INTERNATIONAL BAR ASSOCIATION

BUSINESS LAW INTERNATIONAL

THE BRUSSELS REGULATION RECAST

Jrme Zuccarelli, lawyer at the Nice Bar, in
collaboration with Luiza Dumitrascu, legal intern

Jrme ZUCCARELLI is a French lawyer practicing in Nice, France, specialised in business and
international law. Fluent in French, Italian and English, he has contributed to numerous articles and
conferences in his field of expertise which concerns real estate, taxation and international business
law.
Luiza DUMITRASCU contributed to this article as a legal intern specializing in European and
international legal matters, following a Masters degree in International Business Law. She is fluent in
French, English and Romanian and is pursuing a career in the field of international business law.

Keywords: Brussels, EU, Regulation, recast, recognition, enforcement, choice, court, jurisdiction,
judgment.
This article focuses on the key changes inserted by the revised Brussels Regulation in the European
legislation, which will be applied by the Member States courts starting with 10th January 2015. The
objective of this Regulation is to facilitate the circulation of judgments in civil and commercial
matters within the European Union, taking things further than the initial Brussels Regulation, through
strengthening choice of court agreements and optimizing the enforcement across Member States
inter alia. These upgrades are generally well perceived and will contribute to the harmonization of
the European law, even though several questions remain unanswered.

Background
The Brussels I Regulation n 44/2001 - on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters - is one of the most important instruments of European
private international law1. Despite its general success, some shortcomings have been perceived
during the first ten years of application. In 2009, the European Commission published a report2 on
the application of the Regulation, which identified several concerns regarding the choice-of-court
agreements. The main concern arose from the need to ensure that choice of-court agreements were
effective both within and beyond EU borders. The report also emphasised the relation between the
rules of the Regulation and the Hague Choice of Court Agreements Convention, a treaty which
focuses on improving the status of jurisdiction agreements in international commercial relationships
One review proposal was selected among the proposals drafted by the European
Commission, which addressed issues such as the relationship between the Regulation and
arbitration, the compatibility of its provisions with the 2005 Hague Convention on Choice of Court
Agreements, and the extension of the Brussels I rules on jurisdiction to third State defendants.
Although the reformed Brussels Regulation has passed through the necessary legislative
approval process and been published in the official journal, this recast Regulation (EU Regulation
1215/2012)3 will not be applied by Member State courts until 10 January 2015.
The purpose of this Regulation is to make the circulation of judgments in civil and commercial
matters easier and faster within the Union, in line with the principle of mutual recognition. According
to Article 36 of the Regulation, judgments given in a Member State shall be recognised in the other
Member States without any special procedure being required. Exequatur is thus abolished, although
the regulation supplies a mechanism for refusing recognition or enforcement. Article 45 of the
Regulation provides that the recognition of a judgment may be refused on the application of any
interested party. This concerns the cases when the decision was given in default appearance, if the
defendant was not served with the document which instituted the proceedings or with an equivalent
document in sufficient time and in such a way as to enable him to arrange for his defense, unless the
defendant failed to commence proceedings to challenge the judgment when it was possible for him
to do so. It is also possible to refuse the enforcement of the decision, according to the same reasons
mentioned in Article 45.
In light of the importance of the Brussels regime to the operation of the European market,
the purpose of this article is to critically assess the amendments in the Recast. These amendments

1 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters
2 European Commission Report to the European Parliament, the Council and the European Economic and Social Committee
on the application of Council Regulation (EC) No 44/2001 COM, 2009

3 Regulation (EU) no 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and
the recognition and enforcement of judgments in civil and commercial matters (recast)

are not only significant but also pragmatic and necessary, in view of the importance of cross-border
business transactions in the global economy.

