECJ gives a very broad interpretation to the term proceedings involving the same cause of action (cf. Case 144/86, Gubisch, [1987] ECR 4861, 4872; Case C-406/92, The Tatry, [1994] ECR I-5439; Geimer, European Law of Civil Procedure under Brussels Convention, Festschr. Stiefel (1987), p. 219 et seq., at 233). Therefore, even a declaratory action before the court of one Member State may stop an action involving the same subject matter of litigation brought some time later before the courts of another Member State applying not only for a declaratory judgment but for an order for payment for example. In the past this sometimes led to a kind of battle of forum between the parties. Art. 30 of the Regulation now at least offers a viable answer to the question when a court shall be deemed to be seized of an action. Nonetheless, there still is no satisfactory solution to the problem of lis pendens and parallel proceedings in the EC, cf. for a discussion of this in relation to Case C116/02, Gasser, Fentiman in 42 CML Rev. (2005), 241259. 13. Cf. the English World-wide Mareva injunctions (now freezing orders under the Civil Procedure Rules 1999) and Anton Piller-Orders (now search orders). Cf. Case C-

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Shortly before the Regulation came into force, the European Court of Justice in Van Uden14 and Mietz15 issued two decisions giving a rather narrow interpretation to the term provisional measure. In addition it made the granting of interim measures subject to conditions if the court hearing the application for interim relief has jurisdiction under national law, but does not have jurisdiction as to the substance of the matter according to the Convention.16 Granting of provisional or protective measures on the basis of Article 24 Brussels Convention is conditional on the existence of a real connecting link between the subject-matter sought and the territorial jurisdiction of the State of the court before which those measures are sought. Since then there has been considerable dispute about the interpretation of the real connecting link.17 Further restrictions apply if the interim relief sought is an order requiring performance of an obligation of payment.18 In Van Uden the Court held Consequently, interim payment of a contractual consideration does not constitute a provisional measure within the meaning of Article 24 unless, first, repayment to the defendant of the sum awarded is guaranteed if the plaintiff is unsuccessful as regards the substance of his claim and, second, the measure sought relates only to specific assets of the defendant located or to be located within the confines of the territorial jurisdiction of the court to which application is made. The Commission abstained from proposing a change in the wording of Article 24, believing in our view, wrongly that the rule required no further
80/00, Italian Leather SpA v. WECO Polstermbel GmbH & Co., with annotation by Kramer, 40 CML Rev., 953964. 14. Case C-391/95, Van Uden, [1998] ECR I-7091, 7122. 15. Case C-99/96, Mietz v. Intership Yachting Sneek, [1999] ECR I-2277, 2299. 16. For details see Stadler, Erlass und Freizgigkeit einstweiliger Manahmen im Anwendungsbereich des EuGV, (1999) JZ, 1089; He, Die begrenzte Freizgigkeit einstweiliger Manahmen im Binnenmarkt II weitere Klarstellungen des Europischen Gerichtshof, (2000) IPRax, 370; Sandrock, Prejudgment attachments: Securing international loans or other claims for money, 21 Internat. Lawyer (1987), 1. 17. Stadler, op. cit. supra note 16, 1093, 1097; He and Vollkommer, Die begrenzte Freizgigkeit einstweiliger Manahmen nach Art. 24 EuGV, (1999) IPRax, 220, 224; Wolf and Lange, Das Europische System des einstweiligen Rechtsschutzes doch noch kein System?, (2003) RIW, 55, 58. 18. Dutch and French law provide a kort geding respectively rfr provision procedure by which the plaintiff may apply for a court injunction ordering the defendant to pay a sum of money to the plaintiff as a provisional measure. In practice a large number of those court orders become final and the parties thereafter do not institute litigation as to the substance of the matter. Basing these provisional orders on jurisdiction offered by the national law of the Member States according to Art. 24 of the Convention tends to undermine the jurisdictional system of the Brussels Convention/Regulation.

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clarification after the rulings in Van Uden and Mietz. Consequently, Article 31 of the Regulation adopts the wording of Article 24 of the Brussels Convention without any alterations. In fact, incorporating the principles of Van Uden and Mietz into the new Article 31 would have offered more legal security to litigants as well as national courts. The most significant reform of the Regulation pertains to Chapter III, Recognition and Enforcement, where the Regulation aims at making the procedure for enforcement more efficient and rapid (see below, section 4). Above and beyond this, important consequences ensue from the change of the legal form from a Convention to an EC Regulation. Under the Brussels Convention, the European Court of Justice could be presented with questions for a preliminary ruling by all courts of the Contracting States, with the exception of courts of first instance. Under the Regulation, Article 68 EC now applies: this provides that, where a question on the interpretation of Title IV of the Treaty which is the legal basis for Regulation 44/2001 or on the validity or interpretation of acts of the institutions of the Community based on this title, is raised in a case pending before a court of a Member State, a request to the European Court of Justice to give a ruling thereupon may be issued only by those courts against whose decisions there is no judicial remedy under national law. In the past, it has been the Courts of Appeal in the Member States which have more frequently asked for preliminary rulings from the Luxemburg Court, than for example, the German Bundesgerichtshof, as a court of final instance. The restriction now provided by Article 68 EC will reduce the number of proceedings for preliminary rulings before the European Court of Justice and subsequently questions of interpretation of the Regulation will take much longer to be clarified by the Court of Justice. Another consequence that follows from adopting the specific wording within the Regulation, is that the text of the Regulation and the text of the Lugano Convention (which governs these matters among the EC and EFTA States) no longer coincide. Together with the fact that the Regulation does not apply to Denmark,19 we face a remarkable drifting apart from the once homogeneous rules of the Brussels and Lugano Conventions, which at the very least necessitates future reform of the Lugano Convention.

19. Denmark, in accordance with Arts. 1, 2 of the Protocol on the position of Denmark annexed to the Treaty on European Union and on the Treaty establishing the European Community, does not participate in the adoption of regulations based on Title IV of the EC Treaty (Visas, asylum, immigration and other policies related to free movement of persons).

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3.

