Introduction
There are several conflicting views on what society perceives as justice. One common view that will be maintained in the course of this discussion is the perception that maintains the approach of the philosopher John Rawls (Sen 2009, p. 53). According to the work of this philosopher justice has to be considered based upon the demands of fairness. If this approach were to be considered it becomes crucial that we possess an understanding of fairness prior to developing the principles of justice (Sen 2009, p. 54).
Given this scenario one must then determine what constitutes fairness? This concept can be shaped in numerous ways but the main point in the construction of understanding on fairness must avoid any bias and vested interests. Broadly speaking fairness can be taken to denote impartiality (Sen 2009, p. 54). Further, Rawls suggests that such impartiality is based upon a notion known as the ‘original position’. This position is based on a primordial equality condition that is characterized by both parties involved lack any knowledge of vested interests or in relation to personal interests. This original position is the status quo that ensures that any judgments or agreements reached will be fair (Sen 2009, p. 54).
Rawls suggests that people can cooperate in provision of justice despite having opposing doctrines. This is because the people share a political conception of justice. This shared vision allows them to hold public discussion on fundamental questions and proceed to reasonably decide on what is the most just solution to various social issues (Sen 2009, p. 55). Through this approach it is expected that society can identify and incorporate just institutions that are essential for the structure of society (Sen 2009, p. 56).
According to Rawls, the principles of justice are based upon two essential requirements. The first requirement is that the liberties of an individual can not be violated for any reason such as increase of wealth, improved distribution of economic resources, etc (Sen 2009, p. 59). The second requirement being that there is an institutional framework that ensures public opportunity for all individuals. In line with this the institutional frameworks must give preference to distributive equity thus providing greater protection to marginalized sections of the society.
Jurisdiction based on Traditional Rules
Traditional rules apply in all cases that are not governed by the Brussels, Modified or the Lugano conventions. The rules are often referred to as traditional based on their history which can trace them to the mid 19th century. Prior to the Civil Jurisdiction and Judgments Act of 1982 these rules applied in all cases (O’Brien and Smith 1999, p. 179).
However, there are three questions that arise with regard to the traditional rules; whether the courts had the authority to hear the case leading considerations with regard to serving of the writ; whether the court will stay proceedings or decline jurisdiction of the case and whether any limitations exist upon exercising jurisdiction. The court may be unable to assume jurisdiction due to the role of binding international obligations such as obligations relating to sovereignty and diplomatic immunity (O’Brien and Smith 1999, p. 180).
Jurisdiction based on the Brussels Convention
Generally speaking the rules that apply here are based on the European Convention of 1968 (O’Brien and Smith 1999, p. 180). The convention established a set of rules for Jurisdiction and Enforcement of Judgment on civil and commercial matters. These rules are applicable for all civil and commercial matters based on the Convention’s understanding and when the individual resides within a European Union member state or an agreement is in place that confers jurisdiction on the courts of a contracting state.
Jurisdiction based on the Modified Convention
This convention was introduced following the Civil and Judgments Act of 1982. A matter is governed by this convention if the matter is of a civil or commercial nature and the defendant resides in the UK or jurisdiction arises from causes independent of residence such as a parcel of land in the UK (O’Brien and Smith 1999, p. 180).
Jurisdiction based on the Lugano Convention
Generally speaking the rules of the convention apply in the UK and EC member states in light of civil and commercial litigation and the defendant resides in an EFTA contracting state or the arises independent of residence(O’Brien and Smith 1999, p. 180).
Issues with Jurisdiction
Based on the above data it can be see that presently there are four sets of rules that govern the exercise of civil jurisdiction within Europe (O’Brien and Smith 1999, p. 179). The first set are those that are related to traditional common law rules that can be traced back to the Supreme Court Act of Judicature 1873 and the amendments to the same Act in 1875 (O’Brien and Smith 1999, p. 179).
The second set are those established under the Brussels convention and are mainly concerned with jurisdiction and the enforcement of judgments. The third set are also based on the Brussels convention but have been modified to make them applicable in the UK based on the Civil Jurisdiction and Judgments Act of 1982 (O’Brien and Smith 1999, p. 179). The fourth set being established based on the Lugano convention governing matters relating to the EFTA (European Free Trade Area). It should be noted from the onset that three of these regimes are directly traceable to membership of the EC (European Community).
Whereas the EC sought to dilute the procedures to provide a more harmonious approach to legal issues this has caused serious fundamental issues that need to be addressed urgently. For example, while the traditional rules are founded on procedures of serving a writ, the European conventions are founded on a theory of jurisdiction that forms a connection between the defendant and the forum (O’Brien and Smith 1999, p. 179). Due to flaws that have been observed in the approach it is not uncommon for litigants to circumvent the laws in search of convenient forums.
