Transnational Litigation Introduction Transnational Litigation Summer Course 2013 Professor Volker...

Transnational LitigationIntroduction

Transnational LitigationSummer Course 2013

Professor Volker BehrUniversity of [email protected]


CL-INT


What is Transantional litigation concerned with?

Litigation and arbitration in case there is a nexus to more than one jurisdictionDiversity of citizenshipDiversity of domicile/residenceBusiness transactions abroadTorts abroadProperty abroad

Transnational Litigation Introduction

Scope of Law of International Civil Procedure

(International) JurisdictionDomestic Law and Foreign Law in

Transnational LitigationService AbroadTaking Evidence AbroadEnforcement of Foreign Judgments


Consequences of suing and being sued abroad

Legal consequences Court will apply it‘s domestic law of civil procedure Court will apply it‘s own private international law

when determining the applicable law Practical consequences

Distance Language Finding a suitable lawyer


When do you have to sue abroad? No jurisdiction back home No valid claim back home Prescription Enforceability questionable

When do you want to sue abroad? Favorable law Higher awards Enforcdeability

When may you be sued abroad? Jurisdiction of the foreign court given


Advantages of Suing in Domestic Courts Language Access to lawyers Favorable PLI and favorable applicable law Enforceability in a country where other party has

assets Advantages of Suing in Foreign Courts

Favorable PLI and favorable applicable law Higher awards Lower costs Enforceability in country where other party has

assets


Legal Bases for international jurisdiction

Domestic law of the court Statutory, E.g. 28 USC – Long Arm Statutes Customary Law, E.g. Case Law in American Courts

International treaties (conventions) E.g.: Brussels Convention; Warsaw Convention

Within the EU: Regulations (EC or EU) E.g. Regulation (EC) 44/2001


Legal Bases Convention for the Unification of Certain Rules

Relating to International Carriage by Air, Signed at Warsaw on 12 October 1929 - Warsaw Convention

Article 28 1. An action for damages must be brought, at the option of the

plaintiff, in the territory of one of the High Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the Court having jurisdiction at the place of destination.

2. Questions of procedure shall be governed by the law of the Court seised of the case.


Legal Bases

COUNCIL REGULATION (EC) NO. 44/2001 (BRUSSELS I REGULATION)

= Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters

Article 2 1. Subject to this Regulation, persons domiciled in a Member State shall,

whatever their nationality, be sued in the courts of that Member State. 2. Persons who are not nationals of the Member State in which they are

domiciled shall be governed by the rules of jurisdiction applicable to nationals of that State.


Competence of EU to legislate on international civil procedure

Article 81 TFEU (ex Article 65 TEC) 1. The Union shall develop judicial cooperation in civil matters having cross-border

implications, based on the principle of mutual recognition of judgments and of decisions in extrajudicial cases. Such cooperation may include the adoption of measures for the approximation of the laws and regulations of the Member States.

2. For the purposes of paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall adopt measures, particularly when necessary for the proper functioning of the internal market, aimed at ensuring:

(a) the mutual recognition and enforcement between Member States of judgments and of decisions in extrajudicial cases;

(b) the cross-border service of judicial and extrajudicial documents; (c) the compatibility of the rules applicable in the Member States concerning conflict

of laws and of jurisdiction; (d) cooperation in the taking of evidence; ….


What does a EU regulation mean? Article 288 TFEU (ex Article 249 TEC) To exercise the Union's competences, the institutions shall adopt

regulations, directives, decisions, recommendations and opinions.

A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

A decision shall be binding in its entirety. A decision which specifies those to whom it is addressed shall be binding only on them.

Recommendations and opinions shall have no binding force.


Priority of EC/EU Law ECJ Costa v. Ente Nazionale per l'Energia Elettrica Enel -

(Case 14/1964) … The pre- eminence of Community law is confirmed by Article 189

(now Article 288 TFEU) which prescribes that Community regulations have an 'obligatory' value and are 'directly applicable within each member-State'. Such a provision which, it will be noticed, admits of no reservation, would be wholly ineffective if a member-State could unilaterally nullify its purpose by means of a Law contrary to Community dictates. It follows from all these observations that the rights created by the Treaty, by virtue of their specific original nature, cannot be judicially contradicted by an internal law, whatever it might be, without losing their Community character and without undermining the legal basis of the Community.


Interpretation of EU LAW

Literal interpretation Systematic interpretation Historical interpretation Teleological interpretation Uniform interpretation Effet utile


28 USCSec. 1330. Actions against foreign

states (a) The district courts shall have original jurisdiction without

regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement.

…


28 USC Sec. 1332. Diversity of citizenship; amount in controversy;

costs (a) The district courts shall have original jurisdiction of all civil

actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between -

(1) citizens of different States; (2) citizens of a State and citizens or subjects of a foreign

state; (3) citizens of different States and in which citizens or

subjects of a foreign state are additional parties; and (4) a foreign state, defined in section 1603(a) of this title, as

plaintiff and citizens of a State or of different States. …


CALIFORNIA CODES - CODE OF CIVIL PROCEDURE

SECTION 410.10410.10. A court of this state may exercise

jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.


New York State Consolidated Laws: Civil Practice Law & Rules ARTICLE 3 JURISDICTION AND SERVICE, APPEARANCE AND CHOICE OF COURT S 301. Jurisdiction over persons, property or status. A court may exercise such jurisdiction over

persons, property, or status as might have been exercised heretofore. S 302. Personal jurisdiction by acts of non-domiciliaries. Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts

enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:

1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or

2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or

3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he

(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or


New York State Consolidated Laws: Civil Practice Law & Rules(indirectly addressing case law)

ARTICLE 3 JURISDICTION AND SERVICE, APPEARANCE AND CHOICE OF

COURT

S 301. Jurisdiction over persons, property or status. A court may exercise such jurisdiction over persons, property, or status

as might have been exercised heretofore.

Transnational LitigationImmunity

Not just a hypo Augsburg W-Company constructs a highway in

Thailand. W-Company is not jet payed. Can they sue the state of Thailand in a German Court?

W-Company gets an Swiss arbitral award awarding € 30 mio. The crownprince of Thailand travels to Munich using an airplane. It is questionable whether the airplane in owned by the crownprince or whether it is a military airplane of the Thailand military. Can W-Company enforce the award by taking the airplane?


Again not just a hypo

DSK, the then head of the International Monetary Fund (located in Washington, D.C.) alledgedly has raped a chambermaid in a New York hotel. Can DSK be imprisoned in New York?


Immunity from what?

Immunity from jurisdiction in civil and commercial matters

Immunity from executionImmunity from criminal chargesEtc.


Immunity for whom?

State immunity Immunity of heads of state Immunity of diplomats , diplomatic missions and

staff Immunity of consulats and staff Immunity of international organizations Immunity of personal of international

organizations Immunity of state-owned companies?


Reach of Immunity

Acta iure imperii (sovereign functions)Acta gestionis (civil or commercial

transactions)

Catalogue of exceptions from immunity


Legal Bases for Immunity

Customary lawStatutesConventions


Convention on the Privileges and Immunities of the United Nations, 1 U.N.T.S. 15, 13 February 1946. (Adopted by the UN General Assembly on 13 February 1946

SECTION 19. In addition to the immunities and privileges specified in Section 18, the Secretary-General and all Assistant Secretaries- General shall be accorded in respect of themselves, their spouses and minor children, the privileges and immunities, exemptions and facilities accorded to diplomatic envoys, in accordance with international law.


Articles of Agreement of the International Monetary Fund Article IX - Status, Immunities, and Privileges

Section 3. Immunity from judicial process

The Fund, its property and its assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that it expressly waives its immunity for the purpose of any proceedings or by the terms of any contract.

Section 8. Immunities and privileges of officers and employees All Governors, Executive Directors, Alternates, members of committees,

representatives appointed under Article XII, Section 3(j), advisors of any of the foregoing persons, officers, and employees of the Fund:

(i) shall be immune from legal process with respect to acts performed by them in their official capacity except when the Fund waives this immunity;

…


European Convention on State Immunity (Basle Convention) Basel, 16 May 1972

Preamble The member States of the Council of Europe, signatory hereto, Considering that the aim of the Council of Europe is to achieve a greater unity

between its members; Taking into account the fact that there is in international law a tendency to restrict

the cases in which a State may claim immunity before foreign courts; Desiring to establish in their mutual relations common rules relating to the scope

of the immunity of one State from the jurisdiction of the courts of another State, and designed to ensure compliance with judgments given against another State;

Considering that the adoption of such rules will tend to advance the work of harmonisation undertaken by the member States of the Council of Europe in the legal field,

Have agreed as follows:


European Convention on State Immunity (Basle Convention)

Article 15 A Contracting State shall be entitled to

immunity from the jurisdiction of the courts of another Contracting State if the proceedings do not fall within Articles 1 to 14; the court shall decline to entertain such proceedings even if the State does not appear.



