Exclusive jurisdiction? Court second seised may not stay proceedings - CJEU in Weber (C-438/12)

3 April 2014: judgment CJEU in case Weber (C-438/12)

Today the Court of Justice followed the AG Jääskinen's opinion in determining that in matters of exclusive jurisdiction (in a given case the dispute related to immovable property) if two courts are seized, the second court may not stay its proceedings on the basis of Art. 22 (1) of the Regulation No 44/2001 without examining who has exclusive jurisdiction and if it belongs to the second court, it should proceed with the case. If the first court would recognize its jurisdiction this would be done contrary to exclusive jurisdiction rules and its judgment would not be able to be recognized on the basis of Art. 35. See for more details on this case our previous blog post (The Italian Torpedo...).

The Italian Torpedo: on staying proceedings in exclusive jurisdiction cases - AG Jääskinen in case Weber (C-438/12)

30 January 2014: opinion of AG Jääskinen in case Weber (C-438/12)

Two elderly sisters Weber, Irmengard and Mechthilde, were in a dispute over a piece of land they both partially owned in Germany. In 1971 through a notary act a preemptive right to purchase this lad was entered into a land register for I. Weber. In October 2009 through a notary act M. Weber sold her part of the land (4/10 thereof) to a company, of which her son, domiciled in Italy, is one of managers. She had a right to withdraw from that transaction until 28 March 2010. I. Weber was informed by a notary about this and through a letter of December 2009 she decided to use her pre-emptive right to purchase that land. Two sister signed an agreement in February 2010 and on 2 March 2010 I. Weber paid M. Weber the agreed purchase price. On 15 March 2010 Mechthilde withdrew from the first contract. On 29 March 2010 a case was started in a court in Milan against two sisters in which the Italian company claimed that the pre-emptive right was unlawfully used and that their purchase contract should be recognized as valid. In reply, in July 2010, Irmengard started a case in front of a German court asking them to order Mechthilde to register the change in the ownership of the land in the land register. As you may imagine, one of the matters that arose was as to what courts had jurisdiction etc. and what a German court should do taking into account the fact that an Italian court was seized first - therefore, the issue referred to the CJEU concerned interpretation of the Regulation No 44/2001.

Since this matter even if it concerns a dispute between private persons, relates to immovable property and, therefore, is not strictly a consumer law case we will keep the discussion of the issue short and mention only the primary question related to the CJEU. The AG Jääskinen advises in this case the CJEU to take the view that Art. 22 (1) of the Regulation that gives exclusive jurisdiction over matters related to immovable property to courts of the country in which that property is located encompasses matters related to establishing whether a pre-emptive right to purchase the land was rightfully executed (no surprise here). The AG follows this statement by interpreting Art. 27 (1) as obliging the court last seised to check whether they have exclusive jurisdiction based on Art. 22 (1) which would mean that the court first seised would not have jurisdiction and its judgments would not be recognized on the basis of Art. 35 (1). Current Art. 27 seems rather to oblige the court last seised to await the result of the jurisdiction check by the court first seised and to honor its decisions, but the AG argues that it's formulation "any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established" suggests that in case of exclusive jurisdiction, where the court first seised will never be able to establish its jurisdiction there is no obligation to stay the proceedings for the court last seised. The AG thinks also that the national court should not need to take into account what law will be applicable in the given case or whether the procedure in another Member State would take a long time in deciding whether to stay its proceedings on the basis of Art. 28 (1) of the Regulation, but it should take into account in this test whether the claimant's right to effective legal protection is observed.

Equal property rights for registered partners and married couples

Another vote took place this month at the European Parliament with regard to new matrimonial property rules for international couples. (Simplifying property law for international couples) On 10 September the MEPs adopted a new resolution, recommending that the drafted legislation included the same property rights for registered partners as for married couples in case they separate and need to divide their properties. Original proposal of the Commission would enable married couples to choose which law should be applicable to their joint property (as long as there was a close connection), while registered partners would still be forced to accept the application of the law of the member state in which their partnership was registered. The resolution grants the same rights to registered partners as to married couples, however, their choice of law would not be valid if they choose for a law of a country not recognising registered partnerships. (MEPs call for equal property rights for registered partners and married couples)

