Droit international général

In Sharp v Autorité des marchés financiers, 2023 SCC 29 (available here) the Supreme Court of Canada has held that a Quebec administrative tribunal, the Financial Markets Administrative Tribunal, can hear a proceeding brought by the administrative agency that regulates Quebec’s financial sector, the Autorité des marchés financiers, against four defendants who reside in British Columbia.  The AMF alleged in the proceedings that the defendants had contravened the Quebec Securities Act.

The courts below, including a majority of the Quebec Court of Appeal, focused the analysis on s. 93 of the Act respecting the Autorité des marchés financiers, CQLR, c. A-33.2, which grants the FMAT jurisdiction to make determinations under the Securities Act.  They interpreted and applied this provision in light of Unifund Assurance Co. v Insurance Corp. of British Columbia, 2003 SCC 40, a leading decision on the scope of application of provincial law, which held that a provincial regulatory scheme constitutionally applies to an out-of-province defendant when there is a “real and substantial connection”, also described as a “sufficient connection”, between the province and the defendant.  This test was met on the facts [see para 22] and so the FMAT had jurisdiction.  This analysis is not generally understood as being within the field of conflict of laws.  Indeed, the majority of the Court of Appeal “saw no conflict of jurisdiction or any conflict of laws that would require the application of private international law rules to this case” [see para 29].

In separate concurring reasons at the Court of Appeal, Mainville JA found that the FMAT’s jurisdiction was to be found in Title Three of Book Ten of the Civil Code of Quebec, which establishes rules for the “International Jurisdiction of Québec Authorities”.  These are Quebec’s private international law rules for taking jurisdiction and so squarely this is a conflict of laws approach.

The majority of the Supreme Court of Canada observed [para 7] that “the character of the proceedings and the conclusions sought before the FMAT could suggest, at first blush, a regulatory matter that does not concern the C.C.Q. The dispute involves a public regulator seeking prohibitions and administrative penalties under a legislative scheme designed to protect the public interest in the securities markets. One might indeed expect jurisdiction over this regulatory scheme to stand outside the scope of Quebec’s law of general application established by the C.C.Q.”  Roll credits!  In fairness, that was the view of the courts below and it seems a very straightforward way of resolving the issue.  Surprisingly, then, it does not end up being adopted by the court.

The court concludes that because securities regulation has a “hybrid character” [para 7] the starting point for analysis has to be the general approach to taking jurisdiction under the conflict of laws, looking to the provisions in the CCQ.  Because they are laws of general application, the “provisions of Title Three of Book Ten of the C.C.Q. can, in principle, apply to an administrative tribunal like the FMAT, even if no private right is in issue and even if no conflict of jurisdiction arises” [para 41; see also para 63].  However, the court then concludes, contrary to the decision of Mainville JA, that the FMAT does not have jurisdiction under the CCQ [para 73].  But a majority of the court goes on to hold that s. 93 provides the FMAT with jurisdiction over the defendants in accordance with Unifund (Cote J dissents from this view).  Section 93 is a special jurisdictional rule, beyond the CCQ, which gives the FMAT jurisdiction [paras 93-94].  In the end, the detour/digression into conflict of laws and the CCQ is not a significant factor in arriving at the ultimate result.  The majority explains that “[t]o evaluate whether these statutes may be applied in such circumstances, the Quebec securities scheme must be interpreted to determine its territorial reach. That issue involves consideration of this Court’s decision in Unifund, which holds that the permissible territorial application of provincial legislation is determined by assessing the sufficiency of the connection among the enacting jurisdiction, the subject matter of the legislation, and the individual or entity sought to be regulated” [para 102].  This aligns very closely with the position of the majority of the Court of Appeal below.

Particularly with respect to the law of Quebec, the decision is important for what it says about the relationship between the conflicts rules in the CCQ and the jurisdiction of any administrative tribunal.  It also offers, in setting out its conclusions that none of the general CCQ rules apply, some observations on the scope of those provisions, which could be helpful for future disputes.  Both the majority decision and the dissent contribute to these issues.  In addition, the majority opinion offers several observations about the Unifund test regarding the extraterritorial application of provincial law [paras 111-23].  One of these is that the “real and substantial connection” test used in Unifund is different from other “real and substantial connection” tests used elsewhere in the law, such as for purposes of assumed jurisdiction under Club Resorts Ltd. v Van Breda, 2012 SCC 17.  The majority describes this as a “family” of tests [para 118], noting that “the same formula of words … involves different considerations in each of the varying contexts in which the formula is employed”.  This has been reasonably well understood prior to this decision but it is interesting to see it explained as such by the court.

Justice Cote dissents.  She agrees with the primacy of the CCQ provisions in the analysis and that none of them apply to give the FMAT jurisdiction.  She disagrees with the majority on the basis that, in her view, none of the statutory provisions beyond the CCQ give the FMAT jurisdiction over the British Columbia resident defendants [para 156ff].  In her view, Unifund does not apply to this issue because the concern is the territorial jurisdiction of the FMAT and not the application of the Securities Act [paras 174-75].

In the Canadian context, it will be interesting to think about what the decision might herald for subsequent analysis of the jurisdiction of an administrative tribunal in a common law province.  Will the starting point in those situations be the private international law rules on jurisdiction in that province, whether found in a court jurisdiction statute or in the jurisprudence?

The Children’s Rights Academy of the University of Geneva is organising an online Executive Training on Civil Aspects of International Child Protection (ICPT) from December 2023 to April 2024. For more information, click here.

The training is divided into four modules and is being coordinated by Dr. Vito Bumbaca. There is a registration fee (for the full programme or per module). Click here to register (registration is possible until 18 January 2024).

See below for a description of the modules.

Module 1 – 07 December 2023, 14:15 – 18:45 (online learning)

Children’s Individual Rights in Transnational Parental Relationships

This module pertains to the intersection of international child protection and children’s rights. Children in need of protection hold individual rights that are impacted by parental relationships, behaviours and conduct. Such rights are enshrined in universal, regional and national legal instruments, such as the UN Convention on the Rights of the Child, the European Convention on Human Rights and national Constitutions at first. Inherently, the UN Committee on the Rights of the Child and the European Court of Human Rights, respectively as quasi-judicial and judicial bodies, have in many occasions pinpointed the undeniable legal consequences, arising from parental relationships and litigation in national and transnational contexts, on the protection of children and their fundamental rights. Particularly, but not exhaustively, civil abduction, custody, adoption, surrogacy, family reunification, migration status, children’s properties have been crucial in the courts view for the determination of children as individual rights holders and subject to international protection. Lecturers will present selected topics of current research and practice, focusing on the above intersection. Discussions will follow after each intervention.

Module 2 – 18 January 2024, 14:15 – 18:45 (online learning)

International and Comparative Family Law

This module concerns the implementation of private international law rules governing international child protection, known as ‘International Family Law’. The latter includes international conventions and regional instruments typically determining jurisdiction, applicable law, recognition, cooperation among governmental and other bodies. As a comparative assessment, national laws, known as domestic rules, and national case law are part of this module. Parental relationships and litigation are the subject of multiple legal instruments, of national, regional and international nature, whose knowledge and interplay are fundamental for the timely transnational enforcement of child protection policies and measures. Also, alternative dispute resolution methods (i.e. Arbitration, Mediation) are referred to in this module as a way of preventing parental litigation in court. Lecturers will present selected topics of current research and practice, raising awareness about the above implementation and related issues, with the support of actual case law and law clinic. Discussions will follow after each intervention.

Module 3 – 29 February 2024, 14:15 – 17:45 (online learning)

Vulnerable Migration

This module deals with the protection of unaccompanied minors, as well as with separated and displaced children seeking asylum. The context is the one of transnational movements whereby various vulnerable scenarios would be encountered, such as guardianship, legal representation, family reunification, civil abduction, child custody, recognition of child and family statuses. These are some of the legal situations that are envisaged by parallel family law and migration law procedures involving interconnected issues of vulnerable migration and child protection for civil purposes. Lecturers will present selected topics of current research and practice, handling this specific context in which transversal knowledge of international family law and migration law is required. Discussions will follow after each intervention.

Module 4 – 18 April 2024, 14:15 – 17:45 (online learning)

Practice of Child Protection Stakeholders: Inter-agency Co-operation in Context

This module accentuates both the legislative and practical course of transnational governance of child protection policies and civil measures, addressing the question of “who does what”? What are the potential fora in which international child protection policies are discussed, approved and enforced? Practically, when a child is a victim of international civil abduction, what actors may be involved and how do they cooperate? This module aims to clarify and assess the role of all actors possibly involved in legislating and implementing child protection civil procedures, also with respect to vulnerable migration and asylum contexts, notably civil abduction, parental responsibility, maintenance, and alternative care. Lecturers will present selected topics of current research and practice from the perspective of the stakeholders involved in international child protection policies and practices. Discussions will follow after each intervention.

