Legal Analyses written by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.

Legal Analyses written by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.

1997 International Law Update, Volume 3, Number 4 (April).

AVIATION

In suit by passengers captured during Gulf War, House of Lords reads Warsaw Convention as barring all common law causes of action in areas of liability and damages addressed by its terms

At 6:15 pm on August 1, 1990, passengers boarded a British Airways (BI) scheduled flight from London to Malaysia with fuelling stops in Kuwait and Madras.  It landed in Kuwait on August 2, about four hours after Iraq had invaded the country.  After the passengers had entered the terminal, Iraqi troops seized them and took them to Baghdad where they held the passengers until their release on August 21.

One passenger later sued BI for £100,000 in the Scottish courts based on the common law theory that BI had breached an implied term of the contract of carriage to take reasonable care for her safety.  Several others brought common law actions in an English tribunal, alleging that BI knew of the danger of hostilities and negligently failed to divert the flight to a safer place for fueling. 

The respective lower courts dismissed their actions in reliance upon the Warsaw Convention of 1929, as amended in 1955 (the Convention).  Eventually, the House of Lords granted review on the issue of whether the Convention provided the exclusive cause of action for a passenger who claims against the carrier for loss, injury and damage sustained in the course of, or arising out of, international carriage by air.

Answering the question affirmatively, the House of Lords dismisses the appeals of all passengers.  After noting the conflicts in various foreign courts including the U.S. on the above issue, the Lords analyze the text, context, purpose and travaux preparatoire of the Convention.  They preliminarily point out that Article 3(1) provides that each international ticket shall notify the passenger that the Convention may be the exclusive and limiting law as to claims against the Carrier.

Most of the Lords' focus is on provisions of Chapter III of the Convention.  Article 17 states that the carrier may be liable for the death or bodily injury of passengers in the course of the flight or when getting off or on the aircraft.  Article 23 voids any provision that would relieve or limit the liability of the carrier as set forth in the Convention.  The parties agreed that, if they had a remedy under Article 17, it would exclude any separate common law action for damages not covered by that article.

Plaintiffs' contention that to deny them a remedy would violate the European Convention on Human Rights fails to persuade the Lords.  In their view, that Convention does not apply to international efforts to harmonize arrangements in trade and transportation across national boundaries.

The Lords also note that any other ruling would distort the uniformity sought by the Warsaw Convention since many of its parties -- notably the U.S. -- do not belong to the Human Rights Convention.

The text and history of the Warsaw Convention show that courts should read it as harmonizing two sets of interests: the carrier would accept restraints on its freedom to contract its liability down or away and, in return, international passengers would accept the limits the Convention uniformly imposes on the nature and extent of the claims available against the carrier.  On those matters pre-empted by the Convention, worldwide uniformity is not possible if the carrier is subject to the varying tort and contract laws of the member states.

Citation: Abnett v. British Airways plc, The Times, 13 December 1996 [House of Lords].

CHOICE OF LAW

In securities fraud litigation, Ninth Circuit declines to enforce English choice of law and forum clauses in contracts between U.S. underwriters and Lloyd's of London as advance waiver of rights prohibited by U.S. securities laws

In October 1994, Alan Richards and 573 other plaintiffs (the "Names") sued Lloyd's of London in California federal court.  The suit alleged fraud under United States securities laws, violation of the RICO statutes, breach of state "Blue Sky" laws, common law fraud, and breach of fiduciary duty.  The plaintiffs are newly-recruited members of various Lloyd's underwriting syndicates.  The investment contracts solicited by Lloyd's in the U.S. allegedly constituted "securities" under U.S. law but Lloyd's had not registered them with the S.E.C. 

Plaintiffs complained that Lloyd's had concealed their exposure to pre-existing high liability claims such as those based on asbestos and toxic waste matters.  As part of the alleged fraud, the Names' agreements with Lloyd's included choice of law and choice of forum clauses (Choice Clauses) naming the laws and courts of England as binding upon all disputes arising under the agreements. 

