Linkages and Boundaries in Private and Public International Law 9781509918621, 9781509918652, 9781509918645

Table of contents :
Foreword
Contents
List of Contributors
Introduction: Systemic Dialogue: Identifying Commonalities and Exploring Linkages in Private and Public International Law
I. Mutually Strengthening Dialogue
II. Discerning Synergies and Shared Values in International Law
III. Functional Commonalities in International Law
IV. Exploring Linkages and Boundaries in International Law
V. Conclusion
Part I: Discerning Synergies and Shared Values in International Law
1. Connecting Public and Private International Law
I. Introduction
II. Sources
III. Connections
IV. Conclusions
2. Windows in International Law
I. Introduction
II. Roman Interpretation: Between Strict and Flexible Legal Analysis
III. Private and Public International Law as Professionally Distinct Fields
IV. New Descriptive Tools for Private and Public International Law
V. Windows, (De)coders and Travellers in Private and Public International Law
VI. Public International Law
VII. Concluding Remarks
3. 'International' Rules in an Internal Setting
I. Introduction
II. Case Study: The United Kingdom
III. Conclusion
Part II: Functional Commonalities in International Law
4. Jurisdiction: Betwixt Unilateralism and Global Coordination
I. Introduction
II. Jurisdiction: 'Many, Too Many, Meanings'
III. Trends towards a Global 'System'?
IV. Bases of Jurisdiction
V. Jurisdiction in Private International Law: Global Connectivity and 'Justice Pluralism'
VI. Public International Law Jurisdiction: Somewhere between Law and Power
VII. Improving Coordination of Jurisdictional Frameworks in Private and Public International Law
VIII. Conclusions
5. On the Dwindling Divide between the Public and Private: The Role of Soft Law Instruments in Global Governance
I. Introduction: Global Governance and the Confluence of Public and Private International Law
II. 'Softness' in Public International Law: 'Deformalisation' and the Emergence of Global Governance
III. Soft Law as Governance Technique: The Case of Private International Law
IV. Responding to Law's Globalisation? Order and Justice within Contemporary Frameworks
6. The Role of Global Values in the Evaluation of Public Policy in International Investment and Commercial Arbitration
I. Introduction
II. Public Policy as an Exception to Compliance with International Obligations
III. Public Policy and the Difficulties in its Definition
IV. Public Policy as a Narrow Exception in Private International Law and a Broad Defence in Public International Law
V. Types of Global Values that Influence International Arbitration
VI. Incidence of Global Values in the Interpretation of Public Policy in International and Commercial and Investment Arbitration
VII. Conclusions
Part III: Exploring Linkages and Boundaries in International Law
7. Reconciling Human Rights and Supply Chain Management through Corporate Social Responsibility
I. Introduction
II. CSR and Global Supply Chain Management: The Developing Legal Framework
III. The Barriers in Public International Law
IV. The Barriers in Private International Law
V. Case Study of the Mobile Phone Industry
VI. Towards a Hybrid Regulatory Approach: Transcending the Limits of Private and Public International Law
VII. Conclusion
8. Realising the Objectives of Public International Environmental Law through Private Contracts: the Need for a Dialogue with Private International Law Scholars
I. Introduction
II. The Nagoya Protocol and Ad Hoc Private Contracts
III. Standardised Contractual Clauses under the International Treaty
IV. Overall Reflection
9. International Investment Arbitration and the Arduous Route to Transparency
I. Introduction
II. History
III. International Commercial Arbitration in Private International Law: Confidentiality and Privacy as the Norm
IV. Investor-State Arbitration in Public International Law: Transparency as the Demand
V. Clash of Public Values with Functional Approaches
VI. How Private Values and Public Values Meet
VII. Dispute Settlement in the Proposed TTIP, TPP and CETA
VIII. Conclusions
10. Protecting Whistleblowers: The Roles of Public and Private International Law
I. Introduction
II. Regulatory Approaches to Whistleblowing: Protection and Incentives
III. Domestic UK Whistleblowing Regulation
IV. Private International Law
V. The Contribution of Public International Law to Whistleblowing
VI. Which States are Responsible for Providing Protection in a Cross-border Disclosure?
VII. Conclusions
Index

Citation preview

LINKAGES AND BOUNDARIES IN PRIVATE AND PUBLIC INTERNATIONAL LAW Do private and public international law coincide in their underlying o ­ bjectives when it comes to their respective contribution to the realisation of global values? How do they work together towards the consistency and efficiency of the international legal order? This edited collection sets out a vision: to serve modern society, the international legal order cannot be defined as public or private. Linkages and Boundaries focuses on the interface between private and public international law and the synergies that a joint approach brings to topical issues, such as corporate social responsibility and environmental law, as well as foundational concepts such as international jurisdiction, state sovereignty and party autonomy. The book showcases the dynamic interaction between the two disciplines, with a view to contribute to a dialogue that is still only in the early stages of delivering its full potential. The collection explores ways to deepen the dialogue between these two distinct but interrelated disciplines, with a view to further their progression towards a more integrated and holistic approach to legal problems that require an international approach. The book brings together well-known experts and new voices from both disciplines and from a wide range of jurisdictions in Europe, North America and South America.

ii 

Linkages and Boundaries in Private and Public International Law

Edited by

Verónica Ruiz Abou-Nigm, Kasey McCall-Smith and Duncan French

HART PUBLISHING Bloomsbury Publishing Plc Kemp House, Chawley Park, Cumnor Hill, Oxford, OX2 9PH, UK HART PUBLISHING, the Hart/Stag logo, BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc First published in Great Britain 2018 Copyright © The editors and contributors severally 2018 The editors and contributors have asserted their right under the Copyright, Designs and Patents Act 1988 to be identified as Authors of this work. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers. All UK Government legislation and other public sector information used in the work is Crown Copyright ©. All House of Lords and House of Commons information used in the work is Parliamentary Copyright ©. This information is reused under the terms of the Open Government Licence v3.0 (http://www.nationalarchives.gov.uk/doc/ open-government-licence/version/3) except where otherwise stated. All Eur-lex material used in the work is © European Union, http://eur-lex.europa.eu/, 1998–2018. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication data Names: Abou-Nigm, Verónica Ruiz, editor.  |  McCall-Smith, Kasey, editor.  |  French, Duncan, editor. Title: Linkages and boundaries in private and public international law / Edited by Verónica Ruiz Abou-Nigm, Kasey McCall-Smith and Duncan French. Description: Portland, Oregon : Hart Publishing, 2018.  |  Includes bibliographical references and index. Identifiers: LCCN 2018006884 (print)  |  LCCN 2018007603 (ebook)  |  ISBN 9781509918638 (Epub)  |  ISBN 9781509918621 (hardback : alk. paper) Subjects: LCSH: Conflict of laws.  |  International law.  |  International and municipal law. Classification: LCC K7040 (ebook)  |  LCC K7040 .L548 2018 (print)  |  DDC 340.9—dc23 LC record available at https://lccn.loc.gov/2018006884 ISBN: HB: 978-1-50991-862-1 ePDF: 978-1-50991-864-5 ePub: 978-1-50991-863-8 Typeset by Compuscript Ltd, Shannon To find out more about our authors and books visit www.hartpublishing.co.uk. Here you will find extracts, author information, details of forthcoming events and the option to sign up for our newsletters.

For our children. Anna, Jacob, Matthew, Rebecca, Francisco, Ignacio, Nicolás, Annabelle and Bryce.

vi 

FOREWORD

The subject-matter of this book may provoke at first glance an unavoidable f­ eeling of déjà vu. Indeed, from time to time proposals to bring private and public international law together come out in the most varied ways and with different content. Such proposals have been particularly made by private international law scholars and the occurrences have dramatically grown during the last few years, both in terms of their number and in terms of the diversification and sophistication of the arguments set forth therein. Even though it hardly can be said that the current respective situation of both disciplines is similar to that of ius gentium times, when no distinction was made between them, it seems clear that the constructions which try to draw private and public international law closer together are now more justified than ever. In this sense, the book is both a timely and rich contribution. The reason is simple to explain. Since its codification by states—and, consequently, its nationalisation—private international law has been generally viewed as a domestic issue. Nevertheless, it is evident that this traditional assumption is affected by several factors. Among the most visible (which are, at the same time, the most significant) we can mention the impact of international instruments, supranational integration (namely in the EU), the phenomena associated with globalisation (of social, financial, commercial, political and technological character), the increasing relevance of human rights to private legal relationships, the proliferation of non-national rules, standards and private legal orders, and the extraordinary success of private adjudication. All in all, these factors have not only eroded the foundations of the domestic conception of private international law, they have also had an impact on the formerly solid vision (invariably viewed as ‘classical’ in some civil-law countries) according to which private international law would be a sort of special private law but invariably, at its core, private law. On the other side, similar factors have suggested that public international law has lost its state-centred focus by paying increasing attention to the role of private entities and human beings within the context of the international legal order. As a general and main consequence of the foregoing, a certain confluence of both disciplines is perceived. Obviously, they do keep their individuality and scientific autonomy even if they meet in some particular fields. Frequently, the points of view of private international law and of public international law on the same question are contradictory rather than complementary. However, that is not negative per se. There are many opposing views among the specialists of the same legal discipline and nobody considers that those specialists belong to different

viii 

Foreword

legal fields. Additionally, some contradictions between the private and public aspects of international law are based more on long-standing caricatures rather than on conceptual disagreement. The current proximity between private and public international law may be approached in many ways. The editors of this book have chosen to tackle the topic from three intertwined perspectives as identified by the three parts of this ­collection, namely (i) discerning synergies and shared values in international law, (ii) examining the functional commonalities in international law, and (iii) exploring the linkages and boundaries in international law. Concerning the remit of each discipline, traditionally, public and private international law have occupied very different, mutually exclusive domains. On the one hand, classical public international law is said to be concerned solely with the interactions of states, thus constituting the legally binding rules and principles that govern state interaction. On the other hand, classical private international law is only concerned with the civil and commercial interactions between private actors. These assumptions have long existed and even today find support in both academic and professional circles. However, traditional definitions along these lines simply no longer reflect reality, if they ever did. Rather, changes in the politicallegal landscape have led contemporary scholars and practitioners to reconsider the traditional boundaries of each discipline and how they interact with one another. Of course, both disciplines will continue to exist even if they are challenged by arguments and features of a different kind, essential for the development (rather theoretical) of a transnational law and ultimately of a global law. Of course, selfreflective specialists on both sides have become progressively compelled to be aware of the evolution of the other discipline. Certainly, academics cannot limit themselves to only a part of the reality with which they are faced because the reality will remain as it is, complex by nature. In other words, a complete treatment of international law issues will almost always require the aggregation of all different possible perspectives whether traditionally private or public international law in nature. Nevertheless, isolationist attitudes as well as diverse degrees of disinterest about what happens on the other side have always existed and are still present as surprising as they can be. In fact it has been something of a general rule among many public international lawyers; it is the wholly inappropriate perception that private international law is purely of domestic interest. More formally, some public international lawyers seem to think that their discipline is already too broad and contains too many topics as to add also ‘private’ issues. And some of them still consider that only states and international organisations can be subjects of public international law. Amongst privatists, the reason for isolationism rests on the strength of the historic ‘emancipation’ of private international law, which gained its independence from public international law in the second part of nineteenth­ century. In a similar way in which new states do everything to differentiate themselves from their former metropolis, private international law reinforced its scientific autonomy at the same time as it affirmed its legislative autonomy. An additional reason, clearly linked to the previous one, is a nationalist vision of law in general and of private international law in particular.

Foreword

 ix

Even if some of those arguments could be understood within specific contexts, generally speaking they have lost their validity under the weight of the reality. Thus, the long awaited recognition of non-state actors as subjects of public international law destroys the formal fundament of isolationism among public international lawyers. Similarly, the idea of a private international law, which would not be international because of the pretended national character of its sources, is no longer acceptable. All of the above becomes even clearer when the analysis is not encircled within a rather theoretical framework, but seen in relation to the practice of international law. Those who are involved in an activity linked with the ‘reality’ of international law as a lawmaker, judge, arbitrator, counsel or consultant, know that it is hardly conceivable not to be somehow confronted with the other discipline. International courts and tribunals face cases populated by elements of both disciplines and they deal with them according to the nature of their particular function. For instance, in the context of arbitral disputes, tribunals are beginning to develop truly transnational principles, rules and methodologies of private international law that are completely devoid of connection with the state. Similarly, much of what we describe as domestic private international law has its origins outside the domestic sphere of states. The third part devoted to exploring linkages and boundaries in international law touches on various fields in which private and public international law cannot live apart: human rights, environment and corporate social responsibility. To illustrate in regards to human rights, it is worth highlighting that despite its ‘public’ character, international human rights law has a direct impact on the legislation and jurisprudence of private international law. Such impact is executed on diverse issues and in different circumstances in order to grant, namely, access to justice, workers’ rights or the superior interest of the children, for example. Closely related to this, it is apparent that private international law can hardly be conceived as a simple ‘neutral’ tool to allocate competences among different jurisdictions when the existence of a rampant process of ‘materialisation’, which penetrates all the issues with social, political and economic considerations, is realised. Actually, the changing nature of private international law has spurred academic debate suggesting that it may, like public international law, also play a regulatory function. At the same time, international human rights tribunals now have to deal with private international cases. The situation is particularly common in matters of family law. On the basis of the foregoing, it remains clear that the contribution made by Verónica, Kasey and Duncan to the debate on this crucial issue is huge. The book is full of fresh ideas aiming to develop the notion of private and public international law as components of a general legal system concerned with the regulation of international and transnational relations. Needless to say, their effort was worth it. Diego P Fernández Arroyo Professor at Sciences Po Law School Paris, 30 November 2017

x 

CONTENTS

Foreword������������������������������������������������������������������������������������������������������������������ vii List of Contributors������������������������������������������������������������������������������������������������ xvii

Introduction: Systemic Dialogue: Identifying Commonalities and Exploring Linkages in Private and Public International Law����������������������������������������������������1 Verónica Ruiz Abou-Nigm, Kasey McCall-Smith and Duncan French I. Mutually Strengthening Dialogue��������������������������������������������������������������������1 II. Discerning Synergies and Shared Values in International Law����������������������3 III. Functional Commonalities in International Law��������������������������������������������4 IV. Exploring Linkages and Boundaries in International Law�����������������������������7 V. Conclusion��������������������������������������������������������������������������������������������������������9 Part I: Discerning Synergies and Shared Values in International Law 1. Connecting Public and Private International Law������������������������������������������13 Alex Mills I. Introduction���������������������������������������������������������������������������������������������13 II. Sources������������������������������������������������������������������������������������������������������14 III. Connections���������������������������������������������������������������������������������������������16 A. Principle�������������������������������������������������������������������������������������������16 B. History����������������������������������������������������������������������������������������������18 C. Functional Commonality����������������������������������������������������������������21 D. Policy Incorporation������������������������������������������������������������������������25 E. Shared Objectives�����������������������������������������������������������������������������26 F. Methodology������������������������������������������������������������������������������������28 IV. Conclusions����������������������������������������������������������������������������������������������31 2. Windows in International Law�������������������������������������������������������������������������33 Jean d’Aspremont and Francesco Giglio I. Introduction���������������������������������������������������������������������������������������������33 II. Roman Interpretation: Between Strict and Flexible Legal Analysis�������������������������������������������������������������������������������������������34 III. Private and Public International Law as Professionally Distinct Fields������������������������������������������������������������������������������������������35 IV. New Descriptive Tools for Private and Public International Law���������36 A. Descriptive Tool 1: The Windows���������������������������������������������������36

xii 

Contents B. Descriptive Tool 2: The (De)coders����������������������������������������������37 C. Descriptive Tool 3: The Inbound and Outbound Travellers�������37 V. Windows, (De)coders and Travellers in Private and Public International Law����������������������������������������������������������������������������������37 A. The Windows in Private International Law���������������������������������37 B. The (De)coders in Private International Law������������������������������42 C. The Travellers in Private International Law���������������������������������43 VI. Public International Law�����������������������������������������������������������������������46 A. The Windows in Public International Law����������������������������������46 B. The (De)coders in Public International Law�������������������������������49 C. The Travellers in Public International Law����������������������������������51 VII. Concluding Remarks�����������������������������������������������������������������������������51

3. ‘International’ Rules in an Internal Setting�����������������������������������������������������53 Kirsty J Hood, QC I. Introduction������������������������������������������������������������������������������������������53 II. Case Study: The United Kingdom��������������������������������������������������������56 A. Sovereignty and the UK����������������������������������������������������������������56 B. The Impact of Internal Divisions of Sovereignty on Public International Law and Private International Law Rules��������������58 C. The Balance of State Sovereignty and Individual Autonomy where there is an Internal Division of Sovereignty: Role of Private International Law and Public International Law��������62 III. Conclusion���������������������������������������������������������������������������������������������70 Part II: Functional Commonalities in International Law 4. Jurisdiction: Betwixt Unilateralism and Global Coordination�����������������������75 Duncan French and Verónica Ruiz Abou-Nigm I. Introduction������������������������������������������������������������������������������������������75 II. Jurisdiction: ‘Many, Too Many, Meanings’�������������������������������������������77 III. Trends towards a Global ‘System’?��������������������������������������������������������78 IV. Bases of Jurisdiction������������������������������������������������������������������������������81 V. Jurisdiction in Private International Law: Global Connectivity and ‘Justice Pluralism’���������������������������������������������������������������������������85 VI. Public International Law Jurisdiction: Somewhere between Law and Power����������������������������������������������������������������������������������������������89 VII. Improving Coordination of Jurisdictional Frameworks in Private and Public International Law����������������������������������������������92 A. Development of, and Coordination Between, Rule-based Systems�������������������������������������������������������������������������������������������93 B. Epistemic Internationalisation of General Principles of International Competence�������������������������������������������������������96 C. The Role of International Judicial Oversight�������������������������������98 VIII. Conclusions�����������������������������������������������������������������������������������������104

Contents

 xiii

5. On the Dwindling Divide between the Public and Private: The Role of Soft Law Instruments in Global Governance��������������������������������������������105 Richard Collins and María Mercedes Albornoz I. Introduction: Global Governance and the Confluence of Public and Private International Law�������������������������������������������������������������105 II. ‘Softness’ in Public International Law: ‘Deformalisation’ and the Emergence of Global Governance�����������������������������������������109 III. Soft Law as Governance Technique: The Case of Private International Law���������������������������������������������������������������������������������113 IV. Responding to Law’s Globalisation? Order and Justice within Contemporary Frameworks�����������������������������������������������������118 6. The Role of Global Values in the Evaluation of Public Policy in International Investment and Commercial Arbitration���������������������������121 María Blanca Noodt Taquela and Ana María Daza-Clark I. Introduction�����������������������������������������������������������������������������������������121 II. Public Policy as an Exception to Compliance with International Obligations�������������������������������������������������������������������������������������������123 III. Public Policy and the Difficulties in its Definition�����������������������������124 IV. Public Policy as a Narrow Exception in Private International Law and a Broad Defence in Public International Law����������������������129 V. Types of Global Values that Influence International Arbitration������132 A. Party Autonomy���������������������������������������������������������������������������132 B. Free Trade�������������������������������������������������������������������������������������133 C. Rejection of Corrupt Practices����������������������������������������������������134 D. Non-Discrimination��������������������������������������������������������������������135 VI. Incidence of Global Values in the Interpretation of Public Policy in International and Commercial and Investment Arbitration���������136 A. Public Policy Concerning the Merits of the Dispute and the Arbitral Procedure����������������������������������������������������������139 VII. Conclusions������������������������������������������������������������������������������������������143 Part III: Exploring Linkages and Boundaries in International Law 7. Reconciling Human Rights and Supply Chain Management through Corporate Social Responsibility���������������������������������������������������������������������147 Kasey McCall-Smith and Andreas Rühmkorf I. Introduction�����������������������������������������������������������������������������������������147 II. CSR and Global Supply Chain Management: The Developing Legal Framework����������������������������������������������������������������������������������148 III. The Barriers in Public International Law��������������������������������������������151 A. TNCs and their Limited International Legal Personality�����������151 B. Extraterritoriality�������������������������������������������������������������������������153 C. Absence of Hard Law Triggers Soft Law Development��������������155

xiv 

Contents IV. The Barriers in Private International Law������������������������������������������159 A. The Applicable Law����������������������������������������������������������������������159 B. Rules of Jurisdiction���������������������������������������������������������������������161 C. The Legal Structure of Global Supply Chains����������������������������164 D. Summary: The Barriers to Promoting CSR Posed by EU Private International Law Rules���������������������������������������165 V. Case Study of the Mobile Phone Industry������������������������������������������166 VI. Towards a Hybrid Regulatory Approach: Transcending the Limits of Private and Public International Law����������������������������168 A. The Strategic Use of Home State Regulation������������������������������170 B. Steps Toward the Hybrid Regulatory Approach�������������������������172 VII. Conclusion��������������������������������������������������������������������������������������������173

8. Realising the Objectives of Public International Environmental Law through Private Contracts: The Need for a Dialogue with Private International Law Scholars��������������������������������������������������������175 Elisa Morgera and Lorna Gillies I. Introduction�����������������������������������������������������������������������������������������175 II. The Nagoya Protocol and Ad Hoc Private Contracts�������������������������178 A. The Interface between the Nagoya Protocol and Private International Law�������������������������������������������������������������������������182 B. Choice of Jurisdiction������������������������������������������������������������������182 C. Choice of Applicable Law������������������������������������������������������������185 D. Access to Justice and Recognition of Foreign Judgments����������186 E. Alternative Dispute Resolution���������������������������������������������������188 F. Preliminary Observations������������������������������������������������������������190 III. Standardised Contractual Clauses under the International Treaty����������������������������������������������������������������������������������������������������190 A. The Interface between the International Treaty and Private International Law�������������������������������������������������������������������������191 B. Comparative Observations����������������������������������������������������������194 IV. Overall Reflection���������������������������������������������������������������������������������196 9. International Investment Arbitration and the Arduous Route to Transparency�����������������������������������������������������������������������������������������������199 Sharon E Foster I. Introduction�����������������������������������������������������������������������������������������199 II. History��������������������������������������������������������������������������������������������������200 A. Modern International Commercial Arbitration�������������������������200 B. History of Investor-State Arbitration������������������������������������������201 III. International Commercial Arbitration in Private International Law: Confidentiality and Privacy as the Norm�����������������������������������203 IV. Investor-State Arbitration in Public International Law: Transparency as the Demand���������������������������������������������������������������204 A. Public International Law and Transparency�������������������������������205 B. Investor-State Arbitration and Transparency�����������������������������206

Contents

 xv

V. Clash of Public Values with Functional Approaches�����������������������207 VI. How Private Values and Public Values Meet������������������������������������209 A. Lack of Harmonisation in International Investment Law������210 B. Pluralism������������������������������������������������������������������������������������211 C. Rule of Law��������������������������������������������������������������������������������211 VII. Dispute Settlement in the Proposed TTIP, TPP and CETA������������213 VIII. Conclusions���������������������������������������������������������������������������������������215 10. Protecting Whistleblowers: The Roles of Public and Private International Law������������������������������������������������������������������������������������������217 Dimitrios Kagiaros and Amanda Wyper I. Introduction��������������������������������������������������������������������������������������217 II. Regulatory Approaches to Whistleblowing: Protection and Incentives�����������������������������������������������������������������������������������219 III. Domestic UK Whistleblowing Regulation��������������������������������������220 IV. Private International Law�����������������������������������������������������������������223 A. Jurisdiction��������������������������������������������������������������������������������223 B. Applicable Law��������������������������������������������������������������������������225 V. The Contribution of Public International Law to Whistleblowing�����������������������������������������������������������������������������230 A. Whistleblowers and Freedom of Expression����������������������������231 VI. Which States are Responsible for Providing Protection in a Cross-border Disclosure?����������������������������������������������������������234 A. Human Rights Obligations of the State of Disclosure������������234 B. Human Rights and Private International Law in the Context of Cross-border Whistleblowing��������������������������������237 VII. Conclusions���������������������������������������������������������������������������������������239

Index�����������������������������������������������������������������������������������������������������������������������241

xvi 

LIST OF CONTRIBUTORS

María Mercedes Albornoz is Professor of Private International Law at the Center for Research and Teaching in Economics (Centro de Investigación y D ­ ocencia Económicas, CIDE), located in Mexico City. She graduated in Law at the National University of Litoral in Santa Fe, in her country of origin, Argentina. Then, she obtained a Master Degree in Private International Law and International ­Commerce Law, and a PhD in Law, both at Université de Paris II, in France. Her research focuses on Private International Law and on the interface between Law and Technology, encompassing International Contracts and E-commerce, Cross-border Flows of Personal Data, Online Dispute Resolution, as well as International Surrogacy Arrangements. Professor ALBORNOZ cooperates with the Mexican Ministry of Foreign Affairs as an External Advisor in Private International Law. She is a member of Mexico’s National System of Researchers, of the American Association of Private International Law (ASADIP) and the Mexican Academy of Private International and Comparative Law (AMEDIP). Jean d’Aspremont is Professor of International Law at Sciences Po School of Law. He also holds a chair of Public International Law at the University of ­Manchester where he founded the Manchester International Law Centre (MILC). He is ­General Editor of the Cambridge Studies in International and Comparative Law and Director of Oxford International Organizations (OXIO). He is E ­ ditor-in-Chief of ESIL Reflections. He is a member of the Scientific Advisory Board of the E ­ uropean Journal of International Law and series editor of the Melland Schill Studies in International Law. He is a member of the Board of the European Society of ­International Law (ESIL). Richard Collins is Lecturer in International Law in University College Dublin (UCD). He currently teaches and researches in the fields of public international law and philosophy of law. His recent monograph, The Institutional Problem in Modern International Law, was published in November 2016 with Hart P ­ ublishing. Prior to joining UCD, Richard was a lecturer at the School of Law, University of Sheffield (2009–14). He has held visiting research positions at the ­Universities of Amsterdam and Helsinki, and in 2018, he will be a visiting research ­fellow at Osgoode Hall Law School (Toronto), the University of Sydney and Monash ­University, Melbourne. Ana María Daza Clark is Lecturer in International Law at the Law School, ­University of Edinburgh. She holds a PhD (University of Dundee), LLM Law

xviii 

List of Contributors

and Economics (Utrecht University), LLM Magister Iuris Communis (Maastricht ­University), Abogada (Bolivia). Her research interests cover international investment law, natural resources management (specially water resources) and public international law. She is of counsel at Abogados Asociados para la Navegacion y la Industria (AACNI-UK) and former Legal Director at the Public Utility Regulatory System (SIRESE) in Bolivia. Sharon Foster has been Professor of Law at the University of Arkansas School of Law since 2000. She earned her bachelor’s degree from the University of California at Los Angeles in 1983, her JD from Loyola Law School in 1987, her LLM in 1997 from the University of Edinburgh, and a PhD in law in 2007 from the University of Edinburgh. Prior to her position at the University of Arkansas School of Law, she was an adjunct professor at Loyola Law School in Los Angeles from 1998 to 2000. Between 1987 and 2000, she was in private practice in Los Angeles, focusing on construction and international law. Her recent publications have been in the area of competition law and international law. Duncan French is Head of Lincoln Law School, University Taught ­Postgraduate Dean and Professor of International Law at the University of Lincoln. He was Chair of the International Law Association (ILA) Study Group on Due Diligence in International Law (2012–16) and Co-Rapporteur of the ILA Committee on International Law on Sustainable Development (2003–12) (lead author of five reports). His research focuses on public international law and various specific sub-fields thereof, including international environmental law, law of the sea, and international economic law. Francesco Giglio is Professor of Civil and Private Law at the University of S­ urrey. He has degrees from Dott Giur (four-year LLB) (Rome), LLM (Freiburg iB), Dr iuris (Osnabrück), MSt, DPhil (Oxon). He has published articles and ­monographs on the law of obligations—especially torts, unjust enrichment and damages—from the perspective of both Roman law and Common law; and on private international law. In his research, which is characterised by a legal-­theoretical approach with a focus on taxonomy, he seeks to understand the foundations and the operative mechanisms of legal institutions. Lorna Gillies is Lecturer in Commercial Law at the University of Strathclyde. She was previously Lecturer and Senior Lecturer at the University of Leicester, then Senior Lecturer at the University of Essex. She researches and publishes extensively in private international law, with an emphasis on pragmatism in PIL vis-à-vis internet consumer contracts, Common European Sales Law (2008, 2011); residual jurisdiction rules in civil and commercial matters (2012); the Charter of Fundamental Rights and jurisdiction (2014); international protection of cultural objects (2015); PIL and consumers’ social justice (2016), and the jurisdictional challenges of cross-border torts via social media (2017). She was cited by AG Trstenjak in C585/08 & C-144/09 Pammer and Alpenholf. Lorna is a PI to the Scottish Parliament (SPICe) for research services vis-à-vis Brexit. She is a founding member of

List of Contributors

 xix

the UK Private International Law Academic Network and member of the Scottish Universities Legal Network on Europe (SULNE). Kirsty Hood QC (LLB (Hons), DipLP, PhD—University of Glasgow) is an ­Advocate at the Scots Bar. She called to the Bar in 2001, and took silk in 2015. Whilst she maintains a varied civil practice, her particular expertise is in private international law. Kirsty’s published work is principally in the area of private international law (and its interaction with the UK’s constitutional structure)—she is the author of Conflict of Laws within the UK (Oxford University Press, 2007), was a contributor to Wilkinson & Norrie, The Law Relating to Parent and Child in ­Scotland, 3rd edn (W Green, 2013), and is the contributor of the ‘Cross-border Jurisdiction’ section of the Scottish Family Law Service looseleaf. She also combines with her practice at the Bar, leading seminars on undergraduate courses and giving talks in the field of private international law. She is currently Clerk of ­Faculty at the Faculty of Advocates. Dimitrios Kagiaros is Teaching Fellow in Public Law and Human Rights at the University of Edinburgh and a member of the Edinburgh Centre for Constitutional Law. He has taught on constitutional law, administrative law and human rights law courses at the University of Edinburgh and the University of Hull. He was awarded his PhD for his thesis ‘Whistle-blowing and Democratic ­Governance: Public Interest limitations in Security and Intelligence’ in 2015 from the ­University of Hull under the supervision of Professor Patrick Birkinshaw. His research interests include whistle-blower protection, the impact of the European ­sovereign debt crisis on human rights and the case law of the European Court of Human Rights in relation to freedom of expression. Kasey McCall-Smith is Lecturer in Public International Law and programme director for the LLM in Human Rights. She is a US-qualified lawyer and holds a BA and JD from the University of Arkansas. Dr McCall-Smith was awarded an LLM (2002) and a PhD (2012) in Public International Law by the University of Edinburgh. Her research focuses primarily on treaty law and how treaties are interpreted and implemented at the domestic and supranational levels and she has published predominantly in this area. She is interested in the role of the UN human rights treaty bodies as generators of law. The increasingly blurred ­distinction between public and private international law in terms of human rights ­protection is another key theme on which she works. She currently serves as the Chair of the Association of Human Rights Institutes (AHRI). Alex Mills is Reader in Public and Private International Law at University C ­ ollege London. He is the author of The Confluence of Public and Private International Law (Cambridge University Press, 2009) and co-author of Cheshire, North and ­Fawcett’s Private International Law 15th edn (Oxford University Press, 2017). Dr Mills’ research covers a range of topics in and beyond the fields of Public International Law and Private International Law (also known as the Conflict of Laws). He is particularly interested in areas which cut across traditional d ­ isciplinary

xx 

List of Contributors

boundaries, including international investment law and arbitration, foreign relations law, international commercial arbitration, and transnational (non-state) law. In 2010, he was awarded the American Society of International Law’s inaugural Private International Law Prize, and in 2015 he was Director of Studies for the ­Private International Law Programme of the Hague Academy of International Law. He is a member of the International Law Association Committee on the Protection of Privacy in Private International and Procedural Law, the Academic Research Panel of Blackstone Chambers, and the Editorial Board of the International and Comparative Law Quarterly. Elisa Morgera is Professor of Global Environmental Law at the Strathclyde ­University Law School and Director of the Strathclyde Centre for Environmental Law and Governance. She specialises in international, EU and comparative environmental law and has published specifically at the intersection of biodiversity, the human rights of indigenous peoples and local communities, and corporate environmental accountability. Elisa is the Principal Investigator of the BENELEX project ‘Benefit-sharing for an Equitable Transition to the Green Economy—The Role of Law’, funded by the European Research Council (November 2013–October 2018). María Blanca Noodt Taquela is Professor of Private International Law and Researcher for the Gioja Institute, University of Buenos Aires She was ­Professor of The Hague Academy of International Law and her course ‘Applying the most favourable treaty or domestic rules to facilitate private international law co-operation’ was published in the Recueil des Cours in 2016, tome 377. She is Professor of International Transactions, Comparative Law and International ­ Arbitration for several Master of Laws in Argentina, Bolivia, Brazil, Colombia, Denmark, Ecuador, Spain, United Kingdom and Uruguay. She has experience in International Arbitration as Arbitrator of several Latin-American Institutions and as Counsellor. María Blanca is a Member of the Editorial Board of several law reviews and also a member of various Argentinean and International Academies and Professional Associations. She has authored several books and articles on ­Private International Law and International Arbitration. Andreas Rühmkorf is Lecturer in Commercial Law at the University of ­Sheffield (UK). He is the author of Corporate Social Responsibility, Private Law and Global Supply Chains (Edward Elgar, 2015). His research primarily focuses on c­ orporate social responsibility (CSR), global supply chains and corporate governance. His most recent publications include G LeBaron and A Rühmkorf, ‘Steering CSR Through Home State Regulation: A Comparison of the Impact of the UK B ­ ribery Act and Modern Slavery Act on Global Supply Chain Governance’, p ­ ublished in Global Policy in 2017, and the chapter ‘Global Sourcing through ­Foreign ­Subsidiaries and Suppliers: Challenges for Corporate Social Responsibility’ in A de Jonge and R Tomasic (eds), Research Handbook on Transnational Corporations (Edward Elgar Publishing, 2017).

List of Contributors

 xxi

Verónica Ruiz Abou-Nigm is Senior Lecturer in International Private Law at the Law School of the University of Edinburgh. She is assistant editor in Dicey, Morris & Collins The Conflict of Laws (Sweet & Maxwell) and specialist editor in ­Shawcross & Beaumont on Air Law (LexisNexis). She is co-author of D McClean and V Ruiz Abou-Nigm, Morris on The Conflict of Laws (Sweet & Maxwell, 2016) and author of The Arrest of Ships in Private International Law (Oxford, Oxford University Press, 2011). She has published numerous contributions in the fields of private international law and maritime law. She is Member of the American Association of Private International Law (ASADIP) and represents it at The Hague Conference for Private International Law (HCCH). She is Member of the International Academy of Comparative Law (IACL). She is Vice-President of the European Law Faculties Association (ELFA). Amanda Wyper worked in commercial legal practice as a solicitor specialising in pensions law for a number of years before undertaking her PhD at the University of Edinburgh. Amanda’s PhD research considered the introduction of pension auto-enrolment into workplace pensions in the UK, looking at the legislative intention and evaluating the consequences. Amanda undertook original qualitative empirical research as part of her doctoral work and completed her PhD in July 2016. She has taught on a number of commercial and financial LLM courses and also tutored on the diploma in professional legal practice at the University of Edinburgh.

xxii 

Introduction: Systemic Dialogue: Identifying Commonalities and Exploring Linkages in Private and Public International Law VERÓNICA RUIZ ABOU-NIGM, KASEY McCALL-SMITH AND DUNCAN FRENCH

I.  Mutually Strengthening Dialogue The international legal order is neither public nor private; if it is to serve modern society it cannot be. An interdisciplinary and open outlook is a core feature of all contributions to this book. Scholars from both private and public international law and indeed from other disciplines such as commercial law, public law and private law have accepted the challenge to join in a collective effort to rethink the linkages and boundaries, and the functional commonalities, of both branches of international law. Private international law (or conflict of laws, as it is also known in the common law tradition) is the discipline concerned with cases with a foreign element. Its relationship to, and interaction with, public international law, is however a m ­ atter of significant debate. Traditionally private international law has distinguished itself—or so its scholars would like to believe—by its cosmopolitan open lens, sustained by a robust and sophisticated doctrinal framework. Nevertheless, for those outside the discipline (including public international lawyers) it can seem unduly technical, process-driven and, above-all, a matter of domestic law. Bearing in mind that the mere inclusion of private international law in the international law ‘world’ is itself contested, the controversies and divergences transpiring from the different perspectives shared in this collection are many. Yet, the will to engage in meaningful dialogue and to strengthen the connections prevails. The disciplines this collection is concerned with the move in and out of binary distinctions between both private and public and between domestic and international. They develop in a constant dynamic flux. Both public and private international law play an important role in shaping ‘the global’; hence, systemic consistency and the need to contribute to the development of ‘the global good’ seem to be amongst the main challenges for both disciplines at the present time.

2 

Verónica Ruiz Abou-Nigm, Kasey McCall-Smith and Duncan French

Global issues are pressing and demand private and public international law attention. Such issues include, but are not limited to, human rights, e­ nvironmental protection, religious pluralism, gender equality, a sustainable global economy, poverty alleviation, prevention of conflicts between countries, humanitarian assistance, and the preservation of cultural diversity. This collection can only touch upon a few of these issues and then primarily from the perspective of the international legal order. Nevertheless, it is quite clear that the ‘international’ is being infused by the ‘domestic’, as well as various transnational legal orders, as developed by international organisations, sovereign states, transnational corporations, international professional associations and others. This multiplicity of influences and actors has resulted in a growing body of international agreements, legal statutes, technical standards and ‘soft law’. This edited collection is the result of a two-year project (2015–17) led by ­academics from the Law Schools of the University of Edinburgh, Scotland, and the University of Lincoln, England. The project focused on the dialogue between ­academics from two disciplines, with participants from Europe, North ­America and South America. With many of the chapters jointly written by a scholar from each discipline, this collection seeks to use the discourse and strictures of co-authoring to challenge each other, to question unstated assumptions and to improve understanding across both branches of international law. The methodology of the project, which in turn contributed to the edited ­collection, was especially innovative. The project focused on ‘learning from each other’. And the scope—and need—for mutual learning proved to be far greater than commonly acknowledged. Originally we paired up public and private international law scholars from different jurisdictions and different legal traditions, but this methodology proved more challenging than was originally conceived. In ­several cases, the disciplinary differences were found to be insurmountable. In others, sufficient commonality was found. Nevertheless, the project facilitated the conversation between scholars from different legal traditions, on legal issues concerning the international legal order broadly conceived. In this context, the role and indeed the respective value of these two disciplines is viewed with different lenses in modern legal scholarship. Thus, based on methodological pluralism, the participants explored numerous avenues for strengthening the dialogue between these disciplines with a view to enhancing the discourse and the outreach of international law in its many guises. As Professor Fernández Arroyo notes in the preface, there have been various previous attempts to consider the linkages between public and private international law. However, in this collection, which was designed and written by academics not only from both disciplines but also with contributions from public and private lawyers, the overall tone and content has emulated in its methodology what other books have often envisaged as desirable in their subject-matter. From the outset of the project, it was clear that the task of finding common ground across all of the areas of international law selected would be of variable difficulty. Through presentations and many convivial discussions with the project participants, we learned very quickly that some of the perceived lack of

Introduction

 3

c­ onvergence between the disciplines actually could be distilled quite simply into the ­classic dualist approach to international law as the problems were often articulated as boundaries between private domestic law and public international law. For ­others, it was a matter of definitional disagreements and the lack of convergence over terminology. On all difficulties, we resisted the temptation to revert to old caricatures and pushed our colleagues and ourselves to examine how private and public international law might evolve to overcome these boundaries by capitalising on any common ground. The book’s focus is thus on the interface between public and private international law at various distinct levels, of both theory and practice. It is also recognised that such interaction is rarely achieved at an optimal level. Tackling identified disciplinary linkages, the book seeks to highlight the synergies that already exist, as well as setting up a dialogue aimed to enhance both disciplines, and therefore promote their engagement with the international and regional realities that they are intended to manage. Developing coherent and consistent discourses, and avoiding fragmentation, in public and private international law seems to be the challenge of our disciplines at the present time. This book approaches the development of these discourses as a necessary support for a pluralist, rather than fragmented, international legal landscape. It may be labelled as an issue of perception, but ­perception is crucial if we are interested in overcoming the failure to communicate that these mutually exclusive discourses have generated. In this context, the diversity of the participants, in different stages of their academic careers and coming from very different legal backgrounds and traditions has therefore proved invaluable. We believe it is important to move beyond theory into practice if we are to seek to understand, if not invariably close, such divergence. On a general conviction that both disciplines have an innate belief in the capacity of law to move towards the progressive development of humankind at the global level, this book examines different paths to strengthen the bridges that could enhance the role played by international law broadly conceived in the construction of our modern, integrated society. Ultimately, we learnt it is always exhilarating to engage in new ways of thinking.