Rules of international jurisdiction under the Brussels Convention and Regulation 44/2001

3.1. General principles The rules on jurisdiction, without doubt, constitute the core of the Brussels Convention and the Regulation. The progress achieved, through agreement upon these rules, becomes apparent when one considers the recent failure of a world-wide Hague Convention on jurisdiction, recognition and enforcement of civil judgments.20 The Hague Conference did not succeed in reconciling the differing approaches to international jurisdiction in Europe and the United States. The latter having a rather broad concept of international jurisdiction (minimum contacts, long-arm statutes), in comparison to the rather restrictive European model, based upon a limited number of precisely defined rules. Unlike traditional conventions, the rules on jurisdiction of the Brussels Convention and the Regulation are not only applicable when a second court, deciding on recognition and enforcement of a foreign judgment, reviews the jurisdiction of the first State; they also apply for the court which decides on the action in the original proceedings, and this court is under the obligation to apply the standardized rules of jurisdiction (comptence directe) of the Convention or Regulation. To this extent the Convention, as well as the Regulation, supersedes national law. In particular, this means that national rules which associate jurisdiction solely with property or assets of the defendant located in the Contracting State or the Member State where the action is brought (such as 23 German Code of Civil Procedure) or with the nationality of the plaintiff, are not applicable (cf. Art. 14, 15 New French Code of Civil Procedure). Such exorbitant jurisdiction has been excluded from the uniform European rules (Art. 3(2) Regulation 44/2001). The Convention, therefore, called for a broad consensus on the principles of international jurisdiction. In some compensation for this restriction of national law, the court deciding on the recognition or enforcement of the judgment is as a matter of principle not allowed to review the jurisdiction of the first court (Art. 35(1), (3) Regulation 44/2001). Furthermore, the test of public policy, referred to in Article 34 of the Regulation, may not be applied to the rules re20. Von Mehren, Recognition of United States judgments abroad and foreign judgments in the United States: Would an international convention be useful?, 57 RabelsZ (1993), 449 et seq. and id. The Hague Jurisdiction and Enforcement Convention Project faces an impasse: A diagnosis and guidelines for a cure, (2000) IPRax, 465 et seq.; He, Steht das geplante weltweite Zustndigkeits- und Vollstreckungsbereinkommen vor dem Aus?, (2000) IPRax, 342 et seq. The Hague Convention of 30 June 2005 on Choice of Court Agreements was concluded instead.

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lating to jurisdiction. There are only a few exceptions to this prohibition regarding jurisdiction, namely, in matters relating to insurance (Arts. 814 Regulation 44/2001), jurisdiction over consumer contracts (Arts. 1517 Regulation 44/2001) and exclusive jurisdiction according to Article 22 of the Regulation.21 Both principles comptence directe and the abandonment of review by subsequent Member State courts of the first State courts jurisdiction are notable landmarks for European civil procedure.22 This has farreaching consequences for the defendant. Where the defendant does not want to rely on an ex officio examination of jurisdiction by the foreign court, but actually wants to challenge the jurisdiction of the first State explicitly, the defendant must bear the burden of making an appearance in the proceedings of the court of the first State. A judgment rendered on the merits of the case, even in violation of the rules of jurisdiction of the Regulation,23 must be recognized and enforced by any other Member State without further examination of the jurisdiction. Thus, disputes on the issue of jurisdiction (with the exception of exclusive jurisdiction as afore mentioned) are to be settled in the State of origin and, in principle, contradictory decisions between the Member States are accordingly avoided. 3.2. Defendants domicile as principle place of jurisdiction According to Article 2 of the Brussels Convention, which has been retained without amendment, by Regulation 44/2001, persons domiciled in a Member State must, whatever their nationality, be sued in the courts of that Member State. This is in accordance with, for example, German Law ( 12 et seq. German Code of Civil Procedure), but deviates from the concept in France and other Romanic legal systems, were jurisdiction is primarily based on nationality. In order to decide whether a party is domiciled in a particular Member State, the court applies the internal law of the Member State in question (Art. 59(1), (2) Regulation 44/2001). If the defendant is a company or a legal person, Article 60 of Regulation 44/2001 now offers an indepen21. For the purpose of this article, from now on first the new Regulation 44/2001 will be cited. The Brussels Convention will be taken into consideration only insofar as its rules differ from the Regulation or it requires special consideration. 22. Geimer, op. cit. supra note 12, at 222 and 224. 23. The first court must examine its jurisdiction ex officio and if it lacks jurisdiction must dismiss the action, even if the defendant does not enter an appearance. The Convention already relieved the defendant of the burden to enter an appearance solely to plead lack of jurisdiction. However, if he decides to defend the case, he must plead lack of jurisdiction. Otherwise, according to Art. 24 Regulation 44/2001, jurisdiction of a court of a Member State will be assumed where the defendant enters an appearance without contesting the jurisdiction and no other court has exclusive jurisdiction by virtue of Art. 22.

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dent interpretation of its domicile and no longer refers to the principles of conflicts of laws, as the Brussels Convention did. Article 60(1) of the Regulation offers three possibilities, with regard to determining the domicile of a company: statutory seat, central administration or principle place of business. Thus, the uncertainty arising out of the diversity of these criteria is not at the risk of the plaintiff, but of the defendant, who must take account of the fact that an action might be brought against him in any of the three places if they do not coincide. Moreover, the domicile-based concept defines the scope of application of the rules on jurisdiction of the Regulation (Art. 4). If the defendant is not domiciled in a Member State, jurisdiction of the court, assigned with the matter, shall be determined by its internal law not by the Regulation. In other words, Chapter II (Jurisdiction) of the Regulation applies whenever the defendant is domiciled in a Member State, whereas the domicile or habitual residence of the plaintiff is of no relevance.24 Application of the Regulations rules on jurisdiction is, therefore, not restricted to EC cases. The Regulation protects persons domiciled in a Member State, even if the plaintiff is domiciled in a non-Member State.25 3.3. Special jurisdiction In addition, Chapter 2 Section 2 of the Regulation (which contains Arts. 57) provides for a number of special jurisdiction cases, where the choice of jurisdiction is the plaintiffs prerogative. These provisions are based on the idea that in certain well-defined cases there is a particularly close relationship between a dispute and a specific court, which may be invoked to facilitate opportune resolution of the case. They thus allow, to a certain extent, some forum shopping, and by providing the plaintiff with the freedom to choose a court, they enable him to bring an action before a court which is more convenient to him than that of the defendants domicile. In recent years, the European Court of Justice has had to give special attention to two provisions contained in Section 2: Article 5(1) and Article 5(3), offering special jurisdiction in matters relating to contract and in matters relating to tort, delict or
24. Case C-412/98, Group Josi, [2000] ECR I-5929. 25. Beyond that it is disputable whether application of Chapter II requires any cross-border element of litigation at all. Some argue that it is applicable as well in merely internal cases where both parties are domiciled in the same Member State; Schack, Internationales Zivilverfahrensrecht, 3rd ed. (Beck, Munich, 2002), Ann. 238 et seq.; Kropholler, Europisches Zivilprozessrecht, 7th ed. (Recht und Wirtschaft, Heidelberg, 2002), Art. 2 Ann. 5 et seq. In Case C-281/02, Owusu v. Jackson, judgment of 1 March 2005, the ECJ held that Chapter 2 is at least applicable to legal relationships involving only one Contracting State and one or more non-Contracting States.

