Of Rights and Men: An Assessment of European Jurisdictional Rules Over Transnational Corporate Abuse Claims
| Author | Adeline Michoud |
| Position | LL.M, Graduate Institute of International and Development Studies; Teaching & Research Assistant at the University of Geneva, Ph.D. candidate, trainee lawyer |
| Pages | 7-34 |
© 2019 Adeline Michoud and Dublin University Law Society
OF RIGHTS AND MEN: AN ASSESSMENT OF
EUROPEAN JURISDICTIONAL RULES OVER
TRANSNATIONAL CORPORATE ABUSE CLAIMS
ADELINE MICHOUD
Introduction
In recent years, numerous scandals have exposed labour and
environmental abuses committed by transnational companies (TNCs)
taking advantage of the weak governance systems of the developing
countries where they establish production activities. One of the most
famous of these scandals is the Rana Plaza clothing factory collapse in
Bangladesh.
1
The collapse of the eight-story building killed more than
1100 people and injured 3000 others. The companies responsible failed
to act or prevent the tragedy, despite complaints being made by workers
about the poor maintenance of the building and the worrying cracks on
the building’s walls. Victims of such corporate wrongs often face
difficulties obtaining redress before the judicial system of their home
countries, as these countries lack solid judicial systems capable of
addressing corporate accountability issues.
2
The exercise of extraterritorial jurisdiction has become a vital tool
LL.M, Graduate Institute of International and Development Studies; Teaching &
Research Assistant at the University of Geneva, Ph.D. candidate, trainee lawyer. The
author would like to dedicate this article to Celia and Philippe for their everlasting support
throughout the period of research and drafting of the article and beyond. The author is
indebted to Professor Thomas Kadner Graziano for his inspiring teaching at the University
of Geneva, which has fostered the author’s interest in private international law issues. The
author would also like to thank Eolann Davis for his valuable comments and his assistance
throughout the editing process. This article contains extracts of the author’s doctoral thesis
entitled: ‘The accountability of transnational corporations for the adverse impacts of their
global value chains’ which shall be defended at the University of Geneva.
1
‘The Rana Plaza incident and its aftermath’ (International Labour Organisation)
>
accessed 23
December 2018.
2
This can be explained by some courts’ lack of capacity or because of judicial corruption.
See Maya Steinitz, The Case for an International Court of Civil Justice (Cambridge 2018)
99.
Trinity College Law Review [Vol 22
8
for addressing this accountability gap.
3
Through extraterritorial
jurisdiction, courts can impose liability in instances where no single
domestic system has the capacity to find transnational corporations at
fault.
4
As such, victims of business-related human rights abuses have
increasingly sought remedies in the legal system where the parent
company was incorporated.
5
A high number of claims have been taken
before European jurisdictions, which have progressively addressed
claims related to corporate abuses committed by transnational
corporations or their subsidiaries abroad. A recent decision of the Higher
Regional Court of Hamm,
6
which accepted jurisdiction to hear the claim
of a Peruvian farmer against a German energy company for
contributing to the melting of a glacier in the Andes mountains,
7
illustrates this trend well.
This article seeks to assess the adequacy of current European
private international law rules in guaranteeing access to European
national courts for cross-border tort related claims. Section One will
outline the importance of European private international law rules for
ensuring access to justice for victims of corporate wrongs committed in
non-European countries. The shortcomings of the current European
private international law framework will then be outlined in Section
Two. In order to address this lacuna, by drawing upon pre-existing
reform proposals examined in Section Three, Sections Four and Five will
examine the possibility of introducing a forum necessitatis or a forum
3
See Olivier De Schutter, ‘Extraterritorial Jurisdiction as a Tool for Improving the Human
Rights Accountability of Transnational Corporations’ (Business and Human Rights
Resource Centre, 1 December 2006) ttps://business-
humanrights.org/sites/default/files/reports-and-materials/Olivier-de-Schutter-report-for-
SRSG-re-extraterritorial-jurisdiction-Dec-2006.pdf
>
accessed 7 November 2017.
4
ibid 2-7; Mossavar Rahmani, ‘Exploring Extraterritoriality in Business And Human
Rights’ (Summary Note Of Expert Meeting Tuesday, September 14 2010) 3
extraterritoriality-14-sep-2010.pdf
>
accessed 7 November 2017.
5
Juan-José Alvarez-Rubio and Katerina Yiannibas, Human Rights in Business: Removal
of Barriers to Access to Justice in the European Union (Routledge 2017) 16.
6
Lliuya v RWE AG (Hamm Oberlandesgericht, Court of Appeal)
>
accessed 21 September 2018.
7
Council Regulation (EU) 1215/2012 on jurisdiction and the recognition of judgments in
civil and commercial matters [2012] OJ L351/1, art 4. The regulation is applicable in EU
Member States; provides that the German court of the domicile of the defendant has
jurisdiction.
2019] Of Rights and Men
9
arresti in European jurisdictional rules to extend the extraterritorial
scope of European courts.
I. The Role of Private International Law
Under international human rights law, access to justice is provided for
in the 1948 Universal Declaration on Human Rights (UDHR) under
Article 8, which states: ‘Everyone has the right to an effective remedy
by the competent national tribunals for acts violating the fundamental
rights granted him by the constitution or by law.’ Access to justice is
also a fundamental right recognised in the European Union. Article 13
right to an effective remedy for all rights and freedoms protected by the
convention. Article 47 of the EU Charter of Fundamental Rights also
provides for the right to an effective remedy. Under the Charter, this
right exists for ‘Everyone whose rights and freedoms guaranteed by the
law of the Union are violated.’ With the current challenges of holding
multinational companies accountable, private international rules are an
important tool to ensure victims of corporate abuse secure access to
justice.
Private international law is traditionally conceived of as the law
that regulates the transboundary relations between private actors. With
the establishment of the European Union, European States have
progressively adopted harmonised rules of private international law
which secure a level of certainty and predictability of legal and economic
relations between private individuals.
8
These rules seek to allocate
jurisdiction to national tribunals in the most appropriate and efficient
manner.
9
Generally, conflict of laws rules strive to allocate jurisdiction
to courts on the basis of a nexus with the forum state. The concept of
extraterritoriality has gradually been developed in the context of
8
See Paul R Dubinsky, ‘Human Rights Law meets Private Law harmonization: the coming
conflict’ (2005) 30 Yale Journal of International Law 212, 234, 237; Albert Bleckmann,
Die Völkerrechtlichen Grundlagen des internationalen Kollisionsrecht (Heymanns Verlag
1992) 34.
9
Alex Mills, The Confluence of Public and Private International Law (Cambridge 2009)
228; Heinz-Peter Mansel, ‘Staatllichkeit des Internationalen Privatrechts und Völkerrecht in
Stefan Leibe’ in Matthias Ruffert (ed), Völkerrecht und IPR (Gottmadingen 2006) 119.
Trinity College Law Review [Vol 22
10
corporate abuses, on the basis of establishing a strong link to justify the
intervention of Western courts in cases involving wrongs occurring
abroad. Without the application of private international law, host
countries of TNCs’ activities would be the sole forum with jurisdiction
over actions occurring within their national territory.
10
This would
enable TNCs to evade liability by relocating to countries with poor
human rights protection.