Scope of the recast Regulation

The scope of the Brussels Regulation is extended to defendants who dont reside in Member
States. Enforced protection is granted to consumers, employees and in matters relating to insurance.
The recast Regulation applies to civil and commercial matters and expressly excludes wills,
succession and matters relating to the liability of states for acts and omissions in the exercise of state
authority. Other exclusions are set out in Article 1 of the recast Regulation, such as bankruptcy and
arbitration.
The bankruptcy exclusion concerns "proceedings relating to the winding up of insolvent
companies or other legal persons, judicial arrangements, compositions and analogous proceedings"
and has been the subject of debate, in particular as to whether disputes regarding companies in
administration are within scope. The recast Regulation offers no further clarification regarding the
bankruptcy exclusion, and so the precise scope of this exclusion remains unclear.
The recast Regulation seeks to clarify the extent of the arbitration exclusion. A general
consensus appeared to emerge that arbitration was satisfactorily dealt with by the New York
Convention to which all Member States are party. The European Parliament and Council used a
similar approach, through Article 73(2) which expressly states that the Regulation shall not affect the
application of the New York Convention. Recital 12 provides that the Regulation should not apply to
arbitration and that "nothing in this Regulation should prevent courts of a Member State, when
seised of an action in a matter in respect of which the parties have entered into an arbitration
agreement, from referring the parties to arbitration, from staying or dismissing the proceedings, or
from examining whether the arbitration agreement is null and void, inoperative or incapable of being
performed, in accordance with their national law". This would appear to mean that a court seised by
a party may dismiss the proceedings before it and order the dispute to be referred back to
arbitration. The amendments relating to arbitration in the recast Regulation are overall helpful. They
give further protection to arbitration in the EU and reduce the scope for tactical litigation in this area.
In addition, the recast updates and extends the exclusion relating to the status or legal
capacity of natural persons and rights in property arising out of a matrimonial relationship, to cover
rights in property arising out of "relationships deemed by the law applicable to such relationship to
have comparable effects to marriage". The recast Regulation also now expressly excludes
"maintenance obligations arising from a family relationship, parentage, marriage or affinity" and
"wills and succession, including maintenance obligations arising by reason of death".

Key changes

Strengthening of choice of court agreements

One of the most criticised aspects of the Brussels Regulation relates to the application of its
lis pendens rules. Article 27 provides that, where a court is "second seised" of proceedings between
the same parties and involving the same cause of action as proceedings already brought before
another Member State court, then that court second seised must stay its proceedings until the court
first seised has determined whether or not it has jurisdiction to determine the matter. This "first in
time" rule applies even where a party brings proceedings in breach of a jurisdiction clause for tactical
reasons in the "wrong" jurisdiction. This tactic (known to litigators as an "Italian torpedo") can be
particularly effective if proceedings are commenced first in a jurisdiction known for being slow
moving or that may not, for example, determine jurisdiction as a preliminary matter.
Currently, the parties may designate in their agreement the national court of a Member State
to have (exclusive) jurisdiction to resolve their possible disputes. Under the current Brussels I
Regulation, the court nominated by the parties must stay its proceedings until the court in which
proceedings are first commenced has determined whether it has jurisdiction. Depending on the
jurisdiction of the first court, this can cause severe delays. The strategy called Italian torpedo is
particularly effective for the party seeking delay where it brings the action for declaratory relief
before a court in a state with a reputation of a slow and/or inefficient judicial system.
The European Court of Justice had ruled that seeking to injunct a party from pursuing
proceedings before a court not specified in the jurisdiction clause (an anti-suit injunction) was
incompatible with concepts of mutual trust set out in the Brussels Regulation. These tactics often
have the effect of preventing progress of a claim in the court designated in the jurisdiction clause for
months, if not years. This may severely delay the ultimate resolution of the dispute and waste costs.
The revised Brussels I Regulation aims to end torpedo proceedings by providing that any
other Member State court first seised of an action must stay proceedings if the court designated in
the choice of court agreement is also seised. For example, if the parties agree on an exclusive choice
of court agreement in favour of a French court and the claimant nevertheless commences
proceedings in an Italian court, the Italian court must stay its proceedings if the French court is also
seised by the defendant. The proceedings must be stayed by the first court until the court nominated
by the choice of court agreement rules on its jurisdiction. Where the court designated in the choice
of court agreement has established jurisdiction, any other Member State court, including the court
first seised, must decline jurisdiction.
Once the revised Brussels I Regulation becomes applicable, it will also extend to exclusive
choice of court agreements concluded by parties not domiciled in the EU, but which nominate a
Member State court.

