Encyclopedia of Private International Law
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Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
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Germany

Jan von Hein

I. Sources of private international law

1. EU private international law

Today, private international law in Germany to a large and rapidly increasing extent flows from European sources. This fact is acknowledged by art 3 no 1 of the Introductory Act to the Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche of 21 September 1994, BGBl. I 2494, as amended, henceforth EGBGB), which draws the attention of judges and lawyers to the primacy of immediately applicable rules of the EU as contained in a continually updated list of EU regulations and conventions concluded by the EU. Germany participates in the Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), [2008] OJ L 177/6; →Rome Convention and Rome I Regulation (contractual obligations), the →Rome II Regulation (non-contractual obligations) (Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II), [2007] OJ L 199/40) and the →Rome III Regulation (divorce) (Council Regulation (EU) No 1259/2010 of 20 December 2010 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation, [2010] OJ L 343/10) as well as the Succession Regulation (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, [2012] OJ L 201/107; →Rome IV Regulation (succession)). The law applicable to maintenance obligations is determined according to the Hague Maintenance Protocol 2007 (Hague Protocol of 23 November 2007 on the law applicable to maintenance obligations, [2009] OJ L 331/19). Since ‘private international law’ (Internationales Privatrecht) in the official German terminology (art 3 EGBGB) refers solely to choice-of-law rules, EU Regulations on matters concerning civil procedure (eg Brussels I Regulation (recast) (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), [2012] OJ L 351/1; →Brussels I (Convention and Regulation)), Insolvency Regulation (Council Regulation (EU) No 2015/848 of 20 May 2015 on insolvency proceedings (recast), [2015] OJ L 141/19)) are not mentioned in art 3 no 1 EGBGB, but as this rule is merely a declaratory provision, the omission has no practical impact. Apart from immediately applicable conflicts rules codified in EU Regulations, specific conflicts provisions contained in EU directives relating to the protection of consumers have to be respected, and these rules have been implemented in art 46b EGBGB. Although EU Regulations need not be transposed into domestic law, they occasionally create a need for complementary legislation, eg on procedural issues. Such supplemental rules are assembled in the seventh section of the second chapter of the first part of the EGBGB, eg art 46a EGBGB, which concerns the plaintiff’s right to choose the law applicable to environmental damage under art 7 Rome II Regulation (→Environmental liability). In the same section, conflicts rules may be found on matters which the European legislature has deliberately left to domestic lawmaking, eg art 46c EGBGB on compulsory insurance.

2. International conventions

If a certain question of law is not covered by EU Regulations, courts have to apply conflicts rules found in international conventions, provided that these rules have become directly applicable in national law (art 3 no 2 EGBGB). Germany is a party to the Hague Child Protection Convention (Hague Convention of 19 October 1996 on jurisdiction, applicable p. 1law, recognition, enforcement and cooperation in respect of parental responsibility and measures for the protection of children, 35 ILM 1391) and the Hague Adult Protection Convention (Hague Convention of 13 January 2000 on the international protection of adults, Hague Conference of Private International Law (ed), Collection of Conventions (1951–2009) (Intersentia 2009) 426) as well as the Hague Testamentary Dispositions Convention (Hague Convention of 5 October 1961 on the conflicts of laws relating to the form of testamentary dispositions, 510 UNTS 175). Moreover, Germany remains a party to the Hague Divorce Convention 1902 (Convention of 12 June 1902 relating to the settlement of the conflict of laws and jurisdictions concerning divorce and separation), which is still in force vis-à-vis Italy. Apart from the Hague Conventions, several bilateral conventions have to be taken into account. Important examples for conventions of the latter type are the German–Turkish Consular Agreement of 28 May 1929 (RGBl. 1930 II 748) and the German–Iranian Agreement of 17 February 1929 (RGBl. 1930 II 1006), which concern matters of family and inheritance law. Since art 3 no 2 EGBGB merely has a declaratory nature, conventions involving matters which are not covered by the technical definition of private international law found in this provision (eg uniform substantive law (→Uniform substantive law and private international law), such as the CISG (United Nations Convention of 11 April 1980 on Contracts for the International Sale of Goods, 1489 UNTS 3) or the CMR (Convention of 19 May 1956 on the contract for the international carriage of goods by road, 399 UNTS 189), or civil procedure) also take precedence over German rules on such issues.

