International litigation and arbitration

23.09.2010 (You go in front of a court and not in front of a judge) Books: - Droit international priv Bernard Audit ou Niboyer - Pierre Mayer et Heuze - Les grands arrts de la jurisprudence franaise de droit international priv (biblio) - Hlne Gaudemet-Tallon comptence et excution des jugements en Europe => european Litigation (biblio) - civil judgment jurisdiction - private international law, Chechian - Revue critique de droit international priv - le journal du droit international - www.conflictoflaws.net - www.dalloz-revues.fr - die Rabelzeitschrift - journal of private international law Private international law: Commercial disputes between two persons, two businesses Ex: Mercedes sells cars over Europe, what happens if you have a problem with Mercedes Plane crash: How do you now that the person you are sewing is liable? 90% of the victims are French. Victims are sewing in France and the accident took place in Egypt. There are sewing Booing, the airline (Egyptian) and the owner of the plane. 1. Which law will be applied? One law says it is strict liability and the other says it is negligence, some other legal systems says maybe no liability. There are no international rules; private international law does not give the answer. 2. Before which court can you go? International jurisdiction (comptence internationale). Issue of when the court may try a case, main jurisdiction? In this case infront of which court can you go? Is there a choice? International arbitration: it is possible for international disputes for the parties to decide to argue their case before private judges. These judges will be to decide the case, they are called arbitrators. Two comments: - Both parties agree to do this, if they cannot agree they will go in front of a national court. If they can agree the forum can be either a national court (juridiction tatique) or a private forum which is an arbitral forum (tribunal arbitral). - Arbitration is adjudication (the way to settle the dispute is to ask a third party to make a binding decision) one the adjudicator has decides you must apply it, no choice for the parties. Different to mediation, intervention of a third party for the purpose of helping he parties to reach an agreement. The solution is agreed by the parties, not binding. Arbitration is normally preview in contract. => Two ways to adjudicate a dispute: go to a national court (litigation = adjudication in court) or go to arbitration (third party is an arbitral tribunal) Part 1. International litigation International litigation = determining the international jurisdiction of courts, determining the procedural powers. What is the reason to choose a court instead of the other? It is a question of jurisdiction (competence). - Maybe question of compensation, punitive damages in the USA.
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- Maybe substantive reasons: application of a different law. Normally application of the law where the accident, the tort happened. In case of commercial dispute, contractual dispute the parties have chosen the law in the contract. - Maybe procedural reasons: Laws of civil procedure, courts follow their own procedure. First you can get provisual measures (Mareva injunction = freezing injunction which allows to freeze the assets of the other party during the procedure, it is extraterritorial which is not the case for the saisie conservatoire) and second the practice of the rfr provision(provisional order of payment if you can show that the dette is indisputable). - Another reason is evidence: there are places where witnesses are never heard (France), or question of discovery. - Enforcement of the judgment: you must attach the assets of the defendant, normally he has its assets at is domicile. Question of the circulation of judgments. - Costs of the procedure are different from one country to the other, the service is different. In the US the proceedings are much longer, there are more people involved and discovery is different. - Accessibility to justice is easier in the US because the lawyers take the risks - Independence and impartiality of the judges, political pressure, they can be bias against foreigner, corruption - Who is the adjudicator, the judge? Difference between England and France in commercial litigation: in France the judges are business man, in England it is a former lawyer. In the US there are juries. Chapter 1. Jurisdiction over international disputes Rules of jurisdiction are those rules which determine whether a given court may settle a given dispute. Rules which determine the powers of the court. There is no international law of jurisdiction. States are free to determine the jurisdiction of their courts. There is one rule of international law which gives exclusive jurisdiction to each state to organize its own administration. The 2 consequences of this are: - States determine unilaterally their own rules of jurisdiction - No state decides when he courts of other states will intervene => courts only decide for themselves and if they decline jurisdiction they never try to refer the case to another court. The parties themselves have to choose another forum. Rules of jurisdiction vary in the world. So often the jurisdiction of several courts will overlap. The only case where it gets different is when states conclude international agreements and unify the rules of jurisdiction. Those agreements are not very frequently. One example: Initially European law was an international convention. When European law applies the same law governs the jurisdiction of all courts in Europe. When European law is not applicable you must get back to the national laws. Section 1. The scope of European law European law began in 1968; Brussels convention is concluded between the members of the European community. Article 220 of the treaty of Rom called for the conclusion of an international agreement on this issue. This agreement was the 1968 Brussels convention which dealt witch the rules of jurisdiction and the recognition of judgments in civil and commercial matters. First 6 parties to this convention, later on other members acceded. In 1988 it was decided to extend the European law of jurisdiction and judgments to other European states, members of EFTA. These states concluded the Lugano convention which was a sister convention to the Brussels convention => same rules on international jurisdiction in Europe. Nowadays EFTA is composed of 3 states: Switzerland, Norway and Iceland. Lichtenstein and Monaco are excluded.

