Archive for category: Public consultations

HCCH Public Consultation on Parallel Proceedings and Related Actions Draft Text

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Ugljesa Grusic
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HCCHThe Working Group established under the auspices of the Hague Conference on Private International Law (HCCH) to deal with the Jurisdiction Project has developed draft provisions for a possible convention (Draft Text) to address parallel proceedings and related actions taking place in multiple States, acknowledging the primary role of both jurisdictional rules and the doctrine of forum non conveniens.

The Permanent Bureau of the HCCH is seeking feedback on whether the Draft Text would, in practice, assist in addressing such matters and how the provisions in the Draft Text could be improved. Responses received from this consultation will be submitted to the governing body of the HCCH, the Council of General Affairs and Policy (CGAP), where, in March 2026, CGAP will decide on the next steps for the project.

This is a worldwide consultation. The HCCH especially encourages comments from experts, practitioners and judges with experience in cross-border litigation, and private international law more broadly. This consultation is being conducted in English, French and Spanish.

The deadline for responding is 9:00, 26 January 2026, CET.

Enquiries can be sent to secretariat@hcch.net. Further information is available here.

Grounded or Groundless? The Supranational Approach in Light of the Digital Assets Bill

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The Editors of the EAPIL blog
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This post was written by Aygun Mammadzada, Lecturer (Assistant Professor) in Law at the Swansea University. It is the fifth contribution to the EAPIL online symposium on the Law Commission of England and Wales’s Consultation Paper on Digital Assets and Electronic Trade Documents in Private International Law. The post is based on the author’s presentation at the Journal of Private International Law Biennial Conference of September 2025) and outlines arguments that elaborated in a forthcoming article. The post offers a concise reflection of that work, while also relying on the author’s own response to the Law Commission’s Consultation Paper. Readers are encouraged to participate in the discussion by commenting on this and the previous posts.

The EAPIL Symposium on Digital Assets has already seen sharp and insightful criticism of the Law Commission’s proposed ‘supranational approach’ to private international law issues relating to digital assets (here and here). Earlier contributions have questioned its conceptual coherence, its practical feasibility, and its departure from traditional conflict-of-laws reasoning.

This post does not seek to repeat those valuable critiques. Instead, it takes a complementary perspective: it re-examines the supranational approach through the lens of the Property (Digital Assets etc.) Bill (“Digital Assets Bill” hereinafter), most likely soon to become an Act. Once enacted, the Act will supply the normative and conceptual foundation upon which private international law questions will inevitably rest. In fact, when read alongside the Digital Assets Bill, which recognises digital assets as a third category of property, the supranational approach appears increasingly detached.

The Digital Assets Bill: Reframing Property Foundations for the Digital Age

The Digital Assets Bill marks a pivotal step in English law’s modernisation of property concepts for the digital age. By recognising crypto-tokens and similar digital assets as a new category of personal property, the Bill confirms English law’s capacity to adapt established private law principles to technological change.

This recognition is not merely symbolic. It provides the foundation for ownership, transfer, and protection of digital assets within a stable legal framework. In doing so, the Digital Assets Bill preserves English law’s hallmark virtues: conceptual clarity, adaptability, and predictability as essential qualities for maintaining the UK’s standing as a global commercial and dispute resolution hub. It is precisely against this principled and structured property foundation that the Law Commission’s supranational approach begins to look unsteady.

The Supranational Turn: From Lex Situs to ‘Just Disposal’

Under conventional English conflict of laws rules, lex situs as the law of the place where the property is situated governs proprietary disputes. The rule anchors rights to a specific jurisdiction, providing clarity and foreseeability.

Based on the proposed supranational approach, the Law Commission, however, concludes that the lex situs rule cannot meaningfully apply to decentralised crypto tokens that “exist nowhere and everywhere.” It therefore proposes abandoning localisation altogether. Courts, instead of identifying a governing law through connecting factors, would resolve disputes by focusing on what is “just” in the circumstances, taking into account a wide range of contextual elements, including the parties’ expectations.

While this appears pragmatic, it effectively replaces rule-based determination with judicial discretion. The resulting framework may look flexible but functions unpredictably, particularly in transnational commercial settings where certainty and enforceability are indispensable.

Reassessing the Supranational Vision

The proposed approach becomes troubling. First of all, it relies on indefinite discretion without principle. The pursuit of justice is an unquestionable objective and we would ordinarily apply the multilateralist approach to achieve just. Yet,replacing connecting factors with “justice” as an open-ended guiding standard risks subjective and inconsistent results. Judicial discretion, untethered from doctrinal anchors, threatens the very values of uniformity, predictability and neutrality that conflict rules are designed to ensure.

This leads to the fragmentation of legal certainty. Cross-border commercial actors depend on predictable conflict rules to structure transactions and assess risk. Without clear localisation principles, it becomes impossible to determine the applicable law for transfer, title, or security rights over digital assets. As Matthias Lehmann astutely observed in his contribution to this symposium, such an approach will result in highly divergent substantive rules, since there will be no PIL mechanism to determine which national law applies, and each court will apply its own rules (which it may call ‘supranational’). This observation strikes at the heart of the problem: a “supranational” framework without a supranational authority risks generating disunity rather than convergence.

This uncertainty undermines the very function of the Digital Assets Bill as well, to create a coherent property regime for digital value. Therefore, the proposed approach leaves a doctrinal incompatibility with the Digital Assets Bill. Once enacted, it will be a property statute, not a procedural experiment. It presupposes that proprietary conflicts will continue to operate within structured, objective frameworks like lex situs or its redefined digital equivalents. Indeed, the Digital Assets Bill was designed to establish a normative framework for already existing judicial rulings which relied on the established multilateralist approach and connecting factors, e.g., in AA v Persons Unknown [2019] EWHC 3556 (Comm),Fetch.ai Ltd v Persons Unknown [2021] EWHC 2254 (Comm), Tulip Trading v Persons Unknown [2023] EWCA, Civ 83, etc.. The supranational proposal, by severing the link between substance and conflict rules, destabilises this relationship. The result is conceptual dissonance between the forthcoming Act’s property foundation and the Commission’s procedural innovation.

It is also worth noting that the supranational approach risks to depart from the Law Commission’s very own tripartite methodology in relation to digital assets (see Final Report, Chapter 2). By relying on discretion rather than principle, it halts common law development by incrementally refining doctrinal anchors. It avoids statutory reform at the precise moment when the Digital Assets Bill provides a model for targeted legislative clarity. Hence, it may sideline technical expertise, treating the problem of digital localisation as irrelevant rather than technologically solvable.

Notably, England has long prided itself on being a centre for global transactional law, dispute-resolution, and enforcement reliability. Likewise, the Law Commission several times restated that the laws of England and Wales are sufficiently flexible to accommodate digital assets (see Consultation Paper, para 1.17). To sustain this role in the digital-asset sphere, participants require clarity: what law binds my token, what court hears the dispute, what rules apply? The proposed justice-based discretion may discourage choice of English law as governing law because it reduces predictability, increases forum-shopping risk, and potentially fragments outcomes. Indeed, the Law Commission itself emphasised that “If the rules developed in relation to digital assets are inappropriate, digital asset platforms are less likely to select English law or to be based in the United Kingdom.” (see Digital assets as personal property: Supplemental report and draft Bill, para 4.9)

Altogether, instead of enhancing certainty, coherence, and responsiveness, the supranational proposal risks producing the opposite: incoherence, unpredictability, and diminished commercial confidence.

Reconceptualising Lex Situs, Not Replacing It

If digital assets are now property, the task is not to discard lex situs but to reimagine it. Several models already point the way: e.g., locating the asset with reference to the controlling person or the place of incorporation of the token issuer or linking it to the governing law of the digital system or platform. Each approach preserves the core values of private international law, certainty, foreseeability, and neutrality, while adapting them to decentralised technology. It is an evolution within the system, not an escape from it.

This is undoubtedly a complex undertaking, and the Law Commission’s sustained engagement with these challenges deserves genuine recognition. Yet, true progress may lie in aligning with the ongoing UNIDROIT and HCCH projects on Digital Tokens, initiatives where the Law Commission already participates as an Observer. Engagement through these platforms would ensure that English law’s reform remains both globally relevant and doctrinally consistent.

Grounded Leadership, Not Groundless Innovation

The Digital Assets Bill represents English law’s unique strength: principled adaptability grounded in the common law tradition. The supranational approach represents something different: innovation untethered from structure.

As the Bill becomes an Act, it will form the normative foundation for all future conflicts involving digital property. That foundation demands corresponding private international law rules that are principled, predictable, and anchored in the coherence of English property law.

English private international law does not need to transcend its structure to stay relevant. It needs to evolve within it. Its global influence has always rested not on radical departures, but on the capacity to modernise without losing doctrinal integrity to remain, quite literally, grounded.

Section 72 of the Bills of Exchange Act 1882

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The Editors of the EAPIL blog
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This post was written by Sagi Peari, Associate Professor in Private and Commercial Law at the University of Western Australia Law School. It is the fourth contribution to the EAPIL online symposium on the Law Commission of England and Wales’s Consultation Paper on Digital Assets and Electronic Trade Documents in Private International Law. Readers are encouraged to participate in the discussion by commenting on the posts.

Learning to play the music of negotiable instruments law is incredibly difficult. It takes years to learn the technical terms, understand the underpinning private law nature of the doctrine, consider the case law and statutory provisions, grasp the utility of the underlying policy considerations, and reflect on the comparative outlook. It is understandable why—prior to the work of the Law Reform Commission of England and Wales (“Commission”)—modern conflict of laws reforms had excluded themselves from engaging with negotiable instruments. The most notable instance of such exclusion occurred in the Giuliano and Lagarde Report (1980). The inherent complexity and technicality of the field underscore the significance of the work performed by the Commission in Chapter 7 of its Consultation Paper on Digital Assets and (Electronic) Trade Documents in Private International Law (“Consultation Paper”). It is also evident that the Commission has learnt to play the music of negotiable instruments law while applying it in the context of the applicable law question.

The complexity of negotiable instruments law can be attributed to the interplay of the principles underpinning its normative structure. At the core of this structure lies classical contractual liability. Each contract executed under a negotiable instrument crystallises an independent legal relationship between a specific signatory party (referred to as the drawer, the acceptor, or the indorser) and the holder of the instrument. The liability of each signatory is determined by the specific legal relationship formed between that party and the instrument’s holder. For example, under the acceptor’s contract, the acceptor assumes the primary obligation to pay the amount specified in the instrument. By contrast, the drawer and indorser, through their respective contracts, guarantee the performance of that monetary obligation. Their signatures establish secondary obligations—namely, to reimburse the holder in the event of the acceptor’s dishonour. All three contracts also impose various implicit procedural requirements on the holder, intended to ensure fairness and legal certainty in the holder’s dealings with each signatory party.

