2008 International Law Update, Volume 14, Number 2
(February)
Legal Analyses published by Mike Meier,
Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.
ANTI‑SUIT INJUNCTIONS
In U.K. litigation between anonymous U.S. insured and
U.K. insurer, Court of Appeal (Civil Division) rules that parties’ agreement to
arbitrate in London signified applicability of English rather than U.S. law
thus warranting an English injunction against insurer’s plans to bring suit in
U.S. courts in order to invoke more favorable U.S. law in attacking
arbitrators’ partial award
The Defendant (D) was the liability insurer of the Claimant
(C), a company incorporated in the United States. The policy was a “claims
made” policy. C was the named insured, while the definition of the “insured”
included any of its subsidiaries, affiliates or associated companies.
The policy complied with the Bermuda Form (BF), and,
therefore, it had a choice of law clause declaring that “the internal laws of
the State of New York” should govern the contract. It also included an
arbitration clause providing that: “Any dispute arising under this policy shall
be finally and fully determined in London, England under the provisions of the
English Arbitration Act of 1950 as amended.”
During the policy period, various entities filed claims
against C and one of its subsidiaries. C paid the damages and expenses stemming
from those claims. When C asked the Defendant to indemnify it, however, the
Defendant declined to do so.
C then filed arbitration proceedings in London. The
tribunal’s Terms of Appointment signed by the parties stipulated that the law
governing the arbitration was the U.K. Arbitration Act of 1996. The arbitrators
ruled that C should prevail in full on its policy claim; that it was entitled
to be indemnified and awarded interest and costs; this is the partial award
(PA). The tribunal invited the parties to negotiate the amount of the claims
which the arbitrators had found to be covered by the policy.
It was agreed that the PA was, as a matter of English law,
final as to issues it decided. Following the award, the Defendant applied to
the tribunal to correct it. It argued that the tribunal’s findings had clearly
disregarded New York law. In further correspondence, the Defendant hinted that
it was thinking of applying to a U.S. Federal Court where the court would apply
U.S. federal arbitration law governing the enforcement of arbitral awards. That
law allowed a party to vacate an award where the arbitrators had “clearly
disregarded the law.” The tribunal balked at substantively amending the PA saying
it had no power to do so.
C then brought the dispute before the English High Court;
there it asked for an anti‑suit injunction to bar the Defendant (1) from filing
proceedings on the PA in New York and (2) from relying on New York law in any
proceeding to enforce the PA. The judge ruled that the choice of England as the
situs of the arbitration controlled the matter: the parties had, by that
agreement, limited the scope of proceedings seeking to attack or set aside the
PA to those allowed by English law.
As a result, the Defendant could not lawfully bring any
proceedings in New York or elsewhere to attack the PA pursuant to the law of
that place, e. g., for any alleged “manifest disregard” of the proper law of
the contract. The judge also spurned arguments (1) that the choice of New York
law as the proper law of the contract amounted to an agreement that the law of
England should not apply to post‑award proceedings pursuant to Section 4(5) of
the 1996 Act, and (2) that the separate agreement to arbitrate contained in the
policy was itself governed by New York law so that Defendant could file
proceedings in New York.
The High Court judge granted C, inter alia, a final
injunction. The Defendant appealed to the Court of Appeal (Civil Division)
which unanimously dismisses the appeal.
The Defendant argued, inter alia, that the judge had erred
in holding that English law controlled the arbitration agreement itself merely
because it had chosen London as the seat of the arbitration. It claimed that,
since the arbitration agreement itself was silent as to its proper law, the
court should follow the proper law of the contract as a whole, namely New York
law, rather than apply the law of the seat of the arbitration, namely England.
The Defendant further contended that the fact that English
procedural law governed the arbitration itself did not require that English
substantive law had to govern the arbitration agreement itself. Furthermore, it
submitted that Section 58 of the Arbitration Act of 1996 providing for the
finality of an arbitral award, was not a mandatory provision of the Act. Thus,
it left room for agreements to the contrary contained in the arbitration clause
itself. The law of New York, therefore, did control and it lets one party attack
an award for “clear disregard of the law”. It followed that the English court
should refrain from enjoining such a challenge.
The Court of Appeals rejects these contentions. “... [I]n
[our] judgment, [Defendant’s arguments] fail to grapple with the central point
at issue which is whether or not, by choosing London as the seat of the
arbitration, the parties must be taken to have agreed that proceedings on the
award should be only those permitted by English law. ... The whole purpose of
the balance achieved by the BF (English arbitration but applying New York law
to issues arising under the policy) is that judicial remedies in respect of the
award should be those permitted by English law and only those so permitted.”
“[Defendant] could not say (and did not say) that English
judicial remedies for lack of jurisdiction on procedural irregularities under
Sections 67 and 68 of the 1996 Act were not permitted; it was reduced to saying
that New York judicial remedies were also permitted. That, however, would be a
recipe for litigation and (what is worse) confusion which cannot have been
intended by the parties.”
“No doubt New York law has its own judicial remedies for
want of jurisdiction and serious irregularity but it could scarcely be supposed
that a party aggrieved by one part of an award could proceed in one
jurisdiction and a party aggrieved by another part of an award could proceed in
another jurisdiction.”
“Similarly, in the case of a single complaint about an
award, it could not be supposed that the aggrieved party could complain in one
jurisdiction and the satisfied party be entitled to ask the other jurisdiction
to declare its satisfaction with the award. There would be a serious risk of
parties rushing to get the first judgment or of conflicting decisions which the
parties cannot have contemplated.”
“It follows from this that a choice of seat for the
arbitration must be a choice of forum for remedies seeking to attack the award.
As the judge [below] said ..., as a matter of construction of the insurance
contract with its reference to the English statutory law of arbitration, the
parties incorporated the framework of the 1996 Act. He added that their
agreement on the seat and the ‘curial law’ necessarily meant that any
challenges to any award had to be only those permitted by that Act.”
