Droit international général

On 6 March 2025, the Danish Supreme Court held in a decision that an abducted child should not be returned to Ukraine under the 1980 Hague Convention on the Civil Aspects of Child Abduction (1980 Hague Convention). The court found grounds to refuse the return, emphasizing that while the war in Ukraine influenced the situation, […]

By Adeline Chong, Singapore Management University

1. Introduction

In two decisions decided within a fortnight of each other, the Singapore Court of Appeal considered anti-suit injunctions pursued to restrain proceedings allegedly brought in breach of arbitration agreements. The first case, Asiana Airlines, Inc v Gate Gourmet Korea Co, Ltd (‘Asiana Airlines’)[1] dealt with whether A could rely on an arbitration agreement between A and B to restrain B’s proceedings against C, a third party. The second case, COSCO Shipping Specialized Carriers Co, Ltd v PT OKI Pulp & Paper Mills (‘COSCO Shipping’)[2] considered whether an arbitration agreement covered a tortious claim. To put it in another way, Asiana Airlines mainly concerned the ‘party scope’ of an arbitration agreement while COSCO Shipping concerned the ‘subject matter’ scope of an arbitration agreement.[3] Where the anti-suit application is to restrain foreign proceedings brought in breach of an arbitration or choice of court agreement, ordinarily it would be granted unless ‘strong cause’ is shown by the respondent.[4] This provides an easier path for the anti-suit claimant compared to the alternative requirement of establishing that the foreign proceedings are vexatious or oppressive in nature.

In both judgments, the Court emphasised that forum fragmentation was sometimes inevitable and that the crux was to ascertain parties’ intentions as to the ambit of the arbitration agreement. While both decisions canvassed other private international law issues, the primary focus of this comment is the Court’s approach to construing the scope of dispute resolution clauses. Although both decisions involved arbitration agreements, the same reasoning applies to choice of court agreements.[5] Further, the principles apply equally whether the application concerns a stay of proceedings or an anti-suit injunction.[6]

2. Asiana Airlines

Asiana Airlines (a Korean company) entered into a joint venture agreement with Gate Gourmet Switzerland GmbH (GGS). This joint venture resulted in the establishment of Gate Gourmet Korea (GGK). Asiana entered into a catering agreement with GGK. Both the joint venture and catering agreements contained arbitration agreements. It transpired that the chairman of Asiana had arranged for the two agreements to benefit his own personal interests, in breach of his obligations to Asiana. The chairman was later convicted in Korean proceedings.

Asiana commenced proceedings in Korea against GGK for a declaration that the catering agreement was null and void under Korean law due to its chairman’s breach of trust, and consequently, the arbitration agreement was similarly null and void. It also advanced an argument that the dispute was non-arbitrable due to Korean public policy; all relevant stakeholders were members of the Korean public and the outcome of the proceedings would have an impact in Korea. Subsequently, Asiana also pursued actions against GGS and the directors of the Gate Gourmet Group. It alleged that the directors were actively involved in the chairman’s unlawful conduct and therefore liable in tort under Korean law, and GGS was vicariously liable for their actions. The same points on nullity and public policy were raised.

Gate Gourmet applied for anti-suit injunctions in Singapore to restrain the Korean proceedings. Central to the anti-suit applications was the arbitration agreements in the joint venture and catering agreements. The Court of Appeal, hearing the appeal from a decision of the Singapore International Commercial Court (SICC), held that it was an abuse of process for Asiana to argue that the arbitration agreements were null and void given that it had not pursued previous opportunities to raise this point. Not surprisingly, Asiana’s public policy argument received short shrift; it was too broadly framed as it was inevitable that proceedings involving big companies would have an impact on their home countries. Thus, the Court held that the Korean proceedings against GGK was in breach of the arbitration agreement in the catering agreement and the anti-suit injunction restraining the Korean proceedings against GGK was upheld.

More interesting was the anti-suit injunction restraining the Korean proceedings against the directors. Asiana argued that the directors were non-parties to the joint venture agreement and the arbitration agreement contained therein and as GGS were sued on the basis of vicarious liability, the proceedings were not related to the agreement. The Court applied Korean law, the proper law of the agreement, to construe the arbitration agreement. It observed that under Korean law, arbitration agreements could cover non-contractual claims and that the tortious claims pursued were closely connected with the joint venture agreement. The anti-suit injunction restraining the Korean proceedings against GGS was affirmed. The question which then arose was whether the anti-suit injunction restraining the proceedings against the directors could be maintained on the same basis of breach of the arbitration agreement or could only be maintained if the Korean proceedings against the directors were shown to be vexatious or oppressive in nature. As the Court observed, an anti-suit injunction based on the first ground meant that ‘GGS as the anti-suit claimant would have to show that if Asiana pursued the claim against the [directors], it would breach GGS’s rights under the JVA Arbitration Agreement.’[7]

This question involved the situation where A and B are parties to the dispute resolution clause and B commences proceedings against C in a different forum from that named in the clause. Can A pursue an anti-suit injunction restraining B’s action against C on the ground that that action is in breach of the clause?[8] Another variant of this situation is where C applies for an anti-suit injunction restraining B’s action against C as being in breach of the jurisdiction clause. In a prior decision VKC v VJZ,[9] the Court of Appeal held that section 2(1)(b) of the Contracts (Rights of Third Parties) Act 2001 did not cover exclusive jurisdiction clauses.[10]  In contrast, the New South Wales Court of Appeal in Global Partners Fund v Babcock & Brown[11] took the view that C could rely on the benefit of the jurisdiction clause under the common law provided C was a ‘non-party’ who was intimately involved in the transaction between A and B.[12]

The UK House of Lords in Donohue v Armco Inc[13] held that where an exclusive English choice of court agreement bound some, but not all, of the parties in the foreign proceedings, the avoidance of forum fragmentation amounted to strong reasons not to uphold the choice of court agreement. The requested anti-suit injunction in Donohue, however, involved those who were parties to it: A sought an anti-suit injunction restraining B’s action against A. Nevertheless, Lord Scott of Foscote had commented in obiter that A could in certain circumstances obtain an anti-suit injunction restraining not only proceedings against itself but also proceedings against C if there was a possibility that A and C would be jointly and severally liable. This is provided the wording of the clause was sufficiently wide to cover the proceedings against C and A had a sufficient interest in obtaining the anti-suit injunction, namely, to avoid incurring liability as a joint tortfeasor. The Singapore Court of Appeal rejected Lord Scott’s comments, as it thought that it would be overinclusive and  prohibit legitimate claims against third parties.[14] Instead it cited with approval the decision in Team Y&R Holdings Hong Kong v Ghoussoub; Cavendish Square Holding BV v Ghossoub[15] to the effect that the Fiona Trust[16] principle that the intentions of rational businessmen would be to have a ‘one-stop shop’ for litigation cannot apply with the same force when considering claims involving third parties. Clear language is required before an exclusive jurisdiction clause covers claims brought by or against third parties.[17] The risk of forum fragmentation, which underscored Lord Scott’s suggestion in Donohue, should not be ‘overstated’.[18]

This more narrow construction of the party scope of dispute resolution clauses raises the risk of B manipulating the situation and evading the dispute resolution clause by pursuing claims against C. However, as the Court pointed out, it would be open for A to apply for an anti-suit injunction on the basis that B’s proceedings against C rendered the proceedings between A and B vexatious or oppressive. Additionally, C could also independently seek an anti-suit injunction restraining the proceedings against it on the vexation or oppression ground.[19]

On the facts, the Court held that while the directors had signed the joint venture agreement, they had done so in their capacity as representatives of GGS. There was nothing in the wording of the arbitration agreement to indicate that Asiana and GGS intended the clause to apply to claims against the directors. The anti-suit injunction restraining the action against the directors could not succeed on the basis of breach of the arbitration agreement; it could only succeed on the vexation or oppression ground. However, Gate Gourmet failed to show any bad faith on Asiana’s part in suing the directors. Therefore, the anti-suit injunction was upheld in relation to the action against GGS as being in breach of the arbitration agreement while the anti-suit injunction restraining the action against the directors was discharged.

