This is the first contribution to the on-line symposiumregarding the ruling of the Court of Justice in the case of Hrvatske Šume. The author is Peter Mankowski, who is Professor of Private International Law at the University of Hamburg. It is based on the author’s case note in German, forthcoming in Recht der Internationalen Wirtschaft. The publication of this version is permitted by courtesy of Deutscher Fachverlag, Frankfurt/Main.
Article 7 of the Brussels I bis Regulation provides for special jurisdiction for contractual claims (point 1) and for tort claims (point 2).
On the other hand, it does not mention any claims for unjust enrichment (alternatively called: restitution). Does this mean that there is no special jurisdiction for claims or unjust enrichment under Article 7 of the Brussels I bis Regulation if point 5 does not apply)?
However, even if the answer was ‘yes’, this would not amount to a denial of justice for creditors in unjust enrichment since they could always avail temselves of the general jurisdiction in the State where the defendant is domiciled under Article 4 (1) of the Brussels I bis Regulation as kind of ‘residual jurisdiction’ (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, para. 80). Actor sequitur forum rei might save the last remains of the day for claimants, thus. It is ‘only’ about additional options for the claimant through special jurisdictional grounds.
However, in Hrvatske Šume (Case C-242/20) the CJEU can no longer avoid a more principled approach. A-G Saugmandsgaard Øe had categorically denied, on detailed grounds, that an action for recovery of the property gave rise to liability for damage and therefore ruled out the possibility that it could constitute a tort for the purposes of Article 7(2) of the Brussels I bis Regulation (A-G Saugmandsgaard Øe,Opinion of 9 September 2021 in Case C-242/20, paras. 56-79). In other words, the CJEU accepts this as key argument (paras. 53-59). That is, however, taking things way to litteral. It does not fit with the concept of ‘damage’ in Article 2(1) of the Rome II Regulation, which is very broad and, in particular, must be broad enough to also cover ‘damage’ in the case of other non-contractual obligations beyond the actual law of tort (see only Mankowski, in: Ulrich Magnus v Mankowski, Rome II Regulation [2019] Article 2 Rome II Regulation note 8), further to the fact that claims for injunctive relief under tort law fall within point 2, too. Oh, and on top of it, it tends to disregard purposive interpretation and hails litteral interpretation instead (Layton, Cuniberti, EAPIL Blog 9 December 2021; Cuniberti [Comment], EAPIL Blog 9 December 2021).
In any event, actions for the recovery of ineffective contractual relationships must be characterised differently (to the same avail van Calster, gavclaw.com 9 December 2021). In their case, the assessment of Article 12(1)(d) of the Rome I Regulation is correct. They must be characterised as contractual, and special jurisdiction at the place of performance of Article 7(1) of the Brussels I bis Regulation is therefore open to them (Court of Justice, 20 April 2016, Case C-366/13, para. 55 — Profit Investment SIM SpA v Stefano Ossi; A-G Saugmandsgaard Øe,Opinion of 9 September 2021 in Case C-242/20, points 48-52; Mankowski, RIW 2017, 322, 324-326; Grušić, [2019] 68 ICLQ 837, 854-859). The CJEU does not hesitate to confirm this (paras. 47-50). Profit Investement is still good law on this point. In so far as the void or ineffective contract is a consumer, insurance or individual employment contract, what is at issue would be the grounds of jurisdiction under the relevant protective regime (A-G Kokott, Opinion of 2 June 2016 in Case C-195/15, points 54 et seq.; OLG Dresden IPRspr. 2007 No 140, p. 394; LG Darmstadt ZIP 2004, 1924, 1925), in accordance with the generalisable principle underpinning Articles 12(1)(e) of the Rome I Regulation and 10(1) of the Rome II Regulation. Moreover, the rules on jurisdiction for other kinds of actions where the recovery of sums paid, i.e. the way back, should be the same as the ones governing the way forward, e.g. those of the Maintenance Regulation in the event of recovery of maintenance overpaid (Mankowski, RIW 2017, 322, 326).
The CJEU had to rule on another specific issue: Do actions for recovery based on unjust enrichment in respect of something obtained in enforcement fall within the scope of (now) Article 24(5) of the Brussels I bis Regulation and fall within exclusive jurisdiction at the place of enforcement? It could be argued that this would result in a substantive revision of enforcement and therefore a sort of extraordinary remedy exists. On the other hand, these are not formally attacks or even appeals against individual enforcement measures. Its success does not create the foreclosure measure as such, but merely revises its economic result. This is rightly not sufficient for the Court of Justice (paras. 31-36). Irrespective of the legal basis used, it is not sufficient if this unjust enrichment (para. 36), a general offence or a specific offence such as § 717(2) of the German ZPO (in more detail Mankowski, in: Rauscher, EuZPR/EuIPR, vol. 1 [5th ed. 2021] Article 24 Brussels I bis Regulation notes 220-223; Philip Schwarz, Enforcement shopping in the European judicial area [2019] pp. 227-245; see also OLG Saarbrücken EuZW 2017, 347 paras. 18-23).
