HCCH - Explanatory Report on the 1989 HCCH Succession Convention

Conférence de La Haye de droit international privé Hague Conference on private international law Convention sur la loi applicable aux successions à cause de mort Convention on the law applicable to succession to the estates of deceased persons Texte adopté par la Seizième session Text adopted by the Sixteenth Session Rapport explicatif de Explanatory Report by Donovan W. M. Waters Tirage à part des Actes et documents de la Seizième session (1988) Tome II, Successions - loi applicable Off-print of the Proceedings of the Sixteenth Session (1988) Tome II, Succession to estates - applicable law Edité par le Bureau Permanent de la Conférence Scheveningseweg 6, La Haye, Pays-Bas Edited by the Permanent Bureau of the Conference Scheveningseweg 6, The Hague, NetherlandsAvertissement Preface 1 Le contenu de la présente brochure est repris des Actes et documents de la Seizième session (1988), tome II, Successions - loi applicable. Cette dernière publication contient en plus des pages ciaprès reproduites, les documents préliminaires, rapports et procès-verbaux, relatifs aux travaux de la Deuxième commission de la Seizième session. Ce volume pourra être commandé par l'intermédiaire des librairies ou du Bureau Permanent de la Conférence ou, directement, à l'Imprimerie Nationale des Pays-Bas: Editions SDU, Boîte postale 20014, 2500 EA La Haye. 2 Le Rapport explicatif de M. Donovan W. M. Waters commente la Convention adoptée par la Seizième session et figurant dans l'Acte f mal du 20 octobre 1988. Ce Rapport a été traduit en français par M. Robert Daumières, ancien premier secrétaire à la Cour internationale de Justice. 3 La pagination entre crochets est propre au présent document, l'autre pagination est celle du volume susmentionné des Actes et documents de la Seizième session. 4 La Convention a reçu sa première signature, celle de la Suisse, le premier août 1989 et porte donc cette date. 5 Le Bureau Permanent de la Conférence, 6, Scheveningseweg, 2517 KT La Haye, Pays-Bas, télécopie (70) 360 48 67, fournira très volontiers aux intéressés tous renseignements sur les travaux de la Conférence. 1 The contents of this pamphlet have been drawn from the Proceedings of the Sixteenth Session (1988), Tome II, Succession to estates - applicable law. This latter publication contains in addition to the pages hereinafter reproduced the preliminary documents, reports and summaries of discussions relating to the work of the Second Commission of the Sixteenth Session. The full volume can be ordered either through booksellers or from the Permanent Bureau of the Conference or, directly, from the Netherlands Government Printing Office: SDU Publishers, Postbox 20014, 2500 EA The Hague. 2 The Explanatory Report of Professor Donovan

W. M. Waters serves as a commentary on the Convention adopted by the Sixteenth Session, which is set out in the Final Act of 20 October 1988. This Report was translated into French by Mr Robert Daumières, formerly First Secretary at the International Court of Justice. 3 The page numbers placed within brackets refer to the pages of this document, the other page numbers being

those of the bound volume mentioned above of the Proceedings of the Sixteenth Session. 4 The Convention was first signed on 1 August 1989 by Switzerland and therefore will bear that date. 5 The Permanent Bureau of the Conference, 6, Scheveningseweg, 2517 KT The Hague, Netherlands, telefax (70) 360 48 67, will be glad to furnish interested persons any information desired concerning the work of the Conference. La Haye, août 1990. The Hague, August 1990.ConventionExtract from the Final Act of the Sixteenth Session signed on the 20th of October 1988 CONVENTION ON THE LAW APPLICABLE TO SUCCESSION TO THE ESTATES OF DECEASED PERSONS The States signatory to this Convention, Desiring to establish common provisions concerning the law applicable to succession to the estates of deceased persons, Have resolved to conclude a Convention for this purpose and have agreed upon the following provisionsCHAPTER I - SCOPE OF THE CONVENTION Article 1 1 This Convention determines the law applicable to succession to the estates of deceased persons. 2 The Convention does not apply toa the form of dispositions of property upon death; b capacity to dispose of property upon death; c issues pertaining to matrimonial property; d property rights, interests or assets created or transferred otherwise than by succession, such as in joint ownership with right of survival, pension plans, insurance contracts, or arrangements of a similar nature. Article 2 The Convention applies even if the applicable law is that of a non-Contracting State. 1 For the complete text of the Final Act, see Ptoceedmgs of the Sixteenth Session (1988), tome I, Miscellaneous matteis Convention adopted CHAPTER II - APPLICABLE LAW Article 3 1 Succession is governed by the law of the State in