II.  Discerning Synergies and Shared Values in International Law The opening chapter from a leading scholar on the interface between public and private international law, Alex Mills, sets the scene for the dialogue from a historical, conceptual and functional perspective. Exploring six connections between ­private and public international law—connections of principle, history, ­functional commonality, policy incorporation, shared objectives and methodology—this first substantive single-authored chapter sets the complexity of the scene where the conversations between the two disciplines that follow in the book are to

4 

Verónica Ruiz Abou-Nigm, Kasey McCall-Smith and Duncan French

develop. Mills introduces the reader to the spectrum of specific issues related to a systemic perspective of international law and provides a solid common ground from which the connections between these two interrelated disciplines of international law can be built. In the second chapter, Jean D’Aspremont and Francesco Giglio in ‘Windows in International Law’, draw from Roman law to craft a new descriptive and analytical framework based upon the ideas of windows, (de)­coders and travellers to confront contemporary understanding of private and public international law. These three concepts provide the vantage points from which the methodological moves at work behind legal argumentation in private and public international law are described and compared. The contribution identifies in legal thought and practice several common denominators between public and private international law in terms of methodology and legal reasoning. In shedding light on convergences between these two areas of international law, this second chapter reinforces the idea that both disciplines rest on common methodological patterns. This descriptive and analytical framework in addition to an insightful contribution to the dialogue is in itself a very useful tool for further reading of this book. The concepts are also used by contributors in other parts of the book, therefore, to a certain extent these first two chapters provide the fabric into which the overall argument of the book is woven. The final chapter of Part I is by Kirsty Hood QC who brings together two of the over-arching themes of the project. First, that an overly-rigid categorisation of the role and boundaries of private and public international law is unhelpful and should be rejected; and, second, that both disciplines have a role to play in resolving the conflict between state sovereignty on the one hand, and individual autonomy on the other. In particular, it explores whether such self-described ‘international’ rules have a role to play in resolving that tension, in what might be seen as an ‘internal’ setting. Taking the United Kingdom setting as a case study, the chapter explores how a state regulates the internal relationships between its component political parts (that is, between the organs of power within the state, and as between central government and its sub-state entities) and how the state interacts externally with other states and international bodies; specifically, it explores the role played by private and public international law in this resolution. This study of the UK’s present situation thus demonstrates that the role played by private and public international law is not confined to the international sphere. The chapter reminds us of the practical and political importance of identifying convergences, ensuring paths for further communication, and providing robust foundations for strengthening normative connections, even within a state.

III.  Functional Commonalities in International Law Jurisdiction is generally acknowledged as a field where both disciplines meet. This function commonality is sometimes described as ‘public international law rules of

Introduction

 5

jurisdiction applying to matters of private law and imposing limits on the circumstances in which a state may assert its regulatory authority over a particular person, relationship or event’.1 Yet, the opening chapter of the second part of this book by Duncan French and Verónica Ruiz Abou-Nigm offers a different angle into the field and its meeting points between the branches of international law. Jurisdiction is a multifaceted concept that has generated a wealth of literature yet is yearning further study of the tensions at the crossroads of a common understanding of the concept in private and public international law. The first part of the chapter explores movements towards a more synergised understanding of jurisdiction. To contribute towards that end the chapter starts from the relatively uncontroversial premise that international law, both public and private, should seek to circumscribe outlandish jurisdictional claims and to adopt rules and principles to ensure the ‘system’ operates as smoothly—as efficaciously—as possible, and the second part of the chapter focuses on the steps that can be taken to improve the present arrangements. Three on-going developments are identified as potentially assisting in this field, at differing levels, for both public and private international law. First, the continuing development of, and coordination between, rule-based systems. Second, the increasing internationalisation of general principles in the determination of international competence and in the exercise of international jurisdiction. And third, perhaps of most interest (and controversy), the role of international judicial oversight of municipal jurisdictional decisions. Each might, in part, support states to more effectively demarcate overlapping jurisdictional claims and yet, it is argued, this is to improve coordination, as broadly understood, and not in any hope of establishing a top-down system of jurisdictional rules. In recognising the importance of the argument that ‘what counts is not the pedi­ gree of a norm but the significance of its compliance pull’,2 the following chapter by Richard Collins and María Mercedes Albornoz examines the role of ‘soft law’ instruments as a form of ‘global governance’ considering their impact, in the fields of private and public international law. With the multiplication of regimes and institutions giving rise to a rather uncoordinated, fragmented and increasingly ‘deformalised’ regulatory landscape,3 the concept of global governance, that is, of regulation without any system or centre,4 continues to attract supporters. In fact, as recognised by an increasing breadth of literature, the collection of regimes, institutions and informal actors that make up the contemporary legal landscape seems to make increasingly problematic any clear distinction between the public/private, domestic/international, substantive/procedural in the ordering of many global 1 

In the terms of Alex Mills, ch 1 of this volume. Muir Watt, ‘The Relevance of Private International Law to the Global Governance Debate’ in Muir Watt and DP Fernández Arroyo (eds), Private International Law and Global Governance (Oxford, Oxford University Press, 2014) 1, 13. 3  M Koskenniemi, ‘The Fate of Public International Law: Between Technique and Politics’ (2007) 70 MLR 1, 4–15. 4  See JHH Weiler, ‘The Geology of International Law—Governance, Democracy and Legitimacy’ (2004) 64 Zeitschrift für Ausländisches Öffentliches Recht und Völkerrecht 547, 560. 2  H

6 

Verónica Ruiz Abou-Nigm, Kasey McCall-Smith and Duncan French

affairs. Charting the unique challenges of global governance, this chapter explores the choice of soft legal instruments as a particular kind of regulatory technique for achieving specific aims and ambitions. It contributes to the understanding of the concerns that have arisen over the use of informal regulatory instruments as a means of achieving such goals. Finally, Collins and Albornoz reflect on the lessons for private and public international law in coping with the regulatory ‘pluriverse’ under conditions of increasing institutional complexity.5 In turn, and as the final chapter of this part, the well known concept of public policy is explored in its use on both sides of the international law ‘stream’. The concept seems to have experienced an opposing trajectory in international investment arbitration as compared to international commercial arbitration and María Blanca Noodt Taquela and Ana María Daza Clark offer an interdisciplinary analysis of legislative and jurisprudential developments in these fields. The chapter unpacks the opportunities presented by these developments, and identifies room for progressing the dialogue on these issues. Public policy plays a fundamental role in both private and public international law, allowing states to either prevent the application of foreign law and the enforcement of foreign decisions; or prevent the enjoyment by investors of treaty protections to satisfy countering policy objectives. From this broad perspective it is the decision of the state invoking public policy, whose societal values—as embedded in public policy—are to be protected at a given point in time. This chapter suggests that in both international commercial arbitration and in international investment arbitration, public policy operates with different degrees of latitude. While international commercial arbitration adopts a restrictive approach to the public policy exception, taking recourse to the ‘international public policy’ conception, investment treaty arbitration’s— arguably—more extensive approach reflects recent adjustments in the field. When compared with certain global values, identified in the contribution, the authors argue that underlying precepts in the area of international commercial arbitration constrain the application of the public policy exception in favour of further international trade. On the contrary, while investment arbitration seeks to strike a balance between public policy and investment protection, a state’s regulatory freedom to protect public policy objectives has increasingly acquired recognition vis-à-vis the imperatives of trade and investment. This dichotomy, however, is not true for other global values, such as the fight against corruption. Ultimately the chapter reveals that while public policy principles constantly adapt, their application by international arbitral tribunals requires consistent and sound legal interpretation in the pursuit of global systemic coherence, both in international commercial and investment arbitration.

5  See N Walker, Intimations of Global Law (Cambridge, Cambridge University Press, 2015) 106 et seq.

Introduction

 7

IV.  Exploring Linkages and Boundaries in International Law The contributors to this book all share the vision that the traditional horizons of private and public international law need redesign and rethinking in view of the current needs of our multicultural globalised society. Both disciplines have much to learn from each other and have an important role to play in reconstructing the lawscape for the pursuit of the ‘global good’. Yet the dynamics between the two are manifold. As the final set of chapters show, there are many windows, (de)coders and travellers enhancing the connective capabilities of both disciplines, between and beyond them. In ‘Reconciling Human Rights and Supply Chain Management through Corporate Social Responsibility’ Kasey McCall-Smith and Andreas Rühmkorf examine the different approaches of public and private international law—and the domestic law that informs the solutions of the latter—to the development and legalisation of corporate social responsibility (CSR) standards. The bulk of CSR standards exist as international soft law due to the limited international legal personality of transnational corporations (TNCs). Whilst non-binding, CSR standards are directly linked to binding international law, primarily UN human rights treaties and International Labor Organization conventions, the duty-bearers bound by these instruments are states, not TNCs, which presents a gap in both implementation and enforcement. CSR standards nevertheless represent more than a benchmark against which human rights advocates castigate TNCs; they also serve to strengthen business by ensuring that every dimension of a business operation is sound and thereby not open to legal liability. How and why TNCs choose to regulate their supply chains is outlined from the private domestic and international law dimensions in response to social and legal demands. The chapter assesses the extent to which states have tried, through various legislative and judicial measures, to address the accountability gap, with specific reference to measures taken in the United States and the United Kingdom in relation to responsible supply chain management. Ultimately, it offers short- and long-term opportunities for private and public international law to work together to harmonise protections for human rights and business investments. Among this final set of synergised global visions, Elisa Morgera and Lorna Gillies offer an insightful window into international environmental law. Their chapter maps the interactions between public and private international law by comparing experiences in using private contracts in specifying the meaning of treaty objectives and public international law obligations in relation to equity under international environmental law. In particular, the focus of the contribution is on ad hoc bilateral contracts called for under the Nagoya Protocol on Access to Genetic Resources and Benefit-sharing (ABS) under the Convention on Biological Diversity (CBD) and standardised contractual clauses that have been

8 

Verónica Ruiz Abou-Nigm, Kasey McCall-Smith and Duncan French

inter-governmentally developed under the International Treaty on Plant Genetic Resources for Food and Agriculture. The chapter highlights the significant private law dimension of the selected public international law instruments with a view to contributing to a general debate on a broader notion of private international law, including: the legitimacy question arising from the delegation of regulatory powers foreseen in public international law to negotiations among private parties; the potential for different contracts to offer a diversity of meanings of international obligations; and the increasing significance of public international law sources for private international law. In addition, the chapter seeks to contribute to a general debate on private international law more narrowly and traditionally construed, namely on the role of private international law rules in relation to ensuring access to justice in the context of the implementation of the selected international instruments in order to ensure fair and equitable benefit-sharing. In turn, Sharon Foster offers a different angle into investor-state arbitration and the transparency demands of our globalised society. Traditionally, investor-state arbitration proceedings mirrored commercial arbitration procedures between private parties where privacy and confidentiality have been and continue to be the norm. This has been gradually changing to meet the demands of ‘public interest’ and the chapter explores the discourse regarding the pros and cons of making investor-state arbitrations more transparent. The chapter highlights that arbitration based on investor-state agreements traditionally were oriented toward recognisable ‘private’ law governing principles, such as privacy and confidentiality, but that recent proposed agreements are charting new courses away from the traditional stalwarts of privacy and confidentiality in international commercial arbitration. In so doing, it illustrates how the public international law and domestic law preoccupation with transparency increasingly filters into private international law. Highlighting why those filling the ‘public purse’ have an increasing interest in how it is spent, the chapter acknowledges that awards secreted to other parties as a result of arbitral awards raise public policy concerns but at the same time have been essential to dispute resolution. This can create a clash between the state’s ability to act in the public interest and the fulfilment of access to justice for investors. However, reflecting similar conclusions by Noodt Taquela and Daza-Clark, the chapter highlights that though transparency increasingly informs international arbitration, the convergence between private and public international law rules continue to incubate and leave room for development. Connected to the transparency demands of our global society is the need to protect whistleblowers. The final interdisciplinary contribution of this collection focuses on this issue. Dimitrios Kagiaros and Amanda Wyper shed light on how pressing global issues demand attention from both private and public international law, taking the financial sector as the scenario, where employees work in an increasingly globalised economy and commonly interact with numerous jurisdictions in the discharge of their employment duties. This cross-border element of their employment may raise issues of effective whistleblower protection when such individuals disclose (either to a regulatory body or, more broadly, to

Introduction

 9

the public) information relating to wrongdoing they have uncovered. Legal scholars have noted that public interest disclosures containing a cross-border element create problems when attempting to provide protection to the whistleblower at the domestic level and illustrate the shortcomings of effective whistleblower protection in a cross-border setting. However, retaliation against whistleblowers also raises issues under international human rights law. There is a growing international trend recognising that reprisals against whistleblowers for proceeding to disclosures in the public interest violate their right to freedom of expression, regardless if the whistleblower is employed in the public or private sector. The chapter aims to explore how this complex web of interaction between private and public international law generates opportunities to build a more coherent international approach to the protection of cross-border whistleblowing.

V. Conclusion The different perspectives in this book involve a departure from traditional thinking in private and public international law. The common threads may be the preference for networks over hierarchies; the blending of conceptual and pragmatic perspectives; and the search for universals and the global good. Many of these issues have been explored before from the perspective of one or the other of the disciplines conversing in this collection. Yet, the ‘intrepid’ contributors of this collection, in the words of one of them, have advanced a joint vision. The main aim of this collection is therefore to raise awareness of the advantages of the synergies between the branches of international law. The global scenario asks for dynamic, holistic, hybrid and universalistic regulation and conceptualisation of the international legal landscape. It is hoped that binary distinctions such as the private/ public divide in international law should increasingly be left to the study of legal historians as something that served, at best, a descriptive purpose. We invite the reader to identify more windows, (de)coders and travellers while reading the book, and indeed, beyond the book and between the disciplines. Even though—as was said in the preface to this book—these windows are from time to time opened, the fresh air that this descriptive framework provides invites further travellers to join this challenging yet enjoyable journey.

10 

Part I

Discerning Synergies and Shared Values in International Law

12 

1 Connecting Public and Private International Law ALEX MILLS*

I. Introduction The relationship between public and private international law is a topic which has long been debated, and which remains highly controversial. Despite an increasing range of scholarship looking at connections between the two fields,1 some modern public and private international lawyers would doubt that any deep relationship exists between the two subjects—at least, that is, before having had the opportunity to read this book. In a textbook on private international law, the principal mention of public international law is typically in an expression of regret that the use of the term ‘private international law’ is misleading because the subject is not really ‘international law’, by which the author means not public international law.2 In a textbook on public international law, private international law is generally not mentioned at all, except for an occasional acknowledgment that

*  Thanks to Elisa Morgera and Joseph Crampin for helpful comments, and to all the participants at the project conference in Edinburgh for the many fruitful discussions that transpired. 1 See generally A Mills, The Confluence of Public and Private International Law (Cambridge, ­Cambridge University Press, 2009); R Michaels, ‘Public and Private International Law: German views on Global Issues’ (2008) 4 Journal of Private International Law 121; P Vareilles-Sommières, La ­Compétence Internationale de L’État en Matière de Droit Privé (Paris, LGDJ, 1997); AL Strauss, ‘Beyond National Law: The Neglected Role of the International Law of Personal Jurisdiction in ­Domestic Courts’ (1995) 36 Harvard International Law Journal 373; C McLachlan, ‘The Influence of International Law on Civil Jurisdiction’ (1993) 6 Hague Yearbook of International Law 125; FA Mann, ‘The Doctrine of Jurisdiction Revisited After Twenty Years’ (1984) 186 Recueil des Cours 19; HG Maier, ‘Extraterritorial Jurisdiction at a Crossroads: An Intersection Between Public and Private International Law’ (1982) 76 American Journal of International Law 280; AF Lowenfeld, ‘Public Law in the International Arena: Conflict of Laws, International Law, and Some Suggestions for their Interaction’ (1979) 163 Recueil des Cours 311. 2  See P Torremans et al, Cheshire, North & Fawcett: Private International Law 15th edn (Oxford, Oxford University Press, 2017) 15; J Hill and M Ni Shuilleabhain, Clarkson & Hill’s Conflict of Laws 5th edn (Oxford, Oxford University Press, 2016) 3; P Rogerson, Collier’s Conflict of Laws 4th edn ­(Cambridge, Cambridge University Press, 2013) 4.

14 

Alex Mills

in civil matters rules of public international law jurisdiction and rules of private international law may, debatably, have some interaction.3 There are two main reasons why such doubts over the connections between ­public and private international law continue to be expressed. First, at least formally, rules of private international law are primarily national law, made by national courts or legislatures. In the division between the international and the domestic, they appear very much to fall within the sphere of domestic law. Sometimes rules of private international law are treated as rules of national private law, sometimes as rules of national procedural law—although as discussed further below they are better considered as their own distinctive field of law. Second, there is undoubtedly significant variation between the rules of private international law adopted in different states, and it would be very difficult to argue that, at least under current international law, any particular rules of private international law are mandated. The main exception traditionally mooted is the question of a state’s exclusive authority (including civil jurisdiction) over questions of title to its land,4 which is sometimes considered an implication of territorial sovereignty, but even this has been questioned in some states.5 This chapter addresses these doubts by exploring six connections between public and private international law—connections of (1) principle, (2) history, (3) functional commonality, (4) policy incorporation, (5) shared objectives and (6) methodology. Before addressing each of these, it notes a link between public and private international law which arises in the context of sources. This establishes a connection between these fields which is significant, but at the same time on its own quite limited.

II. Sources The most obvious connection between public and private international law is that some rules of private international law are not found, or are not only found, in the domestic law of states—rules of private international law may be

3  J Crawford and I Brownlie, Brownlie’s Principles of Public International Law 8th edn (Oxford, Oxford University Press, 2012) 474–533. 4  Mills (n 1) 239–44. See eg Council/Parliament Regulation (EU) 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) [2012] OJ L351/1, art 24(1) (Brussels I bis). Under the common law this is traditionally ­analysed as a rule of non-justiciability rather than a rule of exclusive jurisdiction, although it is not clear whether this characterisation is helpful—it is principally a reflection of an historical common law distinction between local and transitory actions. See generally British South Africa Co v Companhia de Mozambique [1893] AC 602; A Mills, Party Autonomy in Private International Law (Cambridge, ­Cambridge University Press, forthcoming 2018) ch 5. 5  Note, for example, the abolition of the common law non-justiciability rule under the Jurisdiction of Courts (Foreign Land) Act 1989 (NSW), although the fact that a dispute concerns title to foreign land remains a significant factor in the exercise of jurisdictional discretion.

Connecting Public and Private International Law

 15

(and i­ncreasingly are) found in treaties. Some rules of private international law therefore take a form which is part of and governed by public international law, ­including its rules on the formation, validity and interpretation of treaties. Such treaties are most commonly negotiated under the auspices of an international organisation, the Hague Conference on Private International Law (which is discussed further below), but they may also be established by regional organisations as part of economic integration efforts, and at least historically could also often be found in bilateral or other regional agreements.6 European illustrations of this practice include the Brussels Convention of 1968,7 Rome Convention of 1980,8 and the various iterations of the Lugano Convention.9 While the former two Conventions have now been replaced with European Regulations, the Lugano Convention continues to function as a separate regional private international law treaty, designed to apply to non-EU Member States (particularly those in the European Free Trade Area). There are numerous other examples of similar treaties around the world, such as those adopted in Latin America.10 Where such treaties are not directly enforceable as a matter of national constitutional law, national rules may also be necessary in order to implement these public international law obligations of the state. But even where that is the case, it is nevertheless still obviously true that state parties to these treaties owe obligations of private international law to each other as a matter of public international law, and that the scope and content of those obligations may be determined through the application of principles of public international law. As a consequence of this, it is further possible that international courts and tribunals, including for example the International Court of Justice, might be seized with disputes concerning the interpretation or breach of a private international law treaty. This indeed occurred in relation to a dispute between Belgium and Switzerland regarding the Lugano Convention, submitted to the International Court of Justice (ICJ) in 2009, although the proceedings were discontinued in 2011.11 Is this enough to establish a significant connection between public and private international law? It may be observed that international lawyers do have a 6  On the international conventions operative between EU Member States before European harmonisation, see eg P Jenard, ‘Report on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed at Brussels, 27 September 1968’ [1968] OJ 79/C 59/1, 6–7; B ­ russels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial ­Matters 1968 (consolidated version) [1968] OJ 98/C 27/1, art 55. 7  Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (consolidated version) [1968] OJ 98/C 27/1. 8  Rome Convention on the Law Applicable to Contractual Obligations 1980 (consolidated version) [1980] OJ 98/C 27/2. 9  Most recently, Lugano Convention on Jurisdiction and the Recognition and Enforcement of ­Judgments in Civil and Commercial Matters [2007] OJ 2007/L 339/3. 10  See eg the Montevideo Civil International Law Treaties 1889, amended 1940; Las Leñas Protocol on the Recognition and Enforcement of Judgments of other Mercosur States 1992; Buenos Aires Protocol on International Jurisdiction in Disputes Relating to Contracts 1994; Inter-American Convention on the Law Applicable to International Contracts 1994. 11  See French and Ruiz Abou-Nigm in this volume.

16 

Alex Mills

somewhat expansionist tendency to view anything in a treaty as automatically a ‘subject’ of international law, and it is certainly true that this is enough to make public international law relevant to private international law. But a deep connection between public and private international law is not necessarily established through this practice. A bilateral treaty which required each state to comply with a codified set of rules of contract law would affect the source of rules of contract law for those states, but this would not itself make contract law ‘international’ in character, at least not in a deep sense. However, if two states agree in a treaty to follow the same rules of contract law, or indeed the same rules of private international law, this signifies something more important than a change in formal sources. It signifies that the states adopting the treaty determined that it was necessary and appropriate to adopt such an international agreement—that regulation of contract law or private international law should take place at the international level, through the adoption of a formal commitment to harmonised rules of law. Such treaties do not, in practice, exist for rules of contract law, but they do exist in significant numbers for rules of private international law. To understand why states have adopted such treaties—and thus why the harmonisation of rules of private international law through treaties is a significant indicator of the international character of rules of private international law—requires a deeper examination of the connections between public and private international law.

III. Connections This chapter now examines six connections between public and private international law which are of greater significance, relating broadly to questions of the function and purpose of the two areas of law. These are not discrete points, but rather a series of filaments in a connecting web.

A. Principle The first stronger connection between public and private international law is ­suggested through a commonality of principles, which is particularly reflected in the central role played by the doctrine of comity in private international law. One of the fundamental premises of traditional private international law is that foreign law and courts are normatively equal to local law and courts. The choice between them is not, or at least not generally, one of superiority (outside a particular US tradition),12 but one of appropriateness (which law or court is best placed 12  Note the ‘better law’ approach advocated in RA Leflar, ‘Choice-Influencing Considerations in Conflicts Law’ (1966) 41 New York University Law Review 267; RA Leflar, ‘Conflicts Law: More on Choice-Influencing Considerations’ (1966) 54 California Law Review 1584.

Connecting Public and Private International Law

 17

to resolve the dispute) or legitimacy (which law or court is entitled to regulate the relationship). Private international law does not give priority to the state or the law which is most democratic, or the court or the law which a judge decides has the better procedures or outcomes, or even (again, outside a particular US ­tradition)13 priority to forum law over foreign law. A guiding underlying principle of private international law is that a state should only impose its law or exercise its judicial authority in relation to a dispute where it has a recognised basis to do so; otherwise the proper course of action, motivated by comity, is to defer to another court’s jurisdiction or apply another state’s law. Where another court has exercised jurisdiction on an internationally recognised basis, the judgment of that court should further be recognised and enforced, subject to certain safeguards but without a review of the merits of the decision. The guiding principle is that the courts and the laws of fellow sovereigns are presumed to be equal to those of the forum, and entitled to mutual respect. Scholars and national courts frequently refer to the concept of ‘comity’ as a motivating force behind private international law and a source of this guiding principle. One of the central concerns of public international law is, similarly, regulating the respectful coexistence of sovereign states. Public international law is based on the principle of sovereign equality,14 which means that no state is superior to any other (there are no ‘second class sovereigns’), and each state is obliged to recognise the sovereignty of each other state. Of course no-one claims that states are equal in terms of their resources or power, but as a matter of international law they are possessed of identical sovereignty, however large or small they are. It has long been understood that sovereign equality does not necessarily imply an identity of legal rights or obligations—states may agree to bilateral or multilateral treaties under which they have different rights or obligations, perhaps most famously illustrated by the powers given to the five permanent members of the Security Council under the UN Charter. This inequality of rights and obligations, however, does not reflect an inequality of sovereignty, but is instead correctly viewed as an exercise of that sovereignty. Sovereign equality is reflected in a variety of contexts in public international law—for example, through obligations of sovereign immunity (long understood to be based on the principle that no domestic court should sit in judgment on a foreign sovereign, because to do so would be inconsistent with the sovereign equality of states)15 and non-intervention.

13 For an influential approach favouring forum law in the case of a ‘true conflict’ of laws, see B ­Currie, Selected Essays on the Conflict of Laws (Durham, NC, Duke University Press, 1963) 181. 14  See UN Charter, Art 2(1): ‘The Organization is based on the principle of the sovereign equality of all its Members.’ 15  The Schooner Exchange v McFadden, 11 US 116 (1812); The Parlement Belge (1879) 5 PD 197; Jurisdictional Immunities of the State (Germany v Italy: Greece intervening) 2012 ICJ Reports 99, para 57: (‘The Court considers that the rule of State immunity occupies an important place in international law and international relations. It derives from the principle of sovereign equality of States, which, as Article 2, paragraph 1, of the Charter of the United Nations makes clear, is one of the fundamental principles of the international legal order.’).

18 

Alex Mills

It does not take a leap of imagination to see the relationship between these two foundational principles—the normative equality of sovereign states in public international law, and the normative equality of their legal systems in private international law. This is not to suggest that in either case these are very solid or secure foundations. ‘Sovereignty’ in public international law and ‘comity’ in private international law are obviously highly contested concepts. The key issue regarding the term sovereignty in public international law is whether it describes an a priori feature of statehood, or is a reflection of the general rights and obligations of states under international law.16 Put another way, the question is whether the principle of state sovereignty is a source or a product of international law— arguably it has shifted from the former conception to the latter over the course of the twentieth century. The classic fin de siècle definition of comity from the US Supreme Court, that it is ‘neither a matter of absolute obligation, on the one hand, nor of mere courtesy and goodwill, upon the other’,17 similarly captures its inherent ambiguity at the beginning of the modern era of international law. Evidently comity cannot be a matter of ‘absolute obligation’, as no state is required to put the sovereignty of another state above its own. Nevertheless, it is more than courtesy, because the equal sovereignty of states is an important foundation of the international legal order, with significant normative pull. The role of comity in private international law thus suggests a vague but nevertheless important connection between the guiding principles of public and private international law—they both reflect and give effect to an underlying concept of sovereign equality.

B. History A second major connection between public and private international law may be found in the historical links between the two subjects. A stronger connection between public and private international law can be revealed through understanding the historical origins of private international law, and indeed also public international law, as part of the ‘law of nations’.18 The earliest origins of private international law are generally considered to be around the time of the Italian Renaissance—a time when an expansion of international trade and commerce led to an increase in the number of disputes with ­significant foreign elements, and thus in one important respect a time much like our own.19 The idea of private international law emerged to respond to these

16  See, eg I Brownlie, Principles of Public International Law 7th edn (Oxford, Oxford University Press, 2008) 291 (describing sovereignty as ‘the legal competence which states have in general’); note the more ambivalent position in Crawford and Brownlie (n 3) 448. 17  Hilton v Guyot, 159 US 113, 163–64 (1895). 18  See generally Mills (n 1) ch 2; A Mills, ‘The Private History of International Law’ (2006) 55 International and Comparative Law Quarterly 1. 19  See d’Aspremont and Giglio in this volume.

Connecting Public and Private International Law

 19

problems, as a mechanism to address the risk of conflicting legal treatment of private disputes, while at the same time accepting a degree of pluralism in substantive private law—the idea that different legal systems were normatively equal. But as private international law rules selected between normatively equal legal systems, they were not themselves viewed as part of those systems. Private international law rules were instead developed by Renaissance lawyers as a distinct part of the universal natural law, ‘secondary’ norms which facilitated and supported the existence of diverse local legal systems by coordinating legal diversity. Private international law was thus first conceived of not as part of the local law which differed from city-state to city-state, but as part of a universal (natural) international law system—the ‘law of nations’—which encompassed the modern territory of both public and private international law. This idea of private international law actually sustained and defined the discipline throughout most of its history. Under the statutist approach, perhaps the earliest idea of private international law, the potential for conflict between legal systems was addressed by attempting to develop a principled and analytical way of determining the scope or the effect of different laws. This was initially based on the idea that each statute ‘naturally’ belongs to one of two categories of laws, either ‘­personal’ (thus applying only to citizens, but regardless of their location) or ‘­territorial’ (thus applying to everyone in the territory, regardless of citizenship). Later scholars adopted variations on this basic approach, emphasising the importance of either territorial or personal characteristics or connections, but right up to the nineteenth century the essentially internationalist character of the field was maintained. The two dominant nineteenth-century figures in private international law, at least outside the Anglo-American tradition, may be singled out as influential archetypes. In the early nineteenth century, the German scholar Savigny argued for an account of private international law in which the basic unit of analysis is the ‘legal relation’, and the role of private international law was thus to ‘ascertain the seat (the home) of every legal relation’. It was central to Savigny’s approach that the private international law rules he developed were of higher level, universal norms—part of an international system of law, derived from the asserted existence of a community of territorial states. The Italian scholar and political figure ­Mancini, working later in the nineteenth century, shared much of Savigny’s approach, but argued for the adoption of nationality as the key connecting factor in private international law. This was based on a conception of the nation as founded on personal connections (the nation embodying the people and their history and culture) rather than Savigny’s conception of territorial power. But like Savigny, Mancini viewed private international law rules as ‘secondary norms’ which are essentially part of a broader system of law—in his case, the law of a community of nations, rather than Savigny’s community of territorial states. In both cases, rules of private international law were essentially characterised as serving an international function of global ordering or governance, coordinating relations between different legal orders—and in fact partly constituting the nature of the international legal order.

20 

Alex Mills

This close relationship between public and private international law, viewed as integral parts of a broadly defined ‘law of nations’, faded in both theory and practice over the course of the nineteenth century. By the end of the nineteenth century, there was an increasing view that rules of private international law were not inherent parts of international law, because international law was concerned only with the ‘public’ relations between sovereign states. This theoretical development corresponded with an increased diversity of private international law rules in practice, partly prompted by a division which was ironically the product of the work of Savigny and Mancini—the debate over the use of territory (or personal territorial connections based on factual criteria such as residence) or ‘nationality’ as connecting factors. This diversity made the view of private international law as fundamentally international in character increasingly seem untenable. The diversification of rules of private international law was not, however, simply a product of disagreement over what rules to adopt. In the early twentieth century, in federal systems such as the United States, the analysis and development of private international law increasingly focused on problems arising within the system, involving its constituent states. The resolution of these problems increasingly drew on national policies and domestic constitutional concerns, and a lack of distinction between the inter-state and foreign contexts shifted the focus away from the traditional ‘international’ perspective on private international law.20 There is an argument that a similar process has occurred again more recently, in the late twentieth century, as the development of EU private international law has focused on domestic objectives such as the efficient functioning of the internal market rather than international policy goals.21 One late nineteenth-century response and reaction to these developments was a series of Hague Conferences on Private International Law, held between 1893 and 1904, to work toward the international harmonisation of private international law. This was of course the precursor to the foundation of the Hague Conference on Private International Law as an international institution in 1955.22 Despite these efforts, in the early parts of the twentieth century, the idea that public and private international law were entirely separate disciplines appeared to become widely established. This was a product both of a narrowing of the domain of ­public international law, to exclude ‘private’ actors and their relations, limiting public ­international law to the law between sovereign actors, and of the

20  See generally A Mills, ‘Federalism in the European Union and the United States: Subsidiarity, Private Law and the Conflict of Laws’ (2010) 32 University of Pennsylvania Journal of International Law 369; A Mills, ‘The Identities of Private International Law—Lessons from the US and EU Revolutions’ (2013) 23 Duke Journal of Comparative and International Law 445. 21 See generally A Mills, ‘Private International Law and EU External Relations: Think Local Act Global, or Think Global Act Local?’ (2016) 65 International and Comparative Law Quarterly 541. 22  See generally www.hcch.net/en/about; A Mills and G De Baere, ‘T.M.C. Asser and Public and Private International Law: The Life and Legacy of “a Practical Legal Statesman”’ (2011) 42 Netherlands Yearbook of International Law 3.

Connecting Public and Private International Law

 21

r­ econceptualisation of private international law itself as a matter of national law and national policy. These matters are discussed further below.

C.  Functional Commonality A third major connection between public and private international law that can be highlighted is a connection of functional commonality. Public international law includes so-called rules of ‘jurisdiction’, which determine the permitted scope of a state’s exercise of regulatory authority.23 A state may, for example, criminalise conduct in its territory, or the conduct of its nationals outside its territory. The essential approach is that each state act of regulation must be justified by one of the accepted grounds of jurisdiction in order to comply with public international law. In the absence of a connection of territory or nationality, states may be able to rely on universal jurisdiction for certain matters which are considered to be a concern for all states. The scope of universal jurisdiction is of course highly contested in public international law. It is clearly recognised in certain treaties, but only for a narrow range of international crimes. The focus of discussion of jurisdiction in public international law is generally on exercises of public authority, particularly through criminal law. Because of the exclusion of ‘private’ concerns from public international law, doubts have sometimes even been expressed as to whether these rules apply to private law regulation or disputes. There is, however, little in principle to support such doubts. Rules of private law are exercises of ‘public’ governmental authority as much as rules of criminal law, and they are ultimately sanctioned through coercive judicial and executive powers. If a court orders that a party is liable to pay damages or face seizure of their property because they have breached tort law, this is not characteristically different from an order that they are liable to pay a fine or face seizure of the same property because they have breached criminal standards. The ultimate recipient of the penalty may differ, but the state power which is exercised to compel payment does not. Public and private law remedies indeed often overlap, and may be interchangeable. In different legal systems, different approaches are often taken to regulating the same issues—for example, competition law, defamation law or environmental law—may be regulated by criminal law or by private law, or a combination of both. The distinction between public and private law has long been criticised as a legal artifice, and in any case does not appear materially relevant to the question of whether state regulatory power is implicated. A state’s contract law, no less than its criminal law, pursues national policy objectives. As many scholars have observed,24 all law is, at least in one sense, public law.

23  See generally A Mills, ‘Rethinking Jurisdiction in International Law’ (2014) 84 British Yearbook of International Law 187. 24  See eg J Waldron, ‘The Rule of Law in Public Law’ in M Elliott and D Feldman (eds), The Cambridge Companion to Public Law (Cambridge, Cambridge University Press, 2015) 56 (‘Maybe we should

22 

Alex Mills

The case of Kiobel v Royal Dutch Petroleum Co in which the US Supreme Court gave judgment in 201325 provides perhaps the clearest and strongest recent support for this argument—that private disputes still engage public international law jurisdiction. Various states intervened in the proceedings, including the European Commission on behalf of the European Union, and (jointly) the United Kingdom and the Netherlands (the home jurisdictions of the defendant). A central question in these submissions was whether it would be compatible with international law for US courts to hear the proceedings, given the lack of connections between the dispute or the defendant and the United States. While the arguments of the intervening states may have differed, they all demonstrated that States do believe that the rules of jurisdiction must be complied with in relation to civil proceedings, and that they do object if they think their nationals are being subject to exorbitant exercises of jurisdiction (a concern which a cynic might observe carries particular weight when those nationals are oil companies). This is a reflection of a broader trend. In a range of ways, public international law scholarship has, in recent years, re-opened its attention to matters which were traditionally characterised as ‘private’ and thus as falling outside the scope of the discipline, recognising that they have important ‘public’ governance implications and effects.26 To put this another way, public international law has increasingly recognised (once again) that private law relations matter. This concern is by no means limited to questions of private international law in the traditional sense (rules on jurisdiction, choice of law, and recognition and enforcement of judgments), but encompasses a variety of private legal relations which have important and significant impacts on a whole range of matters of international and public concern, including some which are addressed in this book—such as global supply chains.27 The term ‘private international law’ is sometimes co-opted to capture this broader range of international private law-making. But traditional private international law still has a particular significance to this regulation, because it is, in practice, private international law which determines how regulatory authority over private law questions is allocated between states—itself an important function of global governance. The private international law decision about which state or states gets to regulate private legal relations also matters, along with the content of that regulation (generally, what rights and obligations are created under private international contracts), because that allocation determines what

say that in the last analysis all law involves the operation of the state on society; all law is public law in some ultimate sense’, citing H Kelsen, Pure Theory of Law, trans Max Knight (Berkley, University of California Press, 1967) 282). The argument may also be found in various places in E Durkheim, The Division of Labour in Society, trans George Simpson (The Free Press, 1933, originally published in French in 1893). 25 

Kiobel v Royal Dutch Petroleum Co 133 SCt 1659 (2013). See generally the chapters in part III of this volume. See also CEJ Schwöbel, ‘Whither the Private in Global Governance?’ (2012) 10 ICON 1106; R Wai, ‘Transnational Private Law and Private Ordering in a Contested Global Society’ (2005) 46 Harvard International Law Journal 471. 27  See chapter by McCall-Smith and Rühmkorf in this volume. 26 

Connecting Public and Private International Law

 23

legal system regulates the contracts.28 This in turn determines, for example, what public interests are accommodated (potentially affecting or overriding contractual rights and obligations), and whether in practical terms a party is able to achieve access to justice—if litigation can only take place in a forum which is remote or expensive, this may not be realistically possible. It is also private international law which determines the even more contested question of when regulatory authority may be taken away from states altogether and exercised by non-state parties— when arbitral tribunals may resolve disputes instead of courts, and when either may apply principles of non-state law instead of state law to govern the relationship between the parties.29 Put simply, if public international lawyers care about private law regulation, and they should, public international lawyers must care about private international law. This recognition that public international law rules of jurisdiction apply to matters of private law reveals a functional commonality between public and private international law rules. Both impose limits on the circumstances in which a state may assert its regulatory authority over a particular person, relationship or event. It is important to recognise that while public international law establishes that a state may not impose its regulation in the absence of a recognised justification, it does not (at least generally) require that state regulation be exercised where such a recognised justification exists. Principles of access to justice, developing particularly in the context of human rights law, may in future have an increased role in requiring states to exercise and perhaps even expand their grounds of civil ­jurisdiction,30 but at present they have had a limited influence, except in relation to the protection of weaker parties (like consumers or employees) and less frequently in the adoption of forum of necessity rules of jurisdiction. Their effect has been felt more in the context of practical barriers to litigation, such as the availability of legal aid.31 States are generally free, under public international law, to decide whether to exercise any of the available grounds of jurisdiction. An important implication of this is that there is scope for a range of different rules of private international law to function compatibly with public international law. So while it is true that public international law does not generally dictate specific rules of private international law that does not establish that there

28 See generally H Muir Watt and DP Fernández Arroyo (eds), Private International Law and Global Governance (Oxford, Oxford University Press, 2014); Mills (n 1). 29  See further Mills (n 4). 30  See generally JJ Fawcett, M Ní Shúilleabháin and S Shah, Human Rights and Private International Law (Oxford, Oxford University Press, 2016); Mills (n 23); MM Karayanni, ‘The Extraterritorial Application of Access to Justice Rights’ in H Muir Watt and DP Fernández Arroyo (ed), Private International Law and Global Governance (Oxford, Oxford University Press, 2014); Amnesty International, ‘Injustice Incorporated: Corporate Abuses and the Human Right to Remedy’ (2014), POL 30/001/2014, at www.amnesty.org/en/library/info/POL30/001/2014/en; F Francioni, Access to Justice as a Human Right (Oxford, Oxford University Press, 2007); JJ Fawcett, ‘The Impact of Article 6(1) of the ECHR on Private International Law’ (2007) 56 International and Comparative Law Quarterly 1. 31  Note eg the Hague Convention on International Access to Justice, 25 October 1980.

