Legal Analyses written by Mike Meier,
Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.
1999 International Law
Update, Volume 5, Number 4 (April).
ARBITRATION
In Kazakhstan's request for
production of evidence for use in Swedish commercial arbitration, Fifth
Circuit holds that Section 1782 does not apply in private international
arbitrations
During an arbitration
before the Arbitration Institute of the Stockholm Chamber of Commerce, the
Republic of Kazakhstan brought a proceeding in a Texas federal court to obtain
evidence in the U.S. pursuant to 28 U.S.C. Section 1782. In particular,
Kazakhstan sought information from Murdock Baker, a non-party, about
Biedermann International, its opponent in the arbitration. The district court
ordered production of the requested evidence.
The U.S. Court of Appeals
for the Fifth Circuit follows the Second Circuit's recent holding [see 1999
Int'l Law Update 18] that Section 1782 does not apply to private international
arbitration, and reverses. Section 1782 permits district courts to compel the
production of evidence "for use in a proceeding in a foreign or
international tribunal." The term "tribunal" is broad but
certainly does not cover every fact-finding or adjudicative body. Furthermore,
the application of Section 1782 to foreign arbitrations would undermine the
purpose of arbitration.
"Empowering the
arbitrators or, worse, the parties, in private international disputes to seek
ancillary discovery through the federal courts does not benefit the arbitration
process. Arbitration is intended as a speedy, economical, and effective means
of dispute resolution. ... Moreover, as a creature of contract, both the
substance and procedure for arbitration can be agreed upon in advance. The
parties may pre-arrange disco-very mechanisms directly or by selecting an
established forum or body of governing principles in which the conventions of
discovery are settled."
"Resort to Section
1782 in the teeth of such agreements suggests a party's attempt to manipulate
United States court processes for tactical advantage. Section 1782 need not be
construed to demand a result that thwarts private international arbitration's
greatest benefits. For the foregoing reasons, we conclude that the term
'foreign and international tribunals' in Section 1782 was not intended to
authorize resort to United States federal courts to assist discovery in private
international arbitrations." [Slip op. 9-10]
Citation:
Application of the Republic of Kazakhstan v. Biedermann Int'l, No. 98-21072
(5th Cir. March 17, 1999).
ATTORNEYS
Supreme Court of Canada
rules that attorney-client privilege has exception for communications to
psychiatrist retained by counsel when interview reveals that client poses
imminent risk of serious bodily harm or death to person or group
Canadian authorities
charged "James Jones" with committing aggravated sexual assault upon
a prostitute. His attorney referred him to "Dr. John Smith," a
psychiatrist, for a forensic assessment and assured him that a privilege
protected his conversations with the psychiatrist. During the evaluation, Jones
told Dr. Smith about his detailed plan to kidnap, rape and murder a hooker. He
said that the first victim would serve as a "trial run" and that, if
he could "live with" his crimes, he would seek out similar victims
for the same treatment.
Dr. Smith diagnosed Jones
as suffering from a paraphiliac disorder, characterized by sexual sadism, a
personality disorder, some antisocial features and difficulties with drug
abuse. In a call to defense counsel, the doctor told the lawyer that, in his
opinion, Jones was a danger to the community and would probably commit more
similar offenses unless he got adequate treatment.
Jones pleaded guilty to
aggravated assault and the British Columbia court put his case over for
sentencing. When Dr. Smith found out that no one was going to tell the judge
about his concerns, he filed suit for a declaration that, in the interests of
public safety, he had the right to disclose the nature of the threat that Jones
posed.
After holding a hearing in
camera, the trial court held that the public safety exception to the
solicitor-client privilege removed his duty of confidentiality. Going further,
the judge held that the doctor had a duty to reveal his diagnosis and Jones'
relevant statements to the police and prosecution. Finally, the judge sealed
the court file and stayed his order to let the accused appeal.
The British Columbia Court
of Appeal allowed Jones' appeal in part. The Court ruled that the doctor was
allowed, but not compelled, to disclose the information to the authorities. It
also ordered the use of pseudonyms, the conduct of the proceedings in camera
and the continued sealing of the record.
On appeal to the Supreme
Court of Canada, the Court held its proceedings in open court subject to a
publication ban. Unsealing the court file and lifting the publication ban, the
Court dismisses Jones' appeal in a 6 to 3 vote.
The Court's majority first
points to the primacy of the solicitor-client privilege. It is vital to the
administration of justice since clients seeking legal advice must be able to
tell the attorney both favorable and unfavorable matters alike without fearing
divulgence without their consent. This includes experts hired by the solicitor.
"Courts in Canada,
Australia, the United Kingdom and the United States have all concluded that
client communications with third‑party experts retained by counsel for the
purpose of preparing their defence are protected by the solicitor‑client
privilege." [391]
Even here, however, other
compelling societal values have given rise to a few clearly defined exceptions.
