Can foreign freezing orders prevent the forum from granting leave to attach provisionally local assets? The Rouen Court of appeal ruled so in a judgment of 24 March 2009.

The case was about the sale of a ship from a company incorporated in Panama to a companny incorporated in the Marshall Islands. The parties had concluded a memorandum of agreement whereby the buyer, which had paid a deposit upon the signature of the memorandum, would pay the price within three days of the notification of the delivery of the ship. The seller notified. The buyer did not pay. The seller terminated the contract, but kept the deposit. The buyer initiated arbitration proceedings in London (substantive claims are not known).

Parallel arrest proceedings

While the arbitration proceedings were pending, the buyer sought to arrest provisionally (saisie conservatoire) the ship in Greece. A Greek court granted leave to do so ex parte, but when the defendant challenged the order in inter partes proceedings, a Greek court set aside the order on the ground that two critical requirements of Greek law were not met: there was neither a good arguable case nor a real risk that the award would go unsatisfied.

When the ship showed up in France a year later, the buyer sought to arrest it provisionally again. The commercial court of Rouen (Normandy) granted leave to do so ex parte. The defendant challenged unsuccessfully the French order in inter partes proceedings. It then appealed.

Recognition of Foreign Order

The Court of appeal of Rouen allowed the appeal, and set aside the arrest. It did so on the ground that the dispute had been settled by the Greek court, not on the ground of French substantive law. Indeed, the Court ruled that French law had different requirements, but that this was irrelevant since the court was bound to recognize the foreign order. It underlined that the foreign order had been rendered between the same parties, had the same object and the same cause.

One would have expected the court to rule that the foreign order was res judicata and thus prevented any other European court  from deciding the dispute again. The court referred to article 33 of the Brussels I Regulation and held that it was bound to recognize the foreign order. It also held that the two disputes were the same by the Brussels I Regulation standards (parties, cause, object).

However, the court got it all wrong when it offered its final legal analysis. It held that the French order was irreconcilable with the Greek order. It concluded that, in such circonstances,  article 34 of the Brussels I Regulation demanded that the foreign order be recognized and the French court not issue a contradictory order. This was a rather innovative reading of article 34. Article 34 provides that, when one of the two irreconcilable judgments was rendered by the forum, it should always be preferred. Article 34  does not help recognition: it offers grounds for denying it.

Nevertheless, the decision is interesting. If the court had applied the res judicata doctrine instead of addressing the issue through the conflict of judgments doctrine, it would have reached the exact result that it wanted to reach.

It might then have wanted to discuss the issue of the applicable law to res judicata: res judicata of provisional orders is typically limited , as they often can be modified in case of new circumstances. This is what article 700 of the Greek Code of civil procedure provides. But did Greek law govern the issue?

I am grateful to Sebastien Lootgieter for drawing my attention to this case.

Dean Symeon Symeonides has posted American Federalism and Private International Law on SSRN. The abstract reads:

This Article is written for readers outside the United States, especially those in the European Union, who are interested in knowing how American federalism has affected the development of American conflicts law.

Among the topics discussed in the Article are: the constitutional allocation of law-making powers between the federal and state governments; the Supreme Court’s interpretation of the constitutional clauses that have a bearing on state choice-of-law decisions; the relative insignificance of interstate as opposed to international boundaries; the development of state choice of law for interstate conflicts; and the law applicable to international conflicts between federal or state law, on the one hand, and foreign law, on the other.

The Article discusses how American conflicts law has moved: (1) from the rigidity of the First Conflicts Restatement to the total flexibility of the choice-of-law revolution; and (2) from the Supreme Court’s close scrutiny of state choice-of-law decisions during the early part of the twentieth century to the laissez faire stance of the Court’s recent jurisprudence. The first movement predates a parallel but much smaller move toward flexibility in Europe, while the latter movement is contrary to the recent rapid centralization of private international law exemplified in the European Union’s Rome I and Rome II regulations.

The Article suggests that the preferred option is a middle course between the excessive flexibility of the American choice-of-law revolution and the European preoccupation with certainty, and between the American de facto regime of total decentralization and the European Union’s rush toward centralization of private international law.

The article is forthcoming in the Hellenic Journal of International Law (2010). It can be freely downloaded here.

The last issue of the Revue critique de droit international privé was just released. It contains three articles and several casenotes.

The first article is a survey of judicial cooperation within the European Union in civil matters (La coopération judiciaire en matière civile dans l’Union européenne: bilan et perspectives). It is authored by Fernando Paulino Pereira, who is in charge of judicial cooperation at the General Secretariat of the Council of the European Union. No abstract is provided, either in French or in English.