24 

Alex Mills

is no connection between the two disciplines. Public international law defines the outer limits within which national rules of private international law must o ­ perate. Those national rules are then an implementation of both public international limits, and, within those limits, policies concerning matters of private international law, which may themselves be national or international in character. Private international law is thus a hybridisation of international obligation and national and international policy. The picture of jurisdiction in private international law also includes considerations of territoriality and personality (through connections of nationality, domicile and residence) as competing approaches to international ordering, mirroring these conceptions in public international law. It also perhaps includes consideration of ideas of universal civil jurisdiction as an emerging principle, through the idea of a forum of necessity, based on arguments that the rights or interests of individuals should be recognised alongside those of states.32 This is not to say that private international law is ‘subsumed’ by public international law. Private international law has its own policy concerns and interests, which operate within the public international law framework. Some of these have been discussed earlier in this chapter, and some are discussed further below. And rules of private international law are also some of the most important evidence of what states view as accepted grounds of public international law jurisdiction, and what they view as ‘exorbitant’. Private international law sources were indeed historically one of the strongest influences on the development of public international law jurisdictional rules, and they can and should continue to influence that development. Perhaps most distinctively, private international law rules almost universally recognise the direct power for private parties to determine the law which governs their legal relationship or the courts which have power over them, through an exercise of party autonomy in the form of a choice of law or choice of court clause. This is a challenge for public international lawyers—private international law encompasses a conception of individuals as having a kind of jurisdictional power, which does not seem to fit comfortably in traditional inter-state conceptions of public international law. It seems to accept a kind of individual sovereignty, alongside the sovereignty of the state.33 But aside from such points of friction, the functional commonality between the two disciplines of public and private international law highlights the importance of recognising that they are in a relationship of close mutual influence. Put simply, private international law rules are shaped by rules of public international law, because they operate within the constraints of international rules on ­jurisdiction. But rules of public international law have also been shaped, and continue to be shaped, by the practices of states in the context of private international law, which at times go beyond and challenge the traditional framework of public international law jurisdiction.

32  33 

See further Mills (n 23). See further Mills (n 4); Mills (n 23).

Connecting Public and Private International Law

 25

D.  Policy Incorporation A fourth significant connection between public and private international law relates to the matter of policy incorporation. This arises particularly in the development of rules of the private international law doctrine of public policy, which operates as a defence against the recognition and enforcement of a foreign judgment, or an exception to the application of foreign law. Public policy is the means through which states may determine that other policy considerations outweigh those of private international law itself—that the usual obligations to recognise a foreign judgment or apply a foreign law are trumped by the harm which would be caused in doing so in the particular circumstances, because the judgment or law offends against important principles. Public policy, in other words, is the limit of the principle of normative equality which underlies private international law.34 It tells us ‘how different is too different’. For this reason, however, public policy must be construed narrowly, otherwise it would risk undermining private international law altogether—a foreign judgment or law must not be rejected simply because it is different, but only where that difference is fundamentally objectionable. Different considerations apply, however, where the public policy concerned is not derived from national policy or interest, but from concerns of public international law such as international human rights law—sometimes referred to as ‘truly international’ public policy. In these circumstances, the application of public policy is not a projection of one state’s norms on matters which would otherwise be governed by the other state, a denial of mutual respect, but rather a recognition and enforcement of norms which bind both states. National courts have rightly suggested that they should be readier to apply public policy in such circumstances—for example, in a House of Lords decision, refusing to apply Iraqi law which purported to nationalise aircraft seized in the 1990 invasion of Kuwait, contrary to the UN Charter and resolutions of the Security Council.35 In such cases, giving effect to norms of international law by refusing to apply foreign law or recognise a foreign judgment essentially involves prioritising other rules of public international law over the rules of ‘jurisdiction’ which provide the foundations of private international law—but such a prioritisation may well be demanded by public international law itself. It might normally be perfectly compatible with international law, and perhaps even a requirement, for UK courts to apply Iraqi law to questions of title to property located in Iraq, but doing so in the circumstances of the Kuwait Airways case would have involved violating a Security Council resolution and indirectly giving effectiveness to an unlawful use 34 See further A Mills, ‘The Dimensions of Public Policy in Private International Law’ (2008) 4 ­Journal of Private International Law 201. 35  Kuwait Airways v Iraqi Airways [2002] UKHL 19. For further analysis see A Mills, ‘The Mosul Four and the Iran Six’ in J Hohmann and D Joyce (eds), International Law’s Objects: Emergence, Encounter and Erasure through Object and Image (Oxford, Oxford University Press, forthcoming 2018).

26 

Alex Mills

of force, both contrary to other obligations of public international law. It may be suggested therefore that a state which breaches important norms of international law can no longer expect to benefit from the principles of sovereign equality and comity which underpin public and private international law. This internationalised conception of public policy thus highlights a distinct ­connection between public and private international law. While private international law might ordinarily reflect public international rules of jurisdiction, through the doctrine of public policy it is also open to the direct consideration and application of other matters of public international law which might in certain cases trump those ordinary jurisdictional rules.

E.  Shared Objectives A further element to the ‘internationalism’ of private international law may be found in its own distinct policy objectives. As noted earlier, private international law has its own policy concerns and interests which occupy the space of regulatory discretion left by public international law. Like public international law, it governs the allocation of regulatory authority between states, relying traditionally on territorial or personal connections to justify regulation. But within the discipline of private international law, there are a range of policy goals which have been developed, which relate to how this regulation should function. And importantly, a number of these policies are themselves international in their scope and conception. For example, rules of private international law have traditionally (through choice of law rules in particular) sought to achieve objectives of decisional harmony, ensuring that the same decision is reached wherever in the world a dispute is litigated. Together with rules limiting overlapping jurisdiction and requiring the recognition and enforcement of foreign judgments, this policy aims to minimise the risk that parties may be subject to inconsistent regulation, leading to potentially conflicting exercises of state enforcement powers. Another related principle is that incentives and opportunities for forum shopping should be reduced (through a combination of both choice of law rules and jurisdictional rules), and thus litigation should take place in the most appropriate forum rather than the forum which most favours the claimant—which would risk again parallel proceedings and inconsistent regulation, as well as inefficient dispute resolution. To put these policy goals another way, private international law has long been concerned, among other things, with facilitating cross-border activity by coordinating the peaceful coexistence of sovereign states, striving to reduce the ‘conflict of laws’ between them. It is of interest that these concerns have not been traditionally addressed in public international law jurisdictional rules, which simply allow for potentially overlapping and conflicting exercises of regulation, without rules of priority to decide which rule or rules should prevail. But there is increasing recognition in

Connecting Public and Private International Law

 27

international law of the need to avoid conflicting regulation, of the benefits of states acting in cooperation rather than independently and unilaterally. This is a context in which public international law may have something to learn from private international law. In any case, the objectives of decisional harmony, of avoiding a conflict of laws, are not objectives which can be reached by each state acting unilaterally in adopting its own national rules of private international law, in pursuit of national policies. They require a process of formal or informal coordination,36 the recognition by states that they have collective interests and goals which may be best served through rules of private international law which are, at least to some extent, internationally harmonised. Thus even where the source of private international law is national law, many of its ambitions, effects and objectives are (at least ­traditionally) international. It is or at least can be international in its outlook and its function. It is this ‘internationalist’ perspective on private international law which is exemplified by the work of the Hague Conference on Private International Law. The work of the Hague Conference, in preparing treaties dealing with matters of private international law, is more than just equivalent to harmonising contract law—it is more than international in form, and more than just the development of public international law sources for private international law. It is a continuation of private international law’s international origins and ambitions, and its public function or potential function as a matter of global governance. According to this tradition, part of the function of rules of private international law is fundamentally ‘public’, ‘international’, and ‘systemic’ in its substantive character—it has at least a relationship of functional equivalence to some of the global governance ambitions of public international law. Similar ‘public’ functions can be observed in federal or similar systems in which private international law rules serve the function of ordering the internal distribution of regulatory authority, a role which private international law has increasingly played in the European Union, Australia and Canada. While as noted above these developments have in the past discouraged thinking about private international law from an international perspective (by instead increasing focus on the issues as they arise within a federal system), ironically they illustrate the way in which private international law might be applied to achieve equivalent public, systemic objectives, at the international level, closely aligned to those of public international law. Private international law can undoubtedly exist without such an internationalist approach. Private international law rules can be designed to act purely for national policy interests, and make no effort at international coordination or achieving systemic policy goals. But rules of private international law are often poor devices to achieve substantive policy objectives, and the international systemic goals of traditional private international law are potentially a unique contribution which it

36 

See further chapter by French and Ruiz Abou-Nigm in this volume.

28 

Alex Mills

could make to global governance. An internationalist vision of the character and objectives of private international law has been strongly influential in the history of the discipline, and could well remain central to its future.

F. Methodology A further potential connection between public and private international law is a connection of methodology. Private international law essentially addresses the problem of deciding which court or legal order gets to regulate an issue, when there are multiple courts or legal orders which have connections with that issue. As well as serving its own purposes, private international law also presents a methodology or a technique which might be adopted and adapted in other contexts. This raises the question of whether public international law could be one such potential context.37 There are two distinct ways in which private international law might be applied by analogy at the international level—the first relates to jurisdiction, and the second to choice of law. In the context of jurisdiction, it may first be noted that there has been a proliferation of international courts and tribunals, both institutionalised (for example, the ICJ and the World Trade Organization (WTO) dispute settlement system) and ad hoc (for example, international investment law). The increase in the number of courts and tribunals raises the possibility that more than one forum may be seised of a single dispute or two (or more) closely related disputes. Clear rules governing the relationship between international courts and tribunals have not developed as part of international law, although a number of potential principles have emerged,38 drawing on the more sophisticated experience of private international law in the management of parallel proceedings.39 The two main techniques are those of forum non conveniens and lis pendens (in either case supported by the further doctrine of res judicata). The first of these (closely associated with the common law) asks each court to analyse the dispute and to determine whether it is the most appropriate forum to resolve the issues, regardless of whether it is first seised of the dispute. A stay of proceedings may be indefinite, or it may be temporary to allow a foreign court to resolve closely related issues before proceedings continue.40 The second of these (closely associated with the civil law tradition and EU regulation) gives priority to the court first seised,

37  See particularly R Michaels and J Pauwelyn, ‘Conflict of Norms or Conflict of Laws? Different Techniques in the Fragmentation of Public International Law’ in T Broude and Y Shany (eds), MultiSourced Equivalent Norms in International Law (Oxford, Hart, 2011). 38  See generally Y Shany, The Competing Jurisdictions of International Courts and Tribunals (Oxford, Oxford University Press, 2003). 39  See generally Torremans et al (n 2) ch 13. 40  This is probably the best analysis of The MOX Plant Case (Ireland v United Kingdom) (Order No 3, 24 June 2003) (UNCLOS Annex VII Tribunal, PCA), because at the time the tribunal stayed its own proceedings no case had been commenced before the Court of Justice of the European Union.

Connecting Public and Private International Law

 29

as either a mandatory or discretionary requirement.41 Either technique is adaptable to the international level as a way of framing mutually respectful relationships between international courts and tribunals, often (tellingly) articulated as a matter of comity.42 The second potential area of application of private international law principles at the international level concerns questions of substantive law. As is well known, public international law has developed a range of distinct ‘regimes’— the regimes of trade law, investment law, environmental law, human rights law, and increasingly numerous others. One of the most pressing problems of public international law is how to deal with questions of regime interaction—how to try to ensure that these independently developing regimes do not contradict each other, and that international law does not thereby become incoherent as a system. In public international law research this is often described as the problem of ­fragmentation—there are a range of techniques available to public international lawyers to resolve such questions, but it is unclear whether these are satisfactory or sufficient (or themselves coherent).43 The issue of fragmentation is not only a theoretical question but is also reflected in a range of quite specific practical problems. For example, can a state block the import of goods, contrary to trade law obligations, on environmental law grounds? Can a state cancel the licence of a foreign investor for failure to comply with human rights law? Private international law is sometimes viewed as a potential source of further techniques which might be drawn on to address these kinds of question. Adapted to this context, the techniques of private international law would still strive to accommodate multiple normatively equal legal orders, but the legal orders would not be those of states, but regimes or fields of public international law. However, a note of caution on such endeavours is necessary. Traditional techniques of private international law are focused on choice, and avoiding overlaps— determining which legal order should apply, generally to the exclusion of others. It is not clear that the problems of public international law regime interaction are ones that should be resolved through such a technique—indeed the application of such a technique may be highly problematic. If we are asking whether a state can block the import of goods on environmental grounds, the answer should not be a choice—deciding whether it is really a trade issue or an environmental issue. It is

41  See generally Brussels I bis (n 4) arts 29–34; C McLachlan, Lis Pendens in International Litigation (Leiden, Brill, 2009). 42 See eg T Schultz and N Ridi, ‘Comity and International Courts and Tribunals’ (2017) 50 Cornell International Law Journal (forthcoming, available at SSRN: www.ssrn.com/abstract=2957570); The MOX Plant Case (Ireland v United Kingdom) (Order No 3, 24 June 2003) (UNCLOS Annex VII ­Tribunal, PCA), para 28. 43  See generally the Report of the Study Group of the International Law Commission, Fragmentation of international law: difficulties arising from the diversification and expansion of international law, UN Doc A/CN.4/L.682 (2006); Broude and Shany (n 37); J Pauwelyn, Conflict of Norms in Public International Law: How WTO Law Relates to Other Rules of International Law (Cambridge, Cambridge University Press, 2003).

30 

Alex Mills

clear that it is both a trade issue and an environmental issue. The solution should therefore not be found in a technique of choice, but in techniques of normative accommodation, or hybridisation—but here, a horizontal hybridisation rather than a vertical one. Some of those techniques can be found in international law itself, such as in the principles of treaty interpretation. There is also some private international law scholarship which has argued for such hybridisation instead of the traditional paradigm of choice in private international law, which might well be a profitable source of inspiration for public international lawyers.44 This technique is also sometimes adopted by arbitral tribunals, which may hybridise rules of national contract law when applying non-state law, particularly if directed to do so by the parties.45 This is not, however, the mainstream of private international law, particularly as practised by courts. But perhaps there is also a lesson for private international law in this experience. Is hybridisation something that courts could or should do more? It may indeed be argued that it is something that private international law already does in a range of indirect ways, such as through the rules on the proof of foreign law, or on the substance/procedure distinction, or through the device of depeçage. It is not only public international lawyers who may learn from the techniques of private international law—there is also scope for further reflection from private international lawyers as to whether the solutions developed in public international law for the problems of regime interaction offer lessons for private international law. There is, finally, another more direct methodological intersection between public and private international law which may be highlighted. An international court or tribunal typically applies rules of public international law, but it may also be required to determine what law governs a contract. This might be a particularly common concern for investor-state arbitrations,46 where the parties often have a contractual relationship which can have an impact on the host state’s investment treaty obligations. This raises the question of how the court or tribunal should decide what law governs the contract. As an international court or tribunal, it will at least generally have no ‘forum choice of law rules’ to apply, and applying those of any particular state could be problematically question-begging. The best answer

44 See eg AT von Mehren, ‘Special Substantive Rules for Multistate Problems: Their Role and S­ ignificance in Contemporary Choice of Law Methodology’ (1974) 88 Harvard Law Review 347. This idea is also developed in some contemporary scholarship on legal pluralism—see eg P Schiff Berman, ‘Global Legal Pluralism’ (2007) 80 Southern California Law Review 1155. 45  See eg Channel Tunnel Group Ltd v Balfour Beatty Constructions Ltd [1993] AC 334; E Gaillard, ‘Transnational Law: A Legal System or a Method of Decision-Making?’ (2000) 17 Arbitration International 59; see discussion in T Schultz, ‘Some Critical Comments on the Juridicity of Lex Mercatoria’ (2008) 10 Yearbook of Private International Law 667, 671ff. See similarly O Lando, ‘The Lex ­Mercatoria in International Commercial Arbitration’ (1985) 34 International and Comparative Law ­Quarterly 747, 752ff; C Croff, ‘The Applicable Law in an International Commercial Arbitration: Is It Still a ­Conflict of Laws Problem?’ (1982) 16 International Lawyer 613. 46  On several aspects of investor-state arbitration see chapters by Foster and by Noodt Taquela and Daza in this volume.

Connecting Public and Private International Law

 31

to this conundrum could be that international courts and tribunals need their own ‘transnational’ choice of law rules, their own truly internationalised private international law.47 This was already arguably recognised by the Permanent Court of International Justice in the Serbian Loan cases in the 1920s.48 The increased judicialisation of international dispute resolution, with a range of international courts and tribunals dealing with disputes that are likely to touch on a range of issues of national law, potentially opens up a new field for private international law—a direct need for the development of an internationalised private international law. The development of harmonised rules of private international law by institutions such as the Hague Conference would thus have the added benefit of creating transnational rules of private international law which may be essential to the work of international courts and tribunals.

IV. Conclusions The relationship between public and private international law is not uncontroversial, and it is not simple. It cuts across a whole range of dimensions: connections of principle in ideas of comity and sovereign equality; deep historical connections in the development of each discipline as part of the law of nations; a functional commonality, highlighted through the role of public international law rules on jurisdiction in shaping private international law, and visa versa; direct policy incorporation, through the doctrine of truly international public policy; increasingly shared international objectives of avoiding regulatory conflict. And perhaps through a mutual influence of methodologies. This is a dynamic and difficult terrain to explore, but it is important that private international lawyers are not blind to the global regulatory effects and potential of private international law, and that public international lawyers are not blind to the significance of private international regulation. The contributors to this book are to be applauded for their intrepid interventions.

47  See further HE Kjos, Applicable Law in Investor-State Arbitration: The Interplay Between National and International Law (Oxford, Oxford University Press, 2013). 48  Serbian Loans Case, France v Yugoslavia (1929) PCIJ Ser A, No 20, Judgment 14.

32 

2 Windows in International Law JEAN D’ASPREMONT AND FRANCESCO GIGLIO

I. Introduction This chapter draws on Roman law to build a new descriptive and analytical framework based upon the ideas of windows, (de)coders and travellers with a view to confronting contemporary understanding of private international law and public international law. We seek to identify in legal thought and practice common denominators between these disciplines in terms of methodology and legal reasoning. In shedding light on convergences between these two areas of international law, we will show that, in many respects, they are not distinct from one another, thereby suggesting that they rest on common methodological patterns. After a few introductory remarks on Roman law (section II) as well as a reminder of how the disciplines of private international law and public international law grew distinct (section III), the descriptive and analytical framework espoused in this chapter is introduced (section IV). Thereafter, the discussion turns to p ­ rivate international law and public international law (section V). It ends with a few ­concluding observations on the implications of the image of private international law and public international law projected here, especially on the possibility of framing these two distinct subjects as parts of the general area of international law (section VI). What the image of international law proposed here actually means for practice and legal thought is a question for further inquiry. Two preliminary caveats are warranted. First, the deployment of a Roman approach to legal reasoning is meant as a heuristic exercise:1 a specific image of private international law and public international law is projected with the aim to reveal points of contact between them in terms of methodology and legal reasoning. As for most methodological and theoretical inquiries, even the idea advanced here is seen as one possible, as opposed to the only, approach to the

1  For a useful definition of heuristic method of inquiry in international legal studies, see C Dupont and T Schultz, ‘Towards a New Heuristic Model: Investment Arbitration as a Political System’ (2016) 7 Journal of International Dispute Settlement 3.

34 

Jean d’Aspremont and Francesco Giglio

k­ inship between private and public international law.2 The second caveat concerns the instant use of Roman law, which is analytical, and not historical: Roman law provides a helpful comparative perspective. No attempt is made to re-construct past institutions and argumentative practices in a contemporary context.3 It should be noted from the outset that, whereas we provide indications of some common methodological patterns, we do not argue that the interpretive and methodological aspects of private international law and public international law overlap completely. As will emerge in the following analysis, although we discuss our thesis on the basis of the same structure of headings and sub-headings, we have kept our respective styles of analysis. The reader will notice that both sections reach the same point by focusing upon slightly different aspects—noticeable differences concern the way in which each of us examines a topic, our use of judicial authorities and scholarly opinion, the depth and breadth of the discussion, and even the function of footnotes. Yet, our similar findings, albeit reached through different paths, confirm—rather than contradict—our claim that it is possible to identify common patterns without having to compromise on how we tackle our respective areas of specialisation.

II.  Roman Interpretation: Between Strict and Flexible Legal Analysis Before the Romans, there was law, but not a legal science. The Greeks, for instance, let rhetoric permeate all areas of their reasoning, including the legal discourse, and allowed arguments ad hominem. Such approach was regarded as unacceptable in Roman law. The Roman jurists did not ground their analysis upon persuasive opinions, but upon ‘strict legal analysis’. They developed what Tony Honoré called a ‘canon of legally acceptable arguments’ mainly based upon the two pillars of the rule of law and the so-called open arguments.4 The strict legal analysis was qualified by the use of regulae. Regulae were not as rigorous as modern private law rules. They were used as guidance and could be disapplied. On the other hand, the open arguments looked like windows on the outside world—they paved the way to the introduction of elements that were 2  For a similar attempt to describe legal reasoning and generate readers’ imaginative empathy for a certain image of legal reasoning without claiming superiority over others, see P Schlag, ‘The Aesthetics of American Law’ (2002) 115 Harvard Law Review 1049, 1054. 3  This is more evident in public international law. On the well-known methodological challenges inherent in any attempt to look back at the history of legal thought and the turn to history in contemporary international legal scholarship see M Craven, ‘Theorizing the Turn to History in International Law’ in A Orford and F Hoffmann (eds), The Oxford Handbook of the Theory of International Law (Oxford, Oxford University Press, 2016) 21–37; see also G Galindo, ‘Martti Koskenniemi and the ­Historiographical Turn in International Law’ (2005) 16 European Journal of International Law 539. 4  AM Honoré, ‘Legal Reasoning in Rome and Today’ (1973) 4 Cambrian Law Review 58.

Windows in International Law

 35

external to the legal system. As such, the open arguments ensured that the legal system did not fossilise into a stationary mechanism but could accommodate new social dynamics. In so doing, they enabled legal argumentation to remain receptive to a wide array of political and social claims as well as different visions of the world. This Roman use of open arguments gives us the opportunity to introduce the overarching concepts upon which to build a structure of methodological patterns common to private and public international law. The concepts which shall be examined in this chapter provide the vantage points from which the methodological moves at work behind legal argumentation in private and public international law will be described and compared in the following sections. By virtue of the above-mentioned conceptual framework, we seek to shed light on some patterns common to the two parts of international law.

III.  Private and Public International Law as Professionally Distinct Fields It is commonplace to present private and public international law as two discrete fields of study and practice.5 According to this traditional view, they are separated by the different nature of the rules and practices on which each of them is built. Such a distinctiveness is also said to be of an epistemic character, as the training and argumentative practices of the professionals in one field are alien to those of the professionals in the other field. This common narrative sometimes goes as far as to contend that private international law is more public than public international law and, conversely, that public international law is more private than private international law.6 All-in-all, the two fields tend to be seen as isolated from one another, an attitude that is firmly embedded in the consciousness of professionals of both fields. It appears, however, that this view is contradicted by the common epistemic roots which these two fields once shared.7 Indeed, when international law, in the late nineteenth century and beginning of the twentieth century, underwent

5  M Bos, ‘Droit international public et droit international privé: deux identités bien distinctes’ in J Makarczyk (ed), Theory of International Law at the Threshold of the 21st Century (Leiden, Martinus Nijhoff, 1996); H Batiffol, ‘Points de contact entre le droit international public et le droit international privé’ (1972) 25 Revista española de derecho internacional 71. 6  See generally M Forteau, ‘Le droit international privé, reflet des limites (mais aussi de la nature) du droit international public’ in P d’Argent, B Bonafé and J Combacau (eds), Les limites du droit international: essais en l’honneur de Joe Verhoeven—The Limits of International Law: Essays in Honour of Joe Verhoeven (Brussels, Bruylant, 2015); M Forteau, ‘L’ordre public “transnational” ou “réellement international: l’ordre public international face à l’enchevêtrement croissant du droit international privé et du droit international public’ [2011] Journal du droit international 3. 7  On this topic, see the chapter by Mills in this volume.

36 

Jean d’Aspremont and Francesco Giglio

a process of professionalisation by virtue of its institutionalisation, the systemic production of publications and the inclusion of public international law in the curricula of law schools,8 there were no professionals whose training and practice were entirely and exclusively in the field of public international law9 and many of the first professionals were drawn from other circles, especially private international law.10 And yet, despite this early kinship, private and public international law grew apart during the twentieth century. In line with the idea that subtends the project that gave birth to this collection, it is our aim to re-qualify the traditional portrayal of these subjects.

IV.  New Descriptive Tools for Private and Public International Law In this section, we shall introduce the descriptive and analytical framework espoused herein, with the ideas of windows, (de)coders and travellers.

A.  Descriptive Tool 1: The Windows The co-habitation of regulae and open arguments in Roman law demonstrates that a legal system requires flexible rules to integrate with a strict legal argumentation. These Roman methodological tenets are of comparative value in examining contemporary legal reasoning. The thought and practice of both private and public international law show that, although legal analysis is constrained by strict argumentative patterns, there is still room to accommodate open arguments. The specific function of these windows on the external world is, like in Roman law, to allow interaction and, more specifically, to permit ideas to travel in and out of the host legal argumentation scene. By virtue of such windows, it is possible to import extra-systemic principles and structures into the legal discourses in private and public international law.

8  Stephen Neff reports that an early professorship in the subject was established at the University of Turin in 1851. The Chichele Chair of International Law and Diplomacy was established in 1859 at Oxford University. The Whewell Chair in International Law at Cambridge University was created in 1867. Although it had tried to appoint Wheaton in the 1840s, Harvard Law School appointed its first international law professors in 1898. See S Neff, Justice Among Nations: A History of International Law (Cambridge, MA, Harvard University Press, 2014) 304. See also M Koskenniemi, ‘Nationalism, ­Universalism, Empire : International Law in 1871 and 1919’ talk delivered at Columbia University, April 2005, available at www.helsinki.fi/eci/Publications/talks_papers_MK.html. 9  In the same vein, see Neff (n 8) 303-04. Neff argues that most international lawyers of the time began their career in the field of criminal law. 10  For some general remarks, see A Mills, ‘The Private History of International Law’ (2006) 55 ­International and Comparative Law Quarterly 1. See also Koskenniemi (n 8).

Windows in International Law

 37

B.  Descriptive Tool 2: The (De)coders Windows are not simply openings through which ideas with the potential to influence a legal system travel. Such movements of extra-systemic ideas are only ­possible as long as certain decoding mechanisms are in place. These mechanisms are necessary to translate the travelling ideas into a language that a legal system can understand. In this fashion, it is possible to adapt the new ideas to the needs of the recipient legal system. The decoding mechanisms are often accompanied by a large interpretive discretion of the actor making use of the window and engaging in a decoding-recoding exercise.11

C.  Descriptive Tool 3: The Inbound and Outbound Travellers The windows are gateways for the travellers, understood here as intellectual inputs moving between a legal system and anything outside it—which we have called the outside world, a term that also includes foreign macro and micro legal systems. Two categories of travellers can be identified: 1. Inbound travellers: influential concepts which move from the outside world into a recipient legal system. 2. Outbound travellers: influential concepts developed in a legal system which travel towards the outside world.

V.  Windows, (De)coders and Travellers in Private and Public International Law Without aiming at comprehensiveness, this section seeks to illustrate how w ­ indows, (de)coders, and travellers materialise in private (subsection A) and ­public international law (subsection B).

A.  The Windows in Private International Law Private international law systems attempt to find the difficult balance between a conservative approach which seeks to minimise external interventions and the need to keep their rules operative and in constant contact with the respective domestic systems, which necessarily interact with the conflict rules, a term

11  The idea is not new. See R Debray, Transmitting Culture trans by E Rauth (New York, Columbia University Press, 1997) 19–20.

38 

Jean d’Aspremont and Francesco Giglio

which will be used here lato sensu, as synonymous with private international law rules. From an English perspective, this balancing act is evident both in its own conflict rules, the so-called English traditional rules, and in the conflict rules of European law. As regards European law, a clear example of a window is offered by the attention which is dedicated to the legal systems that do not offer those rules which apply to the legal dispute but, for different reasons, are deemed to deserve a say in a ­particular legal dispute. As well known, Regulation 593/2008 on the law applicable to contractual obligations, or Rome I Regulation, distinguishes between mandatory and overriding rules. Article 3(3) and (4) of Rome I reads: Where all other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement. Where all other elements relevant to the situation at the time of the choice are located in one or more Member States, the parties’ choice of applicable law other than that of a Member State shall not prejudice the application of provisions of Community law, where appropriate as implemented in the Member State of the forum, which cannot be derogated from by agreement.

For its part, Article 9(1) Rome I provides: Overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation.

These provisions clearly open a rift in the closely integrated system of private international law. What makes these rules particularly interesting for our theory is that they imply a two-step analysis which starts with the identification of the applicable law and then moves to the identification of the particular overriding provisions. The latter enable the interpreter to ignore the overridden provisions of the applicable law to concentrate exclusively on the overriding ones. The applicable law says ‘A’; the overriding rules say ‘A plus b’. For example, in a contract for the sale of Portuguese wine between two ­Portuguese parties to be delivered to Portuguese destinations, the parties are able, if they so wish, to add an exclusive choice of law clause which refers to Spanish law. But European law will not allow them to circumvent rules which Portuguese law classifies as non-derogable. The legal system that regulates the contract is ­Spanish, but the rules to be applied to the contract will be Spanish and Portuguese. The result is a contamination of the original, Spanish contractual model.12

12 

Cf art 3(1) Rome I Regulation considered above.

Windows in International Law

 39

In this context, it should be noted that, although the windows are helpful tools to guarantee the flexibility of the system, since Roman times they cannot be allowed to proliferate without control, because the insertion of an alien body may cause frictions with existing legal principles. A good example of such frictions is offered by United Antwerp Maritime Agencies (Unamar) v Navigation Maritime Bulgare.13 The Court of Justice of the European Union (CJEU)14 was asked to rule on the relationship between overriding provisions and contractual freedom. The Court stated that overriding provisions will be interpreted very strictly to avoid any prejudice to the parties’ freedom to shape a contract according to their needs. The English jurisdictional rules, too, accept the necessity of windows, as demonstrated by the adoption of the Scottish institution of forum non conveniens in The Spiliada.15 Indeed, this legal institution is not only foreign to the original structure of English law, thus showing the permeability of the English system to extra-systemic concepts; it is also a flexible instrument that is a perfect example of a window, because it enables the English courts to override their own conflict rules to protect one of the parties. With the words of Lord Goff: The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, ie in which the case may be tried more suitably for the interests of all the parties and the ends of justice.16

This doctrine is particularly suitable to the theory proposed here from a further perspective. English conflict rules have traditionally been based upon judicial discretion. From this perspective, the doctrine of forum non conveniens is in line with the approach adopted by the English judiciary. In turn, the doctrine of judicial discretion, which distinguishes the English common law from its civilian counterparts, is of itself the best indicator that English private international law is perfectly compatible with the idea of windows—arguably, even more so than the civilian legal systems. Discretion is antipodean to strictness. An absolutely strict system would seal off all external influences—an image that is in stark contrast with the concept of law as a social science which is influenced by cultural, social, economic and all other events that affect human beings. The English doctrine of judicial discretion implies a recognition of external, legal and non-legal, factors that impact upon the legal system. History confirms this approach. The Romans accepted that even strict rules were to be interpreted with caution. But they distinguished the main pillars of their legal system, the regulae, from the open arguments. The modern systems 13  United Antwerp Maritime Agencies (Unamar) v Navigation Maritime Bulgare (C-184/12) [2014] 1 All ER (Comm) 625. 14  Throughout this chapter the Court of Justice of the European Union will be referred to as the CJEU, even when referring to judgments made under the name European Court of Justice. 15  Spiliada Maritime Corporation. Cansulex (The Spiliada) [1987] AC 460 (HL). 16  ibid, 476.

40 

Jean d’Aspremont and Francesco Giglio

that are imbued with Roman law have further developed this approach reducing the flexibility of the modern regulae in favour of a more foreseeable system of rules. Nobody exemplified this concept better than Montesquieu, for whom the judge was la bouche qui prononce les paroles de la loi.17 La bouche, or mouth, not le cerveau, that is, brain. English law has followed quite a different pattern, more readily accepting that judges apply the law taking into account the social and legal implications of their judgments. Against this backdrop, it does no surprise that the CJEU has strongly rejected the doctrine of forum non conveniens as an inadequate legal tool. In Owusu v NB Jackson,18 the Court said: Application of the forum non conveniens doctrine, which allows the court seised a wide discretion as regards the question whether a foreign court would be a more appropriate forum for the trial of an action, is liable to undermine the predictability of the rules of jurisdiction laid down by the Brussels Convention, in particular that of article 2, and consequently to undermine the principle of legal certainty, which is the basis of the Convention.19

Another indication of the role of windows in private international law is evident in the role acknowledged to non-systemic rules by the Rome I Regulation. Recital 13 states: ‘This Regulation does not preclude parties from incorporating by reference into their contract a non-State body of law or an international convention.’ This text seems to go further than the more conservative approach adopted by the English courts under the old Rome Convention.20 In Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd,21 the parties inserted a choice of law clause that referred to English law and Sharia law. Potter LJ said: The wording of article 1(1) of the Rome Convention … is not on the face of it applicable to a choice between the law of a country and a non-national system of law, such as the lex mercatoria, or ‘general principles of law’, or as in this case, the law of Sharia.22

The Rome I Regulation is more accommodating than the preceding legislation also on the point of non-national systems of law. Its preamble allows for the opening of new windows. However, it does not go as far as to allow the inclusion of those ‘general principles of law’ which worried Potter LJ in the Shamil Bank of Bahrain case. It seems therefore, that the legislator has sought a third way. This approach shows that there is consciousness of the risks linked to an excessive use of the windows,23 which may potentially affect the coherence of the legal system in 17 Montesquieu, Esprit

des Lois (Garnier, 1771) 327. Owusu v NB Jackson [2005] QB 801 (Case C-281/02) (Grand Chamber). ibid, 40. 20  Convention on the Law Applicable to Contractual Obligations, Rome 1980. 21  Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd [2004] EWCA civ 19. 22  ibid, 48. 23  Another clear example of such safety brake is offered by the so-called public policy exception, which allows the courts to disapply given rules of the applicable law if they are incompatible with the fundamental principles of the lex fori. Cf art 21 Rome I: The application of a provision of the law of any country specified by this Regulation may be refused only if such application is manifestly incompatible with the public policy (ordre public) of the forum. 18  19 

Windows in International Law

 41

a significant fashion. Yet, it also shows that there is acceptance of the importance to keep communication channels open to allow the travellers to move between the systems. Two instances of more controversial windows are linked to the doctrines of comity and of reciprocity. In English law, there seems to be some room for the former, which will be considered in the section dedicated to travellers, whereas the latter does not enjoy the same kind of acceptance in the courts. In the context of reciprocity, Denning LJ, in Re Dulles’ Settlement (No 2),24 suggested obiter that an English court would be allowed to recognise a foreign judgment when the foreign court assumed jurisdiction on the basis of a set of criteria which even an English court would use to acknowledge its own jurisdiction. The reciprocity principle would cover situations in which the English court accepts jurisdiction via the gateway offered by rule 6.36 of the Civil Procedure Rules, which confers a discretionary power upon English courts to serve a writ on a defendant out of the jurisdiction. Apart from some isolated views, however, the widely accepted judicial dislike for this doctrine can be traced back to old cases such as Schibsby v Westenholz.25 Finally, the substantive rights of the parties to a legal dispute can be influenced even by procedural windows which enlarge the availability of jurisdictions. For example, Article 71 of the Brussels I bis Regulation26 states: 1. This Regulation shall not affect any conventions to which the Member States are parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.

This is an instance of a procedural window.27 Although it does not affect directly the rights applied in court, it might have a profound impact upon such rights. This window allows the application of specialised international treaties as a consequence of which a court that under the normal European rules would not be able to hear a case acquires this right on the basis of an international convention. At first instance, it might appear that this procedural change has no influence upon the actionable rights. But, on a closer look, a different picture emerges. Within the roof of a common European tradition, each Member State has its own legal culture: for example, some legal orders are more prone to protect the stability of rights; others prefer to sacrifice this stability in favour of the security of receipt. The choice between ownership and commerce has clear consequences for the success or failure of a legal action, so that enlarging the radius of available jurisdictions28 implies that the procedural window may influence the outcome of the claim. 24 

Re Dulles’ Settlement (No 2) [1951] Ch 842, 851. Schibsby v Westenholz (1870) LR 6 QB 155. 26  Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast). 27  More examples of procedural windows can be found in the chapter by French and Ruiz AbouNigm in this volume. 28 ibid. 25 

42 

Jean d’Aspremont and Francesco Giglio

The windows play a distinctive role in the process of characterisation, that is, the classification of the legal issues at stake. The rules on choice of law require the individualisation of the legal system that is closer to the parties or to the legal matter. Choosing a legal system which is different from the law of the place where the issue is tried, or lex fori, implies opening a window upon that legal system and therefore has consequences on the outcome of the dispute. The law applicable to the dispute cannot be established on the basis of the lex causae, that is, the law chosen by the adjudicating court, because the relevant legal system can only be determined once the applicable law is known. Hence, to avoid a circular reasoning the applicable law has to be identified by a third system. Normally, this system is supplied by the lex fori, see Macmillan v Bishopsgate Investment Trust.29 By offering a choice between the lex fori and the lex causae, the process of characterisation introduces a window that enlarges the spectrum of the available legal systems. This window is opened by a procedural mechanism but, through the introduction of substantive rules of the system that is not the one of the adjudicating court, affects the judicial analysis.

