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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Chapter V.1: Vested rights theory

Jürgen Basedow

I. Concept

According to the theory of vested rights, private international law does not determine the application of any specific law, potentially a foreign law, to a given dispute; rather, it ensures the recognition of individual rights acquired and ‘vested’ abroad. While this approach has enjoyed a particular notoriety in private international law (see I.2. below), it is in other fields of law where the concept of vested rights (iura quaesita, droits acquis, wohlerworbene Rechte) emerged and still has a certain significance (see I.1. below).

1. Historical background

The rise of absolutism in 17th- and 18th-century Europe aroused the demand for a counter-balance, for a limitation of the ruler’s absolutist powers and for the protection of some basic rights of subjects and citizens. The intellectual construction which could provide that counter-balance and which became popular and even dominant in those centuries was the theory of natural law. Inter alia it postulated the existence of certain innate rights of the individual (iura cognata) which are protected from curtailment by the ruler’s will; some authors would grant the same protection to rights which the individual had acquired in a particular way, ie vested rights (iura quaesita). Authors of the latter group paved the way for the recognition of human and fundamental rights in the French Revolution and in the US Bill of Rights as well as in later constitutions. According to this tradition, vested rights operate within a given jurisdiction; they are of a public law and constitutional nature and protect the individual from the sovereign, in particular against the retroactive effect of laws which deprive him or her of those rights or somehow restrict their recognition (Burkhard Hess, Intertemporales Privatrecht (Mohr Siebeck 1998) 70 ff). Or, as the US Supreme Court put it in 1898: ‘It is not within the power of a legislature to take away rights which have been once vested by a judgment’ (McCullough v Virginia, 172 U.S. 102, 123 ff (1898)).

As the discipline of public international law (→Public international law and private international law) was evolving, the protection afforded to the individual at the domestic level was extended to his or her relation to other sovereigns, especially those which appropriate the rule over a given territory from another state (Georges Kaeckenbeck, ‘La protection internationale des droits acquis’ (1937) 59 Rec. des cours 317; Jacques Barde, La notion des droits acquis en droit international public (Presses Universitaires de France 1981) ff). In the context of state succession it was soon generally agreed that the succeeding state has to recognize the private rights of individuals and private corporate bodies acquired under the rule of a previous sovereign. Thus, the Permanent Court of International Justice, in its 1926 judgment on German interests in Polish Upper Silesia, highlighted the ‘principle of respect for vested rights, a principle which, as the Court has already had occasion to observe, forms part of generally accepted international law . . .’ (Permanent Court of International Justice, Certain German interests in Polish Upper Silesia, 25 May 1926, PCIJ Series A, No 7, 42). Consequently this principle serves as a guideline for the interpretation of international treaties.

2. Vested rights in private international law

In cases of state succession the conflict of legal rules is one of a temporal nature; it is engendered by the sequence of different sovereigns in the same territory. This is a matter of public international law. Where the conflict arises from the existence of diverse rules of law in different jurisdictions, we are in the domain of private international law. From an historical perspective, the systematic difference was not generally acknowledged before the 20th century and then only at different times in the various countries.

In private international law, the vested rights theory was particularly well-received, elaborated and influential in Anglo-Saxon jurisdictions. Adopting a sovereignty-based publicist approach to →choice of law, they had great difficulty in accommodating the undisputed need to give effect to foreign private law in appropriate cases. While Huber’s (→Huber, Ulrik) recourse to →comity was readily accepted as an escape permitting exceptions from the otherwise inevitable application of the lex fori, it was often considered unsatisfactory because of its vagueness and the resulting lack of legal certainty. The vested rights theory appeared to reconcile the conflicting objectives and to offer p. 1814a solution that would allow granting legal certainty without openly applying foreign law.