which the deceased at the time of his death was habitually resident, if he was then a national of that State. 2 Succession is also governed by the law of the State in which the deceased at the time of his death was habitually resident if he had been resident there for a period of no less than five years immediately preceding his death. However, in exceptional circumstances, if at the time of his death he was manifestly more closely connected with the State of which he was then a national, the law of that State applies. 3 In other cases succession is governed by the law of the State of which at the time of his death the deceased was a national, unless at that time the deceased was more closely connected with another State, in which case the law of the latter State applies. Article 4 If the law applicable according to Article 3 is that of a non-Contracting State, and if the choice of law rules of that State designate, with respect to the whole or part of the succession, the law of another non-Contracting State which would apply its own law, the law of the latter State applies. Article 5 1 A person may designate the law of a particular State to govern the succession to the whole of his estate. The designation will be effective only if at the time of the designation or of his death such person was a national of that State or had his habitual residence there. 2 This designation shall be expressed in a statement made in accordance with the formal requirements for dispositions of property upon death. The existence and material validity of the act of designation are governed by the law designated. If under that law the designation is invalid, the law governing the succession is determined under Article 3. 3 The revocation of such a designation by its maker shall comply with the rules as to form applicable to the revocation of dispositions of property upon death.

4 For the purposes of this Article, a designation of the applicable law, in the absence of an express contrary provision by the deceased, is to be construed as governing succession to the whole of the estate of the deceased whether he died intestate or wholly or partially testate. Article 6 A person may designate the law of one or more States to govern the succession to particular assets in his estate. However, any such designation is without prejudice to the application of the mandatory rules of the law applicable according to Article 3 or Article 5, paragraph 1. Convention adopted 515 [3]Artide 7 1 Subject to Article 6, the applicable law under Articles 3 and 5, paragraph 1, governs the whole of the estate of the deceased wherever the assets are located. 2 This law governsa the determination of the heirs, devisees and legatees, the respective shares of those persons and the obligations imposed upon them by the deceased, as well as other succession rights arising by reason of death including provision by a court or other authority out of the estate of the deceased in favour of persons close to the deceased; b disinheritance and disqualification by conduct; c any obligation to restore or account for gifts, advancements or legacies when determining the shares of heirs, devisees or legatees; d the disposable part of the estate, indefeasible interests and other restrictions on dispositions of property upon death; e the material validity of testamentary dispositions. 3 Paragraph 2 does not preclude the application in a Contracting State of the law applicable under this Convention to other matters which are considered by that State to be governed by the law of succession. CHAPTER 111 - AGREEMENTS AS TO SUCCESSION 2 The effects of the agreement and the circumstances

resulting in the extinction of the effects are those recognized by all of those laws. Article 11 The parties may agree by express designation to subject the agreement, so far as its material validity, the effects of the agreement, and the circumstances resulting in the extinction of the effects are concerned, to the law of a State in which the person or any one of the persons whose future estate is involved has his habitual residence or of which he is a national at the time of the conclusion of the agreement. Article 12 1 The material validity of an agreement valid under the law applicable according to Article 9, 10 or 11 may not be contested on the ground that the agreement would be invalid under the law applicable according to Article 3 or 5, paragraph 1. 2 However, the application of the law applicable according to Article 9, 10 or 11 shall not affect the rights of anyone not party to the agreement who under the law applicable to the succession by virtue of Article 3 or 5, paragraph 1, has an indefeasible interest in the estate or another right of which he cannot be deprived by the person whose estate is in question. Article 8 For the purposes of this Chapter an agreement as to succession is an agreement created in writing or resulting from mutual wills which, with or without consideration, creates, varies or terminates rights in the future estate or estates of one or more persons parties to such agreement. Article 9 1 Where the agreement involves the estate of one person only, its material validity, the effects of the agreement, and the circumstances resulting in the extinction of the effects, are determined by the law which under Article 3 or 5, paragraph 1, would have been applicable to the succession to the estate of that person if that person had died on the date of the agreement. 2 If under that law the agreement is invalid, it is