“[Defendant’s] argument was that Section 58 of the 1996 Act
which provided for the finality of an arbitral award was not a mandatory
provision of the Act and that there was a permissible ‘agreement to the
contrary’ contained in the arbitration clause itself which was governed by the
law of the state of New York which permitted challenge for manifest disregard
of the law.”
“The fact, however, that the 1996 Act allows parties to
contract out of its non‑mandatory provisions does not mean that the proper law
of a contract to refer disputes to arbitration can constitute an ‘agreement to
the contrary’ and thus import a method of challenge to the award not permitted
by the seat of the arbitration.”
“Even if, therefore, the first plank of [Defendant’s]
argument (that the arbitration clause itself was governed by the law of New
York) were to be correct, it would not qualify as an ‘agreement to the
contrary’ in the 1996 Act. Still less would it entitle the Defendant to mount a
challenge to the award in a country other than the seat of the arbitration.”
[¶¶ 16‑20].
The Court of Appeal also touches on some secondary points
since counsel fully argued them. “It is necessary to distinguish between the
proper law of the underlying insurance contract which is, by agreement, the
internal law of New York and the arbitration agreement which is, by virtue of
Section 7 of the 1996 Act, as well as by virtue of common law, a separable and
separate agreement, [Cites]. There is also the law of the seat of the
arbitration, namely English law, which will be relevant.”
“The question then arises whether, if there is no express
law of the arbitration agreement, the law with which that agreement has its
closest and most real connection is the law of the underlying contract or the
law of the seat of arbitration. It seems to me that if ... this is a relevant
question, the answer is more likely to be the law of the seat of arbitration
than the law of the underlying contract.”
“In the days before the separability of the arbitration
agreement was fully apparent it was often said that if a contract chose a place
of arbitration, the law of that place was the proper law of the contract on the
principle of ‘Qui elegit judicem, elegit jus.’” [Cite].
“As the judge [below] observed ..., these are only general
considerations; much more forceful in the present case are the positive
indications in the arbitration agreement itself which point to English law
governing the agreement. Moreover, as the judge [below] points out ..., the
provision that the arbitral decision shall be final and binding and ‘...a
complete defence to any attempted appeal or litigation of such decision in the
absence of fraud or collusion.’ would be rendered otiose if either party could
say in New York that there had been a manifest disregard of New York law.”
“That itself must be a strong pointer to the arbitration
agreement being governed by English rather than New York law. [Defendant’s]
response was to say that the clause anyway attempted to exclude forms of
serious irregularity other than fraud or collusion and that, even in English
law, the provision was therefore partially invalid. But that (if true) is a
much less serious invalidity than an invalidity which would permit the parties
to raise any question of law arising on the award when it was the manifest
intention of the parties to exclude that possibility.”
“For all these reasons [Defendant’s] first argument that the
proper law of the arbitration agreement was New York law rather than English
law cannot get off the ground and the only remaining questions relate to remedy
and costs.”
The court then evaluates the remedy devised by the trial
judge. “The judge granted an anti‑suit injunction preventing the Defendant
insurers from initiating proceedings on the [PA] in New York and also
preventing them from relying on law of the [sic] New York in any application to
enforce the [PA] . [Defendant] reminded us of the caution that the English
court always exercises in relation to such injunctions by reason of the
possibility that they may be thought to interfere with decisions or potential
decisions of a foreign court.”
“Having every regard to that caution, it nevertheless seems
to me that the judge was right not only to grant a final injunction but to
frame it in the way in which he did. It is only by doing so that the parties’
legitimate expectations in relation to the [BF] can be respected and enforced.
I have already said that the [BF] constitutes a balancing of the opposing
interests of the insured and their insurers. If either party was permitted to
challenge an award in a manner intended to be excluded by the [BF], that
balance would be fatally compromised.”
“This is just as much in the interest of insurers as well as
of the insured. This particular case is one in which it is the insured who
seeks injunctive relief but tomorrow it may be the insurer in whose interest it
is to uphold the intentions of the parties as expressed in the [BF]. The form
of relief is, in any event, a matter for the judge’s discretion with which this
court will not lightly interfere. Since the insurers have indicated that they
will seek relief unless they are restrained, the judge’s exercise of his
discretion is, in my judgment, unassailable.” [¶¶ 28‑30].
Citation: C v. D, [2007] E. W. C. A. 1282, [2007] All
E. R.(D) 61 (Dec. 5).
AVIATION (INTERNATIONAL)
In case involving airplane crash in Ghana, District of
Columbia Circuit finds that airplane passenger’s subjective belief that travel
was international is not enough to make Warsaw Convention applicable to
domestic flight merely because Plaintiffs intended to take separable
international flight to U.S.
In June of 2000, Kenneth Paul Rosen died when the domestic
Airlink Flight 200 crashed while approaching the airport of Accra, Ghana’s
capital city.. His daughter Megan survived but in an injured state. Siddhartha
Prakash was another passenger on the flight who was injured in the crash. All
three had travelled from the U.S. to Ghana. Rosen and his daughter had
reservations to fly on Ghana Airways three days later. Prakash claimed that he
was scheduled to leave the day after his arrival in Accra.
They all (Plaintiffs) sued Ghana Airways, Airlink and the
Republic of Ghana (Defendants) in D.C. federal district court, claiming damages
pursuant to Article 17 of the Convention for the Unification of Certain Rules
Relating to International Transportation by Air with additional protocol (Oct.
12, 1929, 49 Stat. 3000; T.S. 876; 137 L.N.T.S. 11, reprinted at 49 U.S.C.
Section 40105 note); protocol entered into force for U.S. Dec. 14, 2003]
[“Warsaw Convention”] [providing for air carrier liability for accidental
injury or death in international transportation].
