TRANSNATIONAL LITIGATION AND COMMERCIAL ARBITRATION An Analysis of American, European, and International Law Third Edition Joseph Lookofsky and Ketilbjørn Hertz JURIS DJØF Publishing Copenhagen
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TABLE OF CONTENTS PREFACE to the Third Edition...xi CHAPTER 1 SUBSTANCE AND PROCEDURE IN TRANSNATIONAL DISPUTES 1.1 Introduction... 1 1.2 Themes and Cross-Currents in Transnational Litigation... 7 CHAPTER 2 EXTRATERRITORIAL JURISDICTION 2.1 Introduction... 11 2.1.1 Jurisdiction to Adjudicate... 11 2.1.2 Bases of Jurisdiction: a Comparative Survey... 18 A. Territorial Jurisdiction Based on Domicile... 19 B. Specific Jurisdiction in Contract and Tort... 21 C. Jurisdiction by Consent... 24 D. Nationality-, Property- and Presence-Based Jurisdiction... 25 2.2 Extraterritorial Jurisdiction within the European Union: The Brussels Regulation... 31 2.2.1 Regulation Overview... 31 2.2.2 Jurisdiction in Contract Cases... 38 A. Place of Performance... 38 Tessili v Dunlop (1976)... 42 Notes, Questions & Commentary... 54 A. de Bloos v Bouyer (1976)... 55 Notes, Questions & Commentary... 62 Shenavai v Kreischer (1987)... 63 Notes, Questions & Commentary... 70 B. Jurisdictional Clauses: an Introduction to Article 23... 78 Salotti v RÜWA (1976)... 85 Notes, Questions & Commentary... 94 Zelger v Salinitry (No. 1) (1980)... 101 Notes, Questions & Commentary... 105 C. Ancillary Jurisdiction and the Lis Pendens Problem... 106 D. Jurisdiction with respect to Consumer Contracts... 117 2.2.3 Jurisdiction in Tort... 120 Bier v Mines de Potasse (1976)... 121 Notes, Questions & Commentary... 132 iii
iv table of contents Arcado v Haviland (1987)... 145 Notes, Questions & Commentary... 150 Réunion Européenne v Spliethoff s (1998)... 153 Notes, Questions & Commentary... 165 2.2.4 Doing Business Abroad: an Introduction to Article 5(5)... 167 A. de Bloos v Bouyer (1976)... 171 Notes & Commentary... 176 Schotte v Parfums Rothschild (1987)... 179 Notes, Questions & Commentary... 186 2.3 The Lugano Convention... 189 2.4 Jurisdiction Under English Law... 191 2.4.1 Introduction... 191 2.4.2 Jurisdiction in Contract Under English Law... 192 Underweser Reederei v. Zapata Off-Shore (1969)... 193 Notes, Questions & Commentary... 199 Brinkibon Ltd. v Stahag Stahl (1982)... 201 Notes, Questions & Commentary... 206 Spiliada Maritime v Cansulex (1987)... 207 Notes, Questions & Commentary... 216 Roneleigh Ltd. v MII Exports (1988)... 217 Notes, Questions & Commentary... 222 2.5 Jurisdiction under American Law... 224 2.5.1 Long-Arm; State & Federal Courts; Due Process... 224 World-Wide Volkswagen v. Woodson (1980)... 236 Notes, Questions & Commentary... 244 Helicopteros Nacionales v. Hall (1984)... 245 Notes, Questions & Commentary... 252 2.5.2 Jurisdiction in Contract Cases... 258 A. Supplementary Rules... 258 Burger King Corp. v. Rudzewicz (1985)... 259 Notes, Questions & Commentary... 269 Afram Export v. Metallurgiki Halyps (1985)... 272 Notes, Questions & Commentary... 276 B. Contract Jurisdiction Quasi in Rem... 280 Majique Fashions v. Warwick (1979)... 281 Notes, Questions & Commentary... 286 C. Forum Agreement... 288
table of contents v M/S Bremen v. Zapata Off-Shore (1972)... 290 Notes, Questions & Commentary... 299 Volkswagenwerk v. Klippan GmbH (1980)... 306 Notes, Questions & Commentary... 312 2.5.3 Jurisdiction in Tort... 314 Asahi Metal v. Superior Court of California (1987)... 318 Notes, Questions & Commentary... 326 2.5.4 Forum Non Conveniens, Lis Pendens and Antisuit Injunctions... 330 A. Forum Non Conveniens... 330 Pain v. United Technologies (1980)... 331 Notes, Questions & Commentary... 341 In re. Union Carbide Disaster, Bhopal (1984)... 345 Notes, Questions & Commentary... 351 B. Lis Alibi Pendens... 353 Note re. Ingersoll Milling Machine Co. v. Granger.355 C. Antisuit Injunctions... 