| PROCAR REPORT 2007 Explanatory report on the Lugano Convention 2007 (2009/C 319) by Professor Fausto Pocar
1. The Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, signed by the contracting parties in Lugano on 30 October 2007 (‘the Lugano Convention’ or ‘the Convention’), is concluded between the European Community, the Kingdom of Denmark [1], the Republic of Iceland, the Kingdom of Norway and the Swiss Confederation. It replaces the Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters of 16 September 1988 (‘the Lugano Convention of 1988’ or ‘the 1988 Convention’), which was concluded between the Member States of the European Community and certain Member States of the European Free Trade Association (EFTA) [2]. The Lugano Convention of 1988 was a ‘parallel convention’ to the Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (‘the Brussels Convention’), which was concluded between the six original Member States of the European Community in application of Article 220 (now 293) of the EC Treaty, and was amended several times thereafter to extend its application to new States that had acceded to the Community [3] . After 1988, several States that were parties to the Lugano Convention acceded to the European Community, and became parties to the Brussels Convention, so that they were now participating in the Lugano Convention in a different capacity [4] . In 1997, when the work of revising the Lugano Convention began, the contracting parties were the fifteen States that were members of the European Community at that time and Iceland, Norway and Switzerland. 2. In 1997 the Council of the European Union initiated a simultaneous revision of the Brussels Convention and of the Lugano Convention of 1988, with the aim of fully harmonising the two Conventions and incorporating changes to resolve ...
End of page Official Journal of the European Union C 319/1 (23.12.2009) 3. At a meeting on 4 and 5 December 1997, the Council of the European Union set up an ad hoc working party of experts, composed of representatives of the Member States and representatives of the EFTA States that were parties to the Lugano Convention (Switzerland, Norway and Iceland); the working party was to examine amendments to the Brussels and Lugano Conventions that would be proposed by the Member States and by the European Commission, taking into account the case-law of the Court of Justice and certain decisions made by national courts referred to in Protocol 2 to the Lugano Convention of 1988, with the aim of drawing up a draft convention that would improve on the current texts and harmonise them. The working party’s terms of reference indicated the priorities to be followed, namely examination of the practical aspects of the two Conventions, modernisation of a number of provisions, correction of certain technical aspects, alignment with the Rome Convention of 19 June 1980, and finally certain aspects specific to the Lugano Convention that were regulated differently in the Brussels Convention; other proposals for revision could be considered once the articles given priority had been examined. The ad hoc working party, whose terms of reference were founded on Article 220 of the EC Treaty, conducted its work on the basis of proposals put forward by the Commission and of working papers submitted to it by the Council and by the State delegations, taking full account of the Court of Justice’s case-law and of the opinions expressed in legal literature and by academic associations [2]. The working party held nine meetings, in Brussels; the meetings were chaired by the Finnish delegate Gustaf Möller, with the Swiss delegate Monique Jametti Greiner as deputy chair, while the Italian delegate Fausto Pocar acted as rapporteur. The European Commission was fully associated with the working party’s proceedings [3] . At the last meeting, which took place from 19 to 23 April 1999, the working party reached general agreement on a revised text for the two Conventions, Brussels and Lugano [4] . 4. On 1 May 1999, however, the Amsterdam Treaty entered into force; this gave the European Community new powers with regard to judicial cooperation in civil matters, and prevented the draft proposed by the ad hoc working party from becoming a new version of the Brussels Convention and, in parallel, of a new Lugano Convention. The draft was ‘frozen’ by the Council on 12 May 1999, pending presentation by the Commission, under Article 61 of the EC Treaty, of a draft Community act which would replace the Brussels Convention in the Community framework. At a meeting on 27 and 28 May 1999 the Council gave approval in principle to the agreement reached by the ad hoc working party. 5. On 14 July 1999, the Commission submitted to the Council a proposal for a Community regulation broadly based on the text drawn up by the ad hoc working party, with the adjustments made necessary by the new legal form that the instrument was to take, and with new provisions regarding consumers [5] . This proposal was examined by the Council’s committee for civil law. On 22 December 2000 the Council approved the proposal as Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (‘the Brussels I Regulation’) [6] . The Regulation, subsequently amended to include the new States joining the European Community, came into force on 1 March 2002, and replaced the Brussels Convention in relations between the Member States of the Community, with the exception of Denmark, which under Article 69 of the EC Treaty does not participate in acts adopted on the basis of Title IV. On 19 October 2005, in Brussels, the Community signed an Agreement with Denmark which provides for the application of the provisions of the Brussels I Regulation and their subsequent amendments to the relations between the Community and Denmark [7] . 6. The new powers conferred on the European Community by the Amsterdam Treaty gave rise to the question whether the new Lugano Convention should be negotiated and concluded by ...
