Legal Analyses written by Mike Meier,
Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.
1998
International Law Update, Volume 4, Number 9 (September).
BANKRUPTCY
In
case where foreign creditor intended foreign collection of debt discharged
in U.S. bankruptcy proceeding, Ninth Circuit holds that U.S. bankruptcy
statute applies extraterritorially
The
Hong Kong and Shanghai Banking Corp., Ltd. (HKS) lent more than $ 24,000,000 to
Odyssey International Holdings, Ltd. The latter is a British Virgin Islands
corporation with offices in Hong Kong. William Neil Simon, Odyssey's major
shareholder, personally guaranteed the loan. Simon's guarantee provided that
Hong Kong law should apply and that Hong Kong courts have jurisdiction.
Instead
of paying off the loan, however, Simon went to the U.S. and filed for personal
bankruptcy under Chapter 7 of the U.S. Bankruptcy Code, listing the loan on
the bankruptcy schedules. In 1995, the Bankruptcy Court discharged Simon from
all debts and enjoined other collection actions under 11 U.S.C. § 524.
Shortly
thereafter, HKS sought a declaratory judgment that the bankruptcy discharge had
no legal effect outside the U.S., thus leaving HKS free to file collection
proceedings in Hong Kong. The Bankruptcy Court ruled against HKS and the
district court affirmed. HKS then turned to the Court of Appeals, arguing that
the discharge injunction constituted an improper extraterritorial application
of § 524.
The
U.S. Court of Appeals for the Ninth Circuit affirms. In its view, the U.S.
Congress has authority to extend the reach of its laws beyond the territorial
boundaries of the U.S. Whether Congress has exercised that authority in a
particular case is a matter of statutory construction. Here, Congress clearly
intended extraterritorial application of 11 U.S.C. § 524. The court's
"custody" over the debtor's property through in rem jurisdiction
creates a fiction that the property -- regardless of its actual situs -- is
legally located within the jurisdiction of the court.
This
is consistent with international comity. "The sole, plenary insolvency
proceeding was initiated in the United States without objection and with the
participation of the appellant. Hong Kong-Shanghai cannot point to a single
conflict which exists between Hong Kong and United States law on the issue in
question. In fact, the section 524 discharge injunction does not apply to the
Hong Kong courts at all, but only to the creditor who enjoyed the benefits of
participating in the United States bankruptcy. Under these circumstances,
international comity does not dictate a result contrary to that reached by the
district and bankruptcy courts." [Slip op. 20-21]
Citation: In Re:
William Neil Simon, No. 96-16859 (9th Cir. August 27, 1998).
CHOICE
OF LAW/FORUM SELECTION
In
action by U.S. participants in insurance underwriting against Lloyd's of
London, Eleventh Circuit decides whether the anti-waiver provisions of
securities laws preclude enforcement of certain choice-of-law and
forum-selection clauses
Lloyd's
of London is a large insurance pool that oversees and regulates the competition
for underwriting in the international insurance market in London. To raise
capital, underwriting agencies recruit "names" to provide capital.
They become members of Lloyd's and take part in the underwriting agencies.
A
"name" must provide an irrevocable letter of credit and travel to
England to sign the "General Undertaking." It contains choice-of-forum and choice-of-law
clauses ("choice clauses"). Under these clauses, England's laws apply
and English courts have exclusive jurisdiction.
Several
U.S. citizens (jointly the Lipcons) became involved in Lloyd's as
"names." When it dawned on
them that they would be responsible for the massive insurance losses for
asbestos and pollution claims, they sued Lloyd's in U.S. district court. They
claimed that Lloyd's had actively sought U.S. capital and had fraudulently
exposed the Lipcons to undue risk. The district court dismissed the complaint
against Lloyd's based on the reasoning of M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1 (1972).
[Courts
applying the Bremen doctrine generally enforce choice clauses unless (1)
defendant used fraud or overreaching to induce plaintiffs to contract, (2) the
plaintiff could not properly litigate the case because of the inconvenience or
unfairness of the chosen forum, (3) the fundamental unfairness of the chosen
law would deprive the plaintiff of a remedy, or (4) enforcement of the
provisions would contravene a strong U.S. public policy.]
The
U.S. Court of Appeals for the Eleventh Circuit affirms. The general question
here is whether the anti-waiver provisions of the U.S. securities laws preclude
enforcement of certain choice-of-law and forum-selection clauses in
international agreements. Several Circuits have already upheld them.