11
The European Union has adopted common rules on European
courts’ civil jurisdiction, as partially harmonised through Regulation
(EU) No. 1215/2012,
12
13
The Regulation aims to promote the free circulation of
judgments within the Union
14
and to create the highest possible degree
10
On the principle of territorial jurisdiction, see United Nations, Charter of the United
Nations, (24 October 1945) 1 UNTS XVI, art 1, para 2, art 2, para 4; Am. Banana Co. v
United Fruit Co. 213 US 347, 357 (1909); on jurisdiction generally, see Cédric Ryngaert,
Jurisdiction in International Law (Oxford University Press 2015); Marko Milanovic,
Extraterritorial Application of Human Rights Treaties (Oxford University Press 2011).
11
See, for example, Michael Addo, ‘Human Rights and Transnational Corporations – an
Introduction’ in Human Rights Standards and The Responsibility of Transnational
Corporations (Kluwer Law International 1999) 11. See also Amnesty International,
‘Comments In Response To The UN Special Representative Of The Secretary General On
Transnational Corporations And Other Business Enterprises Guiding Principles –
Proposed Outline (October 2010)’ 20
>
accessed 6 March 2019; Human
Rights Council, ‘ Report of the Special Representative of the Secretary-General on the
issue of human rights and transnational corporations and other business enterprises’ (7
April 2008)
accessed 07 November 2017. See also Anita Ramasastry, ‘Corporate Complicity: From
Nuremberg to Rangoon: An Examination of Forced Labor Cases and Their Impact on the
Liability of Multinational Corporations’ (2002) 20 Berkeley Journal of International Law
91, 91-92.
12
Council Regulation (EU) 1215/2012 of 12 December 2012 on jurisdiction and the
recognition and enforcement of judgments in civil and commercial matters (recast) OJ
[2012] L351/1.
13
This regulation (n 7) replaced Council Regulation (EC) 44/2001 of 22 December 2000
on jurisdiction and the recognition and enforcement of judgments in civil and commercial
matters [2001] OJ L12/1.
14
Paul Jenard, ‘Report on the Convention on jurisdiction and the enforcement of judgments
in civil and commercial matters signed at Brussels’ (27 September 1968, Official Journal C
59, 5 March 1979) >
accessed 6 March 2019.
2019] Of Rights and Men
11
of legal certainty.
15
The rules in the RBI Regulation are relevant for
establishing jurisdiction in tort cases for corporate human rights abuses.
In 2015, the European Commission’s Staff Working Document on
Implementing the UN Guiding Principles on Business and Human Rights
underlined that ‘the current framework of judicial means for access to
remedies is comprehensive and even allows, within certain parameters,
extra-territorial access to remedies for victims of corporate-related
harm’.
16
The accuracy of this statement will be assessed over the course
of the article. It will be argued that the current European private
international law rules lack precision, as they fail to provide rules
capable of connecting European jurisdictions with cross-border torts
committed in third countries by subsidiaries of European transnational
companies.
II. The application of the Brussels I Regulation
A) The need to establish the liability of parent companies for their
subsidiaries and to recognise their joint responsibility
to apply. First, according to Article 1(1) RBI, the Regulation applies
ratione materiae to civil and commercial disputes that are not part of the
exceptions provided in Article 1(2) RBI. Secondly, the temporal scope
of application, ratione temporae, must be fulfilled:
17
the Regulation
applies to claims issued from 10 January 2015.
18
Finally, according to
Articles 4(1) and 6(1) RBI, the ratione personae of the Regulation is
fulfilled if the defendant is domiciled in one of the EU Member States.
Therefore, in procedures with defendants that are not domiciled in a
Member State, the national courts must apply their national
jurisdictional rules to determine if they have jurisdiction. Article 63
RBI provides a definition of the ‘domicile’ of companies. Companies
15
16
Commission, ‘Commission Staff Working Document on Implementing the UN Guiding
Principles on Business and Human Rights’ SWD (2015) 144 final, 35.
17
RBI (n 7), art 66.
18
The previous Regulation (n 7) was in force from 1 March 2002 (art 76), until it was
replaced by the recast RBI (ibid) on 10 January 2015.
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12
are considered to be domiciled in the place where they have their
statutory seat, their central administration, or their principal place of
business. As such, the RBI Regulation only applies where the defendant
corporations are domiciled in the EU.
19
For claims involving
defendants domiciled outside of the EU, it will depend on the private
international law rules of the Member State whose courts are seised to
determine the court’s jurisdiction.
If these three cumulative conditions of ratione materiae, ratione
temporae and ratione personae are not met, the RBI Regulation does not
apply, and European national courts must apply their own conflict of
laws rules on jurisdiction. However, if these three conditions are met,
the RBI Regulation can apply; the courts will need to assess if they
have jurisdiction under the rules of the RBI Regulation. As the RBI
framework is a closed system that seeks to harmonise Member States’
rules on jurisdiction, Member State courts are barred from considering
grounds of jurisdiction other than those contained within the RBI
instrument.
The ‘ordinary jurisdiction’, which is the main ground for
jurisdiction and the cornerstone of the RBI, can be found under Article
4(1) RBI. This article holds that persons domiciled in a Member State
shall be sued in the courts of that Member State. This is also known as
the actor sequitur forum rei principle, meaning the plaintiff must follow
the forum of the thing in dispute. Therefore, when human rights abuses
are perpetrated abroad by European companies, victims can, in theory,
present their claims in the jurisdiction where these companies are
domiciled. Article 4(1) RBI enables any person, whatever their
nationality or domicile,
20
to present a claim against a TNC having its
headquarters in the European Union for violations committed abroad.
21
19
Except in cases provided for by RBI (ibid), art 24.
20
ibid art 2; See also Holger Haibach, Human Rights and Business Report, 12361,
Council of Europe, Parliamentary Assembly (27 September 2010), para 99.
21
I-5925 paras 57 and 59: ‘It follows that, as a general rule, the place where the plaintiff is
domiciled is not relevant for the purpose of applying the rules of jurisdiction laid down by
the [Brussels] Convention, since that application is, in principle, dependent solely on the
criterion of the
defendant's
domicile being in a Contracting State. (…) Consequently, the
Convention does not, in principle, preclude the rules of jurisdiction which it sets out from
applying to a dispute between a defendant domiciled in a Contracting State and a plaintiff
domiciled in a non-member country.’
2019] Of Rights and Men
13
This is also the interpretation of the European Parliament, which in 2002
drew ‘attention to the fact that the … Brussels Convention enables
jurisdiction within the courts of Member States for cases against
companies registered or domiciled in the E.U. in respect of damage
sustained in third countries’.
22
Nevertheless, the RBI regime does not
provide jurisdiction for cases involving companies domiciled outside of
the European Union.
Focusing on the duty of care of parent companies on the activities
they undertake abroad is a welcome approach, as it provides a
mechanism to hold them accountable in their home states for the
consequences of their production methods, regardless of the place where
the harm occurred. Moreover, one way to hold parent corporations
accountable is to consider that they operate as a single economic unit
together with their subsidiaries. In this case, subsidiaries can also be held
to have the same domicile as their parent company.
However, this concept was not extensively applied by national
courts. Notable examples can be taken from English case law, where
courts were asked if a subsidiary company registered in South Africa
could be held to have its ‘central administration’ in England (following
Article 60(1) RBI), as the parent company was headquartered in
England. This was further raised in Vava and others v Anglo American
South Africa Ltd
23
and Young v AASA.
24
In these cases, if English courts
had held that a foreign subsidiary could be held to have its ‘central
administration’ in England, they would have been able to exercise their
jurisdiction. However, this argument was dismissed.