In England Albert Venn Dicey (→Dicey, Albert Venn) clearly enunciated this concern in 1896: ‘The Courts, eg, of England, never in strictness enforce foreign law; when they are said to do so, they enforce not foreign laws, but rights acquired under foreign laws’ (Albert Venn Dicey, A Digest of the Law of England with Reference to the Conflict of Laws (Stevens 1896) 10). This approach was applauded in a book review by Joseph Beale in the USA (Joseph Beale, ‘Dicey’s “Conflict of Laws”’ (1896/97) 10 Harv.L.Rev. 168). Beale, who taught a whole generation of American conflicts lawyers and later served as Reporter to the Restatement (First) on the Conflict of Laws (→Restatement (First and Second) of Conflict of Laws), summarized his views on private international law repeatedly and in an even more pointed way:

The topic called ‘Conflict of Laws’ deals with the recognition and enforcement of foreign created rights. In the legal sense, all rights must be created by some law. . . When a right has been created by law, this right itself becomes a fact; and its existence may be a factor in an event which the same or some other law makes the condition of a new right. In other words, a right may be changed by the law that created it, or by any other law having power over it. If no law having power to do so has changed a right, the existing right should everywhere be recognized; since to do so is merely to recognize the existence of a fact. (Joseph Beale, A Selection of Cases on the Conflict of Laws, vol 3 (Harvard University Press 1902) 501; Joseph Beale, A Treatise on the Conflict of Laws or Private International Law (Harvard University Press 1916) 106 ff)

The crucial question arising from this line of argument is: which law creates the right in question? It is answered by Beale in a strictly territorial sense:

For the creation of rights, as has been seen, there must exist some law with power to create them. . . Not only must every political society have some law, but it must have only one law. . . Since there can be but one law in a place . . ., it follows that every question there arising must be determined by the law of that place. (Joseph Beale, A Selection of Cases on the Conflict of Laws, vol 3 (Harvard University Press 1902) 501–504).

He further elaborated the territorial approach in his voluminous treatise of 1935 (Joseph Beale, A Treatise on the Conflict of Laws, vol 1 (Baker, Voorhis & Co 1935) 308 ff). Thus, the vested rights theory which was influential in England and the USA up to the middle of the 20th century combined the idea of pre-created, ‘vested’ rights originating in the period of natural law, with a claim to strict →territoriality of the application of law and a duty of other states to recognize such rights.

On the European continent, approaches that at first blush appear similar to the vested rights theory have been predicated by various authors ever since around 1700 (Carl Georg von Wächter, ‘Ueber die Collision der Privatrechtsgesetze verschiedener Staaten’ (1842) 25 AcP 1–2; Ralf Michaels, ‘EU Law as Private International Law? Reconceptualising the Country-of-Origin Principle as Vested-Rights Theory’ (2006) 2 J Priv Int L 195, 214–220). Here as well, the heyday of such approaches was shortly after 1900. In France, Antoine Pillet advocated this doctrine in his 1925 Hague course on the general theory of acquired rights. He postulated that

whenever a right has regularly been acquired in some country, this right shall be respected and the effects it produces shall be ensured in another country which, like the first one, forms part of the international community. This is an absolutely inevitable necessity, a principle without which no international commerce would be possible. (Antoine Pillet, ‘La théorie générale des droits acquis’ (1925) 8 Rec. des cours 485, 492; author’s translation)

The key issue in this line of reasoning concerns the ‘regular’ acquisition of a right; which law determines the regularity? Pillet clearly identifies the hidden choice-of-law question and asks whether the relevant law is the one designated by the choice-of-law rules of the country of origin regarding the right in question or the one which would be applicable in accordance with the choice-of-law rules of the country where the right is asserted. His answer is unambiguous:

There is no doubt that on a question like this which touches upon the scope of application of the law and, consequently, of sovereignty, the only binding formula is the one given by the lex fori; there is no reason to be concerned with the law considered to govern in the country of the creation [of the right] . . . (Antoine Pillet, ‘La théorie générale des droits acquis’ (1925) 8 Rec. des cours 485, 497; author’s translation.)

Where the creation of the right is thus determined by the law designated by the forum’s p. 1815choice-of-law rules, the alleged second step consisting of the recognition of the right is, however, reduced to naught; in fact this recognition is the immediate consequence of the application of the foreign law to the creation of the right in question. Pillet’s approach therefore differs profoundly from the one advocated by Dicey and Beale.

