International litigation 8 useful tips for bringing crossborder litigation

International litigation lawyers

International litigation lawyers provide 8 useful tips for bringing crossborder litigation cases.
 
Introduction
 
International litigation lawyers provide a roadmap for bringing international website litigation cases, and enforcing foreign judgments.

 

International litigation lawyers

International litigation lawyers

 

1.International litigation lawyers law speak
 
Applicable law Where the parties have neither expressly nor impliedly selected a law to govern their contract, the `applicable law` is that of the country with which the contract is mostly connected. Applicable law in the UK is currently governed by the Contracts (Applicable Law) Act 1990 (made under the Rome Convention 1980). As from December 2009 the Act will be replaced and cross border contracts within the EU will be governed by EU Regulation Rome I. With regard to the law applicable to non contractual obligations (tort etc) Rome II which came into force 11 January 2009, harmonises EU law on tort/delict- NB Rome II excludes defamation In defamation each point of publication is a separate tort) and privacy. Within the EU area, EU rules as to applicable law are applied universally.
 
Brussels I A jurisdictional system governing cross border disputes within the EU in civil and commercial matters as to jurisdiction and enforcement by a declaration of enforceability and without the possibility of opposing recognition.
 
Composite state A state comprising territorial units with separate systems of laws affecting private obligations such as contract or tort. The UK is a composite state comprising (1) England & Wales (2) Scotland (3) Northern Ireland.
 
Consumer A natural person who in contracts covered is acting for purposes which are outside his trade, business or profession.
 
CPR The Civil Procedure Rules 1998.
 
ECJ The European Court of Justice. Not to be confused with the ECHR (European Court of Human Rights).
 
Exclusive Jurisdiction A mandated or selected choice of venue to bring the action.
 
Jurisdiction The Court’s power to accept a case.

 

Lugano Convention A convention between the EU and Switzerland , Norway and Iceland mirroring Brussels I .

Unfair contract term A contract term in a consumer contract deemed unfair under the Unfair Terms in Consumer Contracts Regulations 1999 as amended.

 

2. Service
 
2.1 The general rule is that persons within the jurisdiction can be served whatever their domicile. CPR 6 makes provision for service out of the jurisdiction where permitted.
 
2.2 In the United Kingdom there are three legal jurisdictions (1) England & Wales, (2) Scotland and(3) Northern Ireland and there are rules governing jurisdiction inter se. The position of individuals and companies domiciled in the EU with regard to jurisdiction and enforcement is governed by an EU Regulation known as Brussels I. Brussels I does not apply to Island of Guernsey, Isle of Man, Bailiwick of Jersey but with regard to enforcement comes under the 1933 Act (see below). But the fact that service is permissible does not preclude the defendant challenging the court’s jurisdiction under CPR 11 to try the claim or arguing that the court should not exercise its jurisdiction under CPR Part 11 and that service should be set aside. CPR Part 6 simply says when the claimant can issue and serve outside the jurisdiction and so long as a challenge is made within the time allowed, CPR 6 is without prejudice to a jurisdiction challenge . The general rule is that the Court may set aside permission if both parties have clearly agreed an exclusive jurisdiction clause in another state. Under CPR 6.33 permission of the Court is not required if the Court has power to determine the claim under Brussels I and the defendant is domiciled in England & Wales and there are no proceedings elsewhere in the UK or EU.
 
2.3 The EU Service Regulation ((EC) No 1348/2000) applies over other methods of service within the EU.

 

3. Brussels I and Lugano jurisdiction
 
3.1 Within the EU area in civil and commercial matters (which includes torts) by Council Regulation (EC) 44/2001 sometimes referred to as the Brussels I Regulation – throughout the 25 EU member states the same rules apply. Therefore if one tried to sue a Frenchman domiciled in France in England he could have the claim struck out.
 
3.2 Between the EU and Switzerland, Iceland and Norway the Lugano Convention of 1988 applies. A new Lugano Convention on jurisdiction in line with Council Regulation (EC) 44/2001has been signed and is likely to enter into force in 2009.
 
3.3 Council Regulation (EC) 44/2001 and by analogy the Lugano Convention contains a regime for automatic enforcement
 
3.4 There is a European Enforcement Order regime under Regulation (EC) No 805/2004 for uncontested claims which can be enforced without the need for a declaration of enforceability and any possibility of opposing its recognition.
 
3.5 25 Member states to which Brussels I applies are: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Greek Cyprus, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Republic of Ireland, Slovakia, Slovenia, Spain, Sweden, UK. (NB Brussels I does not apply to a member’s dependencies and territories).
 
3.6 Lugano states are: Switzerland , Norway and Iceland.
 
3.7 There are also other EU regimes which apply for example to, Intellectual property, bankruptcy and enforcement of decisions on parental responsibility within the EU (the so called Brussels II bis). There is also Timeshare Act 1992 as amended by Timeshare Regulations 1997 (SI 1997/1081) applying to any timeshare or timeshare credit agreement.

 

4. Choice of Law
 
4.1 Well drafted contracts will always contain a choice of law and jurisdiction clause. For example Google contract says:
 
The Terms and your relationship with Google under the Terms shall be governed by English law. You and Google agree to submit to the exclusive jurisdiction of the courts of England to resolve any legal matter arising from the Terms. Notwithstanding this, you agree that Google shall still be allowed to apply for injunctive remedies (or an equivalent type of urgent legal relief) in any jurisdiction.
 
