| JENARD-MÖLLER REPORT 1988
14. As shown above, although the structure of the two Conventions is identical and they contain a great number of comparable provisions, they remain separate Conventions. 15. The respective application of the two Conventions is governed by Article 54b. The first point to note is that this Article primarily concerns the courts of member countries of the European Communities these being the only courts which may be required to deliver judgments pursuant to either Convention. Courts in EFTA Member States are not bound by the Brussels Convention since the EFTA States are not parties to that Convention. However, Article 54b is relevant for the courts of EFTA countries since it was felt advantageous that Article 54b should, for reasons of clarity, contain details relating to the case of a lis pendens, related actions and recognition and enforcement of judgments. The philosophy of Article 54b is as follows: According to paragraph the Brussels Convention continues to apply in relations between Member States of the European Communities. This applies in particular where: (a) a person , of whatever nationality, domiciled in one Community State, e.g. France, is summoned to appear before a court in another such State, e.g. Italy. The plaintiffs nationality and domicile are immaterial; (b) a judgment has been delivered in one European Community Member State, e.g. France and must be recognized or enforced in another such State, e.g. Italy. The Brussels Convention also applies where a person domiciled outside the territory of a European Community Member State and outside the territory of any other State party to the Lugano Convention g. in the United States, is summoned to appear before a court in a European Community Member State (Article 4 of the Brussels Convention). In each of these three instances, the Court of Justice of the European Communities has jurisdiction under the 1971 Protocol to rule on problems which may arise with regard to the interpretation of the Brussels Convention. 16. However, under paragraph 2, the court of a European Community Member State must apply the Lugano Convention where: (1) a defendant is domiciled in the territory of a State which is party to the Lugano Convention and an EFTA member or is deemed to be so domiciled under Articles 8 or 13 of the Convention. For instance, if a person domiciled in Norway is summoned before a French court jurisdiction will be vested in that court only in the cases for which the Lugano Convention ...
(2) the courts of an EFTA Member State possess exclusive jurisdiction (Article 16) or jurisdiction by prorogation (Article 17). The courts of Member States of the European Communities may not, for instance, be seised of a dispute relating to rights in rem in immovable property situated in the territory of a State party to the Lugano Convention and an EFTA Member State, notwithstanding Article 16 (1) of the Brussels Convention, which will apply only if the immovable property is situated in the territory of a State party to the 1968 Convention; (3) recognition or enforcement of a judgment delivered in a State party to the Lugano Convention and an EFTA Member State is being sought in a Community Member State (paragraph 2 (c)). Paragraph 2 also provides that the Lugano Convention applies where a judgment delivered in a Community Member State is to be enforced in an EFTA Member State party to the Lugano Convention. This does not resolve potential conflicts between the two Conventions, but it does define their respective scope. Obviously if a judgment has been delivered in a State party to the Lugano Convention and an EFTA Member State and is to be enforced either in a Community Member State or in an EFTA Member State, the Brussels Convention does not apply; (4) Article 54b also contains provisions relating lis pendens (Article 21) and related actions (Article 22). Under Article 54b (2) (b) a court in . a Community Member State must apply these Articles of the Lugano Convention if a court in an EFTA Member State is seised of the same dispute or a related claim. Apart from the greater clarity which they bring, these provisions serve a double purpose: to remove all uncertainty, and to ensure that judgments delivered in the different States concerned do not conflict; (5) Article 54b (3) provides that a court in EFTA Member State may refuse recognition enforcement of a judgment delivered by a court in a Community Member State if the grounds on which the latter court has based its jurisdiction are not provided for in the Lugano Convention and if recognition or enforcement is being sought against a party who is domiciled in any EFTA Contracting State. These grounds for refusal are additional to those provided for in Article 28, and arise essentially from a guarantee sought by the EFTA Member States. The cases involved can be expected to arise relatively seldom, since the Conventions are so similar in respect of their rules of jurisdiction. The possibility nevertheless remains. The case would arise in the event of a judgment on a contract of employment delivered by a court in a Community Member State which had erroneously based its jurisdiction with regard to a person domiciled in an EFTA Member State either on Article 4 or Article 5 (l) of the Brussels Convention, i.e. in a manner inconsistent with Article 5 (1) of the Lugano Convention, which includes a specific provision on contracts of employment, or on an agreement conferring jurisdiction which predated the origin of the dispute (Article 17). However, in the interests of freedom of movement of judgments, the judgment will be recognized and enforced provided that this can be done in accordance with the rules of common law of the State addressed, in particular its common law rules on the jurisdiction of foreign courts; (6) for convenience, we have used the term ' EFTA Member States in the above examples. Obviously, the same arrangements would apply to States which are not members either the EEC or EFTA but accede to the Lugano Convention (see Article 62 (I) (b)). 17. The question remained unresolved as to how the Lugano Convention would apply between Community Member States one of which was not a party to the Brussels Convention such as, for instance, Spain or Portugal , while both were parties to the Lugano Convention. The issue would, for example, arise should both Belgium and Spain ....
18. The amendments are not numerous. Before considering them in detail it might be helpful to list the Articles in the Lugano Convention which differ from the corresponding Articles in the Brussels Convention. Article 3 This Article adds the rules of exorbitant jurisdiction current in the EFTA Member States and in Portugal. It should be noted that no such rules exist in Spain. A special provision has been inserted covering matters relating to contracts of employment. A new paragraph 4 relates to the combination of proceedings in rem with proceedings in personam. Article 16 Matters relating to tenancies in immovable property are the subject of a new provision (paragraph 1 (b)) and of a reservation (Protocol No 1 , Article Ib). This Article has been amended with regard to the reference to commercial practices and contracts of employment. The reference in this Article to lis pendens has been somewhat amended. This Article now contains further grounds for refusing recognition and enforcement.
Technical modifications have been made to some of these Articles with regard to procedure for enforcement and modes of appeal. The wording of this Article, which concerns authentic instruments, has been slightly altered. This Article has been clarified. with regard to the transitional provisions. This Article is based on Article 36 of the 1978 Accession Convention and contains additions. This is a new Article governing the respective scope of the Brussels Convention and the Lugano Convention. This Article concerns relations with other conventions and refers only to conventions to which EFTA Member States are party. This Article governs implementation of conventions concluded with regard to particular matters and differs appreciably from Article 57 of the Brussels Convention. Articles 60 to 68 (Final provisions) These Articles have been amended. 19. Protocol I Article 1a This new Article contains a reservation requested by the Swiss delegation.
This new Article contains a reservation resulting from the amendment of Article 16 (1) relating to tenancies in immovable property. This Article covers actions on a warranty or guarantee and contains additions covering current legislation in several States. The Article covers maintenance matters in particular and contains additions to take account of the situation in several States. This Article covers disputes between the master and a member of the crew of a vessel and again contains additions to take account of the laws in a number of States. 20. Protocol 2 This Protocol has been added in order to ensure that, as far as possible, the Lugano Convention and the provisions therein which are identical to the Brussels Convention are interpreted uniformly. 21. Protocol 3 This Protocol deals with the problem of Community acts. 22. Declarations First Declaration: supplementary to Protocol 3. Second and Third Declarations: supplementary to Protocol 2 on the uniform interpretation of the Lugano Convention.