Article 1 1. A Contracting State which institutes or intervenes in proceedings before a court

of another Contracting State submits, for the purpose of those proceedings, to the jurisdiction of the courts of that State.

2. Such a Contracting State cannot claim immunity from the jurisdiction of the courts of the other Contracting State in respect of any counterclaim:

a. arising out of the legal relationship or the facts on which the principal claim is based;

b. if, according to the provisions of this Convention, it would not have been entitled to invoke immunity in respect of that counterclaim had separate proceedings been brought against it in those courts.

3. A Contracting State which makes a counterclaim in proceedings before a court of another Contracting State submits to the jurisdiction of the courts of that State with respect not only to the counterclaim but also to the principal claim.



Article 2 A Contracting State cannot claim immunity from the jurisdiction of

a court of another Contracting State if it has undertaken to submit to the jurisdiction of that court either:

a. by international agreement; b. by an express term contained in a contract in writing; or c. by an express consent given after a dispute between the

parties has arisen. Etc.



Waiver of immunity (Article 2) In Writing Waiver of immunity as to service of process is

concerned Waiver from immunity in a lawsuit in courts Waiver of immunity from actions in arbitration Waiver of immunity in enforcement

Transnational LitigationJurisdiction

Jurisdiction in civil and commercial matters within the EU

Council Regulation (EC) No. 44/2001


Scope of Council Regulation (EC) No. 44/2001

Article 11. This Regulation shall apply in civil

and commercial matters whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters.

2. The Regulation shall not apply to: …


Civil or commercial matters European Court of Justice Judgment of the Court of 14 October 1976. LTU Lufttransportunternehmen GmbH & Co.

KG v Eurocontrol. Reference for a preliminary ruling: Oberlandesgericht Düsseldorf - Germany. Case 29/76. (Date of judgment 1976/10/14) (European Court Reports 1976 page 1541 )

As Article 1 serves to indicate the area of application of the convention it is necessary, in order to ensure, as far as possible, that the rights and obligations which derive from it for the contracting states and the persons to whom it applies are equal and uniform, that the terms of that provision should not be interpreted as a mere reference to the internal law of one or other of the states concerned.

The concept in question must therefore be regarded as independent and must be interpreted by reference, first, to the objectives and scheme of the convention and, secondly, to the general principles which stem from the corpus of the national legal systems. = autonomous interpretation

Although certain judgments given in actions between a public authority and a person governed by private law may fall within the area of application of the convention, this is not so where the public authority acts in the exercise of its powers.


Eurocontrol

What can we learn from Eurocontrol?

First of all, the ECJ asks for what is called an autonomous interpretation, because otherwise equal and uniform interpretation in the member states would be compromised.

Second, the ECJ takes from the fact that thy type of court or tribunal concerned is of no significance, the division of jurisdiction between different courts in different member states is of little significance.

Third, the ECJ asks for an interpretation in the light of the convention (now Regulation) and in the light of general principles in the member states.

Forth, the court states that where actions between a public authority and a person governed by private law are determined by the exercise of the power of the public authority, the do not fall under the category of private or commercial.


Scope of Regulation 44/2001

Article 67 (prevailing EU instruments) This Regulation shall not prejudice the application of provisions governing jurisdiction and the

recognition and enforcement of judgments in specific matters which are contained in Community instruments or in national legislation harmonised pursuant to such instruments.

Article 69 (prevailing older conventions) Subject to Article 66(2) and Article 70, this Regulation shall, as between Member States,

supersede the following conventions and treaty concluded between two or more of them: … Article 70 1. The Treaty and the Conventions referred to in Article 69 shall continue to have effect in

relation to matters to which this Regulation does not apply. 2. They shall continue to have effect in respect of judgments given and documents formally

drawn up or registered as authentic instruments before the entry into force of this Regulation.

Article 71 (prevailing special conventions) 1. This Regulation shall not affect any conventions to which the Member States are parties

and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.


Scope of Regulation 44/2001 Time requirements

Article 76 This Regulation shall enter into force on l March 2002.

Article 66 1. This Regulation shall apply only to legal

proceedings instituted and to documents formally drawn up or registered as authentic instruments after the entry into force thereof.


JurisdictionThe U.S. system:

Subject Matter Jurisdiction, In personam Jurisdiction, and In rem Jurisdiction


Jurisdiction The U.S. system:

Long Arm Statutes Calif. CCP § 410.10. Jurisdiction over Nonresident Defendants. A court of this Territory may exercise

jurisdiction on any basis not inconsistent with the Organic Act or the Constitution of the United States.


Jurisdiction The EU system

General and Specific Jurisdiction

General jurisdiction Article 2 1. Subject to this Regulation, persons domiciled in a Member State shall,

whatever their nationality, be sued (whatever the claim) in the courts of that Member State.

… Special jurisdiction Article 5 A person domiciled in a Member State may, in another Member State, be sued: 1. (a) in matters relating to a contract, in the courts for the place of performance

of the obligation in question;


General jurisdiction

Article 2 1. Subject to this Regulation, persons domiciled in a

Member State shall, whatever their nationality, be sued in the courts of that Member State.

… General jurisdiction as stated in Article 2 is

subordinate to quite a number of other jurisdictional bases. Most of them – but not all of them – depend on the defendant having his or her domicile in a Member State but vest jurisdiction in another Member State.


Exclusive Jurisdiction, Article 22 Brussels I Regulation

On top of the hierarchy of jurisdictional bases we find Article 22. Already the title of Article 22 indicates the very special character of this provision. And the text of Article 22 confirms this special character. Moreover, the text of Articles 23 and 24 additionally demonstrate the extraordinary power of Article 22.

Section 6 Exclusive jurisdiction Article 22 The following courts shall have exclusive jurisdiction, regardless of

domicile: 1. in proceedings which have as their object rights in rem in immovable

property or tenancies of immovable property, the courts of the Member State in which the property is situated. However, …



European Court of Justice JUDGMENT OF THE COURT (Sixth Chamber), 13 July 2000 in Case

C-412/98, Group Josi Reinsurance Company SA and Universal General Insurance Company (UGIC),

46. The same conclusion can be drawn from Article 16 of the Convention, which states that the rules of exclusive jurisdiction which it lays down are to apply without the domicile of the parties being taken into consideration. The fundamental reason for those rules of exclusive jurisdiction is the existence of a particularly close connection between the dispute and a Contracting State, irrespective of the domicile both of the defendant and of the plaintiff (as regards, more specifically, in proceedings having as their object tenancies of immovable property, the exclusive jurisdiction of the courts of the Contracting State in which the property is situated, see, in particular, Case C-8/98 Dansommer v Götz [2000] ECR I-0000, paragraph 27).



European Court of Justice Erich Rösler v. Horst Rottwinkel (Case 241/83), [1985] (1

C.M.L.R. 806) Article (now) 22 no. 1 old version Tenancies of immovable property in particular are 'usually governed

by special legislation' which should preferably be administered only by the courts of the country where it is in force. Moreover 'several States' provide for exclusive jurisdiction in such proceedings.

However, as to short term tenancies see no Art. 22 no. 1



Jurisdiction Hypo: Shannon, a student from California, enjoys her stay in Augsburg so much that she

decides to stay in Germany for a couple of weeks after having finished her summer course. Visiting Cinderella’s Castle Neuschwanstein she falls in love with this site and decides to rent it for one month. Bavaria, the owner of the castle, rents it out to Shannon. At the end of the written contract we find a clause: Exclusive jurisdiction shall be vested in the California Courts.

a) Shannon does not pay the rent but returns to California. Bavaria sues Shannon in the civil court in Fuessen (Neuschwanstein is located in the Fuessen Circuit).

b) Back in California Shannon sues Bavaria in a California Court claiming damages for mental diseases because during her stay in Neuschwanstein a ghost had appeared and terrified her almost to death.


Jurisdiction based on Appearance, Art. 24 Brussels I Regulation

Section 7 Prorogation of jurisdiction Article 24 Apart from jurisdiction derived from other provisions of

this Regulation, a court of a Member State before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 22.


Jurisdiction based on Appearance, 24 Brussels I Regulation Section 7 Prorogation of jurisdiction

Article 24 Article 24 is somehow tricky and often misunderstood by lawyers

representing their client – which might be considered to be professional malpractice. In case you want to challenge jurisdiction of the court where the plaintiff has brought his or her lawsuit, you first have to contest jurisdiction of the court. Otherwise the court will have jurisdiction by appearance.

Once you may – additionally and auxiliary – argue on the case. You even should do so, because in some member states rules of civil procedure ask for pleasing everything at the very beginning of the lawsuit, which is sanctioned by penalty of preclusion.


Jurisdiction based on Appearance, Art. 24 Brussels I Regulation

Section 7 Prorogation of jurisdiction

European Court of Justice Hannelore Spitzley v. Sommer Exploitation S.A. (Case 48/84)

[1985] 2 C.M.L.R. 507

The court of a Contracting State before which the applicant, without raising any objection, enters an appearance in proceedings relating to a claim for a set-off which is based on a contract or on facts other than that or those on which the claims in his application are founded and in respect of which there is a validly concluded agreement conferring exclusive jurisdiction on the courts of another Contracting State for the purposes of Article 17 of the Convention of 27 September 1968 on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters, has jurisdiction by virtue of Article 18 of that Convention.