4.2 Very often these clauses contain a proviso enabling provisional relief such as an injunction anywhere in the world so that offending material could be controlled world wide

 

5. The position of consumers under Brussels I Regulation
 
5.1 A consumer can sue a supplier where either of them is domiciled (Article 16) which is deemed to include in relation to the supplier anywhere the supplier has a branch, agency or establishment whose operation have given rise to the dispute. The consumer can only be sued where he is domiciled. Two conditions must be satisfied in order that a party dealt as a consumer: (1) he neither made the contract in the course of business nor held himself out as doing so (eg by producing a trade card or asking in certain circumstances for a trade discount);(2)the other party must make the contract in the course of business. Company purchases for directors can also be consumer contracts.

 

6. Unfair Contract Terms (consumer contracts only)
 
6.1 The Regulations only apply to a natural person who in contracts covered by the Regulations is acting for purposes outside which are outside his trade, business or profession.
 
6.2 Where a jurisdiction clause is included without being individually negotiated, in a contract between a consumer and a seller or supplier and where it confers exclusive jurisdiction on a court in a territorial jurisdiction of which the seller or supplier has his principal place of business, it must be regarded as unfair within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999 as amended by SI 2001/1186 in so far as it causes, contrary ,to the requirements of good faith a significant imbalance in the parties’ rights and obligations arising under the contract to the detriment of the consumer. The national court must determine of its own motion whether a contract term is unfair when making an assessment of the contract: See ECJ case, Oceano Grupo Editorial SA v. Rocio Murciano Quintero [2000]ECR 1- 4941
 
6.3 By virtue of Article 5 of the 1999 Regulations :
 
(1) A contract term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirements of good faith, it causes a significant imbalance to the parties’ rights and obligations arising under the contract, to the detriment of the consumer.
 
(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term…
 
(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.
 
Under Article 8(1): An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on him.
 
The ECJ has categorically emphasised in a number of cases that the requirements governing the validity of jurisdiction clauses must be strictly construed and clear and precise acceptance is required to constitute an agreement; See ECJ decisions, Paretenrederei Tilly Russ v. Haven & Vervoebedrift [1985]QB 931; Oceano Grupo Editorial and Salvat Editores [2000] ECR1-4941;947H;Ditta Estasis Salotti di Colzani Aimo E Gianmario Clozani v. RUWA Polsteriemaschinen Gmbh [1977] 1CMLR 345.
 
6.4 Choice of law and jurisdiction clauses which have not been individually negotiated have been held to be unfair contract terms.

 

International litigation lawyers

International litigation lawyers

 

7. Enforcement
 
7.1 Within the EU/Lugano areas there is an autonomous regime for enforcement.
 
7.2 Elsewhere in the world:
 
(1)The Administration of Justice Act 1920 enables certain judgments of superior courts in parts of the Commonwealth to be registered in the High Court in London (Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Botswana, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Christmas Island, Cocos (Keeling)Islands; Dominica, Fakland Islands, Fiji, The Gambia, Ghana, Grenada, Guyana, Grenada, Jamaica, Kenya, Kiribati, Lesotho, Malawi, Malaysia, Mauritius, Montserrat, New Zealand, Nigeria, Territory of Norfolk Island, Papua New Guinea, St Christopher & Nevis, St Helena, St Lucia, St Vincent & the Grenadines, Seychelles, Sierra Leone, Singapore, Solomon Islands, Sovereign bases in Cyprus, Sri Lanka, Swaziland, Tanzania, Tasmania, Trinidad and Tobago, Turks & Caicos Islands, Tuvalu, Uganda, Zambia, Zimbabwe.
 
(2)The Foreign Judgments (Reciprocal Enforcement) Act 1933 applies to any state which is prepared to give reciprocity of treatment to judgments. (Israel, Suriname, Tonga, Netherland Antilles, Australia, Australian Capital Territory, Canada, Guernsey, Isle of Man, Jersey, India, Pakistan).
 
(3) Countries covered by reciprocal enforcement under Civil Jurisdiction & Judgments Act 1982 (Denmark, Gibralter, Iceland, Northern Ireland, Norway, Scotland, Switzerland)
 
(4)Where none of the above apply foreign judgments can only be enforced in the UK by bringing a fresh action leaving the defendant a second opportunity to challenge . Notably there is no reciprocity with United States of America, all South America , most of Asia including China.

 

8. Specific Problems
 
8.1 Failure to ensure that electronic contracts are legally binding. For example by not ensuring that all terms and conditions are brought to the other party’s attention or by not ensuring the authenticity of the person entering into the contract there is a risk of repudiation or non-payment.
 
If a Clause conferring jurisdiction is included among the general conditions of sale, printed on the back of the contract the prerequisites of Article 23 Brussels I are only fulfilled if the contract signed by the two parties includes an express reference to those terms. Query what happens if the consumer is asked to tick an “I accept box”? The Estasis Salotti case.
 
8.2 Non compliance with tax and legal requirements may result in fines or unenforceable debts.
 
8.3 Integrity of trading partners
 
8.4 Unauthorised purchases
 
8.5 Return of goods sold electronically
 
8.6 Checking unauthorised account activity. In the USA if you have an account you do not require a court order to release activity. Obtaining release of information in USA is governed by the Electronic Communications Privacy Act 1986 “ECPA” . If you don’t have an account or your account has expired you may need a court order from a Federal Court . For example the Western District Court of Washington is Microsofts home court .The web site for the Eastern District Court of Washington is: hhtp://www.waeb.uscourts.gov/
 
This article will be impacted significantly by Brexit. Read our article on Brexit here. Added by Peter Adediran on 29 June 2016 at 11:19am

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