Droit international général

(drafted by Liu Zuozhen and revised by Tu Guangjian)

In recent years, China has put much emphasis on foreign-related rule of law. It is believed that enhancing the construction of foreign-related rule of law is vital for promoting the nation’s comprehensive development and rejuvenation through Chinese-style modernization, high-level opening up, and responding to external risks. China’s top legislature has prioritized and made significant progress in foreign-related legislations across various legal domains, including civil, commercial, economic, administrative, and procedural laws. Two salient examples are the Law on Foreign Relations of the People’s Republic of China and the Foreign State Immunity Law of the People’s Republic of China, both of which were adopted in 2023 and have now entered into force.

Against this background, many official and academic activities have been launched and conducted for foreign-related rue of law. Across the country, in quite a few of universities, research institutes for foreign-related rule of law are established at various levels, some of which are even higher than the faculties.

With China’s increasing foreign trade, the influx of foreign-invested enterprises, and the expansion of Chinese enterprises abroad, there is, of course, a growing demand for foreign-related legal services as well. In Guangzhou, the Capital city of Guangdong Province, which has always been the forefront of the opening-up policy and international business center, with approval from the Guangzhou Municipal Justice Bureau, a local law firm, namely Guangdong Everwin Law Office even established its own foreign-related legal service research institute. It is not common for a law firm to have an internal research institute in China and many more might be on the way to come.

It seems that the Chinese story of foreign-related rule of law has just started and not reached its climax yet.

The latest issue of the „Praxis des Internationalen Privat- und Verfahrensrechts“ (IPRax) features the following articles:

 

Erik  Jayme †

 

T. Lutzi: Unilateralism as a structural principle of the Digital Single Market?

While the body of instruments through which the European legislator aims to create a Digital Single Market keeps growing, it remains strangely devoid of multilateral conflicts rules. Instead, directives in this area usually contain no conflict-of-laws provisions at all, while regulations limit themselves to a unilateral definition of their territorial scope of application. As the instruments do not regulate the matters falling into their material scope of application conclusively, though, they continue to rely on, and interact with, national systems of private law. The existing, general conflict-of-laws rules do not coordinate between these systems satisfactorily. In order to realise a genuine Digital Single Market with uniform standards of liability, specific universal conflicts rules thus seem indispensable

 

L. Theimer: The last arrow in the English courts’ quiver? ‘Quasi-anti-suit injunctions’ and damages for breach of exclusive choice of court agreements

This article analyses the last instance of failed integration of English common law instruments into the jurisdictional system of the Brussels regime. In its decision in Charles Taylor Adjusting, the ECJ held that decisions granting provisional damages for bringing proceedings in another Member State, where the subject matter of those proceedings is covered by a settlement agreement and the court before which proceedings were brought does not have jurisdiction on the basis of an exclusive choice of court agreement, are contrary to public policy under Art 34 (no 1) and Art 45(1) Brussels I Regulation. More specifically, they violate the principle of mutual trust by reviewing the jurisdiction of a court of another Member State and interfering with its jurisdiction. Such decisions also undermine access to justice for persons against whom they are issued. By and large, the decision merits approval as it unmasks the English decisions as “quasi-anti-suit injunctions” which are incompatible with the Brussels Regulation, just like their “real” siblings, anti-suit injunctions. The ECJ’s analysis is, however, not in all respects compelling, particularly with regard to the point of reviewing another court’s jurisdiction. Moreover, the Court’s and the Advocate General’s reluctance to engage with the English view on the issue is regrettable. In conclusion, the ECJ’s decision may well – in terms of EU law – have broken the last arrow in the English courts’ quiver. It is unlikely, however, that English courts will be overly perturbed by this, considering that, following Brexit, their arsenal is no longer constrained by EU law.

 

W. Hau: The required cross-border implication in Article 25 Brussels I Regulation: prerequisite for application or measure against abuse?

It has long been debated whether two parties domiciled in the same Member State can agree on the jurisdiction of the courts of another Member State pursuant to Art. 25 Brussels Ibis Regulation if, apart from this agreement, the facts of the case have no other cross-border implications. The ECJ has now convincingly answered this question in the affirmative. This ruling provides an opportunity to take a closer look at the function of the requirement of an international element in the context of Art. 25 Brussels Ibis Regulation and some questionable arguments that are derived from other legal instruments.

 

A. Hemler: The “consumer jurisdiction of the joinder of parties” in the Brussels Ia Regulation and the comparison between the law applicable to consumer contracts and other contracts in the Rome I Regulation

In the cases Club La Costa and Diamond Resorts, Spanish courts referred various questions to the ECJ on timeshare contracts between consumers and businesses residing in the UK concerning the right to use holiday accommodations in Spain. In Club La Costa, the ECJ primarily discussed whether the consumer jurisdiction of Art 18(1) Brussels Ia Regulation permits an action in front of Spanish courts against the consumer’s contractual partner if the latter is not established in Spain and if the co-defendant, who is only connected to the consumer via an ancillary contractual relationship, has a registered office in Spain. In both proceedings, the question also arose as to whether the law applicable under the general rules of Art 3, 4 Rome I Regulation can be applied instead of the law applicable under Art 6 Rome I Regulation if the former is more favourable to the consumer in the specific case. The ECJ answered both questions in the negative and with somewhat generalised reasoning. Both decisions can be endorsed above all because both International Civil Procedural Law and the Conflicts of Laws realise consumer protection through abstract rules on the access to domestic courts or the applicable law, which means that, in principle, choosing the most favourable forum or legal result in each individual case is not a valid option.

 

C. Uhlmann: The contract to enter into a future contract in Private International Law and International Civil Litigation

In EXTÉRIA, the ECJ decided upon the question of whether a contract to enter into a future contract relating to the future conclusion of a franchise agreement, which provides for an obligation to pay a contractual penalty based on non-performance of that contract to enter into a future contract, is a service contract in accordance with Art. 7(1)(b) Brussels Ia-Regulation. The ECJ answered this question in the negative on the grounds that the contract to enter into a future contract does not stipulate the performance of any positive act or the payment of any remuneration; in the absence of any actual activity carried out by the co-contractor, the payment of the contractual penalty could also not be characterized as remuneration. Instead, international jurisdiction should be determined in accordance with Art. 7(1)(a) Brussels Ia-Regulation. The author criticizes that the ECJ characterizes the contract to enter into a future contract detached from the future contract and generally argues in favor of an ancillary characterization and a broad understanding of the provision of services for the purpose of Art. 7(1)(b) Brussels Ia-Regulation.

 

C. Rüsing: Transfer of jurisdiction under Article 15 Brussels IIbis Regulation and Articles 12, 13 Brussels IIter Regulation in cases of child abduction

According to Art. 15 Brussels IIbis Regulation, a court of a Member State may, under certain prerequisites, transfer its jurisdiction in custody proceedings to the court of another Member State. In TT ./. AK (C-87/22), the CJEU held that in cases of child abduction, a court with jurisdiction under Art. 10 Brussels IIbis Regulation may also transfer jurisdiction to a court of the state to which the child has been abducted. The article welcomes this, but highlights problems that both courts must take into account in doing so. It also discusses changes under the Brussels IIter Regulation now in force.

 

D. Looschelders: Time-preserving effect of a waiver of the succession before the courts of the heir’s habitual residence

Whether a waiver of the succession before a court at the habitual residence of the heir competent under Article 13 of the EU Succession Regulation has time-preserving effect, even if the declaration of the heir is not forwarded to the court responsible for settling the estate within the period stipulated by the law applicable to the succession, has been controversial to date. In the present decision, the ECJ has affirmed a deadline-preserving effect. The operative part and the grounds of the judgement suggest that the ECJ regards the question of before which court the waiver of the succession is to be declared as a matter of form. The prevailing opinion in Germany, on the other hand, still categorises this question as a matter of substantive law; the jurisdiction of the courts at the habitual residence of the heirs is therefore understood as a case of substitution ordered by law. Within the scope of application of Article 13 EU Succession Regulation the divergent characterisation has no practical significance. However, different results may arise if an heir according to the law of his habitual residence does not waive the succession before a court or if he declares the waiver of the succession before a court of a third country. In these cases, only Article 28 EU Succession Regulation is applicable, but not Article 13 EU Succession Regulation. As the ECJ has argued with the interaction between both provisions, a new referral to the ECJ may be necessary in this respect.

 

C. A. Kern/K. Bönold: Blocking effect of filing an insolvency petition with courts in Member States and third countries under the EU Insolvency Regulation and InsO

In its preliminary ruling of 24 March 2022 (Case C-723/20 – Galapagos BidCo. Sàrl ./. DE, Hauck Aufhäuser Fund Services SA, Prime Capital SA), the ECJ confirmed that the filing of an insolvency petition with a court of a Member State triggers a bar to the jurisdiction of courts of other Member States. Due to Brexit, the BGH, in its final decision of 8 December 2022 (IX ZB 72/19), had to apply German international insolvency law, which it interpreted differently from the EU Insolvency Regulation.