In Young, the Court of Appeal held that ‘central administration’
was to be determined individually for each legal person or corporate
entity. The Court of Appeal reiterated the principle that parent companies
and subsidiaries have a separate and distinct legal personality. A
corporate group could not be held to have a common central
administration. The Court of Appeal also held that the relevant decision-
making took place where the subsidiary was located, not where the
22
European Parliament, ‘Resolution on the Commission Green Paper on Promoting a
European Framework for Corporate Social Responsibility’ COM (2001) 366 final (May 30
2002) 50.
23
24
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14
parent company was.
25
The Court did not consider the influence that the
parent company could exercise on its subsidiary. Consequently, this case
suggests that a subsidiary company could only be held to have its central
administration where its parent company is headquartered when the
parent company has assumed control of the decision-making regarding
the subsidiaries' activities.
26
This jurisprudence demonstrates the necessity for the RBI drafters
to consider the liability that a European parent company can incur
because of its strong links with its foreign subsidiary. In Germany, courts
acknowledge that a parent corporation's separate legal personality from
its subsidiaries' may be disregarded in certain circumstances (this is what
is commonly called the Durchgriffshaftung).
27
Under this rule,
subsidiaries of a German parent company can be brought before the
jurisdiction of German courts under Article 4 RBI.
28
This approach
differs significantly from the one in the United Kingdom. Indeed,
through the Durchgriffshaftung’s theory, German courts can have
jurisdiction for cases involving a German corporation’s subsidiary based
in a third country, as the subsidiary will be held to have the same
domicile as its German parent company. This theory has developed a
broader notion of the concept of ‘domicile’ under the RBI Regulation
and thus allows a parent company and its subsidiary to be viewed as a
single unit. Germany and England thus have different conceptions as to
the notion of ‘domicile’ that have not been reconciled. In that regard, the
RBI Regulation fails to provide a harmonised framework between the
different European countries.
25
ibid paras 38-43.
26
Lucas Roorda, ‘Adjudicate This! Foreign Direct Liability and Civil Jurisdiction in
Europe’ in Angelica Bonfanti (ed), Business and Human Rights in Europe (Routledge
2018) 201.
27
Carsten Alting, ‘Piercing the Corporate Veil in American and German Law – Liability
of Individuals and Entities: A Comparative View’ (1995) 2(2) Tulsa Journal of
Comparative and International Law 187, 191.
28
Marios Koutsias, ‘Corporate domicile and residence’ in Peter Stone and Youssef Farah
(eds), Research Handbook on Private International Law (Elgar 2015) 353.
2019] Of Rights and Men
15
B) The necessity of joining proceedings against parent companies and
their subsidiaries
The RBI Regulation permits the joining of proceedings between the
parent and the subsidiary in a Member State court. Article 8(1) RBI
permits the joining of defendants under the condition that ‘the claims are
so closely connected that it is expedient to hear and determine them
together to avoid the risk of irreconcilable judgments resulting from
separate proceedings.’ However, this rule only applies to defendants
domiciled in an EU Member State. The European Court of Justice has
indicated that two conditions must be met to join claims against two
defendants: first, the parent company must not be sued with the sole
objective of bringing the foreign subsidiary before European courts, and
second, a prior relation must exist between the defendants.
29
The imposition of these two conditions by the European Court of
Justice can reasonably be explained by the willingness of the European
judges to ensure the existence of a certain nexus between the case and
the jurisdiction in charge of hearing the claim. In the case of corporate
wrongs committed by TNCs’ subsidiaries abroad, the first condition is
a significant barrier to a subsidiary appearing before European courts, as
the primary motive for victims bringing a joint claim against both
defendants is to have access to European courts. The first condition set
by the European Court of Justice for the application of Article 8 RBI thus
appears problematic. Instead of facilitating victims' access to justice, it
presents obstacles to claimants seeking to address European courts. The
original aim of this provision was certainly to avoid forum shopping.
30
The European legislator should consider the abrogation of the first
consideration, which represents a substantial barrier to victims of
corporate wrongs.
However, in several Member States’ private international rules, in
29
616/10 Solvay SA v Honeywell Fluorine Products Europe BV [2012] ECR. See Virgos
Soriano and Garcimartin Alférez, Derecho Procesal Civil Internacional. Litigación
Internacional (Civitas 2007) 214–215.
30
The term ‘forum shopping’ refers to a practice of litigants aiming to choose the court
where their case is the most likely to receive a favourable outcome.
Trinity College Law Review [Vol 22
16
cases where RBI is inapplicable, it is possible to join proceedings against
EU and non-EU domiciled defendants. Spain for example, adopted a
reform in 2015 to allow Spanish courts to join proceedings against
foreign defendants provided at least one of the defendants is domiciled
in Spain and the claims against the different defendants are sufficiently
connected.
31
Similarly, Croatian courts admit the possibility to hear
cases involving several defendants, under the condition that one of the
defendants has its domicile or seat in Croatia and that the situation arises
from the same factual scenario.
32
Furthermore, according to Dutch private international law rules, a
Dutch court can have jurisdiction over a foreign subsidiary when the
claims against the parent and the subsidiary are so closely connected that
the joining of defendants is justified.
33
This rule has been confirmed in
the Shell case.
34
This case involved four oil spills in Nigeria following
the sabotage of pipelines by third parties. This resulted in the
destruction of livelihoods and the pollution of the neighbouring areas.
Four Nigerian farmers and fishermen claimed the relevant damages,
holding the parent multinational company liable for its lack of
diligence over the operations of its subsidiaries in the local pipeline.
In 2010, the District Court of The Hague accepted that it had
jurisdiction over Royal Dutch Shell Plc (a company domiciled both in
the Netherlands and in the United Kingdom) and the Shell Petroleum
Development Company of Nigeria Ltd (its Nigerian subsidiary). The
Court of The Hague held that the joining of claims was admissible as
long as it was foreseeable by the defendants that they could be sued in a
Member State where at least one of them was domiciled.
35
Here, given
31
See Article 22(3) of the Spanish Organic Law 7/2015: ‘En caso de pluralidad de
demandados, serán competentes los Tribunales españoles cuando al menos uno de ellos
tenga su domicilio en España, siempre que se ejercite una sola acción o varias entre las
que exista un nexo por razón del título o causa de pedir que aconsejen su acumulación.’
32
This term is defined in Article 196(1)(1) of the Civil Procedure Act, Official Gazette of
the Republic of Croatia, 53/1991, 91/1992, 112/1999, 129/2000, 88/2001, 117/2003,
88/2005, 2/2007, 96/2008, 84/2008, 123/2008, 57/2011, 25/2013 and 89/2014.
33
See Article 7(1) of the Dutch Code of Civil Procedure.
34
District Court of The Hague, Oguru-Efangav Shell, ECLI: NL: RBSGR: 2013:BY9850
(30 January 2013); Dooh v Shell, ECLI:NL: RBSGR:2013:BY9854 (30 January 2013);
See also Akpan v Shell, ECLI: NL: RBSGR: 2013: BY9854 (30 January 2013).
35
ibid Akpan v Shell, para 81.
2019] Of Rights and Men
17
the proximity and connection between the activities of the parent
company and its subsidiary, it was held that both companies could
reasonably expect to be sued at the same time, which was all the more
justified by reasons of efficiency.
36
In 2015, the Court of Appeal of The
Hague confirmed this ruling, affirming that Dutch courts had
jurisdiction. This was found under both Article 2 and 60 RBI, as well as
Article 7(1) of the Dutch Code of Civil Procedure, which allows courts
to exercise jurisdiction over connected claims, even where a defendant
is not domiciled in the jurisdiction, under the condition that the joining
of the claims is justified by efficiency reasons.