358 2.5.5 Extraterritorial Jurisdiction and the Corporate Veil... 364 Bulova Watch v. K. Hattori & Co. (1986)... 370 Notes, Questions & Commentary... 381 2.6 Hague Convention on Choice-of-Court Agreements... 384 CHAPTER 3 THE APPLICABLE LAW IN CONTRACT AND TORT 3.1 General Introduction... 393 3.2 European Law... 402 3.2.1 Contract Conflicts and the Rome I Regulation... 402 A. Party Autonomy... 407 ISS Machinery Services Ltd v Aeolian Shipping SA (2001)... 409 Notes, Questions & Commentary... 418 Egon Oldendorff v Libera Corporation (1995)... 420 Notes, Questions & Commentary... 433 B. Supplementary Rules in the Absence of Choice... 435 ICF v MIC Operations BV (2009)... 441 Notes, Questions & Commentary... 465 C. Mandatory Rules... 469
vi table of contents Transocean Drilling Ltd UK v Arbejdsministeriet (2000)... 473 Notes & Commentary... 479 3.2.2 Sales Law Conflicts and Harmonization... 481 A. Introduction... 481 B. 1955 Hague Convention... 482 C. 1980 Vienna Convention (CISG)... 485 D. 1986 Hague Convention... 487 3.2.3 Tort Conflicts under European Law... 488 A. Non-Contractual Obligations and the Rome II Regulation... 488 B. Selected Tort Cases under European National Law... 505 Red Sea Insurance Co. Ltd v Bouygues SA (1994)... 506 Notes & Commentary... 520 Edmunds v Simmonds (2000)... 522 Notes, Questions & Commentary... 528 Krægpøth v Rasmussen (1982)... 533 Notes, Questions & Commentary... 538 3.2.4 Product Liability... 542 Illustrations, Notes & Questions... 547 3.3 Choice and Conflict in American Courts... 551 3.3.1 Introduction: Significant Contacts and Governmental Interests... 551 3.3.2 Contracts and Sales... 564 A. The First Restatement Madaus v. November Hill Farm (1986)... 564 Notes, Questions & Commentary... 569 B. The Second Restatement... 572 Nordson Corp. v. Plasschaert (1982)... 576 Notes, Questions & Commentary... 583 C. International Sales Contracts (Revisited)... 590 Ajax Tool Works, Inc. v. Can-Eng Mfg. (2003)... 591 Notes, Questions & Commentary... 592 3.3.3 Tort Conflicts: General Principles... 593 A. The First Restatement... 593 B. The Second Restatement... 594 Babcock v. Jackson (1963)... 596 Notes, Questions & Commentary... 605 Barkanic v. General Aviation [China] (1991)... 608 Notes, Questions & Commentary... 613
table of contents vii Simon II Tobacco Litigation (2000)... 615 Notes & Questions... 620 3.3.4 Product Liability... 621 Trahan v. Squibb (1983)... 625 Notes, Questions & Commentary... 631 Kozoway v. Massey-Ferguson, Inc. (1989)... 633 Notes, Questions & Commentary... 637 Townsend v. Sears Roebuck (2007)... 638 Notes, Questions & Commentary... 650 CHAPTER 4 EXTRATERRITORIAL SERVICE AND EVIDENCE ABROAD 4.1 General Introduction... 653 4.2 The Service of Process on Defendants Abroad... 655 4.2.1 Introduction... 655 4.2.2 Service under European Law... 656 4.2.3 Service under American Law... 661 4.2.4 The Hague Service Convention... 665 Volkswagenwerk Aktiengesellschaft v. Schlunk (1988)... 668 Notes, Questions and Commentary... 680 4.3 The Taking of Evidence Abroad... 685 4.3.1 Introduction... 685 4.3.2 The Taking of Evidence under National Law... 685 4.3.3 The Hague Evidence Convention... 695 Société Nationale Industrielle Aerospatiale v. United States District Court (1987)... 699 Notes, Questions and Commentary... 712 CHAPTER 5 RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS 5.1 General Introduction... 715 5.2 Enforcement under European Law... 720 5.2.1 Enforcement under National Law... 720 Adams & Others v Cape Industry (1989)... 726 Notes, Questions & Commentary... 740 5.2.2 Recognition & Enforcement under the Brussels Regulation... 741 Debaecker & Plouvier v Bouwman (1985)... 753 Notes, Questions & Commentary... 766 5.2.3 Enforcement under Other EU Regulations... 770