The issue of jurisdiction is often a thorny one based on the differences in the method used to establish jurisdiction under the various sets of Convention based rules. Under the traditional rules the High court can determine jurisdiction based on the procedure used in service of process. This suggests that the traditional rules do not apply any theoretical approach to establishing jurisdiction but instead regard all disputes on jurisdiction based on procedure (O’Brien and Smith 1999, p. 181). This is probably based on the fact that during the time these laws were established the English courts were superior and emphasis on cooperation was minimal. The situation today has changed dramatically and regional alliances are becoming the norm.
The establishment of jurisdiction must under traditional rules begin with service of process or equivalent. The purpose of the writ is to give the defendant proper notice of the claim in question (O’Brien and Smith 1999, p. 181). If this document is not properly served to the defendant jurisdiction can not be established. This position is particularly inappropriate given that the present economic circumstance suggests distribution of resources over a wide range of countries. The process of serving a document thus becomes an unnecessary complication. This position arises as some individuals may use this to their advantage and serve writs for cases that may be better suited for other forums (O’Brien and Smith 1999, p. 182).
It is clear to see that based on the position of presence that is so essential to the traditional rules individuals with little connection to the UK can use the requirement to bring litigation to the UK. It has been observed that the mere service of process is adequate to establish jurisdiction. In light of the above provision there have been cases where foreign individuals have been served and faced litigation in English courts. This is illustrated in the proceedings of, the suit Colt Industries Inc and Sarlie (O’Brien and Smith 1999, p. 182).
The English courts also based on some doctrines have discretionary powers that allow them to either accept or reject proceedings in their courts. Under the doctrine of Forum Non Conveniens an English court can decline or request a stay of proceedings arguing that the suggested forum is not appropriate for hearing the suit (O’Brien and Smith 1999, p. 200). Another approach to postponing proceedings would require the application of the doctrine of lis alibi pendens due to the presence of concurrent proceedings on involving the same persons in England and abroad. Prior to 1973 in the absence of a lis alibi pendens plea would be reluctant to grant a stay of proceedings (O’Brien and Smith 1999, p. 200).
On the other hand is the Brussels convention that seeks to solve problems of jurisdiction based on a set of hard and fast rules (Capps, Evans and Konstandinidis 2003, p. 57). Under this convention the discretionary role of the judiciary is reduced to a minimum though it is not entirely absent. The convention also contains a limited number of narrow bases that a claimant is allowed to invoke. For example if it can be established that there is more than a single forum that can exercise jurisdiction then priority is given to the first court that takes the case.
This position is also fairly rigid given that the assumption is that the court first seised is the most appropriate forum to hear the case (Capps, Evans and Konstandinidis 2003, p. 58). In instances where the court first seised is less than appropriate for the case it becomes very unfair for a second court to decline jurisdiction merely based on the fact that it was not the first court seised. This is particularly true when this second court happens to be a more appropriate forum. The complexity with these two with regards to jurisdiction will be better highlighted in the following cases illustrating the dilemma.
Owusu v Jackson and The Sarrio Case
In this landmark case the claimant Owusu and one defendant, Jackson, were residents of the UK. The remaining five defendants were Jamaican Limited Liability companies (Von Mehren 2002, p. 385). The claim was the result of an accident the plaintiff was involve din while on a vacation Jamaica. During the trip he had been walking in the sea and when the water reached waist level, he dived and hit his head on a submerged sand bank fracturing his spine. This accident left the plaintiff paralyzed below the neck. The claimant under Art 2 had sought to have the trial in the UK (Magnus, Mankowski & Caravaca 2007, p. 498).
In this case following the ruling of the court the defendant made an appeal that caused a lot of controversy. The eventual ruling of the Court of Justice stated that courts in Member states can not stay proceeding based on the fact that a court in a non member state is the forum conveniens (Magnus, Mankowski & Caravaca 2007, p. 498). This arose as the appeal was based on the fact that the UK courts were not the appropriate forum for the trial seeing that the accident occurred in Jamaica.
His ruling was reached reflecting the positions of Articles 22, 23, 27-30 (Clarkson & Hill 2006, p. 65). The Brussels convention rules based on this case appear to apply when the case involves at least two member states are involved. It has been debated widely whether the convention has the power to forbid conferring power on national courts in non member states and whether it has exercised that power.