However, contractual obligations alone do not fully account for the internal structure of negotiable instruments law. The requirement of delivery and the concept of negotiability—according to which a holder can transfer/”negotiate” the instrument to a third party—underpin the proprietary dimensions of this legal framework. A valid transfer of rights under the instrument must be completed through the act of declarative delivery (Bills of Exchange Act 1882 (“BEA”), s 21 (1)).  This requirement reflects a fundamental principle of property law, which assigns central importance to physical possession of a property item. Possession serves as a public signal to third parties regarding the identity of the rightful owner. Similarly, the protected status of a holder who acquires the instrument for value and in good faith derives from a related property law doctrine, which confers superior rights on a good faith purchaser for value.

Many aspects of the central features of negotiable instruments law outlined above remain highly contested between common law and civil law jurisdictions. Common law systems base their negotiable instruments law on the UK BEA, which has served as a model for several codification efforts in jurisdictions such as the United States, Australia, Canada, and South Africa. In contrast, civil law countries have adopted a different framework—the Geneva Conventions of 1930 and 1931—which have influenced countries including Germany, France, Spain, and Italy. Nonetheless, it has been argued that the underlying structures of negotiable instruments law are grounded in classical contract and property doctrines. As Benjamin Geva and I argue in our International Negotiable Instruments monograph (“INI”), there is no reason to exclude the conflict of laws rules applicable to those doctrines from negotiable instruments law, provided that this application involves appropriate qualifications and refinements.

It is clear that the Commission has closely considered INI in Chapter 7. This is evident from the Commission’s frequent explicit and implicit references to the monograph, which aimed to provide the overall reform framework for section 72 of the BEA. Notably, the Commission chose to adopt the key proposals and arguments presented in INI, including:

  • The rejection of the traditional hesitation within modern conflict of laws scholarship to engage with the complex nature of negotiable instruments, as evidenced in the classical Giuliano and Lagarde Report (Consultation Paper, 7.65, 7.147);
  • The recognition that the internal structure of negotiable instruments law is drawn—with proper qualifications—from underpinning private law doctrines (Consultation Paper, 7.42, 7.94, 7.153);
  • The recognition that the traditional rule of the place of contract formation, set out in section 72, must be reconsidered and qualified in light of the underlying rationales and policy considerations (Consultation Paper, 7.88, 7.116, 7.123–7.124);
  • The adoption of the party autonomy principle as a governing principle in the applicable law question (Consultation Paper, 7.133, 7.162–7.163);
  • The adoption of the principal distinction between primary and secondary parties (Consultation Paper, 7.59, 7.174, 7.184, 7.205-7.213, 7.221);
  • The adoption of the place of performance as the connecting factor to govern the obligations of the primary party on the instrument when there is no explicit choice of applicable law (Consultation Paper, 7.183, 7.189);
  • The broad interpretation of section 72(2) of the BEA (Consultation Paper, 7.161).

The adoption of the above-mentioned proposals and arguments is both remarkable and gratifying. It illustrates the central role that INI played in the work of the Commission, which underpins the broader notion of the paramount significance of academia in driving legal reform and social change.

True, the Commission has rejected some of the suggestions made in INI, such as INI’s support for the most significant relationship principle (INI, Chapter VI), its rejection of the validation principle (INI, Chapter VII(A), in particular para. 7.144), and the proposed rule governing the obligations of secondary parties to an instrument in the absence of an explicit choice of applicable law (INI, Chapter VI(B)). To maintain the internal coherence and logic of the arguments advocated in INI, it is hoped that the Commission will reconsider its position on these matters, for the following reasons:

  • The objections expressed in INI against the adoption of the “validation principle” (INI, chapter VII A, in particular 7.144) have been growing and have received validation in recent case law (Enka Insaat Ve Sanayi AS v OOO Insurance Co Chubb [2020] UKSC 38; see also also Ardavan Arzandeh, ‘The Validation Principle and the Choice-of-Law Question’ (2025) 141 LQR). It is important to state that, since contract law doctrine does not present many instances of a “formalities” requirement for contract formation, the jurisprudence of negotiable instruments law warrants particular attention;
  • INI’s support for the rule applicable to secondary parties on the instrument when there is no explicit choice of applicable law (Consultation Paper, 7.205–7.213) closely aligns with practical considerations of commercial utility and a careful assessment of case law spanning over a century (INI, chapter VI, B (2) (b) & (c));
  • INI’s support for the “most significant relationship” principle does not stem from a perception of this principle as an “escape clause” (Consultation Paper, 7.214–7.221), but rather from viewing it as a legitimate and foundational normative principle of the conflict of laws field (Sagi Peari, The Foundation of Choice of Law: Choice & Equality). The endorsement of this principle would be consistent with a careful review of the case law (INI, chapter VI, B (2) (b) & (c)) and would provide an important platform for the operation of legal rules in the age of digitalisation and the increasingly complex web of commercial dealings (INI, chapter VIII).

Despite these relatively minor deviations from INI, all in all, the Commission’s work on section 72 of the BEA represents a monumental achievement, marking a major step in articulating the modern conflict of laws rules applicable to a classical payment mechanism that patiently awaits reinvention in the age of commercialisation and digitalisation.

Digital Assets and PIL: What is “Supranational” in the “Supranational Approach” of the Law Commission?

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The Editors of the EAPIL blog
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This post was written by Matthias Lehmann, Professor at the University of Vienna. It is the third contribution to the EAPIL online symposium on the Law Commission of England and Wales’s Consultation Paper on Digital Assets and Electronic Trade Documents in Private International Law. Readers are encouraged to participate in the discussion by commenting on the posts.

Depending on who you ask, PIL problems raised by digital assets are a nightmare or a delight for conflicts lawyers. The Law Commission for England and Wales’ recent consultation paper dated 5 June 2025 makes a new and particularly interesting proposal. Without any exaggeration, it can be called groundbreaking.

What is Omniterritoriality? An Explanation

At the bottom of the proposal is the idea that blockchains, the distributed registers on which digital assets are recorded, are “omniterritorial”. The term signifies that blockchains have, in principle, equally important connections to every state on the planet. This is because the nodes (computers) recording the blockchain are distributed around the world and keep an identical register of all previous transfers (hence the term “distributed ledger technology”, or DLT). This design was chosen intentionally to avoid a significant connection to a specific state, which could allow the latter to gain control over the blockchain (for more details, see here Part 1).

I am pleased to see that the expression “omniterritorial”, which I have coined (see here Chapter 24), is increasingly adopted. I had suggested it to argue that any state has the power to regulate blockchains under Public International Law. My point was to demonstrate that the application of national regulatory rules to the blockchain would not be a suspicious case of “extraterritoriality”, because the blockchain itself is “omniterritorial”, i.e. present in every state. Any state can claim legislative jurisdiction (i.e. “jurisdiction to prescribe”) under Public International Law because it has a genuine connection to blockchains and the assets recorded on them.

PIL as Inadequate for Blockchains and the New “Supranational” Approach

The Law Commission now uses this term for an entirely different purpose: to discredit the whole edifice of Private International Law (PIL). The Consultation Paper denounces the “multilaterialist rules” of PIL, which could only lead to the application of a specific national private law with a tenuous connection to the case. It also discards the application of the lex fori for being inapposite as a default rule.

Instead, the Law Commission tables a new “supranational” approach to completely overcome PIL. It suggests that the courts of England and Wales, when facing conflict-of-laws issues related to digital assets (widely understood as cryptocurrencies and tokens), should instead apply a new body of substantive rules. This body of rules should be developed incrementally on a case-by-case basis in line with the Common law method (Consultation Paper, para 6.75). While rejecting the simplistic slogan “code is law”, the Law Commission thinks that blockchain protocols (i.e. the software underpinning distributed ledger technology) and “any relevant blockchain conventions” (without any further specification), should, over time, be included in this body of rules (Consultation Paper, para 6.96-6.97). This approach would accommodate the parties’ legitimate and reasonable expectations much more than the application of a specific national law identified as applicable under PIL.

Assessment

Burcu Yüksel has already criticised in her post to this symposium the supranational approach as “rather confusing” and “heavily reliant on a substantial number of relevant cases being brought before the courts of England and Wales”. She has also criticised the significant uncertainty that would exist until a legal issue has actually been decided by a court.

To this justified criticism, I want to add another, more general point. The supranational approach is, in fact, not what its name suggests. The Law Commission does not propose international substantive law harmonisation, as it is done by international organisations (see e.g. the UNIDROIT Principles on Digital Assets and Private Law). What it proposes instead is judicial law-making with a transnational view, taking into account the special nature of the blockchain and the expectations of the parties.

The problem with judicial lawmaking, however, is that it tends to yield very divergent results. This is even true on the national level, where these differences have to be ironed out by an apex court, e.g the UK Supreme Court. But on the international level, such a court is lacking. It will be impossible to harmonise the different judicial rules of, say, the UK and France or China and the US absent a supranational body. But the Consultation Paper does not suggest or envisage creating such a body. This may be beyond its remit, but is indispensable for a “supranational” approach.

Eventually, one must therefore fear that the purported “supranational approach” will result in highly divergent substantive rules. The differences will be exacerbated by the fact that there will be no PIL mechanism to determine which national law applies. Each court will apply its own rules (which it may call “supranational”) to any dispute that comes before it. The determination of jurisdiction will thus coincide with that of the applicable law. Since jurisdiction rules often point to different courts, and the claimant can choose between them, this would inevitably cause surprises for defendants and uncertainty about the applicable law.

Outlook

The name “supranational approach” is misleading. In reality, what the Law Commission suggests is decentralised substantive law harmonisation through national courts. Experience suggests being sceptical about the success of this experiment, especially in such a new and contentious field as digital assets. Even within the UK, differences loom, as the Scottish Law Commission has issued a separate paper on digital assets, which suggests that “Scotland develops its own legislation to clarify the status of digital assets as property in Scots private law”. The paper suggests treating digital assets as a “kind of incorporeal moveable property”. It cannot be excluded that this will result in substantively different rules than those which the Law Commission for England and Wales has suggested for the “third category” of personal property rights.

On the truly supranational level, things are not exactly reassuring. UNIDROIT’s Principles on Private Law and Digital Assets are a milestone, yet they address merely a few issues such as good faith acquisition, custody and insolvency protection. They leave open other salient questions, such as the conditions, timing and effects of digital asset transfers or the treatment of “linked assets”, such as tokenised shares, bonds, and other movables or immovable things.

