| SCHLOSSER REPORT 1979,
No C 59 / 72 on the Association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol on its interpretation by the Court of Justice (Signed at Luxembourg, 9 October 1978) by Professor Dr Peter SCHLOSSER of the Chair of German, international and foreign civil procedure, of the general theory of procedure and of civil law at the University of Munich Pursuant to Article 3 (2) of the Act of Accession of 22 January 1972 a Council working party, convened as a result of a decision taken by the Committee of Permanent Representatives of the Member States, prepared a draft Convention on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol of 3 June 1971 on its interpretation by the Court of Justice. This working party was composed of government experts from the nine Member States and representatives from the Commission. The rapporteur, Mr P. Schlosser, Professor of Law at the University of Munich, drafted the explanatory report which was submitted to the governments at the same time as the draft prepared by the experts. The text of this report, which is a commentary on the Convention! of Accession signed at Luxembourg on 9 October 1978, is now being published in this issue of the Official Journal.
Under Article 3 (2) of the Act of Accession, the new Member States undertook to accede to the Conventions provided for in Article 220 of the EEC Treaty, and to the Protocols on the interpretation of those Conventions by the Court of Justice, signed by the original Member States and to this end to enter into negotiations with the original Member States in order to make the necessary adjustments thereto. As a first step the Commission of the European Communities made preparations for the impending discussions on the contemplated adjustments. On 29 November 1971, it submitted to the Council an interim report on the additions considered necessary to the two Conventions signed in 1968, namely the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (hereinafter referred to as ‘the 1968 Convention’) and the Convention on the mutual recognition of companies and legal persons. Following consultations with the new Member States, the Commission on 15 September 1972 drew up a comprehensive report to the Council on the main problems arising from adjusting both Conventions to the legal institutions and systems of the new Member States. On the basis of this report, the Committee of Permanent Representatives decided on 11 October 1972 to set up a Working Party which was to be composed of delegates of the original and the new Member States of the Community and of a representative of the Commission. The Working Party held its inaugural meeting on 16 November 1972 under the chairmanship of the Netherlands delegate in accordance with the rota. On this occasion, it decided to focus its attention initially on negotiations concerning adjustments to the 1968 Convention which had already been ratified by the original Member States of the EEC and to the Protocol of 3 June 1971 on its interpretation ('the Interpretation Protocol of 1971'), and to postpone the work entrusted to it regarding the Convention on the mutual recognition of companies and legal persons. At its second meeting, the Working Party elected the author of this report as its rapporteur. On the basis of a request made by the Working Party at its third meeting in June 1973 the Committee Permanent Representatives appointed Mr Jenard, the ‘Directeur d'administration auprès du ministere belge des Affaires Étrangères', as its permanent chairman. 2. The Working Party initially considered proposing the legal form of a Protocol for the accession of the new Member States to the 1968 Convention and that the adjustments contemplated should be annexed thereto. However, this method would have introduced some confusion into the subject. A distinction would then have had to be made between three different Protocols, i.e. the Protocol referred to in Article 65 of the 1968 Convention, the Interpretation Protocol of 1971 and the new Protocol on accession. Furthermore there were no grounds for dividing the new provisions required in consequence of the accession of the new Member States to the 1968 Convention by putting some into a protocol and others into an act of accession annexed to it. The Working Party therefore presented the outcome of its discussions in the form of a draft Convention between the original Member States and the new Member States of the EEC. This draft Convention makes provision for accession both to the 1968 Convention and to the Interpretation Protocol of 1971 (Title I) as well as for the necessary changes to them (Titles II and IV). The accession of Denmark, Ireland and the United Kingdom to the 1968 Convention extends also to the Protocol referred to in Article 65 which is an integral part of the 1968 Convention. The Working Party also proposed adjustments to this Protocol (Title III). The decision of the Working Party to adopt the legal form of Convention incorporating adjustments instead of replacing the 1968 Convention by a new Convention has the advantage that the unchanged provisions of the 1968 Convention do not require renewed ratification. Accordingly three different ‘Conventions' will in future have to be distinguished: - The Convention on jurisdiction and the enforcement of judgments in civil and commercial matters in its original form will be referred to as the 1968 Convention [1]. - The expression 'Accession Convention' refers to the draft Convention proposed by the Working Party. - After ratification of the Accession Convention certain provisions of the 1968 Convention will exist in an amended form. References in this ....
... report to the amended form will be indicated by the addition of that word, e.g. 'Article 5 (2) as amended'. 3. The structure of this report does not closely follow the structure of the proposed new Accession Convention. In many places this report can only be understood, or at any rate is easier to understand, if it is read in conjunction with the corresponding parts of the reports on the 1968 Convention and on the Interpretation Protocol of 1971 which were drawn up by the present permanent chairman and erstwhile rapporteur of the Working Party (hereinafter referred to as 'the Jenard report'). The structure of this report is based on that of these earlier reports.
4. The second chapter of the Jenard report sets out the reasons for concluding a Convention. They apply with at least as much force to the new Member States as they did to the relationships between the original Member States of the EEC, but they do not call for further close examination here. The obligation on the new Member States to accede to the 1968 Convention is laid down in Article 3 (2) of the Act of Accession to the EEC Treaty. However, in order to give a clear view of the legal position, it may be helpful to supplement the references in the Jenard report to the laws in force in the original Member States of the EEC and to the existing Conventions between these States with details concerning the new Member States.
5. The legal position in the United Kingdom is characterized by six significant features. 6. (a) In the first place, there is a distinction between recognition and enforcement at common law on the one hand and under the Foreign judgments (reciprocal enforcement) Act 1933 on the other. At common law, a judgment given in a foreign State may serve as a basis for proceedings before courts in the United Kingdom, if the adjudicating court was competent to assume jurisdiction. This legal consequence follows irrespective of whether or not there is reciprocity. In this connection recognition and enforceability are not limited to the use of the foreign judgment as evidence. The United Kingdom court dealing with the case may not in general review the substance of the foreign judgment. There are, of course, a limited number of grounds for refusing recognition. For recognition and enforcement under the Foreign judgments (reciprocal enforcement) Act 1933 on the other hand the successful party does not have to institute fresh proceedings before courts in the United Kingdom on the basis of the foreign judgment. The successful party merely has to have the judgment registered with the appropriate court. However this simplified recognition and enforcement procedure is available only where the judgment to be recognized was given by a Superior Court, and more important, where a convention on the reciprocal recognition and enforcement of judgments is in force between the State of origin and the United Kingdom. Once the foreign judgment is registered, it has the same legal force and effect as a judgment given by the court registration. 7. (b) Both these methods are available in the United Kingdom only for the enforcement of judgments which order payment of a specific sum of money. Consequently maintenance orders made by foreign courts which stipulate periodic payments are not generally enforceable in the United Kingdom. However, the Maintenance orders (reciprocal enforcement) Act which came into force in 1972 makes it possible for international treaty obligations to be concluded in this field.
