Outline of International litigation

Outline of International litigation

1. Transnational Lawyering and Litigation
A. The Rules of Transnational Practice
i. In re Roel (NY Court Appeals)
a. Mexican lawyer maintained office in NY and advised NY public on MX divorce law.
b. Held: Foreign lawyer cannot practice law in NY
1. NY Penal Law, Section 270 forbids anyone from “practicing law” without being licensed by the NY bar.
2. MX Lawyer gave “legal advice.” Even if the advice was about the law of MX. What matters is the nature of the activity performed, not the sources of the law that he practices. Violated NY law and enjoined to give any advice
3. Ct worried about protecting the public from unregulated legal advice. Even if lawyer is more competent of MX law, and has no impact in NY. Policy: If not a member of NY bar, cannot be disciplined for violating rules being admitted to bar gives authority to regulate lawyer.
c. Dissent: Majority too broad and harmful to public.
1. Lawyer should practice if impact on NY. Foreign lawyers should give advice on Foreign Law bc they are good at it. Otherwise, we get sub-standard advice.
2. On majority reasoning, NY residents could seek advice from the following:
A. NY lawyer
B. Foreign lawyer admitted in NY, or
C. Foreign lawyer in foreign lawyer’s jx.
d. Tension bw giving clients access to those who know most of the law and regulating the availability of specialized advice.
ii. Modern NY Law
a. “Foreign Legal Consultants” can give advice on following
1. Own country ‘s law; and
2. NY and US law if based on the advice of a NY Attorney .
b. FLC are subject to discipline in the same manner as NY lawyers.
c. ABA also recognizes FLC, but not all states do
iii. ABA Model Rule 5.5
a. Two questions to ask
1. Am I competent?
2. Will I be engaging in the unauthorized “practice of law” or “lower level activity” ?
b. Competent Required
1. A lawyer must practice competent representation to client (legal knowledge, skill, thoroughness, and preparation)
A. Subject to malpractice and state bar discipline
c. Unauthorized Practice of Law
1. No lawyer shall “practice law” in jx that violates the regulation of that jx
A. Incorporates by reference rules from other jx
B. If American lawyer in France: be aware of both France and US rules
2. No unlicensed lawyer shall establish office or “systematic office or presence” for purpose of practicing law, unless otherwise authorized
A. “Lower level of activity” may be permitted, so long as does not “represent to public” that he is admitted to practice law.
B. Hypo
i. Can CA lawyer advise client on whether a K’s choice-of-law provision is enforceable in US?
a. Informal Advice
1. Yes. Choice-of-law is governed by State law . Even if this is a NY law issue, CA lawyer is competent to give advice of other states. If not, at least you know how to do the research.
b. Formal Advice
1. Cannot sign opinion letter (a formal legal opinion that client can hold against you) if not admitted in jx.
2. But, can draft the letter as long as you don’t sign it.
ii. Can CA lawyer advise client whether a distributorship agreement’s territorial restrictions violate Article 85 of Treaty of Rome?
a. Competent?
1. Depends on EU law
b. Authorized to practice?
1. Depends on EU law
2. You may also violate US rule 5.5
c. However, can suggest changes if competent to give it as long as informal advice.
iii. Can CA lawyer advise client whose investment in another country as been expropriated on the CIL rules concerning expropriation?
a. Yes, International law ( Treaties and Customary International Law ) is everyone’s law and thus is American law.
1. The issue is whether competent, and authorized to practice law
iv. What concerns does the AM&S case raise about the confidentiality of such advice?
a. Rule 8.5 (p. 16)
1. Lawyer’s Ethical Duty when Rules of Different Jx Conflict
v. Hypo: In business transaction (not dispute) US requires disclosing client’s fraud; other party’s jx prohibits disclosure.
a. If MR 8.5(a) (own j has authority over you), (b) deals with choice of law who’s rules do you follow?
1. Is this a dispute? If in arbitration, look at pace of arbitration. If preparing a witness for that arbitration in different jx, may be different.
2. If not, where is the predominate effect of conduct? Look to where the oher person is located. Here, disclosing or not disclosing fraudulent conduct. Of fraud of foreign party, most likely in other party’s jx (which ironically says don’t disclose).
3. Do not have to disclose bc law of predominate effect says not to disclose.
b. Conclusion: while the rules of your jx require disclosure, bc the jx of the predominant effect prohibits disclosure, you are allowed not to disclose.
C. AM&S (Court of Justice of EU)
i. EC investigates under own antitrust law (equivalent to Section 1, 2 of Sherman Act). EC responsible for enforcing anti-competitive rules. EC requests documents; party defends it is privileged.
ii. Appeals: Upheld privilege with limitations if communication made for purpose of client’s defense and come from “independent lawyers” (top of 14)
a. Communications for Client’s Defense (Lowest common denominator approach)
1. Broad interpretation of client’s defense: applies to communications made before case if deal with same subject matter.
A. Here, communications occurred before enforcement, but dealt with same subject whether AMS would violated EC competition law.
b. Advice must come from independent lawyer not employed by client and licensed to practice in EU
1. AMS’s own General Counsel is not independent bc employed by AMS
2. Communications from outside counsel authorized only in US not protected
3. Only applies to lawyers admitted in EU state.
c. Conclusion: operation of privilege depends on the proceeding at issue
1. Privilege in enforcement proceeding is narrower than other proceedings
2. Thus, outside counsel licensed in EU jx is privileged.
d. Solution re structuring your legal representation if you are a multi-national corporation: use outside counsel licensed to practice in a EU jurisdiction.