Under the proper conditions, for example, a serious risk to public safety can
justify setting aside the privilege.
In the Court's view, it
must take into account three factors. The first is whether the risk is clear.
Circumstances showing a high risk may entail whether there is proof of long-range
planning, whether a method of carrying out the specific attack is shown,
whether there is a previous chronicle of violence or threats of violence,
whether the prior crimes are similar to those contemplated, whether the history
shows that violence has become more aggravated, and whether the subject has
aimed his violence toward an identifiable person or group.
Secondly, there must be a
danger of serious bodily harm or death. This might consist of psychological
injury.
Finally, to warrant putting
aside the privilege, the risk of major harm must be imminent and generate a
sense of urgency. After pondering all of these factors, the court must decide
whether the threat to public safety outweighs the need to maintain the
privilege.
Where the court comes down
in favor of disclosure, it must limit what is revealed to parts of the
communication that meet the above criteria. The court must redact any
references to irrelevant criminal acts such as property offenses.
Based on the facts set
forth above, the need for disclosure met the first two elements. More
troublesome is the question of imminence. Although Jones had been out on bail
for almost 15 months after being charged, he had not tried to carry out his
violent schemes. On the other hand, Jones did admit violating his bail
conditions by going to an area where he was aware that he could find
streetwalkers. Considering the circumstances in combination, the court should
have set aside the privilege to safeguard the public.
Though extraordinary, the
sealing of the court file was proper to protect the affidavit from becoming
public should a higher court sustain the privilege. The Court orders the lower
court to unseal the file and to take away the bar to publication except of
those parts that lie outside the public safety exception.
The three dissenting
Justices agree with the majority that courts ought to recognize the public
safety exception. They would narrow it down, however, to letting the doctor
warn the appropriate authorities that Jones was apt to inflict serious injury
or death on prostitutes. The exception should not include Jones' incriminating
statements about the circumstances of the offense charged. "This approach
will ... foster a climate in which dangerous individuals are more likely to disclose
their disorders, seek treatment and pose less danger to the public." [390]
Citation: Smith
v. Jones, 169 D.L.R. 4TH 385 (Sup. Ct. 1999).
COMPETITION
United States and Israel
sign antitrust cooperation agreement designed to reduce conflicts in
transnational enforcement
On March 15, 1999, U.S.
Attorney General, Janet Reno, and the Israeli Ministry of Trade and Industry,
Natan Sharansky, signed an Antitrust Cooperation Agreement. It is entitled
"The Agreement between the Government of the United States of America and
the Government of the State of Israel Regarding Application of Their
Competition Laws."
The Agreement will better
enable their respective antitrust agencies to cooperate in investigating
anti-competitive activities that may take place partially in Israel and
partially in the U.S. The agreement also provides that each party will keep the
other apprised of their enforcement activities to avoid conflicts and
duplications of effort.
In particular, the parties
have adopted the principle of "positive comity." Thus, if a person in
party A's territory commits acts that have an anti-competitive effect in party
B's territory, party A will work with party B to investigate those acts.
The Agreement protects the
confidentiality of data that the parties will exchange. Nevertheless, there is
no duty to share statutorily-protected information.
The agencies in charge of
the day-to-day application of the Agreement are, for the U.S., the U.S. Federal
Trade Commission (FTC) and the U.S. Department of Justice, Antitrust Division,
and for Israel, the Antitrust Authority. To be effective, the Israeli Cabinet
must approve the arrangement.
[The U.S. is Israel's largest
trade partner. The U.S. already has similar agreements in place with Australia,
Canada, the EU, and Germany.]
Citation:
March 15, 1999 press releases from U.S. Department of Justice, U.S. Federal
Trade Commission and from Reuters press report.
CONSULAR RELATIONS
In review of claim by
detained Mexican citizen that customs had not told him of his right to
consular advice under the Vienna Convention, Ninth Circuit finds Convention
violation and remands for determination of whether it had prejudiced the
accused
Customs inspectors at the
Calexico, California, border crossing found 39.3 kilograms of marijuana hidden
in the car of Jose Lombera-Camorlinga (a Mexican national). The inspectors did
not tell defendant that he had the right to contact the Mexican Consulate, and
he made incriminating statements.
Before his trial, defendant
moved to suppress his statements to the inspectors because customs had obtained
them in violation of Article 36 of the Vienna Convention on Consular Relations
[21 U.S.T. 77, T.I.A.S. No. 6820]. The district court denied the motion and
defendant appealed his later conviction. The U.S. Court of Appeals for the
Ninth Circuit reverses and remands.