After Lloyd's failed to answer the complaint, the Names moved for a default judgment.  Lloyd's then countered with a motion for dismissal on grounds of improper venue, forum non conveniens, and res judicata.  In April 1995, the district court dismissed the complaint, holding that the remedies available in the English courts were enough to protect American investors.

The U.S. Court of Appeals for the Ninth Circuit reverses, holding that the Choice Clauses constituted an impermissible prospective waiver of rights and remedies guaranteed by the Securities Acts of 1933 and 1934.  Richards v. Lloyd's of London, No. 95-55757 (9th Cir. March 6, 1997).

As the Court first points out, Section 14 of the 1933 Act and Section 29a of the 1934 Act provide in substantially the same terms that any provision or stipulation that requires any security buyer to waive compliance with the statutes or SEC Rules is void.  The test is thus not one of mere reasonableness.  Here, a federal statute that invalidates the Choice Clauses has formally and precisely declared U.S. public policy

The Court next distinguishes the Supreme Court's opinion in Scherck v. Alberto-Culver Co., 417 U.S. 506 (1974). First, in Scherck, the parties' contacts with the United States were minimal.  In the present case, however, the Names have very strong connections to the United States.  Lloyd's knew this when it carried on its extensive U.S. campaign to recruit plaintiffs. 

Second, and equally important, the Scherck Court had to choose which of two U.S. statutes to apply to the dispute, the Arbitration Act or the securities laws.  In the present case, however, the court faced a choice between a specific U.S. statute, on the one hand, and a general judicial "policy" favoring Choice Clauses, on the other.  The courts must defer to the specific policy choices of the political branches. 

Finally, the Court writes that the plaintiffs would not be able to receive adequate remedies in England, largely because of the privileged position that Lloyd's enjoys in English law.  For, example, English law does not provide a remedy for failing to register securities.  Moreover, 1982 U.K. legislation has immunized Lloyd's from claims based on negligence or breach of duty unless the complainants can show its bad faith.  Finally, English law does not allow for the liability of controlling persons.

The dissenting judge agrees with recent decisions in the Second, Fourth, Sixth, Seventh and Tenth Circuits which have upheld Choice Clauses in contracts with Lloyd's in securities cases.  The judge concludes that the Choice Clauses enable Lloyd's to write insurance against world wide risks at reasonable rates and that the majority decision will have an adverse effect on international commerce. "Our decision means that Americans betting on chicken fights in Zamboanga could sue for breach of American securities law." [slip op., 31]

FORUM NON CONVENIENS

Seventh Circuit affirms motion to dismiss for FNC where Saudi Arabia offers alternative forum for contract dispute

Mohammed Kamel markets medical equipment in Saudi Arabia, his home country.  In 1985, he entered into an exclusive distributorship, and later a joint venture, with Hill-Rom Company, an Indiana corporation that sells hospital equipment.  Kamel hired Hill-Rom's Middle East Area Manager, Elias Abou-Chedid, to market Hill-Rom's products in Saudi Arabia.  In 1991, Chedid took a job with a competing distributor.  After Chedid promised that he would not market Hill-Rom products for the competitor, Kamel released Chedid from his employment obligations.  In fact, Chedid did end up marketing Hill-Rom products.  When Hill-Rom stopped supplying its products to Kamel, Kamel sued for breach of contract in Indiana district court.

After 17 months, Hill-Rom sought dismissal on forum non conveniens grounds, alleging that Saudi Arabia would be more appropriate.  The district court agreed, and so does the U.S. Court of Appeals for the Seventh Circuit.

The first inquiry is whether plaintiff will have an adequate alternative forum.  Courts generally deem an alternative forum available if all parties are amenable to process and are within the foreign court's jurisdiction.  The federal court must ascertain that the foreign court will not deprive the parties of all remedies or treat them unfairly.

Here, Hill-Rom has expressly consented to Saudi-Arabia's jurisdiction.  Even though the foreign forum does not provide the same range of remedies as are available in the home forum, it must provide some potential avenue for redress.  Its foreign law expert testified that Saudi Arabia recognizes a breach of contract action and claims similar to those raised by Kamel.