1. Ethical Rules for Lawyers
A. Model Rules 1.1
i. US lawyers must have sufficient knowledge of law
ii. 5.5 prevents US lawyers to engage in authorized practice of law in foreign jx
2. In re Roel
i. Confidence and XX in tension
ii. NY Court of Appeals holds that Mexican lawyer cannot give advice about Mexican law, unless NY bar
iii. Denies NY Public was denied advice from foreign lawyers who were the most competent to give that advice
B. After that case, NY passed law to license foreign lawyers as FLC
i. Foreign Legal Consultants can give advice and subject to discipline by NY Bar
C. HYPO
i. A CA lawyer should be competent to advice on whether choice of law clause is enforceable in US Courts w/o engaging in unauthorized practice of law
a. Can CA lawyer give advice about whether territorial restrictions in distributor agreements violates EU antitrust law?
1. CA lawyer should be familiar with EU law generally and EU competition law specifically
b. If competent, probably would give informal advice but not formal advice (opinion letter) without being admitted to practice in a EU member state
c. A CA lawyer could be competent to give advice on the CIL about expropriation w/o unauthorized practice of law bc it is part of US law.
d. If two jurisdiction rules of professional conduct point in different directions, Model Rule 8.5 say US lawyer should follow rules where Tribunal located (if a Tribunal is involved) or place where the conduct would have a predominant effects
D. Attorney Client Privilege
i. AMS Case
a. The European Court of Justice allows privilege, but limited to advice from independent lawyers admitted in EU
b. This means most American lawyers cannot operate in the EU system.
c. The larger point of this case is that it comes as something of a surprise that advice you might want to give might not be privileged. You should take nothing for granted in international transaction law.
3. International Litigation
A. Every international K should contain two provisions
i. Choice of law clause.
ii. Forum selection clause
a. Must consider three factors when deciding where to litigate
1. Will the enforcing court recognize the rendering court had Jx over defendant
2. Obtaining evidence
3. Whether resulting judgment is enforceable against assets of losing party
b. Possible fora for litigation
1. National courts (fallback if not specified K)
2. US Court
3. Foreign court of party to the transaction
4. Foreign court of a third jx
c. Plaintiffs like US Courts
1. Discovery more liberal (allows incriminating evidence after lawsuit filed)
2. Right to civil jury trial, usually resulting in higher damages
B. Jurisdiction
i. Each national system has own rules of jx
a. Almost all say the following
1. D may be sued where domiciled
2. D may be sued at place where COA arose (specific jx)
b. US has two additional basis for jx (not recognized by others)
1. Transient/Tag jx
2. Doing business jx when “consistent or systematic” contacts (general jx)
c. Additional JX in other countries
1. France: jx based on nationality of plaintiff
2. Germany/Austria: jx if D has any property in the jx even if unrelated to the COA
ii. Lesson: Uniform Foreign Money Act and German Act suggests, exorbitant Jx may make it hard to enforce judgment in non-exorbitant jx.
a. EX: A court will not enforce judgment if it thinks rendering court had no jx. So in the German Statute, if their citizen is sued in the US, a German court will not enforce it. So they had better have assets in the U.S. that you’ll be able to attach.
b. Most countries recognize jx based on party’s consent (choice of forum clause). This is most common basis for PJx for business transactions.
C. Zapata (US SC)
i. Facts
a. K to tow an oil rig from TX to Italy. Zapata ignored this clause and sued German company in Florida. Forum Selection Clause said resolution in London Court of Justice (Note: London Court of Justice does not exist; parties were probably referring to High Court of Justice)
ii. Questions
a. England has no connections to K. Why does London make sense?
1. Neutral forum (not US, not Germany)
2. Expertise of London Court of Justice in admiralty even if it is a court of general jx, not admiralty
b. If London makes sense, why did Zapata (US) sue in the US?
1. Zapata’s explanation: The damaged machine, witnesses, etc were located in US
2. Other explanations:
A. Damages favorable to US (note 5)
B. Exculpatory Clause may make German company not liable. US SC said such clauses are unenforceable Unclear if London court would.
c. Why doesn’t difference in outcome (exculpatory clause) justify US to have jx?
1. Sophisticated parties, arms-length transaction
