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II. Dispute Settlement 争端解决 A. Settlement of disputes through diplomacy (通过外 交途径解决争端) B. Settlement of disputes in international tribunals (在国际争端解决机构解决争端)

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Presentation on theme: "II. Dispute Settlement 争端解决 A. Settlement of disputes through diplomacy (通过外 交途径解决争端) B. Settlement of disputes in international tribunals (在国际争端解决机构解决争端)"— Presentation transcript:

1 II. Dispute Settlement 争端解决 A. Settlement of disputes through diplomacy (通过外 交途径解决争端) B. Settlement of disputes in international tribunals (在国际争端解决机构解决争端) C. Settlement of disputes in municipal courts (在内国 法院解决争议) D. Immunities of states from the jurisdiction of municipal courts (国家在内国法院的管辖豁免) E. Choosing the governing law (选择准据法) F. Refusal to exercise jurisdiction (拒绝管辖) G. Opposition to the exercise of jurisdiction (管辖权 异议) H. Proving foreign law (外国法的证明) I. Recognition of foreign judgments (外国判决的承认)

2 A.SETTLEMENT OF DISPUTES THROUGH DIPLOMACY 1.Diplomacy Defined: The process of reconciling the parties to a disagreement by negotiation, mediation, or inquiry. a.Formally applies only to disputes between states. b.Informally applies to disputes involving institutions and individuals (where it is commonly called “alternative dispute resolution”). 2.Negotiation a.Defined: The process of reaching an agreement by discussion.

3  3.Mediation  a.Defined: The use of a third party who transmits and interprets the proposals of the principal parties, and, sometimes, advances independent proposals.  1)Good offices: When mediators provide a channel of communications only.  2)Conciliation: When mediators make a formal investigation and present a formal proposal.  4.Inquiry  a.Defined: The determination of a disputed fact or facts by an independent third party.

4 B.SETTLEMENT OF DISPUTES IN INTERNATIONAL TRIBUNALS 1.Where Disputes Are Heard a.Disputes between states or intergovernmental organizations (IGOs) may be heard by: 1)An international tribunal (e.g., ICJ). 2)A dispute resolution panel (e.g., WTO). 3)Arbitration. a)Arbitration is usually arranged on an ad hoc basis.

5  b.Disputes between a private person and a state, or between a private person and an IGO, will normally be decided by either:  1)A municipal court.  2)Arbitration.  a)Arbitration is usually arranged through a permanent arbitration tribunal (or “facility”) such as the International Center for the Settlement of Investment Disputes (ICSID).

6  2.International Court of Justice  a.History  1)Created in 1945 as one of the organs of the UN.  2)Modeled on the Permanent Court of International Justice (PCIJ), which functioned as an organ of the League of Nations from 1920 to 1946.  b.Membership  1)All the member states of the UN are automatically parties to the International Court of Justice’s statute, which is included as an annex to the UN Charter.  2)Nonmembers may adhere to the ICJ’s Statute.

7  c.Kinds of judgments that can be handed down by the ICJ.  1)Those in cases between states (based on the Court’s “contentious” jurisdiction).  2)Those requested by organs or Specialized Agencies of the United Nations (based on the Court’s “advisory” jurisdiction).  3)Caveat: ICJ has no authority to hear cases involving individuals or entities other than those just mentioned.

8  d.Contentious Jurisdiction.  1)Prerequisite to the ICJ assuming a contentious case: All of the states that are parties to the proceeding must have recognized the Court’s jurisdiction.  a)Most commonly done on an ad hoc basis.  b)Sometimes these agreements are made permanent by:  1] Inclusion in a bilateral treaty.  2] Unilateral declarations made by each of the parties (called “optional clause” or Art. 36(2) jurisdiction).

9  2)Optional Clause Jurisdiction.  a) Art. 36(2) of the Statute of the Court — known as the “optional clause” — allows states to make a unilateral declaration recognizing” as compulsory ipso facto and without special agreement, in relation to any other state accepting the same obligation, the jurisdiction of the Court in all legal disputes.”  1] Many states have recognized the Court’s jurisdiction under the optional clause.  2] A few have put no restrictions on the kinds of cases they will respond to.