9. (d) It is possible to institute proceedings on the basis of a foreign judgment or to make an application for its registration under the 1933 Act during a period of six years from the date on which the judgment was given. 10. (e) United Kingdom law distinguishes between the recognition and enforcement of foreign judgments in the same way as the other States of the Community. If a foreign judgment fulfils the common law requirements for its recognition or if it is registered with a United Kingdom court, it becomes effective also in fields other than enforcement. A clear distinction is made between recognition and enforcement of foreign judgments in for example the bilateral Conventions with France and Germany. The requirements mentioned in paragraphs and 9 are not set out in those Conventions as requirements for recognition. 11. (f) Finally, it should be noted that the United Kingdom although not a federal State, is not a single legal and judicial area. It consists of three areas with different legal systems: England and Wales, Scotland and Northern Ireland. Whilst the common law rules described in paragraph 6 apply uniformly to the whole of the United Kingdom, the different judicial systems in each of the three legal areas of this State have to be taken into consideration when the 1933 Act is applied. Applications for registration have to be made in England and Wales to the High Court of Justice in Scotland to the Court of Session, and Northern Ireland to the High Court of Justice of Northern Ireland. If registration is granted, the judgment can be enforced only in the area in which the relevant courts have jurisdiction, which extends to the whole of England and Wales, of Scotland or of Northern Ireland respectively (see paragraph 209; for maintenance orders, see paragraphs 210 and 218)., Recognition of a judgment is, nevertheless, independent of its registration. 12 . The common law provisions of Irish law are similar to those which apply in the United Kingdom. The only statutory provisions of Irish law on the recognition and enforcement of foreign judgments are contained in the Maintenance orders (reciprocal enforcement) Act 1974. This Act gives effect to international agreement between Ireland and the United Kingdom for the reciprocal recognition of maintenance orders made by courts in those States. The agreement is expressed to terminate on the coming into force of the 1968 Convention for both States. 13. Under paragraph 223a of the Law of 11 April 1916, foreign judgments can be recognized only if a treaty providing reciprocity has been concluded with the State of origin, or if binding effect has been given to judgments of a foreign State by Royal Decree. Denmark has concluded no bilateral conventions on recognition and enforcement. There is only one Royal Decree of the type referred to and it concerns judgments given by German courts [2]. 14. Apart from Conventions relating to particular matters (see paragraph 238 et seq.), the United Kingdom is the only new Member State to be bound to other Member States of the EEC by bilateral Conventions on the recognition and enforcement of judgments. These are the Conventions with France, Belgium, the Federal Republic of Germany, Italy and the Netherlands listed in the new version of Article 55 (see ...
15. Neither Article 3 (2) of the Act of Accession nor the terms of reference given to the Working Party provide any clear guide of what is meant by necessary adjustments The term could be given a very narrow interpretation. The emphasis would then have to be laid above all on the requirement of necessity, in the sense of indispensability. At the beginning of the Working Party s discussions it became clear, however, that such a narrow view of the contemplated adjustments was bound to make it more difficult for the 1968 Convention to take root in the legal systems of the new Member States. There are a variety of reasons for this.
16. The 1968 Convention implicitly proceeded from a legal background common to the original Member States of the EEC. By contrast the legal systems of the new Member States unmistakably contain certain special structural features. It would hardly have been reasonable to expect these States to adjust their national law to the legal position on which the 1968 Convention is based. On the contrary, adjustment of the Convention seemed the more obvious course on occasion. This applies, for example, to the distinction made in Articles 30 and 38 between ordinary and extraordinary appeals (see paragraph 195 seq.), which does not exist in United Kingdom and Irish law, to the system of registering judgments in the United Kingdom instead of the system of granting enforcement orders (see paragraph 208) and to the concept of the trust which is a characteristic feature of the common law [4] (see paragraph 109 et seq.). The same also applies to the inter-relation existing in Denmark between judicial and administrative competence in maintenance cases (see paragraph 66 et seq. 17. In certain cases, enqumes about the precise meaning of some provisions of the 1968 Convention by the States obliged to accede to it clearly showed that their interpretation was often uncertain and controversial. The Working Party decided therefore to propose that certain provisions of the 1968 Convention should be given a more precise wording or an authoritative interpretation. This applies, for example, to the provisions about granting legal aid enforcement proceedings (see paragraph 223). The Working Party also dealt in this way with the provisions of Article 57 on the relation between the 1968 Convention and other Conventions, (see paragraph 238 et seq.). In most cases, however the information requested could be given in a sufficiently clear and uniform way, so that this report need do no more than refer to it.
18. In yet other cases, enquiries by the new Member States about the content of some provisions of the 1968 Convention revealed that in the original Member States of the EEC too the law had in the meantime evolved in such a way that general adjustments rather than adjustments restricted to relations with the new Member States seemed advisable. This applies particularly to proceedings in matters of family law in which ancillary relief and especially maintenance claims, are now often combined with the main proceedings concerning status. In family and matrimonial matters, such combined proceedings have replaced the traditional system of separating status proceedings from subsequent proceedings in many countries during the years following the signing of the 1968 Convention. This is the reason for the revised Article 5 (2) proposed by the Working Party (see paragraphs 32 and 90). The development of consumer protection law in the Member States led to a completely new version of Section 4 of Title II, and in one case the 1968 Convention was amended as a result of judgments of the Court of Justice of the European Communities (see paragraph 179). 19. Finally, it became apparent that certain provisions of the 1968 Convention in their application to the new Member States would have economic repercussions unequalled in the original Member States. Thus, the worldwide significance of the British insurance market prompted the Working Party to recommend amendments concerning jurisdiction in insurance matters (see paragraph 136). The new paragraph (7) of Article 5 (see paragraph 122) is justified by the special position occupied by British maritime jurisdiction.
