Tag Archive for: jurisdiction

HCCH Monthly Update: October 2021

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Conventions & Instruments

On 5 October 2021, Indonesia deposited its instrument of accession to the HCCH 1961 Apostille Convention, in a ceremony held during the meeting of the Special Commission on the practical operation of the Apostille Convention. With the accession of Indonesia, the Apostille Convention now has 121 Contracting Parties. It will enter into force for Indonesia on 4 June 2022. With this accession, Indonesia becomes the 156th HCCH Connected Party. More information is available here.

Meetings & Events

On 4 October 2021, the HCCH hosted the 12th International Forum on the electronic Apostille programme (e-APP). Throughout the day, experts from around the globe shared their experiences with the development and implementation of the e-APP, its role in the context of e-Government initiatives, and the future of document authentication. More information is available here.

From 5 to 8 October 2021, the Fifth Meeting of the Special Commission on the practical operation of the Apostille Convention was held via videoconference. The meeting coincided with the 60th anniversary of the Apostille Convention. The Special Commission considered the scope and operation of the Convention, including the electronic Apostille Programme (e-APP). Delegates discussed matters relating to the COVID?19 pandemic, plans for the second edition of the Apostille Handbook, and the outcomes of the Experts Group on the e-APP and New Technologies. More information is available here.

On 7 October 2021, the HCCH hosted a virtual seminar on the HCCH 1965 Service Convention and the HCCH 1970 Evidence Convention for the Supreme Court of Ukraine. This will be the first of a series of seminars, organised through the generous support of the EU Project Pravo-Justice, aimed at facilitating the proper and effective implementation of the HCCH Conventions and instruments in Ukraine. More information is available here.

On 8 October 2021, the HCCH hosted a virtual seminar on the negotiation and adoption of the HCCH 2019 Judgments Convention. More information on the 2019 Judgments Convention is available here.

From 11 to 15 October 2021, the Working Group on Matters Related to Jurisdiction in Transnational Civil or Commercial Litigation met for the first time, via videoconference. The Group commenced work on the development of draft provisions on parallel proceedings, to further inform policy considerations and decisions in relation to the scope and type of any new instrument. More information is available here.

On 19 October 2021, the HCCH hosted the HCCH|Approach Global Event. Held online in celebration of the 25th anniversary of the HCCH 1996 Child Protection Convention, the event featured a series of lectures and a live panel discussion by global experts. The winners of the HCCH|Approach Essay Competition and the HCCH|Approach Media and Design Competition were announced during the event. More information is available here.

On 28 October 2021, the HCCH Regional Office for Latin America and the Caribbean hosted an online event for Central Authorities of the HCCH 1996 Child Protection Convention from the region, as part of the HCCH|Approach Initiative.

Other

Save the Date: HCCH a|Bridged Edition 2021 will be held online on Wednesday, 1 December 2021. This year’s edition will discuss contemporary issues relating to the application of the?HCCH 2005 Choice of Court Convention,?including the establishment of?international commercial courts around the globe and how it enables party autonomy. Registration will open on Monday, 1 November. More information is available here.

Vacancy: Applications are now open for the position of Library Assistant (8 to 16 hours per week). The deadline for the submission of applications is this Sunday, 31 October 2021 (12:00 a.m. CET). More information is available here.

 

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

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

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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]

Two categories of strong reasons predominate. The first category is where, as stated in Akai Pty Ltd v The People’s Insurance Co Ltd, enforcement ‘offends the public policy of the forum whether evinced by statute or declared by judicial decision’.[12] This includes the situation ‘where the party commencing proceedings in the face of an exclusive jurisdiction clause seeks to take advantage of what is or may be a mandatory law of the forum’.[13] The prohibition in Australian law against misleading and deceptive conduct is an example.[14] The second category justifying non-enforcement is where litigation in the forum concerns issues beyond the scope of the choice of court agreement or concerns third parties to the agreement.[15] Where third parties are concerned, it is thought that ‘the court should not start with the prima facie disposition in favour of a stay of proceedings’.[16]

2         Factual Background

The successful appeal represents the latest decision in an ongoing international legal battle between Apple and Epic precipitated by Fortnite’s removal from the Apple App Store in August last year. Epic released a software update for Apple iOS devices on 13 August 2020 making the Fortnite’s virtual currency (called V-Bucks) available for purchase through its own website, in addition to Apple’s App Store, at a 20 per cent discount. Any new game downloads from the App Store ‘came equipped with this new feature’.[17] While Fortnite is free to download, Epic’s revenue is generated by players purchasing in-app content, such as dance moves and outfits, through a digital storefront. After the digital storefront takes a commission (usually 30 per cent), Epic receives the net payment.

App developers only have one avenue if they wish to distribute their apps for use on Apple iOS devices: they must use the Apple App Store and Apple’s in-app payment system for in-app purchases from which Apple takes a 30 per cent revenue cut. Epic’s co-founder and CEO Tim Sweeney has singled out Apple and Google for monopolising the market and for their ‘terribly unfair and exploitative’ 30 per cent commission for paid app downloads, in-app purchases and subscriptions.[18] While a 70/30 revenue split has been industry standard for many years, the case for an 88/12 revenue model is building.[19] Sweeney argues that ‘the 30% store tax usually exceeds the entire profits of the developer who built the game that’s sold’.[20]

3         Apple’s App Developer Agreement

Epic’s relationship with Apple is regulated by the Apple Developer Program License Agreement (‘DPLA’) under which Apple is entitled to block the distribution of apps from the iOS App Store ‘if the developer has breached the App Store Review Guidelines’.[21] These Guidelines include the obligation to exclusively use Apple’s in-app payment processing system. Clause 14.10 contains Epic’s contractual agreement with Apple to litigate in the Northern District of California:

Any litigation or other dispute resolution between You and Apple arising out of or relating to this Agreement, the Apple Software, or Your relationship with Apple will take place in the Northern District of California, and You and Apple hereby consent to the personal jurisdiction of and exclusive venue in the state and federal courts within that District with respect any such litigation or dispute resolution.

