Views
Chinese courts made decision taking into account of the Hague Choice of Court Convention
China has signed the Hague Choice of Court Convention on 12 September 2017, but has not yet ratified this Convention. The Hague Choice of Court Convention has not entered into force in China. However, Shanghai High Court has already relied on the Hague Choice of Court Convention to make decision.
In Cathay United Bank v Gao, Shanghai High Court, (2016) Hu Min Xia Zhong No 99, the appellant, a Taiwan commercial bank, and the respondent, a Chinese citizen resident in Shanghai, entered into a Guarantee contract. It included a clause choosing Taiwan court as the competent court to hear disputes arising out of the contract. This clause did not specify whether it was exclusive or not. Chinese law does not provide how to decide exclusivity of a choice of court agreement. Facing the legal gap, Shanghai High Court took into account Article 3 of the Hague Choice of Court Convention 2005 and decided that choice of court agreements should be exclusive unless the parties stated otherwise. The Shanghai High Court thus declined jurisdiction in favour of Taiwan Court.
This decision was made on 20 April 2017, even before China signed the Hague Choice of Court Convention. Since the Hague Choice of Court Convention has not entered into force in China, it should not be directly applied by Chinese courts in judicial practice. The question is whether Chinese courts could ‘take into account’ of international conventions not being effective in China to make decision. Although Article 9 of the Chinese Supreme Court’s Judicial Interpretation of Chinese Conflict of Laws Act allows the Chinese courts to apply international conventions, which have not entered into effect in China, to decide the parties’ rights and obligations, such an application is subject to party autonomy. In other words, parties should have chosen the international convention to govern their rights and obligations. Article 9 does not apply to international judicial cooperation conventions that do not deal with individuals’ substantive rights and are not subject to party autonomy. Perhaps, a more relevant provision is Article 142(3) of the PRC General Principle of Civil Law, which provides that international customs or practice may be applied to matters for which neither the law of the PRC nor any international treaty concluded or acceded to by China has any provisions. Arguably, the Hague Choice of Court Convention represents common practice adopted internationally and forms a source to fill the gap in the current Chinese law.
EU Member State sees opportunities in Brexit: Belgium is establishing a new English-language commercial court
Expecting higher demands for international commercial dispute resolution following Britain’s departure from the EU, Belgium plans to set up a new English-language commercial court, the Brussels International Business Court (BIBC), to take cases away from the courts and tribunals in London. This decision was announced on 27 Oct 2017. This BIBC is designed to address disputes arising out of Brexit and major international commercial disputes. The court will take jurisdiction based on parties’ choice, and will do the hearing and deliver judgments in English. The parties would have no right to appeal. BIBC combines elements of both traditional courts and arbitration. See comments here.
Although Brexit may cause uncertainty to litigants in the UK, a survey suggests that the EU judicial cooperation scheme is not the main reason for international parties choosing London to resolve their disputes. The top two factors that attract international litigants to London are the reputation and experience of English judges and combination of choice of court clauses with choice of law clauses in favor of English law, followed by efficient remedies, procedural effectiveness, neutrality of the forum, market practice, English language, effective UK-based counsel, speed and enforceability of judgments. Furthermore, Brexit will not affect the New York Convention and would less likely affect London as an arbitration centre. It may be more reasonable to suggest that the main purpose of BIBC is not to compete with London at the international level, but to offer additional judicial tool and become a new commercial dispute resolution centre within the EU to attract companies and businesses to Brussels.
CJEU on the place of the damage under Article 7(2) of Brussels Ia as regards violation of personality rights of a legal person
First personal impressions presented by Edina Márton, LLM, PhD (Saarbruecken)
For jurisdictional purposes, the localisation of cross-border violations of personality rights under European instruments, such as Regulation (EU) No 1215/2012 (Brussels Ia), has attracted the attention of a considerable number of scholars and often led to different legal solutions in the national judicial practice. At EU level, besides Shevill (C-68/93; ECLI:EU:C:1995:61) as well as eDate and Martinez (C-509/09 and C-161/20; ECLI:EU:C:2011:685), since 17 October 2017, a third judgment in case Bolagsupplysningen (C-194/16; ECLI:EU:C:2017:766) has given further clarification in this area. In the recently delivered judgment, the ECJ specified one of the two limbs of the connecting factor “where the harmful event occurred or may occur” under Article 7(2) of Brussels Ia, namely the place of the alleged damage. Read more
News
“Law in the Age of Modern Technologies”, 10 February 2023, University of Milan (hybrid)
The University of Milan, on behalf of the DIGinLaw consortium (consisting of partners: the Josip Juraj Strossmayer University of Osijek, the University of Aberdeen, and the University of Zagreb – University Computing Centre (SRCE)), is organising an international conference on Law in the Age of Modern Technologies, taking place in Milan on 10 February 2023.