Another instance of a case settled based on Article 22 was the The Sarrio case (Mandaraka-Sheppard 200, p. 228). In this case the defendants were established in Kuwait and through several subsidiaries controlled a Spanish company, GT (Grupo Torras). The claimants Sarrio, decided to sell off one of its businesses to a subsidiary of GT. In the agreement it was suggested that the companies would each buy shares in their various subsidiaries. This resulted in a law suit where the claimant argued the defendant had refused to pay on the terms of the contract. Sarrio had gone into receivership following this failure. Sarrio also filed two negligence suits in English courts due to the nature of the contract (Mandaraka-Sheppard 200, p. 229).
The defendants followed by filing suit for stay of action based on Articles 21 and 22 of the Brussels convention and under the doctrine of forum non conveniens. The stay was not allowed based on the fact that the proceedings were unrelated. The defendants had supposed that due to concurrent proceedings they would be granted stay. In this as in the example of Owusu v Jackson it would appear that there is inconsistency in application of the Conventions ruling.
Owens Bank v Bracco / Abouloff v Oppenheimer
According to Article 22 of the Brussels convention when related actions are brought before courts of different contracting states, any other court than the court first seised, may while actions are still pending stay proceedings on the matter (Takahashi 2000, p 186). This implies the court second seised may decline to hear proceedings in the case where the court first seised has jurisdiction over both claims and the second court permits consolidating the actions.
This position makes no sense based on the ruling in the above mentioned case by the Court of Appeal. It would appear that the more important question is whether the court first seised has the authority to consolidate action. In which case if it does not it can proceed to hear only the first claim leaving the second to be heard somewhere else (Takahashi 2000, p 186). In this case the claimant bank had received a ruling from a non contracting state to the Brussels convention. The bank then applied for enforcement in Italian courts to which the defendant alleged the ruling had been obtained fraudulently (Magnus, Mankowski & Caravaca 2007, p. 55).
In response the claimant filed a suit in English courts for a declaration stating the judgment was enforceable. In similar fashion the defendants made attempts relying on the provisions of lis pendens to bar English courts from hearing the case prior to conclusion of the Italian proceedings (Magnus, Mankowski & Caravaca 2007, p. 55). The ECJ declined to accept that proceedings in both English and Italian courts based on the fact that the judgment in question was from a non member state.
In a similar fashion in the case of Abouloff v Oppenheimer the House of Lords declined to over rule and use the principle of forum non conveniens. A court in St. Vincent had already made a ruling in favor of the claimant after the Defendants plea that the judgment was obtained by fraud had been declined in English courts (Collier 2001, p. 120). According to the House of Lords the plea could be raised in enforcement proceedings in England. An unfortunate effect of these decisions is they create a distinction between judgments made in non member states under the Brussels or Lugano conventions.
Shenavai v Kreischer / Union Transport plc v Continental Lines SA
Based on the above mentioned case it has been established that where a claimant present an action concerning various obligations under a single contract, jurisdiction will be determined by the principal obligation (Sime 2007, p. 140). This ruling is based on the contents of Article 5(1) under the Brussels convention (Clarkson & Hill 2006, p. 75). This ruling by the ECJ suggests the prevalence of the maxim accessorium sequitur principale. Once the principal obligation is identified the court with jurisdiction has to deal with the other identified obligations (Chuah 2000, p. 78).
In most cases it is not difficult for courts to establish the principal obligation but instances do arise when arguments could arise on the determination. In the case of Union transport plc Vs Continental Lines plc the claimants made a claim that they had exchanged telexes with the defendant on the charter of a vessel from Florida to Bangladesh (Clarkson & Hill 2006, p. 74). The Belgian company who were defendants in the suit denied the existence of such a contract (Chuah 2000, p. 78). The claimants sued the company for denying obligations of nominating and provision of a vessel (Clarkson & Hill 2006, p. 74). The House of Lords ruled that being that the principal obligation which was to be done in England was nomination of a vessel thus English court had jurisdiction.
Problems of Litigating International Disputes
It has already been mentioned that international commerce presents various challenges that increase the complexity of commerce across borders and legislation of cross border commercial activity (Buhring-Uhle, Kirchhoff & Scherer 2006, p. 12). One difficulty in litigating cross border trade disputes arises from the fact that there is no international tribunal for their resolution. The absence of such a resolution suggests that these disputes have to be resolved in the national courts of some nation (Buhring-Uhle, Kirchhoff & Scherer 2006, p. 12).
