New Book: “Imperativeness in Private International Law. A view from Europe” by Giovanni Zarra

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Giovanni Zarra (Federico II University of Naples) has recently published a book titled ‘Imperativeness in Private International Law. A View from Europe’ (Asser – Springer, 2022).

The book is devoted to a study of the ways and forms through which imperativeness, to be intended as the sum of the various peremptory norms expressing the identity of a legal system, works today in private international law and argues that imperative norms today not only function as a bar to the application of foreign laws and free movement of decisions, but may also positively promote interests and values at the basis of any legal system. Moreover, the book carries out an in-depth analysis of how the concept of imperativeness is influenced by international and EU law, arguing that – in particular in the field of human rights – a minimum content of imperativeness, shared by EU countries, is emerging. In addition, the research, combining theoretical and practical approaches and methodologies, addresses, among others, the question concerning the extent to which the evolution of the concepts of overriding mandatory provisions and public policy has affected the traditional doctrinal views conceptualizing private international law as a neutral subject; in this regard, through the analysis of the category of imperativeness, the book demonstrates that this subject has, in realty, significant (and today not negligible) implications over individual rights. For this reason, the author highlights the crucial role of adjudicators and the importance of the employment of interpretative techniques, such as balancing of principles and rights, in the application of imperative norms.

More in detail, Chapter 1 proposes an historical analysis relating to the development of private international law during time and it focuses on how imperativeness has evolved during the various phases of the evolution of the subject, with particular attention on how and why the distinction between public policy and overriding mandatory rules emerged.

Chapter 2 addresses the various theories relating to the foundation of the distinction between public policy and lois d’application immédiate, exploring in particular the actual margin of discretion courts have in the identification of an overriding mandatory rule, and arrives at arguing that the category of overriding mandatory rules shall today be strictly interpreted in order to comply with the openness characterizing modern systems of private international law. Lois d’application immediate may, therefore, exist only in the cases where there is a clear legislative intention to overcome the functioning of the conflict of laws mechanism.

Chapter 3 tests the findings of the previous investigation in light of the regulations issued by the European Union. The analysis shows, also in light of the practice of EU organs, a tension between the necessity to reduce the recourse to imperativeness in intra-EU relationships and the States’ persisting need to ensure the protection of the principles and rules expressing the identity of their legal systems.

Chapter 4 focuses on the interaction between imperativeness in private international law and substantive obligations arising from international and EU law to assess the existence of “truly international” and EU imperative norms. This Chapter also discusses the (rare) cases of conflicts between imperative norms deriving from supranational law and domestic fundamental principles and offers significant food for thought on how to manage these conflicts.

AMEDIP’s upcoming webinar: presentation of the book Text and Context of the New Private International Law Act of Uruguay – 10 February 2022 at 5 pm (Mexico City time CST) – in Spanish

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The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on 10 February 2022 at 5:00 pm (Mexico City time – CDT), 8:00 pm (Montevideo time). The purpose of this webinar is to present the book entitled Text and Context of the Private International Law Act No 19.920, which will be presented by Dra. Cecilia Fresnedo de Aguirre and Dr. Gonzalo Lorenzo (in Spanish).

Uruguay’s Private International Law Act No 19.920 may be consulted by clicking here. We have previously reported on this new legislation here.

The details of the webinar are:

Link: https://us02web.zoom.us/j/82518817186?pwd=bGw0UjZ4RTBFS3dSaWZ6WXJxZjVLZz09

Meeting ID: 825 1881 7186

Password: AMEDIPBMA

Participation is free of charge.

This event will also be streamed live: https://www.facebook.com/AmedipMX

Certificat de coutume (a statement or certificate issued to attest the content of a foreign law rule) – Practices in International Business Law – Conference, April 12, 2022, Conseil supérieur du notariat, Paris – in French

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The Société de législation comparée is organising, in partnership with the French Conseil supérieur du Notariat, the universities of Nîmes, Strasbourg and Lyon and with the Institut des Usages (Montpellier), an international symposium dedicated to the Certificat de coutume.

