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Epic’s Fight to #freefortnite: Challenging Exclusive Foreign Choice of Court Agreements under Australian Law

By Sarah McKibbin, University of Southern Queensland

Epic Games, the developer of the highly popular and lucrative online video game Fortnite, recently won an appeal against tech juggernaut, Apple, in Australia’s Federal Court.[1] Fortnite is played by over three million Apple iOS users in Australia.[2] In April 2021, Justice Perram awarded Apple a temporary three-month stay of proceedings on the basis of an exclusive foreign choice of court agreement in favour of the courts of the Northern District of California. Despite awarding this stay, Justice Perram was nevertheless ‘distinctly troubled in acceding to’ Apple’s application.[3] Epic appealed to the Full Court.

On 9 July, Justices Middleton, Jagot and Moshinsky found three errors of principle in Justice Perram’s consideration of the ‘strong reasons’ given by Epic for the proceedings to remain in the Federal Court — despite the exclusive foreign choice of court agreement.[4] Exercising its own discretion, the Full Court then found ‘strong reasons’ for the proceedings to remain in the Federal Court, particularly because enforcement of the choice of court agreement would ‘offend the public policy of the forum.’[5] They discerned this policy from various statutory provisions in Australia’s competition law as well as other public policy considerations.[6] The appeal highlights the tension that exists between holding parties to their promises to litigate abroad and countenancing breaches of contract where ‘serious issues of public policy’ are at play.[7]

1          Exclusive Choice of Foreign Court Agreements in Australia

Australians courts will enforce an exclusive choice of court agreement favouring a foreign court either by granting a stay of local proceedings or by awarding damages for breach of contract. The usual approach is for the Australian court to enforce the agreement and grant a stay of proceedings ‘unless strong reasons are shown why it should not.’[8] As Justice Allsop observed in Incitec v Alkimos Shipping Corp, ‘the question is one of the exercise of a discretion in all the circumstances, but recognising that the starting point is the fact that the parties have agreed to litigate elsewhere, and should, absent some strong countervailing circumstances, be held to their bargain.’[9] The burden of demonstrating strong reasons rests on the party resisting the stay.[10] Considerations of inconvenience and procedural differences between jurisdictions are unlikely to be sufficient as strong reasons.[11]

HCCH Monthly Update: February 2021

Conventions & Instruments

On 1 February 2021, the HCCH 1965 Service Convention entered into force for the Marshall Islands. It currently has 78 Contracting Parties. More information is available here.

On 1 February 2021, the HCCH 2007 Child Support Convention entered into force for Serbia. At present, 41 States and the European Union are bound by the Convention. More information is available here.

On 1 February 2021, the HCCH 1993 Adoption Convention entered into force for Saint Kitts and Nevis. It currently has 103 Contracting Parties. More information is available here.

Meetings & Events

From 1 to 5 February 2021, the Experts’ Group on Jurisdiction met for the fifth time, via videoconference. The discussion focused on questions of policy, including in relation to rules of direct jurisdiction, parallel proceedings, related claims, and mechanisms for judicial coordination and cooperation. More information is available here.

HCCH Monthly Update: November 2020

Conventions & Instruments

On 2 November 2020, Jamaica deposited its instrument of accession to the HCCH 1961 Apostille Convention. It now has 119 Contracting Parties and will enter into force for Jamaica on 3 July 2021. More information is available here.

On 4 November, the Permanent Bureau was informed that on 26 October 2020, Saint Kitts & Nevis deposited its instrument of accession to the HCCH 1993 Adoption Convention. It now has 103 Contracting Parties and will enter into force for Saint Kitts & Nevis on 1 February 2021. More information is available here.

Meetings & Events

From 12 to 13 November 2020, the HCCH, together with the UNIDROIT and UNCITRAL, co-hosted the 2020 International Conference of the Judicial Policy Research Institute (Rep. of Korea) on International Commercial Litigation. A full recording of the event is available here.

Universal Civil Jurisdiction – Which Way Forward?

Serena Forlati and Pietro Franzina edited a book on the Universal Civil Jurisdiction, which was published by Brill a couple of days ago. The book features contributions prepared by colleagues  from four different European countries and eight universities.

The contributions included are the following:

  • ‘The Case of Naït-Liman before the European Court of Human Rights – A Forum Non Conveniens for Asserting the Right of Access to a Court in Relation to Civil Claims for Torture Committed Abroad?’ (Andrea Saccucci, University of Campania);

 

  • ‘The Role of the European Court of Human Rights in the Development of Rules on Universal Civil Jurisdiction – Naït-Liman v Switzerland in the Transition between the Chamber and the Grand Chamber’ (Serena Forlati, University of Ferrara);

 

  • ‘The Interpretation of the European Convention on Human Rights – Lessons from the Naït-Liman Case’ (Malgosia Fitzmaurice, Queen Mary University);

 

Unwired Planet v Huawei [2020] UKSC 37: The UK Supreme Court Declared Competence to Determine Global FRAND Licensing Rate