23. Since this differs in no respect from the Brussels Convention, the reader is referred to the Jenard and Schlosser reports.
24. The proposed adaptations to Articles 2 to 4 are confined to mentioning, in the second paragraph of Article 3, certain exorbitant jurisdictions in the legal systems of the EFTA Member States and of Portugal. A brief explanation of the proposed additional provisions (see point 1) precedes, as in the Schlosser report, two more general remarks on the relevance of these provisions to the whole structure of the Lugano Convention.
l. Austria 25. Article 99 of the Law on Court Jurisdiction (Jurisdiktionsnorm) provides that any person neither domiciled nor ordinarily resident in Austria may, in matters relating to property, be sued in the court for any place where he has assets or where the disputed property is located. The value of the assets located in Austria may, however, not be considerably lower than the value of the matter in dispute. Foreign establishments, foundations, companies cooperatives and associations may, according to the abovementioned Article (paragraph 3), also be sued in the court for the place where they have their permanent representation for Austria or an agency. 2. Finland 26. The second sentence of Article 1 of Chapter 10 of the Finnish Code of Judicial Procedure provides that a person who has no habitual residence in Finland may be sued in the court of the place where the documents instituting the proceeding were served on him or in the court of the place where he has assets. The third sentence of the same Article provides that a Finnish national who is staying abroad may also be sued in the court for the place where he had his last residence in Finland. The fourth sentence of the same Article provides that a foreign national , having neither domicile nor residence ...
3. Iceland 27. Article 77 of the Icelandic Civil Proceedings Act provides that in matters relating to property obligations to Icelandic citizens, firms etc. any person not domiciled in that country may be sued in the court for the place where the person was when the documents instituting the proceedings were served on him or where he has assets. 4. Norway 28. Article 32 of the Norwegian Civil Proceedings Act provides that any person not domiciled in Norway may be sued, in matters relating to property, in the court for the place where he has assets or where the disputed property is located at the time when the documents instituting the proceedings were served on him. 5. Sweden 29. The first sentence of Section 3 of Chapter 10 of the Swedish Code of Judicial Procedure provides that anyone without a known domicile in Sweden may be sued, in matters concerning payment of a debt in the court for the place where he has assets. 6. Switzerland 30. Article 40 of the Federal Law on Private International Law states that if there is no other provision on jurisdiction in Swiss law an action concerning sequestration may be brought before the court for the place where the goods were attached in Switzerland. 7. Portugal 31. Article 65 of Chapter II of the Code of Civil Procedure provides that a foreign national may be sued in a Portuguese court where: (paragraph 1 (c)) the plaintiff is Portuguese and, if the situation were reversed, he could be sued in the courts of the State of which the defendant is a national (paragraph 2) under Portuguese law, the court with jurisdiction would be that of the defendant's domicile, if the latter is a foreigner who has been resident in Portugal for more than six months or who is fortuitously on Portuguese territory provided that, in the latter case, the obligation which is the subject of the dispute was entered into in Portugal. Article 65a (c) of the Code of Civil Procedure confers exclusive jurisdiction on Portuguese courts for actions relating to employment relationships if any of the parties is of Portuguese nationality. Article 11 of the Code of Labour Procedure gives jurisdiction to Portuguese labour courts for disputes concerning a Portuguese worker where the contract was concluded in Portugal.
1. Scope of the second paragraph of Article 3 32. The rejection as exorbitant of jurisdictional bases hitherto considered to be important in the various States should not, any more than the second paragraph of Article 3 of the 1968 Brussels Convention mislead anyone as regards the scope of the first paragraph of Article 3. Only particularly extravagant claims to international jurisdiction for the courts of a Contracting State are expressly underlined. Other rules founding jurisdiction in the national laws of the Contracting States also remain compatible with the Lugano Convention only to the extent that they do not offend against Article 2 and Articles 4 to 18. Thus, for example, the jurisdiction of Swedish courts in respect of persons domiciled in a Contracting State can no longer be based, in contractual matters , on the fact that the contract was entered into in Sweden. 2. Impossibility of founding jurisdiction on the location of property 33. With regard to Austria, Denmark, Finland, Germany, Iceland Norway, Sweden and the United Kingdom, the list in the second paragraph of Article 3 contains provisions rejecting jurisdiction derived solely from the existence of property in the territory of the State in which the court is situated. Such jurisdiction cannot be invoked even if the proceedings concern a dispute over rights of ownership, or possession or the capacity to dispose of the specific property in question.
35. As regards persons who are domiciled outside the Contracting States, the provisions which hitherto governed the jurisdiction of courts in the Contracting States remain unaffected. Even the rules on jurisdiction mentioned in the second paragraph of Article 3 may continue to apply to such persons. Judgments delivered by courts which thus have jurisdiction must also be recognized and enforced in other Contracting States unless one of the exceptions in paragraph 5 of Article 27 or in Article 59 of the Convention applies. The latter provision is the only one concerning which the list in Article 3 second paragraph is not only of illustrative significance, but has direct and restrictive importance.
36. The domicile of the defendant constitutes the basic rule of both the Brussels Convention and the Lugano Convention. However, Section 2 (Articles 5 and 6) of Title II on jurisdiction contains a number of supplementary provisions. Under these provisions, the plaintiff may choose to bring the action in the court specified in Section 2, or in the courts of the State in which the defendant is domiciled (Article 2). Article 5 (1) of the Brussels Convention provides that the defendant may be sued ' in matters relating to a contract, in the courts for the place of performance of the obligation in question 37. This paragraph is applicable with regard to a contract of employment (see Jenard report, p. 24 and Chapter VI: judgment of the Court of Justice of November 1979 in Sanicentral v. Collin, according to which employment legislation comes within the Convention s scope). When asked to give a ruling on this matter, the Court of Justice ruled that the obligation to be taken into account in the case of claims based on different obligations arising under a contract of employment as a representative binding a worker to an undertaking was the obligation which characterized the contract, i.e. that of the place where the work was carried out (judgment of the Court of 26 May 1982 in Ivenel v. Schwab, see Chapter VI). This ruling was based amongst other things, on Article 6 of the Rome Convention on the law applicable to contractual obligations (OJ No L 266 1980, p. 1), which provides that in matters relating to an employment contract, the contract ' is to be governed, in the absence of choice of the applicable law, by the law of the country in which the employee habitually carries out his work in performance of the contract, unless it appears that the contract is more closely connected with another country . In the above judgment, the Court commented that the aim of this provision was to secure adequate protection for the party who from the socioeconomic point of view was to be regarded as the weaker in the contractual relationship (see also Giuliano-Lagarde report, OJ No C 282, 1982 25). In another ruling, the Court of Justice observed that contracts of employment, like other contracts for work other than on a self-employed basis, differed from other contracts even those for the provision of services - by virtue of certain particularities: they created a lasting bond which brought the worker to some extent within the organizational framework of the business of the undertaking or employer, and they were linked to the place where the activities were pursued, which determined the application of mandatory rules and collective agreements (judgment of 15 January 1987 in Shenavai v. Kreischer, see Chapter VI). During negotiation of the Lugano Convention the EFTA Member States requested that, in respect of Article 5 and Article 17 (for this last Article, see point 60), matters relating to employment contracts should be the subject of a separate provision. This request was granted. 38. Under the new Article 5 (1) on matters relating to contracts of employment, the place of performance of the obligation in question is deemed to be that where the employee habitually carries out his work. If he does not habitually carry out his work in any one country, the place is that in which is situated the place of business through which he was engaged. It should be noted that such an issue is currently before the Court of Justice (see Chapter, Six Constructions v. Humbert case).