The importance of the subject is major. Statement or written certificate on the content of a foreign law rule, the Certificat de coutume is subject to a heterogeneous practice both in terms of its establishment and its processing.

Ignored by many jurists, its reliability is often called into question due to a double insufficiency that it may conceal: with regard to the law attested when it is issued by a public authority, with regard to the impartiality when it is issued by a private person.

However, these criticisms are not insurmountable. In addition to the combination with other means of establishing the content of the foreign law rule in question, the Certificat de coutume does not avoid obliterate any contradictory discussion and the freedom of interpretation of the authority before which it is produced. The liabilities associated with the Certificat de coutume, whether that of the drafter, the counsel of the parties or the notary using such a certificate, constitute a formidable safeguard against tendentious approaches.

Above all, we must not ignore the virtues of empiricism, which could – in these times of debates regarding a future codification of French private international law – reveal important and good practices to be considered de lege ferenda.

The real added value of this project therefore lies in the desire to lift the veil on the Certificat de coutume, which currently constitutes a blind spot in private international law. Its name is certainly known to all, but its legal system still appears to be embryonic. The ambition of the symposium is to do constructive work and to offer concrete proposals, fruit of a collective reflection, bringing together the essential players in this field.

The symposium will be held in French on 12 April 2022 at the Amphitheater of the French Higher Council of Notaries (60 boulevard de la Tour-Maubourg – Paris, 7th).

Prior registration is required before April 7, 2022 by sending an email to: emmanuelle.bouvier@legiscompare.com

Conference validated as continuing education for lawyers.

Programme and description in French: https://www.legiscompare.fr/web/Certificat-de-coutume-Pratiques-en-droit-des-affaires-internationales-12-avril

The Programme is as follows:

CERTIFICAT DE COUTUME

Practices in international business law

Scientific direction

Gustavo Cerqueira, professor at the University of Nîmes

Nicolas Nord,  Secretary General of the International Commission on Civil Status

Cyril Nourissat, professor at Jean Moulin University – Lyon 3

Opening / 8:45 a.m.

Me David Ambrosiano, president of the Conseil supérieur du notariat        

Me Pierre-Jean Meyssan, 2nd vice-president of the CSN, in charge of legal affairs

 

Introduction / 9:00 a.m.

Certificat de coutume: historical and functional aspects

Bertrand Ancel, professor emeritus at the University of Paris II Panthéon Assas

 

I. Establishment of the certificat de coutume / 9:30 a.m.

under the chairmanship of Bernard Haftel, professor at the Sorbonne Paris Nord Univ.

9:30 a.m. The purpose of the certificate

Determination of the purpose of the certificate

Gilles Vercken, lawyer at the Paris Bar

 

Attestation of uses

Pierre Mousseron, professor at the University of Montpellier

Kevin Magnier-Merran, lecturer at the University of Lorraine

 

Articulation of the sources of foreign law

Gustavo Cerqueira, professor at the University of Nîmes

 

Coffee break

10:50 a.m. The writer of the certificate

The plurality of actors

Nicolas Nord, Secretary General of the ICCS

 

The challenges of choosing an editor

Karlo Fonseca Tinoco, lawyer at the São Paulo Bar

 

11:30 a.m. The certificate method

Developing the certificate – comparative approaches

Alejandro Garro, professor at Columbia University, NY

 

Editor’s discretion

Cyril Nourissat, professor at Lyon 3 University

 

II. The processing of the certificat de coutume / 2:00 p.m.

under the chairmanship of Laurence Usunier, professor at CY Cergy Paris Univ.

