Conflictoflaws

On 15 May 2023, the comparative findings of the ELI Webinar Series on the EU Succession Regulation (previously reported here) will be presented in a concluding webinar. The organizers kindly invite anyone interested into the actual practice regarding cross border succession cases to register for this final event within the series:

“Join us for the concluding webinar on the ‘Application of the EU Succession Regulation in the Member States’! 

The webinar organized within the Special Interest Group on Family and Succession Law of the European Law Institute will take place on Monday, May 15th, 3-5 pm CET and shall present important results gathered during the five webinars on the application of the EU Succession Regulation in the Member States organized in 2022.

Attendance is free of charge. A ZOOM link will be sent to those who register by sending an e-mail to zivilrecht@uni-graz.at”

The first issue for the Journal of Private International Law for 2023 was just published today. It contains the following articles:

 

D McClean, “The transfer of proceedings in international family cases”

There is general agreement that jurisdiction over issues concerning children or vulnerable adults should lie with the court of their habitual residence. There are particular circumstances in which that is not wholly satisfactory and four international instruments have provided, using rather different language, the possibility of jurisdiction being transferred to a court better placed to decide the case. They include Brussels IIb applying in EU Member States since August 2022 and the Hague Child Protection Convention of growing importance in the UK. This paper examines that transfer possibility with a detailed comparison of the relevant instruments.

 

M Lehmann, “Incremental international law-making: The Hague Jurisdiction Project in context”

The Hague Conference on Private International Law is currently working towards a new instrument on jurisdiction and parallel proceedings. But critics ask if we need another instrument, in addition to the Hague Choice of Court Convention of 2005 and the Hague Judgments Convention of 2019. This article gives reasoned arguments for a “yes” and explores possibilities for the substantive content of the new instrument. It does so by looking back and contextualising the new instrument with regard to the two preceding Conventions, and by looking forward to what is still to come, ie the interpretation and application of all three instruments. On this basis, it argues that a holistic approach is required to avoid the risk of a piecemeal result. Only such a holistic approach will avoid contradictions between the three instruments and allow for their coherent interpretation. If this advice is heeded, incremental law-making may well become a success and perhaps even a model for future negotiations.

 

B Köhler, “Blaming the middleman? Refusal of relief for mediator misconduct under the Singapore Convention”

The discussion surrounding the Singapore Convention on Mediation 2018 has gathered steam. In particular, the refusal of enforcement based on mediator misconduct as prescribed in Article 5(1)(e) and (f) has been the focus of debate and is widely perceived to be the Convention’s Achilles heel. These two provisions, already highly controversial in the drafting process, have been criticised as ill-suited to a voluntary process and likely to provoke ancillary dispute. This article defends these grounds for refusal, arguing that they play an indispensable role in guaranteeing the legitimacy of mediated settlements enforced under the Convention. It addresses some of the interpretative challenges within Article 5(1)(e) and (f) before discussing the tension between the provisions on mediator misconduct and the confidentiality of the mediation. The article then offers some guidance on how parties may limit the effects of the provisions, concluding with a brief outlook for the future.

 

A Yekini, “The effectiveness of foreign jurisdiction clauses in Nigeria: an empirical inquiry”

Business entities do not often include terms in commercial agreements unless those terms are relevant and are designed to maximise the gains of the parties to the agreement. To realise their reasonable and legitimate expectations, they expect that contractual terms and promises would be respected by the parties and courts. There is a growing body of literature suggesting that Nigerian courts are not giving maximum effects to foreign jurisdiction clauses (FJC). What is largely missing from the scholarly contributions is that no one has worked out a principled solution to overcome this conundrum. This article significantly contributes to the existing literature through an empirical analysis of Nigerian appellate court decisions on FJCs with a view to gaining deeper insights into the attitude of Nigerian courts to FJCs. Compared to the US where the national average of enforcement is 74%, a 40% rate for Nigeria does not project Nigeria as a pro-business forum. This outlook can potentially disincentivise cross-border trade and commerce between Nigeria and the rest of the world. To address this problem, the paper proceeds by presenting a normative framework, built principally on economic and contract theories, for enforcing FJCs. As most of the cases are B2B transactions, the paper invites the courts to treat FJCs and arbitration clauses equally and to replace forum non conveniens considerations with a more principled approach which limits non-enforcement to overriding policy, and a strong cause that is defined by reasonableness and foreseeability.

 

MM Kabry & A Ansari, “The enforcement of jurisdiction agreements in Iran”

Parties to a contract may designate the court or courts of a particular country to decide their disputes which have arisen or may arise from a particular legal relationship. Many countries give party autonomy its binding effect in selecting the competent court and enforcing jurisdiction agreements. There is complete silence in Iranian law regarding the enforcement of jurisdiction agreements. The current study examines the enforcement of jurisdiction agreements under Iranian law. This study investigates whether parties in international disputes can agree to confer jurisdiction to Iranian non-competent courts and whether they can agree to exclude the jurisdiction of competent Iranian courts in favour of foreign courts. The study contends that parties can agree to grant jurisdiction to Iran’s non-competent courts unless the excluded foreign court has exclusive jurisdiction to hear the dispute. On the other hand, parties may agree to exclude the jurisdiction of the competent Iranian courts in favour of foreign courts unless the Iranian courts assert exclusive jurisdiction over the dispute.

 

A A Kostin & DD Kuraksa, “International treaties on assistance in civil matters and their applicability to recognition of foreign judgments on the opening of insolvency proceedings (reflections regarding the Russian national and international experience)”

The article examines the question of admissibility of recognition of foreign judgments on commencement of bankruptcy proceedings on the basis of international treaties on legal assistance. It examines the background of these international treaties, as well as the practice of their application in respect of this category of foreign judgments. The authors conclude that foreign court decisions on opening of insolvency (bankruptcy) proceedings should be regarded as “judgments in civil matters” for the purpose of the international treaties on legal assistance. This category of foreign judgments should be recognised on the basis of international treaties in the Russian Federation, despite the existing approach of Russian courts (including the Judgment of the Arbitrazh (Commercial) Court of the Ural District of 09.10.2019 in case No. A60-29115/2019).

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on Thursday 27 April 2023 at 14:30 (Mexico City time – CST), 22:30 (CEST time). The topic of the webinar is the Construction of Private International Law and will be presented by Prof. Jorge Alberto Silva (in Spanish).

The details of the webinar are:

Link: https://us02web.zoom.us/j/85789687012?pwd=aXlKWFpzb2Qyb2VoNklwMWxyQ082UT09

Meeting ID: 857 8968 7012

Password: AMEDIP

Participation is free of charge.

This event will also be streamed live: https://www.facebook.com/AmedipMX

[This post has been prepared by Ms. Francesca Albi, J.D. Candidate | Università degli Studi di Verona]

The Summer School on Transnational Litigation has been organized since 2019 within the Ravenna Program on Cross-Border Disputes by the University of Bologna, Department of Juridical Sciences – Ravenna Campus (Italy), under the direction of Prof. Michele Angelo Lupoi.

The organization of its 2023 edition confirms the success this projects continues to enjoy among participants from all over the world, who, over the years, are contributing to build a promising network of Private International Law enthusiasts. Indeed, this project has proven to be a building-bridges catalyst to connect people with the same interests in Private International Law issues: in this sense, this multi-year Summer School actively contributes to the sharing and spread of knowledges and views, which go beyond borders in every possible sense.

 

In 2023, the Summer School will take place from Monday 17 to Saturday 22 July, both in person at the Faculty of Law (Via Oberdan 1/2) in Ravenna – Italy, and online.