3. COSCO Shipping

PT OKI (an Indonesian company) had sub-chartered a vessel which belonged to COSCO Shipping (a Chinese company). The head charter and sub-charter contracts each contained a law and arbitration clause for English law and arbitration in Singapore. Further to that, contracts of carriage were entered into between the two companies. These contracts, which were evidenced by or contained in bills of lading, incorporated the law and arbitration clause in the charter contracts. While loading PT OKI’s cargo at the port of Palembang, Indonesia, COSCO Shipping’s vessel allided with the trestle bridge of the jetty, causing damage which allegedly amounted to US$269m. The bridge and port were owned and operated by PT OKI. Various proceedings were pursued by both parties, the most relevant of which were: PT OKI commenced proceedings against COSCO in Indonesia in tort for the damage to the trestle bridge; COSCO applied for an anti-suit injunction in Singapore to restrain PT OKI from continuing with the Indonesian action; and COSCO commenced arbitration against PT OKI before the Singapore International Arbitration Centre (SIAC) in Singapore seeking declarations of non-liability and various reliefs arising out of the allision. COSCO alleged that PT OKI had breached the safe port warranty under the head charter agreement as incorporated into the bills of lading and raised contractual defences also found in the head charter agreement and incorporated into the bills of lading.

The anti-suit application was based on PT OKI’s alleged breach of the arbitration agreement. The Court of Appeal considered the meaning of the phrase ‘arising out of or in connection with this contract’, used in the arbitration agreement and which is standard language in dispute resolution clauses. At first instance, the judge had referred to various tests-such as the ‘parallel claims test’,[20] ‘causative connection test’ and the ‘closely knitted test’[21] to ascertain if the tort claim fell within the scope of the arbitration agreement. The Court of Appeal emphasised that the various tests were ‘simply labels and tools developed to assist the courts’[22] and pushed back against any presumption that parties must always have intended for all their claims to be decided in the same forum. The crux was the parties’ intentions as encapsulated by the wording of the agreement; thus ‘[i]f upon examining the text of the agreement and the nature of the competing claims, a claim is not within its ambit, then forum fragmentation is inevitable and the courts should not steer away from that outcome …’[23]

The Court adopted a two-stage test when ascertaining the scope of an agreement: first, the court should identify the matter or dispute which parties have raised or foreseeably will raise in the foreign proceedings; and secondly, the court must then ascertain whether such matter or dispute falls within the scope and ambit of the agreement. At the first stage, the court is trying to identify the substance of the dispute between the parties. It should not consider only the claimant’s pleaded cause of action but should also take into account defences or reasonably foreseeable defences and cross-claims that may arise. The Court held that it was not necessary for the claims or defences to be connected to the contractual relationship. This is significant because the tort action in Indonesia was not based on the contract between the parties.[24] It concluded that the tort action fell within the scope of the arbitration agreement. The parties must have contemplated that a pure tort claim for damage to the trestle bridge caused during the performance of the contracts of carriage between the parties and where it was foreseeable that defences based on the contract would be raised would fall within the scope of the arbitration agreement. Thus, the anti-suit injunction could properly be founded on breach of the arbitration agreement. There was no consideration if ‘strong cause’ was shown by PT OKI to justify the breach of the arbitration agreement; it did not appear that arguments had been made on this point.

4. Conclusion

The decisions in Asiana Airlines and COSCO Shipping should not be read as the Singapore courts resiling from the Fiona Trust principle, which has been cited and applied in a number of other decisions.[25] The core idea that one should adopt a common-sense approach when construing dispute resolution clauses, bearing in mind that the parties are rational businessmen, still underlines the two judgments. The clarification added by the Court of Appeal was the starting point must always be the wording of the dispute resolution clause and the context in which it was entered into.[26] This is in contrast with the prior approach where sometimes the court tended to start with the presumption that parties intended for ‘one-stop shopping’ and to apply the presumption in the absence of any contrary evidence.[27] There is now an important shift in focus. The court should not go to great lengths to achieve a construction which supports ‘one-stop shopping’ where this is not borne out by the wording of the clause and the circumstances of the case. If this means that there would be parallel litigation across a few jurisdictions, the courts should not shy away from that conclusion.[28] In particular, where third parties are concerned, clear language must be used to bring third parties within the scope of a dispute resolution clause. Ultimately, Asiana Airlines and COSCO Shipping underscore the importance of clear and precise drafting of dispute resolution clauses.

 

 

[1] [2024] SGCA(I) 8; [2024] 2 SLR 279.

[2] [2024] SGCA 50; [2024] 2 SLR 516.

[3] The phrases ‘party scope’ and ‘subject-matter scope’ was coined by the New South Wales Court of Appeal in Global Partners Fund Limited v Babcock & Brown Limited (in liq) [2010] NSWCA 196.

[4] Sun Travels v Hilton [2019] 1 SLR 732 (Singapore CA) [68], [78], [81]-[87].

[5] Asiana [80]-[83].

[6] COSCO [73].

[7] Asiana [58].

[8] See Thomas Raphael, The Anti-Suit Injunction (2nd edn, OUP 2019) para 7.31.

[9] [2021] 2 SLR 753.

[10] This provision allows C to enforce a term of the contract if the term purports to confer a benefit on C.

[11]  [2010] NSWCA 196 (noted A Chong, ‘The “Party Scope” of Exclusive Jurisdiction Clauses’ [2011] LMCLQ 470).

[12] Cf Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd [2019] NSWCA 61 [90] (President Bell) (in the context of a stay application).

[13] [2002] 1 All ER 749 (HL).

[14] Asiana [85]-[88].

[15] [2017] All ER(D) 81 (Nov) [82].

[16] Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254 (UKHL).

[17] Asiana [72]-[73].

[18] Asiana [88].

[19] Asiana [84].

[20] Eastern Pacific Chartering Inc v Pola Maritime Ltd [2021] 1 WLR 5475 (“The Pola Devora”) [37].

[21] Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd’s Rep 87 (English CA) 89. The Court disagreed with the judge that the ‘closely knitted test’ applies only where the non-contractual claim may be recast as a contractual claim: COSCO [78]-[79].

[22] COSCO [3]

[23] COSCO [5].

[24] The court below had been troubled by the fact that the tort claim could not be recast as a contractual claim. It did not grant the anti-suit injunction: [2024] SGHC 92.

[25] Eg, Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] 2 SLR 1271 (Singapore CA), Allianz Capital Partners GmbH, Singapore Branch v Goh Andress [2023] 1 SLR 1618 (Singapore HC(A)).

[26] See also Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA [2016] 5 SLR 455 [34].

[27] Eg, Vinmar Overseas [79].

[28] See to similar effect, Australian Health [90].

[29] Eg, Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] 2 SLR 1271 (Singapore CA), Allianz Capital Partners GmbH, Singapore Branch v Goh Andress [2023] 1 SLR 1618 (Singapore HC(A)).

[30] Eg, Vinmar Overseas [79].

[31] See to similar effect, Australian Health [90].

A call for papers has recently been issued by Michiel Poesen and Patricia Živković (University of Aberdeen), co-convenors of the Society of Legal Scholars Private International Law section, for the PIL section of the SLS Annual Conference 2025 at Leeds University from 3 to 4 September 2025. The call is reproduced below, as received by the promoters. This […]

[If you do use the blog for research or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.]

I earlier reviewed the jurisdictional ruling in the claim brought by ia members of the Brasilian Quilombola community against Norsk Hydro related corporations. The pleadings this month on the merits reminded me to follow-up on the case and introduced me to a judgment of last May, which I had missed. Hence apologies for late reporting.

