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international litigation blog

U.S. Supreme Court Says Interpretative Statements on Foreign Law by Foreign Governments not Binding on U.S. Courts

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On 14 June 2018, the U.S. Supreme Court (the Supreme Court) gave judgment in Animal Science Products et al. v. Hebei Welcome Pharmaceutical Co. Ltd et al. finding that a federal court determining foreign law is not bound to accord conclusive effect to submissions of a foreign government.

The unanimous judgment concerned the application of Federal Rule of Civil Procedure 44.1 (Rule 44.1), which provides that a court may consider “any relevant material or source” when making a determination of foreign law, and that any such determination “must be treated as a ruling on a question of law“. In the case at hand, U.S. purchasers of vitamin C alleged that Chinese producers had formed a cartel and conspired to fix prices and quantities of exports in violation of U.S. antitrust law. The Chinese producers claimed that they were not liable for such a violation as they were legally obliged to comply with a pricing regime set by the Chinese Government.

At trial, the Chinese Ministry of Commerce intervened as amicus curiae in support of the Chinese producers. In its submission, the Chinese Government stated that the alleged cartel conspiracy was “a regulatory pricing regime mandated by the government of China“. The U.S. producers disputed this characterisation, and noted that the Chinese Government had (i) failed to identify any law or regulation expressly authorising such a regime and (ii) submitted in unrelated WTO proceedings that China had abandoned the practice of export administration of vitamin C.

At first instance, the District Court for the Eastern District of New York held that the Chinese Government’s submission was not conclusive and denied the Chinese producers’ application to dismiss the proceedings. On appeal, the Court of Appeals for the Second Circuit (the Appeals Court) reversed that decision, holding that it was “bound to defer” to reasonable interpretative statements made in court by a foreign government regarding the construction and effect of the foreign government’s own laws and regulations. The Supreme Court was therefore called upon to determine whether such statements could be considered conclusive when a federal court was required to determine foreign law in accordance with Rule 44.1.READ MORE

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Opinion 1/17 on CETA: Hearing Report

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On 26 June 2018, the Court of Justice of the European Union (the CJEU) heard the legal arguments raised by the institutions of the European Union and by some EU Member States in Opinion 1/17 on the compatibility of the Investment Court System (ICS) provided for in the EU-Canada Comprehensive Economic and Trade Agreement (CETA).

As we discussed before, the CJEU is requested to provide an opinion regarding the compatibility of the ICS contained in CETA with respect to: (i) the exclusive competence of the CJEU, pursuant to Article 267 of the Treaty on the Functioning of the European Union (TFEU), to give a binding interpretation of EU law; (ii) the general principle of equality and the practical effect (‘effet utile‘) of EU law; (iii) the right of access to courts; and (iv) the right to an independent and impartial judiciary.

I was unfortunately unable to attend this hearing. However, my friend José Rafael Mata Dona attended the hearing and has kindly provided us with a summary of the main points which were raised.READ MORE

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Netherlands to Modernize Model BIT

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The Netherlands is currently modernizing its model bilateral investment treaty (model BIT) and has recently published the draft of the new model BIT that the government intends to use as a basis for (re-)negotiating their existing and future bilateral investment treaties with non-EU Member States.

Following numerous recent criticisms involving investment protection and investment arbitration, the new draft model BIT is clearly aimed at striking a better balance between the rights and duties of host States, on the one hand, and investors, on the other hand. To this end, the draft model BIT introduces some interesting developments. In particular, it introduces stricter requirements for investors seeking protection.

With respect to investment arbitration, the draft model BIT provides for the following key changes:READ MORE

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U.S. Supreme Court Rules on Enforceability of Individual Arbitration Agreements in Employment Contracts

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On 21 May 2018, the U.S. Supreme Court (the Supreme Court) handed down its decision in Epic Systems Corp. v. Lewis finding that arbitration agreements in which an employee agrees to arbitrate any claims against an employer on an individual rather than on a class or collective basis are enforceable and are not in violation of the National Labor Relations Act (the NLRA).

The judgment concerned three consolidated cases: Epic Systems Corp. v. Lewis; Ernst & Young LLP v. Morris and NLRB v. Murphy Oil USA, Inc. As the Court noted, the three cases differed in detail but not in substance.

In previous decisions (see: AT&T Mobility v. Concepcion; American Express Co. v. Italian Colors Restaurant; DIRECTV, Inc. v. Imburgia), the Supreme Court had already ruled that companies were entitled to include individual arbitration clauses in their consumer contracts which explicitly precluded those consumers from resorting to class arbitration. In the present case, the Supreme Court had to rule on whether companies could also include individual arbitration clauses in their contract with their employees which required those employees to waive their rights to participate in class and collective actions.READ MORE

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New York Court Rules on Proper Venue for Claims Brought Against Foreign Sovereigns

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On 30 March 2018, the U.S. District Court for the Southern District of New York (the Court) handed down an interesting opinion on the issue of proper venue in relation to suing a foreign sovereign in a U.S. court.

The question of proper venue is distinct from that of jurisdiction which focuses on whether a particular court has authority to hear the case. Venue, however, deals with geographical location. Therefore, a court may have jurisdiction over a certain matter, yet be considered as an improper venue.

Choosing the proper venue is crucial in any action as a finding of improper venue can lead to burdensome and adverse consequences for the parties involved. For instance, the time spent on litigating the venue issue may render the claim time-barred due to the expiration of the statute of limitations and it will therefore be unable to move forward I  another forum. At best, improper venue will lead to additional costs for the parties as a party will need to re-file and re-serve the defendant.

The case at hand concerned an action taken against the Government of Ukraine by a group of plaintiffs consisting of a Ukrainian automobile business, Luxexpress-II Ltd; its founders, Mr. and Mrs. Ivaneko; a U.S. supplier, Alamo Group Inc.; and the U.S. corporation Luxexpress 2016 Corp. (the Plaintiffs).  The claims arose from Ukraine’s seizure of land and demolition of the Plaintiffs’ business equipment and property and the subsequent refusal to compensate the Plaintiffs. In response, the Plaintiffs filed claims for racketeering, fraud, abuse of process, theft, conversion, unjust enrichment and unlawful takings and wrongful expropriation before the Court. Ukraine sought to dismiss the claims, arguing, inter alia, that New York was not the proper venue.READ MORE

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U.S.’s Withdrawal from Iran Nuclear Deal: Consequences on Transnational Litigation

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President Trump’s decision to pull the United States out of the Iran nuclear deal (also called JCPOA) is likely to have repercussions on U.S.-EU cross-border litigation. In this short article, I wanted to highlight the EU’s most likely response towards the re-instatement of U.S. sanctions: the expansion of the EU’s blocking statute.READ MORE

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Council of the EU Adopts New Approach on Negotiating and Concluding EU Trade and Investment Agreements

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Yesterday (22 May 2018), the Council of the European Union adopted its conclusions to the new approach on the negotiation of EU trade and investment agreements.

The adoption of this new approach is a direct consequence of Opinion 2/15 of the Court of Justice of the European Union (the CJEU) on the division of competences between the EU and its Member States.READ MORE

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