The Court of Justice on Succession Regulation and Third State Nationals

On 12 October 2023, the Court of Justice of the EU, following an Opinion of the Advocate General Sánchez-Bordona, handed down its long-awaited judgment in OP (C-21/22). The case concerns the application of the Succession Regulation to third States’ nationals, where a bilateral agreement is in place between the Member State whose authorities are seised and the third State in question.

The preliminary question originates from Poland, and represents the second attempt to seise the Court of Justice of the issue. In the OKR case, C-387/20, a similar question was raised by a notary public but the Court held that the request for a preliminary ruling was inadmissible.

Facts of the Case and Proceedings in Poland

OP is a Ukrainian national who resides in Poland and co-owns an immovable property there. OP wanted to draw up a notarial will in Poland choosing Ukrainian law as applicable to her future succession. The notary refused to do so on the ground that Article 37 of the 1993 Poland-Ukraine Bilateral Agreement does not provide for such possibility. In fact this Article states that:

Legal relationships in matters relating to the succession of movable property shall be governed by the law of the Contracting Party of which the deceased was a national at the time of his or her death.

Legal relationships in matters relating to the succession of immovable property shall be governed by the law of the Contracting Party in the territory of which that property is situated. (…)

OP brought an action before a court in Poland against the notary’s refusal. She argued that the 1993 Poland-Ukrainian Bilateral Agreement does not govern the choice of applicable law, and that, accordingly, a choice is admissible under Article 22 of the Succession Regulation. Article 75(1) of the Succession Regulation, which provides that the regulation does “not affect the application of international conventions to which one or more Member States are party at the time of adoption of this Regulation and which concern matters covered by this Regulation” does not prevent such a choice, she added, given that the 1993 Poland-Ukraine Bilateral Agreement is silent as to party autonomy in succession matters.

Put shortly, the view submitted by OP was that Article 21(1) and (2) of the Succession Regulation correspond to Article 37 of the Agreement, whereas Article 22 of the Succession Regulation, which allows for the choice of national law of the deceased, does not have any counterpart in the Agreement. As a result, Article 22 of the Succession Regulation is applicable (and enables the person concerned to make a choice of law) no matter whether the Bilateral Agreement takes precedence over the Succession Regulation. The domestic court, having doubts on the above view, submitted to questions to the Court of Justice of the EU.

Preliminary Questions and Answers of the Court

The first preliminary question was a straightforward one to answer. The domestic court wanted to know whether Article 22 of the Succession Regulation means that a third-country national residing in a Member State of the EU may choose the law of that third State as the law governing future succession case.

The Court of Justice answered in positive stating that a third-country national residing in a Member State of the EU may choose the law of that third State as the law governing his or her succession as a whole (OP, para. 24)

The answer to the second question seems far more interesting and important for the understanding and applying of the Succession Regulation.

The referring court asked whether Article 75(1) of the Succession Regulation, read in conjunction with Article 22 means that, where a Member State of the EU has concluded, before the adoption of the regulation, a bilateral agreement with a third State which designates the law applicable to succession and does not expressly provide for the possibility of choosing another law, a national of that third State, residing in the Member State in question, may choose the law of that third State to govern his or her succession as a whole.

In other words, the Polish court wanted to know whether OP may choose Ukrainian law as applicable to her succession in accordance with Article 22 of the Succession Regulation, while drafting her will in front of a notary public in Poland, even though 1993 Poland-Ukrainian Bilateral Agreement does contain conflict of law rules relating to succession and does not provide for any party autonomy to that respect.

The Court of Justice answered that Article 75(1) of the Succession Regulation read in conjunction with Article 22, in circumstances such as those of the case examined, does not exclude that a national of a third State, residing in the EU Member State, may be barred from choosing the law of that third State to govern his or her succession as a whole. The above is true provided that the Member State of the EU in question has concluded (before the adoption of that regulation) a bilateral agreement with that third State which designates the law applicable to succession and does not expressly provide for the possibility of choosing another law (see: OP, para. 38). Hence, theoretically, the Succession Regulation does not preclude a situation in which a Ukrainian citizen might not be able to choose Ukrainian law as applicable while drafting a will in front of a notary public in Poland.

Comments on the Judgment

In order to know whether the Succession Regulation applies one must examine its scopes, namely: (1) material one – it  covers succession to the estates of deceased persons (Article 1(1)); (2) territorial one –  it covers EU Member States, with the exception of Ireland and Denmark (Recitals 40, 41, the UK also never applied it) and (3) temporal one – it applies as of 17 August 2015 to the succession cases of persons deceased starting from that day (Art. 83(1) and 84 Succession Regulation). The Succession Regulation applies to succession cases covered by its scopes irrespective nationality or habitual residence of the deceased and irrespective where the assets of the estate are located. Hence, as rightly underlined by the Court of Justice, any person may choose applicable law in accordance with Article 22 of the Succession Regulation (not only an EU citizen). This follows also from the wording of Article 21 which provides for universal application of the conflict of law rules of the Succession Regulation.

Hence, the clou here lies not in the Chapter III “Applicable Law” of the Succession Regulation, but the 1993 Poland-Ukraine Bilateral Agreement. The Court of Justice therefore explained the meaning of Article 75(1) of the Succession Regulation. It underlined that where a Member State is a party to a bilateral agreement concluded with a third State (before the entry into force of the Succession Regulation), which contains provisions laying down rules applicable to succession, it is those provisions which, in principle, are intended to apply, instead of these of the Succession Regulation (OP, para. 27). In view of the Court of Justice, the Succession Regulation does not override these provisions simply because they do not provide for party autonomy and possibility of choosing applicable law by the testator (OP, para. 33).

It should be noted, however, that the Court of Justice while explaining that the bilateral agreement takes precedence before the Succession Regulation uses the expression “in principle” (see: OP, para. 27). Hence, this conclusion is of general, abstract character. It applies to every bilateral agreement and not necessary to this particular one and this particular case. Further, the Court of Justice states that “the scheme” of Succession Regulation “does not preclude a situation where, under a bilateral agreement concluded between a Member State and a third State (…), a third-country national residing in the Member State bound by that bilateral agreement does not have the right to choose the law applicable (…)” (OP, para. 37).

Nowhere in the judgment does the Court of Justice discuss the exact content of the 1993 Poland-Ukraine Bilateral Agreement. It does not say that 1993 Poland-Ukraine Bilateral Agreement excludes the possibility of choosing applicable law. It is left for the domestic court to analyze 1993 Poland-Ukraine Bilateral Agreement and finally decide.