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German Judges Travel to Peru in Climate-Change Trial

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In a widely reported trip, members of the 5th Civil Chamber of the Higher Regional Court of Hamm, Germany, together with two court-appointed experts, travelled to Peru to collect evidence in one of Germany’s first climate-change lawsuits. The highly symbolic case has been brought by Saúl Luciano Lliuyas, a Peruvian farmer, who claims that man-made climate change and the resulting increased flood risk threatens his house in the Andes, which is located right below a glacial lake. Supported by two German NGOs, he seeks compensation from RWE, Europe’s single biggest emitter of carbon dioxide, for the equivalent of its contribution to worldwide human carbon dioxide emissions, i.e. 0.47 percent, of the additional protective measures he had to take to flood-prove his house.

The trip had already been scheduled in 2019 but was delayed by the Covid-19 pandemic. Its main purpose appears to have been the proper instruction of the two experts, who are charged with assessing the climate-change-related risk for the claimant and the extent of RWE’s potential contribution to it.

In terms of private international law, the case is straightforward. The German courts have international jurisdiction on the basis of Articles 4(1), 63(1) Brussels Ia as RWE has its statutory seat and central administration in Germany. As far as the applicable law is concerned, the claimant can rely on the privilege awarded to the (alleged) victims of environmental torts by Art 7 Rome II, according to which they may opt for the law of the country in which the event giving rise to the damage occurred (as opposed to the law of the country in which the damage occurred, which generally applies pursuant to Art. 4(1) Rome II), i.e. for German law in the case of pollutions caused by RWE’s power plants in Germany. Thus, the usual PIL problems of climate-change lawsuits (international jurisdiction based on Art. 7(2) or 8(1) Brussels Ia, immunity of state-owned corporations, predictability of the law of the place of the damage, application of Art. 17 Rome II, …) do not arise in this case.

Regarding the application of substantive German law, the case is much more open. In the first instance, the Regional Court of Essen outright rejected the claim for lack of a sufficient causal connection between RWE’s contribution to climate change and the specific risk of the claimant. This is in line with what might still be the majority position in German scholarship, according to which individual contributions to global climate change cannot trigger civil liability in tort or property law. The fact that the second-instance court has now started to collect evidence implies, however, that it considers the claim to succeed on the basis of the claimant’s submissions. Seen together with the German Constitutional Court quashing national legislation for being incompatible with Article 20a of the Constitution and international commitments to limit global warming in 2021, the lawsuit in Hamm may be a sign of German courts slowly adopting a more active position in the global fight against climate change, including with regard to civil liability.

Conflicting Views on the Restatement (Third) of Conflict of Laws

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The American Law Institute is currently drafting the Restatement (Third) of Conflict of Laws. Lea Brilmayer (an eminent scholar of conflict of laws and a professor at Yale Law School) and Kim Roosevelt (the Reporter for the Restatement (Third) and a professor at the University of Pennsylvania Carey Law School) recently engaged in a spirited debate about the current state of that project. Brilmayer and Daniel Listwa argued here that the current draft needs less theory and more blackletter rules. Roosevelt argued in response that the critics identify a problem that does not exist and propose a solution that would make things worse.

This exchange — the latest back-and-forth in a conversation between these interlocutors — is likely to prove illuminating to anyone curious about the status of the Restatement (Third) in the United States.

Can Blockchain Arbitration become a proper ‘International Arbitration’? Jurors vs. arbitrators

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Written by Pedro Lacasa, Legal Consultant, Universidad Nacional de Asunción

There is no doubt that the use of emerging technologies has impacted the international arbitration arena. This tech revolution was unprecedently accelerated by the 2020 pandemic whilst national States’ borders were closed, and travel activity diminished (if not directly forbidden by some States).

The increase of the application of the Blockchain technology in commercial contracts and the proliferation of smart contracts (even though some think they are in essence merely a piece of software code[1]) have reached the point of being a relevant part of international commerce and suddenly they demand more attention than before (see the overview of these new technologies and its impact in arbitration here http://arbitrationblog.kluwerarbitration.com/2019/01/27/2018-in-review-blockchain-technology-and-arbitration/).

The omnipresence of technology in arbitration and the application of the blockchain technology to dispute resolution mechanisms in the international arena led to the naissance of the ‘blockchain arbitration’.

But just because a method focuses on dispute resolution, is not ipso facto a proper ‘arbitration’.

While the utilization of a trusted chain of information enhanced by technology is encouraged in arbitration proceedings, particularly in international arbitrations, we must underscore the fact that not any dispute resolution mechanism is a proper ‘arbitration’… not even if based on the blockchain.