Hence, national substantive laws (including case law) will continue to diverge for the foreseeable future. In this diverse environment, the best tool to ensure legal certainty and predictability of the applicable rules for the parties is for courts to identify the applicable law in the same manner. This is the objective and the aspiration of PIL, and it works particularly well where the conflicts rules are harmonised, as suggested by UNIDROIT’s Principle 5 (see here) and currently explored by the HCCH Working Group on Digital Tokens. Despite the omniterritorial nature of the blockchain, it has been shown that an appropriate law can be identified, e.g. by referring to the choice of the parties, to the place of incorporation of a token issuer, the place of a custodian, or the place of habitual residence of the person in control of the digital asset (for more details see here, here and here). There is no need to spill out the baby with the bathwater and rely exclusively on the hope for a full harmonisation of substantive rules.

“Supranational Approach” to the Conflict of Laws in England and Wales: A Workable Solution for Digital Assets?

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The Editors of the EAPIL blog
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This post was written by Burcu Yüksel Ripley, Professor at the University of Aberdeen School of Law. It is the second contribution to the EAPIL online symposium on the Law Commission of England and Wales’s Consultation Paper on Digital Assets and Electronic Trade Documents in Private International Law. Readers are encouraged to participate in the discussion by commenting on the posts.

The views expressed in the post are solely the author’s and do not represent the views of any advisory, working or expert groups she is part of on digital assets and related subject matters.

Background

The Law Commission of England and Wales (“LCEW”) has been conducting an important and timely law reform project on digital assets and electronic trade documents in private international law. It published its consultation paper with proposals for law reform on 5 June 2025, focusing mainly on wholly decentralised applications of distributed ledger technology (“DLT”).

Chapters 5 and 6 of the consultation paper deal with the applicable law (or the conflict of laws) issues. Chapter 5 gives an overview of the current approach to the conflict of laws and challenges posed by DLT. Chapter 6 identifies an alternative approach and makes a provisional proposal for law reform, the so-called “supranational approach”.

Current Approach to the Conflict of Laws and Challenges Posed by DLT

In its consultation paper, the LCEW refers to three distinct approaches to the conflict of laws, namely the “supranational” approach, the “unilateralist” or “statutist” approach, and the “multilateralist” approach, and it provides definitions and examples for each of them (paragraphs 5.5-5.12).

The LCEW notes that the multilateralist approach is the prevailing approach across jurisdictions in private international law today (paragraph 5.10). The LCEW provisionally proposes to move away from the multilateralist approach in cases concerning wholly decentralised application of DLT. This is because it considers that in such cases “omniterritorial transactions, acts, or objects … exhibit too many genuine connections to too many territories” and this challenges the core premise of the multilateralist approach that “every legal issue has a single objective seat in one legal system, which is identified through a connecting factor” (paragraphs 5.48-5.50).

To illustrate the difficulties with the multilateralist approach, the LCEW provides two case-studies concerning wholly decentralised applications of DLT and concludes that the existing rules result in being unable to identify the applicable law in those cases.

  1. Contracts (purportedly) concluded by smart contracts in wholly decentralised finance (“DeFi”) applications (paragraphs 5.62-5.113):

Regarding the existence and validity of such contracts, the consultation paper looks at Article 10(1) of the assimilated Rome I Regulation and, directed by that, Articles 3 and 4.

The consultation paper suggests that if there is a valid choice of law, the courts are likely to uphold the choice under Article 3 (paragraph 5.83).

If there is no choice of law, the consultation paper considers that the relevant provision in Article 4 for such contracts would be Article 4(4) which provides that the contract is governed by “the law of the country with which it is most closely connected” (paragraph 5.90). It then discusses some suggestions made for the identification of that law for Bitcoin transactions based on various connections, including the concentration of mining activity (paragraph 5.95-5.108). The consultation paper considers those connections tenuous and concludes that “an applicable law rule formulated on the basis of ‘the least tenuous’ connection that did not take legitimate expectations into account would be arbitrary and artificial, causing unfairness to the parties” (paragraphs 5.109-5.110).

Those connections, examined in the consultation paper, indeed seem to be rather tenuous and coincidental. However, if all the connections are tenuous as such, what are the “genuine connections” that the LCEW refers to in its starting point cited above that “omniterritorial transactions, acts, or objects … exhibit too many genuine connections to too many territories”?

The consultation paper does not consider other suggestions made based on the location of the transacting parties, to the extent that these are known or identifiable, or the technique of the “accessory connection” by making the transaction subject to the law of the underlying relationship between the transacting parties as the main connection (see further B. Yüksel Ripley, ‘The Law Applicable to (Digital) Transfer of Digital Assets: The Transfer of Cryptocurrencies via Blockchains’ in M. Fogt (ed) Private International Law in an Era of Change (Edward Elgar, 2024) 123, pp.148-151).

  1. Property relationships in respect of crypto-tokens held directly (paragraphs 5.114-5.155):

Regarding property issues arising in wholly decentralised DLT systems, the consultation paper examines the challenges in the application of the lex situs (the law of the place where the property object is situated) rule to crypto-tokens. It is indeed difficult to identify the location of an asset with no physical existence in a decentralised and digital context.

The consultation paper considers various possible “locations” for cryptoassets, including (paragraphs 5.146-5.154):

  • the place of domicile or residence of the owner (referring to “the party in possession of the private encryption key giving access to the cryptocurrency at the time of the relevant transaction” in Lord Collins of Mapesbury and Jonathan Harris (gen eds), Dicey, Morris & Collins on the Conflict of Laws, 16th edn (Sweet & Maxwell, 2022), paragraph 23-050);
  • the place where the original coder has their primary residence (suggested by the Financial Markets Law Committee (FMLC));
  • the location of the relevant participant, or the residence or domicile of the person in control of the crypto-token (suggested by some of the call for evidence respondents).

The consultation paper does not consider “the place of habitual residence or business of the last known holder of the cryptoasset” (see B. Yüksel Ripley, A. Macpherson and L. Carey, ‘Digital Assets in Scots Private Law: Innovating for the Future’ (2025) 29 Edinburgh Law Review 175, pp.207 and 210).

The LCEW provisionally concludes that the existing lex situs rule does not give a satisfactory answer in this context and that an alternative approach is required (paragraph 5.155).

It is interesting to note that the LCEW examines the situs question for the purposes of jurisdiction too but reaches a different conclusion that it is “the place where the crypto-token can be controlled” (paragraphs 4.134-4.143 and 4.171). It is not entirely clear, in the consultation paper (paragraphs 5.146-5.147), why a crypto-token, which is deemed for the purposes of jurisdiction to be located in the place where it can be controlled, is considered to have no location (or be “nowhere and everywhere at the same time”), in determining the applicable law.

LCEW’s Proposal for Law Reform: “Supranational Approach”

In an attempt to develop an alternative solution, the LCEW provisionally proposes a “supranational approach” (chapter 6 of the consultation paper).

This is explained in the consultation paper as “developing a set of special rules that would apply in the event that a court in England and Wales is faced with a case with an omniterritorial element” (paragraph 6.59). The consultation paper continues that:

… Whilst any substantive rules developed and applied by the courts of England and Wales would ultimately remain a common law decision of our courts, it would not be an application of the “ordinary” law of England and Wales that would continue to apply in a purely domestic case. Rather, it would be a special body of substantive rules of decision that apply only in private law cases in which the law of no country would be appropriate to apply to resolve the issue in dispute, and the law of every country would be appropriate to apply to resolve the issue in dispute (paragraph 6.60).

The consultation paper further explains that “the overall objective of the courts in these cases should be the just disposal of the proceedings” and to achieve this “the courts should take into account a wide range of factors”. This would include, in particular, “the legitimate expectations of the parties which, in these circumstances, are likely to consider elements of the basis on which the participants have interacted with the relevant system, such as the terms of the protocol”. It is also proposed that “the outcomes of the case will remain subject to the public policy and overriding mandatory rules of England and Wales” (paragraph 6.128).

The proposal seems to be based on a substantive law solution, rather than a private international law solution. However, what is being proposed is rather confusing and heavily reliant on a substantial number of relevant cases being brought before the courts of England and Wales, in order to develop a special set of substantive rules. Further, no one would be able to know what the applicable law is (or which relevant legal rules will be applied) until a dispute arises, is brought before a court in England and Wales, and the court determines on this. This would bring significant uncertainty and offer no legal foreseeability and predictability on the applicable law (or the relevant legal rules to be applied), which could create concerns for relevant stakeholders given that legal certainty and predictability are crucial for commercial transactions (see further B. Yüksel Ripley and A. MacPherson, ‘Response to Law Commission of England and Wales Consultation on Digital Assets and (Electronic) Trade Documents in Private International Law including Section 72 of the Bills of Exchange Act 1882’, paragraphs 28 and 34; the Consultation Response by the Law Society of Scotland, pp.8-10).

Concerning the objective of the “just disposal of the proceedings”, the proposal is unclear regarding what criteria the court would decide are “just” in the disposal of the proceedings. Similarly, in a case before a court, “the legitimate expectations of the parties” would be inevitably different, which is why there is a dispute between them (see further B. Yüksel Ripley and A. MacPherson, ‘Response to Law Commission of England and Wales Consultation on Digital Assets and (Electronic) Trade Documents in Private International Law including Section 72 of the Bills of Exchange Act 1882’, paragraph 31).

Implementation Mechanism for the LCEW’s Proposal

The LCEW considers that it is too early to propose statutory reform in relation to conflict of laws matters concerning digital assets. It seems to suggest “the common law method of case-by-case development” as these issues begin to come before the courts (paragraphs 6.129-6.130). The LCEW further considers that a statutory rule might not necessarily be the most appropriate method of implementation for its proposal at any stage (paragraph 6.131).

It remains unclear though on what legal ground a court could possibly not apply (or could disapply) the relevant existing conflict of laws rules in legislation (such as the Rome I Regulation) and instead apply the proposed supranational approach (see U. Grušić, ‘Law Commission’s Consultation Paper on Digital Assets/ETDs and PIL: An Outline’; B. Yüksel Ripley and A. MacPherson, ‘Response to Law Commission of England and Wales Consultation on Digital Assets and (Electronic) Trade Documents in Private International Law including Section 72 of the Bills of Exchange Act 1882’, paragraph 33).

Final Remarks

Digital assets in decentralised and digital contexts raise difficult conflict of laws questions. The LCEW’s attempt to provide solutions to these difficult questions is valuable. However, the proposed supranational approach is ambiguous and confusing in some respects and brings uncertainty and unpredictability.

