Written by Gustavo Becker*
During the 26th Willem C. Vis Moot, Dr. Gustavo Moser, counsel at the London Court of International Arbitration and Ph.D. in international commercial law from the University of Basel, coordinated the organization of a seminar regarding choice of law in international contracts and international arbitration. The seminar’s topics revolved around Dr. Moser’s recent book Rethinking Choice of Law in Cross-Border Sales (Eleven, 2018) which has been globally recognized as one of the most useful books for international commercial lawyers.
On April 15th, taking place at Hotel Regina, in Vienna, the afternoon seminar involved a panel organized and moderated by Dr. Moser and composed of Prof. Ingeborg Schwenzer, Prof. Petra Butler, Prof. Andrea Bjorklund, and Dr. Lisa Spagnolo.The panel addressed three core topics in the current scenario of cross-border sales contracts: Choice of law and Brexit, drafting choice of law clauses, and CISG status and prospects.
The conference started with a video presentation in which Michael Mcllwrath (Baker Hughes, GE), addressed his perspectives on how Brexit might impact decisions from companies regarding choice of law clauses in international contracts, its effects on the recognition of London as the leading seat for dispute resolution, and the position of English law as the most applicable law in international contracts.
In Mr. Mcllwrath’s perspective, in spite of Brexit, London will still remain a significant place for international dispute resolution as it adoptsglobally recognized commercial law principles, is an arbitration friendly state and enjoys a highly praised image as a safe seat for international cases. However, in order to try to predict the impact of Brexit in international dispute resolution, Mr. Mcllwrath collected data released by arbitral institutions and found that in the years leading up to the Brexit vote, London did not grow as a seat of arbitration significantly. Considerable growth nonetheless has been seen outside the traditional centers of international arbitration. Therefore, the big issue involving Brexit, in Mr. Mcllwrath’s view, is the uncertainty that companies will face with the UK’s unsettled political future. For this reason, the revision of contract policies is now likely to be undertaken and the choice of English law in international contracts might be affected.
Prof. Schwenzer pointed out that the whole discussion about Brexit and its effects on international dispute resolution depends primarily on the type of Brexit that will be chosen and the agreements between Europe and Great Britain. In her point of view, one of the main questions is whether the UK will join the Lugano Convention, which would make the enforcement of English court decisions easier in European State-members. Prof. Schwenzer also highlighted that, in terms of choice of law, there will be uncertainty issues regarding the regulations that have been imported from Europe and are now part of the English legal system. The problem might be how these rules will be developed further as the Court of Justice of the European Union will no longer be responsible for interpreting this part of English law.
Furthermore, Prof. Bjorklund stated that, whilst the choice of English law will require more caution after Brexit, the well-recognized security related to arbitration in the UK is likely to continue as long as the New York Convention, the English Arbitration Act, and the arbitration friendly character of English commercial courts will not likely change. However, in the point of view of an international arbitration counsel, certainly, the “risks of arbitrating in the UK” will leave some room for parties to choose arbitration in other places rather than in London or – at least – to start rethinking the classic choice for English-seated arbitration.
Concerning the choice of English law, Prof. Butler reminded the audience of two important regulations which should be analyzed in the context of Brexit: Rome I for deciding which contract law is applicable in international cases, and the Brussels Regulation to define which court is entitled to decide a case and how to enforce and recognize foreign decisions within the EU. According to Prof. Butler, under the first Brexit bill, the statutes signed within the EU regime would still apply. However, subject to confirmation from the English government, the development of these laws might no longer be applicable.
Dr. Spagnolo added that whether a country joins an international instrument sometimes has little to do with rational factors and are often “emotional”. In this sense, one of the arguments that the political environment seems to emphasize nowadays under the notion of nationalism is the maintenance of sovereignty. According to Dr. Spagnolo, this is a dangerous consideration to be emphasized in an environment that relies on commercial sense and needs basic guarantees of international harmonization, such as the enforcement of foreign awards or the application of a uniform law.
Regarding the topic “drafting choice of law clauses”, Mr. Mcllwrath highlighted the “emotional” features involving the choice of law. In his opinion, as Dr. Moser has demonstrated in his book, many choices of law decisions are driven by factors such as how many times a specific law had already been applied by a law firm or what law the attorneys involved in that contract were already familiar with. Considering this, Mr. Mcllwrath understands that Brexit can make lawyers rethink the application of English law, even though this might be dependant upon whether financial institutions and companies currently based in London will or will not move away from the UK.
