Legal Analyses written by Mike Meier,
Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.
1998
International Law Update, Volume 4, Number 10 (October).
ARBITRATION
Declining
to decide enforceability under New York Arbitration Convention of awards
rendered pursuant to Italian informal arbitral rules, Second Circuit spells out
factors for district court to consider in deciding whether to adjourn U.S.
enforcement proceedings pending completion of Italian judicial review
In
1988, Europcar (an Italian car rental business) and Maiellano Tours (an
American travel business) entered into an agreement for Europcar to provide
rental cars to Maiellano customers in Italy. The agreement's arbitration clause
provided that a sole arbitrator would decide contract controversies on
equitable grounds (arbitrato irrituale in equita) under the Italian rules for
informal arbitral proceedings.
During
a later dispute over value-added-tax refunds, the parties entered into a
supplemental arbitration agreement. It declared that a panel of arbitrators
would resolve the dispute in an informal proceeding, the resulting award being
final.
An
arbitral panel eventually ruled in favor of Europcar. Europcar then sued in
Italy to confirm the arbitration award and to obtain an order of payment.
Maiellano, too, sued to set aside the arbitration award on grounds of alleged
fraud.
A
Rome court consolidated the actions and in 1996 ruled in favor of Europcar.
Maiellano appealed to the Roman Court of Appeals. Meanwhile, in 1994, Europcar
had already filed an action in New York district court for recognition of the
arbitral award under the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of 1958 [21 U.S.T. 2517, T.I.A.S. No. 6997,
implemented by 9 U.S.C. §201 et seq.], the "New York Convention." The
U.S. district court held the arbitral award enforceable under the Convention
and granted Europcar's motion for summary judgment. Maiellano appealed.
The
U.S. Court of Appeals for the Second Circuit vacates and remands to the
district court. The lower court is to reconsider its decision not to adjourn
its enforcement proceeding pending the outcome of the Italian appeal.
Maiellano
first argues that arbitral awards rendered under the Italian informal rules are
not necessarily binding and enforceable under the Convention. Italian law
supposedly treats these awards as contractual agreements, reviewable de novo by
Italian courts. Inter alia, Maiellano relied upon a decision of the German
High Court (Bundesgerichtshof, BGH) that declined to enforce awards under the
Convention handed down pursuant to the Italian informal rules [see Compania
Italiana di Assicurazioni v. Schwartzmeer und Ostsee Versicherungsaktien-Gesellschaft
(October 78, 1981), III ZR 42/80, reprinted in 1982 CEC (CCH) 516]. Europcar,
in turn, points to four Italian court opinions that have found such arbitral
awards enforceable under the Convention. Noting that the enforceability of an
award based on the Italian informal rules is a matter of first impression in
the U.S., the Second Circuit prefers to decide the case on other grounds.
Maiellano
also argued that the award violated public policy because it arose out of an
allegedly forged prior agreement. The Court rejects this argument on two
grounds. First, Maiellano did not raise it before the arbitral panel. Secondly,
the Italian court determined that the arbitral panel decided the case primarily
on the 10-year business relationship between the parties.
Finally,
the Court turns to the issue of adjournment. Generally, a court has discretion
to adjourn enforcement proceedings where annulment or suspension proceedings
are pending in the originating country [see Article VI of the Convention]. No
Circuit Court, however, has so far articulated the standard that applies to a
district court's decision on adjournment.
In
ruling on adjournments of this type, the district courts should take into
account the following multiple factors. These include: the general
cost-effective goals of arbitration, the status of the foreign proceedings and
their duration; and whether the award will receive greater scrutiny in the
foreign proceedings. The court should also analyze the characteristics of the
foreign proceeding such as (i) whether a party brought it to enforce or to set
aside an award, (ii) whether it began before the underlying enforcement
proceeding (international comity), (iii) whether the party now seeking to enforce
the award in a U.S. federal court had initiated the foreign proceeding and (iv)
whether the circumstances suggest an intent to hinder or delay resolution of
the dispute. Finally, the lower court must balance the possible hardships to
each of the parties; and look at any other factors that could tilt the balance
for or against adjournment.
Citation: Europcar Italia, S.P.A. v. Maiellano Tours, Inc.,
No. 97-7224 (2d Cir. September 2, 1998).
