Conflictoflaws

Meetings & Events

From 8 to 12 April 2024, the Working Group on Parentage / Surrogacy met for the second time. Pursuant to its mandate, the Working Group continued its consideration of draft provisions for one new instrument on legal parentage generally, including legal parentage resulting from an international surrogacy agreement. More information is available here.

 

Vacancies

Applications are now open for a Communications and Outreach Internship at the Permanent Bureau of the HCCH. The deadline for the submission of applications is 20 May 2024 (18:00 CEST). More information is available here.

 

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

This post was written by Begüm Kilimcio?lu (PhD researcher), Thalia Kruger (Professor) and Tine Van Hof (Guest professor and postdoctoral researcher), all of the University of Antwerp.

During the last plenary meeting of the current composition of the European Parliament (before the elections of June 2024), which took place from Monday 22 until Thursday 24 April, several proposals relevant to private international law were put to a vote (see the full agenda of votes and debates). All of the regulations discussed here still have to be formally approved by the Council of the European Union before they become binding law, in accordance with the ordinary legislative procedure.

It is interesting to note that, while many pieces of new legislation have a clear cross-border impact in civil matters, not all of them explicitly address private international law. While readers of this blog are probably used to the discrepancies this has led to in various fields of the law, it is still worth our consideration.

First, the European Parliament voted on and adopted the proposal for a Directive on Corporate Sustainability Due Diligence (CSDDD) with 374 votes in favour, 235 against and 19 abstentions (see also the European Parliament’s Press Release). The text adopted is the result of fierce battles between the Commission, Parliament and the Council and also other stakeholders such as civil society, academics and practitioners. This necessitated compromise and resulted in a watered-down version of the Commission’s initial proposal of 23 February 2022 and does not go as far as envisaged in the European Parliament’s Resolution of 10 March 2021 (see also earlier blog pieces by Jan von Hein, Chris Tomale, Giesela Rühl, Eduardo Álvarez-Armas and Geert van Calster).

The Directive is one of the few instruments worldwide that put legally-binding obligations on multinational enterprises. It lays down obligations for companies regarding their adverse actual and potential human rights and environmental impacts, with respect to their own operation, the operations of their subsidiaries, and the operations carried out by their business partners in the chains of activities. The Directive further stipulates specific measures that companies have to take to prevent, mitigate or bring an end to their actual or potential adverse human rights impacts. Besides national supervisory authorities for the oversight of the implementation of the obligations, the Directive enacts civil liability for victims of corporate harm.

The adopted Directive is more or less silent on private international law. The closest it gets to addressing our field of the law is Recital 90:

In order to ensure that victims of human rights and environmental harm can bring an action for damages and claim compensation for damage caused when the company intentionally or negligently failed to comply with the due diligence obligations stemming from this Directive, this Directive should require Member States to ensure that the provisions of national law transposing the civil liability regime provided for in this Directive are of overriding mandatory application in cases where the law applicable to such claims is not the national law of a Member State, as could for instance be the case in accordance with international private law rules when the damage occurs in a third country. This means that the Member States should also ensure that the requirements in respect of which natural or legal persons can bring the claim, the statute of limitations and the disclosure of evidence are of overriding mandatory application. When transposing the civil liability regime provided for in this Directive and choosing the methods to achieve such results, Member States should also be able to take into account all related national rules to the extent they are necessary to ensure the protection of victims and crucial for safeguarding the Member States’ public interests, such as its political, social or economic organisation.

While the text contains references to numerous existing Regulations, Brussels I and Rome I are not among them; not even a precursory or confusing reference as in Recital 147 of the GDRP.

Second, the European Parliament voted on two other proposals that build on and implement the objectives of the European Green Deal and the EU Circular Economy Action Plan. The first is a proposal for a Regulation establishing a framework for setting eco-design requirements for sustainable products with 455 votes in favour, 99 against and 54 abstentions (see also the European Parliament’s Press Release). The Regulation aims to reduce the negative life cycle environmental impacts of products by improving the products’ durability, reusability, upgradability, reparability etc. It sets design requirements for products that will be placed on the market, and establishes a digital product certificate to inform consumers.

This Regulation does not contain a private-international-law type connecting factor for contracts or products. Neither does it expressly elevate its provisions to overriding rules of mandatory law (to at least give us some private international law clue). Its scope is determined by the EU’s internal market. All products that enter the European market have to be in conformity with the requirements of both regulations, also those that are produced in third countries and subsequently imported on the European market (Art. 3(1)). “Products that enter the market” is the connecting factor, or the basis for applying the Regulation as overriding mandatory law. The Regulation is silent on products that exit the market. Hopefully the result will not be that products that were still in the production cycle at the time of entry into force will simply be exported out of the EU.

The third adopted proposal is the Regulation on packaging and packaging waste with 476 votes in favour, 129 against and 24 abstentions (see also the European Parliament’s Press Release). This Regulation aims to reduce the amount of packaging placed on the Union market, ensuring the environmental sustainability of the packaging that is placed on the market, preventing the generation of packaging waste, and the collection and treatment of packaging waste that has been generated. To reach these aims, the regulation’s key measures include phasing out certain single-use plastics by 2030, minimizing so called “forever chemicals” chemicals in food packaging, promoting reuse and refill options, and implementing separate collection and recycling systems for beverage containers by 2029.

Like the Eco-design Regulation, no word on Private International Law, no references. The Regulation refers to packaging “placed on the market” in various provisions (most notably Art. 4(1)) and recitals (e.g. Recitals 10 and 14).

Lastly, the European Parliament approved the proposal for a regulation on prohibiting products made with forced labour on the Union market with an overwhelming majority of 555 votes in favour, 6 against and 45 abstentions (see also the European Parliament’s Press Release). The purpose of this Regulation is to improve the functioning of the internal market while also contributing to the fight against forced labour (including forced child labour). Economic operators are to eliminate forced labour from their operations through the pre-existing due diligence obligations under Union law. It introduces responsible authorities and a database of forced labour risk areas or products.

Just as is the case for the other Regulations, this Regulation does not contain references to private international law instruments, and no explicit reference to instruments in this field, even though the implementation of the Regulation requires vigilance throughout the value chain. It would be correct to assume that this provides overriding mandatory law, as the ban on forced labour is generally accepted to be jus cogens even though the extent of this ban is contentious (see Franklin).

Other proposals that are more clearly in the domain of private international law have not (yet?) reached the finish line. First, in the procedure on the dual proposals in the field of the protection of adults of 31 May 2023, the European Parliament could either adopt them or introduce amendments at first reading. However, these proposals have not reached the plenary level before the end of term and it will thus be for the Conference of Presidents to decide at the beginning of the new parliamentary term whether the consideration of this ‘unfinished business’ can be resumed or continued (Art. 240 Rules of Procedure of the European Parliament).

In the second file, the proposal for a Regulation in matters of parenthood and on the creation of a European Certificate of Parenthood of 7 December 2022 the European Parliament was already consulted and submitted its opinion in a Resolution of 14 December 2023. It is now up to the Council of the European Union to decide unanimously (according to the procedure in Art. 81(3) of the Treaty on the Functioning of the European Union). It can either adopt the amended proposal or amend the proposal once again. In the latter case the Council has to notify or consult (in case of substantial amendments) the European Parliament again.

With the EU Service Regulation being active for more than 20 years, and the Hague Service Convention being ratified by almost all European countries, there is little space for practicing fictitious service of proceedings in Europe. However, for service to third countries outside Europe, and especially to continents, such as Africa, Asia, and the Middle East, remise au parquet is still the ground rule for many European countries. A recent judgment issued by the Piraeus Court of Appeal provides a clear picture of how the mechanism operates in Greece [Piraeus Court of Appeal, judgment nr. 142/2024, available here].