39. The stipulation in Article 5 (1) gives rise to the following comments: According to the general structure of the Lugano Convention, the following have jurisdiction where there are disputes between employers and employees:
However, these rules do not apply unless the dispute contains an extraneous element. The Conventions only lay down rules of international jurisdiction (see preamble). They have no effect if the contract (domicile of the employer, domicile of the employee and place of work) is actually situated in a single country. In this connection, the employee nationality must not be taken into account, as the employee must be treated in the same way as other employees. On the other hand, if the defendant is domiciled outside the territory of one of the Contracting States, Article 4 is applicable. 40. Where the defendant does not habitually carry out his work in anyone country, the courts of the place in which the place of business through which he was engaged is situated will have jurisdiction. This system is in keeping with that laid down by Article 6 (2) (b) of the Rome Convention on the law applicable to contractual obligations. The purpose of the provision is to avoid increasing the number of courts with jurisdiction in disputes between employers and employees where the employee is required to carry out his work in several countries. In addition, for States parties to the Rome Convention and the Lugano Convention jurisdiction will be congruent with the applicable law. The same applies in some States which are not parties to the Rome Convention. 41. The question whether a contract of employment exists is not settled by the Convention. If the judge to whom the matter has been referred gives an affirmative reply to this question, he will have to apply the second part of Article 5 (1), which constitutes a specific provision. Although there is as yet no independent concept of what constitutes a contract of employment, it may be considered that it presupposes a relationship of subordination of the employee to the employer (see Chapter VI, judgments in Shenavai v. Kreischer, cited earlier, and in Arcado v. Haviland of 8 March 1988). 42. Article 5 (1) refers only to individual employment relationships, and not to collective agreements between employers and workers' representatives. 43. The term ' place of business' is to be understood in the broad sense; in particular, it covers any entity such as a branch or an agency with no legal personality. 44. In conclusion, it may be considered that although the texts of the Brussels Convention and the Lugano Convention are not identical, they do converge, particularly by reason of the interpretation by the Court of Justice of Article 5 (1) of the Brussels Convention.
45. No change has been made to the text of the Brussels Convention which provides that ' a person domiciled in a Contracting State may be sued where he is one of a number of defendants, in the courts for the place where anyone of them is domiciled'. However, this provision was taken over verbatim only in the light of the comments made in the Jenard report on the 1968 Convention (OJ No C 59/79, p. 26) to the effect that ' in order for this rule to be applicable there must be a connection between the claims made against each of the defendants, as for example in the case of joint debtors. It follows that action cannot be brought solely with the object of ousting the jurisdiction of the courts of the State in which the defendant is domiciled.' A few days after the diplomatic conference ended the Court of Justice delivered a judgment along these lines (judgment of 27 September 1988 in Kalfelis v. Schroder, see Chapter VI, OJ No C 281 4. 1 I. 1988, p. 18).
46. When a person has a mortgage on immovable property the owner of that property is quite often also personally liable for the secured debt. Therefore it has been made possible in some States to combine an action concerning the personal liability of the owner with an action for the enforced sale of the immovable property. This presupposes of course that the court for the place where the immovable property is situated also has jurisdiction as to actions concerning the personal liability of the owner. It was agreed that it was practical that an action concerning the personal liability of the owner of an immovable property could be combined with an action for the enforced sale of the immovable property in those States where such a combination of actions was possible. Therefore it was deemed appropriate to include in the Convention a provision according to which a person domiciled in a Contracting State also may be sued in matters relating to a contract, if the action may be combined with an action against the same defendant in matters relating to rights in rem in immovable property, in the court of the Contracting State in which the property is situated. To illustrate, let us assume that a person domiciled in France is the owner of an immovable property situated in Norway. This person has raised a loan which is secured through a mortgage on his immovable property in Norway. In the eventuality of the loan not being repaid when due, if the creditor wishes to bring an action for the enforced sale of the immovable property, the Norwegian court has exclusive jurisdiction under Article 16 (1). However, under the present provision, this court also has jurisdiction as to an action against the owner of the property concerning his personal liability for the debt, if the creditor wishes to combine the latter action with an action for the enforced sale of the property. 47. It is evident that this jurisdictional basis cannot exist by itself. It must necessarily be supplemented by legal criteria which determine on which conditions such a combination is possible. Thus the provisions already existing in or which in the future may be introduced into the legal systems of the Contracting States with reference to the combining of the abovementioned actions remain unaffected by the Lugano Convention. It goes without saying however that the combination of the two actions which this paragraph deals with have to be instituted by the ' same claimant'. The ' same claimant' includes of course also a person to whom another person has transferred his rights or his successor.
48. Since no amendments have been made to these sections, reference should be made to the Jenard and Schlosser reports. 49. Under Article 16 (1) of the Brussels Convention only courts of the Contracting State in which the immovable property is situated have jurisdiction concerning rights in rem , or tenancies of, immovable property. Thus the wording covers not only all disputes concerning rights in rem in immovable property, but also those relating to tenancies of such property. According to the Jenard report (p. 35), the Committee which drafted the Brussels Convention intended to cover disputes between landlord and tenant over the existence or interpretation of tenancy agreements, compensation for damage caused by the tenant, eviction, etc. The rule was, according to the same report, not intended by the Committee to apply to proceedings concerned only with the recovery of rent, since such proceedings can be considered to relate to a subject-matter which is quite distinct from the rented property itself. The working party which drafted the Convention on the accession of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Brussels Convention and to the Protocol on its interpretation by the Court of Justice was, however, according to the Schlosser report (paragraph 164), unable to agree whether actions concerned only with rent, i.e. dealing simply with recovery of a debt, are excluded from the scope of Article 16 (1). As stated in the Jenard report, the reference to tenancies in Article 16 (1) of the Brussels Convention includes tenancies of dwellings and of premises for professional or commercial use, and agricultural ...