 

  1. Background

The UK Supreme Court delivered the landmark judgment on Unwired Planet v Huawei and Conversant v Huawei and ZTE, [2020] UKSC 37 on 26 Aug 2020. In 2014, the US company Unwired Planet sued Huawei and other smartphone manufacturers for infringing its UK patents obtained from Ericsson. Some of these patents are essential to the 2G, 3G and 4G wireless telecommunication standards set by the European Telecommunications Standards Institute (ETSI), an international standards setting organization (SSO). Since Ericsson and Nokia are subject to various ETSI policies including patent policies, these policies continue to apply after they are acquired by Unwired Planet. The ETSI patent policy requires that holder of patents that are indispensable for the implementation of ETSI standards, referred to as standard essential patents (SEP) , must grant licence to implementers (such as the smartphone manufacturers) on “fair, reasonable and non-discriminatory ” (FRABD) terms. In 2017, Canadian company Conversant filed similar lawsuits against Huawei and ZTE.

Unwired Planet and Conversant proposed to grant the worldwide licence, but Huawei proposed a UK only licence. Huawei believes that the UK litigation only concerns the UK licence and the licence fees paid to resolve disputes under the UK procedure should cover only British patents and not global patents. The UK Supreme Court upheld the High Court and Court of Appeal judgments, ruling that the FRAND licence will need to be global between large multinational companies. If Huawei refuses to pay the FRAND global licence rate determined by the court, the court will issue an injunction restraining Huawei’s sale of infringing products in the UK.

A true game changer and the apex stone of international commercial litigation – the NILR Special Edition on the 2019 HCCH Judgments Convention is now available as final, paginated volume

On 2 July 2019, the Hague Conference on Private International Law (HCCH) adopted the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (2019 HCCH Judgments Convention). The instrument has already been described as a true game changer and the apex stone in international commercial litigation.

To celebrate the adoption of the 2019 HCCH Judgments Convention, the Netherlands International Law Review (NILR) produced a special edition entirely dedicated to the instrument.

Volume 67(1) of the NILR, which is now available in its final, paginated version, features contributions from authors closely involved in the development of the instruments. The articles provide deep insights into the making, and intended operation, of the instrument. They are a valuable resource for law makers, practitioners, members of the judiciary and academics alike.

The NILR’s Volume comprises the following contributions (in order of print, open access contributions are indicated; the summaries are, with some minor modifications, those published by the NILR).

Jurisdiction to Garnish Funds in Foreign Bank Account

By Stephen G.A. Pitel, Faculty of Law, Western University

Instrubel, N.V., a Dutch corporation, has been attempting in litigation in Quebec to garnish assets of the Republic of Iraq.  The difficult issue has been the nature of the assets sought to be garnished and where they are, as a matter of law, located.  The assets are funds in a bank account in Switzerland payable to the Republic of Iraq (through the Iraqi Civil Aviation Authority) by IATA, a Montreal-based trade association.

Indigenous Claims to Foreign Land: Update from Canada

By Stephen G.A. Pitel, Faculty of Law, Western University

In 2013 two Innu First Nations sued, in the Superior Court of Quebec, two mining companies responsible for a mega-project consisting of multiple open-pit mines near Schefferville, Quebec and Labrador City, Newfoundland and Labrador. The Innu asserted a right to the exclusive use and occupation of the lands affected by the mega-project. They claimed to have occupied, since time immemorial, a traditional territory that straddles the border between the provinces of Quebec and Newfoundland and Labrador.  They claimed a constitutional right to the land under s. 35 of the Constitution Act, 1982.

Double Counting the Place of the Tort?

In common law Canada there is a clear separation between the question of a court having jurisdiction (jurisdiction simpliciter) and the question of a court choosing whether to exercise or stay its jurisdiction.  One issue discussed in the Supreme Court of Canada’s recent decision in Haaretz.com v Goldhar (available here) is the extent of that separation.  Does this separation mean that a particular fact cannot be used in both the analysis of jurisdiction and of forum non conveniens?  On its face that seems wrong.  A fact could play a role in two separate analyses, being relevant to each in different ways.

Supreme Court of Canada: Israel, not Ontario, is Forum Conveniens for Libel Proceedings

The decision to stay proceedings under the doctrine of forum non conveniens is discretionary, which in part means that appeal courts should be reluctant to reverse the decisions of motions judges on the issue.  It comes as some surprise, therefore, that the Supreme Court of Canada has disagreed with not only the motions judge but also the Court of Appeal for Ontario and overturned two earlier decisions denying a stay.  In Haaretz.com v Goldhar (available here) the court held (in a 6-3 decision) that the plaintiff’s libel proceedings in Ontario should be stayed because Israel is the clearly more appropriate forum.

The decision is complex, in part because the appeal also considered the issue of jurisdiction and in part because the nine judges ended up writing five sets of reasons, four concurring in the result and a fifth in dissent.  That is very unusual for Canada’s highest court.