Inter-law-chapter7.ppt

1、2020/8/3,1,Chapter SevenInternational Commercial Litigation and Conflict of laws,Lectured by Jonathan ZHONG,2020/8/3,2,International Commercial Litigation and Conflict of laws,Defining international trade and commercial disputes Resolving disputes between governments Resolving disputes involving pri

2、vate parties Defining the means of dispute settlement Defining international commercial litigation Domestic courts and international commercial litigation Functions of the courts in international commercial litigation Contract disputes and conflict of laws Tortious disputes and conflict of laws Cert

3、ain exceptions Disputes relating to real estate and conflict of laws Disputes relating to real estate and conflict of laws Disputes relating to chattels动产 personal and conflict of laws Enforcement of foreign judgment Enforcement of foreign judgments in Australia,2020/8/3,3,Defining international tra

4、de and commercial disputes,International trade and commercial disputes can perhaps be divided into three categories: disputes between governments. The disputes between governments are often covered by the relevant international treaty or convention on international trade and commerce. disputes betwe

5、en a government (or an international organisation) and a private person. Disputes between a government and a private party are largely governed by domestic law, except in the case of foreign investment disputes under the Washington Convention of 1965. and disputes between two private persons (either

6、 natural or legal). Disputes between private parties are subject to domestic laws, which have incorporated various international treaties ratified by the countries concerned.,2020/8/3,4,Resolving disputes between governments,Disputes between governments can be further divided into two groups: those

7、taking place within an international trade organisation and those arising outside a trade organisation. Resolving disputes which fall within the scope of a trade organisation. Resolving disputes which fall outside the scope of a trade organisation.,2020/8/3,5,Disputes within a trade organisation,It

8、should be resolved according to the mechanism adopted by the organisation concerned. The EU has its own court to enforce EU law and regulations. The WTO has special panel proceedings, aided by consultation, mediation, good offices and arbitration. ASEAN does not have any formal dispute settlement ar

9、rangements and the conflict is resolved through friendly dialogue and negotiation between the governments. NAFTAs dispute settlement mechanism is largely based on its own panel system, which is aided by domestic proceedings, negotiation among the three members and arbitration proceedings.,2020/8/3,6

10、,Disputes outside a trade organisation,it should be resolved by the governments in pursuance of the relevant international trade or commercial treaty (if any) between them. At present, most countries have negotiated bilateral trade and commercial treaties to deal with specific issues which are not c

11、overed by any multilateral trade and commercial treaties. A bilateral treaty is a common means for two countries to resolve their differences arising from tax matters or investment disputes. In the absence of any agreement, the general principle of international trade law requires negotiation. The r

12、elevant parties have to find a mutually acceptable way to resolve their trade dispute, if they wish to maintain their normal trading relations. In special circumstances, where both parties have submitted to the compulsory jurisdiction of the court, disputing governments may refer their disputes to t

13、he ICJ, which is capable of adjudicating certain commercial disputes between governments. Settlement of disputes by negotiation probably means the making of a new treaty to resolve a dispute.,2020/8/3,7,Resolving disputes involving private parties,Commercial disputes involving private parties are di

14、vided into two groups: disputes between a government and a private party. The disputes between a government and a private party are largely subject to domestic law, because of the prevalence of restrictive immunity doctrine, which requires a government to be liable in the same way as a private party

15、 in commercial transactions, in most countries of the world. In most commercial disputes the fact that one party is a government is irrelevant for determining the means of dispute settlement, this general rule is qualified by the principles of conflict of laws, under which the court may apply differ

16、ent rules if the country of the court practises absolute sovereign immunity. In addition, certain foreign investment disputes arising from the Washington Convention of 1965 are subject to the special procedures set out in the convention. disputes between two private parties. The means of disputes se

17、ttlement are largely based on domestic law and conflict of laws rules.,2020/8/3,8,The means of dispute settlement,International commercial and trade disputes are settled through three major means: litigation, arbitration and consultation. Conciliation (or mediation) is sometimes also used. Occasiona

18、lly, countries resort to economic sanctions or trade war (involving measures and counter-measures of an economic nature) as a means of settling their differences. The use of military force as a means of resolving a commercial dispute is rarely seen today. Every means of dispute settlement has its ad

19、vantages as well as disadvantages.,2020/8/3,9,Natures of Different Means,Litigation is the traditional means of dispute settlement. It involves the use of a court of law as the referee (judge) for settling a dispute. It is characterised by the power of the court to enforce its decisions and the form