B.  The (De)coders in Private International Law In private international law, the passage of information in the form of general principles or rules—that is, what we call legal materials—undergoes a process of interpretation in the recipient legal system. Such process also requires a decoding of the original message and the application of a code understandable by the recipient system. Here, too, a new coding occurs. As private international law offers a system of rules to identify the appropriate legal system and the jurisdiction, it has to accept a certain level of flexibility. ­Otherwise, the communication between the forum causae and the domestic systems which produce the rules of substantive law would be seriously hampered. If English or European private international law rules did not have decoders, no form of dialogue with the foreign domestic systems could be established. Hence, decoding is a basic exercise in conflict of laws. A good example of this essential activity can be found in the Preamble to the Brussels I bis Regulation, in which recital 28 states: Where a judgment contains a measure or order which is not known in the law of the Member State addressed, that measure or order, including any right indicated therein, should, to the extent possible, be adapted to one which, under the law of that Member State, has equivalent effects attached to it and pursues similar aims. How, and by whom, the adaptation is to be carried out should be determined by each Member State.

‘Adaptation’ is thus decoding. The recital describes a necessary task which the domestic courts have to perform to be able to operate in private international law. 29 

Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1996] WLR 387.

Windows in International Law

 43

The foreign traveller is taken out of its original context and re-interpreted in the light of the recipient system. Note that recital 28 sets boundaries to the interpretive powers of the decoding court. The aim of the exercise is to achieve effectual equivalence. Such equivalence can only be reached through comparison. As the courts are confronted with foreign legal systems, decoding can be attained through two major avenues: expert opinion and praesumptio similitudinis. These tools enjoy different levels of acceptance in each legal system and are particularly helpful in systems, such as English law, where the foreign law must be alleged and proved by the parties. The use of experts is very common in courts. The praesumptio similitudinis is a last resource avenue: when the foreign law pleaded in court is not proved by the parties, the English judges will presume that it coincides with English law.30 Well before European law started playing a major role in the English private international law, the English courts had to develop rules in support of decoding. Issues emerged in relation to English legal institutions which did not have an equivalent in the foreign system, but also in cases in which apparently similar legal institutions were in reality based upon different foundations. In Re Bonacina,31 the claimant brought an action in England based on a foreign contract which was not supported by consideration. This notwithstanding, the court accepted that, although in English domestic law this would not have been the case, from the perspective of conflict of laws the dispute involved a contractual obligation. Hence, the conflict of laws category of contract did not coincide with the domestic contract. Approaching such issues from an international perspective, agreements which would not be contractual according to the English domestic law could nonetheless be enforced as such under private international law. This approach is justified by the judicial acceptance that a window opens up a scenario in private international law which would not be available in domestic law. A window lets in rules and ideas which need to be decoded by the recipient system. In Re Bonacina, the relevant document, which did qualify as a contractual agreement in the foreign legal system, entered English private international law through a window and was interpreted as a contractual tool. In the absence of a window, such as is the case in domestic law, this interpretive avenue would have not been accessible to the court.

C.  The Travellers in Private International Law In the course of this analysis, we have seen several travellers which use the windows to enter into a legal system. Some of them are decoded and absorbed 30  Cf V Ruiz Abou-Nigm, ‘The Traditional Approach to Foreign Law in Civil Litigation in the Legal Systems of the United Kingdom’ in Y Nishitani (ed), Treatment of Foreign Law—Dynamics towards Convergence? (London, Springer, 2017) 373: ‘Put simply, where foreign law is not proved, the court applies English law by default.’ 31  Re Bonacina [1912] 2 Ch 39.

44 

Jean d’Aspremont and Francesco Giglio

into the system; others will not only be absorbed, they will also become windows to facilitate the entry of new travellers. A helpful example of a ‘window traveller’ is the doctrine of forum non ­conveniens. As intimated, it travelled from Scotland, first to other common law jurisdictions, such as the United States, where it took its own course, and later on to England offering the necessary flexibility to introduce new rules to d ­ etermine whether a legal issue should be tried in England as its natural forum. This doctrine is particularly relevant because it shows the difficulties that a traveller encounters during its journey. The English recognition of forum non conveniens has not been achieved without extensive judicial debate. The English courts were more oriented towards the related doctrine of forum conveniens, which has been c­ riticised for facilitating the so-called forum shopping. The Atlantic Star arguably is the case which ­triggered the judicial shift that opened the doors to forum non ­conveniens.32 The opposite views of Lord Denning MR in the Court of Appeal and of Lord Reid in the House of Lords sum up admirably the debate. In Lord Reid’s speech, we read: In the present case Lord Denning M.R. said …: ‘No one who comes to these courts asking for justice should come in vain. … This right to come here is not confined to Englishmen. It extends to any friendly foreigner. He can seek the aid of our courts if he desires to do so. You may call this ‘forum shopping’ if you please, but if the forum is England, it is a good place to shop in, both for the quality of the goods and the speed of service.’ My Lords, with all respect, that seems to me to recall the good old days, the passing of which many may regret, when inhabitants of this island felt an innate superiority over those unfortunate enough to belong to other races. It is a function of this House to try, so far as possible, to keep the development of the common law in line with the policy of Parliament and the movement of public opinion. So I think that the time is ripe for a re-examination of the rather insular doctrine to which I have referred.33

Hence, the traveller intervenes to change a deeply-rooted, ‘insular’ legal thinking. Through the pressure of external ideas, English law becomes more open to the world. In this context, it is worth-mentioning that Robert Goff was counsel for the appellant. Around 15 years later, we find the ideas that he put forward to the Law Lords in The Atlantic Star becoming the new doctrine of forum non conveniens in The Spiliada.34 A more controversial window traveller is the doctrine of comity of nations,35 described by Lord Reid in Regazzoni v KC Sethia (1944) as ‘the background of

32 

The Atlantic Star [1974] AC 436. ibid, 453. 34  The Spiliada (n 15). 35 See further references to the doctrine of comity in the chapters by Mills, French and Ruiz ­ bou-Nigm, and Morgera and Gillies in this volume. A 33 

Windows in International Law

 45

international law and international relationships’.36 In Regazzoni, a contract was valid according to English law but not according to a foreign legal system. The House of Lords recognised that it would have been apposite to consider even the rules of the foreign system when examining the legal issue. In its more extreme application, this approach implies that foreign rules might be given precedence over domestic rules. An example of such situation can be found in OT Africa Line Ltd v Magic Sportswear Corp,37 where Rix LJ stated that, when considering whether to award an anti-suit injunction, ‘considerations of comity will also be highly relevant.’38 So far, only rules as travellers have been examined. Yet the question could be posed whether even argumentative structures and methodological analysis may travel as well. Given that travellers are extra-systemic rules and ideas which influence a given legal system, the same procedure can be applied to ideas that affect the legal system in an indirect fashion. In fact, the concept of Law as an open system, which supports the theory upon which the present analysis is based, is grounded on the premise that a legal system, even if conceived as a close system, is always permeable to ideas that influence the lawyer’s reasoning. Both methodology and argumentation belong to this category of ideas. There is no denying that European law has strongly influenced English international law even from the perspective of the argumentative structures. The E ­ nglish methodology, shaped by the traditional legal discretion, had to adapt to the civilian method, which is based upon an analysis more strictly linked to the legal sources. Whereas the civilian systems, epitomised by French law, develop the law with the support of the so-called legal syllogisms—that is, in the context of an Aristotelian investigation of the facts and the legal rules—English law has evolved on the basis of analogical reasoning. Arguably, one of the reasons for the frictions between the European and the English judiciary is to be found in the different methodological approaches. An example of these tensions is offered by the scenario known as the ‘Italian ­torpedo’, from the first case in which the CJEU was confronted with this issue, Erich Gasser GmbH v MISAT.39 The legal question examined by the European judges was whether a defendant could buy himself time and thus put more ­pressure on the other party in legal proceedings by bringing an unfounded claim in a legal system that is notoriously slow. There was no doubt that, in Erich Gasser, the party had willfully started an action with no chance of success. As it would have taken a long time for the court first seised to reject the claim, could the court offering the correct forum according to European rules try the same case which had already been started in another jurisdiction? The CJEU answered in the negative, because a positive answer would be contrary to the spirit of co-operation between Member 36 

Regazzoni v KC Sethia (1944) [1958] AC 301, 323 (HL). OT Africa Line Ltd v Magic Sportswear Corp [2005] EWCA Civ 710. 38  ibid, para 50. 39  Erich Gasser GmbH v MISAT srl (Case C-116-02) [2005] QB 1 (ECJ). 37 

46 

Jean d’Aspremont and Francesco Giglio

States and their courts which imbues European law. Lord Mance wrote in a commentary to this decision that it ‘promises problems for legitimate claimants and opportunities for those unwilling to meet their obligations.’40 Yet one can see that the European Court correctly applied the legal syllogism starting from Chapter III Treaty on the Functioning of the European Union (TFEU).41 The conclusion was compelled by the premises, but this method was considered as inadequate by Lord Mance in the present context. On the other hand, the English lawyer is well capable of exploiting any opportunity, even if starting hopeless claims in order to force an agreement is at least dubious from a legal-ethical perspective: the line between launching an Italian torpedo and abusing of the process of the court might be fine, but it has clear contours in law. Thus, the Court of Appeal said in Research in Motion UK Ltd v Visto Corporation: [A] party who fires an Italian torpedo may stand to gain much commercially from it. It would be wrong to say that he is ‘abusing’ the system just because he fires the torpedo or tries to. Things may be different if he oversteps the line (eg abuses the process of a court) but he cannot and should not be condemned unless he has gone that far.42

So far, we have sought to demonstrate that our idea of the role played by what we have called windows in international law helps understand the structure of private international law. In the next section, we will provide evidence in support of our claim that private international law and public international law share some common theoretical ground.

VI.  Public International Law A.  The Windows in Public International Law The idea that public international law functions as a closed system where openings are occasional and carefully engineered has long been refuted.43 It is common nowadays to recognise that public international law interacts with other normative orders. Public international lawyers have generally confronted such openings by either finding refuge in the convenience of pluralism44 or by systematising them by virtue of system theories.45 It is submitted here that the ideas of windows, 40 

J Mance, ‘Exclusive Jurisdiction Agreements and European Ideals’ (2004) 120 LQR 357, 357. Treaty on the Functioning of the European Union (2007). 42  Research in Motion UK Ltd v Visto Corporation [2008] EWCA Civ 153, 15–16. 43  See the contributions in A Nollkaemper and J Nijman (eds), New Perspectives on the Divide between National and International Law (Oxford, Oxford University Press, 2007). 44  On the idea that pluralism ceases to make demands on the world, see M Koskenniemi ‘The Fate of Public International Law: Between Technique and Politics’ (1997) 60 MLR 1, 23. 45  G Teubner and P Korth, ‘Two Kinds of Legal Pluralism: Collision of Transnational Regimes in the Double Fragmentation of World Society’ in M Young (ed), Regime Interaction in International Law: Facing Fragmentation (Oxford, Oxford University Press, 2010). 41 

Windows in International Law

 47

(de)coders and travellers offer a new and richer lens on the basis of which the ­openness of international law can be described and evaluated, allowing a much greater range of movements between different orders—including non-legal orders—to be apprehended. In the following paragraphs, a few illustrations are provided with respect to three types of openings of international law: towards domestic systems, towards international sub-systems, and towards non-legal ­systems and micro legal-systems.46 As far as openings to domestic legal systems are concerned, windows could be found in a variety of mechanisms. It suffices to mention a few of them. General principles of law and their—somewhat idealistic47—call for a synthesis of domestic law traditions can be construed as a window.48 Indeed, the ascertainment of general principles requires one to venture in some carefully selected domestic systems with a view to distilling some common norms or procedures. The same holds for rules of attribution found in the law on state responsibility whereby the determination of what constitutes an organ of the state is not entirely reduced to a matter of factual determination. Domestic constitutional arrangements can prove indicative as to whether an actor qualifies as an organ of the state as was codified by the International Law Commission, for which domestic arrangements are indicative of the extent to which a domestic body acts on behalf of the state at the international level.49 Further, one can mention rules on the invalidity of treaties, and especially the invalidity of a treaty for manifest violation of domestic rules regarding competence to conclude treaties that are deemed of fundamental importance.50 According to such a ground of invalidity, domestic arrangements regarding the conclusion of treaties can be determinative of the (in)validity of an international treaty, thereby providing a window between international law and domestic law. 46  The notion of system is used in a generic sense here. It is useful to recall here that, for a long time, scholars have sought to present international law in a systemic fashion. Systemic thinking is probably a heritage from German public law scholarship. While being a brainchild of German public law scholarship, systemic thinking quickly became central in European thinking about international law. It has been argued that the German approach and its systemic thinking about law was introduced in the Anglo-American tradition of international law by Germans and German-speaking émigrés like Francis Lieber, Lassa Oppenheim, Hersch Lauterpacht, Georg Schwarzenberger or Hans Kelsen. See generally M Koskenniemi, ‘Georg Friedrich von Martens (1756–1821) and the Origins of Modern International Law’ (2008) 15:2 Constellations; E Benvenisti, ‘The Conception of International Law as a Legal System’ Tel Aviv University Law Faculty Papers 2008/83, 3. 47  See J Ellis ‘General Principles and Comparative Law’ (2011) 22 European Journal of International Law 949. 48  See generally FO Raimondo, General Principles of Law in the Decisions of International Criminal Courts and Tribunals (Leiden, Martinus Nijhoff, 2008). 49  See art 4, para 2 of the Articles on State Responsibility. On this question, see L Condorelli and C Kress, ‘The Rules of Attribution: General Considerations’ in J Crawford, A Pellet and S Olleson (eds), The Law of International Responsibility (Oxford, Oxford University Press, 2010). 50  See art 46 of the Vienna Convention on the Law of Treaties. On this question, see R Kolb, ‘Note sur un problème particulier de “ratification imparfaite” (article 46 de la Convention de Vienne sur le droit des traites de 1969)’ (2011) 21 Schweizerische Zeitschrift fur Internationales und Europaisches Recht 429. See also M Bothe, ‘Article 46’ in O Corten and P Kein (eds), Les Conventions de Vienne sur le Droit des Traités. Commentaire article par article (Brussels, Bruylant, 2006).

48 

Jean d’Aspremont and Francesco Giglio

It happens that international law allows its own sub-systems to open to one another. All those openings are made possible by virtue of mechanisms that ­function as windows. For instance, the principle of interpretation called ‘systemic integration’ can be considered a window. In fact, this method of interpretation allows one to determine the content of a given rule in the light of other rules applicable between the same parties. In other words, this principle allows the content of a rule to be informed by a broad normative environment where international sub-systems connect with one another through the establishment of an interpretative interconnection between the norm being interpreted and other norms operating as interpretive tools.51 By the same token, the dominant interpretation of Articles 25 and 103 of the UN Charter, whereby the bindingness of S­ ecurity Council Resolutions and their hierarchy within the UN order could apply beyond the UN legal order, could be construed as putting into place a window as it is ­understood here.52 This window allows UN norms, and especially those enshrined in UN Security Council resolutions, to trickle into other sub-systems of ­international law. A final example of a window between sub-systems of international law is found in the treatment of precedents in international adjudication. It is well-known that, despite the absence of a formal doctrine of stare decisis in international law, tribunals often feel bound to take into account interpretive constructions of other tribunals despite the fact that they are adjudicating distinct cases under different treaties.53 This de facto doctrine of precedent also operates as a window through which interpretative constructions are exchanged between international courts and tribunals of the various sub-systems of international law. This is particularly the case in international investment law, where international tribunals, whose respective regimes are completely independent from one another, constantly refer to one another.54 As was mentioned above, windows do not only allow openings towards legal orders. The ideas and norms of non-legal systems and micro legal-systems similarly

51  Art 31(3)(c) of the Vienna Convention on the Law of Treaties reads as follows: ‘There shall be taken into account, together with the context … any relevant rules of international law applicable in the relations between the parties’. See. C McLachlan, ‘The Principle of Systemic Integration and Article 31(3)(c) of the Vienna Convention’ (2005) 54 International and Comparative Law Quarterly 279. 52  See generally J d’Aspremont and F Dopagne, ‘Kadi: The ECJ’s Reminder of the Elementary Divide between Legal Orders’ (2008) 5 International Organizations Law Review 371. 53  See E De Brabandere, ‘The Use of Precedent and External Case Law by the International Court of Justice and the International Tribunal for the Law of the Sea’ (2016) 15 The Law and Practice of International Courts and Tribunals 24. See also H Cohen, ‘Theorizing Precedent in International Law’ in A Bianchi, D Peat and M Windsor (eds), Interpretation in International Law (Oxford, Oxford University Press, 2015). 54  See generally E De Brabandere, ‘Arbitral Decisions as a Source of International Investment Law’ in T Gazzini and E de Brabandere (eds), International Investment Law: the Sources of Rights and Obligations (Leiden, Martinus Nijhoff, 2012). See also chapters by Noodt Taquela and Daza Clark and Foster in this volume.

Windows in International Law

 49

travel in public international law too. For instance, the growing extent to which scientific controversies are, in the case law of international courts, instrumental to the applicable standards put in place by specific legal regimes similarly manifests the presence of a window. Indeed, such a window allows scientific expertise— and the controversies that accompany them—to travel into public ­international law.55 The notion of effectivité which is found in a series of rules of public ­international law equally facilitates factual situations to travel into international law. In fact, the concept of effectivité allows legal rules to be calibrated on certain realities. This is for instance the case with the idea of effective control that enables the extra-territorial application of international human rights rules;56 or the notion of effective control in the rules of attribution that allows attribution to a State by virtue of its factual control over a situation or certain actors.57 In the same vein, it could be argued that the notion of good faith58 which populates a number of rules and practices in international law equally puts in place a window whereby all kinds of ideas and considerations travel into international law. It should be noted that the room of the interpreter relying on the type of windows mentioned in this paragraph is often maximised with respect to the travelling of non-legal materials as they ought to be reconstructed according to the codes of international law. This is the (de)coding process that is further illustrated in the next section.

B.  The (De)coders in Public International Law The passage of legal and non-legal materials through the abovementioned ­windows of public international law brings about a process of interpretation and reconstitution. Such process requires a (de)codification of the original message and the subsequent application of a code understandable by the recipient system. Thus, a new codification occurs and the imported normative materials are translated into the formal modes of legal reasoning recognised by public ­international law.

55  On this debate, see J d’Aspremont and MM Mbengue, ‘Strategies of Engagement with Scientific Fact-Finding in International Adjudication’ (2014) 5 Journal of International Dispute Settlement 240. 56 See M Milanovic, Extraterritorial Application of Human Rights Treaties: Law, Principles, and ­Policy (Oxford, Oxford University Press, 2011). See also chapters by McCall-Smith and Rühmkorf and ­Kagiaros and Wyper in this volume. 57  See art 8 of the Articles on State Responsibility. On this question, see O de Frouville, ‘Attribution of Conduct to the State: Private Individuals’ in Crawford, Pellet and Olleson (n 49). 58  See generally R Kolb, La bonne foi en droit international public: contribution à l’étude des principes généraux de droit (Paris, Presses Universitaires de France, 2000). It can be recalled here that bona fides was one of the main open arguments available to the Romans to counterbalance the strictness of the civil law. Reference can be made to the work of the late Republican jurist Quintus Mucius Scaevola. In this respect see O Behrends, ‘Institutionelles und prinzipielles Denken im römischen Recht’ (1978) 95 ZRG RA 95 (1978) 187–231.

50 

Jean d’Aspremont and Francesco Giglio

A few examples of these (de)codification processes can be provided here. The doctrine of interpretation is probably the most visible of all (de)coding ­mechanisms. Many of the materials that travel into public international law will be subject to an interpretation as it is supposedly organised by the ‘rules’59 on ­interpretation in international law.60 However, the doctrine of interpretation, at least as it expresses itself in Articles 31 and 32 of the Vienna Convention on the Law of Treaties, does not regulate all interpretive activities in international law. This is only one of the many (de)coders found in public international law. Other interpretive processes perform (de)coding functions in public international law. The doctrine of sources of international law, for instance, can be seen as functioning as a (de)coding mechanism. Indeed, it transforms normative standards and behaviour into formal rules of international law by ascribing to them a formal pedigree.61 The same holds with the doctrine whereby domestic law is demoted to a mere fact from the perspective of international law. By virtue of such a doctrine, domestic legal materials are ‘factualised’ and thereby subject to a process of (de)codification.62 The foregoing has only illustrated a small part of the processes of (de)coding at work when legal and non-legal materials travel through the windows of public international law. It will not come as a surprise that the more sophisticated the mechanisms of (de)coding are, the more room the interpreter that makes use of the window will have to reinvent the materials that travel. Indeed, (de)coding mechanisms themselves are in need of interpretation. The more sophisticated the (de)coder, the more interpretive room is put at the disposal of the (de)coding actor, thereby enhancing its discretionary power.63 59  In this respect, it is useful to recall the doubts expressed by some of the drafters of the Vienna Convention on the Law of Treaties. For instance, Alfred Verdross raised the question of the nature of the rules of interpretation which the International Law Commission intended to codify, arguing that ‘the Commission ought first to decide whether it recognised the existence of such rules’ (ILC, 726th Meeting, UN Doc A/CN.4/167) reproduced in YILC (1964), vol I: 20–21, para 15). In his view, ‘it was highly controversial whether the rules established by the case-law of arbitral tribunals and international courts were general rules of international law or merely technical rules’ (ILC, 726th Meeting, UN Doc A/CN.4/167) reproduced in YILC (1964), vol I: 20–21, para 15). In the same vein, Sir Humphrey Waldock conceded that he ‘was decidedly lukewarm on rules on interpretation, including them more because he thought this was expected of him than out of genuine expectation that rules on interpretation would be of much use’. (J Klabbers, ‘Virtuous Interpretation’ in M Fitzmaurice et al (eds), Treaty Interpretation and the Vienna Convention on the Law of Treaties: 30 Years on, Vol 1 (Leiden, Martinus Nijhoff, 2010) 17, 18). 60  See generally Bianchi, Peat and Windsor (n 53). 61  On the functions of the doctrine of sources and the problems pertaining to their use of formal and non-formal criteria of identification, see J d’Aspremont, Formalism and the Sources of International Law (Oxford, Oxford University Press, 2011). 62  The PCIJ and the ICJ have famously held that domestic law constitute a fact from the perspective of international law and therefore had to be evidenced like any other fact. For an example, see Serbian and Brazilian Loans Case (1929) PCIJ, Ser A Nos 20–21, 18–20; Nottebohm Case, 1959 ICJ Reps 4, 20–21. 63 See generally I Venzke, ‘Post-Modern Perspectives on Orthodox Positivism’ in J Kammerhofer and J d’Aspremont (eds), International Legal Positivism in a Post-Modern World (Cambridge, Cambridge University Press, 2014) 182–210.

Windows in International Law

 51

C.  The Travellers in Public International Law The legal and non-legal materials which are moving into public international law by virtue of these windows can be of various types. They can be of normative nature. This is the case when the materials boil down to principles and standards of behaviour which are then applied in the recipient system or inform the interpretation of local normative materials. A good example thereof is found in the abovementioned application of prescriptions by the Security Council beyond the United Nations framework. The travelling materials can also be of interpretive nature. This is the case when the recipient system imports some normative positions, for instance by virtue of the doctrine of precedent already discussed. Institutional and constitutional arrangements can be among the materials that travel, for instance in the case of the determination of the status of organ of a State by virtue of the rules on attribution or in the case of the invalidity of a treaty for breach of domestic rules deemed of fundamental importance. Scientific theories or controversies can also be travelling through windows and will undergo a process of codification, often being re-assessed through legal arguments by judges. This is well-illustrated by the International Court of Justice (ICJ) decision in Pulp Mills on the River Uruguay where the Court indicated that it is its responsibility, after careful consideration of all the evidence placed before it by the Parties, to ‘determine which facts must be considered relevant to assess their probative value, and to draw conclusions from them as appropriate.’64

VII.  Concluding Remarks The aim of our study has been to test the hypothesis that private and public international law share some argumentative and methodological patterns. Rather than shedding light on convergences, it has been argued, albeit in different ways, that these common patterns have always been at work in private and public international law but have long been obfuscated by the inclination to hold these fields as distinct. We have suggested that, although private and public international law may diverge in many respects, they share much in terms of methodology and argumentation. 64  Pulp Mills on the River Uruguay (Argentina v Uruguay), Judgment, 2010 ICJ Reports 14, para 168. In this case, scientific fact-finding was conducive to the determination that the Eastern Republic of Uruguay did not breach its substantive obligation under Arts 35, 36 and 41 of the 1975 Statute of the River Uruguay. By resorting to a distinction between procedural and substantive obligations and overlooking the extent to which they are intertwined, the Court could bypass the difficult scientific questions brought about by the case. Indeed, the Court indicated that it is its responsibility, after careful consideration of all the evidence placed before it by the Parties, to ‘determine which facts must be considered relevant, to assess their probative value, and to draw conclusions from them as appropriate.’

52 

Jean d’Aspremont and Francesco Giglio

The potential of the methodological and argumentative approach put forward in our study can be summarised as follows. As intimated, although our framework can be used to highlight common themes, similar developments, or divergences within the structure of the respective systems, such reflections would be of no avail here, for they would take the focus away from the methodology whilst adding nothing to the analysis. Instead, this framework can be used for further evaluations concerning the level of adaptability of the systems that compose private and public international law, especially in terms of openness to external inputs. On this premise, two concluding observations help understand the i­ mplications of the idea that has been presented here with the support of the images of windows, (de)coders and travellers. The first observation pertains to the amount of legal and non-legal materials that travel in private and public international law as well as the number of mechanisms that allow such materials to travel. The image produced by the previous sections has presented private international law and public international law as being constantly traversed by a flux of travelling materials. The portrait of private and public international law that emerges is thus one of a very dynamic, flexible and active area of law. A second, and probably more fundamental, remark is apposite as to the kinship of private and public international law, bringing us back to where our analysis started. According to a common historical narrative, and despite public international lawyers populating the field of public international law after its professionalisation,65 private international law and public international law grew systematically distinct in the twentieth century. The image produced by virtue of the ideas of windows, (de)coders and travellers challenges this common assumption and sheds light on the extent to which private and public international law still have much in common, that is, their fundamentally open nature through a series of windows allowing legal and non-legal materials to travel through them. Our conclusion implies that the common distinction between private and public international law is arguably overblown and that a holistic idea of one international law that would encapsulate all those windows currently at work in private and public international law is not as far-fetched as it appears at first sight.66 The possibility for lawyers to think of internationality in holistic terms and to play down the traditional distinction between private and public international law is no trifling consequence for the heuristic exercise conducted here.

65 

See above s II. some earlier attempts to re-unite public and private international law, see JHW Verzijl, Un projet d’encyclopédie de droit international public et privé: préparé pour l’Académie Royale des Sciences d’Amsterdam (Leiden, Brill, 1926). See also A Mills, The Confluence of Public and Private International Law (Cambridge, Cambridge University Press, 2009). 66 For

3 ‘International’ Rules in an Internal Setting KIRSTY J HOOD, QC*

I. Introduction This chapter seeks to bring together two of the over-arching themes of the p ­ roject. First, that an overly-rigid categorisation of the role and boundaries of private international law and public international law is unhelpful and should be rejected; and, second, that both private international law and public international law have a role to play in resolving the conflict between State sovereignty on the one hand, and individual autonomy on the other. In particular, the chapter seeks to explore whether such self-described ‘international’ rules have a role to play in resolving that tension, in what might be seen as an ‘internal’ setting. Individual autonomy (which may also be described as ‘individual sovereignty’) can be defined as an individual’s freedom to arrange his/her own affairs. Plainly legal rules may restrict an individual’s ability to act as (s)he chooses, may create a space where the individual may act as (s)he chooses, or may bestow upon the individual the right to act in a particular way. Turning to the concept of State sovereignty, it is submitted that a State, as a sovereign entity, might wish to exert its power of regulation in at least the following four broad ways: (i) to regulate the internal relationship of its component political parts (that is, between the organs of power within the State,1 and as between central government and any regional sub-entities within the State); (ii) to regulate how the State interacts externally with other States and international bodies; (iii) to regulate the behaviour of the State’s citizens or domestically-based corporations (for example, by the granting of permissions and the imposition of restrictions); and (iv) to regulate the ­behaviour of external actors (whether individuals or corporations) insofar as they

*  The genesis of this chapter lay in a projected joint paper with Dr Ugljesa Grusic. The author is grateful to Dr Grusic for the stimulating opportunity to discuss broad underlying themes. As always, the responsibility for any errors must be the author’s. 1  By which is meant the executive, legislature and judiciary.

54 

Kirsty J Hood, QC

affect the interests of the State, in particular their actions which actually or potentially take effect within the State’s boundaries. In a globalised world, with movement of people, goods and capital, there may be increased tension between the goals and interests of the State in the exercise of its sovereignty, and the goals and interests of individuals and corporations seeking to exercise freedom of choice not just within a State, but across the borders of sovereign States. It might be assumed that facet (i) of these regulatory goals really describes the field of domestic public, or constitutional, law, and that facet (iii) is largely the arena of domestic private law. On that approach, the influence of public international law would be confined to facet (ii), and private international law largely to facet (iv). The ability of these latter two disciplines to play any role in resolving the tension between State sovereignty and individual autonomy would then likewise be confined to those areas. Certainly there are obvious ways in which they can operate in that way. To take just one example, a key component of private international law is rules of jurisdiction:2 these rules will define when an individual or corporation has a connection with a State (by way of domicile, nationality, habitual residence or presence) such that the party may litigate, and be litigated against, in the State’s courts. This will be of significance in how far the State may control the behaviour of such parties through action in its own courts. Such jurisdiction rules usually also identify other situations when the subject-matter of a dispute is sufficiently closely linked with a State so as to be litigated there, and thus again are of importance in a State exercising control over matters affecting its territory or citizens. However, such rules will also determine whether (and, if so, when) parties may exercise freedom to choose to litigate particular disputes before the State’s courts (or, instead, before the courts of another State).3 Furthermore, both private international law and public international law rules can indeed be viewed as acting so as to open up a ‘window’ into a different legal order.4 Thus private international law rules will usually decide how far a State’s courts should simply apply the domestic law of the State to disputes before them, and how far a cross-border e­ lement to a case may justify reference being had to an external body of law (whether that be the law of another country, or another set

2 

On which, generally, see the chapter by French and Ruiz Abou-Nigm in this volume. Whilst private international law rules are usually characterised as forming part of each domestic legal order, in reality they are usually drawn from a broad international consensus, and have been adapted to the particular context of a legal system. Similarly, whilst the rules on when nationality is acquired and lost may be seen as part of the domestic legal system, this would be to ignore the extent to which there is international agreement in the public international law field on the broad principles of the law of nationality, and the extent to which a State may legislate thereon (see J Crawford, Brownlie’s Principles of Public International Law 8th edn (Oxford, Oxford University Press, 2012) ch 23; L Fransman, Fransman’s British Nationality Law 3rd edn (Haywards Heath, Bloomsbury, 2011) chs 1, 2). Although EU citizenship flows from nationality of an EU Member State, this has caused an entanglement insofar as EU citizenship is a matter in which the EU quite properly may become involved (see Fransman, ibid, paras 1.3.1.1, 3.6.2). 4  On which, generally, see the chapter by d’Aspremont and Giglio in this volume. 3 

‘International’ Rules in an Internal Setting

 55

of ­internationally-recognised rules). Public international law rules may also allow for the application of a set of internationally-recognised rules5—and, again, this involves determining how far parties’ disputes can be settled by reference to a set of rules other than that of the domestic legal order. Similarly, where a judgment or order has been pronounced by a tribunal outwith the State, one would look to rules of private international law or public international law (as appropriate) to ascertain when that judgment can be acted upon within, or against, the State: and those working in the former field have long grappled with finding a convincing rationale for the State’s willingness to give effect to certain judicial pronouncements coming from outwith its own system. However, what this chapter seeks to explore is whether, and how, the first two facets of a sovereign State’s regulatory goals (as outlined above) also impact upon the tension between State sovereignty and individual autonomy—and the role played by private international law and public international law in its resolution in an ‘internal’ setting. In order to do so manageably, it focuses on one case study, that of the United Kingdom. Currently, the UK is a State composed of a number of component parts, and is also a member of a powerful inter-regional organisation (namely, the EU)—although this is set to change. A referendum held in June 2016 indicated that a narrow majority of the general population of the UK did not wish for the UK to remain an EU Member State, and the current UK government is in the process of implementing that: although it is not yet clear what (if any) relationship the UK will have with other EU nations in the future.6 However, it is contended that whether this case study ultimately becomes one confined to a particular historical period, rather than of a current situation, this should not undermine its utility: indeed, the process of the UK exiting from the EU may shed further light on the issues under examination. Meantime, it is submitted that this study of the UK’s present situation will demonstrate that the role played by public international law and private international law is indeed not capable of rigid categorisation, and is not wholly confined to the international sphere. It will be argued, for example, that domestic constitutional rules can impact upon the ability of an individual to draw upon international human rights. It will be concluded that close political union can trigger a need for rules of private international law (as one possible solution to internal cross-border issues), and provide the ability to enact them in a coherent or uniform fashion. It will be argued that (whilst other factors will also be relevant) this may also affect the way in which the balance between State sovereignty and individual autonomy is struck.

5  On subjects as diverse as the Geneva Conventions applicable in wartime, or the Athens Convention on the carriage of passengers by sea. 6  Equally, given that in two of the UK’s component parts (Scotland and Northern Ireland) a majority of the electorate voted in favour of continued EU membership, it may not be certain whether the UK will necessarily survive as a State in its current form (eg, the Scottish Government consulted on a draft Scottish Independence Referendum Bill, as it explored various options for Scotland in the light of the EU referendum result).

56 

Kirsty J Hood, QC

II.  Case Study: The United Kingdom A.  Sovereignty and the UK It is necessary at the outset to ask where sovereignty in the UK is located. A n ­ umber of observations seem relevant. First, the UK is internationally recognised as an independent (and in that sense sovereign) State. Second, as is well-known, the establishment of Great Britain (which has developed into the United Kingdom of Great Britain and Northern Ireland) was not heralded by a written constitution. There is continued debate as to the precise status of the various Union Acts.7 However, whilst these do, for example, provide for the continued existence of a separate Scottish legal system, they may be thought to have little to say about the relationship between the executive, legislative and judicial branches in the UK. This is not the place to discuss the detail (and limits) of the doctrine of parliamentary supremacy which has developed, and the reader must look elsewhere for a comprehensive survey of the views and debates on that subject.8 Third, whatever the theoretical position, it was becoming increasingly untenable to suggest that the UK Parliament had not effected a transfer of sovereignty to the devolved legislatures in Scotland, Wales and Northern Ireland9 (although the ability of the devolution settlement to withstand the impact of an EU exit has been questioned).10 In any event, this does not, of course, diminish the sovereignty of the UK as a State: A state that is sovereign in the external sense may have a constitution under which no full sovereign power is possessed by any organ of state. The external sovereignty of the state may be, so to say, internally distributed among organs of state in such a way that

7  Union with Scotland Act 1706; Union with England Act 1707; and Union with Ireland Act 1800. For judicial discussions of their status, see, eg, MacCormick v Lord Advocate 1953 SC 396; Thoburn v Sunderland City Council [2002] EWHC 195 (Admin), [2003] QB 151; and R (Buckinghamshire County Council) v Transport Secretary [2014] UKSC 3, [2014] 1 WLR 324; and academic comment, such as E Wicks, ‘A New Constitution for a New State? The 1707 Union of England and Scotland’ (2001) 117 LQR 109. 8  The doctrine has most recently been discussed in the case of R (Miller) v Secretary of State for Exiting the European Union [2017] UKSC 5, [2017] 2 WLR 583. 9  Even at the outset, respected commentators could suggest that ‘[i]n practice, … sovereignty is being transferred [to Scotland], and Westminster will not be able to recover it, except under pathological circumstances’ (V Bogdanor, ‘Devolution and the British Constitution’ in D Butler et al (eds), The Law, Politics, and the Constitution (Oxford, Oxford University Press, 1999) 54 at 61; and see the analysis in M Elliott, ‘The Principles of Parliamentary Sovereignty in Legal, Constitutional, and Political Perspective’ in J Jowell et al (eds), The Changing Constitution 8th edn (Oxford, Oxford University Press, 2015) 40–46). This was strengthened by provisions such as new s 63A of the Scotland Act 1998, and new s A1 of the Government of Wales Act 2006, stating that the respective legislatures and executives ‘are a permanent part of the United Kingdom’s constitutional arrangements’, which may only be abolished after a popular vote. 10  N Burrows and M Fletcher, ‘Brexit as Constitutional “Shock” and its Threat to the Devolution Settlement: Reform or Bust’ [2017] Juridical Review 49.

‘International’ Rules in an Internal Setting

 57

none legally exercises plenary power … Yet externally, the state may be as sovereign as it is possible to imagine.11

Fourth, the UK has become a member of many international or regional bodies, and has taken on commitments which (if adhered to) would limit State action.12 However, the UK’s dualist approach13 usually limits the direct relevance of particular treaties for individuals and associations based in the UK. Fifth, the entry of the UK into the then European Economic Community (now the EU) could be said to fall into a slightly different category, for a number of reasons. Perhaps the most obvious are the direct input of UK voters into the institutional apparatus of the EU (by dint of the election of MEPs) and, crucially, the ability of EU legislation to have direct effect in all the Member States, including the UK, without the need for any action on the part of the UK Government—this, together with the existence of the Court of Justice of the European Union (hereinafter CJEU) as a panEuropean Court to which ordinary legal disputes might be referred in relevant circumstances,14 means that EU legislation can effectively be enforced (whether in private disputes, or directly against the State) against the wishes of the UK Government.15 The courts in the UK themselves accepted this principle, and thus may give effect to EU legislation in the teeth of UK Government (in)action.16 Whilst it may correctly be said that this does not mean that the UK, or any other EU Member State, ceases to exist as a sovereign nation state,17 it does constitute a limitation on the powers of the UK (and each of the other Member States). It is therefore quite different from the UK experience in respect of other international treaties and organisations. There has been disagreement as to how this arrangement is best described18—for the purposes of the present chapter, it will be described as a union of States. The UK’s current trajectory is to leave this union 11  N MacCormick, Questioning Sovereignty (Oxford, Oxford University Press, 1999) 130 (although compare the discussion in M Keating, ‘Sovereignty and Plurinational Democracy: Problems in Political Science’ in N Walker, Sovereignty in Transition (Oxford, Hart, 2003) 191). 12  See, eg, FG Jacobs, The Sovereignty of Law: the European Way (Cambridge, Cambridge University Press, 2007) 137–38. 13  Whereby any treaty entered into does not have force of law in the UK until incorporated into law by legislation in the UK. 14  In contrast, eg, to the European Court of Human Rights in Strasbourg, which may only hear actions brought against a State. 15  See Case 26/62 Van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1; and, in particular, Case 6/64 Costa v ENEL [1964] ECR 585. In both cases, the ECJ expressly stated that with the creation of the EEC in its then form, each of the Member States had limited its sovereignty. 16  R v Secretary of State for Transport, ex p Factortame Ltd [1990] 2 AC 85 (HL). Although note the discussion of how far EU legislation can entrench upon UK law of a fundamental constitutional nature in Thoburn v Sunderland City Council [2002] EWHC 195 (Admin), [2003] QB 151; and R (Buckinghamshire County Council) v Transport Secretary [2014] UKSC 3, [2014] 1 WLR 324; see the discussion thereon in Elliott (n 9) 46–52; and P Craig, ‘Britain in the European Union’ in Jowell et al (n 9) 114–23. 17  See Crawford (n 3), 128–35, 204, 211, 447–49. 18  See, eg, M Wind, Sovereignty and European Integration (Basingstoke, Palgrave, 2001); E Cloots et al (eds), Federalism in the European Union (Oxford, Hart, 2012); MacCormick (n 11) chs 6, 8; and A Rosas and L Armati, EU Constitutional Law 2nd revised edn (Oxford, Hart, 2012).

