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.

1999 International Law Update, Volume 5, Number 9 (September).

ARBITRATION

Although parties had obtained arbitral awards in Nigeria pursuant to UNCITRAL Rules and arbitration clause, Second Circuit denies enforcement because Nigerian court had set aside awards and original contract had made Nigerian not U.S. law applicable

Baker Marine (Nigeria) Ltd., with another company, won a contract to render barge services to Chevron Corporation's Nigerian oil business. The Arbitration Clause of their agreement declared that the parties would settle their contract disputes pursuant to Nigerian substantive law, using the Arbitration Rules of the U.N. Commission on International Trade Law (UNCITRAL). The 1958 United Nations Convention on Recognition and Enforcement of Foreign Arbitration Awards (New York Convention) [21 U.S.T. 2517, T.I.A.S. No. 6997, 330 U.N.T.S. 58] was to govern the enforcement of any arbitral awards.

After disputes came up with its contract partner and with Chevron in 1996, two separate arbitration panels awarded Baker Marine almost $3 million in damages. Baker Marine then sought confirmation of both awards in the Nigerian Federal High Court. The Nigerian court, however, set aside the awards.  It held that the arbitrators, inter alia, had improperly awarded punitive damages, had gone beyond the scope of the submissions, had erred in letting in parole evidence, and had made inconsistent awards.

In August 1997, Baker Marine sued in New York federal court to confirm the arbitration awards under the Federal Arbitration Act (FAA) [9 U.S.C. Sections 201-209]. The court denied Baker Marine's petitions. It ruled that, under the Convention and principles of comity, it would be improper to enforce a foreign arbitral award after the Nigerian courts had set it aside. Baker Marine appealed.

On appeal, Baker Marine argued that the lower court had failed to give effect to Article VII of the Convention. It provides that the Convention shall not "deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon." Article VII(1). The Nigerian court purportedly had set aside the awards on grounds that U.S. law would not have recognized.

The U.S. Court of Appeals for the Second Circuit affirms. "We reject Baker Marine's argument. It is sufficient answer that the parties contracted in Nigeria that their disputes would be arbitrated under the laws of Nigeria. The governing agreements make no reference whatever to United States law. Nothing suggests that the parties intended United States domestic arbitral law to govern their disputes. The 'primary purpose' of the FAA is 'ensuring that private agreements to arbitrate are enforced according to their terms.' ... Furthermore, Baker Marine has made no contention that the Nigerian courts acted contrary to Nigerian law." [Slip op. 7-8].

Citation: Baker Marine Ltd. v. Chevron (Nig.) Ltd., Nos. 97-9615, 97-9617 (2d Cir. August 13, 1999).

BIOETHICS

German Constitutional Court limits organ donation by living persons to friends and relatives to prevent organ trading and to protect health of living donors

The German Constitutional Court (Bundesverfassungsgericht, BVerfG) has rejected the petition of a dialysis patient seeking a kidney donation from a living person who is not a friend or relative. A non-relative willing to donate a kidney to an unknown person and a transplant surgeon joined the patient's petition. The Petitioners had requested the Court to permit organ transplants from any living donors.

In a decision published on August 24, 1999, the Court ruled against Petitioners "for lack of probable success on the merits" but did not formally decide the merits. The Court explained that under the Organ Transplant Law of 1997 (Transplantationsgesetz), organ donation from living persons must be voluntary to prevent any kind of trade in human organs (see Section 8 para. 1, sentence 2). Thus, the donated organ can only come from individuals who are very close to the patient. Furthermore, to protect the health of living potential organ donors, the Law favors organ donations from deceased persons.

The Court admits that this Law interferes to some extent with fundamental rights guaranteed in the "Basic Law." These include the right of individuals to make autonomous decisions (Article 2, paragraph 1) and the right to life and bodily integrity (Article 2, paragraph 2).

In the Court's view, however, this Law is justified to protect important public interests. A law is "necessary" if the Legislature does not have an alternative, equally effective, and less restrictive means of protecting these public interests.

Furthermore, this Law is "proportional" (verhaeltnismaessig) to achieve its goals. In the interest of the public well-being, society must subject organ transplant surgery to the highest ethical standards (here: voluntariness of organ donation). Only then will people be willing to donate organs post-mortem, the Court declares.

Also, the Government may legitimately protect the health of living potential organ donors by restricting the number of persons eligible to donate the organ. Finally, organ recipients have the option of waiting for an organ transplant from a deceased donor.

[Germany currently has approximately 12,000 patients waiting for a kidney transplant. About 2,300 kidney transplants are performed every year in Germany.]

[According to the United Network on Organ Sharing, 42,000 persons in the U.S. were on the transplant waiting list for kidneys as of 1998. In that year, doctors carried out 11,990 kidney transplants in the U.S. Of these, 4,000 organs came from living donors of whom 163 were unrelated to the recipients.]

Citation: [German] Bundesverfassungsgericht, Beschluss vom 11. August 1999 - Az. 1 BvR 2181/98, 2182/98 und 2183/98; Pressestelle, Pressemitteilung Nr. 91/99 vom 24. August 1999; Sueddeutsche Zeitung, August 25, 1999; The Washington Post, September 4, 1999, page A14.

