Tag Archive for: public policy

When Islamic Law Crosses Borders: Ila-Divorce and Public Policy in Japan

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I. Introduction

The question of the application of Islamic law in non-Muslim countries has triggered extensive discussions and debates regarding the consistency of Islamic law rules – whether codified in modern legislation or not – with the forum’s public policy. This issue has attracted particular attention in the field of family law, where various legal Islamic institutions (such as dower, polygamy, and early marriage) have sparked considerable controversy and posed significant challenges in both court practice and academic debate. This is particularly salient in the field of dissolution of marriage, as Islamic practices such as talaq and khul have often been the subject of intense discussions concerning their recognition and validity in non-Muslim jurisdictions.

The case presented here is another example of the complexity inherent in the reception of peculiar Islamic law institutions in private international law. Recently decided by the Nagoya High Court (second-instance court) in its ruling of 12 June 2025, it concerns a type of marital dissolution based on ila (an oath of sexual abstention). To the best of my knowledge, no comparable case involving ila has been decided before in any jurisdiction, which makes this ruling particularly important both in theory and in practice. This is especially so given that resorting to ila in this case appears to have been part of a litigation strategy, anticipating an unfavourable outcome if the case had been brought before the court as a talaq case (see infra V). As such, the case provides an opportunity to consider the nature of this unusual Islamic legal institution, its specific features, and the challenges it may raise when examined by foreign courts.

 

II. The Case:

The parties in this case are a Bangladeshi Muslim couple who married in accordance with Islamic law in Bangladesh and subsequently moved to Japan, where they had their children. All parties, including the children, are permanent residents of Japan.

The case concerns a divorce action filed by the husband (X) against his wife (Y), seeking dissolution of marriage primarily under Bangladeshi law, and alternatively under Japanese law. X argued that, in his complaint, he declared his intention “in the name of Allah” to abstain from sexual relations with his wife; and since four months had passed without any sexual relations with Y, a “talaq-divorce” had been effected and thereby completed in accordance with Bangladeshi law. The divorce action was filed as a result of continuous disagreement and disputes between the parties on various issues including property rights, management of the household finance, and alleged misbehaviour and even violence on the wife’s side. At the time the action was filed, X and Y had already been living separately for some time.

One of the main issues revolved around whether the application of Bangladeshi law, which provides for this form of marital dissolution (referred to in the judgment as “talaq-divorce”), should be excluded due to inconsistency with Japanese public policy under Article 42 of the Act on the General Rules of Application of Laws (AGRAL).

The court of first instance (Nagoya Family Court, judgment of 26 November 2024) held that the “talaq-divorce” (as referred to in the judgment) was valid under Bangladeshi law and that its recognition did not contravene Japanese public policy. Notably, the court emphasized that “any assessment of whether the legal rules applicable between spouses who share the same religious and cultural background violate Japanese public policy should be approached with a certain degree of restraint”, given the strong cultural and religious elements involved in the personal status of the parties, who are both originally Bangladeshi nationals and Muslims who were married in accordance with Islamic law, even if they had been living and residing in Japan for some time.

Dissatisfied with the judgment, Y appealed before the High Court.

Y challenged the first instance judgment on various grounds. She basically argued – inter alia – that, given the strong ties the parties and their children have with Japan and their established life there, the mere fact that the parties are Bangladeshi nationals and Muslims should not justify a restrained implication of public policy, especially considering that the effects and consequences of the divorce would take place in Japan.

 

III. The Ruling

The Nagoya High Court upheld the judgment of the court of first instance, stating as follows (only a summary is provided here, with modifications and adjustments):

Under Bangladeshi law, which governs the present divorce, a husband may dissolve the marriage either through talaq (a unilateral declaration of divorce by the husband) or through other modes. There are several forms of talaq-divorce available to the husband, including ila. The latter entails the husband taking an oath in the name of Allah to abstain from sexual relations with his wife. If no intercourse occurs within four months following the oath, the divorce is considered to have taken effect.

In the present case, considering that Bangladeshi law is the applicable law, the talaq-divorce would be deemed valid, and would be recognized, since a period of four months had passed without any sexual contact between the parties after X made his declaration in the complaint.

Generally, when determining the applicability of Article 42 of the AGRAL, it is not the foreign law’s provisions themselves that should be assessed in abstracto. Rather, the application of the foreign law as the governing law may be excluded [only] where (1)its concrete application would result in a consequence that is contrary to public policy, and (2) the case has a close connection with Japan.

Regarding (1), the marital relationship between the parties had deteriorated over time, and various elements, when taken together, indicate that the parties had already reached a serious state of discord that could reasonably be seen as leading to separation or divorce. Consequently, considering all these circumstances, and taking into account the background of the case, the nature of the parties’ interactions, and the duration of their separation, it cannot be said that applying Bangladeshi law and recognizing the talaq-divorce in this case would be contrary to public policy.

With respect to (2), Y argued that, due to the strong connection between the case and Japan, the exclusion of the application of Bangladeshi in application of article 42 of the AGRAL should be admitted. However, as previously noted, the application of Bangladeshi law in this case does not result in a violation of public policy. Therefore, even considering the strong connection of the case to Japan, the application of Article 42 of the AGRAL cannot be justified.

 

IV. Comments

(*) Unless otherwise indicated, all references to Islamic law here are about classical Islamic law as developed by the orthodox Sunni schools, and not Islamic law as codified and/or practiced in modern Muslim countries.