II. Critique and further development

While the vested rights theory had several followers also in Germany, von Wächter (→Wächter, Carl Georg von) and von Savigny (→Savigny, Friedrich Carl von) raised fundamental criticisms as early as the 1840s, and the theory did not recover from that critique. As von Wächter pointed out, the alleged principle of the protection of vested rights depends upon the prior assertion of what is a vested right, an assertion that cannot entirely be left to a foreign state and its law, but has to be decided by the forum state and its choice-of-law rules. For that reason, von Wächter declared the purported principle of the protection of vested rights a petitio principii; ‘it presupposes what still has to be proved, in particular that the legal relation is governed by foreign and not by domestic law’ (Carl Georg von Wächter, ‘Ueber die Collision der Privatrechtsgesetze verschiedener Staaten’ (1842) 25 AcP 1, 4–5, author’s translation). Some years later, von Savigny reiterated and deepened this criticism: ‘This principle leads 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 complete acquisition’ (Friedrich Carl von Savigny, A Treatise on the Conflict of Laws and the Limits of their Operation in Respect of Place and Time (William Guthrie tr, 2nd edn, Clark 1880) § 361, 147).

This critique is based on logic, but it contains elements of valuation. Von Wächter asks whether the forum state, in accordance with the vested rights theory, should recognize rights to slavery, to interest at usurious rates, or to debts arising from gambling for the sole reason that they have been acquired and ‘vested’ in a foreign country (Carl Georg von Wächter, ‘Ueber die Collision der Privatrechtsgesetze verschiedener Staaten’ (1842) 25 AcP 1, 6). The rhetorical question is meant to provide support to his assertion that it is up to the forum state (and not to the law of origin) to decide which rights can be recognized as ‘vested’. More than 80 years later Pillet (see I.2. above) highlighted the dominant role of the forum state on a similar note, although rather stressing the sovereignty of the forum state.

In modern times the vested rights theory has also been criticized for its rejection of a potential →renvoi element in the ascertainment of a right possibly vested in a foreign jurisdiction. Where the courts in the jurisdiction of origin (A) would not apply their own law but, in accordance with their choice-of-law rules, the law of a different country (B), the disregard by the court of the forum state (C) of the choice-of-law rules of state A leads to the recognition of a right which may not even exist in state A (Kurt Siehr, ‘Renvoi und wohlerworbene Rechte’ in Isaak Meier and Kurt Siehr (eds), Rechtskollisionen – Festschrift für Anton Heini zum 65. Geburtstag (Schulthess 1995) 407, 419). On a similar note, the inflexibility and the lack of consistency of the vested rights theory have been highlighted. Where, for example, an occurrence giving rise to a right takes place partly in state A and partly in state B, a correct appreciation of the resulting right is not possible without giving one of the territorial laws an extraterritorial effect (Elliott E Cheatham, ‘American Theories of Conflict of Laws: Their Role and Utility’ (1945) 58 Harv.L.Rev. 361, here cited after the reprint in Maurice S Culp (ed), Selected Readings in Conflict of Laws (West Publishing 1956) 48, 60–61; Pierre Arminjon, ‘La notion des droits acquis en droit international privé’ (1933) 44 Rec. des cours 1, 22–23).

In the final result it turned out that the vested rights theory could not subsist without the elaboration of choice-of-law rules referring to the law that determined the creation of the right. Since those choice-of-law rules imply the recognition of the right emerging from the designated law, the recognition as the second, allegedly independent and principal element of the vested rights theory becomes redundant: the court always ends up in a ‘conflict of laws the solution of which is justified without any need to have recourse to the notion of vested rights. In all cases, the only point to resolve is that of the applicable law’ (Pierre Arminjon, ‘La notion des droits acquis en droit international privé’ (1933) 44 Rec. des cours 1, 60, author’s translation). At present the vested rights theory therefore appears to be an approach of the past that is no longer defended as the general basis of private international law (Ralf Michaels, ‘EU Law as Private International Law? Reconceptualising the Country-of-Origin Principle as Vested-Rights Theory’ (2006) 2 J Priv Int L 195, 227 regarding English law).

