Daniel S. Tan (O'Melveny & Myers LLP) has posted an article on "Enforcing International Arbitration Agreements in Federal Courts: Rethinking the Court's Remedial Powers" on the Social Science Research Network (SSRN) that will be published in the Virginia Journal of International Law in Spring 2007. The abstract reads:

The area of remedies in private international law is largely unexplored, but provide the very means by which the courts can advance private international law aims such as controlling international litigation and enforcing forum selection. The contractual nature of arbitration agreements and the policy in favor of arbitration make this a good starting point from which a wider remedial framework can be developed.

In practice, the U.S. federal courts invariably enforce arbitration agreements with the statutory remedies in the Federal Arbitration Act. Yet, there is no reason why this should be. Where the statutory remedy is deficient or inappropriate, the courts may appeal to their wider inherent remedial powers to fashion suitable relief. The domestic law of remedies suggests that the courts may use specific and (antisuit) injunctive relief to enforce the parties' right to the arbitral forum, or to award ordinary contractual damages to vindicate what is a straightforward breach of contract. Private international law remedies such as stays of proceedings and nonrecognition of judgments obtained in breach of arbitration agreements are other remedial alternatives that can be used to enforce such agreements. All the same, development of each of these remedies must be done within the context of an overarching remedial scheme – akin to that which exists in domestic law. The domestic law of remedies offers an interlocking set of remedial responses to vindicate wrongs. To effectively control international litigation and improper attempts at forum shopping, the courts must endeavor to develop a similar remedial framework in the private international law context, in order that they may be able to render the most appropriate remedial relief to enforce agreements to arbitrate and advance the policy in favor of arbitration.

You can download the full article here.

In Rickshaw Investments Ltd and Another v Nicolai Baron von Uexkull [2006] SGCA 39 (handed down on 3rd November 2006), there was an appeal against the first-instance decision that the appellant’s (Rickshaw Investments Ltd) action against the respondent (Nicolai Baron von Uexkull) be stayed on the ground of forum non conveniens. The appellants had hired the respondent in 2001 to sell dynasty artefacts from the “Tang Cargo”. The employment contract was subject to German law and the competence of the German courts. When the appellant terminated the contract in 2004, the respondent commenced proceedings in Germany against the first appellant on the basis of a claim in contract.

The appellants, meanwhile, commenced an action against the respondent in Singapore on 10 June 2005. The appellants stated four causes of action, as follows:

• conversion of 25 pieces of the Tang Cargo by the respondent;
• breach of the respondent’s equitable duty of confidentiality towards the appellants;
• breach of the respondent’s fiduciary duties as agent of the appellants; and
• deceit arising from the respondent’s misrepresentations.

In deciding whether or not the appellant’s claim in Singapore should be stayed on the ground of forum non conveniens, the Singapore Court of Appeal looked to the classic test given by the House of Lords in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, stage one of which is that:

a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interest of all the parties and the ends of justice

In order to determine whether Singapore was the appropriate forum for the present proceedings, the court stated the relevant factors for consideration were the general connecting factors; the jurisdiction in which the tort occurred; choice of law, ie, whether the choice of law clause in the contract was exclusive, and if not, which law should be applied to the claims in tort and equity; and the effect of the concurrent proceedings in Germany.

The court found that, under the general connecting factors, Singapore was the appropriate forum to hear the substantive dispute, as the location of the key witnesses was Singapore, and the respondent was a permanent resident of Singapore and resided in Singapore at the time the alleged tortious acts and equitable breaches took place.

In deciding whether the natural and most appropriate forum is that in which the tort occurred, the court placed considerable reliance on Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The Albaforth) [1984] 2 Lloyd’s Rep 91 and Berezovsky v Michaels [2000] 1 WLR 1004, which held that, inter alia, “…if the substance of an alleged tort is committed within a certain jurisdiction, it is not easy to imagine what other facts could displace the conclusion that the Courts of that jurisdiction are the natural forum” (per Goff LJ in the Alberforth at 96). In agreeing with that general principle, the court held that

we must emphasise that the result that is arrived at through the application of the Albaforth principle is only the prima facie position and/or a weighty factor pointing in favour of that jurisdiction. Applying this to the present case, the fact that the respondent’s alleged torts were committed in Singapore does point towards Singapore as being the natural forum to hear the dispute, but this is only one of the factors to be taken into account in the overall analysis, albeit a significant one.