Prorogation and Derogation of Forum, Article 23 Brussels I Regulation

As far as doing transnational business is concerned, predictability is one of the major issues. This is true not only as to the obligations parties are entering into or have entered into but as well as to the question what happens in case the other party does not comply with its obligations and a lawsuit cannot be avoided.

Choice of forum clauses and choice of law clauses hence are widely practiced and of utmost importance. A lawyer should at least try to warn his or her client of the risks of not having such clauses.


Section 7 Prorogation of jurisdiction Article 23 1. If the parties, one or more of whom is domiciled in a Member State, have

agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either:

(a) in writing or evidenced in writing; or (b) in a form which accords with practices which the parties have established

between themselves; or (c) in international trade or commerce, in a form which accords with a usage of

which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to "writing".


Section 7 Prorogation of jurisdictionArticle 23Different from the general principle in

Article 2 Article 23 does not ask for the defendant to be domiciled in a member state. It is sufficient that one of the parties is domiciled in a Member State.

If no party is domiciled in a Member State, Article 23 § 3 applies.


Prorogation of jurisdiction CL-INT, Inc. (CL-INT), a corporation under Delaware law and

headquartered in Pittsburgh, PA, has invented a drug which helps reducing blood sugar levels. CL-INT has applied for patent protection in the US but not yet elsewhere. The new drug is to be sold worldwide under the uniform name of OPTISUGAR. In Europe it shall be marketed by Intermed GmbH, a German corporation headquartered in Augsburg, Germany.

Considering the eventualities of suing or being sued out of the contract or in relation with activities out of the contract, the contract between CL-INT and Intermed as prepared by CL-INT lawyers contains suggestions for two final clauses:


Clause A 1. "All disputes arising out of or in connection with the present agreement shall be finally

settled under the arbitration rules of the UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION by three arbitrators (one appointed by each party and the chairman appointed by the two arbitrators) in accordance with the said Rules. The place of arbitration shall be New York. The arbitration shall be conducted in English language. The arbitration award shall be final and binding.

2. ICC Arbitration Clause All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.

3. Hamburg Chamber of Commerce Arbitration Clause Any dispute arising in connection with the present contract or with respect to its validity shall

be finally settled by the Court of Arbitration of the Hamburg Chamber of Commerce, to the exclusion of the ordinary courts of law.

4. Any dispute arising out of or in connection with the present contract shall be treated in the Pittsburgh Courts.

5. Jurisdiction for all disputes arising out of or in connection with the present contract from orders for OPTISUGAR should be in the Augsburg courts.

6. Any dispute arising must be treated before the London Court of Justice.


Clause B. 1. The substantive law of Pennsylvania shall

be applicable all arbitration/litigation. 2. The substantive law of Germany shall be

applicable to all arbitration/litigation. 3. The substantive law of Germany shall be

applicable to all arbitration/litigation. CISG is excluded.

3. The German Civil Code shall be applicable to all arbitration/litigation


Advantages or disadvantages of arbitration

as compared to litigation?

Duration Finality within one instance Cost Expertise of arbitrators Secrecy


What should be addressed in an arbitration clause?

Number of arbitrators Selection of arbitrators Selection of the chairperson Place of Arbitration Language of Arbitration Procedure Solutions for solving the Gordian knot in case some

issues become controversial Finality of an Award


How to correctly draft a choice of forum clause? Address all issues which might be important and might

become controversial Rely on an arbitration clause prepared by an arbitral

institution and the framework statute of such institution

How to correctly draft a choice of law clause? Always in writing (how else to prove the existence and

content?) Address precisely what law you want to be applied Exclude expressly what otherwise might be implied


Possible obstacles to arbitration clauses?

Will courts abide to arbitrationEnforcement of an arbitral awardPossible obstacles to choice of forum

clauses?Will the chosen forum accept jurisdiction

by choice of forum?


Forum Shopping and Forum Non Conveniens The combined system of general and special jurisdiction leaving

at the option of plaintiff where to sue as well as different jurisdictional bases in different countries very often give the plaintiff a choice among different courts where to sue the defendant. Plaintiff in general may choose where to sue. Selection of one special court among the available courts may be influenced by reasons of practical convenience as well as by expectations of a more favorable judgment as well as by reasons of easier access to execution.

Question is whether the court may refuse jurisdiction (although there is a jurisdictional base given). This question is treated under the heading of forum non conveniens. The doctrine originally was developed in Scottish courts.


Forum Shopping and Forum Non Conveniens U.S. Supreme Court GULF OIL CORPORATION v. GILBERT, 330 U.S. 501 (1947) 330 U.S. 501 This Court, in one form of words or another, has repeatedly recognized the

existence of the power to decline jurisdiction in exceptional circumstances. As formulated by Mr. Justice Brandeis the rule is: 'Obviously, the proposition that a court having jurisdiction must exercise it, is not universally true; else the admiralty court could never decline jurisdiction on the ground that the litigation is between foreigners. Nor is it true of courts administering other systems of our law. Courts of equity and of law also occasionally decline, in the interest of justice, to exercise jurisdiction, where the suit is between aliens or nonresidents, or where for kindred reasons the litigation can more appropriately be conducted in a foreign tribunal.' Canada Malting Co., Ltd., v. Paterson Steamships, Ltd., 285 U.S. 413 422, 423, 52 S.Ct. 413, 415.


Forum shopping The European Approach (1) England Spiliada Maritime Corp v Cansulex Ltd – The Spiliada -,

1986 3 All ER 843 The Atlantic Star 1972 3 All ER 705, 709 (CA) “No one who comes to these courts asking for justice should

come in vain. He must, of course, come in good faith. ... This right to come here is not confined to Englishmen. It extends to any freindly foreigner. He can seek the aid of our courts if he desires to do so. You may call this ‘forum shopping’ if you please, but if the forum is England, it is a good place to shpo in, both for the quality of the goods and the speed of service.”


Forum shopping The European Approach (2) Switzerland Art. 5 Law on private international law (1) As to an existing or future law suit concerning ….claims out of a

distinctive relationship parties may agree upon the forum. Agreement may be done in writing, by telegram, telex, telefax or in any other form of transmission enabling proof of agreement by text. In case the agreement does not say otherwise, the prorogated court has exclusive jurisdiction.

(2) Agreement on the forum is invalid in case it abusively deprives one party of a given Swiss forum.

(3) The agreed forum must not deny jurisdiction: Where one of the parties has his domicile, residence, or agency in the

Kanton (sisterstate within the Swiss Federation) of the agreed court, or b. Where according to this las Swiss law is applicable to the case.


Forum shopping The European Approach (3) Germany Doctrine of forum non conveniens is not accepted in Germany.

Once jurisdiction of German courts being established, there is a constitutional problem in refusing jurisdiction on discretionary grounds. Under Art. 101 § 1 S. 2 of the German Grundgesetz (Constitution) nobody may be deprived of his judge. Put it the other way round, the plaintiff is entitled to have the case decided by a court whenever jurisdiction of the court is once established.

The only thing German courts can do – and occasionally did – is denying jurisdiction at all by interpreting jurisdictional bases in a restricted way.

Cyprus Case on § 23 Code of Civil Procedure


Regulation 44/2001 and domestic bases of jurisdiction

Article 3 1. Persons domiciled in a Member State may

be sued in the courts of another Member State only by virtue of the rules set out in Sections 2 to 7 of this Chapter.

2. In particular the rules of national jurisdiction set out in Annex I shall not be applicable as against them.


Special jurisdiction

Article 5 A person domiciled in a Member State may, in

another Member State, be sued: … 1. (a) in matters relating to a contract, in the

courts for the place of performance of the obligation in question; …..


Special jurisdiction

Article 5 (1) (actual version): A person domiciled in a Member State may, in another Member State, be sued: 1. (a) in matters relating to a contract, in the courts for the place of performance of

the obligation in question; (b) for the purpose of this provision and unless otherwise agreed, the place of

performance of the obligation in question shall be: . in the case of the sale of goods, the place in a Member State where, under the

contract, the goods were delivered or should have been delivered, . in the case of the provision of services, the place in a Member State where,

under the contract, the services were provided or should have been provided, (c) if subparagraph (b) does not apply then subparagraph (a) applies;


Special Jurisdiction, Article 5 No. 1: Jurisdiction in the Member State of the place of performance

COURT OF JUSTICE Judgment of the Court of 6 October 1976. Industrie Tessili Italiana Como v Dunlop AG. Reference for a preliminary ruling:

Oberlandesgericht Frankfurt am Main - Germany. Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Article 5 (1). Case 12/76. (Date of judgment 1976/10/06) - European Court Reports 1976 page 1473

… 10 The convention frequently uses words and legal concepts drawn from civil, commercial and procedural law and capable of a

different meaning from one Member State to another. The question therefore arises whether these words and concepts must be regarded as having their own independent meaning and as being thus common to all the Member States or as referring to substantive rules of the law applicable in each case under the rules of conflict of laws of the court before which the matter is first brought.