The Court first notes that
Article 36(1)(b) of the Vienna Convention provides that, "the competent
authorities of the receiving State shall, without delay, inform the consular
post of the sending State if ... a national of that State is arrested ... The
said authorities shall inform the person concerned without delay of his rights under
this sub-paragraph."
The government argued that
the rights under the Vienna Convention belong to the foreign consulate rather
than to the detained alien. The Court flatly disagrees. This language
unequivocally grants these rights to the detainee. By failing to notify defendant,
the customs inspectors clearly violated his Convention rights.
The Court also rejects the
government's argument that, even if the Vienna Convention establishes
individual rights, individuals lack standing to enforce those rights. In the
Court's view, the case law has firmly established that, where treaty provisions
establish individual rights, the courts of the U.S. must enforce those rights
on behalf of the individual.
"Upon a showing that
the Vienna Convention was violated by a failure to inform the alien of his
right to contact his consulate, the defendant in a criminal proceeding has the
initial burden of producing evidence showing prejudice from the violation of
the Convention. If the defendant meets that burden, it is up to the government
to rebut the showing of prejudice."
"In this case,
Lombera-Camorlinga filed a motion to suppress his post-arrest statements
because he was not first advised of his rights under the Vienna Convention. The
district court denied his motion to suppress without making a determination of
prejudice. We therefore reverse and remand to the district court for a
determination whether in making his post-arrest statements, Lombera-Camorlinga
was prejudiced by the violation of the Vienna Convention." [Slip op. 9-11]
[Compare this to the recent
case of Paraguayan citizen Angel Breard, which sparked a dispute between the
U.S. and Paraguay because U.S. officials did not inform the Paraguayan
Consulate about Breard's initial arrest. Breard was later executed in the U.S.
The U.S. eventually issued an apology to Paraguay and the International Court
of Justice removed the case from its docket. See 1998 Int'l Law Update 41 &
1999 Int'l Law Update 12].
Citation:
United States v. Lombera-Camorlinga, No. 98-50347 (9th Cir. March 25, 1999).
ECONOMIC SANCTIONS
Fifth Circuit finds that
regulations dealing with sanctions against Libya apply not only to transactions
that benefit Libya directly, but also to those that profit individuals who represent
Libyan interests
In 1986, U.S. President
Ronald Reagan issued executive orders to restrict commerce with Libya and to
freeze Libyan assets. This case concerns the resulting Libyan Sanctions
Regulations [31 C.F.R. Section 550.101-.803].
Chris Paradissiotis, a
citizen of Cyprus, was an officer of Holborn Investment Company. Holborn is a
subsidiary of a Dutch company which, in turn, is a wholly-owned subsidiary of a
Libyan state-controlled holding company.
Because of his involvement
in Libya-affiliated companies, the Treasury Department's Office of Foreign
Assets Control (OFAC) labeled Paradissiotis a "Specially Designated
National" of Libya pursuant to 31 C.F.R. Section 550.304(c) and froze his
U.S. assets.
Later OFAC denied
Paradissiotis' request for a license to sell stock and exercise stock options
he had received as a company officer before the Libyan sanctions had gone into
effect. In his federal lawsuit, Paradissiotis claimed that OFAC had misapplied
the regulations to his private transactions since they do not benefit Libya
directly.
The district court ruled
against him. The U.S. Court of Appeals for the Fifth Circuit finds that
Paradissiotis is in fact a Specially Designated National of the Government of
Libya and subject to the sanctions. The Court rejects his contention that the
sanctions only apply to transactions 'to the extent' that they benefit Libya.
"Section 550.304(c) is
among the definitional provisions in the Libyan sanctions regulations. Its
purpose is to cast the widest possible net over individuals who are or have
been or are suspected of being actors directly or indirectly on behalf of the
government of Libya. Unlike Paradissiotis, we do not read the phrase 'to the
extent' as a limiting device, whereby individuals who otherwise fall within the
definition may splice their activities and attempt to avoid the sanctions
regulations. Instead, 'to the extent' is, in this context, a proxy for 'to
whatever extent' or 'to any extent' and includes rather than excludes subjects
from the regulations."
"Without such
language, people might argue that they were independent contractors or brokers
or that mere occasional or incidental work for the government of Libya would
exempt them from coverage. OFAC's interpretation of the language to broadly
cover 'any person' who has acted or purported to act on behalf of the
government of Libya is therefore a reasonable interpretation of its regulation,
and even an equally reasonable interpretation by Paradissiotis would not
prevail." [Slip op. 7-8]
Citation:
Paradissiotis v. Rubin, No. 97-20905 (5th Cir. April 1, 1999).
