Conflictoflaws

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).

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 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.

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)

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

The recently published study titled ‘European Commercial Contract Law’, authored by Andrea Bertolini, addresses the theme of regulatory competition. It offers new policy recommendations to improve EU legal systems’ chances of being chosen as the law governing commercial contracts.

 

The Study’s main question

The European Parliament’s Committee on Legal Affairs has published a new study authored by Andrea Bertolini, titled ‘European Commercial Contract Law’ (the ‘Study’). The Study formulates the main question as follows: ‘why the law chosen in commercial contracts is largely non-European and non-member state law’. The expression ‘non-European and non-member state’ law is specified as denoting the legal systems of England and Wales, the United States, and Singapore, and more generally, common law legal systems. The Study states:

It is easily observed how most often international contracts are governed by non-European law. The reasons why this occurs are up to debate and could be quite varied both in nature and relevance. Indeed, a recent study by Singapore Academy of Law (SAL) found that 43 per cent of commercial practitioners and in-house counsel preferred English law as the governing law of the contracts.

Although the SAL’s findings are immediately relativised, the Study is underpinned by the assumption (derived from the SAL’s findings) that commercial parties frequently opt for common law. The trend of choosing non-European and non-member state law, the Study submits, is the main reason for enquiring into measures that can be taken to improve the chances of EU Member States’ legal systems being chosen as the law governing commercial contracts:

While the validity of such a study may be questioned, the prevalence of common law in international business transactions, emerging also from other reports and studies (see for a detailed discussion §§2.2 ff.), is one of the very reasons that led to need of performing the current analysis, and should be taken into account, so as to identify those elements that may be improved in the European and MS’s regulatory framework for commercial contracts entered into by sophisticated parties.

The endeavour to identify the points of improvement in the EU and Member States’ regulatory frameworks for international contracts merits appreciation and is relevant to businesses and policymakers. Meanwhile, this endeavour implies a complex task. This task can be approached from different perspectives.

The parties’ perspective

The question of what drives private parties to choose one legal system over another as the law governing their contract is an empirical question. It implies the need to conduct an empirical study, including surveys, interviews, or to use another quantitative or qualitative social science methods. This method has been used in several empirical studies, which have provided various insights into the parties’ attitudes to the choice of law in commercial contracts. To name a few important studies, these include the research by Stefan Vogenauer on regulatory competition through the choice of contract law in Europe, the research by Gilles Cuniberti on international market for contracts and the most attractive contract laws, and an empirical study of parties’ preferences in international sales contracts conducted by Luiz Gustavo Meira Moser. Vogenauer’s research focused on Europe (which included the United Kingdom at that time), while the studies by Cuniberti and Meira Moser had a broader ambit.

Despite the possibly empirical nature of the Study’s main question, the Study neither uses empirical methods nor focuses on the parties’ perspectives. Instead, it takes the policymakers’ perspective.

The policymakers’ perspective

The Study aims to ‘identify possible policies to be implemented to overcome’ the trend that ‘the law chosen in commercial contracts is largely non-European and non-member state’. The findings are formulated as recommendations for policymakers who attempt to make their own legal systems attractive to parties involved in international transactions. The recommendations address both substantive contract law and civil procedure (see inter alia point 2.1 on page 42). Within civil procedure, the Study leaves outside the scope conflict-of-law questions of the extent to which the courts upheld choice-of-law agreements or how various legal systems applicable to contract interpretation deal with the application of foreign law. By contrast, specific attention is paid to the efficiency of the national judiciaries.

Along with the discussion of substantive law, civil procedure and national judiciaries’ efficiency, the Study looks for the reasons for (what it assumes to be) the low success rate of EU Member States’ contract law in the pitfalls of the projects to harmonise contract law that have been undertaken over the last decades. The Study states from the outset:

Indeed, absent an autonomous European contract law, business parties often elect other, non-European jurisdictions (often common law ones), to govern their contractual agreements.

It goes on to identify ‘the fate’ of various attempts to harmonise contract law, such as soft law instruments (including the Principles of European Contract Law (PECL), the UNIDROIT Principles of International Commercial Contracts (UPICC), the Acquis Principles, the Draft Common Frame of Reference (DCFR), and the Common European Sales Law project). These are addressed in the first part of the Study, after which the contract laws of various legal systems are compared and coupled with a comparison of the functioning of the court systems. The method on which the Study bases its conclusions and recommendations is outlined as follows:

To do so, it first provides an overview of the relevant academic and policy efforts underwent to formulate a European contract law (Chapter 1). Then it moves on to touch upon a broad spectrum of matters emerging both from international reports on the adjudication and the functioning of the courts systems, as well as from academic literature on matters that span from contract qualification, interpretation, integration, and some fundamental aspects of remedies (Chapter 2). It then provides a series of policy options (Chapter 3), European institutions could consider when attempting to alter this trend and ensure EU regulation a global role in commercial contracts too.

Regulatory competition, soft law, or de facto harmonisation?

Placing harmonisation of contract law at the core of the discussion of regulatory competition is a fresh look at the (soft law) instruments harmonising contract law. However, it is a somewhat unexpected take on these instruments, because participation in regulatory competition, whereby a EU instrument would compete with third states’ laws, does not appear to be the goal of any contract law harmonisation project. For instance, the UNIDROIT principles have harmonised commercial contract law worldwide. The instrument contains a number of rules rooted in the legal system of the United States (Uniform Commercial Code and States’ case law) and has been endorsed by the UNCITRAL. The PECL and DCFR limit their scope to the EU, but at the time of these instruments’ drafting, the United Kingdom was an EU Member State. Furthermore, PECL and DCFR are not confined to commercial contract law; they address contract law more broadly.

In contrast to these harmonisation projects, the Study appears to promote (without explicitly stating this) the de facto harmonisation by contract clauses and the need to foster party autonomy in the interpretation of contracts. If this is correct, this would be a very welcome recommendation, albeit not entirely new. The Study states:

Overall, the analysis is then used to lay out some policy recommendations that may only be broad in scope and point at one direction more than providing detailed solutions.

All efforts should aim at pursuing the efficiency of the judiciary on the one hand, and the creation of a set of minimalist and – possibly – self-sufficient norms dedicated to the regulation of business contracts that prioritize legal certainty, foreseeability of the outcome, preservation of the parties will.

This and other recommendations are summarised on page 9 and provided on pages 76 ff, and are certainly worth reading.

In May, the Hamburg Max Planck Institute organized an online panel to discuss implications from the German Federal Constitutional Court Decision on the Act to Combat Child Marriages rendered just prior. The panelist were Henning Radtke (Judge at the Constitutional Court),  Dagmar Coester-Waltjen (Professor emeritus for PIL at University of Göttingen), Susanne Gössl (Professor for PIL at University of Bonn) and Lars Viellechner (Professor for Constitutional Law at University of Bremen). Their contributions are now available, together with a short introduction, in open access via the “online first” section of Rabels Zeitschrift.