nevertheless valid if it is valid under the law which at the time of death is the law applicable to the succession to the estate of that person according to Article 3 or 5, paragraph 1. The same law then governs the effects of the agreement and the circumstances resulting in the extinction of the effects. Article 10 1 Where the agreement involves the estates of more than one person, the agreement is materially valid only if it is so valid under all the laws which, according to Article 3 or 5, paragraph 1, would have governed the succession to the estates of all those persons if each such person had died on the date of the agreement. Convention adopted

CHAPTER IV - GENERAL PROVISIONS

Article 13 Where two or more persons whose successions are governed by different laws die in circumstances in which it is uncertain in what order their deaths occurred, and where those laws provide differently for this situation or make no provision at all, none of the deceased persons shall have any succession rights to the other or others. Article 14 1 Where a trust is created in a disposition of property upon death, the application to the succession of the law determined by the Convention does not preclude the application of another law to the trust. Conversely, the application to a trust of its governing law does not preclude the application to the succession of the law governing succession by virtue of the Convention. 2 The same rules apply by analogy to foundations and corresponding institutions created by dispositions of property upon death. Article 15 The law applicable under the Convention does not affect the application of any rules of the law of the State where certain immovables, enterprises or other special categories of assets are situated, which rules institute a particular inheritance regime in respect of such assets because of economic, family or social considerations. Convention adopted 517 [5]Artide 16

Where under the law applicable by virtue of the Convention there is no heir, devisee or legatee under a disposition of property upon death, and no physical person is an heir by operation of law, the application of the law so determined does not preclude a State or an entity appointed thereto by that State from appropriating the assets of the estate that are situated in its territory. Article 17 In this Convention, and subject to Article 4, law means the law in force in a State other than its choice of law rules. Article 18 The application of any of the laws determined by the Convention may be refused only where such application would be manifestly incompatible with public policy (ordre public). b he was not a national, the designation is valid only if he then had his habitual residence in that unit, or, if he was not then habitually resident in that unit but was so resident in that State, he had had an habitual residence in that unit at some time. 6 For the purposes of any designation under Article 6 with regard to particular assets whereby the deceased designates the law of a State, it is presumed that, subject to evidence of contrary intent, the designation means the law of each unit in which the assets are situated. 7 For the purposes of Article 3, paragraph 2, the required period of residence is attained when the deceased for the five years immediately preceding his death had his residence in that State, notwithstanding that during that period he resided in more than one of the units of that State. When the period has been attained, and the deceased had an habitual residence in that State at that time, but no habitual residence in any particular unit ofthat State, the applicable law is the law of that unit in which the deceased last resided, unless at that time he had a closer connection with another unit of

the State, in which case the law of the latter unit applies. Article 19 1 For the purposes of identifying the law applicable under this Convention, where a State comprises two or more territorial units, each of which has its own system of law or its own rules of law in respect of succession, the provisions of this Article apply. 2 If there are rules in force in such a State identifying which law among the laws of the two or more units is to apply in any circumstance for which this Article provides, the law ofthat unit applies. In the absence of such rules the following paragraphs of this Article apply. 3 For the purposes of any reference in this Convention, or any designation by the deceased pursuant to this Convention, a the law of the State of the habitual residence of the deceased at the time of designation or of his death means the law of that unit of the State in which at the relevant time the deceased had his habitual residence; b the law of the State of the nationality of the deceased at the time of designation or of his death means the law ofthat unit of the State in which at the relevant time the deceased had his habitual residence, and in the absence of such an habitual residence, the law of the unit with which he had his closest connection. 4 For the purposes of any reference in this Convention, the law of the State of closest connection means the law of that unit of the State with which the deceased was most closely connected. 5 Subject to Article 6, for the purposes of any designation pursuant to this Convention whereby the deceased designates the law of a unit of the State of which at the time of designation or of his death a he was a national, that designation is valid only if at some time he had had an habitual residence in, or in the absence of such an habitual residence, a close