Given the growing support for party autonomy in this area, as seen in Principle 5 of the UNIDROIT Principles on Digital Assets and Private Law and the FMLC’s proposals in Digital Assets: Governing Law and Jurisdiction, it would be desirable if the LCEW further considers party autonomy and related issues in this law reform project. Such issues include the operation of party autonomy among pseudonymous participants, the extent it can apply to property law matters, the impact of weaker party protection in this context, and the effect of choice of law on third parties. It is true that there might be typically no choice of law clauses in permissionless systems, but there is no reason to exclude this possibility altogether from the future developments in the area (B. Yüksel Ripley and A. MacPherson, ‘Response to Law Commission of England and Wales Consultation on Digital Assets and (Electronic) Trade Documents in Private International Law including Section 72 of the Bills of Exchange Act 1882’, paragraphs 4 and 32).

It is also useful to emphasise that the relevant projects and work of various international organisations, particularly the HCCH, UNIDROIT, and UNCITRAL, are valuable and important for the development of widely accepted and internationally agreed conflict of laws rules as well as substantive law rules.

The Law Commission’s Proposed Free-Standing Information Order

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The Editors of the EAPIL blog
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This post was written by Koji Takahashi, Professor at the Doshisha University Law School. It is the first contribution to the EAPIL online symposium on the Law Commission of England and Wales’s Consultation Paper on Digital Assets and Electronic Trade Documents in Private International Law. Readers are encouraged to participate in the discussion by commenting on the posts.

The Law Commission of England and Wales, in its consultation paper Digital Assets and (Electronic) Trade Documents in Private International Law, has put forth a proposal for a new power to issue information orders (paras. 8.1-8.3). This initiative aims to assist victims of crypto hacks or fraud in overcoming existing legal obstacles to recover their assets.

Victims of crypto theft can often trace misappropriated tokens on public blockchains, but the anonymity of these systems typically conceals the wrongdoer’s identity. However, some blockchain addresses are linked to known entities, such as crypto-token exchanges, which hold “know your customer” (KYC) details of their account holders. The proposed order aims to enable victims whose stolen tokens have passed through an identifiable exchange to obtain account holder information, potentially leading to the wrongdoer’s identification.

Usefulness of the Proposed Order

The Law Commission solicited feedback on the proposed order’s usefulness in facilitating legal proceedings and ultimately, the recovery of crypto-tokens (para. 8.4). To address this question, one might consider the functions of exchanges, the adequacy of the existing legal avenues and the advantages of a free-standing order, as detailed below.

1. Functions of exchanges

The proposed order’s usefulness is partly contingent on the extent to which wrongdoers utilise centralised exchanges (CEXs). They can exploit CEXs for money laundering by depositing illicit tokens (e.g., Crypto-token A) into an exchange’s address. The exchange then mixes these funds with legitimate deposits from other customers within its omnibus address. Subsequently, the wrongdoers withdraw the equivalent value in a different asset (e.g., Crypto-token B) to a new address. While this internal pooling and swapping of assets by the exchange severs the on-chain transaction trail, sophisticated criminals are increasingly turning to decentralised exchanges (DEXs) to obscure the origins of illicit funds, limiting the utility of CEXs as mixers. However, CEXs remain crucial as exit ramps for converting crypto-tokens into fiat currencies, making them a reasonable target for investigations. At the same time, it should also be acknowledged that an account holder at an exchange may not be the wrongdoer but merely a purchaser down the chain. It follows that simply revealing the identity of this person may not be sufficient; a further investigation following up the chain may be required to see if it ultimately leads to the wrongdoer’s identity. The practical usefulness of the proposed information order must be considered within these limitations.

2. Adequacy of existing legal avenues

The Law Commission’s proposal seeks to offer a solution to the current legal challenges. Under English law, victims currently petition courts for the ancillary relief of information orders, such as Norwich Pharmacal and Bankers Trust orders, against the relevant exchange. Due to the unknown identity and whereabouts of the wrongdoer, victims must construct a placeholder claim against “persons unknown” and seek permission for the service of proceedings out of the jurisdiction. Gateway 25 (Civil Procedure Rules, PD 6B.3.1(25)) provides a jurisdictional ground for this purpose. In the observation of the Law Commission, however, the requirement in this gateway that “the claimant at least intends to commence proceedings in England and Wales is a significant limitation” (para 3.80).

Gateway 25 was introduced in 2022 specifically with crypto fraud claims in mind (See Hannah Daly & Andrew James, “Searching for Assets in Cyberspace: A New Gateway Opens?” and Hui, Chee, Poppy, & Watt, “The New Service out Gateway for Third Party Information Orders”). It supports an application “made for the purpose of proceedings … which, subject to the content of the information received, are intended to be commenced … in England and Wales.” The words “subject to the content of the information received” indicates that a claimant is not bound to bring proceedings in England, if information received pursuant to the application discloses another more appropriate forum. Not forcing the claimant to commit upfront to suing in England, the language of Gateway 25 does not come across as posing a significant limitation.

3. Advantage of a free-standing order

Despite the potential remaining utility of Gateway 25 as just noted, the Law Commission’s proposal for a new power to issue information orders seems to represent an advancement.

The current system is a convoluted legal workaround, forcing victims into an awkward position of fabricating a nominal claim against anonymous defendants. This also necessitates unconventional and legally dubious methods of service, such as WhatsApp or NFT transfers. The proposed free-standing order would simplify the process by eliminating the need for a fabricated lawsuit and service on an unknown defendant. This directly aligns with the claimant’s goal of obtaining information from an innocent intermediary and promotes a more straightforward legal analysis.

While the judiciary’s main function lies in settling contentious disputes between two parties, disclosure orders issued against innocent intermediaries do not fall within this core function. This renders standard theories of adjudicatory jurisdiction unfit to apply to this type of orders. Instead, the threshold for such orders should be formulated by considering available resources and the interests of various stakeholders. In this regard, it may be helpful to draw parallels with disclosure orders used to identify anonymous online infringers of personality rights. Both scenarios involve a digital detective story to uncover wrongdoers. Just as crypto fraud victims may request information from exchanges, parties whose personality rights have been infringed seek information from internet service providers (See Koji Takahashi, “International Dimensions of Unmasking Anonymous Online Infringers of Personality Rights” (2015/2016) 17 Yearbook of Private International Law pp. 181-208).

Proposed Test for Granting the Order

While acknowledging the usefulness of the Law Commission’s proposed order, it seems also important to highlight its radical nature. It is a new investigative tool that targets an innocent intermediary which may be located abroad. It is also a free-standing order, not requiring a concrete case brought against the actual wrongdoer. Even criminal investigations typically require international cooperation to access information held by exchanges located abroad.

Apparently conscious of the proposal’s radical nature, the Law Commission frames this new power not as arbitrary, but as a carefully circumscribed exception. Inspired by precedents such as free-standing freezing orders and forum necessitatis, a four-limb threshold test is proposed (para. 8.3).

The self-evident element of the formulated test is necessity, as the primary goal of the proposal is to prevent technology from creating a space where justice cannot reach and criminals can operate with impunity.

Another element of the test is the merit of the claimant’s case. In the words of the Law Commission, “the court must be satisfied that there has clearly been wrongdoing on facts that disclose a potential case that is more than barely capable of serious argument and yet not necessarily one which the judge believes to have a better than 50 per cent chance of success” (para. 8.3). It seems wise to avoid setting the bar any higher because the strength of the claimant’s case depends on the facts and the applicable law. The stolen tokens may have found their way into the hands of a bona fide purchaser who has acquired a good title under the applicable law. The choice-of-law question here is exceptionally challenging (See Koji Takahashi, “Law Applicable to Proprietary Issues of Crypto-assets” (2022) 18(3) Journal of Private International Law pp. 339, 347-357). At the investigative stage of litigation, it should be sufficient to filter out frivolous claims.

The test’s third component, impossibility or unreasonableness, is explained by the Law Commission as meaning that the court must be satisfied that there is no other court in which the claimant could reasonably bring the application for relief. Given the potential ambiguity regarding whether, and on what grounds, courts in the exchange’s home country will issue a disclosure order, this hurdle may prove challenging to overcome, making Gateway 25 an easier option in some cases. Nevertheless, this requirement appears sensible for a free-standing order.

And finally, a link to England and Wales is required. The Law Commission explains, “the claimant’s habitual residence, domicile, or nationality would indicate such connection” (para. 4.103). Making judicial resources for the proposed order only available to the claimants with established connections to England seems prudent. It would ensure that the English courts are not stretched to act as a global inspector general.

Discretion in Granting the Order

The Law Commission frames the power to issue the proposed order as discretionary. What follows will suggest a few major considerations that should be entertained.

1. Effectiveness of the order

A crucial consideration would be the effectiveness of information orders. It is worth recalling that effectiveness is also an important element in assessing the expediency of worldwide freezing orders (Motorola Credit Corporation v Uzan [2003] EWCA Civ 752). The English court’s authority is undermined if its order is disobeyed. The Law Commission is, therefore, rightly concerned about the effectiveness of its proposed order. It invited feedback on whether exchanges are likely to comply with this order (para. 8.5). Being an investigative order, the proposed order is unlikely to be enforced abroad. Consequently, a foreign-based exchange may only comply with the English order if it is concerned about the reputational risk or if it is susceptible to the English court’s power of sanction for contempt of court due to the presence of its business interests or assets within the jurisdiction. The English court should exercise its discretion against issuing an information order, if it is likely to end up as an empty gesture.

2. Catch-22 situation for exchanges

Another consideration worth highlighting is the risk for exchanges of being caught in a catch-22 situation. They are generally subject to contractual or statutory duties to maintain customer confidentiality. For foreign-based exchanges, these duties may only be lifted if the English information order is recognised de facto or de jure. It may be recalled that the House of Lords ruled against issuing a third-party debt order (garnishee order) which would put the third-party debtor in double jeopardy (Deutsche Schachtbau v Shell International Petroleum Co Ltd [1990] 1 AC 295 and Société Eram Shipping Company Limited v Hong Kong and Shanghai Banking Corporation Limited [2003] UKHL 30). In the same vein, if an exchange demonstrates a real risk of liability or punishment for breaching confidentiality in its home country, the English court should exercise its discretion against issuing the information order.

Overall, if implemented with care, the Law Commission’s proposed order has the potential to become a chief investigative tool in the crypto ecosystem, ensuring that the courthouse doors remain open even when wrongdoers hide behind a veil of digital anonymity.

Introduction to the Online Symposium on the Law Commission’s Consultation Paper on Digital Assets/ETDs and PIL

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Ugljesa Grusic
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On 5 June 2025, the Law Commission of England and Wales published a consultation paper (paper; summary) proposing reform to certain rules of private international law that apply in the context of digital assets and electronic trade documents. This development was covered by the EAPIL blog.

