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International business law International law
Need for international law Conflict of laws
International private law International public law International economic law
International Business Law
A. WHAT IS INTERNATIONAL LAW? B. THE MAKING OF INTERNATIONAL LAW C. SOURCES OF INTERNATIONAL LAW D. THE SCOPE OF INTERNATIONAL LAW IN
ACTUAL PRACTICE E. INTERNATIONAL PERSONS F. THE RIGHTS OF INDIVIDUALS UNDER
INTERNATIONAL LAW G. LEGAL SYSTEMS IN THE WORLD
Conflict of laws Effectiveness of law in other
sovereign nations Laws differ in different nations Conflict of laws arises between
states Need for rules in the international
plane
A. WHAT IS INTERNATIONAL LAW?
Defined: The body of rules and norms that regulates activities carried on outside the legal boundaries of nations. Three international relationships are
governed by international law: Those between nations and nations. Those between nations and persons. Those between persons and persons.
A. WHAT IS INTERNATIONAL LAW?
Is International Law Really Law? It is because nations regard it as
something they are obligated to respect. Distinguish: Comity
Comity is courtesy. It is the practice between nations of treating each other with goodwill and polite.
Comity is NOT law because countries do not regard it as something they are obligated to respect.
B. THE MAKING OF INTERNATIONAL LAW
There is no formal international law-making machinery
The basic mechanism for creating international law is: The consent of the international community.(example: Diplomatic privilege,
1961 Vienna Convention on Diplomatic Relations)
General consent--State practice: Multilateral treaties statement: diplomatic exchanges, formal
instructions, judiciary decisions Inaction
Particular consent Declarations of government ,
domestic legislations… Arbitration tribunals
C. SOURCES OF INTERNATIONAL LAW
Sources listed in Article 38(1) of the Statute of the International Court of Justice: International conventions. International custom. General principles of law.
Judicial decisions. Teachings of publicist.
C. SOURCES OF INTERNATIONAL LAW 1 Treaties and Conventions - The
most important sources of international law. Treaties: agreements between one or
more nations. Conventions: agreements sponsored
by international community
C. SOURCES OF INTERNATIONAL LAW Reasons for binding effect of treaties
Shared sense of commitment. Because one country fears that if it does not
respect its promises, other countries will not respect their promises.
- Rules governing treaties: Traditionally customary. Now codified in the Vienna Convention on
the Law of Treaties (in force since 1980 ). Case 1-1. Legal Status of Eastern Greenland The effect of an authorized oral commitment
made by a gov’t official … is deemed to be binding .
Binding effect of the pact State may choose to bind itself through
signature, but also by ratification or accession國家可以選擇通過簽署條約以約束自己,更可採取「認可」或「加入」
Ratification is act where state declares itself bound by treaty「認可」是指國家宣布自己受限於某條約
Instrument of ratification deposited with designated state or I.O
C. SOURCES OF INTERNATIONAL LAW Custom
Rules that have been around for a long time or which are generally accepted.
two elements — one behavioral and one psychological:
1) Usus (Latin for: usage): Is the consistent and recurring action (or
lack of action if the custom is one of noninvolvement) by states.
2) Opinio juris sive necessitatis (Latin for: Of the opinion that the rule is proper and required): The custom must be regarded by states observing it as one that they must obligatorily follow.
Exceptions to the application of custom
1) Persistent objector: A state that persistently objects to a practice during its formative stages will never become a party to it.
2) A state allowed by the international community to deviate from a customary practice.
Case 1-2. The Asylum Case
C. SOURCES OF INTERNATIONAL LAW
2 Customary rule Pacta sunt servanda
is a basic principle of international law and civil law. It is Latin and it means "pacts must be respected" by all sides. With reference to international agreements, "every treaty in force is binding upon the parties to it and must be performed by them in good faith" (Vienna Convention on the Law of Treaties, 1969, art. 26, and the Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations, 1986, art. 26). All serious state and international organizations observe this fundamental and basic principle of international law. If a state does breach the agreements she had inked or promises she had given, no state will trust her in future
C. SOURCES OF INTERNATIONAL LAW Domestic laws ( foreign related) General Principles - those legal
principles common to nation states. Interpretation of treaties, customs,
and general practice Judicial decisions Teachings (publicists )
D. THE SCOPE OF INTERNATIONAL LAW The Practice in International
Tribunals Municipal law is regarded as
subordinate (subservient) to international law.
States have a general obligation to bring their municipal law into compliance with international norms.
Procedurally, municipal law is treated as “mere fact.”—the onus of proof
D. THE SCOPE OF INTERNATIONAL
LAW
The Practice in Municipal Courts: International law is regarded as
(correlative). Court determines if a particular
international law has been received into the municipal jurisprudence.
If it has, the Court applies it as if it were a local law and not a mere fact.
D. THE SCOPE OF INTERNATIONAL
LAW
Determining if International Law has been Received Into the Local Jurisprudence
Customary international law: Doctrine of Incorporation: a custom is
automatically part of a nation's laws as long as it is not inconsistent with those laws. (Majority rule)
Doctrine of Transformation: a custom is not part of a nation's laws until expressly adopted by legislative or (legislative) act, or by local usage. (Minority rule)
As for treaties: Reception rules depend upon two factors:
(i) The nature of the treaty; and (ii) The constitutional structure of the ratifying state.
1] The nature of treaties — they may be: Self-executing treaty: One that contains a
provision that says the treaty will apply in the parties’ municipal courts without their having to adopt any domestic enabling legislation.
Non-self-executing treaty: One that has no such provision.
2] The structure of states — constitutions may assign to one or more state
organs (or branches) the responsibility for entering into treaties.
Making and effectiveness of the pact
Bilateral treaties produced by foreign ministries or embassies.
Multilateral treaties made through conferences
Signing of treaty does not indicate acceptance of treaty by signatory
Merely indicates authentication of text. Usually two-thirds of conference must authenticate text
E. INTERNATIONAL PERSONS
States Intergovernmental organizations
(IGOs)
Nongovernmental organizations (NGOs)
Business organizations Sole proprietorship Partnership Company--MNC
Individuals
E. INTERNATIONAL PERSONS States
Defined: Political entities that have all of the following characteristics –
A territory. A population. A government capable of entering into
international (community). A government capable of controlling its
territory and people.
E. INTERNATIONAL PERSONS
Kinds of states: Independent: free from political control
of other states. Dependent: have formally surrendered
some of the their political and governmental functions to another state.
Inchoate: lack some _conditions_ required to be a state.
E. INTERNATIONAL PERSONS International Organizations
Permanent organizations set up by two or more states to carry on activities of common interest.
Inter-government organization Non-government organization
Characteristics: Permanent. Set up by two or more states. Pursue matters of common interest to the creators. Function ___ as independent international persons.