Speakers

Dr. Roberta Ruggiero, CIDE, CRA, UNIGE

Prof. Olga Khazova, UNCRC (former member)

Prof. Karl Hanson, CIDE, UNIGE

Prof. Gian Paolo Romano, Law Faculty, INPRI, UNIGE,

Mr Philippe Lortie, Family Law Division, Hague Conference on Private International Law

Mr Michael Wilderspin, DG Just, European Commission

Dr. Ilaria Pretelli, Swiss Institute of Comparative Law

Prof. Vincent Chetail, International Law Department, Global Migration Centre, IHEID

Irina Todorova, Noelle Darbellay, Core Protection Unit, International Organization for Migration

Dr. Mayela Celis Aguilar, University of Maastricht

Prof. Jason Harts, Professor of Humanitarianism & Development at the University of Bath

Dr. Nicolas Nord, International Commission on Civil Status (ICCS/CIEC)

Joëlle Schickel, Federal Office of Justice, Swiss Central Authority

Jean Ayoub, International Social Service General Secretariat

 

A brochure with detailed information is available here.

This post has been written by Dr Bobby Lindsay, Lecturer at the University of Glasgow. He is the author of a forthcoming book in the OUP Private International Law Series, entitled Cross Border Public Law Claims: Private International Law’s Exclusionary Rules.

Introduction

It is not uncommon for a Rule formulated within Dicey, Morris and Collins to be treated by English lawyers with near-legislative reverence. Fentiman (‘English Private International Law at the End of the Twentieth Century’ in Symeonides (ed), Private International Law at the End of the Twentieth Century, 1999, p169) has noted the impression that, at least in practice, ‘coherence in the conflict of laws means coherence with that legendary work’. Even still, it is remarkable for a judgment of the UK Supreme Court to be framed almost exclusively around an inquiry into the scope of one of the Dicey rules. Rule 20(1) of the latest (16th) edition states:

English courts have no jurisdiction to entertain an action:

(1) for the enforcement, either directly or indirectly, of a penal, revenue or other public law of a foreign state

In Skatteforvaltningen (‘SKAT’) v Solo Capital Partners LLP [2023] UKSC 40, the ‘essential questions’ were identified to be the scope of Rule 20(1) and its application to the facts, which concerned an alleged widescale fraud on the Danish tax authority ([2]). It marks the first time the apex court has considered the revenue rule since Re State of Norway’s Application [1990] 1 AC 723 in 1989, and the first time it directly has addressed the ‘other public law’ strand of Rule 20(1).

Facts and Procedural History

The Danish tax authorities already have contributed to our understanding of the scope of what is now Rule 20(1). But the £4 million sought (via a nominee liquidator) by SKAT’s predecessor in QRS v Frandsen [1999] 1 WLR 2169 pales in significance compared to the £1.44 billion sought by SKAT in the present litigation. The case related to ‘cum-ex’ schemes (also known as ‘dividend stripping’). To create the impression that multiple parties owned shares with dividend entitlements, companies would trade shares with (cum) and without (ex) dividend rights at high volume. That impression allowed those multiple parties to present to tax authorities as meeting the criteria for refunds in respect of dividend tax, when only one party – the true owner of the dividend-entitled shares – could legitimately claim such a refund.

Solo Capital Partners (‘SCP’), the appellants, allegedly assisted companies with such a scheme to SKAT’s detriment. Non-residents of Denmark are liable to pay 27% in ‘withholding’ tax (WHT) on dividends received from Danish companies. Before paying out on dividends, Danish companies will withhold the tax which is due and pay this to SKAT to discharge the shareholder’s liability, before passing on the residue to the shareholder or their agent. However, taxpayers falling under provisions of relevant double taxation treaties were entitled to receive a full or partial refund in relation to the withheld WHT. Clients of SCP presented themselves to SKAT as entitled to WHT refunds, which they duly received. But SKAT later alleged that those clients never owned the relevant shares, never were liable for WHT, and were not entitled to those refunds. The scale of the fraud has become a national Danish scandal, and one factor behind the reorganisation of SKAT into seven separate authorities.

Tortious, equitable, and restitutionary claims (in English and Danish law) were brought by SKAT in England against (as at the time of the Supreme Court’s decision) 89 defendants, including SCP and associated parties. To keep such mass litigation manageable, trials of two preliminary issues were directed: the first on jurisdiction; the second to establish what constituted a valid WHT application under Danish tax law. Andrew Baker J found against SKAT on the jurisdiction point ([2021] EWHC 974 (Comm)), holding that SKAT’s claims were inadmissible attempts to enforce Danish revenue law. This was reversed by the Court of Appeal ([2022] EWCA Civ 234). Permission to appeal to the Supreme Court successfully was obtained by SCP; the trial of the second preliminary issue continued to judgment while the Supreme Court heard the jurisdiction point.

Judgment

Lord Lloyd-Jones first notes ([21]) the suggestion of the editors of Dicey, Morris and Collins that the rule does not really go to the existence of the English court’s jurisdiction, but to its exercise. His Lordship then observes the distinction between the enforcement of a revenue law (which is forbidden) and the recognition of such a law (which is permitted). He then goes on ([22]) to discuss the two primary justifications which have been put forward for the rule. First, sovereignty: by submitting a tax claim in State B, State A exceeds the bounds of its own sovereignty in an impermissible manner. Secondly, the avoidance of embarrassment: the admittance of revenue claims might risk the forum having to declare a particular foreign tax as contrary to public policy, and so wholesale rejection is said to be the safest court. Lord Lloyd-Jones disfavoured the second rationale. English courts, eg in asylum cases, or those involving forum non conveniens and the foreign act of state doctrine(s), may have cause to criticise the conduct of foreign states, their institutions, or their legal system. The sovereignty rationale provided ‘a principled basis’ for the rule.

The key dispute between the parties was whether the existence of an unsatisfied foreign revenue claim was a prerequisite for the application of the revenue rule ([23]). Lord Lloyd-Jones surveyed ([24]-[32]) revenue law authorities from Sydney Municipal Council v Bull [1909] 1 KB 7 up to Webb v Webb [2020] UKPC 22. In each, the relevant court operated on the assumption that the revenue law rule prohibits the collection or recovery of tax which has not been paid. Importantly, this was consistent with the speeches in the House of Lords in Williams & Humbert Ltd v W & H Trade Marks (Jersey) Ltd [1986] AC 368 (see [27]-[29]). There, Lord Mackay noted (at 441A) that the ‘enforcement’ of a foreign revenue law could not be said to arise where ‘no claim under that law remained unsatisfied’: an ‘unsatisfied claim’ was an ‘essential feature’ of the application of the revenue rule.

Lord Lloyd-Jones concluded ([36]) that the existence of an unsatisfied demand for tax was a prerequisite for the application of the revenue rule. Without such a claim, the foreign tax authority’s action cannot be said to involve the enforcement of the foreign revenue law. Not only was this consistent with the ratio of Williams & Humbert, but the limitation was consistent with the sovereignty-based rationale for the revenue rule: if no tax was due, then the tax authority’s claim could not be an extraterritorial assertion of the sovereign power to impose tax. It also cohered with the enforcement/recognition distinction. As the whole basis of SKAT’s claim was that no tax was due from the relevant parties at any point, the revenue rule was not engaged on the facts ([38]-[39]). While the ‘Danish tax system undoubtedly provided the context and opportunity for the alleged fraud and the operation of the fraud can be understood only by an examination of that system’, that did not make the claim one for the enforcement of Danish tax law. At most, the resolution of the claims would involve the recognition of various aspects of the Danish tax regime by the English courts, which was permissible. These were simply private law claims of the same variety as enjoyed by ‘all legal and natural persons’ ([42]).

Nor were the claims precluded by the wider ‘sovereign power’ rule: it was not a claim to recover amounts imposed by Danish public law and did not involve the exercise of any ‘prerogative right’ ([53]-[54]). The test in Mbasogo v Logo Ltd [2006] EWCA Civ 1370, focusing on the exercise of a peculiarly sovereign/prerogative/pubic right, effectively was endorsed ([55]-[57]). Any initial exercise of sovereignty by Denmark was too remote from the claims before the English courts to see them fall foul of that test; the tax regime merely provided the context for the restitutionary claims, which could have been pursued by any private party ([58]). That conclusion was not altered by the fact that SKAT had acquired evidence through sovereign powers: that was ‘at most, of merely peripheral significance’ to the characterisation of the claim ([61]). The claims, therefore, fell entirely outside the scope of Rule 20(1), and now may proceed to trial, which presently is listed to take place for well over one year.

Comment

The judgment in SKAT puts it beyond doubt that an unsatisfied tax claim due under foreign law is a prerequisite for the application of the revenue rule. In a decision handed down between the High Court and Court of Appeal judgments in SKAT, a majority of the Hong Kong Court of Appeal refused to conclude definitively on this point. Andrew Baker J’s first instance judgment played some role in the hesitancy of the majority; the categorical view of a unanimous UK Supreme Court to the contrary will no doubt influence the future position in Hong Kong and elsewhere.