 

1. Islamic law before Japanese Court

There are several cases in which Japanese courts have addressed the application of foreign laws influenced by or based on Islamic law. These cases have involved matters such as the establishment of filiation, annulment of marriage, parental authority, adoption, and divorce (whether based on the unilateral will of the husband or not). While in few instances the courts have applied the relevant foreign law without particular difficulties (for example, allowing a Japanese woman married to a Pakistani Muslim man to seek and obtain a divorce under Pakistani law), in most cases, the courts have refused to apply such laws on the grounds that they were contrary to Japanese public policy. The rules found incompatible with public policy include, among others, the non-recognition of out-of-wedlock filiation, the prohibition of interfaith marriage, the prohibition of adoption, the automatic attribution of parental authority to the father, and talaq-based divorce (triple talaq). The foreign laws at issue in these cases originate either from Muslim-majority countries such as Iran, Pakistan, Indonesia, and Egypt, or from non-Muslim countries with Muslim minorities who are governed by their own personal status laws, such as Myanmar and the Philippines.

The case commented on here provides a new example of a Japanese court grappling with the application of foreign law grounded in Islamic legal principles.

 

2. Ila and dissolution of marriage

Like many other traditional – and in some views, “exotic” – Islamic legal institutions (such as zihar, li’an, khul, tamlik, tafwidh, mubara’a …… definitions are intentionally omitted), ila is often difficult to apprehend correctly, both in substance and in function.

 

a) What is ila?

Generally speaking, ila can be defined as “the swearing of an oath by a man that he will not have intercourse with his wife” for a period fixed in the Quran (chapter 2, verse 226) at four months (See Ibn Rushd (I. A. Khan Nyazee, trans.), The Distinguished Jurist’s Primer – Vol. II: Bidayat Al-Mujtahid wa Nihayat Al-Muqtasid (Garnet Publishing, 2000) 121).

It worth mentioning first that ila is not an Islamic invention but was practiced in pre-Islamic society. In that context, ila allowed the husband to place considerable pressure on his wife by placing her in a state of marital limbo, which can be for an indefinite period. This left the woman in a vulnerable and uncertain position, as she was neither fully married in practice, nor legally divorced.

Islamic Sharia addressed this practice and, while it did not abolish it – unlike some other pre-Islamic institutions and practices –, it attempted to alleviate its harmful effects, by introducing a period of four months, during which the husband is invited to reconsider his decision and either resume marital life (Quran chapter 2, verse 226)  or dissolve the marriage  (Quran chapter 2, verse 227).

 

b) Ila – Different Practices

However, regarding the actual operation of ila, the schools of Islamic religio-legal jurisprudence (fiqh) diverge significantly on several points (Ibn Rushd, op. cit.). Two issues are particularly relevant here:

i. The first concerns whether :

(i-a) the four-month period stated in the Quran represents a maximum period, at the end of which the marriage is dissolved; or

(i-b) the four-month period merely marks the threshold between an oath of abstention that does not lead to marital dissolution and one that does. According to this latter view, only an oath exceeding four months, or one made for an indefinite duration, qualifies as ila that may result in the dissolution of marriage.

 

ii. The second issue concerns whether

(ii-a) the marriage is automatically dissolved once the four-month period has elapsed, if the husband does take the necessary actions to resume the marital life, that is after performing an act of expiation (kaffara) in accordance with the Quranic prescriptions (notably Chapter 5, verse 89); or

(ii-b), upon expiry of the term, the wife may petition a qadhi (Muslim judge), requesting that her husband either end the marriage by pronouncing talaq, or resume marital relations after performing an act of expiation (Chapter 5, verse 89). In such a case, the qadhi would then grant the husband a specified period to decide. If the husband fails to take either course of action, the qadhi may pronounce the dissolution of the marriage on account of his inaction. Depending on the legal opinion, this dissolution may be categorized either as a talaq issued on behalf of the husband, or as a judicial annulment (faskh).

Traditionally, the Hanafi school, prevalent in Bangladesh, follows positions (1-a) and (2-a), while the other major schools adopt views (1-b) and (2-b).

 

3. Ila and talaq – what’s the difference?

It is not uncommon for ila to be described as “a form of talaq.” This appears to be the position of the High Court, seemingly based on the arguments presented by X’s representative during the trial. It is true that both ila and talaq are prerogatives reserved exclusively for men; women do not have equivalent right (except, in the case of talaq, where the husband may contractually delegate this right to his wife at the time of the marriage). It is also true that both ila and talaq may lead to the dissolution of marriage based on the unilateral intention of the husband. However, describing ila as a “form of talaq” is not – technically speaking – entirely accurate.

i. Under the majority of schools of fiqh – except for the Hanafi –, the distinction is quite clear. This is because unlike talaq, ila, by itself, does not lead to dissolution of marriage. A judicial intervention is required upon the wife’s request for the marriage to be dissolved (which is not required for talaq).

 ii. Under the Hanafi school, however, the distinction between ila and talaq may be blurred due to their substantial and functional similarities. In both cases, a qualified verbal formula places the marriage in a suspended state(*) for a specified period (the waiting period (iddah) in the case of talaq, and the four-month period in the case of ila). If the husband fails to retract his declaration within this period, the marriage is dissolved.