20、ality of the procedures under which the court conducts its business. Arbitration involves the use of an impartial and competent person (or persons) as the referee (or referees) to arbitrate a dispute. It is characterised by the freedom of the disputing parties to choose the forum, rules and arbitrat

21、ors. Consultation, which is synonymous with negotiation, is not only the most natural process, but also an inherent part of any dispute settlement. In a process of consultation parties resolve their dispute by direct contact and exchange of opinions.,2020/8/3,10,The main features of arbitration,the

22、parties have the option to choose the place and time for arbitration. the parties have the option, subject to restrictions of law, to decide whether to be bound by procedural rules; and by what particular rules, if they choose to be bound. The parties have the option to choose the arbitrator or arbi

23、trators regardless of the place, time and procedural rules of arbitration.,2020/8/3,11,Defining international commercial litigation,The whole process of international commercial litigation involves a choice of forum, commencement of proceedings, service outside jurisdiction (if applicable), the seek

24、ing of interlocutory relief (if applicable), discovery and gathering of evidence outside the jurisdiction (if applicable), the trial and enforcement of judgment. The conflicts rules dealing with international commercial litigation can be divided into two categories those relating to the determinatio

25、n of a courts jurisdiction, and those relating to the determination of the governing law of the dispute.,2020/8/3,12,Three litigation stages,The whole process of international commercial litigation includes three stages: choice of forum and commencement of proceedings; carrying out the proceedings u

26、nder the rules of the court; and enforcement of judgments.,2020/8/3,13,Domestic courts and international commercial litigation,Litigation is mainly based on domestic judicial systems. A domestic court of law becomes a forum for resolving international commercial disputes merely because there is no o

27、ther effective supranational judicial system where a dispute can be adjudicated and a claim be enforced. While a domestic court must follow the law of the forum, it may also under its conflicts rules take into account relevant foreign law and international laws (treaties or customs). International c

28、ommercial law may be enforced by a domestic court of law either because an international convention has been incorporated into the relevant domestic law, or because the international commercial customs, such as Incoterms 2000, have been accepted expressly or impliedly by the parties to the dispute.

29、The body of international commercial law also includes the rules of domestic law governing certain international transactions.,2020/8/3,14,Functions of the courts in international commercial litigation,In international commercial litigation, a court has two main functions: to adjudicate the dispute;

30、 and to enforce a foreign judicial or arbitral judgment.,2020/8/3,15,adjudicate the dispute,Adjudicating a dispute refers to a process where the court of law first determines whether it has jurisdiction over the dispute, and then proceeds to resolve the dispute if it is satisfied that its jurisdicti

31、on is competent and appropriate. This process involves the exercise of the judicial power to interpret the conflict of laws rules, to ascertain the relevant facts, and to apply the governing law. In this process, the court is bound by domestic law, established international usage and customs and int

32、ernational conventions or treaties which are enforceable in the country of the court.,2020/8/3,16,enforce a foreign judicial or arbitral judgment,enforcement of a foreign judicial or arbitral decision occur when a domestic court is asked by a party, either foreign or local, to enforce a decision of

33、a foreign judicial or arbitral body. A domestic court does not have a general obligation to enforce a foreign judgment or award, unless an obligation to do so arises from a domestic law or an international treaty to which the country of the court is a signatory,2020/8/3,17,Contract disputes and conf

34、lict of laws,Application of conflicts rules to contracts Determination of governing law of a contract Formation of a contract and governing law Performance of contract and proper law Location of property Discretion of courts and governing law,2020/8/3,18,Application of conflicts rules to contracts,I

35、n adjudicating an international commercial contract dispute, a court of law usually has first to determine its jurisdiction over the matter, and then determine the governing law of the contract. The rules of lex loci contractus签约地法律.It points to the law of the place where the contract is entered int

36、o. The rules of lex loci solutionis执行地法律: It refers to the law of the place where the contract, or part of the contract, is performed. The above are often referred to in contractual disputes, and Both are relevant to the determination of the proper law of a contract.,2020/8/3,19,Other conflicts rule

37、s,Lex situs财产所在地法原则：The law of the place where an object (location of property) is situated. Lex fori: 审判地法原则 Lex loci delicti commissi:侵权行为地法原则 Lex domicilli:居住地法原则,2020/8/3,20,Determination of governing law of a contract,Basic rules Intention of the parties,2020/8/3,21,Basic rules,The determinatio

