European Business Litigation

Abla Mayss, Alan Reed

• Publisher: Taylor & Francis
• Year: 2018
• eBook ISBN: 9780429820366
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

First published in 1998, European Business Litigation is a monograph produced as a follow-up step to European Business Law which contains a range of chapters, including a chapter on Business Litigation. Hence, as well as expanding on the issues raised in the chapter, this book provides an insight into the legal and policy problems involved in both the harmonisation process and the substantive EU laws adopted to ameliorate the situation in the field of Private International Law. More specifically, it examines the origin of EU laws in this area, considers the problems with their interpretation and implementation, and addresses the question of whether harmonisation has been achieved.

1 Introduction

A true internal market, within which businesses are able to trade freely, would not be achieved if the relevant rules of private international law, which vary in substance from one Member State to another, were left untouched. As litigation between businesses trading within the Community may be often unavoidable, the operation of the rules of private international law might lead to different outcomes depending on the law of the Member State in whose courts the proceedings are brought. Even where the outcome were to be favourable to a claimant, difficulties might still arise at the stage of enforcing the judgment debt, notably in cases where the judgment debtor had insufficient or no assets in that State.¹ Issues within this area of law have been the subject of numerous debates and initiatives within the European Community (hereafter EC), with the consequence that two major conventions, having the object of promoting harmonisation in this field, have flourished. However, before proceeding to examine the justifications for, and fundamental principles of, these conventions, the boundaries of this area of law beg definition.

Private International Law, also known as Conflict of Laws, is that part of every legal system’s domestic or private law which comes into play whenever a national court is faced with a dispute involving one or more foreign elements. For instance, X, a German company with a branch office in Spain, employs A, a Spanish national domiciled in Spain, to carry out work on a building site in Greece. In the course of business, A suffers personal injury partly due to the negligence of a Greek independent contractor and partly due to the lack of safety in the workplace. In view of the various foreign elements involved, a four-stage process is likely to ensue. First, it is necessary to classify the subject-matter of the dispute, that is whether it is an issue relating to tort or contract. Secondly, the question of jurisdiction must be determined, that is the courts of which State have competent jurisdiction to hear the case, those of Germany, Spain, or Greece? Thirdly, once the jurisdiction of the court has been ascertained, it is necessary to determine the system of law by which the rights and liabilities of the parties to the dispute should be determined. The fourth stage arises where the judgment debt cannot be satisfied due to the debtor’s insufficient assets in the original judgment State, and raises the question of whether the judgment can be recognised and enforced in the courts of another State in which sufficient assets exist.

Inevitably, the above process is prone to intricacies which, if not addressed, will hinder the achievement of a true internal market. EC initiatives, however, have been successful to a limited extent, since only two specific conventions have emerged to date in this field; the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (hereafter the Brussels Convention) concluded on 27 September 1968,² and the Rome Convention on the Law Applicable to Contractual Obligations (hereafter the Rome Convention) concluded on 19 June 1980.³ Thus, the purpose of this chapter is to introduce the subject-matter of this monograph by highlighting the reasons and justifications for these Conventions, and setting out the fundamental principles underlying their adoption.

1. REASONS AND JUSTIFICATIONS

A central common theme echoed throughout the Treaty of Rome which established the European Economic Community, is that of liberalising intra-Community trade. The free movement of goods, services, workers and capital is an essential tool to achieve this end. However, if businesses are to trade freely within the Community, some measures securing effective legal remedies must be available so that business debts can be easily collected and, in case of litigation, judgments awarded be easily recognised and enforced. Awareness of the need for such measures was made explicit in the Treaty of Rome itself, notably art. 220 which required Member States, inter alia, to enter into negotiations with a view to securing the reciprocal recognition and enforcement of judgments.⁴ Acting upon this provision, the EC Commission communicated a letter on 22 October 1959 to the six original Member States,⁵ stating as follows:

‘… a true internal market between the six States will be achieved only if adequate legal protection can be secured. The economic life of the Community may be subject to disturbances and difficulties unless it is possible, where necessary by judicial means, to ensure the recognition and enforcement of the various rights arising from the existence of a multiplicity of legal relationships. As jurisdiction in both civil and commercial matters is derived from the sovereignty of Member States, and since the effect of judicial acts is confined to each national territory, legal protection and, hence, legal certainty in the common market are essentially dependent on the adoption by the Member States of a satisfactory solution to the problem of recognition and enforcement of judgments.’⁶

There is little doubt that ensuring the recognition and enforcement of judgments within the Community forms a major contributing factor towards the attainment of the level of cross-border economic integration as envisaged by the Treaty of Rome. This has become of greater importance, especially after the conclusion of the Single European Act 1986 which marked a new step forward on the path towards a closer European union, and the adoption of the Maastricht Treaty in 1992⁷ whose ultimate objective is to achieve even closer European integration. In compliance with art. 220, and in pursuance of the Commission’s letter, a Committee of Experts, set up in February 1960,⁸ was entrusted with the task of identifying the most appropriate measures to secure recognition and enforcement of judgments in the commercial arena. The Committee, however, soon realised that any attempts at adopting satisfactory measures to facilitate and simplify the formalities of enforcement would be impeded unless rules of direct jurisdiction for mandatory use on a uniform basis were part thereof.⁹ Indeed, the primary obstacle to the mutual recognition and enforcement of judgments under a number of pre-existing bilateral treaties was the requirement that the judgment must have been awarded by a court of competent jurisdiction in the Private International Law sense.¹⁰ It is only when the national courts of Member States assume jurisdiction on specified common grounds that the simplification of recognition and enforcement of judgments can be achieved. Hence, a Convention, dealing with both jurisdiction and enforcement of judgments, in Civil and Commercial Matters was signed at Brussels on 27 September 1968.¹¹

Shortly after the adoption of the Brussels Convention, which enhances forum shopping in a number of limited situations,¹² the Commission expressed the need to set in motion the harmonisation of the choice of law rules in fields ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Table of Cases
• Preface
• Biography
• 1. Introduction
• 2. The Brussels Convention on Jurisdiction and Enforcement of Judgments 1968: Preliminary Issues
• 3. The Brussels Convention: Bases of Jurisdiction
• 4. Special Jurisdiction in Matters Relating to Contract Under Article 5(1) of the Brussels Convention
• 5. Special Jurisdiction for Tort Under Article 5(3) of the Brussels Convention: A Process of Europeanisation
• 6. Protective Jurisdiction Under the Brussels Convention
• 7. Prorogation of Jurisdiction and Lis Pendens
• 8. The Brussels Convention: Forum Non Conveniens and Negative Declarations
• 9. The Rome Convention 1980: Background and General Principles
• 10. The Applicable Law Under the Rome Convention 1980
• 11. Special Contracts: Protected Consumer and Employment Contracts Under the Rome Convention
• 12. Choice of Law in Tort
• 13. Recognition and Enforcement of Foreign Judgments at Common Law
• 14. Recognition and Enforcement of Judgments Under the Brussels Convention
• 15. Conclusions: The European Experience
• Appendix 1
• Appendix 2
• Appendix 3
• Appendix 4
• Appendix 5
• Appendix 6
• Appendix 7
• Appendix 8
• Appendix 9
• Appendix 10
• Appendix 11
• Appendix 12
• Subject Index