connection with, that unit; Article 20 For purposes of identifying the law applicable under this Convention, where a State has two or more legal systems applicable to the succession of deceased persons for different categories of persons, any reference to the law of such State shall be construed as referring to the legal system determined by the rules in force in that State. In the absence of such rules, the reference shall be construed as referring to the legal system with which the deceased had the closest connection. Article 21 A Contracting State in which different systems of law or sets of rules of law apply to succession shall not be bound to apply the rules of the Convention to conflicts solely between the laws of such different systems or sets of rules of law. Article 22 1 The Convention applies in a Contracting State to the succession of any person whose death occurs after the Convention has entered into force for that State. 2 Where at a time prior to the entry into force of the Convention in that State the deceased has designated the law applicable to his succession, that designation is to be considered valid there if it complies with Article 5. 3 Where at a time prior to the entry into force of the Convention in that State the parties to an agreement as to succession have designated the law applicable to that agreement, that designation is to be considered valid there if it complies with Article 11. Convention adopted Convention adopted 519 [7]Artide 23 1 The Convention does not affect any other international instrument to which Contracting States are or become Parties and which contains provisions on matters governed by this Convention, unless a contrary declaration is made by the States Parties to such instrument. 2 Paragraph 1 of this Article also applies to uniform laws based on special ties of a regional or o'ther nature between the States concerned. Article 24 1 Any State may, at the time of signature, ratification,

acceptance, approval or accession, make any of the following reservationsa that it will not apply the Convention to agreements as to succession as defined in Article 8, and therefore that it will not recognize a designation made under Article 5 if the designation is not expressed in a statement made in accordance with the requirements for a testamentary disposition; b that it will not apply Article 4; c that it will not recognize a designation made under Article 5 by a person who, at the time of his death, was not or was no longer either a national of, or habitually resident in, the State whose law he had designated, but at that time was a national of and habitually resident in the reserving State; d that it will not recognize a designation made under Article 5, if all of the following conditions are met 2 It shall be ratified, accepted or approved and the instruments of ratification, acceptance or approval shall be deposited with the Ministry of Foreign Affairs of the Kingdom of the Netherlands, depositary of the Convention. Article 26 1 Any other State may accede to the Convention after it has entered into force in accordance with Article 28, paragraph 1. 2 The instrument of accession shall be deposited with the depositary. Article 27 1 If a State has two or more territorial units in which different systems of law are applicable in relation to matters dealt with in this Convention, it may at the time of signature, ratification, acceptance, approval or accession declare that this Convention shall extend to all of its territorial units or only to one or more of them and may alter this declaration by submitting another declaration at any time. 2 Any such declaration shall be notified to the depositary and shall state expressly the territorial units to which the Convention applies. 3 If a State makes no declaration under this Article, the Convention is to extend to all territorial units ofthat

State. - the law of the State making the reservation would have been the applicable law under Article 3 if there had been no valid designation made under Article 5, - the application of the law designated under Article 5 would totally or very substantially deprive the spouse or a child of the deceased of an inheritance or family provision to which the spouse or child would have been entitled under the mandatory rules of the law of the State making this reservation, - that spouse or child is habitually resident in or a national of that State. 2 No other reservation shall be permitted. 3 Any Contracting State may at any time withdraw a reservation which it has made; the reservation shall cease to have effect on the first day of the month following the expiration of three months after notification of the withdrawal. CHAPTER V - FINAL CLAUSES Article 28 1 The Convention shall enter into force on the first day of the month following the expiration of three months after the deposit of the third instrument of ratification, acceptance or approval referred to in Article 25. 2 Thereafter the Convention shall enter into forcea for each State ratifying, accepting or approving it subsequently, or acceding to it, on the first day of the month following the expiration of three months after the deposit of its instrument of ratification, acceptance, approval or accession; b for a territorial unit to which the Convention has been extended in conformity with Article 27, on the first day of the month following the expiration of three months after the notification referred to in that Article. Article 29 After the entry into force of an instrument revising this Convention a State may only become Party to the Convention as revised. Article 25 1 The Convention shall be open for signature by the States which were Members of the Hague Conference on Private International Law at the time of its Sixteenth Session. Article 30 1 A State Party to this Convention may denounce it, or