 

The title, which summarises the hot topics of the courses of this year’s edition, is “Cross-border litigation and international arbitration”. As a matter of fact, the themes dealt with will concern, on one hand, transnational litigation from a wide perspective (i.e., involving climate litigation, cross-border maritime litigation, family and succession Private International Law, civil and commercial litigation), and, on the other hand, the increasingly interesting matter of international arbitration. The full schedule of classes is available and may be downloaded at https://site.unibo.it/transnational-litigation/en/program.

 

Participants will have the outstanding opportunity to acquire specialised knowledges on these relevant topics of growing importance directly from experts in such matters. In fact, the faculty consists of renowned scholars and legal practitioners, who will offer their experience involving diverse professional backgrounds developed in different States over the world. In detail, the lecturers in this edition are (in alphabetical order) Apostolos Anthimos, Giovanni Chiapponi, Elena D’Alessandro, David Estrin, Marco Farina, Francesca Ferrari, Chris Helmer, Albert Henke, Emma Roberts, Marco Torsello, Stefano Alberto Villata and Anna Wysocka-Bar. Their biographies and professional experience may be consulted at https://site.unibo.it/transnational-litigation/en/faculty.

 

Registration to the School are now open!

In order to participate, some requirements should be met: applicants must be students or graduate students of a Bachelor (three-years) or Master (five-years) Degree (or equivalent under previous systems) in Law (LMG/01), Legal Services Science (L-14), Political and International Relationships Science (L-36), International Relationships (LM52), or Political Sciences (LM62). Other candidates may also be accepted upon the presentation of the CV which should be show a connection to the topics of the Summer School. Alongside students and post-grad students, also practitioners in legal matters are invited to participate. In this regard, it must be noticed that the Ravenna Bar Association will grant 20 formative credits to Italian lawyers who attend the Summer School.

Registration to the Summer School is possible upon the payment of a fee, whose amount is €250,00 and which does not cover expenses for the accommodation and meals (please, note that registration is considered completed only when the payment of the fee is fulfilled). Applications are open until 6 July 2023 (h 23.59 CET); it is not possible to apply beyond this deadline. The application procedure is described at https://site.unibo.it/transnational-litigation/en/fees-and-forms.

 

In this regard, it is worth mentioning that, in order to give to one deserving law student or law graduate, who meets specific age requirements, the opportunity to attend the Summer School online free of charge, a call for papers has been launched. It consists in the submission of an originally and previously unpublished paper on a topic concerning transnational litigation and international arbitration. A selection committee, composed by staff and faculty members of the Summer School, will evaluate the papers and will reward the author of the best one through the possibility to attend the full Summer School online without paying the ordinary registration fee. Moreover, the best three papers will be published in the Linkedin Newsletter of the Summer School on Transnational Litigation “Transnational litigation pills”. Every submission is truly appreciated. Detailed information on this call for papers may be found on the website of the Summer School, especially in the section “Fees and forms”.

 

For any question regarding the application process or logistics, the contact person is Dr. Cinzia Cortesi, Manager of Fondazione Flaminia (master@fondazioneflaminia.it; +39 0544 34345). Otherwise, in order to acquire further information on the project, courses and call for papers, it is possible to contact Prof. Michele Angelo Lupoi, Director of the Summer School (micheleangelo.lupoi@unibo.it) or Francesca Albi, Tutor (francesca.albi@unibo.it).

 

Further information may be found in the official website of the Summer School at https://site.unibo.it/transnational-litigation/en.

 

The organization team of the Summer School warmly invites everyone who meets the requirements listed above to apply for the 2023 edition courses, in order to allow as many people as possible the exciting chance to become part of a group of colleagues and friends with the common interest in Private International Law, that is larger and larger every year.

Wuhan University Institute of International Law, in partnership with global research leader SAGE, is delighted to announce the launce of a new journal “Chinese Journal of Transnational Law”.

The Chinese Journal of Transnational Law is a double-blind peer-reviewed journal that aims to address global challenges from the perspective of transnational law, which is broadly defined to cover international law (public and private), international economic law, comparative law, the interaction between domestic and international law, and any other legal field possessing a cross-border element. This journal embraces relevant submissions from different cultures and regions and attracts readers from the global, regional and Chinese markets. The journal shall be open to not only traditional doctrinal and theoretical legal research on transnational law, but also contextual and inter-disciplinary research. Although focused on contemporary matters in its aspiration to be a forum for the latest debates on transnational legal studies, it also considers submissions inspired by in-depth historical perspectives that cast new light on present developments. The CJTL covers broad topics including but not limited to:

• Innovative transnational dispute resolution, including both state-to-state and private dispute resolution mechanisms and the impact of culture, psychology, language and geopolitics on dispute resolution;
• Transnational trade, investment and economic governance;
• Transnational family law and the wellbeing of children, including surrogacy, child abduction and same sex marriage in the cross-border context;
• Transnational regulation of technology;
• Transnational corporate responsibility and governance;
• Transnational protection of private rights in tort and transactions;
• Transnational law and development;
• Transnational law and global health governance;
• Transnational environment protection and climate change;
• Transnational criminal law;
• Unilateral sanctions, extraterritorial regulations and blocking law.

The Chinese Journal of Transnational Law accepts submissions year round on any topic covered in the journal scope. In the meantime, the journal will publish calls for special issues occasionally. A call for the first special issue is going to be announced soon. You can find more information about this journal and submit your paper here.

We can feel it in the air but also in the incoming announcements – the summer is approaching. One of the great ways to spend a part of it is at a summer school. The University of Uidne (Italy) is the host to the 16th edition of the summer school Consumer’s Rights and Market Regulation in the European Union, to be held on 12-21 July 2023.

The programme addresses aspects of legal protection of consumers and market regulation, including the private international law topics, and a moot court. The full schedule is available here. The course accepts undergraduate students, graduates (who graduated no more than five years ago), PhD students from faculties of law, economics, political science or international relations., and limited amount of posts are available on the academic qualifications bases. The early bird is until 30 April 12:00 pm GMT, and the enrollment closes on 31 May 12:00 pm GMT. For details, please consult the Call for applications Udine Summer School 2023.

The summer school is organised within the Jean Monnet Module “CoRiMaR” (Consumer’s Rights and Market Regulation in the European Union) by the Department of Legal Sciences of the University of Udine (Italy), together with a consortium of European universities including University of Essex (UK), De Montfort University (UK), Universitatea de Vest din Timisoara (Romania), East Anglia University (UK), University of Belgrade (Serbia), University of Rijeka (Croatia) and University of Szeged (Hungary).

Written by Yan WANG, Huaqiao University 

It was with great sadness that we received word from her family that Professor GUO Yujun passed away at 1:50 am GMT+8 on 22 April 2023, at the age of 59.

Professor GUO was a distinguished professor of private international law, art law, and cultural heritage law at the Wuhan University International Law Institute in China. She is the Vice-President and Secretary-General of China Society of Private International Law. During her 30 years at Wuhan University, she taught and mentored hundreds of students, inspiring many of them to work under her supervision from the undergraduate to doctoral level.

She published more than 100 academic articles and works in Chinese, English and Japanese with a wide range of domestic and international influence. She had been to Hokkaido University Law Faculty as a Japanese Government (MEXT) Scholarship student from the October 1991 to April 1993. During her academic career, she went to Harvard University, Osnabrück University, and Max Planck Institute for Comparative and International Private Law as a visiting scholar.

Professor GUO earned the affection from her family, friends, colleagues, and students. A list of her representative private international law publications can be found here.

 

This week a conference took place to honor Professor Linda Silberman at New York University (NYU). She is currently the Clarence D. Ashley Professor of Law Emerita at NYU. The full program is available here.