37
The approach taken by the Dutch courts represents an interesting
precedent. It is submitted that holding both companies jointly liable in
these circumstances is a fair approach. If the extent of collaboration
between both the parent company and its subsidiary is considered, the
resultant predictability that the parent company could draw from this
involvement in its subsidiaries’ activities can also be determined.
Therefore, as the parent company has played a role in the supervision of
the subsidiary and has therefore been active in its operations, it cannot
be deemed unjustified to relate claims against both companies and to
present them before the courts of the jurisdiction where one of the
companies is domiciled.
36
ibid para 4.1. On the merits, the District Court of The Hague held that the Nigerian
subsidiary had a duty of care towards the claimant (para 4.35-61). The Nigerian subsidiary
was ordered to pay compensation to the local communities for the losses generated by the
breach of its duty of care. For a more detailed account of the case, see Matthias Weller and
Alexia Pato, ‘Local parents as “anchor defendants” in European courts for claims against
their foreign subsidiaries in human rights and environmental damages litigation: recent
case law and legislative trends’ (2018) 23 Uniform Law Review 397.
37
Court of Appeal of The Hague, 17 December 2015, ECL-NL: GHDHA: 2015:3586
(Dooh/Shell). See also Cees Van Dam, Preliminary judgments Dutch Court of Appeal in
the Shell Nigeria case,
>
accessed 13 August 2018.
Trinity College Law Review [Vol 22
18
C) The limitations of special rules of jurisdiction
The RBI Regulation contains additional grounds of jurisdiction (called
‘special jurisdiction rules’) in section 2 of the Regulation, in cases where
a court does not have jurisdiction under the basic actor sequitur forum
rei rule of Article 4 RBI.
38
One special rule that is relevant in the context
of corporate abuses is contained in Article 7(2). This rule, which applies
to tort cases, grants concurrent jurisdiction to the courts of the Member
State where the tort was committed, as well as to courts of the state
where the harm occurred.
39
Article 7(2) enshrines the forum loci delicti rule, whereby the court
of the country where the harm occurred will be able to hear the related
claim. In Bier v Mines de Potasse,
40
the Court of Justice of the European
Communities adopted a broad interpretation of the notion of ‘place of the
harm’, acknowledging that this included the place where the wrongful
act causing the harm was initially committed,
41
but also the place where
the effects of the wrongful act were felt.
42
To this date, the extent to which Article 7(2) applies to corporate
responsibility cases has not been adjudicated upon. Article 7(2) could be
a viable means for courts to judge European companies which exercise
a certain control over their subsidiaries abroad. Indeed, if it were
acknowledged that the ‘place where the harm occurred’ includes the
place where decisions regarding the subsidiary are made (that is, where
the parent or ordering company is domiciled), more claims from foreign
claimants could then be brought before the tribunals of the places where
companies are headquartered.
Holding that the place of a TNC’s decision-making is functionally
equivalent to the place where the harm occurred amounts to undertaking
38
The specific jurisdictional rules are an alternative basis of jurisdiction because they do not
supplant the rule of RBI (n 7), art 4, which always allows a defendant to be sued in its home
state. These rules are only subsidiary in cases where the general rule does not directly grant
jurisdiction to a given court.
39
ibid art 7(2). The interpretation of Article 7(2) was elucidated in the case of the
1735.
40
ibid.
41
This is known as the Handlungsort.
42
This is known as the Erfolgsort.
2019] Of Rights and Men
19
a corporate veil-piercing exercise. This approach seeks to ensure a high
level of corporate responsibility, while acknowledging the responsibility
of parent companies for torts committed by the subsidiaries under their
orders. The overarching aim is for there to be clear lines of responsibility
between the parent company and its subsidiary.
If the causal link between the decision-making of the parent
company and the occurrence of the harm were to be recognised, this
would facilitate a justification for the opening of a court’s jurisdiction in
the country where a parent company is headquartered. Politically too,
this involvement of European courts would not be perceived as a trespass
over foreign states’ sovereignty. Rather, it would be a more politically
acceptable position.
43
The existence of this causal link would create a
justified nexus between the European jurisdictions and the claims
involving corporate wrongs claims in non-European countries.
As we have seen, the rules of RBI aimed at providing a harmonised
set of jurisdictional rules. The difficulties raised by cross-border tort
claims involving transnational corporations’ liability have revealed the
shortcomings of the existing RBI framework. The scope of application
of Article 7(2) RBI should be more clearly defined. The Court of Justice
of the European Union (CJEU) or the European legislator could provide
a definition of place of harm that would encompass the place of the
statutory seat, central administration or principal place of business of the
parent company where the original decision or order leading to the tort
was initially taken. Another alternative would be to facilitate the joining
of claims under Article 8 RBI against both parent companies and their
subsidiaries before the forum where the parent company is
headquartered. This would allow claimants to sue both EU parent
companies and foreign subsidiaries before European courts. Several
other ideas have been introduced to initiate reforms in the RBI
43
De Schutter (n 3)
;
Tetsuya Morimoto, ‘Growing Industrialization of our Damaged
Planet. The Extraterritorial Application of Developed Countries’ Domestic
Environmental Laws to Transnational Corporations Abroad’ (2005) 1 Utrecht Law Review
134, 150 (arguing that an indirect exercise of extraterritorial jurisdiction through a focus
on the parent company’s activities rather than on the activities of foreign affiliates ‘would
be less controversial in terms of loss of sovereignty ... because substantial parts of the
illegal conduct, such as (authorising) or condoning environmental wrongdoings in foreign
countries would occur within the territory of a transnational corporation’s home
country’).
Trinity College Law Review [Vol 22
20
Regulation, which shall now be considered.
III. Reforming the RBI Regulation: a way forward
towards access to justice and protection of fundamental
rights in Europe
The European Parliament has previously considered extending the
extraterritorial scope of action of European courts in cases of breaches of
European law or international law,
44
including in cases comprising a
non-European defendant corporation.
45
Indeed, in 2008, a proposal
geographical scope, granting European courts powers of intervention to
sanction fundamental rights’ violations, no matter where they occurred
in the world or where the defendant was domiciled. This ambitious
proposal was soon rejected. Moreover, a Hague preliminary draft
convention on granting universal competence to European courts for
civil matters had been suggested but was finally not adopted.
46
In 2009, the European Commission reflected on extending the
scope of the 2001 Regulation in a Green Paper. The report stated:
The good functioning of an internal market and the Community's
commercial policy both on the internal and on the international
level require that equal access to justice on the basis of clear and
precise rules on international jurisdiction is ensured not only for
defendants but also for claimants … The jurisdictional needs of
persons … in their relations with third States parties are similar.
The reply to these needs should not vary from one Member State
to another, taking into account in particular, that subsidiary
jurisdiction rules do not exist in all the Member States. A
common approach would strengthen the legal protection of
44
European Parliament, ‘Resolution on EU standards for European enterprises operating
in developing countries: towards a European Code of Conduct’ A4-0508/98 (1999).
45
European Parliament, ‘Resolution on corporate social responsibility in international trade
agreements’ A7-0317/2010, 2010.
46
See Etienne Pataut, ‘Les règles de compétences juridictionnelles en Europe et le rôle
du juge à l’épreuve des violations des droits sociaux’ in Marie-Ange Moreau (ed), Justice
et mondialisation du droit du travail (Dalloz 2010).
2019] Of Rights and Men
21
Community citizens and economic operators and guarantee the
application of mandatory Community legislation.
