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Professor Sophia Tang, Wuhan University (China) and Newcastle University (UK) will give a virtual seminar in the Durham University China Law Centre. The topic is “extraterritorial effects of the Hong Kong National Security Law”.

Webinar: Extraterritorial Effects of the Hong Kong National Security Law  Speaker:Prof Zheng TANG (Newcastle Law School)  Time:13:00 p.m. Tuesday, October 13    Zoom: https://durhamuniversity.zoom.us/j/96430562639?pwd=NS9lTGlxN3U2T2dzWWIwckJodGFRQT09 Meeting ID?964 3056 2639 Passcode:131767

Abstract:

The very controversial Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (“HK National Security Law” hereafter) was promulgated in the 20thsession of the 13th National People’s Congress (NPC) of China on 30 June 2020 and entered into effect in the Hong Kong Special Administrative Region (HKSAR) at 23:00 on the same day. This law defines four categories of offences and penalties, namely secession, subversion, terrorist activities and collusion with foreign or external elements to endanger national security. Article 38 provides: “This Law shall apply to offences under this Law committed against the Hong Kong Special Administrative Region from outside the Region by a person who is not a permanent resident of the Region.” This article extends jurisdiction of the HK National Security Law to the action of any individuals or organisations in any country, irrespective of their nationality, residence and the law of the countries where the action has taken place. The extraterritorial effect can be summarised as: no nexus or proximity, no double criminality, and no identity requirements. The legal basis for this jurisdiction is the protective principle, which allows a state to regulate extraterritorial conduct by foreigners or non-residents that may jeopardise its vital interests.  

In this seminar, we are going to discuss what is protective jurisdiction, whether the extraterritorial effect of the HK National Security Law is justifiable in international law, what the overseas impact of the HK National Security Law would be, especially on the freedom of speech, and how this law could be enforced in practice.  

 

The members of the proposed EAPIL Working Group on International Property Law will host a webinar 20 October 2020, from 12:30 to 2 pm.

The webinar will illustrate the goals and agenda of the Working Group and provide EAPIL members with the possibility to join the discussion on a future European Regulation on International Property Law.

The webinar’s programme is as follows:

• Prof. Dr. Teun Struycken (Amsterdam/Utrecht): The Significance of International Property Law (case study)
• Ass. Prof. Dr. Teemu Juutilainen (Turku): The Impact of Free Movement of Goods and Services on International Property Law
• Prof. Dr. Gilles Cuniberti (Luxemburg): The Impact of the Acquis Communautaire on International Property Law
• Prof. Dr. Janeen M Carruthers (Glasgow): Global Measures for the Unification of Private International Rules pertaining to Property
• Prof. Dr. Eva-Maria Kieninger (Würzburg): The Way Ahead: Topics and Goals of the Working Group

The practical details for attending the webinar will be communicated soon on this blog.

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Casino, Guichard-Perrachon et AMC / Commission
Concurrence
Le Tribunal annule partiellement des décisions d’inspection de la Commission faisant suite à des soupçons de pratiques anticoncurrentielles par plusieurs entreprises françaises du secteur de la distribution

Situations exist where a judicial document addressed to a person based abroad may be communicated to a lawyer representing that person in the forum State, instead of being served abroad on the addressee himself or herself. This usually applies to service occurring after the act instituting the proceedings has been served on the defendant in conformity with either the Service Regulation or the Hague Service Convention.

In fact, the described situation may also arise in the framework of proceedings brought by a foreign claimant against a defendant based in the forum. In this case, the defendant may reasonably presume that the lawyer signing the claim on behalf of the foreign litigant is eligible for receiving documents related to the case.

While the latter assumption would generally seem to be accurate, the admissibility of service on the lawyer  depends on the kind of documents that the latter is in fact allowed to receive on behalf of the client.

In 2019, the Greek Supreme Court issued an interesting ruling on the matter.

The Facts

After longstanding business collaboration between a Greek company and a Finnish telecommunications giant, a decade of confrontation began in 2010. In a series of proceedings, the parties fought through all court instances.

The first stage was a successful application for a freezing order filed by the Finnish company. An actio pauliana was filed in parallel by the same company, which was dismissed by the Athens Court of First Instance. The appeal lodged by the Finnish company, instead was successful. The losing party filed cassation against the Athens Court of Appeal ruling.

Almost at the same time, the Greek company lodged an application to reverse the freezing order, which was filed to the Supreme Court, in accordance with domestic Civil Procedure Rules (Article 698 of the Code of Civil Procedure).