Anyone who has had the privilege of taking Linda Silberman’s classes would agree with me that she is an outstanding scholar and professor. Someone who takes the art of teaching to another level, a very kind and brilliant person who truly enjoys building the legal minds of the lawyers and academics of the future. In my view, nothing in the academic world compares to taking the “international litigation” class with her. Thus, this is more than a well-deserved event.

The conference flyer indicates the following:

“When Professor Linda Silberman came to NYU in 1971, she was the first woman hired for the NYU Law tenure-track faculty. In 1977, she became the first tenured female professor on the NYU Law faculty. Although she took emerita status in September 2022, she continues as the Co-Director of the NYU Center on Transnational Litigation, Arbitration, and Commercial Law. For over 30 years, Professor Silberman taught hundreds of first-year students Civil Procedure and she is the co-author of a leading Civil Procedure casebook that starts with her name. Throughout her career, Professor Silberman also taught Conflict of Laws and in the past twenty-five years branched out to teach Comparative Procedure, Transnational Litigation, and International Arbitration. Professor Silberman is a prolific scholar and her articles have been cited by numerous courts in the United States, including the Supreme Court, and also by foreign courts. Professor Silberman has been active in the American Law Institute as an Advisor on various ALI projects, including serving as a co-Reporter on a project on the recognition of foreign country judgments. She has also been a member of numerous U.S. State Department delegations to the Hague Conference on Private International Law. In 2021, Professor Silberman gave the general course on Private International Law at the Hague Academy of International Law.”

Below I include some of the publications of Professor Silberman (an exhaustive list is available here):

Books

• Civil Procedure: Theory and Practice (Wolters Kluwer 6th ed., 2022; 5th ed., 2017; 4th ed., 2013; 3d ed., 2009; 2d ed., 2006; 1st ed., 2001) (with Allan R. Stein, Tobias Barrington Wolff and Aaron D. Simowitz)
• Recognition and Enforcement of Foreign Judgments (Edward Elgar Publishing, 2017) (ed. with Franco Ferrari)
• Civil Litigation in Comparative Context (West Academic Publishing 2d ed., 2017; 1st ed., 2007) (with Oscar G. Chase, Helen Hershkoff, John Sorabji, Rolf Stürner et al.)
• Recognition and Enforcement of Foreign Judgments: Analysis and Proposed Federal Statute (American Law Institute, 2006) (with Andreas F. Lowenfeld)
• The Hague Convention on Jurisdiction and Judgments: Records of the Conference held at New York University School of Law on the Proposed Convention (Juris, 2001) (ed. with Andreas F. Lowenfeld)

Articles

• “Nonparty Jurisdiction,” 55 Vand. J. Transnat’l L. 433 (2022) (with Aaron D. Simowitz)
• “Introductory Note to Monasky v. Taglieri (U.S. Sup. Ct.),” 59 Int’l Legal Materials 873 (2020)
• “Misappropriation on a Global Scale: Extraterritoriality and Applicable Law in Transborder Trade Secrecy Cases,” 8 Cybaris Intell. Prop. L. Rev. 265 (2018) (with Rochelle C. Dreyfuss)
• “Lessons for the USA from the Hague Principles,” 22 Uniform L. Rev. 422 (2017)
• “The Transnational Case in Conflict of Laws: Two Suggestions for the New Restatement Third of Conflict of Laws—Judicial Jurisdiction over Foreign Defendants and Party Autonomy in International Contracts,” 27 Duke J. Compar. & Int’l L. 405 (2017) (with Nathan D. Yaffe)
• “The US Approach to Recognition and Enforcement of Awards After Set-Asides: The Impact of the Pemex Decision,” 40 Fordham Int’l L.J. 799 (2017) (with Nathan Yaffe)
• “Recognition and Enforcement of Foreign Judgments and Awards: What Hath Daimler Wrought?” 91 N.Y.U. L. Rev. 344 (2016)(with Aaron Simowitz)
• “The End of Another Era: Reflections on Daimler and Its Implications for Judicial Jurisdiction in the United States,” 19 Lewis & Clark L. Rev. 675 (2015)
• “Limits to Party Autonomy at the Post-Award Stage,” in Limits to Party Autonomy in International Commercial Arbitration (Juris 2016)(with Maxi Scherer)
• “United States Supreme Court Hague Abduction Decisions: Developing a Global Jurisprudence,” 9 J. Comp. L. 49 (2014);
• “The Need for a Federal Statutory Approach to the Recognition and Enforcement of Foreign County Judgments,” 26th Sokol Colloquium (2014)
• “Civil Procedure Meets International Arbitration: A Tribute to Hans Smit,” 23 Am Rev. Int. Arb. 439 (2012)
• “Goodyear and Nicastro: Observations from a Transnational and Comparative Perspective,” 63 S.Ct. L. Rev. 591 (2011)
• “Morrison v. National Australia Bank: Implications for Global Securities Class Actions,” 12 YB. Priv. Int. L. (2011 “The Role of Choice-of-Law in National Class Actions,” 156 U. Pa. L. Rev. 2001 (2008).

 

* photo credited to NYU

For quite a long time, what China had been doing for its interregional private laws was modelling their solutions on international conventions such as the Hague Service Convention, the Hague Evidence Convention and the Hague Judgments Convention etc. Normally they eventually got a slimmed-down Arrangement for the corresponding matter. This was quite different from what happed in the EU where the enhanced versions of the Hague Conventions could be seen and something extra could even be achieved. Also different from the EU where the ECJ could give answers when many questions at national law level were elevated and tested in the context of Regulations at the EU level, there has been no common court for interregional instruments within China so far. Apart from those bilateral Arrangements, all regions within China are basically treating one another as a ‘foreign country’ in terms of private laws.

The situation is, however, changing, at least from the Mainland side. Yesterday, I was invited to attend a conference which was under the support of the Supreme People’s Court of PRC and organized by the High Court of Guangdong Province that is geographically the closest one to Hong Kong and Macau. The purpose of the conference was to read the Draft Interpretation prepared by a research team of the Guangdong High Court and to be formally adopted and issued by the Supreme People’s Court later on. This Draft Interpretation is, again, an unilateral act of the Mainland China who wants to better its civil procedural rules regarding cases related to Hong Kong and Macau (possibly also Taiwan included). Indeed, different from the past experience for the past decades where inter-regional private cases were generally handled in analogy with foreign-related ones, the Mainland China is now trying to differentiate them. It wants to have more advanced and enhanced rules for interregional private cases. Keep an eye on the development of Chinese interregional private laws ……

Lex & Forum Law Review and Sakkoulas Publications SA are organizing an online conference on:

The International Dimension of Intellectual Property Disputes

PRESIDING:

Prof. Lia Athanasiou, University of Athens

PRESENTERS:

• Prof. Dan Svantesson, Faculty of Law, Bond University/Australia,

‘Intellectual Property disputes and PIL: A Swedish and Australian perspective’

• Prof. Dr. Marketa Trimble, Samuel S. Lionel Professor of Intellectual Property Law, William S. Boyd School of Law, University of Nevada, Las Vegas, Stanford University

‘The Territorial Discrepancy Between Intellectual Property Rights Infringement Claims and Remedies’

• Prof. Dr. Gerald Spindler, Faculty of Law, Georg-August Universität Göttingen

‘EU Digital Services Act und EU Digital Markets Act and its impact on private international law’

• Dr. Ioannis Revolidis, University of Malta,

‘International jurisdiction on online copyright infringements’

More information available here

FAMIMOVE is an international project co-funded by the European Commission under the JUST-2022-JCOO program. The FAMIMOVE website is now live and may be consulted by clicking here.

The project  aims to improve the protection of migrant children and families by bringing actual practice more in line with EU goals and values, such as the protection of fundamental rights and best interests of the child. It also seeks to provide more effectiveness to EU objectives through a better coordination of instruments in overlapping fields, such as Regulations in private international law in family law matters and migration law rules. The duration of the project is 24 months (from 1 January 2023 to 31 December 2024). For more information, click here.