The second inquiry is whether the lower court correctly balanced the public and private interests involved.  Since the primary objective of any forum non conveniens inquiry is to ensure that the trial is convenient, a foreign plaintiff's choice deserves less deference.  Here, many of the relevant documents are written in Arabic and located in Saudi Arabia, as are many of the witnesses.  Most potential witnesses, for example Hill-Rom's and Kamel's customers, live in Saudi Arabia. 

Also the public interest factors favor Saudi Arabia.  Here, an American defendant with extensive foreign dealings, allegedly injured a foreign plaintiff in a foreign land.  Indiana has a mere passing governmental interest in this case.

Finally, the U.S. court would have had to apply Indiana choice-of-law rules for torts and contracts.  Based on the Second Restatement of Conflicts, Indiana applies the law of the place of the injury to tort claims if that place bears a significant connection to the case.  As to contract issues, it employs the "most significant relationship" test.  Both point to Saudi Arabia, and confirm that Saudi Arabia is the better forum to resolve this dispute.

Citation:  Kamel v. Hill-Rom Co., Inc., No. 96-1610 (7th Cir. March 14, 1997).

IMMIGRATION

New Illegal Immigration statute and Antiterrorism amendments impose added restrictions on U.S. immigration such as making adjustment of status for illegal aliens more difficult

The recent "Illegal Immigration Reform and Immigrant Responsibility Act of 1996" (IIRAIRA, commonly pronounced "IRA-IRA") [Pub.L. No. 104-208] comprehensively addresses the problem of illegal immigration.  Many of the Act's provisions may affect you or your clients, even if you usually do not deal with immigration issues.  Some of the provisions are effective immediately, some will enter into force at a later date.  Here is a summary of these important, recent changes:

- Employers must verify that aliens are authorized to work.  IIRAIRA changes some of the documents that employers can accept for verification purposes (beginning no later than September 30, 1997).  The proper documents now include a social security card, a U.S. passport, an alien registration card, as well as other documents to be determined in the future (see Section 411).  IIRAIRA also imposes a new criminal liability on employers who knowingly hire, in any 12-month period, 10 or more unauthorized aliens who have been illegally smuggled into the U.S.

- IIRAIRA Section 601 amends the definition of "refugee" in the Immigration and Nationality Act (INA), Section 101(a)(42).  The term now includes aliens fleeing persecution for resistance to coercive population control methods.  [Editors' note: this provision is presumably directed at China].

- IIRAIRA Section 632 adds a new subsection (g) to INA Section 222. It voids an alien's non-immigrant visa when he or she stays beyond the authorized period.  Such an alien can no longer re-enter the U.S. as a non-immigrant unless the consular office in the alien's country of nationality issues the visa, or unless the U.S. Secretary of State finds that extraordinary circumstances exist.  Moreover, the alien can no longer obtain a visa in a third country such as Canada or Mexico.

- Beginning April 1 of this year, a 180-day "grace period" has begun to run for illegal foreigners in the United States.  During this period, most people without a valid visa will be able to rectify the situation without drastic punishments, probably by paying a fine. On the other hand, if authorities catch someone without a valid visa after September 27, they will probably fine that person and then deport (now called "remove") them.  The statute bars such persons from re-entering the United States for up to 10 years, depending on the length of their overstay.

- IIRAIRA and the "Antiterrorism and Effective Death Penalty Act of 1996" (Antiterrorism Act) [Pub.L. No. 104-132] have expanded the "ineligibility" sections of INA (IIRAIRA Section 342 amends INA Section 212(a)(3)(B)).  Under the Antiterrorism Act, aliens who "incite" terrorism are ineligible for U.S. visas.  This includes those who make utterances, stir up, or arouse terrorist acts.  Under Section 219 of the Antiterrorism Act, the Department of State has begun to collect the names of prominent members of terrorist organizations and to designate certain foreign organizations as "terrorist." (See Wire of the U.S. Department of State No. 006166 of January 1997 to diplomatic and consular posts).

The Immigration and Naturalization Service (INS) has recently issued Interim Final Regulations for IIRAIRA that concern the expedited and regular "removal" proceedings, asylum claims, as well as apprehension and detention.  The following are key examples.

