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THE LAW RELATING TO

INTERNATIONAL

COMMERCIAL

DISPUTES

BY

JONATHAN HILL

Professor of Law

University of Bristol

SECOND EDITION

LONDON HONG KONG

1998

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CONTENTS

Preface v Table of Cases xxix Table of Statutes li Table of Statutory Instruments and Rules lix Table of Conventions, etc. lxi

CHAPTER 1: INTRODUCTION 1 1.1 Preliminary remarks 1 1.2 Jurisdiction and the recognition and enforcement of foreign judgments 3 Basic concepts 3 Jurisdiction 3 Two aspects to jurisdiction 3 Actions in personam and actions in rem 3 Recognition and enforcement 4 The traditional regime 5 The Brussels and Lugano Conventions 6 Jurisdiction and the recognition and enforcement of judgments within the

United Kingdom 7 1.3 Choice of law 7 1.4 Bibliographical note 10

PART I. JURISDICTION AND THE RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS

CHAPTER 2: PERSONS WHO CAN AND CANNOT SUE OR BE SUED 15 2.1 Legal capacity to sue or be sued 15 Foreign corporations 15 Other foreign juristic entities 15 Corporations established under the laws of territories which are not States 16 International corporations 17 Introduction 17 International organisations under the International Organisations Act 1968 18 International corporations to which the United Kingdom is not a party 19

Arab Monetary Fund v. Hashim (No. 3) 19 Westland Helicopters Ltd v. Arab Organisation for Industrialisation 21

Remaining problems 22 Foreign States 23 Foreign governments 25

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CONTENTS

2.2 Persons who cannot sue: enemy aliens

2.3 State immunity

Background

The scope of immunities

The scheme of the Act

The principle of immunity

Exceptions to immunity

The burden of proof

Immunity from adjudicative jurisdiction

Submission

Arbitration

Ships

Commercial activities

Contracts of employment

Tort

Ownership, possession and use of property

Intellectual property rights

Membership of organisations

Taxes

Immunity from enforcement jurisdiction

Preliminary remarks

Immunity under section 13(1) and (2)

Waiver of immunity

No immunity in respect of property used for commercial purposes

Enforcement against separate entities

The general rule

The special position of a State's central bank

Service of process in proceedings against States

Instituting proceedings

Entering appearance

Judgments in default

2.4 Diplomatic immunity

Diplomatic officers

Diplomatic agents

Members of the administrative and technical staff

Members of the service staff

Waiver

The temporal scope of immunity

Consular agents

2.5 International organisations

CHAPTER 3: THE BRUSSELS AND LUGANO CONVENTIONS: GENERAL

CONSIDERATIONS

3.1 Introduction

3.2 Interpretation of the Conventions

Interpretation of the Brussels Convention

References to the European Court of Justice under the Luxembourg

Protocol

Methods of interpretation

Interpretation by national courts

26 26 26 27 29 29 30 30 30 31 31 32 34

35

36 36 37 37 38 38 38 38 39 40 42 42 42 43 43 44 44 45 45 45 46 46 46 46 47 47 49 49 52 52 52 54 55 vin

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Interpretation of the Lugano Convention 56 Protocols and declarations 56 Domestic legislation 57 Can the courts of EC Member States refer questions of interpretation to the

Court of Justice? 58 Practical problems in cases which are not referred to the Court of Justice 59 3.3 Scope of the Conventions 59 Introductory remarks 59 Civil and commercial matters 60 Exceptions 62 Family law 62 Bankruptcy and insolvency 63 Social security 64 Arbitration 64 Legal proceedings relating to arbitration 65 Legal proceedings relating to arbitration in which the validity of the

arbitration agreement arises as a preliminary question 66 Legal proceedings relating to the validity of an arbitration agreement 67 Legal proceedings in which the jurisdiction of the court is contested on the

basis of an arbitration agreement 67 Legal proceedings to enforce an arbitration agreement by injunction 68 The recognition and enforcement of judgments given in breach or

disregard of an arbitration agreement 68 3.4 The relationship between the Brussels and Lugano Conventions 71 3.5 The relationship between the Brussels and the Lugano Conventions and other

international conventions 72 CHAPTER 4: JURISDICTION IN PERSONAM UNDER THE BRUSSELS

AND LUGANO CONVENTIONS: INTRODUCTION 75 4.1 Domicile under the Conventions 75 The domicile of individuals 75 Introduction 75 Domicile in the United Kingdom 76 Domicile in other States 77 The domicile of corporations 77 Introduction 77 Domicile in the United Kingdom 78 Domicile in another State 78 Multiple domiciles 79 Special definitions 80 4.2 The basic structure of the jurisdiction rules 80