3. Major domestic legislation

Finally, if neither EU legislation nor international conventions provide a conflicts rule applicable to the case at hand, a German court will apply domestic conflict-of-laws rules which are mainly codified in the second chapter of the first part of the EGBGB (the other parts dealing with intertemporal and federal issues). This chapter contains certain principles belonging to the general part of private international law in its first section (arts 3a–6 EGBGB; see infra IV.1) as well as conflicts rules for specific areas, such as natural persons and legal transactions (second section), family matters (third section), inheritance law (fourth section), non-contractual obligations (fifth section) and property (sixth section). Other areas of private international law (eg agency (→Agency and authority of agents; →Commercial agency, franchise and distribution contracts) and corporations (→Companies)) have not yet been codified, but have been left to the development of jurisprudence and academic writing. Outside of the EGBGB, specific conflicts rules may be found in various laws, eg on →cheques and promissory notes, whereby the latter provisions have implemented the relevant Geneva Conventions of the 1930s (Convention of 7 June 1930 for the Settlement of Certain Conflicts of Laws in Connection with Bills of Exchange and Promissory Notes (143 LNTS 317), RGBL. 1933 II 377 and Convention of 19 March 1931 for the Settlement of Certain Conflicts of Laws in Connection with Cheques (143 LNTS 407), RGBL. 1933 II 537) into German domestic law. Occasionally, one may discover, by way of interpretation, a so-called ‘hidden’ conflicts rule in a basically substantive provision. Such an approach has been traditionally advocated with regard to the debtor’s right under § 244 German Civil Code (Bürgerliches Gesetzbuch of 2 January 2002, BGBl. I 42, as amended, henceforth German CC) to pay with euros at the →place of performance in Germany even if the debt has been denominated in another currency. It is controversial, though, whether this view is compatible with the Rome I Regulation.

4. Role of case-law

As Germany is a civil law jurisdiction, case-law as such lacks binding force. Nevertheless, it is of considerable practical importance in German private international law. First, important areas of international commercial law (in particular agency (→Agency and authority of agents; →Commercial agency, franchise and distribution contracts) and corporations (→Companies)) are not covered by the EGBGB, so that for practical purposes the Federal Court of Justice (BGH) assumes a legislative role in this regard. However, the Court is increasingly constrained by →Court of Justice of the European Union (CJEU) jurisprudence on the freedom of establishment (see infra IV.7; →Freedom of establishment/persons (European Union) and private international lawp. 1). Second, the general principles of private international law are not comprehensively codified in the EGBGB either, so that questions such as the proper method of characterization or the connection of incidental questions are left to the development of jurisprudence (see IV.1.a) and b) below). Even the codified conflicts rules, eg on →renvoi, leave significant room for judicial interpretation (see IV.1.c) below).

5. Role of doctrinal writing

Although doctrinal writings are not sources of law and lack binding force, German judges cite academic literature significantly more often than, for example, their English or French counterparts. Unlike as allegedly is the case in certain common law jurisdictions, there is no unwritten rule that only dead authors may be considered proper authority. Rather, German judges see themselves as partners in an ongoing dialogue between practitioners and academic writers, aimed at finding adequate solutions to legal problems. Contrary to CJEU practice, decisions of the Federal Court of Justice are not prepared by the conclusions of an Advocate General, and this prevents senior German judges from ‘outsourcing’ academic discussion. Apart from that, particularly judges at the Federal Court of Justice frequently act as honorary professors or assume the role of editors and commentators, thus maintaining their links to academic research. The preferred form of literature cited by courts is the commentary, an article-by-article form of publication which is not only directed at an academic audience, but which is also intended to be of use to practitioners.

A discernible academic influence is also felt on German legislation. The Federal Ministry of Justice is regularly advised by the German Council on Private International Law, a select group of private international law professors divided into two commissions, the first dealing with international family law and the second with international commercial law. Several EGBGB provisions can be traced back to proposals initially made by the Council or one of its working groups. Moreover, the Max Planck Institute for Comparative and International Private Law in Hamburg has frequently accompanied the codification of choice-of-law rules with influential advisory opinions and in-depth preparatory studies.

II. History of private international law

Generally speaking, German conflict of laws is still firmly rooted in the methodological tradition established by Friedrich Carl von Savigny in the 19th century (→Savigny, Friedrich Carl von). Earlier statutist thinking had been focused on solving conflicts issues by analysing the content of various laws and classifying them in a rather formal manner into statuta personalia, realia or mixta. The innovative essence of Savigny’s system consisted in reversing the basic conflicts question. Rather than seeking to determine the spatial reach of a statute, courts should ‘ascertain for every legal relation (case) that law to which, in its proper nature, it belongs or is subject’ (Friedrich Carl von Savigny, A Treatise On the Conflict of Laws (2nd edn, Lawbook Exchange Ltd 1880) 70). Today, we would rather phrase this question as seeking to define the legal order with which the case or a given question is most closely connected. After Carl Georg von Wächter (→Wächter, Carl Georg von) had delivered the first heavy blows to statutism, Savigny’s writings marked the definitive end of statutist thinking in German →Choice of law. Moreover, Wächter and Savigny both debunked the →vested rights theory popular among Dutch and English writers as ‘lead[ing] into a complete circle; for we can only know what are vested rights, if we know beforehand by what local law we are to decide as to their acquisition’ (Friedrich Carl von Savigny, A Treatise On the Conflict of Laws (2nd edn, Lawbook Exchange Ltd 1880) 147).