 

Ralf Michaels, Einleitung zum Symposium

Henning Radtke, Zu den Maßstäben der verfassungsrechtlichen Beurteilung von Regelungen des deutschen Internationalen Privatrechts

Susanne Lilian Gössl, Grundrechte und IPR: Vom beidseitigem Desinteresse zu höflicher Aufmerksamkeit – und zu angeregtem Austausch?

Lars Viellechner, Die Anwendbarkeit der Grundrechte im Internationalen Privatrecht: Zur Methodik der Entscheidung des Bundesverfassungsgerichts über die Kinderehe

Dagmar Coester-Waltjen, Die “Kinderehen”-Entscheidung des Bundesverfassungsgerichts: Welche Schlussfolgerungen ergeben sich für das internationale Eheschließungsrecht?

On 16 November 2023, on the “International Day of Tolerance”, Prof. Rosario Espinosa Calabuig, is organising a new International Seminar, this time under the title: SUSTAINABILITY, SOLIDARITY AND TOLERANCE FROM PRIVATE INTERNATIONAL LAW. Program:  Verónica Ruiz Abu-Ngim CARTEL Seminario Sostenibilidad, solidaridad y tolerancia. 16 nov. 2023 (Edinburgh): “Solidarity and sustainability: a look at Private International Law from the 2030 Agenda” Stéphanie Franq (Louvain): “From Sorority to Solidarity in Private International Law: a methodological approach” Laura Carballo Piñeiro (Vigo): “Tolerance or Solidarity? A look at maritime migrations from the perspective of cinema”. More info here.

The U.S. Supreme Court has long held that a forum selection clause should not be enforced when “trial in the contractual forum will be so gravely difficult and inconvenient” that the plaintiff “will for all practical purposes be deprived of his day in court.” The financial status of the plaintiff is obviously a factor that should be considered as part of this inquiry. Large corporations can usually afford to litigate cases in distant courts. Individual plaintiffs frequently lack the resources to do so. Nevertheless, the lower federal courts in the United States have repeatedly held that financial hardship on the part of the plaintiff is not enough to make an otherwise valid forum selection clause unenforceable.

In a new article, Financial Hardship and Forum Selection Clauses, I argue that this practice is both doctrinally incorrect and deeply unfair. U.S. courts can and should consider the plaintiff’s financial circumstances when deciding whether to enforce foreign forum selection clauses. To illustrate the perversity of current practice, one need look no further than Sharani v. Salviati & Santori, Inc.

Jay Sharani, his wife Catherine, and their two young children were moving from the United Arab Emirates to San Franciso, California. They paid $3600 to IAL Logistics Emirates, LLC (IAL), a shipping company, to transport seventy pieces of household goods to the Bay Area. Although the goods were successfully delivered to a warehouse in Oakland, IAL never communicated this fact to the Sharanis. The Sharanis repeatedly sought to contact IAL over the course of two months. They received no response. When the company finally responded, the Sharanis discovered that many of their goods were in the process of being sold at auction. When the remaining goods were finally delivered, most of them were damaged and unusable.

The Sharanis filed a lawsuit, pro se, against IAL’s delivery agent in federal district court in California alleging breach of contract and negligence under the Carriage of Goods by Sea Act. The defendant moved to dismiss the case based on a forum selection clause in the shipping agreement. That clause required all lawsuits to be brought in London, England. The Sharanis argued that the clause should not be enforced because it would deprive them of their day in court. Specifically, they alleged that (1) they could not afford to hire counsel in the United Kingdom, and (2) they could not afford to take extended time away from their jobs and family responsibilities to represent themselves abroad.  The court rejected these arguments. It held that the Sharanis had failed to show that litigating in England would be so expensive as to deprive them of their day in court. It also held that that the Sharanis had not explained “why one parent could not stay with the children while the other parent pursues the claim, or why their income is insufficient to pay for childcare.” The case was dismissed.

In my article, I demonstrate that the outcome in Sharani is no outlier. In case after case, decided decade after decade, U.S. courts have enforced foreign forum selection clauses knowing full well that the practical effect of enforcement would almost certainly deprive plaintiffs of their day in court because they lack the financial resources to bring their cases abroad. The end result is a long trail of abandoned lawsuits where plaintiffs holding legal claims were denied access to a forum in which to assert those claims through no fault of their own.

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

On Tuesday, December 7, 2023, the Hamburg Max Planck Institute will host its 39th monthly virtual workshop Current Research in Private International Law at 10:00-11:30 (CET). Mary Keyes (Griffith University Brisbane) will speak, in English, about the topic

Trends in Australian Private International Law

This presentation will describe and analyse five important trends in Australian private international law, some but not all of which are not uniquely Australian. These are increasing independence from the English law on which Australian private international law is based; an astonishing increase in the volume of cross-border litigation; the rise and rise of jurisdiction; a broad attitude to the Australian courts’ jurisdiction; and the lack of systemic development of this area of the law.

The presentation will be followed by open discussion. All are welcome. More information and sign-up here.

If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de.

The second issue of the Journal of Private International Law for 2023 has just been published. It contains the following articles:

DJB Svantesson & SC Symeonides, “Cross-border internet defamation conflicts and what to do about them: Two proposals”

Conflicts of laws in cross-border defamation cases are politically and culturally sensitive and their resolution has always been difficult. But the ubiquity of the internet has increased their frequency, complexity, and intensity. Faced with the realities of the online environment—including the virtual disappearance of national borders—several countries have acted unilaterally to preserve their values and protect their interests. Some countries enacted laws favouring consumers or other potential plaintiffs, while other countries took steps to protect potential defendants, including publishers and internet service providers. As a result, these conflicts are now more contentious than ever before. We believe there is a better way—even-handed multilateral action rather than self-serving unilateral action. In this article, we advance two proposals for multilateral action. The first is a set of soft law principles in the form of a resolution adopted by the Institut de Droit International in 2019. The second is a proposed Model Defamation Convention. After presenting and comparing these two instruments, we apply them to two scenarios derived from two leading cases (the first and one of the latest of the internet era) decided by courts of last resort. The first scenario is based on Dow Jones & Company Inc v Gutnick, which was decided by the High Court of Australia in 2002. The second is based on Gtflix Tv v. DR, which was decided by the Court of Justice of the European Union at the end of 2021. We believe that these two instruments would produce more rational solutions to these and other cross-border defamation conflicts. But if we fail to persuade readers on the specifics, we hope to demonstrate that other multilateral solutions are feasible and desirable, and that they are vastly superior to a continuing unilateral “arms race.” In any event, we hope that this article will spur the development of other proposals for multilateral action.

