Views
Brexit: Three modest proposals
After last Thursday’s EU summit, which resulted in a double-barreled “flextension” of the date for Brexit, all cards are on the table again. Insofar, it is worth noticing that the German journalist Harald Martenstein, in his weekly column for the Berlin-based “Tagesspiegel”, has recently offered three innovative solutions for the Brexit dilemma:
The first one may be called the “one island, two countries” proposal: Great Britain would be split into two parts, one leaving the EU, the other remaining. All Britons would then be granted double citizenship and be free to make up their minds according to their preferences.
The second solution that the columnist proposes takes up the frequently raised demand for a second referendum that should overturn the first Brexit vote. Well, if there is going to be a second referendum, why not a third or even a fourth one? Thus, Martenstein suggests that, in the future, a referendum should be held every year on 2 January; for the remaining part of the year, the United Kingdom would then be either in or out of the EU.
Thirdly and finally, if all else fails, Martenstein argues that the UK might simply turn the tables and offer the other Member States the possibility of leaving the EU as well and joining the UK instead, which would then change its name to “Greatest Britain Ever”.
Obviously, the proposals made by the columnist are meant as a satirical comment. Yet, there are some elements of reality contained in his mockery: who knows whether, in case of a hard Brexit, Scotland (or Northern Ireland) would stay a part of the UK or whether a new referendum on seceding from the UK – and re-joining the EU – would be organized? And already today, numerous Britons are applying for a double citizenship in order to keep a foothold in the EU. Who knows whether a second referendum on Brexit will take place and whether it will actually settle the matter once and for all? And wasn’t the EU summit an attempt by the EU-27 to avoid the Brexit populist contagion from spreading to the continent via the impending EU parliamentary elections? In sum, the situation is increasingly reminiscent of a book title by Paul Watzlawick: hopeless, but not serious…
Interpreting Choice-of-Law Clauses
Written by John Coyle, the Reef C. Ivey II Term Professor of Law, Associate Professor of Law at the University of North Carolina School of Law
Over the past few decades, the concept of party autonomy has moved to the forefront of private international law scholarship. The question of whether (and to what extent) private actors may choose the law that will govern their relationship has generated extensive commentary and discussion. The result? An ever-expanding literature on the role of party autonomy in private international law.
Recognition and Enforcement of Chinese Monetary Judgments in Australia based on Chinese Citizenship
The Australian common law does not require reciprocity for recognizing and enforcing foreign judgments. Therefore, although Chinese courts have never recognized and enforced an Australian monetary judgment, Australian courts have recognized and enforced Chinese judgments. Thus far, there have been two Chinese judgments recognized and enforced in Australia (both in the State of Victoria). In both cases, the Australian judges considered whether the Chinese courts had international jurisdiction based on the defendants’ citizenship/nationality.
The first case is Liu v Ma.[1] The plaintiff sought to recognize and enforce a default Chinese judgment (worth RMB 3,900,000) against the defendants. The defendants defaulted in the Australian judgment recognition and enforcement (hereinafter ‘JRE’) proceedings. By applying Australian law, the Supreme Court of Victoria held that the Chinese court had international jurisdiction over the defendants because they were born in China and held a Chinese passport, they had substantial activities or financial affairs in China, and Chinese law does not recognize dual nationality.
The second case, Suzhou Haishun Investment Management Co Ltd v Zhao & Ors, was rendered recently on 27 February 2019.[2] It is a summary judgment but, in contrast to Liu, the defendant thoroughly argued her case in the Australian JRE court. The plaintiff sought to recognize and enforce three Chinese judgments (worth RMB 20,000,000). The plaintiff brought Chinese proceedings against a Ms. Zhao and her company where she was the director and the sole shareholder. A few days before the Chinese proceeding was commenced, Ms. Zhao was informed that the plaintiff intended to sue her, and she left China with no intention to return. However, Ms. Zhao was still registered to an address in the Chinese court’s jurisdiction under the hukou system (China’s system of household registration). She possessed a Chinese identity card and held a Chinese passport. The plaintiff tried various ways to serve Ms. Zhao but was unsuccessful. Finally, the service was conducted by public announcement. Ms. Zhao defaulted in the Chinese proceedings. But at the first hearing, a man purporting to be an employee of Ms. Zhao’s company appeared before the Chinese judge. This man was asked by the Chinese judge whether he knew Ms. Zhao, to which he responded that she was ‘the boss.’ Although this man did not hold Ms. Zhao’s power of attorney, he nevertheless indicated that he had with him documents verifying that Ms. Zhao was diagnosed with depression which explained why she could not attend the hearing. The Chinese court held that Ms. Zhao was aware of the proceedings and service by the public announcement was effective. Chinese judgments were rendered against Ms. Zhao and her company. Her company had no assets in China, so the plaintiff went to Australia to locate Ms. Zhao. The Australian court held that service by the public announcement was legal according to Chinese Civil Procedural law and there was no denial of natural justice. The Australian court also held that the Chinese court had international jurisdiction. First, because the parties submitted to the Chinese court by a choice of court clause in the loan contracts. Second, Ms. Zhao was a citizen of China, possessed a Chinese passport, held an identity card and submitted to the jurisdiction of the Chinese Court by agreement, so it is not necessary to decide whether she was considered by Chinese law to be domiciled in China.