… 13 This freedom of choice was introduced in view of the existence in certain well-defined cases of a particularly close relationship

between a dispute and the court which may be most conveniently called upon to take cognizance of the matter. Thus in the case of an action relating to contractual obligations Article 5 (1) allows a plaintiff to bring the matter before the court for the place ' of performance ' of the obligation in question. It is for the court before which the matter is brought to establish under the convention whether the place of performance is situate within its territorial jurisdiction. For this purpose it must determine in accordance with its own rules of conflict of laws what is the law applicable to the legal relationship in question and define in accordance with that law the place of performance of the contractual obligation in question.

RULING In answer to the question referred to it by the oberlandesgericht frankfurt am main by order dated 14 January 1976, hereby

rules: The ' place of performance of the obligation in question ' within the meaning of Article 5 (1) of the convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters is to be determined in accordance with the law which governs the obligations in question according to the rules of conflict of laws of the court before which the matter is brought.



COURT OF JUSTICE Judgment of the Court of 6 October 1976. Industrie Tessili Italiana

Como v Dunlop AG. Reference for a preliminary ruling: Oberlandesgericht Frankfurt am Main - Germany. Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Article 5 (1). Case 12/76. (Date of judgment 1976/10/06) - European Court Reports 1976 page 1473

… As to Article 5 no. 1 the Court relies on the obligation in question The Court exceptionally denies autonomous interpretation and instead

relies on the law applicable by PIL od the national court



Judgment of the Court of 15 January 1987. Hassan Shenavai v Klaus Kreischer. Reference for a preliminary ruling: Landgericht Kaiserslautern - Germany. Brussels Convention - Place of performance of an obligation. Case 266/85.European Court Reports 1987 page 0239

RULING

On those grounds,

The court

In answer to the question referred to it by the landgericht kaiserslautern by order of 5 March 1985, hereby rules:

For the purposes of determining the place of performance within the meaning of Article 5 (1) of the convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, the obligation to be taken into consideration in a dispute concerning proceedings for the recovery of fees commenced by an architect Commissioned to draw up plans for the building of houses is the contractual obligation which forms the actual basis of legal proceedings.


Special Jurisdiction, Article 5 Jurisdiction in Member State of

establishment Article 5 (5) A defendant domiciled in a Member State may

be sued as regards a dispute arising out of the operations of a branch, agency or other establishment, in the courts for the place in which the branch, agency or other establishment is situated.


Special Jurisdiction, Article 5 Jurisdiction in Member State of establishment,

Article 5 (5) Case 33/78 Somafer “that the essential characteristic of a branch or an agency is 'the fact of

being subject to the direction and control of the parent body'” In addition the court – as in earlier decisions relies on the fact that ['the concept

of a branch, agency or other establishment implies a place of business which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension.'


Special Jurisdiction, Article 5 No. 5: Jurisdiction of establishment

Blanckaert and Willems PVBA v. Luise Trost, (Case 139/80), [1982] 2 C.M.L.R. 1

Order

On those grounds, THE COURT (Third Chamber), in answer to the questions referred to it by the Bundesgerichtshof by an order of 21 March 1980HEREBY RULES:An independent commercial agent who merely negotiates business (Handelsvertreter (Vermittlungsvertreter)), inasmuch as his legal status leaves him basically free to arrange his own work and decide what proportion of his time to devote to the interests of the undertaking which he agrees to represent and whom that undertaking may not prevent from representing at the same time several firms competing in the same manufacturing or marketing sector, and who, moreover, merely transmits orders to the parent undertaking without being involved in either their terms or their execution, does not have the character of a branch, agency or other establishment within the meaning of Article 5 (5) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters.


Special Jurisdiction, Article 5 No. 3: Tort jurisdiction

Article 5 A person domiciled in a Member State may, in

another Member State, be sued: … 3. in matters relating to tort, delict or quasi-

delict, in the courts for the place where the harmful event occurred or may occur;


Special Jurisdiction, Article 5 No. 3: Tort jurisdiction

COURT OF JUSTICE Judgment of the Court of 30 November 1976. Handelskwekerij G. J. Bier BV v Mines de potasse

d'Alsace SA. Reference for a preliminary ruling: Gerechtshof ' s-Gravenhage - Netherlands. Brussels Convention on jurisdiction and the enforcement of Judgment, article 5 (3) (liability in tort, delict or quasi-delict). Case 21-76 - European Court Reports 1976 page 1735

RULING

The court

In answer to the question referred to it by the gerechtshof, the hague, by judgment of 27 February 1976, hereby rules:

Where the place of the happening of the event which may give rise to liability in tort, delict or quasidelict and the place where that event results in damage are not identical, the expression ' place where the harmful event occurred ' , in Article 5 (3) of the convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, must be understood as being intended to cover both the place where the damage occurred and the place of the event giving rise to it.

The result is that the defendant may be sued, at the option of the plaintiff, either in the courts for the place where the damage occurred or in the courts for the place of the event which gives rise to and is at the origin of that damage.


Special Jurisdiction, Article 5 No 3: Tort jurisdiction

Shevill and Others v. Presse Alliance SA - (CASE C-68/93) 52. In the present case, the situation is more complex, involving as it does a causal event

giving rise to more than one instance of damage. The harm occurs in the place of the final element making up the tort, that is to say, in the case of torts committed in a newspaper or in radio or television programmes, in each State where the newspaper is distributed or the broadcast programme is received. In objective terms, the place in which the causal event directly giving rise to such damage occurs is that in which the newspaper is published or the programme is broadcast.

53. Damage to a person' s reputation and/or honour arises in the various places where a defamatory remark is revealed to third parties. Consequently, the damage becomes apparent when that 'information' is brought into public knowledge the publication of the newspaper at issue constitutes the vehicle by which it is transmitted. Thus there is clearly a geographical separation between the causal event and the damage.

71. Consequently, the courts of one of the places where damage arose cannot hear proceedings for compensation for damage arising in other Contracting States, inasmuch as there is no element of proximity connecting the forum with the dispute.


Position of Defendants not Domiciled in a Member State Article 4 1. If the defendant is not domiciled in a Member State, the

jurisdiction of the courts of each Member State shall, subject to Articles 22 and 23, be determined by the law of that Member State.

2. As against such a defendant, any person domiciled in a Member State may, whatever his nationality, avail himself in that State of the rules of jurisdiction there in force, and in particular those specified in Annex I, in the same way as the nationals of that State.


Protection of weaker parties Section 3 Jurisdiction in matters relating to insurance Article 8 In matters relating to insurance, jurisdiction shall be determined by this Section,

without prejudice to Article 4 and point 5 of Article 5. Article 9 1. An insurer domiciled in a Member State may be sued: (a) in the courts of the Member State where he is domiciled, or (b) in another Member State, in the case of actions brought by the policyholder,

the insured or a beneficiary, in the courts for the place where the plaintiff is domiciled,

(c) if he is a co-insurer, in the courts of a Member State in which proceedings are brought against the leading insurer.

2. An insurer who is not domiciled in a Member State but has a branch, agency or other establishment in one of the Member States shall, in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that Member State.


Protection of weaker parties Section 3 Jurisdiction in matters relating to insurance

Article 12 1. Without prejudice to Article 11(3), an insurer may bring proceedings only in the courts of the Member

State in which the defendant is domiciled, irrespective of whether he is the policyholder, the insured or a beneficiary.

2. The provisions of this Section shall not affect the right to bring a counter-claim in the court in which, in accordance with this Section, the original claim is pending.

Article 13 The provisions of this Section may be departed from only by an agreement: 1. which is entered into after the dispute has arisen, or 2. which allows the policyholder, the insured or a beneficiary to bring proceedings in courts other than those

indicated in this Section, or 3. which is concluded between a policyholder and an insurer, both of whom are at the time of conclusion of

the contract domiciled or habitually resident in the same Member State, and which has the effect of conferring jurisdiction on the courts of that State even if the harmful event were to occur abroad, provided that such an agreement is not contrary to the law of that State, or

4. which is concluded with a policyholder who is not domiciled in a Member State, except in so far as the insurance is compulsory or relates to immovable property in a Member State, or

5. which relates to a contract of insurance in so far as it covers one or more of the risks set out in Article 14.


Protection of weaker parties Consumers Section 4 Jurisdiction over consumer contracts Article 15 1. In matters relating to a contract concluded by a person, the consumer, for a purpose which

can be regarded as being outside his trade or profession, jurisdiction shall be determined by this Section, without prejudice to Article 4 and point 5 of Article 5, if:

(a) it is a contract for the sale of goods on instalment credit terms; or (b) it is a contract for a loan repayable by instalments, or for any other form of credit, made to

finance the sale of goods; or (c) in all other cases, the contract has been concluded with a person who pursues

commercial or professional activities in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities.