The Consortium is coordinated by Prof. Marta Pertegás Sender (University of Maastricht) and is comprised of the following partners: Prof. Bettina Heiderhoff (University of Münster), Prof. Costanza Honorati (University of Milano-Bicocca); Prof. Fabienne Jault (University of Versailles Saint-Quentin-en-Yvelines), Prof. Ulf Maunsbach (Lund University), Prof. Orsolya Szeibert (Eötvös Loránd University) and Prof. Jinske Verhellen (Ghent University). Each Partner is further supported by colleagues with expertise in  cross-cutting fields, thus bringing together experts who are representatives from a large range of European regions. More information is available here.

FAMIMOVE (actually, FAMIMOVE 2.0) is a spin-off of an earlier project with the same name, which was very successful and resulted in two insightful documents published by the European Parliament: Children on the Move: A Private International Law Perspective and Private International Law in a Context of Increasing International Mobility: Challenges and Potential.

Any new developments on FAMIMOVE will be published here – stay tuned!

 

As announced on this blog and on the blog of the EAPIL, a series of webinar has been organised under the title The Future of Cross-Border Parenthood in the EU – Analyzing the EU Parenthood Proposal.

This is just a quick reminder for those who also read the EAPIL blog – and a new announcement for those who do not – that registration is open through the form available here.

 

The programme of the series is as follows:

• 3 May 2023, webinar chaired by Claire Fenton-Glynn: Surrogacy in comparative perspective (Jens Scherpe), and What’s in it? Subject matter, scope and definitions (Cristina González Beilfuss)
• 10 May 2023, webinar chaired by Fabienne Jault-Seseke: The EU Proposal and primary EU law: a match made in heaven? (Susanne Gössl), and The law governing parenthood: are you my father? (Tobías Helms)
• 17 May 2023, webinar chaired by Nadia Rustinova: The mutual recognition of decisions under the EU Proposal: much ado about nothing? (Alina Ontanu), and Who decides on parenthood? The rules of jurisdiction (Maria Caterina Baruffi)
• 24 May 2023, webinar chaired by Steven Heylen: Authentic documents and parenthood: between recognition and acceptance (Patrick Wautelet), and The European certificate of Parenthood: a passport for parents and children? (Ilaria Pretelli)

The series of webinars is organized by Cristina González Beilfuss (Universitat de Barcelona), Susanne Gössl (Universität Bonn), Ilaria Pretelli (Institut Suisse de Droit Comparé), Tobias Helms (Universität Marburg) and Patrick Wautelet (Université de Liège) under the auspices and with the support of EAPIL, the European Association of Private International Law.

Jürgen Basedow, a giant of private international law (and numerous other disciplines), has died –  suddenly, and completely unexpectedly, on April 6. He was my teacher (though only briefly so in a formal position), my predecessor as director of the Hamburg Max Planck Institute (where he served as director 1997-2017) and my colleague as an emeritus. His (impressive) vita is still visible on the MPI website.

Words fail me, as they have many, and so I will not attempt to write more here. A longer appreciation of his life and work and personality is in preparation. Until then, you may wish to read one or more of the following announcements that I am aware of; please announce in the comments or by email what I may have overlooked.

Also, the Hamburg Max Planck Institute is setting up a virtual book of condolences. Please consider sharing your own appreciation there, even if you have already written them up somewhere else.

RIP.

Longer appreciations:

Corinna Budras at Frankfurter Allgemeine Zeitung

Giesela Rühl at EAPIL

Federico Garau at conflictuslegum

José Carlos Fernández Rozas at his personal blog

Brief online announcements:

Max Planck Institute for International and Comparative Law, Hamburg

Leuphana University

Tbilisi University

Università degli Studi di Pavia

International Academy of Comparative Law

Monopolkommission

Brief appreciations on social media (incomplete)

Vasco Becker-Weinberg, Pejovic Caslav, Axel Halfmeier, Matthias Kurth, Michael Kubiciel, Monopolkommission, Gülüm Özçelik, Mateusz Pilich

Written by Harshal Morwale, Counsel, Singularity Legal

Introduction

The precise determination of the laws that will govern different aspects of international arbitration is a crucial matter, given that there could be a substantial divergence between different laws, such as the law of the seat and the substantive law of the contract on the same issue. One such issue is limitation.

The determination of the law applicable to limitation is a complex exercise. The different characterization of limitation as a procedural or substantive issue adds more to the complexity. This issue could not be simpler in India. This post is prompted by a recent decision of the Delhi High Court (“DHC”) in Extramarks Education India v Shri Ram School (“Extramarks case”), which although on domestic arbitration, makes various obiter observations on the nature of limitation and flexibility of parties to contract out of the same.

The aim of this post is to explore how would Indian substantive law of the contract impact limitation period and party autonomy, especially in the context of contracting out of limitation in a foreign-seated international arbitration. It will also look at the legality of limitation standstill agreements to defer the limitation period in the context of foreign-seated arbitration by examining prevailing legal principles together with relevant case laws and through the prism of the decision in the Extramarks case.

Classification of limitation in the context of foreign-seated arbitrations – procedural or substantive?

The limitation in India is governed by the Limitation Act, 1963 (“Limitation Act”).

The Supreme Court of India (“SC”) and the Law Commission of India have characterised the law of limitation as a procedural law. That being stated, the SC has also proposed a more nuanced approach to classifying law of limitation noting that while limitation is prima facie a procedural law construct, its substantive law characteristics cannot be wholly discounted.

This distinction was affirmed by the DHC in the NNR Global Logistics case, which concerned the enforcement of a foreign award where the seat of arbitration was Kuala Lumpur and the applicable substantive law of the contract was Indian law. Under Indian law, the limitation for the type of cause of action at stake, in this case, was three years as opposed to Malaysian law, where the limitation was six years. The respondent argued that since Indian law is the substantive law governing the contract, and given that the Limitation Act could be substantive law, Indian limitation law would apply. The DHC rejected this contention and held that the law of limitation is procedural, and the issues of limitation would be governed by procedural/curial law governing the arbitration, i.e., the lex arbitri. However, the DHC’s reasoning is suspect insofar as it makes the link between limitation law and procedural law uncritically, discounting the impact or connection of limitation with the remedy, and the substantive law implications therewith.

While the premise that since the arbitral procedure is governed by the lex arbitri and since limitation is generally a procedural law subject, the lex arbitri must govern the limitation might appear fairly straight forward, there exists a degree of tentativeness as to the characterisation of limitation in the context of international arbitration. The recent DHC decision in the Extramarks case makes some interesting observations which could have a deep impact on the mentioned premise.

In the Extramarks case, the issue at stake was the limitation period for filing an application before the High Court for the appointment of the arbitrator, for a purported India-seated domestic arbitration. The DHC held that conceptually, limitation bars a legal remedy and not a legal right, the legal policy being to ensure that legal remedies are not available endlessly but only up-to a certain point in time. The DHC further held that a party may concede a claim at any time; but cannot concede availability of a legal remedy beyond the prescribed period of limitation. In essence, according to the DHC, passing of limitation bars a remedy, which would generally mean that limitation is a procedural law subject. This distinction is in line with the traditional ‘right is substantive and remedy is procedural’ divide that exists in the common law. However, this position is not a settled one and remedy, could, arguably, be governed by the substantive law governing the contract.

Interestingly, the Singapore Court of Appeal in BBA v. BAZ, drew a distinction between procedural and substantive time bars in the context of international arbitration, noting that time bar of remedy is procedural in nature. Simultaneously, it was also observed that choice of seat does not automatically require application of the seat’s limitation period and the applicable substantive law will have to be looked at. Consequently, the principle that limitation is a procedural law issue and subject to lex arbitri cannot be relied on reflexively.

