II. Dispute Settlement 争端解决

A. Settlement of disputes through diplomacy（通过外
交途径解决争端）
 B. Settlement of disputes in international tribunals
（在国际争端解决机构解决争端）
 C. Settlement of disputes in municipal courts（在内国
法院解决争议）
 D. Immunities of states from the jurisdiction of
municipal courts （国家在内国法院的管辖豁免）
 E. Choosing the governing law （选择准据法）
 F. Refusal to exercise jurisdiction（拒绝管辖）
 G. Opposition to the exercise of jurisdiction （管辖权
异议）
 H. Proving foreign law （外国法的证明）
 I. Recognition of foreign judgments （外国判决的承认）

A. SETTLEMENT OF DISPUTES THROUGH
DIPLOMACY

1. Diplomacy Defined: The process of
reconciling the parties to a disagreement by
negotiation, mediation, or inquiry.
a. Formally applies only to disputes between
states.
b. Informally applies to disputes involving
institutions and individuals (where it is
commonly called “alternative dispute
resolution”).
2. Negotiation
a. Defined: The process of reaching an
agreement by discussion.










3. Mediation
a. Defined: The use of a third party who
transmits and interprets the proposals of the
principal parties, and, sometimes, advances
independent proposals.
1) Good offices: When mediators provide a
channel of communications only.
2) Conciliation: When mediators make a
formal investigation and present a formal
proposal.
4. Inquiry
a. Defined: The determination of a disputed
fact or facts by an independent third party.
B. SETTLEMENT OF DISPUTES IN
INTERNATIONAL TRIBUNALS






1. Where Disputes Are Heard
a. Disputes between states or
intergovernmental organizations (IGOs) may
be heard by:
1) An international tribunal (e.g., ICJ).
2) A dispute resolution panel (e.g., WTO).
3) Arbitration.
a) Arbitration is usually arranged on an ad
hoc basis.
b. Disputes between a private person
and a state, or between a private
person and an IGO, will normally be
decided by either:
 1) A municipal court.
 2) Arbitration.
 a) Arbitration is usually arranged
through a permanent arbitration
tribunal (or “facility”) such as the
International Center for the Settlement
of Investment Disputes (ICSID).


2. International Court of Justice

a. History

1) Created in 1945 as one of the organs of the
UN.
2) Modeled on the Permanent Court of
International Justice (PCIJ), which functioned as
an organ of the League of Nations from 1920 to
1946.


b. Membership

1) All the member states of the UN are
automatically parties to the International Court
of Justice’s statute, which is included as an
annex to the UN Charter.
2) Nonmembers may adhere to the ICJ’s
Statute.

c. Kinds of judgments that can be
handed down by the ICJ.
 1) Those in cases between states
(based on the Court’s “contentious”
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.







d. Contentious Jurisdiction.
1) Prerequisite to the ICJ assuming a
contentious case: All of the states that are
parties to the proceeding must have
recognized the Court’s jurisdiction.
a) Most commonly done on an ad hoc basis.
b) Sometimes these agreements are made
permanent by:
1] Inclusion in a bilateral treaty.
2] Unilateral declarations made by each of
the parties (called “optional clause” or Art.
36(2) jurisdiction).




2) Optional Clause Jurisdiction.
a) Art. 36(2) of the Statute of the Court —
known as the “optional clause” — allows
states to make a unilateral declaration
recognizing” as compulsory ipso facto and
without special agreement, in relation to any
other state accepting the same obligation, the
jurisdiction of the Court in all legal disputes.”
1] Many states have recognized the
Court’s jurisdiction under the optional clause.
2] A few have put no restrictions on the
kinds of cases they will respond to.


a] Rule of Reciprocity: Art. 36(2) only
requires that a state respond to a suit
brought against it if the state bringing the
suit has also accepted the jurisdiction of the
Court. Where both states have limited the
jurisdiction that they will recognize, the ICJ
only has power to decide a case to the extent
that both states have agreed to the same sort
of matters.
3] Most states have added a wide variety of
restrictions on the kinds of suits they are
willing to let the Court hear without a special
arrangement.




b] Self-judging Reservations (or “Connally
Reservations”).
(1) Defined: A clause that allows a state to
exclude from its acceptance of optional
clause jurisdiction any matter which it later
determines is within its own domestic
jurisdiction.
(a) This can be a problem, because the
rule of reciprocity allows would-be
defendants to invoke the plaintiff’s selfjudging clause.
(2) Validity of self-judging clauses is
questionable.