 

G McCormack, “Conflicts in insolvency jurisdiction”

The Hague Judgments Convention 2019 contains an insolvency exception. The paper suggests that the proposed Hague Jurisdiction Convention should contain an insolvency exception that mirrors that contained in the existing Hague Judgments Convention. It is also submitted that international instruments in the field of insolvency, and related matters, are best dealt with by the United Nations Commission on International Trade Law (UNCITRAL).

 

L Theimer, “Protection against the breach of choice of court agreements: A comparative analysis of remedies in English and German courts”

In fixing the place and provider for the resolution of disputes in advance, choice of court agreements increase procedural legal certainty and the predictability of litigation risks. Hence, their protection is crucial. This article undertakes a functional comparison of the remedies for breach of exclusive choice of court agreements in English and German courts, painting a picture of different approaches to a common problem. English courts, now no longer constrained by EU law, employ an entire arsenal of remedies, most strikingly the anti-suit injunction and damages effectively reversing a foreign judgment. In contrast, German courts exercise greater judicial restraint, even though damages for the breach of a choice of court agreement have recently been awarded for the first time. Against this backdrop, two distinct but interrelated reasons for the diverging approaches are identified and analysed, the different conceptions of choice of court agreements and the different roles of comity and mutual trust.

 

V Shikhelman, “Enforcement of foreign judgments – Israel as a case study”

This article shows how enforcement of foreign judgments in Israel works in practice. Using an original hand-coded dataset, the article seeks to determine empirically which factors increase the likelihood of a foreign judgment being enforced by Israeli courts. To do so the article makes use of two major theories about enforcement of foreign judgments – international comity and vested rights. Also, the article hypothesises that enforcement can be influenced by specific characteristics of the Israeli court and the foreign judgment.

The article finds that the best predictor of foreign judgment enforcement in Israel is the specific characteristics of the foreign judgment and of the Israeli court – cases with a contractual-commercial nature, and cases brought before one of the central districts of Israel are more likely to be enforced. Additionally, the volume of trade between the issuing country and Israel might also be a certain predictor of enforcement. Finally, the article finds that the due process in individual cases might have some influence on the enforcement decision.

 

D Zannoni, “How to balance respect for diversity and the rights of the vulnerable? (Non-)recognition of forced and underage marriage under the lens of the European Convention on Human Rights”

Partly in view of the migratory phenomenon to which Europe is exposed, forced and underage marriages nowadays deserve careful consideration both as social phenomena and as legal institutions. This paper aims to verify whether and to what extent forced and underage marriages should be recognised in Europe. On the one hand, recognising the validity of these acts could arguably clash with fundamental values and rights protected by the European Convention on Human Rights and the Convention on Preventing and Combating Violence against Women and Domestic Violence. On the other hand, it is not possible to a priori exclude that a flat refusal to recognise a marriage validly established abroad might entail a violation of further rights of the spouses and ultimately have detrimental consequences for the parties that the refusal aims to protect. The aim is to assess whether private international law tools and techniques can offer a proper balance between respect for the fundamental values of reception societies and protection of the rights and interests of the parties involved.

Review Article

B Hayward, Putting the recognition and enforcement of foreign judgments in context: Comparative Recognition and Enforcement, by Dr Drossos Stamboulakis

Two years ago, the Uniform Law Conference of Canada (ULCC) released a revised version of the Court Jurisdiction and Proceedings Transfer Act (CJPTA), model legislation putting the taking of jurisdiction and staying of proceedings on a statutory footing. The statute is available here.

The ULCC has now released a revised version of another model statute, the Enforcement of Canadian Judgments Act (ECJA). The original version of this statute was prepared in 1998 and had been amended four times. It has now been consolidated and substantially revised. It is available here and background information is available here and here.

Disclosure: I was the lead researcher and a member of the Working Group for the revised ECJA.

The ECJA is based on the general rule that a party seeking to enforce a Canadian judgment in a province or territory that has enacted the ECJA should face no additional substantive or procedural barriers beyond those that govern the enforcement of judgments of the local courts.

The core features of the ECJA are unchanged. The statute allows for the registration of a Canadian judgment (a defined term: s 1). This is an alternative from the common law process of suing on the judgment. Registration is a simple administrative process (s 4) and makes the judgment enforceable as if it were a judgment of the province or territory in which it is registered (s 5). The aim is to make the enforcement of Canadian judgments easier.

Another core feature is also unchanged. The defendant cannot, at the registration stage, object to the jurisdiction of the court that rendered the judgment (s 7(4)(a)). Any challenge to the jurisdiction of that court must be made in the province or territory in which the plaintiff has chosen to sue.

What has changed? First, the commentaries to the statutory provisions have been extensively revised. In part this reflects the many developments that have occurred over the past thirty years. Second, a new provision (s 1(3)(f)) makes it clear that the scheme does not apply to a judgment that itself recognizes or enforces a judgment of another province, territory or foreign jurisdiction. This precludes registering so-called “ricochet” judgments. There had been some debate in the jurisprudence about whether the scheme applies to such judgments. Third, a clearer process has been established (s 7(1)) for setting aside a registration (for example, if the judgment does not in fact meet the requirements for registration). Fourth, there are some smaller changes to provisions dealing with the calculation of post-judgment interest (s 8) and costs of the registration process (s 9).

In addition, an optional defence to registration has been added (s 7(2)(a)(ii)). The defence protects individual defendants who are resident in the place of registration against certain judgments in consumer and employment litigation. Such a defence is not, in general, available under the current statutory schemes or at common law: these treat consumer and employment litigation similar to all other civil litigation rather than as a special case. The defence is optional in that it is left to an enacting province or territory to decide whether to implement it.

It will now fall to the provinces and territories that have enacted the ECJA to determine how to respond to these changes. A version of the statute is in force in several provinces and territories including British Columbia, Manitoba, Nova Scotia and Saskatchewan. It will also be interesting to see if the revised and updated version generates any interest in the provinces and territories that did not enact the earlier version (which include Alberta, Ontario and Quebec).

The expectation is that the ULCC will now turn its attention to revising its third model statute in this area, the Enforcement of Foreign Judgments Act (available here).

The Private International Law Department of the University of Alicante is organizing a conference entitled “Digital Justice for Cross-border Cases” (both onsite and online – in Spanish). The event will take place on 23 November 2023 at the Salón de Grados “Rector Ramón Martín Mateo” of the Faculty of Law at the University of Alicante.

This event is financed by the Spanish Ministry of Science and Innovation, the State Agency of Investigation and funds from the European Regional Development Fund. More information is available here.

Participation is free of charge.  To register click here. Last day to register is 20 November 2023.

Any questions may be directed to proyectodijta@gmail.com.

Please find the program below.