The Amsterdam treaty turned the whole field into a competence of the European Union. The consequence is that now for countries of the UE it will be a European regulation. All future regulations will be called Brussels regulation. The first Brussels regulation is the Brussels 1 regulation of 2000 (regulation 44/2001) which has replaced the Brussels convention of 1968. The source of the law will be essentially the Brussels 1 regulation. => What is now the scope of these two instruments? I. The subject matter scope of these instruments Article 1: define civil and commercial matters - 2 new instruments in the meantime: harmonization has been extended to new fields beyond commercial and civil matters. The fist field is insolvency, regulation 1346/2000. The second field is the field of family law. - Brussels 2a regulation 2003: deals witch two issues, matrimonial matters (issues of divorce) and parental responsibility. The concept of civil and commercial matters, article 1: civil and commercial matters exclude public law (the revenue, customs and administrative matters). European court gave a definition what public law is, judgment of 2007: there are two criterias to define what public law is: There should be a public authority active and second this public authority should make use of its public powers (ds lors quon est en prsence de lintervention dune autorit publique qui agit dans lexercice de la puissance publique => critre de lautorit publique). Civil and commercial matters: Issues which are typically included are contract, torts, issues which regard companies, consumer law, labor actions. 4 exclusions 2: - family law - bankruptcy - social security - arbitration II. The territorial scope of these two instruments These instruments are not of universal application. They only apply to a European dispute. By contrast if the dispute involves a third state then the regulations do not apply => back to national law. A. Basic principle Principe, article 2 = domicile of the defendant: the regulations are applicable when the defendant is domiciled in one of the contracting states. A European dispute is defined by only these criteria. The fact that the dispute otherwise concerns a third state is irrelevant, does not matter where the contract is concluded. Case of the ECJ OWUSU 2005: British national who is of Jamaican origin and has a house in Jamaica. Ask is friend if he want to use his house in vacation. Friend hurt his neck in the sea. His family decides to sew the owner of the house and the people who run the beach. Sewed is taking place in London. Question: should Brussels convention apply application of European law? Answer of the court: sewing owner which is domiciled in Europe, so application of European law. => If this criteria is met, the regulations apply, so you must look at the rules of the convention or regulation. (Ds lors que le dfendeur est domicili sur le territoire dun Etat membres les rgles issus du rglement sont seules applicables). It happens that in the convention or regulation there is a rule which is also the domicile of the defendant. B. Exceptions
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2 categories of rules in the regulation which have particular rules of application, particular territorial scope: 1. article 23: jurisdiction chooses, choice of court agreements (clauses attributives de juridiction) parties may agree on the court which will have jurisdiction. When does article 23 applies: if one of the parties is domiciled in Europe. Interest: les parties vont dsigner un tribunal comptent. Avant mme de la naissance du litige on connait dj le tribunal comptent. 2. article 22 : exclusive heads of jurisdiction, those cases where the jurisdiction of the court is considered extremely strong (rgles de comptence objective). Ex: real property (immeubles) only one court is legitimate to settle the dispute, court of the place where the property is. (En ce qui concerne les droit rels immobiliers et les baux dimmeubles sont exclusivement comptents des tribunaux de lEtat membre sur le territoire duquel limmeuble est situ. Peu importe la nationalit et le domicile des parties concernes). Ex: enforcement (voies dexcution), criteria is the place where enforcement is conducted. => article 22 is applicable irrespective of the domicile of any parties and it is applicable when its criteria give jurisdiction to a court in Europe. => 2 consequences of the scope: European law is applicable and tells which instrument is applicable If any of those three criteria is not met, European law does not apply and so national law should apply. Application of national law, 2 exceptions: - states have concluded bilateral treaties before EU existed, France has concluded treaties with its former colonies and European States. Most of these treaties ate about the recognition and enforcement of judgments but from time to time one of these treaties will have rule of jurisdiction of the courts of the two states. When this treaties overlap with European law, the European regulation will say the parties agree that European law supersedes the treaties, article 69. => If European law does not apply you have to look if there is a bilateral treaty which exists and if not you have to apply national law. - domestic Italian law of private international law, article 3 al2: when the Brussels convention does not applies they extend the scope of European law. The criteria of the convention also apply even when the defendant is not domiciled in a member state => no application of domestic rules. Section 2. Comparative overview of national laws (what happens if European law does not apply) => Common law of all European states, law which applies when there is no other law applicable These rules can be freely defined by all states. Those rules are all unilateral. Those rules will vary from one state to the other but in practice there are a few criteria which are used by many states. One of the reasons is that most states determine this criteria by trying to localize the dispute geographically. They try to find where the dispute is localized and they will take jurisdiction if dispute is localized on their own territorial. Ex: in tort matters most courts in the world will wonder where the dispute is localized and they will deduct the criteria from localizing this dispute. Ex: place where the accident occurred. This operation of localizing is what you already do for domestic purposes, choice of the local courts. 1. Many countries have decided to use the same rules for domestic and international purposes. Ex: France since the Scheffel case 1962: domestic rules regarding territorial jurisdiction would be elevated at the international level (lapplication des rgles de comptence territoriale interne, cour de cassation dit que la comptence internationale se dtermine par extension des rgles de comptence territoriale interne.). Germany: rules of territorial jurisdiction are doppelfunktional 2. None of the state will have only these rules; they will all have in addition other rules which will be special for international relations. These rules will pursue two goals: - to protect the interest, sovereignty of the state, rule about real property
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- protect the nationals: offering, making your courts available (foreign justice can be a danger), article 14 and 15 of the French civil code: if one of the parties is a French national he will always have access to French courts (rgles privilgis de comptence). => In consequence jurisdiction of states will overlap. I. Strong rules of jurisdiction There are rules of jurisdiction which appear as obvious to all sates. The reason why is that because the localization of the dispute is very easy and because often the localization goes in pair of issues of sovereignty. In such cases there is only one appropriate criteria and that any other court would be wrong: - real property, involves sovereignty - enforcement All states will have the same criteria. States will think that it will be illegitimate if any of the court will get jurisdiction => Exclusive jurisdiction. If one foreign court renders a judgment, this judgment will never be recognized. II. Reasonable rules of jurisdiction Rules of jurisdiction which try to address in more complex issues: in most cases disputes cannot be obviously located easily in one legal order. It is very difficult to find an obvious criterion of jurisdiction, a connecting factor (facteur de rattachement). There is no connecting factor which is obvious. There can be more connecting factors. Ex: where is a contract located? Place where contract is performed or place where contract is concluded? Torts, place where the harmful event was committed or place where the loss was suffered? => in most cases states will pick up one the connecting fact, criteria and decide that this factor is better than the others. They also often pick up two and give the choice to the defendant. Consequences: States should now that there is nothing obvious in what they are doing and that other states will use other criteria. Possibility of parallel litigation, several courts of the world can retain jurisdiction. Examples: CPC franais, article 46 option de comptence between place of delivering or place of execution Belgium CPIL 2004 article 96: Belgium courts will have jurisdiction in obligation matters if obligation was born or performed in Belgium England: 6 possibilities (contract was made in England, contract made by an agent, contract is governed by English law, contract contains, breach of contract committed within jurisdiction or claim that no contract exists) => all states have different criteria (In England only one rule of jurisdiction: court has jurisdiction if service (notification) occurred. If you are present in the jurisdiction English court will have jurisdiction. If person outside England you need permission from the court. ) Rules which are designed protecting weaker parties: in certain relationships it is considered that there is a strong party and a weaker party (les comptences protectrices des parties faibles). => Possibility to sew at their home, domicile. They have the choice. Weaker parties: employees, insured, consumers. Examples: Belgium article 97 special provision for consumers and labor contracts. Jurisdiction if residence in Belgium (condition). Article 114-1 of French insurance code: the insured may sew at its own domicile. In Europe the court of the defendant and the court of de plaintiff are considered. The domicile of the defendant is considered at the most legitimate place to sew.