Article 25(5) states that jurisdiction agreements "shall be treated as an agreement

independent of the other terms of the contract". The Regulation also provides that the validity of the
jurisdiction agreement cannot be contested solely on the ground that the contract is not valid.
The recast Regulation has also slightly widened the scope of jurisdiction agreements
concerned by the Regulation, by removing the requirement in existing Article 23 that such an
agreement needs "at least one" party domiciled in a Member State. This means that the domicile of

the parties to such an agreement is irrelevant. It should also make it easier to establish whether or
not the Regulation is applicable in the first place, by avoiding the need for a detailed investigation
into the domicile of parties. The requirement in existing Article 23 that the jurisdiction clause
provides that "a court or the courts of a Member State" has jurisdiction remains in place in new
Article 25.
One of the matters that havent received enough attention in the recast process concerns the
extension of the Regulation to jurisdiction agreements in favour of third (non-EU) State courts. Some
new international lis pendens provisions have been incorporated and they will prove helpful, but it
might have been even more helpful to implement rules allowing Member State courts to decline
jurisdiction where parties have contractually agreed that the courts of a non-EU state have
jurisdiction.
Partial extension to non-EU defendants
The current Brussels I Regulation generally applies, despite a few exceptions, only to
defendants domiciled in an EU Member State. Where defendants are domiciled outside of the EU,
Member State courts apply their own national law to determine whether they have jurisdiction.
These national laws differ from state to state.
The revised Brussels I Regulation now provides for further exceptions to this rule by
addressing a limited number of circumstances under which Member State courts can exercise
jurisdiction even if the defendant is not domiciled within the EU:
-

A consumer with domicile in a EU Member State may bring proceedings against the other
party in the courts of his domicile regardless of whether or not the other party has its
domicile in a Member State (Article 18)

An employee domiciled in a EU Member State may bring proceedings against the employer
in the courts of the Member State where the employee habitually carries out his work or in
the courts of the Member State where the business that engaged the employee is situated
even if the employer is not domiciled in a Member State (Article 21(1-b-ii)).

Finally, as already mentioned, the revised Brussels I Regulation extends its scope to choice of
court agreements entered into by parties not domiciled in the EU but which designate a Member
State court as the chosen forum.
Some experts consider that the Commissions case for extending the Regulations rules to
non-EU domiciled defendants is unconvincing and that this element should not be accepted. 4

Special jurisdiction rules

4 Andrew Dickinson, 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) (Brussels I bis Regulation), 2011

Several restrictions concerning defendants domiciled in Member States have been

maintained and have not been expanded in the recast Regulation. For example, the following
alternative jurisdictional grounds have not been extended to cover third state domiciled defendants:
-

Article 5(1) (now Article 7(1)), which provides that, in respect of contractual claims, the
courts for the place of performance may have jurisdiction;

Article 5(3) (now article 7(2)), which provides that claims in respect of torts may be brought
in the courts of the place where the harmful event occurred or may occur; and

Article 6(1) (now Article 8(1)), which provides that, where a Member State defendant is one
of a number of defendants, he can be sued in the court of the place where any one of them
is domiciled, if the claims are "so closely connected that it is expedient to hear and determine
them together to avoid the risk of irreconcilable judgments from separate proceedings".

Further, there was no expansion of the alternative jurisdictional ground regarding

contractual claims (Article 5(1) and new Article 7(1)) to include a ground that provided jurisdiction to
the courts of the place of the governing law of the contract. It is suggested that this would have been
a helpful extension (for example, many guarantees and other commercial documents omit a
jurisdiction clause, some legal experts perhaps considering the inclusion of a governing law provision
being sufficient). However, the rules have been expanded to cover non-EU domiciled defendants
regarding certain employee, insurance and consumer claims.
Arbitration agreements
Arbitration matters have been excluded from the scope of the Brussels I and some experts
consider that the regulation legitimises court actions in breach of arbitration agreements. In
the West Tankers case the House of Lords has referred a question to the Court of Justice for a
preliminary ruling as to whether anti-suit injunctions to give effect to arbitration agreements are
compatible with Brussels I Regulation (Allianz SpA v West Tankers, case C-185/07). The European
Court ruled that, pursuant to the Brussels I Regulation other Member State courts had to stay any
related proceedings if a decision by the court first seised is pending. Moreover, the European Court
established that Member State courts were not entitled to issue anti-suit injunctions (a court order
restraining a person from commencing or continuing proceedings in another jurisdiction) to restrain
such actions in the courts of other Member States. In West Tankers, a vessel owned by West Tankers
Inc and chartered by ERG Petroli SpA, collided with a jetty in Italy. The charter party provided for
disputes to be resolved by arbitration in London. Arbitration proceedings were commenced in
London. However, the insurer of ERG Petroli SpA commenced state court proceedings in Italy against
West Tankers Inc. West Tankers Inc argued that the Italian courts could not hear the case because of
the existence of an arbitration agreement providing for arbitration in London. West Tankers Inc
sought a declaration in state court proceedings in England arguing that the dispute was covered by
the arbitration agreement and asked the court to issue an anti-suit injunction. The European Court
then decided that one Member State cannot grant an anti-suit injunction to restrain proceedings in
another Member State, even if those proceedings have been commenced in breach of an arbitration
agreement. This judgment was, therefore, impetuously criticised as it undermines arbitration
agreements.
The revised Brussels I Regulation clarifies that arbitration is absolutely excluded from the
scope of the Brussels I Regulation. Therefore, the seizure of a Member State court with a dispute