The district court held that the Convention did not apply in
this case and gave Defendants summary judgment. On Plaintiffs’ appeal, the U.S.
Court of Appeals for the District of Columbia Circuit affirms.
The Warsaw Convention is the exclusive remedy for an
individual who is accidentally killed or injured aboard an aircraft in
international transportation. Both the U.S. and Ghana are parties to the
Convention and Protocol. A domestic flight may constitute “international”
transportation if it is part of an international itinerary by the passenger and
the carriers.
On the issue of jurisdiction over Defendants, the Court
points out that Airlink is an agency or instrumentality of Ghana, because it is
the commercial branch of the Ghana Air Force. The government of Ghana wholly
owns Ghana Airways. Thus, all Defendants would be immune based on the Foreign
Sovereign Immunities Act [28 U.S.C. Section 1602] (FSIA) unless a statutory
exception applies. The Court assumes arguendo that a state which becomes a
party to the Warsaw Convention has thereby waived its FSIA immunity.
The Court then rejects the Plaintiffs’ subjective arguments
that they believed that their travel was “international.” Mr. Rosen and his
daughter had bought the Airlink tickets while in Accra. On the other hand,
their tickets bore a “domestic” label as did Prakash’s ticket. The tickets
listed the flight date as “open.”
The Court then explains its affirmance. “There is no proof
that Airlink intended to provide anything but a ticket for domestic
transportation. Airlink operated only domestic flights and had no operations
outside Ghana. In fact, there was no reason for Airlink to know of the
passengers’ international itinerary. ... Rosen informed an Airlink
representative that they needed to return from Tamale to Accra in time to catch
their flight from Accra to New York.”
“Prakash claims that the travel agent who booked his ticket
knew that Prakash was a foreigner in international travel because his employer,
the World Bank, [had] purchased the ticket. However, M&J Travel &
Tours, not Airlink, dealt with Rosen, his daughter, and Prakash’s employer.
Even if we were to impute the travel agent’s knowledge to Airlink, as
Plaintiffs urge, we would still agree that to ‘hold [an air carrier] to Warsaw
Convention liability for supposed comments made in passing to a single employee
is wholly unreasonable. Stray remarks do not alert an airline of its duties and
liabilities. The Convention requires ‘notice, not clairvoyance.’ ... Under
these circumstances, Airlink did not have the knowledge necessary to intend the
passengers’ flight to be international transportation under the Convention.”
[Slip op. 4]. Summary judgment was, therefore, appropriate.
Citation: Auster v. Ghana Airways Ltd., 514 F.3d 44 (D.C.
Cir. 2008).
CHILD ABDUCTION
Applying Hague Convention on Child Abduction, Ontario
Court of Appeal deferred to U.S. federal courts’ ruling to allow teenager just
under sixteen who expressed mature and reasonable basis for remaining with his
father in Oklahoma rather than return to his mother who lived in Canada, his
former habitual residence, at least until U.S. courts have resolved effect of
Oklahoma custody order and that of Sri Lankan court
The question in this case is whether an Ontario court should
order a child’s return to this province for a custody hearing when an appellate
court and a trial court in the United States have decided against ordering that
child’s return. Determining whether to decline jurisdiction in favour of the
American courts requires an analysis of the Hague Convention on the Civil
Aspects of International Child Abduction, T.I.A.S 11670; 1343 U.N.T.S 49; 19 I.L.M.
1501 [in force for U.S. July 1,1988] the basis for the U.S. courts’ decisions.
Canada and the United States are parties to the Convention.
Paul Pitts (Petitioner or F), is an American citizen who
resides in Ardmore, Oklahoma. He has been married for nine years to Sabrina
Pitts. Ms. Pitts’ daughter, Sarah, lives with the family. The Respondent is
Samarasinghe De Silva (Respondent or M), a citizen of the Republic of Sri Lanka
(formerly Ceylon). M came to Canada as a refugee in 2003 and is now a “landed
immigrant.” She intends to stay in Canada and hopes to become a citizen. She
currently lives in Barrie, Ontario with a daughter.
Jonathan (J) is the 14‑year‑old son of M and F. He was born
in Ardmore, Oklahoma on February 16, 1993. M, who was in the United States on a
student visa when she gave birth to J, registered him as a citizen of Sri Lanka
soon after he was born.
M and F separated shortly after J’s birth. A custody dispute
arose and M filed family court proceedings in Oklahoma county court. The court
ordered both parties not to take J from the court’s jurisdiction during those
proceedings. M, however, violated this order and took J to Sri Lanka in July
1994. A month later, the state Court granted F custody of J. This order remains
unmodified.
F eventually found out where J was living and visited him in
Sri Lanka. M next lodged custody proceedings in the Sri Lanka courts. On
September 29, 1996, a consent order granted custody of J to M. Like the 1994
Oklahoma order, this order has remained in effect.
For seven years, J lived with M in Sri Lanka. F visited J
there several times. In 2003, M took her daughter and J and moved to Canada. In
the summer of 2003, J spent two weeks in Oklahoma with F and then returned to
Canada. In the summer of 2004, J spent one week in Oklahoma with F and again
went back to Canada.
In July 2005, J went to Oklahoma. Though he was due to
return to Canada on August 12, J did not return. He has been living in Oklahoma
with F for more than two years. He is now 14 years old and attends Ardmore
Middle School.
As soon as M realized that J was not going back to Canada,
she resorted to the Ontario courts. On August 17, 2005, Ontario Superior Court
of Justice made an ex parte order granting M interim and permanent custody of
J. In the material filed in support of her motion, M did refer to her Sri Lanka
custody order but she neglected to mention the original Oklahoma court order
granting custody to F.
M next petitioned an Oklahoma federal court for an order
returning J. to her custody in Canada pursuant to the Convention. A full
hearing before a Magistrate Judge Kimberly West (MJ) took place in chambers on
January 18, 2006. M and F were both present and represented by counsel.