The 1900 codification of German substantive civil law in the German CC was accompanied by the codification of German private international law in the EGBGB of the same year. Due to political pressure from the Chancellor and the Foreign Office, however, the fairly modern, multilateral rules contained in the first draft of the EGBGB had largely been replaced by unilateral rules defining only the spatial reach of German law. German courts reacted to this mutilation by interpreting the conflicts rules in a multilateral way all the same. In recent decades, German private international law has witnessed three stages of codification. First, in 1986, the original version of the EGBGB underwent a comprehensive reform. This revision was for the most part concerned with eliminating violations of modern notions of gender equality in international family law and incorporating into p. 1German law the Rome Convention (Rome Convention on the law applicable to contractual obligations (consolidated version), [1998] OJ C 27/34) – today replaced by the Rome I Regulation (→Rome Convention and Rome I Regulation (contractual obligations)). Second, in 1998 conflicts rules concerning non-contractual obligations and rights in property (→Property and proprietary rights) were added to the EGBGB. Although a draft dealing with the law applicable to non-contractual obligations and to rights in property had already been elaborated in the Federal Ministry of Justice in 1984, those issues were dropped in the course of further legislation. It then took the German government several years finally to initiate legislation in 1998, which, despite the considerable time that had passed since the presentation of the 1984 draft, largely incorporated the rules there proposed into German law. The motivation for this sudden leap into legislative action was rooted in fears that Germany would be at a strategic disadvantage in the upcoming negotiations on the Rome II Regulation were it to have not a single rule on tort conflicts in its codified law. Although no similar European initiatives were to be expected in the field of property conflicts, the slightly modified 1984 proposals on this issue found their way into a new chapter 6 of the EGBGB. Third, after the Rome I and Rome II Regulations were passed, the EGBGB was again changed, and conflicts rules on contracts were abolished, while the rules governing non-contractual obligations were kept on the books in view of the Rome II Regulation’s restricted scope of application. Although a draft on international company law had been presented in 2008, this project was shelved because trade unions feared that the planned codification might have an adverse impact on workers’ co-determination.

III. Administration of private international law

1. Special courts

Germany has attempted with mixed success to establish a concentrated jurisdiction for dealing with international cases in various fields of law. From 2002 to 2009, appeals against decisions of lower regional courts (Amtsgerichte) involving a foreign element went directly to the, presumably more competent, regional court of appeals (Oberlandesgericht), thus passing over the intermediate court (Landgericht). However, determining the requisite degree of internationality proved to be an elusive and confusing matter, so that the provision was finally abolished. There remain concentrated forms of venue in cases involving international adoptions or the international protection of adults (→Adults, protection of). Already today, it is possible for the German federal states (Länder) to organize their courts in a way that cases involving an international element are treated by specialized chambers within a competent court, such as the 27th (formerly the 5th) chamber of the Landgericht Hamburg (regional court). Recently, a legislative proposal has been made on the level of federal legislation to create special chambers for international commercial cases. In order to gain a competitive edge over arbitral tribunals, these chambers should be permitted to conduct proceedings before them in English.

2. Application and enforcement of foreign law

German private international law must be applied ex officio. The idea of a ‘facultative’ choice of law has some adherents in academia, but it failed to gain traction with the legislature or the courts. Likewise, courts have as a matter of principle to determine the content of the applicable foreign law ex officio, although they may enlist the help of court-appointed experts. Moreover, judges may call on the parties to provide further information on the applicable law if they have easy access to its content with regard to the issues involved. Whereas a failure to apply conflicts rules correctly justifies an appeal to the Federal Court of Justice, Germany’s highest civil court has consistently declined to review whether the lower courts have committed an error in applying foreign law to the case. An appeal to the Federal Court is only successful if a lower court has failed to establish the content of foreign law in a correct procedural manner.

IV. Basic principles of private international law

1. General principles

a) Characterization

The EGBGB contains no explicit rule on characterization (→Classification (characterization)). Instead the German courts follow an enlightened →lex fori approach in this regard, which is not restricted to the concepts found in German substantive law, but which is rather focused on functional criteria. Accordingly, foreign legal institutions, such as the mahr of traditional p. 1Islamic law, may also be accommodated in the German system (see German Federal Court of Justice (BGH), 183 BGHZ 287). Thus, the gap between the German approach to characterization and European private international law, where the CJEU interprets EU instruments autonomously, is considerably diminished for practical purposes, as both approaches rest on comparative considerations.

b) Incidental questions

Although two German writers, Wilhelm Wengler and George Melchior, are credited with having ‘discovered’ the problem of the incidental (or: preliminary) question (→Incidental (preliminary) question), Germany lacks a codified rule in this regard. The basic rule followed by the courts is that preliminary questions are connected in an independent fashion, ie that they are subject to the conflicts rules of the lex fori rather than the lex causae. The internal harmony of decisions is valued more highly than their international harmony. While an exception is made in the law of names, other exceptions remain controversial. The independent connection of incidental questions is in line with the prevailing approach under EU instruments, in particular the Rome III Regulation.