Last Thursday, on November 9, 2023, Draft No. 02.23 proposing the adoption of a new Code of Civil Procedure (al-musattara al-madaniyya) was submitted to the House of Representatives in Morocco. One of the most significant innovations in this draft is the introduction, for the first time in Morocco’s history, of a catalog of rules on international jurisdiction. Additionally, it modifies the existing rules on the enforcement of foreign judgments.

Despite the importance of this legislative initiative for the development of private international law in Morocco, the proposed provisions are, unfortunately, disappointing in many respects.

Firstly, concerning the rules of international jurisdiction, it is surprising that the drafters of 2023 heavily relied on the rules found in the Egyptian Code of Civil Procedure, which date back to the fifties of the last century. These rules are, in many respects, completely parochial and outdated. Other codifications from the MENA region (e.g., the Tunisian codification of PIL) or elsewhere (e.g., recent codifications of PIL in Europe and Asia) could have served as better models. Furthermore, the proposed rules seem to have overlooked developments at the regional or international level, particularly those in the European Union and the Hague Conference on Private International Law over the last two decades. The fact that the new proposed rules do not consider even the solutions of the 1991 Ras Lanouf Convention, a double convention concluded between the Maghreb countries (though not yet ratified by Morocco), is hard to explain.

Examples of questionable aspects of the new proposed rules include, among others:

• Adopting the defendant’s nationality as the basis for jurisdiction in all matters, including civil and commercial matters, even if the dispute has no connection with Morocco.
• Failing to distinguish between concurrent and exclusive jurisdiction. This is problematic because the new proposed provision on the requirements for the enforcement of foreign judgments allows Moroccan courts to refuse enforcement if the judgments are rendered in matters falling within the exclusive jurisdiction of Moroccan courts, without providing a list of such matters.
• Adopting questionnable and outdated grounds of jurisdiction, such as location of property without limits and the place of conclusion of the contract.
• Failing to introduce new rules that consider the protection of weaker parties, especially employees and consumers.
• Failing to include a clear and coherent rule on choice of court agreements.
• Failing to include a rule on lis pendens.

 

Secondly, regarding the enforcement of foreign judgments, the main surprise is the introduction of the reciprocity rule, which has not been part of the law on foreign judgments in Morocco. Moreover, Moroccan courts have never invoked reciprocity when dealing with the enforcement of foreign judgments, neither as a possible requirement nor to reject giving effect to foreign judgments. It is not clear why the drafters felt the need to introduce reciprocity when there does not seem to be any particular problem with the enforcement of Moroccan judgments abroad.

The following is a loose translation of the relevant provisions. The text in brackets has been added by the author.

Part II – The Jurisdiction of the Courts

Chapter IV – International Judicial Jurisdiction

Article 72 [(General) Jurisdiction over Moroccans]
The courts of the Kingdom shall have jurisdiction to hear actions brought against Moroccans even if they are not domiciled or resident in Morocco, except when the action concerns immovables located abroad.

Article 73 [(General) Jurisdiction over Foreigners Domiciled or Residence in Morocco]
The courts of the Kingdom shall have jurisdiction to hear actions brought against foreigners who are domiciled or resident in Morocco, except where the dispute concerns immovables located abroad.

Article 74 [(Special) Jurisdiction over Foreigners not domiciled or resident in Morocco]
[1] The courts of the Kingdom shall have jurisdiction to hear actions brought against foreigners who are not domiciled or resident in Morocco [in the following cases]:

1. [Property and Obligations] [if the action] concerns property located in Morocco, or an obligation formed, performed, or should have been performed in Morocco;

2. [Tortious Liability] [if the action] concerns tortious liability when the act giving rise to liability or the damage takes place in Morocco;

3. [Intellectual Property] [if the action] concerns the protection of intellectual property rights in Morocco;

4. [Judicial Restructuring] [if the action] concerns procedures for businesses in difficulty instituted in Morocco;

5. [Joint Defendants] [if the action] is brought against joint defendants, and one of them is domiciled in Morocco;

6. [Maintenance] [if the action] concerns a maintenance obligation and the maintenance creditor is resident in Morocco;

7. [Filiation and Guardianship] [if the action] concerns the filiation of a minor resident in Morocco or a matter of guardianship over a person or property;

8. [Personal status] [if the action] concerns other matters of personal status:

a) if the plaintiff is Moroccan;
b) if the plaintiff is a foreigner who has resident in Morocco and the defendant does not have a known domicile abroad,

9. [Dissolution of marriage] [if the action] concerns the dissolution of the marital bond:
a) if the marriage contract was concluded in Morocco;
b) if the action is brought by a husband or a wife of Moroccan citizenship;
c) if one of the spouses abandons the other spouse and fixes his/her domicile abroad or has been deported from Morocco

[2] [Counterclaims and related claims] The courts of the Kingdom that have jurisdiction over an original action shall also have jurisdiction to hear counterclaims and any related claims.

[3] [Conservative and Provisional measures] The courts of the Kingdom shall also have jurisdiction to take conservative and provisional measures to be executed in the Kingdom even if they do not have jurisdiction over the original action.

Article 75
[1. Consent and Submission] The courts of the Kingdom shall also have jurisdiction to hear actions even if they do not fall within the jurisdiction of the defendant explicitly or implicitly accepting their jurisdiction unless the action concerns an immovable located abroad.

[2. Declining jurisdiction] If the defendant in question does not appear, the court shall [in its motion] rule that it has no jurisdiction.

Part IX – Methods of Execution
Chapter III – General Provisions relating to Compulsory Execution of Judicial Judgments

Article 451 [Necessity of an Exequatur Declaration]
Foreign judgments rendered by foreign courts shall not be enforced unless they are declared enforceable following the conditions laid down in the present Act.

Article 452 [Procedure]
[1] The request for exequatur shall be submitted to the First President of the court of the second instance with subject-matter jurisdiction.
[2] Jurisdiction shall lie with the court of the place of execution, and the executor shall have the authority to pursue the execution wherever the property of the person against whom the execution was issued is found.
[3] The first president or the person replacing him/her shall summon the defendant when necessary.

Article 453 [Requirements]
The foreign judgment shall not be declared enforceable except after verifying that the following requirements are satisfied:
[a] The foreign court did not render a judgment that falls within the exclusive jurisdiction of Moroccan courts;
[b] There exists a substantial connection between the dispute and the court of the state where the judgment was rendered;
[c] There was no fraud in choosing the rendering court;
[d] The parties to the dispute were duly summoned and properly represented;
[e] The judgment became final and conclusive following the law of the rendering court;
[f] The judgment does not contradict with a judgment already rendered by Moroccan courts;
[g] The judgment does not violate Moroccan public policy.