(*) However, this does not apply in the case of a talaq that immediately dissolves the marriage: that is, a talaq occurring for the third time after two previous ones (whether or not those resulted in the dissolution of the marriage), or in the case of the so-called triple talaq, where the husband pronounces three talaqs in a single formula with the intention of producing the effect of three successive talaqs.

 

Nevertheless, a number of important distinctions remain between the two, even within the Hanafi doctrine.

a. The first concerns the frequency with which talaq and ila may be resorted to. Similar to ila, talaq does not necessarily lead to the dissolution of the marriage if the husband retracts during the wife’s waiting period (iddah). However, its use – even if followed by retraction – is limited to two occurrences (Chapter 2, verse 229). A third pronouncement of talaq results in immediate and irrevocable dissolution of the marriage, and creates a temporary impediment to remarriage. This impediment can only be lifted if the woman marries another man and that subsequent marriage is irrevocably dissolved (Quran, Chapter 2, verse 230). By contrast, ila, does not have such limitation and can be repeated without restriction (in terms of frequency), provided that the husband retracts by performing the act of expiation each time.

 b. The second concerns the form of retraction. In the case of talaq, the husband can resume conjugal life at will. No particular formality is required; and retraction can be explicit or implied. In the case of ila, however, retraction must take the form of an act of expiation (kaffara) in accordance with the Quranic prescriptions (Chapter 5, verse 89) before marital relations may resume.

 

4. Ila and public policy

a) Ila – some inherent aspects

As previously noted, ila has traditionally been used as a means for a husband to exert pressure or express discontent within the marriage by vowing abstinence from sexual relations. Under Islamic Sharia, this practice is preserved: husbands – even without making any formal oath of abstinence (ila) – are allowed to “discipline their wives” in cases of marital discord by abstaining from sharing the marital bed (hajr) as a corrective measure (Quran, Chapter 4, verse 34). Indeed, it is not uncommon that Muslim scholars justify the “rationale” behind this practice by stating that “a man may resort to ila…when he sees no other option but to abstain from sharing the marital bed as a means of disciplining and correcting his wife (italic added)…. In this case, his abstention during this period serves as a warning to deter her from repeating such behavior” (O. A. Abd Al-Hamid Lillu, ‘Mirath al-mutallaqa bi-al-‘ila – Dirasa fiqhiyya muqarana ma’a ba’dh al-tashri’at al-‘arabiyya [The Inheritance Rights of a Woman Divorced by Ila’: A Comparative Jurisprudential Study with Selected Arab Legislations]’ (2020) 4(3) Journal of the Faculty of Islamic and Arabic Studies for Women 630). It is therefore not surprising that some would view ila as “troubling” due to its perceived “sexism” and the fact that wives may find themselves at their husbands’ “mercy” with little thing to do (Raj Bhala, Understanding Islamic Law (Shar’ia) (Carolina Academic Press, 2023) 803).

These aspects, in addition with inherent gender asymmetry in the rights involved, calls into question the compatibility of ila with the public policy of the forum.

 

b) The position of the Nagoya High Court

As the Nagoya High Court rightly indicated, the exclusion of foreign law under the public policy exception does not depend on the content of the foreign law itself, assessed in abstracto. On the contrary, as it is generally accepted in Japanese private international law, public policy may be invoked based on two elements: (1) the result of applying the foreign law in a concrete case is found unacceptable in the eyes of Japanese law, and (2) there is a strong connection between the case and the forum (see K. Nishioka & Y. Nishitani, Japanese Private International Law (Hart, 2019) 22).

The Nagoya High Court’s explicit adherence to this framework, notably by engaging in an in concreto examination of the foreign law and avoiding invoking public policy solely on the ground of its content as some earlier court decisions suggest (see e.g. Tokyo Family Court judgment of 17 January 2019; see my English translation in 63 (2020) Japanese Yearbook of International Law 373), is noteworthy and should be welcomed.

That said, the Court’s overall approach raises some questions. The impression conveyed by the Court’s reasoning is that it focused primarily on the irretrievable breakdown of the marital relationship and the period of separation to conclude that there was no violation of public policy. In other words, since the marital relationship had reached a dead end, dissolving the marriage on the basis of objective grounds or on the basis of ila does not alter the outcome.

Although this approach is understandable, it would have been more convincing if the Court had carefully considered the nature of ila and its specific implications in this case, and eventually explicitly state that such elements were not established. These aspects appear to have been largely overlooked by the High Court, seemingly due to its unfamiliarity with Islamic legal institutions. It would have been advisable for the Court to address these aspects, at least to demonstrate its concerns regarding the potential abusive use of ila.

 

V. Concluding Remarks: Ila as a litigation strategy?

One may wonder why the husband in this case chose to resort to ila to end his marriage. One possible explanation is that Japanese courts have previously ruled that a talaq divorce in the form of triple talaq is inconsistent with public policy (Tokyo Family Court judgment of 17 January 2019, op. cit.). It appears that, anticipating a similar outcome, the husband in this case was advised to take a “safer approach” by relying on ila rather than resorting to triple talaq (see the comment by the law firm representing the husband in this case, available here – in Japanese only).  To be sure, associating talaq solely with its most contested form (i.e., triple talaq) is not entirely accurate. That said, considering how the case under discussion was decided, it is now open to question whether it would have been simpler for the husband to perform a single talaq and then abstain from retracting during his wife’s waiting period (iddah). At least in this way, the aspect of “disciplining the wife” inherent in ila would not be an issue that the courts would need to address

New Article on Public Policy Exception

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In every private international law system, the forum state reserves the right to reject the application of a foreign rule that deeply offends the forum’s fundamental sense of justice and fairness. In all systems, this “public policy reservation” (ordre public) operates as an exception to the forum’s choice-of-law rules, not its rules on jurisdiction or access to courts. Surprisingly, the First and Second Conflicts Restatements in the United States deviate from this international consensus by narrowly phrasing the exception as a ground for denying a forum to foreign causes of action rather than as a ground for refusing to apply other foreign rules, including those raised as defenses.