Bases of jurisdiction applicable to defendants domiciled in a Contracting State:

Articles 2 and 3 80 Bases of jurisdiction applicable to persons who are not domiciled in a

Contracting State: Article 4 81

Lis pendens and related actions 82

The standard of proof 82 The merits of the dispute 82 Questions of jurisdiction 83

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4.3 Service abroad in cases falling within the scope of the Conventions 84 Service abroad without leave 84 Methods of service 86 Period for service 87 4.4 Procedural safeguards 87 CHAPTER 5: BASES OF JURISDICTION IN PERSONAM UNDER THE

BRUSSELS AND LUGANO CONVENTIONS 91 5.1 Exclusive jurisdiction: Article 16 92 Article 16(1) 92 Preliminary remarks 92 Article 16(l)(a): rights in rent 93 General principles 93 Proceedings relating to contracts for the sale of land 94 Proceedings relating to trusts of land 94 Article 16(l)(a): tenancies of immovable property 96 Leases falling within the scope of Article 16(l)(a) 96 Proceedings which have as their object . . . tenancies of immovable

property 97 Short leases 97 Proceedings concerning immovable property in more than one Contracting

State 98 Certain proceedings relating to corporations 98 Certain proceedings concerning entries in public registers 100 Certain proceedings concerning intellectual property 100 Enforcement proceedings 101 Examination of jurisdiction 102 5.2 Submission: Article 18 102 5.3 Jurisdiction agreements: Article 17 105 Preliminary considerations . 105 The text 105 The relationship between the two Conventions 105 Article 17(1): basic conditions 106 An agreement on jurisdiction 106 An independent concept 106 The legal relationship 106 Choice of the courts of a Contracting State 107 Choice of the courts of a non-contracting State 108 Article 17(1): formal requirements 108 Introduction 108 In writing or evidenced in writing 109 In writing 109 Evidenced in writing 112 In a form which accords with practices which the parties have established

between themselves 112 Trade usages 113 The formal requirements of Article 17(1) and third parties 114 The formal requirements of Article 17 and national law 115 Material validity and interpretation 116 Material validity 116 Interpretation 117

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Situations where jurisdiction under Article 17 is not exclusive 118 Alternative fora 118 Non-exclusive jurisdiction clauses 119 Clauses for the benefit of one party only 120 5.4 Provisional measures 120 5.5 The domicile rule: Article 2 122 5.6 Alternative fora I: Article 5 122 Introduction 122 Jurisdiction in matters relating to contract and tort: introduction 124 Methods of interpretation 124 Are paragraphs (1) and (3) mutually exclusive? 125 Are paragraphs (1) and (3) all-embracing? 126 Jurisdiction in matters relating to a contract 127 Matters relating to a contract 127 Denial of an alleged contract's existence 128 Obligations in cases involving void contracts 128 Pre-contractual obligations 130 The obligation in question 131 The general rule 131 Multiple obligations 133 Place of performance 135

Agreements on the place of performance: the relationship between

Article 5(1) and Article 17 135 The place of performance in the absence of agreement 137 The jurisprudence of the Court of Justice in the light of the purpose of

Article 5(1) 138 Jurisdiction in matters relating to tort 139 Matters relating to tort, delict or quasi-delict 139 A harmful event 140 The place where the harmful event occurred 141 Multiple locality cases 141 Cases involving economic loss 143 Branch, agency or other establishment 145 Branch, agency or other establishment 145 Operations 147 Relations between a branch and the parent body 148 Trusts 149 5.7 Alternative fora II: Article 6 149 Introduction 149 Multiple defendants 150 Third party proceedings 152 Counterclaims 153 Contractual claims involving matters relating to rights in rent in immovable

property 154 5.8 Insurance, consumer contracts and employment contracts 155 Insurance: Articles 7 to 12A 155 Proceedings brought against insurers 156 Article 8 156 Article 9 157 Article 10 157

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Article 5(5) 1 5 8

Jurisdiction agreements 158 Proceedings brought against the policy-holder, the insured or a beneficiary 158 Jurisdiction agreements 159 Paragraph 1 15" Paragraph 2 I5 9 Paragraph 3 I6 0 Paragraph 4 I6 0 Paragraph 5 I6 0

Consumer contracts: Articles 13 to 15 162 The scope of Section 4 162 Proceedings brought against the consumer 163 Proceedings brought against the other party 164 Jurisdiction agreements 165 Employment contracts 165 Special jurisdiction 166 Background 166 The scope of the rules relating to individual contracts of employment 167 Cases where the employee habitually works in a single Contracting State 167 Cases where the employee does not habitually work in a single