By introducing a custom payment facility, the August update breached the App Store Review Guidelines. Apple swiftly removed Fortnite from its App Store. There were three consequences of this removal: first, Fortnite could not be downloaded to an Apple device; secondly, previously installed iOS versions of Fortnite could not be updated; and, thirdly, Apple device users could not play against players who had the latest version of Fortnite.[22]

4         The Proceedings

On the same day as Apple removed Fortnite from the App Store, Epic commenced antitrust proceedings in the United States District Court for the Northern District of California, alleging Apple’s ‘monopolisation of certain markets’ in breach of the United States’ Sherman Act and other California legislation. The judgment in the US trial is expected later this year. Epic also sued Apple in United Kingdom, the European Union and Australia on competition grounds. In February, the United Kingdom’s Competition Appeal Tribunal refused permission to serve Epic’s claim on Apple in California because the United Kingdom was not a suitable forum (forum non conveniens).[23] Together with these legal actions, Epic commenced a marketing campaign urging the game’s worldwide fanbase to ‘Join the fight against @AppStore and @Google on social media with #FreeFortnite’.[24] Epic also released a video parodying Apple’s famous 1984 commercial called ‘Nineteen Eighty-Fortnite’.[25]

The Australian proceedings were brought in the Federal Court in November 2020. Epic’s complaint against Apple is the same as in the US, the EU and the UK, but with the addition of a territorial connection, ie developers of apps for use on Australian iOS devices must only distribute their apps through Apple’s Australian App Store and only use Apple’s in-app payment processing system. As a consequence, Epic alleges that Apple has contravened three provisions of Part IV of the Competition and Consumer Act 2010 (Cth) concerning restrictive trade practices and the Australian Consumer Law for unconscionable conduct. In addition to injunctive relief restraining Apple from continuing to engage in restrictive trade practices and unconscionable conduct, Epic seeks ancillary and declaratory relief.

Apple applied for a permanent stay of the Federal Court proceedings, relying on the choice of court agreement in the DPLA and the doctrine of forum non conveniens. Epic unsuccessfully argued that its claims under Australian law did not ‘relate to’ cl 14.10 of the DPLA.[26] More critically, Justice Perram did not think Epic had demonstrated strong reasons. He awarded Apple a temporary three-month stay of proceedings ‘to enable Epic to bring this case in a court in the Northern District of California in accordance with cl 14.10.’[27] Where relevant to the appeal, Justice Perram’s reasoning is discussed below.

5         The Appeal: Three Errors of Principle

The Full Court distilled Epic’s 17 grounds of appeal from Justice Perram’s decision into two main arguments. Only the second argument — turning on the existence of ‘strong grounds’[28] — was required to determine the appeal. Justices Middleton, Jagot and Moshinsky identified three errors of principle in Justice Perram’s evaluation of ‘strong reasons’, enabling them to re-evaluate whether strong reasons existed.

The first error was Justice Perram’s failure to cumulatively weigh up the reasons adduced by Epic that militated against the granting of the stay. Justice Perram had grudgingly granted Apple’s stay application without evaluating the five concerns he had expressed ‘about the nature of proceedings under Part IV which means they should generally be heard in this Court’,[29] as he was required to do. The five concerns were:[30]

  1. The public interest dimension to injunctive proceedings under the Competition and Consumer Act;
  2. The ‘far reaching’ effect of the litigation on Australian consumers and Australian app developers as well as the nation’s ‘interest in maintaining the integrity of its own markets’;
  3. The Federal Court’s exclusive jurisdiction over restrictive trade practices claims;
  4. ‘[D]icta suggesting that [restrictive trade practices] claims are not arbitrable’; and
  5. That if the claim in California ‘complex questions of [Australian] competition law will be litigated through the lens of expert evidence’.

The second error was Justice Perram’s ‘failure to recognise juridical disadvantages of proceeding in the US Court’.[31] The judge had accepted that litigating the case in California would be ‘more cumbersome’ since ‘expert evidence about the content of Australian law’ would be needed.[32] There was a risk that a California court ‘might decline to hear the suit on forum non conveniens grounds.’[33] Despite that, he concluded that ‘[a]ny inconvenience flows from the choice of forum clause to which Epic has agreed. It does not sit well in its mouth to complain about the consequences of its own bargain’.[34] However, the Full Court viewed the inapplicability of ‘special remedial provisions’ of the Australian Competition and Consumer Act in the California proceedings as the loss of a legitimate juridical advantage.[35]

The third error concerned a third party to the exclusive jurisdiction clause. In Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd, Justice Bell observed that the default enforcement position was inapplicable in cases where ‘not all parties to the proceedings are party to an exclusive jurisdiction clause’.[36] Apple Pty Limited, an Australian subsidiary of Apple, was not a party to the DPLA. Yet it was responsible ‘for the distribution of iOS-compatible apps to iOS device users’ within the Australian sub-market in a manner consistent with Apple’s worldwide conduct.[37] Moreover, Epic’s proceedings included claims under the Competition and Consumer Act and the Australian Consumer Law against the Australian subsidiary ‘for conduct undertaken in Australia in connection with arrangements affecting Australian consumers in an Australian sub-market.’[38] In this light, the Full Court rejected Justice Perram’s description of the joinder of Apple Pty Limited as ‘ornamental and ‘parasitic on the claims Epic makes against Apple’.[39]