In the US if you are asking a court to rule on a case you are making the decision to use public resources, tax payers money. Only local tax payer is legitimate to use this money =>it is normal that an American plaintiff can get in an American court. By contrast other people do not have this right. III. Weak rules of jurisdiction = rule which does not localize the dispute well. It is a rule which uses a connecting factor which is not reasonable because it is not related to the dispute itself. In such cases there will not be a reasonable link between the court and the dispute => exorbitant rules, fors exorbitant. These rules help to protect nationals, offer access to the local courts. 4 examples: - articles 14 and 15 of the French civil code: they are exorbitant because nationality is in most cases irrelevant. Citizenship does not have any consequences in international disputes. It is called by the French: le privilge de juridiction. ( pour champ dapplication voir cours) - 23 of German civil procedure code: Umbrella jurisdiction rule, if you can find property in Germany this is enough to give jurisdiction to German courts. Jurisdiction for any dispute. Can be no relationship between the dispute and the court. - Common law rule: service is enough to give jurisdiction to English courts; it is enough to be present only a few seconds so that you can be served=>TAG jurisdiction: physical presence is enough. - US law, doing business rule: if you have done one time business in the jurisdiction this gives jurisdiction to the court for any other kind of business Consequences of using such rules: 1. you can be sure that outside of your jurisdiction people will consider that your proceedings are illegitimate 2. decision will never be recognized abroad, it must be enough to use that judgment at home, you must know that there is a possibility to enforce it at home Future of these rules: human rights consequences on the law of jurisdiction, it could be that these rules would be regard as contrary to fundamental procedural rights. And so as far as Europe is concerned, the European court of human rights would rule that these rules are contrary to article 6 (right to fair trial). 2 precedents: - US 1945 the Supreme Court held that the due process close of the American constitution asks for a minimal contact between the foreign and the dispute. Case: International shoe company v Washington. - Germany 1990s, 23 was it compatible with the constitution of Germany? Bundesgerichtshof 1991: 23 should only be available if there is an adequate connection between Germany and the dispute. An alternative way could be to grant discussion to the courts to use it, instead of mandatory rule it can be seen that it will only be an option for the court. Court can decide if it is faire to use the rule or not. Ex: - English view: most rules of jurisdiction are not mandatory, therefore the court may exercise discretion to decide whether to use the rule or not. Even if the court has jurisdiction it can decide not to use it because it is not fair => Doctrine of forum non conveniens: the forum is not appropriate. If you sew in England on an exorbitant jurisdiction there is a chance that the court will find that it is not an appropriate forum. - In general on the continent of Europe the jurisdiction is mandatory. Although, the court of appeal of Paris introduced the principle by creating the articles 14 and 15 of the civil code. But Cour de cassation decided that it is not acceptable because it must be mandatory. OWUSU Case 2005: is there discretion when you use the Brussels 1 regulation => newer on earth. Use of the regulation are mandatory, therefore you must exercise jurisdiction if you have it.

Section 3. Jurisdiction under European law

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Cases when European law is applicable, when Brussels1 regulation or Lugano convention are applicable. When European law applies domestic law does not apply => article 3 of each if these instruments. Article 4: if defendant not domiciled in a member State, not application of article 2 and 5. 2: forbidden to discriminate on the base on nationality therefore in Europe nationality should not be a bare to rely on domestic rules of jurisdiction. And so if you are domiciled in one state you should be able to enjoy the same rules as nationals can enjoy. Consequence: article 14 and 15 of the French civil code are extended to any other European national who is domiciled in one of these states. (Donc en application de larticle 42 : ressortissant amricain domicili sur le territoire franais doit disposer des mmes rgles de comptence que toutes les autres personnes. Le ressortissant amricain peut donc faire jouer larticle 14 mme sil ne satisfait pas la condition de nationalit.) I. Overview of jurisdiction under the regulation The Brussels 1 regulation was made on the bases on the Brussels convention which was made in 1968 by 6 countries which were all civil law countries => civil law model. There are 5 categories of rules: a. The general rule of the regulation, article 2 The courts of the domicile of the defendant have jurisdiction. This rule is not only a rule of jurisdiction but also a rule which defines the territorial scope of the regulation. The ECJ has held that it is the most important rule of the convention or regulation because the domicile of the defendant is to be considered as the natural rule in international litigation. It is also the rule of principle: this rule should always be applicable when no other rule applies. If you have a case which does not fall in the scope of any other rule this court will always remain an available court. b. The specials rules of the Convention, article 5 => special jurisdiction in 7 cases These special rules of jurisdiction are all additional to article 2 => option de comptence ( chaque foi larticle 5 permet de dsigner un tribunal, le tribunal spcialement comptent (par contre larticle 2 prvoit une comptence gnrale) => solution simplifie). 2 most important rules : - contractual matters, article 5, 1: the additional court is the court of the place of performance of the obligation. Idea is that the judge of the place of performance is more related to the contract => principe de proximit. - tort, article 5, 2: the additional court is the court of the place where the harmful event occurred. c. Rules protection weaker parties - rules regarded to insurance, article 8 to 14 - rules for consumer claims, article 15 to 17 - rules for employment disputes, article 18 to 21 => For the first 2 parties right to sue at home. By contrast employees do not enjoy the same protection and therefore they must sue where the work is habitually carried out. d. Rules of exclusive jurisdiction Article 22: the domicile disappeared of the rule of jurisdiction. Only one court which has jurisdiction over this claims, the court which is regarded as he only legitimate court. 5 heads of exclusive jurisdiction: immovable property and tenancies enforcement of judgments, registries => rgles de comptences objectives (p4) e. Prorogation of jurisdiction, article 23 and 24 Party can choose the court where they want to argue the case. The will of the parties is a sufficient ground of jurisdiction.
