Jean Monnet

Lifelong Learning Programme

Cross-Border Litigation in Croatia

Workshop Report No 5
30th-31st May 2013

"This project has been funded with support from the European Commission. This
publication reflects the views only of the authors, and the Commission cannot be held
responsible for any use which may be made of the information contained therein."
BACKGROUND

On 30th May 2013, practitioners and academics connected with the Centre for
Private International Law met at the fifth of seven workshops dedicated to
promoting the debate on how cross-border litigation functions within Europe.
The purpose of the workshop was to offer the opportunity for a free and frank
exchange of ideas surrounding the Croatian perspective on EU private
international law.
This report intends to provide a brief overview of the ideas that
emerged from the workshop without attributing any views to any particular
individual.

Jurisdiction and Recognition and Enforcement in Civil and Commercial

Matters

Jurisdiction
A general overview
It was noted that determining the international jurisdiction of domestic courts
within Croatia has not been problematic so far, in part due to the fact that the
number of cases with an international element that are seised by the domestic
courts are relatively few. An additional factor is due to the legal framework,
which provides for a broad application of the criteria for establishing the
international jurisdiction of domestic courts. The relevant legislation is found
in the Act on Conflict of Laws with the Laws of other Countries in Certain
Relations otherwise known as the Private International Law Act. It is also
possible for subsidiary application of special provisions regulating domestic
territorial jurisdiction from the Civil Procedure Act in the absence of a lex
specialis or an international agreement regulating the matter.
It was reported that the application of provisions regulating the issue
of international jurisdiction had recently been defined in a decision of a
second instance Croatian court. The court stated that a special provision did
not necessarily exclude the use of the more general provision, providing that
the legal nature of the claim corresponded to the scope of both provisions.
This pointed to a move away from the rule that special provisions always
have priority over general provisions. The dispute in question arose from a
tort between two foreign legal persons. The court of first instance declared
that it had no jurisdiction since the harmful event had not occurred in Croatia.
The court of second instance overturned the decision stating that rules
relating to tort do not exclude the application of the rules relating to property
claims. It was noted therefore that the jurisdiction of domestic courts in
Croatia had been extended to the place where the object of the dispute is
situated.

Hierarchy of legal sources

Croatian courts apply international agreements first (bilateral agreements
have precedence over multilateral agreements), followed by special
provisions such as the PIL Act or the Maritime Code and then in the absence
of the above, domestic rules on territorial jurisdiction can be applied directly.
It was recalled that in the past, even though the judges were aware that the
rules on international jurisdiction were binding and mandatory, the result of
the proceedings depended to a large extent on the conduct of the parties and
their presentation of the legal reasoning. However it was put forward that
this situation has improved significantly in the past 10-15 years.

Private International Law Rules

The general rule of private international law establishes jurisdiction of a
domestic court when the defendant is domiciled/seated in Croatia. If the
defendant is not domiciled in Croatia, or anywhere else, then the defendants
residence in Croatia is sufficient to establish jurisdiction. When both parties
have Croatian citizenship, the jurisdiction of the domestic courts is dependent
on the defendants residence in Croatia. In disputes with more than one
defendant, international jurisdiction of domestic courts is established over all
defendants even if only one of them has his domicile or seat in Croatia
provided they are sued on the same legal and factual grounds and this legal
and factual connection existed between them even before the lawsuit was
initiated. These rules apply to all types of cases except for cases involving
prorogation of jurisdiction.

Examination as to jurisdiction
This is done in all types of cases not only in cases over which exclusive
international jurisdiction is prescribed. When the court establishes that it has
no jurisdiction, the court will declare it has no jurisdiction, set aside all actions
taken in the course of the proceedings and dismiss the case.
However it was noted that there have been problems as to the moment
when the court should examine whether it has international jurisdiction over
a dispute. This is due to the fact that the PIL Act and the Civil Procedure Act
lay down different moments for examining this issue. The PIL Act states that
the examination should be done when litigation commences and the Civil
Procedure Act states that the examination should be done when the
proceedings start. However recent practice follows the Civil Procedure Act
which is also the view taken by the Supreme Court of the Republic of Croatia.
An exception has been created where disputes are dependant on the consent
of the defendant. In these cases the examination of the jurisdiction is
postponed until the defendant files a response.

Prorogation of jurisdiction
In cases where rules of exclusive jurisdiction do not apply it was noted that it
was possible to prorogate international jurisdiction in favour of a foreign
court if at least one party to the agreement is a foreign citizen or a legal entity
with their seat in a foreign country. The PIL Act gives the possibility for
prorogation in favour of a domestic court if at least one party to the
agreement is a Croatian citizen or a legal entity with the seat in Croatia.
Citizenship or the seat for legal entity is crucial for determining the
admissibility of such an agreement.
For the agreement to be valid it has to be concluded in writing. It also
is valid if it is concluded through an exchange of letters, telegraphs, telexes or
other communication, which provides for a written trace to the concluded
agreement. The agreement cannot be concluded orally.
The courts have stated that prorogation agreements cannot be
concluded by a lack of response to the offer in contractual relations, even if
the silence was sufficient for conclusion of a contract of sale of goods resulting
from a permanent business relationship.
Since Croatias independence, courts have taken the view that previous
agreements on territorial domestic jurisdiction concluded between the former
Yugoslav Republics before the disintegration of Yugoslavia, cannot be
interpreted as prorogation of international jurisdiction as these agreements
are not in effect any more.