In brief, the Consultation Paper makes four key contributions:

  1. Proposals for a new free-standing information order, designed to assist claimants at the initial investigation stage of proceedings where the pseudo-anonymous and decentralised nature of the crypto-token environment presents significant obstacles to formulating and issuing a fully pleaded substantive claim;
  2. An analysis of the preferred interpretation of the tort and property jurisdictional gateways for service out of the jurisdiction in the context of claims relating to crypto-tokens;
  3. Proposals for a supranational approach in cases where the degree of decentralisation is such that the Rome I Regulation and the lex situs rule cannot meaningfully apply;
  4. Proposals to reform section 72 of the Bills of Exchange Act 1882 (‘1882 Act’) for all disputes, whether or not concerning electronic trading documents

The proposals have generated significant interest. The proposals for a supranational approach are particularly radical and controversial, whereas the proposals for a new free-standing information order and to reform section 72 of the 1882 Act represent more incremental reforms.

Given their importance, the EAPIL blog will host an online symposium on the proposals on 5-7 November 2025.

The focus will be on proposals 1, 3 and 4. These aspects of the Consultation Paper will be discussed by Koji Takahashi (Doshisha University), Burcu Yüksel Ripley (University of Aberdeen), Matthias Lehmann (University of Vienna), Aygun Mammadzada (Swansea University). and Sagi Peari (University of Western Australia). Koji will cover the proposals for a new free-standing information order, Burcu, Matthias and Aygun will discuss the proposals for a supranational approach, and Sagi will address the proposals to reform section 72 of the 1882 Act.

We are very fortunate to have contributions from these four contributors, whose scholarship has significantly influenced the Law Commission’s thinking, as is clear from the references in the Consultation Paper.

As always, readers are encouraged to participate in the discussion by commenting on the posts.

UK MoJ Consultation on the Singapore Convention

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Ugljesa Grusic
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The United Kingdom signed the Singapore Convention on Mediation (United Nations Convention on International Settlement Agreements Resulting from Mediation, New York, 7 August 2019) on 3 May 2023.

Ahead of the UK’s ratification of the Convention, the Ministry of Justice is seeking views on certain proposals and options for how the Convention might be implemented and operate in the UK.

This is not a full public consultation (hence the absence of information on the UK Government website), but rather a targeted consultation.

Nevertheless, the MoJ is keen to reach a wide stakeholder audience and will be happy to send a copy of the consultation paper to private international law specialists who request it by emailing PIL@justice.gov.uk. The deadline for responses is 15 October 2025.

Law Commission’s Consultation Paper on Digital Assets/ETDs and PIL: An Outline

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Ugljesa Grusic
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The Law Commission of England and Wales is reviewing how private international law operates in the context of electronic trade documents and digital assets. As previously reported on this blog, on 5 June 2025 the Law Commission published a consultation paper (paper; summary) proposing reform to certain rules of private international law that apply in the context of digital assets and electronic trade documents. The Consultation Paper follows a call for evidence (Digital assets and ETDs in private international law: which court, which law? Call for evidence) and three FAQs documents (Digital assets in private international law: FAQs on the relationship with tax law, banking regulation, and the financial markets; Property and permissioned DLT systems in private international law: FAQ; ETDs in private international law: FAQs).

This post outlines the Consultation Paper and offer some preliminary remarks.

The Consultation Paper makes four key contributions:

(1) Proposals for a new free-standing information order, designed to assist claimants at the initial investigation stage of proceedings where the pseudo-anonymous and decentralised nature of the crypto-token environment presents significant obstacles to formulating and issuing a fully pleaded substantive claim;

(2) An analysis of the preferred interpretation of the tort and property jurisdictional gateways for service out of the jurisdiction in the context of claims relating to crypto-tokens;

(3) Proposals for a supranational approach in cases where the degree of decentralisation is such that the Rome I Regulation and the lex situs rule cannot meaningfully apply;

(4) Proposals to reform section 72 of the Bills of Exchange Act 1882 (‘1882 Act’) for all disputes, whether or not concerning electronic trading documents.

New Free-Standing Information Order

The Law Commission proposes creating a new power for the courts to grant free-standing information orders, enabling claimants who have lost crypto-tokens through fraud or hacking to obtain information about the perpetrators or the whereabouts of their tokens without having to go through the existing jurisdictional gateways.

Specifically, the Law Commission proposes that:

(1) Such a power should be grounded in the principles of access to justice, necessity and the prevention of injustice in modern digital and decentralised environments.

(2) A claimant must satisfy the following four-limb threshold test before the court’s discretion to grant an order may be exercised:

(a) A case of sufficient strength (the merits test);

(b) Necessity;

(c) Impossibility or unreasonableness;

(d) A connection to England and Wales.

Tort and Property Jurisdictional Gateways

The Law Commission suggests that, in cases involving crypto-tokens, the tort and property gateways in Civil Procedure Rules Practice Direction 6B, para 3.1(9)(a), (11), (15)(b) and (21)(a) can be applied without undue difficulty by reference to the general principles of international jurisdiction that underpin the gateway requirements.

Specifically, the Law Commission is of the view that:

(1) For the property gateways based on the location of property within the jurisdiction ((11) and (15)(b)), the appropriate court to hear a cross-border property claim concerning a crypto-token is the court of the place where the crypto-token can be controlled or otherwise dealt with effectively (for example, the place where the person who knows or has access to the private key is located or where control over the software underpinning the network is exercised) at the time proceedings are issued;

(2) For the tort gateways based on damage sustained within the jurisdiction ((9)(a) and (21)(a)):

(a) Where the tortious act involves interference with, or deprivation of, an object that can be localised (such as a private key controlling a crypto-token), the focus should be on the location of the object at the time of the interference/deprivation;

(b) In other cases where the tortious act involves interference with, or deprivation of, an object, the focus should be on the victim, that is, damage is sustained where the victim was physically present at the time of the damage;

(c) Where damage consists of being denied access to an online account that could, in principle, have been accessed from anywhere in the world and no real reason can be given for locating the damage in one place over another, the defendant should be sued in their home court, where possible;

(d) Where damage consists in the experience or consequences of being deprived of a crypto-token or access to a crypto-token, damage could be sustained in a different location from where the victim was physically present at the time of the deprivation.

Supranational Approach to Applicable Law

The Law Commission proposes moving away from the traditional multilateral or bilateral approach to determining the applicable law for issues arising in wholly decentralised applications of DLT – for example, contracts (purportedly) concluded by smart contracts in wholly decentralised finance applications and crypto-tokens held in accordance with the Bitcoin decentralised ideal. It recommends a supranational approach to the conflict of laws, that is, special substantive rules that would apply where a court is faced with an omniterritorial element.

Under this approach, the courts should take into account a range of factors to determine a ‘just disposal of the proceedings’, including the legitimate expectations and understandings of the parties. This might involve considering the terms of a coding protocol that participants have signed up to and any relevant blockchain conventions. However, the Law Commission considers it too early to propose legislative intervention on these issues, which should instead be left to judicial development.

Section 72 of the 1882 Act

The proposals to reform section 72 of the 1882 Act are of a general nature and are not confined to digital and decentralised contexts. The Law Commission proposes changes to paragraph 1, which concerns the determination of the law applicable to the formal validity of bills of exchange, paragraph 2, which concerns the determination of the law applicable to the contractual aspects of bills of exchange, namely the interpretation of the drawing, indorsement, acceptance or acceptance supra protest of the bill, and paragraph 3, which concerns the determination of the law applicable to the duties of the holder of the bill. Since section 72 also applies to cheques and promissory notes, the proposals apply mutatis mutandis to these instruments.

Regarding section 72(1), the Law Commission proposes a pro-validity rule. The proposed menu of options includes:

(1) The law governing the substance of the relevant contract;

(2) The law governing the substance of the drawer’s contract;

(3) The law governing the substance of the acceptor’s contract;

(4) The law of the place where the instrument is payable.

Regarding section 72(2), the Law Commission proposes a multi-limb structure that would use party autonomy as the default rule, followed by rules applicable where each relevant party has not made a valid choice. Specifically:

(1) The default rule for the law applicable to each contract on a bill of exchange should be the law chosen by the party incurring the relevant obligation, as indicated on the bill alongside their signature;

(2) In the absence of a valid choice by the acceptor, the applicable law should be that of the place where the instrument is payable, as interpreted consistently with the place of ‘proper presentment’ under section 45 of the 1882 Act;

(3) In the absence of a valid choice by the drawer, indorsees, and other secondary parties, the applicable law should be that of the relevant secondary party’s habitual residence;

(4) Such a multi-limb structure should not have an ‘escape clause’ or a ‘catch all’ provision;

(5) Section 72(2) should be amended to make clear that it applies to determining the law applicable to the substantive rights and obligations of the parties, material validity and not only interpretation.

Regarding section 72(3), the Law Commission proposes reform that would clearly distinguish the four sub-rules implicit in the current rule and avoid connecting factors referring to the location of the bill itself at the relevant times. Specifically:

(1) The duties of the holder with respect to presentment for acceptance should be governed by the law of the place where the drawee has their habitual residence;

(2) The necessity for, or sufficiency of, a protest or notice upon dishonour by non-acceptance should be governed by the law of the place where the drawee has their habitual residence;

(3) The duties of the holder with respect to presentment for payment should be governed by the law of the place where the bill is payable;

(4) The necessity for, or sufficiency of, a protest or notice upon dishonour by non-payment should be governed by the law of the place where the bill is payable.

 

Preliminary Thoughts

The analysis of the preferred interpretation of the tort and property gateways does not make new proposals. It merely expresses the Law Commission’s view on how the gateways should be interpreted and applied. It is sensible to highlight the difficulties with the existing case law and offer a view on how best to interpret and apply these jurisdictional gateways. There is, of course, no guarantee that the courts will not continue interpreting and applying the gateways in expansive and potentially inconsistent ways, although the discussion of the relevant issues before the courts should now be more informed.

Similarly, the ‘proposals’ for a supranational approach in cases where the Law Commission believes the degree of decentralisation is such that Rome I and the lex situs rule cannot meaningfully apply are not a call for legislative intervention in the field of choice of law, but rather amount to advice to the courts on how to approach such cases. In my view, there are two key points of criticism.

First, the Law Commission is against the application of the law of the forum where Rome I and the lex situs rule cannot meaningfully apply and sees its supranational approach as an alternative (see, eg, paras 6.32, 6.103). But it is not clear, from a legal-technical point of view, how the courts, which are supposed to apply Rome I and the lex situs rule to cases falling within their scope, can disapply these rules (especially Rome I) without a statutory instruction to do so.