E. INTERNATIONAL PERSONS
Examples: European Union United Nations
Creation: essentially in the same fashion as a corporation.— charter
E. INTERNATIONAL PERSONS
Legal capacity of IGOs: the right to carry on diplomatic relations with states
and to sue or to be sued in international tribunals. Sources of legal personality:
Constituent treaty Case law
Acquired by recognition. Automatically from its own state members .Becoming
a state implies recognition of the igo . Exceptional: in U.K. a special certification should
be given by the gov’t to recognize the legal capacity of the igo .
When specifically granted by non-member states.
E. INTERNATIONAL PERSONS
Nongovernmental Organizations (includes Non-profit NGOs and for-profit NGOs) Set up by individuals or groups
Governed by the law of the country where the NGO is incorporated
Ex.: Amnesty International, Greenpeace States are usually not parties of NGOs
Non-profit NGOs: serve as independent agencies for private
national groups in international affairs For-profit NGOs: businesses operating
internationally Other names:
Multinational Enterprises (MNEs) Transnational Corporations (TNCs)
INTERNATIONAL REGULATION OF MULTINATIONAL ENTERPRISES
Several International Organizations Have Promulgated Rules of Ethical Behavior for Multinational Enterprises, including: Organization for Economic Cooperation
and Development (OECD). International Labor Organization (ILO). International Chamber of Commerce (ICC).
These are only Suggested Rules Binding international codes do not exist as
yet.
HOME STATE REGULATION OF MULTINATIONAL ENTERPRISES
The most important forms of home state regulation are:
1) Regulation of competition. 2) Regulation of injuries caused by
defective products. 3) Prohibition of sharp business practices. 4) Regulation of securities. 5) Regulation of labor and employment. 6) The establishment of accounting
standards. 7) Taxation.
Some of these rules are applied extraterritorially by home state
most notably: 1) Regulation of competition. 2) Regulation of injuries caused by defective
products. 3) Prohibition of sharp business practices.
The country that has been most willing to apply its laws extraterritorially has been the United States.
1) The European Union, to a lesser extent, has also begun to apply its internal regulations extraterritorially.
The Host nation’s Regulation
Local regulation: A host state may regulate a foreign firm that is doing business within the state
Extraterritorial regulation: A host state may some-times seek to regulate the foreign firm.
Consent to the Jurisdiction of the Host State.
Common Enterprise Liability
Piercing the Company Veil
Piercing the Company Veil
Ignoring the corporate structure of a company (i.e., “piercing the company veil”) and exposing the shareholders to personal liability. E.g. The commingling of corporate
and personal assets.
F. RIGHTS OF INDIVIDUALS UNDER INTERNATIONAL LAW
Traditional view: no rights, only duties.
Evolving view: Individuals have basic human rights Individuals may sue state in some
international tribunals Icsid-- oecd
G. COMPARISON OF MUNICIPAL LEGAL SYSTEMS
The Romano-Germanic Civil Law System
The Anglo-American Common Law System
The Islamic Law System Review of Chinese law
Comparative Law: The study and analysis of the different municipal law systems.
a. Legal “families”: 1) Romano-Germanic Civil Law. 2) Anglo-American Common Law. 3) Islamic Law. b. These are divided into subfamilies. c. There are also hybrids. d. There are also some practices that
are unique to a particular country.
Civil law system Derived from Roman law. It is a complete
code of written laws whose primary source of law is legislation. It is inquisitorial in form and forms the basis of the legal systems of most western European countries. Japan and the former colonies of France, Spain and Portugal in Latin America, the near East, Indonesia, Thailand, Vietnam and parts of Africa
Countries with Civil Law systems distinguish between the civil law and public law.
1] Public law evolved separately from the movement for codification of civil or private law.
a] Civil law (for civilian lawyers) is only the law contained in the codes and its auxiliary statutes (that is, the law of persons, family law, property law, succession law, the law of obligations, commercial law, labor law, and criminal law).
b] Public law is constitutional and administrative law.
Common law system Derived from case law (or precedent)
and statute. It is accusatorial in form with an emphasis on remedies. It forms the basis of English law and can be found in the U.S. , as well as Commonwealth nations including Canada, Singapore, Malaysia, New Zealand, India, Pakistan
Introduction to THE BUSINESS FORM
a matter of municipal law. The company laws of every country in the world are unique in
many ways. A prudent business investor planning to organize a firm
abroad will investigate in detail the company laws of the particular country involved.
b. Most national company laws are derived from: a) The civil law, especially French and German law. b) The common law, especially English law.
Business Forms in Civil Law States
Company: Partnership:
Limited partnership: Silent partnership: Partnership limited by shares
Corporation: A company of capital whose owners have limited personal liability.
Stock corporationLimited liability company
Business Forms in Common Law States
Company: Partnership: Joint stock company: Business trust:. Corporation:
1) Public corporation: 2) Private corporation:
3) Limited liability company:
Limited liability for equity investors.
1) Unlimited liability corporation
2) No liability corporation
The Importance of the Separate Legal Identity of Companies
a. Juridical entities (such as companies) have legal identities separate from that of their owners.
b. Significance: 1) The liability of the owners is limited to their
investment in the company. 2) The owners are neither managers nor
agents nor representatives of the company. 3) The rights and benefits accruing to the
company belong to the company and not its owners.
a) The property rights of a company can only be claimed by that company.
Chapter 2Chapter 2
SalesSales
introduction International trade
sale, transportation,insurance
The sources of international trade law
International conventions The UN convention on the limitation of the Int’l sale
of goods The UNIDROIT convention on Agency The UNCITRAL ,Model law on Procurement of goods,
construction and services 1994 International customary rules
ICC –International commercial term (INCOTERMS) Domestic laws
Relevant international conventions takes priority if the relevant country ratified and incorporated the convention into the domestic law.
Application of law for international trade contract Autonomy of will The most significant connection conventions
145. The parties to a contract involving foreign interests may choose the law applicable to settlement of their contractua1 disputes, except as otherwise stipulated by Law.
If the parties to a contract involving foreign elements have not made a choice, the law of the country to which the contract is most closely connected shall be applied.
A. CISG United Nations Convention on
Contracts for the International Sale of Goods In effect since January 1, 1988 Current state parties: 64, including Canada Mexico
China RussiaFrance United States
Germany
Web site: http://www.uncitral.org/
B. COVERAGE OF CISG International contracts: buyer
and seller must have their places of business in different states. Both states must be contracting parties
to the convention, or The rules of private international law
must lead to the application of the law of a contracting state.
Exception: A contracting state may declare that it will apply the CISG only when the buyer and seller are both from contracting states.
B. COVERAGE OF CISG Opting in and out
The parties to a contract may exclude or modify the CISG’s application by a choice of law clause.
Whether parties can exclude a domestic law and adopt the CISG in its place depends on the rules of the state where the case is heard.
B. COVERAGE OF CISG Merchants: CISG applies only to
commercial sales transactions between merchants CISG Art.1: buyers and sellers must
both have “places of business.” CISG Art. 2(a): the Convention does
not apply to sales of goods bought for personal, family, or household use.