A forthcoming article by Symeon Symeonides titled The Public Policy Exception in Choice of Law: The American Version discusses the origins of this unique formulation in Judge Cardozo’s classic but misinterpreted decision in Loucks v. Standard Oil Co. of New York, the problems it creates, its tacit rejection by most American courts, and the new flexible formulation of the exception in the proposed Third Conflicts Restatement.

The article will be published in Praxis des Internationalen Privat- und Verfahrensrechts (IPRax), as well as in a special issue of the Emory Journal of International Law dedicated to the renowned conflicts scholar Peter Hay.

The Conflict-of-Laws Provision in the French Influencer Legislation

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by Ennio Piovesani

Certain EU Member States have enacted special rules governing the activities of content creators and influencers. In this context, the French legislature passed Law No. 2023-451 on June 9, 2023, aimed at regulating influencer marketing and addressing potential misconduct by influencers on social media platforms (1). Article 8, I, of Law No. 2023-451 requires that contracts between influencers and (influencer marketing) agents or advertisers, or their representatives, must be made in writing and include a specified set of clauses; failure to comply results in the contract being null.

One such clause mandates ‘[t]he submission of the contract to French law, notably to the Consumer Code, the Intellectual Property Code, and the present Law, when said contract has as its object or effect the implementation of influencer marketing activities through electronic means targeting notably an audience established on French territory’ (Article 8, I, 5°, Law No. 2023-451). Scholars have highlighted the ‘innovative’ nature of the mechanism set forth in Article 8, I, 5°, Law No. 2023-451 and its resemblance to the (more established) concept of overriding mandatory provisions (2).

(1) LOI n° 2023-451 du 9 juin 2023 visant à encadrer l’influence commerciale et à lutter contre les dérives des influenceurs sur les réseaux sociaux

(2) See Sandrine Clavel, Fabienne Jault-Seseke, Droit international privé, Recueil Dalloz 2024, 987, accessed online at Dalloz.fr; see also Ermanno Calzolaio, L’attività pubblicitaria dell’influencer nel diritto francese (Loi n. 451 del 9 giugno 2023), Il Diritto dell’Informazione e dell’Informatica, 2023, no. 6, p. 909, accessed online at Dejure.it).

Bahraini Supreme Court on the Enforceability of a Foreign Judgment Ordering the Payment of Contingent Fees

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I. Introduction

Contingency fee agreements are arrangements whereby lawyers agree with their clients to receive a percentage of the final awarded amount in terms of payment of legal services. Such payment typically depends upon the lawyer winning the case or reaching a settlement. The admissibility of contingency fee agreements varies from one jurisdiction to another, ranging from complete prohibition to acceptance. For example, in the MENA Arab region, jurisdictions such as Bahrain prohibit contingency fee arrangements (see below). However, in other jurisdictions such as Saudi Arabia, contingent fees are not only permitted but also have been described as established practice in the country (cf. Mekkah Court of Appeal, Ruling No. 980/1439 confirming the Ruling of Jeddah Commercial Court No. 676/1439 of 3 Rajab 1439 [20 March 2018] considering that receiving a percentage of the awarded amount that ranges between 15% to 30% as “an established judicial and customary practice among lawyers”).

With respect to the enforcement of foreign judgments, a crucial issue concerns whether a foreign award ordering the payment of contingent fees would be enforced abroad. In a country where contingent fees contracts are prohibited, the presence of such elements in foreign judgments is likely to affect their enforceability due to public policy considerations. The Bahraini Supreme Court (hereafter ‘BSC’) addressed this particular issue in what appears to be an unprecedented decision in the MENA region. The Court held that a foreign judgment ordering payment of contingent fees as agreed by the parties is contrary to public policy because contingency fee agreements are forbidden in Bahrain (Supreme Court, Ruling No. 386/2023 of 20 February 2024).

 

II. Facts

The case concerned an action for the enforcement of a Saudi judgment brought by X (a practicing lawyer in Saudi Arabia) against Y (the appellee, owner of a sole proprietorship, but no further indications as to Y’s nationality, habitual residence or place of business were mentioned in the judgment).

According to the underlying facts as summarized by the Supreme Court, both X and Y agreed that X would represent Y in a case on a fee of 10% of the awarded amount (105,000 USD). As Y failed to pay, X brought an action in Saudi Arabia to obtain a judgment against Y requiring the latter’s sole proprietorship to pay the amount. Later, X sought the enforcement of the Saudi judgment in Bahrain. The first instance court ordered the enforcement of the foreign judgment, but its decision was overturned by the Court of Appeal. There, X filed an appeal to the BSC.