Blockchain arbitration models do not share some of the essential features of arbitration. The parties cannot choose the arbitrator in charge freely. They cannot easily choose aspects like the language of the procedure, the nationality of the arbitrators, the qualification of the arbitrators, the applicable law, etc. If the parties choose the arbitrators based on their qualifications or nationality, such choices can directly impact the availability of the existing ‘blockchain arbitrators’. A fortiori, the parties cannot choose the applicable law to the arbitration itself or to the merits of the dispute either.

Nominating the arbitrators

In Kleros, one of the most popular blockchain arbitration applications, the candidates for adjudicators first self-select themselves into specific courts (i.e., specific types of disputes) and then, the final selection of the adjudicators is done randomly (meaning a party cannot directly nominate someone in particular as an arbitrator for the underlying dispute). As it specifies in its whitepaper[2] “contracts will specify the options available for jurors to vote”, meaning the contract itself is the first factor that restrain party autonomy. In Kleros anyone can be an adjudicator. The probability of being drawn as an adjudicator for a dispute is proportional to the amount of tokens such user stakes within the platform.

Whilst other platforms such as Aragon[3] use the same drafting (of adjudicators) system, networks such as Jur[4], Mattereum and Sagewise[5] use a system that go a step closer to the International Arbitration legal framework (like the 1958 New York Convention, the UNCITRAL Model Law, etc.) in order to make their awards more enforceable worldwide but still lack the flexibility of a wider private autonomy and the role of the conflicts of laws, both present in classical international commercial arbitration processes.

These blockchain-based dispute resolution adjudicators are referred also as ‘jurors’[6]. ‘Jurors’ are Blockchain users elected to vote in favor of one of the parties to the underlying dispute utilizing the Schelling Point method.

But without even analyzing what the Schelling Point methodology has to do with the art of rendering justice in a definitive and final manner, we must ask the question: if the ‘jurors’ have more features of a jury and not of an arbitrator, why do we call a mechanism that solves disputes through decisions made by jurors and not by arbitrators arbitration?

Moreover, these jurors, like users of the Blockchain, have a direct economic interest in serving as jurors in the dispute at hand[7]. However, to think that an arbitrator decided to assume the task of being a part of an arbitral tribunal in an international arbitration constituted to resolve an international dispute, only because that would mean eventually more money to him, is an obscure idea at best. Such arbitrator was elected because of his or her qualities, experience, background, and reputation. This also occurs in domestic arbitrations. Nonetheless, such private autonomy is not possible in some blockchain arbitrations.

It is one thing to refer to such mechanisms as blockchain-based methods. But it is completely different is to maintain that such mechanisms are indeed ‘arbitrations’ stricto sensu[8], just like suggested by many authors[9] and professional associations such as the Blockchain Arbitration Society

Although the global society must embrace all the tech innovations regarding dispute resolution, the clear definition of what is an ‘arbitration’ and what is not should be a healthy practice.

Conclusion

Overall, the technology evolution within the dispute resolution mechanisms is here to stay. This disruption needs a twofold adaptation: on one hand, the parties on an international contractual commercial relationship must adapt themselves to the new ways of solving disputes. The same goes for Sovereign States, that must update their domestic and international legislation to recognize and somehow regulate such new dispute resolution mechanisms.

On the other hand, these platforms for dispute resolution must adapt to the historical surrounding of the conflict solving industry, calling a dispute resolution mechanism for what it is and avoid euphemisms.

Lastly, the misconception on the dispute resolution mechanisms and international arbitration procedures may provoke a confusion to the detriment of the users of such digital networks.

[1] See Charlie Morgan ‘Will the Commercialisation of Blockchain Technologies Change the Face of Arbitration?’ [Kluwer Arbitration Blog, March 5, 2018] available at http://arbitrationblog.kluwerarbitration.com/2018/03/05/topic-to-be-confirmed/.

[2] Kleros white paper [September 2019] available at https://kleros.io/whitepaper.pdf.

[3] See “Juror staking” and “ Juror drafting” https://github.com/aragon/whitepaper.

[4] See “Open Justice Platform” in Jur’s whitepaper V 3.0.0  [March 2021], available at https://jur.io/wp-content/uploads/2021/03/jur-white-paper-v.3.0.0.pdf.

[5] See Darcy W.E. Allen, Aaron M. Lane & Marta Poblet, ‘The Governance of Blockchain Dispute Resolution’ [Harvard Negotiation Law Review, vol. 25, issue 1, Fall 2019] 75-102.

[6] Maxime Chevalier, ‘From Smart Contract Litigation to Blockchain Arbitration, a New Decentralized Approach Leading Towards the Blockchain Arbitral Order’ [Journal of International Dispute Settlement, vol. 12, issue 4, December 2021] 558 – 584 https://academic.oup.com/jids/article-abstract/12/4/558/6414874?redirectedFrom=PDF.

[7] Kleros white paper [September 2019] available at https://kleros.io/whitepaper.pdf.