c) Renvoi

Whereas →renvoi is traditionally excluded in EU private international law and in international conventions (notable exceptions are found in the Succession Regulation (→Succession) and the Hague Child Protection Convention), German private international law as a matter of principle allows renvoi, while providing for exceptions in favour of a direct reference to a substantive law if the parties have either chosen the applicable law (art 4(2) EGBGB) or if the ‘purpose of the conflicts rule’ (Sinn der Verweisung) would be frustrated by the application of renvoi (art 4(1) sentence one, second half-sentence EGBGB). It should be noted that none other than Paul Lagarde has recently suggested using German private international law as a blueprint for the codification of renvoi in European private international law because in his view art 4(1) EGBGB best accommodates the complexity and variety of matters that require regulation (Paul Lagarde, ‘En guise de synthèse’ in Marc Fallon, Paul Lagarde and Sylvaine Poillot-Peruzzetto (eds), Quelle Architecture pour un code européen de droit international privé? (Peter Lang 2011) 365, 373 et seq; the text of his codification proposal is reprinted in (2011) 75 RabelsZ 673). However, the interpretation of art 4(1) first sentence, second half-sentence EGBGB, ie the purpose clause, is generally regarded as problematic in German academic literature. According to the prevailing opinion, the exception of the ‘purpose clause’ only applies if a specific conflicts rule is fuelled by a regulatory purpose exceeding the general aim of determining the law most closely connected with the facts of the case, a goal which is described as a ‘qualified substantive justice’ or a ‘specific regulatory legal policy’. Exceptions are made in particular for alternative connections and →escape clauses; but the proverbial devil lies in the detail. The ongoing doctrinal controversy in Germany raises doubts whether the German rule would be appropriate as a European solution: without further specification, the German ‘purpose clause’ is probably too indeterminate to be applied uniformly in the Member States.

d) Reference to multi-unit states

Article 4(3) EGBGB contains a rule on multi-unit states which follows a so-called direct-reference model. If a German conflicts rule uses a →connecting factor which allows determining the relevant unit directly (eg place of conduct, habitual residence (→Domicile, habitual residence and establishment)), then the interlocal conflicts rules of the state concerned are disregarded. If a connecting factor is indeterminate with regard to the relevant legal unit, in particular →nationality, a two-step test has to be adopted, under which: (i) if the multi-unit state has a uniform law on interlocal conflicts, then those rules are applied; or (ii) if no such uniform law exists, then the closest connection of the case (usually the habitual residence of the person concerned) is decisive.

e) Primacy of the law at the place where property is situated

Although German private international law itself does not impose a scission between the law applicable to movable and →immovable property in family matters, particularly those involving marital property and guardianship, it respects such a split if the law at the place where property is located makes a distinction in this regard (art 3a(2) EGBGB). This rule is highly controversial and it was recently replaced p. 1in inheritance matters by the Succession Regulation.

f) Multiple nationalities

For persons with more than one nationality, none of which is the German one, the most effective →nationality is decisive (art 5(1) first sentence EGBGB), which is usually determined by a person’s habitual residence. Persons who are also Germans are considered as solely German nationals for private international law purposes (art 5(1) second sentence EGBGB). The latter rule is highly convenient, but hardly compatible with art 18 TFEU (Treaty on the Functioning of the European Union (consolidated version), [2012] OJ C 326/47).

g) Stateless persons

For stateless persons, a reference to nationality is substituted by habitual residence, or failing that by mere presence (art 5(2) EGBGB).

h) Adjustment

There are no codified rules on adjustment (→Adjustment/Adaptation (Anpassung)) in German private international law. It remains controversial whether adjustment should be carried out at the level of private international law or rather at the level of substantive law. In practice the courts proceed on a case-by-case basis which is difficult to generalize.

i) Public policy and mandatory rules

Since the EGBGB is based on an essentially jurisdiction-selecting methodology that is indifferent to substantive policies, there is a need for a safety valve when the regular conflicts rules lead to the application of a foreign law that is manifestly repugnant to fundamental substantive values of the forum. The traditional instrument to deal with this problem is public policy (art 6 EGBGB; →Public policy (ordre public)). Article 6 is designed to protect the German ordre public international, in particular the fundamental rights guaranteed in the German Constitution (art 6 second sentence EGBGB). Only the forum’s public policy is protected. This does not exclude, however, that both EU law and other international instruments such as the ECHR (European Convention of 4 November 1950 for the Protection of Human Rights and Fundamental Freedoms, 213 UNTS 221) will have to be respected. The word ‘manifestly’ emphasizes the exceptional character of the public policy clause. Article 6 EGBGB is directed only against repugnant results of applying a foreign law to a specific case, not against the content of the foreign law in the abstract. Article 40(3) nos 1 and 2 EGBGB contains a special public policy clause dealing with punitive and treble →Damages. Public policy has also been invoked by German courts to combat fraude à la loi, eg in cases involving foundations established in →Liechtenstein for the purpose of avoiding German inheritance taxes, whereas the prevailing academic opinion considers the circumvention of laws as a distinct legal concept which – in contrast to public policy – may also prevent a fraudulent application of German substantive law.