only Chapter III of the Convention, by a notification in writing addressed to the depositary. Convention adopted Convention adopted 521 [9]2 The denunciation takes effect on the first day of the month following the expiration of three months after the notification is received by the depositary. Where a longer period for the denunciation to take effect is specified in the notification, the denunciation takes effect upon the expiration of such longer period after the notification is received by the depositary. Article 31 The depositary shall notify the States Members of the Hague Conference on Private International Law and the States which have acceded in accordance with Article 26 of the followinga the signatures and ratifications, acceptances, approvals and accessions referred to in Articles 25 and 26; b the date on which the Convention enters into force in accordance with Article 28; c the declarations referred to in Article 27; d the reservations and withdrawals of reservations referred to in Article 24; e the denunciations referred to in Article 30. In witness whereof the undersigned, being duly authorized thereto, have signed this Convention. Done at The Hague, on the day of 19...., in the English and French languages, both texts being equally authentic, in a single copy which shall be deposited in the archives of the Government of the Kingdom of the Netherlands, and of which a certified copy shall be sent, through diplomatic channels, to each of the States Members of the Hague Conference on Private International Law at the date of its Sixteenth Session. The Convention was signed on the fust of August 1989 and thus beai s that date. Convention adopted 523 [H]Rapport ReportExplanatory Report by Donovan W.M. Waters Contents of the Report INTRODUCTION page 529

THE PROGRAMME OF WORK UNDERTAKEN BY THE

HAGUE CONFERENCE ON PRIVATE INTERNATIONAL

LAW 529

THE PURPOSE AND CHARACTER OF THIS REPORT 531

THE ORIGINS OF THE CONVENTION 531

THE MAIN CHARACTERISTICS OF THE CONVENTION 535

THE STRUCTURE OF THE CONVENTION

COMMENTARY ON THE CONVENTION

PREAMBLE AND FIRST CHAPTER - SCOPE

Article 1 Paragraph 1 Paragraph 2 Sub-paragraph a Sub-paragraph b Sub-paragraph c Sub-paragraph d Article 2

CHAPTER II - APPLICABLE LAW

Article 3 Paragraph 1 Paragraph 2 Paragraph 3 Article 4 Article 5 Paragraph 1 Paragraph 2 Paragraph 3 Paragraph 4 539 539 539 541 541 541 543 543 543 545 547 547 547 549 549 551 551 553 553 557 557 559 Article 6 Article 7 Paragraph 1 Paragraph 2 Sub-paragraph a Sub-paragraph b Sub-paragraph c Sub-paragraph d Sub-paragraph e Paragraph 3

CHAPTER III - AGREEMENTS AS TO SUCCESSION

Article 8 Article 9 Paragraph 1 Paragraph 2 Article 10 Paragraph 1 Paragraph 2 Article 11 Article 12 Paragraph 1 Paragraph 2

CHAPTER IV - GENERAL PROVISIONS

Article 13 Article 14 Paragraph 1 Paragraph 2 Article 15 Article 16 Article 17 Article 18 ' Article 19 Paragraph 1 Paragraph 2 Paragraph 3 Paragraph 4 Paragraph 5 Paragraph 6 Paragraph 7 Article 20 Article 21 page 559 563 565 565 565 567 567 567 569 569 569 573 577 579 581 581 581 583 583

583 583 583 585 585 585 585 587 587 591 593 593 595 595 597 597 597 597 601 601 601 601 Waters Report Waters Report 527 [15]Anide 22 Anide 23 Artide 24 Paragraph 1 Sub-paragraph a Sub-paragraph b Sub-paragraph c Sub-paragraph d