CHILD ABDUCTION

In case of first impression, Ninth Circuit rules that American mother did not "wrongfully" retain child of Israeli father in U.S. and holds that Child Abduction Convention requires choice-of-law analysis in determining "rights of custody" in state of child's habitual residence

Yarden is the young son of Haim Shalit, a dual citizen of the U.S. and Israel, and Cheryl Coppe, a U.S. citizen. The couple had divorced in Alaska in 1989, and the Alaska court had granted the mother custody of the son with visitation rights for the father. In 1995, Yarden had moved temporarily to Israel based on an oral agreement between the parents. Three years later, while Yarden was on vacation back in Alaska, Coppe decided to keep him there.

Shalit then filed a petition in the Alaskan federal court. Claiming that Coppe had wrong­fully kept Yarden in the U.S., he asked that the court order Yarden's return to Israel so that the Israeli courts could decide the merits of the custody dispute. The court granted Coppe's motion for summary judgment and the U.S. Court of Appeals for the Ninth Circuit affirms.

A key question here is whether Coppe's act of keeping the child in Alaska was "wrongful" under the Hague Convention on the Civil Aspects of International Child Abduction [October 25, 1980, T.I.A.S. No. 11,670, 1343 U.N.T.S. 89] and its implementing U.S. legislation, the International Child Abduction Remedies Act (ICARA) [42 U.S.C. Sections 11601-11610]. Both the U.S. and Israel are parties to the Convention.

Under Convention Article 3, the removal or retention of a child is wrongful if "a. it is a breach of rights of custody attributed to a person ... under the law of the State in which the child was habitually resident immediately before the removal or retention; and b. at the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention." Article 19 of the Convention and 42 U.S.C. Section 11601(b)(4) provides: "a United States district court only has authority to determine the merits of an abduction claim, not the merits of the underlying custody claim." Thus, the court may only determine whether the removal or retention of the child was "wrongful" under the law of the child's "habitual residence." If so, it will order the child sent back to the place of "habitual residence."  There the court can decide the merits of the custody dispute under applicable family law.

In the Ninth Circuit's view, the lower court rightly found that Israel was Yarden's habitual residence at the time of the challenged retention. Thus, the Court has to decide whether Coppe's action had transgressed Shalit's custodial rights under Israeli law.

Since nothing in the Hague Convention limits this "law" to the internal law of the State of the child's habitual residence. it includes the choice-of-law rules of the resident state [this approach is often called "renvoi"]. Israel's choice-of-law rules might lead to applying either U.S. or Israeli domestic law as controlling authority. Shalit, however, failed to prove the content of Israel's choice-of-law rules.

Shalit also did not establish that Coppe's retention of Yarden breached his "rights of custody" under the Hague Convention.

Article three of the Convention lists three sour­ces of custody rights: (1) operation of law, (2) judicial or administrative decisions, and (3) agreements effective under the law of that State.

As for the "operation-of-law" test, Shalit merely offered a self-serving statement from his Israeli attorney that omitted to address the choice-of-law issues. Determining Shalit's custody rights under this test, however, would have required evidence of whether Israel would apply its own or U.S. law under these circumstances.

The "judicial or administrative decisions" test also does not help Shalit, in the Ninth Circuit's view. There is only the ruling of the Alaskan court and it had granted sole custody to Coppe. Since the orders came down when both parties were living in Alaska, neither side had any jurisdictional or procedural advantages.

Finally, as for "agreements having legal effect," the oral agreement to have Yarden live with Shalit temporarily did not give Shalit "custody" rights. Even assuming that Israel's "law" would point to its own internal law under a choice-of-law analysis, the Ninth Circuit concludes that a bare assertion of Shalit's attorney that Israeli law allows parents to make agreements about custody matters is not enough to show who has custody rights. For one thing, it overlooks Article 24 of the Israeli Legal Capacity and Guardianship Act of 1962. It makes such parental agreements "subject to court approval."

Citation: Shalit v. Coppe, 182 F.3d 1124 (9th Cir. July 23, 1999).

CHILD ABDUCTION

In case of first impression, Second Circuit holds that Hague Abduction Convention requires complete analysis of protective arrangements that might allow return of abducted children to country of habitual residence without exposing them to "grave risk" of harm

Marthe Dubois had a turbulent extra-marital relationship in France with Felix Blondin during which two children came into the world, Marie-Eline and Francois. Blondin allegedly abused Dubois. After intermittently living in shelters for about nine months, Dubois took the children to the home of relatives in New York City.

In a lawsuit, the New York federal court denied Blondin's petition to order the children sent back to France, pursuant to the Hague Convention on the Civil Aspects of International Child Abduction [T.I.A.S. No. 11670, 1343 U.N.T.S. 89]. The Court held specifically that sending the children back would place them at "grave risk" of harm. 

Article 13(b) allows such a showing to counter the Convention's presumption that abducted children should go back to their home country.  The district court also found that Blondin's means were rather limited and that he could not support Dubois and the children other than in his home in France.

Blondin then filed a timely appeal. The U.S. Court of Appeals for the Second Circuit vacates the judgment and remands.