 

H.-P. Mansel: In memory of Erik Jayme

 

C. Kohler: Guidelines on the recognition of a foreign legal relationship in private international law – Conference of the European Group for Private International Law 2023, Milan, September 2023

This July, the activity of the Court of Justice in PIL matters comprises the publication of two decisions and one opinion. All them relate to the interpretation of the Brussels I bis Regulation: On Thursday 4, the fifth Chamber (sitting judges K. Lenaerts, E. Regan, I. Jarukaitis and D. Gratsias) will deliver its judgment in […]

It has been a hot topic to explore recognition and enforcement of judgments between China and other countries. The core issue of the topic is the role of reciprocity under Chinese law and practice concerning recognition and enforcement of foreign judgments in China. Reciprocity was narrowly interpreted by Chinese courts in the past, blocking circulation of lots of foreign judgments in China. Encouragingly, China’s Suprem People’s Court (SPC) is adopting new rules to interpret reciprocity, which is now far more favorable to establish the reciprocal relationship between China and foreign countries. Then it is up to lower Chinese courts to follow up and the new reciprocity rules established by the SPC are tested in practice.

 

This piece of comment is written by Dr. Meng Yu, lecturer at China University of Political Science and Law, and co-founder of China Justice Observer.

 

In 2019, in the Zhou et al. v. Vusal case, China’s request to Azerbaijan for judgment recognition and enforcement was accompanied by its reciprocal commitment through a diplomatic note, marking the first time China made a reciprocal commitment to a foreign country regarding recognition and enforcement of foreign judgments.

Key takeaways:

• In the field of recognition and enforcement of foreign judgments (REFJ), the new reciprocity criteria in China include three tests, namely, de jure reciprocity, reciprocal understanding or consensus, and reciprocal commitment.
• In 2019, in the Zhou et al. v. Vusal case, China’s request to Azerbaijan for judgment recognition and enforcement was accompanied by its reciprocal commitment through a diplomatic note, marking the first time China made a reciprocal commitment to a foreign country regarding REFJ.
• A reciprocal commitment is essentially a unilateral promise that takes effect upon being made.
• Before making such a commitment, China’s Supreme People’s Court (SPC) examines and decides on the matter. This is logically consistent with the requirement from the Conference Summary that Chinese courts need to examine, on a case-by-case basis, the existence of reciprocity, on which the SPC has the final say.

 

Reciprocity is not new but reciprocal commitment is.

Readers familiar with the topic of recognition and enforcement of foreign judgments (REFJ) will undoubtedly be familiar with the concept of “reciprocity”. Although its manifestations and extent vary, the principle of reciprocity serves as the basis or precondition for REFJ in many countries, including China.

However, few countries have developed the concept of reciprocity as creatively as China, which has had at least five different standards for its determination—de facto reciprocity, presumptive reciprocity, de jure reciprocity, reciprocal understanding or consensus, and reciprocal commitment.

Among these, Reciprocal Commitment, as the most recently developed reciprocity criterion, often leaves people puzzled. What exactly is this unicorn-like criterion?

In 2019, in the case of Zhou et al. v. Vusal (hereinafter the “Vusal Case”), China requested Azerbaijan to recognize and enforce a judgment, making a commitment through diplomatic note. This was the first reported case in which China made a reciprocal commitment to a foreign country regarding REFJ. This case will unveil to us the nature of Reciprocal Commitment.

I. What is “Reciprocal Commitment”?

Since the 2000s, reciprocity criteria have evolved significantly, reflecting China’s efforts to liberalize its REFJ rules.

Over a decade, the early, high-threshold reciprocity criterion—de facto reciprocity, was abandoned. One after another, more pragmatic and flexible criteria such as presumptive reciprocity and de jure reciprocity have emerged in the form of judicial policies, declarations, and memoranda. Following the release of the “Conference Summary of the Symposium on Foreign-related Commercial and Maritime Trials of Courts Nationwide” (hereinafter the “Conference Summary”) of the Supreme People’s Court (SPC), a new generation of more open reciprocity criteria[1] has been established.

The new reciprocity criteria include three tests, namely, de jure reciprocity, reciprocal understanding or consensus, and reciprocal commitment, which also coincide with possible outreaches of legislative, judicial, and administrative branches.

Related Posts:

• How Chinese Courts Determine Reciprocity in Foreign Judgment Enforcement – Breakthrough for Collecting Judgments in China Series (III)[2]
• China’s 2022 Landmark Judicial Policy Clears Final Hurdle for Enforcement of Foreign Judgments[3]

It then begs the question, what exactly is reciprocal commitment?

According to the Conference Summary, the test of reciprocal commitment means that when trying a case applying for recognition and enforcement of a foreign judgment or ruling, the people’s court may recognize the existence of reciprocity, if “the country where the judgment-making court is located has made reciprocal commitments to China through diplomatic channels or China has made reciprocal commitments to the country where the judgment-making court is located through diplomatic channels, and there is no evidence that the country where the judgment-making court is located has refused to recognize and enforce a Chinese judgment or ruling on the ground of lack of reciprocity”.

For a while, reciprocal commitment was like a mysterious unicorn—because there were almost no cases or reports mentioning it. In contrast, the other two reciprocity tests have well-known instances, including the SPAR case, which involved the de jure reciprocity, where an English judgment was recognized and enforced in China for the first time[4]; the China-Singapore MOG, which demonstrated reciprocal understanding[5]; and the Nanning Statement, which involved reciprocal consensus[6].

One year after the Conference Summary, the first public document on reciprocal commitment finally appeared. This is the Vusal case, which was introduced as a typical case of reciprocal commitment in “Understanding and Application of the Conference Summary” authored by the SPC’s Fourth Civil Division, published in June 2023.

II. The Case of Vusal: First Case of Reciprocal Commitment

In July 2018, Yiwu Primary People’s Court, Zhejiang (the “Yiwu Court”), issued a first-instance civil judgment (2018) Zhe 0782 Min Chu No. 8836, in the case of a sales contract dispute between Zhou et al. and the defendant Vusal (a national of Azerbaijan). The judgment ordered the defendant Vusal to pay the plaintiffs Zhou et al. for the goods. The defendant Vusal failed to appear in the court after being duly summoned, and did not appeal during the appeal period. The judgment became effective in August of the same year.

After the judgment took effect, Vusal refused to satisfy the judgment, and the plaintiff applied to the court for enforcement of the judgment. The Yiwu Court filed the case for enforcement but did not find any of Vusal’s enforceable asset in China.

In October 2019, the Yiwu Court reported to the SPC to request the competent court of the Republic of Azerbaijan to recognize and enforce the judgment.

Upon review, SPC decided to submit the judicial assistance request to Azerbaijan, and to make a reciprocal commitment.

Finally, when making a judicial assistance request, the Chinese Embassy in Azerbaijan made a commitment to Azerbaijan in a diplomatic note that “it will provide equal assistance to Azerbaijan under similar circumstances in accordance with the law”.

III. Comments

This case marks the first time that China has proactively made a reciprocal commitment to a foreign country regarding REFJ. It is still unclear whether Azerbaijan has acted on China’s judicial assistance request for REFJ. There is also no available report or discussion on how Azerbaijan views the reciprocal commitment made by China through diplomatic notes.

One thing is certain: combined with the Vusal case, the meaning and application of reciprocal commitment have become clearer.

First, a reciprocal commitment is essentially a unilateral promise that takes effect upon being made. This “unilateral” commitment can be made by a foreign country (the future country where the judgment-making court is located) to China (the future requested country), or by China to the foreign country, as exemplified by China’s commitment to Azerbaijan in the Vusal case.

Second, a reciprocal commitment can be regarded as a presumption of the existence of reciprocity. Since the commitment is unilateral and differs from the bilateral reciprocity understanding or consensus, the making of such a commitment does not automatically prove the existence of reciprocity. Instead, reciprocity is presumed unless there is evidence to the contrary (i.e., the other country has previously refused to recognize and enforce a Chinese judgment on the grounds that a reciprocal relationship does not exist).

Third, reciprocal commitments are made through diplomatic channels, as in the Vusal case where the Chinese Embassy in Azerbaijan made the commitment through a diplomatic note. Before making such a commitment, the SPC examines and decides on the matter. This is logically consistent with the requirement from the Conference Summary that Chinese courts need to examine, on a case-by-case basis, the existence of reciprocity, on which the SPC has the final say.

[1] https://conflictoflaws.net/2022/chinas-2022-landmark-judicial-policy-clears-final-hurdle-for-enforcement-of-foreign-judgments/

[2] https://www.chinajusticeobserver.com/a/breakthrough-for-collecting-judgments-in-china-series-3

[3] https://conflictoflaws.net/2022/chinas-2022-landmark-judicial-policy-clears-final-hurdle-for-enforcement-of-foreign-judgments/

[4] https://www.chinajusticeobserver.com/a/chinese-court-recognizes-english-commercial-judgment-for-the-first-time

[5] https://www.chinajusticeobserver.com/p/memorandum-of-guidance-between-china-supremecourt-and-singapore-supremecourt-on-recognition-and-enforcement-of-money-judgments

[6]  https://www.chinajusticeobserver.com/p/nanning-statement-of-the-2nd-china-asean-justice-forum

 

Norway is not bound by the EU choice of law regulations. Still, Article 7 of the Rome I Regulation applies fully in Norway and the Rome II Regulation governs what law that applies in any non-contractual matter between an insurance company and a person claiming compensation after a traffic accident. This was the view expressed […]

The Mexican Academy of Private International and Comparative Law (AMEDIP) will be holding its annual XLVII Seminar entitled “The teaching, research and promotion of private international law in Mexico” (La enseñanza, investigación y difusión del Derecho Internacional Privado en México) from 23 to 25 October 2024. The venue of the seminar will be the Universidad Panamericana (campus Guadalajara, Mexico) – and online.