47
The European Commission thus seemed willing to expand the coverage
of the Brussels Regulation and not to leave the question of jurisdiction
in case of third state parties’ defendants in the hands of the national laws
of its Member States, which amounts to a lack of harmonisation.
48
In
fact, the current situation leads to unequal access to justice, as solutions
vary depending on which national courts the claimants address.
In 2009, the European Commission raised the possibility of
extending the 2001 Regulation to claims against foreign subsidiaries
acting for European parent corporations. The Green Paper suggested that
this explicit jurisdiction would be based on particular activities and assets
in a Member State if the dispute involving adverse impacts abroad was
related to these activities or assets. Unfortunately, this proposition was
not retained, as the prevailing consensus was that it would have been too
broad a reform.
49
Indeed, the European Parliament expressed concern
that the Commission had exceeded its mandate by proposing to extend
the scope of the Regulation,
50
thereby significantly changing its scope
and effect.
Such an assertion can be contested. The introduction of uniform
rules for claims against non-EU residents would not necessarily imply a
change of scope. The RBI framework already ‘incorporates rules of
national law into itself’.
51
Some Member States already apply the forum
47
European Commission, ‘Green Paper on the review of Regulation 44/2001’ COM (2001),
175 final 21 April 2009 (see the second section on: ‘The operation of the Regulation in the
international legal order’ 3-4).
48
on Jurisdiction and the Recognition and Enforcement of Judgment in Civil and
Commercial Matters’ COM (2009) 175.
49
Daniel Augenstein and Nicola Jägers, ‘Judicial remedies – the issue of jurisdiction’ in
Juan-José Alvarez Rubio and Katerina Yiannibas (eds), Human rights in business:
removal of barriers to access to justice in the European Union (Routledge 2017), section
1.3.2.3.
50
The scope of RBI (n 7) is to be applicable to all civil and commercial cases against
defendants domiciled in the European Union.
51
Adrian Briggs and Peter Rees, Civil Jurisdiction and Judgments (Routledge 2009)
[2.179].
Trinity College Law Review [Vol 22
22
necessitatis rule,
52
which is arguably an incorporation of national laws
into the RBI framework. Yet, the European Parliament indicated that
more debate and discussions were needed before a reform could be
envisaged, underlining the fact that such a reform would not necessarily
improve the EU’s position in future negotiations regarding a universal
jurisdiction convention.
53
The Netherlands had expressed reluctance to the change of the
RBI Regulation in an advisory opinion from the joint Dutch advisory
committees on Private International Law and Civil Law, which was
followed by the Minister of Justice and both parliamentary chambers.
54
The Netherlands indicated that the full harmonisation of jurisdiction
rules concerning defendants domiciled in third countries was not
reasonable because such an issue should be left to The Hague Conference
for Private International Law, as universal jurisdiction is a question that
should be addressed on a worldwide basis.
At the international level, the idea of extending the scope of RBI
has received support. The UN Human Rights Committee, which
monitors the International Covenant on Civil and Political Rights, has
notably indicated that European Member States need to ‘strengthen the
remedies provided to protect people who have been victims of activities
of such business enterprises operating abroad.’
55
Moreover, the 2016
Council of Europe Recommendation advised ‘domestic courts to
exercise jurisdiction over civil claims concerning business-related human
rights abuses against subsidiaries, wherever they are based, of business
enterprises domiciled within their jurisdiction if such claims are closely
connected with civil claims against the latter enterprises.’
56
52
As detailed in the next section, the forum necessitatis grants jurisdiction in limited cases
where the forum seised would ordinarily lack jurisdiction, but where no other
competent forum is available to the claimant.
53
European Parliament, ‘Draft report on the proposal for a regulation of the European
Parliament and of the Council on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters (recast)’ PE467.046v01–00 [28 June 2011].
54
Advies ontwerp-Verordening Brussel I COM (5689654/11/6) (2010) 748.
55
Human Rights Committee, Concluding Observations on the Sixth Periodic Report of
Germany, (CCPR/C/DEU/CO/6, 2012).
56
Council of Europe, ‘Recommendation CM/Rec (2016) 5 of the Committee of Ministers
to member States on Internet freedom’ (13 April 2016) para 35
cm/Pages/result_details.aspx?ObjectId=09000016806415fa> accessed 6 March 2019.
2019] Of Rights and Men
23
Access to justice is an important principle of the Council of
Europe and is based on the right to a fair trial under Article 6(1) of
the European Convention on Human Rights. In 2016, the United Nations
called for a legal regime ‘sufficiently robust to ensure that there is both
proper deterrence from and effective remedy in the event of business-
related human rights abuses [with] corporate contributions.’
57
Unfortunately, however, the proposed reforms of the RBI regulation to
facilitate access to justice in cases of corporate wrongs in non-EU
countries have failed to gather sufficient support to this day.
If the EU wants to embody its own standards and thoroughly
implement Article 6 of the European Convention on Human Rights, it
should consider opening its court system to ensure the prevailing of
fundamental rights everywhere, even in the case of third countries’
nationals who have been affected by the productions activities of EU
businesses abroad. The exercise of jurisdiction in these cases should not
be perceived as a trespass over other countries’ sovereignty. On the
contrary, this should be considered as the due exercise of European
States’ own sovereignty over their legal persons.
III. The idea of a forum necessitatis to avoid denials of
justice
A) An ultimate forum against impunity
Several authors have called for the introduction of a greater territorial
scope of jurisdiction for European courts, such as Professor Muir-Watt,
who underlined:
The EU needs a specific head of competence to guarantee that the
responsibility of corporations whose seat is located outside a
Member state can be invoked, in cases of human rights violations
committed by their subsidiaries in third states, often developing
57
Office of the High Commissioner for Human Rights, ‘Accountability and Remedy
Project, Illustrative examples for guidance to improve corporate accountability and access
to judicial remedy for business-related human rights abuse’ Companion Document to
A/HRC/32/19 and A/HRC/32/19/ [1.9].
Trinity College Law Review [Vol 22
24
states, where they are not subject to high standards.
58
Professor Muir-Watt was deeply critical of the fact that no specific forum
exists for such human rights violations. The European Group for
International Private Law (EGPIL), following the same idea, considered
that it would be desirable to avoid creating a certain impunity for
59
European Commission proposed the inclusion of a forum necessitatis
rule.
60
New Article 26 of the recast Brussels I Regulation proposed to
adopt an exceptional ground of jurisdiction, where European national
courts may, despite the absence of any applicable ground of jurisdiction,
hear a case if ‘the right to a fair trial or the right to access to justice so
requires’ (notably in cases where the case would not be reasonably heard
in a third State where the claim is more closely connected).
In its proposal of reform,
61
the European Commission had
58
Translated from the original French version : ‘(l)’UE a besoin d’un chef de compétence
spécifique pour garantir que la responsabilité sociale des entreprises dont le siège se trouve
sur le territoire d’un État membre puisse être invoquée dans le cas de violations des droits
de l’homme commises par leurs filiales dans des États tiers, souvent en
développement,
où
elles ne sont pas tenues à des normes élevées’ in Proposition de règlement du Parlement
européen et du Conseil concernant la compétence judiciaire, la reconnaissance et
l’exécution des décisions en matière civile et commerciale (refonte), Contribution Prof.
Horatia Muir Watt, 2011
JURI_N
T(2011)453199_ FR.pdf>
accessed 07 November 2017.
59
‘Compte rendu des séances de travail du Groupe Européen de droit international Privé
(GEDIP), Dix-huitième réunion, Bergen 19-21 septembre 2008, point 9’
egpil.eu/reunionstravail/gedip-reunions-18-fr.htm>
accessed 07 November 2017.