20. As already discussed in the Jenard report, the provisions governing the scope of the 1968 Convention contain four significant elements. These required some further explanation in the context of the relationship of the original Member States to each other. They are:
21. The accession of the new Member States to the 1968 Convention in no way affects the application of the principle that only proceedings and judgments about matters involving international legal relationships are affected, so that reference need only be made to Section I of Chapter III of the Jenard report. 22. Under Articles 19 and 20 of the 1968 Convention the provisions concerning 'direct jurisdiction' are to be observed by the court of its own motion: in some cases, i.e. where exclusive jurisdiction exists, irrespective of whether the defendant takes any steps; in other cases only where the defendant challenges the jurisdiction. Similarly, a court must also of its own motion consider whether there exists an agreement on jurisdiction which excludes the court s jurisdiction and which is valid in accordance with Article 17. An obligation to observe the rules of jurisdiction of its own motion is by no means an unusual duty for a court in the original Member States. However, the United Kingdom delegation pointed out that such a provision would mean a fundamental change for its courts. Hitherto United Kingdom courts had been able to reach a decision only on the basis of submissions of fact or law made by the parties. Without infringing this principle, no possibility existed of examining their jurisdiction of their own motion. However, Article 3 (2) of the Act of Accession cannot be interpreted as requiring the amendment of any provisions of the Conventions referred to on the ground that introduction of those provisions into the legal system of a new Member State would necessitate certain changes in its long established legal practices and procedures.
It does not necessarily follow from Articles 19 and 20 of the 1968 Convention that the courts must, of their own motion, investigate the facts relevant to deciding the question of jurisdiction that they must for example inquire where the defendant is domiciled. The only essential factor is that uncontested assertions by the parties should not bind the court. For this reason the following rule is reconcilable with the 1968 Convention: a court may assume jurisdiction only if it is completely satisfied of all the facts on which such jurisdiction is based; if it is not so satisfied it can and must request the parties to provide the necessary evidence, in default of which the action will be dismissed as inadmissible. In such circumstances the lack of jurisdiction would be declared by the court of its own motion, and not as a result of a challenge by one of the parties. Whether a court is itself obliged to investigate the facts relevant to jurisdiction, or whether it can, or must, place the burden of proof in this respect on the party interested in the jurisdiction of the court concerned, is determined solely by national law. Indeed some of the legal systems of the original Member States, for example Germany, do not require the court itself to undertake factual investigations in a case of exclusive jurisdiction even though lack of such jurisdiction has to be considered by the court of its own motion.
23. The scope of the 1968 Convention is limited to legal proceedings and judgments which relate to civil and commercial matters. All such proceedings not expressly excluded fall within its scope. In particular, it is irrelevant whether an action is Brought 'against' a named defendant (see paragraphs 124 et seq.). It is true that in such a case Article 2 et seq. cannot operate; but otherwise the 1968 Convention remains applicable. The distinction between civil and commercial matters on the one hand and matters of public law on the other is well recognized in the legal systems of the original Member States and is, in spite of some important differences, on the whole arrived at on the basis of similar criteria. Thus the term 'civil law' also includes certain important special subjects which are not public law, especially, for example, parts of labour law. For this reason the draftsmen of the original text of the 1968 Convention, and the Jenard report did not include a definition of civil and commercial matters and merely stated that the 1968 Convention also applies to decisions of criminal and administrative courts, provided they are given in a civil or commercial matter, which occasionally happens. In this last respect, the accession of the three new Member States presents no additional problems. But as regards the main distinction referred to earlier considerable difficulties arise. In the United Kingdom and Ireland the distinction commonly made in the original EEC States between private law and public law is hardly known. This meant that the problems of adjustment could not be solved simply by a reference to these classifications. In view of the Judgment of the Court of Justice of the European Communities of 14 October 1976 [5] which was delivered during the final stages of the discussions and which decided in favour of an interpretation which made no reference to the 'applicable' national law, the Working Party restricted itself to declaring, in Article 1, paragraph 1, that revenue, customs or administrative matters are not civil or commercial matters within the meaning of the Convention. Moreover, the legal practice in the Member States of the Community, including the new Member States, must take account of the above judgment which states that in interpreting the concept of civil and commercial matters, reference must be made 'first, to the objectives and scheme of the Convention and secondly, to the general principles which stem from the corpus of the national legal systems'. As a result of this all that this report can do is to throw light on the Court's instructions by setting out some details of comparative law.
24. In the United Kingdom and in Ireland the expression 'civil law' is not a technical term and has more than one meaning. It is used mainly as ...
... the opposite of criminal law. Except in this limited sense, no distinction is made between 'private' and 'public' law which is in any way comparable to that made in the legal systems of the original Member States, where it is of fundamental importance. Constitutional law, administrative law and tax law are all included in civil law . Admittedly the United Kingdom is already a party to several Conventions which expressly apply only to 'civil and commercial matters.' These include all the bilateral Conventions on the enforcement of foreign judgments concluded by the United Kingdom. None of these, however, contains any rules which decide the circumstances under which an original court before which an issue is brought may assume jurisdiction. They govern only the recognition and enforcement of judgments and deal with questions of jurisdiction only indirectly as a condition of recognition. Moreover, these Conventions generally only apply to judgments ordering the payment of a specific sum of money (see paragraph 7). In drafting them, a pragmatic approach dispensing with a definition of 'civil and commercial matters' proved, therefore, quite adequate.
25. In the legal systems of the original Member States, the State itself and corporations exercising public functions such as local authorities may become involved in legal transactions in two ways. Having regard to their special functions and the fact that they are formally part of public law they may act outside private law in a 'sovereign' capacity. If they do this, their administrative ac ('Verwaltungsakt', 'décision exécutoire') is of a special nature. The State and some other public corporations may, however, also engage in legal transactions in the same way as private individuals. They can conclude contracts subject to private law, for example with transport undertakings for the carriage of goods or persons in accordance with tariffs generally in force or with a property owner for the lease of premises. The State and public corporations can also incur tortious liability in the same way as private individuals, for example as a result of a traffic accident in which an official car is involved. The real difficulty arises from distinguishing between instances in which the State and its independent organs act in a private law capacity and those in which they act in a public law capacity. A few guidelines on how this difficulty may overcome are set out below. The difficulties of finding a dividing line are of three kinds. The field of activities governed by public law differs in the various continental Member States (1). Public authorities frequently have a choice of the form in which they wish to act (2). The position is relatively clear only regarding the legal relations between the State and its independent organs (3).