EXTRADITION
House of Lords rules that
crimes of torture allegedly committed during Pinochet regime in Chile are
extraditable to extent they occurred after ratification of Torture Convention
by Chile, Spain and United Kingdom in late 1988; head-of-state immunity held
inapplicable to torture charges as jus cogens offenses
In September 1973, a
right-wing coup overthrew the left-wing regime of President Allende. A
military junta led by then General Augusto Pinochet (applicant) spearheaded the
coup. At some point, applicant became head of state and stayed in power until
March 1990 when he resigned as a Senator for life.
Applicant went to the
United Kingdom for medical treatment in 1998. Soon after, the Spanish
government requested his extradition to Spain for trial on charges of torture
and other crimes against humanity committed during his regime in Chile and
elsewhere that involved Spanish citizens and others. Accordingly, the
metropolitan stipendiary magistrate issued a warrant to arrest applicant in a
London hospital. The original charges included, inter alia, murder, genocide,
torture and conspiracy to torture.
"There is no real
dispute that during the period of [applicant's] regime appalling acts of barbarism
were committed in Chile and elsewhere in the world: torture, murder and the
unexplained disappearance of individuals, all on a large scale. Although it is
not alleged that [applicant] himself committed any of those acts, it is alleged
that they were done in pursuance of a conspiracy to which he was a party, at
his instigation and with his knowledge. He denies these allegations. None of
the conduct alleged was committed by or against citizens of the United Kingdom
or in the United Kingdom."
In 1988, Parliament had
passed Section 134(1) of the Criminal Justice Act to implement the International
Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or
Punishment of 1984 [G.A. Res. 39/46, December 10, 1984; reprinted in 23 I.L.M.
1027 (1984), as modified, 24 I.L.M. 535 (1985)]. [Editorial Note: the U.K. is a
"dualist" state in which Parliament must enact positive law to make
international treaties directly effective in its domestic courts] By virtue of
Section 134(1), torture by a public official or person acting in a public
capacity became a criminal offense in the U.K. after September 29, 1988, no
matter where it took place.
Applicant then moved the
Queen's Bench Divisional Court to quash the warrant. It did so on the grounds
that Section 20 of the State Immunity Act of 1978 granted applicant, as a
former head of state, immunity from extradition proceedings in the U.K. for any
acts committed while acting in that capacity.
On behalf of the
Commissioner of Police and the Spanish government, the Crown Prosecution
Service secured leave to appeal to the House of Lords. Spain submitted draft
charges to the Lords, expanding and more clearly defining the subjects of its
extradition request. Charge 2, for example, involved conspiracy to torture
between January 1972 and September 1973 and between August 1973 and January
1990. In Charge 4, conspiracy to torture between January 1972 and January 1990
was involved. Charge 30 dealt with alleged torture in June 1989.
On November 24, 1998, a
panel of five Lords ruled 3 to 2 that applicant was extraditable to Spain. This
ruling was set aside, however, on January 15, 1999. An entirely new panel of
seven judges from the House of Lords became seized of the appeal, and allowed
Chile and several Human Rights NGOs to intervene. It addresses two main issues.
The first is which, if any, of the charges against applicant involved
extraditable offenses as defined in Section 2 of the Extradition Act of 1989.
Assuming that some offenses are extraditable, the second issue was whether the
applicant was entitled to head-of-state immunity with respect to any or all of
the crimes alleged.
The Extraditability Issues
In his opinion, Lord
Browne-Wilkinson first sets forth some key legal principles that interact in
the decision of this complex case. The general rule is that a state can
exercise criminal jurisdiction only over offenses that take place within its
geographical boundaries. Suppose that a person commits a crime in country A and
flees to country B. Applying the general rule means that B cannot try the
criminal in its own courts. If he is to be punished at all, country A must
have, and comply with, an extradition treaty with country B that provides for
sending the fugitive back for trial at the locus delicti.
"Since the Nazi
atrocities and the Nuremberg trials, [however], international law has recognised
a number of offences as being international crimes. Individual states have
taken jurisdiction to try some international crimes even in cases where such
crimes were not committed within the geographical boundaries of such states.
The most important of such international crimes for present purposes is torture
which is regulated by the Convention against Torture... As required by the
Torture Convention 'all' torture wherever committed worldwide was made criminal
under United Kingdom law [Section 124 above] and triable in the United
Kingdom."
Moreover, the jus cogens
nature of the international crime of torture warrants every state in assuming
"universal jurisdiction" over torture wherever it takes place.
International law provides that any state may punish offences jus cogens
because the violators are "common enemies of all mankind and all nations
have an equal interest in their apprehension and prosecution."
Sad experience has
justified the widespread desire to make torture universally punishable.
"For example, in this case it is alleged that during the Pinochet regime
torture was an official, although unacknowledged, weapon of government and
that, when the regime was about to end, it passed legislation designed to
afford an amnesty to those who had engaged in institutionalised torture. If
these allegations are true, the fact that the local court had jurisdiction to
deal with the international crime of torture was nothing to the point so long
as the totalitarian regime remained in power: a totalitarian regime will not
permit adjudication by its own courts on its own shortcomings. ..."