3-1. CASE CONCERNING MILITARY AND
PARAMILITARY ACTIVITIES IN AND AGAINST
NICARAGUA (Jurisdiction and Admissibility)
(Dissenting Opinion)

International Court of Justice, 1985.

FACTS: Nicaragua brought suit in the ICJ when a US
CIA mine sank one of its fishing trawlers in the port of
Corinto. Shortly before Nicaragua filed its complaint,
the US amended its optional clause declaration
refusing to recognize (for a period of 3 years) the
ICJ’s jurisdiction in any matter relating to Latin
America. The US then refused to participate in this
proceeding. The US’s optional clause declaration
contains a self-judging clause. Judge Schwebel (the
US judge on the Court) examined the effect of that
clause on the jurisdiction of the ICJ.

ISSUE: What is the effect of a self-judging clause on
the ICJ’s jurisdiction?

e. Advisory Jurisdiction.

1) Purpose: To allow the Court to give
opinions about issues of international law
at the request of the UN or its specialized
agencies.
2) Requests will be rejected if they have
the effect of making a state a party to a
dispute without its consent.

f.
 1)
 a)
 b)
 c)

Judgments.
Cases will be concluded when:
Parties reach a settlement.
Applicant withdraws a case.
Court delivers an opinion.



2) Effect of the judgment:
a) Decision of the Court is binding between
the parties and with respect to the particular
case only.
1] Stare decisis does not apply.



b) Judgment is final and without appeal.
1] ICJ will interpret a judgment.
2] ICJ may revise a judgment within ten
years if a request is made within 6 months
of the discovery of some new relevant fact.




g. Compliance with ICJ Decisions
1) Compliance is usually voluntarily.
2) Theoretically, the Statute of the Court
says that if a party refuses to comply with a
judgment, “the other party may have
recourse to the Security Council, which may,
if it deems necessary, make
recommendations or decide upon measures
to give effect to the judgment.”
3) Practically there is no way to force a state
to comply with a judgment.







3. World Trade Organization (WTO) Dispute
Settlement Procedures
a. WTO is responsible for implementing and
enforcing the WTO agreements, including:
1) General Agreement on Tariffs and Trade (GATT).
2) General Agreement on Trade in Services (GATS).
3) Agreement on Trade Related Aspects of
Intellectual Property (TRIPS).
b. Source of WTO Dispute Settlement Rules:
Understanding on Rules and Procedures Governing
the Settlement of Disputes (the Dispute Settlement
Understanding or DSU).
1) This is a unified process that applies to all
disputes arising under the WTO agreements







c. Preliminary Procedures:
1) Consultation: Member states are encouraged
to resolve disputes with each other by
consultation.
a)Dispute Settlement Panels will be established
if:
1] A party asked to participate in
consultations does not respond, or
2] The consultations are not productive.
2) Third Party Participation: If both parties agree,
they may seek the assistance of third parties in
conducting negotiations about their dispute.
a)This assistance may continue, if the parties
agree, even while a Dispute Settlement Panel is
considering a complaint.








d. Dispute Settlement Organs.
1) Dispute Settlement Body (DSB).
a) The WTO General Council convenes as
the DSB under its own Chairman and
following its own rules.
1] Responsibilities:
a] Establishes panels.
b] Adopts panel and Appellate Body reports.
c] Monitors the implementation of rulings
and recommendations.
d] Authorizes the suspension of
concessions and other member state privileges.

b) Dispute Settlement Panel.

1] Made up of three panelists (unless the
parties agree that there should be five).

a] Panelists are nominated by the WTO
Secretariat.
b] Parties must have “compelling reasons” not
to accept a nominated panelist.
c] If the parties do not agree to a panel within
20 days, one will be appointed by the WTO
Director-General after consulting the Chairman
of the DSB and the relevant council or
committee.



2] Panelists serve in their individual
capacities and not as representatives of a
state.




3] Role of Panels:
a] To objectively assess:
(1) The facts.
(2) The applicability and conformity of the
pertinent WTO agreements.

b] To make findings that will help the DSB settle
on recommendations and rulings to resolve the
dispute.