- IIRAIRA Section 604 reforms the process for political asylum in INA Section 208.  The Regulations, however, extend the deadline for filing for asylum application until April 1, 1998 [see 8 C.F.R. 208.4(a), (a)(2)].

- The INS will use expedited procedures to remove persons who try to enter the U.S. with no documents, or with false documents or misrepresentation.  For such persons, an INS officer will conduct an inspection and may issue a removal order that carries a 5-year bar to readmission.  Officials will detain anyone who claims they are afraid to return to their home country for a "credible fear screening." (8 C.F.R. 235.3.)

The effective date of the regulations is April 1, 1997.

Citation:  62 Federal Register 10312 (March 6, 1997).

JUDGMENT ENFORCEMENT

German High Court reviews jurisdiction of German courts in enforcement of foreign judgments to seize domestic assets of a debtor

Ast. is the subsidiary of a Nigerian bank, organized under the laws of New York.  Ast. won a $583,953.29 default judgment in the U.S. against a foreign citizen residing in Nigeria who also owned an apartment in Hamburg, Germany.  Ast. also alleged a claim against a company located in Bavaria.

The trial court in Hamburg considered itself without jurisdiction to review the matter and referred the case to a trial court in Munich that also considered itself without jurisdiction. 

The German High Court (BGH) now decides that the Munich trial court does have jurisdiction.  If one court refers a case to another court for jurisdictional reasons, the receiving court cannot simply declare itself without jurisdiction and thus leave the claimant without a forum.  Under the German Rules of Civil Procedure (ZPO), the claimant has a right to a legal proceeding and a reasoned decision.

The court holds that, for purposes of enforcing a foreign judgment, the court must have jurisdiction, e.g., over the debtor's assets located within the court's district.  The value of the debtor's assets, and whether they are enough to satisfy the judgment, does not matter.

Citation:  BGH, Urt. v. 28.10.1996 - X ARZ 1071/96 (LG München I), 1997 NJW, Number 5, page 325. [German text of opinion submitted by Mr. Marcus C. Ehrhart, Attorney at Law, Munich and Berlin, Germany.]

JUDICIAL ASSISTANCE

(DISCOVERY)

In challenge to release of confidential U.S. deposition testimony containing trade secrets to related German proceeding, Federal Circuit upholds release of such testimony even though it would be undiscoverable under German law and German court did not request it

Therma-Wave, Inc., a California company, sued the German company Jenoptik AG in California district court, seeking a declaratory judgment that Jenoptik's devices for detecting thermal waves may infringe on Therma-Wave's patents.  Therma-Wave also sued Jenoptik in Germany for infringement of a German counterpart of one of its patents.

The district court entered a stipulated protective order governing confidential information disclosed during discovery, providing for two types of protection.  First, "Confidential" information and, second, "Confidential - Trial Counsel Only (TCO)" information.  Some of the deposition testimony in the California action was labelled "Confidential - TCO." 

Thereafter, Therma-Wave wanted to present portions of that testimony to the German court, asserting that the deposition testimony conflicted with a portion of Jenoptik's German brief.  The district court granted Therma-Wave's motion to modify the protective order to allow the release of the deposition passages for use in German court.  Jenoptik requested a writ of mandamus to direct the district court to vacate its order.

The U.S. Court of Appeals for the Federal Circuit denies the writ.  Mandamus is an extraordinary remedy for cases where there is a clear abuse of discretion.  This not such a case.

First, Therma-Wave agreed to comply with the protective order after it presented the deposition excerpts to the German court.  Therefore, the "Confidential - TCO" materials remain protected in the U.S. court.

Second, the modification of the order did not circumvent the discovery procedure of German courts.  It simply made the material available to the German court so that it could apply German discovery rules.  Third, Jenoptik's argument that the deposition testimony did not actually conflict with statements in its brief is a matter for the German court to decide.

The dissenter contends that the order does in fact circumvent German law.  The deposition contains trade secrets that the owner has disclosed under a U.S. protective order.  This data is not discoverable under German law.  Therma-Wave convinced the district court, however, that Jenoptik had contradicted certain statements it made in the German proceeding and that the only way to make it usable abroad would be for the federal court to release it. 