Potential speakers are invited to submit a paper in Spanish, English or Portuguese by 29 July 2024. Papers must comply with the criteria established by AMEDIP and will be evaluated accordingly. Selected speakers will be required to give their presentations preferably in Spanish as there will be no interpretation services but some exceptions may be made by the organisers upon request for presentations in English and Portuguese. For more information on the requirements, click here

Contributions will be published in the Revista Perspectiva Jurídica of the Universidad Panamericana.

There is a fee for participation both in person and online. For in-person participation, click here. For online participation, please contact seminario@amedip.org.

 

This week the United Kingdom ratified the HCCH 2019 Judgments Convention. The Convention will enter into force for the United Kingdom on 1 July 2025. For more information, see the status table here.

The United Kingdom has made only one declaration so far:

27-06-2024
The United Kingdom declares, in accordance with Article 25, that the Convention shall extend to England and Wales only, and that it may at any time submit other declarations or modify this declaration in accordance with Article 30 of the Convention.

For the full notification, click here.

For the HCCH news item, click here.

 

Jacco Bomhoff (Law Department of the London School of Economics and Political Science) has made available on SSRN a paper on Cold-War Private International Law that was published also as a LSE Legal Studies Working Papers (Paper No 16/2024). The abstract reads as follows: This paper explores the character of Private International Law, or the […]

Vesna Lazić (Associate Professor at Utrecht University and Senior Researcher at T.M.C. Asser Institute in The Hague) and the late Peter Mankowski (formerly Professor at the Faculty of Law, University of Hamburg, Germany) published  in 2023 a book titled ‘The Brussels I-bis Regulation: Interpretation and Implementation’. The book is a part of the JUDGTRUST Project […]

I. Introduction

In a previous post, I reported and commented on a decision rendered by the Abu Dhabi Supreme Court (hereinafter “ADSC”) in which the Court addressed the issue of the applicability of the Abu Dhabi Civil Marriage Law (Law No. 14/2021 of 7 November 2021 as subsequently amended) and its Procedural Regulation (Resolution No. 8/2022 of 1 February 2022) to foreign Muslims. In that case (Appeal No. 245/2024 of 29 April 2024), the ADSC overturned the lower courts’ decision, which had admitted jurisdiction in a divorce case and declared the dissolution of the marriage in application of the Civil Marriage Law and its Procedural Regulation. According to the ADSC, the lower courts erred in their decision since “it was judicially established…that [the parties] were Muslim”.

Soon after, a similar issue was addressed in a case brought before the Abu Dhabi Civil Family Court (hereinafter “ADCFC”). However, in its Judgment No. 86/2024 of 17 May 2024, the ADCFC took the opposite position by considering that the Civil Marriage Law applies “even if one or both parties are Muslims” as long as “the parties belong to a country that does not primarily apply Islamic Sharia in personal status”. Although the decision is rendered by a first instance court and is likely to be appealed to higher courts, and potentially overturned, the facts of the case and the ADCFC’s ruling provide interesting elements for further legal analysis and debate. This case also offers a valuable opportunity to introduce some aspects of the UAE/Abu Dhabi legal system of international jurisdiction in divorce matters.   

 

II. Facts

The case involves a no-divorce and joint custody claim brought before the ADCFC by X (husband, a British citizen) against Y (wife, an Australian citizen) under the Abu Dhabi Civil Marriage Law. X and Y were married in Australia in 2019. The action was introduced on 19 March 2024.

Before the ADCFC, Y argued that the case should be dismissed because a previous judgment had been rendered on 28 December 2023 by the same court (ADCFC) on the same matter between the same parties.

Y also contested the jurisdiction of the ADCFC on three grounds:

1. The ADCFC lacked territorial jurisdiction, as Y resides and works in Dubai, has no connection with Abu Dhabi and X presented a sham lease contract of an appartement located in Abu Dhabi in order to establish the jurisdiction of Abu Dhabi courts. (In its judgment, the ADFCF refers to the contract dated 7 December 2023).
2. The ADCFC lacked subject-matter jurisdiction, as the parties are Muslims
3. He ADCFC lacked international jurisdiction, as the parties had agreed in a pre-nuptial agreement to confer jurisdiction to the English courts[1] over any dispute arising from the marriage.

Alternatively, Y requested the dismissal or the stay of the proceeding on the ground that a divorce case was pending before the English courts.

III.  The Ruling

Based on the following grounds, the ADCFC rejected all the arguments raised by Y, assumed jurisdiction over the case, declared the dissolution of the marriage, and awarded joint custody to the parents:[2]

Regarding Y’s plea to dismiss the case on the ground that a prior ruling of the ADCFC had been rendered on the matter, a review of the ruling revealed that the case had been dismissed on of jurisdictional grounds, therefore, the ruling was procedural and did not have res judicata effect.

Regarding the challenges to the court’s jurisdiction – whether subject matter, territorial, or international – [since] there is no divorce judgment from X’s country (the UK) and X has been resident in Abu Dhabi, as evidenced by the submitted lease contract which shows that X rented an appartement located in the Emirate, Abu Dahbi courts have jurisdiction.[3] Accordingly, the dispute falls under the Abu Dhabi Law on Civil Marriage even if one or both parties are Muslims, since the States to which the parties belong do not primarily apply Islamic Sharia in personal status matters according to Article 5 of the 2022 Procedural Regulation (though X has insisted in his memorandums that he was not a Muslim.)

Furthermore, regarding the request to stay the proceeding until a decision in the case pending before the English courts is rendered, since the court has determined that it has jurisdiction on the ground that X’s residence in Abu Dhabi, the request should be rejected.

IV. Comments

Two main issues deserve to be particularly highlighted here. The first concerns the applicability of the Civil Marriage Law and its Procedural Regulation. The second concerns the jurisdiction of the ADCFC.

1. The applicability of the Civil Marriage Law to foreign Muslims

The case commented on here has been widely hailed as “significant”, “landmark” and even “historical” judgment because it confirmed the applicability of the Civil Marriage Law to disputes involving foreign Muslims.[4] However, it is important to note that this is not the first case in which the ADCFC has ruled in this manner. This is particularly the case in the court’s judgment No. 267/2023 of 12 December 2023. The judgment was later confirmed by the Abu Dhabi Court of Appeal’s ruling No. 31/2024 of 29 January 2024 but subsequently overturned by the aforementioned ADSC’s decision reported here.[5] It is worth recalling that, in this particular case, the ADSC clearly stated that the Civil Marriage Law does not apply to foreign Muslims irrespective of their origins. However, as suggested in this case’s note, there are serious doubts about the correctness of the Supreme Court’s interpretation and application the Civil Marriage Law and its Procedural Regulation.

From this perspective, by ruling as it did, the ADCFC gives the impression that it maintains its position in direct opposition to the ADSC. However, one should not lose sight of the fact that Abu Dhabi (and the UAE in general) operates under a civil law system where the doctrine of “precedents” is not recognized.[6] Thus, the decision of the Supreme Court can serve as persuasive authority that lower courts may consider in their judgments, but it is not binding on subsequent similar cases.[7] In any case, by affirming that Civil Marriage Law also applies even if one or both parties are Muslims as long as they belong to a country whose personal status law is not primarily based on Islamic Sharia, the ADCFC has demonstrated its willingness to interpret and apply the Civil Marriage Law in a manner consistent with its intended purpose.[8]

Nonetheless, since the ADFCF’s decision is only a first-instance judgment, it remains to be seen whether an appeal will be lodged against it. If an appeal is filed, and the case finds its way to the Supreme Court, it will be, indeed, interesting to see whether the ADSC will be willing to reconsider its stance on this issue.

2. The jurisdiction of the ADCFC

i. The jurisdictional challenges. Before the ADCFC, Y raised two jurisdictional challenges, aside from contesting the court’s subject-matter jurisdiction on the ground of the non-applicability of the Civil Marriage Law due to the parties’ Muslim faith.

The first challenge pertained to what was mistakenly referred to as “territorial jurisdiction” (ikhtisas makani). In fact, the issue concerned interstate jurisdiction, given that both Abu Dhabi and Dubai have their autonomous judicial systems, independent from each other and other court systems available in the UAE federation.[9]

The second challenge concerned international jurisdiction, and that by arguing that English courts, as the court chosen by the parties in any dispute arising from their marriage, were competent.

ii. Rules of international jurisdiction in divorce matters. The relevant rules that are potentially applicable in divorce cases are found is several legislative acts. These include, as detailed in the table below:

(i) the 2022 Federal Act on Civil Procedure (FACP)

(ii) the 2005 Federal Act on Personal Status (FAPS) and

(iii) the 2021 Abu Dhabi Law on Civil Marriage

(iv) the 2022 Procedural Regulation

As the table shows, the potentially applicable provisions exhibit a high degree of redundancy, complexity and occasional inconsistencies, making them difficult to clearly articulate.

