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Abstract
Tortious actions brought against companies for the violation of human rights and/or environmental damage have raised important issues of jurisdiction and choice of law. Damage caused abroad by subsidiaries of European companies or the possibility of bringing actions against non-European companies for damage caused outside of the European union have been referred to in terms of extraterritoriality. This paper examines these issues in relation to the proposed directive on corporate sustainability due diligence.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 France (Loi sur le devoir de vigilance, 27 mars 2017), Netherlands (Wet van 24 oktober 2019 houdende de invoering van een zorgplicht ter voorkoming van de levering van goederen en diensten die met behulp van kinderarbeid tot stand zijn gekomen (Wet zorgplicht kinderarbeid)), Germany (“Lieferkettensorgfaltspflichtengesetz vom 16. Juli 2021 (BGBl. I S. 2959)”). Other European countries, non- member states of the EU have also adopted similar, albeit more limited in scope, legislation. This is the case with Norway, Switzerland and the UK. However, only the French statute provides for civil liability.
2 M Nioche, Conférence de la Branche française de l'Association de droit international du 5 avril 2022, “La proposition de directive de la Commission européenne sur le devoir de vigilance”.
3 The Council's version is very slightly different, but this difference in wording has no substantive consequences. “Member States shall ensure that the provisions of national law transposing this Article are mandatory in nature in cases where the law applicable to actions for damages to that effect is not that of a Member State”.
4 See Art 17.
5 Incidentally, this raises questions about the weight that the EU legislator wishes to give to civil liability.
6 Regulation n° 1215/2012.
7 C-281/02, Owusu [2005] ECR I-1383.
8 R Michaels and A Sommerfield, The EU sustainability directive and jurisdiction, https://eapil.org/2023/08/03/the-eu-sustainability-directive-and-jurisdiction/
9 There could be some exceptions, such as for example, the exception based on Art 14 of the French civil code, if the claimant is a French national. For a detailed study see T Lutzi, E Piovesani and D Zgrabljic Rotar (eds) Jurisdiction over non-EU Defendants: Should the Brussels Ia Regulation be Extended? (Hart Publishing, 2023).
10 See all the references below in the developments on the possible solutions (B2) including the GEDIP proposal (n 13).
11 However, the concern that such rules could be seen as imperialistic and that ideally these cases should be heard in the countries of the place of the damage is sometimes voiced.
12 It should nevertheless be noted that the time is right for such a reform, insofar as discussions on the revision of the Brussels Ia Regulation have begun.
13 The GEDIP (Groupe européen de droit international privé) sent a recommendation to the European Commission concerning the PIL aspects of the future instrument of the EU on Corporate due diligence and corporate accountability. See https://gedip-egpil.eu/wp-content/uploads/2021/02/Recommandation-GEDIP-Recommendation-EGPIL-final-1.pdf
14 And the main claim is brought in the court of the domicile of one of them. If the court seised is the court of the tort or the chosen forum, Art 8(1) does not apply.
15 For example, Germany does not have such a rule. Even when the rule does exist the conditions under national law might vary.
16 However, actions brought solely against defendants domiciled outside of the European Union for infringement of human rights are not unprecedented. Independently of the statute on the duty of vigilance, an illustration can be found in two cases recently brought in front of French courts, where Congolese refugees residing in France brought actions against their ex-employer in Congo alleging serious human rights violations. Cass, 29 June 2022, n°21-10.106 and n° 21-11.722.
17 For the rule based on “doing business” and the reasons why it is not a good solution see Michaels and Sommerfield (n 8).
19 Of course, not everyone is in favour of the idea. Some authors are hostile to the introduction of forum necessitatis. They consider that such a rule is unnecessary, especially at a time when the Supreme Court of the United States is moving in the opposite direction and adopting a very strict position. V. Ch. Tomale, On the EP draft report on corporate due diligence, https://conflictoflaws.net/2020/chris-thomale-on-the-ep-draft-report-on-corporate-due-diligence/. See also Michaels and Sommerfield, (n 8); R Bray, I Pretelli, D Wallis, “Access to justice in the EU for victims of socio-environmental damages occurring in non-eu countries; The proper law of torts in the value chain” (2023) Yearbook of Private International Law 211. Opposition to forum necessitatis is sometimes also explained by more general hostility to the EU unification of rules of jurisdiction over defendants domiciled outside the EU. The argument is that this task should be left to the Hague Conference on Private International Law.
20 Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations; Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession. Council Regulations (EC) No 2016/1103 and 2016/1104 on matrimonial property regimes and property consequences of registered partnerships.