If the position of the DHC in NNR Global Logistics case is contrasted with the position in Extramarks case, acknowledging the difficulties in making substantive and procedural classification vis-à-vis limitation in international arbitration, then the choice of Indian substantive law in a foreign-seated arbitration could potentially mean that the tribunal presiding over in a foreign-seated arbitration with Indian substantive applicable law could potentially be required to engage in the limitation period analysis from the perspective of the seat as well as the Limitation Act and might be confronted with conflicting limitation periods. However, there lacks judicial clarity as to how to resolve the conflict when there is repugnancy in limitation prescribed in the lex arbitri and the Limitation Act, which would more often be the case.

Notably, Schwenzer and Manner argue that choice of substantive law should prevail over choice of seat and lex causae must govern the question of limitation of actions, notwithstanding whether it is classified as substantive or procedural. Indeed, this is the prevalent position in the civil law jurisdictions. However, this argument, if accepted, will have certain repercussions on the party autonomy, especially from an Indian perspective in the context of standstill agreements, as explored below.

Suspending/Extending Limitation in Foreign-seated Arbitrations

A standstill agreement is a contract between the potential parties to a claim to either extend or suspend the limitation period for a fixed time or until a triggering event occurs without acknowledging the liability.

The legality of such agreements is not entirely clear under Indian law. For instance, Section 28 of the Limitation Act expressly bars agreements that limit the time within which a party may enforce its rights. However, the converse, i.e., the possible extension of limitation, is not discussed in the Limitation Act. According to Section 25(3) of the Indian Contract Act, the parties can enter into an agreement to enforce a time-barred debt as long as there is a written and signed promise to pay the debt, essentially acknowledge the debt/liability. However, as noted above a standstill agreement is not an admission or acknowledgement of liability and hence Section 25(3) would not applicable. It has also been noted that the legality of standstill agreements in India is sub-judice before the Madras High Court.

From an India-seated domestic arbitration perspective, in light of DHC’s ruling in the Extramarks case, that a “party may concede a claim at any time; but cannot concede availability of a legal remedy beyond the prescribed period of limitation”, it would mean that limitation standstill agreements would not be valid.

From a foreign-seated arbitration with Indian substantive applicable law perspective, relying on the NNR Global Logistics case, it may be argued that the seat’s procedural law, including limitation law provisions, will apply and as long as limitation standstill agreements are permitted under the lex arbitri, there should not be an issue. However, given that merits of the claim would be anchored in Indian law, if limitation is viewed from a substantive law perspective, the impact of the Extramarks case ruling on the parties’ ability to enter into standstill agreements in foreign seated arbitration with Indian substantive law appears precarious.

Essentially, the legality of standstill agreements in foreign seated arbitration with Indian substantive law faces a critical impediment explored above, i.e., the divide between substantive and procedural classification. One possible view could be that since the parties have already chosen the seat of the arbitration, all procedural law issues will be governed by law of the seat, if, indeed, limitation is treated as a procedural issue. A second, contrary view may be that the legality of a standstill agreement would be tested on the touchstone of Indian law, since the choice of applicable substantive law of the contract is Indian law under which limitation cannot be conceded beyond the prescribed period by consent.

Given that the impact of Indian substantive law on the issue of limitation and standstill agreements is not entirely clear, in light of the Extramarks case, the tribunals might now be required to consider a relatively unique issue of limitation period alongside large number of other considerations in an international arbitration with Indian substantive applicable law.   

Conclusion

In the process of exploring the impact of Indian substantive law of the contract on parties’ freedom to contract out of limitation in a foreign-seated international arbitration, the tensions between procedural law and substantive law in foreign-seated arbitrations vis-à-vis limitation become apparent. The tensions are further compounded by the ruling in the Extramarks case that limitation bars remedy and that the parties cannot contract out of limitation. The exact impact of the Extramarks case on the parties to an international arbitration contemplating standstill agreements remains unclear and the connected issues in this context remain to be seen.

(The opinions of the author are personal and do not represent the opinion of the organisations he is affiliated with.)

The following information has kindly been provided by Tess Bens, Research Fellow at the Luxembourg Max Planck Institute:

In September 2022, an EAPIL Working Group met for a conference in Luxemburg to discuss the perspectives and prospects of a reform of the Brussels Ibis Regulation. There were panels on the role and scope of the Brussels Ibis Regulation, collective redress, third state relationships, jurisdiction and pendency, and recognition and enforcement. As a result of the conference, Professor Hess and a team of Researchers of the Max Planck Institute Luxembourg published a preliminary Working Paper which put forward 32 proposals for the reform of the Brussels Ibis Regulation.

Parallel to the preliminary Working Paper, a survey was set up to collect reactions and comments on the proposals. By now, over 60 participants from many different Member States have answered the survey. Participation in the survey is open to anybody interested in the reform of the Brussels I bis Regulation, irrespective of whether they are a member of the European Association for Private International Law. Your input is greatly appreciated. Please note that the survey will be open until 15 April 2023.

The following information has kindly been provided by Professor Sarah Green, UK Law Commissioner for commercial and common law:

Thank you for your interest in our project Digital assets: which law, which court?. We would like to draw your attention to an opportunity to join the team, as the Law Commission is currently recruiting for a lawyer or legal academic to lead this project. This is an exciting opportunity to be at the forefront of legal policy development in this cutting-edge and complex area, working with a range of domestic and international stakeholders.

We are ideally looking for specific experience or demonstrable interest in the private international law of England and Wales. This role will ultimately require a good knowledge of conflict of laws, digital assets and electronic trade documents. However, we are also interested in receiving applications from lawyers or academics with different commercial or common law backgrounds, with an interest in law reform and who can demonstrate a capacity to quickly acquire knowledge of complex areas of law.

Details of how to apply, along with the full job description, essential qualifications and other details, are available at this link: Law Commission: Commercial and Common Law Team, Lawyer(Ref: 73409) – Civil Service Jobs – GOV.UK

We would be grateful if you could draw this opportunity to the attention of anyone who might be interested. The role is also potentially available as a secondment opportunity from a business or academic institution. Please note that, due to civil service policies, the candidate must be UK-based.

If you would like to discuss further, please contact:

Laura Burgoyne, Head of the Commercial and Common Law Team
Email:  laura.burgoyne@lawcommission.gov.uk
Telephone: 07793 966 296

Internationale Wirtschaftsverträge edited by Patrick Ostendorf (Berlin University of Applied Sciences) but otherwise exclusively written by practitioners occupies a unique position with the German literature on international transactions. It is undeniably aimed at practitioners, featuring a great number of check lists, English sample clauses, and practical tips. Accordingly, most of the book is structured around specific elements of international contracts such as penalties (ch. 6), indemnities (ch. 7), limitations of liability (ch. 8), force majeure (ch. 10), choice of law (ch. 13) and so on. In addition, the book features a number of cross-cutting chapters dedicated to particular types of contracts (ch. 18–23). But despite this hands-on approach, the book’s authors reflect on, and draw from, a wealth of academic material, which they condense into immediately applicable guidance.

Although coming out a mere five years after the previous edition, the third editions contains significant updates to most chapters in light of Brexit, Covid 19, Russia’s attack on Ukraine, the updates to Incoterms (2020) and the ICC Arbitration Rules (2021), and some significant legislative activity in Germany and Europe, e.g. with regard to international supply chains. Of course, these rapid developments make the book all the more useful for German lawyers navigating the high seas of international transactions.

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.