B. COVERAGE OF CISG Subject Matter of CISG:
The formation of contracts. The remedies available to buyers and
sellers.
B. COVERAGE OF CISG Subject Matter Not Covered:
The validity of contracts. The competency of the parties. The rights of third parties. Liability for death or personal injury. Sales to consumers. Sales of services
B. COVERAGE OF CISG
Sales commonly subject to special regulation:
Auction sales, Sales on execution or otherwise by authority of
law, Sales of stocks, shares, investment securities,
negotiable instruments, or money Sales of ships, vessels, hovercraft, or aircraft, and Sales of electricity.
C. CISG COMPARED General sources of CISG rules:
French Civil Code, the French Commercial Code, and similar civil law codes.
C. CISG COMPARED Distinctive CISG provisions:
Contract formation(offer /acceptance) Firm offers Time of acceptance Acceptance with additional terms Definiteness Formalities Obligations of the buyer/seller Remedies
Offer/acceptance Withdraw an offer Revocation of an offer Rejection an offer Counter offer Modified acceptance Rules for calculating the time of
acceptance Effect of late acceptance Conclusion of contract
FIRM OFFERS Firm Offer is Irrevocable if:
the offeror indicates, whether by stating a fixed time or otherwise, that it is irrevocable, or
the offeree acts in reliance on the reasonable belief that it is irrevocable.
Firm Offer Does Not Have to be: in writing (as required by the UCC), or supported by consideration or cause.
TIME OF ACCEPTANCE Acceptance is Effective and a
contract formed only when the indication of assent reaches the offeror. Caveat: An offeror may not revoke an
offer once it has been dispatched. Basis: French Civil Code's receipt rule.
Compare: UCC provides that an acceptance is effective upon dispatch.
ADDITIONAL TERMS Additions, limitations, or other
modifications constitute a “counteroffer.” Caveat: This is so only if—
the additional or different terms materially alter the terms of the offer, or
the offeror fails to promptly object to changes that are not material.
ADDITIONAL TERMS
Material alterations are changes to the following:
Price Payment quality and quantity of the goods place and time of delivery extent of one party’s liability to the other settlement of disputes
Basis: French mirror image rule and UCC § 2-207.
FILANTO, SPA v. CHILEWICH INTERNATIONAL CORP. United States District Court, Southern District of New York, 1992.
Chilewich had a contract to deliver footwear to Russia. This contract contained an arbitration provision that called for all disputes to be arbitrated in Moscow. Chilewich then engaged Filanto (an Italian corporation) to supply it with footwear that Chilewich had contracted to deliver to Russia. Chilewich’s correspondence to Filanto said that the arbitration provision in the Russian contract was to be part of their contract as well. Filanto supposedly sent Chilewich a counteroffer rejecting the arbitration provision. Chilewich meanwhile proceeded to obtain a letter of credit benefiting Filanto and proceeded as if there was a contract. Filanto, however, signed a contract on August 7 that contained this provision, although it said in its cover letter that it was not bound by the provision. When a dispute arose and Filanto sued in a US court, Chilewich invoked the arbitration provision and asked the court to dismiss Filanto’s suit.
ISSUE: (1) Was the August 7 reply a counteroffer? (2) If it was, was there a contract anyway based on unobjected-to performance?
LAW: A reply that purports to be an acceptance but contains material additions, limitations, or modifications are a rejection of the offer and a counteroffer. (1) The objections to the arbitration provision in the August 7 cover letter were a material modification amounting to a rejection of the offer.
If the offeree knows that the offeror has begun performance and fails to notify the offeror within a reasonable time that it objects to the terms of the contract, it will be deemed to have assented to those terms. (2) Because Chilewich went ahead with the contract (getting the letter of credit) and Filanto did not timely object, Filanto accepted the terms of the Chilewich’s proposed contract.
ORDER: Case dismissed; the matter must be arbitrated in Moscow.
DEFINITENESS A contract must be sufficiently
definite so that a court can enforce it. A contract is sufficiently definite
if it: describes the goods, and expressly or impliedly fixes or makes
provision for determining the quantity.
DEFINITENESS Price should be stated or a
means provided for determining it. Price not stated: courts imply will
the price generally charged at the time of the contract for like goods sold under comparable circumstances in the trade concerned
FORMALITIES No Formalities: The CISG does
not require a contract to be in any particular form (article 11,12,96) A contract may be proven by oral
testimony regardless of the price involved.
Basis: French Commercial Code.
GENERAL STANDARDS FOR PERFORMANCE
Fundamental Breach: When one party substantially fails to deliver what the other
reasonably anticipated receiving. (art. 25) Avoidance: (art. 26)
The right to be excused from having to perform any obligation required by the contract.
3. Requests for Specific Performance( art. 46) a. An injured party make ask a court “to require
performance” if the other party fails to carry out its obligations. b. A court is not obliged to order specific performance unless
the court can do so under its own domestic rules.
Avoidance Requirements:
The other party must have committed a fundamental breach.
The injured party must notify the other party. The injured party must be able to return any goods he
has already received. 2) Effect of avoidance:
Only the obligation to perform is set aside. Avoidance does not affect any provision in the
contract concerning: The settlement of disputes (such as arbitration, choice of
law, or choice of forum clauses), or Any other provisions governing the rights and duties of
the parties “consequent upon the avoidance of the contract.”
Obligations For the seller:
Delivery of goods Transfer of Bills warranty
For the buyer Payment Take delivery
REMEDIES Buyer’s Right of Avoidance
Requirements for avoiding a contract:
The seller commits a fundamental breach, or
The seller commits a lesser breach and the buyer gives the seller a Nachfrist notice that the seller rejects or does not comply with during the period it specifies.
Basis: German Civil Code.
REMEDIES Nachfrist Notice: the fixing of an
additional period of time of reasonable length for performance by the seller of his obligations.
The period must be definite and the obligation to perform within that period must be clear.
During the Nachfrist period the seller is entitled to correct (i.e., “cure”) the non-conformity at his own expense.
A cure may not be made if the breach is fundamental and the buyer chooses to avoid the contract.
REMEDIES Time for Avoidance: Once the
Nachfrist period has run, or once the fundamental breach becomes clear, the buyer has a reasonable time in which to avoid the contract.
REMEDIES Seller’s Right of Avoidance
Analogous to that of the buyer’s avoidance remedy
REMEDIES Buyer’s Right to a Reduction in
Price Applicable when:
the seller delivers non-conforming goods the buyer accepts them, and the seller is not responsible for the non-
conformity
REMEDIES
Formula for determining the price reduction: The price is to be reduced by that ratio of:
The value at the time of delivery of the goods actually delivered, to
The value that conforming goods would have had at the time of delivery.