58 

Kirsty J Hood, QC

of States in the future—but to effectively transpose existing EU law into the law of the various jurisdictions of the UK (where it may be repealed or altered over time).19

B. The Impact of Internal Divisions of Sovereignty on Public International Law and Private International Law Rules It might be thought that the regulation of the relationship between the various component geographical regions of a State, or a union of States, is pre-eminently a (domestic) public law matter for individual States. Nonetheless, it is submitted that rules of private international law and public international law continue to play an important role, and it is necessary to be clear as to why this might be so. First, however, it is submitted that the argument from the opposite extreme should likewise be rejected: that is to say, we should be clear that there is no necessary link between, eg, private international law and any particular division of sovereignty within a State or union of States. The sharing of legislative power between different bodies within the State does not, in itself, determine whether or not private international law has any role to play internally in that State—rather, what is key, is the existence of different legal jurisdictions in the State. Thus, it was the continued existence of a Scottish legal system which permitted the use of private international law rules to resolve ‘internal’ conflict issues which arose in Great Britain (and then the UK), despite the lack of a Scottish Parliament between 1707 and 1999: and, conversely, the (current) existence of a fused English and Welsh legal system means that there is no scope for utilising private international law rules within that system, notwithstanding the existence of the National Assembly for Wales (Cynulliad Cenedlaethol Cymru). Similarly, despite the special features and consequences of EU membership, the Member States continue to be separate legal jurisdictions, such that the use of private international law rules in crossborder matters continues to be possible, and sometimes necessary. Accordingly, it may be said that the most fundamental precondition of the use of private international law rules is simply the existence of distinct legal systems, rather than the formal division of sovereignty between different regions and levels of government. Of course it might be argued that the allocation of jurisdiction to the courts of different component parts within a State is, at base, part of the exercise of the State’s sovereignty—just as the existence of a separate State with its own legal system is a reflection or consequence of its sovereignty.20 However, this may not take us much further in attempting to understand the day-to-day role of private international law within a State or union of States. Indeed, Mills has argued that insofar as constitutional rules may be used in federal States to resolve the type of issues which

19  20 

See the European Union (Withdrawal) Bill. See A Kaushal, ‘The Politics of Jurisdiction’ (2015) 78 MLR 759, 760.

‘International’ Rules in an Internal Setting

 59

are normally the preserve of private international law, aspects of that approach might be applied more broadly in the international sphere: and thus he disputes the necessity of distinguishing between the two situations.21 However, this is not to say that the location of sovereignty internally in a State, or in a union of States, has no effect on the extent to which internal use is made of private international law rules, or how reference is made to public international law rules. Looking first to the former, one can posit a number of potential such effects. First, the increased contacts which arise from a political union of some strength will more readily give rise to issues which have traditionally been resolved by private international law rules—including a pressure for easy judgment-recognition within the State or union. This has historically been visible in the UK, and is also discernible in the EU insofar as it was the need for a free flow of judgments which brought about harmonisation of jurisdiction rules (thus removing the potential for an objection to recognition or enforcement of judgments from elsewhere in the EU, on the ground that the original court improperly exercised jurisdiction). The stated rationale underlying recognition and enforcement in an internal context may also be different: the difficult notion of comity (from the international field)22 may be eschewed in favour of ‘mutual trust’ (as in the EU),23 or the accepted imperatives arising from the existence of a political union (as traditionally in the UK). Indeed, the existence of a pre-eminent, central, power may allow for the harmonisation of substantive law,24 or the merger of legal jurisdictions—thus lessening the role of private international law. Turning back to our case study: with regard to the former, in the UK the harmonisation of substantive law was arguably concentrated in areas such as corporate structure, sale of goods and consumer protection, and intellectual property: and thus may be seen as part of the creation of a UK common market.25 Whilst the EU’s genesis lies explicitly in a common market, and there has been harmonisation of substantive

21  See A Mills, The Confluence of Public and Private International Law (Cambridge, Cambridge ­University Press, 2009) chs 4, 5. 22  See, eg, JR Paul, ‘Comity in International Law’ (1991) 32 Harvard International Law Journal 1. 23  Thus it is stated in Recital (26) of the Brussels I bis Regulation that ‘Mutual trust in the administration of justice in the Union justifies the principle that judgments given in a Member State should be recognised in all Member States without the need for any special procedure’ (Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) [2012] OJ L351/1). In the family law field, Recital (21) of the Brussels II bis Regulation notes that ‘The recognition and enforcement of judgments given in a Member State should be based on the principle of mutual trust and the grounds for non-recognition should be kept to the minimum required’ (Council Regulation (EC) 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) 1347/2000 [2003] OJ L338/1). 24  Of course, this is not the only way that a uniform law may come to be applicable: historically, there have been certain bodies of law which have applied supra-nationally in particular subject areas, such as the law merchant and the canon law. 25  See further, KJ Hood, Conflict of Laws Within the UK (Oxford, Oxford University Press, 2007) paras 3.04–3.64.

60 

Kirsty J Hood, QC

law in c­ ertain areas, the EU has often made use of the tool of simply harmonising private international law rules (rather than the underlying substantive rules) as a means of achieving its goals. With regard to whether the second potential impact of a pre-eminent central power has been felt in the UK, the reasons for the existence of a fused English and Welsh jurisdiction are historical, and (with the advent of a legislature making law for Wales alone) there is now consideration as to whether that linkage should be split.26 It is notable that the legal systems of Scotland and England were not merged on political union.27 Unsurprisingly, given the relatively looser connections between the Member States of the EU, there has not been any merger of the various Member States’ legal systems. Within a political union, there may also be scope for rules of domestic public law, or statutory interpretation, to be used to resolve issues which, had they had an international element, would likely have been characterised as questions of judgment recognition, jurisdiction allocation, or choice of law.28 Arguably such a constitutionalising approach has not often been taken in the UK.29 However, the internal application of Westminster legislation can be seen as simply a matter of statutory interpretation,30 and the reach of the devolved legislatures as a matter of vires.31 In the EU, there are arguments to be had as to how far key rules and consequences of the fundamental freedoms deal with issues which might equally be resolved by the application of private international law rules.32 Lastly, the existence of an intra-State (or internal to a union of States) dimension can impact on the form, and content, of private international law rules: such as the appropriateness of certain connecting factors. Most obviously, nationality is of little value as a connecting factor where (as with the UK) there are a number of legal systems within a State. Turning now to public international law, it might have been thought that an internal division of sovereignty need have little relevance for this field. However, it must be noted that the approach taken in the UK devolution settlement was to embed the impact of certain international obligations into that settlement. Thus, the legislative competence of the Scottish Parliament,33 the Northern I­reland

26  See, eg the draft Government and Laws in Wales Bill published by the Welsh Government in 2016, and the establishment of a Commission on Justice in Wales in 2017. 27  Indeed the continued existence of the Scottish legal system was explicitly protected, as we have seen. One must perhaps add the caveat, of the rather oddly brought-about existence of a court of final appeal in civil matters: a role now fulfilled by the UK Supreme Court. 28  See Hood (n 25) ch 2; Mills (n 21) ch 4. 29  For reasons discussed in Hood (n 25) paras 2.18, 2.31–2.49, 2.62–2.87. 30 See Atlantic Computing Services (UK) Ltd v Burns Express Freight Ltd 2004 SLT 132. 31  See, eg Martin v Most [2010] UKSC 10, 2010 SC(UKSC) 40; In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] UKSC 3, [2015] AC 1016. 32  The most obvious example being mutual recognition, in the sense used in cases from Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837, and Case 120/78 Rewe v Bundesmonopolverwaltung für Branntwein [1979] ECR 649 (Cassis de Dijon), through those which followed, see Mills (n 21) para 4.6.7; Rosas and Armati (n 18) 202–09. 33  Scotland Act 1998, s 29(1), (2)(d).

‘International’ Rules in an Internal Setting

 61

Assembly,34 and the National Assembly for Wales,35 is said explicitly to be l­imited by each body’s inability to act incompatibly with the European Convention on Human Rights (ECHR), or EU law.36 This could be done because each of the devolved legislatures was established by an Act of the UK Parliament at ­Westminster. There is no such express statutory restriction on the powers of the UK Parliament, and traditional constitutional law doctrine would suggest ­difficulties in putting such in place.37 Of course, the extent to which EU membership constrained UK sovereignty has already been discussed. With regard to the ECHR, whilst currently the Human Rights Act 1998 allows parties to rely directly on Convention rights in UK courts in certain circumstances, it does not permit the striking down of legislation of the UK Parliament. Whilst certain courts in the hierarchy may make a declaration of incompatibility (ie, the incompatibility of primary legislation with Convention rights), this is expressly said not to ‘affect the validity, continuing operation or enforcement of the provision in respect of which it is given’.38 This example demonstrates that the internal public law structure adopted by a State such as the UK (and thus the way in which it makes its internal division of sovereignty) can have an impact on how different parts of the system interact with international treaties, and the UK’s obligations thereunder. Lastly, straddling both the fields of public international law and private international law to some extent, is the Hague Conference on Private International Law.39 It opens its Conventions for ratification internationally, and this may result in a uniform approach to private international law. The decision to ratify is, however, for each country—unlike with EU instruments, there is no central political apparatus enforcing participation.40 Moreover, it is possible, eg, to implement a Hague Convention not simply for the UK as a whole, but for only a geographical part thereof. Thus, the Hague Convention on the International Protection of Adults (2000) was implemented with regard to Scotland, ahead of implementation for any other parts of the UK. At a supra-State level, the EU became a member of the Hague Conference in 2007: thus its approval of the Hague Convention on Choice of Court Agreements (2005) has had the effect that all EU Member States 34 

Northern Ireland Act 1998, s 6(1), (2)(c), (d). Government of Wales Act 2006, s 108(2), (6)(c) (on the change to a ‘reserved powers’ model, the relevant provision will be s 108A(2)(e)). 36  Members of each executive body also lack the power to act incompatibly with EU law or Convention rights (Scotland Act 1998, s 57(2); Northern Ireland Act 1998, s 24(1)(a), (b); Government of Wales Act 2006, ss 80(8), 81(1)). 37  See, eg CMG Himsworth and CM O’Neill, Scotland’s Constitution: Law and Practice, 3rd edn (Haywards Heath, Bloomsbury, 2015) para 6.5; P Leyland, The Constitution of the United Kingdom: A Contextual Analysis 2nd edn (Oxford, Hart, 2012) 47–52, 63–65. 38  Human Rights Act 1998, s 4(6)(a) (and s 4(2), (5)). The Houses of Parliament are also excluded from the definition of a ‘public authority’ under the Act (s 6(3)), and thus not caught by the provision rendering it unlawful for a public authority to act incompatibly with a Convention right (s 6(1)). 39  See further the chapter by French and Abou-Nigm in this volume. 40  Thus there may be Hague Conventions which are not considered to be very successful, in that not many countries choose to ratify them (eg, the Hague Convention on Jurisdiction, Applicable Law and Recognition of Decrees Relating to Adoption (1965)). 35 

62 

Kirsty J Hood, QC

(with the exception of Denmark) are now bound by this Convention. In any event, and perhaps inevitably, a number of Hague Conventions have become rather intertwined with EU legislation. The influence of the Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children (1996) upon the Brussels II bis Regulation is well-known.41 Separately, certain of the provisions of the latter Regulation are intended to integrate with the Hague Convention on the Civil Aspects of International Child Abduction (1980). The EU Maintenance Regulation,42 meanwhile, has different procedures for recognition and enforcement dependent upon whether or not the decision in question emanates from an EU Member State which is also bound by the Hague Protocol on the Law Applicable to Maintenance Obligations (2007).

C. The Balance of State Sovereignty and Individual Autonomy where there is an Internal Division of Sovereignty: Role of Private International Law and Public International Law Having made these observations, we can now turn specifically to explore the role of private international law and public international law, where there has been an internal division of sovereignty (whether within a State, or as between a union of States), in giving expression to, or allowing for, individual autonomy in contrast to the powers of the State. Looking first to private international law, is the balance between State sovereignty and individual autonomy differently struck in an internal context (or might it at least be said that the safety valve in relation to individual autonomy is differently tuned)? This has a number of different aspects.43 At its very broadest, the existence of a central source of power which can and does permit (even encourage) free movement and trade between component parts of a State or union of States will allow individual actors (natural or corporate) much greater freedom in their business affairs and social arrangements. This provides an impetus, and then the backdrop, for the operation of private international law rules.44 The passing of legislation by that central source of power, to

41  See, eg P McEleavy, ‘Luxembourg, Brussels and now the Hague: congestion in the promotion of free movement in parental responsibility’ (2010) 59 International and Comparative Law Quarterly 505. 42  Council Regulation (EC) 4/2009 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations [2009] OJ L7/1. 43  For a detailed discussion of autonomy generally, see P Nygh, Autonomy in International Contracts (Oxford, Oxford University Press, 1999). 44  In the intra-UK setting, domicile cases which have arisen out of movement between component parts of the UK include Liverpool Royal Infirmary v Ramsay 1930 SC(HL) 83; Reddington v Riach’s Exr 2002 SLT 537, and an example of a recent intra-UK case in the family sphere is Re V (European Maintenance Regulation) [2016] EWHC 668 (Fam), [2017] 1 FLR 1083. Issues of whether a tort (delict) claim ought properly to be made in Scotland, or in England & Wales, have arisen in cases such as Cook v Virgin Media Ltd [2015] EWCA Civ 1287, [2016] 1 WLR 1672; Lennon v Scottish Daily Record and Sunday Mail Ltd [2004] EWHC 359 (QB), [2004] EMLR 18; and Sunderland Marine Mutual Insurance Co Ltd v Wiseman [2007] EWHC 1460 (Comm), [2007] 2 All ER (Comm) 937.

‘International’ Rules in an Internal Setting

 63

ensure that judgments rendered in one part of the state or union are recognised and enforceable in the other parts, reinforces this: the ability to do business or make social connections across internal borders is further eased where there is no need to repeatedly re-litigate issues. Both the UK,45 and later the EU,46 have taken such steps. By their very nature, such schemes will have only internal effect as regards recognition and enforcement—in that they are designed only to ensure that judgments rendered in one part of the State or union of States are given effect elsewhere in that State or union (and thus may not even permit the onward transmission within the State/union of a judgment originally emanating from an external State which has been afforded recognition by one part of the State/union).47 Plainly then, any exit from the EU will take the UK outside those EU schemes (absent any special agreement being reached).48 More specifically, is the issue of whether or not the private international law rules which have been put in place (whether by a central government power, or cooperation between the constituent states in a union of States) allow parties actively to choose which court hears their disputes, or to choose which law should govern the issues arising between them. With regard to the former, the possibility of parties choosing the courts of a particular country (‘prorogation’) was included in the Brussels Convention, and is now to be found in Article 25 of the Brussels I bis Regulation.49 There are, as there have been since the Brussels Convention, particular requirements to be satisfied as to form, before such an agreement will be given effect to.50 If anything, parties’ freedom of choice has been rather enhanced over the years, as there is now no requirement for parties to be domiciled in a Member State in order to take full advantage of this Article, and furthermore (crucially) the possibility of the

45  Generally in civil matters, see the Crown Debts Act 1801, Judgments Extension Act 1868, and Inferior Courts Judgments Extension Act 1882—the recognition and enforcement schemes contained in schedules 6 and 7 of the Civil Jurisdiction and Judgments Act 1982 now take their place, and extend their coverage (that Act also gave effect to the Brussels and Lugano Conventions, and introduced a modified version of the jurisdiction rules of the Brussels Convention to apply, as necessary, in intraUK situations). In the family law sphere, recognition and enforcement in core areas began to be the subject of legislative provision in the 1970s—and the rules are now largely found in the Family Law Act 1986. 46  The Brussels Convention (1968), which has since been superseded by its successor Regulations, is the key for civil and commercial matters—and, over the years, there have been a number of Regulations in specific fields of the civil law which were excluded from the Brussels Convention and its successor Regulations. 47  For example, if a Thai judgment were recognised in France, one could not then rely upon the Brussels I bis Regulation in order to achieve its recognition and enforcement in other EU Member States (see Lord Collins of Mapesbury (ed), Dicey, Morris & Collins on The Conflict of Laws 15th edn (London, Sweet & Maxwell, 2012) para 14-205). 48  See UK Government, ‘Providing a cross-border civil judicial cooperation framework: a future partnership paper’ (22 August 2017). 49  Art 26 also allows an implied prorogation, in the sense of the defender submitting to a court’s jurisdiction without objection. 50  Effectively it is necessary either that the agreement be recorded in writing, or be in accordance with a practice of the particular parties or international trade generally (Brussels I bis Regulation, art 25(1)(a)–(c)).

64 

Kirsty J Hood, QC

parties’ agreement being sunk by an ‘Italian torpedo’ has now been removed.51 Prorogation and submission were traditional grounds of jurisdiction at common law in all of the UK legal systems: in any event, the rules for the intra-UK allocation of jurisdiction in civil and commercial matters now broadly follow the Brussels scheme (although there are no detailed requirements as to the agreement’s form).52 In family law, there is not the same tradition in the UK of permitting parties to choose which court should hear the dispute,53 and the statutes which will apply in intra-UK matters54 make no provision for this55 (with the exception of maintenance obligations, where the current EU approach is also followed in intra-UK situations).56 Some provision has been made for this in EU Regulations, although it is far more controlled than in the general civil and commercial sphere.57 Thus there is no real ability in the Brussels II bis Regulation to choose the divorce court, and the ability to choose the court in relation to matters of parental responsibility is limited to a choice of either: (a) the court hearing a related action of divorce, separation or nullity, provided that certain conditions are met, and it would be in the superior interests of the child;58 or (b) the courts of a Member State with which the child has a substantial connection (as defined in the Regulation), again provided that certain conditions are met, including it being in the best interests of the child.59 In relation to obligations of maintenance, parties may choose from a limited menu of potential fora for their dispute:60

51  Brussels I bis Regulation, arts 31(2), (3), reacting to Case C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I-14693. 52  Civil Jurisdiction and Judgments Act 1982, sch 4, r 12 (the equivalent provision on submission is to be found in r 13). 53  On this, see J Carruthers, ‘Party Autonomy in the Legal Regulation of Adult Relationships: What Place for Party Choice in Private International Law?’ (2012) 61 International and Comparative Law Quarterly 881. 54  There was initial uncertainty as to whether rules in the Brussels II bis Regulation supplanted (in their incorporation into the UK system) pre-existing rules in intra-UK situations: the view of most of the UK courts which have been called upon to consider this issue would now seem to be that the Regulation does not apply in intra-UK cases (see Carroll v Carroll (unreported, 27 October 2005); Re C and C [2005] NI Fam 3; Re ESJ (A Minor) [2008] NI Fam 6; B v B 2009 SLT (Sh Ct) 24; Re W-B (Family Proceedings: Appropriate Jurisdiction Within UK) [2012] EWCA Civ 592, [2013] 1 FLR 394; Re PC, YC and KM (Brussels IIR: Jurisdiction within United Kingdom) [2013] EWHC 2336 (Fam), [2014] 1 FLR 605; In re X (A Child)(Jurisdiction: Secure Accommodation) [2016] EWHC 2271 (Fam), [2017] Fam 80; and Cumbria County Council, Petr [2016] CSIH 92, 2017 SLT 34; compare S v D 2007 SLT (Sh Ct) 37). 55  See the Domicile and Matrimonial Proceedings Act 1973 and the Matrimonial Causes (Northern Ireland) Order 1978 (consistorial matters); and the Family Law Act 1986 (children). 56  Jurisdiction in relation to maintenance obligations was, of course, originally included in the Brussels scheme, and hence the equivalent intra-UK provisions were to be found in schedule 4 of the Civil Jurisdiction and Judgments Act 1982. Now, there is separate EU legislation in the shape of the EU Maintenance Regulation, and the intra-UK allocation of jurisdiction is carried out by schedule 6 of the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011. 57  Again, see Carruthers (n 53). 58  Brussels II bis Regulation, art 12(1), (2) (and see (4)). 59  ibid, art 12(3) (and see (4)). 60  EU Maintenance Regulation, art 4(1), with the agreement requiring to be in writing (art 4(2)). Submission to jurisdiction is also possible (art 5).

‘International’ Rules in an Internal Setting

 65

although even that is not possible where the maintenance obligation relates to a child.61 In this area of law, therefore, it will be seen that it is common to prioritise the protection of a vulnerable group (ie, children) over free choice. With regard to choosing the governing law, in EU legislation this is p ­ ermitted not just in relation to contractual obligations,62 but also non-contractual ­obligations63 (irrespective of whether it is an intra-EU case or a third State is involved). This approach has been adopted for intra-UK matters also64 (although, of course, parties had been able to choose the proper law of the contract at common law, in all of the various legal systems of the UK): indeed, it would seem that this approach is to be retained even after the UK’s projected exit from the EU.65 Again, in respect of family matters, the opportunity for choice allowed by the EU legislator is rather more limited than in the commercial sphere: with regard to divorce and separation only the laws of certain States may be chosen,66 and there is restricted choice in the Succession Regulation67 (although in both cases, again, it is unimportant whether the law chosen is that of a participating EU Member State, or that of another country).68 The UK did not participate in either of these Regulations, and the choice-of-law rules in its component parts are applied without distinction in intra-UK, intra-EU, and all other, cases—with regard to divorce etc, this will simply entail the application of the lex fori.69 Thus private international law legislation drawn up by the EU has made allowance for parties to choose the forum in which disputes are heard, and the law which applies to the issues arising—although the choice is more restricted outwith the commercial law field. The way in which the provisions are drawn up may implicate the courts and laws of third States external to the EU.70 Insofar as i­ntra-UK rules

61 

EU Maintenance Regulation, art 4(3). Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I Regulation) [2008] OJ L177/6, art 3. 63  Regulation (EC) 864/2007 on the law applicable to non-contractual obligations (Rome II Regulation) [2007] OJ L199/40, art 14. 64 The Law Applicable to Contractual Obligations (England and Wales and Northern Ireland) Regulations 2009, SI 2009/3064, reg 5 and The Law Applicable to Contractual Obligations ­(Scotland) Regulations 2009, SSI 2009/410, reg 4; and The Law Applicable to Non-Contractual Obligations (England and Wales and Northern Ireland) Regulations 2008, SI 2008/2986, reg 6 and The Law Applicable to Non-Contractual Obligations (Scotland) Regulations 2008, SSI 2008/404, reg 4, respectively. 65  UK Government, ‘Providing a cross-border civil judicial cooperation framework: a future partnership paper’ (22 August 2017). 66  Council Regulation (EU) 1259/2010 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation (Rome III Regulation) [2010] OJ L343/10, art 5. 67  Regulation (EU) 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession [2012] OJ L201/107, art 22. 68  Rome III Regulation, art 4; Succession Regulation, art 20. 69  In respect of choice of law in disputes arising from adult relationships (both regarding the EU, and the UK), again see Carruthers (n 53). 70  For a detailed consideration, see T Kruger, Civil Jurisdiction Rules of the EU and their Impact on Third States (Oxford, Oxford University Press, 2008), and subsequent discussions of the amendments made by the Brussels I bis Regulation to relevant aspects of its predecessor Regulation. 62 

66 

Kirsty J Hood, QC

have been patterned on EU legislation, then these similarly retain (or introduced) the ability for parties to select a court, or applicable law. O ­ therwise, it might be thought that rather less provision has been made by legislators in the UK71 for choice of court, or choice of law, by the parties to a dispute. In any event, how far are such apparently free choices for parties curtailed by, eg, the concept of public policy, or overriding mandatory rules? The former would manifest itself in the effective blocking of a chosen law, or the refusal to recognise and enforce a judgment. Insofar as one aspect of such public policy provisions may be to protect the interests of the State, logically this should not be relied upon in internal cases.72 Further, to the extent that a nation’s (or a union’s) public policy will be shaped by societal values and attitudes, it would seem likely that the closer the political union, the less this will diverge between the members thereof.73 Similarly, the greater the trust and co-operation between those members, then logically the less likely that the public policy exception (or similar mechanisms specifically based upon procedural impropriety) will be called upon. The existence of a nation state with a division of sovereignty between its geographical parts, or membership of a tightly-knit inter-regional organisation, might suggest a particularly profound form of co-operation. However, arguably, for as long as any State, or union of States, permits the continued existence of a number of different legal systems within it, each with its own character, history and approach to problems, then the possibility of a law or judgment emanating from one of those legal systems being so offensive to another, that it should not be given effect to, can in theory arise. Turning to overriding mandatory rules, these may simply reflect a distaste for evasion of the rules of a legal system to which the facts seem closely linked. The rationale is well-captured in the Rome I Regulation, where overriding mandatory provisions for the purpose of that instrument are defined as provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable.74

With regard to public policy and overriding mandatory rules, the current UK and EU position can briefly be described. Most of the EU private international law 71  ie, the Westminster Parliament legislating for the whole of the UK (whether in a specific intra-UK scheme, or more generally), or the devolved legislatures within their own territorial limits (insofar as they have the power to legislate on such matters). 72  See Hood (n 25) paras 6.21 and 6.22. 73  Which is not to say that these will always be completely coincident—see, eg, the acknowledgment that ‘choices of social and economic policy and of social justice in Wales … may be different to the views of social and economic policy and social justice reasonably held in other parts of the United Kingdom …’ (In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] UKSC 3, [2015] AC 1016 [107] (Lord Thomas of Cwmgiedd CJ)). The 2015 General Election was notable for a different political party having gained the majority of seats in each of the component parts of the UK (a pattern repeated in the June 2017 General Election), and it has already been noted that different parts of the UK returned different results in the 2016 EU Referendum—but there is not space to embark upon the topic of whether or not this all reflects differing underlying social trends. 74  Rome I Regulation, art 9(1).

‘International’ Rules in an Internal Setting

 67

instruments, whether relating to jurisdiction and recognition, and/or to choice of law, contain a public policy provision. The usual formulations have been that application of a law will be struck at if it would be manifestly incompatible with the public policy of the forum,75 and that recognition or enforcement of a judgment may be refused where that would be manifestly contrary to the public policy of the Member State where it is sought76 (although in respect of the latter, where children are involved, there may also be specific reference to the best interests of the child).77 Whilst the abolition of exequatur in certain circumstances in the Maintenance Regulation was accompanied by the removal of any potential public policy objection, this was not the case in the Brussels I bis Regulation.78 EU Regulations which provide for the recognition and enforcement of judgments usually make separate provision for that to be refused, where (effectively) a party did not have the opportunity to participate in the proceedings.79 With regard to the recognition and enforcement of judgments, these public policy (and similar) provisions will effectively be exclusively intra-EU in their operation—however, with respect to choice-of-law rules, such provisions apply in all international circumstances (without differentiation as to intra-EU cases, and those involving third States). EU Regulations concerning choice of law may also make provision for the application of overriding mandatory provisions.80 More generally, it must also be recalled that EU Regulations concerning private international law may protect broad categories of persons recognised as weaker parties, to an extent that might inhibit autonomy. Perhaps most obvious is the protection of consumers, employees and ­policyholders/beneficiaries,81 but other limits on party autonomy contained in EU Regulations are avowedly for the protection of weaker parties.82

75 

Rome I Regulation, art 21; Rome II Regulation, art 26 (Recital 32 giving further guidance). See, for example, Brussels II bis Regulation, arts 22(a), 31. Council Regulation (EC) 1346/2000 on insolvency proceedings (EU Insolvency Regulation) [2000] OJ L160/1 spelt out matters in more detail, allowing refusal of recognition of insolvency proceedings (or enforcement of a judgment springing therefrom) ‘where the effects of such recognition or enforcement would be manifestly contrary to that State’s public policy, in particular its fundamental principles or the constitutional rights and ­liberties of the individual’ (EU Insolvency Regulation, art 26: this wording also appears in article 33 of its replacement, Regulation (EU) 2015/848 on insolvency proceedings (recast) (EU Insolvency Regulation Recast) [2015] OJ L141/19). 77  See, eg, Brussels II bis Regulation, arts 23(a), 31. 78  Thus in the EU Maintenance Regulation, the abolition of exequatur in respect of decisions given in a Member State bound by the 2007 Hague Protocol has also meant the removal of the public policy challenge, although it remains a potential ground of refusal of recognition in respect of decisions given in Member States not so bound (see arts 19, 24(a)). The maintained public policy exception in the Brussels I bis Regulation is now to be found in arts 45(1)(a), 46. 79  See Brussels I bis Regulation, arts 45(1)(b), 46; Brussels II bis Regulation, arts 22(b), 23(b), (c), (d), 31; and EU Maintenance Regulation, arts 19(1), 24(b) (this ground thus being available in the latter, irrespective of whether it is a decision in relation to which exequatur has been abolished). 80  Rome I Regulation, art 9 (and see art 3(3), (4)); Rome II Regulation, art 16 (and see art 14(2), (3)). 81  With regard to jurisdiction: Brussels I bis Regulation, Ss 3–5; and with regard to applicable law: EU Insolvency Regulation, art 10 (and see Recital 28); Rome I Regulation, arts 6–8, (and see Recitals 23–26, 32, 35–36); and Rome II Regulation, Recital 21. 82  For example, Rome II Regulation, Recital 31; and the explanation proferred in Recital 19 of the EU Maintenance Regulation for the inability to prorogate jurisdiction where a maintenance obligation is in respect of a child. 76 

68 

Kirsty J Hood, QC

Turning to the intra-UK sphere, it is arguable that it would be possible at common law to rely upon a public policy objection in certain circumstances in an intra-UK case, although these would likely be rare.83 In certain legal fields, EU legislation has now effectively been adopted, or adapted, for the intra-UK arena too, without any real narrowing of the scope of the provisions on public policy, or overriding mandatory rules, which are contained therein: for example, the Rome I Regulation84 and the Rome II Regulation are also applied in an intra-UK situation, including their provisions as to public policy and overriding mandatory rules. The rules allocating jurisdiction between the component parts of the UK which are contained in schedule 4 of the Civil Jurisdiction and Judgments Act 1982 (intentionally) largely mirror the Brussels scheme—including the special rules for those categories of perceived weaker parties (with the exception of the provisions relating to insurance contracts). However, legislation specially drafted for the intra-UK sphere often does not allow for public policy objections, eg, to prevent judgments from other parts of the UK being recognised and enforced.85 Thus whilst the possibility of a public policy exception has generally been retained in the intra-EU sphere, it has more frequently been removed in intraUK private international law schemes. It is ironic that the adoption (for the sake of uniformity) of EU legislation also for intra-UK cases may thus have resulted in the retention (or even introduction) of a public policy exception in the latter arena (and which will likely survive an EU exit). Private international law rules introduced by the EU (and which, again, may be adopted for intra-UK disputes) can provide for the application of overriding mandatory provisions.86 Further, such private international law legislation may also be explicitly designed to protect certain broad categories of litigants (such as consumers, employees and policyholders/beneficiaries). In fact, as far as the UK is concerned, much of the overriding legislation (or mandatory rules) which parties may not contract out of, may now have a similar protective function.87 All of this involves a restriction on party autonomy: crucially, however, its purpose is not always to bring about a corresponding strengthening of the power of the State, but rather to protect certain vulnerable groups within the State. Although exceptional, international human rights treaties may be seen as the public international law response to the tension between State sovereignty and individual autonomy, insofar as they protect the rights of the individual against the 83  Perhaps where running fundamentally contrary to the judicial system (eg, if one of the UK’s legal systems did not permit the courts’ decision-making powers to be supplanted by alternative dispute resolution), or contrary to a fundamental tenet of property law (eg, if publicity and delivery was required in every case of transfer of property in one of the legal systems); see Hood (n 25) paras 6.21–6.34. 84  Save for art 7 on insurance contracts. 85  See Civil Jurisdiction and Judgments Act 1982, sch 6, para 7 (recognition and enforcement of money provisions) and sch 7, para 9 (recognition and enforcement of non-money provisions); Family Law Act 1986, Ch V (recognition and enforcement of certain orders regarding parental responsibility and care of children) and ss 44, 51 (recognition and enforcement of decrees of divorce, separation and nullity). 86  Rome I Regulation, art 9 (and see art 3); Rome II Regulation, art 16 (and see art 14). 87  See Collins (n 47) paras 32-089, 32-092.

‘International’ Rules in an Internal Setting

 69

State, and thus the rights of a minority against the majority populace in a State.88 Over time, rights protected by the ECHR and other instruments have been woven into the EU apparatus.89 It can be argued that within the UK, the way in which the balance between the interests of the State and the individual is struck, is currently affected by the internal division of sovereignty in the UK. As has been noted above, the Human Rights Act 1998 allows parties to rely expressly upon ECHR rights in UK courts (rather than being required to bring an action against the UK for breach of its Convention obligations in Strasbourg). However, whilst certain courts throughout the UK may make a declaration of incompatibility in respect of primary legislation of the Westminster Parliament, they may not strike down that legislation.90 By contrast, legislation emanating from each of the devolved legislatures is defined as subordinate legislation, and not primary legislation91—and, as noted above, the powers of each of the devolved legislatures and executives are circumscribed in the devolution legislation by their inability to act incompatibly with any of the Convention rights.92 This permits of a more powerful remedy when an individual is challenging the acts of members of the executive bodies, or the statutory measures of the legislature, of each of the devolved countries.93 The courts will, however, accord appropriate respect to the devolved legislatures.94 This incorporates a traditional understanding of the different roles of legislature and judge, as, eg, recently expressed by Lord Hope: While the judges, who are not elected, are best placed to protect the rights of the individual, including those who are ignored or despised by the majority, the elected members of a legislature of this kind are best placed to judge what is in the country’s best interests as a whole.95

88 

See Crawford (n 3) ch 29. See, as a starting point, the discussion in JJ Fawcett et al, Human Rights and Private International Law (Oxford, Oxford University Press, 2016) paras 2.33–2.57. 90  Indeed, subordinate legislation which was made under, and is necessitated by, primary legislation, is similarly protected (Human Rights Act 1998, s 4(2), (3)). Nor, as noted above, are the Houses of Parliament caught by that part of the Act which makes it unlawful for a public authority to act incompatibly with Convention rights (Human Rights Act, s 6). 91  Human Rights Act 1998, s 21(1). 92  Thus any legislative provision which is incompatible with Convention rights will fall outwith the competence of a devolved legislature (Scotland Act 1998, s 29(1), (2)(d); Northern Ireland Act 1998, s 6(1), (2)(c); Government of Wales Act 2006, s 108(2), (6)(c)—and on the change to a ‘reserved powers’ model, s 108A(2)(e)), and no member of the Scottish Government, no Northern Ireland Minister or department, and none of the Welsh Ministers, has the power to act incompatibly with Convention rights (respectively, Scotland Act 1998, s 57(2); Northern Ireland Act 1998, s 24(1)(b); Government of Wales Act 2006, s 81). On the operation of UK devolution and its human rights legislation, see C Himsworth, ‘The Hamebringing: Devolving Rights Seriously’ in A Boyle et al (eds), Human Rights and Scots Law (Oxford, Hart, 2002) 19. 93 See Somerville v Scottish Ministers [2007] UKHL 44, 2008 SC(HL) 45 [10]–[20]. 94  Thus, eg, the Scottish Parliament is ‘a self-standing democratically elected legislature. Its democratic mandate to make laws for the people of Scotland is beyond question. Acts that the Scottish Parliament enacts which are within its legislative competence enjoy, in that respect, the highest legal authority’ (AXA v Lord Advocate [2011] UKSC 46, 2012 SC(UKSC) 122 [46] (Lord Hope DPSC)). 95  AXA v Lord Advocate [2011] UKSC 46, 2012 SC(UKSC) 122 [49] (Lord Hope DPSC), and see [147]–[148] (Lord Reed). 89 

70 

Kirsty J Hood, QC

Insofar as there are differences in the ability of judges to intervene with regard to the UK Parliament on the one hand, and the devolved legislatures on the other,96 this may strengthen an individual’s hand. However, it would not seem that the different positions of the UK Parliament at Westminster, and the devolved legislatures, in this regard derives from any desire to differently tilt the powers of citizen and government—rather, it would seem simply to be a by-product of the desire to give effect to, and entrench, the sovereignty of the Westminster Parliament.

III. Conclusion It was argued at the outset of this chapter that the exercise of power by a sovereign State, might involve regulation of four different matters: (i) the internal relationship of its component parts (whether between the organs of power, or different geographical regions within the State); (ii) its external interaction with other States and international bodies; (iii) the behaviour of natural and legal persons based within its boundaries; and (iv) the behaviour of external actors (whether natural or legal persons) insofar as they affect the State. It would be easy to assume that (i) is the domain of domestic constitutional or public law, and (iii) is the focus of domestic private law—with the role of public international law being neatly confined to (ii), and the relevance of private international law seen mostly in (iv). Insofar as there is a pushback against State sovereignty by way of the exercise of individual autonomy, that tension would then fall to be resolved by those norms in each category. However, it is submitted that no such neat division is possible. The role played by both public international law and private international law can, and does, defy such rigid categorisation. Nor can it be wholly confined to the international sphere. In exploring that proposition, this chapter has focussed upon the UK as a case study, given that internal cross-border issues can arise as between its component geographical parts, and that for the past 45 years the UK has been a member of a powerful inter-regional organisation (the EU) where, again, ‘internal’ matters can arise. The chapter has then sought to examine how far rules of private international law and public international law have a role to play in such internal situations, in resolving the ever-present tension between State sovereignty and individual autonomy—and whether in the application of those rules, the balance has been struck any differently, in view of the ‘internal’ setting in which the issue arises. It has been concluded that close political union (whether by way of the existence of a State, or an inter-regional grouping having the special character of the EU) will provide a factual setting for increased contact between natural and legal persons, such that cross-border issues will arise. Both the UK, and the EU, have measures 96 See

AXA v Lord Advocate [2011] UKSC 46, 2012 SC(UKSC) 122 [48]–[52] (Lord Hope DPSC).

‘International’ Rules in an Internal Setting

 71

in place which allow parties some choice in where they litigate their disputes— building upon a traditional theme in private international law. Reaching agreement on jurisdiction rules generally, of course, is a key step in allowing judgments to flow more freely—a result which both the UK, and the EU, have wished to achieve in ‘internal’ matters. However, the content of those jurisdiction rules (and hence the boundaries of parties’ free choice as to where they litigate) might owe more to the necessity to reach a compromise, and a wish to protect certain groups of vulnerable litigants, than to a specific desire to allow litigants greater (or less) choice in an intra-UK, or intra-EU dispute. Similarly, neither the EU nor the UK currently really seek to differentiate their choice-of-law rules, dependent upon whether the dispute is internal to the State or union of States. There may, however, be a greater desire to allow for easy recognition and enforcement of judgments in an internal setting, with a more straight-forward underpinning rationale than normally found in international cases. Further, whether in theory or practice, it may be rather less likely that parties’ choice of applicable law will be hampered by considerations of public policy (and protection of the State’s interests). International human rights treaties are perhaps the most obvious example of how public international law rules might strengthen the position of the individual against the State. It has been noted that apparently domestic constitutional rules can, in fact, impact upon how easy it is for a citizen to access those rights. In the case of the UK, the effective division of sovereignty between the ­central UK Parliament, and the various devolved legislatures, has produced the effect that ECHR rights can currently be more powerfully deployed against the devolved legislatures, than the central legislature. However, it has been argued that this is more a by-product of the traditional (and much-debated) concept of parliamentary sovereignty, rather than the product of a deliberate decision to differentiate between the application of public international law rules in different settings. It is therefore submitted that this case study raises issues which would merit further study, such as: (a) how far the conclusions hold true for other States which comprise a number of legal systems, or any other union of States; and (b) the extent to which the UK’s projected exit from the EU will alter the role played by the rules of public international law and private international law in the UK context, in resolving the tension between State sovereignty and individual autonomy.