Simplifying property law for international couples

A year and a half ago we mentioned the plans of the European Commission to simplify rules on matrimonial property for international couples (No more hiding money while filing for a divorce?). This would allow international couples to avoid excessive costs and uncertainty in case of a divorce, since they would know up front what to expect with regards to splitting their estate - which court would have jurisdiction, what laws would apply etc. Today, the European Parliament's Committee on Legal Affairs voted fully in favour of this regulation, but it still needs approval by the Council to become law. (Commission welcomes progress on proposals to clarify property rights for international couples)

Football is money - A-G Bot's opinion in Case C-283/11 Sky Österreich v Österreichischer Rundfunk

A Dutch football coach once famously stated that 'football is war' (see on this and other thoughts on football-nationalism a nice article by Ian Buruma written at the occasion of the last World Cup). Nowadays, however, it might not be too far-fetched to say that, at least in Europe, 'football is money' would be a more correct description of the state of affairs. Rules and cases on transmission rights attest of the economic interests involved in the broadcasting of football matches, such as the ones of the ongoing European Championship.

Today, Advocate-General Bot delivered his opinion in the case of Sky Österreich v Österreichischer Rundfunk (ORF). The case concerned the transmission rights of several Europa League matches for which Sky had paid licence and production costs. In accordance with the EU Directive on Audiovisual Media Services, the Austrian regulatory authority in the field of communications decided that Sky had to grant ORF the right to transmit short news reports on Europa League matches involving Austrian teams. On the basis of Article 15(6) of the Directive it was established that ORF would only have to pay compensation for the costs of access to the satellite channel, which in this case equalled zero. Sky was of the opinion that this result was unfair, in particular insofar as Article 15(6) would systematically put exclusive right holders at an disadvantage. The dispute then reached the Austrian Federal Communications Tribunal, which raised a preliminary question regarding the compliance of the Directive with fundamental rights, in particular the freedom to conduct a business and the right of ownership (Articles 16 and 17 of the EU Charter of Fundamental Rights (EUCFR) and Article 1 of the First Protocol to the European Convention on Human Rights (ECHR)).

The reference for a preliminary ruling requested the Court of Justice of the European Union (CJEU) to evaluate the conformity with fundamental rights, in this case, the freedom to conduct a business and the right to property, of Article 15(6) of Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive).

A-G Bot considers that: 'It is clear from the case-law of the Court that the right to property, like the right freely to exercise an economic activity, is one of the general principles of law of the Union. However, those principles are not absolute but must be viewed in relation to their social function. Consequently, restrictions may be imposed on use of the right to property, and the right to freely pursue an economic activity, provided that those restrictions correspond to objectives of general interest pursued by the Union and do not constitute, with regard to the objective pursued, a disproportionate and intolerable interference affecting the very substance of the rights thus guaranteed.' (para. 29)

Furthermore: 'Article 52(1) [EUCFR] ... accepts that limitations may be imposed on the exercise of rights such as the right to property and the freedom to conduct a business set out in Articles 17 and 16 of the Charter, as long as the limitations are provided for by law, respect the essence of those rights and freedoms and, in compliance with the principle of proportionality, are necessary and genuinely meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others.' (para. 30)

Article 15(6) of the Directive, in the A-G's opinion poses a limit to the right holders freedom of contract: 'From the perspective of freedom to conduct a business, of which freedom of contract forms part, the immediate consequence of Article 15 is that television broadcasters who hold exclusive transmission rights can no longer decide freely with which bodies they may wish to enter into an agreement for access to short extracts. In other words, they may no longer grant licences to operators of their choice with a view to turning rights to extracts to account.' (para. 35)

It also affects the right to enjoy one's property: 'From the perspective of the right to property, this article has the effect of limiting the use that broadcasters who hold exclusive transmission rights may wish to make of their property.' (para. 36)

And, in the line of 'football is money' reasoning: 'More specifically as to Article 15(6) of the Directive, there is an infringement of the freedom to conduct a business and the right to property inasmuch as, the compensation of the right to short extracts being limited to the additional costs incurred directly by the provision of access, broadcasters who hold exclusive rights to the transmission of an event of high interest to the public can no longer freely decide on the price they charge for access to short extracts. The arrangements for compensation in this provision prevent, in particular, those bodies from having other television broadcasting organisations which wish to use short extracts contribute to the acquisition costs of those exclusive rights. The way those arrangements are structured may also have a negative impact on the commercial value of exclusive rights.' (para. 37, emphasis added)

Are these infringements of fundamental rights justified (cf. Art. 52 EUCFR)?