In the choice of law analysis (looked at on the basis that where a dispute is governed by a foreign lex causae, the forum would be less adept in applying this law than the courts of the jurisdiction from which the lex causae originates), a key issue was whether the appellant’s choice to sue in tort was tantamount to an avoidance of the governing law provision in the contract of employment. The court held that, absent bad faith on the part of the appellants,

…we see no reason why they should be denied the freedom of choice to frame their causes of action in the way they have. This has in fact been made clear in the case law. It is, for example, established law that the mere presence of a contractual relationship does not in itself preclude the existence of an independent duty of care in tort: Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 as well as the decision of this court in The Jian He [2000] 1 SLR 8 at [26]….In other words, although the allegedly tortious acts were committed in the course of the respondent’s employment in fact, the acts had a separate legal existence from his contractual obligations and breaches thereof.

The claims in conversion, the other for fraudulent misrepresentation or deceit were claims in tort, and so the double actionability rule applied, subject to the double flexibility exception (see Briggs (1995) 111 LQR 18 at 21); i.e. the decision in Red Sea Insurance Co Ltd v Bouygues SA [1995] 1 AC 190 meant that the tort might nevertheless be actionable even though it was not actionable under the lex fori or the lex loci delicti, and even heralded the possibility that the lex causae of a tort could be the law of a third jurisdiction (other than the lex fori or the lex loci delicti), which has the most significant relationship with the occurrence and with the parties. The court held that it might, in certain exceptional circumstances, be possible for a law other than Singapore law to apply, even in the case of a local tort (i.e. a tort committed in Singapore). That said, the claim in conversion was held to be governed by the lex fori – Singapore law, as that was also the lex loci delicti.The Red Sea exception did not apply, as most of the connecting factors (as discussed above) pointed to Singapore. The claim for fraudulent misrepresentation or deceit likewise fell wholly within Singaporean law under the double actionability rule.

The claims in breach of confidence, and breach of fiduciary duties, were claims in equity. In identifying the choice of law principles, the court relied heavily on T M Yeo, Choice of Law for Equitable Doctrines (Oxford University Press, 2004). The court decided that:

We would, however, accept the more limited proposition to the effect that where equitable duties (here, in relation to both breach of fiduciary duty and breach of confidence) arise from a factual matrix where the legal foundation is premised on an independent established category such as contract or tort, the appropriate principle in so far as the choice of law is concerned ought to be centred on the established category concerned.

On that basis, as the allegations of breach of fiduciary duty as well as breach of confidence arose from the contract of employment itself, German law (as the governing law of the contract) should govern the claims in equity.

The court therefore concluded that, as a whole, the connecting factors clearly pointed to Singapore as being the appropriate forum for the hearing of the substantive issues concerned. On that basis, the appellants’ action in the Singapore courts against the respondent ought not to be stayed.

It is also clear that Singapore is the most natural and appropriate forum to hear the claims in tort. The issue of choice of law appears, as we have noted, to be neutral and, although there is a risk of conflicting decisions by the Singapore and German courts, this factor does not weigh decisively in the respondent’s favour, having regard to the other factors.

The German Federal Supreme Court had to deal with the legal qualification of prize notifications, i.e. communications which are sent to consumers and give the impression that the consumer has won a particular prize, in its judgment of 1st December 2005 (III ZR 191/03). The Court held that jurisdiction concerning a claim based on a prize notification (sec. 661a German Civil Code) which did not lead to the order for goods can be grounded on Art. 5 Nr. 1 Brussels Convention. Before, the Federal Supreme Court has left open how sec. 661a German Civil Code has to be classified and has based jurisdiction on Art. 5 Nr. 3 Brussels Convention and Art. 13 Brussels Convention alternatively. 