More often than not the litigation is carried out in several countries at the same time resulting in additional complexities to the resolution of a dispute. Among the complexities include uncertainty in transaction costs, advice on rulings and delays in relation to the litigation process in general. There are several grounds that have been identified as a potential source of conflict in international litigation and this section will briefly touch on these areas.
The first of these is the jurisdiction, where the term refers to the right of a court to apply the law (Buhring-Uhle, Kirchhoff & Scherer 2006, p. 13). The rules used by courts to apply jurisdiction vary form one country to the next often resulting in conflicting results. This is because courts can base decisions on various grounds such as residence or corporate headquarters of the defendant, location of occurrence of the liability causing event, nationality of the plaintiff, etc. As a result plaintiffs often select from a number of jurisdictions when making a decision on where to file the suit.
It should be noted that such choices are often motivated by tactical considerations such as desires to take advantage of specific procedural rules in a specific country (Buhring-Uhle, Kirchhoff & Scherer 2006, p. 13). This in the view of the plaintiffs is expected to increase bias in their favor, increase the likelihood of collecting high damage rewards or get a neutral forum to present the case (Buhring-Uhle, Kirchhoff & Scherer 2006, p. 13). This process is sometimes referred to as forum shopping and has seen countries such as the US confronted with litigation that has little to do with the country.
However, the lack of uniformity with regards to assertion of jurisdiction it is common to see multiple lawsuits continuing in relation to a single conflict. This occurs whenever a defendant launches a counter suit in a different forum. This fact is further complicated by the fact that the existence of a lawsuit in another country does not provide adequate grounds for stay of proceedings (Buhring-Uhle, Kirchhoff & Scherer 2006, p. 13). Thus the result is often several parallel lawsuits aimed at addressing a single conflict.
This case is illustrated in the historic example of the $1.1 billion anti trust law suit by the liquidator of US owned Lakers airways. It is reported that the airline carrier filed suit again European and American carriers who set up predatory pricing mechanisms and urged the carrier’s banks to suspend their credit (Buhring-Uhle, Kirchhoff & Scherer 2006, p. 13). The resulting suit saw a serious round of legal battles followed by several levels of appeal. In the end the partiers opted to go for a settlement after incurring huge legal fees in the years the court battle ensued. It is estimated that Lakers airline lawyers demanded $60 million compensation for legal fees in the eventual settlement.
The second major issue with regard to international commercial disputes is in relation to applicable law. The selection of applicable law is complicated in light of various substantiative and procedural issues. The selection process allows concerned parties to utilize the law they find tailored to suit their needs (Alexander 2009, p. 69). In line with this it has been observed that for major international actors in commerce the pursuit of standardization can be achieved by selecting a single legal procedure to use in all contracts. This factor plays a major role in international litigation as reported by a survey of 175 businesses across Europe (Alexander 2009, p. 69). In the survey of two thirds of respondents indicated a preference for different legal systems as these presented an advantage.
The process of gathering information and selecting a legal system increases the cost of litigation but these costs reduce as the same jurisdiction is selected repeatedly. Among the essential factors that have been found to influence the choice of jurisdiction and applicable law include the quality of the judiciary, expertise of courts, absence of corruption, availability of witnesses and the effectiveness especially with regard to cost of the litigation (Alexander 2009, p. 69). The selection of applicable law is appropriate because a choice with suitable and developed mediation legislation is crucial in handling and resolving disputes that may arise in the course of business. It should be noted that during signing of contracts neither party usually expects disputes though disputes are likely to arise in the course of transacting business.
Another issue in relation to the selection of jurisdiction is due to the applicable law and the benefits or advantages that can be gained through its application to a particular dispute. It is known that private international law refers to domestic law that is meant to assist in resolution of disputes involving some foreign aspect (Alexander 2009, p. 63). These laws are as diverse as the regions they represent and as such what is applicable in one region may not be applicable in another region. As a result a suit could have varying implications merely based on the law applied in a region (Alexander 2009, p. 63).
The principle used in selection of applicable law varies from one region to the next. In the case of Europe the applicable law is normally allocated based on the seat of law with a better claim irrespective of the substantiative content of this law. As such it will select the stronger or more established legal system over a weaker one in mediation of a dispute. In the US the applicable law will be selected based on the law that is believed will provide the most just judgment in the dispute. For this reason a less established legal system may be accorded preference due to its substantiative content on a specific issue pertinent to the case (Alexander 2009, p. 68). The complexities in identifying suitable applicable rules has seen the European union make moves towards a unified legal system for resolution of disputes across the region.
