International Commercial Litigation PDF

Preview

Summary

International Commercial Litigation notes...

Description

International Commercial Litigation

TERM I WEEK 1 COURSE INTRODUCTION

1. Clarkson & Hill 2. Cheshire, North and Fawcet Lecture handouts -> for main cases and what we're focusing on *Hartley - Intl Comm Litigation (cases&materials) *Rogerson - Collier's Conflict of Laws - more like an introduction

Main topics: JURISDICTION -> Brussels I and common law -> parallel proceedings -> stays of proceedings -> anti-suit injunctions -> freezing injunction/freezing order (relating to enforcement), a way of protecting the jurisdiction of the court -> choice of law - what laws apply in cross-border disputes What will the exam look like? 3 questions out of 8. A. problem question (applying the law to a set of facts); B. essay question – we have to choose at least 1 of A and at least 1 of B Past papers -> they are online on moodle 1

Formative essay -> a practice-exam answer - 1 each term - choice of 2/3 topics (past exam questions usually) - (try to write it in 1 h, after you have read the documents provided on Moodle) – then e-mail them to the course tutor

Main centres for dispute resolution (in courts): *London *Singapore *NY *Paris Esentially, there are 3 questions that are asked during the process: 1) Which court can hear the dispute? (jurisdiction) 2) What law will the court apply? - the most counterintuitive part - because courts don't always apply their own law (just for private law - but there are areas which are blurry - eg competition law - is it public or private? the EU view – it is public; the US view - it is more like private, tort) -> there are also limitations - a court will never apply a foreign court's procedural law and will never apply law that is contrary to the public policy of the state (conflict of laws) 3) Can it be enforced/recognised? How? ( enforcement & recognition)

When discussing JURISDICTION, we will look at both EU rules and common law rules -> European rules regulate the internal market; the boundary between the two regimes (EU, common law) is quite difficult to manage sometimes The EU codification of private international law has major implications in cross-border activities. The Lugano Convention applies in the EFTA (European Free Trade Area) -> so it extands the European regulation to the FTA, very simmilar to Bruselles Regulation, but not the same - it might be another half-solution for England (jurisdiction) after Brexit. In the context of choice of law, the UK will implement the EU rules internally as it stands and continue to apply them after Brexit.

2

JURISDICTION - which jurisdictional regime applies? I. The basis for a court's jurisdiction : 1) personal jurisdiction 2) in rem jurisdiction [location of property]/[suing the ship] 3)subject mater jurisdiction - eg a tort that happened in England, the contrtact is supposed to be performed in England etc 4) consensual jurisdiction - 2 types: submission and jurisdiction clauses in contracts - in EU it does not require any connection with the court, it may be for eg for the sake of neutrality 5) additional party jurisdiction - not based on connections between all those above, but on the efficeny of complex litigation - eg a claim against 2 different defendants, one English and one American - and the things happened in NY - you can sue the English party in England and normally you could not sue the American party in England - but it's convenient for the cases to be heard together – so you can also sue the American party in the England courts II. Will jurisdiction be exercised? - there CAN be a discretion( (forum non conveniens or forum conveniens). Under the common law rules, jurisdiction was almost always discretional, but EU rules have had an impact on this III. What about negative declarations? - eg a tort claim, what you would expect is the victim suing the tort feasor; the mirror image of that claim is an action for a negative declaration - the alleged tort feasor can ask the court to declare that they are not liable (cum ar fi o cerere reconventionala) - important reason to do this: it affects the rules on jurisdiction because the claimant will be the defendant and different courts will have jurisdiction - a negative claim is just as valid as a positive claim - each party often has different options on where proceedings might be commenced -> parallel proceedings IV. Parallel proceedings + anti-suit injunctions - protecting jurisdiction and preserving assets - the asset-freezing order (is the judgment going to be effective?)

3

WEEK 2

Applicable Law Questions For choice of law rules in the EU we have the Regulations Rome I and II But which choice of law rules do we apply to the choice of law rules? This is a question of charachterization -> Courts have an international conception of contract/tort - they do not ask 'is this an English law contract?', they ask 'is this a contract in the international sense?' The next question is: What law governs this agreement? IF it is the English law - the claim will not succeed if you do not have consideration (because it is not a contract in the English law if it does not have consideration), but it may succeed if the law governing the contract is French law – because consideration is not a requirement for contract formation in French law Regarding the proof of foreign law - proof of law is a question of FACT in the English law. Distinction between substance and procedure that must be made -> a court will always apply its own procedural rules - lex fori – it is difficult in some situations eg quantification of damages because in English law it is a procedural law problem and in the European contract law it is a substantive problem Regarding the mandatory rules and public policy -> the English courts will not apply rules that are contrary to public policy; eg mandatory rules: consumer protection. Jurisdiction involving parties from EU Member States is regulated by Brussels I - makes it easy to enforce judgments because of the 'the principle of mutual trust' - it is beneficial particularly to the English courts. Jurisdiction involving parties from non-EU countries is regulated by common law rules, which are a bit more restrictive in relation to enforcement of foreign judgments. The main focus in EU: certainty and predictability for businesses across EU. Forum-shopping is an important factor – there are differences in the applicable law and one of the objectives is decisional harmony, in order to reduce incentives for forum shopping. In the English law there is no concept of abuse of law/right (to be able to limit through this concept the abusive forum-shopping).