CHAPTER V - FINAL CLAUSES

Article 25 Article 26 Article 27 Article 28 Article 29 Article 30 Article 31

THE SIGNATURE CLAUSE page

603 605 607 609 609 609 611 613 615 615 615 615 615 617 617 617 617

INTRODUCTION

THE PROGRAMME OF WORK UNDERTAKEN BY THE HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW 1 The Hague Conference on private international law when it met at its Fifteenth Session in 1984 decided to include the law applicable to decedents' estates in its agenda for the Sixteenth Session in 1988. 2 The preparatory work consisted of a Questionnaire and Commentary on Succession in Private International Law drawn up by the Secretary General, Mr Georges A.L. Droz, being an extract from the Acts and Documents of the Twelfth Session of 1972. It was accompanied by an Update to 1986 of the Commentary prepared by Mr Hans van Loon, First Secretary at the Permanent Bureau of the Conference (Preliminary Document No 1). The Governments of Australia, Argentina, Canada, China, Cyprus, Portugal, Turkey, United Kingdom and the United States of America offered additional replies to the Questionnaire (Preliminary Document No 3). These very valuable documents ware later followed in September 1986, by a Prospective Study of

Succession in Private International Law (Preliminary Document No 2), again prepared by Mr Hans van Loon. This background study should be consulted by all those who wish to understand thoroughly the task which the Commission was then taking up. 3 A Special Commission was convened which held three sessions. The first took place between 17 and 21 November 1986, the second between 30 March and 10 April 1987, and the third between 28 September and 8 October 1987. The Special Commission elected as its Chairman Mr A.E. von Overbeck (Switzerland). The Vice-Chairman appointed was Mr A. Boggiano (Argentina), and MrD. W. M. Waters (Canada) was appointed Reporter. Messrs von Overbeck, Boggiano and Waters served in these offices throughout the period of the Special Commission. Experts participated in the Special Commission from the following countries: Argentina, Austria, Belgium, Canada, Czechoslovakia, Denmark, Federal Republic of Germany, Finland, France, Greece, Hungary, Ireland, Italy, Japan, Luxembourg, Mexico, Netherlands, Norway, China, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom and the United States of America. Also participating were observers from the International Institute for the Unification of Private Law, the Commonwealth Secretariat, the International Commission on Civil Status, the International Union of Latin Notaries, the International Bar Association, and the Association internationale des jeunes avocats. 4 At the second session of the Special Commission a Drafting Committee was appointed. This Committee was presided over by Mr A. Boggiano (Argentina) as Chairman, and included as members Mr A. Duchek (Austria), Mr P.G. L. Lagarde (France), Mr A. Philip (Denmark), and the Reporter, Mr D.W.M. Waters

(Canada). A Federal State Clause Committee was also formed with Mr E. F. Scoles (United States) as Chairman, and comprising as members Mrs A. Borras Rodriguez (Spain), Mr D. J. Hayton (United Kingdom) and Mr J.A. Talpis (Canada). 5 The Special Commission adopted on 8 October 1987, a 'preliminary draft Convention on the law applicable to succession to the estates of deceased persons'. The preliminary draft and a report were submitted to the governments in March 1988. Waters Report Waters Report 529 [17]The Governments of Denmark, Finland, Federal Republic of Germany, Israel, Italy, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States of America offered written comments (Preliminary Document No 13) on the preliminary draft Convention and Report. 6 The Sixteenth Session of the Conference was held at The Hague from 3 to 20 October 1988. It appointed as its President Mr J.C. Schultsz (Netherlands), General affairs of the Conference were entrusted to Commission I, while the preparation of a Convention on the law applicable to succession to the estates of deceased persons was entrusted to Commission II. This was the only Convention on the agenda for definitive treatment. Commission II appointed as its Chairman Mr A.E. von Overbeck (Switzerland) and as its Vice-Chairman Mr

A. Boggiano (Argentina). Mr D.W.M. Waters (Canada) was invited to act as Reporter.

The number of States represented at the Sixteenth Session was greater than that which had been represented at the Special Commission, because delegations were present from Australia, Chile, Cyprus, Israel and Venezuela. The following countries were represented by delegates: Australia, Argentina, Austria, Belgium, Canada, Chile, Cyprus, Czechoslovakia, Denmark, Finland, France,