72 

Part II

Functional Commonalities in International Law

74 

4 Jurisdiction: Betwixt Unilateralism and Global Coordination DUNCAN FRENCH AND VERÓNICA RUIZ ABOU-NIGM*

I. Introduction The jurisdiction of states continues to raise some of the most intractable ­questions of modern international law. Claimants continue to use ingenuity to make the most of jurisdictional opportunities in cases ranging from human rights to consumer claims and everything in between. Jurisdiction is, of course, as crucial for the law of the sea as it is to consumers engaged in international commerce on a daily basis via platforms such as eBay. It is also the first question to impact international litigation proceedings. Globalisation, on the one hand, requires both states and private l­itigants to retune and rethink jurisdictional questions, as modern times challenge the roots of traditional conceptualisations and exercises of jurisdiction based on territoriality. On the other hand, the increasing rise of legal fragmentation poses f­ urther challenges to the international legal order more generally, and to issues of jurisdiction more specifically. This chapter explores some of the commonalities and differences relating to jurisdiction with an international aspect (for short ‘international jurisdiction’) in private and public international law, to enable a joint examination of o ­ n-going developments in both disciplines in the pursuit of further global systemic ­coherence.1 Though public and private international law raise distinctive questions, and each has established its own rules and processes in this regard, there is

*  The authors would like to thank Professor Ralf Michaels for his very insightful comments on a previous draft. The usual disclaimer applies. 1  Undoubtedly, this requires an internationalist perspective in private international law; an approach in the ascendancy yet admittedly not the majoritarian one. See eg A Mills, ‘Private International Law and EU External Relations: Think Local Act Global, or Think Global Act Local?’ (2016) 65 International and Comparative Law Quarterly 541; A Mills, ‘Variable Geometry, Peer Governance, and the Public International Law Perspective on Private International Law’ in H Muir Watt and DP Fernández Arroyo (ed), Private International Law and Global Governance (Oxford, Oxford University Press, 2014) 245–61.

76 

Duncan French and Verónica Ruiz Abou-Nigm

a fundamentally shared tension between balancing the jurisdictional assertions of each territorial unit against managing coherency and integrity within the wider system. Thus, whilst this chapter starts from the relatively uncontroversial premise that international law, both public and private, should seek to circumscribe outlandish jurisdictional claims and to adopt rules and principles to ensure the ‘system’ operates as smoothly—as efficaciously—as possible, we are significantly more circumspect as to either the practicality, or value, of an increasingly institutionalised top-down system. We argue that a principled coordination of international competence is possible without an unnecessarily centralised control of jurisdiction, and identify three on-going developments, which might assist in the pursuit of global systemic coherence. The argument is developed as follows. In section II, we provide a functional working definition of international jurisdiction for the purposes of this chapter, and explain the tensions at the crossroads of the understandings of the concept in private and public international law. The lack of conceptual clarity in the field of jurisdiction within and between both disciplines has hardly contributed to the development of a solid theoretical framework. In section III, we analyse jurisdiction from a ‘systemic’ perspective, reflecting on what it means for a system of jurisdiction to exist and how that can be detached from an unduly hierarchical institutional framework, and ultimately how (far) unilateral claims can be coordinated to achieve globalised objectives. In section IV, we explore a core concept ­featuring in both disciplines in this field: that of bases, or heads, of jurisdiction, from the private and the public international law perspectives. The oscillation between unilateralism and coordination is relevant in this context particularly in private international law and the issue has presented severe problems in the ­reconciliation of different paradigms of jurisdiction in the pursuit of systemic coherence. In public international law, the issue of coordination must also be reconciled with a still paradigmatic conceptualisation of sovereignty. In section V, the specific issues generated by parallel proceedings and the private international law responses to these problems are examined in order to build up the understanding of the role of private international law rules on jurisdiction in the wider ‘system’. On the other hand, in section VI, the public international law perspective is examined to shed light on the extraterritorial exercise of jurisdiction in this context, recognising the evolution of customary norms in this area over recent decades. In section VII, we identify three on-going developments, which might assist in the pursuit of systemic coherence, at differing levels, for both public and private international law. First, the continuing development of, and coordination between, rule-based systems. Second, the increasing epistemic internationalisation of general principles in the determination of international competence, and in the exercise of international jurisdiction. And third, perhaps of most interest (and controversy), the role of international judicial oversight of municipal jurisdictional decisions. Each might, in part, support states to more effectively demarcate overlapping jurisdictional claims and yet, we argue, this is to

Jurisdiction

 77

improve coordination, as broadly understood, and not in any hope of establishing a top-down system of jurisdictional rules. Finally, section VIII offers some conclusions on the importance of a mutually beneficial dialogue in the area of jurisdiction. In truth, both disciplines need to understand better the wider context; this is particularly true on the issue of jurisdiction where each discipline has historically often failed to recognise sufficiently the operation of the parallel framework.

II.  Jurisdiction: ‘Many, Too Many, Meanings’2 Jurisdiction is a multifaceted concept3 that has generated a wealth of literature,4 and yet will always be deserving of further study, especially as regard the t­ ensions between, and at the crossroads of, the respective understandings of the concept in private and public international law. A starting point is the recognition that both, conceptually and functionally, jurisdiction is understood differently in public and private international law. Yet, jurisdiction is generally acknowledged as a field where private and public international law rules meet. Notwithstanding this traditional distinction, this contribution focuses on the functional commonalities of both disciplines. As introduced by Mills,5 there are two foundational principles; namely, the normative equality of sovereign states in public international law, and the normative equality of their legal systems in private international law, which should be seen as the basis for coherent developments in international law in this field. For the purposes of this chapter, we refer to international jurisdiction primarily in the sense of the competence of national courts to adjudicate cross-border disputes. The jurisdiction to adjudicate is a direct and inevitable consequence of a state’s jurisdiction to legislate and its capacity to enforce its law, both of which are derived from state sovereignty.6 Consequently, since sovereignty is itself territorial in character, the focus of public international law on jurisdiction has traditionally

2  United States v Vanness 85 F 3d 661; see further A Kaushal, ‘The Politics of Jurisdiction’ (2015) 78(5) MLR 759; R Michaels, ‘Jurisdiction, Foundations’ in J Basedow (ed), Encyclopedia of Private International Law (Cheltenham, Elgar Publishing, 2017). 3  Namely, it is an omnibus term as it comprises several theoretical and doctrinal principles about the authority of the state and the role of the law. See generally J Crawford, Brownlie’s Principles of Public International Law 8th edn (Oxford, Oxford University Press, 2012). 4  See, inter alia, C Ryngaert, Jurisdiction in International Law 2nd edn (Oxford, Oxford University Press, 2015); R Michaels, ‘Two Paradigms of Jurisdiction’ (2006) 27 Michigan Journal of International Law 1003; R Michaels, ‘Some Jurisdictional Conceptions as Applied in Judgment Conventions’ in E Gottschalk (ed), Conflict of Laws in a Globalizing World (Cambridge, Cambridge University Press, 2007); KM Meesen (ed), Extraterritorial Jurisdiction in Theory and Practice (London, Kluwer, 1996). 5  See chapter by Mills in this volume. 6  FAP Mann, ‘The Doctrine of International Jurisdiction Revisited After 20 Years’ (1984) 186 Recueil des Cours 9, 51.

78 

Duncan French and Verónica Ruiz Abou-Nigm

been firmly rooted in territoriality.7 This has never, however, been absolute and the strictly territorial character always recognised, to varying degrees, extraterritorial considerations. Yet, in both public and private international law, territoriality would appear to provide the firmest conceptual and pragmatic basis for jurisdiction; in private international the most well known bases of jurisdiction (eg the domicile of the defendant—a general jurisdiction basis; or, inter alia, the place of the damage— a special basis for tortious liability) are territorial connections.8 This can, in turn, be seen, in any event, as reflecting public international law considerations. However, territorial connections may present problems in particular scenarios, as discussed in various chapters in this collection. More generally, the territorialtranscendent nature of the internet is fundamentally undermining territorial bases across many more categories.9 Within private international law, reasonableness,10 fairness, substantial contacts with the forum, and the pivotal role of choice-ofcourt agreements, are as dominant criteria for bases of jurisdiction as the territorial connections.

III.  Trends towards a Global ‘System’?11 The international jurisdiction of a state is an essential attribute of its sovereignty. Nonetheless, both in principle (the existence of jurisdiction, ie the scope of its competence) and in substance (the exercise of its jurisdiction), such an attribute is far from unlimited in nature. There is no globally agreed—and ­enforceable—framework on the harmonisation or coordination of jurisdictional issues and rules in either discipline. Moreover, in private international law, there are ­several ­conceptions of international jurisdiction, some dramatically different,

7  Story sustained that every nation possessed an exclusive sovereignty and jurisdiction within its own territory: Joseph Story, Commentaries on the Conflict of Laws (Boston, Hilliard, Gray & Co, 1834). 8  Michaels (n 2). Cf Hills is of the view that the territoriality principle is likely to lead to jurisdiction being exercised on insubstantial connections, leading therefore to a high incidence of parallel and related proceedings (J Hill, ‘The Exercise of Jurisdiction in Private International Law’ in P Capps, M Evans and S Konstadinidis (eds), Asserting Jurisdiction: International and European Legal Approaches (Oxford, Hart, 2003) 61. See below s IV. 9  See, inter alia, T Schultz, ‘Carving up the Internet: Jurisdiction, Legal Orders, and the Private/ Public International Law Interface’ (2008) 19 European Journal of International Law 799. 10  Reasonableness has been evaluated as a strong principle in the elaboration and interpretation of jurisdictional rules in Europe; see DP Fernández Arroyo, Compétence exclusive et compétence exorbitante dans les relations privées internationales Recueil des cours, vol 323 (Leiden, Martinus Nijhoff, 2008) 42. 11  The approach taken by the authors endorses, broadly, a vision of international law, including private international law, as a ‘global system for pluralist international ordering … As a technique for accommodating and supporting tolerance, and the acceptance and ordering of difference’ (Mills, ‘­Variable Geometry’ (n 1) 261).

Jurisdiction

 79

and ­ultimately difficult to reconcile.12 Nevertheless, though invariably there are tensions, it is far from certain whether one should view the absence of harmonisation and/or coordinating regulation as, per se, a problem. Our analysis of these tensions reflects a global systemic perspective,13 with the interest of the international legal order in mind. Arguably this is an aspirational framework; such a ‘system’ is not always recognisable, if it is at all in place at the global level. In any event, we discount a densely institutional approach to such coordination as wholly inappropriate in this context. This is particularly true when one considers that other interests play a crucial role in this sphere, including the interests of the parties to the dispute, the interests of the states to adjudicate and to regulate, and the interests of the courts to manage their caseload. Even though our analysis is framed around the ‘global interest in jurisdictional certainty and harmony’,14 these and other factors will often—and rightly so—be as influential as the systemic perspective. Nevertheless, it raises a genuine question. What is the role of private and public international law in the construction of this global ‘system’? Is it possible to refer to universal ideals and global goals in the field of jurisdiction when approached from a global ‘systemic’ perspective? What are those universal ideals and global goals that should inform further developments? More specifically, are there any signs of a shift towards those global goals and ideals? The lack of global rules might be viewed as an inevitable consequence of each state determining for itself the appropriate scope of its own jurisdiction in light of its own understanding and manifestation as an actor in the wider international community and, on a case-by-case basis, in bilateral or multilateral discussions with other affected states. From this perspective, not only are systemic restrictions wholly unnecessary, but they also make little practical sense. Competing jurisdictional claims might create inefficient dispute adjudication in specific instances (ie parallel proceedings potentially leading to irreconcilable judgments in private international law or cases of overlapping jurisdiction in public international law), but is such inefficiency so harmful that it requires global regulation? In public international law, such competing claims are often seen merely a facet of international existence, as each state asserts its own domestic jurisdiction. But from a

12  These visions of the function of international jurisdiction differ as to whether the focus is on the relationship between states (horizontal, eg EU model) or between the court and the parties (vertical, eg US and English models); whether it is based on multilateral, international, or even universal thinking (EU model, Hague Conference on Private International Law (HCCH) conventions, and many ­multilateral treaties in the Inter-American system) or whether the basis is unilateral and determined mostly by national (‘domestic’) law (eg US model); and whether jurisdiction allocation is said to be ‘neutral’, with states’ individual interests said to keep mostly at bay (eg EU model, English model), or contrarily, where states interest in adjudication and regulation play a prime role (eg US model) (see further Michaels, ‘Two Paradigms’ (n 4)). 13  This idea will find resonance in those who believe in the potential of private international law to play a crucial role alongside public international law in their universalist claims and aspirations. 14  Michaels (n 2).

80 

Duncan French and Verónica Ruiz Abou-Nigm

private international law perspective, the lack of coordination is certainly likely to be considered inefficient as it may render undesirable results for the parties concerned. The focus of the private international law perspective, as opposed to the public international law standpoint, being the cross-border relationships primarily between persons (legal and natural persons) rather than states, would seem to make such inefficiency particularly burdensome on the most vulnerable parties.15 The absence of global regulation of jurisdiction moreover hides the normative chaos at the heart of the present international system. For some, legal relations should not be left to the discretionary choices of states, and the criteria chosen should not simply be whether it is operational on a day-to-day basis, but also whether it is principled and logically justifiable. Ryngaert,16 for instance, strongly argues for such an approach when he says that ‘a system of international jurisdiction is only viable if states balance their regulatory interests with the interests of other affected nations’. In his view, such a system is not only more practical, or efficacious, but is indeed ‘only viable’ if states are willing to set aside the extremes of unilateral claims. On this view, one might find it hard to disagree with R ­ yngaert’s normative desideratum of suggesting ‘jurisdictional reasonableness’17 as a pragmatic and principled response to the problem of competing and overlapping jurisdictions. Put in the alternative, why should states be able to exercise unreasonable extraterritorial jurisdiction? Indeed, when examined closely, both public and private international law have already gone some way to develop principles and rules in this regard to prevent such egregious claims. More specifically, Ryngaert’s view is that any system of jurisdiction must operate ‘as if they were a global regulator who objectively assesses the merits of any one state’s legal and policy interests’.18 His ideas relate to those of the founders of private international law as a discipline, namely Savigny19 and Mancini,20 but they also find resonance in modern constructions such as ideas on the role of the ‘international community’21 or the ‘constitutionalization of the international legal order’.22 Yet, the key phrase in Ryngaert’s conception is ‘as if they were’; indicating something more than instrumental coordination between competing, but

15 R Fentiman, International Commercial Litigation 2nd edn (Oxford, Oxford University Press, 2015) 430. 16  Ryngaert (n 4). 17 ibid. 18 ibid. 19  ‘Central to Savigny’s approach [is] that the private international law rules he developed were of higher level, universal norms—part of an international system of law, derived from the asserted existence of a community of territorial states’ (see chapter by Mills in this volume). 20  See H van Loon, The Global Horizon of Private International Law, v 380 Recueil des cours (Leiden, Brill Nijhoff, 2016). 21 See, inter alia, HG Maier, ‘Jurisdictional Rules in Customary International Law’ in Meesen (n 4) 64. 22  See, inter alia, J Bomhoff, ‘The Constitution of the Conflict of Laws’ in Muir Watt and Fernández Arroyo (n 1) 262–76.

Jurisdiction

 81

nonetheless usually valid, jurisdictional claims of sovereign states towards recognising that by so acting states are themselves establishing a global regime of jurisdiction. In the absence of such a global regulator, states thus act as proxy for such a body ‘objectively assess[ing] the merits’, though whether the act of establishing such a regime occurs consequential to, and as a result of, the judgment (as an almost normative ‘invisible hand’) or consciously as part of judicial decisionmaking is an equally important secondary consideration.

IV.  Bases of Jurisdiction One concept that features in both sub-systems of international law is that of heads (or bases) of jurisdiction, even if the language is nonetheless often different between the disciplines. Thus, as a first order question, it is necessary to understand what each discipline considers when ascertaining such genuine linkages. In private international law, these are links between the parties and the forum, or between the claim and the forum, considered to be appropriate enough to indicate ‘reasonableness’. The role of traditional bases in private international law (eg, as already noted, the domicile of the defendant—a general jurisdiction basis; or, inter alia, the place of the damage—a special basis for tortious liability) varies from the allocation of competence that courts cannot decline from exercising to a much more flexible use as mere indicators of an appropriate enough connection. In between these two ends of the pendulum there is a wide range of connections that can be used in a more or less structured way.23 It is in this oscillation where the different paradigms of jurisdiction may undermine the construction of (global) systemic coherence. In the European paradigm, on the one hand, bases of jurisdiction are narrowly defined; there is an intrinsic relationship between the bases of jurisdiction and the ultimate purpose of the European regime,24 namely that of the free circulation of judgments in the European area

23  See Michaels, ‘Jurisdictional Conceptions’ (n 4) 32. See also A von Mehren, ‘Recognition and Enforcement of Foreign Judgments: A New Approach for The Hague Conference? (1994) 57 Law & Contemporary Problems 271; A Lowenfeld, ‘Thoughts about a Multinational Judgments Convention: a Reaction to the von Mehren Report’ (1994) 57 Law & Contemporary Problems 289. 24  Council Regulation (EC) 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, [2001] Art 2, OJL 12/3 (‘Brussels I Reg’) regulating proceedings instituted in the courts of Member States of the European Union, including Denmark, before 10 January 2015, and European Parliament and Council Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJL 351/1 (‘Brussels I bis Reg’), regulating proceedings instituted in the courts of Member States of the European Union on or after 10 January 2015. The Convention of 16 September 1988 on jurisdiction and the enforcement of judgments in civil and commercial matters (2007 Lugano Convention) applies to proceedings instituted in EFTA states (Iceland, Norway and Switzerland), [2007] OJ L339/1. The provisions of the Lugano Convention are for the most identical to those of the Brussels I (original) Reg.

82 

Duncan French and Verónica Ruiz Abou-Nigm

of justice.25 In the United States, on the other hand, US courts have distilled a wide range of rules and principles from the US Constitution.26 In the leading case of International Shoe Co v Washington the United States Supreme Court held that: [D]ue process requires only that in order to subject a defendant to a judgment …, if he be not present within the territory of the forum, he has certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice’.27

Since that decision much effort has been put into the definition of the appropriate ‘minimum contacts’,28 and the legislatures of the individual US states have added considerably to the traditional common law bases of jurisdiction (eg those of service of process within the state and of submission to the jurisdiction of its courts). ­Others have sought to maximise their jurisdiction by allowing ‘any basis not inconsistent with the Constitution’.29 These long-arm jurisdiction bases are curtailed by considerations of reasonableness, arguably increasingly so.30 In between these two paradigms, the English traditional rules of jurisdiction, long-established in common law and also enshrined in the Civil Procedure Rules, base jurisdiction on (a) the presence of the defendant in England;31 (b) the submission of the defendant to the jurisdiction; and (c) several special connecting factors linking the forum

25  The strictness of the jurisdictional bases has its counterpart in the extreme liberality of the provisions on recognition and enforcement (indirect jurisdiction), designed to allow judgments given in one Member State to run freely throughout the EU. As a general rule, a court of a Member State in which enforcement is sought may not investigate the jurisdiction of the court in another Member State which gave the judgment: it is for the original court to determine that it has jurisdiction and that determination cannot, in general, be questioned in another Member State at the recognition and enforcement stage. See further D McClean and V Ruiz Abou-Nigm, Morris on the Conflict of Laws 9th edn (London, Sweet & Maxwell, 2016) ch 10. 26  Especially the due process clauses of the 5th and 14th Constitutional Amendments (1 Stat 97 (1789); 14 Stat 358 (1866)); see Michaels (n 2). 27  International Shoe Co v Washington 326 US 310 at 316 (1945). 28 In Daimler AG v Bauman 134 S Ct 746 (2014) the US Supreme Court held that a corporation’s ‘slim contacts’ with the state if not ‘continuous and systematic’ did not render the corporation subject to suit in the state (of California) for claims of foreign residents for conduct which did not occur in or impact the state. 29  See, however, Daimler AG v Bauman et al, 134 S Ct 746 (2014) where the US Supreme Court limited this long-arm basis (as provided for in the law of California in this case) in a dispute against a transnational company about human rights violations allegedly committed in Argentina. These ‘­permitted’ bases of jurisdiction (neither required not prohibited) represent a radical difference between the ­European and the United States paradigms of jurisdiction. These constitute the ‘grey’ list as known during the discussion launched by the 1992 US proposal in the context of the first attempt of the HCCH to generate a multilateral convention on jurisdiction and judgments. The vast literature on the Judgments project, past and present, is available at the HCCH website assets.hcch.net/docs/ bd35517f-09ea-47d6-95ad-865d2c162504.pdf. Daimler is a very interesting development from the ­systemic perspective. See further van Loon (n 20). 30  eg the ‘minimum contacts plus reasonableness’ criterion (Guangjian Tu, ‘Finding a Proper Nexus for Constructing Specific (Special) Jurisdiction Regarding Commercial Contract and Tort Cases: A Comparative Study of the US and European Approaches’ (2009) 5 Journal of Private International Law 243, 266. 31  This basis is considered exorbitant in the context of the European regime, and excluded from it. cf Fentiman (n 15) 301; Abela v Baadarani [2013] UKSC 44.

Jurisdiction

 83

to defendants outside of the jurisdiction, justifying in certain circumstances, the exercise of jurisdiction over defendants located outside the jurisdiction.32 A clear meeting point between these diverse conceptions is prorogation of jurisdiction; ie the provision of consent33 as a first and foremost basis of jurisdiction. Party autonomy has two main manifestations in this field: choice of court ­agreements,34 and submission to the jurisdiction by the defendant. Both are in modern times widely accepted as sufficient grounding for the exercise of jurisdiction.35 Public international law also identifies several heads of jurisdiction, which seeks to demarcate national jurisdictional scope (and concurrently seeks to guard against excessive jurisdictional claims and actions) through the interplay of several related, yet distinct, principles. And yet, as the notion of jurisdiction (here used in both the narrow sense of the exercise of competence to adjudicate a dispute and in its broader sense as a characteristic of state power) is inherent to the very conceptualisation of sovereignty, the rules of public international law in this area remain more open-textured and loosely defined. Nevertheless, there are certain fundamental features to a state’s jurisdiction in public international law, which first need briefly expounding to appreciate fully the context in which a national court’s jurisdiction is coterminous. First, as memorably enunciated in The SS Lotus (France v Turkey),36 a state may not, in fact, exercise jurisdiction within the territory of another state without the latter’s explicit consent. The ability to enforce a jurisdictional claim (‘enforce’ here referring comprehensively to the policing, investigative, prosecutorial and judicial aspects of jurisdiction) is thus limited to the territory of the state (or perhaps, more accurately, not within the limits of the territory of any other state, recognising the possibility—if not invariably always the legality—of such action in areas such as the high seas). Of course, consent can be granted for the exercise of jurisdiction within the territory of another state,37 but the instances in which they occur are few and far between. What is much more contentious is the extent to which states exercise jurisdiction within their territory over acts and events that have occurred extraterritorially. As a matter of positive law, international law has yet to codify the precise

32 

See generally McClean and Ruiz Abou-Nigm (n 25) ch 5. further V Ruiz Abou-Nigm, ‘The Effects of Choice of Court Agreements Vis a Vis Third ­Parties’ in S Lamont-Black and R Thomas (eds), Current Issues in Freight Forwarding: Law and Logistics (Witney, Lawtext, 2017) (in press). 34  On choice of court agreements see, inter alia, M Ahmed, The Nature and Enforcement of Choice of Court Agreements, A Comparative Study (Oxford, Hart Publishing, 2017). 35  Michaels groups bases of jurisdiction into three categories: consent, proximity and extraordinary bases. Michaels (n 2). Note that there are countries where the jurisdiction-conferring effect of choice of court agreements is not recognised. This is, regrettably, still the case of Uruguay, for instance. 36  The SS Lotus (France v Turkey) (1927) PCIJ Ser A No 10, 18. 37  An often used example is the establishment of a Scottish criminal court in The Netherlands to try Libyan nationals for the ‘Lockerbie’ terrorist attack. See A Aust, ‘Lockerbie: The Other Case’ (2000) 49 International and Comparative Law Quarterly 278. 33  See

84 

Duncan French and Verónica Ruiz Abou-Nigm

extent and scope of such jurisdiction, but rather states operate in an arena comprised largely of historical (primarily domestic) case law, customary principles and, of course, by reference to the quasi-mystical non-binding 1935 draft ‘Harvard Convention’, which to give it its official title is the draft Convention on Jurisdiction with respect to Crime.38 Nevertheless, most commentators (almost without much thought) apply it equally to the scope of a state’s civil jurisdiction. This non-binding text enunciates several connecting factors that justify the territorial exercise of non-territorial jurisdiction including on the grounds of nationality, protection and universality. The Draft Convention also recognised what is often referred to as subjective territoriality; where part of an act takes place in—but does not culminate within—a state’s territory. Interestingly, jurisdiction on the basis of passive personality (or the nationality of the victim) was not included expressly in the Draft Convention, as is often thought, though as McCarthy notes, The Harvard Research Project did not include passive personality jurisdiction in its Draft Convention because of the overlap between the passive personality and universality principles. Since the Harvard Research Project was published, however, numerous courts and scholars have accepted the bases of jurisdiction it identified, including the passive ­personality principle.39

More recently, most commentators are prepared to acknowledge the existence, though not the precise extent, of an ‘effects’ doctrine in public international law, namely that a state has jurisdiction over extraterritorial acts that have an (economic) effect within its territory. Others prefer to see this as an extension of objective territoriality.40 Thus, as with private international law, rules do exist which seek to constrain outlandish domestic jurisdiction. Notwithstanding significant variations between states on the permissibility (and perhaps of more relevance politically, the actual scope) of the jurisdictional reach, such rules do, at least, demarcate—however broadly—a general approach to jurisdiction in public international law. Up to a certain extent, traditional private international law bases of jurisdiction reflect public international rules of jurisdiction. Yet, globalisation, the never-ending rise of the internet, and the more general internationalisation of daily life are making some of these traditional bases inadequate41 to deal with modern challenges in private—and indeed public—international law. Of course, while there is value in mapping across the disciplines to show the interaction between them in supporting the aspirational construction of the possibilities and value of a wider system, the necessity of identifying appropriate bases for jurisdiction is distinct for both public and private international law. In public 38 

Published in (1935) 29 American Journal of International Law 439. J McCarthy, ‘The Passive Personality Principle and Its Use in Combatting International Terrorism’ (1989) 13 Fordham International Law Journal 298, 307. 40  See, for instance, the so-called Woodpulp case before the European Court of Justice; (1988) 96 ILR 193, 196–97. 41  That is clearly the case of nationality, both of the claimant and defendant, as a basis of jurisdiction. 39 

Jurisdiction

 85

international law, a failure to ground jurisdiction on an established basis risks a claim of an internationally wrongful act under the rules of state responsibility. In private international law, the identification of bases of jurisdiction is primarily aimed to embed reasonableness in the assertion of jurisdiction by national courts. In short, both public and private international law are invariably concerned with the appropriate allocation and demarcation of legitimate jurisdictional claims. And both use the concept of jurisdictional base to determine that legitimacy. In private international law, this allocation (of adjudicatory competence), albeit done in different ways in different systems, is done vis-à-vis the (potentially) competing competence of other states’ courts.42 In public international law, though similar considerations apply, the jurisdictional scope of a national court attaches to, and ultimately reflects, the jurisdictional reach of the state itself.

V.  Jurisdiction in Private International Law: Global Connectivity and ‘Justice Pluralism’43 Private international law rules on jurisdiction have the potential to be for legal systems what the internet is for the digital world, namely a means of global connectivity (with the potential extended analogy that public international law is the overall web-platform).44 As shown in the previous section, agreeing on the most appropriate routers, to continue with the analogy, is a perennial challenge. The following paragraphs attempt to explain the operation of private international law rules on jurisdiction, in order to build up the understanding of their role in a wider system. This is no easy task, as the different approaches to jurisdiction in private international law, referenced above, get in the way when seeking to construe a systemic perspective. These different approaches are then reflected in the practices developed around resolving particular jurisdictional issues in the many instances they arise in international litigation. These issues may appear at various stages in the resolution of a private international law case.45 First, when asserting jurisdiction over a defendant—this initial stage of adjudicatory jurisdiction is sometimes referred to as jurisdiction simpliciter or ‘direct’ jurisdiction; second, to resolve problems of conflicting jurisdictions (parallel or related proceedings in more than one country, which is the focus of this section); and, finally, in scenarios where the competence of the court that issued the judgment needs to be assessed by the court of the

42 

Michaels (n 2). pluralism’ refers to the term coined by Mills (n 1) 246. 44  See chapter by Mills in this volume. 45  See, more generally, McClean and Ruiz Abou-Nigm (n 25) ch 5, 81–94. 43  ‘Justice

86 

Duncan French and Verónica Ruiz Abou-Nigm

place where that judgment needs to be recognised and/or enforced (known as the ­exercise of ‘indirect’ jurisdiction).46 As private international law rules provide for a range of suitable connections, more often than not it is plainly possible for the courts of two or more countries to have jurisdiction, ie to be competent to adjudicate a particular cross-border dispute (known as concurrent jurisdiction). While this could be seen as desirable in principle, facilitating the right of access to justice,47 and fostering global ­connectivity, yet, the downside is the possibility of the abuse of forum shopping tactics, usually by the party that is better placed to take advantage of such opportunities. In any case the simultaneous exercise of jurisdiction by more than one court in parallel proceedings, that is, in cases between the same parties and based on the same cause of action, is clearly inefficient.48 Globalisation has brought these problems and issues49 raised by parallel proceedings to particular importance, complexity and frequency, as modern ways of living and increased global connectivity have rocketed the opportunities for forum-shopping.50 In terms of legal technique, ascertaining the jurisdiction of one court over the jurisdiction of another in cases of parallel proceedings is a difficult task for any ‘system’ of private international law. In the European regime, a multilateral ­system, the solution is provided by the well-known lis pendens rule establishing the priority of the court first seized.51 Nonetheless, this rule poses difficulties, parallel litigation is resolved at the cost of increasing the opportunities for litigation ­tactics and encouraging a race to the court. Yet, the ‘court first seized’ rule is strictly applied in the European system. Additional systemic coherency is provided by the

46  As explained by Michaels, ‘the issue of jurisdiction as a requirement for adjudication is analytically different from the issue of jurisdiction as a requirement for recognition. The first is governed by the law of the rendering state, the second by the law of the requested court. Neither the rendering court, nor the recognizing court, is necessarily bound to the standards of the other’ (Michaels (n 2)). 47  See generally J Fawcett, M Ní Shúilleabháin and S Shah, Human Rights and Private International Law (Oxford, Oxford University Press, 2016); LR Kiestra, The Impact of the European Convention on Human Rights on Private International Law (New York, Springer, 2014); MM Karayanni, ‘The Extraterritorial Application of Access to Justice Rights’ in Muir Watt and Fernández Arroyo (n 1); F Francioni, Access to Justice as a Human Right (Oxford, Oxford University Press, 2007); JJ Fawcett, ‘The Impact of Article 6(1) of the ECHR on Private International Law’ (2007) 56 International and Comparative Law Quarterly 1. 48  L Silberman, ‘Proposed Lis Pendens Rule for US Courts’ in K Siehr and T Einhorn, Intercontinental Cooperation through Private International Law (The Hague, TMC Asser Press, 2004) 353. 49  These issues may include not only the stay of proceedings based on forum non conveniens but also permission of the court to serve the defendant out of the jurisdiction based on forum conveniens considerations, and enjoin a party subject to the jurisdiction of the English court from commencing or continuing proceedings in a foreign court (anti-suit injunctions). Though related, these three powers are exercised on slightly different considerations. See L Collins et al, Dicey, Morris and Collins 15th edn (London, Sweet & Maxwell, 2012) 537. 50 ibid. 51  Brussels I bis Reg, art 29. It has been criticised as mechanical and fostering a race to the court, encouraging the so-called ‘torpedo’ litigation tactic. See Erich Gasser GmbH v Misat srl, C-111/01, [2003] ECR I-14693; [2005] QB 1. See also JP Morgan Europe Ltd v Primacom [2005] EWHC 508 (Comm); [2005] 2 Lloyd’s Rep 665.

Jurisdiction

 87

role of the Court of Justice of the European Union (CJEU) in ensuring a consistent application of EU private international law rules in this sphere. In the absence of multilateral rules, each court must decide the conflict of jurisdictions unilaterally, based on its own rules of private international law. Traditionally, it is in these unilateral solutions where the greater differences show. Many legal systems of the common law tradition52 aim to secure a balance between all the various interests at stake taking recourse to the (originally) Scottish53 doctrine of forum non conveniens.54 The doctrine is of particular interest, since its well-known formulae of ‘for the interests of all the parties and the ends of justice’,55 as seen through a systemic lens, would indicate something transcending the particular and the domestic, and may arguably show how far private international law can embrace the ideal of justice pluralism.56 In Sim v Robinow57 Lord Kinnear in a world renowned passage explained that the plea can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interest of all the parties and for the ends of justice.58

The formulae was maintained when it was later confirmed by the House of Lords in Societé du Gaz de Paris v La Societé Anonyme de Navigation ‘Les Armateurs ­Francais’,59 and was adopted yet again by the English courts almost one century later.60 From Clements v Macaulay in 1866 to Okpabi v Royal Dutch Shell in 2017, 52  For a comparative review of the doctrine in the United Kingdom, the United States, Canada and Australia see R Brand and SR Jablonski, Forum Non Conveniens: History, Global Practice, and Future under The Hague Convention of Choice of Court Agreements (Oxford, Oxford University Press, 2007). 53  See A Arzandeh, ‘The Origins of the Scottish Forum Non Conveniens Doctrine’ (2017) 13 Journal of Private International Law 130. 54  Elsewhere Ruiz Abou-Nigm has discussed the contributions of this doctrine to a global vision on jurisdiction. V Ruiz Abou-Nigm, ‘Forum Non Conveniens, Forum Conveniens and Forum Arresti: Los aportes de una evaluación integral a la construcción de una visión global’ (Rio de Janeiro, OAS, 2016) 113–44, www.oas.org/es/sla/ddi/docs/publicaciones_digital_XLII_curso_derecho_internacional_2015_ Publicacion_Completa.pdf. See also V Ruiz Abou-Nigm, The Arrest of Ships in Private International Law (Oxford, Oxford University Press, 2011) ch 7. 55  Clements v Macaulay (1866) 4 M 583; Sim v Robinow [1892] 19 R 665; Societé du Gaz de Paris v La Societé Anonyme de Navigation ‘Les Armateurs Francais’ [1925] 23 Lloyd’s Rep 209 (HL) 213; Spiliada Maritime Corp v Consulex Ltd [1987] AC 460 (HL). The Spiliada test has been confirmed as ‘the test’ for determining whether England is the appropriate forum by the UK Supreme Court in VTB Capital Plc v Nutriek International Corp [2013] UKSC 5; [2013] 2 AC 337. See also ­Lungowe v Vedanta Resources plc [2016] EWHC (TCC) and Okpabi v Royal Dutch Shell plc [2017] EWHC 89 (TCC), [2017] Bus LR 1335. 56  See Mills (n 1) 246. 57  Sim v Robinow [1892] 19 R 665. 58  ibid, 668. 59  Societé du Gaz de Paris v La Societé Anonyme de Navigation ‘Les Armateurs Francais’ [1925] 23 Lloyd’s Rep 209 (HL) 213. 60  It may be argued, however, that the characteristic feature of the English traditional rules in cases of parallel proceedings to decline jurisdiction (inherent discretion, reinforced by statute) is not necessarily focused on the systemic but rather on the case at hand, aiming to discern whether England is the ‘natural’, some would even say the ‘optimal’ forum for the dispute. See Senior Courts (formerly

88 

Duncan French and Verónica Ruiz Abou-Nigm

and the many authorities in between, the ‘for the interests of all the parties, and for the ends of justice, the cause may more suitably be tried elsewhere’ formulae has stood the test of time. Notably different is, however, the ‘domestication’ of the doctrine of forum non conveniens in the US courts. Federal courts in the US give considerable weight to the claimant’s choice of forum, albeit that is weighted differently if the claimant is a non-US resident, particularly in torts cases where the damage or injury has happened outside US soil.61 In those cases US courts must first consider whether the parallel forum is an adequate one, and if it is, to proceed to balance the public and private interests of the respective fora.62 Among the ‘public interest’ factors are general considerations as to the administration of justice. Sad, paradoxical, and well known is the leading case on the use of the forum non conveniens plea in the US in Piper Aircraft Co v Reyno.63 Yet, even when there may be considerations as to the administration of justice, case law indicates that the global systemic perspective is rarely central to the US criteria when discerning whether to assert or decline jurisdiction.64 Another example of the role of private international law rules of jurisdiction in the wider system is the recently introduced change in the Brussels I bis Regulation in relation to lis pendens cases involving parallel proceedings pending in non-Member States,65 enabling the court in the Member State to stay the proceedings ‘if necessary for the proper administration of justice’. As the leading English commentary recognises the very fact that the court is invited to consider and assess proceedings in a nonMember State means that the concept of ‘the proper administration of justice’ is not to be determined solely by reference to domestic considerations or to the operation of the European Union internal market in the proper allocation of jurisdiction amongst ­Member States and the free circulation of judgments. The concept of justice thus invoked is a broad international concept underlying the general principle of lis pendens.66

As this brief excursion into some different mechanisms to deal with parallel proceedings in cross-border litigation has shown, coordination between these­ Supreme Court) Act 1981 s 49(3); Civil Jurisdiction and Judgments Act 1982 s 49. An application for a stay under forum non conveniens grounds is to be done under Civil Procedure Rules, Pt 11. See further Collins et al (n 49) 12-006, 536. 61  There is a particularly interesting line of cases in aviation litigation. D McClean et al, Shawcross & Beaumont on Air Law (London, Lexis Nexis, 2017) ch 3. Much criticised are the unsatisfactory results that the doctrine has generated in the well known Bhopal and Chevron cases. See further van Loon (n 20). 62  For a very detailed account of forum non conveniens principles applied in US courts as well as through analysis of the development of the doctrine in aviation case law see McClean et al, ibid, ch 3. 63  Piper Aircraft Co v Reyno (1981) 1 S & B Av R I/37, 451 US 928 (1981), 16 Avi 17,986. 64 In Re Air Crash Disaster over the Mid-Atlantic on June 1, 2009 760 F Supp 2d 832 (ND Cal, 2010), 34 Avi 15,536 and 34 Avi 16,166. 65  Arts 33 and 34 Brussels I bis Reg. 66  See Collins et al (n 49) 4th supp (2017) 151. Emphasis added. See also Re Zavarco Plc [2015] EWHC 1898 (Ch), [2016] ch 128.