"The Torture
Convention was agreed not in order to create an international crime which had
not previously existed but to provide an international system under which the
international criminal ‑ the torturer ‑ could find no safe haven."
The law Lords then examine
the principle of "dual criminality." [Editorial Note: most extradition
treaties are bilateral and require that each offense in question be a crime
under the law of both the requesting and requested state]. In their view this
rule limits extraditability to those alleged acts referred to in counts 2, 4
and 30 that took place after the Convention went into force in the U.K. Section
2 of the Extradition Act refers to conduct that, "if it occurred in the
United Kingdom, would constitute an offense punishable with imprisonment for a
term of 12 months, or any greater punishment."
In the view of the Lords,
this language did not alter the century-old English view that the activity had
to be a crime [in both states] at the time it took place (the conduct date) and
not merely, as contended, as of the date of the extradition request (the
request date). Therefore, acts of torture must have taken place after the
Convention entered into force in late 1988 in order to constitute a
"universal crime" under U.K. domestic law.
The Immunity Issue
Over the dissent of Lord
Goff, the majority next rejects applicant's claim of head-of-state immunity as
to alleged acts of torture or of conspiracy to torture committed after Spain,
Chile and the U.K. had ratified the Torture Convention. The Lords also conclude
that Section 20(a)(a) of the State Immunity Act did not apply to all acts that
applicant is alleged to have done in the course of his official functions as
head of state. Thus, the extradition proceedings could continue as limited to
the extradition crimes to which immunity did not attach.
On this point the zone of
dispute is narrow. The parties generally agree on the scope of immunity and its
underlying rationale. There two subissues: (1) whether international law grants
state immunity from prosecution for the international crime of torture and
(2), if so, whether the Republic of Chile is entitled to claim such immunity
despite the fact that Chile, Spain and the U.K. are contractually bound to give
effect to the Torture Convention from December 8, 1988 on.
The state itself along with
its head in power and its ambassadors in office possesses a complete immunity
from all actions or prosecutions whether or not they pertain to things done to
benefit the state. As to individuals, the immunity for acts done while in
office continues to exist afterwards. Under the State Immunities Act of 1978 as
incorporating the Diplomatic Privileges Act of 1964, a head of state enjoys the
same immunity as an ambassador.
Thus, applicant as former
head of state enjoys immunity as to acts done by him as head of state as part
of his official functions. This leads to the question of whether the alleged
organization of state torture by applicant would, under international law,
constitute actions committed by applicant as part of his official governmental
functions.
Instead of setting up a
special tribunal to handle cases of torture by heads of state, the Convention
confers upon the existing domestic tribunals of the parties the power and duty
to carry out this function. Is it clear that those subject to these powers
cannot claim immunity?
Since Article 2 of the
Convention requires all member states to outlaw torture, it is difficult for
Lord Browne-Wilkinson to see how it can be an official function to do something
that international law itself forbids and criminalizes. Moreover, the
international crime of torture must be committed by or with the acquiescence of
a public official or other person acting in an official capacity. Lord
Browne-Wilkinson finds it impossible to accept the notion that the law intended
to impose liability on lower officials who carried out the head's orders but to
exempt the head.
It would indeed be bizarre
in his view to say that courts could prosecute the torturer himself because he
was carrying out "official business" but that the head of state who
ordered it was not. Equally absurd would it be to immunize all officials engaged
in the process of official torture unless the state itself waived the immunity.
In its goal to bar any safe
haven for torturers, the Torture Convention clearly precludes either outcome.
Moreover, in ratifying the Convention, Chile itself agreed that the courts of
any other member state could prosecute acts of official torture committed on
Chilean soil after December 8, 1988.
The Home Secretary has
already ruled out applicant's extradition for genocide but had left open
possible extradition for torture as well as for murder and conspiracy to
murder. As no party has come forth with any reason whey the ordinary rules of
immunity should not apply to the latter offenses, the House of Lords decides
that applicant is entitled to immunity on those charges.
In another scholarly
opinion, Lord Hope of Craighead takes a somewhat different line of analysis. In
his view, torture does not become an "international" crime, unless is
systematic and widespread. Despite the limitations imposed by the ratification
dates noted above, the remaining torture charges qualify, in his view.
Moreover, he agrees with Lord Saville of Newdigate, that applicant had immunity
until December 8, 1988 when the U.K. ratified the Torture Convention.
Lord Hutton concurs. Though
he distinguishes the immunities of the state and its head from those pertaining
to diplomats, he rejects the notion that torture is a valid function of a head
of state no matter how threatening the perceived crises in his country may be.