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quasi-tort respectively. At the same time, within the Chapter on Jurisdiction, Article 5(1) is the provision which underwent the most significant change from the Convention to the Regulation. 3.3.1. Jurisdiction in matters relating to a contract 3.3.1.1. Place of performance Place of delivery. Article 5(1) of the Brussels Convention was, from the outset, something of stumbling block which provoked vivid discussion right from its inception. In order to portray the notion of the revised Article 5(1) of Regulation 44/2001 accurately, a short reminder of the problems caused by the former wording is required. Article 5(1) of the Brussels Convention established special jurisdiction in the courts where the contractual obligation in question was to be performed. This led to the often criticized division of jurisdiction for a single contract, as a result of the fact that each obligation arising out of the contract may have a different place of performance.26 The most important question which had to be answered, with regard to affirming a courts jurisdiction, was how to define place of performance. The European Court of Justice, in a 1976 decision,27 rejected the, otherwise generally accepted, approach of interpreting the terms of the Brussels Convention independently and by reference principally to the system and objectives of the Convention, in order to ensure that it is fully effective.28 With respect to the place of performance in Article 5(1) of the Brussels Convention, the Court came to the conclusion that it was impossible to find an independent definition without reference to the law of the Member States. With regard to the differences between national laws of contract and in the absence, at this stage, of any unification of the substantive law, there existed no common standard in the Contracting States of how to define place of performance. Thus, it became settled case law to qualify the place of performance according to the substantive law applicable under the rules of conflict of laws of the court before which the matter was brought.29 The European Court of Justice adhered to this policy despite severe criticism in the Contracting States,30 which highlighted that the determination of international jurisdiction becomes rather if not too
26. Case 14/76, De Bloos, [1976], ECR 1497. 27. Case 12/76, Tessili, [1976] ECR 1473. 28. See in particular Case 12/76, Tessili, supra, at para 9; Case 150/77, Bertrand, [1978] ECR 1431. See b) below, on matters related to a contract or tort for examples of concepts which the Court did interpret independently. 29. Case 12/76, Tessili, supra, para 15; Case 266/85, Shenavai v. Kreischer, [1987] ECR 239 para 7; Case C-288/92, Custom Made Commercial v. Stawa, [1994] ECR I-2913 para 26; Case C-440/97, GIE Groupe Concorde, [1999] ECR I-6307. 30. Schack, Internationales Zivilverfahrensrecht, 3rd ed. (Beck, Munich, 2002), Ann. 271 et seq.; cf. Cour de Cassation: (1998) Cass.com. Rev.crit., 117; (1997) Cass.com. Rev.crit., 585.

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complicated, if questions regarding conflicts of law have to be decided in this context and at such an early stage of the proceedings. Against the background of this case law, Article 5(1) of Regulation 44/ 2001 now takes a different approach to jurisdiction in matters relating to a contract. With the intention of focusing special jurisdiction in contract-related law suits to a single court, the revised wording of Article 5(1)(b) now gives an independent definition of the place of performance, which applies to all obligations arising from a contract: ..for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be: in the case of the sale of goods, the place in a Member State, where, under the contract, the goods were delivered or should have been delivered, in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided.31 Notwithstanding the improvement that the reform eliminates the possible division of jurisdiction for litigation arising out of the same contract, the revised rule extinguishes an old problem by creating a new one. The most significant example involves the sale of goods, where the place of performance will be the place of delivery. As the Regulation does not offer a definition of this term, the application of Article 5(1) is bound to encounter difficulties. In an international sale with goods being sent from one Member State to another, for example, is the place of delivery the place where the vendor has to dispatch the goods or the place where the buyer receives them?32 Until the European Court of Justice gets the opportunity to decide this issue, parties will have to cope with considerable legal uncertainty. For contracts that do not fall within the scope of Article 5(1)(b), the Regulation retains the wording of Article 5 of the Brussels Convention (Art. 5(1)(c) and (a)) and insofar place of performance must continue to be determined according to the contract law applicable under the rules of conflicts of laws of the forum State.33 In this respect, the reform of Article 5(1) of Regulation 44/2001 cannot be considered satisfactory.

31. The new regulation is based on Art. 46 of the French Nouveau Code de Procdure civil. 32. Among others: Geimer and Schtze, European Civil Procedure, 2nd ed. (Beck, Munich, 2004), Art. 5 Annot. 87 hold that the place where the vendor dispatches the goods is the place of delivery. 33. Geimer and Schtze, op. cit. supra note 32, Art. 5 Annot. 93; Schlosser, EU-Zivilprozessrecht, 2nd ed. (Beck, Munich, 2003), Art. 5 EuGVVO Annot. 10c.