viii table of contents 5.3 Recognition & Enforcement under American Law... 773 5.3.1 Recognition and Enforcement of Sister-State Judgments... 773 Griffis v. Luban (2002)... 775 Notes, Questions & Commentary... 781 5.3.2 Recognition and Enforcement of Foreign Country Judgments... 782 Somportex Limited v. Philadelphia Chewing Gum Corp. (1972)... 786 Notes, Questions & Commentary... 790 Ackermann v. Levine (1986)... 794 Notes, Questions & Commentary... 805 5.3.3 Proposed Federal Legislation and New Federal Speech Statute... 808 A. American Law Institute Proposal... 808 B. New Federal Legislation: Speech (2010)... 809 CHAPTER 6 INTERNATIONAL COMMERCIAL ARBITRATION 6.1 Introduction: the Arbitration Alternative... 813 6.2 The Arbitral Scenario, Institutions and Applicable Laws... 818 6.2.1 The Arbitral Scenario... 818 6.2.2 Institutional Arbitration... 830 6.2.3 From Procedure to Conflicts and Substantive Law... 833 6.2.4 International Regulation: An Introduction to the 1958 New York Convention... 844 6.3 Pre-Award Enforcement... 847 6.3.1 Contract Formation, Interpretation & Validity... 847 Kahn Lucas Lancaster v. Lark International (1999)... 849 Notes, Questions & Commentary... 856 Zambia Steel & Building Supplies v James Clark & Eaton Ltd. (1986)... 860 Notes, Questions & Commentary... 869 McDonnell Douglas Corp. v. Kingdom of Denmark (1985)... 871 Notes, Questions & Commentary... 877 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985)... 878
table of contents ix Notes, Questions & Commentary... 893 6.3.2 Interim Measures... 900 6.4 Post-Award Enforcement... 904 6.4.1 Introduction... 904 6.4.2 Judicial Review in the Country of Origin... 906 Bergesen v. Joseph Muller Corporation (1983)... 911 Notes, Questions & Commentary... 917 6.4.3 Recognition and Enforcement of Foreign Awards... 919 Parsons & Whittemore Inc. v. Rakta (1974)... 921 Notes, Questions & Commentary... 929 Introduction to Bridas and Chromalloy... 934 International Standard Electric v. Bridas Sociedad (1990)... 935 Notes, Questions & Commentary... 944 TABLE OF CASES... 949 INDEX... 961 APPENDICES ON CD-ROM CHAPTER 2 JURISDICTION EU Brussels I Regulation (2000) EU Brussels (I) Convention (1968, consolidated version 1998) EU Brussels II Regulation (2003) EU Insolvency Regulation (2000) EU Maintenance Regulation (2008) 1st Hague Draft Judgments Convention (1999) 1st Hague Draft Judgments Convention Explanatory Report (2000) 2nd Hague Draft Judgments Convention (2001) Hague Choice of Court Convention (2005) Lugano Convention (2007) CHAPTER 3 CHOICE OF LAW EU Rome I Regulation (2008) EU Rome (I) Convention (1980, consolidated version 1998) EU Rome II Regulation (2007) Hague Sales Convention (1955) original French language text
x table of contents Hague Sales Convention (1955) unofficial English translation (excerpts) Hague Sales Convention (1986) United Nations Convention on Contracts for the International Sale of Goods (1980) Hague Products Liability Convention (1973) Hague Traffic Accident Convention (1971) UK Private International Law (Miscellaneous Provisions) Act 1995 CHAPTER 4 SERVICE AND EVIDENCE EU Service Regulation (2007) EU Service Regulation (2000) Hague Service Convention (1965) EU Evidence Regulation (2001) Hague Evidence Convention (1970) CHAPTER 5 RECOGNITION AND ENFORCEMENT (See also Chapter 2 above) EU Enforcement Order Regulation (2004) EU Payment Order Procedure Regulation (2006) EU Small Claims Procedure Regulation (2007) Uniform Foreign Money-Judgment Recognition Act (1962) CHAPTER 6 ARBITRATION UNCITRAL Arbitration Rules (1976, revised 2010) Rules of Arbitration of the International Chamber of Commerce (2001) UNCITRAL Model Law on International Commercial Arbitration (1985) UNCITRAL Model Law on International Commercial Arbitration (1985, revised 2006) UK Arbitration Act 1996 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) (1958)