Exclusive jurisdiction
In civil matters the PIL Act establishes exclusive jurisdiction of domestic
courts in proceedings which have as their object rights in immoveable
property, ownership and similar rights over a ship or aeroplane according to
the place of registration, organizational units of the Armed Forces of the
Republic of Croatia according to the place of command or where proceedings
arise from insolvency or enforcement procedures according to the place
where the proceedings take place.

The PIL Act does not contain provisions on jurisdiction for commercial status
disputes. In these circumstances the international jurisdiction of courts is
derived from the Companies Act.

Special jurisdiction
In civil and commercial matters, the PIL Act stipulates special jurisdiction of
domestic courts in four circumstances. The first concerns disputes against
Croatian nationals who live abroad, if they were posted by domestic legal
entities, providing they were previously domiciled in Croatia. The second
concerns property disputes, if the defendants property or the claimed item is
situated in the territory of Croatia. The third concerns actions against legal
persons with the seat abroad for obligations arising in Croatia or to be
performed in Croatia if this legal person has its branch or agency in Croatia,
or if the seat of the company to which the running of its business is entrusted
is situated in Croatia. The fourth concerns actions for trespass if it occurs
within the territory of Croatia.
Three additional jurisdictional bases are actually contained in the
provisions on territorial jurisdiction and have been used by the courts for
special jurisdiction. One concerns labour disputes where, in addition to the
jurisdiction of the court of general territorial jurisdiction over the defendant,
the Civil Procedure Act also stipulates that the jurisdiction of the court on
whose territory the work is performed or has been performed or the court in
whose territory the employment has been established will apply. Another
one concerns international jurisdiction in disputes for the protection of
warranty rights. The last one concerns consumer protection. Neither the PIL
Act nor the Civil Procedure Act regulate this matter. With regards to actions
for protection of collective consumer interests, the Consumer Protection Act,
which entered into force just under a year ago, provides that in addition to
the jurisdiction of a court of general territorial jurisdiction over the defendant
the jurisdiction of the place where the infringement has occurred or could
have occurred will apply.
Questions were raised around an implication under Croatian law that
the Croatian equivalent of submission under art 24 of the Brussels I
Regulation does not apply to contract but could apply to tort. There appeared
to be a contrast between the views of the Croatian academics and
practitioners where the academics said that it applied to contract but not to
tort and the practitioners viewed it as applying to tort and not to contract.
This would have to change when Croatia becomes a Member State of the EU
governed by Brussels I. Article 24 of Brussels I applies to all types of actions
apart from those governed by the exclusive jurisdictions in article 22.
Difficulties concerning the analysis of the cases concerning
international jurisdiction was also raised based on the fact that there is
difficulty in obtaining the judgments. This was an area that was seen as in
need of improvement.

Jurisdiction and Tort

It was noted that under the Croatian Civil Procedure Act, the basic rules for
establishing international jurisdiction of a court in the Republic of Croatia in
tort cases is the court where the harmful consequence/damage occurred on
the territory of the Republic of Croatia. The interpretation and
implementation of this provision has been controversial, especially in
deciding on court jurisdiction in maritime tort disputes, which are the most
common.
It was noted that until about 2007, domestic courts very rarely declined
international jurisdiction. Until 2007, the Croatian Maritime Code did not
contain special provisions on the jurisdiction of Croatian courts in maritime
tort disputes. Court jurisdiction in such cases was examined on the basis of
the Civil Procedure Act of the Republic of Croatia. The interpretation was
that, if the harmful event occurred, for example, on a seagoing ship, the
harmful consequence occurred in the Republic of Croatia, since the plaintiff
who suffered physical injury or health damage was domiciled in Croatia. The
financial obligations incurred had to be fulfilled in the domicile or seat of the
creditor.
 However it was pointed out that this practice changed in 2007. In the
decision in the case Katic v. Wijsmuller Bros - No. Revt 51/03 of 27 February
2007, the Supreme Court of the Republic of Croatia took the opposite view
namely, the court concluded that Croatian courts had absolutely no
jurisdiction over damage claims of Croatian seamen in tort disputes when the
employment contract was concluded with a foreign company and the harmful
event happened abroad. This view taken by the Supreme Court of the
Republic of Croatia led to the dropping of a whole series of claims by
Croatian seamen who had sued foreign companies for compensation of
damages due to physical injury or death of a crewmember or sustained health
damage. This caused a lot of agitation among the general public in Croatia,
which led in 2008 to the Croatian Parliament adopting, in the urgent
procedure, the Amendments to the Maritime Code.
The 2008 Amendments of the Maritime Code have resolved all
dilemmas with regard to the international jurisdiction of Croatian courts in
damage claims for physical injury or death of a crewmember or sustained
health damage. An article was added to the Maritime Code providing for
international jurisdiction of Croatian courts in damage claims for physical
injury or death of a crew member or health damage sustained by a crew
member while working on a ship or in connection to working on a ship, if the
plaintiff was domiciled in Croatia. The provision applied in all cases in which
a final and enforceable decision had not been taken before the date of entry
into force of the amended Act.
However it was put forward that with Croatia's accession to the EU
this recent provision of the Maritime Code will have to be abandoned and
provisions of Brussels I applied instead. This will bring Croatia back, broadly
speaking, to the position held previously by the Supreme Court in the Katic
case.