REMEDIES Example
Idaho potatoes sold at $3.50/bushel for delivery in Djakarta
Damaged in transit by act of nature Undamaged potatoes are worth $4.00/bushel if
purchased in Djakarta Damages potatoes are worth $2.80/bushel
The price reduction ratio is:
$2.80 = 7 $4.00 10
Applying this ratio, the reduced price the buyer pays is:
$3.50 x 7/10 = $2.45
Anticipate breach of contract Article 71: suspend the performance of a
contract on the ground of an anticipatory breach. Deficiencies in ability or creditworthiness The act in performing or preparing the
contract show that …can not perform at least of the substantial part of the contract
Passing of Risk Vital issue:Who is liable for losses
incurred before the completion of the contract.
Passing of risk and the duty to pay When:
To be transported by carrier Sold in transit Through delivery In unascertained goods
Impediment beyond control
Force majeure A party is not liable for damages resulting from his
failure to perform if he can show that: His failure was due to an impediment beyond his control. The impediment was not something he could have
reasonably taken into account at the time of contracting, and
He remains unable to overcome the impediment or its consequences.
Typical situations: Natural disasters, war, embargoes, strikes, breakdowns, and the bankruptcy of a supplier.
Dirty hands One party may not rely on a failure of the other party
to perform to the extent that such failure was caused by the first party’s act or omission.
Case 10-8 Italy 14 January 1993 District Court Monza
(Nuova Fucinati v. Fondmetall International) [translation available] [Cite as: http://cisgw3.law.pace.edu/cases/930114i3.html]
Other conventions The United Nations Convention on
the Limitation period in the international sale of Goods
Convention on international agency
INTERNATIONAL ECNOMIC LAW
chapter 3chapter 3
Trade TermsTrade Terms
Use of Trade Terms: sales contracts involving transportation customarily contain abbreviated terms to describe: When buyer takes delivery. Who arranges for transportation.
Additionally: place of payment. the price. the time when the risk of loss shifts from the
seller to the buyer. the costs of freight and insurance.
A. TRADE TERMS
A. TRADE TERMS Trade Terms Used Inconsistently
Domestic laws define trade terms for domestic sales. Some states define trade terms for international sales.
Contracting parties may themselves define trade terms. By incorporating definitions from:
foreign legislation. private rules. The most widely used private trade
terms are the “Incoterms” published by the International Chamber of Commerce.
Web address: www.iccwbo.org
A. TRADE TERMS
“ Free” Terms Several of the common trade terms
begin with the word "free" (e.g., free on board, free alongside, free carrier).
“Free” means: the seller has an obligation to deliver the goods to a named place for transfer to a carrier.
B. F.O.B.
Free On Board (port of shipment) contract: requires a seller to deliver goods on board a vessel that is to be designated by the buyer in a manner customary at the particular port. “On board” means that the goods:
have been appropriated to the contracts. have crossed rail.
B. F.O.B. Use limited to seaborne commerce in
most of the world. The Incoterms uses it only in connection
with the carriage of goods by sea. In common law countries it is also applies
to inland carriage aboard any “vessel, car or other vehicle.”
Free Alongside or Free Alongside Ship Contracts: requires the seller to deliver goods to a named port alongside a vessel to be designated by the buyer and in a manner customary to the particular port.
“Alongside” means that the goods be within reach of a ship's lifting tackle.
C F.A.S
D. C.I.F.
Cost, Insurance and Freight (port of destination): requires the seller to arrange for the carriage of goods by sea to a port of destination and to turn over to the buyer the documents necessary to obtain the goods from the carrier or to assert a claim against an insurer if the goods are lost or damaged.
D. C.I.F. Three document represent the
CIF contract: the invoice. the insurance policy. the bill of lading.
Seller’s duties: deliver the documents to buyer
Buyer’s duties: pay the seller on delivery of the documents
E. C.F.R. Cost and Freight
(port of destination): same as the CIF contract, except that the seller does not have to procure marine insurance against the risk of loss or damage to the goods during transit.
F. D.E.S. Delivered Ex-Ship (arrival contract): requires
seller to deliver goods to buyer at an agreed port of destination. Seller remains
responsible for the goods until they are delivered.
Seller is not obliged to obtain insurance for the buyer's benefit.
G. F.C.A. Free Carrier or Free Carrier
Alongside: requires the seller to deliver goods to a particular carrier at a named terminal, depot, airport or other place where the carrier operates. Risks of loss and
liability for cost of transportation shift to buyer upon seller making delivery.
H. E.X.W. Ex-Works: seller delivers the goods at
his own place of business. All risks and transportation.
costs are the responsibility of the buyer
Chapter 4Chapter 4
Transportation
Contract for carriage by sea,air and land A . Introduction
Modes of international transportation By sea ( bill of lading/charter party) By air By land Multimodal transport of goods
Application of law relating to the contract for carriage by sea.
Legal frame work for carriage by sea
It is presently regulated by both international conventions and domestic laws.
Conventions: The Hague Rules 1924 The Hague-Visby Rules 1968 Hamburg rules 1978 The UN Conventions on International Multimodal
Transport of Goods 1980 The UN Conventions on the Liability of operators of
Transport terminals in international trade,1991
B. BILL OF LADING Bill of Lading Defined: an
instrument issued by an ocean carrier and given to a shipper with whom the carrier has entered into a contract for the carriage of goods at the time the goods are delivered to the carrier.
BILL OF LADING Purposes( 法律性质) :
Receipt for the goods. Evidence of a contract of carriage.
Document of title.
RECEIPT FOR GOODS
Functions of a bill of lading: Describes the goods. States their quantity. States their condition.
. RECEIPT FOR GOODS
Kinds of Bills of Lading “On Board” Bill of Lading: certifies that
the goods have been properly loaded. Bill is prima facie evidence that goods
were received by the carrier as described on the bill
Carrier can introduce rebutting evidence if the bill has not been negotiated to a third party.
Carrier is barred from introducing rebutting evidence if the bill has been negotiated.
“ Claused” Bill of Lading: One that notes a discrepancy on its face and is non-negotiable.
Discrepancy must refer to a problem noted at the time the goods are loaded.
Notations as to problems that occur later do not effect the negotiability of the bill.
CONTRACT FOR CARRIAGE
Bill of Lading is evidence of a contract of carriage between the shipper and the carrier. Carrier can introduce rebutting
evidence if the bill has not been negotiated to a third party.
DOCUMENT OF TITLE
Rightful possessor of a bill of lading has title and is entitled to possess, use, and dispose of the goods that the bill represents. Two main kinds of bills of lading:
Straight bills of lading Order bills of lading( OPEN BILL OF LADING )
Straight bills of lading: a non-negotiable bill issued to a named consignee. Transferee acquires same rights as than those of his transferor.
DOCUMENT OF TITLE
DOCUMENT OF TITLE
Order bills of lading: negotiable bill issued to a named consignee. Transfer is by negotiation:
by endorsement and delivery. Third party holder has title and the right to take
possession of the goods described in the bill. Must receive the bill in good faith through due
negotiation. Must surrender the bill to the carrier in order to
take delivery of the goods.