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3.3.3.2. Matters relating to a contract or tort. Under the Brussels Convention and the Regulation, Article 5(1) applies only to matters relating to a contract, whereas in matters relating to a tort (Art. 5(3)), the plaintiff may bring his action before the court where the harmful event occurred. The European Court of Justice has consistently held that these two expressions matters relating to contract and relating to a tort are not to be taken as a reference to national law of one of the Contracting States, but must be interpreted independently in the light of the objectives and the general scheme of the Convention.34 The Court set out in a number of cases that only such an interpretation can ensure the uniform application of the Convention and the Regulation, respectively. Both instruments endeavour to lay down common rules on jurisdiction for the courts of the EC and to strengthen legal protection of parties, by enabling claimant and defendant to identify easily the court in which an action may be brought.35 According to the Courts case law,36 contract, in the terms of Article 5(1), covers situations in which an obligation is freely assumed by one party towards another. This consists not only of primary obligations arising out of a contractual agreement, but also legal obligations, inter alia, claims for damages for the breach of contract or claims of restitution after cancellation of the contract.37 Further, the European Court of Justice defines the scope of Article 5(3) in negative terms, in relation to (1): Matters relating to tort, delict or quasi-delict within the meaning of Article 5(3) Brussels Convention covers all actions which seek to establish liability of a defendant and which are not related to a contract within the meaning of Article 5(1) of the Convention.38 Superficially, there appears to be a clear distinction, enabling application with no problems. Nevertheless, recent decisions from the European Court of Justice reveal that this approach does not work in borderline cases.

34. Case 34/82, M. Peters Bauunternehmung, [1983] ECR 987; Case 9/87, Arcado, [1988] ECR 1539, 1552; Case C-26/91, Handte, [1992] ECR I-3997, 3990; Case C-261/90, Reichert and Kockler [1992] ECR I-2149; for further case law cf. Geimer and Schtze, op. cit. supra note 32, Art. 5 Annot. 13 et seq. 35. Case C-295/95, Farrel, [1997] ECR I-1683 para 13; Case C-256/00, Besix, [2002] ECR I-1737 para 25, 26. 36. Case C-334/00, Tacconi SpA, [2002] ECR I-7357. 37. Case 14/76, De Bloos, [1976] ECR 1497; Case 266/85, Shevanai, [1987] ECR, 239; Austrian High Court (OGH), (1998) JZ, 544; Oberlandesgericht Dsseldorf, (1987) IPRax, 236; Oberlandesgericht Jena, (1999) RIW, 703; for details cf. Geimer and Schtze, op. cit. supra note 32, Art. 5 Annot. 2450, 63 et seq. 38. Case 189/87, Kafelis, [1988] ECR 5565, 5581; Case C-261/90, Reichert and Kockler, [1992] ECR I-2149; Case C-51/97, Runion Europenne, [1998] ECR I-6511.

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(i) Case C-96/00, Gabriel and Case C-27/02, Engler.39 The defendant, a mail-order company established in Germany, sent a letter to a consumer (Mr Gabriel), domiciled in Austria, which was likely to create the impression that a prize would be awarded to Mr Gabriel, on demand, under the condition that he ordered goods to a specific amount. Despite an order for goods, duly returned, by Mr Gabriel to the defendant, the prize was never awarded to him. He sued the German company in an Austrian Court and claimed payment of the financial benefit promised in the letter. The claim was based on Sec. 5j of the Austrian Consumer Protection Law, which provides that undertakings which send prize notifications or similar communications to specific consumers, and through the wording of those communications confer the impression that the consumer has won a particular prize, are obliged to give the prize to the consumer. The Austrian court could only claim international jurisdiction to hear and determine the case based on Article 5(1) or Article 13 of the Brussels Convention (now Art. 15 Regulation 44/2001), which required proceedings concerning a contract concluded by a person for the purpose which can be regarded as being outside his trade or profession .... The Austrian Oberste Gerichtshof stayed proceedings and submitted for preliminary ruling, to the European Court of Justice, the question whether Sec. 5j Consumer Protection Law, which entitles a consumer to claim prizes ostensibly won by them, constitutes a contractual claim under Article 13(3) or Article 5(1) of the Brussels Convention, or whether it constitutes a tortious claim. Despite the fact that Mr Gabriel had indeed entered into a contract with the defendant by ordering goods and thereby fulfilled the condition for the prize, various statements in the letter sent to Mr Gabriel made clear that the prize did not constitute a firm promise from the defendant and thus did not invoke any obligation on his part. The essential issue presented to the Court was, thus, whether the action was contractual in nature, notwithstanding the fact that the claim could not be based on the terms of the contract between the parties, but only on the Austrian legislation protecting consumers. Sec. 5j of the Austrian Consumer Protection Law could be interpreted as amending the contractual obligations explicitly agreed upon by the parties; however, it could just as plausibly be construed as imposing a sanction against an undertaking, such as the defendant, for violating rules of fair competition and, thus consequently be defined as a rule of tort. The European Court of Justice did not take into consideration issues regarding tort: the Court found that there was indubitably a contractual link between the
39. Case C-96/00, Gabriel, [2002] ECR I-6367; Case C-27/02, Petra Engler v. Janus Versand GmbH, judgment of 20 Jan 2005, nyr.

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parties once Mr Gabriel had ordered goods offered by the defendant, and that accordingly the conditions of Article 13 of the Brussels Convention were satisfied in this case. Article 13 must be interpreted in such a way as to enable the consumer to bring all claims under a consumer contract before the same court. If a consumer seeks an order according to Sec. 5j of the Austrian Consumer Protection Law against the vendor, this is so closely linked to the contract between the parties that jurisdiction of another court would be inappropriate. The Court pointed out that a situation in which several courts have jurisdiction in respect of one and the same contract must be categorically avoided.40 More recently, the Court of Justice had to decide on a similar case. In Engler v. Janus Versand GmbH 41 the consumer, Petra Engler, unlike Mr Gabriel, had not actually ordered any goods and, therefore, had not entered into a contract with the mail-order company Janus. She, nevertheless, claimed the prize promised by Janus under Section 5j of the Austrian Consumer Protection Law. The Court held that under these circumstances Article 13 of the Brussels Convention does not apply as its wording requires a contract concluded by a person.... Nevertheless, the Court ascertained that the obligation to pay the prize in such cases is still an obligation relating to a contract in terms of Article 5(1) Brussels Convention, which does not imply that a contract must actually have been entered into by the litigants (this point is also discussed below, see text at and note 51, below). (ii) Case C-334/00, Tacconi SpA v. Heinrich Wagner Sinto Maschinenfabrik GmbH (HWS).42 In this case, Tacconi SpA, a company incorporated in Italy, brought an action against HWS, a company incorporated under German Law, claiming compensation to rectify the damage allegedly caused to Tacconi by a breach of contract by HWS, regarding its duty to act honestly and in good faith during pre-contractual negotiations. Tacconi had, with the consent of HWS, entered into a leasing contract for a moulding plant with an Italian leasing company (BN commercio e finanza SpA). Successful execution of the licence agreement for the moulding plant required that a sales contract be initially concluded between BN and HWS; HWS refused, without justification, to complete said contract. Tacconi alleged that their legitimate interests were thereby infringed by HWS, having relied on the successful conclusion of the contract of sale. Tacconi derived its claim from a pre-contractual li40. See also Case C-256/00, Besix, [2002] ECR I-1699. This concept is in accordance with the new wording of Art. 5(1) Regulation 44/2001, which provides a single forum for all obligations arising out of a contract. 41. Cited supra note 39; cf. (2005) BB, 739. 42. Cited supra note 36.