6          The Appeal: Strong Reasons Re-evaluated

The stay should have been refused. The Full Court found a number of public policy considerations that cumulatively constituted strong reasons not to grant a stay of Epic’s proceedings. The judges discerned ‘a legislative policy that claims pursuant to [the restrictive trade practices law] should be determined in Australia, preferably in the Federal Court’ — although it was not the only court that could hear those claims.[40] Essentially, the adjudication of restrictive trade practices claims in the Federal Court afforded legitimate forensic advantages to Epic — benefits which would be lost if Epic were forced to proceed in California. These benefits included the availability of ‘specialist judges with relevant expertise’ in the Federal Court, the potential for the Australian Competition and Consumer Commission to intervene, and the opportunity for private litigants (as in this case) to ‘develop and clarify the law’.[41] Indeed, the Federal Court has not yet interpreted the misuse of market power provision in the Competition and Consumer Act relied upon by Epic, which came into effect in 2017.[42] The litigation will also impact millions of Australians who play Fortnite and the state of competition in Australian markets.[43]

 

 

[1] Epic Games, Inc v Apple Inc [2021] FCAFC 122.

[2] Epic Games, Inc v Apple Inc (Stay Application) [2021] FCA 338, [7] (Perram J).

[3] Ibid, [64] (Perram J).

[4] Epic Games, Inc v Apple Inc (n 1) [48].

[5] Ibid.

[6] Ibid, [90].

[7] Ibid, [97]. See James O’Hara, ‘Strategies for Avoiding a Jurisdiction Clause in International Litigation’ (2020) 94(4) Australian Law Journal 267. Compare Mary Keyes, ‘Jurisdiction under the Hague Choice of Courts Convention: Its Likely Impact on Australian Practice’ (2009) 5(2) Journal of Private International Law 181; Richard Garnett, ‘Jurisdiction Clauses since Akai’ (2013) 87 Australian Law Journal 134; Brooke Adele Marshall and Mary Keyes, ‘Australia’s Accession to the Hague Convention on Choice of Court Agreements’ (2017) 41 Melbourne University Law Review 246.

[8] A Nelson & Co Ltd v Martin & Pleasance Pty Ltd (Stay Application) [2021] FCA 754, [10] (Perram J) (emphasis added). See also Huddart Parker Ltd v Ship ‘Mill Hill’ (1950) 81 CLR 502, 508–9 (Dixon J); The Eleftheria [1970] P 94, 99 (Brandon J); Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418, 427–9 (Dawson and McHugh JJ), 445 (Toohey, Gaudron and Gummow JJ).

[9] Incitec Ltd v Alkimos Shipping Corp (2004) 138 FCR 496, 505 [43].

[10] There was some argument about onus in Epic Games (Stay Application) (n 2) [35]–[40] (Perram J).

[11] Incitec (n 9) [49]; Andrew S Bell, ‘Jurisdiction and Arbitration Agreements in Transnational Contracts: Part I’ (1996) 10 Journal of Contract Law 53, 65. See generally O’Hara (n 7).

[12] (1996) 188 CLR 418, 445 (Toohey, Gaudron and Gummow JJ). See also Marshall and Keyes (n 7) 257.

[13] Australian Health and Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419, 438 [80] (Bell P).

[14] Australian Consumer Law s 18.

[15] Incitec (n 9) 506 [47], [49] (Allsop J); Marshall and Keyes (n 7) 258.

[16] Australian Health (n 13) 423 [1] (Bathurst CJ and Leeming JA), 442 [90] (Bell J).

[17] Epic Games (Stay Application) (n 2) [6] (Perram J).

[18] @TimSweeneyEpic (Twitter, 29 July 2020, 1:29 pm AEDT) <https://twitter.com/TimSweeneyEpic/status/1288315775607078912>.

[19] See, eg, Nick Statt, ‘The 70-30 Revenue Split is Causing a Reckoning in the Game Industry’, protocol (Web Page, 4 May 2021) <https://www.protocol.com/newsletters/gaming/game-industry-70-30-reckoning?rebelltitem=1#rebelltitem1>.

[20] @TimSweeneyEpic (Twitter, 26 June 2019, 10.13 am AEDT) <https://twitter.com/TimSweeneyEpic/status/1143673655794241537>.

[21] Epic Games (n 1) [5].

[22] Epic Games (Stay Application) (n 2) [7].

[23] Epic Games, Inc v Apple Inc [2021] CAT 4.

[24] ‘#FreeFortnite’, Epic Games (Web Page, 13 August 2020) <https://www.epicgames.com/fortnite/en-US/news/freefortnite>.

[25] Fortnite, ‘Nineteen Eighty-Fortnite – #FreeFortnite’ (YouTube, 13 August 2020) <https://youtu.be/euiSHuaw6Q4>.

[26] Epic Games (Stay Application) (n 2) [11]–[12].

[27] Ibid, [66].

[28] Epic Games (n 1) [41], [47].

[29] Ibid, [57].

[30] Epic Games (Stay Application) (n 2) [59]–[63].

[31] Epic Games (n 1) [58].

[32] Epic Games (Stay Application) (n 2) [53].

[33] Ibid, [44].

[34] Ibid, [58].

[35] Epic Games (n 1) [62].

[36] Australian Health (n 13) 442 [90] (Bell P).

[37] Epic Games (n 1) [74].

[38] Ibid, [78].

[39] Ibid.

[40] Ibid, [99]. The Full Court clarified that ‘other Australian courts may determine Pt IV claims, but within a limited compass and for specific reasons’: [116].

[41] Ibid, [104], [107], [122].

[42] Ibid, [107].

[43] Ibid, [97].

HCCH Monthly Update: February 2021

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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.

