The decision on appeal of the Full Court of the Federal Court in Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International NV (2007) 157 FCR 558; [2007] FCAFC 43 has now been reported in the authorised Federal Court Reports (available online to subscribers to Lawbook).

The case arose out of a claim by Spirits and a related company in relation to the ownership of certain registered trademarks, including marks incorporating the words ‘Stolichnaya’ and ‘Moskovskaya’.  FKP, as the second respondent to the claim, filed a cross-claim against Spirits and the first respondent seeking the transfer or cancellation of registration of the disputed trademarks.  (Related proceedings have been brought in other countries.)  FKP is an economic entity existing under the laws of the Russian Federation.  Another such entity, Federal Public Unitary Enterprise External Economic Union Sojuzplodoimport (FGUP VO), was joined as a second cross-claimant.

FKP and FGUP alleged that, prior to 1992, the disputed trade marks were owned by an entity existing under the laws of the former Soviet Union and that, following the dissolution of the former Soviet Union in 1992, the marks were wrongfully appropriated by certain individuals and ultimately came to be held by Spirits.   Spirits sought discovery of certain documents from the Russian Federation pursuant to the provision of the Federal Court Rules permitting the Court in its discretion to order discovery from non-parties.  The trial judge concluded that the Russian Federation was the ‘real’ party to the cross-claim brought by FKP and FGUP, and ordered that it should make the discovery sought and that, unless it did so, the cross-claim would be stayed.

The Full Court set aside the trial judge’s orders.  The Court noted that it had been conceded (and the Court apparently agreed with the view) that the trial judge had power to make an order for discovery against a non-party foreign state, even if the foreign state was not the ‘real’ party to the litigation.  However, the Court said that the trial judge did not ‘act with the caution that the principled exercise of the discretion requires where there is an intrusion upon the sovereignty of a foreign state.’  Even though the intrusion upon the sovereignty of the Russian Federation was only indirect ‘and possibly only as a matter of perception’ (in the sense that the only sanction for non-compliance was a stay of the cross-claim), ‘comity dictated that caution be exercised before making the order’.   The Court concluded that the Russian Federation should first be given the opportunity to provide the discovery sought voluntarily and in cooperation with FKP and FGUP.

While the long-term practical effect of Sinochem on the American doctrine of forum non conveniens remains to be seen, the Federal Courts of Appeals are beginning to shape the landscape in the first six months since the Court’s decision.

The most significant forum non conveniens decision since Sinochem was recently handed-down by the Seventh Circuit. In Gullone v. Bayer Corp., 484 F.3d 951 (7th Cir. 2007), a group of U.K.-based plaintiffs were among those that sued defendant drug companies for allegedly being exposed to the HIV or Hepatitis C virus during blood transfusions. Judge Diane Wood, writing for a unanimous panel, reviewed the current state of the forum non conveniens doctrine in U.S. courts, and affirmed a district court’s dismissal of U.K plaintiffs on forum non conveneins grounds in favor of an English forum:

Although we find it a close call, largely because the district court placed surprisingly little weight on the interest of . . . the original forum in this litigation and it may have overestimated the administrative difficulties in keeping the case in the United States, we conclude in the end that the court acted within its discretion when it dismissed the case.

While Judge Wood engaged a scoping review of English case law regarding Plaintiff’s causes of action, in particular the recent decision of the House of Lords in Fairchild v. Glenhaven Funeral Servs., Ltd., (2003) 1 A.C. 32 (H.L.), the decision tends to presage that the ultimate battleground for forum non conveniens will rest in the U.S. district courts. Sinochem’s strong authorization of trial-court discretion over this fact-based inquiry will continue to scare appellate courts from more intense review. The Seventh Circuit website has a link to the oral argument in Gullone.

For sure, Gullone is not the only FNC dismissal in favor of a foreign forum in the wake of Sinochem; other circuits have similarly affirmed such dismissals, though in unpublished decisions. See, e.g., Gilstrap v. Radianz, Ltd., No. 06-3984, 2007 U.S. App. LEXIS 13686 (June 11, 2007) (dismissing a tortious interference claim in favor of an English forum).