Recognition and enforcement of foreign judgments

The PIL Act regulates the recognition and enforcement of foreign judgments
in the Republic of Croatia. A foreign judgment, which also includes a court
settlement, is considered equal to a Croatian judgment and has legal effect in
the Republic of Croatia only if a Croatian court recognizes it. However, a
foreign judgment is not defined under Croatian law. Croatian theoreticians
agree that a foreign judgment is not a judgment adopted in the name of the
country of recognition, but in the name of the foreign body, regardless of the
place where it is situated.
The application for recognition and enforcement of a foreign judgment
is submitted with the court on whose territory recognition or enforcement is
to be implemented. When the court with territorial jurisdiction receives an
application for recognition of a foreign judgment, in non-contentious
proceedings, it examines the legal basis for recognition of the foreign
judgment. If the court deems it necessary, an explanation can be requested
from the issuing court and from the parties.
The basic precondition for recognition of a foreign judgment is for the
applicant to submit with the judgment a certificate issued by the competent
foreign court on enforceability of the foreign judgment under the law of the
country in which the judgment was given. A Croatian court is able to refuse
recognition of a foreign judgment in the following situations: if, based on the
objection of the person against whom enforcement is sought, it is established
that this person was not able to participate in the proceedings due to a
procedural irregularity; if a domestic court or another body of the Republic of
Croatia has exclusive jurisdiction over this matter; if a domestic court or
another Croatian body had delivered a final and enforceable judgment in the
same matter; if the judgment for which recognition is sought is contrary to the
Croatian constitution; and in case of lack of reciprocity. However, with regard
to reciprocity, a lack of reciprocity will not be an obstacle for recognition of
foreign judgments in family matters. The existence of reciprocity is assumed
until proven otherwise.
By looking at the judicial practice in Croatia with regard to recognition
of foreign judgements in commercial matters, it can be noted that in most
cases the party against whom recognition was sought opposed the
recognition of the foreign judgement on the grounds that they had not been
able to participate in the procedure in which the foreign judgment was given.
An example was put forward. In the proceedings for recognition of a
judgment delivered by the County Court in Ljubljana a failure to appear
judgment of 8 December 2008 the party against whom recognition was
sought claimed that he had not been notified on time about the court
proceedings in Ljubljana. The party also claimed that his mother, and not he
in person, had received the complaint. In its recognition proceedings for the
judgment of the court in Ljubljana, the Croatian court applied the provisions
of the Agreement on Legal Assistance in Civil and Criminal Matters
concluded between the Republic of Croatia and the Republic of Slovenia,
which was to be applied as an international agreement following the
provisions of the Croatian Constitution.
One of the preconditions for recognition and enforcement of a foreign
judgment is the due and timely notification of the defendant of the
proceedings in which a judgment is delivered against the party, even if the
judgment was given in the party's absence. Examining whether the party
against whom the judgment was delivered was duly and timely notified is
done under the law of the country on whose territory the proceedings were
held in this case Slovene law. Therefore, in deciding on recognition of the
judgment delivered by the court in Ljubljana, the Croatian court also looked
into the Civil Procedure Act of the Republic of Slovenia. The Croatian court
established that under the provisions of the Civil Procedure Act of the
Republic of Slovenia the action has to be served on the defendant in person. If
the person to whom the court document (writ) is to be served is not found in
the place where service of the document is to be effected, the service agent
(bailiff) shall be notified when and where this person could be found and
delivered a written notice, either in person or to an adult household member,
to be at his residence or work at a certain date and hour for the purpose of
service of the court document. Only after that, if the person who is to be
served is not found, the court document shall be left either at their residence
or work, while the date, hour and reason for refusing service of the document
is recorded on the service receipt, as well as the place where the document
was delivered. The court document is then considered served.
According to the data from the case file, the complaint with all the
annexes was served to the defendant's mother. There was no note on the
service receipt by the service agent, although this should have been done in
accordance with the very clear service provisions of the Civil Procedure Act
of the Republic of Slovenia. For this reason, the domestic court concluded that
there was irregularity in service of the action to the defendant. The second
instance court also confirmed this decision.
However, in this case the domestic court noted another reason why the
Slovene court judgment could not be recognized in Croatia. Namely, in the
judgment delivered by the Slovene court the defendant (in Slovenia) was
identified only by the name of the registered trade/craft, but without any
indication of the owner of the trade/craft. According to Croatian law, a