From 8 to 11 February 2021, the Experts’ Group on International Transfer of Maintenance Funds met via videoconference. The Group continued its work discussing good practices and identifying possible future improvements in relation to the cross-border transfer of child support payments, with a view to facilitating the most cost-effective, transparent, prompt, efficient and accessible cross-border transfer of funds. More information is available here.

From 15 to 17 February 2021, the Experts’ Group on Parentage/Surrogacy met for the eighth time, via videoconference. The Group discussed what the focus of its work should be at its next meeting(s) in order to prepare its final report on the feasibility of a possible future general private international law instrument on legal parentage and the feasibility of a separate possible future protocol with private international law rules on legal parentage established as a result of an international surrogacy arrangement. More information is available here.

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

HCCH Monthly Update: November 2020

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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.

From 16 to 19 November 2020, the Experts’ Group on Jurisdiction met for the fourth time, via videoconference. The meeting focused on the elements to be included on a possible future instrument on direct jurisdiction and parallel proceedings. More information is available here.

Following last month’s Roundtable on the 2019 Judgments Convention co-hosted by the HCCH and the University of Bonn (a pre-cursor to the September 2021 Conference), a full recording of the event is available here.

Publications & Documentation

On 24 November 2020, the Permanent Bureau launched the post-event publication of the inaugural edition of HCCH a|Bridged, of which the focus was the Service Convention in the Era of Electronic and Information Technology. The publication is now available for download in English only. More information is available here.

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

Universal Civil Jurisdiction – Which Way Forward?

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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);

 

  • ‘Public International Law Constraints on the Exercise of Adjudicatory Jurisdiction in Civil Matters’ (Lucas Roorda and Cedric Ryngaert, University of Utrecht);

 

  • ‘Universal Civil Jurisdiction and Reparation for International Crimes’ (Beatrice I. Bonafè, University of Rome La Sapienza);

 

  • ‘Limitations to the Exercise of Civil Jurisdiction in Areas Other Than Reparation for International Crimes’ (Fabrizio Marongiu Buonaiuti, University of Macerata);

 

  • ‘Residual Jurisdiction under the Brussels I bis Regulation – An Unexpected Avenue to Address Extraterritorial Corporate Human Rights Violations (Mariangela La Manna, Catholic University of the Sacred Heart, Milan);

 

  • ‘The Law Applicable to the Civil Consequences of Human Rights Violations Committed Abroad’ (Patrick Kinsch, University of Luxembourg);

 

  • ‘The Changing Face of Adjudicatory Jurisdiction’ (Pietro Franzina, Catholic University of the Sacred Heart, Milan).

More info available here.

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

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  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.

  1. Legal Issues

The Supreme Court answers five legal questions: 1. Does the English court have the power or jurisdiction without the parties’ agreement to require the parties to enter into a global licence under a multinational patent portfolio? 2. Is England the proper forum for such a claim? 3. What is the meaning and effect of the non-discrimination component of the FRAND undertaking? 4. Does the CJEU’s decision in Huawei v ZTE mean that a SEP owner is entitled to seek an injunction restraining infringement of those SEPs in circumstances such as those of the Unwired case? 5. Should Court grant damages in lieu of an injunction?

Given our focus on private international law, this note only focuses on the private international law related issue, namely the English court’s “long arm” jurisdiction to grant a global licence for dispute concerning the infringement of the UK patent and to issue an injunction if the global licence rate is not complied.

 

  1. Territoriality of Patents and Globalisation of Telecommunication

Telecommunication industry faces the conflict between territoriality of patents and globalisation of telecom products and equipment. Products made in different countries should be able to communicate and inter-operate and keep operational in different jurisdictions. It would be unrealistic to require patent holders to defend their patent country by country. It is also harmful to the industry if SEP holders demand unreasonable licence fees and prohibit the use of its invention within a national jurisdiction. It is unreasonable for consumers if they cannot use their mobiles smartphones or other telecom devices when travel abroad. To reconcile the conflict, the ETSI policy requires the SEP holders to irrevocably license their SEP portfolios on fair, reasonable and non-discriminatory (“FRAND”) terms. The policy reconciles conflict of interest between SEP holders and SEP implementers but does not, at least directly, resolve the conflict between territoriality and globalisation. In terms of the later, the industry practice shows that multinational SEP holders and implementers usually negotiate worldwide licences, bearing in mind that the SEP holders and implementers cannot test validity of each patent of the portfolio in each country. The licence rate is thus based on the understanding that some patents may be invalid in some countries.

The Supreme Court confirmed the territoriality principle. English court only has jurisdiction to determine validity and infringement of the UK patent. But the English court, based on the jurisdiction on the UK patent, has the competence to grant a global licence rate.

This judgment includes a few private international law matters. Firstly, the granting of global licence rate is a matter in relation to applicable law instead of jurisdiction from the private international law perspective. The case concerns the infringement and validity of the UK patents and the English court has no problem to take jurisdiction. After ruling the defendant indeed infringed the valid UK patents the English court moved to remedy. The remedy to the infringement of SEPs is the grant of FRAND rate pursuant to the ETSI policy and industry practice. This, however, does not mean the English court directly treats business custom or ETSI policy as the governing law, which, standing alone, may not be able to acquire the status as other non-state norms under the current legal framework. (Rome I Regulation) They are applied pursuant to the contract principle. The judgment heavily relies on the ETSI policy, including its language and purpose. The court concludes that the ETSI policy creates a contractual arrangement between SEP holders and implementers and it is the intention of the policy to grant global licences for SEP portfolios taking into account of industry practices and the purpose. English courts’ power to determine a global FRAND licence rate is inherently consistent with the ETSI policy, given there is no alternative international forum available. There is no much consideration of any choice of law rules, except the clarification that the ETSI policy was governed by French law. The court nevertheless does not consider the French law principle in interpreting contracts. Instead, the court naturally applies these non-state norms as part of the contract between the parties. Relying on contract to seise the power to determine the global rate helps the court to avoid the necessity to determine the validity of foreign patents of the same patent family.