The
Lipcons argue that the choice clauses are unenforceable under the anti-waiver
provisions of the U.S. Securities Act of 1933, which provides that "[a]ny
condition, stipulation, or provision binding any person acquiring any security
to waive compliance with any provision of this subchapter or of the rules and
regulations of the Commission shall be void." (15 U.S.C. § 77n). The
Securities Act of 1934 contains a similar provision in 15 U.S.C. § 78cc(a). The
Securities and Exchange Commission (SEC) submitted an amicus curiae brief
arguing that Lloyd's choice clauses are unenforceable.
The
Court agrees with the district court that the Bremen's framework for evaluating
choice clauses in international agreements governs this case. U.S. Supreme
Court precedent suggests that the courts must determine the enforceability of
choice clauses in international agreements in the context of international
commerce. Since the Supreme Court has not yet decided whether the anti-waiver
provisions of U.S. securities law prevail over choice-of-law clauses in
international agreements, the Court looks to policy considerations.
"Although
we do not deny that there is some force to appellants' argument that the
anti-waiver provisions preclude application of the Bremen test, we believe that
to invalidate the choice provisions for that reason in effect would be to
conclude that 'the reach of the United States securities laws [is] unbounded,'
... and to ignore the Supreme Court's caveat that 'we cannot have trade and
commerce in world markets and international waters exclusively on our terms,
governed by our laws, and resolved in our courts.'" [Slip op. 30-31]
Furthermore,
the agreements in this particular case do not contravene public policy. Private
actions under the securities laws serve to compensate investors who have been
harmed by wrongdoers. This goal can be achieved by actions in English courts
under English law.
Citation: Lipcon v.
Underwriters at Lloyd's, London, No. 97-5144 (11th Cir. August 5, 1998).
COPYRIGHT/CHOICE
OF LAW
In
international copyright case involving Russian and U.S. parties, Second
Circuit decides that Russian copyright law is controlling
Kurier
is a weekly newspaper in Russian with a circulation of about 20,000 in the New
York area. Kurier has copied and published hundreds of articles that Itar-Tass,
a Russian news service, had first published or distributed. Itar-Tass and
others brought AN action in which the district court enjoined Kurier from
copying articles that have originally appeared in Itar-Tass' publications.
Kurier then noted an appeal.
The
U.S. Court of Appeals for the Second Circuit affirms in part, reverses in part
and remands.
There
is a threshold question of what law applies. Under U.S. law, an owner may sue for infringement only if the
plaintiff has an "exclusive right" pursuant to 17 U.S.C. § 501(b).
Russian copyright law, however, presents two main substantive questions: (1)
whether a newspaper publisher has enough of an interest to give it standing to
sue another for copying the text of individual articles appearing in its
newspapers or (2) whether only the reporters who wrote the articles may do so.
Copyright
is a form of property, and the general Restatement choice-of-law rule is that
the interests of the parties depend on the law of the state with "the most
significant relationship" to the property and the parties. Since Russian
nationals first created the works at issue here and first published them in
Russia, the Court rules that Russian law determines ownership rights. The Court
concludes that Russian law determines the ownership and essential nature of the
copyrights that have allegedly been infringed in the U.S. as well as the
remedies.
Article
14 of the Russian Copyright Law makes Itar-Tass the owner of copyright
interests in the articles written by its employees, but excludes newspapers
from the Russian version of the "work-for-hire doctrine." Article 11 recognizes a compilers' copyright
"in the selection and arrangement of subject matter that he has made
insofar as that selection or arrangement is the result of a creative effort of
compilation." Thus, authors of
newspaper articles may sue for infringement of their rights in the text of
their own articles. In addition, newspaper publishers may recover for wholesale
copying of the entire newspaper or for copying any portions of the newspaper
that amount to a creative compilation.
The
Court therefore overturns the injunctive relief given to Itar-Tass against
Kurier. It then sends the case back to the district court so that it can settle
the rights of the authors and other parties under Russian law.
Citation: Itar-Tass
Russian News Agency v. Russian Kurier, Inc., No. 97-7498 (2d Cir. August 27,
1998).
GENOCIDE
In
case of first impression, International Court of Justice rules preliminarily
that counter-claims by Yugoslavia against Bosnia and Herzegovina in latter's action under Genocide Convention
were admissible
In
March 1993, Bosnia and Herzegovina filed proceedings in the International Court
of Justice against Yugoslavia charging the latter with violating the Genocide
Convention of 1948 [78 U.N.T.S. 277]. The applicants, inter alia, called upon
the Court to determine that agents and surrogates of Yugoslavia have
"killed, murdered, wounded, raped, robbed, tortured, kidnapped, illegally
detained, and exterminated" the applicants' citizens and to order
reparations.