2:00 p.m. The interest of the certificate for the parties

Jacques-Alexandre Genet, lawyer at the Paris Bar

 

2:20 p.m. The value of the certificate for the authorities

Jean-Luc Vallens, honorary magistrate, former Pr. assoc. at Unistra

Louis Degos, arbitrator, managing partner KL Gates LLP – Paris

Pierre Tarrade, notary, rapp. general of the 115th congress of notaries of France

 

3:20 p.m. Certificate distortion control

Sylvaine Poillot-Peruzzetto, SE Advisor at the Court of Cassation

 

Coffee break

III. Certificat de coutume Responsibilities / 4:00 p.m.

under the chairmanship of Etienne Farnoux, professor at Unistra

4:00 p.m. The editor’s responsibility

Thibault de Ravel d’Esclapon, lecturer at Unistra

 

4:20 p.m.  The responsibility of the council of the parties

Olivier Berg, lawyer at the Paris Bar

 

4:40 p.m. The liability of the notary using a certificate

Marc Cagniart, first vice-president of the Chamber of Notaries of Paris

 

Conclusion: Perspectives de lege ferenda / 5:00 p.m.

Pascal de Vareilles-Sommières, professor at the University of Paris I

 

 

 

 

 

 

 

 

Excess of authority as a ground of refusal for an AAA award in Greece

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Introduction

The case arises from a a long-running family dispute of the parties over the distribution of assets left by their late brother in the USA.  Z. is the sister, and M. the brother of the deceased. Over the course of several years, the parties entered into a series of agreements with an eye towards efficiently dividing the assets and providing for the effective management of the properties and businesses included in the estate. All attempts to settle the dispute amicably failed. Eventually, the case was decided in favour of Z. by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. The efforts of M. to vacate the award failed. As a next step, Z. sought recognition and enforcement of the US award in Greece. First and second instance courts decided in favour of Z. Upon second appeal (cassation) of M., the Supreme Court ruled that the Athens Court of Appeal failed to examine two grounds of appeal raised by M. The case was sent back to the appellate court [Supreme Court nr. 635/20.5.2021]

Stage 1: USA

The parties entered into an agreement known as the “U.S. Agreement,” which set out a process for: (1) an accounting of the affairs of the . . . [U.S. Companies] during the relevant time period leading to a report detailing [an] auditor’s findings; (2) . . . [setting] a period in which the Parties would ‘confer amicably and in good faith to agree on the amount of any distributions or payments that should be made in order to’ realize the objective of equal distribution of the assets or their proceeds and of the earnings of the assets in the relevant period; (3) [and making] a determination as a result of this process as to ‘the extent to which [either Party] has received a disproportionate share of prior income or other distributions in respect of [the U.S. Companies] and the amount of such excess benefit.

The U.S. Agreement further provided that, if the parties failed to agree on the amount of the Party Distribution by way of the auditor’s report, “the amount of the D. Distribution, the P. Distribution, the T. D. and/or the Party Distribution as applicable shall be determined by an arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules,” subject to confirmation by any court having appropriate jurisdiction.

The audit contemplated in the U.S. Agreement was never completed, and the parties were unable to come to reach an agreement on the amount of the Party Distribution. After several years of litigation in both federal and state courts, Z. instituted the subject arbitration in 2009. The arbitration panel issued its Final Award on March 20, 2014, finding in favor of Z. in the amount of approximately $10.8 million, inclusive of approximately $4.8 million of prejudgment interest.

  1. filed a petition to vacate the Final Award on June 16, 2014, and on August 29, 2014, he filed the instant motion in support of that petition. The Petitioner’s Arguments for Vacatur were the following:
  2. a) Failure to Determine the U.S. Company Distributions.
  3. b) Manifest Disregard of the Law and Agreement – “Redefining” the Term “Received”.
  4. c) Award of Prejudgment Interest as Exceeding Authority.

The Southern District Of New York decided that the Petitioner’s motion to vacate the arbitration panel’s Final Award is denied and Respondent’s cross-motion to confirm the award is granted.