4

Brussels I Regulation

1968 Brussels Convention -> 2001 Brussels Regulation -> 2012 & 2015 entered into force - Brussels Recast

When do these rules (Brussels Reg.) apply?

1. In civil & commercial claims against a defendant domiciled in a Member State [DOMICILE of the DEFENDANT] 2. Disputes that have strong subject-mater connections with a Member State - eg title to land in a Member State, EVEN IF neither party is domiciled in a MS [SUBJECT-MATTER connection] 3. Jurisidiction agreement in favour of a court of a Member State, REGARDLESS of the domicile of the parties [JURISDICTION AGREEMENTS]

Claims against a non-EU domiciled party, with no connection and with no jurisdiction agreement -> we will apply the common law rules, the so-called „residual rules”, because EU rules trump national law rules. The European Commission had a proposal in which it tried to create a legal environment in which there will be no more need for national rules on jurisdiction - it was withdrawn - because it was met with opposition. The are 2 major objectives of the EU rules: harmonization AND enforcement & recognition of foreign judgments ('free movement of judgments'). The rules should be certain and predictable – because companies want to know their litigational risk. The rules largely focus on the interest of the defendants (what is the risk of being sued in other states?). Harmonization also means that the provisions of the Regulation have to be interpreted autonomously – to have an European interpretation, because you can't rely on the national conception of various terms (->it would result in contradicting judgments).

In LTU v Eurocontrol -> there was given an autonomous meaning to 'civil and commercial maters' = does not cover a public authority acting in its public capacity In Sonntag -> there was a state-school teacher acting in the course of her duties during a school trip – one pupil was injured in the school trip - but the claim did not arise in relation to exercising public

5

powers - the teacher was acting in the same way in which a private teacher would act - the court tried to draw a distinction between acting in a public capacity and acting in a private capacity In QRS v Frandsen - claiming for unpaid tax involves an exercise of public power, the claimant was suing for conspiracy to defraud - the CJUE claimed it is a civil tort - they were not claiming any sort of public powers; the CJUE takes a broad approach to what is civil and commercial - the claim was NOT for unapid tax, it was for damages resulting from conspiracy In Lechouritou v Germany - a Greek national – sued for compensation against German armed forces for occupation of Greece in the SWW - the court said it was NOT a civil and commercial mater – these claims arose out of exercise of public acts of German armed forces In Her Majesty's Revenue & Customs v Sunico ApS uk tax authorities [...] The CJEU tends to think that usually the Regulation applies. If some incidental issue appears in the course of an arbitration (appointment of arbitrtators ) and you need the courts - Brussels I does not apply, the UK Arbitration Act applies. You have an arbitration agreement issue - one party believes it is valid and the other one holds that it is NOT valid -> look at the West Tankers decision! The concept of 'DOMICILE' – Art 62 Brussels Reg. For natural persons – we do NOT have an autonomous definition. Article 62 1. In order to determine whether a party is domiciled in the Member State whose courts are seised of a matter, the court shall apply its internal law. There are situations in which a persons has 2 member states domiciles. Nationality has no role to play under the Brussels I. In Haji-Ioannu v Frangos – there was a Greek shipping magnate, his daughter married a guy and the magnate gave him a lot of money to establish a business, the billionaire father-in-law sued the son-inlaw because he then said it was not a gift, it was a loan How do we establish if there is domicile in the UK? We look at the Civil Jurisdiction and Judgments Order 2001 : residence + a substantial connection (presumed to exist if the period of residence is greater than 3 months, but it is rebutable). In Petrotrade Inc. v Smith - A UK national living in Switzerland visiting UK for a business trip was subject to criminal proceedings in the UK, and they took his passport - at the end of the criminal proceedings, related civil proceedings were brought againts him: Petrotrade said they can sue him in the UK for these civil proceedings because he had lived in the UK for more than past 3 months (while his criminal trial was pending)- the court said that domicile was not established in this way as he was in the UK because of the criminal proceedings, having no choice – so there must be an intentional side

6

In OJSC Oil Co Yugraneft v Abramovich - regular visits to London did not establish domicile For the concept of legal persons - we have an AUTONOMOUS definition in the Art 63 !!! - a legal person can be domiciled in 3 different member states --- for natural persons we have NO autonomous definition Article 63 1. For the purposes of this Regulation, a company or other legal person or association of natural or legal persons is domiciled at the place where it has its: (a) statutory seat; (b) central administration; or (c) principal place of business. It is a qualitative test, not purely quantitative test for the 'principal place of business' – see CJEU in King v Crown Energy Trading In Ministry Defence of Iran v Faz Aviation - Faz Aviation defrauded the Ministry Defence - the person who defrauded it frequently visited UK for business and the company was Cypriot - so where was their principal place of business? was it London because they came in London very often? - but the person running the company disappeared during the process - and the defendant actually had no activity at that time - the place of business is meant to be the place of business at the moment when the proceedings are commenced - so it is possible to have NO place of business - their domicile was JUST IN Cyprus now (their central administration) Young - the concept of central administration - what level of administration do you identify as central adm - head office vs board of directors in different states - it should be the place where the company takes its entrepreneurial decisions -> the highest level of management (CEO, other senoir members)

WEEK 3

7

In the Brussels Reg there are exclusive and non-exclusive jurisdictional rules -> exclusive : only one court will have jurisdiction; non-exclusive: more than one court may have jurisdiction.