Con-tracting State 168 Jurisdiction clauses in employment contracts 168 CHAPTER 6: BASES OF JURISDICTION IN PERSONAM UNDER THE

MODIFIED CONVENTION 171 6.1 Jurisdiction in civil and commercial matters: the Modified Convention 171 The scope of the Modified Convention 171 The text of the Modified Convention 173 Interpretation 173 6.2 Bases of jurisdiction under the Modified Convention 174 Exclusive jurisdiction: Article 16 174 Prorogation of jurisdiction 175 Article 18 175 Article 17 175 Special jurisdiction 176 Article 5 176 Articles 6 and 6A 177 Consumer contracts 177 Procedural matters and provisional measures 177 CHAPTER 7: BASES OF JURISDICTION IN PERSONAM UNDER

TRA-DITIONAL RULES 179 7.1 Presence 179 Individuals 179 Personal service: RSC, Order 10, rule 1(1) 179 Postal service and letter box service: RSC, Order 10, rule 1(2) 181 Corporations 183 UK companies 183 Oversea companies: introduction 184

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Section 690A: what is a branch? 185 Section 691: what is an established place of business? 185 Section 694A: service of process on an oversea company with a branch in

England 187 Section 695: service of process on an oversea company with a place of

business in England 188 Partnerships: RSC, Order 81 189 Staying proceedings founded on the defendant's presence 190 7.2 Submission 191 Jurisdiction agreements 191 Agreements to submit 191 Voluntary appearance 192 7.3 Service out of the jurisdiction under RSC, Order 11, rule 1(1) 193 Introduction 193 Three issues 193 Procedure 194 A serious question to be tried 195 The heads of RSC, Order 11, rule 1(1) 196 Jurisdiction based on domicile 196 Injunctions 197 Multiple defendants 197 Contract 199 General scope 199 Made within the jurisdiction 201 Whose agent? 202 Contracts governed by English law 202 Jurisdiction clauses in favour of the English courts 203 Breach of contract within the jurisdiction 203 Tort 203 Constructive trusts 205 Other heads of jurisdiction 205 Interpretation and standard of proof 206

Forum conveniens 207

The test 207 When is appropriateness to be assessed? 208 The first stage of the test 208 The second stage of the test 209 The impact of a jurisdiction clause 209 CHAPTER 8: BASES OF JURISDICTION IN ADMIRALTY PROCEEDINGS 211 8.1 Jurisdiction under the Supreme Court Act 1981 212 The Admiralty jurisdiction of the High Court: section 20 212 Section 20(l)(a) and (b) 212 Disputes between co-owners 213 Mortgages and charges 213 Damage to a ship 213 Damage done by a ship 213 Carriage and hire 214 Salvage 216

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Goods supplied to a ship 216 Wages 217 Disbursements 217 Other bases of jurisdiction 217 Section 20(l)(c) 218 Section 20(l)(d) 218 Jurisdiction in rem: section 21(2) to (8) 219 Section 21(2): cases falling within section 20(2)(a) to (c) and (s) 219 Section 21(3): maritime liens 219 Maritime liens 219 "Or other charge" 219 Section 21(4): cases falling within section 20(2)(e) to (r) 220 The relevant person 220 The particular ship: section 21(4)(b)(i) 221 Other ship: section 21(4)(b)(ii) 221 Beneficial owner 222 The relationship between section 21(3) and (4) 223 Jurisdiction in actions in personam: section 21(1) and section 22 224 Commencing Admiralty proceedings 225 Actions in rem 225 Actions in personam 226 8.2 The impact of the Brussels and Lugano Conventions 227 Introduction 227 The basic scheme of the Conventions 227 Do the Conventions apply to actions in reml 227 The preservation of special conventions 228 The combined effect of Title II and Article 57 229 Limitation and salvage 232 Salvage of cargo or freight 232 Limitation of liability 233 CHAPTER 9: DECLINING JURISDICTION AND THE STAYING OF

ACTIONS 235 9.1 Declining jurisdiction and staying proceedings under the Conventions 235 General considerations 236 Section 8 and the scope of the Conventions 236 Parties not domiciled in a Contracting State 237 The bases of jurisdiction on which the parallel proceedings are based 237 Section 8 and enforcement proceedings 238 The court first seised 239 Parallel proceedings commenced on the same day 241 Concurrent proceedings 241

Lis pendens 241

The operation of Article 21 241 The same cause of action 242 The same parties 245 Multiple parties 245 Parallel proceedings in personam and in rem 246 The relationship between the court first seised and the court second seised 248 The general rule 248 Section 8 and jurisdiction under sections 3 to 5 248