In the present case, jurisdiction over a consumer contract according to Art. 13 Brussels Convention (now: Art. 15 Brussels I Regulation) has been refused since this rule had to be interpreted strictly due to its qualification as lex specialis. Here, the requirements of Art. 13 I Nr. 3 Brussels Convention are – according to the Court – not fulfilled since a "contract for the supply of goods or a contract for the supply of services" has not been concluded. The Court regarded it not to be sufficient that the prize notification in question was directed at the arrangement of such a contract, but left open explicitly whether this interpretation also applies with regard to the broader Art. 15 I c) Brussels I Regulation. By refusing Art. 13 Brussels Convention, the Court departs from its former jurisprudence. According to the Federal Supreme Court, jurisdiction has to be based on Art. 5 Nr. 1 Brussels Convention since the term "contract" has to be interpreted widely in view of the ECJ´s case law according to which it is regarded to be sufficient if one person incurs liabilities voluntarily towards another person. Due to the affirmation of Art. 5 Nr. 1 Brussels Convention it could be left open by the Court whether jurisdiction could also be based on Art. 5 Nr. 3 Brussels Convention. 

The full judgment can be found in IPRax 2006,  602 (including an annotation by Jordans, IPRax 2006, 582) as well as on the website of the Federal Supreme Court. 

Advocate General Ruiz-Jarabo Colomer has given his Opinion in Case C-292/05 Lechouritou and Others.

The case is concerned with whether claims for compensation which are brought by a number of Greek citizens against a Contracting State (Germany) as being liable under civil law for acts or omissions of its armed forces fall within the scope ratione materiae of the Brussels Convention. The following questions were referred to the ECJ by order of the Efetio Patron (Court of Appeal, Patras):

1. Do actions for compensation which are brought by natural persons against a Contracting State as being liable under civil law for acts or omissions of its armed forces fall within the scope ratione materiae of the Brussels Convention in accordance with Article 1 thereof where those acts or omissions occurred during a military occupation of the plaintiffs' State of domicile following a war of aggression on the part of the defendant, are manifestly contrary to the law of war and may also be considered to be crimes against humanity?

2. Is it compatible with the system of the Brussels Convention for the defendant State to put forward a plea of immunity, with the result, should the answer be in the affirmative, that the very application of the Convention is neutralised, in particular in respect of acts and omissions of the defendant's armed forces which occurred before the Convention entered into force, that is to say during the years 1941-44?

The Advocate General's answer to the first question referred to the ECJ was that, even if the term “civil and commercial matters” is not defined in the Brussels Convention, it has been held that this term has to be interpreted autonomously and does not include acts iure imperii. The Advocate General establishes two criteria which decide whether an act iure imperii – which does not fall within the scope of the Brussels Convention – has to be identified as such: Firstly, the official role of the parties involved, and secondly the origin of the claim, i.e. whether the exercise of authority by the administration is exorbitant. In the present case, the official character of one of the parties was beyond doubt because the action is directed as against a state. Concerning the second criteria, the exercise of exorbitant authority, it has been stated that martial acts constitute a typical example of a state´s authority. Thus, claims directed at the restitution of damages which have been caused by armed forces of one of the war conducting parties are not “civil matters” for the purposes of Art. 1 of the Brussels Convention.

As – according to the Advocate General´s opinion – the first question has to be answered negatively, the second question referred to the ECJ does not have to be dealt with. However, the Advocate General points out that immunity precedes the Brussels Convention since if it is – due to immunity – not possible to file a suit, it is irrelevant which court has jurisdiction. Further, the examination of immunity and its effects on human rights was beyond the Court´s competence.

In the Advocate General's words,

…a claim for compensation, which is raised by natural persons against a Contracting State of the Brussels Convention, in order to attain compensation for damage caused by armed forces of another Contracting State during a military occupation, does not fall within the material scope of the Brussels Convention, even if those actions can be regarded as crimes against the humanity (approximate translation from the German text of the judgment, para. 79. An English translation is not available.)

This post has been written jointly by Martin George and Veronika Gaertner. There is more coverage of the case on the EU Law Blog.

Substance and Procedure in the Law Applicable to Torts – Harding v Wealands and the Rome II Regulation

Seminar at the British Institute of International & Comparative Law

Tuesday 21 November 2006 17:00 to 19:00
Location: Charles Clore House, 17 Russell Square, London WC1B 5JP

Participants:

• Chair: Mr Justice Lawrence Collins
• Dr Janeen Carruthers, University of Glasgow
• Charles Dougherty (2 Temple Gardens)
• George Panagopoulos (Richards Butler)

This seminar is part of the British Institute's seminar series on private international law which will run throughout the Autumn of 2006 and well into 2007 entitled Private International Law in the UK: Current Topics and Changing Landscapes, sponsored by Herbert Smith.

For more information, see the BIICL website.