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ability (Art. 1337 of the Italian Civil Code) and argued that under Article 5(3) of the Brussels Convention the place where the harmful event occurred must be understood as the place where the aggrieved party has sustained a loss. This loss was incurred in Perugia, Italy, where Tacconi had its office. HWS, in its defence, pleaded that the Italian court lacked jurisdiction because Article 5(1) of the Brussels Convention was applicable instead of Article 5(3). One of the questions finally presented to the European Court of Justice was therefore, whether an action against a defendant seeking to establish pre-contractual liability falls within the ambit of Article 5(1) or (3) of the Brussels Convention. The European Court of Justice again referred to the concept of an independent interpretation of the terms matters relating to a contract or a tort. It held that while Article 5(1) does not require a contract to have been concluded between the parties, it is nevertheless essential to identify an obligation freely assumed by one party towards another. Considering the circumstances present in the main proceedings, the Court could not find such an obligation. It decided that the liability which may follow from the breach of a pre-contractual duty the unjustified breaking off of negotiations could derive only from rules of law such as Article 1337 of the Italian Civil Code. Therefore, according to the Court, an action founded on the precontractual liability of the defendant is a matter relating to tort, delict or quasi-delict within the meaning of Article 5(3) of the Brussels Convention. From the analysis of these two decisions, it is apparent that the willingness of the Court to interpret terms of the Brussels Convention or the Regulation, which are clearly derived from substantive law such as contract or tort, independently, having regard primarily to the objectives and general scheme of the Convention, inevitably encounters difficulties.43 The rules of the Convention as well as of Regulation 44/2001 are procedural in nature, covering jurisdiction and enforcement of judgments; as a result, it should be of no surprise, that they do not offer a general scheme or any underlying objectives which could assist in defining contractual or a tortious liability. Considering the substantive law of the Contracting States or Member States is, similarly, of no help in cases such as those presented before the European Court of Justice. Beyond an undisputed core of clearly contractual obligations on the one hand and obligations obviously arising out of a tort on the other hand, there will always remain a corona of cases that cannot be easily assigned under substantive national law. Pre-contractual obligations are one example. Whether such obligations are qualified as arising out of a con43. See Loussouarn and Bourel, Droit international priv, 5th ed. (Dalloz, Paris, 1996), No. 485.

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tract or a tort under national law, may depend upon particular principles of substantive law. In Germany, pre-contractual obligations (culpa in contrahendo) are perceived as contractual or, at least, quasi-contractual. This is a consequence of the rather narrow concept of German tort law, which does not allow compensation for a pure financial loss without the injury of a particular object of legal protection so-called absolute rights such as life, health, or personal property. For that reason, German legal doctrine adopted a contractual concept for the breach of pre-contractual obligations. In France, Italy and other countries of the Romanic law family such difficulties in tort law do not exist and it was thus not necessary to expand the ambit of application of contract law.44 Nevertheless, the reasons given by the European Court of Justice in the Tacconi case are unpersuasive and involve merely a superficial analysis of the inherent problems. The fact that the Italian Civil Code contains a rule explicitly imposing duties upon the parties to act honestly and in good faith during contract negotiations does not, and should not, lead inevitably to tortious liability. Pre-contractual liability is, obviously, not an obligation freely assumed by a potential party to a contract, but this is equally true for all secondary obligations arising out of a contract, e.g. a liability for a breach of contract, which falls undoubtedly within the scope of Article 5(1). Analogous problems appear under Article 5(1) and (3) of the Regulation, where national substantive law extends the scope of protection under contractual obligations to third parties to the contractual negotiations. Under German law, for example, in addition to the general (tort) rule against causing harm to others, case law has established an equivalent contractual obligation for the contracting parties. This rule, similarly, finds application when the injured person is a non-contracting party herself but is, nevertheless, closely related to the contractual relationship, such as a child accompanying its parents (the buyer) to the vendors salesroom and being injured there during negotiations due to the vendors negligence.45 Once more this solution

44. Cf. e.g. the broad concept of tort liability in France: Sec. 1382, 1384 Code civil. Beyond that, French law contrary to German law does not allow the plaintiff to base its claims arising out of the facts of a case accumulatively on contract as well as tort. Due to that principle there is clear distinction between contract and torts. 45. Krebs, Sonderverbindung und auerdeliktische Schutzpflichten (Beck, 2000); Martiny, Pflichtenorientierter Drittschutz beim Vertrag mit Schutzwirkung fr Dritte Eingrenzung uferloser Haftung, (1996) JZ, 19 et seq.; Canaris, Die Haftung des Sachverstndigen zwischen Schutzwirkungen fr Dritte und Dritthaftung aus culpa in contrahendo, (1998) JZ, 603 et seq. Today case law in this respect tends to be too generous to establish liability in favour of non parties. Cf. Stadler in Jauernig (Ed.), Brgerliches Gesetzbuch, Kommentar, 11th ed. (Beck, Munich, 2003), 311 paras. 3449; 328 paras. 1940.