BANKING
Mexican
Supreme Court resolves issues of bad loans resulting from 1995 Mexican
economic crisis in favor of banks; issues general criteria for loan
arrangements and interest accrual
On
October 7, 1998, the Mexican Supreme Court held en banc that Mexico's banks may
receive the benefits of loan arrangements more favorable to banks than to
creditors. In two related opinions Nos. 31/98 and 32/98, the Supreme Court
established “general criteria” for credit and loan arrangements, interest
accrual, and related issues. Some have criticized these lengthy and complex
opinions as allowing banks to “charge interest on interest.”
With
these opinions, the Court has resolved a conflict between two Courts that had
had diverging opinions [the courts were the “Septimo Tribunal en Materia Civil
del Primer Circuito” (7th Civil Tribunal of the 1st Circuit) and the “Primer
Tribunal Colegiado del Decimo Septimo Circuito” (1st Colegial Tribunal of the
17th Circuit)]. On May 12, 1998, the Court’s President of the First Chamber
had requested all Circuits to submit certified copies of decisions involving
these bank matters. The Court received 207 decisions. Based on these decisions
and various Mexican laws, the Court established inter alia the following rules:
-
Additional credit arrangements to cover interest payments are permissible.
Contract clauses that oblige the debtors to give advance notice to forego part
of the credit for interest payment are valid. Additional credit arrangements in
the original loan arrangement to cover interest do not constitute illegal charging
of interest on interest.
- A
bank’s failure to investigate the economic viability of the project to be
financed does not invalidate the loan arrangement.
-
Interest rates expressly agreed upon by the parties in the loan arrangement are
valid.
With
these general rules, the Court did not resolve any particular dispute. Instead,
all lower Mexican courts will review the previously submitted cases applying
the rules stated by the Court.
This
decision belongs in the context of Mexico’s economic crisis in 1995 when
interest rates exceeded 80%. The banking practices that the Court reviewed are
commonplace in other countries. Mexican bank debtors had reportedly hoped the
Court would hold that the banks cannot use “additional credit arrangements” to
account for the substantial interest accrual, a practice decried as
unconscionable and “charging interest on interest.” The debtors had hoped that
they would have to pay only the principal and minimum interest on their debts,
not on any additional loans used to cover the high interest accrual.
Citation: Corte Suprema de Justicia de la Nacion [Mexican
Supreme Court), Expediente Número 31/98 [main opinion] & 32/98 [secondary
opinion] (Juventino v. Castro y Castro), Contradiccion de Tesis; Direccion
General de Comunicacion Social, Comunicados de Prensa [Mexico], Comunicado
Numero 138 (7 de Octubre de 1998). [Both Supreme Court opinions are available
on the Court’s website www.scjn.gob.mx; see also New York Times, October 9,
1998, page C2.]
COPYRIGHT
German
district court holds that plaintiff who put out routine promotional sites on
internet could not claim copyright protection to prevent defendant's
inclusion of that material on its site
A
copyright dispute arose between two German companies that provide advertising
services for home improvement stores on the Internet. The plaintiff owns the
domain name "baumarkt.de," and promotes several stores.
The
defendant uses "baumarkt.de" for a kind of on-line journal that
allows users to visit the websites of various stores without leaving the
defendant's website. The defendant's website links and presents the stores'
websites within a frame of its own. The links include websites that plaintiff
had created and maintained.
Plaintiff
does not complain about the links to its websites, but vigorously objects to
its web-pages appearing in the defendant's website's frames. Plaintiff argued
that the German Copyright Law (UrhG) protects the webpages it has created.
Making them appear in a frame on defendant's website distorts their distinctive
colors and design.
Moreover,
in plaintiff's view, such links are anti-competitive because the defendant
offers services that rely on the websites that other parties have created at
their expense. Because the linked webpages appear in the defendant's frames,
the defendant's website gives the misleading impression that the stores are
the defendant's clients.
In
April 1998, the Dusseldorf District Court dismisses the complaint. It holds
that the UrhG does not usually treat internet pages that promote a
manufacturer's products as "works."
In this particular case, the content of the websites that went into
evidence is not copyrightable. For example, one of the plaintiff's pages merely
strings together pictures of various bottles of wood glue, presumably furnished
by the manufacturer. This does not show any creative effort.