As in previous stages of the litigation, the document was served on the lawyer representing the Finnish company. The latter did not appear in the hearing.

The Ruling

The Supreme Court ruled that the application was inadmissible because it was not served on a lawyer instructed by the foreign company to accept service on its behalf at a business address within the jurisdiction [Supreme Court Nr. 470/2019, unreported]. The reasoning of the court may be summarised as follows:

• Proper indirect service (in the case at hand, service to a lawyer representing a party), must be demonstrated by the party instructing the process server to deliver the document in this fashion.
• Pursuant to Greek law, a foreign party may appoint a representative ad litem in the following ways: by a declaration addressed to the clerks of the Athens Court of First Instance; by a specific clause in a contract; by appointing a lawyer as a representative ad litem pursuant to Article 96 of the Greek Code of Civil Procedure [i.e. orally before the court and prior to the hearing, or in written by means of a private power of attorney, upon the condition that the signature has been certified by a public authority or another attorney at law].
• Pursuant to Article 143(4) of the Code of Civil Procedure, all documents addressed to a foreign party must be served on the representative ad litem, if properly appointed, provided they fall within the set of cases covered by the power of attorney for the purpose of service.
• The Supreme Court found, however, that the application by the appellant to reverse the freezing order before the Court itself was not related to the set of cases for which the lawyer of the Finnish company was appointed. In particular, the lawyer’s appointment concerned the main dispute (which reached the Supreme Court), not the provisional measures (freezing order).
• Therefore, service of the application to reverse the freezing order to the lawyer who received the writ on behalf of the Finnish company was inadmissible.
• The above result is free of doubt, notwithstanding the same lawyer acted and received documents on behalf of the Finnish company in a number of occasions, such as: representation before the Athens Court of First Instance and Court of Appeal; representation before the court which issued the freezing order; filing on behalf of the Finnish company of an application for declaring the Greek company insolvent, and representing the same party before court in the bankruptcy proceedings.

Comments

Almost ten years after the start of litigation, and following a number of hearings where the Finnish company was represented by the same lawyer, the Supreme Court considered that the latter had no powers of representation in a case initiated by his own application, followed by his appearance before the court, and his instruction to serve the freezing order to the losing party.

The ruling of the Supreme Court rests upon a formalistic construction of the law; contradicts to the factual situation of the dispute; causes additional costs to the applicant with no apparent reason; endangers the right to judicial protection, given that service from Greece to Finland is not business as usual.

Last but not least, the Supreme Court did not utter a word about the actual applicable rules, i.e those in the Service Regulation. It failed to take into account Recital 8 of the Preamble and the pertinent case law of the CJEU. Finally, it missed the chance to address the matter to the European Court of Justice, by filing a preliminary request for an issue which continues to puzzle academia and practice alike.

The 2021 winter course of the Hague Academy of International Law will be held online from 11 to 29 January 2021.

One remarkable feature of the Academy’s winter courses is that they jointly cover topics belonging (or traditionally labelled as belonging) to both public and private international law.

The General Course will be delivered by Maurice Kamto under the title International Law and Normative Polycentrism.

Special courses include: Evidence in International Adjudication by Chester Brown, The Protection of Religious Cultural Property in Public and Private International Law by José Angelo Estrella Faria, and The Regulation of the Internet by Inger Österdahl.

The winter course’s full programme is available here.

Registration will open on 8 October 2020. Further information is available on the Academy website.

La Cour de cassation applique le principe selon lequel deux décisions sont inconciliables, au sens de l’article 34 du règlement Bruxelles I, si elles entrainent des conséquences juridiques qui s’excluent mutuellement.

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Brentwood Industries v. Guangdong Fa Anlong Machinery Equipment Co., Ltd?–A third way to enforce China-seated arbitral awards made by foreign arbitration institution

by Jingru Wang

Wuhan University Institute of International Law

Background

Nationality of an arbitral award marks the source of the legal validity of the award. Most countries generally divide the awards into domestic awards and foreign awards, and provide different requirements for their recognition and enforcement. It is a common practice to determine the nationality of the arbitral award by the seat of arbitration, which is the so-called “territorial theory”. However, Chinese law adopts the “institutional theory”, which raises controversy concerning the nationality of the arbitral award made by foreign arbitration institutions located in mainland. After long-term debate in practice, the Brentwood Case[1] finally confirmed that China-seated arbitral awards made by a foreign arbitration institution shall be regarded as Chinese foreign-related awards.