On the question of foreign state immunity, the world was long divided between countries that adhere to an absolute theory and those that adopted a restrictive theory. Under the absolute theory, states are absolutely immune from suit in the courts of other states. Under the restrictive theory, states are immune from suits based on their governmental acts (acta jure imperii) but not from suits based on their non-governmental acts (acta jure gestionis).

During the twentieth century, many countries adopted the restrictive theory. (Pierre-Hugues Verdier and Erik Voeten have a useful list of the dates on which countries switched on the last page of this article.) Russia and China were the most prominent holdouts. Russia joined the restrictive immunity camp in 2016 when its law on the jurisdictional immunity of foreign states went into effect. That left China. In December 2022, Chinese lawmakers published a draft law on foreign state immunity, an English translation of which has recently become available. If adopted, this law would move China to into the restrictive immunity camp as well.

China’s draft law on foreign state immunity has important implications for other states, which would now be subject to suit in China on a range of claims from which they were previously immune. The law also contains a reciprocity clause in Article 20, under which Chinese courts may decline to recognize the immunity of a foreign state if the foreign state would not recognize China’s immunity in the same circumstances. Chinese courts could hear expropriation or terrorism claims against the United States, for example, because the U.S. Foreign Sovereign Immunities Act (FSIA) has exceptions for expropriation and terrorism.

In this post, the first of two, I look at the draft law’s provisions on foreign state immunity from suit from a U.S. perspective. In the second post, I will examine the law’s provisions on the immunity of a foreign state’s property from attachment and execution, its provisions on service and default judgments, and its potential effect on the immunity of foreign officials.

It is clear that China’s draft law has been heavily influenced by the provisions of the U.N. Convention on Jurisdictional Immunities of States and Their Property, which China signed in 2005 but has not yet ratified. But the purpose of the draft law is not simply to prepare China for ratification. Indeed, Article 21 of the law provides that when a treaty to which China is a party differs from the law, the terms of the treaty shall govern. Rather, the purpose of the law appears to be to extend the basid rules of the U.N. Convention, which is not yet in effect, to govern the immunity of all foreign countries when they are sued in Chinese courts, including countries like the United States that are unlikely ever to join the Convention.

China’s Adherence to the Absolute Theory of Foreign State Immunity

The People’s Republic of China has long taken the position that states and their property are absolutely immune from the jurisdiction of the courts of other states. The question rose to the level of diplomatic relations in the early 1980s. China was sued in federal court for nonpayment of bonds issued by the Imperial Government of China in 1911, did not appear to defend, and suffered a default judgment. After much back and forth, the State Department convinced China to appear and filed a statement of interest asking the district court to set aside the judgment and consider China’s defenses. “The PRC has regarded the absolute principle of immunity as a fundamental aspect of its sovereignty, and has forthrightly maintained its position that it is absolutely immune from the jurisdiction of foreign courts unless it consents to that jurisdiction,” the State Department noted. “China’s steadfast adherence to the absolute principle of immunity results, in part, from its adverse experience with extraterritorial laws and jurisdiction of western powers.” In the end, the district court set aside the default, held that the FSIA did not apply retroactively to this case, and held that China was immune from suit. The Eleventh Circuit subsequently affirmed.

In 2005, China signed the U.N. Convention on Jurisdictional Immunities of States and Their Property. The Convention (available in each of the U.N.’s official languages here) adopts the restrictive theory, providing exceptions to foreign state immunity for commercial activities, territorial torts, etc. Although China has not ratified the Convention and the Convention has not yet entered into force—entry into force requires 30 ratifications, and there have been only 23 so far—China’s signature seemed to signal a shift in position.

The question arose again in Democratic Republic of the Congo v. FG Hemisphere Associates LLC (2011), in which the Hong Kong Court of Final Appeal had to decide whether to follow China’s position on foreign state immunity. During the litigation, China’s Ministry of Foreign Affairs wrote several letters to the Hong Kong courts setting forth its position, which the Court of Final Appeal quoted in its judgment. In 2008, the Ministry stated:

The consistent and principled position of China is that a state and its property shall, in foreign courts, enjoy absolute immunity, including absolute immunity from jurisdiction and from execution, and has never applied the so-called principle or theory of ‘restrictive immunity’. The courts in China have no jurisdiction over, nor in practice have they ever entertained, any case in which a foreign state or government is sued as a defendant or any claim involving the property of any foreign state or government, irrespective of the nature or purpose of the relevant act of the foreign state or government and also irrespective of the nature, purpose or use of the relevant property of the foreign state or government. At the same time, China has never accepted any foreign courts having jurisdiction over cases in which the State or Government of China is sued as a defendant, or over cases involving the property of the State or Government of China. This principled position held by the Government of China is unequivocal and consistent.

In 2009, the Ministry wrote a second letter explaining its signing of the U.N. Convention. The diverging practices of states on foreign state immunity adversely affected international relations, it said, and China had signed the Convention “to express China’s support of the … coordination efforts made by the international community.” But the Ministry noted that China had not ratified the Convention, which had also not entered into force. “Therefore, the Convention has no binding force on China, and moreover it cannot be the basis of assessing China’s principled position on relevant issues.” “After signature of the Convention, the position of China in maintaining absolute immunity has not been changed,” the Ministry continued, “and has never applied or recognized the so-called principle or theory of ‘restrictive immunity.’”

The Draft Law on Foreign State Immunity

China’s draft law on foreign state immunity would fundamentally change China’s position, bringing China into alignment with other nations that have adopted the restrictive theory. The draft law begins, as most such laws do, with a presumption that foreign states and their property are immune from the jurisdiction of Chinese courts. Article 3 states: “Unless otherwise provided for by this law, foreign states and their property shall be immune from the jurisdiction of the courts of the People’s Republic of China.”

Article 2 defines “foreign state” to include “sovereign states other than the People’s Republic of China,” “institutions or components of … sovereign states,” and “natural persons, legal persons and unincorporated organisations authorised by … sovereign states … to exercise sovereign powers on their behalf and carry out activities based on such authorization.” Article 18(1) provides that Chinese courts will accept the Ministry of Foreign Affairs’ determination of whether a state constitutes a sovereign state for these purposes.

These provisions of the draft law generally track Article 2(1)(b) of the U.N. Convention, which similarly defines “State” to include a state’s “organs of government,” “agencies or instrumentalities” exercising “sovereign authority,” and “representatives of the State acting in that capacity.” The draft law differs somewhat from the U.S. FSIA, which determines whether a corporation is an “agency or instrumentality” of a foreign state based on ownership and which does not apply to natural persons.

Exceptions to Immunity from Suit Waiver Exception

China’s draft law provides that a foreign state may waive its immunity from suit expressly or by implication. Article 4 states: “Where a foreign state expressly submits to the jurisdiction of the courts of the People’s Republic of China in respect of a particular matter or case in any following manner, that foreign state shall not be immune.” A foreign state may expressly waive its immunity by treaty, contract, written submission, or other means.

Article 5 provides that a foreign state “shall be deemed to have submitted to the jurisdiction of the courts of the People’s Republic of China” if it files suit as a plaintiff, participates as a defendant “and makes a defence or submits a counterclaim on the substantive issues of the case,” or participates as third party in Chinese courts. Article 5 further provides that a foreign state that participates as a plaintiff or third party shall be deemed to have waived its immunity to counterclaims arising out of the same legal relationship or facts. But Article 6 provides that a foreign state shall not be deemed to have submitted to jurisdiction by appearing in Chinese court to assert its immunity, having its representatives testify, or choosing Chinese law to govern a particular matter.

These provisions closely track Articles 7-9 of the U.N. Convention. The U.S. FSIA, § 1605(a)(1), similarly provides that a foreign state shall not be immune in any case “in which the foreign state has waived its immunity either explicitly or by implication.” Section 1607 also contains a provision on counterclaims. In contrast to China’s draft law, U.S. courts have held that choosing U.S. law to govern a contract constitutes an implied waiver of foreign state immunity (a position that has been rightly criticized).