The judgment is of interest for the application ia of Rome II‘s rules on statutes of limitation and the burden of proof viz aspects of that statute of limitation. The court is most succinct on it [5.29]: (my translation)

Statutes of limitation are governed by the law applicable to the claim, in this case Brazilian law. The court will therefore assess the defense of prescription under Brazilian (substantive) law, also with respect to the burden of proof. This concerns a material aspect of the law of evidence that the court considers is subject to the lex causae, Brazilian law. (emphasis added)

The para caught my attention for corporate defendants have been known to make a spiel about the implication of the evidence and procedure carve-out in Rome II and its interplay with both Article 15’s ‘scope of the law applicable’ and Article 22’s specific provision for the burden of proof. I am not privy to how extensively the issue was argued in the case at issue.

Here, the court held [5.31] that Norsk Hydro had the burden of proof to show knowledge of the damage, its cause and those responsible for it with a view to the statute of limitation beginning to run, leading to a discussion on whether the pollution was a continuous or single event. As a result of the discussion, [5.36] only a few events were held to be past the statute of limitation.

The judgment does not address substantive reversal of the burden of proof issues under Brasilian environmental law: that I imagine might have been at issue in this month’s heairings.

Geert.

On Tuesday, April 1, 2025, the Hamburg Max Planck Institute will host its monthly virtual workshop Current Research in Private International Law at 11:00 a.m. – 12:30 p.m. (CEST). Professor Carlos Esplugues (University of Valencia) will speak, in English, about the topic

“Take Domestic Law and Run? The Application of Foreign (Private? State?) Law in Times of Uncertainty”

 

The possible application of foreign law is one of the features of contemporary private international law, a discipline that is particularly sensitive to the social, political and economic environment in which it operates. However, the redefinition of the role of the State in modern societies, technological changes or the growing wave of intolerance and fear towards what comes from abroad in many parts of the world are creating a new environment that affects this question in a pluralistic way. Beyond the classical issue of the nature of the applicable law and its relationship to the process, questions are being raised about the viability of this possible applicability and the conditions under which it can be established.

 

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.

As already mentioned in my previous post, at the end of each year I publish an article (in German) about the Conflict of Laws developments in Germany of the last twelve months, covering more or less the year 2024 and the last months of 2023. This post is the second with an overview over those topics that seem to be most trending.

The two parts focus on the following topics (part 1 contained 1. and 2.):

1. Restitution of Money lost in Illegal Gambling
2. Applicable Law in the Dieselgate litigation
3. The (Non-)Valitidy of Online Marriages
4. New German conflict-of-law rules regarding gender afiliation / identity
5. Reforms in international name law

I will now give attention to the last three topics that focus on the three areas that are not harmonized by EU law (yet) and are mainly questions of family law.

This is not a resumen of the original article as it contains a very detailed analysis of sometimes very specific questions of German PIL. I do not want to bore the readers of this blog with those specificities. Those interested in knowing those details can find the article here (no free access).

I would be really curious to hear whether these or similar cases are also moving courts in other jurisdictions and how courts deal with them. So, please write me via mail or in the comments to the post if you have similar or very different experiences on those cases.

Part 2 – Online Marriages, Gender Afiliation and Name Law

1.  The (Non-)Validity of Online Marriages

   One highly discussed topic of the last few years was the treatment of Online Marriages. Online Marriage refers to a marriage ceremony where the declarations of intent to marry are declared virtually by digital means. In the relevant cases, at least one of the (future) spouses was located in Germany when this intent was declared via Zoom, Whatsapp or similar means, while the rest of the ceremony, esp. the registration or the other acts of a registrar, was located in another State, esp. in Utah or Afghanistan. The case which the BGH (Supreme Court) decided in September 2024 was about two Nigerians that were in Germany while their declaration was registered in Utah, USA.

   In German law, the validity of such a marriage is determined in two steps: The substantial law of marriage follows the law of the nationality of each spouse (Article 13 EGBGB). The formal validity, in general, follows the classical alternative connecting factors of either the law of the main question (lex causae) or the law of the place of the relevant (lex locus), Article 11 EGBGB. Nevertheless, regarding marriages, a special rule applies regarding the formal validity: Article 13 para. 4 EGBGB provides that a marriage concluded in Germany necessarily follows German law regarding the form.

   As the requirements of each nationality’s laws where fulfilled, main question of the case was: Where does the celebration of a marriage actually take place if it is celebrated online?

   Before this question came up, the prevailing opinion and case law referred to the law of the place where the state authority or the religious authority were located (Coester-Waltjen/Coester Liber Amicorum Verschraegen (2023), 1 (6); vgl. auch Gössl NJW 2022, 3751; BGH 19. 12. 1958 – IV ZR 87/58 ), which in my opinion makes sense as these authorities make the crucial difference between a mere contract and a marriage conclusion from the point of view of German law. Nevertheless, the Supreme Court (BGH 25.9.2024 – XII ZB 244/22) and other courts (VG Karlsruhe 28.9.2023 – 1 K 3074/23; VG Düsseldorf 5.7.2024 – 7 K 2728/22) decided that the place of the marriage is located at the place where the spouses declare their intents to marry – with the consequence that Art. 13 para. 4 EGBGB applied in all cases where at least one spouse was located in Germany at the moment of the declaration.

   I am personally not convinced of the case. The Supreme Court distinguishes the decision from so-called proxy marriages where the declaration is made by the proxy and, therefore, not where the spouses are located but where the proxy is communicating. Nevertheless, this comparison is not convincing: German courts characterize the declaration of a proxy as a (merely) formal requirement in cases where the “proxy” has no power to decide but merely communicates the will of the spouse. Thus, in my opinion, the “proxy” is more a messenger than a real proxy and then the location of the declaration again is where the spouses (not the proxies) are in the moment they send the messenger. Furthermore, I am skeptical because the cases decided yet happened in migration contexts and might have been regarded differently with different parties.

   What are your thought? Do you have similar questions in your jurisdictions?

2. New German conflict-of-law rules regarding gender afiliation and “Mirin”

   Since November 2024 the German EGBGB has an explicit conflict of laws rule on gender affiliation / gender identity. It was introduced by the Gender Self-Determination Act. According to Art. 7a para. 1 EGBGB (here you find the provision in German), a person’s nationality’s law must be applied. That was more or less the unwritten rule, courts followed in Germany. The second paragraph introduces a very limited form of party autonomy: According to Art. 7a para. 2 EGBGB , a (foreign) person with habitual residence in Germany can choose German law for the change of gender or a related change of name.

   While this rule opens non-nationals to change their legal gender in Germany, it does not comply with the case law of the CJEU. In the decision Mirin (ECLI:EU:C:2024:845 – Mirin) the CJEU extended her case law regarding the recognition of names to gender changes that took place in another Member State. It establishes the obligation to recognise the change of gender validly made in another Member State.

    If a person changes the gender in another Member State without being a national of that State but (e.g.) living there, in Germany that gender reallocation cannot be accepted by Art. 7a EGBGB. An extension of Art. 7a para. EGBGB, i.e. a choice of law in favour of every habitual residence (not limited to a German one), might help, even though it probably will not include all situations possible where the obligation to recognize a gender afiliation can exist. This development again shows that the classical “recognition via conflict of laws” method is not able to implement the case law of the CJEU.

   What are your thoughts to those developments (Mirin and the new rule)?

3. Reforms in International Name Law

   Finally, there was a general reform of German name law and – in a last minute move my the legislator – in International Name Law as well. The new rules will enter info force in May 2025.

   At the moment, the law of the person follows her nationality (Article 10 para. 1 EGBGB – version until the end of April 2025). Furthermore, there is a very limited possibility of a choice of law for spouses regarding a common name (each spouses nationalities and German law if one has the habitual residence in Germany) and for children and their family names (nationality of each parent or other person with parental responsibility or German law, if one parent has the habitual residence in Germany).