Under 28 U.S.C. § 1782, federal courts may assist foreign tribunals and litigants who request it to obtain evidence located in the U.S.  The German court, however, did not ask the U.S. court for assistance or request that information from Jenoptik.  Moreover, the criteria for such judicial aid are not met here.  Several Circuits have held that a foreign litigant may not obtain information under § 1782 that is protected from discovery in the foreign forum.

Citation:  In Re Jenoptik AG, Mis. Docket No. 492 (Fed. Cir. March 3, 1997).

JURISDICTION

(EXTRATERRITORIAL)

In case of first impression, First Circuit decides that Sherman Act allows criminal prosecution of price-fixing activities in Japan that had substantial and intended effects in the U.S.

In 1995, a federal grand jury indicted Nippon Paper Industries Co., Ltd. (NPI), a Japanese manufacturer of thermal fax paper, for taking part in price-fixing activities intended to increase the price of such paper in the U.S.  According to the indictment, those activities had a substantial adverse effect on commerce in the U.S. and unreasonably restrained trade in violation of Section One of the Sherman Act [15 U.S.C. § 1 (1994)].

Finding that the government cannot base a criminal antitrust prosecution on wholly extraterritorial conduct, the district court dismissed the indictment.  The government appealed.

The U.S. Court of Appeals for the First Circuit reverses and remands.  Under current case law, civil antitrust actions grounded on wholly foreign conduct which has an intended and substantial effect in the U.S come within the jurisdictional reach of the Sherman Act.  This case, however, involves not a civil matter, as previous cases have, but a criminal prosecution.

Based on common sense, as well as on Ratzlaf v. United States, 510 U.S. 135 (1994), and Strickland v. Commission, Me. Dep't of Human Servs., 48 F.3d 12, 21 (1st Cir.), cert. denied, 116 S.Ct. 145 (1995), the Court concludes that Congress intended the Sherman Act to apply extraterritorially in criminal as well as civil actions.

After establishing this premise, the Court easily dismisses NPI's arguments.  The lack of precedent for applying the Sherman Act to foreign conduct in criminal cases is irrelevant.  Because of the increasingly global nature of the economy, it is not much of a stretch to apply the Act internationally.  Moreover, there have been cases where courts have applied criminal statutes to behavior that took place outside state borders.

NPI also contended that the presumption against extraterritoriality operates with greater force in the criminal area.  In the court's view, however, United States v. Bowman, 260 U.S. 94 (1922), only establishes a presumption against the extraterritorial application of criminal law unless Congress says otherwise in the statute.  The Restatement (Third) of Foreign Relations Law (1987) merely reaffirms the classic presumption against extraterritoriality.  Moreover, comments in the Restatement suggest that a state's decision to prosecute wholly foreign conduct is discretionary.

The "Rule of Lenity" mandates that a reviewing court in criminal cases resolve ambiguities in the statute in favor of the defendant.  The Rule is inapposite here because there is no statutory ambiguity; a statute is not ambiguous simply because some courts or commentators have questioned its proper interpretation.  Finally, international comity is a matter of grace rather than obligation and does not bar the prosecution.  Furthermore, NPI's conduct would be illegal even under Japanese law.

Citation:  United States v. Nippon Paper Industries Co., Ltd., No. 96-2001 (1st Cir. March 17, 1997).

TRADE

Before dispute settlement panel of WTO, U.S. prevails over Canada regarding its imposition of discriminatory taxes and postal rates on U.S. magazine imports

A dispute settlement Panel of the World Trade Organization (WTO) has found in favor of the U.S. in the dispute regarding Canadian restrictions on imports of U.S. magazines.

The Panel found that several Canadian measures restrict or discriminate against U.S. magazine exports and are inconsistent with GATT 1994.  They include Canada's (1) ban on magazines containing advertisements directed to Canadian consumers, (2) 80% excise tax on magazines, and (3) postal rates (except funded rates) that are higher for imported magazines than for Canadian ones.