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- Article 23: choice of court, the parties can agree on a court which be granted normally exclusive jurisdiction. The main use of article 23 is to validate jurisdiction closes in contracts. It provides very few and very liberal formal requirements. => rgles subjectives, clauses attributives de juridiction (p5) Special rules of application. Some parties and some heads of jurisdiction are excluded from the scope of article 23. The parties excluded are the weaker parties; they are special provisions on the issue of whether you may include a jurisdiction clause in a contract involving a weaker party. These provisions are article 21, 17 and 13. Basic rule: agreements are only valid if they are posterior to the dispute. The head of jurisdiction excluded is article 22, in fields where court has exclusive jurisdiction no possibility to derogate from that choice. - Article 24: Rule common in the common law tradition, idea of submission to jurisdiction. If a party enters in appearance before a court and does not change jurisdiction is meant to have submitted to the jurisdiction of the court. And therefore that court has jurisdiction over him. But exclusive jurisdiction is excluded from the scope of that rule. Territorial scope of that provision: article 24 doesnt say anything, applies without any requirement that one party is domiciled in the EU. II. Selected topics a. Jurisdiction in tort matters, article 5,3 There are two courts which have jurisdiction I tort matters: the court of the domicile of the defendant and the second is the court for the place where the harmful event occurred. 1. Scope of the provision, what is a tort dispute: KALFELIS CASE 1988 (p11), the court held that the concept of tort was to be given an autonomous interpretation, tort defined by the ECJ and national concepts are irrelevant. The autonomous interpretation = there are two conditions to have a tort: firs the action of the plaintiff must be seeking to establish liability and second the action should not relate to a contract. What is a contract? Jacob HANDTE case 1992: a contract is an obligation which is freely assumed by one party toward another. (p10) Question of the action between a buyer and the fabricant and not between the buyer and the seller => court decided that it was not an issue of contract. Condition: Need to have an obligation freely assumed by one party, which is not the case in this case. Is there a third possibility? Is it possible to have an action based on an obligation which would be neither contractual no tortuous? Answer of the court: no third category, all actions which are not contractual are therefore tortuous. Article 5,3 is a residual head of jurisdiction, it will cover all obligation claims even if they are not strictly tortuous in character. => Issue of quasi contracts: Act which give rise to the action which is allowed by the law (licite) but which was not based on the agreement of the parties. Ex: unjust enrichment, person who got richer and did not do anything wrong and there was no contract. But the enrichment gives rise to an action which will allow the party who is less rich to get a bit back to him. House of Lords in KLEIMWORD BENSON 1999 case: an action for unjust enrichment was not tortuous in character for the purpose of the Brussels convention => application of article 2. This decision has been criticized because it has not respected that there should not be a third category! 2. The meaning of the provision - Place where the harmful event occurred had jurisdiction. What is the harmful event? 1. What happens if the harmful event give rise to a damage which is laced in a different place, jurisdiction? Ex: MINES DE POTASSE DALSACE 1976 (p12): pollution from France and hurts people in the Netherlands, loss in Holland. FIONA SHEVILLE 1995: issue of liable caused by a journal. French journal sold in England and the claim is that what this journal says is a tort that should be punished. Answer of the court: the harmful event is both the place where the actual harmful event is committed and the damage itself. Therefore two courts may have jurisdiction under article 5,3.
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It remains important to distinguish between those two courts: both courts have jurisdiction but they have a different jurisdiction. The first courts have general jurisdiction (damages for the loss suffered in any other jurisdiction). The second courts may only award damages for the loss suffered locally. - How to define the place where the event giving rises to the damage occurred: FIONA SHEVILLE insisted that it must be the place where the entire harmful event originates. Therefore it has to be the place where the publisher is established rather the place where the journals are sold. - What should be done if it is not possible to know where this event took place? REUNION EUROPEENNE CASE 1998: pears where shipped in containers from Australia which reached Holland by boat and then put on trucks to France. When the containers where opened the pears where not in a good state. Question where the event had taken place. Only option is to sue before the court of the place where the loss was suffered => France. - What is the place where the loss was suffered, when is the loss exactly suffered? It is the place where the direct damage was suffered. The places where indirect losses are suffered should not been taken into account. Possibility of the place where the parties live because this place is the centre of ounce life and the place where people have their assets. But the domicile has been excluded in the case KRONHOFER 2004: an Austrian party invests through a German entity in London. The Austrian cannot argue that he suffered its loss in Austria he must have suffered the lost in London or Germany. DUMEZ Case 1990 (p12): issue of the prejudice par ricochet, what happens if a loss is suffered as a consequence of another loss? Not taking into account the prejudice par ricochet to determine the loss. You should sue where the initial loss took place. HENDERSON v JAONEN 2002: an English person has a car accident in France where he suffered a loss; he goes back to England and suffered additional problems a year later. Where was this second loss suffered? Indirect loss therefore it occurred in France and therefore French courts should have jurisdiction. NOTE: Court has also jurisdiction to prevent the loss from occur! b. Multiple defendants, article 6 Possibility to sue additional defendants in the same court. Article 6 offers a variety of possibilities to join multiple parties in front of one court: - article 6,3 if you have a counter claim of the defendant you should be able to make this counter claim in front of the same court. The counter claim must be connected to the first claim, arise from the same contract of facts. - article 6,2 guarantee actions, a given party is sued before a court and he believes that he should be guaranteed by a third party. - article 6,1 sue a group of defendants before one single court even if you have jurisdiction over one of the parties only. Rules: you may only do this if 2 conditions are met: first the jurisdiction that the court has over one of the defendants must be based on domicile and second there should be a close connection between your claim over this party and the claims you have over all the other parties. Definition of close connection by the text: avoidance of contradictory judgments. Case 2006 ROCHE NETHERLAND ECJ: court said it must be the same situation of law and fact which may lead to a conversion of outcome. Chapter 2. Parallel litigation Different proceeding could be initiated before different courts. The same proceedings developed between two different courts. Reason: the international jurisdiction of courts is typically defined very widely. There are exorbitant jurisdiction rules which can be used, but also in many cases there where various legitimate courts which will be able to retain jurisdiction. There will be an international offer of more than one court. 2 answers of the law: - civil law tradition: doctrine of lis pendens