Stage 2: Greece

The application to recognize and enforce the US award was granted by the Athens Court of 1st Instance [nr. 443/2018, published in: Epitheorissi Politikis Dikonomias (Civil Procedure Law Review) 2017, 643 et seq, note Kastanidis]. The appeal against the first instance court was dismissed [Athens Court of Appeal 5625/2018, unreported]. The final appeal was successful. The Supreme Court ruled that the appellate court did not examine two cassation grounds:

  1. No reference is made in the judgment of the Athens CoA in regards to the lack of an arbitration agreement, as evidenced by points 1-9 of the US Agreement, which refer to an arbitral determination, not an award.
  2. No reference is made in the judgment of the Athens CoA in regards to the excess of authority by the arbitrators.

As a result, the Supreme Court reversed the judgment of the Athens CoA, and ordered Z. to pay the costs of the proceedings.

Comments

An issue that was not examined by the Supreme Court was the conduct of M. during the arbitral proceedings, and the grounds invoked for vacating the AAA award. There is no evidence that M. challenged the authority of the arbitration panel to issue an award. In addition, the arguments for vacatur do not challenge the panel’s authority, save the award of Prejudgment Interest under (c), which was dismissed by the Greek instance courts as contrary to the principle of non-revision on the merits.

The question has been addresses by legal scholarship as follows:

One issue that is not dealt with in the Convention is what happens if a party to an arbitration is aware of a defect in the arbitration procedure but does not object in the course of the arbitration. The same issue arises in connection with jurisdictional objections that are raised at the enforcement stage for the first time. The general principle of good faith (also sometimes referred to as waiver or estoppel), that applies to procedural as well as to substantive matters, should prevent parties from keeping points up their sleeves [ICCA Guide to the NYC, 2011, p. 81].

The Federal Arbitrazh (Commercial) Court for the Northwestern District in the Russian Federation considered that an objection of lack of arbitral jurisdiction that had not been raised in the arbitration could not be raised for the first time in the enforcement proceedings; The Spanish Supreme Court said that it could not understand that the respondent “now rejects the arbitration agreement on grounds it could have raised in the arbitration” [ICCA Guide to the NYC, 2011, p. 82]

It is generally accepted that the party resisting enforcement of the award may, under certain circumstances, be barred from raising a defense under Article V(1)(c) in the exequatur proceedings. Preclusion may, in particular, occur if the party resisting enforcement has taken part in the arbitral proceedings without objecting to the jurisdiction or competence of the arbitral tribunal when it had the opportunity to do so [Wolff/(Borris/Hennecke), New York Convention, Second Edition, 2019, p. 340 nr. 257].

Conclusion

It is not entirely clear whether the judgment of the Athens Court of Appeal did in fact fail to take into account the grounds aforementioned. As mentioned above, the judgment has not been published in the legal press. However, the extracts reproduced in the ruling of the Supreme Court allow the reader to have some doubts. In any event, the case will be re-examined by the Court of Appeal, and most probably, will end up again before the Supreme Court…

Milan Arbitration Week

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From 7 to 13 February 2022, Università degli Studi, Milan and the European Court of Arbitration organize, in cooperation with Comitato Italiano dell’Arbitrato, the Milan-based international law firms Bonelli Erede and DLA Piper, with the support of the Centre of Research on Domestic, European and Transnational Dispute Settlement, the Milan Arbitration Week which, through various events, deals with domestic arbitration, international commercial arbitration and arbitration in the field of international investment.


All the information is available at this link: https://www.transnational-dispute-management.com/news/20220207.pdf

New Journal: “The Italian Review of International and Comparative Law”

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Brill launched a new Journal, The Italian Review of International and Comparative Law, which is managed by a group of professors from the University of Naples and the Scuola Superiore Sant’Anna in Pisa.
The aim of the Journal is to publish contributions on International law, private International law, EU law and comparative law. In this regard, see the recently launched a call for papers on “The European Union and International Arbitration”.