Article 454 [Documents and Appeal]
[1] Except otherwise stipulated in the international conventions ratified by Morocco and published in the Official Gazette, the request [for declarations of enforceability] shall be submitted by way of application accompanied by the following:
[a] an official copy of the judicial judgment
[b] a certificate of non-opposition, appeal, or cassation
[c] a full translation into Arabic of the documents referred to above and certified as authentic by a sworn translator.
[2] The judgment of granting exequatur can be subject to appeal before the Supreme Court.
[3] The Supreme Court shall decide on the appeal within one month.
[4] Judgments granting exequatur in cases relating to the dissolution of marriage shall not be subject to any appeal except by the public prosecutor.

Article 455 [Titles and Authentic Instruments]
Titles and authentic instruments established abroad before competent public officers and public servants can be enforced in Morocco after being declared enforceable, and that after showing that the title or the authentic instrument has the quality of an enforceable title and that it is enforceable following the law of the State where it was drawn up and does not violate the Moroccan public policy.

Article 456 [International Conventions and Reciprocity]
The rules laid down in the previous articles shall be applied, without prejudice to the provisions of the international conventions and treaties ratified by the Kingdom of Morocco and published in the Official Gazette. The rule of reciprocity shall also be considered.

CHINESE JOURNAL OF TRANSNATIONAL LAW

Call for Papers

Special Issue: Private International Law and Sustainable Development in Asia

The United Nations Agenda 2030 with its 17 Sustainable Development Goals (SDGs) seems to have a blind spot for the role of private and private international law. That blind spot is beginning to be closed. A collective volume with global outlook published in 2021 addressed “the private side of transforming our world”: each of the 17 SDGs was discussed in one chapter of the book devoted to the specific relevance of private law and private international law. In 2022, the IACL-ASADIP conference in Asunción, Paraguay discussed sustainable private international law with regard to Latin America; the contributions published in 2023 in a special issue of the University of Brasilia Law Journal – Direito.UnB., V.7., N.3 (2023).

In this occasion the focus is on Asia. The Chinese Journal of Transnational Law invites submissions for its Vol. 2 Issue 2, to be published in 2025, engaging critically with the functions, methodologies and techniques of private international law in relation to sustainability from an Asian perspective, as well as in relation to the actual and potential contributions of private international law to the SDGs in Asia.

Contributions should focus on Asian perspectives, either addressing a specific global challenge through the lens of the relevant normative framework of a particular country, sub-region, or community/ies in Asia; or ‘glocalising’ the challenge, analysing specific issues affecting concrete contexts in the region in relation to the global objectives included in the UN 2030 Agenda.

Topics could include, but are not limited to:

• Relationships between the international and the domestic, or/and the public and the private in the pursue of the UN Agenda 2030 in Asia
• Sustainability in global supply/value chains and private international law in Asia
• Intra-regional (South-South) migration in Asia and private international law (focus on specific kinds of migration, such as labour migration, climate change migration, forced displacement, refugees, etc)
• Clean energy in Asia and private international law
• Decent work (and economic growth) in Asia, and of Asian workers beyond Asia, and private international law
• Sustainable consumption and production in Asia and private international law (focus on a specific sector, such as apparel, food, agricultural products, etc)
• Gender equality in Asia and private international law
• Sustainable Asian cities and communities and private international law
• Establishment and proof of personal identity in Asia; portability across borders of identity documents in Asia and beyond
• (Non-) recognition of foreign child marriages and forced marriages in and from Asia
• Availability and sustainable management of water (and sanitation) in Asia and the role of private international law
• Private international law and cross-border environmental damage/ adverse effects of climate change/ loss of biodiversity from an Asian perspective.

Note: The issue of transnational access to justice in relation to sustainable development has been considered extensively, including from an Asian perspective, so we suggest interested contributors to refrain from submitting contributions based exclusively on SDG 16.

An abstract of 500-800 words should be submitted by 20 Feburary 2024 to PIL.sustainability.CJTL@ed.ac.uk and CJTL.Editor@whu.edu.cn (please send the abstract to both email addresses). Please include the contributor’s last name in the email title. Selected contributors will be invited to submit a draft paper by 1 October 2024 in advance of a hybrid conference at Wuhan University in November 2024 . The submission of the full article through the journal’s homepage: https://journals.sagepub.com/home/ctl is required by 1 March 2025. Accepted articles will be published online first as advanced articles. Contributors may choose between: Research articles (up to 11,000 words inclusive of footnotes) or short articles (up to 6,000 words inclusive of footnotes). The special issue will be published in September 2025.

Those interested may contact the guest editors Verónica Ruiz Abou-Nigm, Ralf Michaels and Hans van Loon at PIL.sustainability.CJTL@ed.ac.uk.

Chinese Journal of Transnational Law

SAGE

Aims and Scope

The Chinese Journal of Transnational Law is a double-blind peer review journal that aims to address internationally emerging transnational challenges that transcend intellectual and geographic boundaries and require academics from different countries to establish dialogue and communication, and to form understanding and trust. The journal takes a thematic approach to address global challenges from the perspective of transnational law, which is also 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. Although published solely in English, the journal embraces relevant submissions from different cultures and regions thus refraining from accentuating the Anglo-Saxon monopoly in the constituency of international legal studies. Its aims and scope are designed in a way that reflects and respects the diversity of views and opinions born out of the particular experiences of different legal regions and attracts readers from the global, regional and Chinese markets. However, it will do so all while providing a forum to enable the analysis, and better understanding, of China, Asia and developing countries’ related matters and perspectives on international and transnational legal issues and their influence in shaping related global legal developments and debates. The journal shall be open to not only traditional doctrinal and theoretical legal research on transnational law, but also policy-oriented, 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.

This journal includes three sections:

• Research articles (up to 11,000 words inclusive of footnotes)
• Short articles and recent development (up to 6,000s inclusive of footnotes)
• Book reviews on transnational law related issues (up to 1,500 words)

Managing board:

Editors-in-Chief: Prof. Sophia Tang & Prof. Ignacio de la Rasilla (Wuhan University)
Heads of Research Articles: Prof. Prof. Qi Tong and Prof. Su Jinyuan (Wuhan University)
Head of Short Articles and Recent Development: Associate Prof. Zhu Lei (Wuhan University)
Book reviews Editor: Assist. Prof. Hao Yayezi (Wuhan University)

Editorial Board

Bjorn Ahl, University of Cologne, Germany
Joaquin Alcaide, Seville University, Spain
Freya Baetens, Oxford University, UK
Ilias Bantekas, Hamad Bin Khalifa University, Qatar
Congyan Cai, Fudan University, China
Adeline Chong, Singapore Management University, Singapore
Ming Du, University of Durham, UK
George Galindo, University of Brasilia – ILC, Brazil
Qisheng He, Peking University, China
Yenkong N. Hodu, Manchester University, UK
Jie Huang, Sydney University, Australia
Zhengxin Huo, China University of Politics and Law, China
Mary Keyes, Griffith University, Australia
Nico Krisch, The Graduate Institute, Geneva, Switzerland
Frédéric Mégret, McGill University, Canada
Jianqiang Nie, Wuhan University, China
Michaels Ralf, Max Planck Institute, Hamburg, Germany
Giesela Ruhl, Humboldt University, Germany
Guangjian Tu, Macau University, Macau, China
Jiangyu Wang, Hong Kong City University, China
Shen Wei, Shanghai Jiao Tong University, China