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Section 8 and jurisdiction agreements 249 The relationship between section 8 and Article 24 251 The relationship between Article 21 and Article 22 251 Related proceedings: Article 22 252 Article 22 does not confer jurisdiction 252 What are "related actions"? 253 Staying proceedings under Article 22(1) 253 Declining jurisdiction under Article 22(2) 255 Rival exclusive jurisdictions: Article 23 255 Parallel proceedings within the United Kingdom 256 9.2 Staying proceedings on the basis of the doctrine of forum non conveniens 256 Forum shopping 256 The development of English law 258 The test of appropriateness 260 General considerations 260 A two stage test 261 The first stage 261 The second stage 263 The application of the test: factors to be taken into account 263 Factors considered at the first stage 264 Convenience and expense 264

Lis alibi pendens 264

Multiple defendants 265 The "Cambridgeshire" factor 266 The applicable law 267 Language 268 Factors considered at the second stage 268 Time bars 268 Delay 269 Costs 269 Damages 269 Impecuniosity 270 The impact of competing choice of law rules 271 Procedural fairness 272 The weighing of factors 273 Appeals against the exercise of discretion 274 9.3 The impact of a jurisdiction clause 274 9.4 Jurisdiction in cases involving foreign land and foreign intellectual property

rights 277 Cases involving foreign land 277 Cases involving foreign intellectual property rights 279 9.5 Staying proceedings under the court's inherent jurisdiction in cases involving

the Conventions 280 Cases where jurisdiction is founded on the traditional rules 281 Cases where jurisdiction is founded on Title II and the alternative forum is a

non-contracting State 282 Cases involving land in a non-contracting State 282 Cases involving a jurisdiction clause in favour of a non-contracting State 282

Forum non conveniens 283

Cases where jurisdiction is founded on Title II and the alternative forum is a

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Cases involving the Modified Convention 286

Internal disputes 287

Cases governed by one of the Conventions and the Modified Convention 287

The alternative forum is the court of a non-contracting State 287

The alternative forum is the court of another Contracting State 287

The alternative forum is the court of another part of the United Kingdom 288

CHAPTER 10: PROVISIONAL MEASURES 289

10.1 Different types of provisional measure 289

Introduction 289

Interlocutory injunctions 291

Mareva injunctions 291

Background 291

Obtaining a Mareva injunction 292

The effect of a Mareva injunction 294

Injunctions operate in personam 294

Third parties 295

Mareva injunctions and the provision of security 295

Ancillary and related orders 296

Disclosure orders 296

Receivership orders 297

Anton Piller orders 298

10.2 Jurisdiction to grant provisional measures: proceedings in rem 299

10.3 Jurisdiction to grant provisional measures: proceedings in personam 302

Background: the position at common law 302

Jurisdiction to grant provisional measures in support of foreign proceedings 304

Section 25 of the Civil Jurisdiction and Judgments Act 1982 304

The exercise of the power 305

Discretion 305

The impact of an exclusive jurisdiction clause 306

The significance of parallel proceedings in another Contracting State 307

Post-judgment provisional measures 308

Jurisdiction to grant provisional measures in support of arbitration

proceedings 309

10.4 Extraterritorial provisional measures 310

Introduction 310

Extraterritorial Mareva injunctions 312

The necessary conditions 312

Factors relevant to the exercise of discretion 313

The protection of the defendant and third parties 314

Protecting the defendant against a multiplicity of proceedings and the

misuse of information 315

The protection of third parties: the Babanaft proviso 316

The dangers of extraterritorial Mareva injunctions 319

10.5 Enforcement of foreign provisional measures 319

CHAPTER 11: ANTISUIT INJUNCTIONS 321

11.1 Preliminary remarks 321

11.2 The bases on which an antisuit injunction may be granted 323

Unconscionable conduct 324

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England is the natural forum 324 Single forum cases 324 Cases in which the English court does not have jurisdiction over the

substance of the dispute 325 Vexatious or oppressive 325 Choice of forum cases 326 Single forum cases 327 Collecting evidence abroad 328 Infringement of a legal or equitable right 329 The older authorities 330 The modern cases 330 Reasons for not granting an antisuit injunction 331 Foreign proceedings for obtaining security 331 Delay 332 Challenge to the foreign court's jurisdiction 333 Cases involving multiple parties 334 11.3 The Brussels and Lugano Conventions 335 CHAPTER 12: THE RECOGNITION AND ENFORCEMENT OF FOREIGN