In particular, the Panel found that:

- Canada's import ban violates GATT Article XI [general elimination of quantitative restrictions], and is not justified as an exception to Article XX [general exceptions].

- Canada's 80% excise tax violates Canada's national treatment obligations under GATT Article III:2 [prohibition of discriminatory taxes and charges on imported products].

The tax artificially distinguishes between "split-run" magazines (sold in different countries with advertisements directed at the particular country) and non-split-run magazines, which are like products.  Canada applied its high excise tax only to split-runs.

- Canada's discriminatory postal rates for magazines mailed in Canada adversely affect imported magazines in violation of Article III:4 [equal treatment for domestic and imported goods].  The panel excuses this violation, however, as constituting a subsidy under GATT Article III:8(b) for Canada's funded postal rates.

The parties may appeal the decision to the WTO Appellate Body.

Citation:  Panel Report "Canada -- Certain Measures Concerning Periodicals" (March 14, 1997); Office of the U.S. Trade Representative press release, No. 97-22 (March 14, 1997).  [You may obtain a copy of the Panel report at the reading room of the U.S. Trade Representative, or from the WTO Office at the U.S. Trade Representative (Phone: (202) 395-3000).  It may also become available on the WTO internet site: www.wto.org].

EC Commission initiates WTO procedures against U.S. regarding textile products

The EC Commission has decided to initiate consultation and dispute settlement procedures against the U.S. within the WTO regarding the U.S. rules of origin for textile products.  The U.S. allegedly refuses to accept certain textile products processed in the EU as "EU products" under the rules of origin.

The Commission's action is based on a complaint by the Italian textile association Federtessile, which alleges that the new U.S. rules of origin refuse "originating status" for loom-state fabrics manufactured in third countries that have been dyed, printed, and finished in the EU [see 1997 Int'l L. Update 21].  Previously, such products were considered EU products.  The U.S. restrictions on the rules of origin allegedly constitute trade obstacles in violation of WTO obligations.

The Commission considers particularly problematic that such products must be labelled as "made in the third country," not the EU.  Federtessile members use raw products such as basic fabrics from China, India or Pakistan.

The label "Made in China" or "Made in India" would make their products less attractive to American consumers than "Made in Italy."  Federtessile points out that the value-added to the original cloth is 400 percent.

Consultations between the U.S and the EU have not led to any long-term results.  The Commission opines that the U.S. Congress should amend the U.S. rules of origin to satisfy WTO requirements.

Citation:  Commission Decision ..., 1997 O.J. of the European Communities (L 62) 43, 4 March 1997; European Union press release No. 11/97 (March 7, 1997).

U.S. Maritime Commission imposes higher fees on Japanese vessels docking in U.S. ports in retaliation for unfavorable conditions for American vessels in Japan

In response to allegedly unfavorable conditions for American vessels in Japanese ports, the U.S. Federal Maritime Commission (FMC) has imposed $100,000 per-voyage fees on certain Japanese vessels calling at U.S. ports.

The FMC has identified governmental restrictions and requirements for U.S. vessels to use Japanese port facilities.  With the support of the Japanese Government, the Japan Harbor Transportation Association (JHTA) controls Japanese harbor services.  The Government does not let non-Japanese companies perform stevedoring or terminal operations.  In response, the FMC has amended 46 C.F.R. Part 586, to

- List the allegedly unfavorable conditions in Japanese ports.

- List the Japanese companies to which the restrictions apply (Kawasaki Kisen Kaisha, Ltd.; Mitsui O.S.K. Lines, Ltd.; Nippon Yusen Kaisha).

- Define the affected vessels (container-carrying liner vessels operated by a Japanese carrier).

- Assess a fee of $100,000 on each such vessel.

The effective date of the regulation is April 14, 1997.

Citation:  62 Federal Register 9696 (March 4, 1997).

U.S. to permit exports of certain goods to human rights organizations, news bureaus, and democratic movements in Cuba

The Bureau of Export Administration of the U.S. Department of Commerce has amended the Export Administration Regulations [15 C.F.R. Part 746] to introduce a licensing review for the approval of certain exports to Cuban human rights organizations, news bureaus, as well as individuals and non-governmental organizations in the area of democratization.  It is consistent with the Cuban Democracy Act of 1992 and the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996.