Another
of plaintiff's webpages shows a colorful presentation of a shower along with
promotional slogans. This sort of thing is common in catalogues and plaintiff
cannot copyright it without more. For these reasons, the District Court did not
reach the question of whether the defendant's frames unduly copied and
distorted the plaintiff's works.
Nor
did the Court decide whether the defendant's presentation was misleading. The
defendant had argued that the average internet user knows that a link or the
appearance of someone else's website in a frame does not necessarily connote a
business relationship. These are merely ways to navigate from one website to
another.
Noting
that the internet is a young phenomenon, the Court admits that it lacks the
necessary knowledge to take judicial notice of the fact that users are aware of
what frames mean. Since plaintiff failed to put on expert testimony, the Court
cannot determine the meaning and importance of frames.
Citation: Landgericht Dusseldorf, Urteil vom 29. April
1998, Geschaftsnummer 12 O 347/98. [Readers can find the German text of this
opinion on the Internet at www.netlaw.de/urteile].
FORUM
NON CONVENIENS
Second
Circuit holds that district court can dismiss federal antitrust action under
doctrine of forum non conveniens where
England was most cost-effective forum
Capital
Currency Exchange, N.V. (organized under Netherlands Antilles law) and its
affiliates (jointly CCE) engage in retail currency exchange and money
transfers. To obtain a New York money transmission license, CCE had to post a
$500,000 bond in favor of New York State banking authorities. As security for
the bond, CCE secured an irrevocable letter of credit through Barclays Bank's
New York office which its London office actually issued. For some reason, CCE
later had to find itself another bank. CCE's negotiations with National
Westminster Bank (NatWest UK), however, became a cropper.
CCE
concluded that Barclays and NatWest UK were conspiring to drive CCE out of the
money transfer business by depriving it of banking services. CCE sued the banks
and several of their officers in U.S. district court, alleging Sherman Act and
common law violations.
The
district court, however, dismissed the complaint on forum non conveniens
grounds. CCE then filed an appeal. The U.S. Court of Appeals for the Second
Circuit affirms.
Citing
Fifth Circuit precedent, CCE argued that a district court cannot dismiss an
antitrust action under the forum non conveniens doctrine. The U.S. Supreme
Court held in U.S. v. National City Lines, Inc., 334 U.S. 573, 596 (1948), that
courts cannot invoke forum non conveniens to dismiss a Sherman Act case based
on the broad "special venue" provisions of the Clayton Act.
The Second
Circuit, however, limits the National City Lines case to domestic transfers of
venue and not to dismissals of such cases for possible trial abroad.
The
Court then analyzes the traditional public and private interest factors in the
context of this case. It finds that the district court did not abuse its
discretion in dismissing the case because England is the more convenient forum.
This case boils down to the refusal of two English banks to do business with
CCE in England. In the Court's view, Barclays' so-called "New York"
letter of credit is a "red herring."
Citation: Capital
Currency Exchange, N.V. v. Nat'l Westminster Bank PLC, 155 F.3d 603 (2d Cir. 1998).
FREEDOM
OF INFORMATION ACT
Where
U.S. State Department refused to disclose letter between British Foreign
Office and U.S. Department of Justice in extradition matter, Ninth Circuit
rules that FOIA does not exempt from disclosure all documents pertaining to
extraditions or all communications with foreign governments
Leslie
Weatherhead is an attorney representing a British citizen whom the U.S. is
seeking to extradite from the U. K. In 1994, Weatherhead had requested a letter
under the Freedom of Information Act (FOIA) [5 U.S.C. § 552]. The U.S.
Department of Justice had received it from the British Foreign Office in
connection with the extradition to the U.S. of two British nationals, Sally
Croft and Susan Hagan. Charged with conspiring to murder the Oregon U.S.
Attorney, the women had been members of the Rajneeshpuram community in Oregon
in the 1980s.
Weatherhead
believed that the British letter had officially requested that the U.S. Justice
Department take steps to avoid prejudice to Croft and Hagan. The British
Government also asked State not to release the letter because disclosure had
"already been refused on grounds of confidentiality."
The
Department of State accordingly classified the letter and then refused to
disclose it to Weatherhead based on FOIA's exemption for classified
information. After an in camera review, the district court agreed with the
Department. Weatherhead then appealed.
The
U.S. Court of Appeals for the Ninth Circuit reverses. FOIA Exemption 1 [5
U.S.C. § 552(b)(1)] exempts from FOIA disclosure "matters that are ...