 

Fact and decision

Guangzhou Intermediate People’s Court (hereinafter, “the court”) delivered the judgment on Brentwood Industries v. Guangdong Fa Anlong Machinery Equipment Co., Ltd. on 6 Aug 2020[2]. After DUFERCOS Case[3], it is another landmark case that granted the enforcement of arbitral award made by a foreign arbitration institution in mainland China.

Brentwood Industries (hereinafter, “plaintiff”) concluded a sales contract with three Chinese companies (hereinafter, “defendants”) and agreed that “any dispute arising out of or in relation to the agreement shall be settled by amiable negotiation. If no agreement can be reached, each party shall refer their dispute to the International Commercial Chamber (hereinafter, “ICC”) for arbitration at the site of the project in accordance with international practice.” Due to the defendants’ delay in payment, theplaintiff submitted their disputes to the ICC for arbitration. Since the “project” mentioned in the arbitration clause was the “Guangzhou Liede Sewage Treatment Plant Phase IV Project” listed in Article 3 of the “Supplementary Agreement”, located in Guangzhou, China, the seat of arbitration shall be Guangzhou, China. After defendants refused to perform the award, which was in favor of plaintiff, plaintiff resorted to the court for recognition and enforcement.

Under current Chinese law, there are two possible ways to enforce the arbitral award made by a foreign arbitration institution in mainland China: (1) Classify such an award as a foreign award by the location of the arbitration institution under Art. 283 Civil Procedure Law of the People’s Republic of China (hereinafter, “Civil Procedure Law”), which provides that an award made by a foreign arbitration institution must be recognised and enforced by a people’s court pursuant to international treaties or the principle of reciprocity. (2) Classify such award as non-domestic award provided by the last sentence of Art. 1(1) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter, “New York Convention”), which provides that the convention shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.

Besides the aforementioned choices, the court provided a third way. It ruled that the arbitral award made by a foreign arbitration institution in mainland China shall be regarded as Chinese foreign-related arbitral award. If a party fails to perform the arbitral award, the other party may refer to Art. 273 of the Civil Procedure Law for recognition and enforcement. Under Art. 273 of the Civil Procedure Law, after an award has been made by an arbitration institution of the People’s Republic of China for foreign-related disputes, no party may file a lawsuit in a people’s court. If a party fails to perform the arbitral award, the other party may apply for enforcement to the intermediate people’s court of the place where the domicile of the person against whom an application is made is located or where the property is located.

 

Comment

Since Long Lide Case[4], Chinese court had affirmed the validity of arbitration agreements providing arbitration proceedings conducted by a foreign arbitration institution in mainland China. But in practice, arbitral awards based on these agreements still face the dilemma in recognition and enforcement. Because in China, different from international practice, the nationality of an arbitral award is determined by the location of the arbitration institution instead of the seat of arbitration, which is referred to as the “institutional theory”. Under Art. 283 Civil Procedure Law, to recognise and enforce an award made by a foreign arbitration institution by a people’s court, the people’s court shall handle the matter pursuant to international treaties concluded or acceded to by the People’s Republic of China or in accordance with the principle of reciprocity. It impliedly refers to the New York Convention. However, concerning the determination of the nationality of the arbitral award, the New York Convention adopts the “territorial theory”, which provides: “this Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought”. The “territorial theory” adopted by the New York Convention collides with the provision of the Civil Procedure Law. The confusion on application of law has not yet been dispelled.

In response to the conflict between domestic legislation and international convention, judicial practice has shown inclination to convert towards the “territorial theory”. For example, in DMT case[5], the nationality of an arbitral award made by ICC in Singapore was deemed Singapore rather than France. But in line with the “territorial theory”, arbitral awards made in mainland China shall therefore be deemed as Chinese awards. Under the “reciprocity reservation” filed by China, the New York convention shall only be applied to the recognition and enforcement of awards made in the territory of another contracting state. Hence, the New York Convention shall not be applied to China-seated arbitral awards.

As early as DUFERCOS Case, the court defined the arbitral award made by the ICC in Beijing as non-domestic and therefore enforced it under the New York Convention. However, it failed to clarify what exactly constitutes a non-domestic award and how to interpret the reciprocity reservation. Originally, both non-domestic awards and reciprocity reservation were methods to encourage the acceptance and enlarge the application of the New York Convention. Conversely, their coexistence has impaired the effect of the New York Convention.