Although German private international law is based on a classic multilateral paradigm of conflict of laws, unilateralist approaches are not completely alien to modern German conflicts thinking. Thus, it is commonly accepted in modern German doctrine that a court has to apply internationally mandatory provisions of its own law irrespective of the law designated by regular conflicts rules, a concept that had already been enshrined in art 34 EGBGB as of 1986 (25 July 1986, BGBl. 1142), which in turn had implemented art 7(2) of the Rome Convention on the law applicable to contracts and which is now replaced by art 9(2) Rome I Regulation. Whereas unilateralism is often seen as influenced by US-style governmental interest analysis, it should be noted that Savigny had already recognized the existence of laws of a strictly positive, mandatory nature which could not be subjected to the operation of regular conflicts rules. However, in Germany →unilateralism is still commonly considered not as a starting point for analysing conflicts, but rather as an exception within the framework of a generally multilateralist system.

The EGBGB is silent with regard to foreign mandatory provisions. Under the Rome Convention, it was generally held that the German reservation entered against its art 7(1) did not bar German courts from considering foreign mandatory laws. This question is now resolved by art 9(3) Rome I Regulation. Under autonomous German law, courts have established a practice of taking foreign mandatory rules into account as so-called ‘moral data’ in the course of the application of German substantive law. If, for example, parties have chosen German law as the applicable tort law (art 42 EGBGB), it remains possible to take a foreign trade →embargo into consideration in p. 1interpreting the public-policy clause of German substantive tort law (s 826 German CC), provided that the embargo rests on political or economic values shared by the Federal Republic of Germany.

2. Obligations and other legal transactions

a) Contractual obligations

Germany no longer has any autonomous private international law rules on →contractual obligations, because the former arts 27–37 EGBGB were abolished by the law adapting the EGBGB to the Rome I Regulation. This creates a dilemma for German courts with regard to contractual obligations outside of the Rome I Regulation’s scope, for instance, choice-of-court agreements. On the one hand, the Brussels I Regulation (recast) now provides that the question as to whether a choice-of-court ‘agreement is null and void as to its substantive validity’ must be judged in accordance with the law of the chosen court (art 25(1) first sentence Brussels I Regulation (recast)); on the other hand, Recital (20) of Brussels I Regulation (recast) makes clear that this reference to the lex fori of the chosen court is not directed at the chosen forum’s substantive law, but is to be understood as including the conflict-of-laws rules of that Member State. As the law currently stands, this problem can only be resolved by applying the Rome I Regulation by way of an analogy to such agreements. The German council on private international law has, however, elaborated a proposal for a specific domestic conflicts rule pointing to the lex fori prorogati in June 2015 (published with an explanatory report by Ulrich Magnus in [2016] IPRax 521).

b) Non-contractual obligations

Autonomous German private international law remains applicable to matters excluded by art 1(2) Rome II Regulation, in particular violations of →Personality rights and nuclear damage (→Nuclear liability). The original EGBGB which came into force in 1900 (Einführungsgesetz zum Bürgerlichen Gesetzbuche of 18 August 1896, RGBl. 604, henceforth EGBGB 1900) contained just one conflicts rule concerning →Torts, which was a special provision on public policy. Article 12 EGBGB 1900 shielded Germans who were sued at home for torts committed abroad from higher liability under foreign law by fixing the amount the plaintiff could receive under German law as a cap. It was generally accepted that this rule presupposed that torts should generally be submitted to the lex loci delicti. German courts considered the place of tort as comprising both the place of conduct and the place of injury. The reform of 1999 (1 June 1999, BGBl. I 1026) codified this bipolar principle of lex loci delicti in art 40 (1) EGBGB whereby the law of the place of conduct is to be applied unless the victim chooses the law of the place of injury. An important deviation from the lex loci delicti had already been introduced in a 1942 Decree Law (Verordnung des Ministerrates für die Reichsverteidigung über die Rechtsanwendung bei Schädigungen deutscher Staatsangehöriger außerhalb des Reichsgebietes of 7 December 1942 (RGBl. 706)) under which German law was to apply to non-contractual claims for damages that arose out of torts committed between Germans abroad (§ 1(1) of the 1942 Decree Law). This rule was replaced by a similar provision in 1999 (art 40(2) EGBGB), which substituted common nationality by common habitual residence. Moreover, the victim and the tortfeasor could either expressly or impliedly agree on the applicable law after the tort had been committed. This restrictive recognition of →party autonomy was also codified in 1999 (art 42 EGBGB). While the above-mentioned rules of the 1999 reform law to a large extent codified what had previously been recognized as existing law, art 41(2) no 1 EGBGB introduced the new possibility of having tort →choice of law be ‘accessory’ to a pre-existing legal or factual relationship between the parties, a solution that has also found its way into art 4(3) Rome II Regulation. Finally, the EGBGB contains conflicts rules for unjustified enrichment (art 38 EGBGB) and →negotiorum gestio (art 39 EGBGB), which are similar, though not identical, to arts 10 and 11 Rome II Regulation.