50. The Court of Justice of the European Communities has ruled that Article 16 (1) does not cover disputes relating to transfer of an usufructuary right in immovable property (judgment of 14 December 1977 in Sanders v. Van der Putte, see Chapter VI). The Court held that Article 16 (1) must not be interpreted as including an agreement to rent under a usufructuary lease a retail business carried on in immovable property rented from a third person by the lessor. However, departing from the intentions of the authors of the 1968 Convention, the Court of Justice recently ruled that the exclusive jurisdiction provided for in Article 16 (1) also applies to proceedings in respect of the payment of rent, and that this includes short-term lettings of holiday homes (judgment of 18 January 1985 in Rosier v. Rottwinkel, see Chapter VI). The Court held that this exclusive jurisdiction applies to all lettings of immovable property, even for short term and even where they relate only to the use and occupation a holiday home and that this jurisdiction covers all disputes concerning the obligations of the landlord or the tenant under a tenancy, in particular those concerning the existence of tenancies or the interpretation of the terms thereof, their duration, the giving up of possession to the landlord, the repairing of damage caused by the tenant or the recovery of rent and of incidental charges for the consumption of water, gas and electricity. This decision seems at least partially to be in contradiction with what, according to the Jenard and Schlosser reports, was the intention of those who drafted the Brussels Convention. 51. Having regard especially to the ruling given by the Court of Justice in the case of Rosier v. Rottwinkel the EFTA Member States insisted on the inclusion of a special provision concerning short-term tenancies of immovable property in the Lugano Convention. As an alternative, these States put forward the idea of excluding tenancies totally from the scope of the Convention or particularly from Article 16. The working party agreed that it was inappropriate to exclude tenancies altogether from the scope of the Convention, in view of the importance of this matter. As to the proposal for excluding tenancies from Article 16 especially, the delegations of the Community Member States found such a solution totally unacceptable as the normal jurisdiction rules of the Convention would have been applicable to tenancies of immovable property, which was alien to the whole philosophy existing in this respect at least in the Community States. Thus the working party decided to include in Article 16 (1) a new subparagraph (b) containing a special provision concerning short-term tenancies. 52. The result of this change is that, where tenancies are concerned, there will be two exclusive jurisdictions, which might be described as alternative exclusive jurisdictions. Under subparagraph (a), the courts of the Contracting State in which the immovable property is situated will always have jurisdiction without restriction. However, under subparagraph (b), in proceedings which have as their object tenancies of immovable property concluded for temporary private use for a maximum period of six consecutive months which covers particularly holiday lettings the plaintiff may also apply to the courts of the Contracting State in which the defendant is domiciled. This option is open to him only if the tenant (and not the owner) is a natural person and if, in addition, neither party is domiciled in the Contracting State in which the property is situated. Legal persons holding tenancies were excluded since they are generally engaged in co~mercial transactions. Furthermore, where one of the parties is domiciled in the Contracting State in which the property situated, it was considered appropriate to retain the rule in Article 16 (1) which lays down the principle of the jurisdiction of the courts of that State. 53. Article 16 (1) (b) did, however, create serious political difficulties for certain Community Member States. In order to overcome these difficulties, the working party agreed that this provision be accompanied by the possibility of a reservation. By means of this, any Contracting State may declare that it will neither recognize nor enforce a judgment in respect of a case concerning tenancies of immovable property, if the immovable property concerned is situated on its territory even if the tenancy is such as referred to in Article 16 paragraph (b) and the jurisdiction of the court which has given the judgment has been based on the domicile of the defendant. This reservation is given in Article Ib of Protocol No l. This possibility of a reservation only concerns such cases in which the immovable property is situated ...
It was however understood that any State which wishes to use this reservation may make a narrower reservation than that provided for. Thus a State may, for instance, declare that the reservation limited to the case where the landlord is a legal person. 54. Article 16 (1) applies only if the property is situated in the territory of a Contracting State. The text is sufficiently explicit on this point. If the property is situated in the territory of a third State, the other provisions of the Convention apply, e.g. Article 2 if the defendant is domiciled in the territory of a Contracting State, and Article 4 if he is domiciled in the territory of a third State, etc.
55. I. Paragraph 1 of this Article essentially concerns the formal requirements for agreements conferring jurisdiction. The question of whether an agreement on jurisdiction has been validly entered into (e. lack of due consent) is to be regulated by the applicable law (judgment of the Court of Justice of 11 November 1986 in Iveco Fiat v. Van Hool, see Chapter VI). As to whether such an agreement can be validly entered into in specific matters it should be pointed out that the Court of Justice (judgment of 13 November 1979 in Sanicentral v. Collin, see Chapter VI) ruled that in matters governed by the Convention national procedural law was set aside in favour of the Convention s provisions. 56. According to the original version of Article 17 of the Brussels Convention, an agreement conferring jurisdiction must be in writing or evidenced in writing. In the light of the interpretation of the Court of Justice of the European Communities in some of its first judgments concerning Article 17 of the Brussels Convention (see Chapter VI), the working party preparing the 1978 Convention on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Brussels Convention and to the Protocol of 3 June 1971 on its interpretation by the Court of Justice was of the opinion that these formal requirements did not cater adequately for the customs and needs of international trade. Therefore a relaxation of these formal requirements as far as agreements on jurisdiction in international trade or commerce are concerned was felt necessary. According to Article 17 of the Brussels Convention as amended by the 1978 Accession Convention, an agreement conferring jurisdiction may in international trade or commerce be in a form which accords with practices in that trade or commerce of which the parties are or ought to have been aware. 57. During the negotiations on the Lugano Convention, the EFTA Member States, however, felt that this provision was too vague and might create legal uncertainty. Those States feared that Article 17 (1), as far as agreements on jurisdiction in international commerce or trade are concerned, might make it possible to consider an agreement established by the mere fact that no protest has been launched against a jurisdiction clause in certain unilateral statements by one party, for instance in an invoice or in terms of trade presented as a confirmation of the contract. Therefore the EFTA Member States proposed the following amendment of the second sentence of Article 17 (1): Such an agreement conferring jurisdiction shall be either (a) in writing (or clearly evidenced in writing) including an exchange of letters, telegrams and telexes (or other modern means of technical communications), or (b) included or incorporated by reference in a bill of lading or a similar transport document. The representatives of the Community Member States found however that this proposal would not only lead to an excessive amount of rigidity but would also be in contradiction with the rulings of the Court of Justice of the European Communities according to which it should be possible to take into account particular practices judgment of 14 December 1976 in Segoura v. Bonakdarian, see Chapter VI).