End of page Official Journal of the European Union C 319/2 (23.12.2009) ... the Community alone or by the Community together with the Member States. On 25 March 2002 the Commission submitted a recommendation for a Council decision authorising the Commission to open negotiations for the adoption of a convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, between the Community and Denmark, of the one part, and Iceland, Norway, Switzerland and Poland (which had not yet acceded to the Community), of the other, to replace the Lugano Convention of 16 September 1988 [1]. Meeting on 14 and 15 October 2002, the Council authorised the Commission to begin negotiations for the adoption of a new Lugano Convention, but left open the question whether the conclusion of the new convention fell within the Community’s exclusive competence, or within the shared competence of the Community and the Member States. Attached to the Council’s decision were negotiating directives and a joint statement by the Council, the Commission and the Member States to the effect that the Council’s decision did not have any legal implications for the question of the respective responsibilities of the Community and the Member States. On that question the Council agreed to ask for the Court of Justice’s opinion in accordance with Article 300(6) of the EC Treaty. 7. On 7 March 2003, the Council submitted a request for an opinion to the Court of Justice, describing the purpose of the prospective agreement as being to align as far as possible the substantive provisions of the new agreement on those of the Brussels I Regulation, and formulating the following question: ‘Does the conclusion of the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, as described in paragraphs 8 to 12 of this memorandum, fall entirely within the sphere of exclusive competence of the Community or within the sphere of shared competence of the Community and the Member States?’ On 7 February 2006, the full Court delivered its opinion as follows: ‘The conclusion of the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, as described in paragraphs 8 to 12 of the request for an opinion, reproduced in paragraph 26 of this Opinion, falls entirely within the sphere of exclusive competence of the European Community’ [2]. 8. Following the delivery of the Court’s opinion, a diplomatic conference took place in Lugano from 10 to 12 October 2006 to finalise the new Lugano Convention, with the participation of representatives from the European Community, Denmark, Iceland, Norway and Switzerland, and various Community institutions and Member States present as observers. The meeting was chaired by the Swiss delegate Monique Jametti Greiner, with Fausto Pocar as rapporteur; it considered all of the provisions diverging from the text on which the ad hoc working party had reached agreement in 1999 – on many of which informal negotiations had already taken place in the Standing Committee set up under Article 3 of Protocol 2 to the Lugano Convention of 1988 – and formally adopted the text of a new Convention. But it was not possible to reach agreement on all of the points under discussion, and some further negotiation was required, following which the text of the new Convention was initialled in Brussels on 28 March 2007, and signed by the contracting parties in Lugano on 30 October 2007.
9. In the negotiating directives it approved at its meeting of 14 and 15 October 2002, authorising the Commission to begin negotiations for the adoption of a new Lugano Convention, the Council specified that an explanatory report should be drawn up on the revised Convention, as had been done for the Lugano Convention of 1988. The present explanatory report therefore follows on from the report that accompanied the Lugano Convention of 1988 (the ‘Jenard-Möller report’) [3] . An advantage of such an explanatory report is that, in the system of the Convention, unlike the system of which the Brussels I Regulation forms part, there is no Court of Justice to resolve uncertainties of interpretation that may arise in cases before national courts, so that it is desirable that the courts should be provided with a point of reference to clarify the meaning of the Convention and facilitate uniform application, not least in view of the possibility that other countries might accede to the Convention in future. 10. Regarding the content, the Council’s negotiating directives indicated that the report was to cover all of the matters contemplated by the Convention and by its associated protocols. During the negotiations the delegations specified that the explanatory report should comment on all of the provisions of the Convention, and should give an account of the way that negotiations had actually progressed and of the growing caselaw of the Court of Justice in relation to the parallel provisions of the Brussels Convention and the Brussels I Regulation. As has been explained, the new Lugano Convention is part of a long and complex process of development that has lasted several decades, beginning with the Brussels Convention concluded in 1968 between the six original Member States of the European Community and progressing in a series of subsequent acts, one of which is the Lugano Convention of 1988. The text of the Convention reflects this development, and many of its provisions reproduce clauses that had already appeared in previous instruments, sometimes with no change or with amendments that are only formal. Each of these instruments, with the exception of the Brussels I Regulation, is accompanied by an explanatory report that comments on the individual provisions. When a provision is ...