In the second article, Laurence Usunier, who lectures at the University of Luxembourg, wonders how useful the Hague Convention on Choice will be (La Convention de la Haye du 30 juin 2005 sur les accords d’élection de for. Beaucoup de bruit pour rien ?). The English abstract reads:

On June 30, 2005, the member states of the Hague Conference of Private International Law adopted the Convention on Choice of Court Agreements. At first sight, one may be disappointed by the outcome of the lengthy negotiations carried out in the Hague. As a matter of fact, there is a huge gap between the ambitions of the initial project – a worldwide convention on jurisdiction and enforcement of judgments in civil and commercial matters – and the subject matter of the Convention which was finally concluded – business-to-business choice of court agreements. However, a thorough study of the Convention scheme reveals that it is far from useless, as it seems to fulfill its main goal, as limited as it may be: making choice of court agreements as effective as possible.

Finally, the Permanent Bureau of the Hague Conference on Private International Law has produced the third article which discusses the opportunity for the Conference of producing principles for international contracts (Choix de la loi applicable aux contrats du commerce international : des principes de La Haye ?). No abstract is provided, either in French or in English.

A full table of contents can be found here. The Revue can be downloaded here, for a fee.

Today, the United States Supreme Court released its decision in Samantar v. Yousef, a case involving whether a top official of Somalia was entitled to assert sovereign immunity for torture and abuse conducted by the government of Somalia on its citizens in the 1980s.  The Court held that the Foreign Sovereign Immunities Act does not govern whether former foreign officials living in the United States can claim immunity from lawsuits in U.S. Courts because the text of the Act, and its legislative history, led to the conclusion that the law was not meant to protect individuals.  Rather, the Act was limited to states and their agencies or instrumentalities, which, in the Court’s view, did not include natural persons.

While this decision might be read to open United States courts for suits against foreign officials, the Court noted that such officials my enjoy immunity under the common law or “other valid defenses” to be examined by the district court on remand.  Such cases will now provide opportunities for the United States government to offer their views on immunity, as did the United States government before the adoption of the Act.  As such, the Obama Administration, and future administrations, will be more concretely involved in determining the metes and bounds of official immunity in United States courts.

In Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19 (available here) the Supreme Court of Canada has upheld the decision of two lower courts that the plaintiff’s claim to enforce a Russian arbitration award was brought after the expiry of the applicable provincial limitation period.

Following a contractual dispute, Yugraneft commenced arbitration proceedings before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation.  The arbitral tribunal issued its final award on September 6, 2002, ordering Rexx to pay US$952,614.43 in damages to Yugraneft.  Yugraneft applied to the Alberta Court of Queen’s Bench for recognition and enforcement of the award on January 27, 2006, more than three years after the award was rendered.

The court was required to interpret article 3 of the New York Convention, which provides that recognition and enforcement shall be “in accordance with the rules of procedure of the territory where the award is relied upon”.  This raised an issue in Canadian litigation since the Supreme Court of Canada has held (in Tolofson v. Jensen, [1994] 3 S.C.R. 1022) that limitation periods are substantive and not procedural.  The court rightly concludes that this does not mean that the forum’s limitation period cannot be applied to the enforcement action (paras. 18-29). 

The remainder of the decision deals with what the limitation period is under Alberta law.  The plaintiff attempted to convince the court to apply a ten-year period, applicable to a “claim based on a judgment or order for the payment of money” (para. 43).  The court, based on the clear wording of the statute, had to conclude that an arbitration award did not fall within this language (para. 44).  As a result, the claim was governed by the general two-year period and so was, on the facts, time barred (para. 63).

The court does suggest that the two-year time period will not start to run until the plaintiff discovers, or should have discovered, that the defendant has assets in the place where enforcement is sought (para. 49).  This fact is not strictly part of the cause of action.  Still, this statement, if accepted as correct, should provide some comfort in the face of the relatively short two-year period.  However, this statement draws in part on the specific language of s. 3(1)(a)(iii) of the Alberta limitation statute, which deals with knowing whether a proceeding is “warranted” (see para. 61).  If so, the analysis could be different under a statute that did not have this specific language as part of the test of discoverability (see for example the language in s. 5(1)(a)(iv) of the Ontario limitation statute).

This area would benefit from a clear legislative solution, namely a provision containing an express limitation period for claims on foreign arbitration awards.  Such a period should, in recognition of the issues involved, be longer than the province’s general limitation period.

On 17 and 18 June 2010, the Schools of Law of Erasmus University Rotterdam and the University of Maastricht (the Netherlands) will jointly organize a conference devoted to the subject “Civil Litigation in a Globalizing World; a Multidisciplinary Perspective”.