He also believes that torture had become an international crime jus cogens well
before the widespread ratification of the Torture Convention.
Finally, Lord Hutton notes
that Article 7 of the Nuremberg Charter imposes liability on heads of state for
war crimes and crimes against humanity. To a like effect are the statutes of
the Hague tribunals now hearing cases arising in the former Yugoslavia and in
Rwanda. Moreover, Article 27 of the statute of the International Criminal Court
approved in Rome in August 1998 contains a similar provision.
Lord Saville of Newdigate
also expresses his concurrence with the opinions of Lord Browne-Wilkinson and
Lord Hope with a number of instructive observations of his own.
Lord Phillips of Worth
Matravers sets forth an especially thorough analysis of the status of
head-of-state immunity under customary international law. He appears to adopt
a narrower concept of immunity since he concludes that it does not protect a
head of state who commits any international crime. Nor does he believe that the
U.K. state immunity act applies to conduct outside the U.K.
Finally, there is general
agreement that, in view of the drastic narrowing of extraditable offenses that
results from its interpretation of international and U.K. law, the Home
Secretary should review his earlier decision as to the scope of
extraditability.
[On April 15, 1999, Home Secretary
Jack Straw stated that the extradition proceedings would proceed. According to
Secretary Straw, the remaining allegations of torture and conspiracy satisfy
the European Extradition Convention. A hearing was set for April 30.]
Citation: Regina
v. Bow Street Metropolitan Stipendiary Magistrate, ex parte Pinochet Ugarte, 2
All ER 97 (House of Lords, March 24, 1999); New York Times, April 16, 1999,
page 4.
JURISDICTION (ADMIRALTY)
Applying law of salvage,
Fourth Circuit holds that U.S. court sitting in admiralty has in rem
jurisdiction to grant exclusive salvage rights to wreck of Titanic under
international waters and to enjoin third party interference with exercise of
those rights
The Titanic sank in the
North Atlantic on April 15, 1912, when it hit an iceberg during its maiden
voyage from Southampton to New York. Searchers discovered the wreck in 1985,
about 400 miles off the coast of Newfoundland.
Applying principles of jus
gentium, a Virginia district court in 1994 granted R.M.S. Titanic (RMST), a
Florida corporation, exclusive salvage rights in the Titanic. The court later
enjoined other parties from interfering with RMST's rights.
One of the enjoined parties
was Deep Ocean Expeditions (DOE), a British Virgin Islands corporation, which
had planned to view and photograph the Titanic. Christopher Haver had arranged
to be a paying guest during DOE's project.
DOE and Haver appealed
objecting, among other things, to the court's jurisdiction over the wreck and
the wreck site, and argued that the scope of the injunction was too broad. The
U.S. Court of Appeals for the Fourth Circuit affirms in part and reverses in
part.
The special issue in this
case is whether a court in admiralty can enforce these salvage rights with
respect to property not within its jurisdiction (or within the jurisdiction of
any admiralty court). If the res is outside the territorial limits of the U.S.,
the court normally cannot exercise in rem jurisdiction over it. Here, the
district court creatively applied "constructive in rem" jurisdiction
based on the physical presence of some recovered items from the Titanic within
the court's jurisdiction.
Even though no nation has
sovereignty over the high seas, there is enforceable law. The law of salvage is
part of the jus gentium which applies to the high seas. Therefore the district
court correctly barred the persons over which it had jurisdiction from
interfering with RMST's salvage effort.
"But we hasten to
point out, again, that the power of an American court to enforce such orders is
effectively limited until persons and property are brought within its
territorial jurisdiction. These are the limits that any court faces, regardless
of the nation involved. Shared rights to the high seas may be exercised by all
nations, and the assertion by any nation of exclusive sovereignty over a
portion would interfere with those rights."
"This notion of
'shared sovereignty' does not, however, preclude all nations from enforcing the
internationally recognized laws of salvage in courts with respect to persons
and property within their jurisdiction, nor even from exercising this form of
shared sovereignty for matters on the high seas. If we were to recognize an
absolute limit to the district court's power that would preclude it, or
essentially any other admiralty court, from exercising judicial power over
wrecks in international waters, then we would be abdicating the order created
by the jus gentium and would return the high seas to a state of lawlessness
never experienced ..." [Slip op. 59]
The Court, however,
interprets salvage law as allowing third parties to view and photograph the
sunken wreck in international waters. Therefore, other parties may approach the
wreck as long as their activity constitutes neither a salvage effort nor an
interference with RMST's salvage rights.
Citation:
R.M.S. Titanic, Inc., v. Haver, No. 98-1934 (4th Cir. March 24, 1999).