CARRIER’S DUTIES Exercise Due Diligence in:
Making the ship seaworthy. Properly manning, equipping and supplying the
ship. Making the holds, refrigerating and cool chambers,
and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.
Properly and carefully loading, handling, stowing, carrying, keeping, caring for, and discharging the goods carried.
Duties are strictly enforced.
CARRIER’S IMMUNITIES Carrier is exempt from liability for
damages arising from “perils” such as: Act, neglect, or default of the master,
mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship;
Fire, unless caused by the actual fault or privity of the carrier;
Perils, dangers and accidents of the sea or other navigable water;
CARRIER’S IMMUNITIES Carrier’s Immunities are
Strictly Construed: carrier is responsible despite any listed exemption if it fails to exercise due diligence in carrying out its fundamental duties.
CARRIER’S LIABILITY LIMITS Carrier Must Issue Bill of
Lading Limits set by the Hague Rules of 1924:
₤100 per package, or₤ 100 per unit when shipped in “customary freight units.”
P. CARRIER’S LIABILITY LIMITS Limits set by the Hague-
Visby Rules are the higher of: 10,000 gold francs per package or unit,
30 gold francs per kilo of the gross weight of the goods lost or damaged, whichever is the higher.
P. CARRIER’S LIABILITY LIMITS Limits do not apply if:
Parties agree to higher amounts. Carrier acted either:
With intent to cause damage, or Recklessly and with knowledge that damage would probably result.
Q. THIRD PARTY RIGHTS
Liability Limits do not Apply to Third Parties: Hague Rules and Hague-Visby Rules liability limits apply to the carrier only. Third parties who help in the transport of
the goods, but who are not parties to the carriage of goods contract contained in the bill of lading, have no contractual right to claim the liability limits established by the Rules.
Q. THIRD PARTY RIGHTS
Himalaya Clauses: Clauses added to bills of lading extending the Hague Rules or the Hague-Visby Rules liability limits to third parties. Unenforceable in most other
countries. Rationale: privity of contract.
The Hague RulesCommon Carriage/The Bill of Lading APPLICATON The Carrier’s Duties Under a Bill of
Lading The Carrier’s Immunities (P 73) Liability Limits Time Limitations Third-Party Rights (Himalaya
Clause)
Contracts for the carriage of goods by air Introduction Warsaw System
Warsaw conventionThe Hague protocol 1955Guadalajara convention 1961
Objectives of Warsaw system
Carriage of goods under the Warsaw Convention Air Consignment of Note(CAN)
Definition Issue of ACN Functions
Liability of the carrier Liability and the period of
laibility Excluded liability Limited liability Liability of successive carriers
Rights and obligations of the consignor Obliged to
Information documents
Entitled to Take goods back Stop the carriage of goods on any
landing Direct goods to the person other than
the consignee
Limitation period Incase of loss of or damage to
goods,complaint must be made within 7days after receiving the goods
Later delivery 14 Ds Forum of action
The carriers ordinary residence; The carriers principal place of business The place the carrier’s rep. Actually
made the contract The place of destination
Chapter 5 Chapter 5
INSURANCEINSURANCE
Marine insurance Introduction Cargo insurance contract
Contract of indemnity Classification of contracts
Valued and unvalued policies Voyage and time policies Floating policies
Risk ,loss and cost Risk
Peril of the sea Risks incedental to the adventure Additional risks
Loss Toal loss Constructive loss Partial loss General average Partial average
Cost
Chapter 6Chapter 6
PAYMENT
Lecture 7Lecture 7
The World Trade Organization
World Trade Organization Agreement Establishing WTO came
into effect January 1, 1995. WTO supercedes the ad hoc organization that
had administered the General Agreement on Tariffs and Trade of 1947.
A. WTO
A. WTO Agreement Establishing WTO provides
legal framework to administer various trade pacts. Final Act Embodying the Result of the Uruguay Round of Multilateral Trade Negations, the Marrakesh Agreement establishing the World Trade Organization and 1 Annexes annex 1 A Annex 1B Annex 1c, Annex 2,Annex 3, Annex 4
Annex 1A,1B,1C General Agreement on Tariffs and Trade of 1994 and
other agreements on trade in goods. General Agreement on Trade in Services. Agreement on Trade-Related Aspects in Intellectual
Property Rights.
Annex 2 Agreement Understanding on Rules
and Procedures Governing the Settlement of Disputes.
Annex 3 Trade Policy Review Mechanism
Annexes 4 Plurilateral Trade Agreement
Annex 4a Agreement on trade in civil aircraft
Annex 4b Agreement on Government Procuremnet
They are two ways to become wto member. Origianal member GATT 1947 Contracting party:“state or special customary territories
possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this agreement and Multilateral trade agreements may accede to this agreement on terms to be agreed between it and the WTO Consessus for admission of new members. A prospective member needs to negotiate with all existing members, who have expressed special intent in its application for admission.
Organs of the WTO Ministerial Conference: the WTO’s
supervisory and policy making organ. General Council:
Also functions as the WTO’s: Dispute Settlement Body. Trade Policy Review Body.
Council for Trade in Goods. Council for Trade in Services. Council for Trade-Related Aspects of
Intellectual Property Rights. Secretariat headed by Director-General.
A. WTO
Ministerial conference
General council
secretariat
DSB COMMITTEES
councils
BOARD
B. THE GATT 1994 Purpose of the GATT Rules: to
progressively liberalize world trade. This is done by giving WTO member
states: Equal access to markets Reciprocity in trade
concessions. Transparent and stable
trading conditions.
B. The Principles Underlying
the GATT Rules Nondiscrimination Most-Favoured-Nation Treatment National treatment Tariff concession Market Access Elimination of Quantitative restrictions Anti-dumping and countervailing Transparency
C. NONDISCRIMINATION Basic principle of GATT:
International trade should be conducted without discrimination.
Rules giving expression to principle of nondiscrimination: Most Favored Nation Rule. National Treatment Rule.
C. NONDISCRIMINATION Most Favored Nation Rule:
WTO member state must apply its tariff rules equally to all other members.
General exceptions to the MFN Rule: Contracting states may take actions to
counter dumping and subsidization. Contracting states may join together to create
customs unions and free trade areas. Contracting states may restrict imports to
protect public health, safety, welfare and national security.
C. NONDISCRIMINATION Special exceptions for developing member states.
Generalized System of Preferences allows developed countries to grant preferential treatment to developing countries, and to do so on a nonreciprocal basis.
South-South Preferences allows developing countries exchange tariff preferences among themselves without extending the same preferences to developed countries.
C. NONDISCRIMINATION National Treatment Rule: A WTO
member state must treat imports equally with its own domestic products once the imports are inside its borders.
National treatment means that a WTO state must accord to the nationals of another WTO state treatment equivalent to that which the state accords to its own nationals.