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- common law: doctrine of forum non convenience Section 1. The civil law tradition - Doctrine of lis pendens: doctrine fist ha a narrow scope of application, doctrine concerned with proceedings which are actually pending before two different courts and it is a doctrine which is concerned with proceedings which are meant to be about the same dispute. A dispute is defined by three elements: the parties must be the same, the cause of action must be the same and the remedies (objet) of the action must be the same. Solution: the court seized in second must decline jurisdiction. It produces a raced court, a race to court, it is the party which will get first at court will get jurisdiction at once. Criteria: only time because lis pendens is a doctrine which was developed for domestic purposes. If you compare two judges from one country it is not politically correct to compare them, to say that one is better than the other. So you need a neutral criterion which is time. => for the ECJ there is a principle of mutual trust (ECJ Gasser2003) so lis pendens works also in the EU - Second doctrine on related actions (connexit): cases which are related but which are not completely identical by the standards of lis pendens. This doctrine gives only discretion to the second court to decline jurisdiction, but no obligation to decline jurisdiction. I. The common law of European states The waste majority of civil law traditions use the two doctrines for international litigation, at the international level. They use their domestic provisions but they adept these provisions. Ex: the French Cc Miniera di Fragne 1974,Belgium code of private international law: article 14 on litispendance internationale. Conditions : - The court gets discretion to decline jurisdiction if it is sued as second. At the international level not an obligation to decline jurisdiction. - At the international level you take also into account whether the judgment of the foreign court could be recognized and declared enforceable in the foreign. Condition for the power to decline jurisdiction is that it can be foreseen that the foreign judgment will be likely of recognition or enforcement in the foreign. Reason of this condition: the issue of parallel litigation is essentially preserved in the civil law tradition as a way to avoid conflicting decisions (conflit de dcision). You solve this that there is only a conflict of decision if the two decisions meet and the only place where they can meet is in a national legal order. What you want to avoid is that the two decisions end up in the same legal order and decide the same dispute. The consequence is that if you are a court you know that if you make a decision your decisions will be in your own legal order. So you have to check if a foreign decision will also come in the same legal order. Other reason of second condition: If the second court was to decline jurisdiction and if the foreign judgment is not recognized then there is no judgment which is valid in this country => deny of justice. II. The European law (differences to the EU States) Brussels I regulation includes 2 provisions on parallel litigation. One on lis pendens and one on related actions, article 27-30 of Regulation. For lis pendens (272) the court seized second has an obligation to decline jurisdiction. Related actions by contrast remain discretional, no obligation (28). Under EU law there is no condition that the judgment of the foreign court is enforceable in the foreign. Reason: The entire regulation is build to facilitate the recognition of judgments. The way European lis pendens functions, way to use this mechanism: only functions if none of the courts has exclusive jurisdiction. It is only a mechanism where none of the jurisdictions are exclusive, article 29.

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Article 27 allows now strategic behavior in the EU. This mechanism is extremely important because it is not only a tool to regulate parallel litigation but it is also now a tool which allows parties in the EU to be in the strategy and to end up in the preferred court. Reason: lis pendens is mandatory; there is no discretion to use the lis pendens mechanism. The second court must decline jurisdiction. The follow strategy can be used: your preferred court must be the first court and if it is the first court then you will end up in that court. That is different from all the other mechanisms in the European states. There is one problem for security: you may be the defendant, it is very easy for the plaintiff to rush court and to choose the preferred court. Question is: if you are the defendant can you also use this mechanism? ECJ: yes it is possible for the following reason, this strategy is to use the mechanism of the negative declaration, the defendant will seek in negative declaration. Ex: in tort matters the defendant could seek a negative declaration that he is not liable => declaration that the other party is not entitled to what it may want to ask. If you are defendant in a tort action you gone initiate first a negative declaration in your preferred court. If you do this first the other party may not sue you somewhere else. If you want to use this mechanism you have to face two counter arguments, conditions: - it is not really clear that there is truly lis pendens between a positive action and a negative action, lis pendens between an action seeking damages and an action of seeking non liability. Is there really lis pendens between those two actions? 3 conditions of lis pendens: same parties, same cause and same remedy. In this setting there is an argument that there is not the same remedy. The ECJ in the case the Tatry (ship) 1994: a negative declaration must be considered as to have the same remedy then a positive action. - being able to seek a negative declaration, before the forum, the court it must be possible to seek a negative declaration. Under the laws of many countries seeking a negative declaration is forbidden. Reason: many countries have a strict definition of the interest that the party should have in initiating proceedings. In France it is not possible, action dclaratoire is forbidden. In English court its allowed. Consequence of using this mechanism: the time of seizure of the court becomes critical. What does the concept of seizing a court mean? What is the definition of seizing a court? ECJ 1984 Zelger: the court said the concept of seizure of court will be governed by national law. No European autonomous concept. In practice the ways courts are seized various dramatically. 2 basic models, English model and French model. You must warn the other person and the court but in which order? - in England you first inform the court by lodging your complaint to the court and getting a claim form, document from the court (writ of summons until 1998). Then you serve (notification) this document on the other party. Solicitor, lawyer of the party does the service, 4 month to do it. For English law when is a court seized? For the purpose of lis pendens, what matters is the second stage. Everything must be completed; a court is seized when the claim form has been served on the other party. - in France you do not need to get a claim form from the court, you just draft it yourself, it is the lawyer who drafts the document (assignation). First you serve the assignation on the other party (service by an authorized officer, huissier de justice) and then you must go to the court and lodge it with the court so than the court can put it on the list of cases => enrlement . When is the court seized? When an enrlement has occurred, at the end of the full process. => The other party could initiate the process of seizing the court in the other country and before it finishes the process you could have completed your own in your country. All this was the situation before the Brussels I regulation which tries to change this. Article 30 introduced to create a concept of seizure which will be harmonized at the EU level. What will matter depending where you are will be the first stage, the date will be the first stage. In France it will be