p. 1816From a present perspective the former adherence to the vested rights theory may be explained by a number of what now appear as amalgamations and inaccuracies. First, several writers amalgamated policy objectives and legal principles. The vested rights theory was accepted because it was beneficial to international exchange and commerce, a generally accepted goal. The recognition of rights acquired abroad can still be regarded as a policy objective that, alongside and in possible conflict with other objectives, inspires many choice-of-law rules; but it should not be taken for a legal rule itself. It is rather pursued through the operation of rules on jurisdiction, the selection of the applicable law, and recognition (→private international law, methods of). A second amalgamation originates in the natural law origin of the vested rights theory (see I. above): the idea of ius quaesitum was intended to protect individual rights from interference by ‘the state’. In a liberal fashion, this included both the successor of a domestic sovereign and the foreign state where the recognition of a right acquired at home might become an issue; public international law and private international law (→Public International Law and Private International Law) were not yet clearly separated. A third amalgamation concerns the ‘right’ that was allegedly vested; there is no clear distinction in the early sources between a foreign judgment acknowledging such rights and rights which arise from legal transactions and contacts without being identified in any formalized way. Thus, the demise of the vested rights theory may be interpreted as resulting from a growing precision and awareness among conflicts lawyers of appropriate distinctions. That demise did not, however, exclude a certain revitalization of the theory in federal entities in more recent times.

III. Contemporary significance

1. The resuscitation of the vested rights theory in federal entities

As pointed out above, a major criticism of the vested rights theory highlights the excessive exposure to foreign law and values: it requires the court to recognize rights created abroad, perhaps subject solely to the →public policy exception, which it would not have acknowledged in the framework of its own legal system. This critique may be perceived as less urgent where the countries involved form part of a federal entity governed by basic common values. Here, the divergence between the values enshrined in the foreign law giving rise to the rights in question and the values of the forum where they are asserted is moderated or is overcome by the merits of competing values, in particular by the aspiration towards the unity or further development of the federal entity. Hence, the recognition of such rights may appear more acceptable.

Michaels has alluded to a certain resuscitation of the vested rights theory, albeit differently named, in federal entities (Ralf Michaels, ‘EU Law as Private International Law? Reconceptualising the Country-of-Origin Principle as Vested-Rights Theory’ (2006) 2 J Priv Int L 195, 213–239). As to the USA he refers to the Due Process clause and the →Full Faith and Credit clause of the US Constitution, which are said to have served in the early 20th century as the legal basis for the Supreme Court when establishing a duty of the individual US courts to recognize foreign-created rights or to apply foreign law (Ralf Michaels, ‘EU Law as Private International Law? Reconceptualising the Country-of-Origin Principle as Vested-Rights Theory’ (2006) 2 J Priv Int L 195, 220–221). Whatever may be said about this interpretation, it lost its significance when the Supreme Court decided in 1981 that the choice-of-law decision by a court cannot be challenged as long as there is a significant contact creating state interests, such that the choice of the law applied is neither arbitrary nor fundamentally unfair (Allstate Insurance Co v Hague, 449 U.S. 302, 313 (1981)). As Michaels concludes, this decision has deprived the vested rights theory in the USA of its constitutional underpinnings.

2. European Union: the country-of-origin principle

a) Country-of-origin principle and vested rights theory

With regards to the European Union a similarity of the vested rights theory with the so-called country-of-origin principle has been suggested (Ralf Michaels, ‘EU Law as Private International Law? Reconceptualising the Country-of-Origin Principle as Vested-Rights Theory’ (2006) 2 J Priv Int L 195, 198, 221 ff). This principle has emerged from the case law of the European Court of Justice on the basic freedoms enshrined in the EU Treaties (→Country of origin rule). In respect of the free movement of goods (now: art 34 TFEU (The Treaty on the Functioning of the European Union (consolidated version), [2012] OJ C 326/47)) the Court p. 1817was asked in 1979 whether German provisions on the minimum alcohol content of a liqueur could possibly serve as a legal basis for the prohibition of the import of Cassis de Dijon from France. It answered in the negative:

There is . . . no valid reason why, provided that they have been lawfully produced and marketed in one of the Member States, alcoholic beverages should not be introduced into any other Member State; the sale of such products may not be subject to a legal prohibition on the marketing of beverages with an alcohol content lower than the limit set by the national rules. (Case 120/78 REWE v Bundesmonopolverwaltung für Branntwein [1979] ECR 649, para 14)

On a similar note the Court held with regard to services (now: art 56 TFEU) that ‘the Treaty requires . . . the abolition of any restriction . . . when it is liable to . . . impede the activities of a provider of services established in another Member State where he lawfully provides similar services’ (Case C-76/90 Säger v Dennemeyer [1991] ECR I-4221, para 12). Subject to certain limitations, the Court’s practice has the effect of requiring the Member States to recognize the right of any supplier established in another Member State to trade in goods or services produced or marketed in accordance with the law of its country of origin in their national markets. Other directly applicable rules of primary EU law have been held to produce similar effects (see III.3. below).