21 Identifying this link is not an easy task. See for example T El Ghadban, “La competence universelle en matière civile”, these Paris I, 2023 who, for the purpose of universal jurisdiction, advocates a link based on the possibility of enforcement of the future decision. However, one can wonder whether, within the EU this refers to the country of the seised court or the whole Union, taking into account the facilitated circulation of judgments within the Union.
22 See Michaels and Sommerfield (n 8).
23 This rule would not incur the criticism that jurisdiction based on doing business incurs since it is limited only to liability based on the proposed directive.
24 The same solution was also examined by M Ho-Dac see https://eapil.org/2022/04/27/brief-overview-of-the-directive-proposal-on-corporate-due-diligence-and-pil/?utm_source=mailpoet&utm_medium=email&utm_campaign=new-contents-on-the-eapil-blog_2.
25 In theory, one could advocate a delictual characterisation of the whole issue (prevention and reparation), but such a characterisation would seem very artificial.
26 As already mentioned, GEDIP did not adopt this interpretation.
27 Namely, Art 17 of the Rome II regulation and the escape clause in Art 4(3). On these questions see O Boskovic, « La loi applicable aux actions en responsabilité », Symposium at the University of Montpellier 25 mai 2023, Le devoir de vigilance des entreprises, l’âge de la maturité, forthcoming.
28 The provision is on civil liability.
29 Another interesting question could be raised. The directive provides for the conclusion of contractual clauses to ensure vigilance throughout the chain of activities. Companies are required to seek contractual assurances from business partners that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan. Victims may therefore consider invoking a breach of contractual obligations on the part of the company owing the duty of due diligence or its partners. In that context, one can wonder about the role of the law governing the contract. The answer will depend on the circumstances. If the action is brought against the company owing the duty of due diligence, the law of the causal event (which is the law of the registered office) will also be the law of the contract. The de facto coincidence of the two laws reduces the importance of the question. However, If the action is brought against the partner, the situation will be different. The contractual clause will contain a reference to the code of conduct, which will itself most of the time include a choice of law clause designating the law of the registered office of the company owing the duty of due diligence. The fact remains, however, that actions brought by third parties for compensation for damage caused by the breach of contractual obligations are of a tortious nature and are subject to the choice of law rules of the Rome II Regulation. Today this means Arts 4 and 7. In the future, if GEDIP's proposal was accepted, the relevant rule would be the proposed new choice of law rule which is an extension of Art 7.
The problem lies in the fact that these choice of law rules do not allow account to be taken of the law governing the code of conduct and the contract. To achieve this result, there are two possible approaches: an exception clause allowing the lex contractus to be applied as the law most closely connected with the situation (already possible under Art 4(3) of Rome II), or an equivalent of the current Art 17 allowing account to be taken of the contractual obligations whose breach caused the damage.
30 At least the main one in Art 4. The Kik case decided in Germany can illustrate this difficulty. See OLG Hamm, Beschluss vom 21.05.2019 - 9 U 44/19, available at: https://openjur.de/u/2174526.html
31 On this text, see O Boskovic, “La loi applicable aux ‘actions pour violations des droits de l'homme en matière commerciale’”, D. 2021, 252.
32 For example, it is clear that “the law of the place where the business carries on its activities” is far too vague a connection.
33 On the question of applicable law, see in more detail Boskovic (n 27).
34 See O Boskovic, Rép. Dalloz, V° Rome II, 2010.
35 https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2021:5339#_77720e22-0a75-4080-97c4-aac8a70b656f. Nevertheless, it should be noted that other judges have reasoned otherwise. V. CA Paris 17 Sept. 2020, EEI 2021, 47, note O Boskovic, who held that the causal event within the meaning of Art 7 of the Rome II Regulation was necessarily a material act.
36 See G Ruhl, “Cross-border Protection of Human Rights: The 2021 German Supply Chain Due Diligence Act” in J Borg-Barthet, K Trimmings, B Yuksel-Ripley and P Živković (eds), From Theory to Practice in Private International Law: Gedächtnisschrift for Professor Jonathan Fitchen (Hart Publishing, 2024).
37 At the time when this article was drafted and accepted for publication the proposed directive seemed well on the way to adoption. The Council of the EU and the European Parliament even reached a provisional political agreement on 14 December 2023. However recently Germany and several other Member States have expressed hesitations and the future of the proposal seems uncertain. In any event the problems and solutions discussed in this article remain, to a large extent, relevant regardless of the proposed directive and could be taken into account, for example, when discussing the reform of the Brussels Ia and Rome II Regulations.