The Court sees this case as presenting issues of first impression under the Hague Convention. Article 1 of the Convention generally favors "the prompt return of children wrongfully removed to or retained in" any signatory state (which includes the U.S. and France). Proper application of the Convention and deference to the children’s home forum, however, demands that the lower courts consider the possibility of special arrangements for their return.

"[I]t is important that a court considering an exception under Article 13(b) take into account any ameliorative measures (by the parents and by the authorities of the state having jurisdiction over the question of custody) that can reduce whatever risk might otherwise be associated with a child's repatriation. In the exercise of comity that is at the heart of the Convention ..., we are required to place our trust in the courts of the home country to issue whatever orders may be necessary to safeguard children who come before it. ... [...] As the District Court properly recognized here, ... granting Blondin's petition would not - as a legal matter — invariably entail turning the children over to his custody. In fact, other arrangements might be available that would allow the children to return to France in some other person's care, pending a long-term custody adjudication - thus reducing or eliminating the risk of harm that might otherwise be associated with granting Blondin's petition." [Slip op. 25-26].

The Second Circuit therefore remands for the district court to reconsider whether French law provides for other options that would allow the children’s return to France without the "grave risk" of harm. Aided by the U.S. State Department, the court should make any appropriate and necessary inquiries of the French government to determine the range of remedial placement options that may be available under French law.

[Editors' Note: Even though the Court does not say so directly, it appears that all family members are French nationals whose contacts with the U.S. were tenuous.]

Citation: Blondin v. Dubois, No. 98-2834 (2d Cir. August 17, 1999).

CHOICE OF LAW

In wrongful death litigation by Colombian plaintiff against American Airlines over air crash in Colombia, Eleventh Circuit rules that Warsaw Convention allows domestic forum's choice-of-law analysis to resolve measure of damages and that Restatement of Conflicts principles leads to application of Florida law

The present litigation arises out of the nighttime crash of American Airlines Flight 965 near Cali, Colombia on December 20, 1995. The wreck killed Maria Constanza Piamba Cortes, a domiciliary of Colombia on her way back from the United States. Doris Cristina Piamba Cortes, a sister of deceased, sued American Airlines in Florida state court.

Both sides agree on the basic facts. The aircraft was in good condition and the Cali airport sits in a valley about 43 miles long and 12 miles wide, surrounded by mountains. There was a tragic confusion in the use of radio navigation beacon frequencies and miscommunications between the flight crew and the Cali Air Traffic Controller. As a result, Flight 965 came down to 8,400 feet causing it to crash on a mountainside 24 miles northeast of the airport.

Defendant removed the case to federal court. The district court held that the suit arose under the Warsaw Convention that caps the amount of damages recoverable for international air crashes except where there was "willful misconduct." [See also WARSAW CONVENTION, below].

As to damages, the court did a choice-of-law analysis as between the laws of Colombia and Florida. It ruled that Florida's compensatory damages law applied to plaintiff. Both sides appealed. The U. S. Court of Appeals for the Eleventh Circuit affirms in part, vacates in part, and remands.

Defendant airlines claimed error in the district court's failure to see plaintiff's and decedent's Colombian domicile as dictating the application of that country's law. Judge Birch, however, disagrees.

Judge Birch first rules that the Warsaw Convention governs plaintiff's claim "for damage sustained" during an international flight. In Zicherman v. Korean Air Lines Co., 516 U.S. 217 (1996), 1996 Int'l Law Update 15, the U.S. Supreme Court read this general language as authorizing the courts of various member states to apply the damages law that would govern in the absence of the Convention. Since there are links here to both Florida and Colombia, the lower court, without challenge from the parties, analyzed the choice-of-law problem under the "most significant relationship" test found in the Restatement (Second): Conflict of Laws (1971).

In the case of damages for wrongful death, Judge Birch notes, the Restatement provides no rigid rules for solving choice-of-law problems. Each court must examine the interests created by the circumstances of each case under the factors set forth in Sections 6 and 145.

Defendant first pointed out that Florida was not its "principal place of business." Judge Birch, however, gives little weight to this reading of Section 145(2). "[T]he district court found not only that Miami serves as one of American's primary transportation hubs, but also that Miami is the site from which American orchestrates its Latin American operations." [Slip op. 23]. Florida thus has an interest in this litigation under Section 145(2).

To discover which contacts were most "significant" in this case, Judge Birch next turns to Restatement Section 6(2)(b) and (c). The court must (1) identify the rules of law applicable in both Florida and Colombia; (2) identify the underlying purposes of both rules of law; (3) assess the degree to which application of each state's law would advance its policy interests.

Step (1) posed prodigious problems [see below]. Adopting arguendo defendant's cap theory, Judge Birch under step (2) sees the goals of such caps as the recompense of domiciliaries for a relative's wrongful death and the shielding of domiciled defendants from exorbitant damage awards. Florida's compensation scheme, on the other hand, seeks to shift the losses resulting from wrong­ful death from the decedent's survivors to the wrongdoer without overly burdening domiciliary defendants.

