New EU rules in the area of property regimes of international couples

 
Introduction

On 24 June 2016, the EU council adopted two regulations concerning common rules on jurisdiction, applicable law and the recognition and enforcement of decisions in the area of the property regimes of international couples.  One regulation covers marriages¹ and the other covers registered partnerships.²

The regulations are a continuation of the EU harmonization process in the field of international private law, complementing the already existing instruments regulating jurisdiction and applicable law concerning divorce (Brussels II bis regulation³ and Rome III regulation⁴) and succession (the Succession regulation⁵). The objective is to clarify the rules applicable to property regimes for international married couples and registered partnerships in order to avoid parallel and possibly conflicting procedures in different EU Member States. The regulations will enter into force on 29 January 2019. The following article will only deal with the former of the two regulations and aims to describe its contents in a concise manner. It will henceforth be referred to as ‘the Regulation’.

Scope of the Regulation

The Regulation will be directly applicable only in those EU countries which are party to the Regulation (Belgium, Cyprus, Greece, Croatia, Slovenia, Spain, France, Portugal, Italy, Malta, Luxembourg, Germany, Czech Republic, the Netherlands, Austria, Bulgaria Sweden and Finland). The countries that did not adopt the Regulation – Ireland, the United Kingdom and Denmark – are to use choice of law rules as defined by their national law.

According to article 21 of the Regulation, the rules on applicable law are universal in scope.  Thus, the law of any state, including states that are not members of the EU, may be found to be applicable. The law provided by the Regulation is applicable on all assets, irrespective of in which country the assets are situated.

The Regulation does not define ‘marriage’, which is defined by the national laws of the Member States.⁶ Lacking a unified definition, it is reasonable to presume that each Member State may decide whether the Regulation is applicable to same-sex marriages.  Member States that do not recognize samesex marriages in their national law, but do recognize registered partnerships, may choose to apply the Regulation regarding registered partnerships instead.

The rules of the Regulation

Jurisdiction

The Regulation explicitly regulates two cases in which jurisdiction is preordained, these being the death of one of the spouses⁷ and divorce.⁸ In the former case, the court in a competent Member State pursuant to the Succession Regulation will have jurisdiction in matters arising from spouses’ matrimonial property. In the latter case, the court called upon to rule on an application of divorce will have jurisdiction, as long as the spouses agree.  Such an agreement may be concluded even during the proceedings.  It is important to note that articles 4 and 5(1) are only applicable in cases wherein a competent court has been seized.

In other cases than the two mentioned above (and cases in which the spouses do not agree pursuant to Article 5), jurisdiction lies with the courts of the Member State in whose territory the spouses are habitually resident.⁹  Failing that, jurisdiction lies with Member State in whose territory the Spouses were last habitually resident, insofar as one of the spouses still resides there.¹⁰ Failing that, jurisdiction lies with the courts of the Member State of the respondent’s habitual residence¹¹ and failing that, the state of the spouses' common nationality at the time the court is seized.¹² The parties may also agree to give jurisdiction to a Member State whose law is found to be applicable to the matter. Should the respondent enter an appearance in court, that court will have jurisdiction irrespective of which court has jurisdiction according to the aforementioned rules.

Should no court be found to have jurisdiction according to the aforementioned Articles, a court may be found to have secondary jurisdiction according to Article 10.  Should no court at all be found to have jurisdiction according to the earlier paragraphs, Article 11 allows for forum necessitatis.

Applicable law

The spouses may choose which state’s law they want to be applicable to their matrimonial property regime, insofar as they select the law of a state in which at least one of the spouses is habitually resident or a national.¹³   Should the spouses forego the opportunity of designating applicable law, the Regulation stipulates that the law applicable to the matrimonial property regime shall be the law of the State of the spouses' first common habitual residence at the conclusion of the marriage.¹⁴  Failing that, the applicable law shall be the law of the state of the spouses' common nationality¹⁵.  Common nationality ought to be an easily verifiable criterion. In cases where the spouses do not share a common nationality, the applicable law shall be the law of the state with which the spouses jointly have the closest connection at the time of the conclusion of the marriage, taking into account all the circumstances.¹⁶ This criterion is contrastingly vague when compared to the previous criterion of common nationality.

