Posts Tagged Comparative conflict of laws
The representatives at the Diplomatic Conference at the Hague Convention have issued a provisional text of the Convention here. I am short of time to post a quick scan of the Convention – see some of my earlier posts on same. Also, since the Convention has taken on the format of the Brussels regime, it is of course quite an exercise even just to give a quick overview.
Of interest is that Jane Holliday posted a summary of key positive takeaways by prof Paul Beaumont, who was heavily involved in the drafting i.a. as a representative of the EU. These include the room for asymmetric choice of court (not covered by the Hague choice of court Convention and crucial for many common law jurisdictions); and the blend between the US and the EU regime for forum contractus: Article 5(g):
‘the judgment ruled on a contractual obligation and it was given by a court of the State in which performance of that obligation took place, or should have taken place, in accordance with
(i) the agreement of the parties, or (ii) the law applicable to the contract, in the absence of an agreed place of performance,
unless the activities of the defendant in relation to
the transaction clearly did not constitute a purposeful and substantial connection to that State.
Of note of course is also the carve-out for intellectual property and of ‘unilateral’ sovereign debt restructuring, but also of defamation and of privacy.
Much analysis no doubt to follow, as are complications in reaching a unified interpretation of the Convention once ratified.
(Handbook of) EU Private International Law, 2nd ed. 2016. Chapter 2.
Comparative US /EU jurisdiction material: Mitchell v. DePuy Orthopaedics (Missouri); and KGS v Facebook (Alabama).
Thank you Stephen McConnell for flagging Mitchell v. DePuy Orthopaedics, Inc., 2019 U.S. Dist. (Missouri) and Alani Golanski for doing the same for KGS v Facebook at the Alabama Supreme Court,
Both cases have plenty of scope for comparative analysis viz EU law and non-US common law. Which is why I had pondered them for use in exam essays but in the end did not – they might come in handy at a later stage.
Readers best refer to the reports linked above for a full picture. In short, Mitchell involves the minimum contacts rule as well as ‘directing activities towards forum residents’: both have clear echos (and differences) in EU jurisdictional rules. On neither ground was specific (what the EU would call ‘special’) jurisdiction upheld.
In the Facebook case, Facebook argument is included on p.10-11. Claimant put forward a case for jurisdiction on p.13-14. She argues i.a. effects doctrine. Bryan J discussed both extensively p.15 ff and held that doing business in Alabama is not sufficient for personal jur., and (p.39) Facebook engagement with complaints not enough for specific jurisdiction.
In both cases the US Supreme Court’s decision in Bristol-Myers Squibb is cited as highly relevant authority.
A very brief post mainly for archival purposes particularly with a view to comparative conflict of laws. Tozzini Freire review the new Article 25 of Brasil’s civil procedure rules here, with a focus on the ‘international’ element required to trigger the validity of choice of court (compare Vinyls Italia), and the potential application of fraus in same.
Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.7.1. Chapter 3, Heading 184.108.40.206
Chapter 15 is the typical entry gate for a foreign insolvency practitioner to engage in US bankruptcy proceedings – it is also the general jurisdictional gateway for US courts viz international insolvencies, COMI and insolvency tourism discussions etc. By way of example see Norton Rose’s 2017 overview here.
In Ema Garp Fund v. Banro Corp., Case No. 18-01986 Law360 summarise the outcome as it stands (I understands motion to appeal has been filed) as follows: ‘Canada’s Banro Corp. won’t face a suit in New York federal court alleging the mining company lied to investors about its operations in the Democratic Republic of Congo after a judge ruled (..) that those claims were resolved last year in bankruptcy proceedings in Canada.’
Kelly Porcelli excellently reviews the issues here, with justified emphasis on comity considerations – I am happy to refer.
One for the comparative litigation ledger.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.5, Heading 5.6.
Zetta Jet: COMI, time of filing, forum shopping, ordre public in insolvency. A comparative law Fest in Singapore.
An interesting comparison may be made between  SGHC 53 Re Zetta Jet Pte Ltd and  EWHC 2186 (Ch) Videology on which I reported here. Both concern recognition of foreign main (or not) proceeding under of the UNCITRAL Model Law on Cross-Border Insolvency (“the Model Law”). Zetta Jet came to me courtesy of my former student Filbert Lam, and has now also been analysed to great effect by Tan Meiyen and colleagues here.