As to the policies that would underlie Colombia's supposedly less generous damages law, Judge Birch agrees with the lower court. "The fact that the decedent was a domiciliary of Colombia, combined with the fact that the primary claimants - including Piamba Cortes - also are Colombian domiciliaries, creates an interest on Colombia's behalf to ensure proper compensation for these claimants." [Slip op. 25].

On the other hand, applying Florida law here would not substantially advance its underlying policies. "[T]he purpose underlying Florida law is to provide an adequate remedy for its own domiciliaries. (Cit.) Florida thus possesses no interest in compensating domiciliaries of other jurisdictions more richly than they would receive in their own courts." [Slip op. 26]

Thus, applying the law of either jurisdiction in this case would further the underlying compensatory policies of both.

Restatement Section 6(2)(e) next urges the courts to consider the policies that underlie the general field of law involved in the particular case.

Tort law stresses (1) compensating injured victims and (2) deterring tortious conduct. "[A]pplication of Colombian law arguably would frustrate these goals by limiting the amount the tortfeasor must pay to compensate the victim and her survivors. Consequently, this factor weighs slightly in favor of applying Florida law." [Slip op. 27].

Finally, Section 6(2)(g) asks the courts to take into account the relative ease of determining and applying one or the other competing set of laws.

"Here, two eminent Colombian jurists and scholars expressed profound disagreement whether Colombian law caps non‑pecuniary damages and restricts the recovery of net accumulations, and the district court's review of the available legal authorities failed to reconcile this debate." [id.] This factor weighs heavily in favor of applying Florida's straightforward measure of damages.

[Editorial Note: F.R.Civ.P. 44.1 governs the proof of foreign law in federal civil actions. While it abolished the "fact approach" of the common law, it put the burden of proof on the party seeking to invoke foreign law.]

Citation: Piamba Cortes v. American Airlines, Inc., 177 F.3d 1272 (11th Cir.1999).

CRIMINAL LAW

For first time, new Japanese statute grants prosecutors and police broad and controversial wiretap powers to facilitate enforcement of anti-conspiracy laws

The Japanese Parliament (Diet) has passed a new Law that for the first time gives police broad wiretap powers in criminal investigations. Even though there are wiretap statutes in the U.S. and elsewhere, the new "Law concerning telecommunication interception for criminal investigation" is particularly controversial in Japan. The concerns stem from the experience of police brutality during the Second World War and severe crackdowns on student groups and labor unions during the 1950s and 1960s.

The Law seeks to enhance the investigations of criminal conspiracies, particularly gang murders, as well as drug and arms trafficking (see Article 1). The Law, however, establishes requirements and proper procedures for using wiretaps. For example, the prosecutor or law enforcement officers must first have enough proof that a criminal conspiracy involving murder, drugs, or arms is in progress (see Article 3).

Second, the prosecutor or the officers must apply for an "interception warrant" before a judge of the district court (see Article 4). The judge will issue an "interception warrant" for a period of less than 10 days (see Article 5). Although the judge may extend the validity of the warrant, the total period of interception should be less than 30 days (see Article 7). Authorities must seal the record of the interception and submit it to the court, describing the procedures used.

The Ministry of Justice will issue regulations to implement this Law (see Articles 9-11). They will prescribe how the police will notify the wiretapped individuals and what documents they will make available to affected persons.

Every year the Government must file a report to Parliament detailing the issuance of interception warrants (see Article 29). This law will become effective within one year of its publication.

Citation: Law concerning telecommunication interception for criminal investigations (Law 137) (Ministry of Justice), published in Kanpo [official gazette], Number 159 (August 18, 1999). [The English translation we received was courtesy of Ms. Akemi Yonemura of New York].

EUROPEAN COMMUNITY LAW

In reference from Finnish Criminal Court, European Court of Justice rules that public order problems warranted Finland in restricting certain alcohol imports after short trips to non-EC states

Sami Heinonen lives in Finland. Between 1996 and 1997, he took a sea voyage of less than 20 hours to Tallinn, a port in Estonia. Authorities inspected his baggage on his return and found that he was carrying nineteen .33 liter cans of beer.

Since 1996, Finnish law has barred Finnish residents from bringing alcoholic beverages from states that do not belong to the European Community if the trip took less than twenty hours and was not by air. Finnish customs officials, therefore, seized Mr. Heinonen's beer and fined him.

Heinonen challenged the customs ruling before the Public Prosecutor who sent the matter to the Helsinki District Court as a criminal proceeding. That Court made use of former Article 177 of the Rome Treaty [now Article 234 of the Treaty of Amsterdam] to refer a question to the European Court of Justice as to whether the Finnish statute clashed with EC law.

One important goal of EC law is to harmonize the duties charged by member states on the importation of goods from non-member countries. By way of derogation, it does let member states impose special restrictions if the state can justify this differential treatment on grounds of public morality, public policy, public security or the protection of human life and health.

Finland had repealed their prior legislation while preparing to accede to the EC. The sharp increase in drunkenness and public disturbances that ensued persuaded the Finnish legislature to re-enact the restrictions in 1996.

The ECJ was satisfied that Finland had made an adequate showing of serious public health problems that needed addressing. Applying the EC principle of proportionality, the Court concludes that the special measures were suitable to a lawful end and imposed no greater restrictions on imports than reasonably necessary.