Commercial Activities

China’s draft law also contains a commercial activities exception. Article 7 provides that a foreign state shall not be immune from proceedings arising from commercial activities when those activities “take place in the territory of the People’s Republic of China or take place outside the territory of the People’s Republic of China but have a direct impact in the territory of the People’s Republic of China.” Article 7 defines “commercial activity” as “any transaction of goods, services, investment or other acts of a commercial nature otherwise than the exercise of sovereign authority.” “In determining whether an act is a commercial activity,” the law says, “the courts of the People’s Republic of China shall consider the nature and purpose of the act.” Unlike the FSIA, but like the U.N. Convention, the draft law deals separately with employment contracts (Article 8) and intellectual property cases (Article 11).

In extending the commercial activities exception to activities that “have a direct impact” in China, the draft law seems to have borrowed from the commercial activities exception in the U.S. FSIA. Section 1605(a)(2) of the FSIA applies not just to claims based on activities and acts in the United States, but also to activities abroad “that act cause[] a direct effect in the United States.”

The draft law’s definition of “commercial activity,” on the other hand, differs from the FSIA. Whereas the draft law tells Chinese courts to consider both “the nature and purpose” of the act,” § 1603(d) of the FSIA says “[t]he commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose.” (Article 2(2) of the U.N. Convention makes room for both approaches.) Considering the purpose of a transaction would make it easier for a government to argue that certain transactions, like issuing government bonds or buying military equipment are not commercial activities and thus to claim immunity from claims arising from such transactions.

Territorial Torts

Article 9 of the draft law creates an exception to immunity “for personal injury or death, or for damage to movable or immovable property, caused by that foreign state within the territory of the People’s Republic of China.” This exception corresponds to Article 12 of the U.N. Convention and § 1605(a)(5) of the U.S. FSIA. Unlike § 1605(a)(5), China’s draft law contains no carve-outs maintaining immunity for discretionary activities and for malicious prosecution, libel, misrepresentation, interference with contract rights, etc.

The English translation of the draft law does not make clear whether it is the tortious act, the injury, or both that must occur within the territory of China. The FSIA’s territorial tort exception has been interpreted to require that the “entire tort” occur within the United States. Article 12 of the U.N. Convention does not. This question has become particularly important with the rise of spyware and cyberespionage. As Philippa Webb has discussed at TLB, U.S. courts have dismissed spyware cases against foreign governments on the ground that the entire tort did not occur in the United States, whereas English courts have rejected this requirement and allowed such cases to go forward. If the Chinese version of the draft law is ambiguous, it would be worth clarifying the scope of the exception before the law is finalized.

Property

Article 10 of the draft law creates an exception to immunity for claims involving immoveable property in China, interests in moveable or immoveable property arising from gifts, bequests, or inheritance, and interests in trust property and bankruptcy estates. This provision closely parallels Article 13 of the U.N. Convention and finds a counterpart in § 1605(a)(4) of the FSIA.

Arbitration

The draft law also contains an arbitration exception. Article 12 provides that a foreign state that has agreed to arbitrate disputes is not immune from suit with respect to “the effect and interpretation of the arbitration agreement” and “the recognition or annulment of arbitral awards.” Like Article 17 of the U.N. Convention, the arbitration exception in the draft law is limited to disputes arising from commercial activities but extends to investment disputes. The arbitration exception in § 1605(a)(6) of the FSIA, by contrast, extends to disputes “with respect to a defined legal relationship, whether contractual or not.”

Reciprocity Clause

One of the most interesting provisions of China’s draft law on state immunity is Article 20, which states: “Where the immunity granted by a foreign court to the People’s Republic of China and its property is inferior to that provided for by this Law, the courts of the People’s Republic of China may apply the principle of reciprocity.” Neither the U.N. Convention nor the U.S. FSIA contains a similar provision, but Russia’s law on the jurisdictional immunities of foreign states does in Article 4(1).  Argentina’s law on immunity also includes a reciprocity clause specifically for the immunity of central bank assets, apparently adopted by Argentina at the request of China.

The reciprocity clause in the draft law means that Chinese courts would be able to exercise jurisdiction over the United States and its property in any case where U.S. law would permit U.S. courts to exercise jurisdiction over China and its property. The FSIA, for example, has an exception for expropriations in violation of international law in § 1605(a)(3) and exceptions for terrorism in § 1605A and § 1605B. Although China’s draft law does not contain any of these exceptions, its reciprocity clause would allow Chinese courts to hear expropriation or terrorism claims against the United States. The same would be true if Congress were to amend the FSIA to allow plaintiffs to sue China over Covid-19, as some members of Congress have proposed.

Conclusion

China’s adoption of the draft law would be a major development in the law of foreign state immunity. For many years, advocates of the absolute theory of foreign state immunity could point to China and Russia as evidence that the restrictive theory’s status as customary international law was still unsettled. If China joins Russia in adopting the restrictive theory, that position will be very difficult to maintain.

[This post is cross-posted at Transnational Litigation Blog.]

This post was written bu Begüm Kilimcioglu, PhD candidate at the University of Antwerp

On 23 February 2023, one of the biggest commercial banks in the Eurozone, BNP Paribas (BNP) was sued by Oxfam, Friends of the Earth and Notre Affaire à Tous for having allegedly provided loans to oil and gas companies in breach of the vigilance duty enshrined in la Loi de Vigilance (2017) of France. This case constitutes an important hallmark for the business and human rights world as it is the first climate action case against a commercial bank and so timely considering that the European Union (EU) is currently discussing whether or not to include the financial sector within the scope of the proposed Corporate Sustainability Due Diligence Directive (CSDDD) (see here).

Article 1 of  la Loi de Vigilance imposes a duty to establish and implement an effective vigilance plan on any company whose head office is located on French territory and complies with the thresholds stated. This vigilance plan is supposed to include vigilance measures for risk identification and prevention of severe violations of human rights and fundamental freedoms, serious bodily injury or environmental damage or health risks resulting directly or indirectly from the operations of the company and of the companies it controls, its subcontractors and suppliers with whom the company  has an established commercial relationship. As such, there is no distinction under the French law regarding the sector in which the company is operating which is in line with the United Nations Guiding Principles. Thus, it was surprising to see that France was quite vocal about not including the financial sector within the scope of CSDDD, as France was the first Member State to adopt a law on the duty of vigilance of the multinational companies and la Loi de Vigilance itself does not make distinctions based on the sector in which the company is operating.

According to la Loi de Vigilance, companies are required to conduct human rights and environmental due diligence which includes the following steps: identification and the analysis of the risks, regular assessment of the situation (in accordance with the previously identified risks) of the subsidiaries, subcontractors or suppliers with whom the company has an established commercial relationship, mitigation and prevention of serious violations through appropriate means, establishment of an alert mechanism which collects reports of existing or actual risks, establishment of a monitoring scheme to follow up on the measures implemented and assessment of their efficiency. This plan must be publicly disclosed.

In case the company does not comply with its vigilance obligations, a court can issue a formal notice, ordering the company to comply with la Loi de Vigilance. Furthermore, la Loi de Vigilance also provides for a civil remedy when a company does not meet its obligations. If damage caused by non-compliance with la Loi de Vigilance, any person with legitimate interest can seek reparation under tort law. Consequently, as a company headquartered in France and complying with the thresholds in Article 1 of la Loi de Vigilance, BNP has the duty to effectively establish, implement and monitor a vigilance plan to prevent, if not possible mitigate and bring an end to its adverse impacts on human rights and the environment.