Interpretation: Products must be treated equally vis-à-vis their content; they may not be discriminated against because of the way in which they were made.
C. NONDISCRIMINATION Exceptions to the National Treatment
Rule: A member state can maintain the preferences it had in place at the time it became a WTO member state.
A member state’s government agencies can discriminate when they procure goods.
A member states can discriminate in paying of subsidies to domestic producers.
A member states can discriminate in favor of domestically produced movies.
D. TARIFF concession Protection Through Tariffs: a WTO member state
may only protect its domestic industries with tariffs. Implementation:
Quotas and other quantitative restrictions are forbidden if they block the price mechanism function (Art. XI).
Tariffs may only be collected at the time or point of importation (Art. II).
This ensures that internal taxes will not be disguised tariffs.
E. TRANSPARENCY WTO member state
governments must disclose to the public, and to other governments, the rules, regulations and practices they follow in their domestic trade systems.
F. EXCEPTIONS TO GATT
The Escape Clause (or GATT safety valve): Allows a WTO member state to temporarily avoid GATT 1994 obligations when a surge in the number of imports coming from other member states threatens a domestic industry.
An injured member may impose emergency, restrictive trade measures.
F. EXCEPTIONS TO GATT
Prerequisites – before adopting restrictive measures a WTO member state must:
Determine threat to a domestic industry.
Notify the WTO of its affected exporting member state to arrange planned action.
Consult with the for compensation. Effect of failure to consult: injured exporting state may withhold substantially equivalent concessions in order to restore the previous balance of trade between the two countries.
F. EXCEPTIONS TO GATT
Safeguards Agreement sets out the procedures for engaging in consultations and for withholding concessions.
F. EXCEPTIONS TO GATT
Permanent Exceptions: GATT 1994 allows WTO member states to permanently implement certain public policies that are in conflict with its general goal of liberalizing trade. These are known as:
General Exceptions
Security Exceptions
G. EXCEPTIONS TO GATT
General Exceptions: GATT Art. XX allows a WTO member state to take measures contrary to its GATT obligations that:
Are necessary to protect public morals. Are necessary to protect human, animal, or
plant life, or health. Relate to the importation or exportation of
gold or silver. Are necessary to secure compliance with
laws or regulations which are not inconsistent with the General Agreement.
Restrict imports of prison labor products. Protect national treasures of artistic, historic,
or archaeological value. Relate to the conservation of exhaustible
natural resources. Are undertaken in accordance with an
intergovernmental commodity agreement. Involve restrictions on exports of domestic
materials needed by a domestic processing industry during a period when the domestic price is held below world prices as part of a governmental stabilization plan.
Are essential to acquiring products in short supply.
F. EXCEPTIONS TO GATT
Prerequisite to implementing a general exception: A WTO member state may not adopt an exception as a way to arbitrarily or unjustifiably discriminate or as a disguised restriction on international trade. (GATT Art. XX)
G. EXCEPTIONS TO GATT
Security Exceptions: GATT Art. XXI allows WTO member states to avoid any obligation that is:
contrary to an essential security interest, or
in conflict with duties imposed by the United Nations Charter for the maintenance of international peace and security.
G. WTO MULTILATERAL TRADE AGREEMENTS WTO Multilateral Trade
Agreements supplementing the GATT 1994, include: Antidumping Code Agreement on Subsidies
and Countervailing Measures
H. ANTIDUMPING CODE Agreement on Implementation of Article VI of
GATT 1994 (the Antidumping Code) provides the procedures a WTO member state may take to counter dumping. Dumping is the introduction into the commerce of
another country a product at less than its normal value.
Dumping is not forbidden. Anti-dumping law and it’s features Investigation and procedure
H. ANTIDUMPING CODE States may take antidumping measures
to counter dumping – but only if they determine: Goods are dumped.(price)
Tests for determining normal value of goods
A domestic industry within the importing country is materially injured or threatened with material injury.
The dumped goods are the cause of the injury or threatened injury.
I. SCM AGREEMENT Agreement on Subsidies and Counter-vailing
Measures (the SCM Agreement) specifies the actions a WTO member state may take to counterbalance an improper subsidy. Subsidy defined: a financial contribu-tion
made by a government or other public body that confers a benefit on an enterprise, group of enterprises, or an industry.
I. SCM AGREEMENT Only specific subsidies are subject to
the disciplines of the SCM Agreement. Specific subsidies are subsidies that target:
A specific enterprise or industry. A group of enterprises or industries.
Enterprises in a particular region.
I. SCM AGREEMENT Categories of Specific Subsidies:
Prohibited subsidies (red subsidies) are subsidies that either:
Depend upon export performance, or Are contingent upon the use of
domestic instead of imported goods.
I. SCM AGREEMENT
Actionable subsidies (yellow subsidies) are subsidies that are trade distorting because, in the way they are used, they:
Injure a domestic industry of another member state.
Nullify or impair benefits due another member state under GATT 1994.
Cause or threaten to cause serious prejudice to the interests of another member state.
I. SCM AGREEMENT Nonactionable subsidies (green subsidies)
are subsidies that either: Are not nonspecific. Are infrastructural subsidies that involve
government funding to: Assist (but not fully cover) the cost of
business research activities. Aid disadvantaged regions. Help existing facilities adapt to new
environmental requirements.
I. SCM AGREEMENT Actions an injured state may take:
Do nothing. Request consultations with the
subsidizing state. Ask the WTO to authorize it to impose
countervailing duties. Independently impose countervailing
duties. Must follow the same procedures used
for imposing antidumping duties.
第十四讲WTO Dispute Settlement
WTO’s most individual contribution to the stability of the global economy. makes the trading system more secure and predictable. clearly structured, with flexible timetables set for completing a case. All final rulings or decisions are made by the WTO’s full membership. No single country can block these.
What is this agreement called?Understanding on Rules and
Procedures Governing the Settlement of Disputes
How are disputes settled? Settling disputes is the
responsibility of the Dispute Settlement Body (the General Council in another guise).
Bodies involved in the systemDSB/Secretariat/the panel/appellate
body/Director - General
The Dispute Settlement Body has the sole authority to
1) establish “panels” of experts to consider the case, and
2) to accept or reject the panels’ findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the
3) power to authorize retaliation when a country does not comply with a ruling.
First stage: consultation countries in dispute have to
talk to each other to see if they can settle their differences by them-selves
they can also ask the WTO director-general to mediate
up to 60 days
Alternative stage Good office Conciliation mediation
Second stage: the panel the complaining country can ask
for a panel to be appointed by the Dispute Settlement Body .
The panel’s final report should normally be given to the parties to the dispute within six months.
up to 45 days for a panel to be appointed, plus 6 months for the panel to conclude
How the panel works?
Before the first hearing: each side in the dispute presents its case in writing to the panel.