Citation: In re Criminal Proceedings against Sami Heinonen, Case C-394/97 (Eur. Ct. Just. 15 June 1999).

FORUM NON CONVENIENS

English Court of Appeal (Civil Division) dismisses appeal from forum non conveniens stay and rejects plain­tiffs' claims that South Africa is not appropriate forum since plaintiff would face criminal charges and fears assassination there

Askin is a British citizen who joined with others in an investment consortium. In March 1990, the consortium acquired the Tollgate Group of South African companies. Two and one half years later, however, Tollgate went into liquidation, causing the consortium to lose their whole investment of over 2,000,000 British pounds.

ABSA and its associated companies were Tollgate's main bankers before and after the acquisition. The consortium claimed that ABSA's false and/or negligent representations about the quality of Tollgate as an investment had induced them to buy it.

The consortium sued ABSA and related individuals in the British courts for fraud and conspiracy to injure plaintiffs. Defendants' theory is that Tollgate's failure stemmed from Mr. Askin's mismanagement and misuse of its funds.

After a hearing, the lower court stayed the proceedings on forum non conveniens grounds. Under English law, there are two elements of this doctrine. First, the court has to decide whether England or the foreign jurisdiction is the more appropriate forum in which to litigate the case. Secondly, even if the foreign forum is, the question remains whether the interests of justice indicate that the English courts should nevertheless handle the litigation.

Upon the acquisition of Tollgate, Mr. Askin went to live in South Africa, though he had lived and worked there previously. He claimed in the suit that his accusations of financial irregularities infuriated Tollgate and ABSA officials and led to the conspiracy to damage plaintiffs. In addition, Askin was in a position to disclose that the South African Central Bank had provided a secret "lifeboat" to ABSA to help it out of certain financial difficulties.

After the South African Supreme Court wound up Tollgate, the Office of Serious Economic Offenses (OSEO) joined in investigating Tollgate's affairs. After OSEO had his home searched and Tollgate documents seized in February 1993, Askin left South Africa for good. Authorities there filed criminal charges against Askin and secured an international arrest warrant in June 1993.

The charges were that Askin took $5,000,000 from Tollgate, supposedly to pay the organizers of the South African Grand Prix. The money, however, allegedly went into a Swiss bank account in Askin's name. Askin denies the charges but has accepted arguendo that there is a prima facie case against him.

Italian authorities arrested Askin while he was on holiday there in October 1994. The Italian courts later set aside his arrest on the grounds that there was no reason to believe he would leave Italy to avoid extradition to South Africa. Askin did just that, however, making it impossible to extradite him.

The criminal charges are still outstanding. The court of first instance assumed that, unless Askin went back to South Africa to face charges, he would not be able to pursue the instant conspiracy suit against ABSA in the South African civil courts.

Askin presented ex parte evidence by affidavit and otherwise from a human rights leader of South Africa and a former MI6 officer stationed there that ABSA and some of its officials are linked to violent elements in South Africa. Viewing Askin and his potential revelations as a threat to the Afrikaner financial establishment, affiants claimed that these elements would probably assassinate Askin should he return there to answer charges or to pursue his civil action.

ABSA and its officials denied all of these allegations. They claim that ABSA is the largest bank in South Africa with 36,000 employees and a good reputation. ABSA also produced evidence below that, under the 1996 Constitution, Askin would receive a fair trial in South Africa within a reasonable time.

Reviewing the lower courts ruling on the forum non conveniens issue, the Court of Appeal (Civil Division) dismisses the plaintiffs' appeal.

It concludes first that this is a case centered in a single jurisdiction, that is, South Africa. Its courts have jurisdiction to hear plaintiffs' civil claims. The Court rejects Askin's contention that its courts are not really "available" to plaintiffs since authorities would arrest and prosecute Askin and because he feared for his personal safety.

The Court agrees with the lower court's exercise of discretion. If Askin chooses not to go to South Africa to face the criminal charges, he cannot then use his own choice as the basis for arguing that the civil courts there are "unavailable" to him or that justice demands that the English courts try his civil claim instead of the more appropriate forum.

Without impugning the credibility of Askin's affiants, the Court rules that it cannot take their allegations at face value but must view them realistically in light of the probabilities. The Court finds it highly unlikely that the largest South African bank has a motive to assassinate Askin.

For example, it is not sinister or unusual for a government reserve bank to confidentially support a bank under its supervision in the interests of the banking system as a whole. Other banks have received similar aid. In fact, a 1998 presidential commission has been looking into the circumstances of many of these "lifeboats."

Also discounting the persuasiveness of Askin's fears are the facts that ABSA was not involved in the OSEO investigation, nor in the attempt to extradite Askin from Italy. Finally, Askin's decision to let his wife and child to go back to South Africa in 1998 to sell their house, seems not to square with his claim that it was worth his life to go there himself.

Citation: Askin v. ABSA Bank Limited, The Times, 23 February 1999 (Transcript: Smith Bernal) (Ct. App., Civ. Div., 1999).