... not new, or when the amendments made are merely formal or linguistic in nature, it will be enough merely to refer back to the earlier explanatory reports. The present report therefore frequently refers, without repeating what was said there, to the reports on the Brussels Convention of 1968 (the ‘Jenard report’) [1], the Accession Convention of 1978 (the ‘Schlosser report’) [2], the Accession Convention of 1982 (the ‘Evrigenis- Kerameus report’) [3] , the Accession Convention of 1989 (the ‘Almeida Cruz-Desantes Real-Jenard report’) [4] , and the Jenard- Möller report, already mentioned, which accompanied the Lugano Convention of 1988. There is no report of this kind attached to the Brussels I Regulation, but an express explanation of its provisions can sometimes be found in the introductory recitals, to which reference will therefore be made wherever necessary. 11. The present explanatory report has to consider all of the provisions of the Lugano Convention in the light of the judicial precedents not only regarding the preceding Convention but also the Brussels I Regulation, whose content is substantially identical; but it should be borne in mind that the report is concerned only with the Lugano Convention, and does not in any way reflect the position of the States or of the Community with regard to the Brussels I Regulation. The absence of an explanatory report on the Brussels I Regulation does not mean that this report is intended to fill the supposed gap. In other words, the present report is not intended to offer clarification of the Regulation, or to give indications as to its interpretation or the application of the rules it lays down: its sole purpose is to explain the rules of the Lugano Convention as they stand after revision.
12. The preamble states that the aim of the Convention is to strengthen in the territories of the contracting parties the legal protection of persons therein established, and for this purpose to determine the international jurisdiction of the courts, to facilitate the recognition of judgments, authentic instruments and court settlements, and to introduce an expeditious procedure for securing their enforcement. With this objective the Convention, taking into account the development of international and Community rules that has been described above, sets out to extend to the contracting parties the principles of the Brussels I Regulation, and substantially reproduces its provisions. The parallelism with the Brussels I Regulation is referred to once again in the introduction to Protocol 2 to the Convention, which stresses the substantial link that exists between the two acts despite the fact that they remain distinct from one another. The structure of the Convention is consequently based on the principles of the Regulation, which in their turn are those that formed the basis of the Brussels Convention. This Convention is thus a dual convention governing, within its field of application, direct jurisdiction of the courts in the States that are bound by the Convention, coordination between courts in the event of competing jurisdiction, conditions for the recognition of judgments, and a simplified procedure for their enforcement. On each of these points the text of the new Convention diverges from that of the 1988 Convention, either because it has been aligned on the Brussels I Regulation, or because specific provision has been made to take account of subsequent developments in the case-law of the Court of Justice or to regulate the relationship between the Convention and the Regulation. 13. Among the principles upon which the Convention is based, attention should be drawn to the principle that the rules it lays down on jurisdiction are comprehensive, meaning that the system of the Convention includes even the rules that regulate jurisdiction by referring a matter to the national law of the States bound by the Convention, as happens, with some exceptions, in the case where a defendant is domiciled in a country outside the Convention. In Opinion 1/03, already cited, the Court of Justice took the view that the clause assigning jurisdiction to the national courts in Article 4 of the Brussels I Regulation was an exercise of the Community’s powers, rather than a recognition that the Member States had powers that restricted the scope of the rules on jurisdiction in the Regulation. The rules on jurisdiction in the Convention are comprehensive, and the fact that a defendant is domiciled within or outside a State bound by the Convention is not a criterion delimiting the scope of the Convention in terms of jurisdiction (see also paragraph 37 below). 14. The material scope of the Convention has not been changed in any way with respect to the Lugano Convention of 1988, and the new wording is identical to that of the Brussels Convention and the Brussels I Regulation. Like the previous texts, the new Convention is confined in its scope to proceedings and judgments regarding international legal relationships, including relationships that involve not two ...