On February 15, 2006, the MJ denied M’s petition, for two
main reasons. First, the MJ held that M was trying to exploit the Convention
for an improper purpose, namely, to circumvent her breach of 1994 the non‑removal
order of the Oklahoma court. “[T]he fact remains [that] Petitioner violated an
express and unequivocal court order issued by an Oklahoma court with competent
jurisdiction, the existence of which she possessed actual notice [of] and now
is trying to evade international law by creating a habitual residence for J to
her unfair advantage.”
“Second, the MJ gave considerable weight to J’s express view
that he preferred to stay in Oklahoma. ... In her ‘Findings of Fact,’ the MJ
described her interview with J as follows: ‘During his stay in Oklahoma, J has
maintained telephonic contact with Petitioner and J’s sister. J expressed to
this Court his desire to remain with F because Ardmore has better schools than
in Canada and he likes F’s house. J appears comfortable in his current
surroundings, well‑settled in school and with friends and genuinely desirous of
remaining in Oklahoma.”
“J shows no animosity for Petitioner and states [that]
Respondents have not spoken ill of her or discourages (sic) J from maintaining
mostly unfettered contact with Petitioner and his step‑sibling. In sum, J
demonstrated a remarkable grasp of the situation, the conflict between his
parents and the proceeding. It is the evaluation of this Court that J has
demonstrated a sufficient degree of maturity whereby his views and opinions may
be given some persuasive weight.”
In the Conclusions of Law section of her judgment, the MJ
stated: “This Court has also considered [J’s] expressed opinions as to his
status in accordance with Article 13(b) of the Hague Convention. This Court
observed J to be a bright, expressive child with a well‑developed understanding
of his situation and the positions of his parents. He has attained an age and
degree of maturity to so consider his views. Unlike M, this Court did not find
J to be particularly swayed by lavish gifts and wealth in forming an opinion
that the schools were better in Oklahoma, he enjoyed his friends and activities
and his home. He is well‑settled in his environment in Oklahoma with [F]
without apparent adult indoctrination. Allowing him to remain with [F] while an
Oklahoma court determines custodial issues between his parents is in his best
interests at this time.”
F appealed the order. M filed the order and sought its
confirmation in the Carter County Court for the State of Oklahoma — the same
court that issued the 1994 custody order in F’s favor. On February 21, 2007, a
Judge denied confirmation of the motion judge’s order.
It will be recalled that Judge West had decided against M on
two bases — [1] the continuing validity and primacy of the original 1994 Oklahoma
custody order and [2] J’s views as given credit pursuant to Article 13(2) of
the Hague Convention. The Tenth Circuit disagreed with the first basis for
Judge West’s decision. The Court stated that the normal focal point for
determining a question of custody is the habitual residence of the child at the
relevant time, which in J’s case was Canada. Accordingly, Judge West erred by
placing too much reliance on the 1994 Carter County custody order in favor of
F.
However, the Tenth Circuit strongly endorsed the second
basis for Judge West’s decision, namely, her ascertainment of, and proper
regard for, J’s views and preferences. After a detailed review of Article 13(2)
of the Hague Convention, case law interpreting this article, and Judge West’s
process for determining J’s views and preferences followed by her assessment of
them, the Circuit Court concluded:
“While a father’s largesse could naturally be a factor in a
child’s decision, our reading of the record suggests this was taken into
consideration by the magistrate judge. Moreover, the fact [that] J and his
father have discussed relocation over a period of time, and that J returned to
Canada during the period of those ongoing discussions, convince us that this
was a considered decision on J’s part and represents his honest wishes. We are
also mindful of the [MJ’s] opportunity to observe J in person, and we accord
great deference to the court’s findings based on that experience.”
Given the court’s duty to consider J’s best interest and to
determine whether he was of sufficient age and maturity to weigh in on this
matter, we find no error in the district court’s ultimate conclusion that J
should remain in Oklahoma while Oklahoma courts decide the custody matter. We
hold that, under the unusual circumstances of this case, it is appropriate to
refuse repatriation to Canada solely on the basis of J’s desire to stay in
Oklahoma.
In the view of the Canadian Court, the sole issue on this
appeal is whether the Ontario courts should decline jurisdiction in this contested
custody matter in favor of the Oklahoma courts.
“Among the most important factors guiding courts’ decisions
to decline jurisdiction is comity — the deference owed to the legitimate
judicial acts of other countries: see Amchem Products Inc. v. British Columbia
(Workers’ Compensation Board), [1993] 1 S. C. R. 897, 912‑15 (S.C.C.), Antares
Shipping Corp. v. ‘Capricorn”’(The) (1976), [1977] 2 S. C. R. 422, 448
(S.C.C.); Beals v. Saldanha, [2003] 3 S. C. R. 416 (S.C.C.). Comity is at the core
of this case. The Superior Court order under appeal orders American authorities
to return J to Canada. Decisions by U.S. federal courts at the trial and
appellate level say the opposite; they decline to order J’s return. The key
question in this case is therefore whether this court should defer to the Tenth
Circuit’s decision to refuse to return J to Canada under the Hague Convention.”
“Beyond the overarching principle of comity, the Hague
Convention’s effectiveness depends on there being a general respect for the
decisions under the Convention by the courts of the Contracting State to which
the child has been removed. It is these courts that have primary responsibility
for adjudicating Hague Convention applications: see Caruso v. Caruso, [2006]
O.J. No. 5311 (Ont. S. C. J.).”
“The combination of comity, on the one hand, and of the need
to preserve the Hague Convention’s effectiveness, on the other, calls for
courts to avoid interfering, as much as possible, with foreign interpretations
of the Convention. As such, this court should respect the Tenth Circuit’s
decision not to order J’s return to Canada unless that decision evinces a clear
misinterpretation of the Hague Convention or fails to meet a minimum standard
of reasonableness.”