Practical Consequences
The Rome II Regulation recognises unjust enrichment as a separate non-contractual obligation besides and on equal footing with tort; it consequently allocates an own and separate conflict-of-law rule to unjust enrichment in Article 10 of the Rome II Regulation. The Brussels I bis Regulation, on the other hand, makes no mention of unjust enrichment. This leads to a discrepancy (Mankowski, RIW 2017, 322 [322]; van Calster, gavclaw.com 14 September 2021). It can be inferred from the 2007 Rome II Regulation that unjust enrichment is not a tort for its purposes. It is precisely for that reason that it sets up its own system of unjust enrichment, almost in return for compensation. The more recent Brussels I bis Regulation of 2012 does not reflect this either in positive or negative terms, but requires a characterisation for every claim based on unjust enrichment, whether it can be characterised — more or less badly — as contractual or delicate for the purposes of the Brussels I bis Regulation. Its grid has therefore remained rougher and less sophisticated than that of the Rome II Regulation. ‘Non contractual’ does not automatically equate to the narrower ‘tort, delict, or quasi-delict’ of Article 7 point 2 of the Brussels I bis Regulation (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, paras. 76-79; Briggs, EAPIL Blog 10 December 2021; Pacula, conflictoflaws.net, 17 December 2021). In that regard, unjust enrichment continues to be an unfamiliar concept for the law of jurisdiction, as it has ever been since the days of the original 1968 Brussels Convention. However, this is no longer fully in line with the state of play since the Rome II Regulation at the latest. Unfortunately, the CJEU does not correct this judicially. The CJEU in effect treats creditors in unjust enrichment (beyond ineffective contracts) less favourably than creditors in tort by denying them the benefit of a special head of jurisdiction which would be encroachable on them.
The CJEU is focused on the premissae maiores, i.e. on the individual grounds of jurisdiction, the limits of which the CJEU feels bound to examine. Unfortunately, the premissa minor does not get like attention. In particular, it is not possible to see any recourse to the assistance which the doctrine on condictiones would offer (see Mankowski, RIW 2017, 322, 323 et seq.), which in turn already has its roots in Roman law — and thus in a central source of European and Community law. The term ‘interference’ or ‘infringement’, Eingriffskondiktion, or a functional equivalent, does not appear anywhere in the CJEU. In that regard, already the A-G’s Opinion scored less than possible. The A-G and, following, the CJEU celebrate a ‘chracterisation festival’, a Qualifikationsfest (van Calster, gavclaw.com 14 September 2021), without employing the full array of methodological tools. The contention that unjust enrichment could never be attributable to an event harmful in the broad sense and to the conduct of the person liable for the condiction (para. 55), is wrong for it disregards the cases of interference and infringement of another’s rights. Hence, other cases in the future might prompt more distinguishing answers (cf. Miguel de Asensio,pedromiguelasensio.blogspot.com, 13 December 2021). While not all claims in unjust enrichment automatically qualify for Article 7 point (2) of the Brussel I bis Regulation, there might be some instances that do individually (cf. Cuniberti, EAPIL Blog 9 December 2021; Miguel de Asensio,pedromiguelasensio.blogspot.com, 13 December 2021). One future day, a notion of ‘restitution in wrong’ should prevail, properly re-transferring interference and infringement into the realm of Article 7 point 2 of the Brussels I bis Regulation even de regulatione lata (Mankowski, in: Ulrich Magnus/Mankowski, Brussels Ibis Regulation [2nd ed. 2022] Article 7 Brussels Ibis Regulation note 245). Predictability would not be overly impinged by that (to calm the concerns raised by (cf. Sisák, EAPIL Blog 10 December 2021).