26. The most important difference between national administrative laws on the continent consists in the legal rules governing the duties of public authorities to provide supplies for themselves and for public tasks. For this purpose the French legal system has established the separate concept of administrative contracts which are governed independently of the 'Code civil' by a special law the 'Code des marchés publics'. The administrative contract is used both when public authorities wish to cover their own requirements and when public works, such as surface or underground construction, land development, etc. have to be undertaken. In such situations the French State and public corporations do not act in the capacity of private persons. The characteristic result of this is that, if the other parties to the contract do not perform their obligations, the State and public corporations do not have to bring an action before the courts, but may impose unilaterally enforceable sanctions by an administrative act ('décision exécutoire'). The legal situation in Germany is quite different. There the administrative contract plays a completely subordinate role. Supplies to the administrative agencies, and in particular the placing of contracts for public works, are carried out solely on the basis of private law. Even where the State undertakes large projects like the construction of a dam or the channelling of a river, it concludes its contracts with the firms concerned like a private individual.
27. However, the borderline between the public law and the private law activities of public agencies is not rigidly prescribed in some of the legal systems. Public authorities have, within certain limits, a right to choose whether in carrying out their functions they wish to use the method of a 'sovereign act', i. e. an administrative contract, or merely to conclude a private transaction. In respect of those areas where public authorities may act either under private or public law, it is not always easy to decide whether or not they have acted as private individuals. In practice a clear indication is often lacking.
28. Relations between public authorities may also be governed either by private or by public law. If governed by public law, such relations are not subject to the 1968 Convention, even if, as in Italy, they are not considered part administrative law. However, relations of States and public corporations with each other would fall almost without exception within the sphere of private law, if they contain international aspects (and are not subject to public international law). It is hard to imagine how, for example, it would be possible for relations under public law to exist between two local authorities in different States. However, such relations could, of course, be established in future by treaties. 29. The Working Party considered it obvious that criminal proceedings and criminal judgments of all kinds are excluded from the scope of the 1968 Convention, and that this matter needed therefore, no clarification in the revised text (see paragraph 17). This applies not only to criminal proceedings stricto sensu. Other proceedings imposing sanctions for breaches of orders or prohibitions intended to safeguard the public interest also fall outside the scope of civil law. Certain difficulties may arise in some cases in classifying private penalties known to some legal systems like contractual penalty clauses, penalties imposed by associations, etc. Since in many legal systems criminal proceedings may be brought by a private plaintiff, a distinction cannot be made by reference to the party which instituted the proceedings. The decisive factor is whether the penalty is for the benefit of the private plaintiff or some other private individual. Thus the decisions of the Danish industrial courts imposing fines which are for the benefit of the plaintiff or some other aggrieved party, certainly fall within the scope of the 1968 Convention.
30. The second paragraph of Article 1 sets out under four points the civil matters excluded from the scope of the 1968 Convention. The accession of the new Member States raises problems in respect of all four points.
31. The Working Party encountered considerable difficulties when dealing with two problems relating to point (1) of the second paragraph of Article 1. The first problem was that of maintenance proceedings ancillary to status proceedings (1) and the second problem was the meaning of the term 'regimes matrimoniaux' (rights in property arising out of a matrimonial relationship) (2). Apart from these two problems the enquiries directed to the Working Party by the new Member States in respect of point (1) of the second paragraph of Article 1 were relatively easy to answer (3).
32. When the 1968 Convention was drawn up, the principle still applied in the original Member States that disputes relating to property could not be combined with status proceedings, nor could ....
33. (a) The solution proposed by the Working Party is the outcome of a lengthy and intensive study of the possible alternatives. A distinctive feature of the 1968 Convention is the inter-relation of the application of its rules of jurisdiction at the adjudicating stage and the prohibition against reopening the question of jurisdiction at the recognition stage. Consequently, on the basis of the original text of the Convention only two completely clear-cut solutions present themselves as regards the treatment of ancillary maintenance judgments. The first is that the adjudicating court dealing with a status matter may give an ancillary maintenance judgment only when it has jurisdiction under the 1968 Convention; the maintenance judgment must then be recognized by the foreign court which may not re-examine whether the original adjudicating court had jurisdiction. The second possible solution is that ancillary maintenance judgments should also be excluded from the scope of the 1968 Convention under point (1) of the second paragraph of Article 1 as being ancillary to status judgments. However both solutions have practical drawbacks. The second would result in ancillary maintenance judgments being generally excluded from recognition and enforcement under the 1968 Convention, even though the great majority of cases are decided by courts which would have had jurisdiction under its provisions. In unacceptably high number of cases established maintenance claims would then no longer be able to move freely. The first solution would constitute a retrograde step from the progressive and widely acclaimed achievement of combined proceedings and judgments in status and maintenance matters. 34. In view of the above, the simplest solution would have been to include rules of jurisdiction covering status proceedings in the 1968 Convention. However, the reasons given earlier against taking that course are still valid. Therefore, the only way out is to opt for one of the two alternatives outlined above, whilst mitigating its drawbacks as far as possible. In the view of the Working Party, to deprive maintenance judgments ancillary to status proceedings of the guarantee of their enforceability abroad, or to recognize them only to a severely limited extent, would be the greater evil. 35. The Working Party therefore tried first of all to find a solution along the following lines. National courts dealing with status matters should have unrestricted power to decide also on maintenance claims even when they cannot use their jurisdiction in respect of the maintenance claim on any provision of the 1968 Convention; ancillary maintenance judgments should in principle be recognized and enforced, but the court addressed may, contrary to the principles of the 1968 Convention which would otherwise apply, re-examine whether the court which gave judgment on the maintenance claims had jurisdiction under the provisions of Title II. However, the principle that the jurisdiction of the court of origin should not be re-examined during the recognition and enforcement stages was one of the really decisive achievements of the 1968 Convention. Any further restriction of this principle, even if limited to one area, would be justifiable only if all other conceivable alternatives were even more unacceptable. 36. The proposed addition to Article 5 would on the whole have most advantages. It prevents maintenance judgments which are ancillary to status judgments being given on the basis of the rule of exorbitant jurisdiction which generally applies in family law matters, namely the rule which declares the nationality of only one of the two parties as sufficient. One can accept that maintenance proceedings may not be combined with status proceedings where the competence of the court concerned is based solely on such ...