“The starting point in any case involving the Hague
Convention must be to recognize its predominant objective — securing the prompt
return of abducted children to the country where they habitually reside. As
expressed by La Forest J. in Thomson , supra, at p. 559: ‘The underlying
purpose of the Convention, as set forth in its preamble, is to protect children
from the harmful effects of their wrongful removal or retention and to
establish procedures to ensure their prompt return to the state of their
habitual residence.’ The Convention is founded on the assumption that a
wrongfully removed or retained child’s best interests will usually lie in the
child’s prompt return to the country of habitual residence, and that the
deterrent effect on wrongful removals or retentions of the Convention’s
mandatory return procedure will also serve the interests of children generally:
see W. (V.) c. S. (D.), [1996] 2 S. C. R. 108 (S.C.C.) at ¶ 77.”
“However, the Convention provides for exceptions to the
mandatory return of abducted or wrongfully retained children to their country
of habitual residence. Four exceptions permitting non‑return relate (I) to
children who have become settled in their new environment (Article 12); (ii) to
a situation where the custodial parent in the country of habitual residence was
not exercising custody rights at the time of removal or retention, or consented
or subsequently acquiesced to the removal or retention (Article 13(1)(a));
(iii) to a situation where there is a grave risk that the child’s return would
expose the child to physical or psychological harm or otherwise place the child
in an intolerable situation (Article 13(1)(b)); and (iv) to a situation where
return would violate the fundamental principles of the requested country
relating to the protection of human rights and fundamental freedoms (Article
20).”
“A fifth exception, central to this appeal, is contained in
Article 13(2) of the Convention which provides: ‘The judicial or administrative
authority may also refuse to order the return of the child if it finds that the
child objects to being returned and has attained an age and degree of maturity
at which it is appropriate to take account of its views.”
“The primary reason Article 13(2) exists is simple: given
that the Convention applies only to people under age 16 (Article 4), it would
not make sense to apply the return mechanism with its full force to children
close to age 16. The Convention’s reporter, Elisa Perez‑Vera, in her
‘Explanatory Report’ in Hague Conference on Private International Law, Acts and
Documents of the Fourteenth Session, vol. 3 (The Hague: 1980) at ¶ 30,
describes Article 13(2) as ‘absolutely necessary given the fact that the
Convention applies, ratione personae, to all children under the age of sixteen;
the fact must be acknowledged that it would be very difficult to accept that a
child of, for example, fifteen years of age, should be returned against its
will.’”
“Article 13(2) requires a court to engage in two inquiries:
(1) does the child object to being returned; and (2) has the child attained an
age and degree of maturity at which it is appropriate to take account of his or
her views?”
“[The MJ] undertook both of these inquiries. [As noted
above], she conducted an in camera interview in her chambers with J. ... J was
a few days short of his thirteenth birthday when this interview took place.”
“Judge West stated that J ‘demonstrated a remarkable grasp
of the situation, the conflict between his parents and the proceeding.’ He
showed no animosity towards [M] He was not improperly influenced by [F]. Thus,
Judge West concluded, J had attained an age and degree of maturity ‘whereby his
views and opinions may be given some persuasive weight.’ J’s views, ...
included ‘his desire to remain in Oklahoma with [F]. Accordingly, Judge West
refused to order J’s return to Canada. A year later, the U.S. Court of Appeals
for the Tenth Circuit dismissed M’s appeal from Judge West’s order.”
“In my view, the Tenth Circuit’s decision merits deference.
It is not a clear misinterpretation of the Hague Convention and does not fail
to meet a minimum reasonableness standard.”
“There can be no doubt that J had ‘attained an age and
degree of maturity at which it is appropriate to take account of his views.’
... The parties agreed that Judge West should interview J, a clear sign that
they recognized his maturity and the relevance of his views. I note,
parenthetically, that the Children’s Law Reform Act, R.S.O. 1990, c. C‑12, s.
64(2), specifically permits a court to interview a child to determine the
child’s views and preferences in a custody proceeding. ... The Tenth Circuit
affirmed this component of Judge West’s reasoning. I see no basis for
challenging this conclusion of the two U.S. courts.”
On the second issue, Judge West recorded J as expressing
“his desire to remain with [his father]” and, later, “his desire to remain in
Oklahoma with [his father]”.
“It might be contended that a ‘desire’ to remain in Oklahoma
is not the same as an objection to returning to Ontario, which is what Article
13(2) requires. However, such a distinction is strained. Judge West recorded
J’s reasons for preferring to stay in Oklahoma, including his comfort in his father’s
home and his satisfaction with his school, activities and friends in Ardmore.
On her description, J compared his life in Oklahoma with the possibility of
living in Ontario and came out in favor of Oklahoma. In these circumstances, a
fair conclusion is that J’s ‘desire’ to stay in Oklahoma comprehends an
objection to returning to Ontario, at least at this point in his life.”
“For these reasons, I conclude that Judge West’s invocation
of Article 13(2) of the Hague Convention to refuse to order J’s return to
Ontario, and the Tenth Circuit’s affirmation of that decision, deserve
deference from this court.”
“I make one final observation. If the parties cannot resolve
their dispute, a custody hearing on the merits must take place in the
appropriate Oklahoma court. As the Tenth Circuit court emphasized, the original
1994 Oklahoma court order granting custody of J to F no longer governs.”
“Accordingly, a new custody hearing in Oklahoma will be
necessary if the dispute cannot be resolved. J will be 15 years old next month.
His opinion regarding where he wants to live will be even more than highly
persuasive — it will probably be determinative. Accordingly, the parties should
seriously consider a means of fairly ascertaining J’s views without further
delay, expense and conflict so that both parents can be actively involved in
J’s life.”