registered craft or trade is neither a natural nor a legal person. A registered
trade/craft is a form in which a natural or legal person performs one or more
business activities. The person concluding contracts from which obligations
arise is the tradesman/craftsman. This means that a registered craft/trade
cannot be a party in court proceedings, but only the tradesman/craftsman as
a natural person owner of a registered trade/craft. Therefore in accordance
with the Croatian law, the defendant, as indicated by the plaintiff in the
proceedings before the Slovene court, could not be a party to the proceedings.
Hence, the judgment of the Slovene court was contrary to Croatian law, and
could not be recognized or indeed enforced.
In another case for recognition of a judgment of a court in Florence,
Italy, of 27 September 2007, again the party against whom enforcement was
sought claimed that in the procedure before the court in Florence he was not
enabled to participate in the hearing. He also pointed out that there was no
legal basis for recognition of the judgment because this matter fell within the
exclusive jurisdiction of the Croatian courts.
In examining the basis for recognition of this particular foreign
judgment, the court established that the legal basis for recognition was
fulfilled. Primarily, the court established that with the judgment for which
recognition was sought the applicant also submitted a certificate of the
competent foreign court on the enforceability of the judgment under the law
of the country in which it was delivered. A court officer of the Civil and
Criminal Court in Florence issued the certificate. The certificate stated that the
decision was not challenged under the Italian Civil Procedure Act, which
constituted valid proof that the judgment was enforceable under Italian law.
 Furthermore, it was noted that from the established evidence stated in
the file (a copy of receipt of service was submitted) it was established that the
defendant was notified of the initiation of proceedings in Florence and that
the foreign judgment was duly served. The defendant claimed a whole series
of procedural irregularities during the proceedings in Florence that he was
denied the right to be heard, right to appeal, that he was not allowed to make
a statement on the subject matter of the dispute, that the plaintiff included
also duly paid invoices in the complaint. By examining the defendant's
objections, the court concluded that all the irregularities stated referred to the
proceedings before the court in Florence. So all the irregularities claimed were
aimed at challenging the validity of the foreign judgment, from both the
procedural and the substantive point of view. Therefore they had no influence
on the decision on recognition of the foreign judgment. Even if the claimed
irregularities in the proceedings under Italian law existed, the defendant had
the opportunity of appealing the foreign judgment, which he did not.
With regard to the objection that this matter fell within the exclusive
jurisdiction of the courts in Croatia, it was established that in the legal matter
decided in the judgment of the foreign court Croatian courts did not have
such exclusive jurisdiction. Exclusive international jurisdiction of Croatian
courts exists only if this is expressly stipulated in a law or when such
jurisdiction is stipulated in a binding bilateral or multilateral convention. The
dispute at hand was a dispute regarding fulfilment of an obligation from a
contract for the international sale of goods. The United Nations Convention
on Contracts for the International Sale of Goods (the Vienna Convention) of
1980 does not stipulate exclusive jurisdiction of the courts of the country in
which goods are to be delivered. The Croatian PIL Act does not stipulate
exclusive jurisdiction over disputes arising from contracts for the
international sale of goods. Therefore, exclusive jurisdiction of the courts in
Croatia over this dispute could not be established.
The judgment of the court in Florence ordering the defendant as the
buyer in the international contract on the sale of goods to pay the seller could,
by its very nature, not be contrary to the public policy of the Republic of
Croatia. The domestic court held that all legal preconditions for recognition of
the foreign judgment were fulfilled. The recognized judgment became
enforceable with identical effects to the judgment of the Croatian court.
Against the decision on recognition or enforcement of a foreign
judgment parties may lodge an appeal within 15 days from the date of service
of the decision. With regard to costs, Croatian judicial practice holds that
regardless of the outcome of the procedure, all costs of the deliberation
should fall at the expense of the applicant and not the party against whom
enforcement is sought, because the non-contentious proceedings are carried
out in the interests of the applicant.
In the course of its accession to the EU, Croatia has faced frequent
changes of the legal framework, implementation of various projects, action
plans which have forced Croatian judges to be more flexible in the
implementation of the legal framework, as well as to be faster and more
efficient in hearing cases. Judges are faced with a great challenge in the
application of a new legal framework, but also of a new way of thinking and
interpretation of laws. In order to succeed in this, a strong operative support
of the executive branch of power will be necessary, as well as the training of
judges. Furthermore, it will be necessary to make relevant sources of law
available in order to ensure correct application of law. It was put forward that
Croatia would be successful in this.