Before the BSC, X argued that the Court of Appeal erred in its decision as it declared the (contingency fee) agreement between the parties null and void on public policy grounds because it violated article 31 of the Bahraini Attorneys Act (qanun al-muhamat), which prohibits such agreements. According to X, the validity of the agreement is irrelevant in casu, as the court’s function was to examine the formal requirements for the enforcement of the Saudi judgment without delving in the merits of the case. Therefore, since the foreign judgment satisfies all the requirements for its enforcement, the refusal by the Court of Appeal to order the enforcement was unjustified.

 

III. The Ruling  

The BSC rejected the appeal by ruling as follows:

“It stems from the text of the provisions of Articles 1, 2 and 7 of the [1995 GCC Convention on the Enforcement of Foreign Judgments] as ratified by Bahrain in [1996], and the established practice of this Court, that judgments of a GCC Member State rendered in civil, commercial, administrative matters as well as personal status matters that become final [in the State of origin] shall be enforced by the courts and competent judicial authorities of the other GCC Member States in accordance with the procedure set forth in [the] Convention if it was rendered by a court having jurisdiction according to the rules of international jurisdiction of the requested State or according to the provision of the present Convention. [In this respect,] the role of the judicial authority of the requested State shall be limited to examination of whether the [foreign] judgment meets the requirement set forth in the Convention without reviewing the merits of the case. [However,] if it appears that the [foreign] judgment is inconsistent with the rules of Islamic Sharia, the Constitution or the public policy of the requested State, the [requested court] shall refuse to enforce the foreign judgment as a whole or in part.

Public policy is a relative (nisbi) concept that [can be interpreted] restrictively or broadly [as it varies with] time, place and the prevailing customs, and it [is closely linked in terms of] existence or not with public interest. It [public policy] encompasses the fundamental principles that safeguard the political system, conventional social agreements, economic rules and the moral values that underpin the structure of the society as an entity and public interest. [In addition,] although public policy is often embodied in legislative texts, however, it transcends these texts to form an overarching and independent concept. [Thus,] when a legislative text contains a mandatory or prohibitive rule related to those fundamental principles and aims at protecting public interest rather than individual interests, [such a rule] should not be disregarded or violated. [This is because, such a rule is] crucial for preserving the [public] interests associated to it and takes precedence over the individual interests with which it conflicts as it falls naturally within the realm of public policy, whose scope, understanding, boundaries and reach are determined in light of those essential factors of society so that public interest is prioritized and given precedence over the interests of certain individuals.

[This being said,] it is established that the judgment whose enforcement is sought in Bahrain ordered Y to pay X 105,000 USD as [contingent fees], which represent 10% of the amount awarded to Y. [It is also established that] the parties’ [contingency fee] agreement, which was upheld and relied upon [by the foreign court] violates article 31 of the Attorneys Act, which prohibits lawyers from charging fees based on a percentage of the awarded amount. This provision is a mandatory one that cannot be derogated from by agreement, and judgments inconsistent with it cannot be enforced. Consequently, the [contingency fee] agreement upon which the [foreign] judgment to be enforced is based is absolutely void, [rendering] the [foreign] judgment deficient of one of the legally prescribed requirements for its enforcement. This shall not be considered a review of the merits of the case but rather a [fundamental] duty of the judge to examine whether the foreign judgment meets all the requirements for its enforcement.

 

IV. Comments

 

1. General remarks

To the best of the author’s knowledge, this is an unprecedented decision not only in Bahrain, but in the MENA region in general. In addition to the crucial issue of public policy (4), the reported case raises a number of interesting questions regarding both the applicable rules for the enforcement of foreign judgments (2) and révision au fond (3). (on the applicable rules in the MENA Arab jurisdictions including Bahrain, see Béligh Elbalti, “Perspectives from the Arab World”, in M. Weller et al. (eds.), The 2019 HCCH Judgments Convention – Cornerstones, Prospects, Outlook (Hart, 2023) 182, 196, 199. On révision au fond, see ibid, 185. On public policy, see ibid, 188-190).

 

2. The Applicable rules

As the reported case shows, the enforcement of the Saudi judgment was examined on the basis of the 1995 GCC Convention, since both Bahrain and Saudi Arabia are Contracting States to it. However, both countries are also parties to a more general convention, the 1983 Riyadh Convention, which was also applicable (on these conventions with a special focus on 1983 Riyadh Convention, see Elbalti, op. cit., 195-198). This raises a serious issue of conflict of conventions. However, this issue has unfortunately been overlooked by the BSC.

The BSC’s position on this issue is ambiguous because it is not clear why the Court preferred the application of the 1995 GCC Convention over the 1983 Riyadh Convention  knowing that the latter was ratified by both countries in 2000, i.e. after having ratified the former in 1996 (see Elbalti, op. cit. 196)! In any case, since the issue deserves a thorough analysis, it will not be addressed here (on the issue of conflict of conventions in the MENA region, see Elbalti, op. cit., 200-201. See also my previous post here in which the issue was briefly addressed with respect to Egypt).

 

3. Révision au fond

In the reported case, X argued that the decision to refuse the enforcement of the Saudi judgment on public policy grounds violated of the principle of prohibition of the review of the merits. The BSC rejected this argument.  The question of how to consider whether a foreign judgment is inconsistent with public policy without violating the principle of prohibition of révision au fond is very well known in literature. In this respect, it is generally admitted that borderline should be that the enforcing court should refrain from reviewing the determination of facts and application of law made by the foreign court “as if it were an appellate tribunal reviewing how the “lower court” decided the case” (Peter Hay, Advance Introduction to Private International Law and Procedure (Edward Elgar, 2018) 121). Therefore, it can be said the BSC rightfully rejected X’s argument since its assessment appears to be limited to the examination of whether the judgment, “as rendered [was] offensive” without “reviewing the way the foreign court arrived at its judgment” (cf. Hay, op. cit., 121).