2. Where a consumer enters into a contract with a party who is not domiciled in the Member State but has a branch, agency or other establishment in one of the Member States, that party shall, in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that State.

3. This Section shall not apply to a contract of transport other than a contract which, for an inclusive price, provides for a combination of travel and accommodation.


Protection of weaker parties Consumers Section 4 Jurisdiction over consumer contracts Article 16 1. A consumer may bring proceedings against the other party to a contract either in the

courts of the Member State in which that party is domiciled or in the courts for the place where the consumer is domiciled.

2. Proceedings may be brought against a consumer by the other party to the contract only in the courts of the Member State in which the consumer is domiciled.

3. This Article shall not affect the right to bring a counter-claim in the court in which, in accordance with this Section, the original claim is pending.

Article 17 The provisions of this Section may be departed from only by an agreement: 1. which is entered into after the dispute has arisen; or 2. which allows the consumer to bring proceedings in courts other than those indicated in this

Section; or 3. which is entered into by the consumer and the other party to the contract, both of whom

are at the time of conclusion of the contract domiciled or habitually resident in the same Member State, and which confers jurisdiction on the courts of that Member State, provided that such an agreement is not contrary to the law of that Member State.


Protection of weaker parties Individual employment

Section 5 Jurisdiction over individual contracts of employment Article 18 1. In matters relating to individual contracts of employment,

jurisdiction shall be determined by this Section, without prejudice to Article 4 and point 5 of Article 5.

2. Where an employee enters into an individual contract of employment with an employer who is not domiciled in a Member State but has a branch, agency or other establishment in one of the Member States, the employer shall, in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that Member State.


Protection of weaker parties Individual employment

Section 5 Jurisdiction over individual contracts of employment Article 19 An employer domiciled in a Member State may be sued: 1. in the courts of the Member State where he is domiciled; or 2. in another Member State: (a) in the courts for the place where the employee habitually carries out his work or in the courts for the last

place where he did so, or (b) if the employee does not or did not habitually carry out his work in any one country, in the courts for the

place where the business which engaged the employee is or was situated. Article 20 1. An employer may bring proceedings only in the courts of the Member State in which the employee is

domiciled. 2. The provisions of this Section shall not affect the right to bring a counter-claim in the court in which, in

accordance with this Section, the original claim is pending. Article 21 The provisions of this Section may be departed from only by an agreement on jurisdiction: 1. which is entered into after the dispute has arisen; or 2. which allows the employee to bring proceedings in

courts other than those indicated in this Section.


Jurisdiction beyond Brussels I Regulation

Council Regulation (EC) NO. 1347/2000 replaced by Council Regulation 2201/2003

Brussels and Lugano Conventions Jurisdiction under Specific Conventions Jurisdicrion under Domestic Law of Civil

Procedure

Transnational Litigation


COUNCIL REGULATION (EC) No 2201/2003 of 27 November 2003 concerning

jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000

L 338/2 EN Official Journal of the European Union 23.12.2003



COUNCIL REGULATION (EC) No 2201/2003

Article 1 Scope 1. This Regulation shall apply, whatever the nature of the court or tribunal, in civil matters relating to: (a) divorce, legal separation or marriage annulment; (b) the attribution, exercise, delegation, restriction or termination of parental responsibility.




Article 2 Definitions … 3. the term ‘Member State' shall mean all

Member States with the exception of Denmark;




Article 60 Relations with certain multilateral conventions In relations

between Member States, this Regulation shall take precedence over the following Conventions in so far as they concern matters governed by this Regulation:…

Article 61 Relation with the Hague Convention of 19 October 1996 on Jurisdiction, Applicable law, Recognition, Enforcement and Cooperation in Respect of Parental Responsibility and Measures for the Protection of Children …




Article 64 1. The provisions of this Regulation shall apply only to legal proceedings

instituted, to documents formally drawn up or registered as authentic instruments and to agreements concluded between the parties after its date of application in accordance with Article 72.

2. Judgments given after the date of application of this Regulation in proceedings instituted before that date but after the date of entry into force of Regulation (EC) No 1347/2000 shall be recognised and enforced in accordance with the provisions of Chapter III of this Regulation if jurisdiction was founded on rules which accorded with those provided for either in Chapter II or in Regulation (EC) No 1347/2000 or in a convention concluded between the Member State of origin and the Member State addressed which was in force when the proceedings were instituted. …




Entry into force This Regulation shall enter into force on 1 August 2004. The Regulation shall apply from 1 March 2005, with the exception of Articles 67, 68, 69 and 70, which shall apply from 1 August 2004. This Regulation shall be binding in its entirety and directly

applicable in the Member States in accordance with the Treaty establishing the European

Community.


Jurisdiction beyond Brussels I Regulation COUNCIL REGULATION (EC) No 2201/2003

Article 3 General jurisdiction 1. In matters relating to divorce, legal separation or marriage annulment, jurisdiction shall lie with the

courts of the Member State (a) in whose territory: — the spouses are habitually resident, or — the spouses were last habitually resident, insofar as one of them still resides there, or — the respondent is habitually resident, or — in the event of a joint application, either of the spouses is habitually resident, or — the applicant is habitually resident if he or she resided there for at least a year immediately before

the application was made, or — the applicant is habitually resident if he or she resided there for at least six months immediately

before the application was made and is either a national of the Member State in question or, in the case of the United Kingdom and Ireland, has his or her ‘domicile' there;

(b) of the nationality of both spouses or, in the case of the United Kingdom and Ireland, of the ‘domicile' of both spouses.

2. For the purpose of this Regulation, ‘domicile' shall have the same meaning as it has under the legal systems of the United Kingdom and Ireland.




Parental responsibility Article 8 General jurisdiction 1. The courts of a Member State shall have jurisdiction in

matters of parental responsibility over a child who is habitually resident in that Member State at the time the court is seised.

2. Paragraph 1 shall be subject to the provisions of Articles 9, 10 and 12.




Article 9 Continuing jurisdiction of the child's former habitual residence 1. Where a child moves lawfully from one Member State to another

and acquires a new habitual residence there, the courts of the Member State of the child's former habitual residence shall, by way of exception to Article 8, retain jurisdiction during a three-month period following the move for the purpose of modifying a judgment on access rights issued in that Member State before the child moved, where the holder of …




Article 10 Jurisdiction in cases of child abduction In case of wrongful removal or retention of the child, the courts of the Member State where the child was habitually resident immediately before the wrongful removal or retention shall retain their jurisdiction until the child has acquired a habitual residence in another Member State and: …




Article 12 Prorogation of jurisdiction 1. The courts of a Member State exercising jurisdiction by virtue of Article 3

on an application for divorce, legal separation or marriage annulment shall have jurisdiction in any matter relating to parental responsibility connected with that application where:

(a) at least one of the spouses has parental responsibility in relation to the child;

and (b) the jurisdiction of the courts has been accepted expressly or otherwise

in an unequivocal manner by the spouses and by the holders of parental responsibility, at the time the court is seised, and is in the superior interests of the child. …



Brussels and Lugano ConventionsBrussels Convention in DenmarkLugano Convention and relationship with

Member States to that convention



Jurisdiction under Specific Conventions

Convention for the Unification of Certain Rules Relating to International Carriage by Air, Signed at Warsaw on 12 October 1929 - Warsaw Convention 1929




Warsaw Convention 1929 Article 1 1. This Convention applies to all international

carriage of persons, luggage or goods performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.




Warsaw Convention 1929 Article 18 1. The carrier is liable for damage sustained in the

event of the destruction or loss of, or of damage to, any registered luggage or any goods, if the occurrence which caused the damage so sustained took place during the carriage by air. …




Warsaw Convention 1929 Article 28 1. An action for damages must be brought, at the option of the

plaintiff, in the territory of one of the High Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the Court having jurisdiction at the place of destination.

2. Questions of procedure shall be governed by the law of the Court seised of the case.



Jurisdicrion under Domestic Law of Civil Procedure

Transnational LitigationService abroad

Hypo: Ben sues Chris, who lives in Germany, in the U.S.

for personal injury. How would service be performed in the U.S., or, in

the language of the Federal Rules of Civil Procedure: How would the summons and the complaint be served?

How can service on Chris in Germany be performed?


Hypo: Chris sues Ben, who lives in the U.S., in a German

court. How would service be performed in Germany? How can Ben in the U.S. be served? What about

Ben living permanently in France?


FEDERAL RULES OF CIVIL PROCEDURE FOR THE UNITED STATES DISTRICT COURTS

Rule 4. SummonsC) Service with Complaint; by Whom

Made. (1) A summons shall be served together with a copy of the

complaint. The plaintiff is responsible for service of a summons and complaint within the time allowed under subdivision (m) and shall furnish the person effecting service with the necessary copies of the summons and complaint.