“I would allow the appeal. The Ontario courts should decline
their admitted jurisdiction in this contested custody dispute in favor of the
Oklahoma courts.” [¶¶ 35‑51].
Citation: De Silva v. Pitts, 2008 CarswellOnt 41;
2008 ONT. C. A. 9 (January, 2008).
MARITIME LAW
In maritime action by car maker against marine transport
company for cargo damage, Sixth Circuit rules that, when court has to choose
between applying U.S. Carriage of Goods by Sea Act (COGSA) or international
Hague‑Visby Rules because both foreign and U.S. ports are involved, it should
do so intermodally rather than apply COGSA and Hague‑Visby standards separately
Ford Motor Company (Plaintiff) and Orient Overseas Container
Line Ltd. (Defendant) had entered into a “Transportation Services Main
Agreement” (TSM) in 2003, providing for carriage of transmission racks from
Blanquefort, France, through Montreal, Canada, to various cities in the U.S. A
storm at sea washed several containers with the transmission units overboard
and damaged many others. Plaintiff and its cargo insurer, Royal Insurance
Company of America (Royal) (jointly Plaintiffs) sued Defendant in a Michigan
federal court for the damage that Ford’s transmission racks suffered during the
stormy voyage from France to Canada then to the U.S.
The district court granted Defendant partial summary
judgment, holding that the liability limitation of $500 per package applied
pursuant to the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. Section 30701.
The district court found that COGSA did apply and that each transmission rack
was a “package” for purposes of calculating damages. On Plaintiffs’ appeal, the
U.S. Court of Appeals for the Sixth Circuit reverses and remands.
COGSA implements within the U.S. the 1924 International
Convention for the Unification of Certain Rules of Law Relating to Bills of
Lading for the Carriage of Goods by Sea , 53 Stat 233; T. S. 931; 120 L.N.T.S
155(the Hague Rules). Many countries later adopted the Hague‑Visby Amendments
of 1968 (the Hague‑Visby Rules) amending the Hague Rules. Several of those
countries also adopted the 1979 Protocol which changed the Hague‑Visby Rules
from the gold standard to a limitation system. The U.S. has never become a
party either to the 1968 or the 1979 amendments.
The Court determines, first, whether COGSA or the Hague‑Visby
Rules apply to the ocean transport between France and Montreal. Here, the Hague‑Visby
Rules apply ex propio vigore if (1) the bill of lading is issued in a
Contracting State, or (2) the carriage is from a port in a Contracting State,
or (3) the Contract expressly makes the Hague‑Visby Rules applicable. Art. 5,
Protocol to Amend the above Convention, Feb. 23, 1968, 1977 Gr.Brit. T.S. No 83
(Cmnd. 6944) (entered into force on June 23, 1977) [Hague‑Visby Rules]. Here,
France is a Contracting State, making the Rules applicable.
COGSA applies to international sea transports to or from
ports of the U.S. 46 U.S.C. Section 30701. Plaintiffs argued that COGSA did not
apply as a matter of law because neither the French port nor the Canadian port
are ports of the U.S. The Court disagrees.
“The Supreme Court’s decision in Norfolk Southern Railway
Co. v. Kirby, 543 U.S. 14 (2004), affirmed the broad principle that courts
should evaluate multimodal contracts in their entirety rather than treat each
of the multiple stages in multimodal transportation as subject to separate
legal regimes, which would present an obstacle to efficient liability rules. We
therefore hold today that, as a matter of federal common law, COGSA liability
rules apply to a multimodal maritime contract with an ultimate destination in
the United States, regardless of whether the contract provides for an
intermediary stop en route during the sea stage of transport or between the sea
and land legs.”
“The parties in this case, however, were free to contract
for application of the liability limits set forth in either the Hague‑Visby
Rules or COGSA. The convoluted and contradictory nature of the contract at
issue has led us to apply the doctrine of contra proferentem and to construe
the bill of lading against its drafter, [Defendant] We hold that [Defendant]
and [Plaintiff] contracted for application of the liability limits set forth in
the Hague‑Visby Rules.” [Slip op. 4‑5]
“We hold today that an intermediary stop en route pursuant
to a multimodal maritime contract with an ultimate destination in the United
States, regardless of whether the stop is during the sea stage of transport or
between the sea and land legs, should not prevent the application of COGSA
liability rules as a matter of federal common law. Our decision effectuates
Congress’s intent when it passed COGSA in 1936 to promote uniformity in
shipping. We think that applying COGSA’s liability rules to all carriage of
goods by sea, in contracts for transportation with ultimate destinations in the
United States, effectuates Congress’s intent in a context that Congress could
never have predicted: one in which containerized transport and ‘through’ bills
of lading prevail.” [Slip op. 11].
As to choice of law, the Court analyzes the choice‑of‑law
provisions in the Transportation Agreement and the bill of lading, and finally
applies U.S. law. As a matter of federal common law, COGSA applies. COGSA
allows parties to contract for higher liability limitations than $500 per
package. [Defendant’s] bill of lading makes the Hague‑Visby Rules applicable.
The remaining issue then is what constitutes a “package.”
“[Plaintiffs] argue that, in the ‘Quantity’ column of the
bill of lading, [Defendant] identified and described each of the thousands of
auto transmissions that [Plaintiff] shipped as a ‘unit.’ ... [Defendant] does
not dispute this contention and instead argues only that, under COGSA liability
limits, each rack within the container rather than each auto transmission
constitutes one COGSA package. ... But we have reached the conclusion that the
bill of lading binds [Defendant] by the Hague‑Visby and not the COGSA liability
limits. Accordingly, we turn to the bill of lading to assess the number of units
listed by [Defendant].”