 

4. Public policy in Bahrain

 

i. Notion & definition. Under both the statutory regime and international conventions, foreign judgments cannot be enforced if they violate “public policy and good morals” in Bahrain. In the case reported here, the BSC provided a lengthy definition of public policy. To the author’s knowledge, this appears to be the first case in which the BSC has provided a definition of public policy in the context of the enforcement of foreign judgments. This does not mean, however, that the BSC has never invoked public policy to refuse the enforcement of foreign judgments (see, e.g., BSC, Appeal No. 611/2009 of 10 January 2011 in which a Syrian judgment terminating a mother’s custody of her two daughters upon their reaching the age of 15, in application of Syrian law, was held to be contrary to Bahraini public policy). Nor does this mean that the BSC has never defined public policy in general (see, e.g., in the context of choice of law, Béligh Elbalti & Hosam Osama Shabaan, “Bahrain – Bahraini Perspectives on the Hague Principles”, in D. Girsberger et al. (eds.), Choice of Law in International Commercial Contracts – Global Perspectives on the Hague Principles (OUP, 2021) 429 and the cases cited therein).

What is remarkable, however, is that the BSC has consistently used for the definition of public policy in the context of private international law the same elements it uses to define public policy in purely domestic cases. This is particularly clear in the definition adopted by the BSC in the case reported here since it described public policy in terms of “ordinary mandatory rules” that the parties are not allowed to derogate from by agreement. It is worth noting in this regard that the BSC’s holding on public policy appears, in fact, to have been strongly inspired by the definition given by the Qatari Supreme Court in a purely domestic case decided in 2015 (Qatari Supreme Court, Appeal No. 348 of November 17, 2015).

Defining public policy in the way the BSC did is problematic, as it is generally admitted that “domestic public policy” should be distinguished from public policy in the meaning of private international law (or as commonly referred to as “international public policy”). It is therefore regrettable that the BSC did not take into account the different contexts in which public policy operates.

 

ii. Public policy and mandatory rules. As mentioned above, the BSC associates public policy with “mandatory rules” in Bahrain, even though it recognizes that public policy could “transcend” these rules “to form an overarching and independent concept”. This understanding of public policy is not in line with the widely accepted doctrinal consensus regarding the correlation between public policy and mandatory rules. This doctrinal consensus is reflected in the Explanatory Report of the HCCH 2019 Judgments Convention, which makes it clear that “it is not sufficient for [a state] opposing recognition or enforcement to point to [its] mandatory rule of the law […] that the foreign judgment fails to uphold. Indeed, this mandatory rule may be considered imperative for domestic cases but not for international situations.” (Explanatory Report, p. 120, para. 263. Emphasis added). The Explanatory Report goes on to state that “[t]he public policy defence […] should be triggered only where such a mandatory rule reflects a fundamental value, the violation of which would be manifest if enforcement of the foreign judgment was permitted” (ibid. emphasis added).

The BSC’s holding suggests that it is sufficient that the foreign judgment does not uphold any Bahraini mandatory rule to justify its non-enforcement, without a sufficient showing of how that the mandatory rule in question “reflects a fundamental value, the violation of which would be manifest if enforcement of the foreign judgment was permitted”. By holding as it did, the BSC unduly broadens the scope of public policy in a way that potentially undermines the enforceability of foreign judgments in Bahrain.

 

iii. Contingency fee arrangements and Bahraini Public Policy.  As noted above (see Introduction), although contingency fee arrangements are prohibited in Bahrain, they are permitted in Saudi Arabia, where they appear to be widely used. From a private international law perspective, the presence of elements in a foreign judgment that are not permitted domestically does not in itself justify refusal of enforcement. In this sense, the non-admissibility of contingent fees in Bahrain should not in itself automatically lead to their being declared against public policy. This is because contingency fee arrangements should not be assessed on the basis of the strict rules applicable in Bahrain, but rather on whether they appear to be manifestly unfair or excessive in a way that violates “fundamental values” in Bahrain. Otherwise, the implications of the BSC’s decision could be overreaching. For example, would Bahraini courts refuse to enforce a foreign judgment if the contingent fees were included as part of the damages awarded by the foreign court? Would it matter if the case has tenuous connection with forum (for example, the case commented here, there are no indication on the connection between Y and Bahrain, see (II) above)? Would the Bahraini courts apply the same solution if they had to consider the validity of the contingent fee agreement under the applicable foreign law? Only subsequent developments would provide answers to these questions.

 

V. Concluding Remarks

The case reported here illustrates the challenges of public policy as a ground for enforcing foreign judgments not only in Bahrain, but also in the MENA Arab region in general. One of the main problems is that, with a few exceptions, courts in the region generally fail to distinguish between domestic public policy and public policy in the context of private international law (see Elbalti, “Perspectives from the Arab World”, op.cit., 189, 205, and the references cited therein). Moreover, courts often fail to establish the basic requirements for triggering public policy other than the inconsistency with the “fundamental values” of the forum, which are often referred to in abstracto. A correct approach, however, requires that courts make it clear that public policy has an exceptional character, that it has a narrower scope compared to domestic public policy, and that mere inconsistency with ordinary mandatory rules is not sufficient to trigger public policy. More importantly, public policy should also be assessed from the point of view of the impact the foreign judgment would have on the domestic legal order by looking at the concrete effects it would have if its recognition and enforcement were allowed. The impact of the foreign judgment, in this case, would largely depend on the intensity of the connection the case has with the forum.

