La Revue Squire

The new Lugano convention


Rédigé par Alhousmi DIALLO le 24 Juillet 2008


When parties were involved in a cross-border legal dispute, in the fields of tort and contract and commercial law, the Conventions of Brussels and of Lugano, signed respectively in 1968 and 1988, have until now enabled the parties to ascertain the relevant jurisdiction and facilitate the enforcement of judgments abroad. On October 30, 2007, Alberto Costa, the Portuguese Minister of Justice, representing the European Community pursuant to Portugal’s presidency of the European Union, signed the new Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters. This new convention replaces the1988 Lugano Convention, which until then had governed the rules on jurisdiction between EFTA Member States (EFTA covers the European Union plus Switzerland, Iceland, Norway and Lichtenstein - however, this latter Member State did not ratify the Brussels Convention).

The original Lugano Convention, signed on 16 September 1988, was negotiated on the basis of the Brussels Convention as interpreted by the European Court of Justice (“ECJ”) over the past 40 years. The construal of the Lugano Convention, however, did not fall within the ambit of the ECJ’s jurisdiction, as of course it falls short of the requirements set out under article 293 of the EC Treaty for a convention to be deemed as a piece of legislation produced by the “European Union” (“EU”).

As a result, to avoid divergent views on the application and interpretation of the two Conventions, three additional protocols were adopted. These additional protocols compel the courts of each Contracting State to “pay due account to the principles laid down by any relevant decision delivered by courts of the other Contracting State” in relation to the provisions of either Convention. Protocol n°2 sets up an information exchange system specifically aimed at achieving uniform interpretation. This information system involves transmitting relevant judgments delivered pursuant to these two Conventions to a central body (a Register of the ECJ).

When a dispute was brought before a court of an EU Member State that was bound by both Conventions, which Convention was applied, that of Brussels or Lugano’s ? It was decided, in the body of the Lugano Convention itself, that the latter would apply in :

- disputes over jurisdiction, where the defendant’s domicile or the choice-of-forum clause designates an EFTA Member State.

- lis pendens (“suit pending”) and related actions, where both courts seized are based, respectively, in an EU Member State that is bound by both Conventions and in a jurisdiction that is only bound by the Lugano Convention.

- matters of recognition and enforcement of judgments, either where the requesting State or the requested State is only party to the Lugano Convention.

Following the Amsterdam Treaty which came into force in March 1997 and which granted the European Community (“EC”) new jurisdiction relating to judicial cooperation in civil matters, the Council transformed the Brussels Convention into an EC Regulation, pursuant to article 65 of the EC Treaty. It therefore became Council Regulation No 44/2001 dated 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, called “Brussels I” (However, it does not bind Denmark).

The Council then authorized the European Commission to enter into negotiations in order to adopt a new convention with EFTA Member States. For that purpose, a legal opinion was sought before the ECJ as to whether or not the European Community had exclusive external jurisdiction to negotiate this new international convention. In a landmark legal opinion issued on February 7, 2006, the ECJ held that the EC has exclusive jurisdiction in this domain.

Mr Franco Frattini, Vice President and member of the European Commission in charge of justice, freedom and security, spoke about “a significant turning point in the evolution of the external competences of the European Community”.
The new Lugano convention will bring its rules on jurisdiction into line with those of “Brussels I”. As a result, rules on jurisdiction between EU Member States and EFTA Member States will be similar, thus easing the recognition and enforcement of judgments between these jurisdictions.

“This new convention is a sign of mutual trust among our respective judicial systems, and it opens doors to more flexible provisions between EU member states, Norway, Switzerland and Iceland. It will simplify proceedings in civil and commercial matters and strengthen the predictability in the law, thereby making life easier for citizens. ” Mr Frattini added.

The originality of this new convention lies in its “openness”; indeed not only can EU Member States adhere, but non-EU states and even non-European states as well.

Thus far, 19 jurisdictions have adopted the new Lugano convention including Norway, Switzerland and Iceland. This new convention is, without doubt, a large step towards the realization of geographical justice, freedom and security in Europe.







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