   The new Article 10 para. 1 EGBGB changes the connecting factor: instead of nationality, habitual residence of the person determines her name, renvoi excluded. According to Art. 10 para. 4 EGBGB, instead, the person can choose the law of the nationality. The futher choice of law for spouses and children family names remains, but allows spouses to choose the law of the habitual residence of one of them, no matter whether it is the German one or not. A child’s name now can be chosen by the parents’ and the child’s nationality (new). In all those cases, persons with double nationality can choose both nationalities.

   Finally, Article 48 EGBGB contains a provision that implements the CJEU case law regarding the recognition of names. Until now, it provides that a person can choose to change the name into the name acquired during a habitual residence in another Member State of the European Union and entered in a civil status register there, unless this is manifestly incompatible with fundamental principles of German law.

   The new provision is almost identical, but some subtle but important changes were made: First, a person does not have to have their habitual residence in the Member State in which they acquired the name. Nationality is sufficient. This implements “Freitag“. Second, it no longer depends on whether the name was ‘lawfully’ acquired in another Member State, but only on the (possibly incorrect) entry of the name in a foreign register. This last requirement (in my opinion, see Gössl, IPRax 2018, 376) goes further that the CJEU requires, as the name has to be “validly acquired” in another Member State to create the obligation to “recognize” or accept that name. Nevertheless, the CJEU most probably will not object to a Member State that is more recognition/acceptance-friendly than necessary.

 

I hope you found this overview interesting. Next year, I am planing to provide similar articles, so any feedback is very welcome.

 

 

On 27 March 2025, the Court of Justice will hand down the judgment in case C-186/24, Auto1 European Cars. The request for a preliminary ruling arises in relation to insolvency proceedings opened by the Landesgericht Linz (Regional Court of Linz) on May 2022. The main dispute opposes the insolvency practitioner to Auto1, a company headquartered […]

 

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on Thursday 27 March 2025 at 14:30 (Mexico City time – CST), 21:30 (CET time). The topic of the webinar is ‘Circular Economy and Private International Law’ and will be presented by Prof. Verónica Ruiz Abou-Nigm (in Spanish).

The details of the webinar are:

https://us02web.zoom.us/j/84118243541?pwd=GoZxHgM7OlZNOCaL1GUpaqsvVTYIK6.1

Meeting ID: 841 1824 3541

Password: AMEDIP

Participation is free of charge.

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

 

Post authored by Lance Huckabee, JD candidate and Global Legal Scholar at the University of Pittsburgh School of Law

When a foreign sovereign breaches a commercial contract with a private entity, what recourse does the wronged party have? In the United States, the Foreign Sovereign Immunities Act (FSIA) governs such disputes, providing an exception for commercial activity that causes a “direct effect” in the U.S. Yet, the definition of “direct effect” has remained elusive, leading to decades of judicial inconsistency and a deepening circuit split.

At the heart of this legal uncertainty is the Supreme Court’s decision in Republic of Argentina v. Weltover (1992), which sought to clarify the issue but instead left room for widely divergent interpretations. Some circuits have adopted a flexible, causation-based approach, analyzing whether a foreign state’s breach had an immediate consequence in the U.S. Others, like the recent D.C. Circuit decision in Wye Oak Tech., Inc. v. Republic of Iraq, have imposed rigid bright-line rules—specifically requiring that the contract contemplate the U.S. as a place of performance. This formalistic approach creates a dangerous loophole, allowing foreign states to structure agreements in a way that insulates them from jurisdiction. As a result, a U.S. business may suffer substantial financial harm from a foreign sovereign’s breach but find itself without legal recourse simply because the contract was silent on where payments were to be made.

This restrictive interpretation undermines the FSIA’s core purpose: to hold foreign sovereigns accountable when their commercial activities impact U.S. businesses. By prioritizing contractual language over economic reality, decisions like Wye Oak erode the ability of American companies to seek redress, making sovereign breaches effectively consequence-free. A proper interpretation of the FSIA should align with Weltover’s focus on causation, ensuring that foreign states cannot exploit technicalities to evade liability. If left uncorrected, the current trend risks turning the FSIA into little more than a paper shield—one that protects sovereigns rather than those they harm.

The Wye Oak decision exacerbates both intra- and inter-circuit inconsistencies, further complicating the FSIA’s application and weakening the commercial activity exception in breach-of-contract cases. By imposing a rigid bright-line rule, it unduly narrows the scope of what qualifies as a “direct effect,” creating uncertainty for U.S. businesses engaged in international commerce. With Wye Oak’s attorneys petitioning for certiorari in January 2025, the case presents a critical opportunity for the Supreme Court to resolve the longstanding circuit split on the FSIA’s direct effects clause.

The Dutch SC has today held that it is minded to refer to the CJEU on a variety of issues relating to Rome II’s applicable law rule for (follow-on damages claims) related to competition law infringement. The case is related to the air cargo cartel referral which I flag here and is a follow-up to the Opinion of the AG at the SC, which I discuss here.

The decision to refer is not definitive yet seeing as the judgment was held on a (intra-Netherlands) preliminary reference. Parties are now given the opportunity to comment on the intention to refer.

The SC first of all refers to the questions it has today already sent up to the CJEU, namely whether continuous infringement leads to one albeit diverse claim as opposed to various albeit related claims. I briefly discuss these here. [4.2.8] clearly a qualification as one claim much facilitates the determination of applicable law and therefore arguably also the enforcement of EU competition law (reference to C-605/21 Heureka v Google).

It then addresses Rome II’s scope ratione temporis and the consequential conflit mobile which I discuss in my earlier post. Unlike its AG (who opined that there is no material difference in outcome hence no need to request an academic opinion, as it were, from Luxembourg), the SC does feel that this question needs to be referred to the CJEU, seeing as it held on yet another question referred to it that the Dutch residual rules do not lead to the outcome suggested by the AG.

Finally, the court intends to ask the CJEU to clarify Article 6(3) a (‘markets affected’ and b (conditions for claimant’s choice of law) Rome II, part of the complex layer of rules on the lex causae for follow-on (and stand alone) claims: in particular, the meaning of ‘markets affected’ and the conditions for choice of law which claimants may exercise.

As I discuss inter alia in this paper, Article 6 frankly is a mess, flying directly in the face of predictability so coveted by EU private international law.

[4.6.6] the SC refers to a perceived need for consistency between Article 6 Rome II and Article 7(2) Brussels Ia (e.g. in Volvo), a need which in my opinion is neither as established nor as obvious as the SC sees it.

This will be a very important case for the application of Rome II Article 6.

Geert.

EU Private International Law, 4th ed. 2024, 4.53 ff.

Palink.Dutch SC minded to refer to CJEU on the scope ratione temporis of Rome II (conflit mobile arising from continuous infringement of competition law; follow-on damages)ECLI:NL:HR:2025:414lnkd.in/eXyB3JTABackground here lnkd.in/emyQYWpG

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-21T12:26:03.537Z

https://www.linkedin.com/posts/geert-van-calster-60abab9_palink-dutch-sc-minded-to-refer-to-cjeu-activity-7308820270905999362-FZ7w?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA

https://x.com/GAVClaw/status/1903054432079647053

 

 

 

I discussed Vlas AG (at the Dutch Supreme Court)’s opinion in the Air Cargo case here. The Dutch Supreme Court today has decided to refer to the CJEU. The specific questions referred, concern the (effet utile of) the EU’s rules on effective enforcement of EU competition law and the qualification of continuous infringement of competition law as leading to one claim per victim, with multiple heads of damages, or rather one claim per infringement, each single handedly qualifying as a separate entitlement for damages.

The difference is relevant to conflict of laws given the ‘conflit mobile’. If the claims are separate, Rome II with its complex rule for competition law damages in Article 6, ratione temporis only applies to some of the claims. I discuss in my previous post how that leads to a complicated patchwork of applicable law.