2. Even if parties wouldn’t have been allowed to agree on exculpatory clause in the US, they can in international parties
iii. Rule
a. Forum selection generally okay
1. You can bring suit in England, but if you do you lose. A US Court would not enforce a clause.
2. Technically, decision only binding on federal courts sitting as admiralty court. Each state is allowed to select own rules. Choice of law is a matter of State law . But, almost all states follow.
b. Exceptions
1. Unequal bargaining power
2. Fraud, overreaching leading to an unfair clause.
3. K of adhesion (take-it-or-leave-it, without negotiations)
4. Would deny plaintiff of meaningful day in court (narrow exception)
A. Just because you are barred by exculpatory clause does not mean you are denied meaningful day in court.
B. Few cases have found P would not have meaningful day in court; exceptions were in context of Iran Hostage Crisis
c. Basic Point Sophisticated parties have hard time not to abide by choice of forum clause
D. Purpose of Choice of Forum
i. Consent to Jx. Eliminates lack of consent or value defenses
a. However, if jx not connected to transaction, need to make sure the chosen jx will accept the case.
1. In Florida, those courts will not take jurisdictions simply on a FSC basis. There has to be some other connection to Florida. This is a point that’s worth researching if you’re going to choose a court that’s not connected to either party. Because it would be really embarrassing to choose a forum that then refuses to select the case. That’d be malpractice.
2. Courts take on this role for policy reasons: London and NY want to be centers for resolution of international disputes.
ii. Exclude jx of other courts
a. Prevents other courts from hearing the case (Zapata)
E. Discovery
i. Discovery limited in foreign courts.
ii. How do you discover evidence?
a. US is a party to the Hague Evidence Convention
1. US parties can ask foreign countries for evidence located abroad.
2. Foreign countries have refused to provide evidence for documents “as known in Common law countries” (i.e., US)
b. Regular Discovery power in US Court
1. US court has power to enforce discovery with its power to sanction foreign party of making an adverse inference against foreign party
c. Use of Hague Convention is optional, not mandatory
1. This means that the HEC is mostly used for discovery of evidence located abroad, but is not within the possession of the party. So discovery of evidence held by non-parties abroad.
F. Enforcement of Judgments
i. Problem if D has no assets in rendering jx
ii. US not party to any Treaties that provide for enforcement if judgment
iii. Enforcement depends on country where judgment is sought (in US, state law)
a. In US, look to state law were D has assets
1. Uniform Foreign Money Recognition Act (31-32)
A. Adopted by majority of states (including NY, CA)
B. Judgments are enforceable unless under an exception
i. Exceptions in Section 4 (similar to other countries)
i. Foreign court not compatible to Due Process (very uncommon)
ii. Foreign court lacked jx
iii. Lack of notice
iv. Fraud
v. Public policy (narrow)
vi. Conflict with another final judgment
iv. Reciprocity
a. Many countries require reciprocity (e.g., Germany) US does not
1. Thus, Germany will not recognize a foreign judgment if CA would not
A. Very common in civil law countries
B. Civil law countries are suspicious of case law, so the Uniform Act was passed.
b. In fact, the uniform act was enacted to prove that forum jurisdictions would respect reciprocity. So you won’t have to point to case law, but a statute that says WE enforce foreign judgments.
c. Other countries also sometimes find public policy violations
1. Holding D strictly liable without finding fault
2. Punitive damages often denied
d. Some think easier to enforce foreign judgments in US than vice versa
e. US signed Convention on Choice of Court agreements in 2005; not yet ratified in US
1. This would make enforcement of judgments a matter of federal law and preempt inconsistent state law
A. States must enforce forum selection clauses and judgment where jx based o forum selection clause.
2. Question should the law governing enforcement of judgments and forum selection be a federal rather than state law issue?
A. Encourage states to compete to attract foreigners. For forum selection clause, States like CA and NY can encourage business K.
(i) Note, for enforcing of judgment, this would work in opposite manner bc encourages D to keep assets outside CA.
(b) Reciprocity not Required in US
(i) US willing to enforce foreign judgment even if they are not willing to enforce US
(ii) ALI would require reciprocity.
(iii) Note: can get “reciprocity” by treaty or reciprocity agreements