GENOCIDE

In proceedings brought by Yugoslavia against United States and other NATO nations, International Court of Justice expresses concern at NATO bombing campaign but concludes it has no jurisdiction to issue provisional cease and desist measures

On April 29, 1999, the Federal Republic of Yugoslavia (FRY) filed proceedings against the United States [and other members of NATO] in the International Court of Justice. It accused the NATO states of unlawfully bombing Yugoslav territory and also asked for provisional measures. The latter would have the Court order the U. S. to immediately stop its use of force and to refrain from any act or threat of such use against the FRY.

The FRY relied on two sources of jurisdiction. The first was Article IX of the Genocide Convention [78 U.N.T.S. 277 (1948)]. It provides that contracting parties shall submit all disputes arising under the Convention to the ICJ.

The second was Article 38, paragraph 5 of its Rules of Court. It declares that when state A files an application against state B which has not accepted the ICJ's jurisdiction, the Court will send the application to state B. The Court will take no action in the proceedings, however, unless and until state B decides to accept the Court's jurisdiction over the dispute with state A.

By a vote of 12 to 3, the Court declines the request for provisional measures and removes the matter involving the U.S. from its General List.  In its Order, the Court expresses its deep concern with "the human tragedy, the loss of life, and the enormous suffering in Kosovo which form the background" of the dispute as well with the continuing loss of life and human suffering in all parts of Yugoslavia. In the Court's view, the use of force in Yugoslavia raises very serious questions of international law. It urges all parties involved to conform to their duties under the U.N. Charter and "other rules of international law, including humanitarian law."

Under its Statute, the Court notes, it lacks the power to decide interstate disputes without the consent of all states involved. Nor can it indicate provisional measures without a prima facie showing that it has jurisdiction over the parties.

Although the FRY and the U.S. belong to the Convention, the latter ratified with a reservation to Article IX. It requires the specific consent of the U.S. to the Court's jurisdiction in each case. The U.S. has declared that it would not give such consent in this matter. The Court notes that the Convention did not ban reservations and that the FRY had not objected to the U.S. reservation.

As a result, the Court concludes that Article IX does not amount even to a prima facie basis of jurisdiction. Nor can Article 38, para. 5 make up for this deficit.

The Court reminds the parties that, despite its lack of power to decide this dispute, the warring parties remain responsible for any acts that contravene international and humanitarian law. Article 33 of the U.N. Charter requires that the parties use peaceful means to resolve issues dealing with the legality of their actions. The Court also stresses that Chapter VII of the Charter confers special responsibilities upon the Security Council when a dispute brings about a "threat to the peace, breach of the peace or act of aggression."

Citation: Yugoslavia v. United States of America, 2 June 1999 (Int. Ct. Just.). [For further information, please contact Mrs. Laurence Blairon, Information Officer, Phone: (31)(70) 302 23 37, E‑mail address: informa­tion@icj‑cij.org].

TRADE

World Customs Organization adopts Kyoto Convention to simplify and harmonize international customs procedures

On June 25, 1999, at the 94th Session of the World Customs Organization (WCO), Brussels, 114 Heads of Customs Administrations unanimously adopted the "International Convention on the simplification and harmonization of Customs procedures" (Kyoto Convention). This Convention updates the Kyoto Convention on customs procedures of 1973.

The Convention's goal is to further streamline international customs procedures. Countries that join the Convention commit themselves to using computer systems to hasten border clearances and to use modern analytical techniques to target only risky shipments for inspection. Governments must release all goods as soon as customs has examined them.

The Convention provides that the parties implement the itemized simplification and harmonization requirements set forth in the "General Annex." In addition, the Convention has several specific annexes, for example on the "Arrival of goods in a Customs territory," and on "Customs Warehouses and Free Zones." The parties will establish a Management Committee to ensure the uniform implementation of the Convention (Article 6).

The Convention will enter into force three months after ratification by 40 countries, which is expected to take more than one year.

Citation: The text of the Kyoto Convention, along with a press release, is available on the website of the World Customs Organization www.wcoomd.org.

WARSAW CONVENTION

In litigation arising from air crash in Colombia, Eleventh Circuit rules that Article 25 of Warsaw Convention as clarified by Montreal Protocol No. 4 provides for subjective interpretation of French term "dol" and that lower court erred in granting summary judgment against airlines on unlimited liability

[For the preliminary facts, see above under CHOICE OF LAW]

The 1920's conferences in Paris and Warsaw produced the Convention for the Unification of Certain Rules Relating to International Transportation by Air [T.S. No. 876, 137 U.N.T.S. 11, see note to 49 U.S.C.App Section 1502 (1988)] or the "Warsaw Convention." It applies to "all international transportation of persons, baggage, or goods performed by aircraft for hire."

Article 22 set a damages cap of $8,300. Under Article 25(1), however, an injured passenger could escape the cap by proving that the airlines was guilty of "wilful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be the equivalent to wilful misconduct." There was widespread dissatisfaction with this limit especially in the U.S. This eventually led international air carriers to agree to contract with all passengers to raise the liability limit to $75,000 for all international flights originating, terminating or having a connecting point in the U.S. [Agreement CAB 18900, 31 Fed. Reg. 7302 (1966)] or the "Montreal Agreement of 1966."