Second, the Law Commission has spent several years explaining how substantive English law applies to smart contracts, electronic trade documents, decentralised autonomous organisations and digital assets. Much of its work has focused on how substantive English law applies to cases with a high degree of decentralisation. Yet now we are told that, in at least some such cases falling within the scope of Rome I and the lex situs rule, the courts should not apply English or any other domestic law, but rather nebulous ‘supranational law’ that is seemingly yet to be developed. In other words, the precise relationship between English law and the supranational approach is not defined. The following explanation of the relationship in para 6.60 is more confusing than clarifying:

In essence, the supranational approach recognises that, in cases with an omniterritorial element, it is not necessarily appropriate to apply the purely domestic private law of any one given country. Whilst any substantive rules developed and applied by the courts of England and Wales would ultimately remain a common law decision of our courts, it would not be an application of the “ordinary” law of England and Wales that would continue to apply in a purely domestic case. Rather, it would be a special body of substantive rules of decision that apply only in private law cases in which the law of no country would be appropriate to apply to resolve the issue in dispute, and the law of every country would be appropriate to apply to resolve the issue in dispute. (original emphasis)

I am sceptical that English courts, which are well-known for their legal-technical prowess, will ever be willing to adopt such an approach without a clear statutory instruction.

By contrast, the proposals for a new free-standing information order and the reform of section 72 of the 1882 Act would require, in the view of the Law Commission, legislative intervention (although the Law Commission thinks that the courts could probably develop the power to grant free-standing information at common law).

The new free-standing information order could be a useful device in cases where (1) there is no way in the country where a crypto-exchange is located to compel it to disclose information about the identity of the perpetrator of the fraud or hacking, the holder of the crypto-token or the whereabouts of the crypto-token and (2) there is some, even tenuous, link with England. Given requirement (1), the order will likely be available in cases where a crypto-exchange is located in a country with strict confidentiality laws. Yet an English order may put the crypto-exchange in the difficult situation of having to choose between complying with either the order or the law of the country in which it is located. This is something that should be taken into account when designing the new order and the test that the courts should apply before granting it.

I generally agree with the proposals to reform section 72 of the 1882 Act. However, I question whether the use of fixed connecting factors without an escape clause in the proposed paragraph 2 might be too rigid. In a consultation event following the publication of the Consultation Paper, some stakeholders expressed the view that, at least in some contexts, it may be desirable for different legal relationships arising under a bill of exchange to be governed by the same law. If the fixed connecting factors do not produce this outcome, and assuming this outcome is indeed desirable, an escape clause seems a logical solution. Any concern that an escape clause would lead to an unacceptable degree of legal uncertainty can be addressed by imposing a high threshold for its application.

The consultation period ends on 8 September 2025. Responses may be submitted to the Law Commission via an online form, by e-mail to conflictoflaws@lawcommission.gov.uk or by post.

Digital Assets and Electronic Trade Documents in PIL: Law Commission of England and Wales Consultation Paper

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Ugljesa Grusic
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On 5 June 2025, the Law Commission of England and Wales published a consultation paper (paper; summary) making proposals for reform on certain rules of private international law that apply in the context of digital assets and electronic trade documents.

The Commission also made proposals for reform of section 72 of the Bills of Exchange Act 1882. Separately, the Commission published an FAQ document concerning property issues in permissioned DLT systems.

They would like to hear from anyone with an interest in or awareness of this area of law. The deadline for responses is 8 September 2025.

The Law Commission describes the problem that the consultation paper addresses and its provisional proposals as follows.

The Problem

When parties to a private law dispute are based in different countries, or the facts and issues giving rise to the dispute cross national borders, questions of private international law arise: in which country’s courts should the parties litigate their dispute, and which country’s law should be applied to resolve it?

When answering these questions, private international law has traditionally placed significant emphasis on geographical location, with rules pointing to “the courts of the place where the property object is situated” or “the law of the place where the damage occurred”.

New technologies – and particularly wholly decentralised applications of distributed ledger technology (DLT) – pose novel problems for private international law because they challenge this reliance on geographical location. DLT uses a network of computers – potentially located in many different places in the world – to record and store data (and crypto-tokens), meaning it can be difficult to “locate” an asset or activity in any one place. This gives rise to legal uncertainty and the application of rules that lead to arbitrary results when applied to the modern digital and decentralised environment.

Those who invest in or use emerging technologies need a clear legal landscape, with modern, fit-for-purpose laws that reflect how these emerging technologies are actually used in modern commercial practice.

Provisional Proposals

In the context of international jurisdiction, the Commission considers how the existing jurisdictional gateways for property and tort can be applied in the context of crypto litigation. The Commission also proposes the creation of a new free-standing information order to help claimants who have lost crypto-tokens through fraud or hacking obtain information about the perpetrators or the whereabouts of their tokens without having to go through the existing gateways.

In the context of applicable law, the Commission identifies wholly decentralised uses of DLT as being particularly problematic for private international law, and suggests that a different approach is required that would no longer require courts to identify a single applicable law. Rather, the courts should take into account a range of factors to determine a just outcome of the dispute, including the legitimate expectations of the parties. We note that this might involve taking into account the terms of a protocol that participants have signed up to.

The Commission also makes proposals to modernise section 72 of the Bills of Exchange Act 1882, a private international law provision that identifies the law applicable to particular contractual issues arising in connection with bills of exchange and promissory notes. These proposals, if implemented, would apply to relevant documents in both paper and electronic form.

Call for Evidence on EU Digital Justice Strategy for 2025-2030

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Marion Ho-Dac
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On 26 May 2025, the European Commission launched a call for evidence to support the preparation of the EU Digital Justice Strategy for 2025-2030 – DigitalJustice@2030. Anyone can contribute by logging in to an EU login account. The call is open for feedback until 23 June 2025.

 General Context

As explained on the dedicated webpage, this new strategy aims “to support and strengthen Member States’ capabilities to deploy and use digital technologies, including AI tools, in their judicial systems”. Moreover, it should propose a “set of tools (…) to improve the efficiency, resilience and quality of justice”.

It is a clear continuum of Regulation (EU) 2023/2844 on the digitalisation of judicial cooperation and access to justice in cross-border civil, commercial and criminal matters adopted in 2023. This latter instrument only tackles certain aspects of digitalisation in the context of cross-border disputes (briefly analysed here). According to the Commission, there is a need “to digitalise practices that are common to all justice systems” notably via “[common] or similar IT tools (including AI tools) and data standards”. To achieve this innovative and integrative step in judicial digitalisation new mechanisms and common frames of reference may be beneficial at EU level.

Future EC Communication

The future document will take the format of a Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. It will therefore not be a binding legislative text, but a soft law instrument containing policy guidelines that may also give rise to future toolkits or recommendations for Member States and their judicial authorities. There are two main reasons for that. First, the digitalisation of judicial systems goes beyond the Union’s competence on judicial cooperation in civil matters (which is cross-border by nature pursuant to Article 81 TFEU), as it blurs the frontier between cross-border disputes, on one side, and purely domestic cases, on the other side. Second, the deployment of digital and AI-based technologies within the Judiciary is a highly complex and sensitive process, implying new technical, ethical and legal skills as well as financial investments. However, Member States are not progressing at the same pace on these issues.

The forthcoming Communication will be drafted under the lead of DG Justice and Consumers (DG JUST) within its “A1 Unit” in charge of Digital transition and judicial training”. The text is expected to be published in the last quarter of 2025 and should be adopted together with the new Judicial Training Strategy (2025-2030).

Next Steps

The supporting document of the call for evidence provides for a list of possible workstreams with actions to be further developed:

Data on digitalisation of national justice systems and exchange of best practices: to create an overview of digitalisation practices in national justice systems, allowing meaningful exchange of best practices. Member States should be able to exploit synergies and implement existing well-functioning systems; and to aim at their interoperability – rather than each Member State developing its own national tools.

IT/AI Toolbox for Justice: to accelerate the level of digitalisation and generate cost savings for Member States, the toolbox could pool information about IT (including AI) tools at EU level.

AI in justice: to ensure the consistent application of the rules under the AI Act and help national authorities to make informed decisions on whether to use AI tools in justice, for which purpose and how. This would include identifying the opportunities related to the development and use of AI tools in the framework of judicial proceedings.

European Legal Data Space (ELDS): to ensure wide and systematic access to EU and national legislation and case-law and to promote the use of legislative and judicial data for the training and development of justice-adapted AI tools.

Digital court proceedings: to achieve fully digitalised cross-border court proceedings in civil and commercial matters. Key enablers include the use of trusted digital identities such as the European Digital Identity Wallet and the European Business Wallet, qualified signatures and seals, time stamps, e-delivery and e-archiving.

EU funding for digitalisation: several workstreams depend on access to sufficient funding at national and EU level. Availability of EU funding should be ensured under the current multiannual financial framework (MFF) and the existing financial programmes. Without prejudice to the Commission proposal and the negotiations with the co-legislators, the need for appropriate funding will be assessed for the next MFF, covering the period 2028-2034.

‘Locating’ Digital Assets in PIL, Tax Law, Banking Regulation and the Financial Markets

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Ugljesa Grusic
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I have already reported on this blog that in 2024 the Law Commission of England and Wales published a call for evidence to help them identify the most challenging and prevalent issues of private international law that arise from the digital, online, and decentralised contexts in which modern digital assets and electronic trade documents are used. I also reported on this blog that later in 2024 the Law Commission published the first result of its call for evidence, an interim document relating to electronic trade documents (ETDs) in private international law.

On 14 January 2025, the Law Commission published the second result of its call for evidence – another interim document on the ‘location’ of digital assets in private international law, tax law, banking regulation and the financial markets. This 35-page document is structured as a ‘Frequently Asked Questions’ to respond directly to the most common concerns raised with the Law Commission so far.

The FAQs answered in the document are:

Q.1. What is the relationship between private international law and other areas of law such as tax law and financial services regulation?
Q.2. How is situs relevant for the purposes of private international law?
Q.2(a) What are the methods and objectives of private international law?
Q.2(b) What policy considerations underpin the private international law situs rules?
Q.3. Can the private international law situs rules be applied in the public law context?
Q.3(a) Can the private international law situs rules be applied in the tax context?
Q.3(b) Can the private international law situs rules be applied in the banking regulation context?
Q.3(c) How do financial services regulation and private international law interact?
Q.4. How does characterisation work in commercial and financial markets use cases of DLT?
Q.4(a) Why is it unhelpful to think in terms of “the law applicable to the digital asset”?
Q.4(b) How might characterisation work in the financial markets?
Q.4(c) How might characterisation work in the context of “linked assets”?

The Law Commission welcomes any follow up questions at conflictoflaws@lawcommission.gov.uk.

Law Commission of England and Wales on Electronic Trade Documents in Private International Law

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Ugljesa Grusic
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I have already reported on this blog that earlier this year the Law Commission of England and Wales published a call for evidence to help them identify the most challenging and prevalent issues of private international law that arise from the digital, online, and decentralised contexts in which modern digital assets and electronic trade documents are used.

