Thank you for reading our posts!

Dear reader,

There’s now two inches of snow in the Law Faculty courtyard. Along the streets, dads are pulling their kids on miniature sledges, and snowmen are mysteriously appearing overnight. Its that time of year again. We’d like to take this opportunity to wish you a very Merry Christmas and a fruitful 2011 for European Private Law. Thank you for taking the time to read our posts and we hope you’ll continue to do so next year!
Snowfall along the river Maas
~ the M-EPLI team
read more

Europeanisation of non-possessory security on movables; a report on the annual meeting of the Dutch Association for Civil Law.

Last Tuesday the Dutch Association for Civil Law convened in the building of the Supreme Court in The Hague to discuss papers written by Prof. Keirse and Prof. Veder, both from the University of Utrecht, on the Europeanisation of patrimonial law. Keirse discussed the Europeanisation of the law of obligations and Veder the Europeanisation of (non-possessory) security rights on movables. I will focus on the paper written by Veder.

For a long time now, legal scholars are of the opinion – though this is not supported by substantial empirical research – that the different regimes with regard to non-possessory securities are an impediment to the functioning of the internal market. Veder gives the example of a German autobus manufacturer who retained title to the autobus supplied to a customer in Spain. When the German manufacturer tried to prevent a seizure of the bus, the retention of title was held invalid because it was not registered in Spain. This was the case in spite of the fact that at the time of delivery of the goods, such a registration was not possible according to Spanish law, as the autobus was still in Germany.

Veder assesses a long list of failed European initiatives in this area and comes to two possible solutions for the problem. The first could be the creation of uniform rules of private international law to deal with the recognition and enforcement by a member-state of security rights created in another member-state. Veder distinguishes the possibility of converting a foreign security right into a local equivalent and the possibility of assimilating a foreign security right as much as possible according to the local law. Veder opts for the latter option, as it would leave the security right intact, be it that it cannot be exercised in so far as that would be contrary to the law of the member-state where the goods are situated. A second solution would be the creation of an optional European security right, after the example of book IX of the DCFR and the UNIDROIT treaty of Cape Town of 16 November 2001, which include the creation of a registry. A question that remains is whether such a European security right would only be valid in cross-border situations.

Intervening on the behalf of the Association were Prof. Struycken and prof. Van Erp. Van Erp regretted the more dogmatic-technical character of the advice and urged a far more fundamental review of the law in order to come to a solution. An example would be the approach taken by Louis d’Avout in France, who is of the opinion that the principle of numerus clausus only serves to prevent the creation of new property rights internally, but should not hamper the recognition of security rights created abroad (Louis d’Avout, Sur les solutions du conflit de lois en droit des biens, Paris: Economica, 2006). Van Erp also signals that a European security right as described by Veder, would be based on Article 9 of the Uniform Commercial Code. The US legislator has emphatically chosen for a single uniform solution, as lawyers were of the opinion that an optional solution would be a dead end. Struycken, in his turn, paints the debate as being one between the realists and the European idealists, himself in the realist camp. A European solution would be politically unfeasible. Moreover, creditors are not looking for legal theories but for legal certainty.

I would agree with this viewpoint in as far as it is true that economic actors cannot be expected to experiment with uncertain solutions. Being as that may, this can hardly be an argument against Van Erp’s call to more fundamental solutions. Whether or not a European security right would be politically feasible is another question. Taking the example of the European rules on financial collateral arrangement, one can argue that this has had quite some influence on the national property regimes of different member-states. Moreover, it is presumably not so much politicians who are interested in preserving national property law dogma’s, but rather nationally-oriented legal scholars who advise these politicians.

Finally, in reaction to the advice of Veder, I have my doubts whether a solution based on uniform rules of international private law would be the way to proceed. A uniform solution on the basis of assimilation of foreign security rights, for instance, would not have prevented the invalidity of the German retention of title, in the example given by Veder.

Willem Loof

read more

On the Need for Collaboration in European Private Law Scholarship

2010 was the year that we combined our research efforts in European private law at Maastricht University in a single research institute. Our aim is to cross borders between the various fields of private law in the conviction that differences between subjects as contract, property and tort, hinder the development of European private law. After all, in the view of the Court of Justice of the European Union (ECJ) it doesn’t matter what the national classification of a measure is. If a national rule directly or indirectly, actually or potentially hinders intra-Union trade, the rule can be deemed contrary to European Union law. Although free movement in the internal market of the European Union concerns goods, persons, services and capital, and as such does not concern rules of private law, they cannot function without it. This concerns the freedom of contract and the freedom of ownership that are of constitutional importance to the internal market.

