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Deference to Foreign Sovereign Submissions

As previously reported here, the United States Court of Appeals for the Second Circuit issued a decision in 2016 reversing a $147.8 million price-fixing judgment against two Chinese manufacturers of Vitamin C. The plaintiffs alleged that the Chinese manufacturers engaged in price fixing and supply manipulation in violation of U.S. antitrust laws. In its first ever appearance as an amicus before a U.S. court, the Chinese government filed a formal statement asserting that Chinese law required the Chinese manufacturers to set prices and reduce the quantities of Vitamin C sold abroad. Relying on this statement, the Second Circuit held that because the Chinese manufacturers could not comply with both Chinese law and the U.S. antitrust laws, principles of international comity compelled dismissal of the case.

This case raises a host of interesting questions. First, did the Second Circuit reach the right result? Second, is this a comity case or a foreign sovereign compulsion case? Third, what level of deference is due to a foreign sovereign that appears in private litigation to explain their country’s laws? Fourth, should U.S. judges defer to such an explanation?

In June 2017, the United States Supreme Court called for the views of the United States.  This past Tuesday, the Solicitor General (SG) filed this brief in response to the Court’s order.

In this submission, the SG explains that the Court should grant review of the Second Circuit’s decision in order to review the court of appeals’ holding that the Chinese government’s submission conclusively established the content of Chinese law.  According to the SG, “a foreign government’s characterization of its own law is entitled to substantial weight, but it is not conclusive.”  The SG argues that the case warrants the Court’s review because “[t]he degree of deference that a court owes to a foreign government’s characterization of its own law is an important and recurring question, and foreign sovereigns considering making their views known to federal courts should understand the standards that will be applied to their submissions.”

Should the Court grant review, the question of what standard should be applied to foreign sovereign submissions will be key.  This is a question I have explored here.

It will be interesting to see whether the Court accepts the SG’s request to review the Second Circuit’s decision.

Jurisdiction, Conflict of Laws and Data Protection in Cyberspace

Report on the Conference held in Luxembourg on 12 October 2017, by Martina Mantovani, Research Fellow MPI Luxembourg

On 12 October 2017, the Brussels Privacy Hub (BPH) at the Vrije Universiteit Brussel and the Department of European and Comparative Procedural Law of the Max Planck Institute Luxembourg held a joint conference entitled “Jurisdiction, Conflicts of Law and Data Protection in Cyberspace”. The conference, which was attended by nearly 100 people, included presentations by academics from around the world, as well as from Advocate General Henrik Saugmandsgaard Øe of the Court of Justice of the European Union. The entire conference was filmed and is available for viewing on the YouTube Channel of the Max Planck Institute Luxembourg (first and second parts) Read more

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.

News

New Private International Law Article in Current Legal Problems

The journal, Current Legal Problems yesterday, inter alia, published an open access article on private international law:

Alex Mills, “The Privatisation of Private (and) International Law”

Privatisation is much studied and debated as a general phenomenon, including in relation to its legal effects and the challenges it presents to the boundaries of public and private law. Outside the criminal context there has however been relatively limited focus on privatisation of the governmental functions which are perhaps of most interest to lawyers—law making, law enforcement and dispute resolution—or on the international legal implications of privatisation. This article argues that modern legal developments in the context of private law and cross-border private legal relations—generally known as party autonomy in private international law—can be usefully analysed as two distinct forms of privatisation. First, privatisation of certain allocative functions of public and private international law, in respect of both institutional and substantive aspects of private law regulation, through the legal effect given to choice of court and choice of law agreements. Second, privatisation of the institutional and substantive regulation of private legal relationships themselves, through arbitration and the recognition of non-state law. Together, these developments have established a global marketplace of state and non-state dispute resolution institutions and private laws, which detaches private law authority from its traditional jurisdictional anchors. Analysing these developments through the lens of privatisation highlights a number of important critical questions which deserve greater consideration—this article further examines in particular whether this form of privatisation in fact increases efficiency in either private international law decision-making or private law dispute resolution, as well as its distributive and regulatory effects.

Out now: Private International Law and Arbitral Jurisdiction by Faidon Varesis

Ever since the infamous West Tankers saga,Private International Law and Arbitral Jurisdiction book cover if not before, the interplay between the international jurisdiction of national courts and arbitral tribunals has been subject to a constant stream of publications. Writing a monograph on this topic that is both fundamental and innovative in this field is therefore no small feat – making this book by Faidon Varesis, which has come out at the beginning of the year and is based on his Cambridge dissertation, all the more impressive. Read more

New Publication in Journal of International Dispute Settlement

On 13 March 2023, the Journal of International Dispute Settlement  published a private international law article:

G Antonopoulou, “The ‘Arbitralization’ of Courts: The Role of International Commercial Arbitration in the Establishment and the Procedural Design of International Commercial Courts” 

International commercial arbitration is the most preferred dispute resolution method in cross-border commercial disputes. It has been, however, claimed that arbitration has lost its flexibility by becoming increasingly formal and by incorporating litigation practices. In academic literature, this trend has been termed the ‘judicialization’ of international commercial arbitration. This article argues that while arbitration is becoming progressively judicialized, international commercial courts evidence an opposite, less studied trend; namely, the ‘arbitralization’ of courts. Through a comparative analysis of different international commercial courts, the article explores how the competition with arbitration has prompted the establishment of these courts, and how arbitration has served as the inspiration for some of their most innovative features. The article concludes that while the incorporation of arbitration features could improve court proceedings, some of international commercial courts’ arbitration features undermine procedural justice and the role of courts as public institutions and therefore hit the limits of arbitralization.