International Scientific Advisory Board

Karen Alter, Northwestern University, USA
Paul Beaumont, University of Stirling, UK
Jose Beneyto, University San Pablo CEU, Madrid, Spain
Simon Chesterman, National University of Singapore, Singapore
Huikang Huang, Wuhan University – ILC, China
Jin Huang, China University of Politics and Law, Beijing, China
Marcelo Kohen, The Graduate Institute, Geneva, Switzerland
Christian Mestre, Wuhan University, China
Roger O’Keefe, Bocconi University, Italy
Anne Peters, Max Planck Institute, Heidelberg, Germany
Hélène Ruiz-Fabri, Max Planck Institute, Luxembourg, Germany
Symeon C. Symeonides, Willamette University, USA
Jorge Viñuales, Cambridge University, UK
Yongping Xiao, Wuhan University, China
Jinsong Yu, Renmin University, China
Peer Zumbansen, McGill University, Canada

Starting 30 November 2023, the French Cour de cassation is going to host a lecture series on the ongoing discussion of Brussels Ia reform under the direction of Marie-Elodie Ancel (Université Paris-Panthéon Assas) and Pascal de Vareilles-Sommières (Université Paris 1 Panthéon-Sorbonne).

The programme of the first session – and the video stream! – can be found here.

Written by Dr Ekaterina Aristova, Leverhulme Early Career Fellow, Bonavero Institute of Human Rights, University of Oxford

On 19 October 2023, the English High Court declined to exercise jurisdiction in Limbu v Dyson Technology Ltd, a case concerning allegations of forced labour and dangerous conditions at Malaysian factories which manufactured Dyson-branded products. The lawsuit commenced by the migrant workers from Nepal and Bangladesh is an example of business and human rights litigation against British multinationals for the damage caused in their overseas operations. Individuals and local communities from foreign jurisdictions secured favourable outcomes and won jurisdictional battles in the English courts over the last years in several notable cases, including Lungowe v Vedanta, Okpabi v Shell and Begum v Maran.

The Dyson case is particularly interesting for at least two reasons. First, it advances a novel argument about negligence and unjust enrichment of the lead purchasing company in a supply chain relationship by analogy to the parent company liability for the acts of a subsidiary in a corporate group. Second, it is one of the few business and human rights cases filed after Brexit and the first to be dismissed on forum non conveniens grounds. Since the UK’s EU referendum in 2016, the return of forum non conveniens in the jurisdictional inquiry has been seen as a real concern for victims of business-related human rights and environmental abuses seeking justice in the English courts. With the first case falling on jurisdictional grounds in the first instance, the corporate defendants started to collect a ‘Brexit dividend’, as cleverly put by Uglješa Grušic in his case comment.

Facts

The proceedings were commenced in May 2022. The claimants were subjected to forced labour and highly exploitative and abusive conditions while working at a factory in Malaysia run by a local company. The defendants are three companies in the Dyson corporate group, two domiciled in England and one in Malaysia. The factory where alleged abuses took place manufactured products and components for Dyson products. Claimants argued that Dyson defendants were liable for (i) negligence; (ii) joint liability with the primary tortfeasors (the Malaysian suppliers running the factory and local police) for the commission of the torts of false imprisonment, intimidation, assault and battery; and (iii) unjust enrichment. They further alleged that the Dyson group exercised a high degree of control over the manufacturing operations and working conditions at the factory facilities and promulgated mandatory ethical and employment policies and standards in Dyson’s supply chain, including in Malaysian factories.

The English courts are already familiar with the attempts to establish direct liability of the English-based parent companies for the subsidiaries’ harms relying on negligence and the breach of duty of care owed to the claimants. In Vedanta and Okpabi, the UK Supreme Court made it clear that the parent company’s involvement and management of the subsidiary’s operations in different ways can give rise to a duty of care.

Broadening the scope of the parent company liability in a corporate group beyond strict control opened paths to supply chain liability. While lead purchasing companies, like Dyson, are not bound by shareholding with their suppliers, they often exercise a certain level of managerial control over independent contractors. Such involvement with particular aspects of a supplier’s activities leads to the argument that a lead company could also be liable in negligence for a breach of the duty of care. The unjust enrichment claim that Dyson group has been enriched at the claimant’s expense is a relatively novel legal basis, although it has already been raised in similar cases. To the best of my knowledge, in addition to the Dyson case, at least four legal actions focusing on supply chain liability are progressing in England: Malawian tobacco farmer claims against British American Tobacco and Imperial, Malawian tea farmer claims against PGI Group Ltd, Ghanaian children accusations against cocoa producer Olam and forced labour allegations by Burmese migrants against Tesco and Intertek.

Judgment

The court had to resolve the jurisdictional question of whether the case would proceed to trial in England or Malaysia. The English common law rules are founded on service of the claim form on the defendant and are based on the defendant’s presence in the jurisdiction. In general terms, jurisdiction over English-domiciled parent companies is effected within the jurisdiction as of right. Following Brexit, proceedings against an English parent company may be stayed on forum non conveniens grounds. Foreign subsidiaries are served outside the jurisdiction with the court’s permission, usually on the basis of the ‘necessary or proper party’ gateway. In the Dyson case, the English defendants asked the court to stay the proceedings based on forum non conveniens, and the Malaysian defendant challenged the service of the claim form, arguing that Malaysia is a proper place to bring the claim.

The court agreed with the corporate defendants, having applied the two-stage test set out by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd. The first stage requires consideration of the connecting factors between the case and available jurisdictions to determine a natural forum to try the dispute. The court concluded that Malaysia was ‘clearly and distinctly more appropriate’ [122]. Some factors taken into account were regarded as neutral between the different fora (convenience for all of the parties and the witnesses [84], lack of a common language for each of the witnesses [96], location of the documents [105]). At least one factor was regarded as a significant one favouring England as the proper place to hear the claim (risk of a multiplicity of proceedings and or irreconcilable judgments [109]). However, several factors weighed heavily in favour of Malaysia (applicable law [97], place where the harm occurred [102]). As a result, Malaysia was considered to be the ‘centre of gravity’ in the case [122].