The regulation amends Section 746.2 to grant licenses, on a case-by-case basis, for certain exports to Cuba for the support of democratization efforts, as long as those exports do not affect U.S. national security and counter-terrorism concerns.  Such export goods may include, for example, fax machines, copiers, computers, software, document scanners, printers, and other office equipment.  The U.S. may also approve the export of such goods to U.S. news bureaus in Cuba whose primary purpose is to gather and disseminate information for the general public.

The effective date of the regulation was March 3, 1997.

Citation:  62 Federal Register 9364 (March 3, 1997).

TRADEMARKS

Irish High Court grants petition of Anheuser-Busch, Inc. to expunge two competing "budweiser" trade marks for non-use in Ireland

In September 1980, Anheuser-Busch, Inc. (ABI) filed a petition to expunge two trademarks on the Irish Register in the name of "Budweiser Budvar" (BB) on the grounds of non-use. ABI filed a declaration in general terms that it had made various inquiries in Ireland and found no indication that BB had used its mark in Ireland within the relevant statutory period.  BB filed a counter statement in which it declared that it had used the Trade Marks throughout Europe and specifically in Germany, "and the United Kingdom of Great Britain, Northern Ireland and the Isle of Man."

The Hearing Officer found that ABI's statement failed to qualify as a prima facie case of non-use.  In October 1985, the Officer denied ABI's petition to correct the Register.  Upon appeal, the court ordered the Hearing Officer to specify his reasons.  Finally, in June 1995, the Officer issued his written reasons for ruling against ABI.  Under existing precedent, he explained, ABI's statement was too vague and failed to specify the nature and extent of its investigation, much less to show what questions ABI had asked and of whom.  The present appeal followed.

The Irish High Court allows ABI's appeal and orders the expungement of BB's two trademarks.  The Court first agrees with the Hearing Officer that ABI's vague declaration by itself failed to establish the prima facie case required.  On the other hand, a close reading of BB's counter-declaration makes it clear that it contains no claim whatever to use of the trade marks in the Irish Republic within the relevant statutory period.  Since BB decided to filed its counter-statement without a claim of use in Ireland, the record as it stood had "overwhelming evidence" of non-use.

Citation: Anheuser-Busch, Inc. v. Controller of Patents, Trade Marks and Designs, 1995 No. 512 Sp (transcript) (High Court of Ireland, 23 October 1996).

- U.K. enacts the Arbitration Act of 1996.  After fighting hard to influence the draft of UNCITRAL's Model Law on International Commercial Arbitration (the Model Law) [24 I.L.M. 1302 (1985)], the U.K. did not adopt the final version.  Since that time, the U.K. has been working on its own Act.  More than a decade later, the result is a complete overhaul of English arbitration law. The new Act directs arbitrators to achieve justice with speed and efficiency.  It suggests various procedures to this end and transfers several powers from courts to arbitrators such as providing security for costs.  The Act delimits the powers reserved to courts and restricts traditional challenges to the arbitration proceeding.  Citation: United Kingdom: Arbitration Act of 1996, 35 Int. Leg. Mat. 155-86. [See also the informative notes by Toby T. Landau, Barrister-at-Law].

- Poland and Iceland have acceded to Hague procedural conventions.  On August 14, 1996, Iceland acceded to the Hague Convention on the Civil Aspects of International Child Abduction [T.I.A.S. 11670, 19 I.L.M. 1501 (1980)].  Poland has acceded to the Hague Evidence Convention as of February 13, 1996. [T.I.A.S. 7444, 23 U.S.T. 2555, 8 I.L.M. 37 (1969)].  Citation: 36 I.L.M. 228 (1997).

- U.S. adapting regulations to Helms-Burton Act.  The Department of the Treasury has issued proposed rules to amend the Foreign Assets Control Regulations and the Cuban Asset Control Regulations to account for the Helms-Burton Act.  The amendments would add procedures for the conduct of administrative proceedings and the settlement of civil penalty cases.  Citation:  62 Federal Register 6896 (February 14, 1997).