Those who attended the launch seminar on 24th October may be interested to know that a transcript is now available on the BIICL website (Institute members only.)

The German Federal Supreme Court dealt with questions concerning Art. 24 Regulation 44/01/EC in its judgment of 1 June 2005 (VIII ZR 256/04).  According to Art. 24 Reg. 44/01/EC a court of a Member State before which a defendant enters an appearance shall have jurisdiction. However, this shall not be the case if appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Art. 22 Reg. 44/01/EC.

After stating that Art. 22 Reg. 44/01/EC was not relevant in the case in question, the Court addressed the question which requirements have to be fulfilled "to contest the jurisdiction" in terms of Art. 24 Reg. 44/01/EC. Here the Court agreed with the prevailing opinion among German legal writers according to a which it is unnecessary to contest international jurisdiction explicitly. Rather, contesting the local jurisdiction of the respective court can – taking account of the concrete situation – also imply that the court's international jurisdiction will be contested. Further, the Court held that the requirements of Art. 24 s. 1 Reg. 44/01/EC (entering an appearance) are not fulfilled if the defendant enters an appearance only in the alternative, i.e. just providently in case the court affirms jurisdiction despite the fact that he is contesting the jurisdiction.

The full judgment can be viewed on the website of the Federal Supreme Court, as well as in IPRax 2006, 594 (including an annotation by Leible/Sommer, IPRax 2006, 568). 

From 9th to 10th November a conference will take place at the Academy of European Law (ERA) in Trier, Germany where recent developments in private international law will be presented. 

Here are the areas which will be discussed:

• Legal and Practical Consequences of Landmark ECJ Decisions (e.g. Lugano Convention Opinion (1/03); Owusu)
• The European Enforcement Order in Judicial Practice
• (The Revision of) the Regulation on Service of Documents
• Cross-border Attachment of Bank Accounts
• International Insolvency Law
• Hague Convention of 30 June 2005 on Choice of Court Agreements
• European Payment Order
• Towards a European Small Claims Procedure – The State of Play
• Future Developments in European Private International Law: Rome I & Rome II

See for the full programme, the list of speakers and further information the website of ERA.

The House of Commons Select Committee on European Scrutiny has produced its thirty-seventh report. It includes discussion of the

• Draft Regulation on the law applicable to contractual obligations (Rome I),
• Commission Green Paper on conflict of laws in matters concerning matrimonial property regimes, including the question of jurisdiction and mutual recognition, and the
• Draft Council Regulation amending Regulation (EC) No. 2201/2003 as regards jurisdiction and introducing rules concerning applicable law in matrimonial matters.

The section on the Draft Regulation on the law applicable to contractual obligations (Rome I) contains an interesting, if out-of-date, appraisal of the Rome I Proposal by Parliamentary Under-Secretary of State at the Department for Constitutional Affairs (Baroness Ashton of Upholland) in a letter dated 20th July 2006. The Under-Secretary of State's objections to Rome I follow the usual pattern, the legislative bones of contention include: Article 1 (scope); Article 3 (freedom of choice); Article 4 (applicable law in the absence of choice); Article 5 (consumer contracts); Article 7 (agency); Article 8(3) (application of the mandatory rules of third countries); Article 13 (voluntary assignment and contractual subrogation) and Article 21 (States with more than one legal system).

Article 8(3) (application of the mandatory rules of third countries) is, of course, cited by the Under-Secretary of State as "the greatest single reason behind the [UK] Governments decision not to opt-in under our Protocol". The Select Committee agreed with the Under-Secretary's evaluation, stating:

We welcome the Government's decision not to opt into this proposal. We also agree with the Government that notwithstanding this decision the United Kingdom should try to participate constructively in the framing of the proposed legal instrument. We ask the Minister to keep us informed as negotiations continue.

With its deletion in both the JURI report (to which the Under-Secretary alludes in her letter), and the Finnish Presidency text produced on the basis of meetings in the Committee of Civil Law (we do not believe the Finnish Presidency Rome I text is publicly available yet), a partial thawing of the attitude towards Rome I may be on the horizon in the UK executive.

In response to the Commission Green Paper on conflict of laws in matters concerning matrimonial property regimes, including the question of jurisdiction and mutual recognition, Government Minister Harriet Harman "cautiously" states:

This is an area of very considerable technical complexity, and the differences in the law relating to matrimonial property differs significantly among the various Member States. The relatively high-level questions raised in the Green Paper do not obviously reflect this concern. The Government will consider how best to respond to the Green Paper and will keep the Scrutiny Committees informed.