Private International Law Aspects of Collective Redress, Competition and

Intellectual Property and Choice of Law in Civil and Commercial Matters

Private International Law Aspects of Collective Redress, Competition and

Intellectual Property

There are no provisions in Croatian PIL to regulate the conflict-of-law issues

relating to intellectual property infringement (including unfair competition
rules). However, Article 28 of the PIL Act regulates the law applicable to tort
liability. This provision leads to the application of the law of the country
where the harm was done or the law of the country where the damage
occurred; whichever is more advantageous for the injured person. For the
unlawfulness of the action, the law of the country where the infringing act
was done or the law of the country where the damage occurred shall apply.
With regards to intellectual property rights, the principle of
territoriality is very strongly supported in both the jurisprudence and the
legal theory and therefore Croatian law is applicable where there is an
infringement of industrial property rights. This not only refers to patents,
trademarks and industrial designs but also to cases of unfair competition.
Therefore, in cases of an infringement of industrial property rights that have
an international element, the Croatian court will not put forward a conflict-of-
laws question. Croatian law will be applied to all questions referring to the
ownership, scope of the rights, infringement, etc. Concerning unfair
competition, there are many cases where foreigners seek damages, which is
the only possible remedy for the acts of unfair competition according to the
present Croatian Trade Act.
The situation is different for copyright. Two recent decisions from the
High Commercial Court discussed conflict-of-laws issues. In both of these
decisions the court found the conflict-of-laws rules in the Berne Convention.
In the case P-7513/08 FREISTAAT BAYERN, Germany vs. CROATIAKNJIGA
d.o.o., the court referred to Art. 7/8 of the Berne Convention in relation to the
question of the duration of the copyright protection. It concluded that the
"conflict-of-laws rules from the Berne Convention lead to the application of
the Croatian law as the applicable law for the question of the duration of the
copyright economic rights". There was the question of the duration of the
rights of Adolf Hitler (who died in 1945) over his work Mein Kampf, in
Croatia. As Croatian law applies and as it states that the duration of the
copyright is 50 years post mortem auctoris, the court concluded that the
copyright had expired and that the Croatian publisher did not infringe any
copyright when it published Mein Kampf in 2001 and 2002. In another case
P-1093/12-4 STEN ERIC ODMAN, Switzerland vs. ADRIS GRUPA d.d.,
Zagreb, the court referred to both Article 28 of the Croatian PIL Act and
Article 5 of the Berne Convention when deciding that Croatian law would
apply. It concluded that in the question of the authorship, according to Article
15 of the Berne Convention, the presumption of authorship should apply.
It was noted that in cases of the infringement of copyright and related
rights, which are administered by the collective management societies (CMS),
conflict-of-laws issues are not raised at all. According to the Croatian
Copyright Act there is the presumption that the local CMS represents the
whole world's repertoire in its own name and on behalf of the copyright and
related rights owners. Therefore, the courts assume that there is no
international element and that Croatian law shall apply in all of these cases, of
which there are many.
With regards to the international law aspects of collective redress, it
was noted that there is only one collective action for the protection of
consumers rights in Croatian jurisprudence, so far. It refers to the question of
the protective monetary clause and the question of calculation of the interest
rate in the consumers' loan agreement. There is no international aspect to this
case.

Applicable Law in Civil and Commercial Matters (Rome I and Rome II)