Choice of Law in the American Courts in 2021: Thirty-Fifth Annual Survey

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The 35th Annual Survey of Choice of Law in the American Courts (2021) has been posted to SSRN. The authors of this year’s survey owe an enormous debt to Symeon Symeonides who has, over the past three decades, provided an extraordinary service by authoring the previous thirty annual surveys. Having now finished our first survey, we are all the more impressed with his work. Thank you Symeon — and thank you all for reading.

John Coyle (University of North Carolina School of Law)
William Dodge (University of California, Davis School of Law)
Aaron Simowitz (Willamette University College of Law)

Giustizia consensuale No 2/2021: Abstracts

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The second issue of 2021 of Giustizia Consensuale (published by Editoriale Scientifica) has just been released and it features:

Silvia Barona Vilar (Professor at the University of València) Sfide e pericoli delle ADR nella società digitale e algoritmica del secolo XXI (Challenges and Pitfalls of ADR in the Digital and Algorithmic Society of the XXI Century; in Italian)

In the XX century, dispute resolution was characterized by the leading role played by State courts: however, this situation has begun to change. With modernity and globalization has come the search of ways to ensure the ‘deconflictualisation’ of social and economic relations and solve conflicts arising out of them. In this context, ADR – and now ODR – have had a decisive impulse in the last decades and are now enshrined in the digital society of the XXI century. ADR mechanisms are, in fact, approached as means to ensure access to justice, favouring at the same time social peace and citizens’ satisfaction. Nevertheless, some uncertainties remain and may affect ADR’s impulse and future consolidation: among such uncertainties are the to-date scarce negotiation culture for conflict resolution, the need for training in negotiation tools, the need for State involvement in these new scenarios, as well as the attentive look at artificial intelligence, both in its ‘soft’ version (welfare) and its ‘hard’ version (replacement of human beings with machine intelligence).

Amy J. Schmitz (Professor at the Ohio State University), Lola Akin Ojelabi (Associate Professor at La Trobe University, Melbourne) and John Zeleznikow (Professor at La Trobe University, Melbourne), Researching Online Dispute Resolution to Expand Access to Justice

In this paper, the authors argue that Online Dispute Resolution (ODR) may expand Access to Justice (A2J) if properly designed, implemented, and continually improved. The article sets the stage for this argument by providing background on ODR research, as well as theory, to date. However, the authors note how the empirical research has been lacking and argue for more robust and expansion of studies. Moreover, they propose that research must include consideration of culture, as well as measures to address the needs of self-represented litigants and the most vulnerable. It is one thing to argue that ODR should be accessible, appropriate, equitable, efficient, and effective. However, ongoing research is necessary to ensure that these ideals remain core to ODR design and implementation.

Marco Gradi (Associate Professor at the University of Messina), Teoria dell’accertamento consensuale: storia di un’incomprensione (The Doctrine of ‘Negotiation of Ascertainment’: Story of a Misunderstanding; in Italian)

This article examines the Italian doctrine of ‘negotiation of ascertainment’ (negozio di accertamento), by means of which the parties put an end to a legal dispute by determining the content of their relationship by mutual consent. Notably, by characterizing legal ascertainment as a binding judgment vis-à-vis the parties’ pre-existing legal relationship, the author contributes to overcoming the misunderstandings that have always denoted the debate in legal scholarship, thus laying down the foundations towards a complete theory on consensual ascertainment.

Cristina M. Mariottini (Senior Research Fellow at the Max Planck Institute Luxembourg for Procedural Law), The Singapore Convention on International Mediated Settlement Agreements: A New Status for Party Autonomy in the Non-Adjudicative Process

The United Nations Convention on International Settlement Agreements Resulting from Mediation (the ‘Singapore Convention’), adopted in 2018 and entered into force in 2020, is designed to facilitate cross-border trade and commerce, in particular by enabling disputing parties to enforce and invoke settlement agreements in the cross-border setting without going through the cumbersome and potentially uncertain conversion of the settlement into a court judgment or an arbitral award. Against this background, the Convention frames a new status for mediated settlements: namely, on the one hand it converts agreements that would otherwise amount to a private contractual act into an instrument eligible for cross-border circulation in Contracting States and, on the other hand, it sets up an international, legally binding and partly harmonized system for such circulation. After providing an overview of the defining features of this new international treaty, this article contextualizes the Singapore Convention in the realm of international consent-based dispute resolution mechanisms.