The actual question referred enquires with the CJEU on whether continuous infringement leads to one albeit diverse claim as opposed to various albeit related claims, but adds ‘with a view to determining applicable law’. It will be interesting to see therefore how intensively the CJEU will engage with the Rome II issues on the specific case, which however is likely to be joined with the other case in which the SC is minded to refer and which I discuss here.

Geert.

EU Private International Law, 4th ed. 2024, 4.53 ff.

Lufthansa ea v SCC eaDutch Supreme Court refers to CJEU re qualification of continuous infringement of competition law, follow-on damages claimsWhether one albeit diverse claim as opposed to various albeit related claimsRelevant viz applicable law, Rome II.deeplink.rechtspraak.nl/uitspraak?id…

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-21T11:47:13.510Z

https://www.linkedin.com/posts/geert-van-calster-60abab9_deutsche-lufthansa-et-al-v-stichting-cartel-activity-7308816006683000832-aU9Q?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA

https://x.com/GAVClaw/status/1903050936391455031

On 24 February 2025, the Arbitration Act 2025 received Royal Assent. The Act implements the recommendations of the Law Commission for reform to the arbitral framework in England and Wales and Northern Ireland. It addresses the following matters: Law applicable to arbitration agreement; Impartiality: duty of disclosure; Immunity of arbitrator: application for removal; Immunity of […]

In IDBI Bank Ltd v Axcel Sunshine Ltd & Anor [2025] EWHC 442 (Comm) claimant is an Indian bank which, at the relevant times, operated outside India via a branch in the Dubai International Financial Centre – DIFC. Defendants are a company incorporated and registered in the British Virgin Islands, and a company incorporated and registered in India.

Second defendant argues ia that a relevant letter of comfort must not be enforced seeing as its performance would contravene Indian law.

Persey J discussed among others therefore whether an English court should disregard a letter of comfort due to A3(3) or A9(3) of the assimilated Rome I Regulation. These are the Articles which in the case of Article 3(3)  give priority to domestic law in a ‘purely domestic’ contract subject to a third country law:

Where all other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.

and in the case of Article 9(3):

Effect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of the contract have to be or have been performed, in so far as those overriding mandatory provisions render the performance of the contract unlawful. In considering whether to give effect to those provisions, regard shall be had to their nature and purpose and to the consequences of their application or non-application.

In the case of Article 3(3), domestic law trumping lex voluntaris is mandatory, while in the case of Article 9(3), the override is optional, at the discretion of the court.

As for Article 3(3), the judge refers in particular to Banco Santander Totta. It was there held that for Art 3(3) to apply, all elements of a claim needed to be within the other country. [105]

In the present case there are elements with connections to the BVI and Dubai, such that Art 3(3) does not apply. Thus, for example, the CFA was entered into by the Bank’s Dubai branch office, the LoC was addressed to the Bank’s Dubai branch office, Axcel was incorporated in the British Virgin Islands, Axcel was required to repay its loan to an account in Dubai, and the facilities under the CFA were used by Siva to repay the debt owed by WinWind (a Finnish company), and thereby to discharge the WinWind Guarantee and Facility (both contracts being governed by English law). The same discharge was used by Siva to obtain the discontinuance of the WinWind Proceedings (before the English court).

([106] the judge doubts very much whether the contended effect of Indian regulation is what defendant purports it to be).

As for A9(3), [108]

I am satisfied that Article 9(3) also does not apply in this case. It is only applicable where the obligations ‘have to be‘ performed in a country where performance would be unlawful. As I have already observed above, performance under clause 3 ought to have taken place in Dubai, not India. Had performance been required to take place in India, the FEMA Regulations are not regarded by India as crucial to safeguarding its public interests. [the judge refers here to expert evidence]

Moreover, obiter [109] even had Article 9(3) applied, the judge would have used his discretion not to grant priority to the Indian rules:

In circumstances where the Indian Courts would enforce the guarantee and/or a judgment of this Court, I am satisfied that there is no basis for giving Siva relief under Art 9(3).

This judgment is a good illustration of what Articles 3(3) and 9 might lead to – although not on the facts of the case.

Geert.

Handbook of EU Private International LAw, 4th ed. 2024, 3.73 ff.

https://bsky.app/profile/gavclaw.bsky.social/post/3ljz7jp7o7c2j https://www.linkedin.com/posts/geert-van-calster-60abab9_judgment-discussing-ia-whether-english-court-activity-7304791236215795712-tb2M?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA https://x.com/GAVClaw/status/1899025501504651508

The fourth issue of 2024 of the Dutch journal of private international law, Nederlands Internationaal Privaatrecht, was published a few weeks ago. It comes with the following contributions An editorial is written by Mathijs ten Wolde (Professor of private international law and international transport law at the Groningen University) who provides an overview of the […]

The Irwin Law “Essentials Series” is a collection of texts about Canadian law aimed at a broad audience: it includes law students and also lawyers, judges and academics.  It has been quite successful over the past twenty years.  In 2024 Irwin Law was acquired by University of Toronto Press.  It has continued the Essentials Series and the use of the Irwin Law imprint.

It has now published the third edition of Conflict of Laws written by Professor Stephen G.A. Pitel of Western University, Canada.  The second edition was published in 2016 and so this edition updates almost a decade of activity, mainly from courts across Canada.  The major change is that the chapter on declining jurisdiction has been reorganized and updated in light of the Supreme Court of Canada’s decisions in Douez v Facebook, Inc (2017) and Haaretz.com v Goldhar (2018).  All chapters have been updated to reflect new decisions, legislative changes and recent scholarship.

More information is available here.  For those outside Canada, the book is a clear and accessible source of comparative conflict of laws analysis.

The 21st century has witnessed a remarkable surge in academic scholarship on private international law in Asia. This is not to say that significant studies on the subject were absent before this period. However, in recent decades, Asian scholars have brought renewed vigour and depth to the field, establishing private international law as a critical area of legal inquiry on the continent.

A testament to this intellectual flourishing is Hart Publishing’s extensive series on private international law in Asia, featuring no fewer than 16 volumes with Professors Anselmo Reyes and Paul Beaumont as Series Editors. These works serve as a rich repository of comparative legal thought, offering valuable insights that extend far beyond Asia’s borders. Scholars and practitioners seeking inspiration from diverse jurisdictions will find these books to be an essential resource. Moreover, other publishers have also contributed to this growing body of literature, further amplifying Asia’s voice in the global discourse on private international law.

Having read and reviewed many of these works on the blog, I am continually struck by the depth of scholarship they offer. Each new book reveals fresh perspectives, reinforcing the notion that private international law is not merely a regional concern but a truly global conversation.

As someone deeply engaged with African private international law, I have found immense value in these Asian publications. The parallels between Asia and Africa—particularly in terms of legal pluralism and cultural diversity—make these studies both relevant and instructive. The cross-pollination of ideas between these regions has the potential to strengthen the development of private international law in both continents.

What is most striking about this surge in Asian scholarship is its outward-looking nature. No longer confined to internal discussions, private international law in Asia is now exporting ideas, influencing legal developments worldwide. This is a phenomenon that deserves both recognition and emulation. The rise of Asian scholarship in private international law is not just an academic trend—it is a pivotal force shaping the future of global legal thought.

In my contribution to the EAPIL online seminar discussing Ekatarina Aristova’s excellent Tort Litigation against Transnational Corporations: The Challenge of Jurisdiction in English Courts (OUP 2024), I flagged the discussion by Dr Aristova in Chapter 6 of the book, of one of the objections to jurisdiction exercised by ‘European’ or by extension courts in the Global North, in cases involving human rights and environmental abuse by business located in the Global South. That is the argument that such exercise of jurisdiction is a form of neocolonialism.