(1)(A) specifically authorized under criteria established by an Executive order
to be kept secret in the interest of national defense or foreign policy and (B)
are in fact properly classified pursuant to such Executive order."
Executive
Order No. 12958 [60 Federal Register 19825 (April 20, 1995)] requires four
conditions for classification: (1) the "original classification
authority" must do the classifying (2) the information must be "under
the control of" the government, (3) the information must fall within one
of the authorized withholding categories under this order, and (4) the original
classification authority must determine that the unauthorized disclosure
could result in damage to the national security, and it must describe the damage
[§ 1.2(a)]. Here, the focus is on the fourth condition.
The
Court agrees with Weatherhead that the government has never explained what
damage to national security could result from disclosure of this letter. The
three government officials only cited vague policy concerns. That is not
enough. Instead of explicitly exempting all information exchanged with foreign
governments from FOIA requests, Congress chose to defer to the Executive
Branch. The Executive Branch, too, could have cloaked all such foreign government
documents. In fact, the Executive Order made public access to such materials
easier by requiring the U.S. agency to prove that disclosure would damage
national security or foreign relations. The Court also spurns the government's
invitation to read the FOIA as exempting all documents relating to
extradition matters.
After
reviewing the letter in chambers, the Court decides that disclosure of the
letter will bring no harm to national security or foreign relations.
On
the other hand, a dissenting judge agrees with the U.S. State Department that
it should not turn over these foreign documents because of "diplomatic
confidentiality." The British
Foreign Office had sent the letter assuming that the U.S. would keep it
confidential. Routine disclosure of similar international documents will in
fact tend to handicap foreign relations. That is enough damage to national
security within the meaning of the Executive Order.
Citation: Weatherhead v. United States, No. 96-36260 (9th
Cir. October 6, 1998).
JURISDICTION
(CIVIL)
In
contract action by satellite communications consultant against Luxembourg and
other parties, Fourth Circuit affirms dismissal based on forum selection
clause that, by virtue of Brusssels Convention, gives Luxembourg courts
exclusive jurisdiction
In
1983, Candace Johnson, the American wife of Luxembourg's then-Ambassador to the
U.S. asked Dr. Clay Whitehead to take part in developing communications
technology in Luxembourg. The resulting company, Societe Luxembourgeoise
Satellites (SLS), secured an exclusive franchise from the Luxembourg government
for the country's satellite system.
Fears
of American cultural infiltration, however, presumably led the Luxembourg
government to change its mind. It later formed Societe Europeenne Des
Satellites (SES) to take over SLS's franchise. Luxembourg owns one-third of the
company's stock through government-held banks; private investors hold the
remainder.
SES
bought out Whitehead for a little more than $1 million and 50 "Founder's
Shares" of SES stock. In return, Whitehead promised not to compete with
SES until the Founder's Shares expired 20 years later. The contract contained
choice clauses wherein the parties agreed that Luxembourg law would govern and
that Luxembourg courts would have jurisdiction over inter-party disputes.
In
1993, Whitehead got involved in a Connecticut-based satellite company with
operations in Europe. SES then seized Whitehead's Founder's Shares for his
supposed violation of the non-competition agreement. Whitehead was unsuccessful
in recovering dividends from the Founder's Shares' in Luxembourg proceedings.
Whitehead
then sued the State of Luxembourg, SES, and Johnson in a Virginia district
court, alleging violations of international law, conspiracy, and breach of
contract. The district court dismissed Whitehead's complaint, and he appealed.
The U.S. Court of Appeals for the Fourth Circuit affirms.
One
of the questions here is whether Luxembourg is immune under the Foreign
Sovereign Immunities Act (FSIA). Since a nation can waive its immunity, the
limit on the Court's jurisdiction flows from respect for that nation's
sovereignty. As long as the Court does not affront Luxembourg's sovereignty, it
may resolve the case in any manner it deems best. In this case, application of
the agreement's forum selection and choice-of-law clauses best determines the
appeal.
"Article
17 of the Brussels Convention of 1968, ... provides in relevant part: 'If the
parties ... agreed that ... the courts of a Contracting State are to have
jurisdiction to settle any disputes ... those courts shall have exclusive
jurisdiction.” Convention on
Jurisdiction and Enforcement of Judgments in Civil and Commercial
Matters, September 27, 1968, 29 I.L.M. 1413, 1422 (1990).