The Supreme Court also considered the forum non conveniens in Conversant case (forum non conveniens was not plead in Unwired Planet). The court refused to accept that China would be the more appropriate alternative forum. Although 64% of Huawei’s sales occur in China and only 1% in the UK and 60% of the ZTE’s operating revenue in the first six months of 2017 was from China and only 0.07% from the UK, the Supreme court held that Chinese courts might not assume jurisdiction to determine the global FRAND term. It seems possible that if China, or any other country, which maybe the most important global market for the disputed patents, follows the UK approach to grant global licence for SEP portfolios, the English court may apply forum non conveniens to decline jurisdiction. In fact, Chinese law does not prevent a Chinese court from issuing licence with broader territorial coverage, though there is not yet any case on this matter. The “Working Guidance for Trial of SEP disputes by the Guangdong Province Higher People’s Court (for Trial Implementation)” of 2018 provides in Art 16 that if the SEP holder or implementer unilaterally applies for the licence covering areas exceeding the court’s territory, and the other party does not expressly oppose or the opposition is unreasonable, the court could determine the applied licence rate with broader geographic coverage.

A more controversial point of the judgment is that the Supreme Court concludes that the ESTI policy would allow the court to issue injunction if the implementer refuses to pay the global licence rate. It is important to know that the ESTI policy does not expressly state such an effect. The UK court believes that an injunction would serve as a strong incentive for the patentee to accept a global licence. Damages, on the other hand, may encourage implementers to infringe patents until damages are applied and received in each jurisdiction. This conclusion is rather surprising as the injunction of SEPs in one jurisdiction may have the potential to disturb the whole telecommunication market for the given manufacturer. There is even argument that the purpose of ESTI is to prohibit injunction for SEPs (here; and here) The use of injunction may not “balance” the conflicting interests, but significantly favours the SEP holders to the disadvantage of the implementers

  1. Forum Shopping and Conflict of Jurisdiction

It is important to note that regardless of the current geopolitical tension between the US and China, the UK Supreme Court’s judgment should not be interpreted as one that has taken the political stance against China’s High-Tech companies. (here) It upholds the judgments of the lower courts dated back to 2017. It is also consistent with the principle of judicial efficiency, protection of innovation and business efficacy. Although the final result protects the patent holders more than the implementers, it is hard to argue anything wrong in terms of policy. Furthermore, since Huawei and Unwired Planet had already settled and the rate set by the court had been paid, this judgment will not result in additional payment obligations or an injunction. (here) Finally, although Huawei lost this case as the implementer, Huawei is also the biggest 5G SEP holder. Pursuant to this judgment, although Huawei has been banned from the UK’s 5G network, it can still require other 5G implementers for a global FRAND licence rate and apply for injunction upon a refusal.

If there is any political drive, it may be the intention to become an international litigation centre for patent disputes after Brexit. This judgment allows the English court jurisdiction to determine a global licence rate simply based on the infringement of a UK patent, no matter how small the UK market is. The one-stop solution available in the English court would be particularly welcome by patent holders, especially SEP holders, who would no longer need to prove validity in each jurisdiction. This judgment also enhances the negotiation power of the SEP holders versus implementers. It is likely that more FRAND litigation would be brought to the UK.

On the other hand, some implementers may decide to give up the UK market, especially those with small market share in the UK. Some companies may decide to accept the injunction instead of paying high global licence rate. This may also suggest that the UK consumers may find it slower and more expensive to access to some high-tech products.

Furthermore, the Supreme Court’s judgment does not depend on any unique domestic legislation but the ETSI contractual arrangement which applies to its members and the industry practice and custom. There is no barrier for other countries, including China, to follow the same reasoning.  It is possible many other countries may, fully or partly, follow this judgment. If the courts of multiple countries can set the global FRAND rate and they apply different standards to set this rate, forum shopping and conflict of jurisdictions may be inevitable. Anti-suit injunction and anti-enforcement injunction may be more frequently applied and issued. The China Supreme Court IP Tribunal recently restrained the Conversant from applying the German court to enforce the German judgment in a related case, which awards Conversant the FRAND rate 18.3 times of the rate awarded by the Chinese courts on the infringement of the Chinese patents of the same family. This is called act preservation in China with the similar function as the anti-enforcement injunction. ((2019) Supreme Court IP Tribunal Final One of No 732, 733 and 734) This case suggests Chinese courts would be ready to issue the similar act preservation order or injunction to prevent the other party from enforcing a global FRAND rate set by the foreign court against the Chinese implementers, whether or not Chinese court could issue the global FRAND licence. The long term impact of the Unwired Planet v Huawei may be the severer competition in jurisdiction between different courts which may require reconciliation either through judicial cooperation arrangement or through the establishment of a global tribunal by the relevant standard setting organisation.

 

 

 

 

 

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

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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).

Thomas John ACIArb, “Foreword” (open access)

Ronald A. Brand, “Jurisdiction and Judgments Recognition at the Hague Conference: Choices Made, Treaties Completed, and the Path Ahead”

Ron Brand considers the context in which a Hague Convention on Jurisdiction and the Recognition and Enforcement of Foreign Judgments was first proposed in 1992. It then traces the history of the Hague negotiations, both from within those negotiations and in regard to important developments outside the negotiations, through the completion of the 2005 Convention on Choice of Court Agreements and the 2019 HCCH Judgments Convention. The article ends with comments on whether it is advisable to now resume discussion of a separate convention on direct jurisdiction.