[8] See for example Sharath Mulia & Romi Kumari, ‘Blockchain Arbitration: The Future of Dispute Resolution’ [Fox Mandal, November 2021] available at https://www.foxmandal.in/blockchain-arbitration-the-future-of-dispute-resolution/.

[9] For example, see Ritika Bansal, ‘Enforceability of Awards from Blockchain Arbitrations in India [August 2019] available at: http://arbitrationblog.kluwerarbitration.com/2019/08/21/enforceability-of-awards-from-blockchain-arbitrations-in-india/.

News

SICL: Workshop on Providing Information on Foreign Law to Courts on 26 November

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As foreign law assumes an increasingly significant role in judicial practice, the Swiss Institute of Comparative Law is pleased to announce a Workshop on Providing Information on Foreign Law to Courts, which will take place in Lausanne on November 26.

Renowned experts, both individuals and institutions, will delve into practical challenges and share insights, comparing practices from various countries, including England, France, Germany, Poland, Switzerland and USA.

Presentations will be conducted in English, in German or in French.

For further information, please contact: marie-laure.lauria@isdc-dfjp.unil.ch

The program for the workshop is available below or can be accessed here.

 

INDIVIDUAL EXPERTS

9.30-11.00

Chair: Dr. Lukas Heckendorn, Deputy Director, Swiss Institute of Comparative Law

  • Experiences in Poland and Germany compared

Prof. Arkadiusz Wudarski, European University Viadrina Frankfurt

  • A Common Law Experience

Prof. Franz Werro, University of Fribourg and Georgetown University

  • French Experiences

Prof. Gustavo Cerqueira, Université Côte d’Azur

Discussion

11.00-11.30: Coffee break

INSTITUTIONAL EXPERTS

11.30-12.30

Chair: Dr. Ilaria Pretelli, Legal Adviser, Swiss Institute of Comparative Law

  • The German Approach: The Max Planck Guidelines

Jan Peter Schmidt, Priv.-Doz., Max Planck Institute for Comparative and International Private Law, Hamburg

  • The Swiss Approach: experience of SICL

Lukas Heckendorn Urscheler, Deputy Director, Swiss Institute of Comparative Law

Discussion

12.30-13-30 : Lunch

BARCAMP

13.30-16.00

Moderator: Prof. Nadjma Yassari, Director, Swiss Institute of Comparative Law

A Barcamp session is an open and interactive format that encourages collaboration and idea-sharing. Since all participants join every session, the process is highly collaborative, ensuring focused, inclusive, and enriching discussions for everyone involved.

  • Proposing Topics: Any participant can suggest a topic, which will be guided by a moderator.
  • Moderated Discussions: A designated moderator ensures the session stays focused and that everyone has the chance to contribute.
  • Flexible Structure: Sessions can take the form of a short presentation, group discussion, or collaborative brainstorming.
  • Open Exchange: Everyone is encouraged to actively contribute their ideas, perspectives, and questions.
  • Shared Learning: The goal is to exchange knowledge, explore new approaches, and learn from each other.

16.00: closure of event

Issue 4 of Lloyd’s Maritime and Commercial Law Quarterly for 2024

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Issue 4 of Lloyd’s Maritime and Commercial Law Quarterly for 2024 was just published. It contains the following articles, case notes, and book review:

Katherine Reece-Thomas,  “State Immunity and Sunken Treasure: Finders will not Always be Keepers”

Anthony Kennedy, “Unanswered Questions”

Michael F Sturley†, “The Centenary of the Hague Rules: Celebrating a Century of International Conventions Overmining the Carriage of Goods by Sea”

2024 marks the centenary of the Hague Rules, which still play a central role in allocating the risk of cargo loss or damage. To celebrate that milestone, it is valuable to review the history, beginning with the pre-existing risk allocation. When maritime nations applied widely accepted principles differently, efforts began in the late nineteenth century to achieve uniformity by international agreement. Those efforts failed until domestic legislation exacerbated the problem and created greater pressure for a solution. Even after agreement was reached in 1924, however, another fourteen years passed before the Convention was widely in force. Since then, international uniformity has been challenged in multiple ways, and the story continues to this day.

Marcus Teo, “Foreign Law as Fact”

In English law, “foreign law”, as applied under choice-of-law rules, is a question of fact. This “fact doctrine”, however, faces scepticism for three reasons: it remains unclear whether foreign law is truly treated as a question of fact, why it is so treated, and what the precise fact-in-issue is. This article addresses these concerns. It demonstrates that, today, foreign law is treated like any other question of fact. It then argues that foreign law should be classified as a question of fact, and should refer to foreign legal rulings, because this facilitates the accurate prediction of foreign decisions.

Adrian Briggs, “Book Review – Dicey+100. Albert Venn Dicey: A Centennial Commemoration”

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