The 2022 FACP[10]

The 2005 FAPS The 2021 Civil Marriage Law

The 2022 Procedural Regulation

General rules

Article 19

Article 5 Article 17bis provisio, first sentence

Article 4 para. 1

Disputes other than in rem rights over immovable located abroad

The defendant’s UAE nationality

Disputes relating to personal status matters:

The defendant’s UAE nationality

Disputes over personal status matter of persons covered by the Civil Marriage Law

The defendant’s UAE nationality

Disputes relating to the personal status of the persons covered by the Civil Marriage Law

(without indicating the procedural status of the parties)

(Nationality is not explicitly mentioned but implied)

Domicile or residence in the UAE of the foreign defendant

Domicile, residence, or place of work in the UAE of the foreign defendant

Domicile, residence, or place of work in Abu Dhabi of the foreign defendant

Domicile, residence, current or former place of work in Abu Dhabi

Property (assets) object of the dispute is located in the UAE

Special rules

Article 20

Article 6

Article 17bis provisio, in fine

Article 4 para. 2

Actions brought against foreign defendants who do not have domicile or residence in the UAE

Actions relating to personal status matter brought against foreign defendants who do not have domicile, residence or place of work in the UAE Actions relating to personal status matter (without specification) brought against foreign defendants who do not have domicile, residence or place of work in the UAE

Actions (without specification) brought against foreign defendants who do not have domicile, residence of place of work in the Abu Dhabi or do not have a known domicile or residence abroad

Article 20(4)

(category not specified)

When the action is brought by a wife having domicile in the UAE against her husband who used to have a domicile therein No equivalent provision No equivalent provision Article 4 para. 2 (5)

(category not specified)

When the wife is the plaintiff and has domicile, place of work or residence in Abu Dhabi

(but without specifying that it is brought against her husband)

No equivalent provision

Article 6 (2)

Actions relating to resolution, annulment of marriage, talaq-divorce[11] or tatliq[12]–divorce

If the action is brought by a wife who is a UAE national, or who previously held UAE nationality, but lost it,

–> when the wife has domicile or residence in the UAE Article 17bis (2)

Actions relating to resolution, annulment of marriage or divorce

If the action is brought by a wife who is a UAE national, or who previously held UAE nationality, but lost it,

–> when the wife has domicile or residence in Abu Dhabi

Article 4 para. 2 (2)

Actions relating to civil divorce and its consequences

When any of the spouses has residence, place of work or domicile in Abu Dhabi

If the action is brought by a (foreign) wife who has a domicile or residence in the UAE and the action is brought against husband who had domicile, residence or place of work in the UAE,

–> when:

·   The husband abandons his wife and establishes his domicile, residence and place of work abroad

·   The husband is deported from the UAE

Article 20 (6)

Actions relating to personal status

When the plaintiff is a UAE national or a foreigner who has domicile in the UAE:

· If the defendant does not have a known domicile abroad or,

· When UAE law is the applicable law to the dispute

Article 6 (5)

Actions relating personal status

When the plaintiff is a UAE national or a foreigner who has domicile, residence or place of work in the UAE:

·   If the defendant does not have a known domicile or residence abroad, or

·    When UAE law is the applicable law to the dispute

Article 17bis (4)

Actions concerning one the personal status matters governed by the [Civil Marriage] Law

When the plaintiff is a UAE national or a foreigner who has domicile, residence or place of work in Abu Dhabi, if:

· The defendant does not have a known domicile or residence abroad

Article 4 para. 2 (7)

(no reference to the category of the dispute)

When the plaintiff has domicile, residence or place of work in Abu Dhabi:

·  If the defendant does not have a known domicile abroad, or

·  When UAE law is the applicable law to the dispute

iii. The plaintiff’s residence as ground of international jurisdiction. In its judgment, the ADCFC has, interestingly, addressed the three challenges above raised by Y as if they were of the same nature. The court justified its jurisdiction (territorial/interstate, subject-matter and international) based on the fact that X (the plaintiff) had a place of residence in Abu Dhabi on the basis of a copy of a lease contract of an appartement located in Abu Dhabi that X submitted to the court.

The legal basis for asserting jurisdiction on the residence of the plaintiff in Abu Dhabi is found in particular in Article 4 of the 2022 Procedural Regulation.[13] Two important remarks can be made here.

a) First, one of the remarkable aspects of Article 4 of the 2022 Procedural Regulation is that it stands distinct from similar provisions found in other federal and local regulations. Indeed, in comparison with the other applicable rules, Article 4 para. 1 of the Procedural Regulation grants jurisdiction to the ADFCF in cases involving persons covered by the Civil Marriage Law simply on the basis of their residence, or even their current or a former place of work in Abu Dhabi, regardless of their procedural status (i.e. plaintiffs or defendants). Paragraph 2 dealing specifically with divorce action, allows jurisdiction to be based on the residence of one of the spouses in Abu Dhabi even when the other spouse – the foreign defendant – has no domicile, residence or place of work in Abu Dhabi (or does not have a known domicile or residence abroad).

b) Second, the case discussed here shows that the jurisdiction of the ADCFC was based on the plaintiff’s simple residence in Abu Dhabi without any other additional specifications (e.g. permanent residence, habitual residence, primary residence, secondary residence etc.). According to the ADCFC’s judgment, residence was established on the basis of a lease contract showing address in Abu Dhabi, which was concluded slightly over three months before the action is filed with the ADCFC. This undoubtedly raises concerns about the risk of forum shopping. This is more so if Y’s arguments appear to be true that the lease contract was a sham entered into solely to manipulate the jurisdiction of the ADFCF. The fact that the ADCFC had in a prior case rejected the action between the same parties on jurisdictional grounds, only 18 days before the X rented his appartement in Abu Dhabi, adds to the suspicion.

V. Concluding Remarks:

The ADCFC’s judgment presents other interesting aspects. These include the fact that Y: (i) invoked a choice of court agreement in favor of English courts; and (ii) raised the issue of lis pendens based on the pending divorce proceeding before English courts.

Regarding (i), it is generally accepted in the UAE that choice of court agreement in general, including in civil and commercial matters are null and void. In this respect, case law, based on explicit provision in the 2022 FACP (Article 23), is rather consistent.[14]

Regarding (ii), UAE courts have generally refused to take into account lis pendens considering their jurisdiction as a matter of public policy, that if established, cannot be declined on the ground that the same case is pending before a foreign court (see, e.g., UAE Federal Supreme Court, Appeal No. 183//21 of 18 March 2001).

————————————————————–

[1] The judgment, in its both English and Arabic versions, used the terms “British courts (al-mahakim al-britaniyya). Although it is not technically incorrect to refer to “British courts” in a broad and informal sense, it is more accurate to refer to the specific courts within the various legal systems of the United Kingdom. Each system – English and Welsh law, Scottish law, and Northern Irish law – operates independently with its own courts. For this reason, it seems more appropriate here to refer to “English courts” instead, as it is most likely that these are the courts agreed upon by the parties.

[2] Although the judgment was rendered in both Arabic and English, the English version of the text was not relied upon due to its insufficient quality. This is merely an extensive summary of the decision and not a full translation.

[3] The decision refers here only to territorial jurisdiction (al-ikhtisas al-makani), however the general context of the judgment indicate that the court was also referring to subject matter and international jurisdictions.

[4] This was made on different online platforms which shared information about this case.

[5] The reference of the ADCFC’s judgment and the Court of Appeal’s ruling are mentioned in the ADSC’s decision which provides a brief summary of both cases.

[6] Except for the common law enclaves of Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM).

[7] Cf. on the legal system of the UAE in general, Essam Al Tamimi, Practical Guide to Litigation and Arbitration in the United Arab Emirates (Kluwer Law International, 2002) 5, 15.

[8] See Civil Marriage Law and Its Effects in the Emirate of Abu Dhabi (Q & A) (Publication of Abu Dhabi Judicial Department, 2023).

[9] For an overview, see the information provided by the Government Portal here.

[10] It should be noted that, although the FACP, which was initially enacted in 1992 (Federal Law No. 11/1992), was replaced by a new Act of 2022 (2022 Federal Act on Civil Procedure), rules of international jurisdiction have remained untouched. This missed opportunity could have been used to bring some order to the regulation of international jurisdiction in family law matters.

[11] Talaq here refers to the dissolution of marriage by the unilateral declaration of will by the husband.

[12] Tatliq refers to judicial divorce (usually requested by the wife) based on the admitted grounds of divorce.

[13] It should be noted that although Article 4 is titled “Territorial Jurisdiction of the Court”, it actually deals with international jurisdiction, as the rules included therein concerns cases brought against a foreign who has no domicile, residence or place of work in Abu Dhabi or has no known domicile or residence abroad.

[14] Cf. Béligh Elbalti, “Perspective of Arab Countries,” in M. Weller et al. (eds.), The 2019 HCCH Judgments Convention – Cornerstones, Prospects, Outlook (Hart, 2023), p. 188. On the validity of choice of court agreements in Bahrain, see my comments here.

The Australian Institute of International Affairs (AIIA) and the Australian Branch of the International Law Association (ILA (AB)) are pleased to present the Peter Nygh Hague Conference Internship.

The award will support a post – graduate student or graduate of an Australian law school to undertake an internship with The Hague Conference on Private International Law (The Hague Conference) in the Netherlands by providing funds to cover the cost of travel to the Netherlands and a contribution towards living expenses. Applications for the 2025 Nygh Internship are now open, and close on 31 July 2024. Please see below for more information about the award and how to apply.