It was put forward that historically, Croatian courts have been inclined
towards disregarding the international element of a case, and therefore did
not often apply conflict-of-law rules. The turning point was the series of
decisions of the Supreme Court (such as Rev-279/90 of 1991, and more
recently Rev-61/99 of 2003) where the court confirmed the doctrinal opinions
asserting that conflict provisions are mandatory and their non-application
results in misapplication of substantive law.
The Croatian contract and tort choice of law is subject to different legal
sources. In the absence of international conventions the national laws apply,
in particular the 1982 PIL Act. According to Art. 19 of the PIL Act, the
primary applicable law is the one chosen by the parties. There is no further
legislative qualification of the choice; however the doctrine tends to interpret
its scope in line with the equivalent of Art. 3 of Rome I. If parties to a contract
did not choose the applicable law, the law is determined pursuant to Art. 20,
which is similar in structure to Art. 4 of Rome I. Art. 20 contains a catalogue
of 19 different contracts and connecting factors for each of them, essentially
inspired by the principle of characteristic performance, localised by means of
the partys domicile/seat. The last in the list is the general clause pointing to
the law of the domicile/seat of the offeror, which sometimes (in arbitration)
has been interpreted in the light of the characteristic performance. The
provision also states the law designated in the catalogue applies unless
special circumstances of the case refer to another law. While the wording (as
well as some courts in their reasoning) suggests that this is an escape clause,
part of the doctrine relies on the travaux preparatoires to assert this is the
conflict provisions designating the law of the closest connection as the
applicable law. The special provision of Art. 21 of the PIL Act states that
contracts concerning immoveable property are exclusively governed by the
lex rei sitae. Statutory depeage is laid down for in Art. 23 of the PIL Act
providing that, unless otherwise agreed by the parties, the method of take-
over of property and the measures required in case of rejection of take-over of
property are governed by the law of the place of delivery of the property. In
line with the EU consumer law, the Consumer Protection Act provides that a
consumer cannot be deprived of the protection afforded to him/her under
that Act by mere choice of another law.
The Maritime Code contains a slightly different conflict-of-laws
scheme. Under Art. 973 and 975 of the Maritime Code a contract on the
exploitation of a ship is subject to the law chosen by the parties, and if none is
chosen, to the law of the closest connection. If such connection cannot be
determined, the lex loci contractus applies to the main rights and obligations,
while the lex loci solutionis applies to auxiliary obligations. An exception is
reserved for standard contracts for transport (of goods or passengers) in
which nationality of the carrier is the connecting factor. Special provision in
Art. 971 of the Maritime Code regulates seaman employment contracts
subjecting it to the law chosen by the parties, and subsidiarily the lex bandierae
which may be displaced by virtue of an escape clause if there is a closer
factual or legal connection to the relationship or the parties. Finally, the
mandatory rules of the most closely connected law on liability for death or
injury of seaman apply regardless of the otherwise applicable law.
In tort cases two Hague Conventions, the one on traffic accidents and
the one on product liability, are applicable to the cases falling within their
respective scopes. There are some other conventions (such as the one on
nuclear damage) which take precedence over the national conflict provisions.
In the absence of a convention, a non-contractual dispute is subject to Art. 28
of the PIL Act which provides for the application of either lex loci actus or lex
loci damni (which only refers to the direct damage if the case law on
international jurisdiction is extended by analogy to choice of law) depending
on which is more favourable to the injured person. The special provision
provides that unlawfulness is subject to the law of any of the countries where
locus actus or locus damni is located. Art. 29 of the PIL Act provides that where
the event giving rise to liability for damages occurred aboard a ship at open
sea or aboard an aircraft, the reference to lex loci delicti should be understood
as the reference to the law of the ships or aircrafts flag/register. A special
provision for disputes for the compensation of damage incurred as a result of
the ship collision is contained in Art. 1000 and 1001 of the Maritime Code.
Applicable law is the law of the state in whose coastal sea or in whose internal
waters the collision took place; or the Croatian law if the collision occurred on
the high seas. However, if all the ships in collision are of the same nationality,
the law of the state of their flag applies as well as if the ships in collision are of
different nationalities and their states share the same law, the law of their
states is applicable. Irrespective of the applicable foreign law, damages arising
from the collision of ships are subject to the provisions of Croatian law, if all
the interested persons are citizens of the Republic of Croatia or Croatian legal
persons, or if one of the ships in collision is a Croatian warship or a Croatian
public ship. Likewise, certain specific matters such as the statute of limitation
are subject to Croatian law. An agreement to the contrary has no legal effect.
Based on the research carried out for the purpose of this workshop,
two basic conclusions were put forward. First in relation to the current
Croatian case law: that although the choice of law provisions for contractual
and non-contractual matters are recognised in the majority of the cases even
by the lower-instance courts, there are occasional cases in which these courts
disregard the cross-border nature of the case and fail to apply the designated
law. Nevertheless, in such cases the second-instance courts or the Supreme
Court remedy the failure. The second conclusion relates to the legislative
changes linked to joining the EU: the differences which will have to be
acknowledged by the Croatian courts after joining the EU are not as
fundamental in contracts or even in torts as in family and succession law. The
most important changes include special conflicts regimes for consumer
contracts, employment contracts and insurance contracts in Rome I and
environmental torts and industrial action in Rome II as well as overriding
mandatory provisions in general. Additionally, the maritime contracts and
torts will be subject to different schemes. As the PIL Act does not allow for the
parties choice of law in tort cases, Art. 14 of Rome II might also present some
challenges. On the whole, the adaptation to the new legal regimes will have to
be accompanied with good logistics, including constant training of judges and
legal practitioners as well as making the judgments of the Croatian courts
more available to the public.
Questions were raised surrounding the issue of renvoi in respect of
determining the nationality of a company under Croatian conflict-of-laws. It
was asked whether a Croatian court would apply the priority of the real seat
theory. The people present were unaware of a ruling specifically addressing
this issue but some believed that such renvoi would go against Croatian
Company Law.