(b) The significance of the new approach is as follows: 37. It applies uniformly to the original and to the new Member States alike. 38. The jurisdiction of the court of origin may not be re-examined during the recognition and enforcement stages. This still follows from the third paragraph of Article 28 even after the addition made to Article 5. The court of origin has a duty to examine very carefully whether it has jurisdiction under the 1968 Convention because a wrong decision on the question of jurisdiction cannot be corrected later on. 39. Similar rules apply in respect of lis pendens. was not necessary to amend Articles 21 and 23. As long as the maintenance claim is pending before the court seised of the status proceedings it may not validly be brought before the courts of another State. 40. The question whether the court seised of the status proceedings has indeed jurisdiction also in respect of the maintenance proceedings, without having to rely solely on the nationality of one of the parties to the proceedings, is to be determined solely by the lex fori including of course its private international law and procedural law. Even where the courts of a State may not as a rule combine a status matter with a maintenance claim, but can do so if a foreign legal system applicable under the provisions of their private international law so provides they have jurisdiction in respect of the maintenance claim under the provisions of Article 5 (2) of the 1968 Convention as amended. This is subject to the proviso that the court concerned in fact had jurisdiction in respect of both the status proceedings and the maintenance claim under the current provisions of its own national law. 41. The 1968 Convention prohibits the assumption of a combined jurisdiction which may provided for under the national law to cover both status and maintenance proceedings only where the court s jurisdiction would be based solely on the nationality of one of the two parties. This concerns principally the exorbitant jurisdictions which are referred to in the second paragraph of Article 3, and provided for in Article 15 of the Belgian Civil Code (Code civil), and Articles 14 and 15 of the French and Luxembourg Civil Code (Code civil), governing proceedings which do not relate only to status and are therefore not excluded pursuant to point (1) of the second paragraph of Article 1. Maintenance actions combined with status proceedings continue to be permitted, even if the jurisdiction of the court is based on grounds other than those which are normally excluded by the 1968 Convention as being exorbitant. Jurisdiction on the basis of both parties having the same nationality is excluded by the 1968 Convention in respect of ordinary civil and commercial matters, (Article 3, second paragraph), but in respect of combined status and maintenance proceedings, it cannot be considered as exorbitant, and consequently should not be inadmissible. The plaintiff's domicile recognized in any case as a basis for jurisdiction in maintenance actions. Finally, the proposed addition to Article (2) deprives courts of jurisdiction to entertain maintenance claims in combined family law proceedings only where their jurisdiction in respect of the status proceedings is based solely on the nationality of one of the two parties. Where the jurisdiction of a court depends on the fulfilment of several conditions, only one of which is that one of the parties should possess the nationality of the country concerned, jurisdiction does not depend solely on the nationality of the two parties. Article 606 (3) of the German Code of Civil Procedure is intended to ensure, in conjunction with Article 606a, that in matrimonial matters a German court always has jurisdiction, even when only one of the spouses is German. The fact that this provision is only supplementary to other provisions governing jurisdiction does not change the fact that jurisdiction may be based solely on the nationality of one of the parties. Once Article 5 (2) of the 1968 Convention comes into force in its amended form maintenance claims can no longer be brought and decided under that particular jurisdiction. 42. Article 5 (2) does not apply where the defendant is not domiciled in a Contracting State, or where maintenance questions can be decided without the ...
43. The exclusion of 'rights in property arising out of a matrimonial relationship' from the scope of the Convention (Article 1 second paragraph, point (1)) raises a problem for the United Kingdom and Ireland. Neither of these countries has an equivalent legal concept, although the expression 'matrimonial property' is used in legal literature. In principle, property rights as between spouses are governed by general law. Agreements between spouses regulating their property rights are no different in law from agreements with third parties. Occasionally, however, there are special statutory provisions affecting the rights of spouses. Under English law (Matrimonial homes Act 1967) and Irish law (Family home protection Act 1976), a spouse is entitled to certain rights of occupation of the matrimonial home. Moreover, divorce courts in the United Kingdom have, under the Matrimonial causes Act 1973 considerable powers, though varying in extent in the different parts of the country, to order the payment of capital sums by one former spouse to the other. In England even a general redistribution of property as between former spouses and their children is possible. The concept of 'rights in property arising out of a matrimonial relationship' can also give rise to problems in the legal systems of the original Member States. It does not cover the same legal relations in all the systems concerned. For a better understanding of the problems involved, they are set out more fully below (a), before the solution proposed by the Working Party is discussed (b). 44. (a) Three observations may give an indication of what is meant by 'matrimonial regimes' (rights in property arising out of matrimonial relationship) in the legal systems of the seven continental Member States. They will deal with the character of the concept which is confined exclusively to relationships between spouses (paragraph 45), with the relationship with the provisions which apply to all marriages irrespective of the particular 'matrimonial regime' between the spouses (paragraph 46), and - finally with the possibility of third parties becoming involved (paragraph 47). 45. For the purpose of governing the relations between spouses in respect of property, these legal systems do not or at least not predominantly, employ the legal concepts and institutions otherwise used in their civil law. Instead, they have developed exclusive legal institutions the application of which is limited to relations between spouses, and whose most important feature is a comprehensive set of rules governing property. However, there is not merely one such set of rules in each legal system. Instead spouses have a choice between several, ranging from general 'community of property' to strict separation of property . Even the latter, when chosen by the spouses, is a special form of property regime although special features arising from marriage can then hardly be said to exist any longer. The choice of a 'property regime' must take the form of a 'marriage contract' which is a special legal concept and should not be confused with the conclusion of the marriage itself. If the spouses do not make a choice, one of the sets of rules governing property rights applies to them by law (known as the 'statutory matrimonial regime'). In some legal systems (France and Belgium) the matrimonial regime existing at the beginning of a marriage can subsequently be changed only in exceptional circumstances. In others (Germany) the spouses are free to alter their 'matrimonial regime' at any time. Disputes concerning 'matrimonial regimes' can arise in various forms. There may be a dispute about the existence and interpretation of marriage contract. In certain circumstances, a spouse may apply to the court for conversion of one 'matrimonial regime' into a different one. Some 'matrimonial regimes' provide for different rules in respect of different types of property. A dispute may then arise as to the type of property to which a particular object belongs. Where the 'matrimonial regime' in question differentiates between the management of different types of property, there may be disagreement as to which spouse may manage which items of property. The most frequent type of dispute relating to 'matrimonial regimes' concerns the winding up of the 'matrimonial regime' after termination of the marriage particularly after divorce. The 'statutory matrimonial regime' under German .....