which may be subject to arbitration will no longer stop another Member State court from exercising
jurisdiction to address the question of the validity of the arbitration agreement and to refer the
parties to arbitration. Referring to the facts in the West Tankers case under the revised Brussels I
Regulation, the English court can address the validity of the arbitration agreement and refer the
parties to arbitration.
In addition, the revised Brussels I Regulation sets out in its recital the primacy of the 1958
New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Pending "third state" proceedings
For the first time, Member State courts now have the power to stay proceedings to take into
account proceedings pending before the courts of a (non-EU) third state. A Member State court can
do so having assessed "all the circumstances in the case before it" (Recital 24). The circumstances
"may include connections between the facts of the case and the parties and the third State
concerned, the stage to which the proceedings in the third State have progressed by the time
proceedings are initiated in the court of the Member State and whether or not the court of the third
State can be expected to give judgment within a reasonable time".
Recital 24 specifically provides that "that assessment may also include consideration of the
question whether the court of the third State has exclusive jurisdiction in the particular case in
circumstances where a court of a Member State would have exclusive jurisdiction". This would
include presumably a third state exclusive jurisdiction clause or where, for example, proceedings
relate to patents registered in a third state.
However, there are limitations to these new provisions. For example:

they require proceedings to have been initiated first in the third State. This means that it is
still possible for a prospective judgment debtor starting tactical litigation in a Member State
court (for example, in the Austrian courts), even though the proceedings relate solely to
property based in, say, Hong Kong. If the proceedings in Hong Kong had been commenced
second in time or, indeed, had not been commenced at all, then the new provisions at Article
34 are not even engaged and the Member State court in Austria may have no basis upon
which to decline jurisdiction; and

it may encourage more litigation, not less, because it may encourage parties who fear that
their counterparty may initiate abusive litigation in a Member State to start proceedings in
that third state, so as to ensure they are first in time, perhaps as a purely defensive strategy.
This will inevitably increase costs and waste time.

The regulation maintains the principle of the first court seised: for these provisions to be
applied, the court of a third State has to be seised before the Member State court. Consequently, the
strength of these articles is diminished because these articles will only apply to certain situations. In
addition, parties may start proceedings the earliest possible to insure their preferred court will have
jurisdiction. Furthermore, these articles do not provide a clear answer as for the discretion of
Member State courts when first seised, for instance: are they allowed to decline jurisdiction in favour
of a third state court if it is designated by a choice of court agreement?

Secondly, the word may indicates that the stay of the proceedings is a discretionary power.
The courts are not bound. The consequence is a non-uniform application of these articles within the
European Union. A lack of uniformity will affect the legal certainty and predictability.
Thirdly, a court may accept to stay the proceedings if three conditions are met: the nonEuropean Union court is first seised, the prospective judgment is capable of recognition and
enforcement in the concerned State and the stay is necessary for the sound administration of justice.
The condition regarding recognition is controversial. Indeed, article 45 states that the recognition of
a judgment could be refused if the recognition is contrary to the public policy of the concerned State.
Public policy is defined on a national basis and aims at protecting the national interests of States.