- International Legal Materials publishes text of international warrants for Messrs. Karadzic and Mladic from Hague War Crimes Tribunal.  During 1995, the ICTFY communicated the indictments and warrants for the arrest and orders to surrender these two accused war criminals to responsible authorities in the Federal Republic of Yugoslavia (FRY) and the Republika Srpska (RS).  Under its Rule 61, the Tribunal notified the Security Council of the failure of FRY and RS to execute its warrants even though there is reason to believe that the accused have, at various times, been within their territorial jurisdiction.  As a result, the Trial Chamber has issued international arrest warrants to all States, to Interpol and to IFOR.  Readers may find the text of the old and new warrants and the Tribunal's letter to the President of the Security Council at the following location.  Citation: 36 I.L.M. 92-99 (1997).

- EC Commission explains penalties relating to Helms-Burton Act imposed by Member States.  The EU has recently issued a regulation to counteract the effect of the Helms-Burton Act, and to bar the enforcement of foreign judgments based on the Act (see 1997 Int'l L. Update 2).  The regulation provides that "[e]ach Member State shall determine the sanctions to be imposed ..."  In answer to a question from a member of the European Parliament, the Commission explained the meaning of that provision.  Each Member State will determine the sanctions under Article 9 within its national system governing the enforcement of legal obligations.  The second sentence of Article 9, however, defines the margin of discretion left to the individual Member States; it provides that the penalties must be "effective, proportional and dissuasive."  The Commission will monitor the implementation of Article 9 by the Member States.  Citation:  1997 O.J. of the European Communities (C 83) 103, 14 March 1997.

- U.S. and Switzerland ratify new extradition treaty.  On March 14, 1997, U.S. Secretary of State Madeleine Albright and Swiss Federal Counselor Flavio Cotti exchanged the Instruments of Ratification for the new U.S.-Switzerland Extradition Treaty.  The Treaty will update and standardize the conditions and procedures for extradition between the two countries, and expand the list of extraditable offenses to include, e.g., certain narcotics offenses and white collar crimes.  Also, it excludes from the "political offense" exception certain terrorist crimes such as aircraft hijacking, aircraft sabotage, crimes against internationally protected persons, and hostage-taking.  Citation: U.S. Department of State press release (March 14, 1997).

- Test-Ban-Treaty organization established in Vienna.  With a headquarters agreement signed on March 18, the Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) has begun its work to establish a global verification system (International Monitoring System, IMS) to monitor compliance with the Treaty.  It will include a network of 321 seismic, hydroacoustic, infrasound and radionuclide stations to verify that no nuclear tests are being conducted.  The data will be analyzed in an International Data Center (IDC) currently being constructed in Vienna.  The organization is not part of the United Nations.  The signatory states provide the resources for this year's budget of $27.4 million.  Citation:  United Nations press release DCF/294 (19 March 1997).

- EU reviewing U.S. Antidumping Act of 1916 as possible trade obstacle.  Based on a complaint received from a European steel federation (Eurofer), the Commission is reviewing whether the U.S. Antidumping Act of 1916 (15 U.S.C. 72) constitutes an obstacle to trade, particularly to steel mill products.  According to the complaint, the Act prohibits the import and sale in the U.S. of products "at a price substantially less than the actual market value in the principal markets of the country of their production."  Any person acting to injure a U.S. industry is punishable by fine and/or imprisonment.  Any injured person may recover treble damages.  The complaint alleges that the U.S. failure to repeal the Act results in violations of the WTO Agreement.  The Commission has decided to investigate this complaint.  Citation:  Notice of initiation of an examination ..., 1997 O.J. of the European Communities (C 58) 14, 25 February 1997.

- WTO nominates panel to decide EU-U.S. dispute over Helms-Burton Act.  Even though negotiations between the European Union and the U.S. over the extra-territorial effects of the Helms-Burton Act are continuing, the WTO has established a panel to decide the dispute on February 20, 1997.  Citation:  European Union News press release, February 20, 1997 (No. 7/97) & February 12, 1997 (No. 6/97).