At
applicants' request, the court twice during 1993 issued interim injunctions
against Yugoslavia to immediately stop the acts of genocide and all actions
that might worsen or prolong the dispute. Yugoslavia next objected to the
Court's jurisdiction but the Court rejected the claim.
Yugoslavia
then filed counter-claims in July 1997. They asked the Court to find applicants
responsible for committing genocide against the Serbs in Bosnia and Herzegovina
and to punish these violations.
Under
Article 80 of the Rules of Court, a party may interpose a counter-claim that
falls within the Court's jurisdiction and is linked directly to the subject
matter of applicants' main claims. Their purpose is to broaden the original
subject-matter of the case beyond an applicant's claims.
In a
case of first impression as a preliminary matter, the Court heard the arguments
of the parties and, in a 13 to 1 vote, holds that the counter-claims are
admissible. It also sets a schedule during 1998 for replies and rejoinders. The
Court cautions, however, that this ruling in no way prejudges the question of
whether there is evidence to support the counter-claims.
The
Vice-President of the Court dissents. In his view, the Serbian charges do not
qualify as "counter-claims" under Article 80. Thus, the proper way to
handle the allegations would be in a separate proceeding. Moreover, they bring
Croatia into the matter and would delay the decision on the merits of
applicants' claims.
Citation: Case concerning the Application of the
Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia
and Herzegovina v. Yugoslavia) [based on press release from I.C.J. website at:
http://www.icj‑cij.org. For further information, you may call Mrs. Blairon,
Information Officer, at (31)(70) 302 2337)].
INSURANCE
House
of Lords remands complex insurance case to Commercial Court for reconsideration
of whether custom or usage dictates that proportional reinsurers must also
share claim-processing costs as to asbestos and Vietnam defoliant claims arising
in United States
The
Black Sea and Baltic General Insurance Company, Ltd. has been doing business as
an insurance and reinsurance company in London. Beginning in 1957, they were
reinsuring Lloyd's Syndicate 947 under a continuous contract. It was a 50/50
proportional reinsurance, in which there was an equal sharing of premiums and
losses as to risks ceded by the syndicate. The premium to be shared was the
original one received by the syndicate net of brokerage fees, less a deduction
of a five percent "overriding commission."
On
December 31, 1968, the parties ended the contract on notice. The "run
off" was working well until 1984. At that point, defendants declined to
reimburse Syndicate 947 on certain outstanding claims. Arising in the United
States, the contested claims involved asbestos injuries and claims by American
soldiers that the use of defoliants during the Vietnam conflict had caused them
long term health injuries. Defendants
rejected any further liability from the third quarter of 1988 on.
Next,
Colin Baker, a member of the syndicate, sued defendant in May 1989 on behalf of
himself and all other syndicate members in the London Commercial Court. After
prolonged proceedings, the judge ruled favorably to the syndicate on nine of
the ten identified issues. The syndicate lost, however, on the question of
whether an insurer could recover a proportion of the expenses spent on
investigating, settling or defending claims by its insured under a quota share
or other form of proportional reinsurance.
Defendants
filed an appeal on the nine adverse rulings and plaintiff cross-appealed its
single adverse ruling. Plaintiffs argued that there was an obligation implied
by law upon the reinsurer to pay a pro rata share of the reasonable costs of
processing the insured's claims. This implication arose either out of the need
to give the contract business efficacy or out of a trade practice or usage in
the London insurance market. The Court of Appeal dismissed both the appeal and
cross-appeal and the syndicate sought review in the House of Lords.
At
this point Equitas Reinsurance, Ltd. took over the rights and liabilities of
all Lloyd's members with respect to the 1992 and prior accounts. After the
court granted Equitas leave to intervene in the proceedings, it petitioned for
leave to bring out new evidence on the trade practice or usage issue. The
amount at stake for Equitas might range as high as $10,000,000.
The
House of Lords rules that there is no legal basis for implying a contract term
to share the costs of processing claims made by insured on the underlying
policies on a theory of business efficacy.
The
House is more receptive, however, to the trade practice or usage theory.
Defendants would have to show by "firm evidence" that cost sharing
by reinsurers was a universal and admitted practice throughout the entire
market. This is an issue of major importance in the case which the parties did
not get a chance to explore fully below. The House therefore decides that the
rational course would be to set aside this aspect of the lower court judgments
and to remand to the Commercial Court. That Court should hear any new evidence
presented by either side and consider additional arguments from the parties.