First hearing: the case for the complaining country and defense
Rebuttals: the countries involved submit written rebuttals and present oral arguments at the panel’s second meeting.
Experts: if one side raises scientific or other technical matters, the panel may consult experts or appoint an expert review group to prepare an advisory report.
First draft: the panel submits the descriptive (factual and argument) sections of its report to the two sides, giving them two weeks to comment.
Interim report: The panel then submits an interim report, including its findings and conclusions, to the two sides, giving them one week to ask for a review.
Review: The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides.
Final report : A final report is submitted to the two sides and three weeks later, it is circulated to all WTO members.
The report becomes a ruling: The report becomes the Dispute Settlement Body’s ruling or recommendation within 60 days unless a consensus rejects it. Both sides can appeal the report.
Appeals Either side can appeal a panel’s ruling.
Each appeal is heard by three members of a permanent seven-member Appellate Body set up by the Dispute Settlement Body.
Members of the Appellate Body have four-year terms. They have to be individuals with recognized standing in the field of law and international trade, not affiliated with any government.
Appeals have to be based on points of law such as legal interpretation — they cannot reexamine existing evidence or examine new evidence.
The appeal can uphold, modify or reverse the panel’s legal findings and conclusions. (in 60 days )
The Dispute Settlement Body has to accept or reject the appeals report within 30 days — and rejection is only possible by consensus.
How long to settle a dispute? Consultations, mediation, etc 60 days
Panel set up and appointment 45 days
Final panel report to parties 6 months
Final report to WTO members 3 weeks
DSB adopts report(if no appeal) 60 days
Appeals report 60-90 days
DSB adopts appeals report 30 days
The case has been decided: what next? If the country that is the target of
the complaint loses, it must follow the recommendations of the panel report or the appeals report.
If it fails to act within “reasonable period of time”, it has to enter into negotiations with the complaining country (or countries) in order to determine mutually-acceptable compensation.
If after 20 days, no satisfactory compensation is agreed, the complaining side may ask the Dispute Settlement Body for permission to impose limited trade sanctions (“suspend concessions or obligations”) against the other side.
In principle, the sanctions should be imposed in the same sector as the dispute. If this is not practical or if it would not be effective, the sanctions can be imposed in a different sector.(cross sector retaliation)
GATT: The tuna-dolphin dispute
In eastern tropical areas of the Pacific Ocean, schools of yellowfin tuna often swim beneath schools of dolphins. When tuna is harvested with purse seine nets, dolphins are trapped in the nets. They often die unless they are released.
The US Marine Mammal Protection Act sets dolphin protection standards for the domestic American fishing fleet and for countries whose fishing boats catch yellowfin tuna in that part of the Pacific Ocean.
If a country exporting tuna to the United States cannot prove to US authorities that it meets the dolphin protection standards set out in US law, the US government must embargo all imports of the fish from that country.
The embargo also applies to “intermediary” countries handling the tuna en route from Mexico to the United States. Often the tuna is processed and canned in an one of these countries.
Mexico asked for a panel in February 1991. A number of “intermediary” countries also expressed an interest. The panel reported to GATT members in September 1991. It concluded:
1) that the US could not embargo imports of tuna products from Mexico simply because Mexican regulations on the way tuna was produced did not satisfy US regulations. This has become known as a “product” versus “process” issue.
2) that GATT rules did not allow one country to take trade action for the purpose of attempting to enforce its own domestic laws in another country — even to protect animal health or exhaustible natural resources. The term used here is “extra-territoriality”.
The report was never adopted. Mexico and the United States held their own bilateral consultations aimed at reaching agreement outside GATT.
WTO: Gasoline Case, 1995
On 23 January 1995, Venezuela complained to the Dispute Settlement Body that the United States was applying rules that discriminated against gasoline imports, and formally requested consultations with the United States.
Just over a year later (on 29 January 1996) the dispute panel completed its final report.
The United States appealed. The Appellate Body completed its report, and the Dispute Settlement Body adopted the report on 20 May 1996
The United States and Venezuela then took six and a half months to agree on what the United States should do.
The case arose because the United States applied stricter rules on the chemical characteristics of imported gasoline than it did for domestically-refined gasoline. Venezuela said this was unfair because US gasoline did not have to meet the same standards — it violated the “national treatment” principle and could not be justified under exceptions to normal WTO rules for health and environmental conservation measures.
The dispute panel agreed with Venezuela. The appeal report upheld the panel’s conclusions.
The United States agreed with Venezuela that it would amend its regulations within 15 months and on 26 August 1997 it reported to the Dispute Settlement Body that a new regulation had been signed on 19 August.
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Powerful IntegratedMultilateralrespectable
International Business Law
Lecture 10Lecture 10
Dispute SettlementDispute Settlement
THE SETTLEMENT OF DISPUTES Disputes may be settled
1. By diplomacy, ADR2. By litigation 3. By arbitration
1. Definition of arbitration 2. Arbitration agreement3. Rules of arbitration
1. SETTLEMENT OF DISPUTES THROUGH DIPLOMACY
Diplomacy: The process of reconciling the parties to a disagreement by negotiation, mediation, or inquiry., formally between states .
Informally it is also used to resolve the disputes involving institutions and /or persons., which is commonly referred as “alternative dispute resolution” --ADR
1. SETTLEMENT OF DISPUTES THROUGH DIPLOMACY
Negotiation: The process of reaching an agreement by discussion.
Mediation: The use of a third party who transmits and interprets the proposals of the principal parties, and sometimes, advances independence proposal.
Inquiry: The determination of a disputed fact or facts by an independent third party.
2. THE SETTLEMENT OF DISPUTES BY LITIGATION
A. Litigation States or IGOs v. states or IGOs –
cases are heard in: International courts (such as Inter-national Court of Justice)
International arbitration tribunals (icsid)
Municipal courts (rarely)
Private persons v. private persons, states, or inter-governmental organizations – cases are heard in:
International arbitration tribunals (such as International Center for the Settlement of Investment Disputes tribunals)
Municipal courts
LITIGATION—international courts and tribunals
International Court of Justice --ICJ
Created in 1945 as one of the organs of the UN. All the member states of the UN are automatically parties to the ICJ’s statute,
Kinds of judgments that can be handed down by the ICJ. 1) cases between states (based on the Court’s “conten-tious” jurisdiction).
2) Those requested by organs or Specialized Agencies of the United Nations (based on the Court’s “advisory” jurisdiction).
3) Caveat: ICJ has no authority to hear cases involving individuals or entities other than those just mentioned.
W T O
The World Trade Organization (WTO) implements and enforces international agreements regulating international trade. Regulatory agreements include:
General Agreements on Tariffs and Trade General Agreement on Trade in Services Agreement on Trade-Related Aspects of Intellectual Property Rights
Procedures For Dispute settlement
Consultation: Member states are encouraged to resolve disputes with each other by consultation.
