Federal Supreme Court on the Application of Foreign Law in German Courts

stock-photo-15986220-sign-quot-bundesgerichtshof-quotForeign may well be applicable in German court proceeding, either because the parties have expressly chosen foreign law or because international private law determines its application.

If German judges apply foreign law, they are no less error-prone than in the application of their own laws. Hence, the question arises how (alleged) mistakes of a lower court in the determination and application of the foreign law are to be treated at the appeal stage. The Federal Supreme Court (Bundesgerichtshof) has provided specific guidance in a recent decision.

Background

Section 545 of the German Code of Civil Procedure (ZPO) was revised as of 1 September 2009. Originally, this provision had stated that an appeal on points of law (Revision) could only be based on a violation of federal law. Following the revision, it now reads:

“An appeal on points of law may only be based on the reason that the contested decision is based on a violation of the law.”

The restriction to “federal” law was therefore no longer applicable. In the legal literature, it was argued by some authors that following the removal of the restriction to federal law, the appeal of points of law could now be based on the argument that a foreign law was incorrectly applied.[1] The question whether the new Section 545 ZPO did indeed how that effect sparked a scholarly discussion on statutory interpretation and its methodology, with one of the authors coining the phrase of the law that was cleverer its fathers.[2] After initially leaving the question open, the Federal Supreme Court decided in 2013[3] against the review of foreign law as such as part of the appeal on points of law. German procedural law continues to treat the determination of foreign law as a factual rather than as a legal matter.

The Federal Supreme Court based its decision on the legislative history. The court argued that the word “federal” was dropped only to harmonise the wording across various pieces of legislation, whereas the legislative materials made it clear that a higher court would continue to be bound by the lower court’s finding on foreign law. It would take the literal interpretation too far to read such a far-reaching consequence into the revised wording; had the legislators wanted to widen the scope of the appeal on a point of law to include the review of foreign law, they would have addressed this issue explicitly.

Facts

In the case at hand, the Federal Supreme Court has further developed its approach to the application of foreign law. In its decision of 25 May 2017, it has held that that at the stage of the appeal on a point of law, it will only examine whether the lower courts have correctly exercised their discretion in determining the foreign law. The case concerns the international law applicable to matrimonial names, which is only of marginal interest here:

The applicants got married in January 2014. The applicant wife is a German national, the applicant husband is of Italian and Ecuadorian nationality. At the time of their marriage, the spouses on the advice of the registrar (Standesamt) had refrained from making a declaration as to which names that they wanted to use during their marriage. They now request that the wife be able to add the surname of the husband M. to her maiden name K. Combined with the preposition “de” according to Ecuadorian law, and apply that the registrar is instructed to accept and implement their declaration to that effect.

For the purposes of our question, the decisive factor is how the court dealing with the initial application determined Ecuadorian law:

“The court based its determination on legal advice obtained from the Ecuadorian Embassy. In addition, it referred to academic sources dealing with the peculiarities of legal systems in the Roman legal tradition (romanischer Rechtskreis), in particular Spanish law, which has common features with Ecuadorian law.

The – albeit brief – information provided by the Ecuadorian Embassy, as the body responsible for civil status matters, is particularly suited to serve as evidence of foreign law. There was no need to obtain a more detailed legal opinion because of the question was manageable and concerned a topic that was obviously not unusual. (…) On the contrary, it is a question which potentially arises in every marriage under the laws of Ecuador and it appears that the legal practice is well settled in this respect.”

Decision

The Federal Court of Justice agrees with the approach that the lower court had taken. It summarizes the applicable standard as follows:

“The German judge establishing the facts (Tatrichter) must investigate foreign law (here: Ecuadorian law regarding the married name); the judge is not bound by formal restrictions on the taking of evidence (Freibeweis). It is in the judge’s discretion how to obtain the necessary knowledge.

The appeals court (Rechtsbeschwerdegericht) shall only examine whether the judge establishing the facts exercised his discretion free of legal error, in particular whether he sufficiently exhausted the available sources on the foreign law, taking into account the circumstances of the individual case.”

Note

An example case for the inadequate determination of foreign law can be found in a decision of the Federal Supreme Court dated 14 January 2014, a case where the applicable rules under English law had to be established (see also the detailed note over at zpoblog.de). There, the Federal Supreme Court reached the conclusion the Court of Appeals could restrict itself to relying on information obtained from the Foreign & Commonwealth Office, since the latter’s answer in the specific case did not provide an exhaustive answer to the question asked. In determining the foreign law, the judge establishing the facts was not allowed to limit himself to rely on primary legislation, but had to take into account the practical application of the law in the jurisdiction concerned, in particular the relevant case law.

In practice, the decision discussed here means that the battle for the correct application of foreign law must be already being fought and won in lower courts, before the judges establishing the fact. The parties’ counsel will have to introduce all available legal sources into the proceedings or at least point the judge into the direction. The Federal Supreme Court will overrule a decision only if the appellant can show that there were legal sources that the judge establishing the facts could have used, but failed to do so and in doing so overstepped the boundaries of his discretion.

An extended German version of this case note that dives more deeply into the legislative history of Section 545 ZPO has been published on zpoblog.de.

Federal Supreme Court (Bundesgerichtshof), order (Beschluss) dated 24 May 2017, file no. IXX ZB 337/15.

[1] Burkhard Hess/Rudolf Hübner, Die Revisibilität ausländischer Rechts nach der Neufassung des § 545 ZPO, NJW 2009, 3132

[2] Thomas Riehm, Vom Gesetz, das klüger ist als seine Verfasser – Zur Revisibilität ausländischen Rechts JZ 2014, 73; see also; Herbert Roth, Die Revisibilität ausländischer Rechts und die Klugheit des Gesetzes, NJW 2014, 1224

[3] Federal Supreme Court, order dated 4 July 2013, file no.V ZB 197/12

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