1. Forum Selection Clause.
A. Most will enforce parties’ choice of forum.
B. In US, this is a matter of state law.
i. Most states follow Zapata and will enforce unless induced by fraud, overreaching, or enforcing will deny meaningful day in court (Zapapta).
C. Forum Selections have two purposes:
i. Exclude a forum
ii. Permit a forum
D. Before choosing forum
i. Must make sure chosen court will hear dispute especially if no contacts with forum (FL courts).
ii. Most also know if can discover information (US courts can discover evidence abroad or under the Hague).
a. If evidence abroad against parties to litigation, can use regulate discovery procedures not Hague bc Court has ability to sanction parties.
iii. Should know if US judgments can enforce abroad depends on law where enforcement is sought.
iv. A foreign court judgment in US is a question of state law (like forum-selection). A majority of states adopt Uniform Reorganization of Foreign money act with exceptions under Section 4.

Conclusion

Notes

See Also

About the Author/s and Rewiever/s

Author: admin

Further Reading

Metropolitan Court, Budapest: Litigation between Hungary and France concerning the United Nations Convention on Contracts for the International Sale of Goods , 13 J. L. & Com. (1994), 49-78; 1993 WL 601537 (LRI)
Omar Paul J. , Consumer Litigation: An International Perspective , I.C.C.L.R. 1999, 148-152
Vanto Jarno , Attorney’s fees as damages in international commercial litigation , 15 Pace Int’l L. Rev 2003, 203 – 222
Gee Steven / Debattista Charles , An English Sale of Goods Act that will be suitable for the worldwide market: Much of the Vienna Convention’s litigation has reflected the differing views on how the law should apply to contracts , Lloyd’s List International (December 8, 2004), Issue #58805, p.6
Goode Royston M. , Litigation or Arbitration? The Influence of the Dispute Resolution Procedure on Substantive Rights , 19 Pace International Law Review (Spring 2007/1); available online at: https://cisgw3.law.pace.edu/cisg/biblio/goode.html
Butler Allison E. , A Practitioner’s Guide to CISG Litigation , New York: Aspen (2007)
Van LIth Hélène , International Jurisdiction and Commercial Litigation , Uniform Rules for Contract Disputes, Cambridge University Press (2009) 585 p.
Haig Robert L. (ed.) , Business and commercial litigation in federal courts , 3rd ed., Eagan, MN: Thomson/West (2011)

About the Author/s and Reviewer/s

Author: admin

Mentioned in these Entries

Attorney, Common law, Customary International Law, Due Process, Foreign Law, Outline of International Arbitration, State law, Treaties, country.


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