First, according to Article 17 (1) (b) of the Lugano Convention, an agreement conferring jurisdiction fulfils the formal requirements if it is in a form that accords with practices which the parties have established between themselves. This is not provided for in the wording of Article 17 of the Brussels Convention. In the light of the case law of the Court of Justice of the European Communities (see Chapter VI), this seems, however, to be the understanding of Article 17 of the Brussels Convention. The working party was of the opinion that this understanding should be explicitly reflected in the text of the Lugano Convention. Secondly, in international trade or commerce an agreement conferring jurisdiction fulfils the formal requirements if it is in a form that accords with a usage of which the parties are or ought to have been aware and which in such trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned. Thus, even in international trade or commerce, it is not sufficient that an agreement conferring jurisdiction be in a form which accords with practices (or a usage) in such trade or commerce of which the parties are or ought to have been aware. It is moreover required that the usage shall be, on the one hand, widely known in international trade or commerce and, on the other, regularly observed by parties to contracts of the type involved in the particular trade or commerce concerned. In particular, having regard to the words ' internationale Handelsbräuche' and ' usages' which are used in the German and French versions of Article 17 of the Brussels Convention, it seems that there are at least no major differences in substance between the provisions concerned in the two Conventions. In order to ensure a uniform interpretation it was, however, felt by the EFTA States that the present wording of paragraph 1 (c) was necessary in the Lugano Convention. 59. Article 17 of the Brussels Convention has given rise to a considerable number of judgments by the Court of Justice of the European Communities. In this connection, readers are referred to Chapter VI.2, point 12 ' Article 17' , paragraphs 1 to 12. However, it should be mentioned in this context that the Court of Justice has ruled that an agreement between the parties with regard to the place of performance, which constitutes a ground of jurisdiction pursuant to Article 5 (1), is sufficient to confer jurisdiction without being subject to the formal requirements laid down in Article 17 for prorogation of jurisdiction (judgment of 17 January 1980 in Zelger v. Salinitri, see Chapter VI). 60. 2. Article 17 (5) was proposed by the EFTA Member States. It provides that in matters relating to contracts of employment an agreement conferring jurisdiction within the meaning of the first paragraph shall have legal force only if it is entered into after the dispute has arisen. The background of this provision is the same as that for Article 5 (1), i. the protection of the employee, who from the socioeconomic point of view is regarded as the weaker in the contractual relationship. It seemed desirable that it should not be possible for the protection intended to be given to employees by virtue of Article 5 (1) to be taken away by prorogation agreements entered into before the dispute arose. As in the case of Article 5 (I) this provision applies only to individual employment relationships and not to collective agreements concluded between employers and employees' representatives. 61. During the Diplomatic Conference, stress was laid on the difference between the Brussels and Lugano Conventions as regards agreements conferring jurisdiction with respect to contracts of employment and a number of problems were highlighted. The example given was that of an agreement conferring jurisdiction which, at the time, was concluded between parties domiciled in the territory of two States which had ratified the Brussels Convention. Under that Convention, prorogation of jurisdiction by agreement may, as regards a contract of employment, be effected before the dispute arises. What happens if, at a later stage, one of the parties transfers his domicile to an EFTA Member State? What would be the attitude either of the court in a Community Member State to which a dispute is referred on the basis of that agreement conferring jurisdiction, or of a court in an EFTA Member State to which a dispute is referred despite the agreement? The question was left open and, although the solutions adopted by the Brussels and the Lugano Conventions are not without their merits, might possibly be resolved in the Convention on the accession ....
62. Discrepancies have been noted between the various versions of the Brussels Convention. A number of versions, for example the English and the German ones, provide that the rule whereby the court of the Contracting State has jurisdiction does not apply where appearance was entered 'solely' to contest the jurisdiction, which restriction is not included in the French text. However, no amendment was made to the various texts in view of a judgment given by the Court of Justice to the effect that Article 18 applies under certain conditions where the defendant contests the court's jurisdiction and also makes submissions on the substance of the action (judgment of 24 June 1981 in Elefanten Schuh v. Jacqmain, see Chapter VI).
63. Although these Articles correspond to Articles 19 and 20 of the Brussels Convention, Article 20 requires some comment, given that it is a particularly important provision where the defendant fails to enter an appearance (see Jenard report, page 39). A judge required to apply the Lugano Convention must declare of his own motion that he has no jurisdiction unless his jurisdiction is derived from the provisions of Sections 2 to 6 of Title II of that Convention. For example, a French judge before whom person domiciled in Norway is required to appear on the basis of Article 14 of the Code Civil (jurisdiction derived from the French nationality of the applicant) must declare of his own motion that he has no jurisdiction if the defendant fails to enter an appearance. Likewise, the judge must declare of his own motion that he has no jurisdiction unless his jurisdiction is derived from the provisions of an international convention governing jurisdiction in particular matters, as stipulated in Article 57 (2). In this connection reference should be made to the comments on Article 57. It should be noted that almost all the Community and EFTA Member States are currently parties to the Hague Convention of 15 November 1965 on the service abroad of judicial and extra-judicial documents in civil or commercial matters since, at 1 June 1988, the sole exceptions are Austria, Ireland, Iceland and Switzerland.
64. Only this Article has been amended in Section 8. Article 21 of the Brussels Convention provides that in case of a lis alibi pendens. any court other than the court first seised must of its own motion decline jurisdiction in favour of that court and may stay its proceedings if the jurisdiction of the other court is contested. The representatives of the EFTA Member States thought this solution was too radical. They observed that an action often had to brought in order to comply with a time limit or stop further time from running, and that opinions differed as to whether a time limit had been complied with where an action had been brought before a court lacking jurisdiction internationally. Thus, in their view, if an action was brought before a judge who would have had jurisdiction, but was not the first to be seised, that judge would of his own motion have to decline jurisdiction in favour of the court first seised. However, that court might perhaps decide that it did not have jurisdiction. In that case, both actions would have been dismissed with the result that the time limits might have run out and the action be time barred. These remarks have been taken into consideration. Article 21 has been amended so that the court other than the court first seised will of its own motion stay its proceedings until the jurisdiction of the other court has been established. A court other than the one first seised will not decline jurisdiction in favour of the court first seised until the jurisdiction of the latter has been established (see Schlosser report, paragraph 176). The Court of Justice has ruled that the term lis pendens used in Article 21 covers a case where a party brings an action before a court in a Contracting State for a declaration that an international sales contract is inoperative or for the termination thereof whilst an action by the other party to secure performance of the said contract is pending before a court in another Contracting State (judgment of 8 December 1987 in Gubisch v. Palumbo). 65. Article 24 Provisional, including protective, measures As this provision has not been amended, reference should be made to the Jenard report, page 42 and the Schlosser report, paragraph 183.