4] Panel reports are adopted automatically
within 60 days after being circulated, unless:

a] A party gives notice that it intends to appeal.

(1) Only a party directly involved in a dispute may
appeal.

b] The DSB decides by consensus not to adopt
the report.

Case 3-2. EUROPEAN
COMMUNITIES - CUSTOMS CLASSIFICATION OF
CERTAIN COMPUTER EQUIPMENT

World Trade Organization, Appellate Body, 1998

FACTS: The US alleged that the EC, the UK, and

Ireland had imposed import tariffs on certain
computer equipment (i.e., local area networks, or
LANs, and PC’s with multimedia capability) in excess
of that specified in the Schedule the EC had agreed
to as a party to the General Agreement on Tariffs and
Trade (GATT). A WTO panel agreed. The EC, the UK,
and Ireland appealed, arguing that the US had not
‘identified with sufficient specificity” the measures in
dispute and the products affected.
ISSUE: Were the measures in dispute and the
products affected identified with sufficient specificity
by the complainant?







c) Appellate Body.
1] An appeal board made up of seven
persons who serve terms of four years.
a] Three of the members of the Appellate
Body will serve when hearing a case.
2] Proceedings are confidential.
3] Opinions expressed by the members of
the Appellate Board are anonymous.
4] Decisions of the Appellate Body will be
adopted automatically unless the DSB
decides by consensus not to do so.
e. Effect of Panel and Appellate Body
Rulings: No formal precedential effect.

Case 3-3. JAPAN - TAXES ON ALCOHOLIC
BEVERAGES

World Trade Organization, Appellate Body, 1996

FACTS: The EC, Canada, and the US complained that
Japan’s application of its Liquor Tax Law did not
comply with the requirements of the GATT. The WTO
Panel hearing the complaint concluded, among other
things, that “panel reports adopted by the [old] GATT
[1947] Contracting Parties and the [new] WTO Dispute
Settlement Bodies” constitute “subsequent practice”
that were to be treated as “an integral part of GATT
1994.” In other words, they were to be regarded as
precedents. On the appeal of this case, the US argued
that the Panel hearing the case had erred in making
this finding.
 ISSUE: Must the panel reports adopted by the GATT
1947 Contracting Parties be treated as precedents?







4. International Center for the Settlement of
Investment Disputes (ICSID)
a. Created by Convention on the Settlement of
Investment Disputes between States and Nationals
of Other States (the Washington Convention).
1) Drafted in 1965 by the World Bank.
b. Purpose of ICSID: To encourage private
investment in underdeveloped countries.
1) Rationale: Many individuals and businesses
were reluctant to make investments out of the fear of
having their investment expropriated.
2) Goal: To provide a reliable mechanism for
impartially resolving disputes between an investor
and the country of investment.
c. Signatories: Half the countries of the world.








d. Constituting an ICSID Arbitration Tribunal.
1) Prerequisites:
a) The state where the investment is being made
(the host state) and the state of which the investor is
a national (the home state) must both be parties to
the Washington Convention.
b) The host state must have notified ICSID of the
class or classes of disputes that it considers
arbitrable.
1] Note: Only a few states have done so.
c) The investor and the host state must both
consent to ICSID jurisdiction.
2) These prerequisites may not be waived.
3) Unilateral withdrawal is ineffective.




Case 3-4. FEDAX N.V. v. REPUBLIC OF
VENZUELA
ICSID Arbitral Tribunal, 1997.
FACTS: Venezuela issued promissory notes to
Industrias Metalurgicas Van Dam C.A. (IMVD).
IMVD endorsed these over to Fedax N.V., a
company domiciled in Netherlands Antilles.
When Venezuela defaulted, Fedax brought suit
before an ICSID panel to collect on the notes.
Venezuela seeks to have the suit dismissed on
the grounds that an ICSID panel, which can only
hear in cases involving investments, does not
have jurisdiction.
ISSUE: (1) Had Fedax made an investment in
Venezuela? (2) Was it a “direct foreign
investment”





e. Exclusive Remedy.
1) By giving consent to ICSID arbitration, the
litigants are deemed to have excluded all
other remedies.
a) The case cannot be tried in a municipal
or another international tribunal.
b) The investor may not ask its home state
for diplomatic protection.
c) Note: The host state can require that all
local remedies be exhausted before the
dispute can be taken to ICSID.