The judgment is a master class on COMI determination, but also on comparative legal analysis re time of filing etc.: best read judgment and Tan’s note for oneself. Of particular note are
- the expression of sympathy by Aedit Abdullah J for forum shopping in insolvency law; compare also with Ocean Rig, and Kekhman; here this took the particular form of following the US approach to selecting the date on which the application for recognition is filed, as relevant to COMI determination (friendlier to forum shopping than the EU’s and England’s date of commencement of the foreign insolvency proceedings);
- the emphasis on the basket of criteria required to identify COMI;
- the narrow approach to ordre public despite Singaporean court order having been defied; yet also the relevance of the fact that these orders post defiance had been varied.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1 et al.
Cuzco v Tera (Chapter 11). Respect for Korean exclusive jurisdictional rule (shareholder derivative claims) does not trump US subject-matter jurisdiction.
Thank you Dechert for flagging Case No. 16-00636 Cuzco v Tera (Chapter 11), in which Faris J with great clarity wades in on a motion to dismiss US Chapter 11 jurisdiction in favour of exclusive jurisdiction for the Seoul courts with respect to a Korean company shareholder derivative action.
The case is relevant to insolvency practitioners. More generally however it highlights the need for a court to keep a level heading when wading through to and fro litigation in various States.
A bit of factual detail is required to appreciate the ruling.
Cuzco USA filed a chapter 11 in Hawaii with its sole asset real property in Hawaii. Tera Resources Co., Ltd. (“Tera”), one of Cuzco Korea’s shareholders asserted that the Debtor and its insiders conspired to deprive Cuzco Korea of the value of the real property. Tera commenced an action for fraud, breach of fiduciary duties, piercing the corporate veil, unjust enrichment and imposition of constructive trust.
The defendants moved to dismiss, in favour of the Korean courts – and failed, both on arguments of forum non conveniens and on arguments of there being exclusive jurisdiction for the courts at Seoul. Defendant Mr Lee is purportedly the manager of Cuzco USA and the representative director of Cuzco Korea. Defendant Ms Yang is shareholder and creditor of Cuzco Korea and an ally of Mr. Lee.
Cuzco USA had proposed, and the court confirmed, a Third Amended Plan of Reorganization. Briefly summarized, the Third Amended Plan provided that Cuzco USA would transfer the Keeaumoku (Hawaii) Property to Newco, a Hawaii limited liability company of which Mr. Lee is the sole member, that Newco would attempt to raise enough money through a refinancing to repay all of Cuzco USA’s creditors in full, and that if the refinancing did not occur by a date certain, Newco would sell the Keeaumoku Property at auction and distribute the proceeds to Cuzco USA’s creditors.
Tera and others filed motions for reconsideration of the order confirming the Third Amended Plan. Tera is a shareholder of Cuzco Korea. It also holds a judgment, entered by a Korean court, against Ms. Yang, and orders from a Korean court that, according to Tera, resulted in the seizure of Ms. Yang’s interests in and claims against Cuzco Korea.
Cuzco USA then moved to modify the Third Amended Plan and replaced it with a Fourth Amended Plan. Briefly summarized, this Plan eliminates the transfer of the Keeaumoku Property to Newco; instead, Cuzco USA will retain the property and either refinance it or sell it at auction. Tera and others vigorously objected to plan confirmation on multiple grounds. The court confirmed the Fourth Amended Plan.
Tera argued (among other things) that the Third Amended Plan was the product of a fraudulent scheme by Mr. Lee, Ms. Yang, and others to divert the equity in Cuzco USA from Cuzco Korea to themselves and to render Tera’s interests in Cuzco Korea worthless.
That Korean law covers governs the right to bring derivative claims on behalf of a Korean corporation is not under dispute between the parties. (It is therefore considered part of the rules on internal organisation which are subject to lex societatis). However Faris J dismissed defendants’ suggestion that the US court should also respect Korea’s jurisdictional rules that such suits be brought in Seoul only.
At B, p.10: US statutes confer subject matter jurisdiction on US courts. Statutes of another nation, such as the South Korean statute on which the moving defendants rely, cannot change the subject matter jurisdiction of a United States bankruptcy court under a United States statute.
Forum non conveniens was dismissed for there is a strong policy that favors centralization of claims against the debtor in the bankruptcy court that outweighs any other interest (at C, p.12). One would have to have strong arguments to push that aside and clearly these were not present here.
Many thanks to Filbert Lam for alerting me to Menon CJ’s most exquisite 2018 speech on cross-border insolvency law. His honour’s talk addresses forum shopping (including for cram down reasons), the Model Law, a most enlightening comparison between international commercial arbitration (particularly: the New York Convention’s role) and insolvency, and of course modified universalism (on which see also this recent post by Bob Wessels, with ia analysis of the EU position). A delightfully sharp observation of key elements of international insolvency practice and policy.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.