***

The Internship

The award will provide a post-graduate student or graduate with the opportunity to work with some of the leading private international law practitioners in the world. With over 80 members (including the European Union) representing all major regions and legal systems, The Hague Conference is a global intergovernmental organisation. A melting pot of different legal traditions, The Hague Conference aims for the ‘progressive unification’ of the various State private international law rules. The work of The Hague Conference involves finding internationally agreed approaches to jurisdiction of courts, applicable law and the recognition and enforcement of judgments. This is achieved through the development and servicing of multilateral legal conventions which respond to global needs in the areas of international commercial law and banking, international civil procedure, international protection of children, international family and family property relations, international legal co-operation and litigation as well as international judicial and administrative co-operation. Activities of The Hague Conference are coordinated by a multinational Secretariat – the Permanent Bureau – located in The Hague. The Conference’s working languages are English and French. The successful intern will work for 5 to 6 months under the direction of the Secretariat assisting with research, translation and preparation of meetings in accordance with the needs of the lawyers of the Permanent Bureau.

The Hon Dr Peter Nygh AM

The Peter Nygh Hague Conference Internship has been established in memory of the late Hon Dr Peter Nygh AM, a leading international lawyer and former judge of the Family Court of Australia. Dr Nygh began his 25 year association with The Hague Conference as a member of Australia’s first delegation in 1975. During this time, Dr Nygh helped to draft the Convention on the Celebration and Recognition of the Validity of Marriages as well as the Convention on the Law Applicable to Matrimonial Property Regimes, work which contributed to his appointment to the Family Court of Australia. After his retirement from the bench, Dr Nygh returned to The Hague Conference and between 1994 and his death in 2002 he contributed in many ways, including serving as a co-rapporteur on The Hague ‘judgments project’ from 1996 and representing Australia in the negotiations that led to the Convention on the Protection of Children. In his later years Dr Nygh spent extended periods in The Hague without remuneration or payment of his expenses, yet his work did not go unrecognised. He was awarded the Centenary Medal by the Australian Government as well as the Order of Australia, partly in recognition of his outstanding and longstanding contribution to private international law, and in particular his representation of Australia at The Hague Conference.

 

On Tuesday, July 2, 2024, the Hamburg Max Planck Institute will host its 46th monthly virtual workshop Current Research in Private International Law at 2:00 pm – 3:30 pm (CEST). Maggie Gardner (Cornell Law School) will speak, in English, about the topic

Beyond the Presumption Against Extraterritoriality

For the last decade, the debate over prescriptive jurisdiction in the United States has been monopolized by the Supreme Court’s rejuvenated presumption against extraterritoriality. Under this framework, U.S. courts interpreting federal statutes must ask (1) whether the statute expresses clear congressional intent to reach extraterritorial conduct, and if not, (2) whether the statute is nonetheless being applied domestically because its “focus” occurred in the United States. But even the Court’s presumption-with-teeth cannot answer all questions of prescriptive jurisdiction in a world of concurrent jurisdiction and economic interdependency. Are there limits on the applicability of U.S. statutes that do rebut the presumption at step one? At step two, does some need for balancing of sovereign interests remain–and is that balancing subsumed within the step two inquiry, or is it a distinct doctrine of international comity? This survey of lower federal court decisions shows that U.S. courts are continuing to engage in contextual balancing despite the rule-like framework of the modern presumption against extraterritoriality, but also that the “focus” test may be encouraging judges to identify a more limited and relevant set of factors to consider. What emerges is a multi-factor analysis that is statute-specific but still responsive to the circumstances of individual cases, in which the presumption serves only as an initial sorting rule. This project distills and defends this updated approach as more feasible for judges to apply, more faithful to congressional intent, and sufficiently capable of addressing international comity concerns without the need for an additional, free-standing comity doctrine.

The presentation will be followed by an 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.

Articles 14 and 15 of the French Civil Code establish the jurisdiction of French courts where either the plaintiff or the defendant is a French national. The provisions date back to the original Napoleonic Code. Although Articles 14 and 15 refer to obligations, the French supreme court for private and criminal matters (Cour de cassation) […]

The Max Planck Institute for Social Anthropology in Halle, Germany, is hiring four docotoral students in the context of its project on “Cultural and Religious Diversity under State Law across Europe” (CUREDI). Two of the positions will be part of the research group on “Transformations in Private Law: Culture, Climate, and Technology” lead by Mareike Schmidt.

Specifically, the institute is looking for researchers interested in the following four topics:

• Asylum Law;
• Private Law;
• Law and Religion; and
• Procedural Justice.

The deadline for applications is 1 August 2024; more information is available here.

This post was prepared by Tess Bens from University of Vienna. Burkhard Hess and his team at the University of Vienna have finalised an updated version of the Position Paper on the Reform on the Brussels Ibis Regulation of the association. Establishment of the EAPIL Working Group The Brussels Ibis Reform project leading up the […]

Introduction

As one of the most complex and fiercely contested recent investment disputes, the Indian Satellite Saga originated from India’s annulment of an agreement for leasing S-band electromagnetic spectrum on two satellites (Satellite Agreement) to Devas Multimedia Private Ltd. (Devas). The Saga involved multiple international arbitrations and domestic litigations. In 2022, the Supreme Court of India made a judgment (SCI Judgment) to wind up Devas. Devas and its foreign investors allege the SCI Judgment is a retaliatory measure against them for enforcing arbitration awards.

Since 2023, courts worldwide, including those in Australia, Canada, Germany, Mauritius, the Netherlands, Singapore, Switzerland, and the US, rendered decisions regarding whether to recognize the SCI Judgment and to allow it as a defence against the enforcement of arbitration awards.[1] This Insight analyzes these courts’ judgments and reflects on the decentralized judgment/award recognition and enforcement system for addressing alleged state retaliation measures.

 

Investment Disputes and Alleged Retaliatory Measures

Devas was an Indian telecommunications company with investors from Germany and Mauritius. Antrix Corporation Ltd. (Antrix) was under the direct control of the Department of Space of India. In 2005, Antrix concluded the Satellite Agreement with Devas but unilaterally terminated it in 2011 on the ground of force majeure because the Government of India decided not to provide orbital slots in S-band for commercial activities.[2]

Consequently, Devas initiated a commercial arbitration seated in India before an International Chamber of Commerce (ICC) Tribunal against Antrix.[3] The ICC Tribunal rejected Antrix’s force majeure argument and awarded damages to Devas, reasoning that the Chairman of Antrix failed to do everything in his power to ensure that the Satellite Agreement would remain on track.[4] Devas’s investors from Mauritius and Germany also brought UNCITRAL investment arbitrations against India separately in the CC/Devas (1)[5] and DT[6] arbitrations. Both tribunals rejected, at least in part, India’s defense that it had annulled the Satellite Agreement to protect essential security interests.[7]

The three arbitration tribunals rendered billion-dollar awards in favor of Devas and its investors.[8] Devas and its investors have started to enforce these awards against Indian assets abroad. Devas also entrusted its related US company, Devas Multimedia America Inc., with collecting debts arising from the ICC award.

Meanwhile, the Indian Central Bureau of Investigation filed a First Information Report against Devas and the officers of Devas and Antrix for corruption in 2015.[9] Antrix initiated proceedings to wind up Devas in 2021 at India’s National Company Law Tribunal (NCLT). Devas appealed to the National Company Law Appellate Tribunal (NCLAT) and the Supreme Court of India. The Supreme Court upheld the judgments of NCLT and NCLAT to liquidate Devas due to fraudulent activities, including Devas improperly enticing Antrix into the Satellite Agreement.[10] The fraud also involved collusion between Devas, Antrix, and Indian government officials.[11]

The shareholders of Devas were found to be fully aware of the fraud.[12] Notably, Devas and one of its shareholders, namely Devas Employees Mauritius Private Limited, were fully represented in the SCI proceedings. Devas’s other shareholders did not participate in the SCI proceedings.

As a consequence of the SCI Judgment, under its authority at the seat of the ICC arbitration, the High Court of Delhi set aside the ICC award.[13] Devas and its investors initiated the CC/Devas (2) investment arbitration against India alleging the latter’s retaliation for the enforcement of the ICC award.[14] Upon India’s request, the Supreme Court of Mauritius issued an interim anti-arbitration injunction.[15] India also sought to set aside the DT and CC/Devas (1) awards in their respective seats in Switzerland and the Netherlands.

Devas or its investors have sought to enforce the ICC, DT, and CC/Devas (1) awards in approximately 6 different countries.[16]

 

Recognize or not?

In the award-setting-aside proceedings and the award-enforcement proceedings, a critically important defense for India is the finding of fraud in the SCI Judgment.

To determine whether to recognize the SCI Judgment, the focal points are: whether foreign enforcement courts can exercise jurisdiction over India and whether the SCI Judgment should create res judicata effects in these courts. The varying approaches taken show how enforcement jurisdictions can independently decide whether retaliation existed and how to address it based on their laws.