„El clásico“ of Recognition and Enforcement – A Manifest Breach of Freedom of Expression as a Public Policy Violation: Thoughts on AG Szpunar 8.2.2024 – Opinion C-633/22, ECLI:EU:C:2024:127 – Real Madrid Club de Fútbol

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By Madeleine Petersen Weiner, Research Fellow and Doctoral Candidate at Heidelberg University

Introduction

On 8 February 2024, Advocate General (AG) Szpunar delivered his Opinion on C-633/22 (AG Opinion), submitting that disproportionate damages for reputational harm may go against the freedom of expression as enshrined in Art. 11 Charter of Fundamental Rights of the European Union (CFR). The enforcement of these damages therefore may (and at times will) constitute a violation of public policy in the enforcing state within the meaning of Art. 34 Nr. 1 Brussels I Regulation. The AG places particular emphasis on the severe deterring effect these sums of damages may have – not only on the defendant newspaper and journalist in the case at hand but other media outlets in general (AG Opinion, paras. 161-171). The decision of the Court of Justice of the European Union (CJEU) will be of particular topical interest not least in light of the EU’s efforts to combat so-called “Strategic Lawsuits Against Public Participation” (SLAPPs) within the EU in which typically financially potent plaintiffs initiate unfounded claims for excessive sums of damages against public watchdogs (see COM(2022) 177 final).

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Which Law Governs Subject Matter Arbitrability in International Commercial Disputes?

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Written by Kamakshi Puri[1]

Arbitrability is a manifestation of public policy of a state. Each state under its national laws is empowered to restrict or limit the matters that can be referred to and resolved by arbitration. There is no international consensus on the matters that are arbitrable. Arbitrability is therefore one of the issues where contractual and jurisdictional natures of international commercial arbitration meet head on.

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Uber Arbitration Clause Unconscionable

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In 2017 drivers working under contract for Uber in Ontario launched a class action.  They alleged that under Ontario law they were employees entitled to various benefits Uber was not providing.  In response, Uber sought to stay the proceedings on the basis of an arbitration clause in the standard-form contract with each driver.  Under its terms a driver is required to resolve any dispute with Uber through mediation and arbitration in the Netherlands.  The mediation and arbitration process requires up-front administrative and filing fees of US$14,500.  In response, the drivers argued that the arbitration clause was unenforceable.

The Supreme Court of Canada has held in Uber Technologies Inc. v. Heller, 2020 SCC 16 that the arbitration clause is unenforceable, paving the way for the class action to proceed in Ontario.  A majority of seven judges held the clause was unconscionable.  One judge held that unconscionability was not the proper framework for analysis but that the clause was contrary to public policy.  One judge, in dissent, upheld the clause.

A threshold dispute was whether the motion to stay the proceedings was under the Arbitration Act, 1991, S.O. 1991, c. 17 or the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5.  Eight judges held that as the dispute was fundamentally about labour and employment, the ICAA did not apply and the AA was the relevant statute (see paras. 18-28, 104).  While s. 7(1) of the AA directs the court to stay proceedings in the face of an agreement to arbitration, s. 7(2) is an exception that applies, inter alia, if the arbitration agreement is “invalid”.  That was accordingly the framework for the analysis.  In dissent Justice Cote held that the ICAA was the applicable statute as the relationship was international and commercial in nature (paras. 210-18).

The majority (a decision written by Abella and Rowe JJ) offered two reasons for not leaving the issue of the validity of the clause to the arbitrator.  First, although the issue involved a mixed question of law and fact, the question could be resolved by the court on only a “superficial review” of the record (para. 37).  Second, the court was required to consider “whether there is a real prospect, in the circumstances, that the arbitrator may never decide the merits of the jurisdictional challenge” (para. 45).  If so, the court is to decide the issue.  This is rooted in concerns about access to justice (para. 38).  In the majority’s view, the high fees required to commence the arbitration are a “brick wall” on any pathway to resolution of the drivers’ claims.

The majority then engaged in a detailed discussion of the doctrine of unconscionability.  It requires both “an inequality of bargaining power and a resulting improvident bargain” (para. 65).  On the former, the majority noted the standard form, take-it-or-leave-it nature of the contract and the “significant gulf in sophistication” between the parties (para. 93).  On the latter, the majority stressed the high up-front costs and apparent necessity to travel to the Netherlands to raise any dispute (para. 94).  In its view, “No reasonable person who had understood and appreciated the implications of the arbitration clause would have agreed to it” (para. 95).  As a result, the clause is unconscionable and thus invalid.

Justice Brown instead relied on the public policy of favouring access to justice and precluding an ouster of the jurisdiction of the court.  An arbitration clause that has the practical effect of precluding arbitration cannot be accepted (para. 119).  Contractual stipulations that prohibit the resolution of disputes according to law, whether by express prohibition or simply by effect, are unenforceable as a matter of public policy (para. 121).