 

Observatory on Legislation and Regulations

Ivan Cardillo (Senior Lecturer at the Zhongnan University of Economics and Law in Wuhan), Recenti sviluppi della mediazione in Cina (Recent developments in mediation in China; in Italian)

This article examines the most recent developments on mediation in China. The analysis revolves around, in particular, two prominent documents: namely, the ‘14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035’ and the ‘Guiding Opinions of the Supreme People’s Court on Accelerating Steps to Motivate the Mediation Platforms of the People’s Courts to Enter Villages, Residential Communities and Community Grids.’ In particular, the so-called ‘Fengqiao experience’ ? which developed as of the 1960s in the Fengqiao community and has become a model of proximity justice ? remains the benchmark practice for the development of a model based on the three principles of self-government, government by law, and government by virtue. In this framework, mediation is increasingly identified as the main echanism for dispute resolution and social management: in this respect, the increasing use of technology proves to be crucial for the development of mediation platforms and the efficiency of the entire judicial system. Against this background, the complex relationship becomes apparent between popular and judicial mediation, their coordination and their importance for governance and social stability: arguably, such a relationship will carry with it in the future the need to balance the swift dispute resolution with the protection of fundamental rights.

Angela D’Errico (Fellow at the University of Macerata), Le Alternative Dispute Resolution nelle controversie pubblicistiche: verso una minore indisponibilità degli interessi legittimi? (Alternative Dispute Resolution in Public Sector Disputes: Towards an Abridged Non-Availability of Legitimate Interests?; in Italian)

This work analyzes the theme of ADR in publicity disputes and, in particular, it’s understood to deepen the concepts of the availability of administrative power and legitimate interests that hinder the current applicability of ADRs in public matters. After having taken into consideration the different types of ADR in the Italian legal system with related peculiarities and criticalities, it’s understood, in the final part of the work, to propose a new opening to the recognition of these alternative instruments to litigation for a better optimization of justice.

 

Observatory on Jurisprudence

Domenico Dalfino (Professor at the University ‘Aldo Moro’ in Bari), Mediazione e opposizione a decreto ingiuntivo, tra vizi di fondo e ipocrisia del legislatore (Mediation and Opposition to an Injunction: Between Underlying Flaws and Hypocrisy of the Legislator; in Italian)

In 2020, the plenary session of the Italian Court of Cassation, deciding a question of particular significance, ruled that the burden of initiating the mandatory mediation procedure in proceedings opposing an injunction lies with the creditor. This principle sheds the light on further pending questions surrounding mandatory mediation.

 

Observatory on Practices

Andrea Marighetto (Visiting Lecturer at the Federal University of Rio Grande do Sul) and Luca Dal Pubel (Lecturer at the San Diego State University), Consumer Protection and Online Dispute Resolution in Brazil

With the advent of the 4th Industrial Revolution (4IR), Information and Communication Technology (ICT) including the internet, computers, digital technology, and electronic services have become absolute protagonists of our lives, without which even the exercise of basic rights can be harmed. The Covid-19 pandemic has increased and further emphasized the demand to boost the use of ICT to ensure access to basic services including access to justice. Specifically, at a time when consumer relations represent the majority of mass legal relations, the demand for a system of speedy access to justice has become necessary. Since the early ’90s, Brazil has been at the forefront of consumer protection. In the last decade, it has taken additional steps to enhance consumer protection by adopting Consumidor.gov, a public Online Dispute Resolution (ODR) platform for consumer disputes. This article looks at consumer protection in Brazil in the context of the 4IR and examines the role that ODR and specifically the Consumidor.gov platform play in improving consumer protection and providing consumers with an additional instrument to access justice.