Digitalization strongly affects society, science, and the transfer of knowledge. While taking advantage of modern technologies, the DIGinLaw Project aims to raise awareness of digital demands in higher education and research in law and fosters the creation of digital literacy and digital competence that is needed in the law labour market. The Project aims to create an open and inclusive society of legal knowledge and to open access to the scientific areas dealing with the effects of digitalization on law and legal education.
The Conference is the culmination of scientific research on the digitalization of legal education and the digitalization of law. It provides a venue for the presentation and discussion of scientific research focusing on such and related themes. The full program of the event is available here.
The conference will be held in a hybrid format. Participation is free of charge, but registration is required.
Yegiazaryan v. Smagin, Civil RICO, and the Enforcement of Foreign Awards in the United States
Thanks to Alberto Pomari, JD Candidate at the University of Pittsburgh School of Law, for his assistance with this post.
Two cases slated for Supreme Court’s 2024 term could boost the enforcement of foreign arbitral awards in the United States. On Friday January 13, 2023, the U.S. Supreme Court granted certiorari and consolidated the cases of Yegiazaryan v. Smagin and CMB Monaco v. Smagin. Both present the question of when an injury is foreign or domestic for purposes of RICO civil applicability. Beyond this statutory issue, however, the Supreme Court’s decision will have consequences for the enforcement of foreign arbitral awards too.
The Racketeer Influenced and Corrupt Organizations Act (“RICO”) enables private individuals injured by a racketeering violation to bring a civil suit and recover treble damages if he was “injured in his business or property.” In RJR Nabisco, Inc. v. European Cmty., the U.S. Supreme Court upheld the federal presumption against extraterritoriality to limit RICO’s private right of action to only those injuries that are “domestic” in their nature. However, no definition or test was provided to draw a bright line between domestic and foreign injuries.
In Yegiazaryan v. Smagin, the defendant (Yegiazaryan) is a Russian businessman living in California. The plaintiff (Smagin) commenced arbitration proceedings against him in London and was awarded $84 million. In 2014, Smagin successfully filed to recognize and enforce the award against Yegiazaryan in the U.S. district court where Yegiazaryan now resides. In 2020, Smagin filed a RICO action against Yegiazaryan alleging that he and various associates attempted to conceal $198 million from Smagin, which inevitably “injured in his business or property.” Specifically, Smagin alleged that his U.S. judgment confirming this prior foreign arbitral award against Yegiazaryan is intangible property located in the United States, thus making any injury thereto eligible for a RICO civil claim even though he lives abroad.
As to the location of intangible property for purposes of RICO injuries, circuits have split. The Seventh Circuit adopted the residency test, according to which an injury to intangible property must occur in the place where the plaintiff has its residence. Accordingly, a foreign-resident plaintiff like Smagin always suffers foreign injuries to intangible property and cannot recover under RICO. The Third Circuit rejected the residency test in favor of a holistic, six-factor test, with particular emphasis on where the plaintiff suffers the effect of the injurious activity. The Ninth Circuit in the Smagin cases adopted a totality-of-the-circumstances test similar to the Third Circuit’s one, yet with a particular emphasis on the defendant’s conduct. Indeed, the court concluded that Smagin had pleaded a domestic injury because much of the defendant’s alleged misconduct took place in California and the U.S. judgment confirming the foreign award could be executed against the defendant only in California.
The case also has implications for the enforcement of foreign judgments and arbitral awards in the United States. If a U.S. judgment recognizing a foreign judgment or confirming a foreign arbitral award are considered property in the United States, then RICO violations committed in the process of trying to avoid enforcement of the U.S. judgment may give rise to civil liability.
Ferrari, Rosenfeld & Kotuby, Recognition and Enforcement of Foreign Arbitral Awards: A Concise Guide to the New York Convention’s Uniform Regime
With my co-authors Professor Franco Ferrari and Friedrich Rosenfeld, I am pleased to announce the publication of my newest work, “Recognition and Enforcement of Foreign Arbitral Awards: A Concise Guide to the New York Convention’s Uniform Regime.” It is available for order here.
This incisive book is an indispensable guide to the New York Convention’s uniform regime on recognition and enforcement of foreign arbitral awards. Framing the Convention as a uniform law instrument, the book analyses case law from major arbitration jurisdictions to explain its scope of application, the duty to recognize arbitral agreements and awards as well as their limitations, and the procedure and formal requirements for enforcing arbitral awards.
Combining insight from arbitration practice with perspectives from private international law, the book underlines the importance of the Convention’s foundation in a treaty of international law, arguing that this entails a requirement to interpret the key concepts it sets forth based on international law rules of interpretation. However, it also demonstrates where municipal laws are relevant and discusses the private international law principles through which these instances can be identified.
Addressing one of the core treaties of international arbitration, this will be crucial reading for legal practitioners and judges working in the field. It will also prove valuable to scholars and students of commercial and private international law, particularly those focused on cross-border disputes and arbitration.