10  a]Rule of Reciprocity: Art. 36(2) only requires that a state respond to a suit brought against it if the state bringing the suit has also accepted the jurisdiction of the Court.Where both states have limited the jurisdiction that they will recognize, the ICJ only has power to decide a case to the extent that both states have agreed to the same sort of matters.  3] Most states have added a wide variety of restrictions on the kinds of suits they are willing to let the Court hear without a special arrangement.

11  b]Self-judging Reservations (or “Connally Reservations”).  (1)Defined: A clause that allows a state to exclude from its acceptance of optional clause jurisdiction any matter which it later determines is within its own domestic jurisdiction.  (a)This can be a problem, because the rule of reciprocity allows would-be defendants to invoke the plaintiff’s self- judging clause.  (2)Validity of self-judging clauses is questionable.

12  3-1. CASE CONCERNING MILITARY AND PARAMILITARY ACTIVITIES IN AND AGAINST NICARAGUA (Jurisdiction and Admissibility) (Dissenting Opinion)  International Court of Justice, 1985.  FACTS: Nicaragua brought suit in the ICJ when a US CIA mine sank one of its fishing trawlers in the port of Corinto. Shortly before Nicaragua filed its complaint, the US amended its optional clause declaration refusing to recognize (for a period of 3 years) the ICJ’s jurisdiction in any matter relating to Latin America. The US then refused to participate in this proceeding. The US’s optional clause declaration contains a self-judging clause. Judge Schwebel (the US judge on the Court) examined the effect of that clause on the jurisdiction of the ICJ.  ISSUE: What is the effect of a self-judging clause on the ICJ’s jurisdiction?

13  e.Advisory Jurisdiction.  1)Purpose: To allow the Court to give opinions about issues of international law at the request of the UN or its specialized agencies.  2)Requests will be rejected if they have the effect of making a state a party to a dispute without its consent.

14  f.Judgments.  1)Cases will be concluded when:  a)Parties reach a settlement.  b)Applicant withdraws a case.  c)Court delivers an opinion.

15  2)Effect of the judgment:  a)Decision of the Court is binding between the parties and with respect to the particular case only.  1] Stare decisis does not apply.  b)Judgment is final and without appeal.  1] ICJ will interpret a judgment.  2] ICJ may revise a judgment within ten years if a request is made within 6 months of the discovery of some new relevant fact.

16  g.Compliance with ICJ Decisions  1)Compliance is usually voluntarily.  2)Theoretically, the Statute of the Court says that if a party refuses to comply with a judgment, “the other party may have recourse to the Security Council, which may, if it deems necessary, make recommendations or decide upon measures to give effect to the judgment.”  3)Practically there is no way to force a state to comply with a judgment.

17  3.World Trade Organization (WTO) Dispute Settlement Procedures  a.WTO is responsible for implementing and enforcing the WTO agreements, including:  1)General Agreement on Tariffs and Trade (GATT).  2)General Agreement on Trade in Services (GATS).  3)Agreement on Trade Related Aspects of Intellectual Property (TRIPS).  b.Source of WTO Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes (the Dispute Settlement Understanding or DSU).  1)This is a unified process that applies to all disputes arising under the WTO agreements

18  c.Preliminary Procedures:  1) Consultation: Member states are encouraged to resolve disputes with each other by consultation.  a)Dispute Settlement Panels will be established if:  1] A party asked to participate in consultations does not respond, or  2] The consultations are not productive.  2) Third Party Participation: If both parties agree, they may seek the assistance of third parties in conducting negotiations about their dispute.  a)This assistance may continue, if the parties agree, even while a Dispute Settlement Panel is considering a complaint.

19  d.Dispute Settlement Organs.  1)Dispute Settlement Body (DSB).  a) The WTO General Council convenes as the DSB under its own Chairman and following its own rules.  1] Responsibilities:  a] Establishes panels.  b] Adopts panel and Appellate Body reports.  c] Monitors the implementation of rulings and recommendations.  d] Authorizes the suspension of concessions and other member state privileges.

20  b)Dispute Settlement Panel.  1]Made up of three panelists (unless the parties agree that there should be five).  a]Panelists are nominated by the WTO Secretariat.  b]Parties must have “compelling reasons” not to accept a nominated panelist.  c]If the parties do not agree to a panel within 20 days, one will be appointed by the WTO Director-General after consulting the Chairman of the DSB and the relevant council or committee.  2]Panelists serve in their individual capacities and not as representatives of a state.