Despite clearly stating the limits of the revenue rule, the decision does not give much succour to those (such as the present author) who would like to see the rule pared back. The rule still is alive and well. In discussing the conspiracy claim brought by HMRC in Case C-49/12 Sunico, Lord Lloyd-Jones opines ([44]-[47]) that private law actions brought by a foreign tax authority still will be caught by the revenue rule if their success would have the effect of making good on an unsatisfied tax claim. That stands in opposition to conclusions reached (albeit on a preliminary basis) in Hong Kong and Singapore, but a similar approach recently has been adopted in Gibraltar. The rule still will constitute a firm barrier to attempts by foreign tax authorities to pursue claims for tax the payment which has been evaded by fraudsters.

The judgment also confirms that the ‘other public law’ rule, possibly rebranded as the ‘sovereign authority rule’, definitively forms part of the exclusionary rules of English private international law.  That raises the question of its relationship with the revenue and penal law rules. Rule 20(1) suggests the ‘other public law’ rule sits alongside the revenue and penal rules. However, following SKAT, it seems that the ‘sovereign authority rule’ is a higher-order principle, and that the revenue and penal law rules are specific categories of its operation. Lord Lloyd-Jones notes ([54]) that ‘it would require exceptional circumstances’ to bring a claim falling outside the revenue rule within the ‘wider sovereign authority rule’, and it is difficult to envisage what such circumstances could entail. Lord Lloyd-Jones notes ([62]) that the sovereign authority rule, but not the revenue rule, may be subject to a public policy exception. While it might seem strange that a public policy exception operates at the general, but not the specific, level, the situation can be compared (loosely and impressionistically) with the law of negligence. There, a claim falling within an established category attracts the application of fixed rules, but a novel claim invites wider considerations of policy. The existence of that policy stopgap perhaps makes up for the fact that definition of what is an ‘other foreign public law’, or what involves the exercise of foreign ‘sovereign authority’, sometimes can be elusive.

Whether the Supreme Court’s analysis of SKAT’s claim makes that definitional exercise any more straightforward is a question for another time. More, too, could be said about Rule 20 being described as one which goes to the ‘admissibility’ of foreign claims (eg [1], [15], [39]). The Supreme Court’s faith in the ‘sovereignty’ justification, rendered contestable by convincing attacks by Carter, and a sustained recent critique by O’Hanlon, also deserves further comment. And nothing in the decision does much to help illuminate the precise relationship between Rule 20(1) (the revenue rule, the penal rule, and the ‘sovereign authority’ rule) and Rule 20(2) (the various act of state doctrines). But, on the narrow question presented to the Court, its very clear limitation of the revenue rule is to be welcomed.

The Universidade Portucalense (UPT) will be hosting the 2nd International Congress of Civil Procedural Law on 15 and 16 December 2023. The hybrid event will focus on “The Challenges of De-Judicialisation of Justice”.

The organizers have been so kind as to share the call for papers with us. Further information can also be found here.

Yesterday, the UK Government published its response to a consultation on the prospect of joining the 2019 HCCH Judgments Convention. After summarising the responses received during the consultation, the Government concludes:

16. It is clear from the responses received for questions 1, 2 and 5 that respondents consider the merits of Hague 2019 to outweigh any potential downsides. This corresponds with the feedback that the Government received from stakeholders during round-table engagement sessions on this matter.

17. Having carefully considered the responses received and wider stakeholder feedback, the Government has decided that the UK will sign Hague 2019 as soon as practicable. […]

The Government also addresses the question of possible reservations under Articles 14, 16, 18, and 19 and a possible notification under Article 29:

49. Declarations under Articles 14, 16, 18 and 19 can be made upon signature, ratification, or at any time thereafter, and may be subsequently modified or withdrawn at any time. Having carefully considered the responses to question 9, the Government is of the view that there were no sufficiently strong policy reasons raised by respondents to this Consultation to warrant the UK making declarations under the relevant articles of Hague 2019 at this time.

[…]

52. The Government will keep questions of declarations under review as it proceeds to signature and implementation, and in future as the Convention comes into force between the UK and current and future Contracting States.

53. The Government has considered the concerns in relation to the Russian Federation having signed Hague 2019 and considers that UK should sign the Convention with the understanding that a future notification in relation to the Russian Federation under Article 29 would be available to prevent the Convention applying between the UK and Russia, should there be any development in the latter’s ratification of Hague 2019.

The decision has already been welcomed by the President of the Law Society.

On 23 November 2023, the UK Ministry of Justice published its response to the consultation on whether the UK should sign and ratify the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The Government has concluded that it is the right time for the UK to join Hague 2019 and will seek to do so as soon as practicable.

The Convention will have UK-wide extent, that is apply in all three jurisdictions of the UK. It will be implemented using a registration model, similar to the one used for the 2005 Hague Choice of Court Convention. The UK will not make a declaration under Articles 14, 16 or 19.

The Children’s Rights Academy at the University of Geneva offers an executive training programme on Civil Aspects of International Child Protection (ICPT).

The programme includes four half-day online modules in English (Children’s Individual Rights in Transnational Parental Relationships; International and Comparative Family Law; Vulnerable Migration and Practice of Child Protection Stakeholders: Inter-agency Co-operation in Context), scheduled to take place between 7 December 2023 and 18 April 2024.

Roberta Ruggiero, Gian Paolo Romano and Karl Hanson are the programme directors; Vito Bumbaca is the coordinator.

Speakers include: Roberta Ruggiero, Olga Khazova, Karl Hanson, Gian Paolo Romano, Philippe Lortie, Michael Wilderspin, Ilaria Pretelli, Vincent Chetail, Irina Todorova, Noelle Darbellay, Mayela Celis Aguilar, Jason Harts, Nicolas Nord, Joëlle Schickel and Jean Ayoub.

For further info, see here.

Written by Bill Dodge, the John D. Ayer Chair in Business Law and Martin Luther King Jr. Professor of Law at UC Davis School of Law.

There are better and worse ways to criticize U.S. extraterritorial jurisdiction. In Part I of this post, I discussed some shortcomings of a February 2023 report by China’s Ministry of Foreign Affairs, “The U.S. Willful Practice of Long-arm Jurisdiction and its Perils.” I pointed out that the report’s use of the phrase “long-arm jurisdiction” confuses extraterritorial jurisdiction with personal jurisdiction. I noted that China applies its own laws extraterritorially on the same bases that it criticizes the United States for using. I argued that the report ignores significant constraints that U.S. courts impose on the extraterritorial application of U.S. laws. And I suggested that China had chosen to emphasize weak examples of U.S. extraterritoriality, such as the bribery prosecution of Frédéric Pierucci, which was not even extraterritorial.

In this post, I suggest some better ways of criticizing U.S. extraterritorial jurisdiction. Specifically, I discuss three cases in which the extraterritorial application of U.S. law appears to violate customary international law rules on jurisdiction to prescribe: (1) the indictment of Huawei executive Wanzhou Meng; (2) the application of U.S. sanctions based solely on clearing dollar transactions through U.S. banks; and (3) the application of U.S. export controls to foreign companies abroad based on “Foreign Direct Product” Rules. The Ministry of Foreign Affairs report complains a lot about U.S. sanctions, but not about the kind of sanctions that most clearly violates international law. The report says much less about export controls and nothing about Meng’s indictment, which is odd given the tensions that both have caused between China and the United States.

Wanzhou Meng

In 2018, federal prosecutors in New York indicted Huawei executive Wanzhou Meng for bank and wire fraud. They then sought her extradition from Canada, where she had been arrested at the request of U.S. authorities. The indictment was based on a meeting in Hong Kong between Meng and HSBC, a British bank, to convince it to continue doing business with Huawei despite concerns that the Chinese company might be violating U.S. sanctions on Iran. The prosecution’s theory appears to have been that Meng’s representations at this meeting ultimately caused HSBC’s U.S. subsidiary to clear foreign transactions denominated in dollars through the United States in violation of Iran sanctions.

During the extradition proceeding, I filed an affidavit with the Canadian court explaining why the U.S. prosecution violated international law.  Customary international law allows states to exercise prescriptive jurisdiction only when there is a “genuine connection” between the subject of the regulation and the regulating state. There are six traditional bases for jurisdiction to prescribe: territory, effects, active personality, passive personality, the protective principle, and universal jurisdiction.

Clearly the United States did not have prescriptive jurisdiction based on territory or nationality because the conduct occurred in Hong Kong and Meng is not a U.S. national. Passive personality, which recognizes jurisdiction to prescribe based on the nationality of the victim, also could not justify the application of U.S. law in this situation because the alleged misrepresentations were made to a non-U.S. bank. And bank and wire fraud do not fall within the categories of offenses that are subject to the protective principle or universal jurisdiction.