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has been developed in order to circumvent restrictions of German tort law and might not be necessary under the tort law of another Member State. From the above discussion it becomes evident that peculiarities of substantive law should not determine the interpretation of terms of the Brussels Convention or Regulation 44/2001. A uniform application of the rules of international jurisdiction among the Member States is required in order to achieve one of the main objectives of common rules of European civil procedure: defendants as well as plaintiffs must be able to identify easily the court in which an action may be brought. The European Court of Justice has, so far, failed in its attempts to find a practical differentiation between Article 5(1) and (3). Guidelines for a solution should revolve around the notion that rules on jurisdiction must be highly predictable, and be founded upon the principle that jurisdiction is generally based on the defendants domicile. Exceptions to Article 2 should be accepted only in a few well-defined situations, in which the subject-matter of the dispute warrants such deviation through a special link.46 Article 5(3) provides for jurisdiction of the court where the harmful event occurred or may occur. It is settled case-law, that this implies a choice of forum for the plaintiff in some cases. If the place where the event establishing tortious liability and the place where damage ensues are different, the defendant may be sued, at the option of the plaintiff, in either place.47 This privilege, for the plaintiff, should only apply as an exception. With respect to the relationship between Article 5(1) (on matters relating to a contract) and (3) (on matters relating to tort), one could deduce that, where doubt is present, preference should be given to the application of Article 5(1).48 Such an interpretation would be in accordance with the idea that where an exception to the principle laid down in Article 2 is being accepted the court having concurring jurisdiction should be predictable as far as possible. The scope of application of provisions such as Article 5(3) giving the plaintiff a choice of forum should be restricted as tightly as possible. An alternative resolution to the dilemma would be to favour a rather narrow interpretation of Article 5(1), namely, that matters relating to a contract must be understood as requiring the parties to have definitely entered into a contract, and as including only those claims between the parties which arise directly out of this relationship.49 Under this narrow formulation, precontractual liability, as in the Tacconi case, would indeed fall within the
46. See Regulation 44/2001, Introductory note No. 11. 47. Case 21/76, Mine de Potasse dAlsace, [1976], ECR 1541. 48. See e.g. Stadler, in Heinrich (Ed.), Festschr. Musielak (Beck, Munich, 2004), p. 569 et seq. at 587. 49. Schmidt-Kessel, Culpa in contrahendo im Gemeinschaftsprivatrecht, (2004) ZEuP, 1019 et seq.

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scope of Article 5(3) of the Regulation. This strict interpretation is in accordance with the Court of Justices decision, in 2002, in Verein fr Konsumenteninformation v. Henkel,50 where the Court held that an action brought by an Austrian consumer association seeking an injunction against the defendant, to prevent him from using particular terms in contracts concluded with Austrian clients, is not a matter relating to contract. The Court emphasized that Article 5(1) of the Convention does not apply where the right to bring an action does not stem from a contract between the parties but from statute. Conversely, one may contend that such a strict interpretation of Article 5(1) is inconsistent with an earlier decision of the European Court of Justice, from 1982, which held that a dispute as to the existence of the contract does not prevent the application of Article 5(1) of the Brussels Convention, providing that the obligation is prima facie of a contractual nature and that the action is bona fide brought by the plaintiff.51 According to this decision, the actual existence of a contract between the litigants is not a prerequisite for the application of Article 5(1). Altogether, there is no consistent case law providing decisive arguments as to the interpretation of Article 5(1) of the Convention, and thus there remains an evident lack of guidance for the national courts upon this issue. Finally, the number of difficulties arising out of Article 5(1), may provide support for the views of those who deny the need for a special jurisdiction in matters relating to a contract and who pleaded in favour of the abrogation of Article 5(1) in Regulation 44/2001.52 The Brussels Convention had adopted the forum executionis, from German law, despite the fact that it was unknown in most other Contracting States;53 whether the place of performance offers any particularly close relationship between the dispute and the court is indeed questionable. In the majority of cases, there is no guarantee that evidence will be more available at the place of performance (when the action is brought, goods have often been resold and delivered elsewhere).54 Equally, the likelihood that the court at the place of performance of a contractual obligation will apply its own substantive law of contract is not particularly high. According to the 1980 Rome Convention on the law applicable to contrac-

50. Case C-167/00, Verein fr Konsumenteninformation v. Henkel, [2002] ECR I-8111. 51. Case 38/81, Effer SpA, [1982] ECR 825. In Tacconi (supra note 36) the Court again pointed out that under Art. 5(1) it is not necessary that the parties actually entered into a contract. 52. For details see Kohler, op. cit. supra note 10, p. 12. 53. Schlosser, op. cit. supra note 33, Art. 5 EuGVVO Annot. 1. 54. Geimer and Schtze, op. cit. supra note 32, Art. 5 Annot. 8; Gsell, Autonom bestimmter Gerichtsstand am Erfllungsort nach der Brssel I-Verordnung, (2002) IPRax, 484 at 489.

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tual obligations,55 the place of performance is of no special relevance in determining the applicable law.56 Consequently, future revision of the Regulation 44/2001 should seriously consider whether special jurisdiction for matters relating to contracts as provided by Article 5(1) is necessary at all.

4.

Recognition and Enforcement under the Brussels Convention and Regulation 44/2001

4.1. Enforcement procedure One of the main intentions of the Brussels Convention, as was mentioned above, was to facilitate, to the greatest possible extent, the free movement of judgments among the Contracting States, by providing for a simple and rapid enforcement procedure.57 Under the Brussels Convention, this meant that a judgment given in one Contracting State had to be recognized in the other States, without the use of any special procedure (Art. 26 Brussels Convention). An application made within the State where enforcement was sought was the only requirement for declaring a judgement enforceable in this Contracting State. Without any substantive review of the foreign judgment, the application could be refused only for one of the reasons specified in Articles 27 and 28 of the Convention. In practice, the objection raised in most cases by the defendant was Article 27(2), under which a judgment given in default of appearance was not recognized if the defendant had not been duly served with the document which instituted the proceedings, or with an equivalent document, in sufficient time to enable him to arrange for his defence. There is considerable case law on Article 27(2), which cannot be discussed here. In Regulation 44/2001, the corresponding Article 34(2) is worded differently: A judgment shall not be recognised ... where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so. Firstly, the last part of the provision now assigns to the defendant, the burden of challenging a judgment by default in the State of origin. Under the Regulation, he can no longer abstain from legal remedies in the State of origin of the judgment, and simply rely upon the fact
55. O.J. 1998, C 27/34. 56. Geimer and Schtze, op. cit. supra note 32, Art. 5 Annot. 9. 57. See inter alia Case C-414/92, Solo Kleinmotoren, [1994] ECR I-2237 para 20; Case C267/97, Coursier, [1999] ECR I-2543 para 25.