The
defendants submitted affidavits from two experts on Luxembourg law both of whom
opined that this provision means what it unambiguously says: a forum selection
clause in a contract subject to the Convention designates an exclusive
forum." [Slip op. 12-13] While the
contracting parties may legally override such a provision, their consent must
be clear and mutual. It is not.
Citation: Whitehead v. The Grand Duchy of Luxembourg, No.
97-2703 (4th Cir. September 11, 1998) [unpublished].
JURISDICTION
(CRIMINAL)
U.S.
District Court holds that it has criminal jurisdiction over foreign citizen who
sexually abused minor U.S. citizen on high seas aboard Liberian vessel owned
by Panamanian company
Kingsley
Roberts, a citizen of St. Vincent & the Grenadines, was a member of the
crew of the M/V CELEBRATION, a Carnival Cruise Lines ship of Liberian registry.
The Carnival company is a Panamanian corporation.
While
the vessel was on the high seas about 63 miles off the Mexican coast, Roberts
allegedly engaged in a sexual act with a minor U.S. citizen. A federal grand
jury indicted Roberts for committing the offense within the "special
maritime and territorial jurisdiction of the United States." Roberts moved
the district court to dismiss the indictment for lack of jurisdiction because
the M/V CELEBRATION is not an American vessel. The government responded that
jurisdiction lay under the "objective territorial" and "passive
personality" theories. The court denies the motion.
The
judge concludes that Congress has extended U.S. special maritime and
territorial jurisdiction by enacting 18 U.S.C. § 7(8) as part of the Violent
Crime Control and Law Enforcement Act of 1994. In an exercise of the passive
personality principle, U.S.
jurisdiction includes, to the extent allowed by international law, crimes
perpetrated on foreign vessels during a voyage having a scheduled departure
from, or arrival in, the U.S. as to an offense committed by, or against, a U.S.
citizen.
Roberts
relied on the FCN treaty between the U.S. and Liberia and on the two U.N.
conventions on the law of the sea. The court finds, however, that none of the
cited provisions of these treaties are self-executing. Thus, in the absence of
implementing legislation, an individual cannot directly base a cause of action
upon these agreements as part of domestic U.S. law. Nor does an individual
citizen have standing to object when a nation declines to comply with the terms
of such an international agreement.
In
the Court's view, the case also falls within the objective territorial
principle. The charge is that defendant committed an act outside the U.S. which
had a harmful effect within it. "The [M/V CELEBRATION] originates and
terminates its voyage in the United States, and the majority of its passengers
are American citizens. As a result of the alleged offense, the Federal Bureau
of Investigation was required to conduct an investigation and arrest the
defendant. The victim will have to undergo psychiatric counseling in the United
States." [608]
Citation: United States v. Roberts, 1 F.Supp. 2d 601
(E.D.La. 1998).
REFUGEES
In
split decision, Supreme Court of Canada rules that alien's Canadian conviction for large-scale
trafficking in heroin did not bar him from refugee status since conduct not
contrary to "purposes and principles of United Nations" under Refugee
Convention
When
Veluppillai Pushpanathan first came to Canada from Sri Lanka in March 1985, he
petitioned for persecuted refugee status under the U.N. Convention Relating to
the Status of Refugees as implemented by the Federal Immigration Act. Without
ruling on Pushpanathan's refugee status, the government let him stay as a
permanent resident.
In
1987, a Canadian court convicted Pushpanathan for conspiring in an organized
group to traffick in heroin and sentenced him to eight years in prison.
Pushpanathan later renewed his refugee petition.
Five
years later, the government issued a conditional deportation order against
Pushpanathan based on the conviction. Since his deportation also depended on
his Convention refugee status, however, that issue went to the Immigration and
Refugee Board.
The
Board ruled that, under Art. 1F(c) of the Convention and the corresponding §
2(1) of the Act, Pushpanathan was not a Convention refugee. Specifically, his
heroin trafficking had made him "guilty of acts contrary to the purposes
and principles of the United Nations" and thus ineligible for refugee
status.
The
federal trial court declined to overturn the Board's ruling and the Federal
Court of Appeal dismissed his appeal. Pushpanathan then took his case to the
Supreme Court of Canada. In a 4 to 2 vote, the Supreme Court allows
Pushpanathan's appeal.