21  3]Role of Panels:  a]To objectively assess:  (1) The facts.  (2) The applicability and conformity of the pertinent WTO agreements.  b]To make findings that will help the DSB settle on recommendations and rulings to resolve the dispute.  4]Panel reports are adopted automatically within 60 days after being circulated, unless:  a]A party gives notice that it intends to appeal.  (1) Only a party directly involved in a dispute may appeal.  b]The DSB decides by consensus not to adopt the report.

22  Case 3-2. EUROPEAN COMMUNITIES ‑ CUSTOMS CLASSIFICATION OF CERTAIN COMPUTER EQUIPMENT  World Trade Organization, Appellate Body, 1998  FACTS: The US alleged that the EC, the UK, and Ireland had imposed import tariffs on certain computer equipment (i.e., local area networks, or LANs, and PC’s with multimedia capability) in excess of that specified in the Schedule the EC had agreed to as a party to the General Agreement on Tariffs and Trade (GATT). A WTO panel agreed. The EC, the UK, and Ireland appealed, arguing that the US had not ‘identified with sufficient specificity” the measures in dispute and the products affected.  ISSUE: Were the measures in dispute and the products affected identified with sufficient specificity by the complainant?

23  c)Appellate Body.  1]An appeal board made up of seven persons who serve terms of four years.  a] Three of the members of the Appellate Body will serve when hearing a case.  2]Proceedings are confidential.  3]Opinions expressed by the members of the Appellate Board are anonymous.  4]Decisions of the Appellate Body will be adopted automatically unless the DSB decides by consensus not to do so.  e.Effect of Panel and Appellate Body Rulings:No formal precedential effect.

24  Case 3-3. JAPAN ‑ TAXES ON ALCOHOLIC BEVERAGES  World Trade Organization, Appellate Body, 1996  FACTS: The EC, Canada, and the US complained that Japan’s application of its Liquor Tax Law did not comply with the requirements of the GATT. The WTO Panel hearing the complaint concluded, among other things, that “panel reports adopted by the [old] GATT [1947] Contracting Parties and the [new] WTO Dispute Settlement Bodies” constitute “subsequent practice” that were to be treated as “an integral part of GATT 1994.” In other words, they were to be regarded as precedents. On the appeal of this case, the US argued that the Panel hearing the case had erred in making this finding.  ISSUE: Must the panel reports adopted by the GATT 1947 Contracting Parties be treated as precedents?

25  4.International Center for the Settlement of Investment Disputes (ICSID)  a.Created by Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the Washington Convention).  1) Drafted in 1965 by the World Bank.  b.Purpose of ICSID: To encourage private investment in underdeveloped countries.  1) Rationale: Many individuals and businesses were reluctant to make investments out of the fear of having their investment expropriated.  2) Goal: To provide a reliable mechanism for impartially resolving disputes between an investor and the country of investment.  c.Signatories: Half the countries of the world.

26  d.Constituting an ICSID Arbitration Tribunal.  1)Prerequisites:  a)The state where the investment is being made (the host state) and the state of which the investor is a national (the home state) must both be parties to the Washington Convention.  b)The host state must have notified ICSID of the class or classes of disputes that it considers arbitrable.  1]Note: Only a few states have done so.  c)The investor and the host state must both consent to ICSID jurisdiction.  2)These prerequisites may not be waived.  3)Unilateral withdrawal is ineffective.

27  Case 3-4. FEDAX N.V. v. REPUBLIC OF VENZUELA  ICSID Arbitral Tribunal, 1997.  FACTS: Venezuela issued promissory notes to Industrias Metalurgicas Van Dam C.A. (IMVD). IMVD endorsed these over to Fedax N.V., a company domiciled in Netherlands Antilles. When Venezuela defaulted, Fedax brought suit before an ICSID panel to collect on the notes. Venezuela seeks to have the suit dismissed on the grounds that an ICSID panel, which can only hear in cases involving investments, does not have jurisdiction.  ISSUE: (1) Had Fedax made an investment in Venezuela? (2) Was it a “direct foreign investment”

28  e.Exclusive Remedy.  1) By giving consent to ICSID arbitration, the litigants are deemed to have excluded all other remedies.  a) The case cannot be tried in a municipal or another international tribunal.  b) The investor may not ask its home state for diplomatic protection.  c) Note: The host state can require that all local remedies be exhausted before the dispute can be taken to ICSID.