46. Some provisions apply to all marriages irrespective of the particular matrimonial regime under which spouses live, especially in Germany and France. Significantly the German and French texts of the 1968 Convention use the term in the plural ('die Güterstände','les régimes matrimoniaux'). This can be explained as follows: the Code civil for instance, deals with property aspects of marriage in two different parts of the code. Title of the third book (on the acquisition of property) refers in detail to the 'contrat de mariage' and then 'regimes matrimoniaux', while property aspects of the relations between spouses are also covered by Articles 212 to 226 in Title V of the first book. The new French divorce law of 11 July 1975 [6] introduced into the new version of Article 270 et seq. of the Code civil equalization payments normally in the form lump sum compensation (Article 274) which are independent of the particular 'regime' applicable between the spouses. German law in the fourth book of the Bürgerliches Gesetzbuch makes a similar distinction between the legal consequences in respect of property rights which generally follow from marriage (Title V, Article 1353 seq. and those which follow from 'matrimonial property law', which varies according to the various matrimonial regimes. Under both systems (Article 1357 (2) of the Bürgerliches Gesetzbuch, Article 220 (2) of the French Code civil) it is possible, for example, to prevent a spouse from engaging in certain legal transactions which he is normally entitled to engage in his capacity as spouse. According to Article 285 of the Code civil the court can, after divorce make orders concerning the matrimonial home irrespective of the 'matrimonial regime' previously applicable. Similar possibilities exist in other States. French legal literature refers to provisions concerning property rights which apply to all marriages as 'régime matrimonial primaire'. Other legal systems have no such special expression. It is within the spirit of Article 1 second paragraph point (1) of the 1968 Convention to exclude those provisions concerning property rights affecting all marriages from its scope of application, in so far as they are not covered by the term 'maintenance claims' (see paragraph 91 et seq.) In all legal systems of the Community it is possible to conceive of relations affecting rights between spouses which are governed by the general law of contract, law of tort or property law. Some laws contain provisions specifically intended to govern cases where such relations exist between spouses. For example, Article 1595 of the French Code civil contains restrictions on the admissibility of contracts of sale between spouses. Case law has sometimes developed special rules in this field which are designed to take account of the fact that such transactions commonly occur in relations between spouses. All this does not alter the position that legal relations governed by the general law of contract or tort remain subject to the provisions of the 1968 Convention, even if they are between spouses. 47. Finally, legal provisions comprised in the term 'matrimonial regimes' are not limited to relations between the spouses themselves. For example, in Italian law, in connection with the liquidation of A 'fondo patrimoniale' disputes may arise between parents and children (Article 171 (3) of the Codice civile), which under Italian law unequivocally concern relations arising out of matrimonial property law ('il regime patrimoniale della famiglia'). German law contains the regime of 'continued community of property' ('fortgesetzte Gütergemeinschaft'), which forms a link between a surviving spouse and the issue of the marriage. 48. (b) These findings raise problems similar to those with which the Working Party was faced in connection with the concept 'civil and commercial matters'. It was, however, possible to define the concept of 'matrimonial regimes' not only in a negative manner (paragraph 49), but also positively, albeit rather broadly. This should enable implementing legislation in the United Kingdom and Ireland, in reliance on these statements, to indicate to the courts which legal relations form part of 'matrimonial regimes' within the meaning of the 1968 Convention (paragraph 50). Consequently no formal adjustment of the 1968 Convention became necessary. 49. As a negative definition, it can be said with certainty that in no legal system do maintenance claims between spouses derive from rules governing 'matrimonial regimes'; nor are .......
50. The mutual rights of spouses arising from 'matrimonial regimes' correspond largely with what are best described in English as 'rights in property arising out' of a 'matrimonial relationship'. Apart from maintenance matters property relations between spouses which are governed by the differing legal systems of the original Member States otherwise than 'matrimonial regimes' only seldom give rise to court proceedings with international aspects. Thus the following can be said in respect of the scope of point (1) of the second paragraph of Article 1 as far as 'matrimonial regimes' are concerned: The Convention does not apply to the assumption of jurisdiction by United Kingdom and Irish courts, nor to the recognition and enforcement of foreign judgments by those courts, if the subject matter of the proceedings concerns issues which have arisen between spouses, or exceptionally between a spouse and a third party, during or after dissolution of their marriage, and which affect rights in property arising out of the matrimonial relationship. The expression 'rights in property' includes all rights of administration and disposal whether by marriage contract or by statute of property belonging to the spouses.
51. (a) The non-applicability of the 1968 Convention in respect of the status or legal capacity of natural persons concerns in particular proceedings and judgments relating to:
However the 1968 Convention is only inapplicable when the proceedings are concerned directly with legal consequences arising from these matters. It is not sufficient if the issues raised are merely of a preliminary nature, even if their preliminary nature is, or has been, of some importance in the main proceedings. 52. (b) The expression 'wills and succession' covers all claims to testate or intestate succession to an estate. It includes disputes as to the validity or interpretation of the terms of a will setting up a trust, even where the trust takes effect on a date subsequent to the death of the testator. The same applies to proceedings in respect of the application and interpretation of statutory provisions establishing trusts in favour of persons or institutions as a result of a person dying intestate. The 1968 Convention does not therefore, apply to any disputes concerning the creation, interpretation and administration of trusts arising under the law of succession including wills on the other hand, disputes concerning the relations, of the trustee with persons other than beneficiaries, in other words the 'external relations' of the trust, come within the scope of the 1968 Convention (see paragraph 109 et seq.
53. Article 1, second paragraph, point (2), occupies a special position among the provisions concerning the legal matters excluded from the 1968 Convention. It was drafted with reference to a special Convention on bankruptcy which was being discussed at the same time as the 1968 Convention.