Under the second limb of the Spiliada principle, the English courts consider whether they should exercise jurisdiction in cases where the claimant would be denied substantial justice in the foreign forum. The claimants advanced several arguments to demonstrate that there is a real risk of them not obtaining substantial justice in Malaysia [125–168], including difficulties in obtaining justice for migrant workers, lack of experienced lawyers to handle the case, the risk of a split trial, the cost of the trial and financial risks for the claimants and their representatives, limited role of local NGOs to support the claimants. The court did not find cogent evidence that the claimants would not obtain substantial justice in Malaysia [169]. A stay of proceedings against English defendants was granted, and the service upon the Malaysian company was set aside [172]. Reaching this conclusion involved consideration of extensive evidence, including contradictory statements from Malaysian lawyers and civil society organisations. The Dyson defendants have given a number of undertakings to submit to the jurisdiction of the Malaysian courts and cover certain claimants’ costs necessary to conduct the trial in Malaysia, which persuaded the court [16].

Comment

The Dyson case marks a shift from the recent trend of allowing human rights and environmental cases involving British multinationals to proceed to trial in the UK courts. Three principal takeaways are worth highlighting. First, the claimants in the business and human rights cases can no longer be certain about the outcome of the jurisdictional inquiry in the English courts. The EU blocked the UK’s accession to the Lugano Convention despite calls from NGOs and legal experts. The risk of dismissal on forum non conveniens grounds is no longer just a theoretical concern.

Second, the Dyson case demonstrates the difficulties of finding the natural forum under the doctrine of forum non conveniens in civil liability claims involving multinationals. These complex disputes have a significant nexus with both England, where the parent or lead company is alleged to have breached the duty of care, and the foreign jurisdiction where claimants sustained their injuries. The underlying nature of the liability issue in the case is how the parent or lead company shaped from England human rights or environmental performance of its overseas subsidiaries and suppliers. In this context, I agree with Geert van Calster, who criticises the court’s finding about Malaysia being the ‘centre of gravity’ in the case. I have argued previously that the forum non conveniens analysis should properly acknowledge how the claimants frame the argument about liability allocation between the parent company and other entities in the group or supply chain.

Finally, the Dyson case is not the first one to be intensely litigated on the forum (non) conveniens grounds. In Lubbe v Cape, Connelly v RTZ and Vedanta, the English courts accepted jurisdiction, acknowledging that the absence of a means of funding or experienced lawyers to handle the case in a host state will lead to a real risk of the non-availability of substantial justice. The court in Dyson reached a different conclusion, but its analysis of the availability of substantial justice for claimants in Malaysia is not particularly persuasive, especially considering the claimants’ ‘fear of persecution, detention in inhumane conditions and deportation should they return to Malaysia’ [71].

One aspect of the judgment is notably concerning. Claimants referred to the conduct of the Dyson defendants as being ‘aggressive’ and ‘heavy-handed’ [71], [73]. In concluding remarks, the court accepted there were deficiencies in Dyson’s responses to the claimants’ requests for the documents [173]. Yet despite this acceptance, the court has on multiple occasions relied on the defendants’ undertakings to cooperate with the claimants to ensure the trial can proceed in Malaysia [136], [147], [151], [152], [166], [169]. Undoubtedly, the ruling will be appealed, and it remains to be seen if the English courts will be willing to try cases involving British multinationals in the post-Brexit landscape.

This post has been written by Sanja Marjanovi? (Faculty of Law, University of Niš, Serbia) and Uglješa Gruši? (UCL).

The 18th Regional Private International Law Conference will take place on 17 November 2023 at the Faculty of Law, University of Niš, Serbia, with the support of the Deutche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ). The theme of the Conference is Private International Law and International Organizations – Achievements and Challenges.

The Conference will provide an opportunity to celebrate the 20th anniversary of the inaugural regional PIL conference, which was also held in Niš in 2003. These regional PIL conferences are a result of the vision of Professor Mirko Živkovi? (Faculty of Law, University of Niš) to re-establish a regional PIL network that had been broken by the tragic dissolution of the former Yugoslavia. Although PIL scholars from countries stemming from the former Yugoslavia continue to be the nucleus of these conferences, they regularly attract PIL scholars from other countries as well.

The opening panel will feature the following topics and speakers:

• Reflections on the Complementarity of Global and Regional Unification of Private International Law, Hans van Loon (Former Secretary General of the Hague Conference on Private International Law), The Hague
• Characterisation in the CJEU Case Law: Unity or Diversity?, Vesna Lazi?, Utrecht University and Asser Institute, The Hague
• Centennial of the Hague Academy of International Law, Maja Stanivukovi?, University of Novi Sad

The full programme of the conference can be found here.

The working language of the Conference will be English, and it will also be streamed online.

Those wishing to attend the Conference online are invited to register by emailing contact details and affiliation to antanasijevic@prafak.ni.ac.rs by 16 November at 12 CET.

Conference proceedings will be published in September 2024.

Written by Akanksha Oak, Jindal Global Law School, India

 

Introduction

The modern commerce landscape faces a significant challenge: the widespread infringement of intellectual property (“IP”) rights due to online interactions that enable instant global access. This issue is exacerbated by cross-border activities, necessitating the application of private international law (“PIL”). However, IP protection remains territorial, guided by the principle of “lex loci protectionis.” This results in complexities when it intersects with PIL. Online IP infringement further convolutes matters due to the internet’s omnipresence and accessibility, making the establishment of jurisdiction a complicated process for legal professionals. A pivotal development in this arena occurred in 2021 when the Delhi High Court rendered a judgement in the case of HK Media Limited and Anr v. Brainlink International Inc.,[1] illuminating India’s legal framework for determining jurisdiction in cases of online IP infringement within the context of cross-border disputes.

Facts

HT Media, the plaintiff in this case, was involved in the business of print media and online publications. They operated online editions of their newspapers through their websites, specifically www.hindustantimes.com,  and held registered trademarks for “Hindustan” and “Hindustan Times”. The defendants, Brainlink Int. Inc., were a corporation based in New York and owned the domain name www.hindustan.com. Their website provided news content like HT Media, focusing on India-America interests and stock market reports from India.

Due to the striking similarity between the websites, the plaintiffs initiated legal proceedings seeking a permanent injunction against the defendants, restraining them from using the domain name. Simultaneously, the defendants filed a suit in the United States District Court, asserting non-infringement of the plaintiffs’ rights.

In response, the plaintiffs argued that the Indian court should halt the proceedings in the foreign court through an anti-suit injunction. They contended that the defendants were subject to the personal jurisdiction of the Delhi High Court, making it appropriate for the Indian court to intervene in the case.

Enhanced and vital interpretation of “Carrying on Business”

The court’s jurisdiction in the present case was established under Section 134 of the Trade Marks Act 1999, which permits a plaintiff to file a suit in the court’s jurisdiction where it carries on business.