The duty to respect such rights acquired abroad may indeed be considered as similar to the court’s obligation, postulated by the vested rights theory, to recognize rights created in a foreign jurisdiction. There is, however, a fundamental difference: the exponents of the vested rights theory in private international law refer to private rights asserted by private persons against other private persons, eg ownership, →marriage, maintenance, a right to →damages etc. No one ever invoked the vested rights theory to protect rights acquired abroad from sovereign intervention in the forum state. By contrast, the country-of-origin principle has been enunciated by the Court of Justice in cases opposing private persons and states, ie in a public law context. Although the Säger opinion arose from a civil litigation, the legal rule at issue was one of public market regulation which allegedly prohibited the defendant Dennemeyer from providing the services of patent renewal in →Germany. The crucial objection raised against the vested rights theory, ie that the law giving rise to the right in question still has to be determined under choice-of-law rules and that the theory therefore leads into a vicious circle (see II. above), does not hold true in public law. In public law matters there is no doubt about the territorial application of the law; the country of origin and its law which created the right in question are always clear.

b) Application to private law issues

So far the Court of Justice has expanded the scope of the country-of-origin principle only to a few issues of private law. This has occurred in the field of unfair competition (→Competition, unfair). Here, the Court has declared that a law of the target or host state prohibiting advertising practices which are lawful in the country of origin of the advertising firm may be incompatible with basic freedoms (Case C-362/88 GB-Inno-BM v Confédération du commerce luxembourgeois [1990] ECR I-667; Case C-126/91 Schutzverband gegen Unwesen in der Wirtschaft v Yves Rocher [1993] ECR I-2384). The law of advertising is generally subject to the territorial regime of the market concerned, either under the choice-of-law rules of private international law (see art 6 →Rome II Regulation (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)) or as a consequence of the territorial application of public market regulations. The recognition, by the Court of Justice, of an undertaking’s right to employ the advertising practices of its home market also in the target or host market, irrespective of the divergent laws of the latter, may therefore be interpreted as the recognition, by the host state, of a right ‘vested’ in the country of origin. But again, this has happened in an area where the ‘country of origin’ and thereby the law giving rise to the right of advertising are unambiguously identified.

It is still unclear whether the country-of-origin principle, as applied to private law issues, is a choice-of-law rule or rather a rule of EU law impacting choice of law. The progressive codification of private international law at EU level renders this question largely immaterial. The role of the country-of-origin principle may perhaps be extrapolated from the interpretation of the E-Commerce Directive (Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects p. 1818of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce) [2000] OJ L178/1) by the Court of Justice. Against the background of a very complex setting, Recital (22) of that Directive points out that ‘information society services should in principle be subject to the law of the Member State in which the service provider is established’, while art 1(4) explicitly states that this ‘Directive does not establish additional rules on private international law . . .’. Under art 3(2) Member States may not, ‘for reasons falling within the coordinated field, restrict the freedom to provide information society services from another Member State’, and the definition of art 2(h)(i), second indent includes issues concerning the service provider’s liability in the coordinated field that should be subject to the law of the country of origin (Recital (22), see above). In a case involving such liability the Court of Justice was called upon to reconcile those divergent indications of the Directive. It pointed out that art 3 need not be interpreted as requiring transposition in the form of a choice-of-law rule referring to the law of the country of origin, but that Member States must ensure that a service provider, except for particular reasons specified in the Directive, is not ‘subject to stricter requirements than those provided for by the substantive law applicable in the Member State in which that service provider is established’ (Joined cases C-509/09 and C-161/10 eDate advertising v X [2011] ECR I-10269, paras 60–68). Arguably this substantive law limitation also applies where the country-of-origin principle follows from primary EU law.