66. Article 27 (5) refers only to cases where the judgment recognition of which is requested is irreconcilable in the State addressed with an earlier judgment given in a non- Contracting State and recognizable in the State addressed. The case of a judgment given in a Contracting State which is irreconcilable with an earlier judgment given in another Contracting State and recognizable in the State addressed is not specifically dealt with, nor is it covered in the Brussels Convention. It was felt that such cases would be extremely exceptional given the mechanisms provided for in Title II and in particular Articles 21 and 22 with a view to avoiding contradictory decisions. Should such a case, however, arise it would be for the court in the State addressed to apply its rules of procedure and the general principles arising out of the Convention and to refuse to recognize and enforce the judgment given after the first judgment had been recognized. It might, indeed, be argued that since it has already been recognized in the State addressed, the first judgment should produce the same effects there as . a judgment given by the courts in that State, the situation covered by Article 27 (3). 67. Two grounds for refusal have been added. They concern the cases provided in Articles 54B and 57; reference should be made to the comments on those Articles.
68. Under the first paragraph of this Article in the Brussels Convention, 'A judgment given in a Contracting State and enforceable in that State shall be enforced in another Contracting State when, on the application of any interested party, the order for its enforcement has been issued there’. Since United Kingdom law does not have the exequatur system for foreign judgments, paragraph 2 of this Article provides that such a judgment shall be enforced in England and Wales, in Scotland, or in Northern Ireland where, on the application of any interested party, it has been registered for enforcement in that part of the United Kingdom (see Schlosser report paragraphs 208 et seq). 69. In Switzerland, a distinction must be drawn between judgments ordering the payment of a sum of money and those ordering performance other than the payment of money. The enforcement of judgments ordering the payment of a sum money is governed by Articles 69 et seq. of the federal law on suit for bankruptcy debts (LP) Articles 80 and 81 LP require, for the purposes of enforcement, the production of an enforceable judgment in a civil case. In the case of foreign judgments, involving an order for payment of money, an order for its enforcement is necessary only if the judgment was given in a State which has not concluded treaty on recognition and enforcement with Switzerland. If such a treaty exists, a foreign judgment involving an order for payment of money is enforceable in the same way as a Swiss judgment. The only objections which can be raised are those provided for in the convention in question (third paragraph of Article 81 LP). A foreign judgment ordering performance other than the payment of money is enforced under cantonal law, even if there is a treaty with the State concerned. In general, the cantonal rules governing orders for enforcement are then applicable. With the convention in mind, Switzerland declared that it intends to continue to grant the preferential treatment it gives to judgments involving an order for payment of money. The working party agreed that the wording of Article 31 (1) of the Brussels Convention had been chosen to comply with the legal system of the original six Member States of the European Communities and acknowledged that this wording could create problems for States with different enforcement procedures than those existing in these six States. Therefore and in order to take account, in ...
70. The formal adjustments to Articles 32 to 45 relate exclusively to the courts having jurisdiction and possible types of appeal against their decisions. For applications for a declaration of enforceability of judgments only one court has been given jurisdiction in Iceland and in Sweden. In Sweden, this is due to the practice according to which the ' Svea hovratt' is competent to declare enforceable foreign judgments and arbitral awards. If the judgment debtor wishes to argue against the authorization of enforcement, he must lodge his application to set the enforcement order aside not with the higher court, as in most other Contracting States, but as in Austria, Belgium, Ireland, Italy, the Netherlands and the United Kingdom, with the same court as declared the judgment enforceable. The proceedings will take the form of an ordinary contentious civil action. This applies also regarding the appeal which the applicant may lodge if his application is refused.
71. Since no amendments have been made to the provisions of this section, reference should be made to the Jenard report (pp. 54 to 56) and the Schlosser report (paragraph 225).
Article 50 Authentic instruments 72. The representatives of the EFTA Member States were able to agree to the text of Article 50 although the concept of an authentic instrument is contained only in Austria s legislation. However, they did request that the report should specify the conditions which had to be fulfilled by an authentic instrument in order to be regarded as authentic within the meaning of Article 50 (see Schlosser report, paragraph 226). The conditions are as follows: - the authenticity of the instrument should have been established by
a public authority, Thus, for example, settlements occurring outside courts which are known in Danish law and enforceable under that law (udenretlig forlig) do not fall under Article 50. Likewise, commercial bills and cheques are not covered by Article 50. As in Article 31 (see point 69), the phrase ' have an order for its enforcement issued there' has been replaced by the words ' be declared enforceable It should be noted that the application of Article 50 of the Brussels Convention appears to be relatively uncommon.
Article 52 Domicile 73. The third paragraph of Article 52 of the Brussels Convention relates to persons whose domicile depends on that of another person or on the seat of an authority. It adopts a common rule of conflicts based on the personal status of the person making the application, in the case in point, the national law of the person. The EFTA Member States challenged this rule particularly in view of the developments regarding the domicile of married women that have taken place since the 1968 Convention was drawn up. It was decided to delete the third paragraph. It follows that in order to determine whether the defendant is a minor or legally incapacitated, the judge will apply the law specified by the conflicts rules applied in his country. In the affirmative case, either the first paragraph or the second paragraph of Article 52, depending on the case, will be applied to determine the legal domicile. Thus, to determine whether a minor is domiciled in the territory of the State whose courts are seised of a matter, the judge will apply his internal law. end of page Official Journal of the European Communities No. C 189/81 When the minor is domiciled in the territory of the State whose courts are seised of the matter, the judge will, in order to determine whether the minor is domiciled in another Contracting State, apply the law of that State.
74. The adjustments made to this Article are only technical ones, given that the procedures for entry into force of the two Conventions are not identical, but that no substantive changes have been made (see Jenard report, pp. 57 and 58 and Schlosser report paragraphs 228 to 235).
75. Article 54a corresponds to Article 36 of the 1978 Accession Convention (see Schlosser report, paragraphs 121 et seq). Paragraph 5 of this Article defines the expression maritime claim . A maritime claim, according to this definition, is inter alia a claim arising out of dock charges and dues (point (I)). The German version of this Convention as well as of the Brussels Convention uses the word ' Hafenabgaben' for dock charges and dues. This should however not mislead anybody into thinking that port charges dues or tolls or similar public fees are regarded as dock charges or dues for the purposes of this Article.
76. Reference should be made to the comments in Chapter II.
77. Article 55 lists conventions concluded between the EFTA Member States and conventions concluded between EFTA Member States and Community Member States (see Annex II). Conventions between Community Member States have not been included since they are already covered by Article 55 of the Brussels Convention and where Spain and Portugal are concerned, will be covered by the Conventions on Accession to the Brussels Convention. 78. Article 56 has not been amended. 79. It may be said that the problem of conflicts of law together with the problem of conflicts of jurisdiction, are the chief concern of private international law. However, the problem of conflicts of convention also requires attention, since nowadays, with so many international organizations drawing up international conventions, the number which deal directly or indirectly with the same subject is considerable. As for solving the problem, several systems could perfectly well be contemplated under international law. Some are based on the principle specialia generalibus derogant others on the rule of antecedence. Lastly, yet others advocate taking the effectiveness criterion into consideration. For example, where a judgment is to be recognized and enforced, the conventions which exist might be considered and the one selected which, translating the aim sought by the authors of the conventions gives the party to whom judgment has been delivered in one country the best possibility of getting it recognized and enforced in another. As noted by Professor Schlosser in his report (paragraphs 238 to 246), this question was dealt with at length during the negotiations on the 1978 Accession Convention. The solution was enshrined in Article 25 of that Convention. 80. The problem was taken up again during negotiation of the Lugano Convention. The same basic principle has been adopted in both Conventions: namely, that the Convention will not affect any conventions to which the Contracting States are or will be parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments (6). The arrangements adopted are set out in Article 57. They may be examined on two levels: firstly, the ...