However, neither the unconvincing reasoning nor the conclusion raising severe doubts for cases of interference or infringement (see Mankowski, RIW 2017, 322, 326 et seq.) can erase the fact that the CJEU establishes a seemingly clear orientation mark for practical purposes (to the same avail Miguel de Asensio, pedromiguelasensio.blogspot.com 13 December 2021). It would be ill-advised to implement any specific restriction on actions for recovery in natura. This is because such recovery is the primary legal consequence of any claim for enrichment, and a subsidiary shift to compensation for value must not have the effect of changing the jurisdiction of the court, as the primary legal consequence is also the ground for the subsidiary one. Hrvatske Šume conveys the practical message, for the time being: Beyond the realm of ineffective contracts, claims in unjust enrichment can avail them only of general jurisdiction and the special grounds of jurisdiction derived from Article 7 point 5; 8 points 1 and 3 of the Brussels I bis Regulation, but not of the special grounds of jurisdiction derived from Article 7 points 1 and 2 Brussels I bis Regulation. The Kalfelis formula (Athanassios Kalfelis v Bankhaus Schröder Münchmeyer Hengst & Cie) has always been deceptive, and there have always been tertia to contract and tort even in liability cases. Liability is not a binary world. Any perceived suggestion that Article 7 (2) Brussels I bis Regulation, or previously Article 5 point 3 Brussels Convention or Brussels I Regulation, was a residual rule within the realm of special jurisdiction (cf. Cuniberti, EAPIL Blog 9 December 2021; Okoli, EAPIL Blog 9 December 2021) has always been wrong. Sloppy and inaccurate drafting must prompt such important consequences.
Choice of court agreements pursuant to Article 25 of the Brussels I bis Regulation remain possible, ex ante as well as posteventum (Mankowski, RIW 2017, 322, 330). However, ex ante choice of court agreements (also) on claims for enrichment are unlikely to exist outside a contractual environment; they score their highest probality in framework agreements covering all legal relationships between the respective parties.
The reform agenda of the European legislature for a future Brussels Ib Regulation ought to reflect whether unjust enrichment should be blessed with a separate rule on special jurisdiction (Grušić, [2019] 68 ICLQ 837, 854-859; Mankowski, in: Ulrich Magnus/Mankowski, Brussels Ibis Regulation [2nd ed. 2022] Article 7 Brussels Ibis Regulation note 63a). The same applies to claims in negotiorum gestio (see in detail Dornis, in: Mankowski [ed.], Research Handbook on the Brussels Ibis Regulation [2020], p. 64). If these categories of non contractual obligations, well within the realm of the Rome II Regulation, were expressly addressed this would placate the principal questions.
This is the first contribution to the on-line symposium regarding the ruling of the Court of Justice in the case of Hrvatske Šume. The author is Peter Mankowski, who is Professor of Private International Law at the University of Hamburg. It is based on the author’s case note in German, forthcoming in Recht der Internationalen Wirtschaft. The publication of this version is permitted by courtesy of Deutscher Fachverlag, Frankfurt/Main.
On the other hand, it does not mention any claims for unjust enrichment (alternatively called: restitution). Does this mean that there is no special jurisdiction for claims or unjust enrichment under Article 7 of the Brussels I bis Regulation if point 5 does not apply)?
However, even if the answer was ‘yes’, this would not amount to a denial of justice for creditors in unjust enrichment since they could always avail temselves of the general jurisdiction in the State where the defendant is domiciled under Article 4 (1) of the Brussels I bis Regulation as kind of ‘residual jurisdiction’ (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, para. 80). Actor sequitur forum rei might save the last remains of the day for claimants, thus. It is ‘only’ about additional options for the claimant through special jurisdictional grounds.
The CJEU has so far avoided rendering a fundamental opinion where to place unjust enrichment (in particular in Case C-102/15, Gazdasági Versenyhivatal v Siemens AG Österreich; see, as contrast to A-G Wahl, Opinion of 7 April 2016 in Case C-102/15, paras. 54 to 75) and only occasionally decided on bits pieces (CJEU Case C-611/45, Land Berlin v Ellen Mirjam Sapir, paras. 35 et seq.; CJEU Case C-366/13, Profit Investment SIM SpA v Stefano Ossi, para. 55; CJEU Case C-185/15, Marjan Kostanjevec v F&S Leasing GmbH, paras. 34-40).
Decision of the CJEU in Hrvatske Šume
However, in Hrvatske Šume (Case C-242/20) the CJEU can no longer avoid a more principled approach. A-G Saugmandsgaard Øe had categorically denied, on detailed grounds, that an action for recovery of the property gave rise to liability for damage and therefore ruled out the possibility that it could constitute a tort for the purposes of Article 7(2) of the Brussels I bis Regulation (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, paras. 56-79). In other words, the CJEU accepts this as key argument (paras. 53-59). That is, however, taking things way to litteral. It does not fit with the concept of ‘damage’ in Article 2(1) of the Rome II Regulation, which is very broad and, in particular, must be broad enough to also cover ‘damage’ in the case of other non-contractual obligations beyond the actual law of tort (see only Mankowski, in: Ulrich Magnus v Mankowski, Rome II Regulation [2019] Article 2 Rome II Regulation note 8), further to the fact that claims for injunctive relief under tort law fall within point 2, too. Oh, and on top of it, it tends to disregard purposive interpretation and hails litteral interpretation instead (Layton, Cuniberti, EAPIL Blog 9 December 2021; Cuniberti [Comment], EAPIL Blog 9 December 2021).