The only possible way of justifying the application of U.S. law would be effects jurisdiction, reasoning that Meng’s meeting with a British bank in Hong Kong caused its U.S. subsidiary to continue clearing dollar transactions through New York. But, in this case, it was not clear that the alleged misrepresentations actually caused such effects in the United States. And even if they did, it is difficult to say that such effects were substantial, which is a requirement for effects jurisdiction under customary international law.

Apart from customary international law, it is also doubtful that Meng’s conduct in Hong Kong fell within the scope of the federal bank and wire fraud statutes. Applying the presumption against extraterritoriality (a limit on U.S. extraterritorial jurisdiction discussed in yesterday’s post), the Second Circuit has interpreted those statutes to require conduct in the United States that constitutes a “core component” of the scheme to defraud. Although U.S. courts are currently divided on how much U.S. conduct is required under the federal bank and wire fraud statutes, Meng engaged in no U.S. conduct at all.

After nearly three years of house arrest in Canada, Meng agreed to a deferred prosecution agreement with the United States, in which she admitted that her statements to HSBC were false (though not that they violated U.S. law), and she returned to China. The agreement resolved a “damaging diplomatic row” between China and the United States. Because the indictment provides a clear example of U.S. extraterritorial jurisdiction in violation of international law, it is odd to find no mention of this case in the Ministry of Foreign Affairs report.

Correspondent Account Jurisdiction

A second example of U.S. extraterritorial jurisdiction that violates international law involves U.S. secondary sanctions. In contrast to Meng’s indictment, the report discusses U.S. sanctions at length, but it does not focus on the kind of sanctions that most clearly violate international law. This is what Susan Emmenegger has called “correspondent account jurisdiction”: sanctions imposed on foreign persons engaged in foreign transactions when the only connection to the United States is clearing dollar payments through banks in the United States.

The report calls the United States a “sanctions superpower” and specifically mentions U.S. sanctions against Cuba, Iran, Iraq, Libya, and Syria, as well as human rights sanctions under the Global Magnitsky Human Rights Accountability Act. “Sanctions strain relations between countries and undermine the international order,” the report says. They can also cause “humanitarian disasters.”

One can certainly criticize some U.S. sanctions as a matter of policy. As a matter of international law, however, most of these programs have strong support. U.S. sanctions typically take the form of access restrictions, limiting the ability of foreign parties to do business in the United States or with U.S. nationals. Under international law, these programs are based on the territoriality and nationality principles. In their comprehensive legal analysis of U.S. secondary sanctions, Tom Ruys and Cedric Ryngaert note that “most of these measures—denial of access to the US financial system, access to US markets, or access to the US for individual persons—merely amount to the denial of privileges” and “international law does not entitle foreign persons to financial, economic, or physical access to the US.”

But correspondent account jurisdiction is different. The United States is currently prosecuting a state-owned bank in Turkey, Halkbank, for violating U.S. sanctions on Iran. According  to the indictment, Halkbank ran a scheme to help Iran repatriate more than $20 billion in proceeds from oil and gas sales to Turkey’s national oil company by using the proceeds to buy gold for Iran and creating fraudulent transactions in food and medicine that would fit within humanitarian exceptions to U.S. sanctions. The only connection to the United States was the clearing of dollar payments through banks in the United States.

As discussed above, customary international law requires a “genuine connection” with the United States. None of the traditional bases for jurisdiction to prescribe would seem to supply that connection. Halkbank is not a U.S. national, and it is being prosecuted for conduct outside the United States. Passive personality does not provide jurisdiction under international law because the only potential harm to U.S. persons from Halkbank’s conduct is the risk of punishment for Halkbank’s correspondent banks for violating U.S. sanctions, harm the United States is well placed to avoid. And clearing dollar transactions is not the sort of conduct that either the protective principle or universal jurisdiction covers.

That leaves the effects principle—that by arranging transactions with Iran in dollars outside the United States, Halkbank caused the clearing of those transactions in the United States. As in Meng’s case discussed above, the problem with this argument is that the effects must be substantial to satisfy customary international law. It is difficult to see how merely clearing a transaction between foreign nationals that begins and ends outside the United States rises to the level of a substantial effect, since it does not in any way disrupt the U.S. financial system.

Correspondent account jurisdiction is not just a violation of international law; it is also a violation of U.S. domestic law. U.S. sanctions against Iran are issued under a statute called the International Emergency Economic Powers Act (IEEPA). IEEPA authorizes the President to prohibit financial transactions only “by any person, or with respect to any property, subject to the jurisdiction of the United States.” As I explain in greater detail here, if the United States does not have jurisdiction under international law, the sanctions are invalid as a matter of domestic law under IEEPA.

The Ministry of Foreign Affairs report wants to claim that U.S. extraterritorial jurisdiction “violates international law.” But on sanctions, it spends most of its energy discussing programs that are consistent with international law. The report mentions correspondent account jurisdiction only briefly, accusing the United States of exercising jurisdiction based on “the flimsiest connection with the United States, such as … using U.S. dollar[s] for clearing or other financial services.” With this example, I agree. I simply wonder why the report did not focus on it to a greater extent.

Foreign Direct Product Rules

A third example of U.S. extraterritorial jurisdiction that the report could have emphasized involves U.S. export controls. On October 7, 2022, in a “seismic shift” of policy, the United States adopted new rules to limit China’s ability to develop advanced computing power, including artificial intelligence. (The rules were updated last month.) Most of these rules are consistent with international law, but the Foreign Direct Product Rules arguably are not.

First, the regulations limit the export from the United States of computer chips with advanced characteristics, other products that contain such chips, and equipment used to manufacture such chips. These restrictions are consistent with international law because they are based on U.S. territorial jurisdiction.

Second, the regulations add several Chinese companies, universities, and other entities to the U.S. Entity List and Unverified List, which prohibit those entities from receiving exports from the United States. Again, these restrictions are consistent with international law because they are based on U.S. territorial jurisdiction.

Third, the regulations prohibit U.S. engineers and scientists from helping China with semiconductor manufacturing even if those individuals are working on things that are not subject to export controls. These restrictions are consistent with international law because they are based on U.S. nationality jurisdiction.

Fourth, the regulations extend U.S. export controls extraterritorially to non-U.S. companies outside the United States. These rules are known as Foreign Direct Product Rules (FDP rules) because they prohibit foreign companies from exporting goods to China that are the direct products of technology that originated in the United States. Currently, the most advanced computer chips are made in Taiwan, South Korea, and Japan. The machines to make these chips are manufactured in the Netherlands. But U.S.-origin technology is used in virtually all chip manufacturing. So, the effect of these FDP rules is to extend U.S. export controls to chips made in Taiwan, Japan, and South Korea even if those chips themselves contain no components that were originally made in the United States.

There is a serious question whether FDP rules violate international law. None of the traditional bases for jurisdiction to prescribe exists. These U.S. rules are not based on territory, effects, nationality, passive personality, the protective principle, or universal jurisdiction. The origin of technology is not a traditional basis for jurisdiction to prescribe. Of course, the traditional bases are not exclusive. They are simply well accepted examples of a more general requirement that the regulating state must have a “genuine connection” to whatever it wishes to regulate. But it is not clear that the origin of technology qualifies as a genuine connection.

One thing that makes this analysis more complicated is the reaction of other states. Customary international law is based on state practice, so one must pay close attention to whether other states consider the origin of technology to be a legitimate basis for export controls. China, of course, has protested the U.S. export controls. But Taiwan, Japan, South Korea, and the Netherlands have not. This is different from what happened 40 years ago when the United States imposed export controls on foreign companies to prohibit the sale of certain goods to the USSR to try to stop the building of pipelines from Russia to Europe. In that case, the United States’ allies in Europe strongly protested the export controls as a violation of international law, and in the end the United States withdrew those controls. This time, U.S. allies are supporting the export controls on sales of advanced computer chips to China.

The Ministry of Foreign Affairs report makes no mention of FDP rules. It does claim that “[u]nder the pretext of safeguarding national security,” the United States “has adopted a package of measures including the Entity List and economic sanctions to restrict foreign enterprises from obtaining raw materials, items and technologies vital to their survival and development.” The report’s specific mention of the Entity List, which essentially blacklists certain Chinese companies, is consistent with the emphasis on this list in other Chinese protests of U.S. export controls. But, as explained above, the U.S. Entity List does not violate international law, whereas the FDP rules arguably do.

Conclusion

The United States frequently exercises extraterritorial jurisdiction. As I discussed in Part I of this post, so does China. Countries are within their rights to apply their laws extraterritorially so long as doing so is consistent with international law.