Jurisdiction

 89

different approaches is paramount to achieve further systemic coherence. Whether such coordination is grounded by principle is discussed further below. And yet one further point is worth making. It should not be neglected that public international law contains as a source of its law: ‘general principles of law recognised by civilised nations’ as listed in Article 38(1)(c) of the Statute of the International Court of Justice. Such principles are ordinarily borrowed from domestic legal systems to help in the administration of international adjudication. Examples include res judicata, the use of circumstantial evidence, estoppel and various notions relating to reparation. It seems paradoxical that a source of law, which allows borrowing from domestic law to support international adjudication has so far been of ­little use in either how public international law understands private international law (see below, for instance, of the discussion of the ARA Libertad (Argentina v Ghana)67) or is itself taken up by private international law in furthering its own general principles. It seems even more perplexing that the genesis (and consequent direction of travel) of general principles in private international law seems to have an opposite basis to that of general principles in public international law. In public international law, general principles derive from state practice (ie from national practices into international principles); the development of ‘principles’ in private international law, on the other hand, seem to germinate in professional international consensus and aims to provide further guidance to national practice. It would thus appear that mutual borrowing as a systemic endeavour in both disciplines and from both disciplines remains notably selective in its application; to continue the analogy used in D’Aspremont and Giglio’s chapter, ‘a window’ yet to be explored.

VI.  Public International Law Jurisdiction: Somewhere between Law and Power As noted in a previous section, in public international law, each head of jurisdiction beyond the strictly territorial opens up the possibility for unilateral over-stretch and (to a lesser extent) examples of self-denial by a state. With limited overarching constraint (legal and institutional), and only the occasional d ­ iplomatic—and even less judicial—pushback, states (largely through their senior courts) operate unfettered other than what their domestic law itself prescribes, more so for powerful states than weaker members of the international community. As the joint ­separate opinion of Judges Higgins, Kooijmans and Buergenthal to the International Court 2002 judgment in Arrest Warrant of 11 April 2000 (Democratic

67  ARA Libertad (Argentina v Ghana, International Tribunal for the Law of the Sea, Order of 15 December 2012.

90 

Duncan French and Verónica Ruiz Abou-Nigm

­ epublic of the Congo v Belgium),68 (a dispute primarily concerning the immunity R of state officials, but which the separate opinion notes invariably must mean— by definition—immunity from jurisdiction) noted: While the notion of ‘immunity’ depends, conceptually, upon a pre-existing jurisdiction, there is a distinct corpus of law that applies to each … In by-passing the issue of jurisdiction the Court has encouraged a regrettable current tendency (which the oral and written pleadings in this case have not wholly avoided) to conflate the two issues.69

Setting to one side the issue of immunity, which doesn’t presently concern us, the real relevance of this quote is to indicate the importance of understanding that there is indeed a ‘distinct corpus of law’ on jurisdiction in public international law. While one can debate how far such a corpus is ‘distinct’—as fully determinate and readily ascertainable—this is nevertheless acceptance in principle of the existence of positive law constraining state jurisdiction. Of course, such constraint is within the context of significant sovereign discretion; jurisdiction lying somewhere between legal rules and the exercise of political (often in the guise of judicial) power. To this end, the Joint Separate Opinion finds some value in the famous dictum of The SS Lotus: Far from laying down a general prohibition to the effect that States may not extend the application of their laws and the jurisdiction of their courts to persons, property and acts outside their territory, it leaves them in this respect a wide measure of discretion which is only limited in certain cases by prohibitive rules; as regards other cases, every State remains free to adopt the principles which it regards as best and most suitable.70

Recognising as valid the significant criticism that such a ‘laissez-faire’ approach to sovereignty has within an increasingly communitarian system of international law,71 these ICJ judges nevertheless opine that ‘it represents a continuing potential in the context of jurisdiction over international crimes’.72 Here, international crimes is surely taken to refer to crimes against which states may choose—or may be required—to exercise a form of universal jurisdiction (the specific issue under consideration in the Arrest Warrant Case). But this reasoning, appropriately contextualised, can also be taken to represent a wider discussion, namely that the rules of public international law on jurisdiction have the potential—as rules of customary international law—to change, to evolve and thus to be facilitative, or permissive, as much as they are p ­ rohibitive. To quote elsewhere from their opinion: ‘The development of the concept of

68  Arrest Warrant of 11 April 2000 (Democratic Republic of the Congo v Belgium) ICJ Reports 2002, 3, 63. 69  ibid, 64. 70  ibid, 77–78 citing (1927) PCIJ Ser A No 10, 18. 71  ibid, 78: ‘The application of this celebrated dictum would have clear attendant dangers in some fields of international law’. 72 ibid.

Jurisdiction

 91

“impact jurisdiction” or “effects jurisdiction” has in more recent years allowed continued reliance on territoriality while stretching far the jurisdictional arm’.73 Thus, the trend in public international law would seem to be concerned with stretching a state’s jurisdictional reach, whereas in private international law the opposite has, at times, been seen as desirable.74 In any case, this would not seem to be making a normative judgement as to the legality of such extension as much as a statement of fact as to state practice. Indeed, the judges arguably go further when they note ‘The contemporary trends, reflecting international relations as they stand at the beginning of the new century, are striking. The movement is towards bases of jurisdiction other than territoriality’.75 Such evolution in how states view and exercise jurisdiction—even within recognised constraints—is aptly captured, of course, in The SS Lotus dicta itself when it talks of the adoption (and one assumes the practical application) of those ‘principles which it regards as best and most suitable’. Emphasis might also be placed on the auto-interpretative nature of the phrase— ‘which it regards’—highlighting again a strong focus on unilateral discretion in the matter of jurisdiction. Ryngaert’s argument of a normative ‘as if ’ invisible hand might likely suggest that such individual state choices would cumulatively ensure a globally coordinated response to overlapping jurisdictional claims. This seems a step (at least presently) too far. Certainly in matters of preventing impunity for international crimes, one might be able to foresee the beginnings of such a strategy. But for ordinary claims, there is little evidence of such coordination. In matters beyond the moral imperative of trying international crimes, coordination between courts remains fragmented and unilaterally determined.76 A final thought on public international law rules of jurisdiction is perhaps relevant here. It is notable that in the substance of their opinion in Arrest Warrant, Judges Higgins et al endeavour to determine how far treaty law, state practice, case decision and academic writings are able to demonstrate a positive right for one state (in this case to claim universal jurisdiction in absentia). Thus, such an exercise of jurisdiction is neither unfettered nor determined by state claim alone. A claim to jurisdiction must be based and evidenced on positive law (or, at least, fall within or be reasonably close or analogous to a claim already recognised by international law). Correspondingly, an unlawful exercise of jurisdiction would result in

73 

ibid, 72. The banning of bases considered to be exorbitant in the European Regime is the clearest example. Cf. the enlargement of unilateral jurisdiction bases in the English traditional rules in the CPR in 2016. 75  (n 68) 76. 76  See Justice Scalia, dissenting, in the US Supreme Court’s 1993 judgment in Hartford Fire Insurance Co v California (509 US 764 (1993)) in which he noted ‘the practice of using international law to limit the extraterritorial reach of statutes is firmly established in our jurisprudence … a nation having some “basis” for jurisdiction to prescribe law should nonetheless refrain from exercising that jurisdiction ‘with respect to a person or activity having connections with another state when the exercise of such jurisdiction is unreasonable’’ (818), quoting the Restatement (Third) of the Foreign Relations Law of the United States. 74 

92 

Duncan French and Verónica Ruiz Abou-Nigm

a ­violation of international law and the imposition of responsibility for an internationally wrongful act under the rules of state responsibility, as was seen recently in J­urisdictional Immunities of the State (Germany v Italy: Greece i­ntervening) (2012),77 a case involving an alleged wrongful denial of state immunity. As the international judges themselves recognise above, international norms can flux and evolve. Yes, there may be clear breaches of the rules but usually that involves a violation of another primary rule (eg state immunity) rather than violation of the heads of jurisdiction themselves. In other cases (eg US v Yunis78 which involved the US asserting passive personality jurisdiction against terrorist actions elsewhere in the world) there are often what might be termed instances of jurisdictional stretch, sometimes of a small nature, sometimes less so. Essentially public international law rules in this area provide a normative space where jurisdiction is neither unduly prescribed nor overly circumscribed but where there is the potential for ‘movement’.79 The judges’ reference to ‘contemporary trends, reflecting international relations as they stand at the beginning of the new century’ indicates a permissible (if however loosely defined) evolution within an equally loose yet ‘distinct corpus of law’. Of course, as a matter of international relations, such incremental development in the scope and coverage of jurisdiction is subject to valid contestation between states. This is particular the case where jurisdiction is perceived as a zero-sum game as one state’s further extension of its jurisdiction reduces the jurisdiction of another state. This, however, is an overly simplistic analysis of a much more dynamic process, subject principally to open-textured international rules and auto-interpretation by states and their municipal courts. Whether one likes it or not, multiple and overlapping jurisdictions is a reality of international relations and public international law.

VII.  Improving Coordination of Jurisdictional Frameworks in Private and Public International Law There is general acceptance that the present jurisdiction frameworks do not work as well as they might, and that there is global interest in greater coordination.80 This contribution identifies three interrelated avenues for furthering systemic d ­ ialogue in this field, at differing levels for both public and private international law. 77 

ICJ Reports 2012, 99. US v Yunis 681 F Supp 896 (DDC, 1990). 79  Cf Report of the International Law Commission, Fifty-Eighth Session (2006) (GAOR, Supplement No 10 (A/61/10)) Annex V, 237: ‘Assertions of extraterritorial jurisdiction are subject to limitations based on certain fundamental principles of international law such as the sovereign equality of States, the principle of territorial integrity of a State and the principle of non-intervention … Considerations of comity should also be taken into account.’ 80  Michaels (n 2). 78 

Jurisdiction

 93

First, the increasing development of, and coordination between, rule-based systems. Second, the epistemic internationalisation of general principles of ­ international competence thought to promote coordination in the exercise of jurisdiction. And third, the role of international judicial oversight of municipal jurisdictional decisions.

A. Development of, and Coordination Between, Rule-based Systems There continue to be attempts to create global regimes on jurisdiction, arguably more so in private international law81 than in public international law. The work of the Hague Conference on Private International Law (HCCH) has been pivotal in this field. The Hague Convention on Choice of Court Agreements is in force and continuing to gain international acceptance82 and intensive work is being ­carried out in pursuit of an international treaty on the recognition and enforcement of foreign judgments in civil and commercial matters, including jurisdictional ­filters.83 It has long been an ambitious project of the HCCH to produce a potentially worldwide convention that could provide on a much larger scale the benefits of systematic recognition and enforcement of foreign judgments presently found in the European Union. The prospective new instrument is being designed with the potential to be adopted by states generally. However, and even with this instrument eventually in place, rule-based systems are by definition inchoate and ­selective,84 either in terms of topic-area, geographical reach85 or adjudicative form.86 Hence, coordination between different rule-based systems is crucial.87 This is a contemporary feature in private (and indeed public88) international law more generally, and in the field of jurisdiction in particular. Different ensembles of

81 See the vast work of the Hague Conference on the Judgments Project at www.hcch.net/en/ projects/legislative-projects/judgments/special-commission. 82  HCCH Convention of 30 June 2005 on Choice of Court Agreement, currently in force between the Member States of the European Union (except Denmark), Mexico and Singapore. See www.hcch. net/en/instruments/conventions/status-table/?cid=98. 83  See the text of the Draft Convention from November 2017 assets.hcch.net/docs/2f0e08f1-c4984d15-9dd4-b902ec3902fc.pdf. See also the extensive literature on the topic assets.hcch.net/docs/ bd35517f-09ea-47d6-95ad-865d2c162504.pdf. 84  See the long list of excluded matters (art 2) from the scope of application of the HCCH Draft Judgments Convention from November 2017. 85  eg Brussels I bis Regulation for civil and commercial matters applicable for the most part to defendants domiciled in the EU Member States. 86  The parallel regulation of international commercial litigation and international commercial arbitration is a typical example, both generating separate and not necessarily interrelated instruments. 87 There is abundant literature on the relationship between the Brussels II bis Regulation (Regulation 2201/2003) and the Hague Convention on Child Abduction. See generally the database of the EUFAM’s project. www.eufams.unimi.it/2017/11/12/eufams-database-12-11-17/. 88  See chapter by Mills in this volume.

94 

Duncan French and Verónica Ruiz Abou-Nigm

norms will often come into play, each time adding complexity and lessening predictability. The interface between instruments may become wider or narrower depending on the distinctive stages where jurisdiction issues arise, ie jurisdiction simplicter, conflict of jurisdictions or recognition and enforcement (­indirect ­jurisdiction).89 To this effect, the main examples of coordination appear in instruments of a public international law nature, namely international treaties. The Hague Conventions,90 as well as European instruments on private ­international law on jurisdiction have recognised the need to improve the sophistication of ­compatibility clauses.91 Normative accommodation in this sense is provided for, in general terms, in the 1969 Vienna Convention on the Law of Treaties, which sets a framework of secondary rules92 for international treaties to include these sorts of ‘coordination clauses’.93 These exist in most international treaties in the field of direct and ­indirect jurisdiction. Notably, the ever-increasing sophistication of these ­provisions94 tries to anticipate the many possible clashes between rule-based systems in practice. Coordination rules of this kind in private international law treaties include: (a) ‘neutral’ compatibility clauses that provide for coexistence of overlapping instruments as far as possible without providing any guidance as to how to resolve ‘conflicts’;95 (b) priority clauses, stating the priority of the instrument they are embedded in;96 (c) subordination clauses, providing a priority rule in favour of an earlier or later treaty;97 and (d) maximum effectiveness clauses,98 providing a ­criterion to resolve the eventual clash in favour of a p ­ articular result. 89  Lamont Black explains how in relation to transport conventions the opening of art 71 of the Brussels I bis Regulation to specialised regimes on jurisdiction can be greater in relation to ‘second stages’ ie conflicts of jurisdiction and indirect jurisdiction and becomes narrower when considering jurisdiction simpliciter. See further S Lamont-Black, ‘The UK Supreme Court on Jurisdiction over Successive CMR Carriers and European Union Rules’ (2017) 21 Uniform Law Review 504. 90  See eg the current Draft of the Judgments Convention, art 26. On compatibility clauses in HCCH conventions more generally see P Volken, ‘Conflicts between Private International Law Treaties’ in WP Heere (ed), International Law and the Hague’s 75th Anniversary (The Hague, TMC Asser Press, 1999) 149; S Álvarez González, ‘Cláusulas de compatibilidad en los Convenios de la Conferencia de La Haya de DIPR’ (1993) XLV Revista Española de Derecho Internacional 1, 39. 91  On compatibility clauses see MB Noodt Taquela, Applying the Most Favourable Treaty or Domestic Rules to Facilitate Private International Law Co-operation, Recueil des Cours Collected Courses of the Hague Academy of International Law (Leiden, Brill Nijhoff, 2016) vol 377, 121–318, ch 3. 92  For instance, art 30.2: ‘When a treaty specifies that it is subject to, or that it is not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty prevail’. 93  ‘Coordination clause’ is the term used by A Malan, La concurrence des conventions d’unification des règles de conflit de lois (Aix-en-Provence, Presses Universitaires d’Aix-Marseille, PUAM, 2002). 94  See eg art 26 of the HCCH Convention on Choice of Court Agreements. 95  See further D Bureau, ‘Les conflits de conventions’ in Travaux du Comité Français de Droit International Privé, 1998–2000, 201. There are numerous examples of this kind of clause, to mention just one see art 26.1 of the HCCH Convention on Choice of Court Agreements. 96  Art 103 of the UN Charter is often referred to as the ultimate example in this regard. 97  HCCH Convention on Choice of Court Agreements, arts 26.3 and 26.5. 98  eg Inter-American Convention on International Jurisdiction for the Extraterritorial Validity of Foreign Judgments, La Paz 1984 (CIDIP—III) art 8: ‘The rules contained in this Convention shall not limit any broader provisions contained in bilateral or multilateral conventions among the States Parties regarding jurisdiction in the international sphere or more favourable practices in regard to

Jurisdiction

 95

This taxonomy is not meant to be exhaustive but indicative of the range of different mechanisms required to provide global systemic coherence at the normative level in this field. The greater or lesser possibility of interaction between such instruments depends mostly on the ‘windows’ in the structure of the normative frameworks themselves. However, the window99 for coordination is not always easy to open at a multilateral level,100 and when such mechanisms are not provided for in a relevant treaty, it is for national rules of private international law to provide such normative accommodation.101 Such national rules, on the other hand, are invariably subject to—and constrained—by various factors, some domestic and some international. From a systemic perspective, however, such variation at the national level is sub-optimal and highlights both inefficiencies and normative gaps within the wider global order. If progress on global rule-based systems has been slow for private international law, and coordination mechanisms and strategies remain inchoate, in public international law a regulated general approach to the extraterritorial limits of domestic jurisdiction has proved equally an anathema to states. It is noticeable that in this sphere the International Law Commission (ILC), which has responsibility within the UN system for making recommendations on the codification and progressive development of public international law, has not considered the general grounds of jurisdiction within its work programme in the almost 70 years of its existence. Of course, it has looked at specific topics (eg international criminal jurisdiction) as well as matters which touched tangentially upon jurisdiction (eg state immunity) but never at jurisdiction itself. Though the secretariat prepared a note on extraterritorial jurisdiction in 2006,102 and it thus remains on the long-term work programme of the ILC, it has yet to be taken up. Indeed, in one of the only times that the ILC has drafted a general statement on jurisdiction so far, it was notably obscure and one might say even verging on the simplistic. In its 1949 draft Declaration on Rights and Duties of States, it proposed that ‘Every State has the right to exercise jurisdiction over its territory and over all persons and things therein, subject to the immunities recognized by

the ­extraterritorial validity of foreign judgments.’ On the same lines, although with a different kind of wording see art 26.4 of the HCCH Convention on Choice of Court Agreements; art 52.1.b of the Convention on the International Recovery of Child Support and Other Forms of Family Maintenance, concluded in The Hague, on 23 November 2007. 99  See, on this point, the chapter by D’Aspremont and Giglio in this volume on the particular ‘­window’ provided for in art 71 of the Brussels I bis Regulation. 100  See the discussion in relation to art 25 (relationship with other international instruments) of the Draft HCCH Convention on Judgments of November 2017. 101  See, particularly, the discussion around the exclusion of arbitration from the scope of application of the European regime of jurisdiction and from the Draft HCCH Convention on Judgments. See NA Dowers, The Interface between Jurisdiction Instruments and Arbitration (Thesis, University of Edinburgh, 2015). 102  Report of the International Law Commission, Fifty-Eighth Session, GAOR, Supplement No 10, UN Doc A/61/10 (2006) Annex V, 229.

96 

Duncan French and Verónica Ruiz Abou-Nigm

­international  law’.103 Things have undoubtedly moved on quite a lot since that time. Interestingly, the ILC has also touched upon private international law matters, however briefly, in its 2006 Draft principles on the allocation of loss in the case of trans-boundary harm arising out of hazardous activities.104 Nevertheless, as a sole focus, the ILC has so far refrained from undertaking such a study. And yet as the secretariat noted in 2006: ‘Although there appears to be a strong need for codification in this field, some may question whether the practice is sufficiently uniform or widespread to support a codification at this time’.105 Hence, it would seem that the impetus in this area presently remains with ­private international law. Coordination may take several forms, including normative accommodation, provided for in multilateral frameworks or in their absence, residually determined by national rules of private international law. This process requires adaptability and is, by definition, dynamic and at times open-ended. But equally, how is it possible to ensure that such a process will produce the expected results in terms of ‘justice’ and ‘systemic coherence’? It is here submitted that the further two interrelated developments analysed in this section, namely the epistemic internationalisation of general principles of international competence, and the international judicial oversight of municipal decisions, have an important role in achieving those objectives.

B. Epistemic Internationalisation of General Principles of International Competence The importance of close coordination between rule-based systems—and indeed the difficulties in designing rules to enable this coordination—suggests the utility of more open-ended principles to guide national courts in the ascertainment and exercise of jurisdiction. Such principles, however, to be of most use must be of general application and thus capable of universal application; which we refer to as epistemic internationalisation. Just as with the development of rule-based coordination, it is noticeable that almost invariably all the activity in this field has been in private international law, and thus this section focuses upon those examples. That is not to say there could not be refinement of general principles in public international law—indeed the very act of judicial decision-making acts as a catalyst in this regard—but as a conscious act of refinement, just as the ILC has been slow in looking at the system of jurisdiction, there is a similar resistance to explore systematically the general principles underpinning jurisdiction in public international law. Again, the note prepared by the secretariat in 2006 for the ILC recognised the potential value of ‘setting forth general principles and more specific

103 

Yearbook of the International Law Commission (1949), 287. (n 102) 56. 105  ibid, 229. 104 

Jurisdiction

 97

rules governing the assertion of extraterritorial jurisdiction’,106 but the Commission itself has not yet taken up the opportunity. On the other hand, there are an increasingly important number of academic and professional developments in the sphere of transnational civil procedure107 and transnational access to justice, aiming to strike a balance between the different conceptions of jurisdiction in private international law referenced above in this contribution. A recent endeavour, the Principles on Transnational Access to Justice adopted by ASADIP (the American Association of Private International Law108) in 2016, is particularly worth discussing. The ASADIP Principles on T ­ ransnational Access to Justice (the ‘TRANSJUS Principles’) contain specific provisions on ­jurisdiction.109 These provisions shed light on the foundations of jurisdiction in private international law. The Principles require the use of substantial connecting factors, including a non-exhaustive list of the sort of connections considered to be substantial for this purpose;110 prioritising choice of court agreements;111 banning exorbitant jurisdiction grounds (with a non-exhaustive list of exorbitant connecting factors);112 providing for the court first seized rule for resolving parallel proceedings, ‘unless it is evident that in the tribunal were the claim has been previously initiated the claim would not be adjudicated in a fair, just and diligent manner’;113 recognising the benefits of joinder and consolidation; and allowing the plea of forum non conveniens for the purposes of guaranteeing the access to justice of all the parties, the court, even on its own motion, could stay the proceedings when, notwithstanding its international jurisdiction to adjudicate the dispute, the exercise of this jurisdiction appears as manifestly inadequate due to the lack of a sufficient connection between the dispute and the forum; there is an alternative forum internationally competent to hear connected claims; …114

Further principles include providing for forum necessitatis115 to grant access to justice for claimants that have nowhere else to turn, ‘provided that it is possible to ascertain, taking into account the rights and possibilities of both parties, that the

106 

ibid, 236. See, inter alia, the ILA Leuven/London Principles on Declining and Referring Jurisdiction in Civil and Commercial Matters (2000, ILA Res 1/2000) the ALI-UNIDROIT Principles of Transnational Civil Procedure (2004) and the on-going ELI-UNIDROIT Project www.europarl.europa.eu/RegData/ etudes/IDAN/2017/556972/IPOL_IDA(2017)556972_EN.pdf. See also P Glenn, ‘The ALI/UNIDROIT ­Principles of Transnational Civil Procedure as Global Standards for Adjudication’ (2004) 9 Uniform Law Review 829. 108  See www.asadip.org. 109  TRANSJUS, ch 3. 110  TRANSJUS, art 3.2. 111  TRANSJUS, arts 3.3–3.5. 112  TRANSJUS, art 3.6. 113  TRANSJUS, art 3.7. 114  TRANSJUS, art 3.9. 115  See generally Kiestra (n 47). 107 

98 

Duncan French and Verónica Ruiz Abou-Nigm

claimant could not obtain an effective and reasonable access to justice in another jurisdiction’.116 These are fundamental propositions that arguably should be considered foundational to many modern jurisdictional systems. Yet, undoubtedly some of these principles are more broadly accepted than others. Take, for instance, one where there is well-known contestation,117 namely the recognition of the very exceptional jurisdictional leeway of forum necessitatis.118 In Europe there are fewer legal systems119 that expressly provide for it than not. Nonetheless, the rationale underpinning this exceptional ground is considered to be based on, or even imposed by, the right to a fair trial under Article 6(1) of the European Convention on Human Rights. And, in some countries reference is also made to the prohibition of ‘denial of justice’, a general principle of public international law.120 In conclusion, principles such as the TRANSJUS Principles reflect core global values enshrined in national, international, regional and supranational jurisdictional frameworks. Courts are being guided by general principles of this kind and, in turn, are constantly refining them. Principles gain ‘internationalism’ in such a process via cross-pollination between legal systems.121 Yet, admittedly, even with these more open-textured principles, the possibility for epistemic internationalisation is limited by context, the legal culture of national systems and the judicial ‘appetite’ for accepting and internalising globalised values.122

C.  The Role of International Judicial Oversight A third approach to the coordination of domestic jurisdictions is an appropriately assigned role for international judicial oversight. Indeed, even were such a regulator or such regulation to exist, the existence of a third party tribunal would be considered an important, if not indispensable, aspect of any framework. As noted above, there are examples, if varying in nature and form, of a rule-based approach to mediating competing jurisdictions. The most advanced, of course, are the highly formalised set of rules, as contained in various EU Regulations, which

116 

TRANSJUS, art 3.10. This issue was broadly discussed during the revision of the Brussels I Regulation, pursuant to the adoption of the Recast. See generally A Nuyts, ‘Study on Residual Jurisdiction, General Report’ (2007) 64–66, ec.europa.eu/civiljustice/news/docs/study_residual_jurisdiction_en.pdf. 118 ibid. 119  ibid. Austria, Belgium, Estonia, Netherlands, Portugal, Romania, France, Germany, Luxembourg and Poland are recognised as providing for this jurisdictional leeway in this study. 120  See C De Visscher, ‘Le déni de justice en droit international’ (1935-II) 52 Recueil des Cours 365. 121  The concepts of reception and transposition as used in comparative law may be also useful in this context. Yet, the epistemic internationalisation referred to in this chapter is one that, rather than adapting the ‘traveller’ (see chapter by D’Aspremont and Giglio in this volume) to the particulars of a specific legal system, is making the traveller ‘a citizen of the world’. 122 See AG v Bauman 134 S Ct 746 (2014), 21–23. See further van Loon (n 20) 91. 117 

Jurisdiction

 99

by their very nature—being part of EU law—are subject to the interpretative function of the Court of Justice of the European Union. The CJEU has had cause to reflect on its own unifying role in this particular area of EU law, notably in cases such as Erich GasserGmbH v Misat srl.123 Thus, there is no doubt that the CJEU plays a significant role in the full implementation and principled operationalisation of the Brussels regime. Of course, within the context of the broader goal of achieving an ‘ever closer union’ and the finalisation of a single market within the EU, the CJEU has a defined institutional role to play, a role not evident with any other supranational or international judicial body. Notwithstanding the surprising paucity of international case law dealing with questions of jurisdiction, there is nevertheless an important residual role for international courts and tribunals to mediate conflicting national jurisdictions. In public international law terms, the most (in)famous case on jurisdiction was perhaps The SS Lotus. The case has been subject to a wide array of interpretations— notably its ratio being used as an expansive account for the permissive rights of states in the absence of a prohibitive rule124—and yet the judgment of the court, in this case the Permanent Court of International Justice (PCIJ), also identifies certain key functions (and limitations) of an international court itself in such a dispute. As the PCIJ noted, ‘[t]he discussions have borne exclusively upon the question whether criminal jurisdiction does or does not exist in this case’.125 Though nuanced, it highlights an important truth; the role of international judicial oversight in such matters is invariably constrained by its constitutive mandate, in this case the special agreement between the parties. Such an international court is rarely called on to resolve a case de novo, though as noted below there are (and have always been) instances in international law. Nevertheless, in most instances, the role of the international court or tribunal is invariably on the issue of jurisdiction and not to determine the competence of the national court. Notwithstanding the ability of an international court to resolve disputes on jurisdiction, international cases on such matters are relatively rare. Even rarer is the use of the dispute settlement mechanisms of public international law to resolve disputes inherently of a private international law nature. This may, in part, be because of a need to prove exhaustion of local remedies in some (though by no means all) of these cases. A summary of a number of recent examples (not all of which continued to final adjudication) might suffice. One particular example of the submission by a state to the International Court of Justice was the discontinued case of Belgium v Switzerland (2009),126 in which the claimant sought an

123 

Erich GasserGmbH v Misat srl [2003] ECR I-14693. generally D Guilfoyle, ‘SS Lotus (France v Turkey) (1927)’ in E Bjorge and C Miles (eds), Landmark Cases in Public International Law (Oxford, Hart Publishing, 2017). 125 See SS Lotus (n 36) 13. 126  Application Instituting Proceedings, 21 December 2009, www.icj-cij.org/files/case-related/145/ 15763.pdf. 124  See

100 

Duncan French and Verónica Ruiz Abou-Nigm

interpretation of the 1998 Lugano Convention on Jurisdiction and Enforcement on Judgments in Civil and Commercial Matters. Belgium in its submission argued that Switzerland was responsible under the treaty and general international law for the failure of its judicial system to recognise and give effect to a judgment of a Belgian court and similarly for failing to halt proceedings before its courts on the subject-matter of the same dispute: as clear a case as might be imagined of public international law being relied on to give effect to private international law rules. In the end, as noted, the case was discontinued; but as Belgium contended in its original submission, Swiss actions were ‘a breach of the rules of general international law governing the exercise by States of their authority, in particular in judicial matters, according to which State authority of any kind must be exercised ­reasonably’.127 As other cases, like Kiobel v Royal Dutch Petroleum Co,128 show ‘States do believe that the rules of jurisdiction must be complied with in relation to civil proceedings, and that they do object if they think their nationals are being subject to exorbitant exercises of jurisdiction’.129 The International Court of Justice has also, on occasion, been requested to adjudicate on particularly detailed matters of international judicial cooperation. In Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v France),130 the Court was required to adjudge whether France had failed to provide the assistance required under a treaty, in part by a French judicial decision not to transmit a case file to the Djibouti authorities as requested. Having concluded on this point that France was able to rely on one of the treaty’s own exceptions, an interesting aside was in the Court’s reasoning on remedies. Having found that the reasons invoked by France, in good faith, under Article 2 (c) fall within the provisions of the 1986 Convention, the Court will not order the Borrel file to be transmitted with certain pages removed, as Djibouti has requested in the alternative and specified in more detail in response to the question put by Judge Bennouna during the hearings. Nor, in any event, would it have been in a position so to do, having itself no knowledge of the contents of the file.131

The final line is hugely significant, again reflecting the limitations of international judicial oversight, in this case, not of a dispute over jurisdiction but of the extent of national judicial cooperation. The role of the international court was constrained not only by the scope of its own jurisdiction but by deference to the innate limitations of its role. Of course, the ICJ is not the only international court or tribunal to which private international law questions might very aptly arise. The increasing reliance

127 

ibid, 13. Kiobel v Royal Dutch Petroleum Co 133 S Ct 1659 (2013) (US SCt). 129  See chapter by Mills in this volume. 130  Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v France) ICJ Reports 2008, 177. 131  ibid, 245. Emphasis added. 128 

Jurisdiction

 101

on ad hoc arbitration, particularly in matters of investor-state adjudication, has the potential to raise issues of jurisdiction (though on the whole, the existence of a bilateral investment treaty forecloses many of the legal avenues involving private international law, at least in terms of direct jurisdiction). Nevertheless, this is less international judicial oversight of any kind and a forum—at the international level—for substantive adjudication, almost invariably without a right of appeal. Another area of particular interest—however niche—will be the role of the Seabed Disputes Chamber of the International Tribunal for the Law of the Sea, which has the novel capacity to resolve disputes ‘between parties to a contract, being States Parties, the Authority or the Enterprise, state enterprises and natural or juridical persons … concerning: (i) the interpretation or application of a relevant contract or a plan of work’.132 In this regard, of particular interest are its provisions dealing with applicable law and enforcement of its decisions. Article 39 of Annex VI of UNCLOS is worth noting especially here: The decisions of the Chamber shall be enforceable in the territories of the States Parties in the same manner as judgments or orders of the highest court of the State Party in whose territory the enforcement is sought.

There has yet to be such a dispute but it will be interesting to see how far private international law rules, techniques and concepts are central to the working of the Chamber. In this regard, it might be hoped that the Chamber does not rely too heavily on another law of the sea dispute, which raised a particularly interesting—and perhaps surprising—example of how public and private international law can interact. In the judgment of the International Tribunal for the Law of the Sea in ARA Libertad (Argentina v Ghana), a matter concerning the indication of provisional measures, the Tribunal had to deal with the arrest of an Argentinian military vessel on the order of a Ghanaian court enforcing a US judgment awarded against Argentina in a dispute over bond defaults. The ­Tribunal gave short shrift to the private nature of the court order, and focused on the public international law status of the vessel. Ghana in its submission had sought to argue, ultimately unsuccessfully, on an alternative delimitation of the legal questions before the Tribunal: … the central question … is whether Argentina has waived immunity. Prima facie, that is a question to be resolved by the law applicable to the interpretation and application of the bond, namely New York law, and possibly also the law of Ghana. To the extent that this is a question governed by private international law relating to the identification of rules applicable to the interpretation of the bond, UNCLOS is irrelevant … ITLOS should not (as a matter of ‘court comity’) decide the matter at this stage.133

132  133 

UNCLOS art 187(c). Written Statement of Ghana (28 November 2012), paras 16–17.

102 

Duncan French and Verónica Ruiz Abou-Nigm

The Tribunal, as a matter of international law, ordered the release of the vessel. More interesting perhaps are the obiter of several of the judges. While some were cognisant of the jurisdictional issues, but wary to fully engage (Judge Lucky, for instance, noting that the ‘domestic proceedings are between NML Capital Limited and Argentina and not between Ghana and Argentina’134 and Judges Wolfrum and Cot note that these proceedings ‘have to be clearly distinguished from other issues to be considered before national fora’135), not all were so measured. Judge Paik was particularly vocal in this regard, recognising the factual, if not the legal, linkages in the case: The information available to the Tribunal also indicates that the plaintiff, which filed a motion for interlocutory injunction and interim preservation … is apparently a quite active litigant. While the outcome of the litigation … [is] unknown, the fact that they are pending and have the potential further to aggravate the situation cannot be taken lightly.136

In all of the recent cases, however, undoubtedly the most interesting, if equally one of the most impenetrable, disputes is Avotiņš v Latvia,137 considered by the Grand Chamber of the European Court of Human Rights, not a ‘natural forum’ it must be admitted for contractual and commercial disputes raising private international law questions.138 As the Grand Chamber noted, it had ‘never previously been called upon to examine observance of the guarantees of a fair hearing in the context of mutual recognition based on European Union law’.139 The dispute is complex, and this summary cannot adequately provide an overview.140 It is made more complicated by the subject-matter of the dispute being, in part, the application of EU law through the so-called Bosphorus presumption, namely that the European Court of Human Rights will presume that ‘State action taken in compliance with such legal obligations is justified as long as the relevant organisation is considered to protect fundamental rights … in a manner which can be considered at least equivalent to that for which the Convention provides’.141 Namely, the CJEU’s case law will be considered as equivalent protection, though as a presumption it can be ‘rebutted if, in the circumstances of a particular case, it is considered that the protection of Convention rights was manifestly deficient’.142 In this dispute, the claimant argued for a breach of his right to a fair trial under Article 6 ECHR on the grounds that the application of EU law (in the form of a 134 

Separate Opinion of Judge Lucky (n 67) 388. Joint Separate Opinion of Judge Wolfrum and Judge Cot (n 67) 365. 136  Declaration of Judge Paik (n 67) 353. 137  Judgment of 23 May 2016 (Application no 17502/07). 138  See generally Kiestra (n 47). 139  (n 137) para 98. 140  For an excellent summary, see S Øby Johansen, ‘EU law and the ECHR: the Bosphorus Presumption is Still Alive and Kicking—the Case of Avotiņš v. Latvia’, eulawanalysis.blogspot.co.uk/2016/05/ eu-law-and-echr-bosphorus-presumption.html. 141  Bosphorus Hava Yolları Turizm ve Ticaret Anonim Şirketi v Ireland, Judgment of 30 June 2005 (Application no 45036/98) para 155. 142  ibid, para 156. 135 

Jurisdiction

 103

Latvian court applying Brussels I Regulation on jurisdiction and enforcement of foreign judgments (in this case, a Cypriot judgment)) denied him, inter alia, a right to provide a defence. In the end, the Strasbourg Court did not find the system of mutual recognition as applied in this case manifestly deficient but it is interesting to note its general stance, worth quoting at length. Accordingly, the Court must satisfy itself … that the mutual recognition mechanisms do not leave any gap or particular situation which would render the protection of the human rights guaranteed by the Convention manifestly deficient. In doing so it takes into account, in a spirit of complementarity, the manner in which these mechanisms operate and in particular the aim of effectiveness which they pursue. Nevertheless, it must verify that the principle of mutual recognition is not applied automatically and mechanically … to the detriment of fundamental rights—which, the CJEU has also stressed, must be observed in this context. … In this spirit, where the courts of a State which is both a Contracting Party to the Convention and a Member State of the ­European Union are called upon to apply a mutual recognition mechanism established by EU law, they must give full effect to that mechanism where the protection of Convention rights cannot be considered manifestly deficient. However, if a serious and substantiated complaint is raised before them to the effect that the protection of a Convention right has been manifestly deficient and that this situation cannot be remedied by European Union law, they cannot refrain from examining that complaint on the sole ground that they are applying EU law.143

This dispute brought together a complex mix of legal questions. It is especially intriguing from the point of view that the case could be brought within the schema of regional human rights law, and thus subject to the judicial system set up thereunder. It opens up new avenues for reflection (as well as future litigation strategies) that many will not have considered before. Nonetheless, the possibilities for international judicial supervision are, by definition, limited in this area. States are very wary of opening their judicial systems up for external scrutiny. The fact that the Belgium v Switzerland dispute was discontinued is as relevant as the fact that it was initiated in the first place. Nevertheless, as perhaps both ARA Libertad and Avotiņš v Latvia reveal, there are occasions when private international law and public international law (in the latter case, through the additional lens of human rights law) coalesce, though not always in an easy manner. Judicial misunderstandings are as problematic as any systemic questions of reconciling complex legal regimes in supranational/international oversight. The progressive role of the CJEU in this area is unlikely to be replicated, other than perhaps at another regional level, and thus the capacity for other courts to play a role here will remain tangential and sporadic. Nonetheless, this issue is likely to become more relevant for the UK jurisdictions after Brexit, where the rules are likely to be similar to the regional rules prevailing in Europe but where it is presently very unlikely that the CJEU will continue to have judicial oversight.

143 

(n 137) para 116.