38、n of a governing law (or a proper law) of a contract is a process of balancing conflicting interests. The general rule affecting the determination of the governing law of a contract is largely twofold: the governing law can be determined by referring to the express intention of the contracting parti

39、es; the governing law can be decided by referring to the closest, real or most significant connection between a contract and a law (the connection test). The second approach applies in the absence of an express choice by the parties. Sometimes, there is another approach which lies between these two

40、by referring to the implied intention of the parties. If there is an express choice of law clause, task of the court is to ascertain whether or not a choice was indeed made willingly by the parties concerned. In the absence of the express choice, the court considers a number of relevant factors, whi

41、ch, depending on the particular circumstances, may be any factors and elements which suggest the nature, scope and level of connection between a contract and a law.,2020/8/3,22,Intention of the parties,Intention of the parties to the contract is a decisive factor in determining the governing law. Ho

42、wever, the intention of the parties in entering into the contract may be denied on the ground of illegality under local law or public policy consideration in certain cases.,2020/8/3,23,Formation of a contract and governing law,Formation of a contract is a relevant consideration for determining the e

43、xistence of a connection, although it is not always determinative。 The process of determining the formation of a contract is to identify or ascertain the connection between the facts which suggest the existence of the contract and the law which gives effect to the contract. In other words, formation

44、 of a contract is the application of the lex loci contractus rule签约地原则. In some circumstances, a court may use its own law (lex fori) to judge the validity of a contract.,2020/8/3,24,Performance of contract and proper law,Performance of a contract is another relevant factor, although it may be less

45、determinative than the lex loci contractus. This is the lex loci solutionis rule.,2020/8/3,25,Location of property,lex situs财产所在地法 may be a relevant consideration in a contract relating to real property, or sometimes movable property. In an international commercial contract, particularly a foreign i

46、nvestment in real estate, the governing law would be the law of the place where the real estate is located, unless the parties stipulate otherwise. A court of law may refuse to enforce a foreign judicial or arbitral decision if the decision is contrary to local law.,2020/8/3,26,Discretion of courts

47、and governing law,Common considerations which may affect the exercise of judicial discretion in determining the governing law can be summarised as follows: the court of law may uphold a law chosen expressly or impliedly by the parties concerned to be the governing law of the contact, provided that t

48、his does not result in illegality under the local law, and violation of public interest. No matter what rules are involved the court of law will not allow a party to use any rules for illegal, unjust, unconscionable and unfair purposes, or to benefit from his or her fraud, dishonesty or illegal acti

49、vities.,2020/8/3,27,Tortious disputes and conflict of laws,Tortious disputes and international commerce General rules for tortious disputes,2020/8/3,28,Tortious disputes and international commerce,At common law, the governing law of a tort is usually the law where the tortious act is committed. A to

50、rtious dispute can arise from international commercial transactions. A tort committed by a foreign person within the territory of the country of the victim is usually, without a real conflict, governed by the lex fori (assuming the action is taken in the victims own country).,2020/8/3,29,General rul

51、es for tortious disputes,the double actionability rule may be used. Following two rules or tests can be identified: a court in a common law country may entertain a tortious action originated overseas only when the action is allowed under its own law. The lex fori行为地/审判地法 will not override the effect

52、 of lex loci delicti commissi 侵权行为地法in circumstances actionable under the lex fori.,2020/8/3,30,Certain exceptions,although the jurisdiction of a forum is wide enough to apply to a foreign defendant in most circumstances, a court of law may, sometimes, decline jurisdiction over a dispute on the grou

53、nd that it does not have jurisdiction over a foreign defendant (on the ground of lex domicilli perhaps), who has allegedly committed civil wrong against the plaintiff.,2020/8/3,31,Disputes relating to real estate and conflict of laws,In order to avoid unsettled disputes as to the distinction between

54、 movables and immovables, we will divide property into real estate and personal property. lex situs is the basic law for resolving disputes relating to real property. The lex situs applies to the purchase of land, houses or other forms of real property, extending to disputes relating to legal or equ

55、itable interests derived from the transfer of real property. To some extent, contract, torts and real property overlap. In such cases, the lex situs prevails. We may perhaps say that lex situs is a governing rule in all cases involving real property, except in circumstances where the notion of justice and fairness or the operation of law results in the prevalence of other rules.,2020/8/3,32,The definition of property,The definition