It is this effect of the case law of the ECJ that I am interested in. Let’s take the case of Reisch (C-515/99) as an example. The case concerns a German national wishing to acquire ownership in Austria. Under Austrian legislation the acquisition of ownership is restricted by local legislation that seeks to prevent a ‘tourist colony’ from forming. Therefore, Reisch needed to declare that the Austrian ownership would be his primary residence. The ECJ did not agree with the rule and held it violated the free movement of capital. As a result non-Austrian nationals could no longer be required to make such a declaration. Austrians, however, could still be required to do so, as EU law accepts reversed discrimination as an unavoidable result.
Recently Advocate General Sharpston gave conclusion in the case of Zambrano v RVA (C-34/09). This case concerns a Colombian national who established himself with his wife, with a valid visa, in Brussels Belgium. He ends up having children, but, once the visa expires, illegally resides in the EU. His children, however, are Belgian nationals under the applicable Belgian law and are therefore citizens of the European Union. The case centres on the question whether the EU fundamental rights of the children are violated if the parents would be sent back to Columbia. Relevant for us is the question if EU law applies, because the children have not moved residence between Member States and this therefore concerns a purely internal situation. Most interestingly AG Sharpston proposes to move beyond purely internal situations and apply EU law on the basis of EU citizenship. Another interesting case (C-434/09) concerns Mrs McCarthy a British and Irish national who has lived in England all her life, seeking a right of establishment in England on the basis of her Irish citizenship to benefit the residence permit of her Jamaican husband. In this case AG Kokott disagrees and argues that EU law cannot provide an answer to reversed discrimination in the way AG Sharpston proposes.
The cases have nothing to do with contract, property or tort, but are still of extreme relevance to European private law. The EJC follows If AG Sharpston, internal market law will receive an effect beyond cross-border situations. It would therefore automatically also apply to horizontal relations including obligations and property relations. EU law will in the eyes of many private lawyers not automatically cover the acquisition of ownership of a piece of land in the middle of a country. However, when one of the two neighbours has the nationality of another EU member state, as was the case in Reisch, there is an immediate link to EU law. Under Sharpston’s reasoning there is influence of EU internal market law on this legal relation. When two nationals are involved there is a purely internal situation and therefore EU law does not apply. However, when EU law affects purely internal situations, there is no reason why acquisition of ownership is included.

This is just an example. Not many legal scholars have sufficient knowledge of EU law and substantive private law to oversee all the developments that are of interest to European private law. These developments, even when the ECJ would not follow Sharpston in her approach, show the need to collaborate. We must therefore inform each other, work together on research proposals and projects and discuss these very relevant questions beyond our own field, discipline and the borders of our own legal system. We must therefore reach beyond traditional measures to work together. Blogs on European private law are up and coming, including our own effort, and are a great way to informally keep each other up to date. In my view this is not nearly enough. We should meet each other online through videoconferences and video and online (real-time) lectures, where we can also combine groups of students and share our ideas and insights beyond our own classroom. I warmly invite everyone to join me in this effort.

Merry Christmas and a Happy New Year!

read more

Consumer Protection & Online Shopping (Part II)

Picking up on my previous post (7 Dec), a summary (factual background excerpt from the official press release, which can be found here) and some brief comments on the joined cases  Pammer and Hotel Alpenhof (C-585/05 and C-144/09) whose judgments were released yesterday.
read more

Consumer Protection & Online Shopping (Part I)

Most of us probably don’t even think about it, but for those of us who do, we tend to assume (not unreasonably) that if we buy stuff from a Dutch or German website, the transactions concluded at these sites are governed respectively by Dutch or German law. A year ago, while writing a piece on how consumers (don’t) think about consumer protection (though not specifically regarding online shopping), I decided to conduct some amateurish checks to see whether this was indeed true. Our household buys a lot of books from Amazon’s UK site, so their general terms and conditions (usually the last clause) seemed a natural place to start.
read more