Citation:
Baker v. Black Sea & Baltic
General Ins. Co., [1998] 2 All ER 833 (House of Lords).
INTERNET
In
case of internet website with competitive travel offers entered by clients of
website provider, German State Supreme Court holds website provider responsible
for clients' anti-competitive statements
The
German website "www.last-minute.com" (hereinafter Last-Minute)
permits travel providers to directly post travel offers as "Super Last
Minute" offers. Last-Minute generically lists the offers of the travel
providers without listing the provider's name.
The
plaintiff obtained a default judgment and an injunction in district court in
Munich, Germany. It barred Last-Minute from advertising travel offers as
"last minute" offers where the departure date is more than 14 days
away. The district court held that holding out such a schedule as "last
minute" was misleading and held Last-Minute responsible under the German
Competition Law (UWG). Last-Minute appealed.
The
State Supreme Court in Munich, Bavaria (Oberlandesgericht Munchen) holds that a
person who maintains a website where clients enter information is responsible
for the clients' anti-competitive statements. That person must see to it, such
as by automatic content controls, that website ads do not violate competition
laws.
The
fact that Last-Minute is merely an advertising vehicle is irrelevant. It is
technically feasible to electronically filter out travel offers with departure
dates that are more than 14 days away. Last-Minute in fact should have
installed the necessary technology after the initial district court decision.
The
Court also rejects Last-Minute's argument that its contracts with the travel
providers do not permit Last-Minute to review the travel offers. Last-Minute
must make legal arrangements with its clients that prevent it from taking part
in anti-competitive behavior.
Citation: Oberlandesgericht Munchen, Urteil,
Geschaftsnummer: 29 U 4466/97 (LG Munchen I) (February 26, 1998).
JUDICIAL
ASSISTANCE (EVIDENCE)
On
appeal of insurers' proceeding to obtain evidence for use in foreign tribunal
pursuant to 28 U.S.C. § 1782, Second Circuit concludes that adverse ruling by
French Cour de Cassation followed by French bankruptcy filing by insurers means
there is no foreign proceeding in which insurers could use evidence
Euromepa,
S.A. is a French corporation in the insurance brokerage business under common
control with Allied Insurance and Reinsurance Company, a Cyprus corporation. R.
Esmerian, Inc., a New York corporation, does business as a diamond and jewelry
dealer. The basic dispute is whether Euromepa is liable for some $20,000,000
worth of Esmerian's jewelry that a courier misappropriated based (1) on the
insurers' misrepresentation as to the trustworthiness of that courier (2)
their advice to forego insurance on the jewelry.
Esmerian
sued the insurers in the French courts where the court of first instance handed
down a $10,000,000 judgment for Esmerian. In its view, plaintiff and defendants
were equally at fault so it split the loss equally between them. As the French
proceeding went up on appeal, defendants sought evidence from Esmerian under 28
U.S.C. § 1782. The district court denied the petition as aimed at evidence the
French courts would not order produced.
While
an appeal from the § 1782 ruling was pending in the Court of Appeals, the
French Court of Appeals at Versailles amended the lower court's ruling to raise
the recovery to $20,000,000 on the grounds that Esmerian did not "commit
any misconduct." Right after that,
Euromepa petitioned for protection under French bankruptcy law.
Without
addressing a motion by Esmerian to dismiss the appeal as moot for lack of a
predicate foreign proceeding, the Second Circuit reversed the § 1782 ruling
[see 1995 Int'l Law Update 7 (October); 1997 Int'l Law Update 126]. A week
later, the insurers perfected an appeal to the French Cour de Cassation.
On
remand, Esmerian moved in early 1995 to dismiss the § 1782 petition as moot but
the district court did not grant the motion until February 1997. By that time,
the Cour de Cassation had ruled that the appeal to it had been an abuse of
process and had sanctioned Euromepa's liquidator. This satisfied the district
court that the final judgment of France's highest private law court meant that
there were no pending proceedings in which to use the § 1782 evidence. The
insurers again filed an appeal of the district court's dismissal. The U.S.
Court of Appeals for the Second Circuit affirms.
Petitioners
rely on the French bankruptcy proceeding as qualifying under § 1782.