 

Sovereign Immunity of India

When deciding whether to enforce the CC/Devas (1) award, both the Australian Federal Court and the Superior Court of the Province of Quebec in Canada held that India waived its sovereign immunity by ratifying the 1958 New York Convention because of the “clear and unequivocal submission” in Article 3 of the Convention.[17]

When enforcing the DT award, the Higher Regional Court of Berlin held that India did not enjoy sovereign immunity because according to the German Code of Civil Procedure, India’s liability came from Antrix’s commercial activities, and it was thus irrelevant that the Satellite Agreement was revoked partially due to national security concerns.[18] Taking another path, the US District Court for the District of Columbia held that it had jurisdiction over India based on the arbitration exception to sovereign immunity, which requires “the existence of an arbitration agreement, an arbitration award, and a treaty governing the award.”[19] In discussing the last requirement, the court mentioned the membership of the US and Switzerland (the seat of arbitration), rather than India’s membership in the 1958 New York Convention[20] as the Australian Federal Court and the Superior Court of the Province of Quebec had. When rejecting the enforcement of the ICC award, the US Court of Appeals for the Ninth Circuit held that a minimum contacts analysis should be satisfied.[21]

Notably, the Australian Federal Court did not consider the legality of investment under the applicable bilateral investment treaty and the validity of the arbitration agreement because, when determining sovereign immunity, Devas needed only to provide prima facie evidence that a valid arbitration agreement existed.[22] The US District Court for the District of Columbia reached the same conclusion for a different reason: because the legality of investment was an arbitrability issue falling under the merits, not a jurisdictional matter.

 

Res Judicata

This issue can be analyzed from four aspects:

Preclusion effects of other tribunals’ decisions: India was not successful in setting aside the CC/Devas (1) Award on Merits at the Hague Court of Appeal, which found that India did not sufficiently substantiate the accusations of fraud.[23] After the SCI Judgment was rendered, India asked the Hague District Court to set aside the Award on Quantum.[24] An important factor for the District Court in rejecting India’s request was that the Hague Court of Appeal had already rejected India’s assertions of fraud in the setting aside proceedings concerning the Award on Merits, and despite some new evidence, the fraud allegations in the request to set aside the Award on Quantum were virtually identical.[25] Therefore, the Hague District Court found that the SCI Judgment should not be recognized because of the res judicata effect of the earlier judgment of the Hague Court of Appeal.[26] In an action to enforce the DT arbitration, the Court of Appeal in Singapore similarly declined to consider the SCI Judgment’s fraud findings because the Swiss Federal Supreme Court at the seat of the arbitration had dismissed the setting-aside application and affirmed the DT arbitration tribunal’s jurisdiction and the validity of the award.[27] Further, based on the competence-competence doctrine, the US District Court for the District of Columbia considered itself precluded from second-guessing the DT arbitrators’ findings about arbitrability.[28]

Timing: In rejecting the revision proceedings against the DT final award, the Swiss Federal Supreme Court found that India’s fraud allegation based on the SCI Judgment was time-barred.[29] This was because the 90-day limitation period to request the revision of the DT final award started to run when India obtained “sufficiently certain knowledge” of fraud even before the SCI Judgment was issued.[30] Like the Hague District Court, the Swiss Federal Supreme Court held that the SCI Judgment did not provide new evidence of fraud because the Supreme Court of India did not conduct its own fact-finding investigation.

The (un)due process of the Supreme Court of India is also hotly debated. In 2023, the Hague District Court declared the request of Devas Multimedia America Inc. to enforce the ICC award on behalf of Devas inadmissible, after a liquidator appointed under the SCI Judgment instructed the company not to act as an agent of Devas in enforcement efforts.[32] The Hague District Court found no evidence showing that the SCI failed to act independently and impartially.[33] In contrast, when deciding to enforce the DT award, the Singapore International Commercial Court expressed reservations about the proceedings at the SCI, finding that they had been carried out based on summary evidence without oral evidence or the cross-examination of witness;[34] and the same view was shared by the Higher Regional Court of Berlin.[35]

Divergence of parties is a significant barrier to extending the res judicata effects of the SCI Judgment against Devas to its investors. At the Superior Court of the Province of Quebec, India relied on the SCI Judgment arguing that its consent to arbitration was induced by fraud. The Court held that the SCI Judgment could prove only that Devas was liquidated and addressed a different question from that in the enforcement proceeding, because it did not rule on the validity of the CC/Devas (1) arbitration agreement, and the Devas investors were precluded from participating in the liquidation proceeding.[36] Similarly, the Singapore International Commercial Court held that the fraud finding in the SCI Judgment should not be binding on Devas’s investor, Deutsche Telekom, because it was not a party to the proceedings at the Supreme Court of India.[37]

 

Decentralized System to Address States’ Retaliatory Measures

As the Indian Satellite Saga demonstrates, private international law and international investment law use a decentralized judgment/award recognition and enforcement system to address alleged states’ retaliatory measures against foreign investors.

In terms of practical lessons, one is that fraud allegations should be argued as early as possible in the award-rendering proceedings, rather than waiting for the enforcement proceedings. Notably, India raised fraud late without reasonable justifications, so the claim was rejected by the arbitration tribunals.[38] Although some enforcement courts may allow parties to re-argue a fraud claim that has been fully litigated by a judgment/award-rendering tribunals, the Saga shows that saving these claims for the enforcement proceedings is risky because not every court will allow this practice.

More broadly, although the decentralized system produces inconsistent results, it also has an overlooked benefit of resilience when addressing state retaliatory measures, as it has no choke points and can function regardless of political tensions. This system, although sacrificing consensus and consistency, promotes democracy because each state has its voice. In contrast, some international systems to resolve alleged state retaliatory measures are centralized based on consensus. The centralized systems are supposed to bring authority, consistency, and certainty. However, the malfunction of one choke point can effectively dismantle the whole system. For example, although the WTO can authorize its members to retaliate against another member that continuously adopts non-compliance measures,  the “WTO consensus” system enables one member to dismantle the WTO Appellate Body.[39] Another example is the United Nations Security Council, where the “veto privilege” and political tensions among its standing members have impeded international efforts to resolve the Gaza war.[40] The inconsistent outcomes reached over the course of the Indian Satellite Saga should thus be understood in light of the benefits of decentralization and resilience.

* Author: Jie (Jeanne) Huang, Associate Professor, the University of Sydney School of Law, Jeanne.huang@sydney.edu.au. This is a cross-posting from the American Society of International Law Insights.

[1] Devas Multimedia Private Ltd., v. Antrix Corporation Ltd. & Anr., Civil Appeal No. 5906 of 2021 (India) [hereinafter SCI Judgment].

[2] Id., ¶ 3.11.

[3] Devas Multimedia Private Limited v. Antrix Corporation Limited (Final Award) ICC Case No. 18051/CYK (Sept. 14, 2015).

[4] ICC Case No. 18051/CYK, ¶¶ 230-236, 312.

[5] CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited, and Telcom Devas Mauritius Limited v. the Republic of India, Case No. 2013-09, UNCITRAL, Award on Quantum (Perm. Ct. Arb. 2020) (“CC/Devas (1)”).

[6] Deutsche Telekom AG v. India, Case No. 2014-10, UNCITRAL, Final Award (Perm. Ct. Arb. 2020) (“DT Arbitration”).

[7] CC/Devas (1) Award on Jurisdiction and Merits (July 25, 2016), ¶¶ 354-361, 371-73; DT Interim Award (Dec. 13, 2017), ¶¶ 280-286.

[8] Approximately USD 562.5 million (ICC), USD 93.3 million (DT), USD 111 million (CC/Devas (1)), plus interest and costs.

[9] SCI Judgment, ¶ 3.13.

[10] SCI Judgment, ¶ 12.8 (vi).

[11] Id. ¶ 12.8 (xii).

[12] Id. ¶ 12.8 (xv).

[13] Devas Employees Mauritius Pvt. Ltd. v. Antrix, High Court of Delhi at New Delhi, 2023: DHC: 1933-DB.

[14] CC/Devas v. India (2), Case No. 2022-34 (Perm. Ct. Arb. 2022) (“CC/Devas (2)”).

[15] India v. CC/Devas (Mauritius) Ltd., SC/COM/WRT/000010/2023, Sup. Ct. Mauritius.

[16] See CC/Devas v. India (I) on Jus Mundi at https://jusmundi.com/en/document/decision/fr-cc-devas-mauritius-ltd-devas-employees-mauritius-private-limited-and-telcom-devas-mauritius-limited-v-republic-of-india-arret-de-la-cour-dappel-de-paris-22-11819-tuesday-13th-february-2024.

[17] CC/Devas (Mauritius) Ltd. v. India, 2022 QCCS 4786, ¶¶ 161 & 167; CCDM Holdings, LLC v. India (No. 3) [2023] FCA 1266, ¶¶ 35, 38, 45, and 51.

[18] Lisa Bohmer, German Court Grants Application for Partial Enforcement of Deutsche Telekom v India Award, as Neither Fraud Allegations Nor BIT’s Unique Wording on Enforcement Sway the Judges, Investment Arb. Rep. (Feb. 9, 2023), https://www.iareporter.com/articles/german-court-grants-application-for-partial-enforcement-of-deutsche-telekom-v-india-award-as-neither-fraud-allegations-nor-bits-unique-wording-on-enforcement-sway-the-judges/.

[19] Deutsche Telekom AG v. India, Civil Case No. 21-1070 (RJL), Memorandum Opinion (Mar. 27, 2024), at 6.

[20] Id.

[21] Devas Multimedia Private Ltd v Antrix Corp. Ltd., No. 20-36024 (9th Cir. 2023), ¶ 1.

[22] CCDM Holdings, supra note 17, ¶ 44.