54. It is relatively easy to define the basic types of proceedings that are subject to bankruptcy law and therefore fall outside the scope of the 1968 Convention. Such proceedings are defined in almost identical terms in both the Jenard and the Noël-Lemontey reports [12] as those 'which, depending on the system of law involved, are based on the suspension of payments, the insolvency of the debtor or his inability to raise credit, and which involve the judicial authorities for the purpose either of compulsory and collective liquidation of the assets or simply of supervision by those authorities.' In the legal systems of the original States of the EEC there are only a very few examples of proceedings of this kind, ranging from two (in Germany) to four (Italy and Luxembourg). In its 1975 version (8) the Protocol to the preliminary draft Convention on bankruptcy enumerates the proceedings according to types of proceedings and States concerned. A list is reproduced in Annex I to this report. Naturally, the 1968 Convention does not a fortiori cover global insolvency proceedings which do not take place before a court as, for example, can be the case in France when authorization can be withdrawn from an insurance undertaking for reasons of insolvency. The enumeration in Article 17 of the preliminary draft Convention on bankruptcy cannot, before that Convention has come into force, be used for the interpretation of Article 1, second paragraph point (2) of the 1968 Convention. Article 17 mentions the kind of proceedings especially closely connected with bankruptcy where the courts of the State where the bankruptcy proceedings are opened are to ,have exclusive jurisdiction. It is not desirable at this stage to prescribe this list, or even an amended list, as binding. Further amendments may well have to be made during the discussions on the Convention on bankruptcy. To prescribe a binding list would cause confusion, even though the list to be included in the Protocol to the Convention on bankruptcy will, after the latter s entry into force prevail over the 1968 Convention pursuant to Article 57, since it is part of a special Convention. Moreover, the list, as already mentioned, does not include all bankruptcies, compositions and analogous proceedings. For instance it has become clear during the discussions on the Convention on bankruptcy that the list will not cover insurance undertakings which only undertake direct insurance [13], without thereby bringing the bankruptcy of such undertakings within the scope of the 1968 Convention. Finally the Working Party was not sure whether all the proceedings included in the list as it stood at the beginning of 1976 could properly be regarded as bankruptcies, compositions or analogous proceedings, before the list formally comes into force. This applied particularly to the proceedings mentioned in connection with the liquidation of companies (see paragraph 57). 55. As far as dissolution, whether or not by decision of a court, and the capacity to be made bankrupt are concerned, the legal treatment of ......
A distinction is made between winding-up by the court, voluntary winding-up and winding-up subject to the supervision of the court. The second kind of winding-up takes place basically without the intervention of the court, either at the instance of the members alone or of the members together with the creditors. Only as a subsidiary measure and exceptionally can the court appoint a liquidator. The third kind of winding-up is only a variation on the second. The court has certain supervisory powers. A winding-up of a company by the court requires an application either by the company or by a creditor which is possible in a number of circumstances of which insolvency only one. Other grounds for a winding-up include: the number of members falling below the required minimum, failure to commence, or a lengthy suspension of, business and the general ground 'that the court is of the opinion that it is just and equitable that the company should be wound up'. 56. The legal position outlined has the following consequences for the application of Article 1 second paragraph, point (2), and Article 16 (2) of the 1968 Convention in the Continental (b) and other (a) Member States: 57. (a) A voluntary winding-up under United Kingdom or Irish law cannot be equated with court proceedings. The same applies to the non-judicial proceedings under Danish law for the dissolution of a company. Legal disputes incidental to or consequent upon such proceedings are therefore normal civil or commercial disputes and as such are not excluded from the scope of the 1968 Convention. This also applies in the case of a winding-up subject to the supervision of the court. The powers of the court in such a case are not sufficiently dearly defined for the proceedings to be classed as judicial. A winding-up by the court cannot, of course, be automatically excluded from the scope of the 1968 Convention. For although most proceedings of this kind serve the purpose of the liquidation of an insolvent company, this is not always the case. The Working Party decided to exclude from the scope of the 1968 Convention only those proceedings which are or were based on Section 222 (e) of the British Companies Act [18] or the equivalent provisions in the legislation of Ireland and Northern Ireland. This would, however involve too narrow a definition of the proceedings to be excluded, as the liquidation of an insolvent company is frequently based on one of the other grounds referred to in Section 222 of the British Companies Act, notably in (a), which states that a special resolution of the members is sufficient to set proceedings in motion. There is no alternative therefore to ascertaining the determining factor in the dissolution in each particular case. The English version of Article 1 second paragraph point (2), of the 1968 Convention has been worded accordingly. It was not, however, necessary to alter the text of the Convention in the other languages. If a winding-up in the United Kingdom or Ireland is based on a ground other than the insolvency of the company, the court concerned with recognition and enforcement in another Contracting State will have to examine whether the company was not in fact insolvent. Only if it is of the opinion that the company was solvent will the 1968 Convention apply. 58. Only in that event does the problem arise of whether exclusive jurisdiction exists for the courts at the seat of the company pursuant to Article 16 (2) of the 1968 Convention. In the United Kingdom and Ireland this is the case for proceedings which involve or have involved a solvent company. The term 'dissolution' in Article 16 (2) of the 1968 Convention is not to be understood in the narrow technical sense in which it is used in legal systems on the Continent. It also covers .............