"While it is clear that a bankruptcy proceeding may, in some instances, be
an adjudicative proceeding within the meaning of the statute, we hold that the
French Bankruptcy Proceeding in this instance is not an adjudicative
proceeding within the meaning of the statute for the following reasons. The merits
of the dispute between Esmerian and Euromepa have already been adjudicated and
will not be considered in the French Bankruptcy Proceeding. ... Thus, in the
French Bankruptcy Proceeding, nothing is being adjudicated; the already extant
judgment is merely being enforced (to the extent permitted by the assets of the
bankruptcy estate)." [Slip op. 4]
Nor
does petitioners' reliance on the possibility that the French court will reopen
the action based on newly discovered evidence have merit. "In this case,
as conceded by Petitioners, such a motion to reopen will not even be made, let
alone granted, absent newly discovered evidence. The motion to reopen is thus
neither very likely to occur nor very soon to occur. Section 1782 is designed
to provide discovery in aid of foreign litigation, not to provide discovery to
justify the reopening of already completed foreign litigation. The motion to
reopen the proceedings in the French Court of Appeal thus cannot serve as a
predicate foreign proceeding for the Petition." [Slip op. 5] Evidence received pursuant to Civil Rule 44.1
that the Cour de Cassation does not entertain new evidence reinforces the
Court's conclusions.
Citation:
In the Matter of the application
of: Euromepa, S.A., No. 97-7333 (2nd Cir. August 10, 1998). [See also the
Singapore phase of this matter at 1997 Int'l Law Update 126].
SELF-DETERMINATION
The
Supreme Court of Canada hands down landmark advisory opinion declaring that
neither the Canadian Constitution nor international law would allow Quebec to
secede unilaterally from Canada
Under
the Supreme Court Act, the Governor in Council may ask the Supreme Court of
Canada for advisory opinions on important questions as to the meaning of the
Constitution Acts, as well as the powers of Parliament and of the governments
of the respective provinces. Invoking that Act, the Governor referred three
questions to the Court, only two of which it found necessary to answer.
The
questions actually answered were: (1) Under the Constitution of Canada, can the
National Assembly, legislature or government of Quebec unilaterally bring
about the secession of Quebec from Canada? and (2) Does the right to
self-determination or other right under international law give the National
Assembly, legislature or government of Quebec the unilateral right to bring
about the secession of Quebec from Canada?
As
to the first question, the Court holds that, under the Canadian Constitution, a
province cannot, as a matter of law, unilaterally secede, however strong the
majority vote in favor of secession might be in that province. While entitled
to a degree of consideration during negotiations on the subject, such a vote
cannot displace constitutional principles such as federalism, the rule of law,
the rights of individuals and minorities and the workings of democracy in all
Canadian provinces.
An
extensive review of 131 years of Canadian nation-building among peoples of
diverse race, culture and religion supports this conclusion. Canadian
Federalism, for example, sets up a divided provincial and federal government
with the latter empowered to act in areas of concern to the nation as a whole.
To achieve legitimacy under this system, the rule of law must interact with
democracy to bring about majority rule, equality of opportunity and respect for
diverse cultures.
Finally,
the principle of constitutionalism means that all government action must
conform to the Constitution. This document not only organizes and allocates the
various powers of government but also provides a shield against majority
oppression of minorities. As now written, the Constitution is silent on
secession and its underlying structure and principles do not allow a province
to secede totally on its own.
The
necessity of devising a constitutional amendment to permit secession of a
province, however, would require extensive and delicate negotiations. The give and
take of political bargaining, however, does not fall within the supervisory
province of the Court. The political branches would have to determine what
amounts to a clear majority on a clear issue of secession and to reconcile the
various national and local interests by negotiation among all parties to the
Canadian union.
On
the second question, the Court rules that international law does not give the
component parts of sovereign states the legal right to unilateral secession.
The argument is essentially (1) that, since international law does not
specifically bar unilateral secession, it permits it and (2) that states of the
international community have an obligation to recognize a new state arrived at
by exercise of the Quebec peoples right of self-determination.
It
is true that Articles 1 and 55 of the U.N. Charter affirm the right of a people
to self-determination. Likewise Article 1 of the widely-ratified International
Covenant on Civil and Political Rights and many other agreements and resolutions
are in accord. In effect, the principle has worked its way into customary
international law without, however, shedding much light on the scope of the
term "people."
Even
if the whole population of Quebec or a major portion thereof, constituted a
"people," this alone would not accord it the lawful right of
unilateral secession. A body politic generally exercises its right to internal
self-determination within the framework set up by a sovereign state to maintain
the coordinate principle of territorial integrity.