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that execution will be denied in another Member State due to irregularities in the service of process. A more fundamental change in the enforcement procedure results from Article 41 of the Regulation, under which the judgment shall be declared enforceable immediately on completion of the formalities in Article 53, without the requirement of any review under Articles 34 and 35 (formerly Arts. 27, 28 Brussels Convention). The defendant is at this stage of the proceedings not entitled to make any submissions on the application (Art. 41 of the Regulation); if he intends to object to the enforceability of the judgment, he must lodge an appeal. It was the explicit intention of the Regulation to make the enforcement procedure more efficient and rapid. In order to achieve this objective, the declaration that a judgment given in another Member State is enforceable, now has essentially to be issued automatically. As mentioned earlier, this is but one step towards surrendering the declaration of enforceability altogether, as currently provided by the Regulation for the creation of a European enforcement order for uncontested claims, mentioned above. As a consequence, objections by the defendant, which can now be raised, according to Article 34, 35 of Regulation 44/2001, after lodging an appeal, may be of no relevance in the future. Those who purport that the legal systems within the Community, with respect to substantive as well as procedural law, are still too heterogeneous for an absolute free movement of judgments58 refer inter alia to the fact that there is noteworthy case law relating to Article 27(1) Brussels Convention, demonstrating the necessity to have a public policy restriction.59 On the other hand, courts throughout the Member States have always been reluctant to allow parties to invoke public policy in the end (see below, 4.2). Article 27(1), therefore, is not a real drawback for the free movement of judgments.60 4.2. Public policy Clause of Article 34(1) of Regulation 44/001/EC The objection that recognition and enforcement of a judgment is contrary to public policy in the Member State where execution is sought, is often raised
58. Wagner, Vom Brsseler bereinkommen ber die Brssel I-Verordnung zum Europischen Vollstreckungstitel, (2002) IPrax, 75, 89 et seq.; Bruns Der anerkennungsrechtliche ordre public in Europa und den USA, (1999) JZ, 278; Schlosser, op. cit. supra note 33, Art. 3436 EuGVVO paras 2. 59. Cf. Case C-7/98, Krombach v. Bamberski, [2000] ECR I-1935; BGH, (2000) NJW, 3289; BGH, (1987) IPRax, 219; BGH, (1993) NJW, 3269; Cour de Cassation, (1979) Clunet, 380; Cour dappel Paris, (1981) Rev. crit., 113; Cour de Cassation, Rev. crit. 1981, 553; Cour de Cassation, (1992) Rev. crit., 516; Cour de Cassation, (1999) Bulletin civil, I n. 92; Cour dappel Luxembourg (Central Bank of Irak), Pasicrisie lux. 31 (2000), p. 227 et seq. 60. Jayme and Kohler, Europisches Kollisionsrecht 2001: Anerkennungsprinzip statt IPR?, (2001) IPRax 501, 507.

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by defendants, but has been accepted by the courts in only a few cases.61 The European Court of Justice has always emphasized that recourse to the public policy clause must be ultima ratio and can be envisaged only where enforcement of the foreign judgment would constitute a manifest breach of a rule of law, regarded as essential, in the legal order of the State in which recognition is sought. Article 34 of the Regulation, in accordance with this case law, now accentuates that recognition [must be] manifestly contrary to public policy. Nevertheless, the isolated cases in which recourse to the public policy clause has been permitted, indicate the indispensable nature of the clause and that any thoughts of forgoing this test altogether must be reconsidered. The necessity of the public policy clause is remarkably exemplified by Krombach, decided in 2000.62 Mr Krombach, a physician domiciled in Germany, was the subject of a preliminary prosecution in Germany, following the death of a 14-year old girl of French nationality. Subsequently prosecution in Germany ceased. Thereupon, the victims father initiated an investigation in France, based on the fact that the victim was a French national. By judgment of the Chambre de Accusation in Paris, Mr Krombach was committed for trial before the Cour dAssises. Together with the criminal proceedings, the father of the victim brought a civil claim against Mr Krombach before the same court. Although Mr Krombach was ordered to appear in person, he did not attend the hearing. Consequently, the court applied the contempt procedure, provided for by Article 627 et seq. of the French Code of Criminal Procedure. Under Article 630 no defence counsel may appear on behalf of the person in contempt if the person is charged with an intentional offence and does not appear in person. Through application of this ruling, the Cour dAssises reached its decision without hearing the defence counsel instructed by Mr Krombach. The court imposed a custodial sentence of 15 years, after finding Mr Krombach guilty of violence resulting in involuntary manslaughter, whilst simultaneously ordering him to pay compensation to the victims father, with regard to the civil proceedings. German courts, in the first instance, declared the civil judgment enforceable in Germany. Mr Krombach appealed to the Bundesgerichtshof, which subsequently referred questions to the European Court of Justice for preliminary ruling. The Bundesgerichtshof took the position inter alia that the
61. The German Bundesgerichtshof rejected recognition and enforcement of a foreign judgment based on Art. 27(1) of the Brussels Convention in only a few cases: BGH, (1987) IPRax, 219; BGHZ 123, 268; BGH, (1998) IPRax, 205 (Krombach). 62. Krombach, cited supra note 59; for comments cf. case note by van Hoek 38 CML Rev., 1011 et seq.; Heringa, European Human Rights Cases (2000), p. 491; von Bar, (2000) JZ, 725 et seq.