... Contracting States, but one Contracting State and one non-Contracting State [1]; it applies automatically, whether or not it is invoked by the parties; and it applies only to civil and commercial matters, irrespective of the nature of the court. The Convention does not concern revenue, customs or administrative matters, but it may apply to disputes between public administrative authorities and individuals, in so far as the authorities have not acted in the exercise of their public powers [2]. The Convention’s material scope is also delimited by means of a list of matters excluded from it, which has remained unchanged, and which is discussed more fully in the reports on earlier conventions (Jenard report, pages 10-13; Schlosser report, paragraphs 30-65; Evrigenis-Kerameus report, paragraphs 24-37). 15. The ad hoc working party discussed whether the material scope of the Convention should be widened by reducing the number of excluded matters. The Commission suggested that the Convention should include rights in property arising out of a matrimonial relationship, in view among other things of their connection with maintenance matters, which were already included in the Convention [3] . But in view of the significant differences in national legislation, and the desirability of remaining within the context of a revision of the existing text, it was decided to postpone the possible inclusion of matrimonial property rights in the Convention to some future date. The working party also examined a proposal that the Convention should include social security: social security had originally been excluded because of the diversity of national systems, which make it sometimes a public and sometimes a private matter. The working party preferred not to try to explore further an issue on which no agreement had been reached at the time of the adoption of Regulation No 1408/71 [4] , although it recognised that the matter was not totally excluded from the Convention, as might appear from the text of Article 1, since the Convention does cover legal proceedings brought by a social security body (for example) that is acting on behalf of one or more of its beneficiaries to sue a third party responsible for injury (see also the Schlosser report, paragraph 60). It also encompasses an action under a right of recourse by which a public body seeks from a person governed by private law recovery of sums paid by it by way of social assistance to the divorced spouse and the child of that person, provided that the basis and the detailed rules relating to the bringing of that action are governed by the rules of ordinary (private) law in regard to maintenance obligations. It does not cover, on the contrary, an action under a right of recourse that is founded on provisions by which the legislature conferred on the public body a prerogative that places that body in a legal situation which derogates from the ordinary law [5] . 16. The 1988 Convention, in defining the parties to whom the obligations imposed by the Convention were to apply, used the expression ‘Contracting States’. The Treaty of Amsterdam gave the Community exclusive power to conclude such a convention, which meant that the Convention would no longer be an agreement between the Member States of the European Community and other States, but would instead become an agreement in which the Community itself acted as the contracting party on behalf of its Member States (with the exception of Denmark); the expression ‘Contracting States’ is thus unsatisfactory, and it has therefore been replaced in Article 1(3) by the term ‘States bound by the Convention’, which is new as compared to the preceding Convention. The new formula designating the parties subject to the obligations imposed by the Convention is also based on the realisation that the application of the Convention, both in relation to jurisdiction and to the recognition and enforcement of judgments, is normally the responsibility of the Community’s Member States, rather than of the Community as such. A simple reference to the contracting parties to the Convention would not therefore be appropriate or sufficient to ensure the Convention’s correct implementation. With the new wording, paragraph 3 covers both the States that are contracting parties to the Convention – that is, the non-Community States of Iceland, Norway and Switzerland plus Denmark – and the Community Member States which are bound to apply the Convention in their respective national legal systems. 17. The provision specifies, however, that the expression may also mean the European Community as a party to the Convention in its own right, since certain of the Convention’s obligations may apply directly to the Community itself, or may concern the recognition and enforcement of judgments delivered by the Court of Justice or by other Community courts associated with it, such as the Court of First Instance or the Civil Service Tribunal. In the light of the discussion on Article 70(1)(c), it was finally agreed not to include regional economic integration organisations among the parties bound by the Convention’s obligations, although they may also become contracting parties.