This same argument was used by counsel for defendants in Da Silva & Ors v Brazil Iron Ltd & Anor [2025] EWHC 606 (KB). The case involves mining pollution in Bahia state by Brazil Iron, domiciled at England. Background to the case is here. [71] Bourne J summarises counsel’s argument:

For this Court to accept the Claimants’ attempt to litigate the case in this country would, [counsel] submits, be contrary to requirements of judicial comity and would be an exercise of judicial colonialism. In that regard he referred to Altimo Holdings v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804 PC, where Lord Collins said at [97]:

“Comity requires that the court be extremely cautious before deciding that there is a risk that justice will not be done in the foreign country by the foreign court, and that is why cogent evidence is required.”

Justice Bourne did not directly address the ‘judicial colonialism’ vocabulary yet in accepting jurisdiction for the E&W courts and rejecting the forum non conveniens challenge, he clearly disagrees with it.

Defendants’ attempt at rebuffing jurisdiction of course centres upon the Court of Appeal’s recent application of the test in cases like these in Limbu v Dyson and the approach, as was to be expected, attempts to distinguish Dyson and /or employ the one or two levers to support a forum non challenge, indicated by that judgment.

The judge summarises [100]

“an examination of “connecting factors” leads to the conclusion that Brazil is the forum with which this action has the more real and substantial connection, although there are factors leaning in both directions.”

Emphasis was put by defendants ia on the risk  of irreconcilability of the outcome of the English proceedings with an ongoing Brasilian ‘Civil Public Action’ – CPA, a well as an ordinary civil claim introduced in Brasil.

The judge acknowledges that risk [101]. He refers in this context to Vedanta which flagged it as an important issue.  (See also the extensive discussions on irreconcilability in Municipio viz the then applicable European rules of Brussels Ia (Articles 33-34)).

However he finds it outweighs the fact that the Defendants in England and are served there “as of right” (the actor sequitur forum rei principle). Also, control of  the Brazilian company Brazil Iron Mineração Ltda (“BIML”), which operates the Fazenda Mocó iron ore mine in Mocó that is core to the claim, is held to be an issue which will be important in the proceedings and which heavily leans towards England. [101] Although “the Defendants’ directors may not live in the UK, it would be a logical assumption that a significant amount of evidence about the control issue may emanate from England and be in English.”

Overall, arguments which counted for Brasil are

[103] “the most important issues in the case are likely to concern (1) the operation and regulation of the Mine and (2) its impact on the Claimants. That does not mean that control will not be an important issue, but ultimately the claims concern environmental damage and the relevant environment is in Brazil. Those matters obviously occurred in Brazil and will be the subject of witness evidence and documentary evidence in that country.”

[104] “it is agreed that Brazilian law applies to the dispute. The relevant regulatory framework also is that of Brazil, or Bahia State. It therefore appears highly likely that there will be expert witnesses from Brazil, whether or not there are also experts from any other country. I do not overlook the fact that the English courts are well accustomed to applying foreign law. Nevertheless, there may be significant differences between the applicable systems of law – civil law and common law – and that favours the jurisdiction of the Brazilian courts. There may also be issues about Quilombola status and although I do not place much emphasis on that fact, it would be a theme with which the English courts would be wholly unfamiliar.” The latter refers to the issue of protection of indigenous communities under Brasilian law.

[105] “it would plainly be easier and cheaper for ..evidence to be received in Brazil, in Portuguese.”

However the one strong argument standing out in favour of jurisdiction of the English courts is [106]-[107]

that there is a real risk that the Claimants will not be able to obtain substantial justice in Brazil. That means that Brazil, despite its closer connection with the case, is not the appropriate forum in which it can most suitably be tried in the interests of the parties and for the ends of justice.

The reason, in brief summary, is that the evidence reveals a real risk that the Claimants will not be able to fund, or obtain funding for, legal representation of the kind necessary to litigate these claims to a proper conclusion.

This is not [108] down to any criticism of the Brasilian legal system, nor lack of integrity of that system or delay, neither of which the judge suggests exist. Rather, [110] the relatively small size of the claims, [111] the small number of claimants (implicit reference here by the judge to Municipio), [112] the limited means of the claimants, [113] complexity of the case in terms of both liability and control, [114] despite the judge not accusing the Brasilian system of delay, it has been shown that it does take a long time for Brasilian courts to hold on issues of such complexity.

[115] in England the case will go forward under a conditional fee arrangement – CFA, while [116] ff the expert evidence on balance of the possibility to find appropriate funding in Brasil including via legal aid, on the whole shows that that is unlikely.

[134] Comity is not considered to be an obstacle:

“As I have said, it is not premised on any criticism of the legal system in Brazil. Instead, it is founded on the fact that the economics of litigating this claim in the two jurisdictions are significantly different.”

[146] Lack of representation in a particular forum clearly is the Leitmotiv for the judge’s decision, and it is one based on a detailed consideration of the various options presented to him.

A judgment of note!

Geert.

EU private international law, 4th ed. 2024, Chapter 7.

 

Catarina Oliveira Da Silva ea v Brazil Iron ea [2025] EWHC 606 (KB)High Court applying Limbu v Dyson gavclaw.com/2024/12/13/l… rejects forum non challenge in mining pollution case Reject defendants' suggestion that jurisdiction for E&W courts would amount to 'judicial colonialism'

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-16T10:41:59.200Z

https://www.linkedin.com/posts/geert-van-calster-60abab9_court-rules-claim-against-brazil-iron-can-activity-7306988440980516864-PSld?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA

https://x.com/GAVClaw/status/1901222249807462509

 

The German Parliament has adopted a reform of the law of names, including private international law, to enter into force in mid-2025. It includes a ground-breaking change from the classic connecting factor, nationality, to habitual residence. This seems to be a new trend: the incoming Austrian coalition government also plans a similar shift. The Text […]

This article was written by Prof. William S. Dodge (George Washington University Law School) and first published on Transnational Litigation Blog. The original version can be found at Transnational Litigation Blog. Reposted with permission.

On March 7, 2025, Judge Stephen N. Limbaugh, Jr. (Eastern District of Missouri) entered a default judgment for more than $24 billion against the People’s Republic of China and eight other Chinese defendants for hoarding personal protective equipment (PPE) during the early days of the COVID pandemic in violation of federal and state antitrust laws. The Eighth Circuit had previously held that the Foreign Sovereign Immunities Act (FSIA) barred most of Missouri’s claims but that the hoarding claim fell within the act’s commercial activity exception.

Missouri now has the judgment against China that it wanted. But Missouri may find that judgment hard to enforce. As discussed below, there appear to be significant procedural problems with the judgment that at least some defendants might raise. More broadly, the properties of foreign states and their agencies or instrumentalities are entitled to immunity from execution under the FSIA. Immunity from execution is broader than immunity from suit, and it is not clear that any of the defendants have property in the United States that can be used to satisfy the judgment.

The Defendants and the Claims

On April 21, 2020, Missouri brought four COVID-related claims against nine Chinese defendants: the People’s Republic of China, the Chinese Communist Party, the National Health Commission, the Ministry of Emergency Management, the Ministry of Civil Affairs, the People’s Government of Hubei Province, the People’s Government of Wuhan City, the Wuhan Institute of Virology, and the Chinese Academy of Sciences. The original complaint asserted four claims under Missouri tort law: (1) public nuisance, (2) abnormally dangerous activity, (3) breach of duty by allowing the transmission of COVID, and (4) breach of duty by hoarding PPE. The district court initially held that all the claims were barred by the FSIA, but the Eighth Circuit reversed on the hoarding claim.

The FSIA governs the immunity of foreign states and their agencies and instrumentalities from suit in federal and state courts, as well as the immunity of their properties from execution to satisfy judgments. Some of the FSIA’s provisions distinguish between foreign states and their political subdivisions on the one hand and their “agencies or instrumentalities” (including “organs” and majority state-owned companies) on the other. Other provisions extend the same immunities to both categories.

