By Tasha Joseph

The confusion between ‘place’, ‘seat’ and ‘venue’ in International Commercial Arbitration cases was put to rest in the recent judgment of the Supreme Court in Union of India v. Hardy Explorations And Production(India) Inc.1. The decision was given by a three-judge bench which unanimously passed the decision that ‘seat’, ‘venue’ and ‘place’ did not signify the same meaning and could not be used interchangeably. Instead, the three terms denote different meanings and in the absence of express provision for any of the same, there were tests to be met in order to determine the actual ‘place’, ‘venue’ and ‘seat’.

In this case, Kuala Lumpur was selected as the ‘venue’ for the arbitration proceedings in the agreement, with the application of the UNCITRAL model for the same. Upon the Union of India challenging the award under section 342 in the Delhi High Court, the Court had to determine whether Kuala Lumpur was the ‘seat’ and hence if the action in the Indian court was unmaintainable. The Delhi High Court held that the courts did not have jurisdiction and thus refrained from looking into the merits of the case. The matter then went to a division bench and finally a three-judge bench of the Supreme Court.

The court went into the previous decisions such as Sumitomo Heavy Industries Ltd. v. ONGC & Ors. 3, Bhatia International v. Bulk Trading S.A. 4and BALCO case5 to understand the principles that need to be applied for deciding the seat of arbitral proceedings.

The Court observed that the determination of the seat has to be contextually done. Only when the ‘place’ was agreed upon, in the agreement, between the parties, ‘place’ would be equivalent to the seat. Positive action is needed and for ‘place’ to be treated as ‘seat’, a condition precedent (if any) must be met as well. For instance, a ‘place’ can become a ‘seat’ if a condition precedent present (if any) is met. For the ‘venue’ to become ‘seat’ something else was needed as a concomitant to the provision of ‘venue’ in the agreement. ‘Venue’ and ‘place’ do not ipso facto assume the status of a ‘seat’.

There were no conditions precedent or any positive act mentioned to determine Kuala Lumpur as the ‘seat’ in the concerned matter and hence Kuala Lumpur could not be treated as the juridical seat. Thus, the matter was maintainable as the courts in India have jurisdiction and the order passed by the Delhi High Court had been set aside.

The Conference represents the final event of the JUDGTRUST Project (2018-2020), funded by the Justice Programme of the European Union (2014-2020). The objective of the Project is to identify best practices and to provide guidelines in the interpretation and application of Regulation 1215/2012 (BI-bis). The JUDGTRUST Project is coordinated by the T.M.C. Asser Instituut and carried out in partnership with the University of Hamburg, the University of Antwerp and the Internationaal Juridisch Instituut.

The Conference will host panels on, inter alia, the scope of application, relationship with other instruments, rules on jurisdiction, provisional measures, as well as enforcement and recognition of foreign judgments. Additionally, the key findings from the National Reports of the EU Member States will be presented. It aims to bring together academics, policy makers and legal practitioners. It will take place on Thursday 24 September 2020 at the T.M.C. Asser Instituut, The Hague. 

More information will be provided on the Project website (https://www.asser.nl/judgtrust) shortly.

Advocate General Szpunar proposes that the Court should rule that the victims of the sinking of a ship flying the Panamanian flag can bring an action for damages under the Brussels I Regulation as a “civil and commercial matter” in the sense of Article 1 before the Italian courts against the Italian bodies which classified and certified that ship.

At para. 47, the Opinion deals with the effect of customary international law on the scope ratione materiae of the Brussels I Regulation and holds:

[t]he EU legislature might have drawn inspiration from customary international law and taken general guidance from it in so far as concerns the distinction between acta iure imperii and acta iure gestionis. However, I am of the opinion that it did not have recourse to the concept of immunity from jurisdiction in order to define precisely the reach of EU rules in the area of judicial cooperation in civil matters having cross-border implications or, in particular, the material scope of Regulation No 44/2001.

At para. 59, the Opinion explains the concept of “civil and commercial matters” abstractly with a view to previous case law and holds:

[t]he Court has repeatedly held that it is the exercise of public powers by one of the parties to the case, inasmuch as it exercises powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals, that excludes such a case from civil and commercial matters within the meaning of Article 1(1) of that regulation. On that basis the Court has already held that an action whereby a tax authority of one Member State claims damages for loss caused by a tortious conspiracy to commit value added tax (VAT) fraud in that Member State falls within the concept of ‘civil and commercial matters’, provided that the tax authority is in the same position as a person governed by private law in the action in question. I infer from this that, in order to determine whether or not Regulation No 44/2001 is applicable in a case, it is not necessary to focus upon the field or area to which belongs the act in respect of which liability is alleged; it is necessary to consider whether that act proceeds from the exercise of public powers

As an interim conclusion, the Opinion states, at paras. 99 et seq.:

99. …[t]he mere fact that the defendants carried out the acts at issue upon delegation from a State does not in itself mean that the dispute in which liability for those acts is alleged falls outside the scope ratione materiae of Regulation No 44/2001. Secondly, the fact that those acts were carried out on behalf of, and in the interests of the delegating State does not have that effect either. Thirdly and last, the fact that those operations were carried out in performance of international obligations of the delegating State in no way calls the foregoing conclusions into question.

100. Nevertheless, whenever recourse is had to public powers when carrying out acts, Regulation No 44/2001 will not as a result apply ratione materiae in a dispute in which liability for those acts is alleged. Given the range of powers exercised by the defendants in carrying out the classification and certification of the Al Salam Boccaccio ’98, those operations cannot be regarded as proceeding from the exercise of public powers.

101.  In light of the foregoing, it should be held that Article 1(1) of Regulation No 44/2001 is to be interpreted as meaning that an action for damages brought against private-law bodies concerning classification and certification activities carried out by those bodies upon delegation from a third State, on behalf of and in the interests of that State, falls within the concept of ‘civil and commercial matters’ within the meaning of that provision.

After rejecting jurisdictional immunity for the defendants, the Advocate General concluded, at para. 155:

Article 1(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is to be interpreted as meaning that an action for damages brought against private-law bodies in respect of classification and certification activities carried out by those bodies as delegates of a third State, on behalf of that State and in its interests, falls within the concept of ‘civil and commercial matters’ within the meaning of that provision.

The principle of customary international law concerning the jurisdictional immunity of States does not preclude the application of Regulation No 44/2001 in proceedings relating to such an action.

The Opinion can be found here.

The Annual Survey of American Choice-of-Law Cases for 2019, now in its 33rd year, has been posted on SSRN. A summary of the contents is reproduced below. If you are interested in the Survey, you can download it here

Here is the abstract:

This is the Thirty-Third Survey of American Choice-of-Law Cases. It was written at the request of the Association of American Law Schools Section on Conflict of Laws. It is intended as a service to fellow teachers and to students of conflicts law, both inside and outside of the United States. Its purpose remains the same as it has been in the previous 32 years: to inform, rather than to advocate.

This Survey covers cases decided by American state and federal appellate courts during 2019 and posted on Westlaw by December 31, 2019. Of the 1,404 appellate cases that meet these parameters, the Survey focuses on those cases that may contribute something new to the development or understanding of conflicts law—and in particular choice of law.

The Survey proceeds in four parts. The first describes fourteen cases decided by the United States Supreme Court. The second part discusses judgments delineating the reach of federal law in cases with foreign elements (extraterritoriality). The third part focuses on the choice-of-law part of conflicts law, in both interstate and international cases. The fourth part deals with the recognition of sister state and foreign country judgments, as well as domestic and international arbitral awards.