Francisco Garcimartín, “The Judgments Convention: Some Open Questions”

Francisco Garcimartín explores some of the open issues that were discussed in the negotiation process but remained open in the final text, such as, in particular, the application of the 2019 HCCH Judgments Convention to pecuniary penalties (2) and negative obligations (4), as well as the definition of the res judicata effect (3).

Cara North, “The Exclusion of Privacy Matters from the Judgments Convention”

Cara North considers on issue of particular focus in the later phases of the negotiations of the Convention, namely, what, if any, judgments ruling on privacy law matters should be permitted to circulate under the 2019 HCCH Judgments Convention. Having acknowledged that privacy is an evolving, broad and ill-defined area of the law and that there are obvious differences in the development and operation of privacy laws and policies in legal systems globally, the Members of the Diplomatic Session on the Judgments Convention determined to exclude privacy matters from the scope of the Convention under Article 2(1)(l). The purpose of this short article is to describe how and why the Diplomatic Session decided to exclude privacy matters from the 2019 HCCH Judgments Convention and to offer some observations on the intended scope of that exclusion.

Geneviève Saumier, “Submission as a Jurisdictional Basis and the HCCH 2019 Judgments Convention”

The 2019 HCCH Judgments Convention establishes a list of jurisdictional filters, at least one of which must be satisfied for the judgment to circulate. One of those is the implied consent or submission of the defendant to the jurisdiction of the court of origin. While submission is a common jurisdictional basis in international litigation, its definition and treatment vary significantly across states, whether to establish the jurisdiction of the court of origin or as a jurisdictional filter at the enforcement stage in the requested court. This diversity is most evident with respect to the mechanics and consequences of objecting to jurisdiction to avoid submission. The 2019 HCCH Judgments Convention adopts a variation on an existing approach, arguably the least complex one, in pursuit of its goal to provide predictability for parties involved in cross-border litigation. This contribution canvasses the various approaches to submission in national law with a view to highlighting the points of convergence and divergence and revealing significant complexities associated with some approaches. It then examines how the text in the 2019 HCCH Judgments Convention came to be adopted and whether it is likely to achieve its purpose.

Nadia de Araujo, Marcelo De Nardi, “Consumer Protection Under the HCCH 2019 Judgments Convention”

The 2019 HCCH Judgments Convention aims at mitigating uncertainties and risks associated with international trade and other civil relationships by setting forth a simple and safe system according to which foreign judgments can easily circulate from country to country. The purpose of this article is to record the historical moment of the negotiations that took place under the auspices of the HCCH, as well as to pinpoint how consumer cases will be dealt with by the Convention under Article 5(2).

Niklaus Meier, “Notification as a Ground for Refusal”

The 2019 HCCH Judgments Convention provides for several grounds for the refusal of recognition, including refusal based on insufficient notification. While this ground for refusal of the 2019 HCCH Judgments Convention seems quite similar to those applied in other conventions, the comparison shows that there are several differences between this instrument and other texts of reference, both with respect to the context of application as well as with respect to the details of the wording. The optional nature of the grounds for refusal under the 2019 HCCH Judgments Convention indicates that its primary focus is the free circulation of judgments, and not the protection of the defendant. The latter’s protection is left to the discretion of the state of recognition: a sign of trust amongst the negotiators of the 2019 HCCH Judgments Convention, but also a risk for the defendant. Practice will show whether the focus of the negotiators was justified.

Junhyok Jang, “The Public Policy Exception Under the New 2019 HCCH Judgments Convention”

The public policy exception is inherently a fluid device. Its content is basically left to each State. A shared public policy is an exception. Therefore, the obligation of uniform interpretation, as provided in Article 20 of the 2019 HCCH Judgments Convention, will have an inherent limit here. Moreover, the 2019 HCCH Judgments Convention leaves some important issues, including procedure, to national rules. Each requested State retains a discretion to invoke the Convention grounds of refusal in a concrete case, and on whether to make an ex officio inquiry or have the parties prove those refusal grounds. The 2019 HCCH Judgments Convention also provides for the concrete applications of the public policy exception, following the model of the 2005 Choice of Court Convention. Here, a purely grammatical reading may create some peripheral problems, especially with the specific defences of conflicting judgments and parallel proceedings. Solutions may be found in the method of purposive interpretation and some general principles, particularly the evasion of the law and the abuse of rights, before resorting to the public policy defence.

Marcos Dotta Salgueiro, “Article 14 of the Judgments Convention: The Essential Reaffirmation of the Non-discrimination Principle in a Globalized Twenty-First Century”

The 2019 HCCH Judgments Convention includes a non-discrimination disposition in Article 14, according to which there shall be no security, bond or deposit required from a party on the sole ground that such a party is a foreign national or is not domiciled or resident in the State in which enforcement is sought. It also deals with the enforceability of orders for payment of costs in situations where the precedent disposition applied, and lays down an ‘opt-out’ mechanism for those Contracting States that may not wish to apply that principle. This article frames the discussion of the non-discrimination principle in the wider context of previous private international law instruments as well as from the perspectives of access to justice, human rights and Sustainable Development Goals (SDGs), understanding that its inclusion in the 2019 HCCH Judgments Convention was an important, inescapable and necessary achievement.