JUDGMENTS UNDER THE COMMON LAW AND UNDER

RELATED STATUTORY REGIMES 337 12.1 Introduction 337 Why recognise foreign judgments? 337 Which foreign judgments should be entitled to recognition and enforcement? 338 12.2 Conditions for enforcement at common law 338 The jurisdiction of the original court 338 Introductory remarks 338 Submission 339 A sufficient territorial connection 342 Individuals 342 Corporations 343 The problem of federal States 345 No other bases of jurisdiction 346 Judgments concerning foreign immovable property 346 Final and conclusive 347 For a fixed sum 347 12.3 Conditions for recognition at common law 348 Introduction 348 On the merits 351 Identity of the parties 353 Identity of the cause of action or issue 355 Cause of action estoppel 355 Issue estoppel 356 12.4 Defences to recognition and enforcement at common law 358 Natural justice 359 Traditional categories 359 Substantial justice 359 Fraud 360 General principles 360 The application of the principles to different types of fraud 361 Public policy 363

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Res judicata 364

Civil Jurisdiction and Judgments Act 1982, section 32 364

Multiple damages 365

12.5 Recognition and enforcement of judgments in rem 366

Jurisdiction of the original court 366

Defences 367

Enforcement 367

12.6 Recognition and enforcement under statutory regimes based on the common

law 367

Enforcement under Part II of the Administration of Justice Act 1920 368

Recognition and enforcement under the Foreign Judgments (Reciprocal

Enforcement) Act 1933 370

Enforcement: conditions and procedure 370

Resisting enforcement 371

Improper registration 371

Lack of jurisdiction 372

Lack of notice of the proceedings 373

Fraud 373

Public policy 373

Irreconcilability 373

When an appeal is pending abroad 373

Protection of Trading Interests Act 1980 374

Recognition 374

CHAPTER 13: THE RECOGNITION AND ENFORCEMENT OF

JUDG-MENTS UNDER THE CIVIL JURISDICTION AND JUDGJUDG-MENTS

ACT 1982, JUDGMENTS AGAINST STATES AND EUROPEAN

COMMUNITY JUDGMENTS 375

13.1 Basic conditions for recognition and enforcement under the Brussels and

Lugano Conventions 376

The scope of the Conventions 376

What is a "judgment"? 376

Article 25 376

Procedural orders 377

Ex pane orders 378

Penalties 378

Partial enforcement 379

The relationship between Title II and Title HI 379

13.2 The principle of automatic recognition under the Brussels and Lugano

Conventions 380

13.3 Defences to recognition under the Brussels and Lugano Conventions 382

No review of the merits: Article 29 382

Limited review of jurisdiction: Article 28 382

Public policy: Article 27(1) 385

The proper approach to public policy 385

Limits on public policy 385

Public policy and fraud 386

Safeguarding the rights of the defendant: Article 27(2) 387

The relationship between Article 20 and Article 27(2) 387

One defence or two? 388

"In default of appearance" 389

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Due service 390 In sufficient time 391 Irreconcilability: Article 27(3) 394 Irreconcilability: Article 27(5) 395 Irreconcilability: Article 27(4) 396 Appeals in the State of origin: Article 30 396 Article 30(1): what is an "ordinary appeal"? 396 Article 30(2): the special position of appeals in Ireland and the United

Kingdom 397 The exercise of discretion 397 13.4 Enforcement of judgments under the Brussels and Lugano Conventions 398 Introduction 398 Application for enforcement 398 The application 398 Formalities 399 Security for costs 402 The decision 402 Appeals against registration 403 The first appeal 403 The effect of an appeal pending before the court of the State of origin 404 Limitations on enforcement 406 A further appeal on a point of law 408 Appeals against a refusal to register 409 The first appeal 409 A further right to appeal on a point of law 409 Legal aid 409 The relationship between national law and Title III 410 The exclusivity and autonomy of the Conventions 410 Enforcement and execution 410 13.5 Authentic instruments and court settlements under the Brussels and Lugano

Conventions 411 Authentic instruments 412 Court settlements 412 Grounds for refusing enforcement 413 13.6 Recognition and enforcement of judgments within the United Kingdom 413 Introduction 413 Recognition 414 Enforcement 415 Introduction 415 Money judgments: Schedule 6 416 Non-money judgments: Schedule 7 416 13.7 Judgments against States and European Community judgments 417 Recognition of judgments given against the United Kingdom 417 Recognition and enforcement of judgments given against other States 418 European Community judgments 418

PART II: CHOICE OF LAW

CHAPTER 14: CHOICE OF LAW IN CONTRACT: INTRODUCTION 423 14.1 The common law 423

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14.2 The Contracts (Applicable Law) Act 1990 425

