BRUSSELS AND LUGANO CONVENTIONS
(20188)
7700/99
JUSTCIV 60
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Note by the Council Working Party on the Revision of the Brussels and Lugano Conventions.
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| Legal base: |
— |
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| Document originated:
| 30 April 1999 |
| Deposited in Parliament:
| 08 June 1999 |
| Department: |
Lord Chancellor's |
| Basis of consideration:
| EM of 25 June |
| Previous consideration:
| None |
| Committee's assessment:
| Legally important |
| Committee's decision:
| Not cleared; further information requested
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Background
2.1 The Brussels and Lugano Conventions
are international instruments harmonising conflicting rules on
recognition and enforcement of judgments. The Brussels Convention
is the most significant instrument in the Community context in
the sphere of private international law. It has been amended four
times, on the accession of the UK, Denmark and Ireland in 1978,
Greece in 1982, Spain and Portugal in 1989 and most recently Austria,
Finland and Sweden in 1996. The Brussels Convention was supplemented
in 1988 by the Lugano Convention which was designed to extend
the Brussels Convention to the EFTA countries. The Lugano Convention
broadly accords with the Brussels Convention.
2.2 Before the Maastricht Treaty, harmonised
European rules in this field were in the form of conventions based
upon Article 293 (ex Article 220). This article requires Member
States, so far as is necessary, to enter into negotiations with
each other with a view to securing, for the benefit of their nationals,
the simplification of formalities governing the reciprocal recognition
and enforcement of judgments of courts or tribunals and of arbitration
awards.
2.3 Since 1993 it has been possible for
Conventions on judicial co-operation in civil matters to be based
on Title VI TEU. With the entry into force of the Treaty of Amsterdam,
judicial co-operation in civil matters falls into the new Article
IV EC[2].
However, the application of this Title is subject to a Protocol
on the position of the UK and Ireland which states that they,
subject to an entitlement to opt into negotiations on the adoption
of proposed measures, will not participate in measures to be adopted
under the Title.
The document
2.4 At a meeting in December 1997, the Council
initiated a method for dealing with the revision of the Brussels
and Lugano Conventions. In particular an ad hoc Working
Group was set up comprising EU Member States and expanded to include
the Lugano member states Switzerland, Norway and Iceland.
2.5 Working priorities were established
and the group was asked to present its conclusions by early 1999.
The working group considered amendments submitted by Member States
as well as the Commission, and also took account of the ECJ's
case law in this area.
2.6 The document is the culmination of these
discussions and is a revised consolidated text of the proposed
amendments to the two Conventions.
2.7 At a JHA Council meeting of 28 May,
the Council agreed to the proposed amendments in the document
and 'froze' them pending a proposal from the Commission for a
Community Act to replace the Brussels Convention, which will incorporate
the working group's suggestions. Negotiations on that proposal
are expected to begin in the autumn, but it is uncertain when
the draft would be ready for submission to the Council. Moreover,
it is unlikely that negotiations with the EFTA States on the Lugano
Convention would begin before the completion of the Community
Act.
The Government's view
2.8 In their Explanatory Memorandum of 25
June, the Parliamentary Secretary at the Lord Chancellor's Department
(Mr Vaz) and the Secretary of State for Scotland (Dr Reid) say
that the amendments will improve the operation of the two Conventions
and will therefore have a beneficial impact on business, although
the Government did not think it appropriate to produce a regulatory
impact assessment of the proposals.
2.9 Indeed the EM states "most of the
agreed amendments are relatively minor and technical, and although
useful, are generally uncontroversial". Those of a more substantial
nature are:
"Article 5(1): an amendment
to the ground of jurisdiction in contractual matters to make specific
provision as to the place of performance in relation to contracts
for the sale of goods and supply of services; other types of contract
will remain subject to the present rule.
"Article 13: amendments to the grounds of jurisdiction
in consumer contracts; the general thrust of these amendments
is to make it somewhat easier for a consumer to bring proceedings
in the State of his domicile.
"Article 15a to d: new provisions relating to
employment contracts; these are designed to create jurisdictional
protection for employees broadly similar to that which the Conventions
already provide for consumers and insurance contracts.
"Article 23a: this new provision establishes
a single uniform date as to when a court in a Contracting State
has jurisdiction in relation to a particular case for the purpose
of the provisions in the Convention dealing with concurrent proceedings;
the present rule is confusingly that this date is governed by
the relevant national law.
"Article 27(2): this provides for a failure
to serve the defendant with proceedings in the State of origin
to be a ground for a refusal to recognise or enforce a foreign
judgment; it is to be amended so that it strikes a fairer balance
between the legitimate interests of the parties — at present
the balance unfairly favours the defendant.
"Articles 31 to 49: the principal change in
these provisions dealing with enforcement is to ensure that the
first stage in the enforcement process, namely the issue of a
declaration of enforceability, follows automatically once a creditor
presents the enforcing court with the required documents (including
a certificate issued by the court of origin) and cannot be resisted
at that stage on any of the grounds for refusal laid down in the
Convention. A defendant will effectively be required to establish
the case for non-enforcement and this should speed up the enforcement
process.
"Article 53: a new autonomous definition of
the domicile of companies and other legal persons which closely
follows our present definition under section 43 of the Civil Jurisdiction
and Judgments Act 1982.
"Articles 62, 62a, 62b and 62c of the Lugano
Convention: these provisions contain the new procedure for third
States acceding to this Convention. The principle innovation is
the requirement on such States to provide the information about
their legal system and relevant law. This should help Contracting
States to decide whether to accept new accessions."
Conclusion
2.10 Although, as the Department's Explanatory
Memorandum states, these amendments are for the most part uncontroversial,
we invite Ministers to clarify their views on three matters.
2.11 Until now the ECJ has generally
interpreted and applied the Brussels Convention as an instrument
of international law and has not sought to 'communitize' it. However,
if the Council adopts a Community Act to replace the Brussels
Convention, the effect is an alteration in the inherent character
of the Brussels Convention. The ECJ will no longer be asked to
rule on matters of international, but of Community, law. We
ask the Ministers what consequences they anticipate from the change
in the nature of the Conventions from international Conventions
to Community legislation, and whether they regard those changes
as beneficial or not.
2.12 Secondly, we ask whether the Government
intends to exercise its option to take part in the adoption and
application of the proposed Community Act.
2.13 Thirdly, amended Article 13, the
aim of which is, according to the Explanatory Memorandum, to make
it easier for a consumer to bring legal proceedings in his own
State of domicile without being forced to do so in the State of
the seller's domicile, has been criticised because "it would
deter small and medium sized companies from using the Internet
as they would have to be aware of 15 different concurrent régimes
in order to trade across borders" (Financial Times,
6 July 1999). We invite Ministers to comment on this point.
2.14 In the meantime we do not clear
the document.
2 Articles 61(c) and 65 cover measures in the field
of judicial co-operation in civil matters having cross border
implications, insofar as is necessary for the proper functioning
of the internal market. Back
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