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courts of the State in which enforcement is sought, can take into account, under the public policy clause of Article 27(1) of the Brussels Convention, that the French criminal court did not allow Mr Krombach to be defended by a lawyer in the civil litigation for damages instituted within the criminal proceedings. The European Court of Justice finally affirmed the position of the Bundesgerichtshof, and was concurrently provided with the opportunity to specify general guidelines as to the interpretation of Article 27 of the Convention. The Court held that the provision must be construed strictly, inasmuch as it constitutes an obstacle to one of the fundamental objectives of the Convention. Recourse to Article 27(1) is to be had only in exceptional cases. The courts of the State where enforcement is sought, are, in principle, free to determine, according to their own conceptions, what public policy requires. Nevertheless, establishing limits to this public policy clause is required for interpretation of the Convention and, therefore, affirms the competence of the European Court of Justice (with reference to interpretation of this provision). With regard to the particular case, the Court pointed out that the right to be defended is one of the fundamental elements in a fair trial and an accused person does not forfeit entitlement to such a right simply because he is not present at the hearing.63 This position corresponds with the case law of the European Court of Human Rights.64 Although the Convention is intended to secure the simplification of formalities governing recognition and enforcement, the Court held that it is not permissible to achieve this aim by undermining the right to a fair trial.65 The decision of the European Court of Justice in Krombach was almost unanimously approved in the Member States. Amid the Tampere resolutions66 and the ambition of the Commission to abolish the public policy clause altogether which the Commission had proposed already for the Regulation 44/200167 it seems noteworthy that there are indeed situations where the law of one Member State deviates to an unacceptable degree from the fundamental principles in other Member States and even from the European Convention on Human Rights to necessitate recourse to such a clause. The established practice of including public policy clauses as a sheet an63. Krombach, cited supra note 59, para 39. 64. Judgment 23 Nov. 1993 Poitrimol, Ser. A No. 227A; Judgment 22 Sept. 1994 Pelladoah Ser. A. No. 297B, and Judgment 21 Jan. 1999 Van Geyseghem, (1999) EuGRZ, 9. 65. Cf. Case 49/84, Debaecker, [1985] ECR 1779 para 10. 66. See also the joint programme of the Commission and the Counsel adopted 30 Nov. 2000 of measures for the implementation of the principle of mutual recognition of decisions in civil and commercial matters; O.J. 2000, L 12/1. 67. For details cf. Stadler, Revision des EuGV, Verffentlichungen der Wissenschaftlichen Vereinigung fr Internationales Verfahrensrecht e.V., vol. 11 (2000, Gieseking, Bielefeld), p. 43 et seq.

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chor in international conventions is not a superfluous addition.68 Within the EC, harmonization of substantive and procedural law is embryonic.69 The waiving of a public policy clause should be a consideration at the conclusion of the harmonization process not at its inception.

5. Conclusion The ongoing debate on the necessity for a public policy-clause within an area of freedom, security and justice is one of the key issues for the future of judicial cooperation in the EC. The Regulation creating a European enforcement order for uncontested claims invokes the mutual trust in the administration of justice in the Community as a basis for allowing enforcement of a judgment in all other Member States without further judicial review. Considering the rapid geographical expansion of the EC, it becomes increasingly apparent that this is an ornamental phrase denoting a political postulate rather than reality. It is undisputed that the sound operation of the internal market calls for measures to lighten the burden of judicial cooperation. However, those measures have to be implemented with a sense of proportion for the conflicting interests of the litigants in civil matters. For the further development of European Civil Procedure, it is of utmost importance that the parties of the litigation do not lose confidence in the courts. The surrendering of any kind of review of foreign judgments might give defendants the impression that they are not receiving adequate protection from the Member State of their domicile, where execution of the foreign judgment is sought. Further, to a large extent, the European regime asks defendants to defend proceedings in the courts of another Member State, which brings about great inconvenience: primarily, the language problem. The core of the right to due process comprises the obligation of the court to communicate with the parties in a language which they are able to understand. The Commission has been neglecting the language issue for a long time, with the result that the Regulation on Service of Documents does not give adequate protection to the defendant in this regard.70 Worse still, the Regulation creating a European enforcement order does not ensure that the documents initiating the
68. For details Bruns, Der anerkennungsrechtliche ordre public in Europa und den USA, (1999) JZ, 278 at 281. 69. Schwartze, Enforcement of Private Law. The Missing Link in the Process of European Harmonization, (2000) European Rev. of Private Law, 135 et seq. 70. Lindacher, Europisches Zustellungsrecht, 114 Zeitschrift fr Zivilproze (2001), 179 et seq.; Stadler, Neues europisches Zustellungsrecht, (2001) IPRax, 514 et seq.

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proceedings served upon the defendant and the instructions given to the defendant, warning him of the severe consequences of not defending the action brought against him, are translated into his native language.71 In contrast to the European approach, the Principles of Transnational Civil Procedure,72 adopted in spring 2004 by UNIDROIT and the American Law Institute, assume a different stance. According to Rule 5.2.,73 documents initiating the proceedings must be in a language of the forum, and also a language of the State of the individuals habitual residence or legal entitys principal place of business. The referendums held in 2005, in France as well as in the Netherlands, both rejecting the Treaty establishing a Constitution for Europe, should be taken as a severe warning. European policy pursued in the last decade is en route to gambling away the credit of European citizens. A period of consolidation in European Civil Procedure is, at present, imperative. We have already achieved considerable success in developing an area of freedom, security and justice. All Member States should now be provided with the opportunity to gain experience in applying the Regulations promulgated recently, before the Commission takes further steps to harmonize the rules on cross border litigation or even national rules of civil procedure. It may be worth waiting to observe how national legislators accept the UNIDROIT / ALI Priniciples of Transnational Civil Procedure.

71. Rauscher, 11 RIW (2004), I (Die erste Seite), Europischer Vollstreckungstitel fr unbestrittene Forderungen; Stadler Kritische Anmerkungen zum Europischen Vollstreckungstitel, (2004) RIW, 801 et seq.; Stadler Das Europische Zivilprozessrecht Wie viel Beschleunigung vertrgt Europa? Kritisches zur Verordnung ber den Europischen Vollstreckungstitel und ihrer Grundidee, (2004) IPRax, 2 et seq.; Kohler, Systemwechsel im europischen Anerkennungsrecht in Baur and Mansel (Eds.) Systemwechsel im europischen Kollisionsrecht (Beck, Munich, 2002), p. 146 et seq. at 159. 72. For details on the Principles cf. Strner, The Principles of Transnational Civil Procedure An Introduction to their Basic Conceptions, (2005) RabelsZ, 201 et seq. 73. For the language in which the proceedings should be conducted and for necessary translations see Rule 6 of the Principles.

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