The last problem identified ion litigating international commercial disputes arises due to complexities in enforcing and recognition of rulings. For example consider a scenario where an international dispute has been heard and resolved resulting in an award and the party against which the award is made refuses to honor the award? In such cases a question arises as which law is charged with the responsibility of recognition and enforcement of the award in question (Moens 2005, p. 19). This has been found to be the state in which the enforcement is sought. Therefore it is reported that for member states enlisted under the New York convention upon receipt of an award the procedure for enforcement or recognition must be guided by convention rulings.
The regime detailed in the New York convention aim to provide uniformity in principles and processes with reference to conformity irrespective of the country (Moens 2005, p. 19). The rules of this convention state that enforcement is performed based on the location of recoverable assets. It is therefore very crucial that an award is readily transferable without the occurrence of any legal complications.
The problem with recognition and enforcement of awards arises due to the various regional conventions that offer varying interpretations and conditions with regards to awards. For example The Hague convention provides a condition that once judgment has been given by a court in a given state in relation to a dispute must be recognized and enforced by all other contracting states (Brand & Herrup 2008, p. 273).
There are several treaties in place across various regions of the world that are useful in assisting with enforcement and recognition of awards. An example is the New York convention that currently has over 140 members including all countries of economic significance in today’s world (Mcllwrath & Savage 2010, p. 346). Of the various existing conventions the New York convention appears to be the most considerate when it comes to acceptance of foreign judgments (Rubino-Sammartano 2001, p. 952). Other than this there are several other conventions in operation that have enlisted members such as the 1975 US convention known as the Inter-American Convention on International Commercial Arbitration. There is also the 1987 Arab Convention of Commercial Arbitration of Amman having a membership of over 10 Arab states (Mcllwrath & Savage 2010, p. 349).
The Civil Approach Vs Integrated Approach
Though legal issues can arise in almost any area of law, conflict has been rife in private international law due to jurisdictional issues (Capps, Evans & Konstadinidis 2003, p. 57). As a result there are two main options available in resolution of private international law suits. One school of thought ascribes to the use of civilian procedures that are enforced through an integrated framework of hard and fast rules.
This approach includes regimes such as the Brussels convention in which the role of judicial discretion is reduce d to a bare minimum (Capps, Evans & Konstadinidis 2003, p. 57). The second approach being the common law approach which allows jurisdiction issues to be resolved on a case by case basis. From this introduction alone it is possible to suggest that the common law approach appears more suitable. This is because a unified approach to dealing with international legal issues does not allow for consideration of the various differences that each case brings to the suit.
The common law approach being based on a long standing legal system tends to provide a wider range of judicial bases. For example, a person intending to make a claim can invoke the English rules in civil and commercial matters by simply serving process on the defendant even during temporary presence in England (Capps, Evans & Konstadinidis 2003, p. 57). Another similar benefit arises from the fact that the court can provide permission of service of process based on the fact that the service is based on a contract that was made in England. Though the common law approach offers these advantages the defendant can still request for a stay of the proceedings if they can provide adequate proof to establish that there is a more appropriate forum to hear the case.
In addition to this the common law approach has been observed as a more flexible approach to legal issues when compared with the Brussels convention (Capps, Evans & Konstadinidis 2003, p. 58). This position is illustrated clearly upon observing rules such as ‘lis pendens’ or the first come first served rule that amplifies the effect of exorbitant bases of jurisdiction. Based on this rule the convention gives priority in any dispute to the first court seized.
Thus if the first court seized happens to be an inappropriate forum the case is likely to result in poor or inappropriate judgment. It would seem even more inappropriate for the appropriate forum for the hearing to decline the suit based on the fact that it was the second court selected (Capps, Evans & Konstadinidis 2003, p. 58). This over simplification in the selection of jurisdiction is a major failure with the Convention that is likely to result in the interference with justice being served.
However, this should not be taken to suggest that common law is without disadvantages. It has been observed that common law rules are complex as their operation is dependant on discretion. This unpredictable nature causes this law to be almost irresistible when it comes to protracted and often wasteful litigation on jurisdictional points (Capps, Evans & Konstadinidis 2003, p. 58). It is reported that even with these points the common law approach appears more likely to result in the selection of the most appropriate forum for hearing.
The Brussels convention presents a further challenge in the pursuit of justice based on the fact that it does not define domicile (Campbell 2007, p. I/124). The issue of domicile is especially crucial in international civil litigation as it is on this basis that most litigants opt for alternate forums. It should be noted that the traditional rules often provide more suitable mechanisms due to a wider scope in the definition of the aspect of domicile. As a result of this the use of traditional rules is often times preferred as opposed to the use of the Brussels convention.
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