3. European Union: the principle of mutual recognition

The Anglo-Saxon variant of the vested rights theory consists of two elements: the territorial approach to the ascertainment of the acquisition of a right – which is an equivalent to the country-of-origin principle – and the court’s duty to recognize such foreign-created rights. The principle of (mutual) recognition becomes increasingly significant in EU law, both in case law and in legislation.

a) Case law of the ECJ

The impact of the principle of recognition is particularly visible in company law. According to the choice-of-law rules of some Member States the law applicable to a company is determined not by the statutory seat, but by the location of the actual administration, the ‘real seat’. A transfer of the headquarters to another country will therefore lead to a change of the applicable law. Since the company was not founded in accordance with the new applicable law, the relocation may engender the loss of the company’s legal personality, ie a loss of its capacity to hold rights and to appear in court (→Capacity and emancipation) unless it is reincorporated under the new law. According to the Court of Justice such

requirement of reincorporation . . . is tantamount to outright negation of freedom of establishment [under art 49 and 54 TFEU]. In those circumstances, the refusal by a host Member State . . . to recognise the legal capacity of a company formed in accordance with the law of another Member State . . . constitutes a restriction of the freedom of establishment. (Case C-208/00 Überseering BV v NCC [2002] ECR I-9919, paras 81–82)

Put in other words, Member States are under a duty to recognize the legal capacity of a company established in another Member State, ie a right vested abroad. The bearing of this jurisprudence on the other various aspects of company law is still unclear. The criticism voiced against the vested rights theory (II. above) does not hold water in the present context because the country of origin of a company and the law bestowing legal personality on it unambiguously emerge from the entry into the foreign company register.

A further area of private law that is affected by what may appear as a revival of the vested rights theory concerns the →names of individuals. German parents living in →Denmark had registered their new-born child, who was a German national as well, under the family name Grunkin-Paul. In accordance with Danish law this name was composed of the family names of the father and the mother. When they later moved to →Germany, the German registry office refused to register the child with this family name, insisting, because of the child’s →nationality, on the application of German law which did not allow a child’s surname to be composed of each of the parents’ family names, but required the parents to choose between their surnames. The dispute went to court and up to the Court of Justice. It pointed out that the need to use a surname in the country of which the child is a national differing from the surname p. 1819conferred and registered in the country of birth hampered the exercise of the right of free movement of an EU citizen (now: art 21 TFEU). The Court concluded that the right to free movement flowing from EU citizenship ‘precludes the authorities of a Member State . . . from refusing to recognise a child’s surname, as determined and registered in a second Member State in which the child . . . was born and has been resident since birth’ (Case C-353/06 Grunkin and Paul [2008] ECR I-7639, para 39). Again, the Court uses a term of recognition familiar from the vested rights theory. And again this occurs in respect of a right registered in a foreign country.

b) Legislation

It might appear that the following general principle can be inferred from the cases reported above: a legal situation that has crystallized through registration or other proceedings in one Member State shall be recognized in other Member States irrespective of choice-of-law rules, perhaps subject to a public policy reservation. In fact, such principle might be regarded to be in line with the Union’s mission expressed in art 81 TFEU to ‘develop judicial cooperation in civil matters . . ., based on the principle of mutual recognition of judgments and of decisions in extrajudicial cases’. The reference to ‘decisions in extrajudicial cases’ makes clear that the principle of mutual recognition does not relate to legal situations which arise from the application of a substantive law without the stabilization and solidification resulting from administrative or judicial proceedings. Put in other words, a contract concluded or a holographic will executed in a foreign country is not capable of being ‘recognized’; it is valid or invalid in accordance with the law applicable under the relevant choice-of-law rules.

It is, however, doubtful whether the principle enunciated above is already sufficiently underpinned by specific experience in the various fields of law. Apart from the legal capacity of →companies and the →names of individuals, EU law has not yet established many duties of recognition bearing substantive effects. A duty of enforcement is enshrined in art 58 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)) and art 46 →Brussels IIa Regulation (Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, [2003] OJ L 338/1) with regard to authentic acts, court settlements and certain agreements enforceable in the country of origin. And arts 59 and 60 of 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) extend the evidentiary and enforcement effect of authentic instruments executed in a Member State and relating to matters of succession to all other participating Member States. But would all legally relevant facts and occurrences evidenced in some kind of public document be susceptible of being recognized and of producing their substantive effects in all other Member States for the sole reason of the principle of mutual recognition mentioned above (→Recognition of legal situations evidenced by documents)? In a Green Paper of 2010 the EU Commission contemplated such an extension of the principle with regard to matters of civil status such as kinship relations (→Kinship and legitimation), →marriage, →adoption and acknowledgement of paternity (European Commission, ‘Green Paper: Less bureaucracy for citizens: promoting free movement of public documents and recognition for the effects of civil status records of 14 December 2010’ COM(2010) 747 final, part 4). However, the proposal resulting from the public consultation abandoned the idea and exclusively aims at ensuring the free movement of public documents by reducing formalities (European Commission, ‘Proposal for a Regulation of the European Parliament and of the Council on promoting the free movement of citizens and businesses by simplifying the acceptance of certain public documents in the European Union and amending Regulation (EU) No 1024/2012 of 24 April 2013’ COM(2013) 228 final, see in particular Recital (6)).