Justice Brown also set out at length his concerns about the majority’s reliance on unconscionability: “the doctrine of unconscionability is ill-suited here.  Further, their approach is likely to introduce added uncertainty in the enforcement of contracts, where predictability is paramount” (para. 147).  Indeed, he criticized the majority for significantly lowering the hurdle for unconscionability, suggesting that every standard-form contract would, on the majority’s view, meet the first element of an inequality of bargaining power and therefore open up an inquiry into the sufficiency of the bargain (paras. 162-63).  Justice Brown concluded that “my colleagues’ approach drastically expands the scope of unconscionability, provides very little guidance for the doctrine’s application, and does all of this in the context of an appeal whose just disposition requires no such change” (para. 174).

In dissent, Justice Cote was critical of the other judges’ willingness, in the circumstances, to resolve the issue rather than refer it to the arbitrator for decision: “In my view, my colleagues’ efforts to avoid the operation of the rule of systematic referral to arbitration reflects the same historical hostility to arbitration which the legislature and this Court have sought to dispel. The simple fact is that the parties in this case have agreed to settle any disputes through arbitration; this Court should not hesitate to give effect to that arrangement. The ease with which my colleagues dispense with the Arbitration Clause on the basis of the thinnest of factual records causes me to fear that the doctrines of unconscionability and public policy are being converted into a form of ad hoc judicial moralism or “palm tree justice” that will sow uncertainty and invite endless litigation over the enforceability of arbitration agreements” (para. 237).  Justice Cote also shared many of Justice Brown’s concerns about the majority’s use of unconscionability: “I am concerned that their threshold for a finding of inequality of bargaining power has been set so low as to be practically meaningless in the case of standard form contracts” (para. 257).

The decision is lengthy and several additional issues are canvassed, especially in the reasons of Justice Cote and Justice Brown.  The ultimate result, with the drivers not being bound by the arbitration clause, is not that surprising.  Perhaps the most significant questions moving forward will be the effect these reasons have on the doctrine of unconscionability more generally.

Book: Feraci, “L’ordine pubblico nel diritto dell’Unione europea”

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Ornella Feraci (Univ. of Siena) has recently published “L’ordine pubblico nel diritto dell’Unione europea” (The public policy in EU Law) (Giuffrè, 2012). An abstract has been kindly provided by the author (the complete table of contents is available on the publisher’s website):

The work aims to examine one of the classic topic of private international law in the perspective of the European Union law under the two aspects of applicable law and recognition and enforcement of foreign decisions. Through the analysis of the case-law of the Court of Justice of the European Union and of the most recent instruments of private international law of the Union, it comes to identify a new concept of “public policy of the European Union”, which intends to protect the fundamental principles of European Union law; the book investigates the characteristics of the exception, trying to identify the functions, the relations with national public policy of the Member States and, as far as possible, the content.

Title: “L’ordine pubblico nel diritto dell’Unione europea“, by Ornella Feraci, Giuffrè (series: Collana di Studi del Dipartimento di Diritto pubblico dell’Università di Siena), 2012, XVI – 463 pages.

ISBN: 9788814173394. Price: EUR 50. Available at Giuffrè.

European Parliament’s Workshop on the Brussels I Proposal (20 September 2011) – Study on the Interpretation of the Public Policy Exception in EU PIL

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On Tuesday, 20 September 2011, the EP Committee on Legal Affairs (JURI) will host in Brussels a workshop on the review of the Brussels I regulation. The round table, chaired by Tadeusz Zwiefka (EP rapporteur on the Brussels I proposal), will be followed by the presentation of the study “Interpretation of the Public Policy Exception as referred to in EU Instruments of Private International and Procedural Law”, prepared by Prof. Burkhard Hess and Prof. Thomas Pfeiffer (Ruprecht-Karls-Universität Heidelberg) on behalf of the Commission. Here’s the programme:

[UPDATE: the live video streaming of the workshop will be broadcasted on this page. The recorded session will be later available in the EP’s Multimedia Library]

9:00 – 9:10 Welcome and opening remarks by Tadeusz Zwiefka, Rapporteur.

9:10 – 10:20 Analysis of the main elements of reform of Brussels I Regulation – Round Table:

  • Professor Burkhard Hess, Institut für ausländisches und internationales Privat- und Wirtschaftsrecht der Ruprecht-Karls-Universität
  • Heidelberg;
  • Professor Marie-Laure Niboyet, Université Paris X-Nanterre;
  • Professor Horatia Muir-Watt, Sciences-Po Law School, Paris;
  • Professor Ilaria Pretelli, Università degli Studi di Urbino “Carlo Bo”;
  • Alexander Layton QC of the Bar of England and Wales;
  • Professor Andrew Dickinson, University of Sydney, solicitor advocate (England and Wales), consultant to Clifford Chance LLP;
  • Florian Horn, partner and attorney at law, Brauneis Klauser Prändl law firm.

10:20 – 11:00 Questions and answers.

11:00 – 11:10 Presentation of the Study on the “Interpretation of the Public Policy Exception as referred to in EU Instruments of Private International and Procedural Law” by Professor Burkhard Hess and Professor Thomas Pfeiffer, Institut für ausländisches und internationales Privat- und Wirtschaftsrecht der Ruprecht-Karls-Universität Heidelberg.

11:10 – 11:20 Questions and answers.

11:20 – 11:30 Closing remarks by the Rapporteur.

(Many thanks to Prof. Koji Takahashi for providing the links to the video sessions)