“The bill of lading, however, is sufficiently confusing to
make it inadvisable for us to reach a conclusion as to the total number of
units listed. A total of forty‑three consecutive pages in the bill of lading
include ‘Quantity’ columns with various numbers of units listed. .... An
understanding of what exactly these numbers reference, where the pages
duplicate and should not be counted twice, and ultimately how to calculate the
total number of units listed requires a factual understanding of the practices
of the shipping industry and specifically [Defendant’s] bill of lading.”
“Surveying and weighing such factual evidence is the job of
the fact‑finder. Therefore, we remand to the district court for further
proceedings consistent with this opinion. We reiterate that, as a matter of
law, the total number of units so listed will constitute the number of packages
or units to be used to assess the limits set by the Hague‑Visby Rules to
[Defendant’s] liability. Of course, the Hague‑Visby Rules only set limits to
liability; actual liability will depend on other relevant factors, which have
not yet been addressed by the parties or the district court.” [Slip op. 23‑24]
Citation: Royal Ins. Co. of America v. Orient
Overseas Container Line Ltd., 514 F.3d 621 (6th Cir. 2008).
SOVEREIGN IMMUNITY
In appeal of lawsuit against retired Israeli General by
victims of battles between Hezbollah and Israel, District of Columbia Circuit
finds (1) that lower court lacked jurisdiction under Foreign Sovereign
Immunities Act because General was acting in his official governmental
capacity, and (2) that Plaintiffs contention that such official loses immunity
once he or she leaves office, or violates jus cogens norms lacked merit
Plaintiffs filed suit in the District of Columbia federal
court, claiming that they suffered injuries and death during a battle between
Israel and the terrorist Hezbollah at the Lebanese border in April 1996. The
Defendant is Moshe Ya’alon, a retired Israeli general who served as the Head of
Army Intelligence from 1995 to 1998. He allegedly was one of the responsible
commanders during that attack, and Plaintiffs had him served with process while
Defendant was a fellow at a Washington, D.C., think tank.
The district court dismissed the case for lack of
jurisdiction based on the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C.
1602. On Plaintiffs’ appeal, the U.S. Court of Appeals for the District of
Columbia Circuit affirms. As to the FSIA issue, the Court concludes that the
Plaintiffs had failed to allege any acts that [Defendant] committed outside the
scope of his official capacity.
“Upon review of their complaint it appears that [Plaintiffs]
pleaded themselves out of court. The complaint identifies nothing that
[Defendant] is alleged to have done in an individual capacity, or other than as
an agent or instrumentality of the state of Israel. Indeed, the complaint
alleges nothing that [Defendant] did at all. The factual allegations of
tortious conduct all concern acts allegedly done by the military of the state
of Israel in the conduct of hostile operations.”
“The personal liability of [Defendant] seems to be entirely
based on the proposition that the ‘defendant, acting singly and in concert with
others,’ conducted a military operation which was rather plainly on behalf of
the state of Israel. The complaint alleges nothing that [Defendant] allegedly
did himself. Indeed, the critical portions of the complaint alleging specific
wrongful ‘acts’ by [Defendant] which allegedly caused the harm to the
Plaintiffs all consist of claims that, at a time when [Defendant] ‘knew or
should have known that Lebanese civilians sought shelter’ ...., he did nothing
to prevent it. Since there is nothing in an individual capacity that
[Defendant] or any other individual not acting as an agent of the Israeli
government could have done to stop the military actions ..., on the face of
Plaintiffs’ complaint, it is apparent that any argument that he acted in an
individual capacity rendering him unprotected by the FSIA is meritless.”
“We have no difficulty in holding that the district court
properly ruled that the FSIA does not extend jurisdiction over this action
against an officer for actions committed by the state in whose army he served.”
[Slip op. 5‑6]
The Court also rejects, without expressly deciding, the
Plaintiffs’ argument that the FSIA does not apply to a foreign official who
leaves office after committing the challenged acts and before the lawsuit is
filed.
“[Plaintiffs] ask us to hold that a public official
protected by the sovereign immunity of his country at the time he performs acts
on behalf of the government loses that protection on the day he resigns or
reaches the expiration of his term. Aside from the fact that such a holding
makes no practical sense, it would be a dramatic departure from the common law
of foreign sovereign immunity, as codified in the FSIA.”
“The Supreme Court recently reiterated that one ‘well‑recognized’
purpose of the FSIA was the ‘codification of international law at the time of
the FSIA’s enactment.’ ... In 1976, it was well settled that sovereign immunity
existed for ‘any other public minister, official, or agent of the state with respect
to acts performed in his official capacity if the effect of exercising
jurisdiction would be to enforce a rule of law against the state.’ RESTATEMENT
(SECOND) OF FOREIGN RELATIONS LAW OF THE UNITED STATES Section 66(f) (1965).
The common law of foreign sovereign immunity made no distinction between the
time of the commission of official acts and the time of suit. When Congress
codified the common law in the FSIA, it retained this same protection for
foreign officials.” [Slip op. 7]
Finally, Plaintiffs argued (creatively) that [Defendant]
acted contrary to jus cogens norms of international law and thus [acted]
outside the scope of his authority. “It is not necessary for this Court to
reach the issue of whether the acts alleged by Plaintiffs constitute violations
of jus cogens norms because the FSIA contains no unenumerated exception for
violations of jus cogens norms. [Slip op. 9]
Citation: Belhas v. Ya’alon, 2008 WL 398465 (D.C.
Cir. February 15, 2008).
VIENNA CONVENTION
On appeal by two foreign citizens convicted of drug
offenses, Germany’s Highest Court hold that failure to promptly inform
Defendant’s of their rights to notify its diplomatic officials under Vienna
Convention does not require suppression of incriminating statements made during
delay
In October 2006, the Defendants, a Macedonian citizen and a
Serbian citizen, travelled by car from Oslo, Norway, to Hamburg, Germany, where
they met a drug carrier and received approximately 1.5 kilograms of cocaine.