In cases of online infringement of IP, the test for carrying on business was outlined in World Wrestling Entertainment Inc. v. Reshma Collection.[2] In the World Wrestling case, the plaintiffs were a company incorporated under the State of Delaware, USA laws. They filed for a trade mark infringement in a suit in the Delhi High Court. They contested that their website was accessible in Delhi, and thus, under Section 134 of the Trade Marks Act, they carried on business in Delhi. The court noted that “the availability of transactions through a website at a particular place is virtually the same thing as a seller having shops in that place in the physical world.” This means that if a website is accessible via the internet at a particular place, the courts of that place could claim jurisdiction over the dispute. Moreover, due to the pervasive and global access of the internet, this gives the parties an opportunity for forum shopping; the jurisdiction can be established at any place where the online site is accessible.

This principle was further affirmed in the case of Millennium & Copthorne International Ltd. v. Aryans Plaza Services (P) Ltd.[3] In this instance, the plaintiff, “Millennium & Copthorne,” was a London-based company without a physical office in India. Nevertheless, the plaintiff extensively promoted its services in India through its online presence, collaborating with notable companies such as “MakeMyTrip” and “Hotel Travel Ltd.” Applying this law, the plaintiff argued that despite lacking an office in Delhi, they were carrying out business in Delhi and thus qualified to file the suit in the Delhi High Court under Section 134 of the Trade Marks Act.

Unsurprisingly, this approach raises concerns about predictability. This is because parties could file suits in any court where their website is accessible. In the present case, however, this reasoning was not accepted, as the court emphasised the physical existence of the plaintiff’s registered office in Delhi to meet the criterion of “carrying on business.” Moreover, the court deemed the lawsuit filed in the Eastern District of New York vexatious and oppressive.

One of the grounds to establish that the jurisdiction of the US court was oppressive was that the plaintiff was not carrying on business in the US. This determination was made by diverging from the precedent set in the World Wrestling case, as illustrated above. In this case, the court analysed the target audience of the plaintiff’s business. This analysis demonstrated that the plaintiff was indeed conducting business in India, and most of its readers were residents of India despite the global accessibility of its website. Had the court followed the World Wrestling case ratio, the mere accessibility of the plaintiff’s website would have constituted carrying on business in the US. However, the court, in this instance, refrained from doing so. Hence, the court’s interpretation of “carrying on business” was twofold: it relied on the physical presence of the plaintiff’s registered office and evaluated its target audience to establish the “carrying on of business.” The court did not solely consider the accessibility of the plaintiff’s website, as was the practice in previous cases.

The ruling in the WWE case allowed parties to potentially misuse the right of forum shopping, enabling them to file suits in any country where their website was accessible. However, the approach adopted in the present case aligns more closely with the principles of PIL. It helps prevent the abuse of forum shopping by restricting the options available to parties when filing a suit under the ambit of “carrying on business.” This decision establishes a precedent, underscoring the significance of establishing jurisdiction based on various connecting factors, such as the registered office of the party’s business and its target audience. This approach emphasises the importance of a collective analysis by considering a range of factors rather than solely relying on the accessibility of a website in a specific location.

The test of “Cause of Action”

In online IP infringement cases, another ground for establishing jurisdiction revolves around determining the place where the cause of action arose. The Delhi High Court has established precedents in this regard, notably in Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy,[4] and further elucidated in Impresario Entertainment v. S & D Hospitality.[5] In the Banyan Tree case, the plaintiff had a registered office in Singapore. It had an e-commerce website accessible in India, and thus, it instituted a suit in Delhi. It filed for trade mark infringement against the defendant, whose place of business was in Andhra Pradesh, India. The issue in this case was regarding the jurisdiction of the Delhi High Court, as neither of the parties resided in the territory of Delhi. Thus, the court established the “tighter version of the effects test” for deciding the place of cause of action in online infringement matters. The court ruled that to establish jurisdiction when the defendant does not reside or conduct business in the forum state but the website in question is universally accessible, and the plaintiff must demonstrate that the defendant specifically targeted the forum state with the intent to harm the plaintiff.

Building on this, in Impresario Entertainment v. S & D Hospitality, a Mumbai-based restaurant business (plaintiff) sued a Hyderabad-based restaurant (defendant) with a similar name in the Delhi High Court. The plaintiff claimed jurisdiction under the grounds of cause of action based on the reasoning that interactive website listings such as Zomato were accessible in Delhi, and thus, it was also one of the places where infringement took place, resulting in the cause of action. However, the court ruled in favour of the defendant, stating that mere website interactivity was insufficient for establishing jurisdiction under this ground. Thus, the Impresario case emphasised the concept of “specifically targeting the forum state,” requiring the plaintiff to prove that one of their customers was misled by the defendant, leading to the conclusion of a commercial transaction or a strong intention to finalise a transaction.

The tests for carrying on business and cause of action represented opposite ends of the spectrum: the former was relatively easy to establish, and the latter was challenging to prove, placing the burden on the plaintiff. In the present case, the court struck a balance between these tests. It established a criterion where the connecting factors for identifying where the cause of action arose required a demonstration of the likelihood of damage without conclusively proving a commercial transaction. The court held that since the plaintiff was an Indian news channel catering to an Indian audience, their goodwill and reputation were primarily in India. Consequently, any damage inflicted would stem from the defendant’s site being accessed from India, given that the plaintiff’s primary target audience resided there. The burden of proof was not on the plaintiff to prove that he had “actually” faced financial damage but to show that there was a “likelihood” of facing such financial damage to invoke the grounds for cause of action, unlike in the cases of Banyan Tree and Impresario. Furthermore, as the IP rights were safeguarded in India, any infringement would constitute a cause of action where these rights were granted.

Implications of the case

In the European Union (EU), the court’s jurisdiction is established under Art 7(2) of the Brussels I Recast Regulation. The connecting factors in this article are the places where the damage occurred or may occur. Thus, jurisdiction is established based on the location of the harm caused by online infringement, which the likelihood of financial loss to the plaintiff would prove. The plaintiff must prove that damage was caused due to the accessibility of the defendant’s site in that country. The court’s reasoning in the present case aligns with the reasoning of the EU to establish jurisdiction in such cases, as even in the present case, the court established jurisdiction based on connecting factors such as the place of “damage” by analysing the plaintiff’s target audience and how damage to its goodwill in India would lead to financial loss for the party. Thus, with the ruling in HK Media Limited and Anr v. Brainlink International Inc., India has also adopted an Article 7(2) Brussels approach. This ruling sets an encouraging precedent, fostering consistency and harmonising private international law rules across nations for cross-border online IP infringement. It furthers the goals of establishing predictability and certainty in determining jurisdiction in cross-border disputes.

[1] 2020 SCC Online Del 1703.

[2] 2014 SCC Online Del 2031.

[3] 2018 SCC Online Del 8260.

[4] 2009 SCC Online Del 3780.

[5] 2018 SCC OnLine Del 6392.