The
law of nations thus assigns the creation of new states to domestic law. The
right to external self-determination or sovereign independence only arises in
the case of peoples under colonial rule (e.g. oppressed by foreign military
occupation) or to those denied significant access to their government. The
prominent roles that the people of Quebec have always played in the national
government of Canada, along with their cultural and economic successes, belie
the notion that the people of Quebec are oppressed.
Under
the so-called principle of "effectivity," of course, the people of
Quebec may have the power to achieve a de facto independence that many nations
might later officially recognize. But the Court can only decide whether the
province has a legal or constitutional right to unilaterally secede. In the
absence of such a right, later recognitions cannot retroactively validate a
prior unconstitutional secession under either domestic or international law.
Citation: Re Reference by Governor in Council concerning
certain questions relating to secession of Quebec from Canada, 161 D.L.R. 4th
385 (Sup. Ct. Can. 1998).
SOVEREIGN
IMMUNITY
In
case of first impression against formerly government-owned Italian company for
conduct that occurred while it was government owned, Fifth Circuit holds that
FSIA applies to company despite its later privatization
Off
the coast of Angola, West Africa, Marcus Daniel Pere died when the U.S.-made
starter turbine on an oil platform exploded. Pere's widow sued Nuovo Pignone,
an Italian company that had designed and assembled the turbine system. At the
time of the accident, Nuovo Pignone's major shareholder was Ente Nazionale
Idrocaburi (ENI), an entity created by the Italian government to promote
Italy's oil and gas exploration.
By
the time Pere's representative sued in federal court, however, ENI had already
transferred most of the stock to a private consortium. Nuovo Pignone then
claimed lack of jurisdiction under the Foreign Sovereign Immunities Act of 1976
(FSIA) [28 U.S.C. § 1602]. Although the district court treated it as an
instrumentality of a "foreign state," the court found that its business
brought it within the FSIA's "commercial activity" exception [see
§1605(a)(2)]. Nuovo Pignone appealed.
In a
case of first impression for it, the U.S. Court of Appeals for the Fifth
Circuit agrees with the company that it comes within the FSIA immunity. It finds,
however, that the plaintiff had failed to prove that the commercial exception
applied.
"The
foreign policy concerns underlying sovereign immunity do not necessarily
disappear when a defendant loses its foreign status before suit is filed. Thus,
courts are to look to the defendant's status at the time the litigated events
occurred." [6]
Moreover,
plaintiff must base its action upon an act performed within the U.S. in
connection with a commercial activity of the foreign state elsewhere. Here,
Nuovo Pignone's design and assembly of the turbine system was a commercial
activity. The mere fact that Nuovo Pignone sent representatives to the U.S. to
consult in the final assembly of the turbine system, however, did not create a
sufficient connection with the U.S.
A
"material connection must exist between the availability for consultation
during final assembly in [the U.S.] and Pere's allegations of wrongful death
due to improper design and/or manufacture. Pere fails to show such a material
connection. The components of the turbine system were manufactured, tested,
and delivered to [the decedent's employer] in Italy. More importantly, once the
components arrived in [the U.S], Nuovo Pignone did not perform the final
assembly ..." [10-11]
Finally,
the Court rejects Pere's argument of "implicit waiver" under §
1605(a)(1). Nuovo Pignone had concluded a separate overhaul contract with the
decedent's employer that covered the turbine at issue. In that contract, Nuovo
Pignone had agreed that Texas law would govern any disputes. That is not
implicit waiver. In cases where courts have found implied waiver based on a
contract, the plaintiff and defendants were both parties to the contract.
Furthermore, nothing in that contract indicates Nuovo Pignone's intent to accept
liability to third parties.
Citation: Pere v. Nuovo Pignone, Inc., No. 97-30572 (5th
Cir. August 7, 1998).
-
U.S. and Chinese defense agencies agree to consult on aviation and maritime
issues. On January 19, 1998, the
U.S. Defense Department and the Ministry of National Defense of the People's
Republic of China entered into a defense consultation agreement. Its goal is
to improve maritime safety for their respective naval and air forces when they
operate within international law and the U.N Convention on the Law of the Sea.
The Agreement has in mind annual conferences, the use of regular expert working
groups and specialized ad hoc committees. The participants will summarize the
results of the various meetings and will make the reports available to certain
third parties for feedback. Citation: 37 I.L.M. 530 (May, 1998).