f. Jurisdiction.
1) An ICSID tribunal must have both
personal and subject matter jurisdiction.
2) Personal Jurisdiction.
a) The parties must be:
1] A “state party.”
2] A “national of another contracting
state.”
3) Subject matter jurisdiction.
a) ICSID arbitration tribunals can only
decide matters that are:
1] Legal disputes.
2] Which arise out of an investment.







g. Orders and Awards.
1) An ICSID tribunal has the power to issue:
a) Interim orders.
b) Binding awards.
1] Although binding, an ICSID award is
not final.
a] The tribunal itself can review an
award either to interpret it or to revise it.
b] Appeal is allowed to an ad hoc
committee that has the power to annul an
award.
h. Enforcement.
 1) ICSID awards are binding and
contracting states agree to comply
with them.
 a) 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.

1] In such a case, an investor can
seek diplomatic remedies from its
home state, and other states party to
the Convention can protest.








5. Other Arbitration Tribunals
a. Rarely arbitration between private parties
is done on a purely ad hoc basis with the
parties appointing arbitrators and devising
procedures and rules for the conduct of a
proceeding on their own.
b. Commonly, the parties agree in advance
to resolve their disputes using existing
guidelines set up by one of several
international arbitration organizations.
1) Examples:
a) American Arbitration Association.
b) London Court of Arbitration.
c) International Chamber of Commerce.
C. SETTLEMENT OF DISPUTES IN
MUNICIPAL COURTS

1. Jurisdiction of Municipal Courts
 a. Jurisdiction defined: The competence or
ability of a national court to exercise the
power to try a case.
 b. Scope of jurisdiction: Under international
law, the jurisdiction of municipal courts to
try an international dispute is limited.


1) Most governing rules are prohibitory.
2) There are only a few cases where international
law requires a municipal court to take a case
contrary to its wishes (e.g., air piracy).





c. Immunity: The ability of a party to
escape the jurisdiction of a court.
1) Natural and juridical persons have few (if
any) immunities from the powers of a
municipal court.
2) Immunity of foreign states:
a) Traditionally they have had complete
immunity.
b) Modern rule: State agencies that carry
out commercial activities (such as national
airlines or national shipping lines) are
treated as having no immunity.








2. Jurisdiction in Criminal Cases
a. Grounds (or justifications) given by municipal
courts for assuming jurisdiction over international
crimes:
1) Territoriality nexus: A court has jurisdiction if the
crime was committed within the forum state’s territory.
a) The crime may have been initiated within the state’s
territory, and/or
b) The crime may have its effect within the state’s
territory.
2) Nationality nexus: A court has jurisdiction if a
national of the forum state committed the crime.
3) Protective nexus: A court has jurisdiction if the
offender injured a national interest of the forum state.
4) Universality nexus: A court has jurisdiction if the
offense is one recognized by the international
community as being of universal concern.




Case 3-5. ATTORNEY GENERAL OF THE
GOVERNMENT OF ISRAEL v. EICHMANN
Israel, District Court of Jerusalem, 1961.
FACTS: Israeli agents abducted Adolf
Eichmann from Argentina for trial for World
War II war crimes.
ISSUES: (1) Does an Israeli court have
jurisdiction to hear a dispute involving a crime
committed outside of Israel and before Israel
came into existence? (2) Can a court hear a
case when the defendant was illegally
kidnapped and forcibly brought into the
country?








3. Jurisdiction in Civil Cases
a. Jurisdiction over Persons.
1) In personam jurisdiction exists when an
individual or juridical person is physically
present within the forum state.
a) Individuals subject to in personam
jurisdiction include:
1] Nationals of the forum state (whether
physically present or not).
2] Natural persons physically present
within the state.
3] Natural persons domiciled in the state.
4] Natural persons who consent to a
court’s jurisdiction.
b) Juridical persons (e.g., business
entities and foreign governments)
subject to the in personam jurisdiction
of a municipal court include:

1] Domestic entities (e.g., companies
incorporated or formed within the
forum state).

2] Foreign entities if they:

a] are recognized as juridical entities
by the forum state.