Background and commencement 425

Opposition to the Rome Convention 426

14.3 Interpretation of the Rome Convention 427

The jurisdiction of the Court of Justice 427

Interpretation in cases where there is no reference 429

14.4 The scope of the Convention 430

Material scope 430

Choice of law relating to contractual obligations 430

Exceptions 431

Status and family law matters 432

Insurance contracts 432

Jurisdiction and arbitration agreements 432

Negotiable instruments 433

Agency 434

Questions governed by company law 434

Evidence and procedure 434

Territorial scope 434

Universal application 434

"Internal" conflicts 435

Temporal scope 435

14.5 Exclusion of the doctrine of renvoi 435

CHAPTER 15: CHOICE OF LAW IN CONTRACT: GENERAL CHOICE OF

LAW RULES 437

15.1 The applicable law in cases of choice 437

Introduction 437

The principle of party autonomy 437

The existence and validity of choice 438

Choice and incorporation 438

Express choice 439

"Implied" choice 440

Standard forms 441

Previous course of dealing 442

Dispute resolution clauses 443

Reference to provisions of domestic law 445

Related transactions 445

Concluding remarks 446

Splitting the applicable law 446

Changing the chosen law 447

Mandatory rules 448

15.2 The applicable law in the absence of choice 449

Introductory remarks 449

Closest connection 449

The presumption in paragraph 2 450

Introduction 450

Characteristic performance 451

The connecting factor 453

Habitual residence 454

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Central administration 455

Place of business 455

Principal place of business 455

The presumption 456

The presumption does not apply 458

Rebuttal of the presumption 458

Scission 461

Mandatory rules 461

15.3 Mandatory rules and public policy 461

Introduction 461

The application of mandatory rules 463

The application of overriding rules 464

Overriding rules under Article 7(1) 464

Overriding rules of the forum: Article 7(2) 464

Public policy: Article 16 466

15.4 Particular aspects of the contract 468

Preliminary remarks 468

Material validity: Article 8 469

Introduction 469

The general principle 470

The problem of consent 471

Formal validity: Article 9 472

What are questions of form? 472

Choice of law rules 473

Capacity 474

Individuals 474

General principles 474

Article 11 475

Corporations 476

Performance 476

The applicable law 476

Performance and manner of performance 477

Interpretation 478

Discharge 478

Nullity 479

Illegality 479

Initial illegality 480

Subsequent illegality 481

Remedies 483

CHAPTER 16: CHOICE OF LAW IN CONTRACT: SPECIFIC CONTRACTS 485

16.1 Certain consumer contracts 485

Consumer contracts governed by Article 5 485

General scope 486

The qualifying conditions 487

Three special rules 487

The applicable law in the absence of choice 487

The application of mandatory rules in cases where the parties have chosen a

law 488

Formal validity 488

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Overriding rules of the forum 488