c) Other legal transactions

For legal transactions outside the scope of the Rome I or II Regulations, the EGBGB contains two provisions on the law applicable to the formal validity of legal acts (art 11 EGBGB) and the protection of the other party (art 12 EGBGB). Both provisions were modelled on arts 9 and 11 of the Rome Convention. For questions relating to agency (→Agency and authority of agents; →Commercial agency, franchise and distribution contracts), German courts generally apply the law of the place where the power of representation p. 1was exercised (or where it was intended to be exercised). The German Council on private international law has agreed on a highly differentiated proposal for a new conflicts rule on the law applicable to agency in June 2015, which lays down party autonomy as the basic principle of attachment in this regard as well (published in [2015] IPRax 578 with an introductory note by von Hein; the full explanatory report authored by Andreas Spickhoff is published in (2016) 80 RabelsZ 481).

3. Property

Article 43(1) EGBGB contains a codification of the familiar principle of lex rei sitae, whereby ‘[r]‌ights in property are governed by the law of the state where it is situated’. This rule is deliberately silent on party autonomy, but an important functional equivalent to party autonomy is found in art 43(3) EGBGB. This provision reads: ‘[i]f an interest in property brought into this state has not yet been perfected, events that occurred in another state are to be considered as local events for the determination of the perfection of such an interest in this state’. In academic parlance, this phenomenon is known as a qualifizierter Statutenwechsel, that is a qualified change in the applicable law. The background to this rule is the ‘Knitting Machine’ case, in which the Federal Court of Justice decided that an oral retention of title clause which was invalid under Italian law became effective when the goods crossed the German border (German Federal Court of Justice (BGH), 45 BGHZ 95). Article 44 EGBGB, which concerns cross-border polluting emissions emanating from real property, provides: ‘[a]s to claims arising from the adverse effects of emissions from real property, the provisions of Regulation (EC) No 864/2007 [Rome II] except for chapter III shall apply by way of analogy’. The doctrinal background behind this rule is that injunctive and similar protective claims under German substantive neighbour law are divided into tort-related damages claims and property-related claims for revindication. In the conflict of laws, however, splitting a neighbour’s →Remedies between the lex situs and the lex loci delicti would lead to practical complications and possibly even to conflicting judgments. Article 45 EGBGB deals with security rights in means of transportation. Article 45(1) provides that rights in aircraft, vessels, and rail vehicles are governed by the law of the state of origin, which is defined in more detail in the second sentence of this provision. Article 45(2) provides that the attachment of security interests as a matter of law (ie liens) in the concerned means of transportation is governed by the law applicable to the claim that is to be secured. Due to this technique involving an accessory connection, a valid choice-of-law clause for the secured claim (art 3 Rome I Regulation) also determines the attachment of statutory security interests. However, there is an important restriction in that pursuant to art 45(2) second sentence EGBGB, the lex rei sitae still determines the priority as among several security interests. Finally, an escape clause is found in art 46 EGBGB.

4. Intellectual property

There is no autonomous rule on this subject because the question is largely covered by art 8 Rome II Regulation; already before this Regulation entered into force, however, the principle of lex loci protectionis was universally accepted.

5. Family matters

The autonomous German private international law on family matters is characterized by the fact that the German legislature in 1986, contrary to other proposals made in the course of the discussion about a reform of the EGBGB, had upheld the primacy of →nationality as the decisive connecting factor in family and →succession law. However, in the light of an enduring migration flow as well as with regard to European unification, this principal decision was highly questionable from a policy perspective; moreover, it was and is considerably attenuated in its practical consequences by the fact that →renvoi is permitted (see V.1.c) above), which frequently results in an application of the factually closer and more appropriate law of a person’s domicile or their habitual residence (→Domicile, habitual residence and establishment). Nationality is the decisive or at least primary connecting factor in the EGBGB conflicts rules on legal capacity (art 7, which is applied analogously to determining the law applicable to a person’s gender), declaration of death (art 9), the name of a person (art 10), the conclusion of →marriage (art 13(1)), the general effects of marriage (art 14 no 1), →matrimonial property p. 1(art 15(1) no 1), →adoption by a single unmarried or ‘un-partnered’ person (art 22(1) first sentence) and guardianship or curatorship (art 24(1) first sentence). Nevertheless, habitual residence has steadily gained ground in German private international law. It is the decisive connecting factor with regard to parental responsibility (art 21 EGBGB), a provision which was deliberately framed following the Hague Child Protection Convention (albeit with the difference that, under autonomous German private international law, renvoi is generally accepted). Habitual residence is frequently used as an additional, either alternative or subsidiary connecting factor, eg with regard to descent (art 19 EGBGB, where it is named even before nationality) or as part of a cascade of subsidiary connections for the general effects of marriage (art 14 no 2 EGBGB). As far as the effects of a divorce on the property of the spouses is concerned (→Divorce and personal separation), art 17(1) EGBGB provides for an accessory connection to the Rome III Regulation, thus indirectly acknowledging the primacy of habitual residence. With regard to foreign nationals, the EGBGB allows for additional flexibility by providing that German law must be applied if there is a legitimate interest in doing so (art 9 second sentence EGBGB, concerning the declaration of death) or if the foreign national is habitually resident in Germany (art 24(1) second sentence concerning the care for adults (Betreuung), an institution akin to guardianship).