TRADE
Russia issues new law on
leasing to facilitate companies' access to means of production
The Russian Federation
recently adopted a new Law on Leasing which defines the legal and economic
rules for leasing operations. The Russian Parliament (Duma) overrode President
Yeltsin's veto, and enacted the Law on October 29, 1998. The new Law aims to
encourage investments in means of production, to protect property rights, and
to improve the efficiency of investments.
Important to Russian as
well to as foreign businesses operating in Russia, the Law will enable
companies to upgrade their facilities and equipment with leased materials
instead of having to buy them outright. Because of Russian economic problems,
aggravated by the financial crisis of August 1998, it is hard for companies to
obtain loans for such purchases. Another advantage of leasing is that the
lessee does not have to pay property tax on the leased property.
Under the Law, leasing
property is "a type of direct investment." A person may lease any
non-consumption property except for land and natural resources. The parties to
a leasing transaction may include Russian residents, non-residents, and Russian
entities with foreign investments.
The Law also addresses
international leasing when one of the parties is a non-resident entity and the
leased property crosses the borders. The Law does not consider international
and cross-border leasing a transfer of funds. Such leases thus escape the regulatory
requirements that apply to financial transactions. The Law, however, does not
abolish some of the other obstacles to cross-border leasing, such as the
Russian value-added tax and customs duties.
[The Russian Federation
joined the UNIDRUA Convention on International Financial Leasing on February 8,
1998.]
Citation: Federal
Law "On Leasing," report prepared by the Business Information Service
for the Newly Independent States (BISNIS), distributed by the U.S. Department
of Commerce, Phone: (202) 482-2000. [The Russian Association of Leasing
Companies (Roslizing) and other groups have a website with further information
at www.leasing.ru.]
- EU and Canada conclude
agreement on trade in live animals and animal products. By Council
Decision, the EU has approved the "Agreement between the European
Community and the Government of Canada on sanitary measures to protect public
and animal health in respect of trade in live animals and animal
products." The Agreement provides for the mutual acceptance of equivalency
for sanitary measures and animal health status. The text of the Agreement
follows the Council Decision. It entered into force on December 17, 1998. Citation:
1999/201/EC: Council Decision of 14 December 1998 ..., 1999 O.J. of the
European Communities (L 71) 1, 18 March 1999.
- U.S. concludes Trade
& Investment Framework Agreements with South Africa, Ghana, and Jordan.
On February 18, 1999, the U.S. and South Africa signed a Trade and Investment
Framework Agreement (TIFA) in Cape Town at the end of a meeting of the
U.S.-South Africa Binational Commission (BNC). Effective immediately, the
Agreement establishes a Council on Trade and Investment with representatives of
both governments, chaired by the U.S. Trade Representative and the DTI. The
purpose is to address trade issues and to conclude agreements where necessary
to remove obstacles to free trade -- Similarly, on February 26, the U.S. and
Ghana also signed an immediately effective Trade and Investment Framework
Agreement. The Agreement sets up a Council on Trade and Investment with
representatives of both governments, chaired by the U.S. Trade Representative
and the Ghana Ministry of Trade and Industry. -- Finally, on March 15, the U.S.
and Jordan signed a Trade and Investment Framework Agreement, which also enters
into force right away. The Council on Trade and Investment will consist of the
U.S. Trade Representative and the Jordan Ministry of Industry and Trade. Citation:
U.S. Trade Representative press releases 99-13 (February 18, 1999) [U.S.-South
Africa] & 99-16 (February 26, 1999)[U.S.-Ghana] & 99-22 [U.S.-Jordan].
- Landmine Convention
entered into force on March 1, 1999. The Convention on the Prohibition of
the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and their
Destruction [36 I.L.M. 1507 (1997)] of September 18, 1997, entered into force
on March 1, 1999. It obliges signatory states never to use or distribute such
landmines, and to destroy existing stockpiles. The first meeting of the Parties
will be in May in Maputo, Mozambique. The U.S., Russia, China, India, and
several other countries have not yet acceded to the Convention. Citation:
The Landmine Convention and related materials are available on the website
www.un.org/depts/landmine; Press Conference of Press Secretary of the
[Japanese] Ministry of Foreign Affairs [of Japan] (March 2, 1999), available on
the web at www.mofa.go.jp.
- U.S. has transferred
commercial satellites to Munitions List. The U.S. Department of State has
amended the International Traffic in Arms Regulations (ITAR) [22 C.F.R. Parts
121 and 124]. The changes remove satellites, including related items and
services, from the Commerce Control List and put them on the U.S. Munitions
List. Export controls generally do not apply to the launch of U.S.-origin
satellites and components from or by nationals other than NATO allies or major
non-NATO allies (such as Australia and Japan). There may be export controls for
those countries, however, if security or foreign policy grounds so require. The
effective date is March 15, 1999. Citation: 64 Federal Register 13338
(March 18, 1999) [removal from Commerce Control List] & 13679 (March 22,
1999) [re-designating satellites on Munitions List].