§ 266 German Code of Civil Procedure

Service means giving information of a document to a person in a way laid down in this title of the code.

Where service is prescribed by law or by order of a court, documents are to be served ex officio unless otherwise ordered.

§ 253 German Code of Civil Procedure Filing of a suit is effectuated by service of a writ of

summons.


Council regulation (EC) No 1348/2000 (Service Regulation)

Council regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters

Official Journal L 160 , 30/06/2000 p. 0037 – 0043



Article 1 Scope1. This Regulation shall apply in civil and commercial matters where a judicial or extrajudicial document has to be transmitted from one Member State to another for service there.2. This Regulation shall not apply where the address of the person to be served with the document is not known.



Article 2 Transmitting and receiving agencies1. Each Member State shall designate the public officers, authorities or other persons, hereinafter referred to as "transmitting agencies", competent for the transmission of judicial or extrajudicial documents to be served in another Member State.2. Each Member State shall designate the public officers, authorities or other persons, hereinafter referred to as "receiving agencies", competent for the receipt of judicial or extrajudicial documents from another Member State.



Article 3 Central body

Each Member State shall designate a central body responsible for:(a) supplying information to the transmitting agencies;(b) seeking solutions to any difficulties which may arise during transmission of documents for service;(c) forwarding, in exceptional cases, at the request of a transmitting agency, a request for service to the competent receiving agency.A federal State, a State in which several legal systems apply or a State with autonomous territorial units shall be free to designate more than one central body.



Article 4 Transmission of documents1. Judicial documents shall be transmitted directly and as soon as possible between the agencies designated on the basis of Article 2.2. The transmission of documents, requests, confirmations, receipts, certificates and any other papers between transmitting agencies and receiving agencies may be carried out by any appropriate means, provided that the content of the document received is true and faithful to that of the document forwarded and that all information in it is easily legible.3. The document to be transmitted shall be accompanied by a request drawn up using the standard form in the Annex. The form shall be completed in the official language of the Member State addressed or, if there are several official languages in that Member State, the official language or one of the official languages of the place where service is to be effected, or in another language which that Member State has indicated it can accept. Each Member State shall indicate the official language or languages of the European Union other than its own which is or are acceptable to it for completion of the form.4. The documents and all papers that are transmitted shall be exempted from legalisation or any equivalent formality.5. When the transmitting agency wishes a copy of the document to be returned together with the certificate referred to in Article 10, it shall send the document in duplicate.



Article 7 Service of documents1. The receiving agency shall itself serve the document or have it served, either in accordance with the law of the Member State addressed or by a particular form requested by the transmitting agency, unless such a method is incompatible with the law of that Member State.2. All steps required for service of the document shall be effected as soon as possible. In any event, if it has not been possible to effect service within one month of receipt, the receiving agency shall inform the transmitting agency by means of the certificate in the standard form in the Annex, which shall be drawn up under the conditions referred to in Article 10(2). The period shall be calculated in accordance with the law of the Member State addressed.



Article 12 Transmission by consular or diplomatic channels

Each Member State shall be free, in exceptional circumstances, to use consular or diplomatic channels to forward judicial documents, for the purpose of service, to those agencies of another Member State which are designated pursuant to Article 2 or 3.



Article 13 Service by diplomatic or consular agents

1. Each Member State shall be free to effect service of judicial documents on persons residing in another Member State, without application of any compulsion, directly through its diplomatic or consular agents.2. Any Member State may make it known, in accordance with Article 23(1), that it is opposed to such service within its territory, unless the documents are to be served on nationals of the Member State in which the documents originate.



Article 14 Service by post

1. Each Member State shall be free to effect service of judicial documents directly by post to persons residing in another Member State.2. Any Member State may specify, in accordance with Article 23(1), the conditions under which it will accept service of judicial documents by post.



Article 15 Direct service1. This Regulation shall not interfere with the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the Member State addressed.2. Any Member State may make it known, in accordance with Article 23(1), that it is opposed to the service of judicial documents in its territory pursuant to paragraph 1.

Transnational Litigation Service abroad


Article 19 Defendant not entering an appearance

1. Where a writ of summons or an equivalent document has had to be transmitted to another Member State for the purpose of service, under the provisions of this Regulation, and the defendant has not appeared, judgment shall not be given until it is established that:(a) the document was served by a method prescribed by the internal law of the Member State addressed for the service of documents in domestic actions upon persons who are within its territory; or(b) the document was actually delivered to the defendant or to his residence by another method provided for by this Regulation;and that in either of these cases the service or the delivery was effected in sufficient time to enable the defendant to defend.



Article 20 Relationship with agreements or arrangements to which Member States are Parties1. This Regulation shall, in relation to matters to which it applies, prevail over other provisions contained in bilateral or multilateral agreements or arrangements concluded by the Member States, and in particular Article IV of the Protocol to the Brussels Convention of 1968 and the Hague Convention of 15 November 1965.2. This Regulation shall not preclude individual Member States from maintaining or concluding agreements or arrangements to expedite further or simplify the transmission of documents, provided that they are compatible with this Regulation.


Service abroad CONVENTION ON THE SERVICE ABROAD OF JUDICIAL AND

EXTRAJUDICIAL DOCUMENTS IN CIVIL OR COMMERCIAL MATTERS (Concluded November 15, 1965)

Article 2 Each Contracting State shall designate a Central Authority which will

undertake to receive requests for service coming from other Contracting States and to proceed in conformity with the provisions of Articles 3 to 6.

Each State shall organise the Central Authority in conformity with its own law.


CONVENTION ON THE SERVICE ABROAD OF JUDICIAL AND EXTRAJUDICIAL DOCUMENTS IN CIVIL OR COMMERCIAL MATTERS (Concluded November 15, 1965)

Article 3 The authority or judicial officer competent under the law of the State in

which the documents originate shall forward to the Central Authority of the State addressed a request conforming to the model annexed to the present Convention, without any requirement of legalisation or other equivalent formality.

The document to be served or a copy thereof shall be annexed to the request. The request and the document shall both be furnished in duplicate.


Article 5 The Central Authority of the State addressed shall itself serve the

document or shall arrange to have it served by an appropriate agency, either –

a) by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its territory, or

b) by a particular method requested by the applicant, unless such a method is incompatible with the law of the State addressed.

Article 6 The Central Authority of the State addressed or any authority which it

may have designated for that purpose shall complete a certificate in the form of the model annexed to the present Convention.



Article 8 Each Contracting State shall be free to effect service of judicial

documents upon persons abroad, without application of any compulsion, directly through its diplomatic or consular agents.

Any State may declare that it is opposed to such service within its territory, unless the document is to be served upon a national of the State in which the documents originate.



Article 10 Provided the State of destination does not object, the present

Convention shall not interfere with – a) the freedom to send judicial documents, by postal channels,

directly to persons abroad, b) the freedom of judicial officers, officials or other competent

persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination,

c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.


Convention v. Domestic Law U.S. Supreme Court, Volkswagen Aktiengesellschaft v. Schlunk,

486 U.S. 694 (1988)

The Convention does not specify the circumstances in which there is "occasion to transmit" a complaint "for service abroad." But at least the term "service of process" has a well established technical meaning. Service of process refers to a formal delivery of documents that is legally sufficient to charge the defendant with notice of a pending action.


Convention v. Domestic Law U.S. Supreme Court, Volkswagen Aktiengesellschaft v. Schlunk,

486 U.S. 694 (1988) VWAG protests that it is inconsistent with the purpose of the

Convention to interpret it as applying only when the internal law of the forum requires service abroad. One of the two stated objectives of the Convention is "to create appropriate means to ensure that judicial and extrajudicial documents to be served abroad shall be brought to the notice of the addressee in sufficient time."


Convention v. Domestic Law There is no question but that the Conference wanted to

eliminate notification au parquet. Id. at 75-77. It included in the Convention two provisions that address the problem. Article 15 says that a judgment may not be entered unless a foreign defendant received adequate and timely notice of the lawsuit.


Convention v. Domestic Law VWAG explains that, as a practical matter, VWoA was certain to transmit the complaint

to Germany to notify VWAG of the litigation. Indeed, as a legal matter, the Due Process Clause requires every method of service to provide "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections."

Mullane v. Central Hanover Bank & Trust Co., supra, at 339 U. S. 314. VWAG argues that, because of this notice requirement, every case involving service on a foreign national will present an "occasion to transmit a judicial . . . document for service abroad" within the meaning of Article 1. Tr. of Oral Arg. 8. VWAG emphasizes that, in this case, the Appellate Court upheld service only after determining that "the relationship between VWAG and VWoA is so close that it is certain that VWAG 'was fully apprised of the pendency of the action' by delivery of the summons to VWoA."