60
Commission, ‘Green Paper on the Review of Council Regulation (EC) No. 44/200 1
on
J
urisdiction
and the Recognition and Enforcement of Judgments in Civil and
Commercial Matters’ COM (2009) 175 final (21 April 2009); Commission, ‘Proposal for a
Regulation of the European Parliament and of the Council on Jurisdiction and the
Regulation and Enforcement of Judgments in Civil and Commercial Matters’ COM (2010)
748 final (14 December 2010). See also Catherine Kessedjian, ‘Commentaire de la refonte
du règlement n°44/2001’ (2011) 47 Revue Trimestrielle de Droit Européen 1,1; Johannes
636-637.
61
Commission, ‘Proposal for a Regulation of the European Parliament and of the Council
2019] Of Rights and Men
25
suggested that two conditions should be met for the forum necessitatis to
be established. First, the Commission stated that there should be enough
links between the jurisdiction seised and the dispute (ie parties involved
in the dispute should be nationals of the EU, claimants may have their
domicile or habitual residence in one of the EU Member States, etc).
Secondly, the Commission required the existence of a risk of a denial of
justice in the normally competent third state for the forum necessitatis
ground of jurisdiction to be applied. However, Article 26 was not
retained. Indeed, the proposed universal scope of the Regulation was
rejected. Nevertheless, forum necessitatis still applies as a ground of
jurisdiction in several EU Member States, either on a statutory basis or
in the case law.
62
B) The application of forum necessitatis in domestic law frameworks
Forum necessitatis is a doctrine that is sometimes applied when the RBI
framework does not apply, whereby European states that recognise this
doctrine in their legal system can apply their own conflict of laws rules
to decide whether their tribunals have jurisdiction. In 2012, the
International Law Association, an NGO, re-opened the discussion about
the usefulness of the introduction of a forum necessitatis rule in the RBI
Regulation. In its 2012 resolution,
63
the NGO noted that national courts
should be able to decide when to exercise their jurisdiction despite the
lack of an objective ground for jurisdiction under applicable private
international law rules. This is necessary to avoid denials of justice in
cases where no other competent court could reasonably be seised to hear
the claim.
64
on jurisdiction and the recognition and enforcement of judgments in civil and commercial
matters, Recast’ 2010/0383 (COD)
com_com(2010)0748_en.pdf>
accessed 20 February 2019.
62
For an overview see Arnaud Nuyts, ‘Study on Residual Jurisdiction – General Report’,
(2007) 66 ttp://ec.europa.eu/civiljustice/n ews/docs/study_residual_jurisdiction_en.pdf
>
accessed 07 November 2017.
63
International Law Association, Resolution 2, Report of the Seventy-Fifth Conference
on the International Law Association, (2012) 23 and the accompanying report, 321.
64
Article 2.3(3) of the above-mentioned resolution details the criteria that help to determine
the existence of a sufficient connection between a tribunal and a claim, namely: the
presence of the claimant in that jurisdiction, the fact that the claimant or the defendant
Trinity College Law Review [Vol 22
26
The explanatory report provided by the International Law
Association expressed strong support for the idea of the introduction of a
forum necessitatis rule, as ‘the committee unanimously considered that
a forum of necessity was essential to the effectiveness of civil actions
for human rights violations’.
65
However, to this day, the idea of
introducing a universal jurisdiction rule in the RBI framework has not
been reopened.
In his review of the forum necessitatis doctrine worldwide,
Chilenye Nwapi concluded that the application of the doctrine generally
requires the existence of five cumulative conditions. First, there must be
an absence of jurisdiction in the forum seized of the matter. There must
be some connection with that forum, but it must be impossible to bring
proceedings in the foreign forum with jurisdiction. It must be reasonable
to require the plaintiff to bring proceedings in the foreign forum, and
lastly, there must be an absence of access to a fair trial in the foreign
forum.
66
Private international law is a system characterised by its aim to
reach certain and accurate criteria for determining jurisdiction and to
justify in an ascertainable manner the hearing of a case in a specific
jurisdiction rather than in others. The cumulative criteria developed by
Chilenye Nwapi are helpful in trying to circumscribe the conditions
giving rise to the opening of a forum necessitatis jurisdiction. However,
the harmonisation of the criteria to be retained in the RBI Regulation if
the forum necessitatis were to be enshrined in a future recast version of
the RBI framework promises to be difficult. Indeed, to this day, no
jurisdiction has been able to provide a clear definition of these
conditions, leaving much leeway to national courts as to the justifying
criteria for the application of the forum necessitatis doctrine.
In the Netherlands, Article 9 of the national Code of Civil
Procedure entitles Dutch courts to exercise their jurisdiction under the
forum necessitatis principle. This article has been invoked numerous
holds the nationality of the jurisdiction, the presence of assets of the defendant in that
jurisdiction, the existence of some activity of the defendant in the jurisdiction or the
existence of a civil claim related to existing criminal proceedings in that same jurisdiction.
65
International Law Association, Report of the Seventy-Fifth Conference (2012) 363.
66
Chilenye Nwapi, ‘Jurisdiction by Necessity and the Regulation of the International and
European Law Transnational Corporate Actor’ (2014) 30 Utrecht Journal of International
and European Law 24, 40.
2019] Of Rights and Men
27
times by Dutch courts. For example, Dutch civil courts have accepted
forum necessitatis jurisdiction in a case brought by Iraqi pilots residing
in the Netherlands that concerned a labour dispute with the Kuwait
Airlines Corporation.
67
Even though the labour contract established the
competence of the Kuwaiti courts, the Dutch court accepted jurisdiction
because the pilots, as former Iraqi nationals, could not expect a fair trial
in Kuwait.
68
Moreover, in another case in 2012, a Dutch court granted a
Bulgarian doctor one million Euro in damages for torture and inhumane
treatment to which he had been subjected in Libya under the Gaddafi
regime.
69
Here, a sufficient connection with the Netherlands was found,
because the claimants had been living in the Netherlands for some time
and it was held that Libyan courts, due to the conflict in the country, were
not in a situation to hear the case.
70
In France, through an interpretation of Articles 14 and 15 of the
Civil Code, the 19th century case law also introduced the idea that
French courts could intervene to deal with some matters for which they
would normally have no jurisdiction, when it is established that normally
competent foreign courts would not render justice properly.
71
The
underlying aim is to avoid a situation of ‘denial of justice’.
72
There are cases in which French courts have recognised the
application of the forum necessitatis jurisdiction in the light of Article 6
73
Indeed, in the
67
Kuwait Airways case I, Nederlands Internationaal Privaatrecht, 1996, 145-222.
68
In a similar case brought a few years later, the Dutch courts declined forum necessitatis
jurisdiction due to an insufficient connection to the Dutch forum because the claimants
did not reside in the Netherlands; see Saloum/Kuwait Airways Corp., Amsterdam Sub-
District Court (27 April 2000), 2000 Nederlands Internationaal Privaatrecht, 2000, 315-472
(Kuwait Airways case II).
69
Rechtsbank Gravenhagen, (El-Hojouj/Derba el al.) 400882/11-2252, District Court
of The Hague, 21 March 2012.
70
For more information on the forum necessitatis system in the Netherlands, see Nicola
Jägers, Katinka Jesse and Jonathan Verschuuren, ‘The future of corporate liability for
extraterritorial human rights abuses: the Dutch case against Shell’ (2013) 107 AJIL 36.