Of the nine defendants, the Eighth Circuit held that seven of them were part of the Chinese state. China itself is clearly a foreign state, and its National Health Commission, Ministry of Emergency Management, and Ministry of Civil Affairs are part of the state. The People’s Government of Hubei Province and the People’s Government of Wuhan City fall into the same category because they are political subdivisions. “The Chinese Communist Party may look like a nongovernmental body at first glance,” the court of appeals wrote, but it is “in substance” the same body that governs China and therefore properly considered part of the state. The remaining two defendants, the Wuhan Institute of Virology and the Chinese Academy of Sciences, are legally separate from the Chinese government “but still closely enough connected” to qualify as “organs” and thus as “agencies or instrumentalities” of a foreign state covered by the FSIA.

Under the FSIA, all nine defendants are immune from suit in the United States unless an exception to immunity applies. The Eighth Circuit found that only one exception applies—the commercial activity exception in 28 U.S.C. § 1605(a)(2)—and that it applies only to Missouri’s claim for hoarding PPE. The court reasoned that hoarding was the kind of activity that private parties can engage in and that the complaint sufficiently alleged that the hoarding had a direct effect in the United States.

After the Eighth Circuit’s decision, I pointed out some of the difficulties that Missouri would face on remand trying to prove its tort claims, including whether Missouri law applied under Missouri choice-of-law rules, whether Missouri law established a duty of care for these defendants, whether the defendants breached any such duty of care, and whether any such breach was the actual and proximate cause of Missouri’s damages. I don’t know whether Missouri’s attorney general reads TLB, but on the eve of trial Missouri changed the legal basis for its hoarding claim from common-law tort to federal and state antitrust law. Antitrust claims are not subject to state choice-of-law rules.

The District Court’s Judgment

The Chinese defendants decided not to appear and defend against Missouri’s claims. Section 1608(e) of the FSIA provides: “No judgment by default shall be entered by a court of the United States or of a State against a foreign state, a political subdivision thereof, or an agency or instrumentality of a foreign state, unless the claimant establishes his claim or right to relief by evidence satisfactory to the court.” This provision is supposed to ensure that the U.S. court does not simply accept the plaintiff’s allegations and instead tests the evidence to make sure that judgment is warranted. Some courts have held, however, that they may accept as true a plaintiff’s “uncontroverted evidence.” That is what Judge Limbaugh did here.

Relying on the plaintiff’s evidence, the district court concluded that “China engaged in a deliberate campaign to suppress information about the COVID-19 pandemic in order to support its campaign to hoard PPE from Missouri and an unsuspecting world.” The court noted that local officials closed schools and quarantined doctors and patients in December 2019, while at the same time other officials were denying that COVID could be spread between human beings. The district court further concluded that “Defendants engaged in monopolistic actions to hoard PPE through both the nationalization of U.S. factories [in China] and the direct hoarding of PPE manufactured or for sale in the United States.” The court pointed to evidence that China stopped exporting PPE and started importing a lot of it.

The court found the evidence sufficient to establish liability for monopolization under federal antitrust law. Pursuant to 15 U.S.C. § 15c, Missouri’s attorney general was also permitted to bring a federal antitrust claim parens patriae on behalf of the citizens of Missouri. The court also found the evidence sufficient to establish liability for monopolization under Missouri antitrust law, which the court noted is to be construed “in harmony with” federal antitrust law.

Relying on an expert report on damages submitted by Missouri, the court found that between 2020 and 2051 Missouri either had lost or would lose $8.04 billion in tax revenue because of the impact of China’s hoarding of PPE on economic activity. The court further found that hoarding caused Missouri to spend an additional $122,941,819 on PPE during the pandemic. The court added these amounts and multiplied by three—because federal and state antitrust laws permitted treble damages—for a total damages award of $24,488,825,457.

Problems with the District Court’s Analysis

I see a number of problems with the district court’s analysis. First, the court treated the defendants as an undifferentiated group, seemingly following Missouri’s supplemental brief, which refers simply to the nine defendants collectively as “China.” But the individual defendants in this case knew different things and did different things (and Missouri does not appear to have argued that there was a conspiracy allowing the acts of one defendant to be attributed to the others). The fact that local officials seem to have been aware that COVID could be transmitted from human to human, for example, does not establish that the central government knew this. Indeed, a U.S. intelligence report in 2020 found that local officials hid information about the virus from Beijing. Similarly, the fact that the central government was nationalizing PPE factories, limiting exports, and buying PPE abroad does not show that the Wuhan Institute of Virology or the Chinese Academy of Sciences was doing so.

Second, the damages calculations seem fanciful. The opinion contains no discussion of causation. How can one disentangle the impact of China’s hoarding PPE on Missouri from other factors that contributed to the spread of the pandemic there, for example the fact that Missouri was among the last states to adopt a stay-at-home order? Establishing hoarding’s impact on Missouri’s economy and derivatively its impact on Missouri’s tax revenues is fraught with complications, especially when estimates are projected to the year 2051.

Third, the court failed to consider whether trebling damages is allowed under the FSIA. Section 1606 provides that “a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages.” In other words, while the FSIA allows the trebling of damages against the Wuhan Institute of Virology and the Chinese Academy of Sciences, it may not allow the same against China itself or the other governmental defendants.

But China did not make any of these points, or others that it would undoubtedly have thought of, because it decided not to appear. The China Society of Private International Law did file two amicus briefs, but the district court did not mention them. I can understand China’s reluctance to submit to the authority of a U.S. court (including to the discovery of evidence) in a case that it no doubt feels is politically motivated. But the decision not to appear gave Missouri an enormous advantage.

What Happens Now?

So, what happens now? There are probably many possibilities, but I will discuss just three: (1) the possibility that some of the defendants might seek to set the judgment aside for improper service; (2) the possibility of enforcing the judgments against the defendants’ property in the United States; and (3) the possibility of similar suits in other states.

A Rule 60(b) Motion Addressing Service of Process?

China could move to set aside the judgment under Rule 60(b)(4) on the ground that the judgment is void for lack of subject matter jurisdiction. The factors that made China decide not to appear in the first place would likely dissuade it from raising all the issues that it could raise in a 60(b) motion. But it might make sense for some of the defendants to raise service of process in such a motion, particularly the Wuhan Institute of Virology and the Chinese Academy of Sciences, which, as explained below, are likely to be the most vulnerable to enforcement of the judgment.

The FSIA has rules for serving foreign states and their agencies or instrumentalities. For foreign state and their subdivisions, Section 1608(a) lists four means of service that must be tried in order. In this case, the first three were not available. (China refused to execute a request for service under the Hague Service Convention on the ground that doing so would infringe its sovereignty, as Article 13 of the Convention allows it to do.) So, the district court ordered service through diplomatic channels, which was then made on all the defendants except the Chinese Communist Party, the Wuhan Institute of Virology, and the Chinese Academy of Sciences. I see no defects in service here.

With respect to the remaining three defendants, the district court authorized service by email pursuant to Rule 4(f)(3). There are three problems with this. First, the district court treated the Chinese Communist Party as a non-governmental defendant for purposes of service, but the Eighth Circuit later held that it is instead a foreign state for purposes of the FSIA. After the Eighth Circuit’s decision, Missouri argued that its service on China through diplomatic channels should count as service on the Chinese Communist Party as China’s alter ego. Judge Limbaugh seems to have accepted this assertion without discussion, but the Communist Party could certainly raise the issue in a Rule 60(b) motion.

The second problem is that Rule 4(f)(3) allows a district court to order alternative means of service only if those means are “not prohibited by international agreement.” As Maggie Gardner and I have explained repeatedly, the Hague Service Convention prohibits service by email, at least when the receiving state has objected to service through “postal channels” as China has done. District courts are divided on this, however, and Judge Limbaugh cited a number of district court cases holding (wrongly) that email service is permitted. A Rule 60(b) motion raising this point would be unlikely to convince him, but it might succeed on appeal to the Eighth Circuit.