Of the most interesting unpublished decisions applying the actual holding in Sinochem, the Third Circuit has ironically moved to the forefront. In Davis Int’l, LLC v. New Start Group Corp., Nos-06-2294/2408, U.S. App. LEXIS 12032 (3rd Cir., May 23, 2007), a group of Russian defendants were sued in the District Court for the District of Delaware, and sought to dismiss the claims based on, inter alia, subject-matter jurisdiction, personal jurisdiction, and direct estoppel of a prior federal decision. The latter motion was based on a 2000 decision by the Southern District of New York that dismissed indentical claims against the Defendants on forum non conveniens grounds in favor of a Russian forum. The District of Delaware dismissed the new claims “by reason of the estoppel effect of another court’s forum non conveniens decision, without first deciding [Plaintiff’s] subject-matter and personal jurisdiction motions.” The Third Circuit (per judge Debevoise, sitting by designation) affirmed this course “in light of” Sinochem . Davis thus represents a slight expansion of Sinochem; not only are forum non conveniens dismissals proper before jurisdiction is established, but so are estoppel dismissals based on a prior forum non conveniens determination

Some readers of this site may be interested in the following:

 Vaughan Black, “The Hague Choice of Court Convention” (2006) 6 Canadian International Lawyer 181-195 (an account of the proposed treaty’s principal provisions and discussion of differences with existing Canadian law)

 Elizabeth Edinger, “New British Columbia Legislation: The Court Jurisdiction and Proceedings Transfer Act; The Enforcement of Canadian Judgments and Decrees Act” (2006) 39 U.B.C.L. Rev. 407-421 (review of the main provisions of two provincal statutes that codify, but also change, the law on jurisdiction and on recognition and enforcement)

Richard Frimpong Oppong, “Enforcing Foreign Non-Money Judgments: An Examination of Some Recent Developments in Canada and Beyond” (2006) 39 U.B.C.L. Rev. 257-286 (focuses on the Court of Appeal decision in Pro Swing but also advances general arguments and comparative analysis)

Janet Walker, “Castillo v. Castillo: Closing the Barn Door” (2006) 43 C.B.L.J. 487-500 (analysis of Supreme Court of Canada decision on choice of law and limitation periods)

I cannot provide links to these, but at least some should be available through various on-line subscription sites.

A recent judgment of the Supreme Court of South Australia provides a useful summary of the Australian common law authorities about when the enforcement of a foreign judgment can be set aside. 

The judge concluded: 

a foreign judgment is only binding and conclusive so long as it stands.  A corollary of this principle is that where a judgment is made entirely on the basis of a foreign judgment, and the foreign judgment is later overturned and set aside, good reason exists to set aside the judgment that relied on it.

Benefit Strategies Group Inc v Prider [2007] SASC 250 (4 July 2007)

The Council, in the meeting held by the “Environment” configuration in Luxembourg on 28 June 2007, has adopted the Rome II joint text approved by the Conciliation Committee, with the Latvian and Estonian delegations voting against (see the concerns regarding the conflict rule on industrial action – art. 9 – that these Member States had expressed in a joint declaration issued in the Council’s vote on the Common position).

An addendum to the minutes of the Council’s meeting contains three statements by the Commission on the studies regarding the controversial issues that were set aside in the conciliation (violations of privacy and rights relating to personality, level of compensation awarded to victims of road traffic accidents, treatment of foreign law), to be submitted in the frame of the review clause of Art. 30. These statements will be published in the Official Journal with the legislative act.

The Parliament’s vote on the joint text, that will formally end the codecision procedure by adopting the Rome II Regulation, is scheduled on 9 July 2007. With a view to the final vote, Rapporteur Diana Wallis has prepared a Report of the EP Delegation to the Conciliation Committee, summarizing the legislative procedure and presenting to the Parliament’s plenary the agreement reached with the Council.