Recognition and enforcement

The principle of mutual recognition is applicable to matters of matrimonial property regimes.  A decision given in a Member State shall be recognized in the remaining Member States without any special procedure.¹⁷  Enforceable decisions made in a Member State are likewise enforceable in other Member States when they have been declared enforceable in accordance with the procedure provided for in the Regulation.  It should be noted that definite enforceability only exists within the EU. Decisions made pursuant to the Regulation might not be enforceable in a third country.

Entry into force and relation to current choice of law regulation in Sweden

The Regulation will, with some exceptions, enter into force in Sweden on 29 January 2019.  Its choice of law rules will thus be applied to marriages entered after 29 January 2019 or choices of law made after that date.¹⁸ Marriages entered prior to that date will still be subject to the national choice of law regulations applicable at the time.

Concerning Sweden, this means that the Act on Conflict of Laws in Regard to Matters of Matrimonial Property Regimes (Swedish: Lag [1990:272] om internationella frågor rörande makars och sambors förmögenhetsförhållanden  “LIMF”) will still be of importance for decades to come.

LIMF stipulates that spouses or spouses-to-be may choose which state’s law shall be applicable on their matrimonial property regime if the contract pertains to a state in which one of the spouses has been resident or held a citizenship, unless an exception is applicable.

The Regulation's provision regarding applicable law in the absence of a choice by the spouses contrasts with the Swedish regulation in LIMF, which stipulates that the applicable law is that of the state in which the spouses have had habitual residency for the past two years. If both spouses previously have had habitual residency or are citizens of their state of habitual residency, the two-year criterion is waived.  In cases where the spouses have not lived in their state of habitual residency for two years, the law of the state in which the marriage was concluded will be applicable. Rather than using the principle of immutability, the Swedish rules primarily uses a social criterion based on the spouses’ current situation.

Conclusion

The Regulation does in some sense achieve its objective to increase  foreseeability and legal certainty regarding jurisdiction and applicable law in the matter of property regimes of international couples, as well as harmonizing the international private law rules between the EU countries.

Assuming that the spouses are well integrated in their state of habitation, they may find it more beneficial to apply the law of the state of their current habitual residence (as LIMF prescribes), rather than the first state of habitual residence after the conclusion of the marriage (as the Regulation prescribes).

Under the Regulation, two Swedish nationals that work abroad and get married and cohabitate there for a few years before returning to Sweden will be subject to that country's law in matters of marital property regimes.¹⁹

Simultaneously it might be argued that the application of the law of the “original” habitual state or the state of mutual nationality allows for an application of a law with which the spouses may feel closer ties to, especially in cases in which the spouses only have lived in their country of current habitation for a short period of time.

 

For more information, contact:

Anna Beck-Friis Arp, Advokat

Flood Herslow Holme Advokatbyrå, Stockholm

t: +46 (0)8 56 26 90 64

e: aa@fhhlaw.se 

 

Footnotes

1. Council Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes.
2. Council Regulation (EU) 2016/1104 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of the property consequences of registered partnerships.
3. 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.
4. 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.
5. 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.
6. Paragraph 17 of the preamble to the Regulation.
7. Article 4 of the Regulation.
8. Article 5(1) of the Regulation.
9. Article 6(a) of the Regulation.
10. Article 6(b) of the Regulation.
11. Article 6(c) of the Regulation
12. Article 6(d) of the Regulation.
13. Article 22 of the Regulation.
14. Article 26(1)d of the Regulation.
15. Article 26(1)b of the Regulation .
16. Article 26(1)c of the Regulation. 
17. Article 36 of the Regulation.
18. Article 69(3) of the Regulation.
19. However, an exception may be made if the spouses demonstrate that they have had common habitual residence in, say, Sweden for a significantly longer period of time than the state in which the marriage was concluded and if they can demonstrate that they have relied on the Swedish regulation for the planning of their property relations. See Article 26(3) in the Regulation.