A-G Bot considers: 'By framing one of the ways in which the right to short extracts may be exercised, namely the compensation payable to the primary broadcaster, Article 15(6) of the Directive pursues the objectives set out in recitals 48 and 55, that is to say, in particular, the freedom to receive information and media pluralism.' (para. 42)

In this light, the analysis then requires the balancing of fundamental rights: 'The reason for the infringement of the rights recognised by Articles 16 and 17 of the Charter having thus been identified, it is now necessary to verify whether the limitation on the rights enshrined by these two articles is proportionate to the legitimate aim pursued. As this aim is primarily the need to protect another fundamental right, namely the freedom to receive information and media pluralism, the review of proportionality which I shall now conduct calls for the weighing of several fundamental rights. The issue is therefore whether, in adopting Article 15(6) of the Directive, the EU legislature achieved a fair balance between the right to property and the freedom to conduct a business, on the one hand, and the freedom to receive information and media pluralism, on the other.' (para. 45, emphasis added)

Taking into account the margin of discretion for fundamental rights protection, the fact that the Directive was not pursuing complete harmonisation and the market-oriented nature of EU law, A-G Bot concludes that 'Article 15(6) of the Directive is able to achieve the aim sought, namely to ensure the freedom to receive information and media pluralism, but also that it does not go beyond what is necessary to achieve this aim.' (para. 53, emphasis added)

In this context, the A-G considers of particular significance the fact that the restriction of fundamental rights is mitigated by conditions and limitations attached to the use of the short reports of football matches (para. 63). Importantly, the right to broadcast these short reports only extends to 'events of high interest to the public' (para. 64). Furthermore, the Member States, in the A-G's opinion, also play a role, since it is for them, 'in the transposition of the Directive, to ensure that they adopt an interpretation of the Directive which allows a fair balance to be struck between the different fundamental rights protected by the legal order of the Union' (para. 68).

Finally, comparing the aims and objectives of the EU, related to the internal market, with the case law of the Austrian and German Constitutional Courts, A-G Bot notes: 'It follows that the weighing of the different fundamental rights at stake does not necessarily call for the same response at national or EU level' (para. 80, emphasis added). Accordingly, the national highest Courts' different views on the matter (holding that a right to extracts of football matches should not be granted free of charge) are dismissed as not having significant bearing on the review of Article 15(6) of the Directive (para. 79). So: 1-0 for EU policy in respect to the Member States' balancing of fundamental rights? Let's see what the CJEU makes of it.

See also the press release on A-G Bot's opinion and, if you like European football, the Euro2012 website.

 

No more hiding money while filing for a divorce? - new regulations on recognition and enforcement of decisions in mattters of matrimonial and patrimonial property regimes

One of the four pillars of the European Union is the freedom of movement within the European Community. Since its establishment and enforcement with every year more and more European citizens travel within the borders of the EU, get jobs in other Member States, settle there and often also get partners from other Member States (today there are ca 16 million international couples in the European Union). This has all been made easier by the harmonisation of European laws. Now the European Commission and Council take a closer look to what happens to these international partnerships/marriages when they end - either via divorce or death. More specifically, it has become clear that a lack of harmonized rules regarding the property rights of such international couples leads to long-time disputes, forum shopping (since often it's not clear a court of which country is empowered to give a ruling), and as a result: many costs to European citizens as well as institutions. 

The European Council proposes now two new regulations that would provide for clear rules for recognising and enforcing court judgements on a couple's property in all EU Member States through a single procedure. These simplified, unified rules are supposed to save per case (per couple) ca 2000-3000 Euro. They will enable married couple to choose the law that applies to their joint property. Registered partners will also get legal certainty since their assets would be subject to the laws of the country where the partnership was registered. Finally, clear rules would be set for choosing the court that is responsible for adjudicating the case.

Hopefully, this will contribute to European consumers being more secure in their property and financial rights and it will decrease the uncertainty and confusion at a time that is not easy to begin with since you are either getting divorced or burying your spouse...

Press release on this subject may be found here.

Questions and answers on problems relating to this subject may be found here.

Council regulation on jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes may be found here.

Council regulation on jurisdiction, applicable law and the recognition and enforcement of decisions regarding the property consequences of registered partnership may be found here.