The Scrutiny Committee's equally cautious response:

We ask the Minister to explain under what legal base, if any, the Commission may bring forward future legislative measures pertaining to the applicable law regimes governing trans-national matrimonial property proceedings. We also ask the Minister for further information as and when the Government's position on the specific questions raised by the Commission crystallises, and in any event, before the Government formally replies to the Commission.

The Draft Council Regulation amending Regulation (EC) No. 2201/2003 as regards jurisdiction and introducing rules concerning applicable law in matrimonial matters also receives a mixed welcome, with the Parliamentary Under-Secretary of State raising concerns about the applicable law under the Draft Regulation:

A number of other Member States have rules which allow foreign law to apply to family proceedings. However, family courts in the UK are not accustomed to applying foreign law. The Government's approach is that such provisions are not obviously necessary here and that the law of the forum should continue to apply.

"The Government is concerned that to apply the law of a foreign jurisdiction in the UK could involve considerable practical difficulties, cause delay and increase costs, because it may be necessary to call expert evidence as to the foreign law. It is Government policy that the costs to parties should be reasonable. The Government is not at this point wholly persuaded that there are such problems with the lex fori principle to justify departure from that principle.

The response by the Scrutiny Committee is fairly negative as well:

…we share the Government's reservations about the practical difficulties involved in the application of a foreign law in matrimonial proceedings. We ask the Ministers if the Government's thinking in this respect has changed and, if not, if the Government nevertheless intends to opt into this proposal under Title IV.

…we are concerned in particular about the added complexity and additional costs of litigation likely to flow from applying foreign law not only in the courts of England and Wales but also in Scotland and Northern Ireland.

Finally, we note that legal problems associated with "international marriages" are not restricted to marriages between spouses of EU nationalities. We therefore ask the Minister if the Government agrees that the Hague Conference on Private International Law would more appropriately deal with this issue.

All comments welcome.

Christian Schulze (University of South Africa) has published a mongraph: On Jurisdiction and the Recognition and Enforcement of Foreign Money Judgments (Unisa Press). It is the first book of its kind to cover African countries, including Botswana • Malawi • Namibia • South Africa • Swaziland • Tanzania • Uganda • Zambia. The publisher states:

This is a systematic and thorough exposition, with abundant reference to relevant local and international statutes, conventions, treaties, case laws and other authorities, which makes it a very valuable source of knowledge in this field.

In an ever-shrinking world where trade and commerce flow almost naturally across all national boundaries, it is no surprise that the number of cross-border disputes is on the rise. A significant problem associated with the resulting increasing international litigation is the absence of international courts with mandatory jurisdiction in international commercial matters.

Once the litigant has overcome the hurdle of identifying the court which has jurisdiction to hear the international dispute, he may yet face the problem of having the judgment of that court recognised and enforced in another country.

This book is intended to provide some guidelines for establishing the right forum and having a judgment recognised and enforced in another forum. It deals not only with South African, but also with European and English law, as well as the laws of seven Southern African countries.

ISBN 1 86888 340 X (item 7461) xxii + 331pp, soft cover :SA price R119,00 (VAT incl) :Other countries in Africa R169,40 (airmail incl) :Europe and elsewhere: US$31.30 GB?19.90 €27.40 (airmail incl). It can be purchased directly from Unisa Press.

We will shortly be posting a review of the book, so stay tuned.

There is a short note in the new issue of the New Law Journal by Stephen Turner (Beachcroft LLP) entitled "Rome II – all change?" The abstract reads:

Considers the UK law as it applies to torts committed overseas, with reference to the House of Lords ruling in Harding v Wealands, where a road traffic accident had occurred in Australia. Examines the provisions of the Private International Law (Miscellaneous Provisions) Act 1995 on how to deal with international disputes and how the provisions of the Proposal for a Regulation of the European Parliament and the Council on the law applicable to non-contractual obligations (Rome II) will change how the appropriate jurisdiction is determined, considering if any exception should be made for product liability claims.

Ref: New Law Journal N.L.J. (2006) Vol.156 No.7247 Pages 1666-1667. Available on Lawtel.