The first result of that call for evidence is an interim document relating to electronic trade documents (ETDs) in private international law. This 22-page document explains how the UK Electronic Trade Documents Act 2023 and other legislation inspired by the UN Model Law on Electronic Transferrable Records interact with private international law. It is structured as a ‘Frequently Asked Questions’ to respond directly to the most common concerns raised with the Law Commission so far.

The FAQs answered in the document are:

Q.1. When will ETDs engage private international law?
Q.1(a) What is private international law?
Q.1(b) How do private international law and trade documents interact in the cross-border context?
Q.1(c) How do the courts of England and Wales approach private international law?
Q.1(d) If an applicable law rule points to the law of England and Wales, does this include the private international law rules of England and Wales?
Q.2. What law applies to/governs an electronic trade document and electronic validity?
Q.2(a) What law “governs” or “applies to” a trade document”?
Q.2(b) What law “governs an electronic trade document” or “electronic validity”?
Q.3. When does the Electronic Trade Documents Act 2023 apply?
Q.4. Can I choose the Electronic Trade Documents Act 2023 as the law applicable to my trade document?
Q.5. Is section 72 of the Bills of Exchange Act 1882 problematic in the electronic context?
Q.6. Can section 72 of the Bills of Exchange Act 1882 “invalidate” an electronic trade document?
Q.6(a) When do issues of “electronic validity” arise under section 72?
Q.7. Is Section 72 out of date?

The Law Commission welcomes any follow up questions at conflictoflaws@lawcommission.gov.uk with the subject “ETDs in PIL: FAQs”.

Working Group on the Reform of the Brussels Ibis Regulation Issues New Position Paper

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Anna Wysocka-Bar
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This post was prepared by Tess Bens from University of Vienna.

Burkhard Hess and his team at the University of Vienna have finalised an updated version of the Position Paper on the Reform on the Brussels Ibis Regulation of the association.

Establishment of the EAPIL Working Group

The Brussels Ibis Reform project leading up the Academic Position Paper commenced with the formation of a Working Group within the European Association for Private International Law (EAPIL) in 2021, spearheaded by Burkhard Hess and Geert Van Calster. This Working Group consisted of 42 academics from 22 EU Member States plus Iceland, Norway, Switzerland and the UK. The Members of the Working Group provided information on the application of the Brussels Ibis Regulation in their respective jurisdictions by means of a questionnaire, after which a Members Consultative Committee of the EAPIL produced a report. Based on this input, the former MPI Luxembourg and the KU Leuven organised a conference in Luxembourg on 9 September 2022.

Reform Proposals

After the Luxembourg conference, Burkhard Hess and a team of researchers of the former MPI Luxembourg prepared a Working Paper with 32 reform proposals. The Members of the EAPIL Working Group and the academic public were invited to express their opinion on these proposals through online surveys. The results of these surveys were processed by Burkhard Hess and his team , which led to amendments to the original proposals. These amended proposals were presented discussed at a conference in Vienna on 12 April 2024. The findings of this conference were integrated into the Academic Position Paper that, after consulting the Members of the EAPIL Working Group, received a final update before being uploaded on SSRN

The Academic Position Paper

The five parts of the Academic Position Paper cover the role and scope of the Brussels Ibis Regulation, collective redress, third-state relations, jurisdiction and pendency, as well as recognition and enforcement. Each part covers distinct issues identified at the 2022 Luxembourg conference and formulates specific proposals to resolve them. The background of each proposal is briefly explained and the charts indicating the responses to the surveys are presented, before discussing the feedback received through the surveys and during the 2024 Vienna Conference.

Thanks to Participants

Burkhard Hess and his team would like to thank everyone that has taken the time to answer the surveys and/or attend the conferences. Your input was invaluable, and we have sought to take your views into account as much as possible. We believe that the proposals in the Academic Position Paper provide a solid set of recommendations to consider in recasting the Brussels Ibis Regulation, which will be presented to the European Commission as a meaningful contribution of academia in the upcoming law-making process.

United Kingdom to Join Hague 2019

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Ugljesa Grusic
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On 23 November 2023, the UK Ministry of Justice published its response to the consultation on whether the UK should sign and ratify the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The Government has concluded that it is the right time for the UK to join Hague 2019 and will seek to do so as soon as practicable.

The Convention will have UK-wide extent, that is apply in all three jurisdictions of the UK. It will be implemented using a registration model, similar to the one used for the 2005 Hague Choice of Court Convention. The UK will not make a declaration under Articles 14, 16 or 19.

Mapping European Practitioners’ Training Needs: The e-Capsules Project

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Elena Alina Ontanu
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In its Communication Ensuring justice in the EU – a European judicial training strategy for 2021-2024, the European Commission underlined the importance of European judicial training opportunities that enable legal practitioners to understand the role of EU law in their daily practice and to ensure that the rights and obligations stemming from EU law are respected in national judicial proceedings.

The European Institute for Public Administration (EIPA) and ICF are working to create and develop a series of e-learning courses (e-Capsules) for European practitioners on EU Civil Justice, Criminal Justice and Fundamental Rights for the European Commission Directorate-General for Justice and Consumers (DG JUST).

In order to identify the training needs and knowledge gaps all legal professionals within the 27 EU Member States are struggling with in the area of EU fundamental rights, civil justice, and criminal justice, EIPA and ICF have designed an online survey.

Those with an interest in these areas are invited to participate in the online survey that is available here in English, French, and German. The survey is meant to take approximately 10 minutes and can be completed over more than one session, if needed.

The survey is open until 31 October 2023.

Draft UNIDROIT Principles on Digital Assets and Private Law – Online Consultation

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Marco Pasqua
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The International Institute for the Unification of Private Law (UNIDROIT) is presently conducting a public consultation regarding a set of Draft Principles and Commentary on Digital Assets and Private Law.

These Principles have been prepared by the Working Group on Digital Assets and Private Law over the course of 7 sessions between 2020-2022. Additional information about the Working Group and its meetings can be found here.

Comments should be provided in English, using this online form. The form is divided into seven sections consistent with the text of the Principles; section II is about private international law.

The deadline to submit comments is 20 February 2023. The Working Group will consider the comments received at its next session (8-10 March 2023).

For further information, please contact Hamza Hameed at h.hameed@unidroit.org.

Should the UK Join the Hague Judgments Convention?

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Marco Pasqua
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On 15 December 2022, the UK Government launched an open consultation on its plan for the United Kingdom to become a Contracting State to the Hague Convention of 2 July 2019 on the recognition and enforcement of foreign judgments in civil or commercial matters (the Hague Judgments Convention).

As part of the decision-making process on becoming a Contracting State, the Government is looking to gather wide-ranging perspectives, especially from who have experience of current cross-border litigation.

Based on the overall analysis, the Government will make a final decision on signing and ratifying and any declarations to be made, and commence the necessary processes to ensure that this can be achieved within a reasonable timescale, in consultation with the Devolved Administrations.

The Convention would be implemented in UK domestic law under the terms of the Private International Law (Implementation of Agreements) Act 2020, subject to appropriate parliamentary scrutiny. The Convention would enter into force for the United Kingdom 12 months after the date it deposits its instrument of ratification.

The consultation, which consists of 14 questions, is meant to remain open for eight weeks, that is, until 9 February 2023.

Further details concerning submissions are available here.

A paper summarising the responses to this consultation will be published in spring 2023. The response paper will be available on-line at gov.uk.

Unidroit Draft Model Law on Factoring: Online Consultation

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Marta Requejo Isidro
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The International Institute for the Unification of Private Law (Unidroit) is conducting an online consultation on the draft Model Law on Factoring.

The online consultation will run for 12 weeks, from 29 July until 21 October 2022.

The purpose of the consultation is to: (1) Raise awareness about the instrument; (2) Ensure that the instrument is well suited to application in different contexts, including both civil law and common law jurisdictions as well as developing economies, emerging markets, and developed economies; (3) Seek feedback from parties engaged in factoring on whether the instrument sufficiently addresses issues that arise under existing legal frameworks and will improve factoring arrangements in those States that implement the Model Law; (4) Solicit comments on the drafting of the instrument itself.

The public consultation has three aspects:

  1. The launch of this webpage on the UNIDROIT website allowing interested parties to access the draft Model Law on Factoring and facilitating the submission of comments.
  2. The circulation of the draft Model Law on Factoring directly to interested parties.
  3. The organisation of one or more consultation events to discuss the content of the draft instrument with stakeholders.

Further information, including on the draft Model Law on Factoring itself, is available here.

Launch of a Public Consultation on the French Draft Code of Private International Law

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Marion Ho-Dac
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Following the release of a draft code of private international law (announced here), the French Ministry of Justice has launched on 8 June 2022 a public consultation to gather feedback from all stakeholders, including academics, “in order to determine the possible next steps”.

The blog has started to contribute to the discussion (see here on renvoi and here on foreign law) and other comments will follow.

Scope of the Consultation

The consultation template is divided into three main parts. The first part concerns the very principle of adopting written codified rules in the field of private international law, as well as the scope of the code (i.e. purely national or including EU and international rules applicable within the French jurisdiction). The second part allows for general comments on the draft Code (eg. its structure, its material scope). Finally, the third part proposes article-by-article comments (among 207 articles).

Conditions for Participation in the Consultation

The French Ministry of Justice invites interested parties to send comments on the draft code of private international law to consultation-codedip.dacs@justice.gouv.fr using the Word document provided for. Comments that do not respect this format will not be taken into account.

The consultation is open until 30 September 2022.

Vulnerable Adults – EAPIL Working Group Tasked with Responding to a Public Consultation

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The Editors of the EAPIL blog
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The European Commission has launched a public consultation on the prospect of an EU-wide protection for vulnerable adults, i.e., persons aged 18 or more who are unable to protect their interests because of an impairment or insufficiency of their personal faculties.

In the document presenting the initiative, the Commission notes that vulnerable adults, together with their legal representatives, “currently face multiple barriers when they move abroad, buy or sell properties, or just manage their bank account in another Member State”. This is so, “because the rules governing cross-border cases (private international law rules) differ from one Member State to another”.

Actually, none of the legislative measures enacted  so far by the Union on the basis of Article 81 TFEU deals with the support that vulnerable needs may need to access to exercise their legal capacity.

The aim of the consultation is to “gather evidence on the problem and its consequences and to give all interested parties the opportunity to share their views on the possible policy options”.

The deadline for contributing to the consultation is 29 March 2022.

The Scientific Council of the European Association of Private International Law has approved a proposal for the creation of a Working Group charged with drafting a response to the consultation on behalf of the Association.

The members of the group are Pietro Franzina (co-chair), Estelle Gallant, Cristina González Beilfuss (co-chair), Katja Karjalainen, Thalia Kruger, Tamás Szabados and Jan von Hein.

The Working Group plans to hold a webinar in the coming weeks in order to publicly present a preliminary draft and collect the views of experts and stakeholders.