29  f.Jurisdiction.  1)An ICSID tribunal must have both personal and subject matter jurisdiction.  2)Personal Jurisdiction.  a) The parties must be:  1] A “state party.”  2] A “national of another contracting state.”  3)Subject matter jurisdiction.  a) ICSID arbitration tribunals can only decide matters that are:  1] Legal disputes.  2] Which arise out of an investment.

30  g.Orders and Awards.  1)An ICSID tribunal has the power to issue:  a) Interim orders.  b) Binding awards.  1] Although binding, an ICSID award is not final.  a] The tribunal itself can review an award either to interpret it or to revise it.  b] Appeal is allowed to an ad hoc committee that has the power to annul an award.

31  h.Enforcement.  1)ICSID awards are binding and contracting states agree to comply with them.  a) Any review of the award by the courts of the state party to a particular dispute is considered to be in noncompliance with the award.  1] In such a case, an investor can seek diplomatic remedies from its home state, and other states party to the Convention can protest.

32  5.Other Arbitration Tribunals  a.Rarely arbitration between private parties is done on a purely ad hoc basis with the parties appointing arbitrators and devising procedures and rules for the conduct of a proceeding on their own.  b.Commonly, the parties agree in advance to resolve their disputes using existing guidelines set up by one of several international arbitration organizations.  1)Examples:  a) American Arbitration Association.  b) London Court of Arbitration.  c) International Chamber of Commerce.

33 C. SETTLEMENT OF DISPUTES IN MUNICIPAL COURTS 1.Jurisdiction of Municipal Courts a.Jurisdiction defined: The competence or ability of a national court to exercise the power to try a case. b.Scope of jurisdiction: Under international law, the jurisdiction of municipal courts to try an international dispute is limited. 1)Most governing rules are prohibitory. 2)There are only a few cases where international law requires a municipal court to take a case contrary to its wishes (e.g., air piracy).

34  c.Immunity: The ability of a party to escape the jurisdiction of a court.  1)Natural and juridical persons have few (if any) immunities from the powers of a municipal court.  2)Immunity of foreign states:  a)Traditionally they have had complete immunity.  b)Modern rule: State agencies that carry out commercial activities (such as national airlines or national shipping lines) are treated as having no immunity.

35  2.Jurisdiction in Criminal Cases  a. Grounds (or justifications) given by municipal courts for assuming jurisdiction over international crimes:  1) Territoriality nexus: A court has jurisdiction if the crime was committed within the forum state’s territory.  a) The crime may have been initiated within the state’s territory, and/or  b) The crime may have its effect within the state’s territory.  2)Nationality nexus: A court has jurisdiction if a national of the forum state committed the crime.  3)Protective nexus: A court has jurisdiction if the offender injured a national interest of the forum state.  4)Universality nexus: A court has jurisdiction if the offense is one recognized by the international community as being of universal concern.

36  Case 3-5. ATTORNEY GENERAL OF THE GOVERNMENT OF ISRAEL v. EICHMANN  Israel, District Court of Jerusalem, 1961.  FACTS: Israeli agents abducted Adolf Eichmann from Argentina for trial for World War II war crimes.  ISSUES: (1) Does an Israeli court have jurisdiction to hear a dispute involving a crime committed outside of Israel and before Israel came into existence? (2) Can a court hear a case when the defendant was illegally kidnapped and forcibly brought into the country?

37  3.Jurisdiction in Civil Cases  a.Jurisdiction over Persons.  1)In personam jurisdiction exists when an individual or juridical person is physically present within the forum state.  a) Individuals subject to in personam jurisdiction include:  1] Nationals of the forum state (whether physically present or not).  2] Natural persons physically present within the state.  3] Natural persons domiciled in the state.  4] Natural persons who consent to a court’s jurisdiction.

38  b)Juridical persons (e.g., business entities and foreign governments) subject to the in personam jurisdiction of a municipal court include:  1] Domestic entities (e.g., companies incorporated or formed within the forum state).  2] Foreign entities if they:  a] are recognized as juridical entities by the forum state.