German private international law allows party autonomy in certain family matters, albeit with considerable restrictions concerning the eligible laws. A rather broad menu is offered in the law of names, in that spouses may choose the name they will use after marriage either: (i) under the law of the country of which one of the spouses is a national – even if this nationality is not the effective one or if the spouse is also a German national; or (ii) under German law if one of them has their habitual residence in Germany (art 10(2) EGBGB). The person with the parental responsibility for a child may declare that the child is to obtain the family name either: (i) pursuant to the law of a country of which one of the parents is a national (again regardless of effectiveness); or (ii) pursuant to German law, if one of the parents has their habitual residence in Germany; or (iii) pursuant to the law of a country of which a person conferring the name is a national (art 10(3) EGBGB). In addition, under the recently introduced art 48 EGBGB a person may opt for a name they have lawfully acquired while habitually resident in another EU Member State, unless that foreign name would violate public policy. This is the German reaction to the case-law of the CJEU in this area of law (Case C-353/06 Stefan Grunkin and Dorothee Regina Paul [2008] ECR I-7639, Case C-208/09 Ilonka Sayn-Wittgenstein v Landeshauptmann von Wien [2010] ECR I-13693). In the law of marriage, for the general effects of marriage and under certain conditions, spouses may choose the law of the state of which at least one of them is a national (art 14(2) and (3) EGBGB). With regard to →matrimonial property, spouses may opt for the law of the state of which one of them is a national, the state where one of them is habitually resident or, for immovable property, the lex rei sitae (art 15(2) EGBGB).

Moreover, the principle of →nationality is constrained by several specific public policy clauses: if two persons cannot marry because the requirements of the state(s) of which they are nationals are not met, then German law may be applied instead if denying a marriage would otherwise constitute a violation of the constitutional right to marry (art 13(2) EGBGB). In order to protect a spouse from domestic violence, art 17a EGBGB provides that the right to use a marital home that is located in Germany as well as pertaining prohibitions as to trespass, approaching and contact are governed by German law and not by the law applicable to the general effects of marriage.

A conscious departure from the principle of nationality has been made for homosexual →registered partnerships. The law governing such partnerships is that of the state in whose register the partnership has been entered, without any requirement pertaining to a close connection of at least one of the partners with that state (art 17b(1) EGBGB). This generous attitude is curtailed, however, by art 17b(4) EGBGB, which provides that the effects of a partnership registered abroad must not exceed those available under German substantive law. According to the prevailing view, homosexual marriages, eg under Dutch or French law, are characterized as – or rather demoted to – registered partnerships in German private international law. Whether the CJEU will accept this remains to be seen.

6. Inheritance matters

The autonomous German private international law on inheritance matters has been adapted p. 1to the Succession Regulation in 2015 (→Succession). Article 25 EGBGB now provides that for cases not covered by the substantive scope of the Succession Regulation, the Regulation’s provisions shall be applied by way of analogy. Article 26(1) EGBGB governs the formal validity of testamentary dispositions; it implements art 3 of the Hague Testamentary Dispositions Convention as this Convention continues to take precedence over the Succession Regulation (art 75(1) Succession Regulation). Article 26(2) EGBGB clarifies that the formal validity of testamentary dispositions not covered by this Convention, ie contracts governing inheritance matters, is subject to art 27 of the Succession Regulation. Moreover, s 32 of the Act on the Procedure in International Inheritance Matters (IntErbRVG) of 29 June 2015 (BGBl. I 1042) introduces a hitherto unknown governmental right of acquisition concerning bona vacantia.