Further details will be made available in the Group’s dedicated page.

For information: pietro.franzina@unicatt.it.

EC’s Initiative on Recognition of Parenthood – An Update

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Anna Wysocka-Bar
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The European Commission (EC) set out an initiative Recognition of parenthood between Member States. As underlined by the EC, the initiative aims to ensure that parenthood, as established in one EU country, is recognised across the EU, so that children maintain their rights in cross-border situations, in particular when their families travel or move within the EU. Currently, in certain circumstances they might see the parenthood not recognised, which in turn might result in adverse consequences for the child (for example, obstacles in obtaining a passport or an identity card).

These problems might be easily illustrated by the background of the case, which resulted in a very recent judgement of the Court of Justice in Stolichna obshtina, rayon “Pancharevo” (C-490/20). See posts on this blog on the attitude of administrative authorities of some Member States, on the example of Bulgaria and AG Kokott’s opinion as to its implications in EU law, especially the Charter of Fundamental Rights of the EU – respectively – here and here.

Inception Impact Assessment

As reminded in the inception impact assessment published in Spring 2021, there is currently no instrument on the recognition of parenthood at the international level. The Hague Conference on Private International Law (HCCH) is engaged in exploring the possibilities of tackling this issue (information about these works might be found at HCCH website here). In the EU, each Member State applies its own law on the recognition of civil status records/judgements on parenthood handed down in another Member State. On the one hand, under EU treaties, substantive family law falls within the competence of Member States. Their substantive rules on the establishment and recognition of parenthood differ. On the other hand, the EU has competence to adopt measures concerning family law with cross-border implications pursuant to Article 81(3) TFEU. These measures can include the adoption of common conflict rules and the adoption of common procedures for the recognition of judgments issued in other Member States. The EC plans to present a proposal of the regulation by the third quarter of 2022.

Public Consultation

The EC has also lunched a public consultation. The outcome of the consultation was recently published (and is available here). Although collected answers are not necessary representative for the whole EU (interestingly, out of 389 answers 112 come from Slovakia), they indicate that indeed there are instances where parenthood was not recognised as between Member State.

(…) the cases mainly involved a child born out of surrogacy (37% or 116 responses), followed by a child born out of assisted reproductive technology (ART) (23% or 73 responses) and second parent adoption by the partner of the biological parent (21% or 65 responses). Other cases in which parenthood was not recognised included parenthood established by operation of law (14% or 45 responses) and adoption by two parents (10% or 30 responses). Adoption by one single parent and establishment of parenthood over an adult were not recognised according to 6% (or 18 responses) and 3% (or 8 responses) respectively.

As specified by respondents, the primary reason for not recognising parenthoods established in another Member State is that the recognition of parenthood is contrary to the national law of the Member State [or rather a public policy of that Member State? – AWB] where recognition is sought (72% or 184 responses) (…)

Expert Group

The Expert Group was set up to advise EC on the preparation of this new legislative initiative. The Group has met already on several occasions. As  minutes of these meeting reveal (see here for details), the Group was discussing, inter alia, the very notion of “recognition” with respect to parenthood, which often is confirmed by an administrative document, for example the birth certificate.

(…) existing Union instruments address the circulation of authentic instruments under three possible forms: acceptance, only enforcement and recognition and enforcement, and that by definition enforcement is not applicable to the status of persons. The group considered that acceptance may refer only to the evidentiary effects of the facts recorded in the document but not to the existence of a legal relationship, such that only recognition would be relevant for the purposes of the planned regulation on parenthood. 

It was thus agreed that the term ‘recognition’ should be used in the proposal as it refers not only to the factual elements but also to the legal effects of the authentic instrument. 

Enhanced Cooperation?

It might be added that adoption of a regulation under Article 81(3) TFEU requires unanimity. As a result, so far regulations aimed at unifying international family law were adopted within enhanced cooperation, due to lack of such unanimity (for example, the Divorce Regulation). The side effect is that these regulations are applied only in participating Member States, which undermines the unification efforts of the EU. Hence, there is a risk that non-participating Member States could be the ones, in which the problem of non-recognition of parenthood established in another Member State is more pressing than in other ones.

How to Determine the Law Applicable to Crypto Assets?

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Matthias Lehmann
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Which conflict-of-laws rule is the most appropriate for the blockchain? This fundamental question is part of two parallel targeted consultation papers issued as recently by the European Commission.

One of the consultations covers the Settlement Finality Directive (SFD), while the other concerns the Financial Collateral Directive (FCD). Both regulate the “plumbing” of financial markets (the so-called market infrastructures) and contain conflict-of-laws provisions (see Article 9(2) SFD and Article 9 FCD). Yet, the infrastructures and transactions they target are conventional ones. The Settlement Finality Directive deals with payment and securities settlement systems, in which traditional cash (e.g. euros) and conventional financial instruments (e.g. shares and bonds) are traded. The Financial Collateral Directive concerns collateral provided in either cash or financial instruments.

The question posed by the European Commission is whether these texts also can (and must) be applied to modern digital assets, like cryptocurrencies (e.g. Bitcoin) and tokens, and whether they need to be adapted to them through reform.  Since both directives also contain conflict-of-laws provisions, the relationship of crypto-assets to these regulations raises typical conflict-of-laws questions as well.

Take for example Article 9(2) SFD. Its text speaks about securities “legally recorded on a register, account or centralised deposit system” and submits them to the law of the Member State where this register, account or system is “located”. This raises the following issues: 1. whether a blockchain network is a “register” in this sense; 2. whether crypto assets can be said to be “legally” recorded, despite the lacking legal protections of such assets under most private laws; and 3. where blockchains, which may be distributed potentially on a planetary scale, are located.

Even more doubts are caused by Article 9 FCD. It submits financial collateral arrangements to the law of the country “in which the relevant account is maintained”. Blockchain networks basically operate without any intermediaries and do not feature “accounts” in the proper sense of the word. Even if they would, it would be hard to say where the account is “maintained” given the distributed nature of a blockchain network.

These issues have a certain sense of urgency due to the fact that some EU and EEA Member States have already pressed ahead and created specific rules for crypto assets.

France for instance allows for securities (such as bonds and shares) traded over the counter (OTC) to be issued on blockchain networks (described as “distributed electronic registers” (dispositif d’enregistrement électronique partagé – DEEP)). The condition is that the securities are issued in the French territory and governed by French law, see Art. L211-3 French Code monétaire et financier. The transfer and pledge of such crypto financial instruments is equally governed by French law.

Germany has drafted a bill to allow the issuance of bonds (including covered bonds) and investment participations on the blockchain. Section 32 of the bill provides for the applicability of the law of the country in which the administrator of the register is supervised.

Liechtenstein, an EEA member and as such also bound by the SFD and the FCD, has adopted an Act on Token and TT (Trustworthy Technology) Services Providers, which, by any standard, is one of the most comprehensive and innovative blockchain regulations in the world. The Act is appliable where: 1. the TT provider is headquartered or residing in the Principality; or 2. where the parties expressly chose its provisions, see its Art. 3(2).

These are three different approaches to the conflict-of-laws issues raised with regard to different types of crypto assets. But are those national laws compatible with the SFD and the FCD? Do the SFD and FCD apply at all to crypto assets? If so, are their provisions, including those on the conflict of laws, compatible with the nature of the blockchain? And if they do not apply, should they be extended to them? Some legal consistency and harmony would surely be welcome. The question is if and when the EU legislator will provide it.

Modernising Judicial Cooperation between EU Countries

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Elena Alina Ontanu
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The European Commission is carrying out a public consultation on the modernisation of judicial cooperation via digital technology (Modernising judicial cooperation between EU countries – use of digital technology). The consultation is opened until 5 February 2021 and will be taken into account for a proposal for an initiative by the European Commission. This will be followed by a public consultation later this year.

The initiative for which the European Commission is gathering input aims to make judicial cooperation in cross-border cases throughout the EU more efficient and more resilient to crises, such as the COVID-19 pandemic that we are currently going through.

The project for the regulation seeks to make it mandatory for the authorities involved in judicial cooperation each Member State to use digital technology for communicating documents and information, instead of paper, as it is usually the case at the moment. In taking this initiative, the European Commission looks to improve access to justice by ensuring that individuals, businesses and legal practitioners involved in cross-border civil, commercial or criminal cases can communicate digitally with the competent authorities in the other Member States.

Additional information on European Commission’s vision and objectives for the coming period can be found in the communication published on 2 December 2020 – Communication on digitalisation of justice in the EU – A toolbox of opportunities.

Public Consultation on the European Enforcement Order

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Marion Ho-Dac
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On 10 August 2020, the European Commission launched a public consultation on Regulation 805/2004 creating a European Enforcement Order for uncontested claims (“the EEO Regulation”).

The consultation is carried out in the framework of an ongoing evaluation of the EEO Regulation.

In this context, the European Commission “seeks opinions on how the Regulation is working, also with regard to the revised Brussels I Regulation (Regulation 1215/2012). It also aims to collect practical experiences with the EEO Regulation, and attitudes towards its use in the future”.

The consultation is open until 20 November 2020 (midnight Brussels time) and can be found here.

EU Public Consultation on Cross-border Investment within the EU

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Marion Ho-Dac
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European_CommissionOn 26 May 2020, the European Commission launched a public consultation on cross-border investment within the EU.

Why this initiative?

First, the Commission is currently working on a new regulatory framework for intra-EU investments in order to make the internal market more attractive for foreign investors. The main objective of the future legislation will be to better protect and facilitate cross-border investments (see communication COM/2020/102, A New Industrial Strategy for Europe).

Second, following the Achmea judgment of the European Court of Justice (Case C-284/16), an agreement for the termination of intra-EU bilateral investment treaties has recently been adopted by a broad majority of Member States. At the same time, many investors but also arbitration practitioners have raised concerns because of this brutal change in the regulatory framework. They principally  invoke the loss of effective enforcement of their rights within the EU.

The main topics of the consultation are as follows: the first section contains some general questions aimed at gaining inputs on respondents’ familiarity with cross-border investments and linked issues; the second seeks feedback from stakeholders on rules to protect intra-EU investments; the third invites views on enforcement of intra-EU investment protection rules, including dispute resolution mechanisms and remedies when issues related to cross-border investments arise; the fourth section contains some general questions to assess the overall EU investment protection framework (as presented in section two and three); the fifth section seeks views of stakeholders on measures to facilitate and promote cross-border investment.

The consultation is open until 8 September 2020 and can be found here.

Link to: Who we are

CONTACT US
Association Européenne de droit international privé
European Association of Private International Law
4 Rue Alphonse Weicker, L-2721 Luxembourg

THE SECRETARY GENERAL
secretary.general@eapil.org

THE EDITORS OF THE BLOG
blog@eapil.org