In any event, actions for the recovery of ineffective contractual relationships must be characterised differently (to the same avail van Calster, gavclaw.com 9 December 2021). In their case, the assessment of Article 12(1)(d) of the Rome I Regulation is correct. They must be characterised as contractual, and special jurisdiction at the place of performance of Article 7(1) of the Brussels I bis Regulation is therefore open to them (Court of Justice, 20 April 2016, Case C-366/13, para. 55 — Profit Investment SIM SpA v Stefano Ossi; A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, points 48-52; Mankowski, RIW 2017, 322, 324-326; Grušić, [2019] 68 ICLQ 837, 854-859). The CJEU does not hesitate to confirm this (paras. 47-50). Profit Investement is still good law on this point. In so far as the void or ineffective contract is a consumer, insurance or individual employment contract, what is at issue would be the grounds of jurisdiction under the relevant protective regime (A-G Kokott, Opinion of 2 June 2016 in Case C-195/15, points 54 et seq.; OLG Dresden IPRspr. 2007 No 140, p. 394; LG Darmstadt ZIP 2004, 1924, 1925), in accordance with the generalisable principle underpinning Articles 12(1)(e) of the Rome I Regulation and 10(1) of the Rome II Regulation. Moreover, the rules on jurisdiction for other kinds of actions where the recovery of sums paid, i.e. the way back, should be the same as the ones governing the way forward, e.g. those of the Maintenance Regulation in the event of recovery of maintenance overpaid (Mankowski, RIW 2017, 322, 326).
The CJEU had to rule on another specific issue: Do actions for recovery based on unjust enrichment in respect of something obtained in enforcement fall within the scope of (now) Article 24(5) of the Brussels I bis Regulation and fall within exclusive jurisdiction at the place of enforcement? It could be argued that this would result in a substantive revision of enforcement and therefore a sort of extraordinary remedy exists. On the other hand, these are not formally attacks or even appeals against individual enforcement measures. Its success does not create the foreclosure measure as such, but merely revises its economic result. This is rightly not sufficient for the Court of Justice (paras. 31-36). Irrespective of the legal basis used, it is not sufficient if this unjust enrichment (para. 36), a general offence or a specific offence such as § 717(2) of the German ZPO (in more detail Mankowski, in: Rauscher, EuZPR/EuIPR, vol. 1 [5th ed. 2021] Article 24 Brussels I bis Regulation notes 220-223; Philip Schwarz, Enforcement shopping in the European judicial area [2019] pp. 227-245; see also OLG Saarbrücken EuZW 2017, 347 paras. 18-23).
Practical Consequences
The Rome II Regulation recognises unjust enrichment as a separate non-contractual obligation besides and on equal footing with tort; it consequently allocates an own and separate conflict-of-law rule to unjust enrichment in Article 10 of the Rome II Regulation. The Brussels I bis Regulation, on the other hand, makes no mention of unjust enrichment. This leads to a discrepancy (Mankowski, RIW 2017, 322 [322]; van Calster, gavclaw.com 14 September 2021). It can be inferred from the 2007 Rome II Regulation that unjust enrichment is not a tort for its purposes. It is precisely for that reason that it sets up its own system of unjust enrichment, almost in return for compensation. The more recent Brussels I bis Regulation of 2012 does not reflect this either in positive or negative terms, but requires a characterisation for every claim based on unjust enrichment, whether it can be characterised — more or less badly — as contractual or delicate for the purposes of the Brussels I bis Regulation. Its grid has therefore remained rougher and less sophisticated than that of the Rome II Regulation. ‘Non contractual’ does not automatically equate to the narrower ‘tort, delict, or quasi-delict’ of Article 7 point 2 of the Brussels I bis Regulation (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, paras. 76-79; Briggs, EAPIL Blog 10 December 2021; Pacula, conflictoflaws.net, 17 December 2021). In that regard, unjust enrichment continues to be an unfamiliar concept for the law of jurisdiction, as it has ever been since the days of the original 1968 Brussels Convention. However, this is no longer fully in line with the state of play since the Rome II Regulation at the latest. Unfortunately, the CJEU does not correct this judicially. The CJEU in effect treats creditors in unjust enrichment (beyond ineffective contracts) less favourably than creditors in tort by denying them the benefit of a special head of jurisdiction which would be encroachable on them.