Although the parties made several efforts since 1929 to update the Convention itself, the U.S. ratified only Montreal Protocol No. 4 in November 1998. Replacing the term "willful misconduct" in Article 25, the Protocol allowed avoidance of the cap by proof "that the damage resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result." It entered into force for the U.S. on March 4, 1999.

The Court next considers whether it should apply the new Protocol in a pending case over a 1995 air crash. The answer turns on whether this amendment brings about a substantive change in the law or merely clarifies the original meaning of Article 25.

Two key factors bear on this analysis. The first is whether the history of Article 25(1) shows conflict or ambiguity as to the proper standard of liability. The second is whether the text and legislative history of Montreal Protocol No. 4 showed an intent to clarify the original provision.

Examining its own precedents and those of other federal circuits, the Court finds a consensus on the use of "reckless disregard" of consequences as a formula equivalent to "wilful misconduct." Nevertheless, the decisions widely vary on the degree to which they focus on a "subjective" state of mind versus an "objective" standard, i.e., of the reasonable prudent pilot. The courts have generally used a "know-it-when-we-see-it" approach rather than articulating precisely what "reckless disregard" means.

After looking into the approaches of other Convention parties, the Court also finds a similar lack of uniformity. One commentator concludes that France, Germany, Greece and Korea have adopted objective interpretations of Article 25(1) while Switzerland favors a subjective test.

"Even this limited review, however, reveals a body of law that frequently is inconsistent and that provides a vague and nebulous definition of willful misconduct, rendering it difficult to apply. Under these circumstances, this ambiguity supports a conclusion that Montreal Protocol No. 4 clarifies, rather than effects a substantive change to, Article 25." [Slip op. 12]

The Court then reviews the original 1929 legislative history and concludes that its interpretations of "wilful misconduct" were ambiguous. It next examines statements made in the Senate in connection with its 1998 approval of Protocol No. 4 and the interpretations by representatives of the U.S. State Department at the hearings.

Both agreed that Article 25 has always demanded that a passenger prove that the carrier knew that its conduct would probably result in damage. Accordingly, they read Protocol No. 4 as an effort to clarify existing law by expressly codifying this element. "Under the clarified standard, we no longer inquire as to reckless disregard, but rather examine whether the pilots of Flight 965, at a minimum, acted recklessly and with knowledge that their conduct likely would result in damage." [Slip op. 15].

A plaintiff can meet the standard by indirect inferences from the proven facts, in the Court's view. "In this way, a plaintiff may rely solely upon circumstantial evidence related to the obviousness of a grave risk to satisfy both tests, but the subjective test is satisfied only if the circumstances also permit an inference that the actor 'must have known' about the risk." [Slip op. 16].

In reviewing a summary judgment on liability, the Court decides de novo whether there is a genuine issue of material fact. "To justify entering summary judgment in her favor on this claim, Piamba Cortes must show that no genuine dispute exists with respect to three distinct factual issues: (1) the pilots of Flight 965 knew that the plane was significantly off course in a mountainous region; (2) the pilots knowingly elected to continue descending the plane; and (3) the pilots knew that descending the plane under such circumstances would likely result in harm to the passengers." [Slip op. 17].

The Court readily resolves issues (2) and (3) in favor of plaintiff. After a careful analysis of the known facts and the range of reasonable inferences therefrom, however, the Court concludes that a reasonable trier of fact might or might not infer the existence of element (1).

As a result, the Court finds error in the lower court's grant of summary judgment against defendant on the issue of unlimited liability under the Convention. Thus, a trial on this element is required.

Citation: Piamba Cortes v. American Airlines, Inc., 177 F.3d 1272 (11th Cir.1999).

WORLD TRADE ORGANIZATION

On complaint from U.S., WTO Appellate Body confirms that India's import restrictions violate WTO trading rules, and rejects procedural challenges to competence of panels, burden of proof, and objective assessment of matters in dispute settlement proceedings

On August 23, 1999, the Appellate Body of the WTO issued its report regarding India's quantitative restrictions on imports. The U.S. had brought the complaint on July 15, 1997, challenging India's import restrictions on a variety of agricultural, textile and industrial products. The restrictions affect 2,714 product tariff lines.

In a Report issued on April 6, 1999, a Dispute Settlement Panel had held that India's import restrictions were in fact contrary to WTO trading rules, and India had appealed. See 1999 Int'l Law Update 71.

India restricts imports by means of a "Negative List" of products for which the importer has to obtain a case-by-case license from the Indian Government. This "Negative List" includes many consumer goods such as food, clothing and household appliances. As for agricultural imports, India uses State trading monopolies or "canalizing agencies." Finally, India limits imports for resale.

India justified its restrictions as a balance-of-payments measure (see Article XVIII:B of GATT 1994). Within the Committee on Balance-of-Payments Restrictions (BOP Committee), India had agreed to phase out its quantitative restrictions over a seven-year period. Some Committee members, including the U.S., thought that this was not good enough.

On appeal, India argued that the Panel had failed to consider that each WTO organ has only enumerated powers. For example, WTO law assigned jurisdiction over balance-of-payment issues to the BOP Committee and the General Council. It also contended that the balance of powers found in other political systems and organizations requires such a separation also within the WTO.