-
EU Regulations, agreements and commentary on international animal trapping
issues published in I.L.M. In
1991, the EU adopted a Regulation banning the use of "leghold traps"
within the EU and barring imports of products resulting from inhumane trapping
standards. When the International Standards Organization (ISO) could not agree
on trapping precepts, the EU negotiated one agreement with Russia and Canada
and another with the U.S. The EU-US Agreement is substantively similar to the
EU-Canada/Russia arrangement. Unlike the former, however, it is not binding and
lacks dispute settlement machinery. The Agreement's main purpose is to provide
harmonized technical standards to protect animal welfare. It governs the
production and use of traps to promote trade between the EU and the U.S. in
pelts and products manufactured from animal species covered by the Agreement.
The EU approved the Agreement on July 13, 1998. Nancy L. Perkins, Esq. writes
a succinct analysis of the complex situation. The limitations of the EU-US
agreement, in Ms. Perkins' view, may leave the U.S. vulnerable to a possible
ban on its fur trade with the EU. She also highlights important issues arising
under the WTO Agreement that generally bans embargoes or quantitative
restrictions on trade. GATT Article XX(b), however, allows for exceptions where
necessary to protect "animal ... life or health." The texts of the above Regulations and
international agreements follow Ms. Perkins' commentary. Citation: 37
I.L.M. 532 (May, 1998). [The EU recently published a Council Decision
"concerning to the conclusion of an International Agreement in the form of
an Agreed Minute between the European Community and the United States
...", 1998 O.J. of the European Communities (L 219) 24, 7 August 1998. The
text of the Agreement is attached to the Council Decision.]
- U.S.
President suspends lawsuit provisions for Libertad Act. The U.S. President
Bill Clinton has exercised his authority under the U.S. Helms-Burton Act [Cuban
Liberty and Democratic Solidarity (Libertad) Act of 1996, Pub.L. No. 104-114
(March 12, 1996), H.R. 927, 110 Stat. 785] to suspend for another six months
the lawsuit provisions of Title III of the Act. One of the reasons stems from a
recent Understanding with the EU [see 1998 Int'l Law Update 67]. With this
Understanding, the U.S. and the EU have set up a framework for dealing with
expropriated investment property. The Understanding's scope is world-wide, but
it has particular importance with regard to Cuba. It provides for an
international claims registry and the denial of financial assistance to
countries that expropriate investment assets. Citation: U.S. Department of State, Office of the
Spokesman, Press Statement (July 16, 1998). [The U.S.-EU Understanding is
available on the website of the EC Commission in the U.S., at www.eurunion.org.]
- U.S.
reduces regulatory burden for U.S. branches and agencies of foreign banks.
The Office of the Comptroller of the Currency (OCC), the Board of Governors of
the Federal Reserve System (Board), and the Federal Deposit Insurance
Corporation (FDIC) have issued a joint interim rule to extend the examination
cycle for U.S. branches and agencies of foreign banks with total assets of $
250 million or less [see § 2214 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (EGRPRA)]. According to the International Banking Act of
1978 (IBA), as amended by the Foreign Bank Supervision Enhancement Act of 1991,
foreign banks are subject to a 12-month examination cycle. Under the rule, such
institutions may have an 18-month examination cycle if they meet certain
criteria such as a composite ROCA supervisory rating of 1 or 2. This cuts down
on the regulatory burden and the need for on-site examinations. The effective
date was August 28, 1998. Citation: 63 Federal Register 46118 (August 28, 1998).
- NAFTA
countries have eliminated almost $1 billion in tariffs ahead of schedule.
As part of the NAFTA acceleration, the U.S., Canada, and Mexico have gotten rid
of nearly $1,000,000,000 in tariffs, effective August 1, 1998. Originally, the
target year was 2008. The NAFTA nations have done away with the tariffs for
several hundred items such as chemicals, pharmaceuticals, fabrics, yarns,
bedding, hats, stainless steel products, locomotive parts, watches and toys.
Companies can now trade them duty-free within NAFTA. Citation: U.S. Trade Representative press release 98-71
(August 3, 1998). [The complete tariff list is available from the U.S. Trade
Representative, Washington D.C., Phone: (202) 395-3230.]