In these posts, I have used the Ministry of Foreign Affairs report as a foil because it has shortcomings. As I described yesterday, it uses confusing terminology, criticizes the U.S. for regulating on the same bases that China does, ignores constraints on U.S. extraterritoriality, and illustrates its points with weak examples (like the case of Frédéric Pierucci, which was not even extraterritorial). But I do not mean to suggest that the United States is beyond criticism. The United States does sometimes apply its laws extraterritorially in ways that violate international law, and, in this post, I have pointed to three examples.

It seems to me that China’s criticism of U.S. extraterritorial jurisdiction would be more effective if it would focus on examples that violate international law rather than on examples that do not. China should be talking less about Frédéric Pierucci and more about Wanzhou Meng.

[This post also appears at Transnational Litigation Blog (TLB)]

A Russian father, who was long since separated from the mother of his children in Russia, came to Finland with his two sons in September 2022 and applied for asylum. The mother in Russia pleaded in Finnish courts that the children should be returned to Russia in line with the 1980 Hague Convention on the Civil Aspects of Child Abduction (1980 Hague Convention), which the two countries are signatories to. The father stated that a return to Russia would not be in the best interest of the children and would constitute a breach of Finland’s international obligations to protect fundamental human rights.

Judgment

In its judgment of 27 September 2023, the Finnish Supreme Court initially held that the prerequisites for return of the children were met as it was uncontested that the removal was wrongful. The issue for the court was whether a return to Russia could be refused despite this. Article 13.1.b of the 1980 Hague Convention allows for refusal if “there is a grave risk that a return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation.” With reference to the Hague Conference on Private International Law’s Guide to Good Practice from 2020, the Finnish Supreme Court held that the ground for refusal should be interpreted narrowly.

As regards refusal on the grounds of Article 13.1.b, the Court emphasized that an assessment cannot be based on a  comparison of different general living conditions in the requested state and the state of potential return. Living conditions in another country can only be taken into consideration under Article 13.1.b if the fundamental needs of the children will not be met. Holding that it was not proven that the children would lack fundamental needs like food, rest, hygiene, or child-like activities in Russia, the Court found that there was no ground for refusal under Article 13.1.b. Nor was it claimed in the case that the children risked being involved in the Russian war on Ukraine. However, the father argued that the children’s learning of military skills in school was harmful. In this regard, the Supreme Court concluded that there are ideological and practical differences between the Russian and the Finnish school systems. This difference was not considered to reach the threshold for refusing the return of the children.

The Finnish Supreme Court also noted that Article 20 of the 1980 Hague Convention allows a state requested to return a child to refuse to do so if it is not permitted by its fundamental principles relating to the protection of human rights and fundamental freedoms. Here, the court argued that Finnish law has not implemented Article 20 of the Hague Convention and that it therefore could not be applied. Nonetheless, the Court added that a return of children to another country may be refused if it is in conflict with Section 9 of Finland’s Constitution which grants foreigners the right not to be sent to countries where they risk death penalty, torture or other treatment that violates their human dignity.

Lastly, the court also assessed the views of the children themselves. Under Article 13.2, the own views of the child can be taken into consideration if the child has attained such an age and degree of maturity that this is appropriate. Both children had a strong and genuine view that they wanted to stay with the father in Finland. However, the court held that it was only the older of the two children who had attained such an age and maturity that his views could be taken into account. Thus, the Finnish Supreme Court held that “the best interest of the child” as a whole prevailed over the older child’s own view of wanting to stay with the father in Finland.

Comment

Even if the judgment truly illustrates the strong principle of returning the child after a wrongful removal under the 1980 Hague Convention, I think that the Court’s non-application of Article 20 in the Hague Convention deserves some discussion. First, it is worth noting that Article 20 of the 1980 Hague Convention is not formulated as a traditional public policy exception. According to the explanatory report to the 1980 Hague Convention, Article 20 is a compromise of opposing views (see in particular paragraphs 31-34 of the explanatory report). On the one hand, the convention would risk being a “dead letter” if the requested state too easily could apply an exception. On the other hand, the most fundamental human rights must be protected by a requested state in all circumstances. To that extent, Article 20 serves as a public policy exception in practice. Even if the legal value of human rights has increased in Europe since the 1980 Hague Convention was adopted, one must also remember that every in casu-exception of the strong principle rule that abducted children must always be returned risk leading to a collapse of the system. This is especially true for two neighbouring countries with so fundamentally different ideological and political systems as Finland and Russia.

Written by Bill Dodge, the John D. Ayer Chair in Business Law and Martin Luther King Jr. Professor of Law at UC Davis School of Law.

China has been critical of U.S. extraterritorial jurisdiction. In February, China’s Ministry of Foreign Affairs issued a report entitled “The U.S. Willful Practice of Long-arm Jurisdiction and its Perils.” In the report, the Ministry complained about U.S. secondary sanctions, the discovery of evidence abroad, the Helms-Burton Act, the Foreign Corrupt Practices Act, the Global Magnitsky Human Rights Accountability Act, and the use of extraterritorial jurisdiction in criminal cases. The report claimed that U.S. extraterritorial jurisdiction has caused “severe harm … to the international political and economic order and the international rule of law.”

There are better and worse ways to criticize U.S. extraterritorial jurisdiction. The Ministry of Foreign Affairs report pursues some of the worse ways and neglects some better ones. In this post, I discuss a few of the report’s shortcoming. In a second post, I discuss stronger arguments that one could make against U.S. extraterritorial jurisdiction.

Confusing Extraterritorial Jurisdiction with Personal Jurisdiction

One problem with the report is terminology. The report repeatedly uses the phrase “long-arm jurisdiction” to refer to the extraterritorial application of U.S. law. The United States, the report says, has “expand[ed] the scope of its long-arm jurisdiction to exert disproportionate and unwarranted jurisdiction over extraterritorial persons or entities, enforcing U.S. domestic laws on extraterritorial non-US persons or entities, and wantonly penalizing or threatening foreign companies by exploiting their reliance on dollar-denominated businesses, the U.S. market or U.S. technologies.”

In the United States, however, “long-arm jurisdiction” refers to the exercise of personal jurisdiction over non-resident defendants based on contacts with the forum state. The report seems to recognize this, referring in its second paragraph to the U.S. Supreme Court’s decision in International Shoe Co. v. Washington (1945) and the requirement of “minimum contacts.” But the report goes on use “long-arm jurisdiction” to refer the extraterritorial application of U.S. law. This is more than an academic quibble. Jurisdiction to prescribe (the authority to make law) and jurisdiction to adjudicate (the authority to apply law) are very different things and are governed by different rules of domestic and international law.

The report’s confusion on this score runs deeper than terminology. The Ministry of Foreign Affairs seems to think that the United States uses the concept of “minimum contacts” to expand the extraterritorial application of U.S. law. The United States “exercises long-arm jurisdiction on the basis of the ‘minimum contacts’ rule, constantly lowering the threshold for application,” the report states. “Even the flimsiest connection with the United States, such as having a branch in the United States, using [the] U.S. dollar for clearing or other financial services, or using the U.S. mail system, constitutes ‘minimum contacts.’”

In fact, the requirement of “minimum contacts” for personal jurisdiction is quite stringent. Moreover, as I have recently noted, this requirement serves to limit the extraterritorial application of U.S. law rather than expand it. When foreign defendants lack minimum contacts with the United States, U.S. courts cannot exercise personal jurisdiction and thus cannot apply U.S. laws extraterritorially even when Congress wants them to. The Helms-Burton Act (one of the laws about which China’s Ministry of Foreign Affairs complains) is an example of this. Congress clearly intended its cause of action for trafficking in confiscated property to discourage non-U.S. companies from investing in Cuba. But U.S. courts have been unable to apply the law to foreign companies because they have concluded that those companies lack “minimum contacts” with the United States.

China’s complaint is not against U.S. rules of personal jurisdiction or the requirement of “minimum contacts.” It is rather with the extraterritorial application of U.S. law. Using the phrase “long-arm jurisdiction” confuses the two issues.

Criticizing Extraterritorial Jurisdiction that China Exercises Too

The report also criticizes the United States for applying its law extraterritorially based on effects: “the United States has further developed the ‘effects doctrine,’ meaning that jurisdiction may be exercised whenever an act occurring abroad produces ‘effects’ in the United States, regardless of whether the actor has U.S. citizenship or residency, and regardless of whether the act complies with the law of the place where it occurred.” This is true. For example, the U.S. Supreme Court has held that U.S. antitrust law “applies to foreign conduct that was meant to produce and did in fact produce some substantial effect in the United States.”

But China also applies its law extraterritorially based on effects. China’s Anti-Monopoly Law provides in Article 2 that it applies not only to monopolistic practices in the mainland territory of the People’s Republic of China but also “to monopolistic practices outside the mainland territory of the People’s Republic of China that eliminate or restrict competition in China’s domestic market.” In 2014, China blocked an alliance of three European shipping company because of possible effects on Chinese markets.

