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international litigation blog

Hong Kong Court Sets High Standard for Crown Immunity Exception

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On 8 June 2017, the Hong Kong Court of First Instance (the Court) ruled in TNB Fuel Services Sdn Bhd v. China National Coal Group Corporation that a Chinese state-owned enterprise was not entitled to rely on the doctrine of Crown immunity in proceedings relating to the enforcement of an arbitral award unless this company could demonstrate that it bears almost no independence and acts fully under the control of the Crown.READ MORE

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CJEU Rules on Mandatory Mediation before Court Proceedings in Consumers Claims

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On 14 June 2017, the Court of Justice of the European Union (the CJEU) handed down a judgment interpreting, in light of Directive 2013/11/EU of 21 May 2013 on alternative dispute resolution for consumer disputes (Directive 2013/11/EU), the conditions under which mandatory out-of-court mediation should take place before a consumer can initiate court proceedings against a trader.READ MORE

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French “Tribunal des Conflits” Rules on Jurisdiction to Enforce Arbitral Award Relating to Public Law Contracts

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In a decision of 24 April 2017, the French Tribunal des conflits ruled on the issue of whether the French civil courts or the French administrative courts have jurisdiction to enforce arbitral awards relating to public and administrative law.READ MORE

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Hong Kong and Paris Bar Council Adopt Rules on Third Party Funding

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On 14 June 2017, Hong Kong passed key legislation allowing third party funding in arbitral proceedings and mediation seated in Hong Kong, as well as for work carried out in Hong Kong in arbitral proceedings seated elsewhere.

Hong Kong therefore joins Singapore, which also passed a similar legislation earlier this year. However, contrary to the newly enacted law in Singapore, Hong Kong embraces a wider definition of “third party funder“. Indeed, Hong Kong extends the category of a potential third party funder to any “person who is a party to a funding agreement […] and who does not have an interest recognized by the law in arbitration other than under the funding agreement“. Hong Kong therefore does not only limit the notion of third party funder to professional funders. Based on this definition, it is clear, however, that lawyers who provide legal services to a party to an arbitration case remain prevented from funding this case. Hence, contingency or conditional fee agreements to the effect that no fees will be charged if the client’s case is unsuccessful remain prohibited under Hong Kong law. The newly adopted law also encourages the issuance of a code of conduct setting out ethical and financial standards for third party funders.

In the meantime, the Paris Bar Council also passed a resolution indicating support for third party funding and confirming that such a financial arrangement was a positive element for access to justice in international arbitration, as it restores equality of arms between the parties insofar as it allows a party to initiate a claim even if this party does not have the financial means to finance those costly proceedings. The resolution adopted by the Paris Bar Council also emphasises that the current state of French Law does not prohibit third party funding for international arbitration and details the ethics obligations owed by counsel representing a funded party.

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Yukos Case: Brussels Court of First Instance Unfreezes Russia’s Assets

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On 8 June 2017, the Brussels Court of First Instance handed down its decision on the legality of the seizures of assets belonging to Russia carried out by Yukos Universal Ltd (YUL) in the context of the Belgian enforcement proceedings of the Yukos case. As you certainly know, the Yukos case refers to an arbitral saga that saw three arbitral tribunals issuing three arbitral awards which cumulatively ordered Russia, in 2014, to pay USD 50 billion as reparations for the irregularities committed during the nationalisation of the Russian oil company Yukos (click here for a report of the hearing that took place before the Brussels Court of First Instance in November 2016).

Following the issuance of the award in 2014 in its favour, YUL (one of Yukos‘s former shareholder) sought the exequatur and the enforcement of the award in several countries, including Belgium. The Belgian exequatur of the award was granted to YUL in June 2015. In addition, YUL was also allowed to freeze and seize several key assets belonging to Russia as well as assets belonging to two Russian press agencies (ITAR TASS and Ria Novosti).

As a response to those precautionary seizures, Russia filed a third-party opposition before the Brussels Court of First Instance in which it challenged the legality of those seizures. As explained earlier, Russia’s main argument in opposing those seizures was that the three awards rendered in favour of Yukos‘s former shareholders had all been annulled by the District Court of the Hague (the Netherlands being the seat of the arbitration) in April 2016. As a consequence of this judgment by the District Court of the Hague, Russia argued that the Belgian exequatur order which had initially been granted to YUL in June 2015 was null and void and YUL was thus not entitled to proceed with the seizure of Russia’s assets.

In its decision of 8 June 2017, the Brussels Court of First Instance fully sided with Russia on this point.READ MORE

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