Here’s a substantial part of the EP’s Report (for further details on the previous stages of the procedure, see the Rome II section of our site):

The codecision and conciliation procedure

The Commission submitted on 22 July 2003 a proposal for a Regulation on the Law Applicable on Non-Contractual Obligations. Following Parliament’s first reading on 6 July 2005 (54 amendments adopted) the Council adopted its common position on 25 September 2006. Parliament then concluded its second reading on 18 January 2007 adopting 19 amendments to the Council’s common position. The main issues at stake were: violation of personality rights (“defamation”); road traffic accidents; unfair competition; the definition of “environmental damage” the relationship with other Community instruments; the treatment of foreign law; the review clause.

The Council informed with letter from 19 April 2007 that it could not accept all of Parliament’s amendments and that conciliation was necessary. Conciliation was then formally opened on 15 May 2007. […]

Three trilogues held between 6 March and 24 April 2007 […], followed by subsequent meetings of the EP Delegation […], lead to provisional agreement on 5 amendments. The Conciliation Committee met then in the evening of 15 May 2007 in the European Parliament with a view to formally opening the conciliation procedure and possibly reaching agreement on the outstanding issues. After several hours of deliberations an overall agreement was reached at midnight. It was unanimously confirmed by the EP Delegation with 17 votes in favour.

The main points of the agreement reached can be summarised as follows:

Road traffic accidents

[…] One of the EP Delegation’s main priorities was […] to ensure that the individual victim’s actual circumstances are taken into consideration by the court seized when deciding on the level of the compensation to be awarded.

For the short term, the EP Delegation succeeded in including a reference in the recitals of the Regulation whereby judges when quantifying personal injuries will take account of all relevant actual circumstances of the specific victim, including in particular the actual losses and cost of after-care and medical attention.

For the long term, the EP Delegation succeeded in securing a public commitment by the Commission for a detailed study on all options, including insurance aspects, on the specific problems faced by victims of cross-border road traffic accidents. The study will be presented by 2008 the latest and would pave the way for a Green Paper. […]

Unfair competition

On the EP Delegation’s insistence the Council agreed to the Commission’s proposal for a specific rule on unfair competition that respects the principle of the application of one single national law (an important point for judges and lawyers) while at the same time limiting to a large extent the danger of “forum shopping” (the possibility for plaintiffs to raise their law suit in the Member State of their choice).

Environmental damage

The EP Delegation succeeded in obtaining a definition on “environmental damage” – a term used but not defined in the common position. The definition is in line with other EU instruments, such as the Directive on Environmental Liability.

Violation of personal rights (“defamation”)

In view of an overall compromise the EP Delegation had to withdraw its amendments on the inclusion of rules on the violation of personal rights, particularly defamation in the press. Though Parliament managed to overcome the national differences and various conflicts of interests and to adopt its amendments by a large majority, the Member States were unable until the very end to agree on a common approach. The issue however is considered as a “left-over”: as part of the review of the Regulation the Commission will draw up a study by 2008 on the situation in this specific field. The findings of the study can serve as a basis for the adoption of relevant rules at a later stage.

Relationship with other Community instruments

On the controversial issue of the relationship between the “Rome II” Regulation and other provisions of Community law it was agreed that the application of provisions of the applicable law designated by the rules of this Regulation should not restrict the free movement of goods and services as regulated by Community instruments such as the e-Commerce Directive.

Treatment of foreign law

The issue of the treatment of foreign law by national courts – especially how often and how well national courts apply the law of another country – is also settled on the basis of a detailed study to be carried out by the Commission as part of its report on the application of the Regulation. […]

Review clause

On the insistence of the EP Delegation the review clause was split into a special section with a shorter timetable by 2008 as regards violation of privacy rights (“defamation”) and a general section with the standard timetable whereby the Commission will present a report on the application of the Regulation four years after its entry into force. As part of the general review clause the Commission will also carry out a study on the treatment and application of foreign law by the courts of the Member States and a second study on the effects of Article 28 of the Regulation (“Relationship with existing international conventions”) with regard to the Hague Convention of 4 May 1971 on the law applicable to traffic accidents.

[Update: following a comment by M. Winkler on a previous item on Rome II, Mrs Wallis has posted on our site a reply providing some clarifications on the Parliament’s approach to the conflict rule on environmental damage. Any further comment, on this or other provisions of the Regulation, is welcome]