China regulates extraterritorially on other bases too. Although the Ministry of Foreign Affairs characterizes the extraterritorial application of U.S. criminal law as “an extreme abuse,” China applies its criminal law extraterritorially on all the bases that the United States employs. The Criminal Law of the People’s Republic of China asserts jurisdiction based not just on territory (Article 6), but also on effects (Article 6), nationality (Article 7), passive personality (Article 8), the protective principle (Article 8), and universal jurisdiction (Article 9). Each of these bases for jurisdiction to prescribe is consistent with customary international law, and China has the right to extend its criminal law extraterritorially like this. But so does the United States.

In their excellent article Extraterritoriality of Chinese Law: Myths, Realities and the Future, Zhengxin Huo and Man Yip provide a detailed discussion of the extraterritorial application of Chinese law. “China’s messaging to the international community is,” they note, “somewhat confusing: it opposes the US practice of ‘long-arm jurisdiction,’ yet it has decided to build its own legal system of extraterritoriality.” By criticizing the United States for exercising jurisdiction on the same bases that China itself uses, China opens itself to charges of hypocrisy.

Ignoring Constraints on U.S. Extraterritoriality

The Ministry of Foreign Affairs report also ignores important constraints on the extraterritorial application of U.S. law. It says the United States has “developed a massive, mutually reinforcing and interlocking legal system for long-arm jurisdiction” and has “put in place a whole-of-government system to practice long-arm jurisdiction.”

In fact, U.S. courts limit the extraterritorial application of U.S. law in significant ways. First, as noted above, U.S. rules on personal jurisdiction (including “minimum contacts”) limit the practical ability of the United States to apply its laws abroad. As I have written before, “Congress cannot effectively extend its laws extraterritorially if courts lack personal jurisdiction to apply those laws.”

Second, U.S. courts apply a presumption against extraterritoriality to limit the reach of federal statutes. Most recently, in Abitron Austria GmbH v. Hectronic International, Inc. (2023), the Supreme Court held that federal statutes should be presumed to apply only to conduct in the United States unless those statutes clearly indicate that they apply extraterritorially. At issue in Abitron was the federal trademark statute, which prohibits use of a U.S. trademark that is likely to cause confusion in the United States. The defendants put U.S. trademarks on products in Europe, some of which were ultimately sold to the United States. The dissent argued that the statute should apply to foreign conduct as long as the focus of Congress’s concern—consumer confusion—occurred in the United States. But the majority disagreed, holding that there must also be conduct in the United States. As I have noted previously, this version of the presumption has the potential to frustrate congressional intent when Congress focuses on something other than conduct.

Third, some lower courts in the United States impose additional limits on the extraterritorial application of U.S. law when foreign conduct is compelled by foreign law. In 2005, U.S. buyers sued Chinese sellers of vitamin C for fixing the prices of vitamins sold to the United States. The U.S. court found the Chinese sellers liable for violating U.S. antitrust law and awarded $147 million in damages. Although the anticompetitive conduct occurred in China, it had effects in the United States because vitamins were sold at higher than market prices in the United States.

The Chinese companies appealed, arguing that they were required by Chinese law to agree on export prices. The case went all the way to the U.S. Supreme Court on the question of how much deference to give the Chinese government’s interpretation of its own law. Ultimately, in 2021, the Second Circuit Court of Appeals held that Chinese law did indeed require the anticompetitive conduct and that the case should therefore be dismissed on grounds of international comity because China had a stronger interest in applying its law than the United States did. This is a remarkable decision. Although Congress clearly intended U.S. antitrust law to apply to foreign conduct that causes anticompetitive effects in the United States, and although applying U.S. law based on effects would not violate international law, the U.S. court held that the case should be dismissed in deference to Chinese law.

To be clear, I disagree with these constraints on the extraterritorial application of U.S. laws. I think Congress should have more authority to define rules of personal jurisdiction, particularly when it wants its laws to apply outside the United States. I disagree with Abitron’s conduct-based version of the presumption against extraterritoriality. And I filed two separate amicus briefs (with Paul Stephan) urging the Supreme Court to take up the international comity question and make clear that lower courts have no authority to dismiss claims like those in Vitamin C that fall within the scope of U.S. antitrust law. But whether these constraints are wise or not, ignoring them provides a distorted picture of U.S. extraterritorial jurisdiction.

Weak Examples

The Ministry of Foreign Affairs also weakens its case by relying on examples that do not support its arguments. The report singles out the indictment of French executive Frédéric Pierucci for violating the U.S. Foreign Corrupt Practices Act (FCPA), a story he recounts in his 2019 book The American Trap. Here is how the report describes what happened:

In 2013, in order to beat Alstom in their business competition, the United States applied the Foreign Corrupt Practices Act to arrest and detain Frédéric Pierucci on charges of bribing foreign officials. He was further induced to sign a plea deal and provide more evidence and information against his company, leaving Alstom no choice but to accept General Electric’s acquisition, vanishing ever since from the Fortune 500 list. The U.S. long-arm jurisdiction has become a tool for its public power to suppress competitors and meddle in normal international business activities, announcing the United States’ complete departure from its long-standing self-proclaimed champion of liberal market economy.

I have read Pierucci’s book, and his story is harrowing. But the book does not show what the report claims.

First, and perhaps most significantly, application of the FCPA in this case was not extraterritorial. Pierucci was indicted for approving bribes paid to Indonesian officials to secure a contract for Alstrom from his office in Windsor, Connecticut (p. 65). He seems to acknowledge that the bribes violated the FCPA but counters that the statute was “very poorly enforced” at the time (p. 67) and that he “received no personal gain whatsoever” (p. 71). These are not valid defenses under U.S. law.

Second, Pierucci was not arrested to facilitate GE’s acquisition of Alstom. The U.S. Department of Justice (DOJ) began investigating Alstom’s payment of bribes in late 2009 (p. 54), and Pierucci was arrested in April 2013 (p. 1). Alstom’s takeover discussions with GE began during the summer of 2013 (p. 162), and the deal was made public in April 2014 (p. 155). Pierucci plausibly claims that GE took advantage of Alstom’s weakened position, noting that “Alstom is the fifth company to be swallowed up by GE after being accused of corruption by the DOJ” (p. 164). But I saw no claim in the book that DOJ’s investigation of Alstom was intended to bring about its acquisition by a U.S. competitor.

Finally, it is hard to credit the report’s assertion that prosecuting bribery constitutes “meddl[ing] in normal international business activities.” China has joined the U.N. Convention Against Corruption. In 2014, China fined British company GlaxoSmithKline 3 billion yuan (U.S.$489 million) for bribing Chinese doctors. Earlier this year, China launched an unprecedented campaign against corruption in its health care industry. And, of course, fighting corruption remains a top priority of President Xi Jinping.

Conclusion

Perhaps it seems unfair to criticize a report from a foreign ministry for making mistakes about law. Perhaps the report should be seen merely as a political document. But the report itself discusses legal matters in detail and charges the United States with “violat[ing] international law.” Whether the report is a political document or not, the shortcomings that I have discussed here weaken its credibility and undermine its arguments.

There are better ways to criticize U.S. extraterritorial jurisdiction. In Part II of this post, I will offer some examples.

 

[This post also appears at Transnational Litigation Blog (TLB)]

 

 

The event organized to celebrate the launch of the book Blockchain & Private International Law, originally scheduled for 5 October, will now take place on 20 December 2023 at 18.15, both physically at the Université de Lausanne (AULA, IDHEAP Building) and online (Zoom link).

On 4 December 2023, at 6 p.m. CET, a free webinar will take place in preparation of the 2024 inaugural edition of the EAPIL Winter School on Personal Status and Family Relationships, which will be held on-site in Como between 12 and 16 February 2024 (a detailed brochure is available here).

The webinar will give a glimpse of what the Winter School will be about. Specifically, it will focus on selection of hot topics, such as the cross-border recognition of sex reassignment and the enjoyment of the right to name abroad.

The speakers are some of those who will be lecturing at the Winter School, namely Laura Carpaneto (University of Genova), Ester di Napoli (University of Ferrara), Cristina González Beilfuss (Unversity of Barcelona), Satu Heikkilä (LL.D., Administrative Law Judge), Silvia Marino (University of Isnubria), Nadia Rusinova (Hague University), Michael Wildespin (Legal Advisor to the European Commission), Anna Wysocka-Bar (Jagiellonian University), and Mirela Župan (University of Osijek).

The webinar will also offer an opportunity to provide information about the EAPIL Winter School.

Join the free seminar to discover what awaits you during the Winter School week, and…if you want to know more, enrol and come to Como in February!

Those interested in attending the webinar may do so directly through this link. No prior registration is required.

More information on the Winter School is found here. To enrol in the Winter School, please fill in this form.

In the summer of 2023 Tine Van Hof defended her PhD on this topic at the University of Antwerp.  The thesis will be published by Hart Publishing in the Studies in Private International Law series (expected in 2025). She has provided this short summary of her research.