Convention v. Domestic Law We reject this argument. Where service on a domestic agent is valid and

complete under both state law and the Due Process Clause, our inquiry ends and the Convention has no further implications. Whatever internal, private communications take place between the agent and a foreign principal are beyond the concerns of this case. The only transmittal to which the Convention applies is a transmittal abroad that is required as a necessary part of service. And, contrary to VWAG's assertion, the Due Process Clause does not require an official transmittal of documents abroad every time there is service on a foreign national. Applying this analysis, we conclude that this case does not present an occasion to transmit a judicial document for service abroad within the meaning of Article 1. Therefore the Hague Service Convention does not apply, and service was proper. The judgment of the Appellate Court is

Affirmed.


Convention v. Domestic Law Service by mail

The other important question was whether service of process was available by mail under Article 10 of the Convention.

This question was decided in the negative in Bankston v. Toyota, 889 F.2d 172

Transnational LitigationTaking evidence abroad

Hypo: Ben sues Chris in the U.S. for personal injury.

Witnesses and pieces of evidence are in Germany.

How can evidence been produced in the U.S. court?

Chris sues Ben in a German court. Witnesses are in the U.S. and in France.

How can evidence been produced in the German court?


Among EU Member States: COUNCIL REGULATION (EC) No 1206/2001

of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters

Official Journal of the European Communities L 174/1 of 27.6.2001

Otherwise: CONVENTION ON THE TAKING OF EVIDENCE ABROAD IN

CIVIL OR COMMERCIAL MATTERS (Concluded March 18, 1970) Or: Addressing the host state


COUNCIL REGULATION (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters

Article 1 Scope 1. This Regulation shall apply in civil or commercial matters

where the court of a Member State, in accordance with the provisions of the law of that State, requests:

a) the competent court of another Member State to take evidence; or

b) to take evidence directly in another Member State. …



Article 2 Direct transmission between the courts 1. Requests pursuant to Article 1(1)(a), hereinafter referred to

as "requests", shall be transmitted by the court before which the proceedings are commenced or contemplated, hereinafter referred to as the "requesting court", directly to the competent court of another Member State, hereinafter referred to as the "requested court", for the performance of the taking of evidence.

…



Article 3 Central Body 1. Each Member State shall designate a central body

responsible for: a) supplying information to the courts; b) seeking solutions to any difficulties which may arise in

respect of a request; c) forwarding, in exceptional cases, at the request of a

requesting court, a request to the competent court. …



Article 4 Form and content of the request 1. The request shall be made using form A or, where

appropriate, form I in the Annex. It shall contain the following details:

a) the requesting and, where appropriate, the requested court;

b) the names and addresses of the parties to the proceedings and their representatives, if any;

…



Article 6 Transmission of requests and other communications Requests and communications pursuant to this Regulation

shall be transmitted by the swiftest possible means, which the requested Member State has indicated it can accept. The transmission may be carried out by any appropriate means, provided that the document received accurately reflects the content of the document forwarded and that all information in it is legible.



Article 7 Receipt of request 1. Within seven days of receipt of the request, the requested

competent court shall send an acknowledgement of receipt to the requesting court using form B in the Annex. Where the request does not comply with the conditions laid down in Articles 5 and 6, the requested court shall enter a note to that effect in the acknowledgement of receipt.

…



Article 10 General provisions on the execution of the request 1. The requested court shall execute the request without delay and, at the

latest, within 90 days of receipt of the request. 2. The requested court shall execute the request in accordance with the law

of its Member State. 3, The requesting court may call for the request to be executed in

accordance with a special procedure provided for by the law of its Member State, using form A in the Annex. The requested court shall comply with such a requirement unless this procedure is incompatible with the law of the Member State of the requested court or by reason of major practical difficulties. If the requested court does not comply with the requirement for one of these reasons it shall inform the requesting court using form E in the Annex.

…



Article 11 Performance with the presence and participation of the

parties 1. If it is provided for by the law of the Member State of the

requesting court, the parties and, if any, their representatives, have the right to be present at the performance of the taking of evidence by the requested court.

…



Article 14 Refusal to execute 1. A request for the hearing of a person shall not be executed when

the person concerned claims the right to refuse to give evidence or to be prohibited from giving evidence,

a) under the law of the Member State of the requested court; or b) under the law of the Member State of the requesting court, and

such right has been specified in the request, or, if need be, at the instance of the requested court, has been confirmed by the requesting court.

2. In addition to the grounds referred to in paragraph 1, the execution of a request may be refused only if:

…



Article 17 1. Where a court requests to take evidence directly in

another Member State, it shall submit a request to the central body or the competent authority referred to in Article 3(3) in that State, using form I in the Annex.

2. Direct taking of evidence may only take place if it can be performed on a voluntary basis without the need for coercive measures.

Where the direct taking of evidence implies that a person shall be heard, the requesting court shall inform that person that the performance shall take place on a voluntary basis.

…


CONVENTION ON THE TAKING OF EVIDENCE ABROAD IN CIVIL OR COMMERCIAL MATTERS

(Concluded March 18, 1970)




Article 1 In civil or commercial matters a judicial

authority of a Contracting State may, in accordance with the provisions of the law of that State, request the competent authority of another Contracting State, by means of a Letter of Request, to obtain evidence, or to perform some other judicial act.



(Concluded March 18, 1970) Article 2 A Contracting State shall designate a Central Authority

which will undertake to receive Letters of Request coming from a judicial authority of another Contracting State and to transmit them to the authority competent to execute them. Each State shall organize the Central Authority in accordance with its own law.

Letters shall be sent to the Central Authority of the State of execution without being transmitted through any other authority of that State.



(Concluded March 18, 1970) Article 3 A Letter of Request shall specify- a) the authority requesting its execution and the authority

requested to execute it, if known to the requesting authority; b) the names and addresses of the parties to the proceedings

and their representatives, if any; c) the nature of the proceedings for which the evidence is

required, giving all necessary information in regard thereto; d) the evidence to be obtained or other judicial act to be

performed. …




Article 6 If the authority to whom a Letter of Request has been

transmitted is not competent to execute it, the Letter shall be sent forthwith to the authority in the same State which is competent to execute it in accordance with the provisions of its own law.



(Concluded March 18, 1970) Article 9 The judicial authority which executes a Letter of Request shall

apply its own law as to the methods and procedures to be followed.

However, it will follow a request of the requesting authority that a special method or procedure be followed, unless this is incompatible with the internal law of the State of execution or is impossible of performance by reason of its internal practice and procedure or by reason of practical difficulties.

A Letter of Request shall be executed expeditiously.



(Concluded March 18, 1970) Article 10 In executing a Letter of Request the requested

authority shall apply the appropriate measures of compulsion in the instances and to the same extent as are provided by its internal law for the execution of orders issued by the authorities of its own country or of requests made by parties in internal proceedings.



(Concluded March 18, 1970) Article 11 In the execution of a Letter of Request the person concerned may refuse

to give evidence in so far as he has a privilege or duty to refuse to give the evidence –

a) under the law of the State of execution; or b) under the law of the State of origin, and the privilege or duty has been

specified in the Letter, or, at the instance of the requested authority, has been otherwise confirmed to that authority by the requesting authority.

A Contracting State may declare that, in addition, it will respect privileges and duties existing under the law of States other than the State of origin and the State of execution, to the extent specified in that declaration.



(Concluded March 18, 1970) Article 15 In civil or commercial matters, a diplomatic officer or

consular agent of a Contracting State may, in the territory of another Contracting State and within the area where he exercises his functions, take the evidence without compulsion of nationals of a State which he represents in aid of proceedings commenced in the courts of a State which he represents.




Article 23 A Contracting State may at the time of

signature, ratification or accession, declare that it will not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents as known in Common Law countries.


Blocking Statutes

Law enacted in one jurisdiction to obstruct the local (extra jurisdictional) application of a law enacted in another jurisdiction.


Blocking Statutes

In Accessdata Corp. v. Alste Techs. Gmbh, 2010 U.S. Dist. LEXIS 4566 (D. Utah Jan. 21, 2010), a United States based company entered into a contract with a German company to sell electronic discovery forensic software in Germany. Litigation followed after the German Defendant failed to pay the Plaintiff for software sales. The Defendant objected to producing electronic discovery of third parties based on German law and the Hague Convention.

The Court quickly defeated the Defendant’s objections based on German law and the Hagee Convention, citing the US Supreme Court case Societe Nationale Industrielle Aerospatiale v. United States District Court, 482 U.S. 522, 544 (1987).


Blocking Statutes

The French blocking statute is the amended version of a 1968 statute which, at the time, prohibited communication to “foreign authorities” of any document or information relating to carriage by sea if such communication would have been contrary to “the rules of international law or likely to hurt the sovereignty of the French state”. In 1980, this provision (art. 1) was amended, and another one (art. 1bis) was added, which prohibits any person from seeking to obtain or communicating documents or information for the purpose of constituting evidence in foreign judicial or administrative proceedings. The new art. 1bis applies to documents or information of almost any kind (i.e. of economic, commercial, industrial, financial or technical kind). The statute imposes criminal penalties, which can go up to 6 months of prison, and a fine up to €18,000.