From this perspective, the Guangzhou Intermediate Court did find another way out by completely avoiding such conflict. The current Chinese law divides arbitral awards into: (1)domestic awards; (2)Chinese foreign-related awards; (3)foreign awards. Compared with domestic awards, Chinese foreign-related awards take into account the particularity of foreign-related factors, and the review standards for recognition and enforcement are less strict, subject to procedural review only. Compared with foreign awards, Chinese foreign-related awards can be set aside by Chinese court, which makes them under more restrictive supervision. That is reason why some argued that China-seated arbitral awards will be subject to stricter supervision by Chinese court because there are more diversified judicial review channels.[6] Indeed, arbitral awards made by Chinese foreign-related arbitration institution are under triple supervision carried out by the seat of arbitration, the place of recognition and enforcement, and China. But it should be noted that when it comes to China-seated arbitral awards made by foreign arbitration institution, China, as the seat of arbitration, has the inherent power to review the arbitral award and set it aside. Moreover, according to Art. 70 and Art. 71 of the Chinese Arbitration Law, reasons for setting Chinese foreign-related arbitral awards aside do not exceed the scope of reasons for refusing recognition and enforcement of these awards. Therefore, they are not imposed with any additional burden by being regarded as Chinese foreign-related arbitral awards. Concerning the recognition and enforcement of Chinese foreign-related award, Art. 274 of the Civil Procedure Law provided a more tolerant standard than the New York Convention. Compared with Art. 5 of the New York Convention, the legal capacity of the parties to the agreement and the final effect of the award are no longer obstacles to recognition and enforcement. Since arbitral awards made by foreign arbitration institutions are regarded as Chinese foreign-related award, they are treated more favorably than foreign awards concerning recognition and enforcement. Left the legal problems behind, it showed China’s effort to support the arbitration within the current legislative framework.

However, Chinese foreign-related arbitral award itself is a distorting product of the conflicts between “institutional theory” and “territorial theory”. Application of Art. 273 of the Civil Procedure Law can only temporarily ease the tension. “Institutional theory” stipulated by Chinese law is an issue left over from history. “Foreign-related arbitration institutions” historically referred to the China International Economic and Trade Arbitration Commission (hereinafter referred to as CIETAC) and China Maritime Arbitration Commission (hereinafter referred to as CMAC). They were established respectively in 1954[7] and 1958[8]. At that time, only CIETAC and CMAC can accept foreign-related arbitration cases, while domestic arbitration institutions can only accept domestic arbitration cases. Accordingly, arbitral awards made by different arbitration institutions were divided into Chinese foreign-related arbitral awards and domestic arbitral awards. However, nowadays, such restrictions are extinct in practice. In 1996, the State Council of People’s Republic of China issued a document stating that: “The main responsibility of the newly established arbitration institution is to accept domestic arbitration cases; if the parties to a foreign-related arbitration case voluntarily choose the newly established arbitration institution for arbitration, the newly established arbitration commission can accept the case.”[9] In fact, there is no longer division of foreign-related arbitration institution and domestic arbitration institution. Hence, the “institutional theory” can no longer meet the needs of practice. Under the “territorial theory”, the arbitral awards are divided into domestic awards, non-domestic awards and foreign awards. We may wonder whether China would revoke the reciprocity reservation, the obstacle in recognition and enforcement of non-domestic arbitral awards, in the future. Would China-seated arbitral awards made by foreign arbitration institution be defined as non-domestic awards by then? To get out of the dilemma once for all, the responsibility remains on the shoulder of legislative body.

 

[1] https://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=bded4e3c31b94ae8b42fac2500a68cc4

[2]  https://wenshu.court.gov.cn/website/wenshu/181107ANFZ0BXSK4/index.html?docId=bded4e3c31b94ae8b42fac2500a68cc4

[3] https://www.pkulaw.com/specialtopic/61ffaac8076694efc8cef2ae6914b056bdfb.html

[4] https://www.pkulaw.com/chl/233828.html

[5] http://www.pkulaw.cn/fulltext_form.aspx/pay/fulltext_form.aspx?Db=chl&Gid=bd44ff4e02d033d0bdfb

[6]Good News or Bad News? Arbitral Awards Rendered in China by Foreign Arbitral Institutions Being Regarded as Chinese Awards available at: https://www.chinajusticeobserver.com/a/good-news-or-bad-news-arbitral-awards-rendered-in-china-by-foreign-arbitral-institutions-being-regarded-as-chinese-awards?from=timeline