German authorities arrested them as they were about to leave Germany by ferry,
and charged them with conspiring to distribute cocaine. In April 2007, the
District Court at Luebeck found the Defendants guilty and sentenced them to
three years imprisonment. Defendant appealed to the Bundesgerichtshof (BGH).
On the appeal, they claim that the District Court improperly
took into account their incriminating statements made to the German customs
officers and the investigating magistrate, because at the time no one had told
them about their rights under the Vienna Convention on Diplomatic Relations,
Apr. 18, 1961, 23 U.S. T. 3227; T. I. A. S. 7502; 500 U. N. T. S. 95
(Convention) to have their diplomatic officials informed of their predicament.
The German authorities, however, did warn them of their right to remain silent
and to contact a lawyer.
Both proceeded to make self‑incriminating statements.
Eventually, the magistrate did advise them of their right to contact their
diplomats but the Defendants refused to do so. Defendants now argue that the
German authorities should have notified them of their Convention rights to
inform their respective diplomats right after they had arrested Defendants.
In a December 20, 2007 ruling, the BGH affirms. The Court
agrees that German authorities had violated the Defendants’ rights under
Article 36 of the Convention but it does not amount to reversible error. The
District Court thus did not err in considering the Defendants’ incriminating
statements.
Although German authorities should have told the Defendants
about their Article 36 rights immediately upon arrest, this does not bar
evidence of their incriminating statements. There is no basis in international
or German constitutional law for excluding evidence received in violation of
Article 36 of the Convention. The International Court of Justice (ICJ) has held
in LaGrand ‑ Germany v. United States of America, Judgment, I.C.J. Reports
2001, 466, 541 (see 2001 International Law Update 118) that national courts
should review whether the U.S.’s failure to inform an arrested person of his or
her Convention rights as to whether it had adversely affected the outcome of
the criminal case.
“In the case of such a conviction and sentence, it would be
incumbent upon the United States to allow the review and reconsideration of the
conviction and sentence by taking account of the violation of the rights set
forth in the Convention. This obligation can be carried out in various ways.
The choice of means must be left to the United States.” The ICJ did not go so
far as to require the national courts to suppress evidence obtained in
violation of the Convention.
As for German domestic law, the German Constitutional
Tribunal (BVerfG) has held that, even if a violation of Convention Article 36
does takes place, the German courts need not keep out incriminating evidence
obtained thereby. See BVerfG NJW 2007, 499, 503. While this additional
protection applies only to foreign persons, they also enjoy the general rights
and protections of German law.
Defendants here do not claim that immediate compliance with
the Convention would have caused a different outcome in the criminal
proceeding. In fact, when informed by the magistrate of their rights, they
expressly refused to contact their respective officials. Therefore, in this
particular case and on these particular facts, the Court does not find any
reversible error.
Citation: [German] Bundesgerichtshof, 3 StR 318/07
(20 December 2007). See full Court opinion at www.bundesgerichtshof.de.
EU amends anti‑dumping duty on U.S. and Russian steel. With
Council Regulation No 41/2008, the European Union has amended the definitive
anti‑dumping duty on silicon‑electrical steel from the U.S. and Russia. The
company‑specific duty for the U.S. producer AK Steel Corporation is 31.5
percent. “Grain oriented flat‑rolled silicon‑electrical steel” (GOES) has a
high degree of magnetic conductivity. The Council notes that its investigation
has convinced it that it should exempt GOES with a thickness of 0.16 mm or less
from the anti‑dumping duty. The national customs authorities are to refund any
anti‑dumping duties paid for such thin GOES.
Citation: Council Regulation No 41/2008, 2008 O. J.
of the European Union (L 16) 1, January 19, 2008.
European Court of Justice rules on privacy during
intellectual property litigation. The European Court of Justice has held
that EU law does not require the disclosure of personal data in a civil
proceeding regarding copyright in a Member State. Here, Promusicae is an
association of producers and publishers of musical and audiovisual recordings.
It sought a court order requiring a telephone company to disclose the
identities of persons who used an online file exchange program, KaZaA, where
copyright‑protected files were exchanged. Promusicae’s intent was to use that
information to sue the persons who had exchanged the protected files. The
Spanish Court submitted the issue to the European Court of Justice (ECJ) under
Article 234. In particular, the Spanish court asked the ECJ whether the parties
to civil proceedings have to reveal their personal data. The ECJ notes that EU
directives on the protection of personal data include exceptions for the
protection of the rights and freedoms of others. Member States have the duty to
implement EU directives in a way that balances the various fundamental rights
(here: intellectual property and personal privacy). Citation: Judgment
of the Court of Justice in Case C‑275/06, Productores de Musica de Espana
(Promusicae) v. Telefonica de Espana SAU (January 2008). [Opinion and related
press release are available on website curia.europa.eu.]
U.S. Treasury Announces new U.S. tax agreements with
Belgium, Denmark, Finland and Germany. On January 2, 2008, the Treasury
Department reported some recent developments in several U.S. international tax
agreements. In the case of Belgium, a new income tax treaty and protocol
entered into force on December 28, 2007. The protocols to existing tax treaties
are with Denmark, Finland and Germany. Two types of provision are common to the
agreements with Belgium, Denmark, Finland and Germany: (1) the elimination of
source‑country withholding taxes on certain dividends; and (2) the
modernization of the treaty’s limitation of benefits provision. Both Germany
and Belgium have added a provision requiring arbitration of certain tax
disputes that competent authorities have been unable to resolve within a
specified period. These changes generally apply to tax years beginning on or
after January 1, 2008. Certain provisions of the protocols with both Germany
and Finland are effective, however, on or after January 1, 2007.
Citation:
U.S.
Federal News (HT Syndication), Washington, D.C., Wednesday, January 2, 2008;
2008 W. L. N. R. 211 267.