Dispute Settlement Panels will be established. Dispute Settlement Panel. Panel reports are adopted automatically within 60 days after being circulated,
Third Party Participation If both parties agree, they may seek the assistance of third parties in conducting negotiations about their dispute.
Appellate Body. An appeal board made up of seven persons who serve terms of four years. Decisions of the Appellate Body will be adopted automatically unless the DSB decides by consensus not to do so
ICSID
International Center for the Settlement of Investment Disputes (ICSID) Established in 1965 by the World
Bank sponsored Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the Washington Convention)
ICSID Purpose of Washington Convention: To
encourage private investment in underdeveloped countries by providing a reliable mechanism for impartially resolving disputes between an investor and the country of investment.
ICSID Constituting an Arbitration Tribunal
Requirements: 1. Host state and home state of the investor
must both be parties to the Washington Convention.
2. The host state must have notified ICSID of the class or classes of disputes that it considers arbitrable. The dispute must be a legal dispute arising out of on an investment
3. The investor and the host state must both consent to ICSID jurisdiction.
ICSID Effect of consenting to ICSID
arbitration: Litigants agree to exclude all other remedies.
The case cannot be tried in a municipal or another international tribunal.
The investor may not ask its home state for diplomatic protection.
Caveat: The host state can require that all local remedies be applied before the dispute can be taken to ICSID.
Unilateral withdrawal is ineffective
ICSID ICSID Awards
ICSID awards are binding and contracting states agree to comply with them.
Any review of the award by the courts of the state party to a particular dispute is considered to be in noncompliance with the award.
ICSID Review: The tribunal itself can
review an award either to interpret it or to revise it.
Appeal: Appeal is allowed to an ad hoc committee which has the power to annul an award.
B. DISPUTE SETTLEMENT INMUNICIPAL COURTS Introduction
Jurisdiction: the competence of a municipal (or national) court to exercise the power to try a case.
Immunity: The ability of a party (usually a state) to escape the jurisdiction of a court - such as:
Sovereign Immunity Act of State
G. DISPUTE SETTLEMENT INMUNICIPAL COURTS Jurisdiction in Civil Cases
Jurisdiction over Persons In personam jurisdiction exists when a natural or juridical person is physically present within the forum state.
G. DISPUTE SETTLEMENT INMUNICIPAL COURTS
Consent to Jurisdiction Expressly by:
Appearing in court after a suit has commenced.
Appointing an agent within a state to receive service of process on him.
Agreeing to the personal jurisdiction of a particular court in a forum selection clause contained in a contract.
G. DISPUTE SETTLEMENT INMUNICIPAL COURTS
Impliedly by having “minimum contacts” with the forum state.
Minimum contact depends on: Whether the defendant engaged in acts
that relate to the forum state Whether the suit is based on those acts,
and Whether the defendant has indicated by
its conduct that it intended to rely on the benefits (such as doing business) of the forum state
G. DISPUTE SETTLEMENT INMUNICIPAL COURTS
Jurisdiction over Property In rem jurisdiction: The power of a municipal court to determine the ownership rights of persons as to property located within the territory of the forum state.
I. CHOOSING THE GOVERNING LAW
Municipal courts apply the laws of other states when that is the fair thing to do. Rationale: To have a court in
another country apply different laws would discourage international exchanges of all kinds.
I. CHOOSING THE GOVERNING LAW
Rules for Choosing the Governing Law Courts use choice of law or
conflict of law rules to determine if they should apply their own laws or the laws of another state in settling disputes.
I. CHOOSING THE GOVERNING LAW
Procedure: Step One: If the parties to a dispute
have agreed to the application of the laws of a particular country, the court will apply those laws.
The agreement of the Parties may appear in:
A choice of law clause. Statements made to the court.
I. CHOOSING THE GOVERNING LAW
Step Two: If the parties have not agreed as to which laws should apply (either expressly or impliedly), then the court (depending on the state it is located in) will determine for itself which laws it should apply by:
Following statutory dictates, Using the most significant relationship
test. Using the governmental interest test.
I. CHOOSING THE GOVERNING LAW
Statutory Choice of Law Provisions Commonly found in civil law countries in:
Statutory codes (usually). International treaties (occasionally).
Common basis of these provisions: Vesting of Rights Doctrine: A court is to
apply the law of the state where the rights of the parties to a suit vested (i.e., where they legally became effective).
I. CHOOSING THE GOVERNING LAW
Rules for determining vesting. The general case: The law of the place where
the act occurred shall govern the dispute. The particular case: Depends on the type of
dispute. For example: for a dispute involving the
interpretation of a contract: The law of the place where the contract
was made governs questions of validity. The law of the place where the contract
was to be performed governs questions of performence_______________.
I. CHOOSING THE GOVERNING LAW
Most Significant Relationship Test A court is to apply the law of the state which has the
most contacts with the parties and their transaction. General factors that a court will consider in all
cases are (in essence): Which law best promotes the needs of the
_____________ system? Which state's law will be furthered the most by
applying it to the case at hand? Which law will best promote the underlying
policies of the legal subject-matter area involved?
Specific factors that a court considers depends on the kind of case that is before it.
I. CHOOSING THE GOVERNING LAW
Governmental Interest Test If asked to make a choice of law, a court using
this test will look to see which state has a legitimate interest in determining the outcome of the dispute.
If only the forum state has an interest: the court will apply the forum state's law.
If the forum state and another state/states have an interest: the latter should be applied, as the court obviously understands those interests better.
I. CHOOSING THE GOVERNING LAW
If only one state other than the forum has an interest: the court will apply that state's law.
If two states other than the forum state have interests: the court may –
Dismiss the case if the state in which the court is located can use the doctrine of forum non conveniens (discussed later).
Apply whichever law it feels is the sounder.
Apply the law that is most like that of the _____ _______.
J. REFUSAL TO EXERCISE JURISDICTION Forum Non Conveniens
Doctrine: a court may refuse to exercise its power to hear a case when it believes that it would be fairer and more convenient for the case to be decided elsewhere.
Factors that courts consider: Private interests of the parties (e.g., the ease
and cost of access to documents and witnesses). Public interest factors (e.g., the interests of the
forum state, the burden on the courts, and the notion of judicial comity).
L. RECOGNITION and ENFORCEMENT OF FOREIGN JUDGMENTS Recognition of Foreign Court's
Judgment Hearing will be held by a court asked
to convert a foreign judgment into a local judgment.
Common consideration: Did the foreign court have JURISDICTION before handing down its judgment?
Other considerations depend on the country.
L. RECOGNITION and Enforcement OF FOREIGN JUDGMENTS
Recognition of Foreign Arbitral Awards Treated like domestic judgments in courts in
states that are parties to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Otherwise, must be converted into a foreign judgment in the state where the arbitration takes place, and then that judgment is treated like any other foreign court judgment.
NEW YORK CONVENTION(p607-617)
Foreign arbitral judgment Recognition and enforcement of
judgment Procedure Refusal of recognition and
enforcement Public policy