Posts Tagged Comparative conflict of laws
A concise note (I am currently tied up mostly in writing research grants. And and and… I hope to return to the blog in earnest later in the week) to signal prof Hess’ excellent short paper on Brexit and judicial co-operation. Prof Hess focuses on the possibility to use the Lugano Convention. (See here for a draft of Michiel Poesen’s overview). I agree that Lugano would not be a good route if one’s intention is to safeguard as much as possible co-ordination between the UK’s common law approach to private international law, and the EU’s. Neither evidently if one aims to facilitate smooth cross-border proceedings.
Prof Hess has an interesting side consideration on schemes of arrangements. (Including reference to Apcoa). Again I agree that the English courts’ approach to same is not entirely without question marks (particularly jurisdictional issues in the event of opposing creditors: see here). I do not though believe that they would justify hesitation at the recognition and enforcement stage in continental Europe – even after Brexit. At least: not in all Member States. For of course post Brexit, UK judgments become those of a ‘third country’, for which, subject to progress at The Hague, we have no unified approach.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.
Interestingly enough the issue of inclusion of foreign victims in class action suits came up in conversation around our dining room the other day. (Our youngest daughter, 15, is showing encouraging signs of an interest in a legal career). In 2017 ONCA 792 Airia Brands Inc v Air Canada is reviewed excellently by Dentons here and I am happy to refer. (See also here for Norton Rose reporting on related cases – prior to the CA’s decision in Airia Brands).
The jurisdiction and ‘real and substantial connection’ analysis referred to Van Breda (which recently also featured mutatis mutandis in the forum necessitatis analysis in Cook).
Certification of global classes was part of the classic analysis of developments in international class action suits, which hit us a few years back when many EU states started introducing it. Airia Brands shows that the concerns are far from settled.
The RBS rights issue litigation: A missed opportunity for choice of law re privilege to go up to the UKSC.
Update 6 January 2018. Thank you Gordon Nardell QC for signalling that the CA has given leave to appeal in  EWHC 1017 (QB) Serious Fraud Office (SFO) v Eurasian Natural Resources Corporation Ltd. The issues there are summarised by Gordon’s learned friend Christopher Newman here. Appeal in SFO v ENR will give an opportunity to the Court of Appeal to address many of the same privilege issues – although not perhaps lex causae.
Welcome to this end of 2018.
Thank you Kate Wilford for flagging  EWHC 3161 (Ch) The RBS Rights issue litigation. The litigation concerns a rights issue of shares in the Royal Bank of Scotland (“RBS”) which was taken up in 2008. By the various actions, shareholders in RBS seek to invoke statutory remedies against RBS under the Financial Services and Markets Act 2000 (“FSMA”) whereby to recover substantial investment losses incurred further to the collapse of RBS shares. The prospectus for the Rights Issue was argued not be to accurate or complete.
The case at issue was held December 2016 but has only now come to my attention. Of note to this blog is one of the three issues that were sub judice: whether RBS is entitled to rely on the federal law of the USA as the law applicable to the particular issue, and if so, whether under that law the claim of privilege is maintainable: Hildyard J referred to this as “the Applicable Law Point”. It is discussed under 129 ff.
As Kate notes, the issue was concerned with the availability of legal advice privilege over records of interviews conducted by US lawyers in a fact-gathering investigation. RBS contended that the English court should have applied US privilege rules, which would have afforded the interview records a much broader degree of protection against disclosure.
I reviewed privilege and applicable law in my post on People of State of New York v. PriceWaterhouseCoopers, albeit that in that case the toss-up was between different States’ law, not federal law. Hildyard J discusses the English 1859 authority Lawrence v Campbell: lex fori applies. Particular attention is paid to the in my view rather convincing arguments of Adam Johnson (who has since taken silk) as to why this 1859 authority should no longer hold, see 145-147. Yet his arguments were all rejected, fairly summarily. RBS’ lawyers proposed an alternative rule (at 137): “Save where to do so would be contrary to English public policy, the English court should apply the law of the jurisdiction with which the engagement or instructions, pursuant to which the documents came into existence or the communications arose, are most closely connected.”
Rome I or II did not feature at all in the analysis – wrongly I believe for there could have been some useful clues there and at any rate the applicable law rules of the Regulations certainly apply to the litigation at issue and should have been considered.
Now, there seems to have been consensus that the case was Supreme Court material – however RBS did not pursue the point. We’ll have to wait therefore until another suitable case comes along which I imagine should not be too long in the making.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 1.
I have reported before on the relevance of lex curia /curial law and other lex causae decisions to be made in the arbitration context. I have also reported on the qualification of ‘international‘ for conflict of law /private international law purposes. And finally of course privity of choice of court and -law is no stranger in my postings either. All these considerations apply in the arbitration context, too.