When a child is abducted by one of their parents, the courts dealing with a return application must consider several legal instruments. First, they must take into account private international law instruments, specifically, the Hague Child Abduction Convention (1980) and the Brussels IIb Regulation (2019/1111). Second, they have to take into account children’s rights law instruments, including mainly the UN Convention on the Rights of the Child.

Because these instruments have different approaches regarding the concept of the best interests of the child, they can lead to conflicting outcomes. Strict adherence to private international law instruments by the return court could mean sending a child back to the country where they lived before the abduction. Indeed, the Hague Child Abduction Convention and Brussels IIb presume that it is generally best for children to return to the State of habitual residence and therefore require ¾ in principle ¾ a speedy return. The children’s rights law instruments, on the other hand, require that the best interests of the individual child be taken into account as a primary consideration. If the court follows these instruments strictly, it could for example rule in a particular case that it is better for a child with medical problems to stay in country of refuge because of better health care.

The question thus arises how to address these conflicts between private international law and children’s rights law in international child abduction cases. To answer this question, public international law can give some inspiration, as it offers a number of techniques for addressing conflicts between fields of law. In particular, the techniques of formal dialogue and systemic treaty interpretation can provide relief.

Formal dialogue, in which the actors of one field of law visibly engage with the instruments or case law of the other field of law, can be used by the Hague Conference, the EU and the Court of Justice of the European Union (CJEU) as private international law actors, and the Committee on the Rights of the Child and the European Court of Human Rights (ECtHR) as children’s rights law actors. By paying attention to the substantive, institutional and methodological characteristics of the other field of law, these actors can promote reconciliation between the two fields and prevent the emergence of actual conflict. However, a prerequisite for this is that the actors are aware of the relevance of the other field of law and are willing to engage in such a dialogue. This awareness and willingness can be generated through informal dialogue. The CJEU and the ECtHR, for example, conduct such informal dialogue in the form of their biennial bilateral meeting.

In addition, supranational, international and domestic courts can apply the technique of systemic treaty interpretation by interpreting a particular instrument (e.g., the Hague Child Abduction Convention) in light of other relevant rules applicable in the relationship between the parties (e.g., the UN Convention on the Rights of the Child). This allows actual conflicts between the two fields of law to be avoided. This technique was used, for example, by the ECtHR in X v. Latvia. To apply this technique, it is also important that courts are aware of the applicability of the other field of law and are willing to take into account its relevant rules. Again, courts have established initiatives that promote this awareness and willingness, such as the International Hague Network of Judges.

The expectation is that by applying these techniques, the potential conflict between private international law and children’s rights law in the context of international child abduction will no longer manifest itself as an actual conflict. Further, applying these techniques will make it possible for national courts to adequately apply all instruments and make a balanced decision on the return of children. In addition to these two techniques, other techniques, such as coordination ex ante, are considered appropriate to better align private international law and children’s rights law when dealing with other issues, such as for example international surrogacy.

A seminar series on the recast of Brussels I bis Regulation, organized by the Research Centre for Private International Law and International Trade (CRDI, University of Paris Panthéon Assas) and the Sorbonne Department Study of International Private Relationships (SERPI, University of Paris 1 Panthéon-Sorbonne), together with the Société de Législation Comparée (SLC), the French national school for the judiciary (ENM) and the French Supreme Court for civil and criminal matters (Cour de cassation), will take place during the 2023-2024 academic year, both in Paris and online (in French).

According to the scientific coordinators of the seminar series, Marie-Elodie Ancel (University of Paris-Panthéon-Assas) and Pascal de Vareilles-Sommières (University of Paris 1 Panthéon-Sorbonne), the seminar series aims to provide a forum for French legal experts – academics and practitioners – to discuss the future reform of Brussels I bis Regulation and to propose key improvements to the text.

The first seminar will take place on 30 November 2023 (9.00 – 12.30 am, UTC+1). The objective will be to present the prospect of a recast, from a political and technical perspective, and to discuss different issues relating to the scope of a future “Brussels I ter Regulation”.

The list of speakers includes Pascal de Vareilles-Sommières, Tania Jewczuk, Marie-Elodie Ancel, François Ancel, Malik Laazouzi and Etienne Pataut.

The programme, as well as registration and access details can be found here. The conference series will take place at the Cour de cassation (Paris, France) and will also be broadcast live (see here).

The other seminars will take place in 2024 from 16.00 to 18.00 (UTC+1) on 18 January, 26 February, 18 March, 22 April, 30 May and 24 June.

A post published a few days ago on this blog presented, and briefly discussed, the private international law issues raised by the case of Indi Gregory, the critically ill eight-month-old child that parents wanted to transfer to Italy, to avoid the withdrawal of the life-sustaining treatment she was receiving at a hospital in England.

In fact, the child’s doctors at Queen’s Medical Centre in Nottingham had assessed that withdrawing the life-sustaining treatment would be in Indi’s best interests, having regard to the pain she was enduring because of the treatment itself and the lack of prospects of improvement. The parents disagreed, and sought to have the treatment extended for as long as possible.

As explained in more detail in the post mentioned above, the English High Court ruled in favour of the hospital trust in October 2023, and authorized the withdrawal of the treatment. A request for permission to appeal against the ruling was dismissed, and so was a subsequent application to the High Court whereby Indi’s parents sought to have the initial ruling reconsidered in light of new circumstances, including the fact that a hospital in Rome had expressed its availability to provide Indi with the extended treatment that parents were seeking.

Several readers will likely be aware by now of the dramatic developments of the case, as these were largely reported in the media throughout Europe and elsewhere. Indi was eventually transferred to a hospice in England, where she died on 13 November 2023, soon after the first steps for the court-approved withdrawal plan were put in place.

Before this tragic epilogue occurred, Indi’s parents had sought permission to appeal against an additional order given by Peel J for the High Court. Specifically, the parents had challenged the decision whereby the removal of invasive mechanical ventilation, i.e., extubation, that Peel J had previously authorised, should take place at a hospice. Their case was that Indi should be rather extubated at home.

On 10 November 2023, the Court of Appeal of England and Wales dismissed the application, assessing that no grounds appeared to exist to reconsider the order. The Court held, in particular that, contrary to the parents’ submission, they had not suffered from any unfairness in the proceedings before the High Court (Indi’s father claimed, inter alia, that he did not know that he had the opportunity to get his own evidence about the issue of the location of extubation at the hearing held before Peel J), and that the conditions for reopening a court’s earlier determination of a child’s best interests were not met in the circumstances.

The Court of Appeal had not been asked to deal with issues of private international law for the purposes of fiving the ruling of 10 November. In a significant obiter, however, the Court did address such issues.

It is worth recalling that on 6 November 2023 the Italian Government decided to grant Italian citizenship to Indi Gregory, and that, shortly afterwards, the Italian Consul in Manchester, acting as a “guardianship judge” pursuant to Italian legislation, took two measures. First, as reported by the Court of Appeal, the Consul issued a decree – arguably, one taken as a matter of urgency – whereby he appointed a guardian for Indi and authorised her removal to Italy for treatment. Secondly, the Consul wrote to the High Court requesting that that he be authorised to exercise jurisdiction over the case in accordance with Article 9(1) of the Hague Convention of 19 October 1996 on the Protection of Children, which permits such a request where the requesting authority considers that they are better able to assess the child’s best interests. compared with the authorities in the State where the child is habitually resident.

The Court of Appeal, in the words of Peter Jackson, criticised the latter moves in unusually strong terms. Having noted that the “only basis upon which such a request could even theoretically be made in Indi’s case is that she was granted Italian citizenship”, the Court observed that in hearings before the High Court and before the Court of Appeal itself, Indi’s father had “accepted that decisions about Indi’s welfare are to be made by [English] courts”, adding that

in any case, the argument that the Italian authorities are better able than the English court to determine Indi’s best interests is in our view wholly misconceived and a request of this nature is clearly contrary to the spirit of this important international convention.

The Court did not elaborate on the denounced misconception nor on the spirit of the Convention.

Arguably, the obiter reflects an understanding of the Hague Convention on the Protection of Children that could be summarised as follows.

1. The Convention, as stated in the preamble, aims to “improve the protection of children in international situations”. It does so by avoiding (or managing) conflicts between their Contracting States’ legal systems in respect of jurisdiction, applicable law, recognition and enforcement of measures for the protection of children.

2. Contracting States share the view that, as stated in the United Nations Convention on the Rights of the Child and recalled in the Hague Convention’s own preamble, “the best interests of the child are to be a primary consideration”. The Convention, based as it is on the assumption that the protection of children is best ensured in a cross-border cases through international cooperation, builds on mutual trust among Contracting States. It is in fact mutual trust, combined with the primary consideration owed to the best interests of the child, that suggests that the authorities of a State other than the State of habitual residence of the child should refrain, in principle, from exercising their jurisdiction over the child, let alone disregarding the measures taken by the authorities of the State of habitual residence.