The process of enforcement across Member States

According to the existing Brussels I Regulation, a creditor is required to obtain a declaration of
enforceability (known as exequatur) from the enforcing Member State court in order to enforce a
civil or commercial judgment from one Member State court in another Member State. Depending on
the particular enforcing State, this process is not only potentially time-consuming but also costly. The
judgment debtor could even delay this process by raising baseless defences.
The revised Brussels I Regulation will remove the requirement of a declaration of
enforceability by abolishing the exequatur process and, therefore, reduce time and cost for judgment
creditors.
The Commission has accepted that the free movement of judgments within the EU cannot
be accepted without limits. It proposes to allow opposition on the basis of a fundamental procedural
defect in the proceedings, such as the rights of defense and fair trial, while removing the other
grounds of challenge currently to be found in Arts. 34-35 of the Brussels I Regulation. The burden will
be placed on the judgment debtor to challenge a judgment, which means that the following reasons
can be evoked by the debtor:
- The judgment is contrary to public policy (ordre public) in the enforcement State; or
-

A default judgment and he was not served with the document which instituted the
proceedings; or

Irreconcilable with a judgment given between the same parties in the Member State
addressed, or with an earlier judgment given in another Member State or in a third State
involving the same cause of action and between the same parties.

The Hague Convention on Choice of Court Agreements

It has been suggested that the issue regarding jurisdiction agreements in favour of non-EU
State courts might be addressed as part of a renewed EU interest in the Hague Convention on Choice
of Court Agreements. This Convention, which was concluded on 30 June 2005 and signed by the EU

in 2009, following Council decision No 2009/397/EC of 26 February 2009, sets out a regime for the
mutual recognition of exclusive jurisdiction clauses as between contracting states.5
The question of the ratification of the Hague Convention by the European Union and its
coordination with the Brussels regime could prove problematic, nevertheless the renewed Brussels I
Regulation would continue to be applied between Member State domiciled parties even if the EU will
ratify the Convention. When the Hague Convention will become binding upon the Union, the issue
will arise of its relationship with the rules on choice of court agreements and the recognition and
enforcement of judgments laid down in the Brussels I and the Brussels I bis regulation.
According to article 26, the Convention shall not affect the application of the Regulation
where none of the parties is resident in a contracting State that is not a Member State of the EU
and as concerns the recognition or enforcement of judgments as between Member States.
According to the proposal submitted by the Commission on 30 th January 2014, the Convention will
reduce the scope of application of the Brussels I regulation, but this reduction of scope is
acceptable in the light of the increase in the respect for party autonomy at international level and
increased legal certainty for EU companies engaged in trade with third State parties.

In conclusion, the primary objectives of the Recast should be achieved. They concern the
effectiveness enhancement of choice-of-court agreements and ensure that such agreements are
treated consistently in the Regulation and the Hague Convention on Choice of Court Agreements. It is
nevertheless considered that the Recast could have contributed more to increase the overall
effectiveness of choice-of-court agreements by addressing the situation where the designated court
is a non-EU state. The EU legislators took steps towards improving the treatment of jurisdiction
clauses in favour of third States with the introduction of the international lis pendens rules in Articles
33 and 34 of the Recast. Nevertheless, there are limitations attached to the application of these
provisions and a sense of uncertainty continues to be associated with conflicting proceedings
involving non-Member States' courts, such as the potential for tactical litigation. In light of these
concerns, the inclusion of an express provision in the Recast Regulation granting precedence to the
court of a non-Member State designated in an exclusive jurisdiction agreement should be advocated
to augment legal certainty in the European judicial area. 6

SOURCES
-

Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial matters
European Commission Report to the European Parliament, the Council and the
European Economic and Social Committee on the application of Council Regulation (EC) No
44/2001 COM, 2009

5 http://www.allenovery.com/publications
6 Justin P. Cook, Pragmatism in the European Union: Recasting the Brussels I Regulation to Ensure the Effectiveness of
Exclusive Choice-of-Court Agreements

Regulation (EU) no 1215/2012 of the European Parliament and of the Council of 12

December 2012 on jurisdiction and the recognition and enforcement of judgments in civil
and commercial matters (recast)
Justin P. Cook, Pragmatism in the European Union: Recasting the Brussels I
Regulation to Ensure the Effectiveness of Exclusive Choice-of-Court Agreements
-

Allen&Overy, Brussels Regulation (recast): are you ready? 26 June 2014

Andrew Dickinson, 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) (Brussels I bis Regulation), 2011
Gilllies, Lorna, Creation of subsidiary jurisdiction rules in the recast of Brussels I,
Journal of Private International Law, 2012.
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http://conflictoflaws.net/

http://www.allenovery.com/publications

http://www.disputeresolutiongermany.com/

http://eur-lex.europa.eu

http://europa.eu/