[23] India’s set-aside application against the CC/Devas (1) Award on Merits was rejected by the District Court of the Hague on November 14, 2018 (ECLI:NL:RBDHA:2018:15532), the Hague Court of Appeal on February 16, 2021 (ECLI:NL:GHDHA:2021:180), and the Dutch Supreme Court on February 3, 2023 (ECLI:NL:HR:2023:139).

[24] India v. CC/Devas (Mauritius) Ltd. (C/09/615682/HA ZA 21-674), October 25, 2023 issued by the District Court of the Hague.

[25] Id. ¶¶ 4.16, 4.19, and 4.20.

[26] Id. ¶ 4.09.

[27] India v. Deutsche Telekom AG, [2023] SGCA(I) 10, ¶¶ 142-178; 2023 SGHC(I) 7, ¶¶ 136-155.

[28] Deutsche Telekom AG v. India, Civil Case No. 21-1070 (RJL), Memorandum Opinion (Mar. 27, 2024).

[29] Swiss Bundesgericht Tribunal Fédéral (4A_184/2022), Urteil vom 8. März 2023.S.

[30] Lisa Bohmer, Swiss Federal Tribunal Decides that Revision Proceedings Are not Available against Interim Award that Withstood Set-aside Request, while Finding that Request for Revision on Final Award is Time-Barred and Not Based on New Evidence, Investment Arb. Rep. https://www.iareporter.com/articles/analysis-swiss-federal-tribunal-decides-that-revision-proceedings-are-not-available-against-interim-award-that-withstood-set-aside-request-while-finding-that-request-for-revision-of-final-award-is-t/.

[31] Id. India v. CC/Devas (Mauritius) Ltd., supra note 24, ¶ 4.20.

[32] Order issued by Judge H.J. Vetter at the Hague District Court (July 18, 2023), https://www.iareporter.com/articles/dutch-court-declares-request-for-enforcement-of-devas-antrix-icc-award-inadmissible/.

[33] Id.

[34] India v. Deutsche Telekom, [2023] SGHC(I) 7, paras¶¶ 126-134.

[35] Bohmer, supra note 18.

[36] CC/Devas (Mauritius) Ltd. v. India, supra note 17, ¶¶ 210-215.

[37] Deutsche Telekom, “would be the victim, rather than a perpetrator” in the alleged fraud, Deutsche Telekom AG v The Republic of India, [2023] SGHC(I) 7, ¶¶ 87 and 123.

[38] Prabhash Ranjan, Corruption and Investment Treaty Arbitration in India, in Corruption and Illegality in Asian Investment Arbitration 235, 248 (Nobumichi Teramura, et al. eds., 2024).

[39] Chad Bown & Joost Pauwelyn, The Law, Economics and Politics of Retaliation in WTO Dispute Settlement 21-86 (2010).

[40] Press Release, United Nations, Security Council passes resolution demanding “an immediate ceasefire” during Ramadan, https://news.un.org/en/story/2024/03/1147931?_gl=1*1y7ggfh*_ga*MTYxNDY2ODE4Ni4xNzA5NzczMDA4*_ga_TK9BQL5X7Z*MTcxMTQxMzkxNS4xLjAuMTcxMTQxMzkxNS4wLjAuMA.

 

 

 

The authors of this post are Leon Theimer (Humboldt University of Berlin) and Nicolas Dewitte (Humboldt University of Berlin). Introduction From 6 to 8 June, around 100 members of the EAPIL gathered in the captivatingly charming city of Wrocław in Poland for the 2024 EAPIL conference on ‘Private International Law and Global Crises’. Over the […]

Solomon Okorley Ph.D, University of Johannesburg, and affiliated with the Research Centre for Private International Law in Emerging Countries at the University of Johannesburg.

Introduction

South Africa is one of the most developed countries on the African continent and a key country in the Southern African Development Community (SADC) and the BRICS (Brazil, Russia, India, China, and South Africa) economic bloc. Its status in private international law on the African continent is evinced as the country on the African continent where two vital instruments of private international law were adopted: the Convention on International Interests in Mobile Equipment (Cape Town Convention) and the Mining, Agricultural and Construction Protocol (MAC Protocol). It is also a member of the Hague Conference of Private International Law. Thus, development in its private international is likely to significantly impact the neighboring countries in the SADC region and the continent.

 

In the recent case of Lindsey and Others v Conteh (774/2022) 2024 (3) SA 68 (SCA), the South African Supreme Court of Appeal dismissed an appeal for the recognition and enforcement of a Californian judgment. The South African Supreme Court of Appeal held that “The California Court Orders do not constitute a liquid document evidencing an unconditional acknowledgment of indebtedness, in a fixed sum of money. The appeal must accordingly fail” (para 35).

This case is significant because the case addresses the recognition and enforcement of foreign judgment in South Africa and matters concerning provisional sentence. It is, therefore, a case that other SADC countries and common law jurisdictions would find helpful when recognizing and enforcing foreign judgments, especially under the common law regime.

 

Facts

The case outlined below concerns the recognition and enforcement of a Californian foreign judgment in South Africa. The brief facts of the case is as follows: The sixth appellant, African Wireless Incorporated (AWI), is a corporation registered in terms of the laws of the State of Delaware in the United States of America; and the first to fifth appellants are the shareholders of AWI. The respondent is a businessman and citizen of the United States of America and now resides in South Africa. The appellants filed a suit against Mr Conteh, the respondent. The basis of the suit was that the respondent had transferred some shares of AWI to companies belonging to him without the requisite permission of AWI.

Consequently, the appellants obtained a judgment by default. Further, the Californian Superior Court ordered the respondent to turn over the shares to the appellants. The court also placed a value upon the shares ‘for bond purposes only’. The appellants then brought an ex parte application, which inter alia sought to convert the earlier court order to a monetary judgment. However, the application was dismissed.

 

The case before the High Court

The appellants argued that the foreign default judgment and the post-judgment enforcement orders collectively constituted a final and binding money judgment. They further argued that, by operation of law, the judgment was enforceable in the same manner as a “money judgment for the value of the shares”. This is because it had been converted into a liquid and executable money judgment under California law. Therefore, its nonpayment entitled them to seek a provisional sentence. However, the respondent contended that the foreign judgment was not a money judgment; hence, it was not a liquid document. He averred that what was before the courts was merely a judgment for the delivery of shares.

 

The ruling of the High Court

According to the High Court, ‘the judgment does not constitute prima facie proof of a debt enforceable by provisional sentence’, as it did not comprise a liquid document. The court determined that extrinsic evidence on Californian law was necessary to prove that the order to turn over the shares had been converted into a debt in monetary terms, thus constituting a money judgment. The court concluded that the need to resort to such extrinsic evidence was inconsistent with South African courts’ usual strict adherence to the requirements for granting a provisional sentence. Dissatisfied with this ruling, the plaintiffs appealed to the Supreme Court of Appeal.

 

Summary of the Judgment of the Supreme Court of Appeal

The Supreme Court of Appeal extolled the importance of recognizing and enforcing foreign judgment ‘in a world of ever greater international commerce’ (para 26). It reechoed its previous statement in Richman v Ben-Tovim 2007 (2) SA 283 (SCA), where it stated that “it is now well established that the exigencies of international trade and commerce require ‘. . . that final foreign judgments be recognised as far as is reasonably possible in our courts, and that effect be given thereto’” (para 25). The court stated that a court judgment serves as prima facie evidence of a debt owed and constitutes an acknowledgment of the indebtedness for the amount specified in the judgment.

The central issue in this case was whether a series of orders and two writs, granted by the Superior Court of California in the State of California, United States of America, cumulatively constituted a liquid document that can be enforced through provisional sentence in South Africa. Thus, the Supreme Court of Appeal was invited to determine the true nature of the Californian court orders in relation to the granting of a provisional sentence.

The appellants argued that the foreign judgment, when read cumulatively, constitutes a liquid document despite the initial judgment being for the turnover of shares. According to them, because a monetary value was ascribed to the shares and a writ of execution for the monetary value of the shares was issued, it is sufficient to enable them to secure a provisional sentence.

The court referred to the seminal case of Jones v Krok 1995 (1) SA 677 (A) to set out the conditions to be met for the recognition and enforcement of a foreign judgment, namely: ‘(i) that the court which pronounced the judgment had jurisdiction to entertain the case according to the principles recognised by our law with reference to the jurisdiction of foreign courts (sometimes referred to as “international jurisdiction or competence”)? (ii) that the judgment is final and conclusive in its effect and has not become superannuated? (iii) that the recognition and enforcement of the judgment by our courts would not be contrary to public policy? (iv) that the judgment was not obtained by fraudulent means? (v) that the judgment does not involve the enforcement of a penal or revenue law of the foreign state? and (vi) that enforcement of the judgment is not precluded by the provisions of the Protection of Businesses Act 99 of 1978, as amended…’. In this case, the parties did not seek to qualify these requirements (para 27).

According to the court, a provisional sentence is a “summary remedy” that allows a judgment creditor with a liquid document to obtain relief quickly without initiating a trial action (para 19). The liquid document relied upon by the judgment creditor “must be a written instrument signed by the defendant acknowledging indebtedness unconditionally for a fixed amount of money,” and the judgment debt  “must be fixed, definitive, sounding in money,” which is “evident on the face of the document” (para 21). Thus, the judgment creditor must satisfy the court that the foreign judgment satisfies these conditions in order to succeed under the proceedings for a provisional sentence. Under the proceedings for provisional sentence, the need for extrinsic evidence nullifies the liquidity requirement. However, over time, there has been a shift away from the strict application of the principle of “the document must speak for itself” towards the need for “greater flexibility as to what evidence extrinsic to the foreign judgment itself may be permissible” (para 22).