The
Court first analyzes the language of Article 1F of the Refugee Convention,
along with its purposes and negotiating history. In general, the Article
authorizes the exclusion of persons who have taken part in serious, ongoing or
systemic violations of basic human rights amounting to persecution. This would
also include violation of express bans on conduct found in the U.N. Charter or
in U.N. resolutions or in generally accepted international agreements as
hostile to U.N. purposes and principles.
In
the Court's view, this test would not extend to trafficking in heroin. Of
course, the U.N. has cooperated with its members in extensive efforts to curb
such socially harmful activity. Nevertheless,
international law has not proclaimed that it runs afoul of the U.N.'s
basic purposes and principles or that it bars acceptance of refugees who take
part in it. Nor does drug trafficking amount to systematic persecution.
Though
concurring in the scope of judicial review, two judges dissent. The majority is
wrong in requiring that some explicit norm must refer to drug trafficking as
contrary to basic U.N. principles. Nor would it be proper to scour the whole
panorama of the U.N.'s manifold and expanding activities. A better test would
fall somewhere in between. The international community has deemed some forms
of misconduct so serious as to threaten that community and its principles of
social order. These activities could qualify under the statutory and Convention
test though they might not constitute systematic violations of human rights.
While
the U.N. has not explicitly declared drug trafficking contrary to its purposes
and principles, it has often and clearly denounced its evils. Many
multilateral treaties seek to ban the international drug trade. In sum,
Pushpanathan's conviction for taking part in a multi-million dollar heroin ring
meets the test of the Convention and of the Act.
Citation: Pushpanathan v. Canada, 160 D.L.R. 4th 193 (Sup.
Ct. Can. 1998).
SOVEREIGN
IMMUNITY
English
Court of Appeal (Civil Division) holds that American employed by U.S. Defense
Department to oversee training of U.S. military in England may claim
sovereign immunity under English law in defamation suit by American program
instructor over his adverse report on her teaching performance
Dr.
Carolsue Holland is a U.S. citizen and a professor of international relations
at Troy State University (TSU). TSU is an American institution that also
provides extension courses at several military bases abroad including Menwith
Hill, an RAF Station in England.
The
U.S. government runs the base as part of its NATO functions and conducts
education and training programs for U.S. Military personnel stationed overseas.
It has contracted with TSU to administer the program. James Lampen-Wolfe is
another U.S. national. In 1995, the U.S. Department of Defense hired him as a
civilian to plan, develop and carry out the educational programs at Menwith Hill.
In
1997, Dr. Holland was teaching international relations on behalf of TSU at
Menwith Hill. In March of that year, Mr. Lampen-Wolfe sent a memorandum to
TSU's program director, listing seven complaints about her conduct that a number
of her students had sent to him. He regretfully recommended that the director
assign another instructor to complete the current class.
Dr.
Holland then filed a defamation action against Mr. Lampen-Wolfe in an English
court. Defendant moved to dismiss the action on the grounds of sovereign or
state immunity. The lower court granted it and gave plaintiff leave to appeal.
The Court of Appeal (Civil Division) dismisses the appeal.
It
first points out that state immunity can arise under either the State Immunity
Act of 1978 or under the common law. If the Act does not apply, the common law
does. Section 16(2) of the Act declares that "This Part of this Act does
not apply to proceedings relating to anything done by or in relation to the
armed forces of a State whilst present in the United Kingdom and, in
particular, has effect subject to the Visiting Forces Act 1952."
The
Court of Appeal finds § 16(2) applicable. The U.S. Department of Defense
employed defendant. His immediate superior had told him to put the complaints
in writing. Plainly, defendant had published the memorandum in the course of
his duties as educational services officer.
Thus,
the Court finds it necessary to resolve the immunity issue by resort to the
common law doctrine. Under that law, the crucial distinction is between acts
jure imperii or the kind of acts that only a government can do, and acts jure
gestionis, where a government agent is acting commercially or in a private
capacity. Providing education for members of the armed forces posted outside of
their own country, and for their families, resembles the provision of medical
care in like circumstances. It is a normal and essential part of the overall
activity of maintaining those forces in the foreign country and is a
governmental not a business or commercial responsibility. Thus, defendant is
immune from this action under the common law.