71
On this topic, see Michael Akehurst, ‘Jurisdiction in international law’ (1972-1973)
46 British Yearbook of International Law 145; Bertrand Ancel and Yvan Lequette, Grands
arrêts de la jurisprudence française de droit international privé (Dalloz 2006) 663.
72
See Charles De Visscher, ‘Le déni de justice en droit international’ (1935) 52 Recueil des
Cours 365; Andronico Adede, ‘A Fresh Look at the Meaning of the Doctrine of Denial of
Justice under International Law’ (1976) 14 Canadian Yearbook of International Law 73.
73
See, respectively, Aix-en-Provence Court of Appeal (31 May 1923), Journal de Droit
Trinity College Law Review [Vol 22
28
COMILOG case,
74
denial of justice was an argument used to claim
access to French courts.
75
In 1991, the Gabonese mining company
Comilog, operating on the territory of the Democratic Republic of
Congo, dismissed several workers without compensation. The workers
tried to obtain reparation from a Congolese court, but this court failed to
deliver a judgment. Meanwhile, the French company Eramet had become
the majority owner of Comilog. In 2007, former Comilog workers
brought a complaint before a French labour tribunal, alleging unfair
dismissal. The Paris Court of Appeal held that French courts were
competent to hear the case to avoid a denial of justice affecting the
Congolese workers.
76
In January 2015, the Cour de Cassation confirmed
the French courts’ jurisdiction.
77
Ultimately, the workers obtained
compensation for unfair dismissal in September 2015.
78
These national examples show the variety of criteria retained to
justify the opening of a necessity forum. The establishment of a necessity
forum is needed at the European level to ensure a safe haven for victims
of corporate wrongs no matter where the harm took place and to prevent
TNCs from operating with impunity. However, as we have seen,
European national courts use different criteria to open a forum
necessitatis jurisdiction. Therefore, this lack of common criteria between
the different national legal systems compromises the perspective of
adopting a single harmonised approach that could be applied at the
European level.
International, Clunet, 1924, 204; Paris Court of Appeal, 10 November 1960, Journal de
Droit International, Clunet, 1961, 426.
74
Cour d’appel de Paris (Pôle 6 – Chambre 2) 20 juin 2013 no. 13/03892.
75
Yves Queinnec, ‘Emergence du devoir de vigilance raisonnable ou l'impératif de
cohérence des dispositifs de gouvernance ESG’ (2016) 4 Revue Internationale De la
Compliance et de l’Ethique des Affaires 1, 5.
76
COMILOG (n 74). The underlying idea is that France recognises an ‘ordre public de
rattachement’. See Petra Hammje, L’ordre public de rattachement (Travaux du Comité
Français de Droit International Privé, 2006-2008) 153.
77
Cour de Cassation, Chambre Sociale, 28 janvier 2015, no. 13–22.994, 13–22.995, 13–
23.003, 13–23.004, 13–23.005, 13–23.006.
78
Cour d’Appel de Paris, arrêt du 10 septembre 2015, no. 11/05956.
2019] Of Rights and Men
29
IV.
The
forum
a
rres
ti
: an alternative based on the
presence of assets in jurisdictions
As previously discussed, the required connection between a forum and
a claim is deemed to exist when the defendant is domiciled or
habitually resident in the forum State. However, other kinds of
connections with the forum State may be relevant, depending on the
circumstances, such as the presence of assets or the economic activity of
a company within the jurisdiction of the State wishing to exercise its
jurisdiction. The underlying idea is that when a person or a company
conducts a continuous business activity within a State, this represents a
kind of presence in the forum, which justifies that this person or this
company, who benefits from activities in the forum and has established
contacts with this forum, be subject to general jurisdiction there.
79
This
ground of competence is called the forum arresti which is when ‘damages
that might be awarded are easily enforceable in the forum, instead of
having to be recognised and enforced in another State’.
80
Sweden was one of the first jurisdictions recognising the existence
of a forum arresti.
81
Indeed, for a long time, Swedish courts accepted
their jurisdiction on the basis of the forum arresti, even if the value of
assets present in Sweden was negligible. This was known as the
‘Swedish umbrella’, because the metaphor was made that a person who
accidentally left his or her umbrella in Sweden could later be subject to
a Swedish court’s jurisdiction for an unrelated claim on the basis of the
presence of their umbrella on the Swedish territory.
82
Nevertheless,
Swedish courts later restricted this possibility to establish their
jurisdiction, introducing the condition that the value of the claim at stake
cannot be disproportionate to the value of the asset present on Swedish
79
See Mary Twitchell, ‘Why we keep doing business with doing-business jurisdiction’
(2001) University of Chicago Legal Forum 171; Kessedjian, (n 60) 117.
80
Roorda (n 26) 206.
81
Chapter 10, Section 3, para 1 of the Swedish Code of Judicial Procedure.
82
See Antonio Cassese, Realising Utopia: The Future of International Law (Oxford
University Press 2012) 631; Nwapi (n 66) 24.
Trinity College Law Review [Vol 22
30
soil.
83
Jurisdiction based on the forum arresti principle is also recognised
in systems influenced by the German legal tradition. Under Section 23
of the German Code of Civil Procedure (Zivilprozessordnung), the
forum arresti is a valid jurisdictional ground for tribunals. However,
German case law has restricted the scope of Section 23. In 1991, the
German Supreme Court held that for a forum arresti jurisdiction to be
established by a German court, the case at stake would need to have a
‘genuine connection’ with Germany.
84
Similarly to the Swedish rule, the
German doctrine holds that for German tribunals to retain their
jurisdiction over a claim, the value of this claim should be proportional
to the value of assets based in Germany.
85
Similarly, in Austria,
86
in
cases where the defendant owns property in the country, jurisdiction can
be granted to courts of that State, under the same condition that property
held in this country is not disproportionate to the claim.
87
the European Commission included the idea of the
introduction of a forum arresti, basing the European courts’ jurisdiction
on the presence of assets of the defendant on their territory. The
European Commission wished to set two conditions to the application of
a forum arresti, indicating first that the value of such assets should not
be disproportionate to the value of the dispute and second that the dispute
needed to have a sufficient connection with the Member State of the
court seised.
88
83
Ulf Maunsbach, ‘Some reflexions concerning jurisdiction in cases on cross-border
trademark infringements through the Internet’ (2004) 47 Scandinavian Studies in Law 493,
510, referring to NJA 1981, 386.
84
German Supreme Court (Bundesgerichthof), 2 July 1991, Neue Juristische
Wochenschrift (NJW) [1991] 3092.
85
See Gerhard Dannemann, ‘Jurisdiction based on the presence of assets in Germany: a
case note’ (1992) International and Comparative Law Quarterly 632.
86
See Julian Feichtinger and Karin Lehner, Comparative Study of Residual Jurisdiction
in Civil and Commercial Disputes in the EU, National Report for Austria
>
accessed
07 November 2017.
87
Commission, ‘Proposal for a regulation of the European Parliament and of the Council
on jurisdiction and the recognition and enforcement of judgments in civil and commercial
matters (Recast)’ COM (2010) 748 final 2010/0383.
88
See Pietro Franzina, ‘The Proposed New Rule of Special Jurisdiction Regarding
2019] Of Rights and Men
31
Introducing forum arresti would have presented the advantage of
facilitating litigation for victims of TNCs’ activities abroad, as they could
demonstrate jurisdiction of European forums where TNCs have
significant business activities on a certain territory. However, if the
responsibility of the parent company is not established and if the claimant
wishes to introduce a claim against the subsidiary domiciled in a non-
European State, the forum arresti will not provide the establishment of a
European court’s jurisdiction. Indeed, ‘given the foreign direct investment
structure by which corporate groups are generally organized, it is more
often the case that the parent has assets in the place of the subsidiary’s
domicile, not the other way around’.