Private International Law Aspects of Succession and Jurisdiction and

Recognition and Enforcement in Family Matters (Brussels IIa and
Maintenance)

Succession

The PIL Act, which currently regulates private international law in the
Republic of Croatia, stems from the beginning of the 1980s and is currently
being revised. Its general rules on recognition and enforcement (Articles 86-
96), as well as the basic provisions (Articles 1-13) apply to matters of
succession.
There is a separate set of jurisdictional rules devoted to succession
matters. The rules differ on the basis of two points: nationality of the deceased
(domestic national, alien or a stateless person) and characterisation of the
property that should be administered (immoveable or moveable). The
Croatian courts have exclusive jurisdiction for immoveable property situated
in Croatia. The subsidiary jurisdiction for moveable property situated in
Croatia and the immoveable property situated abroad is also prescribed,
subject to some requirements. There is no specific provision on choice of court
agreements in succession matters so the general provision of Article 49
applies which does not regulate the choice of court in succession particularly.
A recently proposed approach for Private International Law conforms more
to recent European legislation, ie the Succession Regulation. The general
jurisdictional rule is the same the habitual residence of the deceased at the
time of death, but the new approach limits the jurisdiction for the
immoveable property situated abroad for which the foreign courts will have
exclusive jurisdiction. The subsidiary jurisdictional rules still differ from the
Regulation giving the Croatian court jurisdiction to decide the matter when
the deceased was a Croatian national if the foreign bodies do not want to
decide themselves. Additionally, the Croatian court will have no jurisdiction
when the deceased had his previous habitual residence in Croatia as provided
by the Article 10/1/b of the Regulation. Lastly, the new rules provide for
specific rules on court prorogation in succession matters.
Under the existing Croatian regime, the law applicable to succession is
that of the nationality of the deceased at the time of death and it applies under
the requirement of presumed reciprocity, ie foreign nationals can only inherit
in Croatia if Croatian nationals can inherit in their country. The proposed
regime might retain the same connecting factor and thereby diverge from the
Succession Regulation. However, it will introduce a limited choice of law in
succession, as well as a general escape clause that will also be applicable to
succession matters. The capacity to dispose of property upon death is now
governed by the law of nationality at the time of disposition and the proposed
regime might introduce an alternative connecting factor the habitual
residence of the testator at the time of disposition. The law governing the
form of wills, on the other hand, is going to remain more or less the same
since Croatia is a party to the Hague Convention on the Conflicts of Laws
Relating to the Form of Testamentary Dispositions of 1961. Still, the existing
regime extended the favor testamenti principle by allowing the will to be valid
under the Croatian law as well. This will not be the case when the new Act
comes into force.
Looking at the existing regime and the possible amendments, the
Croatian PIL of succession is coming one step closer to the European regime,
which is commendable. However, since the envisioned changes are not
completely in conformity with the Succession Regulation, the differences will
only survive until 17 August 2015 when the Regulation becomes applicable.
 Questions were raised as to why Croatia had decided to create a new
Succession PIL when the Regulation was on its way? The answer was that the
Regulation was not finished at the time of the drafting. The new Croatian PIL
rules on succession would apply for now until the Regulation took over.
One major issue that was raised was whether it was necessary to have
a clause that identified EU law as being supreme. It was suggested that if it
was necessary then it could be inserted as a separate rule within the Croatian
Constitution. However it was questioned as to whether it was possible to
define it properly as well as whether the Constitution is the right place to put
it since the Constitution already defines the priority of any international
treaty over national laws (thus also of any act based on such a treaty); perhaps
having a legal provision that provided guidance would be better. Opinions at
the workshop were split as to whether drafting such a provision might cause
some problems too.

Jurisdiction in family matters

For the purpose of this discussion the field of divorce, parental responsibility
and maintenance obligations were considered. In Croatia the emphasis is
equally placed on jurisdictional criteria and conditions for recognition and
enforcement, and to a lesser extent applicable law rules are dealt with as well.
The Croatian system starts with the list of relevant Croatian legal sources:
bilateral agreements, multilateral agreements and the 1982 PIL Act.
According to the PIL Act, the main criteria for jurisdiction are domicile and
nationality. The main applicable law connecting factors are nationality and
common nationality. The conditions for recognition and enforcement are
numerous and rigid.
Croatian court practice reveals that in most family related situations
the existence of a foreign element is not considered by the court. In most cases
judges apply lex fori to the case by default. Despite that, it was noted that in
many rulings the result conforms to the PIL Act. The structure of case law
reflects the current Croatian migration situation: no extensive immigration
has yet occurred and most international cases relate to Croatian nationals
living abroad, or to a Croatian national living in Croatia and seeking legal
protection with the defendant being a foreign national. The jurisdictional
requirements found within the Croatian PIL Act are based on nationality or
domicile, which in most cases results with proper and legally justified
jurisdiction of the Croatian courts. Problems occur with the lack of proper
jurisdiction in associated applications: such as the PIL Act does not
acknowledge maintenance issues or parental responsibility issues in a divorce
case. Instead claims for divorce, parental rights and maintenance are
examined separately. Neglect of this PIL Act provision occurs for a reason
that in the Croatian Family law system a judge issuing a divorce order for a
marriage with minor children must ex officio issue a decision on parental
rights, visitation rights and child maintenance. In many cases the
jurisdictional criteria for divorce do not comply with criteria for visitation or
maintenance.
Selected cases have been used to simulate the outcome of a result with
the hypothesis that EU Regulations have been applied to settle the case.
Therefore the same factual pattern is used as a hypothetical ground and EU
Regulations are applied to it. The result is in many situations the same as it
was currently in Croatian practice. The connecting factors in the EU
regulations are often based on habitual residence and in most of these cases
the jurisdiction of the Croatian court would have existed. The applicable law
criteria based on habitual residence mostly leads to application of the lex fori
as well.
Despite the enormous difference in criteria for jurisdiction and
applicable law in Croatian legislation and EU regulations, the practical result
would not change much with the shift to the EU instruments. In connection to
recognition and enforcement, the system would have to be flexible once
Croatia becomes a Member State.
Discussions highlighted problems in the courts when dealing with
international cases especially in family law to define habitual residence. It was
also noted that the training of judges and practitioners is problematic.