39  Case 3-6. BUMPER DEVELOPMENT CORP., LTD. v. COMMISSIONER OF POLICE OF THE METROPOLIS AND OTHERS  (Union of India and Others, Claimants)  FACTS: A stone Hindu religious artifact had been wrongfully removed from India. Bumper purchased it (or one like it) because the seller provided false papers. The police seized the artifact while its provenance (origins) was being checked at the British Museum. Bumper then brought suit to get the artifact back. Among those who intervened as claimants for the idol was the Hindu temple and the idol within the temple to which the artifact belonged.  ISSUE: Should the temple (and the idol) be recognized as parties?  Does it (do they) have legal identity?

40  b]give their consent to the jurisdiction of a court.  (1)Consent arises by:  (a)Appearing in court after a suit has commenced.  (b)Agreeing to the personal jurisdiction of a particular court in a forum selection clause contained in a contract.  (c)Appointing an agent within a state to receive service of process on behalf of the individual.  (d) Minimum business contacts with the forum state.

41  Case 3-7. SHELL v. R. W. STURGE, LTD.  United States Sixth Circuit Court of Appeals, 1995  FACTS: Investors in Lloyd’s of London had signed forum selection clauses that gave exclusive jurisdiction to English courts to hear and resolve any disputes between them and Lloyd’s. Later, in a suit brought by the investor’s to rescind their investment contracts with Lloyd’s (after Lloyd’s had suffered huge losses and demanded contributions from its investors to cover those losses) on the grounds that Lloyd’s had sold securities to the investors without registering with the state of Ohio, the trial court dismissed the suit because of the forum selection clauses. The investors appealed.  ISSUE: Is a forum selection clause enforceable?

42  (d) Minimum business contacts with the forum state.  [1]Example: International Shoe Co. v. State of Washington (US Sup. Ct. 1945) says that the court should consider the following in determining if there are sufficient minimum contacts. [a] Whether the company has performed acts that relate to the forum state. [b] Whether the suit is based on those acts. [c] Whether the company has indicated by its conduct that it intended to rely on the benefits (such as doing business) of the forum state.

43  b.Jurisdiction over Property.  1)In rem jurisdiction: The power of a municipal court to determine the ownership rights of persons as to property located within the territory of the forum state.

44 D.IMMUNITIES OF STATES FROM THE JURISDICTION OF MUNICIPAL COURTS 1.Sovereign or State Immunity a.Defined: Doctrine that domestic courts must decline to hear cases against foreign sovereigns out of deference to their roles as sovereigns. 1)Foreign sovereigns today include all of the officials of government.

45  b.Scope of sovereign immunity.  1)Absolute sovereign immunity.  a)The traditional rule (in effect until the 1950s).  b)Defined: A state is absolutely immune and cannot be brought before a foreign court no matter what activities it is involved in or what injuries it may cause.  c)Rationale: States need immunity when they are only involved in tax collection, law enforcement, and national defense.

46  d)Criticism.  1] It is unfair: Individuals and businesses that contracted to buy or sell goods or services to a foreign country would be unable to sue the country if it breached its contract.  2] It is bad business.  2)Restrictive Sovereign Immunity.  a) Prevalent rule in world today.  b) Defined:  1] A state is immune from suit in cases involving injuries that are the result of its governmental actions.  2] A state is not immune when the injuries result from a purely commercial or nongovernmental activity.

47  c.Effect of waiver of sovereign immunity by a state:  1)Waivers by states are valid.  a)Waivers may be:  1]An express waiver at the time the suit is brought.  2]A waiver made in advance in a contract clause.  3]An implicit waiver made by bringing or participating in a suit.  2)The waiver must be knowingly made.

48  Case 3-8. ABBOTT v. REPUBLIC OF SOUTH AFRICA  Spain, Constitutional Court, 1992.  FACTS: The plaintiff, Abbott, a foreign national who had been fired from her job at the South African Embassy in Madrid, Spain, won a judgment granting her compensation for back salary. The plaintiff sough to execute the judgment against Embassy properties, including its local bank accounts. South Africa appealed and an intermediate court held that its bank accounts were absolutely immune from execution. It dismissed the plaintiff’s request for the enforcement of her judgment and she appealed.  ISSUE: Can a court enforce a judgment against property belonging to a foreign state?

49  2.Act of State Doctrine  a.Defined: A municipal court will decline to exercise jurisdiction over a foreign state when that state:  1)Performed an act that was an expression of its sovereign powers.  2)Carried out an act within in its own territory.