Case 3-6. BUMPER DEVELOPMENT CORP.,
LTD. v. COMMISSIONER OF POLICE OF THE
METROPOLIS AND OTHERS

(Union of India and Others, Claimants)

FACTS: A stone Hindu religious artifact had been
wrongfully removed from India. Bumper purchased it
(or one like it) because the seller provided false
papers. The police seized the artifact while its
provenance (origins) was being checked at the
British Museum. Bumper then brought suit to get the
artifact back. Among those who intervened as
claimants for the idol was the Hindu temple and the
idol within the temple to which the artifact belonged.

ISSUE: Should the temple (and the idol) be

recognized as parties?
Does it (do they) have legal identity?

b] give their consent to the jurisdiction
of a court.

(1) Consent arises by:

(a) Appearing in court after a suit has
commenced.
(b) Agreeing to the personal jurisdiction of a
particular court in a forum selection clause
contained in a contract.
(c) Appointing an agent within a state to receive
service of process on behalf of the individual.
(d) Minimum business contacts with the forum
state.




Case 3-7. SHELL v. R. W. STURGE, LTD.

United States Sixth Circuit Court of Appeals, 1995

FACTS: Investors in Lloyd’s of London had signed
forum selection clauses that gave exclusive
jurisdiction to English courts to hear and resolve any
disputes between them and Lloyd’s. Later, in a suit
brought by the investor’s to rescind their investment
contracts with Lloyd’s (after Lloyd’s had suffered
huge losses and demanded contributions from its
investors to cover those losses) on the grounds that
Lloyd’s had sold securities to the investors without
registering with the state of Ohio, the trial court
dismissed the suit because of the forum selection
clauses. The investors appealed.

ISSUE: Is a forum selection clause enforceable?

(d) Minimum business contacts with the
forum state.

[1] Example: International Shoe Co. v. State of
Washington (US Sup. Ct. 1945) says that the
court should consider the following in
determining if there are sufficient minimum
contacts.
[a] Whether the company has performed acts
that relate to the forum state.
[b] Whether the suit is based on those acts.
[c] Whether the company has indicated by its
conduct that it intended to rely on the benefits
(such as doing business) of the forum state.
b. Jurisdiction over Property.
 1) 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.

D.
IMMUNITIES OF STATES FROM THE
JURISDICTION OF MUNICIPAL COURTS
1. Sovereign or State Immunity
 a. Defined: Doctrine that domestic
courts must decline to hear cases
against foreign sovereigns out of
deference to their roles as sovereigns.
 1) Foreign sovereigns today include all
of the officials of government.






b. Scope of sovereign immunity.
1) Absolute sovereign immunity.
a) The traditional rule (in effect until the
1950s).
b) Defined: A state is absolutely immune
and cannot be brought before a foreign court
no matter what activities it is involved in or
what injuries it may cause.
c) Rationale: States need immunity when
they are only involved in tax collection, law
enforcement, and national defense.

d) Criticism.

1] It is unfair: Individuals and businesses that
contracted to buy or sell goods or services to a
foreign country would be unable to sue the
country if it breached its contract.
2] It is bad business.

2) Restrictive Sovereign Immunity.

a) Prevalent rule in world today.
b) Defined:
1] A state is immune from suit in cases
involving injuries that are the result of its
governmental actions.
2] A state is not immune when the injuries
result from a purely commercial or
nongovernmental activity.











c. Effect of waiver of sovereign immunity
by a state:
1) Waivers by states are valid.
a) Waivers may be:
1] An express waiver at the time the suit is
brought.
2] A waiver made in advance in a contract
clause.
3] An implicit waiver made by bringing or
participating in a suit.
2) The waiver must be knowingly made.



Case 3-8. ABBOTT v. REPUBLIC OF SOUTH
AFRICA
Spain, Constitutional Court, 1992.
FACTS: The plaintiff, Abbott, a foreign national who
had been fired from her job at the South African
Embassy in Madrid, Spain, won a judgment granting
her compensation for back salary. The plaintiff sough
to execute the judgment against Embassy properties,
including its local bank accounts. South Africa
appealed and an intermediate court held that its bank
accounts were absolutely immune from execution. It
dismissed the plaintiff’s request for the enforcement
of her judgment and she appealed.

ISSUE: Can a court enforce a judgment against
property belonging to a foreign state?
2. Act of State Doctrine
 a. Defined: A municipal court will
decline to exercise jurisdiction over a
foreign state when that state:
 1) Performed an act that was an
expression of its sovereign powers.
 2) Carried out an act within in its own
territory.