59. (b) If a company established under a Continental legal system is dissolved, i.e. enters the stage of liquidation, because it has become insolvent court proceedings relating to the 'dissolution of the company' are only conceivable as disputes concerning the admissibility of, or the mode and manner of conducting, winding-up proceedings. All this is outside the scope of the 1968 Convention. On the other hand all other proceedings intended to declare or to bring about the dissolution of a company are not the concern of the law of winding-up. It is unnecessary to examine whether the company concerned is solvent or insolvent. It also makes no difference if bankruptcy law questions arise as a preliminary issue. For instance, when litigation ensues as to whether a company should be dissolved, because a person who allegedly belongs to it has gone bankrupt, the dispute is not about a matter of bankruptcy law, but of a type which falls within the scope of the 1968 Convention. The Convention also applies if, in connection with the dissolution of a company not involving the courts, third parties contend in legal proceedings that, they are creditors of the company and consequently entitled to satisfaction out of assets of the company. 60. Matters relating to social security were expressly excluded from the scope of the 1968 Convention. This was intended to avoid the difficulties which would arise from the fact that in some Member States this area of law comes under public law whereas in others it is on the border-line between public and private law. Legal proceedings by social security authorities against third parties for example against wrongdoers, in exercise of rights of action which they have acquired by subrogation or by operation of law, do come within the scope of the 1968 Convention. 61. The United Kingdom requested information on matters regarding the effect of the exclusion of 'arbitration' from the scope of the 1968 Convention, which were not dealt with in the Jenard report. Two divergent basic positions which it was not possible to reconcile emerged from the discussion on the interpretation of the relevant provisions of Article 1 second paragraph, point (4). The point of view expressed principally on behalf of the United Kingdom was that this provision covers all disputes which the parties had effectively agreed should be settled by arbitration, including any secondary disputes connected with the agreed arbitration. The other point of view, defended by the original Member States of the EEC, only regards proceedings before national courts as part of 'arbitration' if they refer to arbitration proceedings, whether concluded, in progress or to be started. It was nevertheless agreed that no amendment should be made to the text. The new Member States can deal with this problem of interpretation in their implementing legislation. The Working Party was prepared to accept this conclusion, because all the Member States of the Community, with the exception of Luxembourg and Ireland, had in the meantime become parties to the United Nations Convention of 10 June 1958 on the recognition and enforcement of foreign arbitral awards, and Ireland is willing to give sympathetic consideration to the question of her acceding to it. In any event, the differing basic positions lead to a different result in practice only in one particular instance (see paragraph 62).
62. If a national court adjudicates on the subject matter of a dispute, because it overlooked arbitration agreement or considered it inapplicable, can recognition and enforcement of that judgment be refused in another State of the Community on the ground that the arbitration agreement was after all valid and that therefore pursuant to Article 1, second paragraph, point (4), the judgment falls outside the scope of the 1968 Convention? Only if the first interpretation (see paragraph 61) is accepted can an affirmative answer be given to this question.
Against this, it is contended that the literal meaning of the word 'arbitration' itself implies that it cannot extend to every dispute affected by an arbitration agreement; that 'arbitration' refers only to arbitration proceedings. Proceedings before national courts would therefore be affected by Article 1, second paragraph, point (4) of the 1968 Convention only if they dealt with arbitration as a main issue and did not have to , consider the validity of an arbitration agreement merely as a matter incidental to an examination of the competence of the court of origin to assume jurisdiction. It has been contended that the court in the State addressed can no longer re-open the issue of classification; if the court of the State of origin, in assuming jurisdiction, has taken a certain view as to the applicability of the 1968 Convention, this becomes binding on the court in the State addressed.
63. (a) The 1968 Convention as such in no way restricts the freedom of the parties to submit disputes to arbitration. This applies even to proceedings for which the 1968 Convention has established exclusive jurisdiction. Nor, of course does the Convention prevent national legislation from invalidating arbitration agreements affecting disputes for which exclusive jurisdiction exists under national law or pursuant to the 1968 Convention. 64. (b) The 1968 Convention does not cover court proceedings which are ancillary to arbitration proceedings, for example the appointment or dismissal of arbitrators, the fixing of the place of arbitration, the extension of the time limit for making awards or the obtaining of a preliminary ruling on questions of substance as provided for under English law in the procedure known as 'statement of a special case' (Section 21 of the Arbitration Act 1950). In the same way a judgment determining whether an arbitration agreement is valid or not, or because it is invalid ordering the parties not to continue the arbitration proceedings, is not covered by the 1968 Convention. 65. (c) Nor does the 1968 Convention cover proceedings and decisions concerning applications for the revocation, amendment recognition and enforcement of arbitration awards. This also applies to court decisions incorporating arbitration awards a common method of recognition. under United Kingdom law. If an arbitration award is revoked and the revoking court or another national court itself decides the subject matter in dispute, the 1968 Convention is applicable.
66. As between the original Member States, and also as between those States and the United Kingdom and Ireland, the 1968 Convention could and can in one particular respect be based on a surprisingly uniform legal tradition. Almost everywhere the same tasks pertaining to the field of private law are assigned to the courts. The authorities which constitute 'courts' can everywhere be recognized easily and with certainty. This is also true in cases where proceedings are being conducted in 'court' which are not the result of an action by one party 'against' another party (see paragraphs 23 and 124 et seq.). The accession of Denmark raised new problems. Although the Working Party had no difficulty in confirming that the Industrial Court under the Danish Industrial Court Act of 21 April 1964 (Bulletin No 124) was, in spite of its unusual structure, clearly to be considered a court within the meaning of the 1968 Convention, it was more difficult to decide how to classify proceedings in maintenance matters, which, in Denmark, failing an amicable settlement, are almost always held before administrative authorities and terminate with a decision by the latter.
67. The legal position may be summed up as follows. Maintenance matters are determined as regards the obligation to pay either by agreement or by a court judgment. The amount of the payment and the scale of any necessary modifications are however, determined by an authority known as the 'Amtmand', which under Danish law clearly not court but an administrative authority which in this case plays a judicial role. It is true that decisions given in such proceedings come under The Hague Convention on the recognition and enforcement of decisions relating to maintenance obligations, but this is only because under that Convention the matter does not specifically require a court judgment.
68. There would, however, be an imbalance in the scope of the 1968 Convention, if it excluded maintenance proceedings of the type found in Denmark on the sole ground that they do not take place before courts. The amendment to the 1968 Convention thus made necessary is contained in the proposal for the adoption of a new Article Va in the Protocol. This method appeared simpler than attempting to amend a large number of separate provisions of the 1968 Convention. Wherever the 1968 Convention refers to 'court' or 'judge' it must in the future be taken to include Danish administrative authorities when dealing with maintenance matters (as in Article 2, first paragraph, Article 3, first paragraph, Article 4 first paragraph, Article 5 (2), Article 17, Article 18, Articles 20 to 22, Article 27 (4), Article 28 third paragraph and Article 52). This applies in particular to Article 4 first paragraph, even though in the French, Italian and Dutch texts unlike the German version, the word 'court' does not appear. Similarly, wherever the 1968 Convention refers To 'judgments, the decisions arrived at by the Danish administrative authorities in maintenance matters will in future be included in the legal definition of the term 'judgment' contained in Article 25. Its content is extended in this respect by the addition of Article Va to the Protocol, so that it is now to be understood as reading: 'For the purposes of this Convention "judgment" means any judgment given by a court or tribunal of a Contracting State - including in matters relating to maintenance the Danish administrative authorities - whatever the judgment may be called.
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