I.

EXCLUSIVE GROUNDS OF JURISDICTION

The order of the Regulation heirarchy: 1. art 24 EXCLUSIVE SUBJECT-MATTER JURISDICTION 2. art 26 3. art 25

1) ARTICLE 24 Article 24 The following courts of a Member State shall have exclusive jurisdiction, regardless of the domicile of the parties: (1) in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Member State in which the property is situated. However, in proceedings which have as their object tenancies of immovable property concluded for temporary private use for a maximum period of six consecutive months, the courts of the Member State in which the defendant is domiciled shall also have jurisdiction, provided that the tenant is a natural person and that the landlord and the tenant are domiciled in the same Member State; (2) in proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat. In order to determine that seat, the court shall apply its rules of private international law; (3) in proceedings which have as their object the validity of entries in public registers, the courts of the Member State in which the register is kept; (4) in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, irrespective of whether the issue is raised by way of an action or as a defence, the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of an instrument of the Union or an international convention deemed to have taken place. Without prejudice to the jurisdiction of 8

the European Patent Office under the Convention on the Grant of European Patents, signed at Munich on 5 October 1973, the courts of each Member State shall have exclusive jurisdiction in proceedings concerned with the registration or validity of any European patent granted for that Member State; (5) in proceedings concerned with the enforcement of judgments, the courts of the Member State in which the judgment has been or is to be enforced. Art 24 - the subject-mater has such a strong connection to the courts of the Member State, that this court has exclsuive jurisdiction REGARDLESS OF THE DOMICILE OF THE PARTIES (eg you may have a party in NY and one in Singapore) 2009 – in Choudhary v Bhatter the court said it is not an exception and should only be applied when you deal with MS residents ---> WRONG; the approach accepted by most authorities is that this provision applies regardless of domicile, we do not have a decision of ECJ which confirms that yet

24.1 - dispute concerning immovable property -> see the case of Rosler v Rothwinkel - about the short term property rental, two Germans signed the contract, the property was situated in Italy - the ECJ said that the rule has to be applied strictly – when the case is about tenancy in an immovable property - if you sue for the breach of the tenancy for damage to the property itsef, you have to go to the courts at the place of the property (in this case, Italy – lex rei sitae), but if you want to sue for damage to the furniture (movable property) you should sue in the German courts --- BUT KEEP IN MIND that the 24(1) was amended - as it is now now, the claimant can choose between the place of the property or the place of common domicile of the parties (the exception was introduced because of the Rosler case and it is a very narrow exception) - you have to analyse jurisdiction in relation to each defandant separately!!

24.2 - internal management of the company in company law issues – the jurisdiction will be held by the courts of the seat of the company - there's not a similar definition to the one in 63(2) - we have a similar one in the Civil Jurisdiction and Judgments Order 2001, s.10 - incorporated/central management or control is exercised in the UK In Speed Investments - shareholders' agreement had a choice of court in it in favour of the Swiss Courts, the company was English - was the proceeding covered by 24 or by the jurisdiction agreement? The court has exclusive jurisdiction under 24 – so the agreement could not operate. BUT the concern is the following : what happens if the defendant raises an issue of corporate law as a defence, for eg in a contract dispute? For example, he argues that the contract is non-existent because the person who entered into the contract on behalf of one of the parties did not have authority to do so - what rules shall apply? See Hassett v South Eastern Health Board case. The court says that this type of case is not covered by art. 24.2 - it is not really about company law Similarly - in BVG v JPMorgan ( a swap agreement which had an exclusive jurisidiction agreement ) the German company refused to pay and JP Morgan sued in English courts on the basis of the agreement - the German company said that the director has exceeded his powers in entering the 9

contract and that it is a company law problem for the German courts to try - the English court rejected the claim made by the German party because if a question of corporate law airises as an INCIDENTAL QUESTION in a dispute which is essentially about contract law, the court that has jurisdiction over the contract dispute will also have jurisdiction to hear the corporate law issue.

24.3 - public registers – Jurisdiction will be held by the courts of the state where the public register is held

24.4 - IP disputes - the registration or validity of patents - ofc copyright is NOT covered (because is not about registration)

What happens if the issue of validity is raised as a defence? Do we have the same solution as for 24.2? NO! In the case of GAT - ECJ : so strongly connected with one MS, that only the courts of that MS should be able to hear the dispute - even if they arise incidentally!!! In the Recast - 'irrespective of whether the issue is raised by way of an action or as a defence' because of the GAT decision

2) ARTICLE 26 Article 26 1. Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 24. 2. In matters referred to in Sections 3, 4 or 5 where the policyholder, the insured, a beneficiary of the insurance contract, the injur...