Prof. Schwenzer highlighted that what Dr. Moser has found in his research regarding the emotional aspect of the choice of law is a proving fact of what she has experienced in practice: choice of law decisions are mostly emotionally charged and seldom rational. One example is that even though Swiss law is arguably the second most chosen law in international contracts, in Prof. Schwenzer’s view, Swiss law is not predictable: in core areas of contract law, such as limitation of liability, Swiss law is not advantageous for commercial contracts in her opinion. Prof. Schwenzer added that this shows that lawyers seldom analyze the pros and cons of laws deeply before applying them in international commercial contracts.
Concluding the panel discussions, Dr. Moser brought up the topic “CISG status and prospects”. While discussing this matter, all the panelists agreed upon the urgent need of global initiatives to increase awareness and improve knowledge of the CISG for both young lawyers who are sitting for the bar exam, and for judges who will face international commercial cases and might not be familiar with the CISG or even prepared to apply its set of provisions.
*With contributions from Gustavo Moser
Pourvoi c/ Cour d'appel de Bordeaux, chambre de l'instruction, 29 décembre 2018
Pourvoi c/ Cour d'appel de Paris, chambre 1, pôle 7, 5 avril 2019
Pourvoi c/ Cour d'appel de Rennes, chambre de l'instruction, 22 mars 2019
Tribunal correctionnel de Mamoudzou, 24 avril 2019
Pourvoi c/ Cour d'appel de Grenoble, chambre de l'instruction, 5 avril 2019
Pourvoi c/ Cour d'appel de Paris, chambre 6, pôle 7, 29 novembre 2018
In January 2017 I reported that Ms Kiobel, following failure to convince the USSC of jurisdiction under the Alien Tort Statute, subsequently initiated proceedings in the Dutch courts to try and sue Shell over the case. (Evidently unrelated to the pursuit of Shell in The Netherlands on environmental grounds – a case which is still pending upon appeal).
The court in first instance at the Hague on 1 May accepted jurisdiction against
Coming so soon after the UKSC in Vedanta the Dutch case has received quite a bit of attention. After first not considering an English translation (not surprisingly; these are the Dutch courts, not a World Service), the clerks have now announced that there will be one, coming up some time soon.
Readers of the blog will expect me to hold the judgment against a clear jurisdictional and conflict of laws lens – in doing so, I fear I have to be a little bit less optimistic than media soundbites following the case.
Jurisdictional issues were in the end dealt with fairly summarily. Most attention went to issues of evidence and discovery, as well as a first review of the substance of the case.
Of note is:
Importantly, a great deal of attention at 4.30 ff goes to the debate on the use of documents obtained in US discovery, in the Dutch proceedings. A fair amount of these had to be returned following a confidentiality agreement in the US proceedings. Claimants make recourse to Article 6 ECHR to regain access for use in the Dutch proceedings however the Dutch court curtails much of that. Civil law discovery rules are notoriously more claimant friendly than those of the common law (a comment also made by Marsh CM in Glaxo v Sandoz. It leads to Shell not having to turn over quite a large part of the documents claimants had hoped to use.
At 4.58 ff the Court then turns to the substance of the case for case management reasons, with a view to determining which parts of the claim may be made subject to further proof. It holds in a way which I imagine must have been very disappointing for claimants. Only limited claims (of the Nigerian daughter’s involvement in the bribing of witnesses) will be allowed to continue.
The court held that claims of controlling meddling in the Nigerian court proceedings were not proven with sufficient force for these claims to continue – instead it held that Shell’s policy of silent diplomacy, in line with its business policies, had been consistently carried out.
All in all I would suggest claimants have scored clear points on jurisdiction, minor points on discovery and a disappointing outcome for them on substance. Albeit that the witness bribe leg may still lead to a finding of human rights infringement.
Geert.
(Handbook of) European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2.
Par un arrêt du 17 avril 2019, la Cour de cassation se prononce dans l’affaire médiatique du navire « Le prestige », à propos de la responsabilité des sociétés de certification, et ce sous l’angle du droit international privé.
Procédures civiles d'exécution
Urbanisme
Séparation des pouvoirs
Urbanisme
Appel civil
Saisie immobilère
Procédure civile
Theme by Danetsoft and Danang Probo Sayekti inspired by Maksimer