7. Corporations and securities

International company law has at all times been confronted with the question as to whether the legal existence of a corporation is determined by the place of its incorporation (incorporation theory) or by the law of its actual administrative office (real seat theory). Germany traditionally prefers the connection to the real seat. Recently, however, under the pressure of CJEU case-law (Case 212/97 Centros Ltd v Erhvervs- og Selskabsstyrelsen [1999] ECR I-1459; Case C-208/00 Überseering BV v Nordic Construction Company Baumanagement GmbH [2002] ECR I-9919; Case C-167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd [2003] ECR I-10159), the Federal Court of Justice felt compelled to switch to the incorporation theory under certain circumstances. In this respect and at least concerning →companies established in the EU, the BGH has abandoned the real seat theory in favour of the incorporation theory (German Federal Court of Justice (BGH), 14 March 2005, [2005] ZIP 805). This latter theory was supposed to be codified in the German draft bill on international company law (art 10(1) EGBGB in its amended version) submitted by the Federal Ministry of Justice in 2008. However, in light of the persisting differences and uncertainties, the German Council on Private International Law has developed a further proposal for a uniform introduction of the incorporation theory at the European level. The transition to the incorporation theory also affects companies of contracting states of the EEA, which have to be treated in the same way as companies of EU Member States (German Federal Court of Justice (BGH), 164 BGHZ 148 concerning Liechtenstein). Equally, the incorporation theory applies by virtue of bilateral conventions concluded with important trade partners, particularly the USA (German Federal Court of Justice (BGH), 153 BGHZ 353 regarding art XXV(5) of the German–American Treaty of Friendship (Treaty of Friendship, Commerce and Navigation between the United States of America and the Federal Republic of Germany of 29 October 1954, 273 UNTS 4)). However, with regard to third countries such as →Switzerland, the BGH continues to apply the real seat theory (German Federal Court of Justice (BGH), 178 BGHZ 192, ‘Horse Racing Track’). In contrast, the proposal elaborated by the German council on private international law provides for a comprehensive codification of the incorporation theory also in relation to third countries.

V. International civil litigation

1. Jurisdiction of state courts

Where neither EU Regulations nor international conventions apply, jurisdiction is governed either by the German Code of Civil Procedure (Zivilprozessordnung of 5 December 2005, BGBl. 3202, as amended, henceforth German CCP) or by the German Law on the Procedure in Family Matters (Gesetz über das Verfahren in Familiensachen und in den Angelegenheiten der freiwilligen Gerichtsbarkeit of 17 December 2008, BGBl. I 2586, as amended, henceforth FamFG). Several heads of jurisdiction found in the German CCP resemble rules of Brussels I Regulation (recast), such as the →place of performance (s 29 German CCP), the place where a tort was committed (s 32 German CCP) or the place where a branch is situated (s 21 German CCP). A fairly exorbitant jurisdiction is provided for by the (in)famous ‘umbrella rule’ found in s 23 German CCP (place where a defendant’s property is situated). Against EU defendants, this provision has been blacklisted by the Brussels I Regulation (recast). Whereas the jurisdictional rules of the German CCP are credited with a ‘double function’, in that they regulate jurisdiction and venue at the same time, the more modern FamFG clearly differentiates p. 1between these issues. Sections 99–104 FamFG contain detailed rules on the jurisdiction of German courts for various matters such as marriage, divorce, parental responsibility, descent, →adoption, registered partnerships, and guardianship or curatorship (→Guardianship, custody and parental responsibility). These rules largely combine nationality and habitual residence of the parties concerned as grounds for jurisdiction. For other matters, German courts have (international) jurisdiction if a German court is the proper (local) venue (s 105 FamFG).

2. Recognition and enforcement of foreign judgments

The above laws also govern the recognition and enforcement of foreign judgments (s 328(1) German CCP; s 109(1) FamFG). Foreign judgments are recognized and enforced if the foreign court would have had jurisdiction under the applicable German rules (so-called ‘mirror-image’ principle). A reservation is made for public policy, cases in which the defendant has not been properly served and for conflicts with a German judgment (or a judgment recognizable in Germany). Under the German CCP, →reciprocity is still required.

3. Arbitration

Germany has implemented the UNCITRAL Arbitration Model Law (United Nations Commission on International Trade Law, UNCITRAL Model Law on International Commercial Arbitration as adopted on 21 June 1985 and as amended on 7 July 2006, UN Doc A/40/17 and A/61/17; →Arbitration, (UNCITRAL) Model Law) in ss 1025–66 German CCP. With regard to the applicable law, s 1051 German CCP (as translated by the German Institution of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit) provides that the arbitral tribunal will decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system of a given state will be construed, unless otherwise expressed, as directly referring to the substantive law of that state and not to its conflict of laws rules (s 1051(1) German CCP). Accordingly, the strict prohibition against a choice of foreign private international law found in art 4(2) EGBGB is not applicable. Absent designation by the parties, the arbitral tribunal will apply the law of the state with which the subject matter of the proceedings is most closely connected (s 1051(2) German CCP). The arbitral tribunal will decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so. The parties may so authorize the arbitral tribunal at any time up to its decision (s 1051(3) German CCP). In all cases, the arbitral tribunal is to decide in accordance with the terms of the contract and must take into account the usages of the trade applicable to the transaction (s 1051(4) German CCP). Germany is party to the principal multilateral conventions on arbitration, including the New York Convention (New York Convention of 10 June 1958 on the recognition and enforcement of foreign arbitral awards, 330 UNTS 3) and the European Arbitration Convention (European Convention of 21 April 1961 on international commercial arbitration, 484 UNTS 349). When acceding to this Convention, Germany had made a declaration restricting its application on the basis of art 1(3) first sentence, but this reservation was withdrawn in 1998.

Literature

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