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serving and in England it will be the lodging with the court. After that you must reasonably quickly finish the second stage, you must not fail the following steps. Section 2. Parallel litigation in the Common law tradition In the common law tradition there are 2 tools which have been traditionally use to regulate international parallel mitigation. I. Forum non convenience The 2 major differences between forum non convenience and lis pendens are these: - forum non convenience does not necessarily applies when proceedings are pending before two different courts. It is possible to make a claim that a court should decline jurisdiction on convenience grounds even before the other court is seized of the matter. For that reason many Anglo American layers will tell that forum non convenience is not the tool to regulate parallel litigation but the tool to regulate the jurisdiction of the forum and to allow the forum to exercise discretion to decline jurisdiction. => To give the power to the forum not to use its jurisdiction when it believes that another court would be a better court. - the way the 2 different proceedings are appreciated and compared is much more sophisticated because it uses much more than one factor to compare it. In the civil law you just compare the proceedings with one faction which is time, when were the proceedings initiated. In the Common law tradition you will compare the proceeding on a much larger scale to determine the most appropriate forum. You will take into consideration the connection with the case. In particular the connection of the case with the countries, the availability of the evidence, the fairness of the procedure towards the parties, and in the US you will take into consideration public factors such as court conjustion, and is the plaintiff a tax payer in the relevant jurisdiction. Doctrines of the US and the UK: - UK: In England there are 2 conditions for an English court to accept that it is forum non convenience. 1. There should be another available forum; the other available forum is the foreign court. This court should exist and should be available. It must be an option for the plaintiff to sue before that other court. Available = another forum must exist and have jurisdiction over this dispute. Explain to the English judge that the rules of jurisdiction of the other court give this court jurisdiction => discussion of the rules of jurisdiction of the other court. 2. This available forum must be the natural forum for the dispute. It must be clearly more appropriate than the English court. Criteria: - first set of criteria: connections between the disputes and the two relevant courts, geographical connections of all the aspects of the dispute - second set of criteria: the availability of the evidence and weather it would be easier to look at the evidence before one court rather than before the other court (ex: House of Lords: Lubbe litigation (people who worked in asbestos environment in South Africa they were sewing the company in London => if you want to look at the evidence the court of SA is much more appropriate because if the people want to be witnesses they have to travel to England), Bhopal, city in India where an industrial disaster occurred, 200 thousand people were injured because they lived nearby the plant, the bulk of the evidence will be in India so the Indian court will have jurisdiction. - third set of criteria: The foreign forum should be suitable for the interests of all parties and the ends of justice. If there is sth about the foreign court which made it unjust to send the litigation there it will not be done. Injustice, ex: foreign court which will be biased not be impartial, it could be that the foreign court is not equipped to offer proceedings which have a chance to provide unjust outcome (in some cases some procedural tools will appear as so critical for the case that if the court doesnt have it the plaintiff will have no chance to get the outcome he deserves, ex: the lack of legal aid in the foreign country, Lubbe=> no legal aid in SA so English court has jurisdiction, ex: the action is already time bared abroad (action est prescrite)).
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The English are trying to accept that even with a different civil procedure you can be an appropriate forum. So it is not because one tool of English procedure is absent that the other court can be seen as non appropriate. Fact that foreign civil procedure is different is not enough, the difference must be so important that it made sending the dispute away unjust. - US: American federal civil procedure, when you go before American federal courts the court will also have a doctrine of forum non convenience but the conditions will be different. 2 conditions: 1. There should be an adequate, alternative forum. Adequate = not only should you have an alternative forum but also this forum should be adequate, it should offer a reasonably fair justice to the parties. Not only be physically available but also be impartial and fair to both parties. 2. The foreign court should be clearly more appropriate. 2 series of criteria will be used: - first set of criteria: private law factors, factors which have an impact on the parties. The court will look at the connection between the 2 forum and the dispute and where the evidence is and finally where it is predictable that the judgment will be enforced. - second set of criteria: public factors, courts look at the impact of the litigation on the 2 states concerned. It wonders whether it would have more sense to have the litigation handled in one or the other country. Court looks at 3 things: Court conjustion (how busy is each court) Local interest in resolving the controversy, which state has an interest in the matter Which law will be applicable, would foreign law be applicable? If foreign law is applicable it cost a lot of money to show what it says. Flash Airlines: French victims want so sew Booing in California and Booing wants to go to France, little evidence in the US, interest of the US limited so interest will be of France and application of French law. South America: accident I SA and victims want to go to the US, and US will say forum non convenience. Many states in SA have created statutes against the US doctrine. Different perception on foreign litigation that the US and the UK have: - In the UK there is no taking into account of the public factors. The English perception is not only that foreign litigation will be allowed but it is also welcome => open court theory. A lot of fees will be paid to English lawyers. - In NY foreign litigation is preserved as an evil against whom you have to fight, it costs too much to the American tax payers. American courts think that they should take into account public factors because they use public money. An American plaintiff deserves more deference than a foreign plaintiff. => resolution from the institute de droit international => moodle, summary of the rules which govern the relevant doctrines (page 2, 2) => Under the Brussels I regulation forum non convenience is not applicable, Owusu case 2005. May an English court say that the forum convenience is Jamaica? => Court: if the regulation applies (domicile of the defendant was in London) there is no room for forum non convenience. The court must retain jurisdiction. II. Anti-suit injunctions Second traditional way of dealing with parallel litigation in the common law world. Difference is that it is much more aggressive than the 2 others because the court instead of saying I decline jurisdiction the court will order the parties to stop litigation before the foreign court. The foreign court may have retained jurisdiction but the English court will say that it has to stop. a. Concept The concept is to use an ancient tool of English law in international relations => the equitable injunction developed by the court of equity in the Middle Ages in England. In England the legal system was the common law which was developed by the 3 courts of common law. After these courts of common law were created and established a problem arose because the