50  Case 3-9. REGINA v. BARTLE (Ex parte Pinochet)  England, House of Lords, 1999  FACTS: Spain seeks to extradite former Chilean President Pinochet to stand trial for crimes of torture, murder, and the unexplained disappearances of Spanish citizens committed (mainly) in Chile.  ISSUE: (1) Did Pinochet commit extraditable crimes? (2) Is Pinochet immune from trial for committing those crimes?

51 E.CHOOSING THE GOVERNING LAW 1.Reasons Municipal Courts Apply Laws Other Than Their Own a.Fairness: Individuals take actions in a particular place.To later have a court in another country apply different laws would discourage international exchanges of all kinds. b.Comity: Because each state has an interest in protecting the rights of its subjects, and only by respecting the interests of foreign subjects can a state expect similar treatment for its subjects in other states. 1)This rationale is now considered out of date. c.This is a sui generis juridical right.

52  2.Choosing the Law  a.Courts use “choice of law” or “conflict of law” rules to determine if they should apply their own laws or the laws of another state in settling civil disputes.  b.This involves a two-step procedure:  1)If the parties to a dispute have agreed to the application of the laws of a particular country, the court should apply those laws.  2)If the parties have not agreed as to which laws should apply (either expressly or impliedly), then the court should determine for itself which laws it should apply by:  a)Following statutory dictates.  b)Determining which state has the most significant relationship with the dispute.  c)In a few jurisdictions: Determining which state has the greatest interest in the outcome of the case.

53  3.Agreement of the Parties  a.Most commonly arises in contract cases.  1)The parties may agree in advance as to what law should apply in a “choice of law clause.”  a)Validity of these clauses:  1]Valid if freely entered into.  2]No requirement of a factual connection with the country whose legal system they have adopted.  2)The agreement of the parties can be made in statements to a court.  3)The intent of the parties may be inferred.

54  4.Statutory Choice of Law Provisions  a.Statutory choice of law provisions are commonly found in civil law countries in:  1)Statutory codes (most commonly).  2)International treaties (occasionally). b.Common basis of these provisions: Vesting of rights doctrine - A court is to apply the law of the state where the rights of the parties to a suit vested 。  c.Rules for determining vesting.  1)The general case: The law of the place where the act occurred shall govern.  2)Rules for special cases relate to the subject matter of the case:

55  a)Delict or tort: The governing law is the law of the place where the wrong was committed.  b)Contract: The law of the place where the contract was made governs questions of validity, and the law of the place where the contract was to be performed governs questions of performance.  c)Real property: The law of the place where the property is located governs.

56  5.Most Significant Relationship  a.Defined: A court is to apply the law of the state that has the most “contacts” with the parties and their transaction.  1)General factors that the courts will consider in all cases are (in essence):  a)Which law best promotes the needs of the international system?  b)Which state’s law will be furthered the most by applying it to the case at hand?  c)Which law will best promote the underlying policies of the legal subject-matter area involved?

57  2)“Specific” factors that a court considers depends on the kind of case that is before it.  a)Tort cases:  1]The place of injury.  2]The place of the act.  3]The nationality, domicile, residence, or place of incorporation of the parties.  4]The place where the relationship between the parties was centered.  b)Personal property cases:  1]The location of the property.  2]The nationality, domicile, residence, or place of incorporation of the parties.  c) Real property cases: The location of the property.

58  d)Contract cases:  1]The place of contracting.  2]The place of negotiation.  3]The place of performance.  4]The location of the subject matter.  5]The nationality, domicile, residence, or place of incorporation of the parties.  Case 3-10. BANK OF INDIA v. GOBINDRAM NARAINDAS SADHWANI  Hong Kong, High Court, 1982.

59  FACTS: Mr. & Mrs. Gobindram Sadhwani (G), residents of Hong Kong, had acted as guarantors of a line of credit of 230,000,000 yen that the Bank of India had provided Sadhwanis (Japan) Ltd. (SJL). The Bank was an Indian corporation with branches in Japan and Hong Kong. SJL was a Japanese firm managed by Mr. G’s brother, Mr. Kishinchand Sadhwani (K). It had drawn bills of exchange on corporations in Sri Lanka and Nigeria (run by other brothers). The bills were dishonored and the Bank sought payment from Mr. K as a guarantor. Mr. K told the Bank it would have to pursue the Hong Kong guarantors, Mr. & Mrs. G. Although the Bank had given Mr. & Mrs. G a release, it eventually brought suit against them anyway. Mr. & Mrs. G. then argued that the law governing their guarantee contract was Japanese law and that Japanese law excused them from liability because the Bank had released them as guarantors. The Bank argued that either Indian or Hong Kong law should apply.  ISSUE: What law governs the guarantee contract?