Alternatively,
even assuming that the suit does not come within § 16(2), the Court can find no
exception to state immunity under the Act that would allow plaintiff's action
to continue. First, the Act [unlike FSIA § 1605(a)(2)] contains no general
exception for tortious acts, much less one for defamation. Section 5 only
exempts suits for death or personal injury or injury to tangible property
through an act or omission within the U.K.
Plaintiff
also suggested that § 3(1) applies. It has an exception for a state's
"commercial transaction" and defines that phrase as including any
contract "for the supply ... of services." In plaintiff's view, the suit is about the quality
of services under the contract between the U.S. and TSU.
The
Court, however, remains unpersuaded. Under any normal use of language, the
action raises no issue as to the meaning, enforceability or due performance of
the contract by the parties to it.
Plaintiff
also relied upon Article 6 of the European Convention on Human Rights. [Ed.
Presumably the reference is to subsection (1): "In the determination of
his civil rights and obligations ... everyone is entitled to a fair and public
hearing within a reasonable time by an independent and impartial tribunal established
by law."] The Court rejects the
notion that sovereign immunity violates Article 6. Finally, Article 24.1 of the
European Convention on State Immunity of 1972 clearly recognizes the duty to
grant immunity in cases similar to this one.
Citation: Holland v. Lampen-Wolfe, Ct. App. (Civ. Div.)
[Trans: Smith Bernal, July 30 1998]; Times, August 29, 1998.
TELECOMMUNICATIONS
German
Court rules that, unlike German law on injurious statements found in
newspapers and magazines, there is no "right of reply" to such
statements when made on internet
In a
German court, a case involved the "right to reply" on the internet
under the German Telecommunications Law and the Telecommunication Services
Law. Here, the petitioner asked for a preliminary injunction because of the
respondent's website statements. The Dusseldorf District Court denies the
preliminary injunction.
The
Court holds that the German Telecommunication and Telecommunications Services
Laws do not grant a "right to reply" on the internet to present an
opposing point of view. This exists only in the case of periodically published,
printed journalistic texts such as journals and newspapers. The fact that
someone frequently updates the website does not turn it into a periodic publication.
The
right of reply tries to balance freedom of speech with protection of the
individual. If a published statement injures someone, he or she has the right
to respond in the same forum. Periodic, printed publications have considerable
influence because of their frequency and their extensive circulation (more than
any individual could possibly have) and because of their widespread reputation
as regular information providers. In the Court's view, an internet site lacks
the influence of the printed media although persons from all over the world can
view it.
Citation: Landgericht Dusseldorf, Beschluss vom 29. April
1998, Geschaftsnummer 12 O 132/98 (nicht rechtskraftig). [The German text of
this opinion is on the Internet at www.netlaw.de/urteile].
TRADE
WTO
Appellate Body essentially upholds Dispute Settlement decision unfavorable to
U.S. in Shrimp dispute; U.S.turtle protection law resulted in arbitrary
discrimination for failure to consider environmental conditions in other WTO
Members
On
May 15, 1998, the Dispute Settlement Body of the WTO circulated its report in
the case “United States - Import Prohibition of Certain Shrimp and Shrimp
Products “ (WT/DS58). India, Malaysia, Pakistan and Thailand had brought that
case against the U.S. because of an amendment to the U.S. Endangered Species
Act of 1973 that prohibits the import of shrimp and shrimp products where
harvesting methods do not sufficiently protect sea turtles [see Section 609 of
Pub.L. No. 101-62]. The Report found the U.S. import ban inconsistent with GATT
Article XI:1 [elimination of quantitative restrictions] and not justifiable
under the environmental exceptions of Article XX.
The
U.S. appealed, claiming errors in the Panel’s failure (1) to accept
non-requested information from non-governmental organizations on disputed
issues, and (2) to consider Section 609 within the realm of GATT Article XX.
On
October 12, 1998, the Appellate Body issued an opinion that essentially upheld
the findings against the U.S. The Appellate Body again reviewed the
relationship of Section 609 to its purported goal of protecting sea turtles.
It finds that Section 609 is in fact a measure “relating to” the conservation
of an exhaustible natural resource and was made effective in conjunction with
the restrictions on domestic shrimp harvesting within the meaning of Article
XX(g) [Paragraphs 135-145 of the opinion].