81. Regarding jurisdiction, the two Conventions, i.e. the 1968 Convention as amended by the 1978 Convention, and the Lugano Convention, both contain similar provisions. Article 57 (2) of the Lugano Convention, like Article 25 (2) of the 1978 Accession Convention provides that the Convention will not prevent a court of a Contracting State which is party to a convention relating to a particular matter from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in a State party to the Lugano Convention, but not to the convention on the particular matter. In this respect, Article 57 provides another exception to Article 2, which lays down the principle that the defendant must be sued in the courts of his domicile. Take the following example: The International Convention for the unification of certain rules relating to international carriage by air, signed at Warsaw on 12 October 1929, has not been ratified by Luxembourg. The carrier is domiciled in Luxembourg, but the Warsaw Convention provides that the court with jurisdiction is that of the place of 'destination ' (a court not adopted such by the Lugano Convention, nor, for that matter, by the Brussels Convention). Article 57 enables the applicant to sue the Luxembourg carrier in the court of a State party to the Lugano Convention and to the Warsaw Convention, since that court is allowed under that Convention. Exactly the same arrangement is adopted in the Brussels Convention. It is the special convention which prevails, in the interests, as stated by Professor Schlosser in his report on the 1978 Convention (paragraph 240 (b)), of ' simplicity and clarity of the legal position' and , let us add, so as not to fail to recognize the rights that nationals of third States might hold under the special convention. However, the court seised will have to apply Article 20 of the Lugano Convention in order to ensure respect for the rights of the defence. In the case in point, if the defendant fails to enter an appearance, the judge must of his own motion examine whether he does indeed have jurisdiction under the special convention and whether the defendant has been sued properly. and in sufficient time to enable him to arrange his defence. 82. Regarding recognition and enforcement. the arrangements in the Brussels Convention (as adjusted on this point by the 1978 Convention) and the Lugano Convention are not the same. Unlike the Brussels Convention, the Lugano Convention provides that recognition or enforcement may be refused if the State addressed is not a contracting party to the special convention and if the person against whom recognition or enforcement is sought is domiciled in that State. The reason for this difference is that the Brussels Convention applies between Member States of the same Community, while the Lugano Convention is not based on a similar principle. The EFTA Member States therefore requested that the courts of the State addressed should be able to refuse recognition or enforcement if the person against whom they were sought was domiciled in that State, on the grounds that such a guarantee should be granted the defendant, particularly for fear that the special convention might contain grounds for jurisdiction considered as exorbitant by the State addressed in accordance with the law of that State. It must be emphasized that this ground for refusal is an exception, given that paragraph 3 establishes the principle of recognition and enforcement. It does not therefore apply automatically, but is left to the discretion of the judge in the State addressed under the law of that State. It goes without saying that a judgment delivered in an EFTA Member State on the basis of a rule of jurisdiction provided for in a special convention might be refused recognition or enforcement, under the same terms, in a Community Member State. 83. In the opinion of the rapporteurs, although the question is not expressly dealt with in the text of Article 57, if a court in a Contracting State having jurisdiction under a special convention is seised first, the rules on lis pendens and related actions in Articles 21 and 22 are applicable. Hence, for instance, in the case of lis pendens, the courts of another Contracting State would, even though that ...
84. For the purposes of the Lugano Convention, Community acts are to be treated in the same way as special conventions. Reference should be made here to the comments on Protocol 3.
85. Although final provisions are usually fairly standard, those in the present Convention are somewhat different and therefore require quite detailed comment. This is a Convention which first and foremost requires the Contracting States to have extremely similar thinking on constitutional and economic matters (see Chapter 1.2, point 3). Moreover, the Convention was negotiated between States all of which belong to European organizations, either the European Communities or EFT. The drafters of the Convention had to deal with several questions. The first was the general one of deciding which States could become parties to the Convention. Other more specific questions were: What was the position of those States which, after the opening of the Convention for signature became members either of the European Communities or EFTA? What was the position of third States, i.e. countries which did not belong to either of these two organizations but wished to become parties to the Convention? What was the territorial application of the Convention? What, finally, was the position if one of the territories for whose international relations a Contracting State was responsible were to become independent? Each of these questions was examined in detail and a series of solutions was found (1).
86. Article 60 deals with this question, while Articles 61 and 62 define the relevant procedures involving either signature and ratification (Article 61) or accession (Article 62). The following may in any case become parties to the Convention: 1. States which, at the date of the opening of the Convention for signature, are members either of the European Communities or of EFTA; 2. States which, after that date, become members of one or other of the two organizations. In view of the origins of the Convention, this solution was virtually self-evident since neither of the two organizations could remain fixed in time; 3. third States. This was undoubtedly the most delicate question. There are, in addition to Member States of the two organizations, States which share the same fundamental conceptions even though they are not European. As shall see in the comments on Article 62, provision has been made for fairly strict conditions for the accession of such States to the Convention. In brief, although the Convention reflects a desire for openness, its approach is clearly a cautious one. 87. According to Article 61, the Lugano Convention shall be opened for signature by those States which were members of one or other of the two organizations on the date 16 September 1988 which it was opened for signature. This was agreed because it was at the diplomatic conference that the final text was drawn up and adopted by the persons empowered to do so by their States. On that date, the Convention was signed by 10 States: for the Community Member States: Belgium, Denmark, Greece, Italy, Luxembourg and Portugal, and for the EFTA Member States: Iceland, Norway, Sweden and Switzerland. The Convention was subsequently signed by Finland on 30 November 1988 and by the Netherlands on 7 February 1989. The Convention may be signed at any subsequent time by the other six States (Federal Republic of Germany, Spain, France, Ireland and the United Kingdom on the one hand and Austria on the other). 88. Pursuant to Article 61 (3), the Convention shall enter into force when it has been ratified by one ...