16.2 Individual employment contracts 490

What is an individual employment contract? 490

The applicable law in cases where the parties have not made a choice of law 490

The common law 490

Article 6(2) 491

The application of mandatory rules in cases where the parties have made a

choice of law 492

Overriding rules 493

16.3 Carriage of goods 494

The applicable law 494

Overriding rules of the forum 495

16.4 Contracts relating to the transfer of property 496

Immovables 496

The applicable law 497

Formal validity 497

Capacity 498

The sale of tangible movables 498

The law governing the contract 498

The transfer of tangible movables 499

Retention of title agreements 500

Voluntary assignment of intangibles 501

Introduction 501

Assignability 501

Contractual questions 502

Proprietary questions: the transfer of property from the assignor to the

assignee; priorities 502

16.5 Agency 504

Introduction 504

Formal validity 504

Is the principal bound? 504

16.6 Insurance and reinsurance 505

Introduction 505

Insurance Companies Act 1982 506

General policies 506

Long term policies 508

The Friendly Societies Act 1992 508

16.7 Negotiable instruments 508

Introduction 508

What is a negotiable instrument? 508

Which law governs whether a particular instrument is negotiable? 510

Contracts (Applicable Law) Act 1990 510

Choice of law rules 510

Questions of form 511

Interpretation 512

Presentment 513

The date of payment 514

Contractual capacity 515

Transfer of the instrument 515

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CHAPTER 17: CHOICE OF LAW: NON-CONTRACTUAL OBLIGATIONS 517

17.1 Approaches to choice of law in tort 517

Introduction 517

The law of the forum 518

The law of the place of the wrong 518

Alternative approaches 519

Alternative approaches to choice of law in tort 519

The proper law of the tort 519

Governmental interest analysis 520

Alternative approaches in practice 521

Babcock v. Jackson: an easy starting-point 521

Subsequent developments: harder cases 522

Problems with governmental interest analysis 524

17.2 Choice of law in tort: common law rules 525

Background to the English choice of law rules 525

The importance of the place of the wrong 525

Torts committed abroad 526

The modern position 527

Boys v. Chaplin: outline 527

Lord Wilberforce's speech and its application 529

The general rule: double actionability 529

The exception 530

17.3 Choice of law under Part HI of the Private International Law (Miscellaneous

Provisions) Act 1995 534

Introduction 534

Background to the 1995 Act 534

The scope of the statutory rules 535

Issues relating to tort 535

Defamation claims 536

Torts committed in England 537

The exclusion of renvoi 538

The general rule 538

Single locality cases 539

Multiple locality cases 539

The exception 540

The threshold for the application of section 12 540

What factors are relevant? 541

When is the exception likely to be applied? 541

The scope of the applicable law: substance and procedure 543

Public policy and overriding rules 545

Public policy 545

Overriding rules 545

17.4 The interaction of contract and tort choice of law rules 546

Introduction 546

The nature of the problem 546

Contract or tort? 547

The position if the plaintiff advances the claim in contract 548

The position if the plaintiff advances the claim in tort 548

Preliminary remarks 548

The simple analysis 548

The developed analysis 549

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Further preliminary choice of law questions 549

The application of the developed analysis 550

17.5 Restitution and equitable wrongs 551

Introduction 551

Classification 553

Equitable wrongs 553

Unjust enrichment 554

Restitution for wrongs 556

Unjust enrichment: choice of law rules 557

CHAPTER 18: FOREIGN CURRENCY OBLIGATIONS AND JUDGMENTS

IN A FOREIGN CURRENCY 561

18.1 Nominalism 561

The general principle 561

The importance of the law governing the obligation 562

Revalorisation under the law applicable to the transaction 563

Compensation for late payment 564

Avoiding the effects of nominalism: gold clauses 565

Gold-coin clauses and gold-value clauses 565

The role of the applicable law 566

18.2 The money of account and the money of payment 567

Introduction 567

Determining the money of account 567

Debts 567

Damages 569

The parties' agreement 569

If there is no agreement 570

Qualifications 572

Discharging foreign currency obligations 572

18.3 Judgments in a foreign currency 574

Background 574

The Miliangos case 574

18.4 Problems arising out of exchange control legislation 576

General principles 576

"Exchange contracts" 578

What is an "exchange contract"? 578

The effect of Article VIH(2)(b) 578

CHAPTER 19: FOREIGN LIMITATION PERIODS 581

19.1 The Foreign Limitation Periods Act 1984 581

The general principle 581

Public policy and undue hardship 583

Undue hardship: section 2(2) 583

Public policy 585

The effects of disapplying the foreign limitation period under section 2 585

19.2 The Rome Convention 585

CHAPTER 20: PROOF OF FOREIGN LAW 587

20.1 Foreign law: a question of fact 587

20.2 Cases in which foreign law does not have to be proved 588

20.3 Mode of proof 589

The requirement of evidence 589

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Uncontradicted evidence 590

Conflicting evidence 590

Who is an expert? 590

Decisions on points of foreign law in subsequent cases 591

Seeking outside help 592

20.4 Appeals 592

PART III: ARBITRATION

CHAPTER 21: ARBITRATION: INTRODUCTION 597

21.1 What is arbitration law? 597

21.2 Various types of arbitration 598

Domestic and international 598

Ad hoc and institutional 599

Specialised arbitrations 601

21.3 Trends in international commercial arbitration 601

Encouragement 601

Harmonisation 602

The Geneva Protocol 1923 and the Geneva Convention 1927 602

The New York Convention 1958 602

UNCITRAL Arbitration Rules 603

The UNCITRAL Model Law 603

The evolution of English law 604

21.4 Outline of English arbitration law 606

The foundations of arbitration: the arbitration agreement 606

The doctrine of separability 607

Validity and scope of the arbitration agreement 608

The powers of the tribunal 608

General powers of the tribunal 608

The problem of delay 609

The powers of the court 610

Assistance and support 610

Enforcing the agreement to arbitrate 610

The constitution of the arbitral tribunal 611

Extending time limits 611

The conduct of proceedings 612

Enforcement of the award 613

Supervision and control 614

The removal of an arbitrator 614

Costs and fees 614

Determination of the arbitrator's jurisdiction 615

Recourse against the award 616

Appeals on a point of law 617

CHAPTER 22: THE AGREEMENT TO ARBITRATE 621

22.1 The law governing the arbitration agreement 621

22.2 Enforcement of the agreement to arbitrate 622

Introduction 622

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Conditions for the grant of a stay under section 9 624 An arbitration agreement between the parties 624 An arbitration agreement within the scope of section 9 625 Capable of settlement by arbitration 625 Formal requirements 626 A dispute within the scope of the agreement 629 The timing of the application 630 Null and void, inoperative or incapable of being performed 631 Null and void 631 Inoperative or incapable of being performed 632 No other conditions 632 The effect of a stay under section 9 634 Inherent jurisdiction 634 CHAPTER 23: THE LAW GOVERNING THE CONDUCT OF AN