Paul R. Beaumont, “Judgments Convention: Application to Governments” (open access)

The 2019 HCCH Judgments Convention makes the classic distinction between private law matters within its scope (civil or commercial matters) and public law matters outside its scope. It also follows the same position in relation to State immunity used in the Hague Choice of Court Convention 2005 (see Art. 2(5) in 2019 and 2(6) in 2005). The innovative parts of the 2019 HCCH Judgments Convention relate to the exclusions from scope in Article 2 relating to the armed forces, law enforcement activities and unilateral debt restructuring. Finally, in Article 19, the Convention creates a new declaration system permitting States to widen the exclusion from scope to some private law judgments concerning a State, or a State agency or a natural person acting for the State or a Government agency. This article gives guidance on the correct Treaty interpretation of all these matters taking full account of the work of the Hague Informal Working Group dealing with the application of the Convention to Governments and the other relevant supplementary means of interpretation referred to in Article 32 of the Vienna Convention on the Law of Treaties.

João Ribeiro-Bidaoui, “The International Obligation of the Uniform and Autonomous Interpretation of Private Law Conventions: Consequences for Domestic Courts and International Organisations”

This article addresses the issue of the uniform and autonomous interpretation of private law conventions, including of private international law conventions, from the perspective of their Contracting States, particularly their judiciaries, and of the international organizations. Firstly, the author analyses the use of standard uniform interpretation clauses, and the origin of such clauses, in the context of the Hague Conference on Private International Law. The following part the article addresses negative and positive obligations imposed on States and their judiciaries under international law regarding the uniform and autonomous interpretation of international treaties. It is argued that States are not only obliged to refrain from referring to concepts from national laws for the purpose of the interpretation of international law instruments, but also that they face certain positive obligations in the process of applying the conventions. Those include referring to foreign case law, international scholarship, and under certain circumstances, also to travaux préparatoires. Thirdly, the author discusses the role of international organizations—e.g. HCCH, UNCITRAL, UNIDROIT, in safeguarding and facilitating the uniform and autonomous interpretation of private law conventions. It does so by describing various related tools and approaches, with examples and comments on their practical use (e.g. advisory opinions, information sharing, access to supplementary material, judicial exchanges and legislative action).

The NILR’s Special Edition on the 2019 HCCH Judgments Convention concludes with a reproduction of the text of the 2019 HCCH Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, as adopted on 2 July 2019.

Jurisdiction to Garnish Funds in Foreign Bank Account

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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.

The judge at first instance held the assets were not a debt obligation but in effect the property of the Republic of Iraq and located in Switzerland and so could not be subject to garnishment in Quebec proceedings.  The Court of Appeal reversed, holding the assets were a debt due to the Republic of Iraq which it could enforce against the trade association at its head office in Quebec, so that the debt was located in Quebec under the basic rule for locating the situs of a debt.

Last December the Supreme Court of Canada denied the appeal for the reasons of the Quebec Court of Appeal.  One judge, Justice Cote, dissented with reasons to follow.  On May 1, 2020, she released those reasons: see International Air Transport Association v. Instrubel, N.V., 2019 SCC 61 (available here).

As a Quebec case, the decision is based on the civil law.  Justice Cote’s dissent hinges on the view that the funds in the account are the property of the Republic of Iraq, not the IATA, and are merely being held by the latter before being remitted to the former (see para. 36).  The funds are not part of the “patrimony” of the IATA.  This is because the nature of the agreement between the Republic of Iraq and the IATA is one of “mandate” (see paras. 40-41 and 45).  As Justice Cote notes (at para. 48) “there is a general principle in the law of mandate that a mandatary’s obligation towards a mandator is not a debt”.  While the payments that went into the bank account were collected and held by the IATA, they were made to the Republic of Iraq (para. 53).  Indeed, the account “is for practical purposes equivalent to a trust account” (para. 61).

As noted, the six judges in the majority simply adopted the reasons of the Quebec Court of Appeal (available here).  So they did not directly engage with Justice Cote’s reasons.  The Court of Appeal concluded (at para. 41) that “there is no ownership of or real right to the funds … Rather, there is a creditor/debtor relationship”.  It also observed that the Republic of Iraq “never owned the debts due it by various airlines in consideration of landing at Iraqi airports.  It does not now own the funds collected in satisfaction of those debts and deposited by IATA in its bank account.  IATA’s obligation is to pay a sum of money not to give the dollar bills received from third parties” (para. 43).

The Court of Appeal noted (at para. 50) a practical rationale for its conclusion: “More significantly it seems that [Instrubel, N.V.] and others in similar positions which seek to execute an unsatisfied claim would be forced into an international “shell game” of somehow discovering (or guessing) where the mandatary/garnishee (IATA), deposited the money – a virtually impossible task.  The law, correctly applied, should not lead, in my view, to such unworkable results.  As the in personam debtor of ICAA, it matters not whether IATA deposited the money it collected and giving rise to such indebtedness in a bank account in Geneva, New York or Montreal.  The situs of its bank account does not change the situs of the debt IATA owes to its creditor.  As such, that funds were initially collected in Montreal or at an IATA branch office in another country is inconsequential.”

The case is at minimum important for what it does not do, which is authorize the garnishing of assets outside Quebec.  All judges take the position that would be impermissible.

Indigenous Claims to Foreign Land: Update from Canada

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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.

The mining companies and the Attorney General of Newfoundland and Labrador each moved to strike from the Innu’s pleading portions of the claim which, in their view, concerned real rights over property situated in Newfoundland and Labrador and, therefore, fell under the jurisdiction of the courts of that province.

In Newfoundland and Labrador (Attorney General) v Uashaunnuat (Innu of Uashat and of Mani-Utenam), 2020 SCC 4, the Supreme Court of Canada held (by 5-4 majority) that the motion to strike failed and that the Quebec court had jurisdiction over the entire claim advanced by the Innu.

Quebec’s private international law is contained in Book Ten of the Civil Code of Quebec. Jurisdiction over the mining companies was based on their being domiciled in Quebec. However, as a special rule of jurisdiction, Division III governs what are called real and mixed actions (para. 18). The general rule is that Quebec has jurisdiction to hear a real action only if the property in dispute is situated in Quebec (art. 3152). In the case of a mixed action, Quebec must have jurisdiction over both the personal and real aspects of the matter: see CGAO v Groupe Anderson Inc., 2017 QCCA 923 at para. 10 (para. 57). These rules required the court to properly characterize the Innu’s action.

