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international litigation blog

U.S. Supreme Court in May… Arbitration and International Litigation Not Far Away

Spring and the month of May seem to have inspired the U.S. Supreme Court (the Supreme Court) justices. In less than three weeks, the Supreme Court rendered three interesting opinions with respect to arbitration and international litigation:

  • Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co. (on FSIA pleading standards);
  • Kindred Nursing Centers Partnership v. Clark (on whether state-law could require that a PoA expressly refer to arbitration agreements before an attorney-in-fact can bind his or her principal to an arbitration agreement);
  • Water Splash, Inc. v. Menon (on whether the Hague Service Convention allows service of process by postal channels).

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CJEU’s Opinion 2/15: Consequences on ISDS and Investment Court System

On 16 May 2017, the Court of Justice of the European Union (the CJEU) delivered its long-awaited opinion (the Opinion 2/15) on the allocation of competences between the European Union (the EU) and its Member States for the conclusion of the EU-Singapore Free Trade Agreement (the EUSFTA).

As you may know, the core issue in this Opinion was whether the EU had an exclusive competence to conclude the EUSFTA and similar free trade agreements (FTAs) (meaning that the EU could act unilaterally on this issue) or whether the EU shared this competence with the European Member States.

Although the objective of this article is not to provide an in-depth analysis of Opinion 2/15 (for those interested, Van Bael & Bellis recently published a detailed memorandum on this topic), I wanted to share with you some thoughts on the impact of Opinion 2/15 on investor-State dispute resolution and on the Investment Court System (ICS).READ MORE

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Belgian Constitutional Court Rules on State Immunity From Execution

In a judgment dated 27 April 2017, the Belgian Constitutional Court (the Constitutional Court) largely confirmed the validity of the Belgian legal provision on State immunity from execution (Article 1412quinquies of the Belgian Judicial Code).

As a general rule, Article 1412quinquies of the Belgian Judicial Code provides that assets located in Belgium that belong to a foreign State are immune from execution and cannot be subject to enforcement proceedings by creditors. As mentioned before, France recently adopted a similar provision which largely mirrors Article 1412quinquies of the Belgian Judicial Code.

Exceptions to that rule are, however, possible if very strict conditions are met: a party wishing to seize the assets belonging to a State needs to obtain a prior authorisation from a judge (juge des saisies). This judge will only authorise the seizure if (i) the foreign State has “expressively” and “specifically” consented to the seizure of the assets; (ii) the foreign State has specifically allocated those assets to the enforcement of the claim which gives rise to the seizure; and (iii) the assets are located in Belgium and are allocated to an economic or commercial activity.

Given the difficulty of meeting those requirements, two entities (NML Capital Limited (NML), an American hedge fund which holds debts securities against Argentina, and Yukos Universal Limited (YUL), an entity that had been granted a multi-billion arbitral award against Russia) initiated legal proceedings before the Constitutional Court seeking the annulment of Article 1412quinquies of the Belgian Judicial Code.READ MORE

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Paris Court of Appeal Endorses “Adverse Inferences” Principle

On 28 February 2017, the Paris Court of Appeal (the Court of Appeal) rendered an interesting decision endorsing the “adverse inferences” principle provided for under Article 9(5) of the IBA Rules on the Taking of Evidence in International Arbitration (the IBA Rules): “[i]f a Party fails without satisfactory explanation to produce any Document requested in a Request to Produce […] the Arbitral Tribunal may infer that such document would be adverse to the interests of that Party“.

The dispute at hand arose in the context of a share purchase agreement (the SPA) concluded between Dresser-Rand Group Inc. (the Buyer), a U.S. based company, and twelve Spanish companies (the Sellers) for the purchase of all shares in Grupo Guascor SL.READ MORE

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Belgian Court Rules on Recognition of U.S. Class Action Settlements

On 23 March 2017, the Ghent Court of Appeal in Belgium (the Court of Appeal) handed down a lengthy decision on the civil merits in the very well-known Lernout & Hauspie (L&H) case. Although the judgment rendered by the Court of Appeal is very long and covers various legal issues, it contains a specific section on the recognition, in Belgium, of two American opt-out class action settlements.

As most of you know, class action suits are legal devices that allow an individual or a small group of individuals to proceed in court on behalf of a much larger and unnamed group of individuals who have suffered a similar injury and who share common claims.

While class actions form an integral part of the legal framework in the United States, European jurisdictions (with the notable exception of the Netherlands (see my previous post)) tend to be very cautious with respect to this instrument. It is only in June 2013 that the European Union published a recommendation setting out a series of common, non-binding principles that EU Member States should adopt in order to put collective redress mechanisms in place. Based on this recommendation, some EU Members that previously did not allow for collective redress mechanisms have since introduced them into their legal systems.

In sharp contrast with the American class action system – where any individual who fulfils the conditions to be part of a class action will automatically be considered as part of the class bringing the action, unless that member expressively indicates his desire to be excluded from of the proceedings (i.e. “opt-out” system) – most European systems have adhered to an “opt-in” system where plaintiff classes are formed through the expressed consent of their members.

The case at hand therefore concerns an interesting scenario in which the Belgian court, belonging to a jurisdiction where only opt-in class action are allowed, is asked to recognise a U.S. opt-out class action settlement.READ MORE

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The Netherlands to Introduce Possibility for Damages Claims Under Class Action System

As explained in my latest contribution in Business Law International (“Fortis’s Settlement: A comparative case-study of (securities) class action mechanisms in Europe and in the United States“), the Netherlands presently offer one of the most friendly regimes in Europe for collective actions. Unlike the U.S. class action system, however, the Netherlands does not offer the possibility to obtain monetary damages under the current class action rules.

Nevertheless, a new bill (the Bill) recently put before the Dutch legislature suggests that this significant limitation could be on the way out. I therefore wanted to take this opportunity to briefly introduce you to the future changes that might be brought to the class action regime in the Netherlands.READ MORE

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U.S. Second Circuit Clarifies Law on Arbitral Award Enforcement

On 18 January 2017, the U.S. Second Circuit Court of Appeals (the Second Circuit) overturned a ruling by the Southern District of New York (SDNY) dismissing an action to enforce an ICC arbitration award rendered in Paris. The judgment (subject to a later correction issued in March) will likely be cited often as it helps clarify how the influential Second Circuit views the enforcement of awards, the applicable law regarding who an award may be enforced against, and what issues an award may preclude from later judgment.READ MORE

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