Case 3-9. REGINA v. BARTLE (Ex parte
Pinochet)
England, House of Lords, 1999
FACTS: Spain seeks to extradite former
Chilean President Pinochet to stand trial for
crimes of torture, murder, and the
unexplained disappearances of Spanish
citizens committed (mainly) in Chile.
ISSUE: (1) Did Pinochet commit extraditable
crimes? (2) Is Pinochet immune from trial for
committing those crimes?
E.





CHOOSING THE GOVERNING LAW
1. Reasons Municipal Courts Apply Laws Other
Than Their Own
a. Fairness: Individuals take actions in a particular
place.
To later have a court in another country
apply different laws would discourage international
exchanges of all kinds.
b. Comity: Because each state has an interest in
protecting the rights of its subjects, and only by
respecting the interests of foreign subjects can a
state expect similar treatment for its subjects in
other states.
1) This rationale is now considered out of date.
c. This is a sui generis juridical right.








2. Choosing the Law
a. 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 civil disputes.
b. This involves a two-step procedure:
1) If the parties to a dispute have agreed to the
application of the laws of a particular country, the court
should apply those laws.
2) If the parties have not agreed as to which laws should
apply (either expressly or impliedly), then the court should
determine for itself which laws it should apply by:
a) Following statutory dictates.
b) Determining which state has the most significant
relationship with the dispute.
c) In a few jurisdictions: Determining which state has the
greatest interest in the outcome of the case.








3. Agreement of the Parties
a. Most commonly arises in contract cases.
1) The parties may agree in advance as to
what law should apply in a “choice of law
clause.”
a) Validity of these clauses:
1] Valid if freely entered into.
2] No requirement of a factual connection with
the country whose legal system they have
adopted.
2) The agreement of the parties can be made
in statements to a court.
3) The intent of the parties may be inferred.







4. Statutory Choice of Law Provisions
a. Statutory choice of law provisions are
commonly found in civil law countries in:
1) Statutory codes (most commonly).
2) International treaties (occasionally).
b. 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。
c. Rules for determining vesting.
1) The general case: The law of the place
where the act occurred shall govern.
2) Rules for special cases relate to the
subject matter of the case:
a) Delict or tort: The governing law is
the law of the place where the wrong
was committed.
 b) Contract: The law of the place
where the contract was made governs
questions of validity, and the law of the
place where the contract was to be
performed governs questions of
performance.
 c) Real property: The law of the place
where the property is located governs.


5. Most Significant Relationship

a. Defined: A court is to apply the law of the
state that has the most “contacts” with the
parties and their transaction.
1) General factors that the courts will
consider in all cases are (in essence):




a) Which law best promotes the needs of the
international system?
b) Which state’s law will be furthered the most by
applying it to the case at hand?
c) Which law will best promote the underlying
policies of the legal subject-matter area involved?






2) “Specific” factors that a court considers
depends on the kind of case that is before it.
a) Tort cases:
1] The place of injury.
2] The place of the act.
3] The nationality, domicile, residence, or place of
incorporation of the parties.
4] The place where the relationship between the
parties was centered.

b) Personal property cases:


1] The location of the property.
2] The nationality, domicile, residence, or place of
incorporation of the parties.

c) Real property cases: The location of the
property.






d) Contract cases:
1] The place of contracting.
2] The place of negotiation.
3] The place of performance.
4] The location of the subject matter.
5] The nationality, domicile, residence, or
place of incorporation of the parties.

Case 3-10. BANK OF INDIA v.
GOBINDRAM NARAINDAS SADHWANI

Hong Kong, High Court, 1982.

FACTS: Mr. & Mrs. Gobindram Sadhwani (G), residents
of Hong Kong, had acted as guarantors of a line of credit
of 230,000,000 yen that the Bank of India had provided
Sadhwanis (Japan) Ltd. (SJL). The Bank was an Indian
corporation with branches in Japan and Hong Kong. SJL
was a Japanese firm managed by Mr. G’s brother, Mr.
Kishinchand Sadhwani (K). It had drawn bills of
exchange on corporations in Sri Lanka and Nigeria (run
by other brothers). The bills were dishonored and the
Bank sought payment from Mr. K as a guarantor. Mr. K
told the Bank it would have to pursue the Hong Kong
guarantors, Mr. & Mrs. G. Although the Bank had given Mr.
& Mrs. G a release, it eventually brought suit against them
anyway. Mr. & Mrs. G. then argued that the law governing
their guarantee contract was Japanese law and that
Japanese law excused them from liability because the
Bank had released them as guarantors. The Bank argued
that either Indian or Hong Kong law should apply.