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common law could not evolve well, adapt to new circumstances. In parallel a new court developed, the court of the chancellor. This court would rule in equity, not in law. Creation of new remedies. The chancery court was changing the law and was sometimes correcting what the common law was doing. Since the start the chancery court had invented a doctrine to pretend that it was not correcting the common law. This doctrine was that equity acts in personae. Instead of action directly on the things, instead of touching directly the common law it was only talking of the conscience of the litigants. => Equity could correct the common law without getting in a conflict with the common law. If an English court was to order a French court to stop its proceedings there would be an infringement of the French sovereignty. By contrast if you only order in personae the parties to stop there proceedings in front of the French courts this is different. Ex: there is an exclusive jurisdiction in real property matters. However that does not necessarily an English court from intervening. The English court will consider that it has no jurisdiction but can order the parties to sell the real property. English courts have used this same injunction of equity to stop proceedings developing before foreign courts => anti-suit injunction. Consequence: it is personal in character; therefore if you do not comply with anti-suit injunction you are facing sanctions in England => you are in contempt of court, you not comply with court order. If you are found in contempt of court, 2 basic sanctions: being jailed or pay a fine. The English court can force you to do sth anywhere in the world. b. Cases where it has been used by the English and US courts It does not have been used freely and without caution. Therefore it has only been used when there is a strong belief that the other court is really doing sth unacceptable, proceedings are illegitimate. When is that the case? It has been the case in 3 cases: 1. When there is a choice of court agreement or an arbitration agreement and the foreign court is violating this agreement. 2. The possibility of an oppressive conduct by the plaintiff. The plaintiff tries to oppress the other party by sewing him in many different countries in the world. Purpose to make litigation so expensive that the other party has to stop. 3. Cases where the common law court considers that it is critical that it is the only court involved in a particular dispute and that it must protect its own jurisdiction. Ex: insolvency and administration of estates (sucessions) => resolution p3, point 5. Examples: - Case of Italian torpedo =>West Tankers 2009: there was an arbitration agreement for an arbitration tribunal sitting in London. One party initiated the proceedings before another court. The other party asked the English court to issue an anti-suit injunction; party has to stop the proceedings in front of the other court and to act in front of the English court. - Turner case 2004: it only involved courts, no choice of court agreement. 2 people, one wanted to sew in Spain and the other in England. The Spanish courts were seized second. The Spanish court should have stopped there proceedings because of lis pendens but they continued. Therefore the English court issued an anti-suit injunction ordering the plaintiff in Spain to stop its proceedings. => Anti-suit injunctions forbidden under EU law (because of the principle of mutual trust) and as soon as you belong to a federal entity it cannot be accepted that disputes of this kind are handled by such aggressive tools. Attempt in France to transplant the mechanism of the anti-suit injunction. At the moment situation is not really clear. The starting point is certainly a case of 2004 Stolyenberg: question whether the
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French court may enforce in France a freezing injunction. Injunction which intends to freeze assets (saisie concervatoire => Mareva Injunction). The Cour de cassation took the opportunity to say although a Mareva Injunction could be declared enforceable in France but this does not mean that an anti-suit injunction could be because this injunction would be a breach of the sovereignty of the French state. 2 years before the court in Bank Worms case 2002 realized the legal transplant => mechanism to change the law by boring concepts from foreign jurisdictions. Many third world countries bored laws from the West and the North. Sometimes transplant occurred between western countries: in Bank Worms the Cour de cassation decided to incorporate under French law the in persona injunction (injunction la personne du dfendeur) which could achieve different things that a normal judge would not achieve. French court could do sth for which under normal rules it would not have jurisdiction to do. In that case there was an insolvency in France and one of the assets of the defendant was a real property, apartment in Spain. One of the creditors was trying to sell that property in Spain to be paid. The French court issued an injunction which told the creditor to stop its proceedings in Spain. => The French court accepted that it was possible to issue injunction to the creditor to stop the enforcement proceedings n Spain. There were 3 good reasons not to issue this injunction: - immovable in Spain, exclusive jurisdiction of the Spain courts - enforcement in Spain (saisie immobilire), exclusive jurisdiction of the Spain courts - it was an anti-suit injunction by telling the other court to stop its proceedings => but anti-suit injunction not discussed in this case!!! Conflictoflaws.net - !!! Case In Zone Brands Inc 2009: business contract between a French and an American, the contract included a choice of court agreement for Us court. However the French party sued in France. He American party asked an anti-suit injunction in the US. The party wants to enforce the anti-suit injunction and the default judgment in France. French court took no decision at that time. So the Cour de cassation accepted that the anti-suit injunction could be declared enforceable in France. Limit: it was the case only because the foreign anti-suit injunction was to enforce a jurisdiction clause. Other condition: Only if European law does not apply because under European law there is no anti-suit injunction. - Vivendi Case (anti-suit injunction denied by French court): case where there are many French parties which are plaintiffs which decide to go to the US but the French defendants are unhappy of this. In this case Vivendi has tried to stop the foreign proceedings from France, to get an anti-suit injunction from the French court. Question whether it was possible to issue an anti-suit injunction was not asked to the court because the court found that there was nothing to stop, there was no misconduct to go in front of the US courts. In this case anti-suit injunction is not possible because there are too legitimate courts.