The introduction
("chapeau") to Article XX, however, prohibits the use of the exceptions
to trading rules in an arbitrary and discriminatory manner. The U.S. requires
the use of approved turtle excluder devices at all times by domestic shrimp
trawlers whenever they may encounter sea turtles. It is not acceptable, in the
Body’s view, to force other WTO Members
to adopt essentially the same regulatory program without taking into
consideration different conditions that may exist elsewhere [Paragraphs
161-166]. Consequently, the application of Section 609 results in “arbitrary
discrimination” among WTO Members and is thus not justifiable under Article
XX. In particular, the Appellate Body:
-
Reverses the Panel’s finding that accepting non-requested information from
non-governmental sources is incompatible with dispute settlement rules;
-
Reverses the Panel’s finding that Section 609 is not within the scope of
Article XX;
-
Concludes that Section 609, while qualifying under Article XX(g), fails to
meet the requirements of the chapeau of Article XX and is thus not justified
under Article XX.
Citation: World Trade Organization WT/DS58/AB/R (12
October 1998), United States - Import Prohibition of Certain Shrimp and Shrimp
Products (AB-1998-4), Report of the Appellate Body. [The Report is available on
the WTO website: www.wto.org.]
TRADE
WTO
Panel report in South Korean liquor case brought by EC and United States concludes that tax differentials between
competitive domestic and imported liquors is not de minimis and
violates GATT
In
April and May of 1997, the European Communities and the U.S. brought complaints
against South Korea before the Dispute Settlement Body of the World Trade
Organization (WTO). Korea had imposed internal taxes on imported alcoholic
beverages based on its Liquor Tax Law of 1949 and its Education Tax Law of
1982. Complainants claimed that these taxes contravened Korea's obligations
under the GATT.
The
WTO Panel circulated its report on September 17, 1998. In essence, the WTO
Panel found that soju (traditional Korean liquor) directly competes with
imported liquors, and that Korea has taxed the imported products in a
dissimilar manner. The tax differentials were not merely de minimis [Panel
Report, paragraphs 10.103 & 10.104, page 194].
Under
the standard for examining a Member's internal tax laws, GATT Article III:2,
the panel compared the imported products with "like" domestic
products that are "directly competitive or substitutable." [paragraphs
10.34-10.43] For this review, the Panel scrutinized cross-price elasticity, considered
evidence from outside the Korean market, evaluated potential competition, and
made product comparisons. The evidence dealing with physical characteristics,
end-uses, channels of distribution and pricing, has shown a strong, competitive
relationship [paragraph 10.98]. To be "not similarly taxed," the tax
burden on imported products must be heavier than on "directly competitive
or substitutable" domestic products, and that burden must be more than de
minimis. [paragraphs 10.99 & 10.100]
Here, the Korean Liquor Taxes are 35% on diluted soju and 50% on
distilled soju. The Education Tax is a surtax of 10%.
For
imported alcoholic beverages, however, the Liquor Tax ranges from 50% for
liquors to 100% for whisky and brandy. The Education Tax is 30% for all
imported alcoholic beverages, except liqueurs for which it is 10%. Thus, the
total tax is 38.5% for diluted soju; 55% for distilled soju and liqueurs; and
130% for other beverages such as whisky, brandy and cognac. These differentials
are somewhat above de minimis levels.
Citation: Korea - Taxes on Alcoholic Beverages, Complaint
by the European Communities (WT/DS75/R) & Complaint by the United States
(WT/DS84/R) (17 September 1998). [The Report is available on the WTO website
www.wto.org.]
- Land
mine convention enters into force. With the fortieth ratification by the
West African nation of Burkino Faso, the United Nations Convention on banning
Anti-Personnel Land Mines will enter into force on March 1, 1999. The parties
to this Convention pledge to clear away all stockpiles of these weapons within
four years. They then have ten years in which to eliminate all such mines from
their territories. Some ninety other nations have signed the Convention, not
including the United States, China and Russia. A recent U.S. State Department
report estimates that from 60 to 70 million mines are scattered throughout
sixty nations. Among the most afflicted are Afghanistan, Bosnia, Cambodia,
Croatia, Eritrea, Iraq, Mozambique, Somalia, Sudan and Nicaragua. The U.N.
Children’s Fund estimates that land mines kill or maim 26,000 persons each
year, most of them children. Citation: The U.N. maintains a special
website with the text of the Convention, Fact Sheets, and information on the
current state of ratification at www.un.org/depts/landmine/index.html; Baltimore
Sun, September 17, 1998, page 19A.