18. In consideration of the close links it has with the Brussels I Regulation, the Convention seeks to provide a precise delimitation of the scope of the two instruments, in a specific provision in Article 64. This article largely reproduces the contents of the provision in the 1988 Convention that governed the relationship between that Convention and the Brussels Convention (Article 54B) [1], taking account of developments in Community legislation in the meantime. As before, the first two paragraphs of the provision are essentially addressed to the courts of Member States of the Community bound by the Brussels I Regulation, which are the courts that may find themselves having to apply both instruments, since courts of States bound only by the Lugano Convention are obliged to apply the Lugano Convention in any event. Paragraph 3 is broader, since it is also addressed to courts in States that are bound only by the Lugano Convention. But the provision can offer clarification to any court, particularly on matters of lis pendens and related actions as well as the recognition of judgments. 19. Article 64(1) states that the Convention does not prejudice the application by European Community Member States of the Brussels I Regulation, the Brussels Convention and its Protocol of Interpretation of 1971, or the EC-Denmark Agreement [2]. This means that the scope of these instruments remains unaltered, and is not in principle limited by the Lugano Convention. Thus the jurisdiction of the courts of States bound by the Brussels I Regulation or by the EC-Denmark Agreement continues to be exercised in accordance with the Regulation with regard to persons domiciled in the States referred to, and also with regard to persons domiciled in other States that are not party to the Lugano Convention. Likewise, any judgments delivered in one State bound by the Regulation must be recognised and enforced in accordance with the terms of the Regulation in any other State bound by the Regulation. 20. However, according to paragraph 2, the Lugano Convention is applicable in certain situations in any event, whether by the courts of a State bound both by the Brussels I Regulation and by the Lugano Convention, or by the courts of a State bound only by the Lugano Convention. In matters of jurisdiction, the Lugano Convention is to be applied in all cases, by the courts of any State bound by the Convention, including the courts of States bound by the Brussels I Regulation, if the defendant is domiciled in the territory of a State where the Convention applies and the Regulation does not. The same occurs when jurisdiction is conferred on the courts of such a State by Article 22 or Article 23 of the Convention, as these are exclusive jurisdictions which must always be respected. Furthermore, in relation to lis pendens and related actions regulated by Articles 27 and 28, the Lugano Convention is to be applied in all cases where the proceedings are brought in a State where the Convention applies and the Brussels I Regulation does not, as well as in a State where both the Convention and the Regulation apply. From the standpoint of the coordination of jurisdiction, therefore, the States bound by the Lugano Convention are treated as a single territory. Finally, in matters of the recognition and enforcement of judgments, the Lugano Convention is to be applied in all cases where either the State of origin or the State addressed does not apply the Brussels I Regulation. Consequently, the Convention applies when both States are parties to the Lugano Convention alone or when only one of the States is a party to the Convention and the other is bound by the Regulation. 21. The Convention also takes over the provision in paragraph 3 of the corresponding article in the 1988 Convention, under which the court seised, having jurisdiction under the Lugano Convention, may refuse to recognise or enforce a foreign judgment if the ground of jurisdiction on which the original court based its judgment differs from that resulting from the Convention, and recognition or enforcement is sought against a defendant domiciled in a State where the Convention applies but the Brussels I Regulation does not. This rule is not applicable when the judgment may otherwise be recognised or enforced under the law of the State addressed. The ad hoc working party discussed the advisability of retaining this rule, which is clearly inspired by a lack of confidence in the States bound by the Regulation among the States party to the Convention. But although the rule will most probably never be applied, and despite the solid mutual trust that exists between the States bound by the Convention, the rule may nevertheless provide a useful guarantee, given that the States bound by the Brussels I Regulation are free to amend their rules on jurisdiction through the Community procedures for the amendment of Community legislation, without the consent of the States that are party only to the Lugano Convention. 22. Finally, it should be pointed out that everything said so far about the relationship between the Lugano Convention and the Brussels I Regulation also applies, mutatis mutandis, to the relationship between the Lugano Convention and the Brussels Convention and between the Lugano Convention and the EC-Denmark Agreement.
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