Part 2. International arbitration Concept of arbitration: belongs to adjudication, the goal of arbitration is also to get a final and binding decision by a third party on the dispute. Third party will not be a judge but a private individual the parties have appointed. This person has the power to decide finally the dispute and his decision will be as binding as a court decision. Possible to enforce it in the same way. - Arbitration is not mediation, the third party who is appointed has the power to decide the dispute and therefore the power is not limited to helping the parties to reach an agreement on the solution. Arbitration is not expert determination either; the arbitrator is here to decide the dispute, not here only to settle an issue of fact. - The most important feature of arbitration hat it is contractual in character. It is never possible to go to arbitration unless you agreed to go to arbitration. Litigation is always the principle and arbitration will be possible only if you made a special agreement to go o arbitration. Once you are in the
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arbitration you are still performing the contract. Consequence, it will be complicated to involve third parties, third parties are not touched by this contractual relationship. Why should parties choose or not choose international arbitration? Arbitration might be the dominant mode of international dispute resolution, many practicians say hat in the majority of cases when you try to settle an international dispute you go to arbitration. These claims are surprising because there is no way of making such calculations: arbitration is confidential and decentralized. - One single advantage of arbitration explains why arbitration should be preferred: it ensures neutrality of adjudication. There is neutrality if the alternative court would not be impartial or bias against one of the parties. Ex: when you act against another state, go in front of a non state court. Even if the foreign court would not necessarily be biased the issue of neutrality remains because there is the issue of the home town advantage. Nationals are in the better situation, they know better the procedures, the law In arbitration everybody is on an equal level, no home town advantage because every party can appoint a national arbitrator. - Arbitral process is extremely flexible and you can therefore use it to design a mode of dispute resolution which will fit your particular needs. Ex: alternative courts are not to be trusted (stuffed with non lawyers) and you want famous law professors so you can go to arbitration. Or the other way round, the dispute is technical and you want professionals to be arbitrators. Also possible to change the procedure. - enforcement: arbitral awards are considered to be much more easily enforceable than court judgments. Existence of the New York convention of 1958: limits the grounds for refusal of enforcement of arbitral awards. It prohibits courts to revue on the merits of arbitral awards, verify whether the arbitrators did it right. Such a convention does not exist for court judgments. 3 limits: 1. in Europe this does not apply because between European states here is a mechanism of enforcement of foreign judgments 2. 2005 Hague Convention of choice agreements, will this convention become the NY convention of the 21th century? 3. Chinese or a Russian court often deny recognition Disadvantages: pay the arbitrators which is expensive, fees of the lawyers are also higher. Chapter 1. Overview of the law of arbitration Section 1. The arbitration agreements (equivalent of the jurisdiction of the courts) Definition: this is an agreement between the parties to arbitrate their dispute. This can be any kind of agreement. This agreement will be binding on the parties and will define how the arbitration will be organized. When is this agreement reached by the parties? 2 different moments: - moment when you are negotiating the contract, include an arbitration clause in the contract (clause compromissoire). - agree to go to arbitration after the dispute arose, writing a special agreement (compromis). The arbitration agreement can also be completed by other agreements which may come later in time. 2 additional agreements: the document that the parties will sign when they will first meet with the arbitrators to discuss the procedure (terms of reference) and the rules of international institutions. 2 possibilities to conduct to arbitration: - conduct arbitration without the help of anybody => ad hoc arbitration - conduct arbitration under the supervision of an arbitral institution, their job is to supervise the arbitration and help if a problem occurs during the arbitration. You have to put into your clause that you want o be put under the roles of these institutions. Ex: international chamber of commerce in Paris or London court of international arbitration.
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Consequence: ICC arbitration rules (moodle): rules which are explaining how the arbitration will take place. If you submit to the ICC arbitration these rules become of contractual value, because you are agreeing to follow those rules during your arbitration. I. The validity of arbitrational agreements A. Kinds of disputes, arbitrability All states have decided on the types of disputes which may be arbitrated. Depending on their perception that they may have of arbitration they may lay down different rules on arbitrability. In Europe the most widely used test to define arbitrability is whether the rights in the dispute can be disposed of by the parties (droits disponibles). When the parties have the possibility to contract on their rights and would have the possibility to settle disputes on those rights than they are allowed to be arbitrated. - Rights that parties cannot dispose of: family law, divorce, criminal law, public law, security law - By contrast some rights are clearly disposable: most of commercial law, torts. Some of the relevant rules which govern those rights are mandatory but it is possible to ask an arbitrator to apply mandatory rules. Question asked in Mitsubishi case 1985: application of competition law. Is it possible to go to arbitration if the rules are rules of competition law? It is possible however the court can verify if the arbitrators apply correctly the rules. Case 1999 ECJ: Equo Swiss China, court admitted that arbitrators could apply the article on conspiracies (compettion law). However control. Fields of commercial law which are not arbitrable: in principle all fiels of commercial law are arbitrable, however when the state decides to grant exclusive jurisdiction to one of its authorities to decide certain types of disputes then the fields become inarbitrable. Ex: - insolvency - in some fields partial exclusive jurisdiction: competition law distinction between sewing parties to impose fines on them and drawing civil consequences on their actions. - Same with patent law, validity of patent is an issue which has to be dealt by a special authority, but the use of it not. - tax law For employment law and consumer law it is not clear, difference between different states. B. The form of the agreement Formal requirement for arbitrational agreement to be validity: under most laws the arbitrational agreement must be in writing (NY convention). Exceptions: France there is no formal requirement. Limits to this requirement: - in a few countries this requirement is only evidentially, not a rule of validity. Ex: Switzerland - modern laws will accept that the electronic form is a writing - it is widely accepted that an agreement by reference satisfies the test By contrast it is very rare that arbitration laws required that the arbitration agreement contains specific provisions, information. Many countries tolerate very short clauses and the so called white clauses. This can be dangerous, especially if you do not say where. II. The scope of the arbitrational agreements

III. The effects of the arbitrational agreements Section 2.

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Chapter 2. The validity of arbitral awards

Chapter 3. Issues of applic able law

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