ARBITRATION AND THE SCOPE OF THE COURT'S POWERS 637 23.1 Introduction 637 Preliminary remarks 637 The "delocalisation" theory 637 The importance of the seat of arbitration 638 23.2 The scope of the statutory provisions: general principles 640 23.3 The scope of the statutory provisions: cases where the seat of arbitration is in

England 641 Introduction 641 Internal aspects of the procedure 641 External aspects of the procedure 643 23.4 Scope of the statutory provisions: cases where the seat is abroad or no seat has

been designated or determined 645 23.5 Jurisdiction in proceedings ancillary to an arbitration 647 CHAPTER 24: THE LAW APPLICABLE TO THE MERITS OF A DISPUTE

REFERRED TO ARBITRATION 653 24.1 Introduction 653 Types of choice of law clause 653 Legal background 653 24.2 The position under the 1996 Act 654 Section 46 of the 1996 Act 654 The exclusion of section 46 655 The three circumstances envisaged by section 46 656 Choice of law 656 Choice of other considerations 657

Equity and good conscience: amiable composition and arbitration ex

aequo et bono 658

The lex mercatoria 658 Absence of choice 659 Cases where the arbitrator misapplies section 46 662 Where the right to appeal has not been excluded 662 Where the right to appeal has been excluded 662 The impact of mandatory rules 663 24.3 Arbitration and EC law 665

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CHAPTER 25: THE RECOGNITION AND ENFORCEMENT OF ARBITRAL

AWARDS 669

25.1 Preliminary issues 669

The relationship between enforcement and setting aside 669

The enforcement of domestic awards 669

The enforcement of foreign arbitral awards 670

25.2 Recognition and enforcement of foreign awards under Part HI of the

Arbitration Act 1996 671

The scope of Part III of the 1996 Act 671

The arbitration agreement 671

Territorial scope 672

Introduction 672

Where is an award made? 673

Temporal scope 674

Conditions for obtaining recognition or enforcement 674

The relevant documents 674

Procedural steps 674

Grounds for refusing recognition or enforcement 675

The statutory framework 675

Lack of capacity: section 103(2)(a) 676

Invalidity of the arbitration agreement: section 103(2)(b) 677

Procedural unfairness: section 103(2)(c) 678

Excess of jurisdiction: section 103(2)(d) and section 103(4) 679

Failure to comply with the relevant procedural rules: section 103(2)(e) 680

Invalid award: section 103(2)(f) 681

Not binding 681

Set aside or suspended 682

Non-arbitrability 682

Public policy 683

Awards based on the lex mercatoria or arbitration extra legem 684

Illegality and comity 684

No review of the merits 685

Discretion to adjourn the decision on recognition or enforcement 685

25.3 Recognition and enforcement of foreign awards at common law 687

The relationship between the Arbitration Act 1996 and the common law 687

Methods of enforcement 687

Conditions for recognition or enforcement at common law 688

Defences at common law 689

Matters which are not defences 689

Valid defences 690

Excess of jurisdiction 690

Breach of the principles of natural justice 690

Public policy 691

Fraud 691

25.4 Recognition and enforcement of foreign awards under Part II of the

Arbitration Act 1950 691

The relationship between Part II of the 1950 Act and other regimes 691

Conditions for recognition and enforcement 692

Defences to enforcement 693

25.5 Other regimes for the recognition and enforcement of foreign arbitral awards 693

Part II of the Civil Jurisdiction and Judgments Act 1982 693

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Part II of the Administration of Justice Act 1920 694

Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 694

Arbitration (International Investment Disputes) Act 1966 695

Recognition of awards made by the Iran-US Claims Tribunal 695

25.6 Awards, judgments and the cause of action 696

Conflicting judgments and awards 696

The effect of a foreign judgment on the award 697

The effect of a foreign arbitral award on the cause of action 699

APPENDICES

Appendix 1: Civil Jurisdiction and Judgments Act 1982 (c 27) 701

Appendix 2: Supreme Court Act 1981 (c 54) 761

Appendix 3: Contracts (Applicable Law) Act 1990 (c 36) 767

Appendix 4: Private International Law (Miscellaneous Provisions) Act 1995 (c 42) 779

Appendix 5: Arbitration Act 1996 (c 23) 783

Index 791

References

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