Thank you Herbert Smith for flagging CS(COMM) 447/2017 GMR Energy, in which all these issues featured in the arbitration context. The judgment would not seem to add anything new (mostly applying precedent) however it is a usual reminder of the principles. As reported by HS (and with further factual background there), GMR Energy argued
- on the plain reading of the arbitration clauses, Singapore was not the seat of arbitration but only the chosen place or venue for hearings; Not so, the High Court found: reference to SIAC rules and to Singapore points to Singapore as the curial seat;
- the parties being Indian, choice of a foreign seat for arbitration would be in contravention of Section 28 of the Indian Contract Act 1872 which provides that agreements which restrain parties’ rights to commence legal proceedings are void (save for those which do so by way of an arbitration agreement) – GMR Energy contended that an agreement between Indian parties to arbitrate offshore would fall foul of this provision. This, too, the High Court rejected: per precedent, offshore arbitration is compatible with the Act. (It is also particularly useful for Indian subsidiaries of foreign companies); and
- for two Indian parties to choose an overseas seat for their arbitration (thereby disapplying Part I of the Arbitration Act) would amount to a derogation from Indian substantive law, and therefore would not be permissible. This, the High Court ruled, is not a decision to make at the stage of jurisdictional disputes between the parties.
Further, on the issue of privity, Doosan India ‘contended that GMR Energy should be party to the SIAC Arbitration proceedings by virtue of common family ownership and governance, lack of corporate formalities between the companies, common directorships, logos and letterheads, and GMR Energy’s past conduct in making payments towards GCEL’s debts’ (I am quoting HS’s briefing here). This is referred to as the alter ego doctrine and the High Court upheld it. Liability for affiliated undertakings’ actions is to be discussed on the merits (here: by the arbitral tribunal). But a the level of jurisdiction (including reference to arbitration), Doosan India’s arguments were upheld: the common ownership between the entities; the non-observance of separate corporate formalities and co-mingling of corporate funds; and GMR Energy’s undertaking to discharge liabilities of GCEL (and the fact that it had made part payments towards the same) all conspire to the conclusion that GMR Energy is bound by the arbitration agreement.
An interesting confirmation of precedent and ditto application of the alter ego doctrine.
And I would be very happy to supervise. Thank you Nicolas Contis for flagging Stockholm National Museum v X at the French Supreme Court /Cour de Cassation. Nul ne peut se contredire au détriment d’autrui: aka (here: procedural) estoppel. (The newly out Encyclopedia of Private international law, edited by Basedow, Ruhl, Ferrari and de Miguel Asensio, has a very good entry on it, discussing both public and private international law).
On the eve of a hearing on the ownership of an ancient artefact, a cup, defendants changed their stance and argued that the cup had belonged to their mother, for whom they were acting as representatives only. Previously, they had always presented themselves as owners. They suggested therefore that the suit was misdirected, hoping to sink it. The Court of Appeal dismissed the defendants’ motion on account of procedural estoppel. The Supreme Court disagreed: its stance means, as Nicolas summarises, that ‘to face the procedural penalty of dismissal, not only must the change of stance happen throughout the judicial proceedings (ie, notably, that a contradiction including a repeated allegation made before the launching of a suit could not pass the estoppel test), but the party at fault must also have changed its ‘pretentions’ – that is, its legal claims (meaning that changing the factual allegations presented to the courts could not pass the test either)’.
I do not see entirely clear in French civil procedure law but as I saw the case reported, the thought struck me: this would be a good topic for a PhD: a comparative study in procedural estoppel, specifically in a private international law context (especially if one were also to throw a comparison with arbitration in the mix).
Happy to discuss. Geert.
Worldwide freezing injunctions are one of the civil procedure reasons for forum shopping to the English courts.  EWHC 2747 (Ch) Campbell v Campbell is an excellent illustration of the current state of the law, with Sarah Worthington QC expertly summarising and applying precedent. The application is for a freezing injunction over assets located outside England and Wales, partly in aid of domestic proceedings (partnership dissolution proceedings) and partly in aid of foreign proceedings (proceedings in Jersey re claims for 50% interest in shareholdings).
One for the comparative binder.
In Fernandes v. Wal-Mart Canada 2017 MBCA 96 the Court of Appeal of Manitoba offers great material for comparative conflict of laws. I will leave the Canadian analysis to the experts, in particular Chloe Snider who alerted me to the case. Suffice to say here that the gist of the ruling is that where a corporation carries on business in the territory (here: Wal MArt operating stores), this suffices to establish jurisdiction (here: re an employment issue): no ‘real and substantive connection’ test needs to be separately established. (Cue comparative litigation: compare with ‘domicile’ and extended notions of domicile in EU conflicts law).
The action was eventually still stayed on forum non conveniens grounds in favour of Ontario (extra cue for comparative review here: for this was so held despite the fact that the Ontario limitation period had probably expired).