The majority held that the claim was a mixed action (para. 56). This was because the Innu sought both the recognition of a sui generis right (a declaration of Aboriginal title) and the performance of various obligations related to failures to respect that right. However, the claim was not a “classical” mixed action, which would require the court to have jurisdiction over both the personal and real aspects of the matter. Rather, this was a “non-classical” mixed action that involved the recognition of sui generis rights and the performance of obligations (para. 57).  Put another way, the nature of the indigenous land claims made them different from traditional claims to land. Accordingly, the claim did not fall within the special jurisdiction provisions in Division III and jurisdiction could simply be based on the defendants’ Quebec domicile.

The majority was influenced by access to justice considerations, being concerned about requiring the Innu to litigate in both Quebec and Newfoundland and Labrador. It noted that “[t]he Innu have argued that separating their claim along provincial borders will result in higher — perhaps prohibitive — costs caused by “piecemeal” advocacy, and inconsistent holdings that will require further resolution in the courts. … These are compelling access to justice considerations, especially when they are coupled with the pre-existing nature of Aboriginal rights” (paras. 46-47).

The dissenting reasons are lengthy (quite a bit longer than those of the majority). Critically, it held that “Aboriginal title and other Aboriginal or treaty rights are “real rights” for the purposes of private international law, which is to say that they resemble or are at least analogous to the domestic institution of real rights” (emphasis in original) (para. 140). Labeling them as sui generis was not sufficient to avoid the jurisdictional requirement for a mixed action that the land had to be in Quebec: “the fact that Aboriginal title is sui generis in nature does not mean that it cannot be a proprietary interest or a real right strictly for the purposes of private international law” (para. 155).

In the view of the dissent, ” if Quebec authorities were to rule directly on the title that the Innu believe they hold to the parts of Nitassinan that are situated outside Quebec, the declarations would be binding on no one, not even on the defendants … , precisely because Quebec authorities lack jurisdiction in this regard” (emphasis in original) (para. 189).

On the issue of access to justice, the dissent stated that “access to justice must be furnished within the confines of our constitutional order. Delivery of efficient, timely and cost-effective resolution of transboundary Aboriginal rights claims must occur within the structure of the Canadian legal system as a whole. But this is not to suggest that principles of federalism and provincial sovereignty preclude development by superior courts, in the exercise of their inherent jurisdiction, of innovative yet constitutionally sound solutions that promote access to justice” (emphasis in original) (para. 217). It went on to proffer the interesting procedural option that both a Quebec judge and a Newfoundland and Labrador judge could sit in the same courtroom at the same time, so that the proceedings were heard by both courts without duplication (para. 222).

There are many other issues in the tension between the majority and the dissent, including the role of Newfoundland and Labrador as a party to the dispute. It was not sued by the Innu and became involved as a voluntary intervenor (para. 9).

The decision is very much rooted in the private international law of Quebec but it has implications for any Indigenous claims affecting land in any legal system. Those systems would also need to determine whether their courts had jurisdiction to hear such claims in respect of land outside their territory. Indeed, the decision offers a basis to speculate as to how the courts would handle an Indigenous land claim brought in British Columbia in respect of land that straddled the border with the state of Washington. Is the court’s decision limited to cases that cross only internal federation borders or does it extend to the international realm? And does there have to be a straddling of the border at all, or could a court hear such a claim entirely in respect of land in another jurisdiction? The court’s decision leaves much open to interesting debate.

Double Counting the Place of the Tort?

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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.

Justice Cote, with whom Justices Brown and Rowe agreed, held that “applicable law, as determined by the lex loci delicti principle, should be accorded little weight in the forum non conveniens analysis in cases where jurisdiction is established on the basis of the situs of the tort” (para 90).  She indicated that this conclusion was mandated by the separation of jurisdiction and staying proceedings, which extends to each being “based on different factors”.  So if the place of the tort has been used as the basis for assuming jurisdiction, the same factor (the place of the tort) should not play a role in analyzing the most appropriate forum when considering a stay.  And since the applicable law is one of the factors considered in that analysis, if the applicable law is to be identified based on the connecting factor of the place of the tort, which is the rule in common law Canada, then the applicable law as a factor “should be accorded little weight”.

In separate concurring reasons, Justice Karakatsanis agreed that the applicable law “holds little weight here, where jurisdiction and applicable law are both established on the basis of where the tort was committed” (para 100).  In contrast, the three dissenting judges rejected this reason for reducing the weight of the applicable law (para 208).  The two other judges did not address this issue, so the tally was 4-3 for Justice Cote’s view.

As Vaughan Black has pointed out in discussions about the decision, the majority approach, taken to its logical conclusion, would mean that if jurisdiction is based on the defendant’s residence in the forum then the defendant’s residence is not a relevant factor in assessing which forum is more appropriate.  That contradicts a great many decisions on forum non conveniens.  Indeed, the court did not offer any supporting authorities in which the “double counting” of a fact was said to be inappropriate.

The majority approach has taken analytical separation too far.  There is no good reason for excluding or under-weighing a fact relevant to the forum non conveniens analysis simply because that same fact was relevant at the jurisdiction stage.  Admittedly the court in Club Resorts narrowed the range of facts that are relevant to jurisdiction in part to reduce overlap between the two questions.  But that narrowing was of jurisdiction.  Forum non conveniens remains a broad doctrine that should be based on a wide, open-end range of factors.  The applicable law, however identified, has to be one of them.