89
Therefore, as foreign subsidiaries
often do not hold assets in European countries, the forum arresti doctrine
would be of no use to open a forum in Europe. In any case, as for the
forum necessitatis principle, the idea of a forum arresti ground in the
RBI Regulation was entirely abandoned.
As mentioned earlier, a possible solution might be to consider
parent companies and their subsidiaries as a single economic unit. Such
a conception has been developed by the CJEU in competition law.
90
In
fact, the CJEU seems to recognise the nexus that exists between a certain
forum and business activities conducted in that forum. In the Google
Spain case,
91
the Court held that the activities of a foreign operator and
those of its establishment situated in the Member State of the competent
forum could not be dissociated. The CJEU has recognised here that
activities of an operator in one state, selling products under the direction
of another operator in another state, cannot be detached from each other.
In fact, although a part of these activities is conducted from abroad, both
aim at rendering the undertaken activities ‘economically profitable …
Regulation?’ (2011) 25 Diritto del Commercio Internazionale 789.
89
Roorda (n 26) 208.
90
Communities [1972] ECR 619; Case C-41/90 Höfner v Moctroton [1991] ECR I-1979;
Case C-97/08 Akzo Nobel NV and Others v Commission of the European Communities
[2009] ECR II-5049; Frédérique Berrod and Antoine Ullestad, ‘Le droit de l’Union
européenne et la notion d’entreprise : donner un sens juridique à l’exercice de l’activité
économique’ in Kathia Martin-Chenut and René de Quenaudon (eds), La RSE saisie par le
droit, perspectives internes et internationales (Pedone 2016) 287.
91
Trinity College Law Review [Vol 22
32
enabling those activities to be performed’.
92
Currently however, the
grouping of responsibilities for activities conducted to reach the same
goal has not been recognised in the European private international law
framework.
93
Conclusion
Access to European Courts for victims of corporate wrongs abroad remains
difficult. Contrary to the assumptions raised by the Commission,
94
it remains
difficult for victims of corporate abuse involving European transnational parent
companies abroad to secure access to justice in Europe, as the current
framework is not comprehensive enough. Reforms to the RBI Framework
need to be adopted, notably to provide clearer rules on European courts’
jurisdiction to hear claims relating to corporate wrongs that have
occurred outside the European territory.
95
The RBI Regulation has not
provided an entirely harmonised framework of European private
international law rules. This is revealed by the differences in the
application of the notion of ‘domicile’ by the different national courts.
This situation is representative of the varying approaches to the issue of
separate legal personality among European Member States.
The RBI Framework also requires clarification on the definition of
certain terms. The CJEU or the drafters of the RBI Regulation should
clarify the meaning of ‘place of harm’,
96
to assess whether this place
shall include the location where the original decision leading to the
harmful event was taken (ie the European headquarters of the parent
company). If this definition were extended, it would open a new
ground of jurisdiction for European courts in cases involving
European multinational parent companies. Moreover, the European
92
ibid.
93
This same goal refers to the selling a specific good in a specific country.
94
European Commission, ‘Commission Staff Working Document on Implementing the
UN Guiding Principles on Business and Human Rights- State of Play’ SWD 144 final, (14
July 2015) 35.
95
See notably Hans Van Loon who speaks of the European Union as the ‘more promising
arena for litigants from developing countries seeking relief’ in Hans Van Loon, ‘Principles
and building blocks for a global legal framework for transnational civil litigation in
environmental matters’ (2018) 23 Uniform Law Review 298, 313.
96
As defined in Article 7(2) RBI.
2019] Of Rights and Men
33
legislator might reflect upon the facilitation of joint claims under
Article 8 RBI to allow claimants to take foreign subsidiaries and
European parent companies before European courts, taking the
example of several national jurisdictional existing rules on the matter.
The proposal of introducing a forum necessitatis jurisdiction had
notably been discussed and considered during the RBI Regulation
reform process but unfortunately was abandoned. It seems unlikely that
European States will agree on the integration of this ground of jurisdiction
in the RBI Framework as Member States have different approaches as to
its application and criteria. This concept is thus not universally accepted
or applied among European States and might lack the necessary support
to be integrated as part of the harmonising jurisdictional rules of the RBI
Regulation. States that do not apply the forum necessitatis in their
national jurisdictions might oppose such a rule, considering that the
intervention of their own tribunals would be an acknowledgement of
other countries’ judicial systems’ weaknesses, which might generate
political tension.
97
The proposal of a forum arresti, already developed in countries
belonging to the German legal tradition, seems more appropriate.
According to this doctrine, claims can be brought before the tribunals
where a defendant has substantial assets or has developed substantial
economic activities, thus providing a sufficient nexus between the claim
and the forum. If such a doctrine came to be applied, it could allow
claims against multinationals that are not headquartered in Europe,
but which have developed important economic activities in Europe, to
be heard by European courts. This is a more practical solution for
victims to gain direct access to European courts, rather than seeking
enforcement of foreign judgments in European countries where
defendants have some assets.
The drafters of the RBI Regulation could also consider the
introduction of a whole new ground of jurisdiction, specific to TNCs’
human rights violations, regardless of the place where the parent
97
On the question of universal jurisdiction, see Eugene Kontorovitch, ‘The Piracy
Analogy: Modern Universal Jurisdiction’s Hollow Foundation’ (2004) 45 Harvard
International Law Journal 183; Henry Kissinger, ‘The Pitfalls of Universal Jurisdiction,
Foreign Affairs’ (July-August 2001) available at
>
accessed 9 August 2018.
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34
company is headquartered, to prevent TNCs committing corporate
abuses with impunity and to promote access to justice in cases where no
other forum would be accessible to provide reparation to victims. The
issue of multinational corporations evading jurisdiction with impunity
represents a global challenge. The EU must take action and start
discussing possible reforms of its private international law rules to tackle
this issue.
The question of access to justice for victims of corporate abuses
goes beyond Europe or Western countries more generally. In September
2013, following a proposal made by Ecuador and South Africa, the
Human Rights Council adopted a resolution on the establishment of an
Intergovernmental Working Group ‘to elaborate an international legally
binding instrument’, aiming to ensure access to justice and redress to
victims of corporate abuse.
98
It is submitted that the envisaged treaty
should define the elements of corporations’ responsibility for their
subsidiaries’ and suppliers’ activities. Once these elements are defined,
private international law rules of the contracting State parties should be
amended accordingly with the introduction of a new ground of
jurisdiction. This new ground of jurisdiction would secure the
competence of courts where the main company held to be responsible for
its supply chain is headquartered. Discussions are currently held at the
United Nations to find an agreement on the elaboration of the binding
treaty. These discussions and their outcome will be crucial to fostering
access to justice for victims on a global scale.
98
Resolution A/HRC/26/9, United Nations, General Assembly, Human Rights Council,
26th session, 14 July 2014, Elaboration of an International Legally Binding Instrument on
Transnational Corporations and other Business Enterprises with respect to Human Rights.
The first draft of this treaty (called the ‘zero draft’) was published in July 2018 and
discussions were held at the United Nations in October 2018. Discussions are expected to
take a few more years before any final treaty is adopted. The ‘zero draft’ of the treaty is
available at:
nsCorp/Session3/DraftLBI.pdf
>
accessed 22 September 2018.
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