3. The substantive and procedural rules applied in one Contracting State may differ from those in force in another, but such differences do not mean that Contracting States may, as a matter of principle, step out from the framework of cooperation established by the Convention, and depart from its rules (engaging with differences is precisely the purpose of private international law, generally). Put in another way, it may be that the (political) institutions of a Contracting State disagree with the way in which a particular case is handled by the (judicial) authorities of another (including because of the rules and standards applied by such authorities to decide the case differ from the rules and standard that the former institutions would follow in the circumstances), but the Convention does not permit the former State to interfere, on this ground, with the work carried out by the authorities of the latter State, notably by issuing competing orders.

4. Habitual residence is the key connecting factor under the Convention for the purposes of allocating jurisdiction. It was chosen on the assumption that, generally, the authorities of the State where the centre of the child’s interests are located, regardless of the child’s nationality, are best placed to assess his or her interests. Nationality, too, may play a role, but only insofar as the circumstances indicate that the authorities of the State of nationality would be better place to assess the child’s interests in the particular case concerned, provided, in any case, that the authorities of the State of habitual residence agree with this finding. The mere fact that a child possesses the nationality of a Contracting State does not confer as such on the authorities of the State of nationality the power to rule on the child.

A loose-leaf publication tends to stay as current as the most recent set of insert pages, and so identifying it either by its initial year of publication or its edition number can be misleading. For many years the leading Canadian work on private international law has been the 6th edition of Castel & Walker Canadian Conflict of Laws, with that edition first appearing in 2005. For nearly two decades, then, it has had the same year of publication and edition number, but as a loose-leaf (and as available through an electronic subscription) it has been kept quite up-to-date on a frequent basis. Now comes a new edition, the 7th, published in 2023 and with a revised title. The text is now called simply Canadian Conflict of Laws and its sole author, as was the case for the 6th edition, is Professor Janet Walker of Osgoode Hall Law School. The change in the title reflects the completion of a long process of transition from the original edition (1975) as written by Professor Jean-Gabriel Castel through some editions that were co-written by Professors Castel and Walker.  Detailed information about the new edition is available here. It remains an indispensable resource in the Canadian context and beyond.

Dear readers, dear EAPIL Members,

You might have received the email below, from gilles.cuniberti@gmx.de.

This is a fraud, please do not answer.

GC

 

 

Dear xx,

How are you doing today?.

Please, I need your assistance for the EAPL.

Get back to me by email so I can explain further.

 

Best regards

Gilles Cuniberti

—
Gilles Cuniberti
President of European Association of Private International Law (EAPL)
Professor of Comparative and Private International Law
Université du Luxembourg
4, rue Alphonse Weicker
L-2721 Luxembourg

Posted by Marlene Wethmar-Lemmer

This booklet contains the first draft of the envisaged African Principles on the Law Applicable to International Commercial Contracts. The proposal could be used by national legislators on the continent and African economic integration organisations, particularly the African Union, in, respectively, domestic legislation and regional or supranational laws of a soft or binding nature. The existence of a reliable transnational legal infrastructure in respect of international commercial law, including commercial private international law, is a prerequisite for investor confidence, inclusive economic growth, sustainable development, and the ultimate alleviation of poverty on the African continent. The instrument may contribute to sustainable growth on a long-term basis. The regulation of private international law of contract is essential to the further development of the African Continental Free Trade Area.

Jan L Neels is professor of private international law and director of the Research Centre for Private International Law in Emerging Countries at the University of Johannesburg.

ISBNs
978-1-7764474-0-4 (Paperback)
978-1-7764474-1-1 (PDF)
978-1-7764474-2-8 (EPUB)
978-1-7764474-3-5 (XML)
DOI:  https://doi.org/10.36615/9781776447411
PRICE:  R125 (print), OA (ebook)

This is the second of a series of posts which will present how the issue of the applicable law to the time limit to enforce or recognise foreign judgments is addressed in comparative private international law. The first post presented the view of the Swiss federal tribunal.

In a judgment of 11 January 2023, the French supreme court for private and criminal matters (Cour de cassation) confirmed its traditional position by ruling that the French 10 year time limit applies to the enforcement of foreign judgments in France and that foreign time limits may indirectly be taken into consideration by denying standing to the party seeking a declaration of enforceability.

Time Limit to Enforce Foreign Judgments

For more than 30 years, the Cour de cassation has ruled that the enforcement of foreign judgments in France is governed by the applicable French time limit. For years, there was no specific time limit applicable to the enforcement of judgments, and French courts would thus apply the general time limit of 30 years. Since 2008, a specific rule was included in article L 111-4 of the Code of Civil Enforcement Proceedings providing for a time limit of 10 years.

In order to justify the application of French law to the issue, the Cour de cassation has consistently held that the subject matter of the time limit was the enforcement of a judgment. In other words, the issue was identified as concerned with a particular effect of the judgment, namely enforcement.

In a judgment of 4 November 2015, the court clarified that the starting point of the time limit was the date of the French order declaring the foreign judgment enforceable in France. This has been convincingly interpreted by French scholars as meaning that the subject matter of the time limit was, in an international context, the enforcement of a French judgment rather than a foreign one, i.e. the exequatur order. A possible rationale for such a proposition is that, under the French common law of judgments, a foreign judgement cannot, strictly speaking, be enforced. Only a French exequatur order can. In other words, the enforcement of foreign judgments in France is not, strictly speaking, a problem of private international law. It is a matter a domestic enforcement (of a French exequatur judgment).

This approach works fine under the French common law of judgments. But it is unclear whether it works as under the European law of judgments. In the 2023 judgment, the Cour de cassation repeated the traditional rule in the context of the Lugano Convention. Under the Lugano Convention, foreign judgments can only be enforced on the basis of a declaration of enforceability. Is it exactly the same as an exequatur order under the common law of judgments of the Member States? It seems that the Cour de cassation thought so.

All this begs the question of the time limit applicable to the enforcement of a judgment under the Brussels I bis Regulation. In the absence of any declaration of enforceability, it is hard to consider that the foreign judgment is not enforced as such.

Standing

The judgment of 11 January 2023 also confirms that the Cour de cassation would still take into account the time limit of the country of origin of the judgment to assess whether the judgment creditor would have standing to seek enforcement of the judgment in France.

The reasoning of the Cour de cassation starts from the premice that the foreign judgment may only be declared enforceable in France if it is enforceable in its country of origin. As a result, a judgment creditor of a foreign judgment time barred in its country of origin would lack standing to seek a declaration of enforceability in France, as the foreign judgment would not be enforceable in its country of origin.

The consequence of this rule is that, at least until the foreign judgment has been declared enforceable in France, it is, in effect, also subject to the time limit of its country of origin, to the extent to such time limit would affect its enforceability.

The case leading to the judgment of 11 January 2023 was concerned with the enforcement in France of a Swiss judgment. The Lugano Convention applied. The Cour de cassation does not underscore that peculiarity, which does not seem to be relevant for the court. The issue arises, however, whether the proposition that an action seeking a declaration of enforceability under the Lugano Convention might be found inadmissible comports with the rule that the only grounds for denying such declaration are the limited grounds found in Art 34 of the Convention (Case C-139/10, Prism Investments). True, the Cour de cassation does not rule that it would dismiss the application on the merits, but rather that it would find it inadmissible. Is the issue of admissibility governed by the law of the Member States?

Or should the issue of lack of enforceability of the foreign judgment be addressed at the stage of enforcement of the declaration of enforceability (and the foreign judgment)? This is what the Swiss federal Tribunal ruled in its judgment of 2 August 2022.

Co-edited by Rishi Gulati, Thomas John and Ben Koehler, the Elgar Companion to UNCITRAL is now out. This is the second in the trilogy of books on the three key international institutions mandated to work on private international and international private law. The Elgar Companion to the HCCH has already been published in 2020, with the Elgar Companion to UNIDROIT out in 2024.

The Elgar Companion to UNCITRAL brings together a diverse selection of contributors from a variety of legal backgrounds to present the past, present and future prospects of UNCITRAL instruments. Split into four key thematic sections, this book starts by providing an institutional background to UNCITRAL, before moving on to discuss the topic of dispute resolution, including contributions on international arbitration, mediation, and online dispute resolution. Further chapters then explore key topics in international contract law, especially relating to the United Nations Convention on Contracts for the International Sale of Goods. The final section of the Companion consists of chapters on a variety of matters considered at UNCITRAL, namely, micro, small and medium-sized businesses; insolvency; secured transactions; negotiable instruments; public procurement; electronic commerce and transport law.

The book will be virtually launched by the Secretary of UNCITRAL, Ms Anna Joubin-Bret, on 14 December 2024 at 13:00 CET. The launch event will also include a highly informative panel discussion. To register, please click at the link below:

https://events.mpipriv.de/book_launch_elgar_companion_to_uncitral