Globalization of legal traffic and the inherent necessity of having to litigate in foreign courts or to enforce judgments in other countries considerably complicate civil proceedings and access to justice. This triggers the debate on the need for harmonization of civil procedure. In recent years, this debate has gained in importance because of new legislative and practical developments both at the European and the global level. These developments, amongst others the bringing about of the ALI/UNIDROIT Principles of Transnational Civil Procedure (2004) and some recent European Regulations introducing harmonized procedures, as well as problems encountered in the modernization of national civil procedure and in attempts for further harmonization, require deliberation.

Papers will be presented by renowned speakers from the perspectives of legal history, law and economics, policy, private international law and private law. European and global projects in the field of harmonization of civil procedure will be discussed by experts involved in those projects. Furthermore, national papers on specific developments, problems relating to or views on harmonization of civil procedure will be presented by experts from that jurisdiction.

For further information on the program, the speakers and to register, please click here.

CLA – CONFERENCIA LATINOAMERICANA DE ARBITRAJE – 10 – 11 de junio de 2010 – Asunción, Paraguay

On the 10th and 11th of June, the II Latin American Conference on Arbitration will be held in the city of Asunción, organized by the CEDEP with the support of the American Association of Private International Law.

Following, on June 12th, at noon, a meeting will take place, regarding “Contemporary Management Issues in International Arbitration and Dispute Resolutions Practices”, organized in association with The Law Firm Management Committee of the International Bar Association, and whose agenda and direction will be in charge of Norman Clark, Head of the Law Firm Management Committee of the IBA.

Likewise, on Saturday 12 a “pre-moot” will be held, for Latin American students, organized jointly with the Moot Madrid 2010, with the support of the Willem C. Vis International Commercial Arbitration Moot of Vienna.

In this year’s Conference themes regarding commercial and investment arbitration will be addressed, for the purpose of updating concepts, regulations and arbitral practices and bring them to discussion to the hands of arbitrators, academics and lawyers with experience on international arbitration.

and compare it with English (French, Italian…) versions:

“In particular, the application of a rule of the law determined by this Regulation may not be considered to be contrary to the public policy of the forum on the sole ground that its clauses regarding the reserved portion of an estate differ from those in force in the forum”.

But, who knows, may be there is a way to reach a common understanding of the texts.

Ralf Michaels, who is a professor of law at Duke University School of law, has posted After the Revolution – Decline and Return of U.S. Conflicts of Laws on SSRN.

Scholars in the US have become uninterested in conflict of laws, at least in the core issues that spurred the conflict of laws revolution, especially questions of method and areas of tort and contract law. Proposals for a new (third) Restatement have not yet led very far. By contrast, new interest comes from the fringes: special political questions and interdisciplinarity. As to the first, I use the example of same?sex marriages to discuss the extent to which discussions about politics are inseparably linked with discussions over conflict of laws. Conflict of laws is here not a mere additional field in which policy interests clash; rather, conflict of laws is central to these clashes themselves. As to interdisciplinarity, I discuss (drawing on an issue of Law & Contemporary Problems co-edited with Karen Knop and Annelise Riles, Vol. 71, Summer 2008) the new interdisciplinary interest in the discipline: especially law and economics, but also political science and sociological and anthropological ideas about legal pluralism. We should welcome these developments, because the return of politics and (interdisciplinary) theory may be necessary if we want to make progress in the discipline, including if we want to start working on a new Restatement.

The paper is forthcoming in the Yearbook of Private International Law 2009 (Vol. 11, pp. 11-30). It can be downloaded here.

The British Institute of International and Comparative Law will host a conference on Transnational Securities Class Actions on July 6th, 2010.

The speaker will be Linda Silberman, the Martin Lipton Professor of Law at New York University School of Law, and a Scholar-in-Residence at Wilmer Cutler Pickering Hale and Dorr LLP.

The Conference will be chaired by The Rt Hon the Lord Collins of Mapesbury, Justice of the Supreme Court of the United Kingdom.

The topic is transnational securities class actions, and in particular, the problem of the “f-cubed” (foreign-cubed) securities case. The f-cubed case presents the situation where claims in state A are brought by purchasers who reside outside state A and who purchased their securities from non-state A issuers on exchanges outside state A. The United States Supreme Court has this paradigm case pending before it (Morrison v. National Australia Bank Ltd) and will shortly determine the reach of U.S. jurisdiction and application of U.S. securities law in this situation. Courts in other countries are confronting similar questions. Among the issues raised by these cases are:
(1) In what circumstances should a court exercise jurisdiction over a multinational securities action? (2) Which country’s securities laws should apply in such a case? (3) Will court decisions or settlements of these actions be recognized in other jurisdictions?

Where: BIICL, Charles Clore House, 17 Russell Square, London WC1B 5JP

When: Tuesday 6 July 2010 17:30 to 19:00

More information is available here.

Recent scholarship of Professor Silberman includes an article co-authored with Stephen Choi on Transnational Litigation and Global Securities Class-ActionLawsuits, which can be downloaded here.