Thus, the Panel should not have the authority to review balance-of-payment issues. Furthermore, such a review would interfere with India's development policy.

India also alleged that the Panel had improperly relied on the IMF to assess India's balance-of-payments situation. The Panel had submitted to the IMF a number of questions regarding India's balance-of-payments situation, and gave substantial weight to the IMF's responses.

The Appellate Body Report upholds the findings of the Dispute Settlement Panel. In concludes first that the Panel was competent to review India's balance-of-payments restrictions under Articles XVIII:B of GATT 1994. Secondly, the Panel had properly allocated the burden of proof in these matters (see Note Ad Article XVIII:11 of GATT 1994). Third, the ruling below did not compel India to change its development policy. Finally, the initial Panel made an objective assessment of the issues as required by Article 11 of the Dispute Settlement Understanding.

Citation: India - Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products (WT/DS90/AB/R), 23 August 1999. [The Report is available on WTO website www.wto.org; U.S. Trade Representative press release 99-70 (August 23, 1999); India Trade Notes, published by Mr. Arun Goyal of Academy of Business Studies, New Delhi, Email: arung@nda.vsnl.net.in].

U.S. Department of Commerce makes important technical changes to Commerce Control List. The Bureau of Export Administration (BXA) of the U.S. Department of Commerce maintains a "Commerce Control List" (CCL) that lists items that are subject to U.S. export controls. The BXA has revised the CCL based on recent changes in the Wassenaar Arrangement regarding conventional arms and dual-use goods. The Wassenaar Arrangement is an international export control arrangement for specified strategic goods that can be used for military purposes. The changes in the CCL are highly technical. For example, in Category 3 - Electronics, increases the gate count for digital integrated circuits from 300 to 3,000. Furthermore, BXA no longer controls digital telecommunications equipment under Category 5 - Telecommunications. Citation: 64 Federal Register 40106 (July 23, 1999).

U.S. and Taiwan reach agreement on pesticide standards. The U.S. and Taiwan have reached an agreement on pesticides applied to U.S. exports of produce to Taiwan, the fourth-largest market for U.S. fresh fruit and vegetables. Taiwan has implemented new inspection standards for produce, including new pesticide residue standards, measured in permissible "maximum residue limits" (MRLs). The Taiwanese standards will become effective on July 16, 2000, and will be set based on scientific evidence or on applications by foreign companies. Citation: U.S. Trade Representative press release 99-65 (July 27, 1999).

EU publishes report on U.S. trade barriers. On August 31, 1999, the European Commission released its fifteenth annual Report on Barriers to Trade and Investment in the United States. It purports to list all obstacles that European exporters and investors have encountered in the U.S. The report is available on the Internet on the Commission's Market Access Database http://mkaccdb.eu.int, and on the EU-US Relations home page http://europa.eu.int/comm/dg01/eu-us.htm. The Report is also available from the Commission's office at 2300 M Street, N.W., Suite 300, Washington, D.C., 20037. Citation: The European Union Press Release No. 55/99 (August 31, 1999).

U.S. and Canada settle dispute over pricing of softwood lumber. The 1996 U.S.-Canada Softwood Lumber Agreement regulates exports from Alberta, British Columbia, Ontario and Quebec to the U.S. The Agreement will expire in the year 2001. The U.S. considered British Columbia's 1998 reduction of timber prices a violation of the Agreement and called for arbitration. The parties agreed to a settlement before the arbitrators issued their report. The settlement increases Canada's fees on British Columbia timber to offset the price reduction when the quantities exceed the average annual shipment to the U.S. Citation: U.S. Trade Representative press release 99-71 (August 26, 1999).

U.S. Department of Commerce announces reductions of steel imports from Russia and Brazil. As a result of extensive antidumping investigations, the U.S. Department of Commerce has announced agreements with Russia and Brazil to sharply reduce their exports of steel to the U.S. Russia will reduce exports by 80% for hot-rolled steel, and by 50% for cold-rolled steel. Compared to last year, the overall reduction of Russian steel mill products will be 64%. — Brazil's steel exports to the U.S. fell 99% after U.S. industry brought an action in September 1998 over alleged dumping. Under the new agreement, Brazil will resume steel exports to the U.S. after October 1, 1999, but only at prices above $327 per metric ton. Citation: U.S. Department of Commerce News of July 7 (Brazil) & 13 (Russia), 1999. [Final antidumping determinations and agreements are available on website: www.doc.gov.].

U.S. Treasury amends Angola sanctions. Pursuant to Executive Orders 13069 ad 13098, the U.S. Department of Treasury, Office of Foreign Assets Control, has amended the UNITA (Angola) Sanctions Regulations [31 C.F.R. 590]. The Regulations, based on Executive Order 12865 and initially issued in 1993, banned certain transactions with the National Union for the Total Independence of Angola (UNITA), including arms and petroleum. In 1997 and 1998, President Clinton issued two additional Executive Orders pursuant to UN Security Council Resolutions, closing down all UNITA offices in the U.S. and blocking all UNITA property. The Regulations now conform to the two recent Executive Orders. Citation: 64 Federal Register 43924 (August 12, 1999).