Although the defendant’s citizenship is not a ground for Australian courts to exercise direct jurisdiction, it remains to be ground in the Australian JRE proceedings to determine whether a foreign court has international jurisdiction. In Independent Trustee Services Ltd v Morris,[3] the plaintiff applied to enforce a UK judgment in Australia on the ground that the defendant had an active UK citizenship. The defendant was a UK citizen and held a UK passport issued in 2003 and current until 2013, and he used this passport to travel to Australia. The Supreme Court of New South Wales found that the defendant’s citizenship was not some relic of an early stage of his life but was an active part of his present situation on which he had relied for international travel and for other purposes. It held that the UK judgment should be recognized and enforced because citizenship of a foreign country means allegiance to the foreign country, and it is a recognized ground of international jurisdiction on which the effectiveness of foreign judgments is accepted under the common law. However, even the judge deciding Morris acknowledges the ‘absence of citation in the English authorities of any case in which this ground of jurisdiction has been contested and upheld after argument’.[4] Liu cites the English case Emanuel v Symon[5], which found that a foreign court has international jurisdiction if the defendant is a subject of the foreign country in which the judgment has been obtained. However, this is a dictum rather than a holding. As Dicey, Morris and Collins The Conflict of Laws indicates there is no actual decision in English common law which supports that the courts of a foreign country might have jurisdiction over a person if he was a subject or citizen of that country. Private International Law in Australia by Reid Mortensen and et al also considers active citizenship is a dubious ground of international jurisdiction.
The cases involving Chinese citizenship and Hukou are more complicated. First, the fact that China does not recognize dual citizenship does not mean China is necessarily a Chinese citizen’s domicile. A Chinese citizen automatically loses his/her Chinese citizenship only when a Chinese citizen has obtained foreign citizenship and resides overseas.[6] It is not uncommon that a Chinese citizen may reside overseas under a foreign permanent residency visa. Second, these groups of Chinese citizens still maintain a registered address in China (Hukou). This is because every Chinese citizen must have a Hukou even if s/he resides abroad. This Hukou may enable them to receive Chinese pension and voter registration. Third, under Chinese civil procedure law, a Chinese court has jurisdiction on a Chinese citizen when his or her Hukou is in its jurisdiction,[7] even if the Chinese citizen (defendant) is not present in China when the initiating process is commenced. If all other service methods are not successful, people’s courts can use a public announcement to effect service. The question is whether Australian courts recognize and enforce the consequent Chinese default judgment based on the defendant’s citizenship. I would suggest Australian courts to be cautious to follow Liu and Zhao regarding the issue of citizenship. The classical grounds for international jurisdiction are presence and submission. Service by a public announcement is hard to establish international jurisdiction on a defendant who is neither present nor submitted. Citizenship as a ground of international jurisdiction has been doubted by three English High Court judges[8] and rejected by the Irish High Court.[9] Additionally, Liu is a default judgment, so the citizenship issue has not been contested, and the defendant in Zhao submits to Chinese court by a choice of court clause.
[1] Liu v Ma & anor [2017] VSC 810.
[2] Suzhou Haishun Investment Management Co Ltd v Zhao & Ors [2019] VSC 110.
[3] Independent Trustee Services Ltd v Morris [2010] NSWSC 1218.
[4] Ibid, para 28.
[5] Emanuel v Symon[1908] 1 KB 302.
[6] Art. 9 of the Chinese Nationality Law, http://www.mps.gov.cn/n2254996/n2254998/c5713964/content.html.
[7] Under the Hague Service Convention, service on Hukou may not be upheld if the defendant can demonstrate that his habitual residence is different. If a Chinese citizen leaves its Hukou address and resides in another address continuously for more than one year, the latter address becomes his habitual residence and the court in that address also has jurisdiction.
[8] Blohn v Desser [1962] 2 Q.B. 116, 123; Rossano v Manufacturers’ Life Insurance Co Ltd [1963] 2 Q.B. 352, 382–383; Vogel v RA Kohnstamm Ltd [1973] Q.B. 133; see also Patterson v D’Agostino (1975) 58 D.L.R. (3d) 63(Ont). Dicey, Morris and Collins The Conflict of Laws (15th ed) 14-085.
[9] Rainford v Newell-Roberts [1962] I.R. 95.