I. THE FACTS:

The parties are two companies active in the international maritime sector. The claimant, a Greek company with its seat in Piraeus, filed an action before the Piraeus Court of First Instance, seeking the award of the total sum of $29,163,200. The defendant, an Iranian company with its seat in Tehran, did not appear in the hearing. The action was upheld as being well founded in substance by the Piraeus Court of 1st Instance. The defendant was ordered to pay the equivalent of $28. 663,200.

Both the action and the first instance judgment were duly served on the Piraeus District Attorney, in accordance with the provisions of Articles 134 §§ 1 and 2, and 136 § 1 Code of Greek Civil Procedure (henceforth CCP), due to the defendant’s domicile in a non-member state of the European Union, thus excluding the application of EU law, and because Iran has not acceded to the Hague Convention of 15 November 1965, which requires actual service of documents by one of the methods provided for therein. Finally, the court underlined the absence of a bilateral agreement between Iran and Greece, which would possibly regulate the issues of service in a different manner.

The defendant lodged an appeal. The appeal was however untimely filed, because it was brought after the expiry of the sixty [60] days period following service of the judgment, provided for in Article 518 § 1 CCP, which began with the fictitious service of the judgment on the Public Prosecutor, to be sent to the Minister of Foreign Affairs, in order to be transmitted through diplomatic channels to the addressee, as provided for by Article 134 §§ 1 and 3 CCP.

The Iranian company acknowledged that the time-limit had expired without effect. For this reason, it filed a request for restitutio in integrum in accordance with Article 152 CCP, requesting that the appeal be considered as timely lodged, claiming that the delay in lodging the appeal was due to force majeure. In particular, it is asserted that the Iranian company did not receive notification of both the claim, which resulted in a default judgment without its participation in the trial at first instance, and of the judgment given in default of appearance, due to the service method selected, i.e., ficticious service to the Public Prosecutor, which sets the time-limit for the appeal. Secondly, the appellant asserts that that it acted within the time-limit laid down in Article 153 CCP, that is to say, immediately after real service.

The appellant invokes the delay caused by the Piraeus Prosecutor’s Office and the diplomatic services of the Country, which did not take care to complete service within two months. In other words, it relies on the omission of third parties, which it could not prevent, and which prevented the appellant from being aware of the fictitious service and the commencement of the time-limit for lodging an appeal in Greece.

II.THE JUDGMENT OF THE PIRAEUS COURT OF APPEAL

The appellate court ruled as follows: The lawsuit was forwarded by the Piraeus Prosecutor’s Office to the Minister of Foreign Affairs, in order to be served at the defendant’s headquarters in Tehran. The diplomatic authorities of Greece did indeed send and their counterparts in Iran did receive and forward the statement of claim to its addressee. However, the Iranian company’s agents, namely the secretariat and the clerk in the Legal Affairs Department, refused to receive it. This is evident from the “Letter of confirmation for declaration of received documents from foreign countries” issued by the International Affairs Department of the Judiciary of the Islamic Republic of Iran. This document states that the defendant, through its aforementioned nominees, refused to receive the disputed “document”.

The reason for that refusal is not specified. However, from the document of the Consular Office of the Embassy of Greece in Iran, and the attached document of the Ministry of Foreign Affairs of the Islamic Republic of Iran, it can be inferred that the refusal was made because the document to be served was not accompanied by an official translation into Farsi. Iranian law does indeed appear to permit refusal to accept service of a foreigner’s statement of claim against an Iranian national on that ground (a legal opinion of Mr., a lawyer at the Central Iranian Bar Association was submitted to the CoA by the appellant). Still, domestic Greek law does not make the validity of service of an action dependent on the attachment of a translated copy of the action in the language of the State of destination. Therefore, service of the action, if it had been completed, would always be valid under Greek law.

In addition, the mere attempt to serve the action made it clear to the defendant in any event, irrespective of whether it had been aware of its content from the outset, that a claim has being brought against it in a Greek court and triggered its obligation under Article 116 CCP to monitor the progress of the proceedings from that time onwards, even if it chose not to participate in the proceedings, which the defendant was able to do, by behaving in a prudent and diligent manner, and by following the fate of the action brought in Greece.

To that end, it was sufficient simply to appoint a lawyer in Greece, who would arrange for the translation of the documents, and would attend the ongoing proceedings at first instance. Such an action was made by the appellant only after actual service of the judgment.

Similarly, the applicant does not explain the reason why it did not act by appointing a lawyer in Greece, after the refusal to receive the summons of the claimant, even though it was also sent to it accompanied by a translation of the summons in English. That omission gives the impression that the refusal to receive the summons was made in order to prolong the proceedings, and to prepare for the lodging of the appeal and the application for restitutio in integrum, which on the whole is considered to be abusive.

Consequently, the application for restitutio in integrum was dismissed as unfounded and the appeal, which was nevertheless brought out of time, was dismissed as inadmissible.

III. COMMENT

The judgment of the Piraeus CoA is interesting because it goes a step further in the examination of fictitious service: It did not simply reiterate the wording of the domestic rules; moreover, it scrutinized the facts, and avoided a stringent application of Article 134 CCP. Due process and right to be heard were included in the court’s analysis. Finally, the court dismissed the legal remedies of the appellant due to its reluctance to demonstrate proactivity, and its intention to bring the Greek proceedings to a stalemate.

Nobumichi TERAMURA (Assistant Professor, Universiti Brunei Darussalam; Affiliate, Centre for Asian and Pacific Law in the University of Sydney), Luke Nottage (Professor of Comparative and Transnational Business Law, Sydney Law School) and Bruno Jetin (Associate Professor of Economics, Universiti Brunei Darussalam) published an edited volume entitled “Corruption and Illegality in Asian Investment Arbitration” from Springer on 20 April 2024. The book is an open access title, so it is freely available to any states and organisations, including less well-resourced institutions in transitioning economies. Corrupt behaviour by foreign investors, like bribery to local government officials, faces wide condemnation in any society. Nevertheless, there remains a paucity of research appraising the consequences of corruption and illegality affecting international investment in Asia, especially investment arbitration involving East and South Asian jurisdictions. This book intends to fill the gap from an interdisciplinary (legal-economic) perspective.

 

The volume’s description reads as follows:

This open access book explores Asian approaches towards investment arbitration—a transnational procedure to resolve disputes between a foreign investor and a host state—setting it in the wider political economy and within domestic law contexts. It considers the extent to which significant states in Asia are, or could become, “rule makers” rather than “rule takers” regarding corruption and serious illegality in investor-state arbitration. Corruption and illegality in international investment are widely condemned in any society, but there remains a lack of consensus on the consequences, especially in investment arbitration. A core issue addressed is whether a foreign investor violating a host state’s law should be awarded protection of its investment, as per its contract with the host state and/or the applicable investment or trade agreement between the home state and the host state. Some suggest such protection would be unnecessary as the investor committed a crime in the host state, while others attempt to establish an equilibrium between the investor and the host state. Others claim to protect investment, invoking the sanctity of promises made. The book starts with a deep dive into economic and legal issues in corruption and investment arbitration and then explores the situation and issues in major countries in the region in detail. It is a useful reference point for lawyers, economists, investors, and government officials who are seeking comprehensive and up-to-date information on anti-bribery rules in Asian investment treaties. It is of particular interest to students and researchers in economics, finance, and law, who are undertaking new research relating to the multifaceted impacts of corruption.

 

The book’s table of contents is as follows:

Chapter 1 – “Bribery and Other Serious Investor Misconduct in Asian International Arbitration” by Nobumichi Teramura, Luke Nottage and Bruno Jetin;

Chapter 2 – “Does Corruption Hinder Foreign Direct Investment and Growth in Asia and Beyond? The Grabbing Versus the Helping Hand Revisited” by Ahmed M Khalid (Professor of Economics, Universiti Brunei Darussalam);

Chapter 3 – “The Effect of Corruption on Foreign Direct Investment at the Regional Level: A Positive or Negative Relationship?” By Bruno Jetin, Jamel Saadaoui (Senior Lecturer of Economics, The University of Strasbourg), Haingo Ratiarison (The University of Strasbourg);

Chapter 4 – “Anti-Corruption Laws and Investment Treaty Arbitration: An Asian Perspective” by Anselmo Reyes (International Judge, Singapore International Commercial Court) and Till Haechler (Associate, Lenz & Staehelin);

Chapter 5 – “Multi-Tiered International Anti-Corruption Cooperation in Asia: A Review of Treaties and Prospects” by Yueming Yan (Assistant Professor, Chinese University of Hong Kong) and Tianyu Liu (ADR Case Manager, Hong Kong International Arbitration Centre);

Chapter 6 – “Corruption in International Investment Arbitration” by Michael Hwang SC (Arbitrator, Michael Hwang Chambers) and Aloysius Chang (Michael Hwang Chambers);

Chapter 7 – “Rebalancing Asymmetries Between Host States and Investors in Asian Investor–State Dispute Settlement: An Exception for Systemic Corruption” by Martin Jarrett (Senior Research Fellow, Max Planck Institute for Comparative Public Law and International Law);

Chapter 8 – “Foreign Investment, Investment Treaties and Corruption in China and Hong Kong” by Vivienne Bath (Professor of Chinese Law, Sydney Law School) and Tianqi Gu (Sydney Law School);

Chapter 9 – “Corruption and Investment Treaty Arbitration in India” by Prabhash Ranjan (Professor and Vice Dean, Jindal Global Law School);

Chapter 10 – “Corruption and Illegality in Asian Investment Disputes: Indonesia” by Simon Butt (Professor of Indonesian Law, Sydney Law School), Antony Crockett (Partner, Herbert Smith Freehills Hong Kong) and Tim Lindsey (Malcolm Smith Chair of Asian Law and Redmond Barry Distinguished Professor, Melbourne Law School);

Chapter 11 – “Foreign Investment, Treaties, Arbitration and Corruption: Comparing Japan” by Luke Nottage and Nobumichi Teramura;

Chapter 12 – “Corruption and Investment Arbitration in the Lao People’s Democratic Republic: Corruptio Incognito” by Romesh Weeramantry (Special Counsel, Clifford Chance Perth) and Uma Sharma (Associate, Jones Day Singapore);

Chapter 13 – “Corruption and Illegality in Asian Investment Arbitration: The Philippines” by Thomas Elliot A Mondez (Faculty Member, De La Salle University, Philippines) and Jocelyn P Cruz (Associate Professor, De La Salle University, Philippines);

Chapter 14 – “Investment Arbitration, Corruption and Illegality: South Korea” by Joongi Kim (Professor Yonsei Law School);

Chapter 15 – “Foreign Investment, Corruption, Investment Treaties and Arbitration in Thailand” by Sirilaksana Khoman (Professor, Thammasat University, Thailand), Luke Nottage and Sakda Thanitcul (Professor, Chulalongkorn University); and

Chapter 16 – “Towards a More Harmonised Asian Approach to Corruption and Illegality in Investment Arbitration” by Nobumichi Teramura, Luke Nottage and Bruno Jetin.

On 14 and 15 February 2025, the 5th Conference for Young Researchers in PIL will take place at Heidelberg University. It will be dedicated to the topic of ‘Digital transformation and Private International Law. Local connections in boundless spaces’ and feature a keynote speech by Christiane Wendehorst (University of Vienna).

After statute theory, Savignyan PIL and Europeanisation, digitalisation has the potential to initiate a fourth evolutionary stage in the history of conflict of laws, which is characterised by decentralisation and delocalisation. We may therefore be on the threshold of a PIL 4.0. We would like to discuss how the conflict-of-laws problems arising from the boundless spaces of digitalisation can be solved in European and
autonomous German, Austrian and Swiss private international law. At the same time, we would like to look at the possibilities for legal changes at national, European and international level. In particular, we welcome contributions on comparative aspects of conflict of laws and international procedural law.

More information, including on possible topics and formal requirements can be found in the German and English Call for Papers.
All submissions need to be sent to nachwuchstagung@ipr.uni-heidelberg.de by 23 September 2024.

Further information can also be found on the conference website.

The IBA Litigation Committee is pleased to present this new guide to cross-border enforcement of judgments against states.

Authors from almost fifty jurisdictions have taken part in this project. For each jurisdiction, our aim is to outline the key requirements for enforcing a foreign judgment against a state entity. The guide covers the basic criteria for enforcement of a foreign judgment, the application of sovereign immunity, and due process standards and exceptions (service, representation, etc). It also considers how these principles apply where states are involved in armed conflict, which is sadly relevant to a number of litigants around the world currently seeking to recover for wartime damages against aggressor states.

More information can be found here.

Application of Singapore’s new rules on service out of jurisdiction: Three Arrows Capital and NW Corp

The Rules of Court 2021 (‘ROC 2021’) entered into force on 1 April 2022. Among other things, ROC 2021 reformed the rules on service out of jurisdiction (previously discussed here). Order 8 rule 1 provides:

‘(1) An originating process or other court document may be served out of Singapore with the Court’s approval if it can be shown that the Court has the jurisdiction or is the appropriate court to hear the action.

…

(3) The Court’s approval is not required if service out of Singapore is allowed under a contract between the parties.

…’

A handful of decisions on the application of Order 8 rule 1 have since been delivered; two are discussed in this post. One of them considers the ‘appropriate court’ ground for service out of jurisdiction provided in Order 8 rule 1(1) and touches on the location of cryptoassets; the other is on Order 8 rule 1(3).

Service out under the ‘appropriate court’ ground

Cheong Jun Yoong v Three Arrows Capital[1] involved service out of jurisdiction pursuant to the ‘appropriate court’ ground in Order 8 rule 1(1). As detailed in the accompanying Supreme Court Practice Directions (‘SCPD’), a claimant making an application under this ground has to establish the usual common law requirements that:

‘(a) there is a good arguable case that there is a sufficient nexus to Singapore;

(b) Singapore is forum conveniens; and

(c) there is a serious issue to be tried on the merits of the claim.’[2]

For step (a), the previous Order 11 gateways have been transcribed as a non-exhaustive list of factors.[3] This objective of this reform was to render it ‘unnecessary for a claimant to scrutinise the long list of permissible cases set out in the existing Rules in the hope of fitting into one or more descriptions.’[4] As Three Arrows illustrates though, old habits die hard and the limits of the ‘non-exhaustive’ nature of the jurisdictional gateways remains to be tested by litigants. The wide-reaching effect of a previous Court of Appeal decision on the interpretation of gateway (n) which covers a claim brought under statutes dealing with serious crimes such as corruption and dug trafficking and ‘any other written law’ is also yet to be grasped by litigants.[5]

In Three Arrows, the first defendant (‘defendant’) was a British Virgin Islands incorporated company (BVI) which was an investment fund trading and dealing in cryptocurrency. It was under liquidation proceedings in the BVI; its two liquidators were the second and third defendants in the Singapore proceedings. The BVI liquidation proceedings were recognised as a ‘foreign main proceeding’ in Singapore pursuant to the UNCITRAL Model Law on Cross-Border Insolvency as enacted under Singapore law.[6] The claimant managed what he alleged was an independent fund called the ‘DC Fund’ which used the infrastructure and platform of the defendant and its related entities. After the defendant decided to relocate its operations to Dubai, the claimant incorporated Singapore companies to take over the operations and assets of the DC Fund. Not all of the assets had been transferred to these new companies at the time the defendant went into liquidation. The claimant’s case was that the DC Fund assets remaining with the defendant were held on trust by the defendant for the claimant and other investors in the DC Fund and were not subject to the BVI liquidation proceedings. The Liquidators in turn sought orders from the BVI court that those assets were owned by the defendant and subject to the BVI Liquidation proceedings.

The claimant relied on three gateways for service out of jurisdiction: gateway (a) where relief is sought against a defendant who is, inter alia, ordinarily resident or carrying on business in Singapore; gateway (i) where the claim is made to assert, declare or determine proprietary rights in or over movable property situated in Singapore; and gateway (p) where the claim is founded on a cause of action arising in Singapore.

On gateway (a), the defendant was originally based in Singapore before shifting operations to Dubai a few months before the commencement of the BVI Liquidation proceedings. The claimant attempted to argue that residence for the purposes of gateway (a) had to be assessed at the time when the company was ‘alive and flourishing’.[7] This was rightly rejected by the court, which observed that satisfaction of the gateway depended on the situation which existed at the time application for service out of jurisdiction was filed or heard. On gateway (p), it was held that there was a good arguable case that the cause of action arose in Singapore because the trusts arose pursuant to the independent fund arrangement between the parties which was negotiated and concluded in Singapore. All material events pursuant to the arrangement took place when the defendant was still based in Singapore and the defendant’s investment manager was a Singapore company.

It is perhaps the court’s analysis of gateway (i) which is of particular interest as it deals with a nascent area of law. Are cryptocurrencies ‘property’ and if so, where are they located?

The court confirmed earlier Singapore decisions that cryptocurrencies are property.[8] It held:

‘Given the fact that a cryptoasset has no physical presence and exists as a record in a network of computers …. It best manifests itself through the exercise of control over it.’[9]

Between a choice of the identifying the situs as the domicile or residence of the person who controls the private key linked to the cryptoasset, the court preferred residence as being the ‘better indicator of where the control is being exercised.’[10] Seemingly drawing from the position in relation to debts, one of the reasons for preferring residence was that this was where the controller can be sued.[11] The court was also concerned that there may be difficulties in identifying domicile.[12] On the facts, the controller was one of the Singapore incorporated companies set up by the claimant and the claimant was in turn the sole shareholder of that company. Both the company and claimant were resident in Singapore and thus gateway (p) was satisfied.

On the other requirements for service out with permission of the court under the ‘appropriate court’ ground, the court was persuaded that there was a serious issue to be tried on the merits and that connecting factors indicated Singapore was forum conveniens. The defendants’ application to set aside the order granting permission to serve out of jurisdiction and to set aside service of process on them thus failed. The Appellate Division of the Singapore High Court has recently refused permission to appeal against the first instance decision.[13]

It bears pointing out that the same issue of ownership of the assets of the DC Funds was before the BVI court in the insolvency proceedings. The first instance court was unmoved by the existence of parallel proceedings in the BVI, as the BVI proceedings were at a very early stage and hence were not a significant factor in the analysis on forum conveniens.[14] However, as mentioned above, the BVI insolvency proceedings had been recognised as a ‘foreign main proceeding’ by the Singapore court. Under Article 21 of the UNCITRAL Model Law on Cross-Border Insolvency, relief granted pursuant to such recognition can include staying actions concerning the ‘debtor’s property’.[15] While the very issue in the Singapore action is whether the assets of the DC Funds are indeed the ‘debtor’s property’,[16] staying the action will clearly be in line with the kinds of relief envisaged under Article 21. Under the Model Law, the issue of forum conveniens should take a back seat as the emphasis is on cross-border cooperation to achieve an optimal result for all parties involved in an international insolvency.

Service out pursuant to a contractual agreement

In NW Corp Pte Ltd v HK Petroleum Enterprises Cooperation Ltd,[17] the contract between the claimant and defendant, who were Singapore and Hong Kong-incorporated companies respectively, contained this clause:

‘This Agreement shall be governed by and construed in accordance with the English law [sic]. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by Singapore court [sic] without recourse to arbitration and to service of process by registered mail …’

The claimant served process on the defendant in Hong Kong by way of registered post to the defendant’s last known address and purportedly pursuant to Order 8 rule 1(3) ROC 2021. The issue whether the service was validly effected arose when the defendant sought to set aside the default judgment that was subsequently approved by the Singapore High Court Registry. The defendant argued that Order 8 rule 1(3) required that the agreement name not only a method of service but also specify a location out of Singapore where service could take place. The Assistant Registrar (‘AR’) disagreed, holding that this would be too narrow an interpretation of Order 8 rule 1(3). Pointing to the more relaxed modes of service permitted under the ROC 2021[18] in comparison with the predecessor ROC 2014,[19] the AR stated that there was no suggestion in Order 8 rule 1(3) or in the definitions provided elsewhere which suggested that both method and place of service had to be specified in a jurisdiction clause in order for a claimant to avail itself of service out without permission of the court. The AR was of the view that an agreement could come within Order 8 rule 1(3) so long as it provided for service of originating process of the Singapore courts on a foreign defendant.

The reasoning was as follows. First, Order 8 rule 1(3) was a deviation from the orthodox principles that the Singapore court’s jurisdiction was territorial in nature and service on a defendant abroad ordinarily required permission of court. If a foreign defendant agreed that jurisdiction of the court can be founded over them by way of service of originating process, that service necessarily included service out of Singapore. Thus, to come within Order 8 rule1(3), the agreement merely required the foreign defendant to consent to the jurisdiction of the court to be founded over them by way of service of originating process. Secondly, the phrase used in Order 8 rule 1(3) was service ‘out’ of Singapore, rather than service ‘outside’ Singapore. Only the latter phrase, in the AR’s view, connoted that service of process at a location other than Singapore was required.

On the first rationale, the Singapore court’s in personam jurisdiction over a defendant is founded on service of process.[20] This is the case ordinarily, with or without the defendant’s agreement. If the defendant expressly agrees that this can be done, this could be used to counter a subsequent challenge by the defendant to the existence of jurisdiction of the Singapore court, but it is difficult to see how, without more, an agreement to accept service of Singapore process takes the defendant outside the orthodox territorial framework of the Singapore court’s jurisdiction. Surely only the defendant’s agreement to service of Singapore process abroad, rather than merely agreement to service of Singapore process, would provide justification for the deviation from orthodox principles? The AR seemed to be suggesting that it is implicit that a foreign defendant, by agreeing to accept service of Singapore process, also consents to service of process out of Singapore, but the second rationale proffered renders any implicit agreement moot as, on the AR’s view, Order 8 rule 1(3) does not require the defendant to agree to accept service abroad. However, the legal difference between ‘out’ and ‘outside’ is elusive, as ‘service out of jurisdiction’ is uncontroversially understood to refer to service on a defendant who is abroad and thus not within the territorial jurisdiction of the court.

A parallel provision to Order 8 rule 1(3) can be found in the Singapore International Commercial Court Rules 2021 (‘SICC Rules’). Permission of the SICC is likewise not required where the defendant is party to a ‘written jurisdiction agreement’ for the SICC or ‘service out of Singapore is allowed under an agreement between the parties.’[21] Order 8 rule 1(3) is missing the first option. However, it would be unlikely for the parties to have agreed on ‘service out of Singapore’ without first having agreed on a Singapore choice of court agreement. Despite this slight oddity, the intention of the drafters is clearly to liberalise the service out(side) of jurisdiction rules. Whether the intention was to liberalise it as much as was held in NW Corp is, however, debatable.

[1] [2024] SGHC 21.

[2] SCPD 2021 para 63(2).

[3] SCPD 2021 para 63(3).

[4] Civil Justice Commission Report, Chapter 6, p 16 (29 December 2017).

[5] Li Shengwu v Attorney-General [2019] 1 SLR 1081 (CA). The point is explained here.

[6] Insolvency, Restructuring and Dissolution Act 2018 s 252 and Third Schedule.

[7] [2024] SGHC 21 [46].

[8] CLM v CLN [2022] 5 SLR 273; Bybit Fintech Ltd v Ho Kai Xin [2023] 5 SLR 1748.

[9] [2024] SGHC 21 [60]

[10] [2024] SGHC 21 [63].

[11] [2024] SGHC 21 [63].

[12] [2024] SGHC 21 [63].

[13] Three Arrows Capital Ltd v Cheong Jun Yoong [2024] SGHC(A) 10.

[14] [2024] SGHC 21 [82].

[15] Insolvency, Restructuring and Dissolution Act 2018, Third Schedule, Art 21(1)(a).

[16] The respondent was clearly the legal owner; the question was whether the assets belonged beneficially to the applicant.

[17] [2023] SGHCR 22.

[18] ROC 2021 O7 r2(1)(d).

[19] ROC 2014 O10 r3.

[20] Supreme Court of Judicature Act 1969 s16(1)(a). The court also has jurisdiction if the defendant had submitted to the jurisdiction of the court (s16(1)(b)), but submission is normally used to counter a jurisdictional objection by the defendant; in the ordinary course of things, service of process must first take place.

[21] SICC Rules 2021 O5 r6(2).

For a workshop on collective actions on ESG toics that will take place in Amsterdam on 21 and 22 November 2024 a call for paper has been posted, deadline 1 July 2024.

As a follow-up from the 4th International Class Action Conference in Amsterdam, 30 June – 1 July 2022, the University of Amsterdam, Tilburg University and Haifa University are jointly organizing a workshop on large scale collective actions on Environmental, Social and Governance topics. The workshop is intended to act as a forum for the sharing of experiences and knowledge. In an increasingly interconnected world, such opportunities for international scholars and practitioners to come together and discuss notes and views on the development of collective redress in their jurisdictions, are more relevant than ever. We choose to organize this as a workshop centered around academic papers in order to both give serious substance to the forum and to convert the exchange of knowledge into lasting contributions in the shape of publications in a special issue journal.

More information is available here: Call for papers for workshop on ESG collective action in Amsterdam – 21 and 22 Nov 2024

On Tuesday 23 April the Pax Moot Court Competition will kick off in Ljubljana. The oral rounds between 29 teams from all over Europe and beyond (including Asia and Australia) will start on Wednesday 24th. Teams will be litigating against each other for two days in front of private international law experts from academia and practice. The semi-finals and finals are scheduled for Friday 26th.

Also on Friday 26 April, there will be a hybrid conference on Dispute Resolution in Private International Law, co-organised by the Pax team and the University of Aberdeen’s Centre for Private International Law. This will include of three panels: Commercial Arbitration, Business and Human Rights, and Decolonial Perspectives on private international law. All welcome to join!

Please see the programme and register.

Australian and New Zealand courts have developed a practice of managing trans-Tasman proceedings in a way that recognises the close relationship between the countries, and that aids in the effective and efficient resolution of cross-border disputes. This has been the case especially since the implementation of the Agreement on Trans-Tasman Court Proceedings and Regulatory Enforcement, which was entered into for the purposes of setting up an integrated scheme of civil jurisdiction and judgments.  A key feature of the scheme is that it seeks to “streamline the process for resolving civil proceedings with a trans-Tasman element in order to reduce costs and improve efficiency” (Trans-Tasman Proceedings Act 2010 (TTPA), s 3(1)(a)). There have been many examples of Australian and New Zealand courts working to achieve this goal.

Despite the closeness of the trans-Tasman relationship, one question that had remained uncertain was whether the TTPA regime allows for the grant of an anti-suit injunction to stop or prevent proceedings that have been brought in breach of an exclusive jurisdiction agreement. The enforcement of exclusive jurisdiction agreements is explicitly protected in the regime, which adopted the approach of the Hague Convention on Choice of Court Agreements in anticipation of Australia and New Zealand signing up to the Convention. Section 28 of the Trans-Tasman Proceedings Act 2010 (NZ) and s 22 of the Trans-Tasman Proceedings Act 2010 (Cth) provide that a court must not restrain a person from commencing or continuing a civil proceeding across the Tasman “on the grounds that [the other court] is not the appropriate forum for the proceeding”. In the secondary literature, different opinions have been expressed whether this provision extends to injunctions on the grounds that the other court is not the appropriate forum due to the existence of an exclusive jurisdiction agreement: see Mary Keyes “Jurisdiction Clauses in New Zealand Law” (2019) 50 VUWLR 631 at 633-4; Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at [2.445].

The New Zealand High Court has now decided that, in its view, there is no place for anti-suit injunctions under the TTPA regime: A-Ward Ltd v Raw Metal Corp Pty Ltd [2024] NZHC 736 at [4]. Justice O’Gorman reasoned that the TTPA involves New Zealand and Australian courts applying “mirror provisions to determine forum disputes, based on confidence in each other’s judicial institutions” (at [4]), and that anti-suit injunctions can have “no role to play where countries have agreed on judicial cooperation in the allocation and exercise of jurisdiction” (at [17]).

A-Ward Ltd, a New Zealand company, sought an interim anti-suit injunction to stop proceedings brought against it by Raw Metal Corp Pty Ltd, an Australian company, in the Federal Court of Australia. The dispute related to the supply of shipping container tilters from A-Ward to Raw Metal. A-Ward’s terms and conditions had included an exclusive jurisdiction clause selecting the courts of New Zealand, as well as a New Zealand choice of law clause. In its Australian proceedings, Raw Metal sought damages for misleading and deceptive conduct in breach of the Competition and Consumer Act 2010 (Cth) (CCA). A-Ward brought proceedings in New Zealand seeking damages for breach of its trade terms, including the jurisdiction clause, as well as an anti-suit injunction.

O’Gorman J’s starting point was to identify the different common law tests that courts had applied when determining an application to the court to stay its own proceedings, based on the existence (or not) of an exclusive jurisdiction clause. While Spiliada principles applied in the absence of such a clause, The Eleftheria provided the relevant test to determine the enforceability of an exclusive jurisdiction clause: at [16]. The alternative to a stay was to seek an anti-suit injunction, which, however, was a controversial tool, because of its potential to “interfere unduly with a foreign court controlling its own processes” (at [17]).

Having set out the competing views in the secondary literature, the Court concluded that anti-suit injunctions were not available to enforce jurisdiction agreements otherwise falling within the scope of the TTPA, based on the following reason (at [34]):

1. The term “appropriate forum” in ss 28 (NZ) and s 22 (Aus) of the respective Acts could not, “as a matter of reasonable interpretation”, be restricted to questions of appropriate forum in the absence of an exclusive jurisdiction agreement. This was not how the term had been used in the common law (see The Eleftheria).
2. The structure of the TTPA regime reinforced this point, because it is on an application under s 22 (NZ)/ s 17 (Aus), for a stay of proceedings on the basis that the other court is the more appropriate forum, that a court must give effect to an exclusive jurisdiction agreement under s 25 (NZ)/ s 20 (Aus).
3. Sections 25 (NZ) and 20 (Aus) already provided strong protection to exclusive choice of court agreements, and introducing additional protection by way of anti-suit relief “would only create uncertainty, inefficiency, and the risk of inconsistency, all of which the TTPA regime was designed to avoid”.
4. The availability of anti-suit relief would “rest on the assumption that the courts in each jurisdiction might reach a different result, giving a parochial advantage”. This, however, would be “inconsistent with the entire basis for the TTPA regime – that the courts apply the same codified tests and place confidence in each other’s judicial institutions”.
5. Australian case law (Great Southern Loans v Locator Group [2005] NSWSC 438), to the effect that anti-suit injunctions continue to be available domestically as between Australian courts, was distinguishable because there was no express provision for exclusive choice of court agreements, which is what “makes a potentially conflicting common law test unpalatable”.
6. Retaining anti-suit injunctions to enforce exclusive jurisdiction agreements would be inconsistent with the concern underpinning s 28 (NZ)/ s 22 (Aus) about “someone trying to circumvent the trans-Tasman regime as a whole”.
7. The availability of anti-suit relief would defeat the purpose of the scheme to prevent duplication of proceedings.
8. More generally, anti-suit injunctions “have no role to play where countries have agreed on judicial cooperation in the allocation and exercise of jurisdiction”.

The Court further concluded that, even if the TTPA did not exclude the power to order an anti-suit injunction, there was no basis for doing so in this case in relation to Raw Metal’s claim under the CCA (at [35]). There was “nothing invalid or unconscionable about Australia’s policy choice” to prevent parties from contracting out of their obligations under the CCA, even though New Zealand law (in the form of the Fair Trading Act 1986) might now follow a different policy. The TTPA regime included exceptions to the enforcement of exclusive jurisdiction agreements. Here, A-Ward seemed to have anticipated that, from the perspective of the Australian court, enforcement of the New Zealand jurisdiction clause would have fallen within one of these exceptions, and the High Court of Australia’s observations in Karpik v Carnival plc [2023] HCA 39 at [40] seemed to be consistent with this. The “entirely orthodox position” seemed to be that the Federal Court in Australia “would regard itself as having jurisdiction to determine the CCA claim, unconstrained by the choice of law and court” (at [35]).

Time will tell whether Australian courts will agree with the High Court’s emphatic rejection of anti-suit relief under the TTPA as being inconsistent with the cooperative purpose of the scheme. The parallel debate within the context of the Hague Choice of Court Convention – which does not specifically exclude anti-suit injunctions – may be instructive here: Mukarrum Ahmed “Exclusive choice of court agreements: some issues on the Hague Convention on choice of court agreements and its relationship with the Brussels I recast especially anti-suit injunctions, concurrent proceedings and the implications of BREXIT” (2017) 13 Journal of Private International Law 386. Despite O’Gorman J’s powerful reasoning, her judgment may not be the last word on this important issue.

From a New Zealand perspective, the judgment is also of interest because of its restrained approach to the availability of anti-suit relief more generally. Even assuming that the Australian proceedings were, in fact, in breach of the New Zealand jurisdiction clause, O’Gorman J would not have been prepared to grant an injunction as a matter of course. In this respect, the judgment may be seen as a departure from previous case law. In Maritime Mutual Insurance Association (NZ) Ltd v Silica Sandport Inc [2023] NZHC 793, for example, the Court granted an anti-suit injunction to compel compliance with an arbitration agreement, without inquiring into the foreign court’s perspective and its reasons for taking jurisdiction. O’Gorman J’s more nuanced approach is to be welcomed (for criticism of Maritime Mutual, see here on The Conflict of Laws in New Zealand blog).

A more challenging aspect of the judgment is the choice of law analysis, and the Court’s focus on the potential concurrent or cumulative application of foreign and domestic statutes (at [28]-[31], [35]). The Court said that, to determine whether a foreign statute is applicable, the New Zealand court can ask whether the statute applies on its own terms (following Chief Executive of the Department of Corrections v Fujitsu New Zealand Ltd [2023] NZHC 3598, which I criticised here on The Conflict of Laws in New Zealand blog, also published as [2024] NZLJ 22). It is not entirely clear how this point was relevant to the issue of the anti-suit injunction. The Judge’s reasoning seemed to be that, from the New Zealand court’s perspective, the Australian court’s application of the CCA was appropriate as a matter of statutory interpretation and/or choice of law, which meant that the proceedings were not unconscionable or unjust (at [35]).

On 7 and 8 November, the European Legal Studies Institute (ELSI) at the University of Osnabrück, Germany, is hosting a conference on “Enforcement of Rights in the Digital Space”.

The organizers have kindly shared the following Call for Papers with us:

The European Legal Studies Institute (ELSI) is pleased to announce a Call for Papers for a conference at Osnabrück University on November 7th and 8th, 2024.

We invite submissions on the topic of »Enforcement of Rights in the Digital Space« and in particular on the interplay between the current EU acts on the digital space and national law. The deadline for submissions is May 15th, 2024.

Legal Acts regulating the digital space in the European Union, such as the GDPR, the Data Act and the Digital Services Act, establish manifold new rights and obligations, such as a duty to inform about data use and storage, rights of access to data or requests for interoperability. Yet, with regard to many of these rights and obligations it remains unclear whether and how private actors can enforce them. Often, it is debatable whether their enforcement is left to the member states and whether administrative means of enforcement are intended to complement or exclude private law remedies. The substantial overlap in the scope of these legal acts, which often apply simultaneously in one and the same situation, aggravates the problem that the different legal acts lack a coherent and comprehensive system for their enforcement.

The conference seeks to address the commonalities, gaps and inconsistencies within the present system of enforcement of rights in the digital space, and to explore the different approaches academics throughout Europe take on these issues.

Speakers are invited to either give a short presentation on their current work (15 minutes) or present a paper (30 minutes). Each will be followed by a discussion. In case the speakers choose to publish the paper subsequently, we would kindly ask them to indicate that the paper has been presented at the conference. We welcome submissions both from established scholars and from PhD students, postdocs and junior faculty.

All speakers are invited to a conference dinner which will take place on November 7th, 2024. Further, the European Legal Studies Institute will cover reasonable travel expenses.

Electronic submissions with an abstract in English of no more than 300 words can be submitted to [elsi@uos.de]. Please remove all references to the author(s) in the paper and include in the text of the email a cover note listing your name and the title of your paper. Any questions about the submission procedure should be directed to Mary-Rose McGuire [mmcguire@uos.de]. We will notify applicants as soon as practical after the deadline whether their papers have been selected.

We have kindly been informed that a limited number of places remains available at the conference on Informed Consent to Dispute Resolution Agreements on 20 and 21 June in Bremen, which we advertised a couple of weeks ago.

The full schedule can be found on this flyer, which has meanwhile been released.

A first view article was published online on 12 April 2024 in International and Comparative Law Quarterly.

Raphael Ren, “The Dichotomy between Jurisdiction and Admissibility in International Arbitration”

The dichotomy between jurisdiction and admissibility developed in public international law has drawn much attention from arbitrators and judges in recent years. Inspired by Paulsson’s ‘tribunal versus claim’ lodestar, attempts have been made to transpose the distinction from public international law to investment treaty arbitration, yielding a mixed reception from tribunals. Remarkably, a second leap of transposition has found firmer footing in commercial arbitration, culminating in the prevailing view of the common law courts in England, Singapore and Hong Kong that arbitral decisions on admissibility are non-reviewable. However, this double transposition from international law to commercial arbitration is misguided. First, admissibility is a concept peculiar to international law and not embodied in domestic arbitral statutes. Second, its importation into commercial arbitration risks undermining the fundamental notion of jurisdiction grounded upon the consent of parties. Third, the duality of ‘night and day’ postulated by Paulsson to distinguish between reviewable and non-reviewable arbitral rulings is best reserved to represent the basic dichotomy between jurisdiction and merits.

Béligh Elbalti (Osaka University):
‘Conflict of Laws’ in the Islamic Legal Tradition –
Between the Principles of Personality and Territoriality of the Law

 

Research Group on the Law of Islamic Countries at the Max Planck Institute for Comparative and International Private Law Afternoon Talks on Islamic Law

• DATE: Apr 25, 2024
• TIME: 04:00 PM (Local Time Germany)
• LOCATION: online

more info here.

Registrations are still open for Module n°4, which is taking place on April 18th, 2024. 

The speakers are the following:

• Dr Nicolas Nord, Secretary General, CIEC, “The ICCS Activities and Good Practices in the field of International Child Protection”
• Ms Joëlle Schickel-Küng, Deputy Head of Division, Co-Head of Unit, Swiss OFJ, “Cooperation in the area of international child abduction under the 1980 Hague Convention”
• Mr Jean Ayoub, Secretary General, International Social Service, “ISS – Bridging support to vulnerable children on the move”

Price per module registration fee: 200 CHF. More information is available here.

The author is Dr. Faidon Varesis, Attorney at Law

Teaching Fellow, National and Kapodistrian University of Athens

PhD (University of Cambridge); MJur (University of Oxford); LLM, LLB (University of Athens).

 

In an era where the resolution of disputes is increasingly moving away from traditional court systems towards alternative methods, the comprehensive collective work in Greek with Professor Charalampos (Haris) P. Pamboukis as editor emerges as both a timely and seminal contribution to the field of arbitration, both nationally within Greece and on an international scale. This book review seeks to delve into the multifaceted contributions of the book, examining its scope, its pioneering contributors, its evolution within Greek law, and its broader implications for dispute resolution globally.

The book begins by exploring the flourishing landscape of arbitration across various domains such as commercial, investment, construction, maritime, and energy disputes, alongside other alternative dispute resolution (ADR) methods. The interest in these mechanisms reflects a societal shift towards less adversarial, more cosmopolitan forms of dispute resolution, aimed at alleviating the burdens on state judiciary systems characterized by procedural rigidity and often excessive delays. The prologue set the stage by discussing the significant legislative and jurisprudential developments in domestic and international arbitration within Greece, highlighting the transformative impact of laws passed from 1999 through to the latest reforms in 2023. Such legislative milestones not only signify Greece’s evolving arbitration framework but also illustrate the dynamic interplay between law, scholarly research, and practical application in shaping effective dispute resolution practices. Furthermore, the book weaves through the theoretical underpinnings and the practical aspects of arbitration agreements, the composition of arbitral tribunals, and the procedural norms governing arbitration proceedings, offering a holistic view of the arbitration landscape.

Central to the book’s discourse is the collaborative effort of esteemed scholars, academics, and practitioners who contribute their insights across various themes. This collective approach not only enriches the book’s content with a diversity of perspectives but also underscores the collaborative spirit within the arbitration community. The inclusion of introductory developments on increasingly significant areas such as investment arbitration and mediation, alongside a critical overview of international arbitration consent and the arbitral process, reflects a comprehensive and forward-looking examination of the field.

The book does not shy away from discussing the inherent challenges within arbitration and the diverse methodological approaches adopted by different contributors. However, these aspects are presented as enriching the scientific pluralism and intellectual rigor of the work rather than detracting from its cohesion.

In addition to its substantive chapters, the book is augmented with appendices that include key legislative and regulatory texts relevant to arbitration and mediation. This practical inclusion underlines the book’s aim to serve as a useful tool for both practitioners and scholars.

In conclusion, this collective work stands as a testament to the evolving and vibrant field of arbitration within Greece and its broader implications on the international stage. It encapsulates the intellectual legacy, the legislative advancements, and the practical insights of a diverse group of contributors, offering a comprehensive resource for understanding and navigating the complexities of arbitration. As such, it represents an invaluable contribution to the legal scholarship and practice of arbitration, both within Greece and beyond, fostering a deeper appreciation for alternative dispute resolution mechanisms in the pursuit of justice and societal harmony.

Written by Shubh Jaiswal, student, Jindal Global Law School, Sonipat (India) and Professor Saloni Khanderia, JGLS. 

In the landmark case of TransAsia Private Capital vs Gaurav Dhawan, the Delhi High Court clarified that Indian Courts are not automatically required to determine and apply the governing law of a dispute unless the involved parties introduce expert evidence to that effect. This clarification came during the court’s examination of an execution petition stemming from a judgment by the High Court of Justice Business and Property Courts of England and Wales Commercial Court. The Division Bench of the Delhi High Court invoked the precedent set by the United Kingdom Supreme Court in Brownlie v. FS Cairo, shedding light on a contentious issue: the governing law of a dispute when parties do not sufficiently prove the applicability of foreign law.

The Delhi High Court has established that in the absence of evidence proving the applicability of a foreign law identified as the ‘proper law of the contract’, Indian law will be applied as the default jurisdiction. This decision empowers Indian courts to apply Indian law by ‘default’ in adjudicating international civil and commercial disputes, even in instances where an explicit governing law has been selected by the parties, unless there is a clear insistence on applying the law of a specified country. This approach aligns with the adversarial system common to most common law jurisdictions, where courts are not expected to determine the applicable law proactively. Instead, the legal representatives must argue and prove the content of foreign law.

This ruling has significant implications for the handling of foreign-related civil and commercial matters in India, highlighting a critical issue: the lack of private international law expertise among legal practitioners. Without adequate knowledge of the choice of law rules, there’s a risk that international disputes could always lead to the default application of Indian law, exacerbated by the absence of codified private international law norms in India. This situation underscores the need for specialized training in private international law to navigate the complexities of international litigation effectively.

Facts in brief

As such, the dispute in Transasia concerned an execution petition filed under Section 44A of the Indian Civil Procedure Code, 1908, for the enforcement of a foreign judgment passed by the High Court of Justice Business and Property Courts of England and Wales Commercial Court. The execution petitioner had brought a suit against the judgment debtor before the aforementioned court for default under two personal guarantees with respect to two revolving facility loan agreements. While these guarantee deeds contained choice of law clauses and required the disputes to be governed by the ‘Laws of the Dubai International Finance Centre’ and ‘Singapore Law’ respectively, the English Court had applied English law to the dispute and decided the dispute in favour of the execution petitioner. Accordingly, the judgment debtor opposed the execution of the petition before the Delhi HC for the application of incorrect law by the Court in England.

It is in this regard that the Delhi HC invoked the ‘default rule’ and negated the contention of the judgment debtor. The Bench relied on the decision rendered by the Supreme Court of the United Kingdom in Brownlie v. FS Cairo, which postulated that “if a party does not rely on a particular rule of law even though it would be entitled to do so, it is not generally for the court to apply the rule of its own motion.”

The HC confirmed that foreign law is conceived as a question of fact in India. Thus, it was for each party to choose whether to plead a case that a foreign system of law was applicable to the claim, but neither party was obliged to do so, and if neither party did, the court would apply its own law to the issues in dispute. To that effect, the HC also relied on Aluminium Industrie Vaassen BV, wherein the English Court had applied English law to a sales contract even when a provision expressly stipulated the application of Dutch law—only because neither party pleaded Dutch law.

Thus, in essence, the HC observed that courts would only be mandated to apply the chosen law if either party had pleaded its application and the case was ‘well-founded’. In the present dispute, the judgment debtor had failed to either plead or establish that English law would not be applicable before the Court in England and had merely challenged jurisdiction, and thus, the Delhi HC held that the judgment could not be challenged at the execution stage.

Choosing the Proper Law

The mechanism employed to ascertain the applicable law under Indian private international law depends on whether the parties have opted to resolve their dispute before a court or an arbitral tribunal. In arbitration matters, the identification of the applicable law similarly depends on the express and implied choice of the parties. Similarly, in matters of litigation, courts rely on the common law doctrine of the ‘proper law of the contract’ to discern the applicable law while adjudicating such disputes on such obligations. Accordingly, the proper law depends on the express and implied choice of the parties. When it comes to the determination of the applicable law through the express choice of the parties, Indian law, despite being uncodified, is coherent and conforms to the practices of several major legal systems, such as the UK, the EU’s 27 Member States, and its BRICS partners, Russia and China – insofar as it similarly empowers the parties to choose the law of any country with which they desire their disputes to be settled. Thus, it is always advised that parties keen on being governed by the law of a particular country must ensure to include a clause to this effect in their agreement if they intend to adjudicate any disputes that might arise by litigation because it is unlikely for the court to regard any other factor, such as previous contractual relationships between them, to identify their implied choice.

Questioning the Assumed: Manoeuvring through the Intricate Terrain of Private International Law and Party Autonomy in the Indian Judicial System

By reiterating the ‘default rule’ in India and presenting Indian courts with another opportunity to apply Indian law, this judgment has demonstrated the general tendency on the part of the courts across India to invariably invoke Indian law – albeit in an implicit manner – without any (actual) examination as to the country with which the contract has its closest and most real connection. Further, the lack of expertise by the members of the Bar in private international law-related matters and choice of law rules implies that most, if not all, foreign-related civil and commercial matters would be governed by Indian law in its capacity as the lex fori. Therefore, legal representatives should actively advocate for disputes to be resolved according to the law specified in their dispute resolution clause rather than assuming that the court will automatically apply the law of the designated country in adjudicating the dispute.

Foreign parties may not want Indian law to apply to their commercial contracts, especially when they have an express provision against the same. Apart from being unclear and uncertain, the present state of India’s practice and policy debilitates justice and fails to meet the commercial expectations of the parties by compelling litigants to be governed by Indian law regardless of the circumstance and the nature of the dispute—merely because they failed to plead the application of their chosen law.

This would inevitably lead to foreign parties opting out of the jurisdiction of the Indian courts by concluding choice of court agreements in favour of other forums so as to avoid the application of the Republic’s ambiguous approach towards the law that would govern their commercial contracts. Consequently, Indian courts may rarely find themselves chosen as the preferred forum through a choice of court agreement for the adjudication of such disputes when they have no connection to the transaction. In circumstances where parties are unable to opt out of the jurisdiction of Indian courts – perhaps because of the lack of agreement to this effect, the inconsistencies would hamper international trade and commerce in India, with parties from other jurisdictions wanting to avoid concluding contracts with Indian businessmen and traders so as to avert plausible disputes being adjudicated before Indian courts (and consequently being governed by Indian law).

Therefore, Indian courts should certainly reconsider the application of the ‘default rule’, and limit the application of the lex fori in order to respect party autonomy.

Parallel proceedings in international commercial litigation between the courts of different countries have long been discussed and explored, for which the Brussels I Regulation in the EU provides a good model for solution although it is still a problem at the global level and an obstacle for the Hague Jurisdiction Project.

 

However, it seems that so far no enough attention has been paid to the problem of parallel proceedings between international commercial litigation and arbitration. Theoretically, parties’ consent to arbitration will exclude the jurisdiction of states’ courts by virtue of the rules set out in Article 2 of the New York Convention altogether. But the Convention fails to successfully eradicate parallel proceedings between arbitral tribunals and state courts, owing to its inherent defects. When a conflict arises between international commercial arbitration and litigation proceedings, a rational balance must be struck between the judiciary and the arbitral tribunal with a reasonable division of competence between the two bodies. Different from parallel proceedings between two courts of different countries where usually both have jurisdiction and the question is only who should decide first, the jurisdiction of a national court and that of an arbitral tribunal excludes each other; similar to them, the problems with the former will also happen to the latter. Shall one always give “priority” to the arbitral tribunal to decide i.e. the issue of validity of the arbitration agreement for the purpose of respecting the doctrine of competence/competence? Can a simple lis pendens rule like that under the Brussels I Regulation work i.e. a national court or arbitral tribunal whoever is seized earlier shall decide when the issue of the validity of arbitration agreement is raised as a preliminary question in the national court? This presentation will try to explore an ideal model for the solution to this problem.

The recording can be found here.

This Friday (12 April) at 3 pm (NZST), Jack Wass and Maria Hook will be giving a seminar at the University of Otago (New Zealand) on their project “Hague Conventions on International Civil Procedure – Pathway to Adoption”. This project, which is funded by the Borrin Foundation, explores a pathway for New Zealand to adopt four key treaties on international civil procedure developed by the Hague Conference on Private International Law – the Service Convention 1965, the Evidence Convention 1970, the Choice of Court Convention 2005, and the Judgments Convention 2019. The purpose of the project is to try and dislodge the inertia within the executive that has resulted in consideration of these Conventions stalling, by producing a briefing paper and draft legislation for the implementation of the treaties. The seminar will focus on the proposed pathway for adoption of the Conventions and discuss its potential effectiveness in encouraging New Zealand’s participation in international treaties.

There is a Zoom link available for anyone who would like to attend the seminar but is unable to do so in person. Please contact me if you would like to attend.

In this post, Yehya Badr (Associate Professor, College of Law, Al-Yamamah University, KSA) presents his recent publication entitled “Religion, Colonialism, and Legal Pluralism: The Story and Legacy of the Egyptian Choice of Law Rules for Personal Status International and Interpersonal Conflicts of Law“, published in the Indiana Journal of Global Legal Studies, Issue 1 of Volume 31, 2024. The paper addresses the important issue of Egyptian choice of law rules for international and interpersonal conflicts of law.

The detailed summary, kindly provided by the author, reads as follows:

Personal status in Egypt is an example of legal pluralism, where different laws govern the personal affairs of Egyptian citizens based on their religion and foreigners based on their nationality. This system derives from the rules of Islamic Shariah and the Ottoman millet system, which was modified under pressure from Western powers after the Crimean War. Under this system, Non-Muslim Egyptians historically had the option of resolving personal status disputes through their respective religious courts (known as “Milli Courts”) in application of their religious laws, unless they opted for Sharia courts. In this case, Islamic Sharia would apply. Similarly, foreigners were exempt from Egyptian courts’ jurisdiction by virtue of privileges granted under foreign capitulations during Ottoman rule. This resulted in their personal status disputes being adjudicated by courts established by their consulates, known as “consular courts”. Furthermore, in response to financial difficulties and pressure from colonial powers during the foreign debt crisis of the 1860s, Egypt entered into a multilateral agreement to establish the so-called “Mixed Courts”. These courts had jurisdiction over disputes between foreigners and Egyptians or between foreigners themselves. The Mixed Courts applied the so-called “Mixed Civil Code” which were enacted with the approval of the then colonial powers. Notably, the Mixed Courts were specifically excluded from hearing personal status disputes and operated independently of the Egyptian government under their own charter.

Thus, the Egyptian legal system was an example of true legal pluralism, designed to accommodate the interests of foreigners residing in Egypt and different religious communities through the establishment of five different courts. However, this form of legal pluralism gave rise to various problems, including conflicting decisions and confusion over the applicable law in disputes, particularly in matters of personal status. In particular, there were no established rules of choice of law for personal status disputes, except for the application of non-Muslim law in cases where both parties shared the same sect and rite.

This prompted Egypt to embark on a process of legislative and judicial consolidation. This consolidation used choice-of-law rules to govern personal status conflicts for both Egyptians and foreigners, with lasting consequences. The article examines Egypt’s efforts to reduce legal pluralism by abolishing foreign capitulations through the Montreux Convention of 1937. In addition, it examines the adoption of choice-of-law rules for international personal status disputes included in the Convention, thus rendering Egypt’s choice of law rules for international conflict of laws a product of an international treaty designed to accommodate the demands of Western colonial powers.

Moreover, the article examines the challenges posed by these rules, including the use of nationality as a connecting factor, as well as the unresolved issues related to the application of foreign law resulting from the aforementioned choice-of-law rules. These issues include the characterization and protection of Egyptian public policy.

Finally, the article explains the processes within Egyptian law aimed at limiting legal pluralism within Egyptian personal status law through legislative consolidation. This entailed the enactment of laws applicable to all Egyptians regardless of their faith. Judicial consolidation followed with the abolition of the Shariah courts and the Milli courts. However, religion continues to have a significant influence in determining the laws governing personal status disputes, as not all aspects of personal status have been consolidated. The latter focal point includes a special examination of the challenges associated with the application of Islamic Shariah law to non-Muslims and the reluctance of the Coptic Orthodox Church to recognize divorce decrees issued by Egyptian courts.

As noted above, the Mixed Courts operated independently of the Egyptian government and on numerous occasions adjudicated personal status matters under the pretext of the Mixed Interest Theory. Under this theory, the Mixed Courts had jurisdiction over any dispute involving the interests of a foreigner. In addition, Egypt’s religious courts vied for jurisdiction over personal status disputes involving non-Muslims, further complicating the legal landscape.