- Poland, Czech Republic
and Hungary have acceded to NATO. On March 12, 1999, Poland, the Czech
Republic, and Hungary officially acceded to the North Atlantic Treaty Organization
(NATO). NATO had accepted these three countries as members during the NATO
Summit in Madrid in July 1997. Citation: Ministry of Foreign Affairs of
Japan, Press Conference by the Press Secretary, 12 March 1999; The Baltimore
Sun, March 13, 1999, page 1A. [Several related news reports are on the CNN
website at http://www.cnn.com.]
- U.S. and El Salvador
sign bilateral investment treaty. On March 10, 1999, the U.S. and El
Salvador signed a Bilateral Investment Treaty (BIT). It guarantees the parties'
right to invest in most sectors on terms no less favorable than those accorded
domestic or third-country investors. Furthermore, it guarantees the free transfer
of capital, profits and royalties, international arbitration, and standards for
expropriation and compensation consistent with U.S. practice. Citation:
U.S. Trade Representative press release 99-20 (March 10, 1999).
- Vietnam provides new
incentives for foreign investors. With Prime Ministerial Decision 53,
Vietnamese Prime Minister Phan Van Khai has issued several investment
incentives for foreign-invested enterprises (FIEs) and foreign individuals. The
incentives include (1) telephone installation and usage charges equal to those
for domestic users, and (2) reduced electricity and water rates. Finally,
Vietnam has reduced the fee for setting up a representative office from about
$5,000 to roughly $72. Citation: Reuters press report, March 29, 1999.
[More information on Vietnamese investment laws is available on the internet at
http://vietnam.tdb.gov.sg/vninves.html.]
- Taiwan to accept U.S.
telecommunications equivalency. On March 16, 1999, the U.S. and Taiwan
concluded an agreement to carry out Phase I of the Asia Pacific Economic
Cooperation (APEC) Telecommunication Accord. It is called the "Mutual
Recognition Arrangement for Conformity Assessment of Telecommunications
Equipment (MRA)." Taiwan is the first APEC country to conclude an MRA with
the U.S. Under it, the U.S. National Institute of Standards can accredit
private U.S. labs to test telecommunications equipment for use in Taiwan.
Likewise, Taiwanese labs can certify their products for distribution in the
U.S. The goal is to ensure mutual compatibility in the field of
electro-magnetics and other technology. Citation: U.S. Trade
Representative press release 99-24 (March 16, 1999).
- WTO financial services
agreement entered into force on March 1, 1999. On March 1, 1999, the WTO
Agreement on Financial Services entered into force. It results from the WTO
Financial Services Agreement of December 1997. The 70 countries taking part
(plus the EU) account for more than 95% of the global financial services
market. The Agreement covers the banking, securities and insurance industries.
It reduces, for example, currency restrictions applicable to foreign financial
service providers. Citation: WTO press release PRESS/120 (February 15,
1999); 16 Int'l Trade Rep. (BNA) 265 (February 17, 1999). [Additional
information is available on the WTO website www.wto.org; U.S. Trade
Representative press release 99-12 (February 15, 1999)].
- U.S. Commerce
Department report summarizes Azerbaijan's investment-related laws. The
U.S. and Azerbaijan recently concluded a bilateral trade and investment
agreement designed to ensure property rights and independent arbitration
through ICSID in case of disputes. Under the 1992 Law on the Protection of
Foreign Investments, foreign investors may repatriate profits in foreign currency.
Under the 1997 Regulations on the Purchase and Sale of Land, foreign entities
may not buy real estate. As an aid to transnational companies, the U.S.
Department of Commerce is distributing a summary of investment-related laws in
Azerbaijan as an excerpt from the USACC Investment Guide to Azerbaijan 1999. It
warns investors about the inconsistent application of laws and the lack of
judicial protection of rights. Citation: "Azerbaijan: Legal
Environment and Legislation Update" is available from the U.S. Department
of Commerce, Phone: (202) 482-2000.
- World Trade
Organization adopts disciplines on domestic regulation for accounting sector.
On December 14, 1998, the WTO Council for Trade in Services (CTS) adopted
"Disciplines on Domestic Regulation in the Accountancy Sector." The
Disciplines will apply to all WTO Members who have scheduled specific commitments
for accountancy under the General Agreement on Trade in Services (GATS). The
Disciplines require transparency in accounting practices by setting applicable
standards and requiring competent authorities; by providing for licensing
standards; and by setting minimum qualifications for professionals in the
accounting sector. These Disciplines will become legally binding once the CTS
has integrated them into GATS with other "disciplines" for
professional services. Citation: WTO Focus Newsletter No. 36 (December
1998).