Transnational LitigationRecognition and Enforcement

Hypo: While Chris was on vacation in Florida, where at the same time he

opened a small account with an American Bank, Ben had him tagged and then sued in an U.S. Court.

Ben duly served the writ of summons accompanied by the complained based on the Hague Service Convention. Chris did not appear in the U.S. Court. Ben got a default judgment ordering Chris to pay

$ 50,000 for medical expenses, which he had when having his teeth repaired

$ 200,000 for pain and suffering $ 800,000 in punitive damages because Chris had recklessly harmed

him. The judgment has become final. Ben now wants to enforce the judgment

in the Florida. However, as Chris’s account over there is relatively small, Ben wants to enforce the judgment as well in Augsburg, where Chris owns real property


Vice versa:Chris sues Ben in Augsburg, where Ben

had forgotten his suitcase full of dirty laundry.

Chris is awarded a final judgment, which he wants to enforce in part in France, where Ben has some property, and for the rest in the U.S.


What is a judgment?A judgment is an official document

expressing the power of the state and enforced by the state

The power of the state ends at ist border lines

Outside the state a judgment is just qa piece of paper


Regulation Brussels I

Article 33 1. A judgment given in a Member State shall be recognised in the

other Member States without any special procedure being required.

2. Any interested party who raises the recognition of a judgment as the principal issue in a dispute may, in accordance with the procedures provided for in Sections 2 and 3 of this Chapter, apply for a decision that the judgment be recognised.

3. If the outcome of proceedings in a court of a Member State depends on the determination of an incidental question of recognition that court shall have jurisdiction over that question.



Article 34 A judgment shall not be recognised: 1. if such recognition is manifestly contrary to public policy in the Member

State in which recognition is sought; 2. where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so;

3. if it is irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought;

4. if it is irreconcilable with an earlier judgment given in another Member State or in a third State involving the same cause of action and between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the Member State addressed.



Article 351. Moreover, a judgment shall not be

recognised if it conflicts with Sections 3, 4 or 6 of Chapter II, or in a case provided for in Article 72.

…



Article 36Under no circumstances may a foreign

judgment be reviewed as to its substance.



Enforcement Article 38 1. A judgment given in a Member State and enforceable in that

State shall be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there.

2. However, in the United Kingdom, such a judgment shall be enforced in England and Wales, in Scotland, or in Northern Ireland when, on the application of any interested party, it has been registered for enforcement in that part of the United Kingdom.



Enforcement Article 41 The judgment shall be declared enforceable

immediately on completion of the formalities in Article 53 without any review under Articles 34 and 35. The party against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application.



Enforcement Article 43 1. The decision on the application for a declaration of

enforceability may be appealed against by either party. 2. The appeal is to be lodged with the court indicated

in the list in Annex III. 3. The appeal shall be dealt with in accordance with

the rules governing procedure in contradictory matters. …



Enforcement Article 47 1. When a judgment must be recognised in

accordance with this Regulation, nothing shall prevent the applicant from availing himself of provisional, including protective, measures in accordance with the law of the Member State requested without a declaration of enforceability under Article 41 being required.

…


Hilton v. Guyot

Mr. Justice GRAY, after stating the case, delivered the opinion of the court.

These two cases-the one at law and the other in equity-of Hilton v. Guyot, and the case of Ritchie v. McMullen, 16 Sup. Ct. 171, which has been under advisement at the same time, present important questions relating to the force and effect of foreign judgments, not hitherto adjudicated by this court, which have been argued [159 U.S. 113, 163] with great learning and ability, and which require for their satisfactory determination a full consideration of the authorities. To avoid confusion in indicating the parties, it will be convenient first to take the case at law of Hilton v. Guyot.


Hilton v. Guyot The most certain guide, no doubt, for the

decision of such questions is a treaty or a statute of this country. But when, as is the case here, there is no written law upon the subject, the duty still rests upon the judicial tribunals of ascertaining and declaring what the law is, whenever it becomes necessary to do so, in order to determine the rights of parties to suits regularly broght before them.


Hilton v. Guyot No law has any effect, of its own force, beyond the

limits of the sovereignty from which its authority is derived. The extent to which the law of one nation, as put in force within its territory, whether by executive order, by legislative act, or by judicial decree, shall be allowed to operate within the dominion of another nation, depends upon what our greatest jurists have been content to call 'the comity of nations.' Although the phrase has been often criticised, no satisfactory substitute has been suggested.


Hilton v. Guyot 'Comity,' in the legal sense, is neither a matter

of absolute [159 U.S. 113, 164] obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons was are under the protection of its laws.


Hilton v. Guyot

Mr. Wheaton says: 'All the effect which foreign laws can have in the territory of a state depends absolutely on the express or tacit consent of that state.' 'The express consent of a state to the application of foreign laws within its territory is given by acts passed by its legislative authority, or by treaties concluded with other states. Its tacit consent is manifested by the decisions of its judicial and administrative authorities, as well as by the writings of its publicists. There is no obligation recognized by legislators, public authorities, and publicists to regard foreign laws; but their application is admitted only from considerations of utility and the mutual convenience of states,-'ex comitate, ob reciprocam utilitatem." Wheat. Int. Law (8th Ed.) 78, 79.


UNIFORM FOREIGN MONEY-JUDGMENTS RECOGNITION ACT

SECTION 3. [Recognition and Enforcement.]

Except as provided in section 4, a foreign judgment meeting the requirements of section 2 is conclusive between the parties to the extent that it grants or denies recovery of a sum of money. The foreign judgment is enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit.


German Code of Civil Procedure § 722: (1) The judgment of a foreign court shall not be

enforced except by virtue of a judgment for enforcement.

(2) Jurisdiction to pronounce such a judgment for enforcement shall be exercised by the Amtsgericht (County Court) or Landgericht (District Court) respectively, having general jurisdiction over the debtor, or otherwise by the Amtsgericht or Landgericht respectively, before which an action may be brought against the debtor under § 723.


German Code of Civil Procedure

§ 328: The judgment of a foreign court shall not be recognized: (1) where the courts of the country to which the foreign court belongs have no

jurisdiction under German law; (2) where the documents instigating the proceedings were not served on the

defendant in accordance with law or in such a timely manner that he could defend himself and he made no appearance and he pleads this fact;

(3) where the judgment conflicts with a German judgment or with an earlier recognizable foreign judgment or where the proceedings underlying the foreign judgment conflict with a German proceeding that began before the foreign proceeding;

(4) where recognition of the judgment would lead to a result that would clearly conflict with essential principles of German law, in particular where recognition would conflict with the German constitution (Basic Law: Grundgesetz);

(5) where reciprocity is not guaranteed.


Bundesgerichtshof (Federal Supreme Court) On June 4, 1992, the Federal Supreme Court

reviewed the Duesseldorf judgment on further appeal of both parties. [FN82] The Federal Supreme Court's perspective of the public policy requirement differed somewhat from the Duesseldorf court. The Federal Supreme Court held the following:

(a) The fact that evidence was collected during pretrial discovery in a U.S. proceeding does not by itself constitute grounds for denying enforcement due to a violation of German public policy, even though this method of collecting evidence differs from the German notion of a fair trial.


Bundesgerichtshof (Federal Supreme Court)

(b) Although the U.S. adjudication of damages differs from German judicial practice, the fact that a U.S. judgment grants damages for prospective medical expenses, regardless of whether or not the victim purchases, or is willing to purchase, medical treatment with the amount of damages awarded, does not prevent a German court from enforcing the U.S. judgment due to a violation of German public policy.



(c) The fact that a U.S. judgment award includes a contingency fee, even in the amount of 40% of the total damage award, does not prevent a German court from enforcing the judgment based on public policy grounds, even though contingency fees are forbidden under German law.


Bundesgerichtshof (Federal Supreme Court) (d) Even if the U.S. judgment conflicts with

fundamental principles of German law by granting damages for anxiety, pain and suffering in an amount in excess of the amount that would be granted by a German court in similar circumstances, the German court shall not deny enforcement based on public policy grounds. The German court is not required to decide the issue of awarding damages. In cases in which the action is totally embedded in the foreign jurisdiction aside from the fact that the judgment debtor's assets are located in Germany, the German court need only decide whether to enforce the foreign judgment.


Bundesgerichtshof (Federal Supreme Court) (e) Although punitive and exemplary damages are an aspect of

private law, and not criminal law, an award of punitive and exemplary damages is fundamentally contrary to German public policy even in enforcement cases. In

the past, German law has adhered to a theory of awarding damages in which awards are exclusively restricted to reimbursing the victim for what he has lost. This theory is a fundamental principle of German law. Therefore, insofar as the U.S. judgment states that the punitive damage award compensates the plaintiff only for what he has lost or will lose, which in this case has not been evidenced, the Federal Supreme Court is willing to enforce a U.S. judgment awarding punitive damages.



The fundamental principle of the German law of damages is compensation and nothing but compensation for loss

Punitive damages as such are contrary to German public policy

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