The Supreme Court of Appeal stated that the judgment debt contained in the California Court Orders was for the possession of property. That is, the respondent should turn over the shares to AWI. Although the California court determined the value of those shares, it did not order Mr Conteh to pay an amount; it only required the respondent to deliver up specified shares. On this issue, the Court of Appeal of the State of California had already held that the appellants ‘were not entitled to an actual money judgment in the default judgment proceedings’ (para 11).

The SCA further made two observations on the relevant provisions of California law. First, court orders for the possession of property cannot be immediately enforced as a money judgment upon issuance. Some steps need to be followed: “The levying officer must have failed to take custody of the property; made demand of the judgment debtor, if the debtor can be located; the levying officer must then make a return that the property cannot be obtained” (para 31). It is only when these steps have been followed that the judgment for the possession of property will be enforced ‘in the same manner’ (para 31) as a money judgment. Secondly, the Supreme Court of Appeal emphasized that although the relevant provisions of Californian law allow for the enforcement of the Californian Court Orders ‘in the same manner’ as a money judgment, it does not render the court orders to be a money judgment (para 31).

On why a court order that can be enforced as a money judgment under Californian laws should not be recognised and enforced by a South African court, the Supreme Court of Appeal stated that it “is a matter of sovereignty” (para 33). South African courts are not simply instruments for enforcing California court orders. In addition, the summons by the appellants was for a provisional sentence and did not request a South African court to implement the enforcement procedures of Californian law (para 34).

Most crucially, the court stated that because the cause of action set out in the summons was based on a foreign judgment that is not a money judgment, the provisional sentence cannot be granted (para 35). Also, the California courts did not constitute a liquid document for a fixed sum of money. Thus, the Supreme Court of Appeal dismissed the case, but on a ground different from that of the high court. The Supreme Court of Appeal reasoned that it was not the recourse of the appellants to extrinsic evidence that rendered provisional sentence unavailable to them. Instead, the foreign judgment they relied upon is not a money judgment, hence not a liquid document (para 36). Consequently, the appeal was dismissed.

 

Comment

This is a case where the judgment creditors sought the assistance of the South African courts to recognize and enforce the California court orders. It was a typical case of recognition and enforcement of foreign judgments. However, the foreign judgment fell short of the requirements to be satisfied when recognizing and enforcing judgment sounding in money. One of the recognized procedures for recognizing and enforcing foreign judgment in South Africa is by way of provisional sentence. When making this application for a provisional sentence, the judgment creditor should be armed with a liquid document. As a requirement, the judgment in question needs to be a money judgment. However, in this instant case, according to the Supreme Court of Appeal, the California Court Orders do not constitute a liquid document: the judgment obtained in the Californian courts was not a money judgment. Consequently, according to both the High Court and the Supreme Court of Appeal, because this ‘necessary’ requirement has not been met, the foreign judgment cannot be enforced by way of a provisional sentence.

In most common law legal systems, when recognizing and enforcing a foreign judgment, one of the requirements is that the judgment should be a fixed sum of money. Although it is not stated clearly in SADC countries, it is implicit in the procedure for enforcing foreign judgments through provisional sentence summons, which are summons on liquid documents (para 21). In this case, the South African court upheld this requirement and did not recognize the Californian court orders, which did not constitute a liquid document. Although a monetary value had been placed on the shares the respondent had to transfer, it was not deemed a money judgment. Thus, the fact that a foreign court order can be converted into a monetary value does not change the nature of the judgment into a monetary value. For a judgment to qualify as a fixed sum of money, it needs to be shown clearly in the foreign judgment that the judgment debtor is required to pay a specific sum of money. In the words of the court, the debt must be “fixed, definitive, sounding in money and evident on the face of the document relied upon” (para 21). Without that, it does not qualify as a monetary judgment and cannot be recognized and enforced. The California judgment was not a money judgment. Thus, it was not recognized and enforced by way of provisional sentence. It is submitted that the Supreme Court of Appeal was right to dismiss the appeal on this ground. This decision by the Supreme Court of Appeal will be of great importance to Southern African courts, which are influenced by the jurisprudence of South African courts (Standic BV v Petroholland Holding (Pty) Ltd (A 289-2012) [2020] NAHCMD 197).

 

This judgment also shows the clinging of South Africa’s court to the common law theory of obligation (para 18). Per the theory of obligation, a foreign judgment can be recognized and enforced by initiating a new action for the judgment debt. The rationale is that the foreign judgment imposes an obligation on the individual against whom the judgment was rendered to pay the judgment debt. The claim to pay the judgment debt is separate from the original cause of action that led to the judgment in the foreign jurisdiction. The judgment obtained in this new suit, not the original foreign court judgment, is enforceable as a judgment in the domestic courts. However, one should not be quick to pin this theoretical basis on South Africa’s legal regime. This is because, in other cases of recognition and enforcement of foreign judgment that have come before the South African courts, such as Richman v Ben-Tovim (para 4) and the Government of Zimbabwe v Fick 2013 (5) SA 325 (CC) (para 56-57), other bases such as comity and reciprocity have been mentioned to be the basis for enforcing a foreign judgment. One should thus be guided by the counsel of Booysen J in Laconian Maritime Enterprises Ltd v Agromar Lineas1986 (3) SA 509 (D), where she observed rightly that trying to search for a theoretical basis was “a most interesting and somewhat frustrating exercise to attempt to pin it down” (Laconian Maritime Enterprises Ltd v Agromar Lineas 1986 (3) SA 509 (D) 513). The court thus observed that the concern should be on the applicable legal regime (that is, whether common law regime or the statutory regime) and the stipulated conditions for the recognition and enforcement of foreign judgment (Laconian Maritime Enterprises Ltd v Agromar Lineas 1986 (3) 509 (D) 516).

 

Another aspect of this case concerns recognizing and enforcing non-monetary foreign judgments. It is submitted that the practice where only judgments sounding in money are recognized and enforced is problematic and does not reflect recent developments in the field of recognition and enforcement of foreign judgment. A foreign judgment, beyond the requirement for the payment of a specific sum of money, might also require that the judgment debtor perform an act that includes the transfer of shares (like in this instant case) or delivery of property. There is a need for development in South Africa’s legal regime to enable it to recognize and enforce non-monetary foreign judgments.

Current legislative developments in the arena of recognition and enforcement of foreign judgments allow for the recognition and enforcement of non-monetary judgments. For instance, the 2019 Hague Judgments Convention allows for recognizing and enforcing non-monetary judgments. According to the Garcimartín-Saumier Report, recognition and enforcement of foreign judgment “includes money and non-money judgments, judgments given by default.. and judgments in collective actions” (para 95). Further, the Report adds that “Judgments that order the debtor to perform or refrain from performing a specific act, such as an injunction or an order for specific performance of a contract (final non-monetary or non-money judgments) fall within the scope of the Convention”. Also, the Commonwealth Model Law on Recognition and Enforcement of Foreign Judgment of 2018 allows for the recognition and enforcement of non-monetary judgments (Art 2). Even before these legislative innovations, the Supreme Court of Canada, in the case of Pro Swing Inc v Elta Golf Inc ((2007) 273 DLR (4th) 663), had already held that the traditional common law rule that limits enforcement to fixed sum judgments should be revised to allow for the enforcement on non-monetary judgments. Also, common law countries such as Australia and New Zealand have all, by legislation, done away with the fixed sum of money restriction (Australia: Section 5(6) of Foreign Judgments Act 1991; New Zealand: Section 3B of Reciprocal Enforcement of Judgments Act 1934).

These represent current developments in the law, and thus, the courts in South Africa, as part of their responsibility to develop the common law (section 8(3) of South Africa’s 1996 constitution), should incorporate this innovation in order to develop the common law in this regard the next time they are seised with a case which requires them to recognize and enforce a non-monetary foreign judgment.

Suppose South Africa’s legal regime recognizes and enforces non-monetary foreign judgments; the court might have reached a different conclusion rather than outright dismissing the case and the appeal. In that situation, the California court order, which required the respondent to transfer shares to AWI, would have been capable of being recognized and enforced by the South African court. After the recognition and possible enforcement of the order to transfer the shares, the court would subsequently be invited to determine how to handle the monetary value placed on the shares to be transferred. However, such an opportunity was missed because South African courts do not recognize and enforce non-monetary judgments.

 

The fist issue of 2024 of the Rivista di diritto internazionale privato e processuale (RDIPP) is out. Along with recent case law and materials, it features six contributions. Francesco Salerno, Il contributo degli studiosi italiani ai corsi de L’Aja di diritto internazionale privato [The Contribution of Italian Scholars to the Teaching of Private International Law […]

The second edition International Commercial Contracts – Contract Terms, Applicable Law and Arbitration, authored by Giuditta Cordero-Moss (University of Oslo), is out. The book is published by Cambridge University Press. Any practising lawyer and student working with international commercial contracts faces standardised contracts and international arbitration as mechanisms for dispute settlement. Transnational rules may be […]