- EU
imposes import duty on U.S. corn residues. In response to the U.S.
quantitative restriction on wheat gluten imports from countries including the EU,
the EU has imposed an autonomous duty of ECU 50/mt on U.S. residues from
starch manufacture from maize (corn gluten feed, CN codes 2303 10 19 and 2309
90 20). The EU has also introduced a tariff rate quota of 2,730,000 tons with
a duty rate of ECU 5/mt. This will apply from June 1, 2001 on, or beginning 5
days after a WTO Dispute Settlement Body decision that the U.S. safeguard
measure is incompatible with WTO Agreements, whichever is earlier. Citation:
Council Regulation (EC) No 1804/98 ..., 1998 O.J. of the European Communities
(L 233) 1, 20 August 1998.
- U.S.
signs "Prior Informed Consent" Convention for trade in hazardous
chemicals. On September 12, 1998, the U.S. and several other countries
signed the "Rotterdam Convention on Prior Informed Consent for Certain
Hazardous Chemicals and Pesticides in International Trade." The Rotterdam
Convention is the first worldwide agreement aimed at protecting human health
and the environment from toxic chemicals. The Convention expands the voluntary
"Prior Informed Consent" (PIC) system of the U.N. Environment
Program (UNEP) and the U.N. Food and Agriculture Organization (FAO). In
essence, the PIC system requires a developing country to give its informed
consent before anyone can sell hazardous chemicals there. The reason is that
many developing countries do not ban many hazardous pesticides and chemicals
outright and industrial countries are still exporting them there. Under the
Convention, the exporting parties must annually notify importing countries that
the laws of the nations of origin ban or severely restrict those chemicals.
Furthermore, exporters must properly label all such shipments as well as
provide Safety Data Sheets. So far, the Convention has 27 designated chemicals,
including DDT and PCP. Citation: U.S. Department of State Press
Statement (September 10, 1998). [Additional information on PIC and recent
developments is available on a joint FAO/UNEP website www.fao.org/ag/agp/agpp/pesticid/pic/pichome.htm].
- EU
imposes provisional anti-dumping duty on U.S. electrolytic aluminum capacitors.
The EC has imposed a provisional anti-dumping duty of 24.6% on imports of large
electrical capacitors (LAECs) [non-solid, aluminum electrolytic with CV between
8000 and 550000 micro-coulombs at 160V or more, CN code ex 8532 22 00)] that
originate in the U.S. and Thailand. For products of Matsushita of America,
however, the duty is 19.9%. These LAECs are electronic components used primarily
in consumer electronics such as TVs, video recorders, and personal computers. Citation:
Commission Regulation (EC) No 1845/98 ...., 1998 O.J. of the European Communities
(L 240) 4, 28 August 1998.
- According
to U.S. Trade Representative, U.S. has won Korean Liquor Case before WTO.
According to a press release of the U.S. Trade Representative and newspaper
reports, a WTO Dispute Settlement Panel has held that Korean taxes on imported
liquor that are significantly higher than taxes on local spirit (soju) violate
WTO obligations. The Panel has allegedly held that the Korean taxes violate
GATT Article III:2 [No special taxes/charges on imported goods]. The U.S. had
brought that case before the WTO in 1997 (WT/DS84/1) because of Korea's taxes
of up to 100% on imported liquor. The U.S. complaint followed an earlier one
submitted by the EU (WT/DS/75/1). Currently, U.S. liquors amount for less than
1% of the Korean market.
[Editors'
Note: Japan lost a similar case before the WTO in 1996]. Citation: U.S.
Trade Representative press release 98-73 (August 5, 1998); Financial Times
(London), August 14, 1998, page 4. [The WTO Panel Report has not yet been
published.]
- Ukraine
established new business registration procedures. By Resolution of the
Cabinet of Ministers of Ukraine Number 740 (May 25, 1998), Ukraine has
introduced new registration procedures for businesses. The local State Administrations
handle the business registration. It involves (1) company documentation, (2)
registration forms, (3) registration fee receipts, (4) capital payment
receipts, (5) addresses, and (6) where legal entities establish new businesses,
the entities' registration certificates. The Administration must register the
company within five working days. The registration fee is about U.S.$ 50. Citation:
Report by Maxim Bougriy of BISNIS, distributed by the U.S. Department of
Commerce, Phone: (202) 482-4655.
- U.S.
bans U.S. flights over Sudanese territory because of U.S. military strike
against alleged terrorists. The Federal Aviation Administration (FAA) has
prohibited all U.S. flight operations within the territory of Sudan. It is
concerned about hazards that might come about from the U.S. military strike on
August 20, 1998, against facilities and forces of Usama Bin Ladin in Sudan and
Afghanistan (14 C.F.R. Part 91). The effective date of the rule was August 21,
1998. Citation: 63 Federal Register 45654 (August 26, 1998).