ISSUE: What law governs the guarantee contract?






6. Governmental Interest
a. Procedure:
1) Courts will make no choice of law unless
asked to do so by the parties.
In such a case,
they will apply the law of their own state.
2) If asked to make a choice of law, courts will
look to see which state has a legitimate interest
in determining the outcome of the dispute.
a) If only the forum state has an interest (a so-called
“false conflicts” case), it will apply the forum state’s
law.
b) If both the forum state and another state or
states have some legitimate interest (a “true conflicts”
case), then the forum’s laws should be applied, since
the court obviously understands those interests
better.
c) If two states other than the forum
state have legitimate interests (also a
“true conflicts” case), then the court
may:
 1] Dismiss the case if the state in which
the court is located can use the doctrine
of forum non conveniens (discussed
below).
 2] Apply whichever law it feels is the
sounder.
 3] Apply the law that is most like that of
the forum state.


Case 3-11. REYNO v. PIPER AIRCRAFT COMPANY

United States District Court, Middle District of Pennsylvania, 1979.

FACTS: In 1976, a small aircraft, owned and operated by
Scottish companies, crashed in Scotland, killing the Scottish
pilot and passengers. The aircraft was manufactured in
Pennsylvania by Piper Aircraft (P), and the propellers in
Ohio by Hartzell Propeller (H). Reyno, who became the
administratrix for the decedent’s heirs, began a wrongful
death suit in California against P and H. At P and H’s
request, the case was moved to a US federal court, where
the proceeding against H was quashed. Then, at P’s request,
the case was moved to a federal court in Pennsylvania.
Both P and H then asked that the case be dismissed. They
argued that Scottish law should apply, and that under
Scottish law the plaintiff had no standing and no right to
bring a wrongful death suit under a theory of strict liability.

ISSUE: Should California, Pennsylvania, or Scottish law be
applied?
F. REFUSAL TO EXERCISE JURISDICTION





1. Forum Non Conveniens Doctrine
a. Defined: A court may refuse to exercise
its power to hear a case where it is either
inconvenient or unfair to do so.
1) Factors the court will consider are:
a) Private interests of the parties (i.e., the
ease and cost of access to documents and
witnesses).
b) Public interest factors (i.e., the interests
of the forum state, the burden on the courts,
and the notion of judicial comity).
G. OPPOSITION TO THE EXERCISE OF
JURISDICTION
1. Antisuit Injunction: an injunction
issued by a litigant’s home country
forbidding the litigant from
proceeding with a suit in a foreign
court.
 Case 3-12.Airbus Industries G.I.E. v.
Patel


Case 3-12. AIRBUS INDUSTRIE G.I.E. v. PATEL

United Kingdom, House of Lords, 1998.

FACTS: Four UK citizens were killed and four were
injured when an Airbus A-320 plane crashed in India.
They, or their representatives, joined a suit in a Texas
court against Airbus Industrie brought by the
representatives of three Americans killed in the crash.
Airbus Industrie then obtained a judgment from an
Indian court forbidding any injured parties from bringing
suit in any court except the Indian court. Airbus
Industrie then obtained an antisuit injunction from the
English High Court forbidding the UK citizens or their
representatives from proceeding with the suit in Texas.
The UK citizens/representatives appealed.

ISSUES: When should an antisuit injunction be
granted?
H.





PROVING FOREIGN LAW
1. Presumptions
a. Courts are held to know the law that
applies in their own state.
b. Courts are held to know the rules of
international law.
c. Courts are assumed not to know the law
of foreign states.
1) The parties must prove foreign law as a
fact.
I. RECOGNITION OF FOREIGN JUDGMENTS

1. Foreign Court Judgments: A court asked
to convert a foreign judgment into a local
judgment will hold a hearing.
 a. Common consideration: Did the foreign
court have jurisdiction before handing down
its judgment?
 b. Other considerations depend on the
country.


2. Arbitral Awards:
a. 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.
 b. Must first be converted into a foreign
judgment in other states, and then that
judgment is treated like any other foreign
court judgment.