Recognition and Enforcement in family matters

The rules surrounding recognition and enforcement of foreign decisions in

family matters are found within Articles 86-92 of the Croatian PIL Act. A
foreign judicial decision needs to be recognised by a Croatian court if it is to
become the equivalent to a decision from a court of the Republic of Croatia
(Art 86). Only foreign judicial decisions that are final in the court of origin can
be recognised. A certificate from a competent court of origin is required to say
that the judgment is final (Art 87). However the Croatian courts will refuse
recognition and enforcement if the person against whom it was rendered
could not take part in the proceedings because of an irregularity (Art 88). A
foreign judicial decision shall not be recognised if a Croatian court has
exclusive jurisdiction (Art 89). A foreign judgment will not be recognised if a
Croatian court has already rendered a final and binding decision for the same
case (Art 90). Foreign judgments will not be recognised if they are contrary to
public policy (Art 91). Finally, a foreign judgment shall not be recognised if
there is no reciprocity (Art 92). It should be noted that there are many
bilateral treaties to which Croatia is a party and only one multilateral treaty of
significance, the 1996 Hague Children Convention.
With regards to the procedure for recognition and enforcement, the
Croatian legal system allows the question of recognition and enforcement to
be decided within the main proceedings or as a preliminary question, which
can form part of the litigation.
 The court has no power to modify the foreign judgment that is
submitted for recognition and enforcement. The court has no power to review
the merits; the law applied or the established facts. Anyone with an interest in
recognition of the judgment may start the proceedings. Any judgment that is
capable of review in the state of origin will not be recognised in a Croatian
court.
Exclusive jurisdiction of the dispute in Croatia is an absolute obstacle
to recognition and enforcement of a foreign judgment. If the defendant
spouse is a Croatian citizen and is domiciled in Croatia then the jurisdiction is
exclusive (Art 89). There is reported case law where the recognition of a
foreign divorce decision was rejected, as there were problems with the
translation into the Croatian language. In custody disputes where both the
mother and the child are domiciled in Croatia, the Croatian courts have
exclusive jurisdiction.
However the greatest concerns surround the handling of child
abduction cases within Croatian courts. One plaintiff father was a citizen of
Canada residing in France. The mother was Croatian, residing in Croatia, and
she brought the child to Croatia without the fathers consent. The last
common residence for the family was Lyon in France. The Croatian court
rejected the return of the child to Lyon, as it was not in the childs best
interest. The Croatian court justified the non-return of the child on the basis of
art 13. It was explained that the Croatian courts do not understand the
concept of habitual residence and therefore relied, mistakenly, on the grave
risk of harm defence in art 13 to refuse the return of the child. In this case
many believe that the court should have used art 3 of the Hague Child
Abduction Convention and found that the child was habitually resident in
France and should have been returned there.
Decisions regarding child abduction cases are made from 3 days to 6
years after the commencement of the proceedings, however first instance
decisions are usually given within 6 months. Opinions of minor children were
obtained in only 1 of the 9 cases. The applicant was heard in one case where
the return was refused. The courts refuse the return of the child on the basis
of art 13 of the Abduction Convention because it would cause the child
psychological harm to be returned due to the child having become settled in
Croatia. It looks as though the Croatian courts are considering the merits of
the custody case based on the best interests of the child. This is an incorrect
application of the Convention. The family court in Zagreb deals with most
cases.
The analysis demonstrates worrying issues surrounding child
abduction. Judges seem inclined to deal with the merits by determining the
best interests of the child rather than sticking to a summary return of the
child, unless one of the exceptions in art 13 applies. This indicates the need for
further training of judges.