It is characteristic of the recognition of legal situations that a state where the consequences of such situation are asserted does not apply its own choice-of-law rules (Paul Lagarde, p. 1820‘Introduction au thème de la reconnaissance des situations: Rappel des points les plus discutés’ in Paul Lagarde (ed), La reconnaissance des situations en droit international privé (Pedone 2013) 19). In Dutch private international law this is indeed what the law provides for:

In the Netherlands, the same legal consequences may be attributed to a fact to which legal consequences are attributed pursuant to the law which is applicable under the private international law of a foreign state involved, in contravention to the law applicable to Dutch private international law, as far as not attaching those consequences would constitute an unacceptable violation of the legitimate expectations of the parties or of legal certainty. (art 10:9 Dutch New Civil Code (Nieuw Burgerlijk Wetboek of 1 January 1992))

Thus the principle of recognition of vested rights is an equitable solution that applies under uncertain conditions. But it encounters the criticism voiced against the vested rights theory reported above (see II. above). When is a foreign state involved? This cannot be ascertained without legal provisions of the forum state that determine which involvement is relevant and which is not. The EU appears well-advised to further study the interplay of private international law and basic freedoms before adopting a similar rule.

Literature

  • Pierre Arminjon, ‘La notion des droits acquis en droit international privé’ (1933) 44 Rec. des cours 1;

  • Jacques Barde, La notion des droits acquis en droit international public (Presses Universitaires de France 1981);

  • Joseph Beale, ‘Dicey’s Conflict of Laws’ (1896/97) 10 Harv.L.Rev. 168;

  • Joseph Beale, A Selection of Cases on the Conflict of Laws, vols 1–3 (Harvard University Press 1902–1907); Joseph Beale, A Treatise on the Conflict of Laws or Private International Law (Harvard University Press 1916);

  • Joseph Beale, A Treatise on the Conflict of Laws, vols 1–3 (Baker, Voorhis & Co 1935);

  • Elliott E Cheatham, ‘American Theories of Conflict of Laws: Their Role and Utility’ (1945) 58 Harv.L.Rev. 361, here cited after the reprint in Maurice S Culp (ed), Selected Readings in Conflict of Laws (West Publishing 1956) 48;

  • Albert Venn Dicey, A Digest of the Law of England with Reference to the Conflict of Laws (Stevens 1896);

  • Burkhard Hess, Intertemporales Privatrecht (Mohr Siebeck 1998);

  • Georges Kaeckenbeck, ‘La protection internationale des droits acquis’ (1937) 59 Rec. des cours 317;

  • Paul Lagarde (ed), La reconnaissance des situations en droit international privé (Pedone 2013);

  • Ralf Michaels, ‘EU Law as Private International Law? Reconceptualising the Country-of-Origin Principle as Vested-Rights Theory’ (2006) 2 J Priv Int L 195;

  • Antoine Pillet, ‘La théorie générale des droits acquis’ (1925) 8 Rec. des cours 485;

  • Friedrich Carl von Savigny, A Treatise on the Conflict of Laws and the Limits of their Operation in Place and Time (William Guthrie tr, 2nd edn, Clark 1880);

  • Kurt Siehr, ‘Renvoi und wohlerworbene Rechte’ in Isaak Meier and Kurt Siehr (eds), Rechtskollisionen – Festschrift für Anton Heini zum 65. Geburtstag (Schulthess 1995) 407;

  • Carl Georg von Wächter, ‘Ueber die Collision der Privatrechtsgesetze verschiedener Staaten’ (1841) 24 AcP 230 and (1842) 25 AcP 1.