Since this is a multilateral Convention, such a method of entry into force might seem somewhat surprising. The intention was deliberately to speed up entry into force of the Lugano Convention. For persons domiciled in a Member State of EFTA, the Convention offers a number of guarantees when they are sued in the courts of a Community Member State. Thus, for example, Article 4 of the Brussels Convention will cease to apply to such persons. Moreover, persons domiciled in a Community Member State will not be able to be sued in the courts of a Member State of EFTA on the basis of exorbitant rules of jurisdiction. Furthermore, ratification procedures can be quite slow and this would delay the entry into force of a multilateral Convention where a certain number of ratifications are required. Examples of this are the 1968 Convention, which only entered into force in 1973, and the 1978 Accession Convention, which only entered into force between the six original Member States and Denmark on 1 October 1986, the United Kingdom on I January 1987 and Ireland on I June 1988. The Convention on the accession of Greece of 25 October 1982 entered into force on 1 April 1989 with regard to Belgium, Denmark, the Federal Republic of Germany, Greece, France, Ireland, Italy, Luxembourg and the Netherlands and on 1 October 1989 with regard to the United Kingdom. In brief, it is sufficient therefore for one Community Member State and one EFTA Member State to ratify the Lugano Convention in order to bring it into force between those two States as from the first day of the third month following the deposit of the second instrument of ratification.
New Member States 89. Those States which, after the opening of the Convention for signature, become members of either the Communities or EFTA may accede to the Convention. Under Article 62 (4), a Contracting State may, however, consider that it is not bound by such an accession. This clause was adopted in view of the fact that a Member State of one of the two organizations has no say in the accession of new States to the other organization and, for reasons of its own, might feel it cannot have ties with that new State which are as close as those created by the Lugano Convention. This is a safeguard clause which also applies to third States. Third States 90. A cautious attitude to such States is reflected in specific conditions. Firstly, their wish to accede to the Lugano Convention must be ' sponsored' by a Contracting State i.e. a State which has either ratified the Convention or acceded to it, which will inform the depositary State of the third State s intention. Secondly, the third State will have to inform the depositary State of the contents of any declarations it intends to make in order to apply the Convention and of any details it would like to furnish in order to apply Protocol No 1 , and the depositary State will then communicate that information to the other signatory States and States which have acceded. Negotiations may be held on this subject: they may not, in any circumstances, call into question the provisions of the Lugano Convention itself. The device envisaged therefore differs from that in Article 63 of the Brussels Convention which stipulates that a new Member State of the European Economic Community may ask for necessary adjustments' to be the subject of a special convention. This procedure, which was followed notably when drawing up the 1978 Accession Convention, is not therefore applicable in the present case. Thirdly, the States referred to in Article 60 (a) and (b) must, when they have thus been informed of the declarations and details envisaged by the State applying for accession decide unanimously whether that State should be invited to accede. The States referred to in Article 60 (a) and (b) are either those States which were members of one or other of the two organizations on the date on which the Convention was opened for signature e. 16 September 1988, or States which became members of one or other of the two organizations after that date. The agreement of any third States which have acceded to the Convention is not therefore required. This was agreed because the Convention is essentially a Convention between Community and EFTA Member States and consequently it did not seem advisable to give a third State which has become a party to the Convention ...
Fourthly, once the decision has been taken to look at the application of a third State, negotiations can be started, either at that State s request or at the request of other States concerned, regarding the details it intends to furnish for the purposes of Protocol No I. Finally, it should be noted that a last safeguard clause allows any Contracting State (pursuant to paragraph 4) to refuse application of the Convention in its relations with a third State which has acceded to the Convention. This system, which is based on various Conventions drawn up pursuant to The Hague Conference on Private International Law, takes account of the (possibly political) problems which might arise between a Contracting State and a third State. 91. Article 60 of the 1968 Convention and Article 27 of the 1978 Convention deal with the territorial application of those Conventions, limiting it to the European territory of the Contracting States, subject to clearly defined exceptions. 92. In the negotiations leading up to the Lugano Convention it was found that application of the Convention to non-European territories forming an integral part of the national territory of Contracting States or for whose international relations the latter assume responsibility needed to be envisaged on a broader basis. A number of these territories are frequently important financial centres having close relations with Contracting States. Given the speed with which means of communication are developing, assets could be transferred to such territories and if the Convention could not be applied to them, this would create a situation which would defeat the desired aim, since judgments given in a State which was party to the Convention could not be enforced in such territories under these provisions. 93. It was agreed at the diplomatic conference that it would be better if, like many other international conventions, the Convention contained no provision on territorial application. The limitation to European territories laid down in principle in the 1968 and 1978 Conventions is thus not included in the Lugano Convention. 94. However, it was clear from the negotiations that in the absence of any specific clause the Lugano Convention applies automatically to: - the entire territory of the Kingdom of Spain 95. The situation is slightly different where Denmark and the Netherlands are concerned. Denmark: With a view to ratification of the Lugano Convention, Denmark made known its wish to reserve the right to extend the scope of the Convention at a later stage to the Faroe Islands and Greenland which are part of the Kingdom of Denmark but enjoy autonomy in their internal affairs (Law No 137 of 23 March 1948 for the Faroe Islands and No 577 of 29 November 1978 for Greenland) and which must be consulted on draft laws affecting their territories. In the light of the outcome of such consultations, Denmark will be able to state, in a declaration to be addressed at any time to the depositary State, what the situation is with respect to the application of the Convention to these territories. The Netherlands: Since 1 January 1986, the Kingdom of the Netherlands consists of three countries, namely: the Netherlands, the Netherlands Antilles (the islands of Bonaire, Curacao, Sint Maarten (Netherlands part of the island), Sint Eustatius and Saba) and Aruba. Following the necessary consultations, the Netherlands, just like Denmark in the case of the Faroe Islands and Greenland, will be able to state in a declaration which may be addressed at any time to the depositary State, what the situation is with respect to the application of the Convention to the Netherlands Antilles and to Aruba. 96. On the other hand, other Contracting States (the United Kingdom and Portugal in the case of Macao and Timor-Leste) comprise entities which are separate from the metropolitan territory. International agreements cannot be concluded on behalf of these entities other than by the United Kingdom and Portugal. United Kingdom: During the negotiations, the United Kingdom, like the other States, provided a full list of non- European .... end of page No. C 189/86 Official Journal of the European Communities
This list of non- European territories is included in the acts of the diplomatic conference. The United Kingdom also gave an indication of the territories to which it might consider making the Convention actually apply. It was agreed that provision of such information did not imply any binding obligation that other extensions could not be made, but the information provided was intended to assist the other States in assessing the practical consequences for them of an extension of the application of the Convention. For this purpose, the United Kingdom indicated that, of its non- European territories, Anguilla, Bermuda, British Virgin Islands, Montserrat, Turks and Caicos Islands and Hong Kong were ones to which there might be a real prospect of the Convention being extended. Portugal: The question of extending the Convention to Macao and Timor- Leste has not yet been settled. 97. The question of what would happen regarding application of the Lugano Convention to territories gaining independence was also considered. The Convention contains no provisions on this subject. Such a clause is not usual in international Conventions. On the other hand, this is a familiar problem in public international law and it is generally accepted that, if a country gains independence any Contracting State is free to decide whether or not it is bound by the Convention in question in respect of the new State and vice versa (on this point, see Schlosser report, paragraph 254). In any event, a State which has become independent may, if it wishes to become a party to the Lugano Convention make use of the accession procedure provided for third States in Article 62 of the Lugano Convention (see point 90).
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