60  6.Governmental Interest  a.Procedure:  1)Courts will make no choice of law unless asked to do so by the parties.In such a case, they will apply the law of their own state.  2)If asked to make a choice of law, courts will look to see which state has a legitimate interest in determining the outcome of the dispute.  a)If only the forum state has an interest (a so-called “false conflicts” case), it will apply the forum state’s law.  b)If both the forum state and another state or states have some legitimate interest (a “true conflicts” case), then the forum’s laws should be applied, since the court obviously understands those interests better.

61  c)If two states other than the forum state have legitimate interests (also a “true conflicts” case), then the court may:  1]Dismiss the case if the state in which the court is located can use the doctrine of forum non conveniens (discussed below).  2]Apply whichever law it feels is the sounder.  3]Apply the law that is most like that of the forum state.

62  Case 3-11. REYNO v. PIPER AIRCRAFT COMPANY  United States District Court, Middle District of Pennsylvania, 1979.  FACTS: In 1976, a small aircraft, owned and operated by Scottish companies, crashed in Scotland, killing the Scottish pilot and passengers. The aircraft was manufactured in Pennsylvania by Piper Aircraft (P), and the propellers in Ohio by Hartzell Propeller (H). Reyno, who became the administratrix for the decedent’s heirs, began a wrongful death suit in California against P and H. At P and H’s request, the case was moved to a US federal court, where the proceeding against H was quashed. Then, at P’s request, the case was moved to a federal court in Pennsylvania. Both P and H then asked that the case be dismissed. They argued that Scottish law should apply, and that under Scottish law the plaintiff had no standing and no right to bring a wrongful death suit under a theory of strict liability.  ISSUE: Should California, Pennsylvania, or Scottish law be applied?

63 F. REFUSAL TO EXERCISE JURISDICTION 1.Forum Non Conveniens Doctrine a.Defined: A court may refuse to exercise its power to hear a case where it is either inconvenient or unfair to do so. 1)Factors the court will consider are: a)Private interests of the parties (i.e., the ease and cost of access to documents and witnesses). b)Public interest factors (i.e., the interests of the forum state, the burden on the courts, and the notion of judicial comity).

64 G.OPPOSITION TO THE EXERCISE OF JURISDICTION 1.Antisuit Injunction: an injunction issued by a litigant’s home country forbidding the litigant from proceeding with a suit in a foreign court. Case 3-12.Airbus Industries G.I.E. v. Patel

65  Case 3-12. AIRBUS INDUSTRIE G.I.E. v. PATEL  United Kingdom, House of Lords, 1998.  FACTS: Four UK citizens were killed and four were injured when an Airbus A-320 plane crashed in India. They, or their representatives, joined a suit in a Texas court against Airbus Industrie brought by the representatives of three Americans killed in the crash. Airbus Industrie then obtained a judgment from an Indian court forbidding any injured parties from bringing suit in any court except the Indian court. Airbus Industrie then obtained an antisuit injunction from the English High Court forbidding the UK citizens or their representatives from proceeding with the suit in Texas. The UK citizens/representatives appealed.  ISSUES: When should an antisuit injunction be granted?

66 H.PROVING FOREIGN LAW 1.Presumptions a.Courts are held to know the law that applies in their own state. b.Courts are held to know the rules of international law. c.Courts are assumed not to know the law of foreign states. 1)The parties must prove foreign law as a fact.

67 I. RECOGNITION OF FOREIGN JUDGMENTS 1. Foreign Court Judgments: A court asked to convert a foreign judgment into a local judgment will hold a hearing. a.Common consideration: Did the foreign court have jurisdiction before handing down its judgment? b.Other considerations depend on the country.

68 2.Arbitral Awards: a.Treated like domestic judgments in courts in states that are parties to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. b.Must first be converted into a foreign judgment in other states, and then that judgment is treated like any other foreign court judgment.

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