The case against BNP before the French courts is a reminiscent of the case against Shell before the Dutch courts in 2019 where the environmental group (Milieudefensie) and co-plaintiffs argued that Shell’s business operations and sold energy products worldwide contributes significantly to climate change (and also much more than it has pledges to in its corporate policies and to the levels internationally determined by conventions) was a violation of its duty of care under Dutch law and human rights obligations. It is important here to highlight that the plaintiffs took Shell to the Dutch courts based on the environmental damage caused in the Netherlands, due to Shell’s operations worldwide.

In the said case, the applicable law to the dispute was determined by Rome II Regulation on non-contractual obligations, article 7. Article 7 presents an additional venue to the general rule for determining the applicable law (article 4) and grants the victims of environmental damage an opportunity to base their claims on the law of the country in which the event giving rise to the damage occurred. As such, the claimant primarily chose to base its claims on the law of the country in which the even giving rise to the damage occurred, as they claimed that the corporate policies for the Shell group were decided in its headquarters in the Netherlands. The Court considered the adoption of the corporate policy of the Shell group as an independent cause of the damage which may contribute to environmental damage with respect to Dutch residents. Thus, the Court considered that the choice of Dutch law by Milieudefensie was in line with the idea of protection of the victims behind the applicable law clauses in Rome II Regulations and upheld the choice to the extent that the action aimed to protect the interests of the Dutch residents (see paragraphs 4.3-4.4 of the decision).

In 2021, the Hague District Court ordered Shell to reduce both its own carbon emissions and end-use emissions by 45% by 2030 in relation to the 2019 figures. Naturally, the legal basis in the Dutch case was different than the legal basis in the French case, considering that the Netherlands does not yet have a national law like la Loi de Vigilance. Consequently, the core of the arguments of the applicants lied on the duty of care in Article 6:162 of the Dutch Civil Code and Articles 2 (right to life) and 8 (rights to private life, family life, home and correspondence) of the European Convention on Human Rights.

In contrast, the BNP case has a more preventive nature and aims to force BNP to change and adapt its actions to the changing climate and scientific context. The NGOs primarily request an injunction for BNP to comply with the obligations provided for in the French Vigilance Law, as BNP falls within the scope of the French Law. More specifically, the NGOs request that BNP publishes and implements a new due diligence plan, containing the measures explained in the writ of summons. Therefore, the obligations arising from the French Vigilance Law are of a civil nature. Consequently, the law applicable to this dispute should also be determined by Rome II Regulation on non-contractual obligations. As explained above, Rome II Regulation gives an additional option for the plaintiffs to choose the applicable law in cases of environmental damage as either the country of damage or the country where the event that gives rise to the damage occurred. In the BNP case, the plaintiffs’ claim was based on French law. Applying Rome II Regulation, France can be considered as the country of the event which gives rise to the damage because it is where the corporate policies are prepared. Alternatively, it is also where the environmental damage occurs, as well as the rest of the world. Moreover, the plaintiffs relied on the general obligation of environmental vigilance as enshrined in the Charter of the Environment, which is considered an annex to the French Constitution and thus has the same authoritativeness. Invoking the constitution might bring in an argument on the basis of Article 16 Rome II, namely overriding principles of mandatory law.

If we rewind the story a little bit, the non-governmental organizations (NGOs) stated above, firstly, served a formal notice to BNP on 26 October 2022 to stop supporting the development of fossil fuels. In the formal notice, the NGOs state that, to achieve the Paris Agreement trajectories, no more funding or investment should be given to the development of new fossil fuel projects, either directly or to the companies that carry out such operations (see p 3). They also draw attention to the fact that BNP has joined the Race to Zero campaign which aim for the inclusion of the nonstate actors in the race for carbon neutrality (p 3).

Basic research into BNP’s publicly available documents reveals that it, indeed, has committed to sustainable investment, acknowledging that air pollution and climate change deplete many resources. BNP further claims that it only supports companies that contribute to society and the environment and exclude coal, palm oil and nonconventional hydrocarbons. Moreover, as can be seen from its 2021 activity report, BNP presents itself as organizing its portfolios in a way that upholds the aims of the Paris Agreement. Lastly, BNP’s code of conduct, states that it commits to limiting any environmental impact indirectly resulting from its financing or investment activities or directly from its own operations (p 31). Furthermore, BNP also presents combatting climate change as its priority while stating that they finance the transition to a zero-carbon economy by 2050 by supporting its customers in energy and ecological transitions (p 31).

However, the NGOs claim that contrary to these commitments, through various financing and investment activities, BNP becomes one of the main contributors to the fossil fuel sector by supporting the big oil and gas companies (p 4 of the formal notice). In this regard, BNP allegedly provides funds for the companies that actually put fossil fuel projects into action rather than financing these projects directly. As such, the NGOs aver that BNP’s vigilance plan is not in compliance with la Loi de Vigilance or its obligations to limit the climate risks resulting from its activities (p 6 of the formal notice). In this regard, the report draws attention to BNP’s prior public commitments to strengthen its exclusion policies regarding coal, oil and gas sectors (see pp 8-9 of the formal notice). Consequently, claiming that BNP has failed to comply with the notice, NGOs have referred the matter to the court.

In a bid to address the negative allegations on its behalf, BNP stated that it is focused on exiting the fossil fuel market, accelerating financing for renewable energies and supporting its clients in this regard. Furthermore, BNP also stated its regret in the advocacy groups choosing litigation over dialogue and that it was not able to stop all fossil-fuel financing right away.

In the course of these proceedings, the applicants will have to prove that if BNP were able to establish, implement and monitor a vigilance plan, the damage caused by these fossil fuel projects put into motion by different energy companies could have been avoided. In other words, the fact that BNP (or any other provider of the financial means) is the facilitator of these projects and that the damage is indirectly caused by its actions, make it more difficult for it to be held liable. As such, it may be more difficult for the claimants in the BNP case to prove the causality between the action and the damage than the Dutch case.

Consequently, this intricate web of interrelations demonstrates how important it is to include the financial actors within the scope of the CSDDD and explicitly put obligations on them to firstly respect and uphold human rights and environmental standards and then to proactively engage with an effective due diligence mechanism to prevent, mitigate and/or bring an end to actual/potential human rights and environmental impact.

Therefore, I hope that the European Commission and the Parliament will hold strong positions and not cave in to the proposal by the Council to leave it up to the Member States whether or not to include the financial sector within the scope. Such a compromise would significantly hinder the effectiveness of the proposed Directive.

 

At the ArbMetaBlock2023 Conference leading experts in technology and dispute resolution will discuss the impact of blockchain, the Metaverse, and Web3 on arbitration. These concepts have become part of the conversation in the arbitration community, but few understand their true significance and potential impact.

Panelists will discuss the impact of blockchain and the Metaverse on arbitration, the changing role of lawyers and arbitration institutions, and the effect of new technology on arbitration fundamentals during our full-day event.

Confirmed speakers include Mihaela Apostel, Pedro Arcoverde, Elizabeth Chan, Paul Cohen, Dirk De Meulemeester, David Earnest, Elizabeth Zoe Everson, Anna Guillard Sazhko, Wendy Gonzales, Emily Hay, Cemre Kadioglu Kumptepe, Creguta Leaua, Matthias Lehman, Niamh Leinwather, Aija Lejniece, Maud Piers, Colin Rule, Sean McCarthy, Sophie Nappert, Ekaterina Oger Grivnova, Pietro Ortolani, Amy Schmitz, Takashi Takashima, David Tebel, Leandro Toscano, and Dirk Van Gerven.

The event is organized by the Center for the Future of Dispute Resolution at the University of Ghent in collaboration with leading organizations, including ArbTech, Arbitrate.com, Cepani, Cepani40 CyberArb, MetaverseLegal, and UNCITRAL.

See here for more information and registration.