The CJEU on Subsidiary Jurisdiction in Succession Matters

On 7 November 2024 the Court of Justice handed down its judgement in Hantoch case (C‑291/23) in which it interpreted jurisdictional rules of Article 10 of the Succession Regulation. The preliminary question originated from Germany, from Landgericht Düsseldorf.

Background of the Case and the Doubt of the Referring Court

The deceased lived and worked for many years in Germany. Since the retirement the deceased resided principally in Egypt. As he was entitled to a German retirement pension he maintained a German bank account solely for the purpose of transferring the payments from his pension scheme to the bank account in Egypt, by way of a standing order. On the date of his death in Egypt, in  2017, he had both German and Egyptian nationality. LS and PL are descendants of the deceased, whereas PL is the sole testamentary heir. LS brought an action before the referring court, requesting certain information from PL and claiming a right to a reserved share. In LS view the court has jurisdiction as at the time of death of the deceased, he did held assets in Germany consisting of, inter alia, a sum in the bank account.

As the deceased was found to be habitually resident in Egypt at the time of death and held German nationality, the referring court contemplated establishing its jurisdiction based on Article 10(1)(a) of the Succession Regulation. The referring court noticed that legal literature is divided as to the point in time, at which assets should be present in the Member State of the forum. The solution to this doubt is crucial in the case at hand, as ‘at the time of death’ of the deceased there was a credit balance in his bank account, but the account had already been closed at the time the proceedings were initiated. Hence, the referring court turned to the Court of Justice.

Judgment of the Court of Justice

The Court of Justice answered in a straightforward way that in order to establish subsidiary jurisdiction of the courts of the Member State based on Article 10 ‘it is necessary to examine whether those assets were located in that Member State not at the time those courts were seised, but rather at the time of death.’

Comments on the Jurisdictional Rules of the Succession Regulation and the Judgment

Succession Regulation, as opposed to the Brussels I bis or Brussels II ter Regulations, does not provide for residual jurisdiction of the court of the Member States, which might be derived from domestic laws of the Member States. The jurisdictional rules of the Succession Regulation are of exclusive nature, as long as the given succession proceedings falls within the material (Article 1), temporal (Article 83(1)) and territorial scope of the Succession Regulation (Recitals 82, 83); and no international agreement concluded by a given Member State with a third state comes into play (see with that respect: OP case, C-21/22, commented on this blog here).

The jurisdictional rules of the Succession Regulation are built on two pillars: Article 4 and Article 10 (and supplemented by mechanisms, regulated in Articles 5-9, allowing for ‘transfers’ of jurisdiction from one Member State to another, solely in case the deceased has chosen his/her national law as applicable pursuant to Article 22 of the Succession Regulation). Already in VA, ZA v. TP case (C-645/20, commented on this blog here). Court of Justice underlined that there is no hierarchical relationship between Article 4 and Article 10 Succession Regulation, even though the latter is referred to as ‘subsidiary jurisdiction’. As nicely put in the opinion of the AG Sànchez-Bardona to the above case: ‘each caters for a different factual situation: either the deceased was last habitually resident in a Member State of the European Union (the assumption informing Article 4) or he or she wasn’t (the assumption informing Article 10)’.

In its order in Jurtukała case (C‑55/23), the Court of Justice had to explain that Article 10 comes into play only in scenarios, where the deceased at the time of death was habitually resident in a third state. In its judgment in VA, ZA v TP. the Court of Justice reminded that a Member State, which do not apply the Succession Regulation (now Denmark and Ireland; and the UK before its withdrawal from the EU) is not ‘a Member State’ within the meaning of the Regulation, but consequently a third state.

So, if the deceased at the time of death was habitually resident in a third state (including in Denmark or Ireland), the jurisdiction of an EU Member State might be derived from the location of assets of the estate and nationality of the deceased (Article 10(1)(a)) or ‘previous’ habitual residence of the deceased (Article 10(1)(b)); or location of assets only (Article 10(2)). Depending on the strength of the connection with a Member State – including both assets and personal connection of nationality or previous habitual residence; or assets only – the extent of jurisdiction is different. In the former case it extends to ‘the succession as a whole’, meaning all assets of the estate irrespctive their location, including assets located outside of the EU, or in the latter case covers only the assets located in the Member State of the forum.

 In Hantoch case the Court of Justice had to look closer on the requirement of the presence of assets within the territory of the Member State of the forum, and more precisely the point in time, where the assets have to be present in order to trigger the existence of jurisdiction in succession matters. The Court of Justice rightly underlined that the Succession Regulation generally refers to ‘the time of death’ for the purposes of assessing whether the criteria for establishing general jurisdiction or subsidiary jurisdiction are met (para. 21). In view of the Court of Justice, this interpretation is supported by the objectives of the Succession Regulation, which is ensuring that citizens are able to organise their succession in advance, which requires legal certainty and predictability for all interested parties: heirs, legatees or creditors. This certainty and predictability would be jeopardised if jurisdiction could be dependand on circumstances arising after the death of the deceased (paras 24-25). This argument is very convincing.

Another interesting aspect revealed by the case but not specifically discussed in the preliminary question and the judgment, is how substantial these assets located on the territory of a Member State should be in order to justify the jurisdiction based on Article 10 of the Succession Regulation. It seems that when it comes to bank account held in the bank in a Member State, even small amount should justify the existence of the jurisdiction of the courts of a Member State. When coupled with nationality or ‘previous’ habitual residence, these immaterial assets give quite a power to the court of the Member State to rule on the ‘succession as a whole’. Would this be also the case if the assets consisted of a suitcase in a hotel where the deceased unexpectedly died during a business trip?