The third problem is that service by email in this case is inconsistent with the FSIA. For agencies and instrumentalities, like the Wuhan Institute of Virology and the Chinese Academy of Sciences, Section 1608(b)sets forth the permitted means of service. It appears that the first two were not available and that the district court relied on Section 1608(b)(3)(C), which allows service “as directed by order of the court consistent with the law of the place where service is to be made” (emphasis added). But Chinese law does not permit private parties to serve process by email.

When this issue arose after the Eighth Circuit’s decision, Missouri argued that the language of Section 1608(b)(3)(C) “is nearly identical to Federal Rule of Civil Procedure 4(f)(3), which Missouri previously invoked in its request to serve WIV and CAS by email.” This was misleading. Rule 4(f)(3) refers to means of service that are “not prohibited by international agreement,” whereas Section 1608(b)(3)(C) refers to means of service that are “consistent with the law of the place where service is to be made,” that is Chinese law. Even if service by email were permitted by the Hague Convention—which, as discussed above, it is not—that would not establish that service by email is consistent with Chinese law. Judge Limbaugh did not address this issue in his judgment and might be open to persuasion on a Rule 60(b) motion.

A Rule 60(b) motion limited to service of process issues might have some appeal for China. Although it would require becoming involved in the U.S. litigation, it would not involve arguing the merits of China’s actions during the pandemic or submitting to U.S. discovery. China would be able to make purely legal arguments that the Chinese Community Party was not properly served under Section 1608(a) and that the Wuhan Institute of Virology and the Chinese Academy of Sciences were not properly served under Section 1608(b) because email service is prohibited by both the Hague Service Convention and by Chinese law.

Alternatively, defendants could raise the service of process issues, and perhaps other procedural defects, at the enforcement stage if and when Missouri attempts to execute the judgment against any of their properties in the United States. One advantage of waiting for enforcement is that the arguments would be heard by a different judge with no psychological commitment to past decisions. Also, if defendants were to file a Rule 60(b) motion before Judge Limbaugh and lose, they might be precluded from raising the same issues again at the enforcement stage. On the other hand, a successful Rule 60(b) motion could void the judgment once and for all for some of the defendants, whereas saving these arguments for the enforcement stage could require the defendants to raise them anew in multiple enforcement proceedings.

Immunity from Execution

Defendants also have the option of asserting that any property Missouri attempts to seize is immune from execution. As a general matter, federal court judgments are enforceable against a judgment debtor’s assets anywhere in the United States. But judgments against foreign states and their agencies or instrumentalities are subject to the FSIA’s rules on immunity from execution.

Specifically, Section 1610(a)(2) provides that “[t]he property in the United States of a foreign state … used for a commercial activity in the United States, shall not be immune … from execution, upon a judgment entered by a court of the United States or of a State … if … (2) the property is or was used for the commercial activity upon which the claim is based.” This means that the properties in the United States of China, its ministries and subdivisions, and the Chinese Communist Party are immune from execution unless those properties were used to hoard PPE. I find it hard to imagine a situation in which that would be true.

The immunity for properties owned by agencies or instrumentalities is not as broad. Section 1610(b)(2) permits execution against “any property in the United States of an agency or instrumentality of a foreign state engaged in commercial activity in the United States” if the judgment was rendered under the FSIA’s commercial activities exception (as this judgment was) “regardless of whether the property is or was involved in the act upon which the claim is based.” This means that the properties in the United States of the Wuhan Institute of Virology and the Chinese Academy of Sciences would be subject to execution if those defendants are engaged in commercial activities in the United States even if the properties themselves were not used to hoard PPE. Thus, these two defendants, unless they can get the judgment set aside for improper service as discussed above, are potentially more exposed to execution than the others.

It is worth emphasizing the district court’s judgment against these nine defendants is enforceable only against properties owned by these nine defendants. Missouri cannot execute its judgment against property in the United States simply because the property is Chinese owned. This is clear from the Second Circuit’s decision in Walters v. Industrial & Commercial Bank of China (2011), another case involving a default judgment against China under the FSIA, in which the court of appeals held that plaintiffs could not use assets belonging to agencies or instrumentalities of China to satisfy a judgment against China itself.

Walters relied on the Supreme Court’s decision in First National City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec) (1983). As Ingrid Brunk has explained, Bancec stands for the proposition that U.S. courts must generally respect the corporate separateness of foreign states and their agencies or instrumentalities. Indeed, the Supreme Court in Bancec quoted the FSIA’s legislative history, which says specifically that the FSIA “will not permit execution against the property of one agency or instrumentality to satisfy a judgment against another, unrelated agency or instrumentality.”

If a judgment against an agency or instrumentality of a foreign state cannot be executed against the property of another agency or instrumentality of that foreign state, it necessarily follows that the judgment cannot be executed against property not belonging to any agency or instrumentality of that foreign state. For example, Smithfield Foods is a major pork producer operating in Missouri. Its property cannot be seized to satisfy this judgment. Smithfield Foods is owned by a private Chinese conglomerate, but Smithfield Foods was not a defendant in this action, and so its property is not subject to execution.

Copycat Cases

In addition to Missouri’s efforts to enforce this judgment, it is likely that the defendants will face copycat cases in other states. Mississippi filed a similar complaint against the same defendants in May 2020. Again, the defendants chose not to appear. On February 10, 2025, Judge Taylor B. McNeel (Southern District of Mississippi) held an evidentiary hearing. It remains to be seen whether Judge McNeel will scrutinize Mississippi’s arguments more carefully than Judge Limbaugh did.

Conclusion

$24 billion is a big number. But it seems highly unlikely that Missouri will ever see a penny of it, given the FSIA’s rules on immunity from execution. Missouri may, nevertheless, be able to harass these defendants—and potentially other Chinese parties holding property in the United States—by filing actions to execute the judgment even if those actions ultimately prove unsuccessful.

Last week, friend-of-TLB Ted Folkman had this to say about the Missouri judgment over at Letters Blogatory:

When we think about these cases, we have to think about what it would be like if the shoe were on the other foot. In 2021, the US and other western countries were accused of hoarding the COVID vaccine. Should the United States have been amenable to suit in China or elsewhere because it prioritized the public health needs of its own people? The technical term for taking seriously the question, “what if the shoe were on the other foot?” is comity. We need more of it.

Ugljesa Grusic (UCL) has kindly shared the following invitation with us.

On 24 March 2025, at 6pm UK time, Marta Pertegás (Maastricht University; University of Antwerp; a fulltime member of the Permanent Bureau of the Hague Conference on Private International Law between 2008 and 2017) and Alex Mills (UCL; a Specialist Editor of Dicey, Morris and Collins on the Conflict of Laws, with particular responsibility for, inter alia, the rules on the recognition and enforcement of foreign judgments) will give a seminar on The 2019 Hague Judgments Convention – English and EU Perspectives at the Faculty of Laws, University College London. The event will be delivered in a hybrid format and the readers of the blog are welcome to join either in person or on line.

The seminar is part of the International Law Association (British Branch) Lecture Series and will be chaired by Ugljesa Grusic.

On 1 July 2025, the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters will enter into force in England and Wales. This historic regime establishes a general treaty basis for the recognition and enforcement of civil judgments between Convention States, supplementing the existing national rules and the Hague Choice of Court Convention 2005. Perhaps most significantly, it will provide common rules for the recognition and enforcement of judgments from England and Wales in EU Member States, and conversely, for EU Member State judgments to be recognised and enforced in England and Wales, to some extent filling a ‘gap’ created by Brexit.

This seminar will address the significance of this development from both an English and EU perspective, examining the main features of the 2019 Convention and considering the opportunities and challenges it presents.

To register, please follow this link.