News
First View of Third Issue of ICLQ
The first view of three recent private international law articles have recently appeared in International and Comparative Law Quarterly.
Ardavan Arzandeh, “Brownlie II and The Service-Out Jurisdiction under English Law”
FS Cairo (Nile Plaza) LLC v Brownlie (Brownlie II) is arguably the United Kingdom’s highest appellate court’s most significant decision this century on a private international law question. The judgment has ended nearly two decades of debate about the meaning of ‘damage’ sustained in England for the purpose of paragraph 3.1(9)(a) of Practice Direction 6B of the Civil Procedure Rules. In a four-to-one majority ruling, the Supreme Court decided that the provision was to be interpreted widely, such that, in a personal injury claim, any significant harm of any kind suffered by a claimant in England could provide a basis for the service of proceedings on a foreign-based defendant. The article is critical of the majority’s decision, as it is liable to create both immediate and long-term problems in the context of the service-out jurisdiction in England. It also examines the court’s pronouncements on the other question before it concerning proof of foreign law.
Richard Garnett, “Determining the Appropriate Forum by the Applicable Law”
The concepts of jurisdiction and applicable law have been traditionally regarded as separate inquiries in private international law: a court only considers the applicable law once it has decided to adjudicate a matter. While such an approach still generally applies in civil law jurisdictions, in common law countries the concepts are increasingly intertwined. This article examines the relationship between jurisdiction and applicable law in two key areas: applications to stay proceedings on the ground of forum non conveniens and to enforce foreign exclusive jurisdiction agreements. While courts generally apply the principle that jurisdiction and applicable law should coincide where possible, there are circumstances where a court may retain jurisdiction despite a foreign governing law or may ‘trust’ a foreign tribunal to apply the law of the forum. This article seeks to establish a framework by which courts may assess the role of the applicable law in forum determinations.
Djakhongir Saidov, “An International Convention on Expert Determination and Dispute Boards?”
This article makes a case for an international convention on expert determination (ED) and Dispute Boards (DBs) that would require its Contracting States to recognise agreements on ED/DBs and enforce ED/DB decisions. Whilst strong, the case for the convention may not be compelling as there are arguments against it. But at least the time has come for the international legal community to start thinking about and debating the need for such an international regime. This article takes the first step towards imagining this international regime by evaluating a number of key issues relating to its scope of application.
CJEU on the time limits for refusal of acceptance of a document/for lodging an objection against a decision on enforcement, in the context of the Service Regulation, in the case LKW Walter, C-7/21
This Thursday, the Court of Justice handed down its judgment in the case LKW Walter, C-7/21. In this case, the request for a preliminary ruling originates in the proceedings on a litigation malpractice action, between a company established under Austrian law and the lawyers established in that Member State, who represented the said company in the proceedings before Slovenian courts, in which it acted as a defendant.
In essence, the Austrian lawyers who in the context of the proceedings before Slovenian courts failed to timely lodge the reasoned objection against a decision on enforcement on the behalf of their client, now the defendant lawyers within the proceedings initiated by the said client against them, argue that the time limit set by the Slovenian legislator is not compatible with EU law.
HCCH Monthly Update: June 2022
Conventions & Instruments
On 4 June 2022, the HCCH 1961 Apostille Convention entered into force for Indonesia. The Convention currently has 122 Contracting Parties. More information is available here.
On 22 June 2022, the Philippines deposited its instrument of ratification of the HCCH 2007 Child Support Convention. With this ratification, 44 States and the European Union are now bound by the Child Support Convention. It will enter into force for the Philippines on 1 October 2022. More information is available here.
Meetings & Events
On 1 and 2 June, the HCCH Regional Office for Latin America and the Caribbean organised a judicial training on the HCCH 1980 Child Abduction Convention in partnership with the Judicial School of Bolivia.
On 23 and 24 June, the HCCH participated in the Conference on Conflicts of Jurisdiction organised by the Journal of Private International Law and the Singapore Management University. More information is available here.
On 30 June and 1 July, the HCCH participated in the Regional Forum “HCCH 2019 Judgments Convention: Prospects for the Western Balkans”, organised by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Center for International Legal Cooperation. More information is available here.
Upcoming Events
The webinar “Cross-border Commercial Dispute Resolution – HCCH 2005 Choice of Court and 2019 Judgments Conventions”, organised in partnership with the Asian Business Law Institute (ABLI), will be held on 27 July 2022. More information is available here.
The inaugural CODIFI Conference will be held online from 12 to 16 September 2022. CODIFI will examine issues of private international law in the Commercial, Digital, and Financial (CODIFI) sectors, highlighting developments in the digital economy and fintech industries as well as clarifying the roles of core HCCH instruments: the 1985 Trusts Convention, the 2006 Securities Convention, and the 2015 Choice of Law Principles. More information is available here.
These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.
Upcoming Events
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