In addition to the foregoing, this issue features the following book review by Maria Rosaria Ferrarese (Professor at the University of Cagliari): Antoine Garapon and Jean Lassègue, Giustizia digitale. Determinismo tecnologico e libertà (Italian version, edited by M.R. Ferrarese), Bologna, Il Mulino, 2021, 1-264.

Out now: Zeitschrift für vergleichende Rechtswissenschaft (ZVglRWiss) 120 (2021) No. 4

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The most recent issue of the German Journal of Comparative Law (Zeitschrift für Vergleichende Rechtswissenschaft) features the following articles on private international and comparative law:

 

Jürgen Samtleben: Internationales Privatrecht in Guatemala

Guatemala’s rules on private international law of Guatemala are found in the Law of Judicial Organization of 1989. But conflict-of-law questions are also regulated in other laws. All these legislative texts are based on older laws, since Guatemala has a rich legal tradition on this subject. It is only against the background of this tradition that one can understand the meaning of the laws actually in force. The article discusses the different aspects of Guatemalan private international law, which today is generally based on the principle of domicile. The law of 1989 introduces two innovations which are worth emphasizing: the application of foreign law ex officio and the principle of party autonomy for international contracts.

 

Christoph Wendelstein: Eigenes und Fremdes im Kollisionsrecht

The article sheds light on the relationship between the conflict of laws and the substantive laws (potentially) called upon to apply. In doing so, the question is addressed whether the substantive law influences the conflict of laws. The focus is on the question of characterisation, which traditionally represents a kind of crystallization point between conflict of laws and substantive law. If the conflict of laws rules apply to foreign substantive law, the question may arise as to whether this completely displaces the own domestic substantive law or whether it is still relevant in some way. This refers to the ordre public and the overriding mandatory provisions (Eingriffsnormen), which are also object of the study. The focus lies on their functioning.

 

Jean Mohamed: Die aktienrechtliche actio pro socio im globalen Kontext – Zur Abgrenzung von materiellem Recht und Verfahrensrecht im anglo-amerikanischen Rechtskreis am Beispiel der derivative action in New York

The German procedure for the admission of corporate claims (derivative claims), a special institution based on stock corporation law for the so-called actio pro socio, has taken a long journey all the way to New York at present. In keeping with the verse by Frank Sinatra: “If I can make it here, I’ll make it anywhere”, the subject is whether an international movement of the shareholder action – i. e. claims of the corporation asserted in the shareholder’s own name – may be imminent. In the New York proceeding Zahava Rosenfeld, derivatively as a shareholder of Deutsche Bank AG and on behalf of Deutsche Bank AG v. Paul Achleitner et al., the conflict of laws matches the German system known in § 148 of the German Stock Corporation Act with the New York’s (and the US) concept of the related derivative suit, also known as derivative action or derivative claim. Given the potential risks involved, it seems highly relevant from a legal, academic, and political point of view to discuss and model this quite complex but so far barely studied issue. In the following, the global procedural rules of derivative actions will therefore be discussed.

 

David B. Adler: Extraterritoriale US-Discovery für Schieds- und Gerichtsverfahren im Ausland

For decades, 28 U.S.C. § 1782(a) has offered a powerful tool for parties to obtain discovery through U.S. courts for use in foreign proceedings. Referring to the statute’s twin goals to provide “efficient assistance to participants in international litigation and encourag[e] foreign countries by example to provide similar assistance to our courts”, U.S. courts have time and again demonstrated that they are willing to readily grant respective discovery requests from foreign applicants. While the U.S. Supreme Court has answered various questions regarding the applicability and scope of § 1782(a) in its Intel Corp. v. Advanced Micro Devices, Inc. decision, two key issues remained undecided. The first issue U.S. courts have been grappling with, and which has been an ongoing topic of interest among international arbitration practitioners and scholars for several decades, is whether the statute allows parties of foreign private arbitration proceedings to seek discovery via § 1782(a), or if § 1782(a) is limited to parties that seek support for a foreign court or administrative proceedings. The second issue concerns the extraterritorial reach of § 1782(a). Courts have issued diverging rulings on whether Section 1782 allows an applicant to seek the production of documents that are located outside the U.S. and on whether § 1782(a) contains a per se bar to its extraterritorial application. This article analyzes the recent appellate decisions of the United States Court of Appeals for the Second, Fourth and Sixth Circuit – which are the first appellate rulings since Intel to weigh in on these issues in detail. This article further discusses whether there should be a per se bar to the extraterritorial application of Section 1782 and explains the broad implications that the recent appellate courts’ decisions on both issues have for foreign litigants and entities that are subject to the United States’ jurisdiction.

Nudging in Private International Law: The Design of Connecting Factors in Light of Behavioural Economics

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Dr Johannes Ungerer (Lecturer, University of Oxford)

Cross-border disputes are particularly complex due to the challenges involved in understanding and deciding on the applicable law and international jurisdiction. Contrary to this reality, it is commonly assumed that all private parties are capable of rational choices in pursuit of efficiency, which however disregards the fact that humans are not always guided by rationality but can be affected by psychological biases. Acknowledging ‘bounded rationality’ in cross-border cases calls for reconsidering the way private international law determines which law shall apply and which court may hear the case. In particular, it requires analysing connecting factors from this new perspective, thus appreciating the significance of how bounded rationality affects private parties in choosing a law or court or abstaining from choice.

In an English paper published in RabelsZ volume 1/2022 of mine, such a new approach is pursued based on the insights of behavioural economics, which have been neglected in private international law to date. Looking at the existing EU instruments, the paper investigates how the connecting factors of the Rome and Brussels Regulations are designed to ‘nudge’ private parties towards a particular jurisdiction, both with regard to subjective and objective connecting factors. Special consideration is given to the requirements of nudging to justify its libertarian paternalism. Particularly illustrative is the application of behavioural insights to the paradigmatic area of consumer protection.

The paper finds that, amending the traditional economic analysis and its assumption of rational decision-making in pursuit of efficiency, behavioural economics contributes a more realistic understanding of private international law and its connecting factors. Objective connecting factors in the Rome and Brussels Regulations, such as the habitual residence or domicile of a particular party to the case in addition to more specific factors, are relied upon in the absence of a valid choice of law or court by the parties. These objective connecting factors can be understood as the lawmaker’s nudges towards a predetermined jurisdiction for the benefit of the parties, and not merely for the sake of individual efficiency. Behavioural economics appreciates that objective connecting factors are majoritarian default rules, but unlike the traditional economic understanding of this term and its hypothetical consensus explanation, the new perspective can openly acknowledge that default rules are set by the lawmaker, who is legitimised by the majority, as a form of libertarian paternalism. Yet, because of their characteristic as a safety net, which still allows the parties to make deviating arrangements, the objective connecting factors are defaults which serve as both choice-preserving and debiasing decisions without being coercive.

Subjective connecting factors, which enable and regulate party autonomy with regard to choice of law and court, are to be conceived as choice architecture from the perspective of behavioural economics. This understanding is to be preferred to previous explanations which draw on a naturalist or positivist reasoning in analogy to substantive private autonomy or which solely proclaim individualist freedom striving for efficiency. By ensuring a choice-preserving design which complements the default rules, the lawmaker can be understood to pursue nudging by providing for a suitable and legitimised choice architecture that steers the choice of law and court. From this perspective, the regulation and limitations of party autonomy are to be seen as measures of libertarian paternalism which intend to protect private parties from their own fallibility and from exploitation by others when making choices.

In response to existing criticism against nudging as a form of libertarian paternalism, the requirements of transparency and a choice-preserving design have proved particularly important. They are met by providing for specific and general defaults (sector-specific and residual objective connecting factors) alongside a choice architecture with clear validity