[7] http://www.cietac.org/index.php?m=Page&a=index&id=2

[8] http://www.cmac.org.cn/%E6%B5%B7%E4%BB%B2%E7%AE%80%E4%BB%8B

[9] http://cicc.court.gov.cn/html/1/218/62/83/440.html

 

 

 

As announced in a previous post, the UK has (again) joined the 2005 Choice of Court Convention and the 2007 Child Support Convention. On 2 October 2020, the Depositary has officially notified of the new UK instrument of accession to the Choice of Court Convention and of the new UK instrument of ratification of the Child Support Convention, including the new UK declarations and reservations. And yes both Conventions have been extended to Gibraltar from the outset.

As you may remember, the previous UK instruments of accession to and ratification of the above-mentioned Conventions were withdrawn because the United Kingdom and the European Union signed, ratified and approved a Withdrawal Agreement. Such an agreement entered into force on 1 February 2020, and included a transition period that started on the date the Withdrawal Agreement entered into force and which will end on 31 December 2020. In accordance with the Withdrawal Agreement, during the transition period, European Union law, including the HCCH Conventions, will continue to be applicable to and in the United Kingdom.

While from a public international law standpoint the UK has joined the HCCH Conventions above-mentioned three times (by EU approval, by accession/ratification – instruments that were later withdrawn, and by accession/ratification in September 2020), the view of the UK is that the HCCH Conventions have applied seamlessly since October 2015 regarding the HCCH Choice of Court Convention and since August 2014 regarding the HCCH Child Support Convention. In this regard, the UK declares:

With respect to the Choice of Court Convention: “Whilst acknowledging that the Instrument of Accession takes effect at 00:00 CET on 1 January 2021, the United Kingdom considers that the 2005 Hague Convention entered into force for the United Kingdom on 1 October 2015 and that the United Kingdom is a Contracting State without interruption from that date.”

With regard to the Child Support Convention: “Whilst acknowledging that the Instrument of Ratification takes effect at 00:00 CET on 1 January 2021, the United Kingdom considers that the 2007 Hague Convention entered into force for the United Kingdom on 1 August 2014 and that the United Kingdom is a Contracting State without interruption from that date.”

Before referring to the UK declarations and reservations, perhaps our readers may find it interesting to get a recap of the unorthodox process by which the UK joined the two HCCH Conventions.

• On 1 October 2015, the UK was bound by the Choice of Court Convention by virtue of its membership of the European Union which approved the Convention on behalf of its Member States;
• On 1 August 2014, the UK was bound by the Child Support Convention by virtue of its membership of the European Union which approved the Convention on behalf of its Member States;
• On 28 December 2018, the UK deposited an instrument of accession to the Choice of Court Convention and an instrument of ratification of the Child Support Convention in the event the Withdrawal Agreement would not be ratified and approved by the UK and the European Union
• On several occasions, the UK suspended the legal effect of the accession/ratification, stating that as the European Council agreed a further extension of the period for withdrawal of the United Kingdom from the European Union under Article 50(3) of the Treaty on European Union. During the Extension Period, the United Kingdom remains a Member State of the European Union. As a Member State, European Union law, including the Agreement, will remain applicable to and in the United Kingdom. See our previous posts part I, part III;
• The UK extended its accession/ratification to Gibraltar in the event the Withdrawal Agreement would not be ratified and approved by the UK and the European Union. See our previous post here;
• The Withdrawal Agreement between the UK and the European Union was signed and approved and entered into force on 1 February 2020:
• On 31 January 2020, the UK withdrew its instrument of accession to the Choice of Court Convention and its instrument of ratification of the Child Support Convention (incl. declarations and reservations and extension to Gibraltar). See our previous post here;
• On 28 September 2020, the UK deposited a new instrument of accession to the Choice of Court Convention and a new instrument of ratification of the Child Support Convention, incl. declarations and reservations

While this process may seem to be undesirable from a legal standpoint (or just a legal nightmare!), the UK has acted in this way out of an abundance of caution and because of the lack of legal certainty surrounding Brexit.

With regard to the UK declarations, and in addition to the extension to Gibraltar, they seem to be exactly the same as those submitted previously, perhaps with some minor improvements.

The Depositary’s notifications are available here for the Child Support Convention and here for the Choice of Court Convention.

Fortunately, the process of joining the above-mentioned Conventions by the UK has finally come to an end.

Pourvoi c/ Cour d'appel de Cayenne, 15 juillet 2020