The CJEU is focused on the premissae maiores, i.e. on the individual grounds of jurisdiction, the limits of which the CJEU feels bound to examine. Unfortunately, the premissa minor does not get like attention. In particular, it is not possible to see any recourse to the assistance which the doctrine on condictiones would offer (see Mankowski, RIW 2017, 322, 323 et seq.), which in turn already has its roots in Roman law — and thus in a central source of European and Community law. The term ‘interference’ or ‘infringement’, Eingriffskondiktion, or a functional equivalent, does not appear anywhere in the CJEU. In that regard, already the A-G’s Opinion scored less than possible. The A-G and, following, the CJEU celebrate a ‘chracterisation festival’, a Qualifikationsfest (van Calster, gavclaw.com 14 September 2021), without employing the full array of methodological tools. The contention that unjust enrichment could never be attributable to an event harmful in the broad sense and to the conduct of the person liable for the condiction (para. 55), is wrong for it disregards the cases of interference and infringement of another’s rights. Hence, other cases in the future might prompt more distinguishing answers (cf. Miguel de Asensio, pedromiguelasensio.blogspot.com, 13 December 2021). While not all claims in unjust enrichment automatically qualify for Article 7 point (2) of the Brussel I bis Regulation, there might be some instances that do individually (cf. Cuniberti, EAPIL Blog 9 December 2021; Miguel de Asensio, pedromiguelasensio.blogspot.com, 13 December 2021). One future day, a notion of ‘restitution in wrong’ should prevail, properly re-transferring interference and infringement into the realm of Article 7 point 2 of the Brussels I bis Regulation even de regulatione lata (Mankowski, in: Ulrich Magnus/Mankowski, Brussels Ibis Regulation [2nd ed. 2022] Article 7 Brussels Ibis Regulation note 245). Predictability would not be overly impinged by that (to calm the concerns raised by (cf. Sisák, EAPIL Blog 10 December 2021).
However, neither the unconvincing reasoning nor the conclusion raising severe doubts for cases of interference or infringement (see Mankowski, RIW 2017, 322, 326 et seq.) can erase the fact that the CJEU establishes a seemingly clear orientation mark for practical purposes (to the same avail Miguel de Asensio, pedromiguelasensio.blogspot.com 13 December 2021). It would be ill-advised to implement any specific restriction on actions for recovery in natura. This is because such recovery is the primary legal consequence of any claim for enrichment, and a subsidiary shift to compensation for value must not have the effect of changing the jurisdiction of the court, as the primary legal consequence is also the ground for the subsidiary one. Hrvatske Šume conveys the practical message, for the time being: Beyond the realm of ineffective contracts, claims in unjust enrichment can avail them only of general jurisdiction and the special grounds of jurisdiction derived from Article 7 point 5; 8 points 1 and 3 of the Brussels I bis Regulation, but not of the special grounds of jurisdiction derived from Article 7 points 1 and 2 Brussels I bis Regulation. The Kalfelis formula (Athanassios Kalfelis v Bankhaus Schröder Münchmeyer Hengst & Cie) has always been deceptive, and there have always been tertia to contract and tort even in liability cases. Liability is not a binary world. Any perceived suggestion that Article 7 (2) Brussels I bis Regulation, or previously Article 5 point 3 Brussels Convention or Brussels I Regulation, was a residual rule within the realm of special jurisdiction (cf. Cuniberti, EAPIL Blog 9 December 2021; Okoli, EAPIL Blog 9 December 2021) has always been wrong. Sloppy and inaccurate drafting must prompt such important consequences.
Choice of court agreements pursuant to Article 25 of the Brussels I bis Regulation remain possible, ex ante as well as post eventum (Mankowski, RIW 2017, 322, 330). However, ex ante choice of court agreements (also) on claims for enrichment are unlikely to exist outside a contractual environment; they score their highest probality in framework agreements covering all legal relationships between the respective parties.
The reform agenda of the European legislature for a future Brussels Ib Regulation ought to reflect whether unjust enrichment should be blessed with a separate rule on special jurisdiction (Grušić, [2019] 68 ICLQ 837, 854-859; Mankowski, in: Ulrich Magnus/Mankowski, Brussels Ibis Regulation [2nd ed. 2022] Article 7 Brussels Ibis Regulation note 63a). The same applies to claims in negotiorum gestio (see in detail Dornis, in: Mankowski [ed.], Research Handbook on the Brussels Ibis Regulation [2020], p. 64). If these categories of non contractual obligations, well within the realm of the Rome II Regulation, were expressly addressed this would placate the principal questions.
Condividi:
Like this: