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Transnational Litigation Introduction

Transnational Litigation Introduction. Transnational Litigation Summer Course 2013 Professor Volker Behr University of Augsburg volker.behr@jura.uni-augsburg.de. Transnational Litigation Introduction. CL-INT. Transnational Litigation Introduction.

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Transnational Litigation Introduction

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  1. Transnational LitigationIntroduction Transnational Litigation Summer Course 2013 Professor Volker Behr University of Augsburg volker.behr@jura.uni-augsburg.de

  2. Transnational LitigationIntroduction • CL-INT

  3. Transnational LitigationIntroduction • What is Transantional litigation concerned with? • Litigation and arbitration in case there is a nexus to more than one jurisdiction • Diversity of citizenship • Diversity of domicile/residence • Business transactions abroad • Torts abroad • Property abroad

  4. Transnational Litigation Introduction • Scope of Law of International Civil Procedure • (International) Jurisdiction • Domestic Law and Foreign Law in Transnational Litigation • Service Abroad • Taking Evidence Abroad • Enforcement of Foreign Judgments

  5. Transnational Litigation Introduction • Consequences of suing and being sued abroad • Legal consequences • Court will apply it‘s domestic law of civil procedure • Court will apply it‘s own private international law when determining the applicable law • Practical consequences • Distance • Language • Finding a suitable lawyer

  6. Transnational Litigation Introduction • When do you have to sue abroad? • No jurisdiction back home • No valid claim back home • Prescription • Enforceability questionable • When do you want to sue abroad? • Favorable law • Higher awards • Enforcdeability • When may you be sued abroad? • Jurisdiction of the foreign court given

  7. Transnational Litigation Introduction • Advantages of Suing in Domestic Courts • Language • Access to lawyers • Favorable PLI and favorable applicable law • Enforceability in a country where other party has assets • Advantages of Suing in Foreign Courts • Favorable PLI and favorable applicable law • Higher awards • Lower costs • Enforceability in country where other party has assets

  8. Transnational Litigation Introduction • Legal Bases for international jurisdiction • Domestic law of the court • Statutory, • E.g. 28 USC – Long Arm Statutes • Customary Law, • E.g. Case Law in American Courts • International treaties (conventions) • E.g.: Brussels Convention; Warsaw Convention • Within the EU: Regulations (EC or EU) • E.g. Regulation (EC) 44/2001

  9. Transnational Litigation Introduction • Legal Bases • Convention for the Unification of Certain Rules Relating to International Carriage by Air, Signed at Warsaw on 12 October 1929 - Warsaw Convention • Article 28 • 1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the Court having jurisdiction at the place of destination. • 2. Questions of procedure shall be governed by the law of the Court seised of the case.

  10. Transnational Litigation Introduction • Legal Bases • COUNCIL REGULATION (EC) NO. 44/2001 (BRUSSELS I REGULATION) • = Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters • Article 2 • 1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State. • 2. Persons who are not nationals of the Member State in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that State.

  11. Transnational Litigation Introduction • Competence of EU to legislate on international civil procedure • Article 81 TFEU • (ex Article 65 TEC) • 1. The Union shall develop judicial cooperation in civil matters having cross-border implications, based on the principle of mutual recognition of judgments and of decisions in extrajudicial cases. Such cooperation may include the adoption of measures for the approximation of the laws and regulations of the Member States. • 2. For the purposes of paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall adopt measures, particularly when necessary for the proper functioning of the internal market, aimed at ensuring: • (a) the mutual recognition and enforcement between Member States of judgments and of decisions in extrajudicial cases; • (b) the cross-border service of judicial and extrajudicial documents; • (c) the compatibility of the rules applicable in the Member States concerning conflict of laws and of jurisdiction; • (d) cooperation in the taking of evidence; • ….

  12. Transnational Litigation Introduction • What does a EU regulation mean? • Article 288 TFEU • (ex Article 249 TEC) • To exercise the Union's competences, the institutions shall adopt regulations, directives, decisions, recommendations and opinions. • A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States. • A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods. • A decision shall be binding in its entirety. A decision which specifies those to whom it is addressed shall be binding only on them. • Recommendations and opinions shall have no binding force.

  13. Transnational Litigation Introduction • Priority of EC/EU Law • ECJCosta v. Ente Nazionale per l'Energia Elettrica Enel - (Case 14/1964) • … • The pre- eminence of Community law is confirmed by Article 189 (now Article 288 TFEU) which prescribes that Community regulations have an 'obligatory' value and are 'directly applicable within each member-State'. Such a provision which, it will be noticed, admits of no reservation, would be wholly ineffective if a member-State could unilaterally nullify its purpose by means of a Law contrary to Community dictates. It follows from all these observations that the rights created by the Treaty, by virtue of their specific original nature, cannot be judicially contradicted by an internal law, whatever it might be, without losing their Community character and without undermining the legal basis of the Community.

  14. Transnational Litigation Introduction Interpretation of EU LAW • Literal interpretation • Systematic interpretation • Historical interpretation • Teleological interpretation • Uniform interpretation • Effet utile

  15. Transnational Litigation Introduction 28 USC • Sec. 1330. Actions against foreign states • (a) The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement. • …

  16. Transnational Litigation Introduction • 28 USC • Sec. 1332. Diversity of citizenship; amount in controversy; costs • (a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between - • (1) citizens of different States; • (2) citizens of a State and citizens or subjects of a foreign state; • (3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and • (4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States. …

  17. Transnational Litigation Introduction • CALIFORNIA CODES - CODE OF CIVIL PROCEDURE • SECTION 410.10 • 410.10. • A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.

  18. Transnational Litigation Introduction • New York State Consolidated Laws: Civil Practice Law & Rules • ARTICLE 3 • JURISDICTION AND SERVICE, APPEARANCE AND CHOICE OF COURT • S 301. Jurisdiction over persons, property or status. A court may exercise such jurisdiction over persons, property, or status as might have been exercised heretofore. • S 302. Personal jurisdiction by acts of non-domiciliaries. • Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent: • 1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or • 2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or • 3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he • (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or

  19. Transnational Litigation Introduction New York State Consolidated Laws: Civil Practice Law & Rules (indirectly addressing case law) • ARTICLE 3 • JURISDICTION AND SERVICE, APPEARANCE AND CHOICE OF COURT • S 301. Jurisdiction over persons, property or status. • A court may exercise such jurisdiction over persons, property, or status as might have been exercised heretofore.

  20. Transnational LitigationImmunity • Not just a hypo • Augsburg W-Company constructs a highway in Thailand. W-Company is not jet payed. • Can they sue the state of Thailand in a German Court? • W-Company gets an Swiss arbitral award awarding € 30 mio. The crownprince of Thailand travels to Munich using an airplane. It is questionable whether the airplane in owned by the crownprince or whether it is a military airplane of the Thailand military. • Can W-Company enforce the award by taking the airplane?

  21. Transnational LitigationImmunity • Again not just a hypo • DSK, the then head of the International Monetary Fund (located in Washington, D.C.) alledgedly has raped a chambermaid in a New York hotel. • Can DSK be imprisoned in New York?

  22. Transnational LitigationImmunity • Immunity from what? • Immunity from jurisdiction in civil and commercial matters • Immunity from execution • Immunity from criminal charges • Etc.

  23. Transnational LitigationImmunity • Immunity for whom? • State immunity • Immunity of heads of state • Immunity of diplomats , diplomatic missions and staff • Immunity of consulats and staff • Immunity of international organizations • Immunity of personal of international organizations • Immunity of state-owned companies?

  24. Transnational LitigationImmunity • Reach of Immunity • Acta iure imperii (sovereign functions) • Acta gestionis (civil or commercial transactions) • Catalogue of exceptions from immunity

  25. Transnational LitigationImmunity • Legal Bases for Immunity • Customary law • Statutes • Conventions

  26. Transnational LitigationImmunity • Convention on the Privileges and Immunities of the United Nations, 1 U.N.T.S. 15, 13 February 1946. (Adopted by the UN General Assembly on 13 February 1946 • SECTION 19. In addition to the immunities and privileges specified in Section 18, the Secretary-General and all Assistant Secretaries- General shall be accorded in respect of themselves, their spouses and minor children, the privileges and immunities, exemptions and facilities accorded to diplomatic envoys, in accordance with international law.

  27. Transnational LitigationImmunity • Articles of Agreement of the International Monetary FundArticle IX - Status, Immunities, and Privileges • Section 3.  Immunity from judicial process • The Fund, its property and its assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that it expressly waives its immunity for the purpose of any proceedings or by the terms of any contract. • Section 8.  Immunities and privileges of officers and employees • All Governors, Executive Directors, Alternates, members of committees, representatives appointed under Article XII, Section 3(j), advisors of any of the foregoing persons, officers, and employees of the Fund: • (i)  shall be immune from legal process with respect to acts performed by them in their official capacity except when the Fund waives this immunity; • …

  28. Transnational LitigationImmunity • European Convention on State Immunity (Basle Convention) • Basel, 16 May 1972 • Preamble • The member States of the Council of Europe, signatory hereto, • Considering that the aim of the Council of Europe is to achieve a greater unity between its members; • Taking into account the fact that there is in international law a tendency to restrict the cases in which a State may claim immunity before foreign courts; • Desiring to establish in their mutual relations common rules relating to the scope of the immunity of one State from the jurisdiction of the courts of another State, and designed to ensure compliance with judgments given against another State; • Considering that the adoption of such rules will tend to advance the work of harmonisation undertaken by the member States of the Council of Europe in the legal field, • Have agreed as follows:

  29. Transnational LitigationImmunity • European Convention on State Immunity (Basle Convention) • Article 15 • A Contracting State shall be entitled to immunity from the jurisdiction of the courts of another Contracting State if the proceedings do not fall within Articles 1 to 14; the court shall decline to entertain such proceedings even if the State does not appear.

  30. Transnational LitigationImmunity • European Convention on State Immunity (Basle Convention) • Article 1 • 1. A Contracting State which institutes or intervenes in proceedings before a court of another Contracting State submits, for the purpose of those proceedings, to the jurisdiction of the courts of that State. • 2. Such a Contracting State cannot claim immunity from the jurisdiction of the courts of the other Contracting State in respect of any counterclaim: • a. arising out of the legal relationship or the facts on which the principal claim is based; • b. if, according to the provisions of this Convention, it would not have been entitled to invoke immunity in respect of that counterclaim had separate proceedings been brought against it in those courts. • 3. A Contracting State which makes a counterclaim in proceedings before a court of another Contracting State submits to the jurisdiction of the courts of that State with respect not only to the counterclaim but also to the principal claim.

  31. Transnational LitigationImmunity • European Convention on State Immunity (Basle Convention) • Article 2 • A Contracting State cannot claim immunity from the jurisdiction of a court of another Contracting State if it has undertaken to submit to the jurisdiction of that court either: • a. by international agreement; • b. by an express term contained in a contract in writing; or • c. by an express consent given after a dispute between the parties has arisen. • Etc.

  32. Transnational LitigationImmunity • European Convention on State Immunity (Basle Convention) • Waiver of immunity (Article 2) • In Writing • Waiver of immunity as to service of process is concerned • Waiver from immunity in a lawsuit in courts • Waiver of immunity from actions in arbitration • Waiver of immunity in enforcement

  33. Transnational LitigationJurisdiction • Jurisdiction in civil and commercial matters within the EU • Council Regulation (EC) No. 44/2001

  34. Transnational LitigationJurisdiction • Scope of Council Regulation (EC) No. 44/2001 • Article 1 • 1. This Regulation shall apply in civil and commercial matters whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters. • 2. The Regulation shall not apply to: …

  35. Transnational LitigationJurisdiction • Civil or commercial matters • European Court of Justice • Judgment of the Court of 14 October 1976. LTU Lufttransportunternehmen GmbH & Co. KG v Eurocontrol. Reference for a preliminary ruling: Oberlandesgericht Düsseldorf - Germany. Case 29/76. (Date of judgment 1976/10/14) (European Court Reports 1976 page 1541 ) • As Article 1 serves to indicate the area of application of the convention it is necessary, in order to ensure, as far as possible, that the rights and obligations which derive from it for the contracting states and the persons to whom it applies are equal and uniform, that the terms of that provision should not be interpreted as a mere reference to the internal law of one or other of the states concerned. • The concept in question must therefore be regarded as independent and must be interpreted by reference, first, to the objectives and scheme of the convention and, secondly, to the general principles which stem from the corpus of the national legal systems. = autonomous interpretation • Although certain judgments given in actions between a public authority and a person governed by private law may fall within the area of application of the convention, this is not so where the public authority acts in the exercise of its powers.

  36. Transnational LitigationJurisdiction • Eurocontrol • What can we learn from Eurocontrol? • First of all, the ECJ asks for what is called an autonomous interpretation, because otherwise equal and uniform interpretation in the member states would be compromised. • Second, the ECJ takes from the fact that thy type of court or tribunal concerned is of no significance, the division of jurisdiction between different courts in different member states is of little significance. • Third, the ECJ asks for an interpretation in the light of the convention (now Regulation) and in the light of general principles in the member states. • Forth, the court states that where actions between a public authority and a person governed by private law are determined by the exercise of the power of the public authority, the do not fall under the category of private or commercial.

  37. Transnational LitigationJurisdiction • Scope of Regulation 44/2001 • Article 67 (prevailing EU instruments) • This Regulation shall not prejudice the application of provisions governing jurisdiction and the recognition and enforcement of judgments in specific matters which are contained in Community instruments or in national legislation harmonised pursuant to such instruments. • Article 69 (prevailing older conventions) • Subject to Article 66(2) and Article 70, this Regulation shall, as between Member States, supersede the following conventions and treaty concluded between two or more of them: … • Article 70 • 1. The Treaty and the Conventions referred to in Article 69 shall continue to have effect in relation to matters to which this Regulation does not apply. • 2. They shall continue to have effect in respect of judgments given and documents formally drawn up or registered as authentic instruments before the entry into force of this Regulation. • Article 71 (prevailing special conventions) • 1. This Regulation shall not affect any conventions to which the Member States are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.

  38. Transnational LitigationJurisdiction • Scope of Regulation 44/2001 • Time requirements • Article 76 • This Regulation shall enter into force on l March 2002. • Article 66 • 1. This Regulation shall apply only to legal proceedings instituted and to documents formally drawn up or registered as authentic instruments after the entry into force thereof.

  39. Transnational LitigationJurisdiction • Jurisdiction • The U.S. system: • Subject Matter Jurisdiction, In personam Jurisdiction, and In rem Jurisdiction

  40. Transnational LitigationJurisdiction • Jurisdiction • The U.S. system: • Long Arm Statutes • Calif. CCP § 410.10. • Jurisdiction over Nonresident Defendants. • A court of this Territory may exercise jurisdiction on any basis not inconsistent with the Organic Act or the Constitution of the United States.

  41. Transnational LitigationJurisdiction • Jurisdiction • The EU system • General and Specific Jurisdiction • General jurisdiction • Article 2 • 1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued (whatever the claim) in the courts of that Member State. • … • Special jurisdiction • Article 5 • A person domiciled in a Member State may, in another Member State, be sued: • 1. (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;

  42. Transnational LitigationJurisdiction • General jurisdiction • Article 2 • 1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State. • … • General jurisdiction as stated in Article 2 is subordinate to quite a number of other jurisdictional bases. Most of them – but not all of them – depend on the defendant having his or her domicile in a Member State but vest jurisdiction in another Member State.

  43. Transnational LitigationJurisdiction • Exclusive Jurisdiction, Article 22 Brussels I Regulation • On top of the hierarchy of jurisdictional bases we find Article 22. Already the title of Article 22 indicates the very special character of this provision. And the text of Article 22 confirms this special character. Moreover, the text of Articles 23 and 24 additionally demonstrate the extraordinary power of Article 22. • Section 6 Exclusive jurisdiction • Article 22 • The following courts shall have exclusive jurisdiction, regardless of domicile: • 1. in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Member State in which the property is situated. However, …

  44. Transnational LitigationJurisdiction • Exclusive Jurisdiction, Article 22 Brussels I Regulation • European Court of Justice • JUDGMENT OF THE COURT (Sixth Chamber), 13 July 2000 in Case C-412/98, Group Josi Reinsurance Company SA and Universal General Insurance Company (UGIC), • 46. The same conclusion can be drawn from Article 16 of the Convention, which states that the rules of exclusive jurisdiction which it lays down are to apply without the domicile of the parties being taken into consideration. The fundamental reason for those rules of exclusive jurisdiction is the existence of a particularly close connection between the dispute and a Contracting State, irrespective of the domicile both of the defendant and of the plaintiff (as regards, more specifically, in proceedings having as their object tenancies of immovable property, the exclusive jurisdiction of the courts of the Contracting State in which the property is situated, see, in particular, Case C-8/98 Dansommer v Götz [2000] ECR I-0000, paragraph 27).

  45. Transnational LitigationJurisdiction • Exclusive Jurisdiction, Article 22 Brussels I Regulation • European Court of Justice • Erich Rösler v. Horst Rottwinkel (Case 241/83), [1985] (1 C.M.L.R. 806) • Article (now) 22 no. 1 old version • Tenancies of immovable property in particular are 'usually governed by special legislation' which should preferably be administered only by the courts of the country where it is in force. Moreover 'several States' provide for exclusive jurisdiction in such proceedings. • However, as to short term tenancies see no Art. 22 no. 1

  46. Transnational LitigationJurisdiction • Exclusive Jurisdiction, Article 22 Brussels I Regulation • Jurisdiction • Hypo: • Shannon, a student from California, enjoys her stay in Augsburg so much that she decides to stay in Germany for a couple of weeks after having finished her summer course. Visiting Cinderella’s Castle Neuschwanstein she falls in love with this site and decides to rent it for one month. Bavaria, the owner of the castle, rents it out to Shannon. At the end of the written contract we find a clause: Exclusive jurisdiction shall be vested in the California Courts. • a) Shannon does not pay the rent but returns to California. Bavaria sues Shannon in the civil court in Fuessen (Neuschwanstein is located in the Fuessen Circuit). • b) Back in California Shannon sues Bavaria in a California Court claiming damages for mental diseases because during her stay in Neuschwanstein a ghost had appeared and terrified her almost to death.

  47. Transnational LitigationJurisdiction • Jurisdiction based on Appearance, Art. 24 Brussels I Regulation • Section 7 Prorogation of jurisdiction • Article 24 • Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 22.

  48. Transnational LitigationJurisdiction • Jurisdiction based on Appearance, 24 Brussels I Regulation • Section 7 Prorogation of jurisdiction • Article 24 • Article 24 is somehow tricky and often misunderstood by lawyers representing their client – which might be considered to be professional malpractice. In case you want to challenge jurisdiction of the court where the plaintiff has brought his or her lawsuit, you first have to contest jurisdiction of the court. Otherwise the court will have jurisdiction by appearance. • Once you may – additionally and auxiliary – argue on the case. You even should do so, because in some member states rules of civil procedure ask for pleasing everything at the very beginning of the lawsuit, which is sanctioned by penalty of preclusion.

  49. Transnational LitigationJurisdiction • Jurisdiction based on Appearance, Art. 24 Brussels I Regulation • Section 7 Prorogation of jurisdiction • European Court of Justice • Hannelore Spitzley v. Sommer Exploitation S.A. (Case 48/84) [1985] 2 C.M.L.R. 507The court of a Contracting State before which the applicant, without raising any objection, enters an appearance in proceedings relating to a claim for a set-off which is based on a contract or on facts other than that or those on which the claims in his application are founded and in respect of which there is a validly concluded agreement conferring exclusive jurisdiction on the courts of another Contracting State for the purposes of Article 17 of the Convention of 27 September 1968 on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters, has jurisdiction by virtue of Article 18 of that Convention.

  50. Transnational LitigationJurisdiction • Prorogation and Derogation of Forum, Article 23 Brussels I Regulation • As far as doing transnational business is concerned, predictability is one of the major issues. This is true not only as to the obligations parties are entering into or have entered into but as well as to the question what happens in case the other party does not comply with its obligations and a lawsuit cannot be avoided. • Choice of forum clauses and choice of law clauses hence are widely practiced and of utmost importance. A lawyer should at least try to warn his or her client of the risks of not having such clauses.

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