104 

Duncan French and Verónica Ruiz Abou-Nigm

VIII. Conclusions The idea of a global system of jurisdiction—whether being based on better coordination of the frameworks currently in place, in the making of a multilateral international treaty in this field, or achieved through other means (eg soft law instruments)—though welcome, nevertheless poses some fundamental questions. Is there, or will there ever be, a move towards universal ideals and common goals, or will unilateralism and reciprocity (namely, narratives based strongly on territorial sovereignty), continue to prevail in international law in this sphere? In both private and public international law, there are systemic challenges in the present situation for the possibility of overreaching jurisdictional claims. In public international law, the rise of an expansive effects doctrine, the self-justification of the protective principle and the paucity of international case law on jurisdiction, all reveal the lack of limitations on states. On the other hand, in private international law, the challenge is reconciling different approaches to the very nature of international jurisdiction itself. And yet, with both, the existence of practical and workable alternative models that avoid giving either too much deference to state autonomy or acting on Ryngaert’s rather utopian postulate ‘as if they were a global regulator’ remain both under-actioned and under-theorised. The chapter has considered the contribution that further developments in rulebased regimes, general principles and international judicial oversight might play in enhancing coordination, without either discipline becoming unduly institutionalised in nature. This is not to suggest that there is a simplistic and formulaic response for either discipline, never mind proposing an identical answer for both. Nevertheless, there is more similarity than many might previously have recognised: both disciplines reject exorbitant exercises of jurisdictional power; they both rely on bases of jurisdiction that are premised on similar considerations; for both, there is innate potential for international law to do more to circumscribe overreaching and outlandish jurisdictional claims. In some respects, notable activity is already underway and yet unilateralism retains a strong gravitational force against radical change. The chapter, based on mutual learning and academic discourse between scholars of both disciplines, has led to a deeper appreciation of this conceptual and functional labyrinth. Without seeking to homogenise the very distinctive challenges for each discipline, the chapter has nevertheless shown that one must strengthen the appreciation of the commonalities and divergences in this field to achieve an enriched understanding of the wider ‘system’. Private international law is not exclusively focused upon procedural or technical formalism and public international law is not exclusively tied to territorial control. The practice of jurisdiction exhibits, and the courts involved must seek to navigate, an increasing c­ omplexity in which both states and litigants find in their relations. As this co-authored chapter has demonstrated, each discipline, and scholars from either side, have much to learn from the other.

5 On the Dwindling Divide between the Public and Private: The Role of Soft Law Instruments in Global Governance RICHARD COLLINS AND MARÍA MERCEDES ALBORNOZ

I.  Introduction: Global Governance and the Confluence of Public and Private International Law Public and private international law are disciplines built upon constructed and contested foundations. Indeed, to buttress their authority and autonomy as orders or systems it has been necessary to rely on certain foundational myths. If public international law came to be explained as a positive legal system derived from the concordant will of equal sovereign states then its logical counterpart in the ­private sphere would be that cross-border transactions between private actors are governed by freedom of choice of the parties—such ‘party autonomy’ being a necessary corollary, but also an important concession, of sovereign-equal ­statehood.1 From this foundation grew up a persistent divide and also a certain hierarchy between the public and private international spheres, solidifying the idea of a Westphalian ‘duality’ between the international and the national and the public and private as an important explanatory element in understanding the core principles, boundaries and reach of modern legal practices.2 From these constructed

1  See H Muir Watt, ‘“Party Autonomy” in International Contracts: From the Makings of a Myth to the Requirements of Global Governance’ (2010) 3 European Review of Contract Law 1, 8–9 in particular. 2  A Mills, The Confluence of Public and Private International Law: Justice, Subsidiarity and Pluralism in the International Constitutional Ordering of Private Law (Cambridge, Cambridge University Press, 2009) 1–2.

106 

Richard Collins and María Mercedes Albornoz

foundations, it becomes easy to imagine public international law as unconcerned with, even conceptually opposed to private, informal ordering,3 whilst private international law can be seen simply as an extension of domestic regulation, understood as a largely technical and apolitical exercise to deal with the transnational dimensions to legal transactions.4 Nevertheless, as others have begun to argue, these images are questionable as a matter of historical or empirical fact,5 and normatively problematic insofar as they mask important interactions between the ordering of public and private matters, particularly in the field of economic governance.6 In fact, much that seemed plausible about the perceived divide between disciplines has anyway now seemingly been swept away by the political, social and economic forces of globalisation, and in particular the recognition of so-called ‘global governance’. In this chapter our aim is to look at both fields through a ‘governance’ lens and, in doing so, to highlight the way in which globalisation is undermining this constructed divide between both disciplines and bringing to light areas of mutual learning between them. The impact of globalisation on the practices of public international law has been perhaps more obvious to appreciate. For some time now it has been clear that there has been something of a transition underway in the substantive concerns and institutional structures of the international legal system. In this respect, the image of public international law as a system of rules regulating the relations between sovereign states has been straining under the weight of its own success, with the sovereignty of states seen as increasingly constrained and managed through the regulatory activities of global institutions.7 As such, with the multiplication of regimes and institutions giving rise to a rather uncoordinated, fragmented and increasingly ‘deformalised’ regulatory landscape,8 it is plausible to speak of global governance rather than government, that is, of regulation without any system or centre.9 This shift does not just concern the substantive concerns of contemporary international law, but extends to its overall institutional structure and functioning also, as a range of functionally-differentiated institutions look to both formal and informal regulatory solutions to normative problems, ­supported by an increasingly broad constituency of actors, both public and private.

3 

See eg CEJ Schwöbel, ‘Whither the Private in Global Governance?’ (2012) 10 ICON 1106. H Muir Watt, ‘Private International Law Beyond the Schism’ (2011) 2 Transnational Legal Theory 347, 377–81. 5  Mills (n 2). 6  Muir Watt (n 4). 7  P Alston, ‘The Myopia of the Handmaidens: International Lawyers and Globalization’ (1997) 3 European Journal of International Law 435. 8  M Koskenniemi, ‘The Fate of Public International Law: Between Technique and Politics’ (2007) 70 MLR 1, 4–15. 9  See JHH Weiler, ‘The Geology of International Law—Governance, Democracy and Legitimacy’ (2004) 64 Zeitschrift für Ausländisches Öffentliches Recht und Völkerrecht 547, 560 and throughout. 4 

Soft Law Instruments in Global Governance

 107

In fact, the collection of regimes, institutions and informal actors that make up the contemporary ‘post-national’ political space seems to make increasingly ­problematic any clear distinction between the public and the private in the ordering of many global affairs.10 It might be far less obvious to think of private international law as a form of global governance. Indeed, classically, it has been much easier to picture the regulatory challenge of private international law purely through the eyes of the domestic decision-maker, understanding the field as essentially a transnational extension of domestic law. On this view, the nature of the discipline can be seen simply as a largely technical exercise in the management of potential conflict between the domestic and the ‘foreign’. However, the classic regulatory problems of private international law—the choice of law to be applied, the question of jurisdiction and the recognition and enforcement of foreign awards—can be seen also as macrolevel questions over how to achieve the most just solution to legal problems under conditions of global pluralism. Indeed, as Alex Mills puts this: [T]he problem of private international law is a governance problem—the appropriate allocation of private law regulatory authority, in the sense of which state should hear a dispute, whose law should be applied, and whether a foreign judgment should be enforced locally … Private international law thus essentially articulates the standards by which we may evaluate the application of states’ private law regulatory power, in a world in which diverse and potentially overlapping legal orders are accepted to coexist.11

Mills is correct that private international law can be thought of through a global governance lens as an order aimed at providing solutions to regulatory problems. Indeed, this kind of image is not necessarily new, being clearly at play in the internationalist spirit witnessed at the Hague Conference on Private International Law (HCCH) since its inception towards the end of the nineteenth century. However, suggesting that private international law is regulated at this macro, inter-state level is perhaps to overplay an image of this discipline as only subordinate to what is itself an ever-more contested image of its public counterpart. Increasingly, therefore, we might instead emphasise the interconnected role of private and public actors in creating a horizontal, transnational ordering or regulatory space for private legal transactions: ‘a multiplicity of often overlapping forms of cross-border and ­subnational governance, including state and non-state forms, [which] creates ­governance beyond traditional state models but short of world government.’12

10 See, most comprehensively, A Marx et al (eds), Private Standards and Global Governance: Economic, Legal and Political Perspectives (Cheltenham, Edward Elgar, 2012). 11  A Mills, ‘Variable Geography, Peer Governance, and the Public International Law Perspective on Private International Law’ in H Muir Watt and DP Fernández Arroyo (eds), Private International Law and Global Governance (Oxford, Oxford University Press, 2014) 245, 246. 12  R Wai, ‘The Interlegality of Transnational Private Law’ (2008) 71 Law and Contemporary Problems 107, 108.

108 

Richard Collins and María Mercedes Albornoz

On this view, the autonomy of private law transactions at the global level—fuelled by the foundational principle of party autonomy, the increasing use of non-state sources of law or the availability of international commercial arbitration—appears as a deliberate regulatory choice that empowers private actors and downplays the role of public policy and mechanisms of constitutional accountability. Accordingly, the more autonomous the private regulatory sphere the more the concerns of public and private international law should converge around the question of how to substantively regulate global governance outside of our traditional, that is, ­Westphalian legal forms.13 With this background in mind, the principal aim of this chapter is to engage the issue of regulatory choice in global governance by considering the increasingly common use of non-formal, or ‘soft’ legal instruments. Adopting the governance lens, we can see the choice of soft legal instrument as a particular kind of regulatory technique for achieving specific aims and ambitions, but also understand more clearly the concerns that have arisen over the use of informal regulatory instruments as a means of achieving such goals. In particular, whilst considering the potential instrumental benefits of the turn to soft law, we consider the broader regulatory context in which the move away from hard law takes place and try to assess potential concerns in terms of public accountability and the rule of law— concerns that are currently fuelling the global governance debate. In doing so, we also discuss, finally, the potential for mutual learning between the fields of private and public international law, both in terms of a re-thinking of p ­ rivate law regulatory problems—adopting what might be termed a ‘constitutionalist mindset’14— as well as how a private law, ‘conflicts’ methodology might provide valuable lessons for public international law in coping with regulatory pluralism under conditions of increasing institutional complexity.15 The following sections of the chapter will first chart the more long-standing recognition and accommodation of ‘softness’ in public international law, considering in particular the narrative around the law’s apparent ‘deformalisation’ with the emergence of a global governance paradigm. Second, we consider the recognition of soft law as a form of governance in the context of private international law. Finally, and in conclusion, we will explore the question of how this mutual recognition and convergence offers more plausible forms of response, as well as opportunities for mutual learning between disciplines, in facing up to the challenge of law’s globalisation.

13  H Muir Watt, ‘The Relevance of Private International Law to the Global Governance Debate’ in Muir Watt and Fernández Arroyo (n 11) 8. 14  See eg M Koskenniemi, ‘Constitutionalism as Mindset: Reflections on Kantian Themes about International Law and Globalization’ (2006) 8 Theoretical Inquiries in Law 9. 15 See N Walker, Intimations of Global Law (Cambridge, Cambridge University Press, 2015) 106 et seq.

Soft Law Instruments in Global Governance

 109

II.  ‘Softness’ in Public International Law: ‘Deformalisation’ and the Emergence of Global Governance The emergence of ‘soft law’16 in public international law can be dated back to the period after the end of the Second World War, particularly with the creation of the United Nations (UN) and the explosion in international institutions that followed. Thus, a clear early example of soft law would be the 1948 Universal Declaration of Human Rights (UDHR). However, it was really not until the 1970s that the term came into vogue, in particular with the emergence of the field of international environmental law and the plethora of non-binding agreements that have come to characterise the field since the signing of the Stockholm ­Declaration in 1972.17 Whilst there is no one accepted definition of soft law in public international law, in its broadest sense the term can be taken to imply a situation where ‘legal arrangements are weakened along one or more of the dimensions of obligation, precision, and delegation.’18 In particular, since Richard Baxter’s somewhat pathforging work from 1980, celebrating international law in ‘her infinite variety’,19 it has been common to refer to two distinct understandings of ‘softness’ in explaining legal normativity: on the one hand, there are those provisions of binding law that are nonetheless vague and indeterminate in terms of obligation (a form of ‘soft negotium’); on the other, there are those written instruments that are formally non-binding, taking a variety of forms and used for a variety of ends, but which are nonetheless intended to have some normative influence and impact (a form of ‘soft instrumentum’).20 It is really soft law in this latter sense with which we are concerned in this paper, that is, with the specific use of a ‘written international instrument, other than a treaty, containing principles, norms, standards, or other statements of expected behavior’.21

16  The literature on soft law in international law is voluminous, and much of it will be referenced in what follows. For completeness, however, see T Fajardo, ‘Soft Law’, Oxford Bibliographies, International Law (2014), available at: www.oxfordbibliographies.com/view/document/obo-9780199796953/ obo-9780199796953-0040.xml. 17 Stockholm Declaration of the United Nations Conference on the Human Environment, June 5–16, 1972, UN Doc. A/CONF.48/14 (1972). 18  KW Abbott and D Snidal, ‘Hard and Soft Law in International Governance’ (2000) 54 International Organization 421, 422. 19  RR Baxter, ‘International Law in “Her Infinite Variety”’ (1980) 29 International and Comparative Law Quarterly 549. 20  J d’Aspremont, ‘Softness in International Law: A Self-Serving Quest for New Legal Materials’ (2008) 19 European Journal of International Law 1075, 1081–87. 21 DH Shelton, ‘Soft Law’ in D Amstrong (ed), The Routledge Handbook of International Law ­(Abingdon, Routledge, 2009) 68, 69.

110 

Richard Collins and María Mercedes Albornoz

This understanding of soft law now encapsulates a wide variety of instrument types, such as resolutions of international organisations (or organs thereof), including most obviously the UN General Assembly, but also outcome documents of international conferences, recommendations of international treaty bodies (particularly in fields like international human rights law), memoranda of understanding (MOUs), and other forms of regulatory guidelines, recommended rules and procedures and codes of conduct. Furthermore, as Dinah Shelton notes, in some instances rules of hard law may also count as soft law insofar as they have normative impacts beyond the particular treaty regime or other order within which they have formal applicability (a good example being the normative influence of decisions of regional courts and decision-making bodies). Shelton also notes the possibility of breaking these categories down further, introducing a typology of ‘primary’ and ‘secondary’ soft law instruments: the former category including general ‘legislative’ instruments aimed at all states (or peoples), such as the UDHR; the latter category including more directed recommendations, ­comments or decisions of courts and treaty bodies.22 Although formally non-binding, there are a variety of ways in which soft law instruments of this sort can have normative effects or impacts on the behaviour of states, non-state actors, individuals and other relevant bodies. In fact, Shelton identifies eight specific uses of soft law:23 1. Codification of pre-existing customary international law, helping to provide greater precision through the written text (e.g. draft articles of the International Law Commission); 2. crystallisation of a trend towards a particular norm (helping to overcome disagreement that prevents the conclusion of hard law); 3. evidence towards the formation of new customary international law; 4. consolidation of political opinion / acting as a guide for new action, or policy initiative; 5. gap-filling surrounding existing treaty norms; 6. evidence of state practice applicable in the interpretation of treaty norms; 7. providing model guidance for the development of domestic legislation (particularly relevant in the harmonisation of rules of private international law); and 8. substitution for formal legal rules in the absence of political will or slow ­progress in fostering agreement on binding legal rules. Given this vast array of uses, it is feasible to think about soft law as enhancing the flexibility of international law as a means of regulating or governing specific normative problems. Indeed, in the main, international lawyers have warmly

22  23 

ibid, 69–71. ibid, 72.

Soft Law Instruments in Global Governance

 111

embraced soft law as a necessary enhancement of the regulatory capacity of the international system.24 As Christine Chinkin puts this: The complexity of international legal affairs has outpaced traditional methods of lawmaking, necessitating management through international organizations, specialized agencies, programmes, and private bodies that do not fit the paradigm of Article 38(1) of the Statute of the ICJ. Consequently the concept of soft law facilitates international co-operation by acting as a bridge between the formalities of law-making and the needs of international life by legitimating behaviour and creating stability.25

Nevertheless, others have been far from positive in their reception of the idea of soft law and its regulatory impact on the structure of public international law. Perhaps the most famous intervention came in 1986 from the French international lawyer, Prosper Weil, who argued that international law was faced with a ‘pathological phenomenon’ in attempts by jurists to ascribe specific normative force to soft instruments, when state governments themselves, when opting to use such instruments, ‘neither intend to commit themselves legally nor feel they are doing so’.26 From Weil’s perspective, it was ‘better to reserve the term “soft law” for rules that are imprecise and not really compelling, since sublegal obligations are neither “soft law” nor “hard law”: they are simply not law at all’.27 More recently, Jan Klabbers has expressed concern that in doing away with formal procedures for substantiating binding law we risk giving licence to unrestrained administrative discretion and power: By creating uncertainty at the edges of legal thinking, the concept of soft law contributes to the crumbling of the entire legal system. Once political or moral concerns are allowed to creep back into the law, the law loses its relative autonomy from politics or morality, and therewith becomes nothing else but a fig leaf for power.28

Though it is possible to see hard and soft law in a relationship of antagonism in this way, or just to doubt—as Weil and Klabbers seem to do—the utility of adopting the terminology of ‘law’ to describe this kind of soft ‘normativity’, it seems to be undeniable both that soft law has dramatically changed the landscape of international legal regulation and that the use of soft law instruments is becoming more prevalent. In fact, it would seem to be the case now that ‘softness’ not only permeates the rules of formal institutions, but soft instruments are increasingly

24  In addition to eg Baxter (n 18) and Shelton (n 20), see also the majority of the contributions to J Pauwelyn, RA Wessel and J Wouters (eds), Informal International Lawmaking (Oxford, Oxford University Press, 2012). 25 C Chinkin, ‘Normative Development in the International Legal System’ in D Shelton (ed), Commitment and Compliance: The Role of Non-Binding Norms in the International Legal System (Oxford, Oxford University Press, 2003) 21, 42. 26 P Weil, ‘Towards Relative Normativity in International Law?’ (1986) 77 American Journal of ­International Law 413, 417. 27  ibid, 415. 28 J Klabbers, ‘The Undesirability of Soft Law’ (1998) 67 Nordic Journal of International Law 381, 391. Jean d’Aspremont expresses similar concerns in d’Aspremont (n 19).

112 

Richard Collins and María Mercedes Albornoz

promulgated by forms of ‘soft organisation’ also.29 Indeed, in an era of so-called ‘global governance’, the boundary between binding and non-binding legal normativity is evermore blurred such that we might see now a kind of gradated or graduated approach to international legal normativity overall. At one extreme, in addition to the formally binding rules of treaty and customary international law, would be the kind of regimes and institutions derived from treaty rules—the World Trade Organization (WTO) and the EU being good examples—the impact of which extends mostly, though not always exclusively, to the states parties. Relatedly, one could also include those binding determinations (as opposed to general legal rules) that are underpinned by formal legal authority (eg decisions of the International Court of Justice, resolutions of the UN Security Council, rulings of the WTO Dispute Settlement Body, etc). Again, although taking their binding character from the underpinning treaty regime, the impact of many of these decisions increasingly impacts or directly addresses other parties, including non-state actors. Moving further along the spectrum, we find much clearer examples of ‘soft’ rule making, especially considering the regulatory output of many international institutions. In particular, this would include UN General Assembly Resolutions,30 as well as the guidelines and codes of conduct of bodies like the UN Environment Programme (UNEP), the International Labour Organization (ILO) or the Food and Agricultural Organisation (FAO).31 The most striking example in this respect would be the kind of conditionality attached to the loans and bailouts agreed with the international financial institutions, such as the World Bank or International Monetary Fund (IMF).32 Going further still, we might also include the normative output of non-treaty or non-governmental organisations (eg codifications/ reports of bodies such as the International Committee of the Red Cross, or indeed policy agreements, guidelines and other instruments produced by informal transnational networks of actors operating below the level of inter-state diplomacy. And at perhaps the furthest extreme, we might also include the ‘soft’ normative output of ‘soft’ international actors, which might include private interest groups, multinational corporations, as well as informally constituted meetings of heads of states outside of traditional UN or other intergovernmental organisational structures (eg meetings of the G20 or G7/8). It is at this furthest extreme, considering soft rules developed and influenced by, but also intending to impact, non-state actors, including often individuals and

29 See eg J Klabbers, ‘Institutional Ambivalence by Design: Soft Organizations in International Law’ (2001) 70 Nordic Journal of International Law 403; J Petman, ‘Deformalization of International Organizations Law’ in J Klabbers and Å Wallendahl (eds), Research Handbook on the Law of ­International Organizations (Cheltenham, Edward Elgar, 2011) 398–430. 30  See further the contributions to Part III of this volume. 31 For a good survey of this institutional law-making practice, see RA Wessel, ‘Institutional ­Lawmaking: the Emergence of a Global Normative Web’ in C Bröllman and Y Radi (eds), Handbook on the Theory and Practice of International Law-Making (Cheltenham, Edward Elgar, 2016) 179–99. 32  The literature here is vast, but a pointed introduction is probably C Brummer, ‘Why Soft Law Dominates International Finance—and not Trade’ (2010) 13 Journal of International Economic Law 623.

Soft Law Instruments in Global Governance

 113

private actors, that we see an increasingly blurry threshold between the public and private in global governance.33 In fact, as Nico Krisch notes, it is at ‘the confluence of formal and informal, public and private, domestic and international’ that our traditional categorisations of law—our Westphalian orthodoxy—becomes most problematic, prompting reflection on the potential for mutual learning between the spheres of public and private international law to better understand how to understand and, perhaps, to bring some order to global governance.34 Undoubtedly, taking a strictly public law-inspired perspective we will have good reasons for concern over the accountability, overall coherence and legitimacy of the range of institutions and actors, formal and informal, that characterise contemporary global governance. However, it may well be that taking a private law-inspired perspective allows us to be more comfortable with such normative and institutional plurality whilst also providing a lens through which a more decentred and transparent form of ordering can be achieved.35 We will return to consider this interaction further in the last section. Before doing so, it is necessary to consider further the ways in which private international law can be understood to function as a system of global governance and the increasingly important role of soft law regulation therein.

III.  Soft Law as Governance Technique: The Case of Private International Law In the introduction, we claimed that it was plausible to consider private international law as a form of global governance. From this global perspective, private international law can be understood as a regulatory order aimed at achieving the best (consistent, procedurally and materially just) approach to the issues of jurisdiction, choice of law, the recognition and enforcement of foreign judgments, and international cooperation between authorities. Nevertheless, it remains open as to how this ambition should be achieved. Undoubtedly, the view of private international law as a kind of transnational extension of domestic law has been sustained by the so-called ‘conflicts’ approach that has dominated the field for most of the nineteenth and twentieth centuries. This approach views the question of choice of law as essentially a technical problem of applying the appropriate legal system in order to achieve a fair outcome to any given cross-border legal problem. In fact,

33 A good example would be the increasingly influential rules of the Codex Alimentarius ­ ommission, formed between the WHO and the FAO. For a good discussion of the way in which Codex C rules become ‘hardened’ through their interaction with other hard law standards, see GC Shaffer and MA Pollack, ‘Hard vs Soft Law: Alternatives, Complements and Antagonists in International ­Governance’ (2010) 94 Minnesota Law Review 706, 756–65 in particular. 34  N Krisch, ‘Global Governance as Public Authority: An Introduction’ (2012) 10 ICON 976. 35  See Muir Watt (n 4) and see Schwöbel (n 3).

114 

Richard Collins and María Mercedes Albornoz

conflict of laws has traditionally been considered as the main content of private international law, to the extent that in common law countries the whole discipline has tended to be referred to simply as ‘Conflict of Laws’, or just ‘Conflicts’. Nevertheless, it is clear that the conflicts approach has not been the only method at play in private international law over the years.36 In fact, the methodological pluralism of the discipline has been explicitly recognised and praised by scholars since, at least, the 1970s.37 Even if today the conflict of laws still has an important role to play, it has certainly lost its exclusiveness as an approach to private international law cases. This is especially true in the field of international commerce, where the substantive rules method, also known as ‘creation method’ (because it creates substantive direct solutions),38 has been increasingly used in order to regulate many issues in the life of cross-border contracts. Moreover, another method for determining the applicable law is the lois d’application immédiate method, or ‘self-limitation method’,39 where an internationally mandatory rule of a given state exclusively points to the application of the domestic law of that same state, notwithstanding the internationality of the case at hand. This last method is also relevant in foreign trade: states benefit from it when they need to guarantee that certain policies are respected, despite the contract concerned being linked to several legal systems. On this basis, then, it is possible to understand the field of private international law as having a degree of autonomy, as a system structured around certain core organising principles and embodying ‘diverse, imperfect strategies which aspire to the universal value of reducing conflicts in the exercise of private law regulation’.40 This internationalist outlook on private international law has a long pedigree in the discipline. As Muir Watt recognises, the same kind of internationalist spirit that drove the professionalisation and systematisation of public international law towards the turn of the twentieth century41 also shaped a desire to globally regulate private law transactions, leading in particular to the establishment of the Hague Conference on Private International Law (HCCH) in 1893, which would provide a forum and an impetus for the drafting of many private law treaties with universal reach.42 As Mills argues also, [The Hague Conference] invites its participants to see private international law as global law, responding to global problems, requiring global solutions. As in the ­European 36 See eg discussion in G Rühl, ‘Methods and Approaches in Choice of Law: An Economic ­Perspective’ (2006) 24 Berkeley Journal of International Law 801. 37  See H Batiffol, ‘Le pluralisme des méthodes en droit international privé’ (1974) 139 Recueil des cours de l’Académie de Droit International 1973 75. 38  A Boggiano, Derecho Internacional Privado Vol I, 2nd edn (Buenos Aires, Ediciones Depalma, 1983) 118. 39  ibid, 124. 40  Mills (n 2) 308. 41  For the best description of this internationalism and the figures involved, see M ­Koskenniemi, The Gentle Civilizer of Nations: The Rise and Fall of International Law 1870-1960 (Cambridge, Cambridge University Press, 2001). 42  Muir Watt (n 4) 375–76.

Soft Law Instruments in Global Governance

 115

Union, the harmonisation of private international law it pursues offers not merely a change in the source of private international law, but a change in its character and status—from private rules designed to deal with specific disputes, to a technique of ­public global governance.43

Indeed, since the signature of the first Hague conventions on private international law issues, from 1902 to 1945 (seven instruments known as the ‘old’ ­conventions),44 40 newer instruments have been adopted up to the present day.45 All of these instruments are binding conventions and protocols, except the most recently approved instrument: the Principles on Choice of Law in International Commercial Contracts, adopted on 19 March 2015.46 The adoption of the Principles is particularly relevant for current purposes as it demonstrates that the HCCH is open to the use of soft law as a codification technique. In the Americas, the work performed by the Inter-American Specialized Conference on Private International Law (CIDIP) in the context of the Organization of American States (OAS) can also be seen through this lens as a global governance tool. The Inter-American legal instruments adopted in this regional codification forum are aimed at harmonising private international law throughout the continent. To this effect, hard law was traditionally and mainly used. Since the first CIDIP47 held in 1975, 21 international conventions were signed. However, in the last two CIDIP (VI and VII), taking place at the start of the twenty-first century, a shift to soft law can be appreciated. This is the case with, for example, the 2002 Model Inter-American Law on Secured Transactions and the 2009 Model Registry Regulations under the Model Inter-American Law on Secured Transactions. It is worth noting that openness to soft law was reflected in the adoption of an international legal instrument in the Americas well before the HCCH. The choice of soft law or hard law in these examples will depend on various factors, not least of which are the feasibility of achieving consensus among States and the disposition of States to accept formally binding standards. From the perspective of private international law conceived as regulatory governance, what matters is the potential of any new international legal instrument to have an effective and positive incidence in the life of people or corporations involved in cross-border legal relationships. Nevertheless, these reflections perhaps overemphasise an image of private international law as being driven by the regulatory activities of states, particularly through intergovernmental conferences and

43  A Mills, ‘Variable Geography, Peer Governance, and the Public International Law Perspective on Private International Law’ in Muir Watt and Fernández Arroyo (n 11) 258. 44  Available at the HCCH’s website www.hcch.net/en/instruments/the-old-conventions. 45  Available at: www.hcch.net/en/instruments/conventions. 46 Full text and accompanying commentaries are available at: www.hcchnet/en/instruments/ conventions/full-text/?cid=135. 47  All the hard law or soft law instruments adopted by the seven CIDIP are accessible from the website of the Department of International Law of the OAS: www.oas.org/en/sla/dil/private_international_law_conferences.asp.

116 

Richard Collins and María Mercedes Albornoz

treaty-based ­interventions. This perhaps focuses too squarely on the influence of state actors and reinforces the hierarchy of public international legal regulation over the ­private sphere. It thereby fails to fully capture the more autonomous private regulation that has evolved within the field, particularly under the organising impetus of party autonomy. Indeed, it is in the spaces left unregulated by states that there emerges more informal modes of global governance, and it is within these spaces that soft law instruments become particularly relevant.48 In this respect, the use of soft codification is not simply the reserve of the intergovernmental domain, but sees an increasing influence from private actors, in particular in how the rules are implemented and take on normative force.49 Thus, one can see a clear relocation or transition of sovereignty in the field of regulating private commerce.50 Soft law instruments in this field nearly always contain substantive rules.51 Yet, nothing impedes the presence of indirect rules— facilitative principles—in such instruments, thus offering greater discretion to private actors at the expense of sovereign control. This is precisely the case in the Hague Principles on Choice of Law in International Commercial Contracts, which affirm the principle of party autonomy. According to this principle, the parties to an international commercial contract can choose the law or the ‘rules of law’52 to govern their contract. Of course, the creation of soft law rules in the field of private international law involves a variety of stakeholders, and in this respect international organisations and (frequently through them) States have a particularly important role. Nevertheless, private stakeholders are undoubtedly of considerable influence, not only in the formation of the rules but also in their adjudication, even often relying on their own private dispute resolution bodies to apply such rules. A paradigmatic example of this is the International Chamber of Commerce (ICC), which gathers merchants around the world. As per its website, the ICC is ‘the world’s largest ­business organization working to promote international trade, responsible business conduct and a global approach to regulation to accelerate inclusive and sustainable growth to the benefit of all’.53 A vital tool to fulfil its regulatory 48  G Kaufmann-Kohler, ‘La codificación y la normatividad del soft law en el arbitraje internacional’ in J Basedow et al (eds), ¿Cómo se codifica hoy el derecho comercial internacional? (Asunción, La Ley Paraguaya, CEDEP, Thomson Reuters, 2010) 125. 49  See JR Albornoz and PM All, ‘La lex mercatoria, el soft law y el derecho internacional privado’ in JA Silva (ed), Estudios sobre lex mercatoria. Una realidad internacional 2nd edn (Mexico City, Instituto de Investigaciones Jurídicas de la Universidad Nacional Autónoma de México, 2013) 17. 50  Muir Watt (n 4) 357–58. 51 Consider, for instance, the 1996 UNCITRAL Model Law on Electronic Commerce, including its Guide to Enactment, the International Chamber of Commerce Incoterms Rules 2010, or the UNIDROIT Principles of International Commercial Contracts 2010. 52 For a critical approach to Art 3 of the Hague Principles, on the choice of rules of law, see R Michaels, ‘Non-State Law in The Hague Principles on Choice of Law in International Commercial Contracts’ in DP Fernández Arroyo and JA Moreno Rodríguez (eds), Contratos internacionales (Buenos Aires, Organización de los Estados Americanos / Asociación Americana de Derecho Internacional Privado, 2016). 53  See www.iccwbo.org/about-us/.

Soft Law Instruments in Global Governance

 117

mission is soft law.54 Furthermore, the ICC has its own International Court of Arbitration. The recipients of private international law soft legal instruments are manifold. Corporations and individuals, especially those who participate in international commerce, have the freedom to choose whether to adopt soft law to govern their contracts. If they do so, for that specific international contract, those originally non-binding rules become binding. In fact, certain soft law instruments are mainly addressed to them. Besides, other private recipients of soft law instruments are arbitrators, who apply them in order to settle disputes. However, those soft law instruments dealing with private international law issues can also target States. Legislators and courts, indeed, are key when it comes to assessing the practical impact of such instruments. As a codification technique, soft law contributes to build a global consensus, to standardise many rules of cross-border trade. Such a contribution has an obvious positive impact in legal certainty for international business operators. A close examination of the role soft law plays as a cohesive element in a context of regulatory fragmentation and divergence requires looking at the relationship between soft law and hard law rules, the latter including rules of either an international or a domestic source. This is necessary because it is impossible to conceive of soft law as absolutely independent from hard law.55 In private international law literature, often, the relationship between hard and soft law is studied in terms of alternatives, complements and antagonists, and some authors even place the emphasis on antagonism.56 From our perspective, however, the most salient aspect of that relationship is complementarity. In fact, while we recognise that antagonism between a hard law rule and a soft law rule could happen, thinking about private international law as a form of governance leaves room for alternative means of norm implementation, with soft and hard law techniques playing complementary roles in this respect. Of course, none of this is to take way from the increasing concern that the ­growing autonomy and normative influence of private actors in global governance might raise accountability concerns, that there might be an absence of democratic oversight and public law-inspired constitutional controls. ­However, it might well be naïve to presume that the best organisation of the private sphere would come from reinstating unrealistic public law-inspired normative hierarchies. Indeed, as we show in the final section below, insofar as the global governance paradigm throws up questions of coordination and accommodation between a plurality of actors and standards it might well be that the sphere of private international law—at least as we have conceived it here—offers s­ ignificant learning potential

54 

One of the most successful ICC soft law instruments is the Incoterms Rules. Albornoz and All (n 49) 24. 56  See Shaffer and Pollack (n 33). 55 

118 

Richard Collins and María Mercedes Albornoz

for p ­ ublic international lawyers in coping with the growing ‘disorder of normative orders’ that arguably now characterises the post-­Westphalian global legal space.57

IV.  Responding to Law’s Globalisation? Order and Justice within Contemporary Frameworks So far in this chapter we have attempted to chart the increasing recognition of the phenomenon of global governance and its impact on how we understand the nature of the public and private international legal orders. We have utilised the example of soft law as a means of illustrating the diverse ways in which normative standard setting and regulatory mechanisms are deployed for a variety of regulatory goals, in the private as much as the public sphere. Whilst we are broadly positive about the instrumental benefits of soft law as an alternative regulatory technique in this respect, we also recognise that the more the public and private converge in the field of global governance, the weaker may be the traditional tools of constitutional accountability found at the domestic and international levels. Thus, the more there is convergence in how we understand the function of public and private international legal regulation, the more the two fields can be understood as essentially responding to similar problems.58 The question that remains, therefore, and one which we want to briefly consider in this final section, is how we might harness the recognition of the diminishing divide between disciplinary concerns and growing confluence in private and public regulatory agendas in order to better respond to law’s globalisation. Thus far, much of the response to this concern, particularly amongst public international lawyers and comparative constitutional theorists, has been to seek a compensatory agenda that responds to the breakdown in the traditional Westphalian divide between the state and the inter-state, and the public and the private, by seeking to deploy constitutional vocabulary and public law principles to impose order and constitutional accountability on the field of global governance. Many of these perspectives, motivated by well-meaning concerns for accountability within, as well as the systemic integrity of, international law, advocate for a range of ‘public’ gatekeeper principles to evaluate and judge the impact of global governance, from an assessment of the ‘publicness’ of the acts of, or

57  N Walker, ‘Beyond Boundary Disputes and Basic Grids: Mapping the Disorder of Normative Orders’ (2008) 6 ICON 373. 58  As Mills argues, ‘Public and private international law are increasingly facing the same problems and issues—reconciling the traditional role and impact of the state with the legalisation of the international system, and balancing universal individual rights against the recognition of diverse cultures, all under the shadow of globalisation.’ See Mills (n 2) 2.

Soft Law Instruments in Global Governance

 119

forms of authority ­exhibited by institutionalised decision-making bodies59 to the development of a more overarching and cohesive framework under the banner of ‘Global Administrative Law’.60 Others have gone further to argue for the necessary ‘constitutionalisation’ of international law, or of specific regimes therein, as a means to counteract or compensate for the seeming erosion of constitutional authority at the state level.61 However, many of these perspectives are increasingly critiqued to the extent that they would seem to presuppose the existence of a ­cohesion and systemic integrity that belies the nature of the allocation of authority at the global level.62 Elsewhere, for instance, one of the current authors has argued extensively that these kind of public law-inspired, compensatory models, fail to take seriously the unique constitutional ordering of international law and the necessarily plural dispersal of authority and normative influence that results.63 For this reason, it might well be the case that public international lawyers have more to learn from the field of private international law, which for a long time has existed—as we have sought to show—as an attempt to bring a non-­hierarchical systemic ordering to a divergent, competitive normative ‘pluriverse’. Indeed, in the wake of apparent scepticism over the possibility of any universal public lawinspired organisation of the complex institutional structures of global governance, attention increasingly turns towards a more ‘laterally coordinate’ vision of ‘global’ as opposed to international law—one which accepts divergence and difference and seeks to regulate it only insofar as it suggests potential mechanisms and methods for accommodating such normative plurality.64 At the core of this

59  See eg the project on developing the ‘publicness’ of public international law under the auspices of the Max Planck Institute of Comparative Public Law and Public International Law: A von Bogdandy, P Dann and M Goldmann, ‘Developing the Publicness of Public International Law: Towards a Legal Framework for Global Governance Activities’ (2008) 9 German Law Journal 1375, as well as the various contributions in the rest of the symposium that follows. And recently see eg M Goldmann, ‘A Matter of Perspective: Global Governance and the Distinction between Public and Private Authority (and Not Law)’ (4 November 2013) www.ssrn.com/abstract=2260293, in which legitimate international public authority is identified (at 18) on the basis of whether ‘the actor may reasonably claim to act on behalf of a community of which the affected person or entity is a member, or a member of such member’. 60  See eg N Krisch and B Kingsbury, ‘Introduction: Global Governance and Global Administrative Law in the International Legal Order’ (2006) 17 European Journal of International Law 1; and see the symposium which follows at 1–278 of the same edition; B Kingsbury, N Krisch and R Stewart, ‘The Emergence of Global Administrative Law’ (2005) 68 Law and Contemporary Problems 15, and the rest of the symposium in the same issue; and more recently, B Kingsbury, ‘The Concept of “Law” in Global Administrative Law’ (2009) 20 European Journal of International Law 23, 31–33. 61  See, eg A Peters, ‘Compensatory Constitutionalism: The Function and Potential of Fundamental International Norms and Structures’ (2006) 19 Leiden Journal of International Law 579, 585. 62  See, eg J Klabbers, ‘Constitutionalism Lite’ (2004) 1 International Organizations Law Review 31; JL Dunoff, ‘Constitutional Conceits: The WTO’s “Constitution” and the Discipline of International Law’ (2006) 17 European Journal of International Law 647; and see discussion in R Collins, ‘The Rule of Law and the Quest for Constitutional Substitutes in International Law’ (2014) 83 Nordic Journal of International Law 87. 63  See especially, ch 9 of R Collins, The Institutional Problem in Modern International Law (Oxford, Hart, 2016). 64  See, eg Walker (n 15) 106 et seq.

120 

Richard Collins and María Mercedes Albornoz

idea is not just a vision for conflict alleviation, but a resuscitation of a more longstanding ‘cosmopolitan’ agenda,65 which, for Mills, for instance, we might trace back to a time before the Westphalian state, inspired by the Roman tradition of jus gentium.66 Much more sustained academic engagement would be necessary to flesh out such a theoretical vision for the ordering of global governance.67 Whilst we cannot pursue that task here, one caveat is perhaps necessary. It seems clear that to simply suggest that our inherited Westphalian legal forms have been supplanted by an alternative vision of ‘global law’ perhaps overplays the demise of the kinds of rules, principles and institutions that constitute and continue to reproduce these forms.68 Nevertheless, to the extent that we might revisit the very nature of our inherited legal traditions—as we have tentatively suggested here, in our attempt to rethink public and private international law as non-hierarchical systems of regulatory governance—the more scope there might be for both utilising and critiquing long-standing regulatory techniques for the management of conflict between diverse legal orders, that is, to bring some measure of order and coherence to the challenge of law’s globalisation including, as a notable example, the increasing reliance on soft law instruments.

65 See, eg R Wai, ‘Transnational Liftoff and Juridical Touchdown: The Regulatory Function of Private International Law in an Era of Globalization’ (2002) 40 Columbia Journal of Transnational Law 209. 66  See A Mills, ‘The Private History of International Law’ (2006) 55 International and Comparative Law Quarterly 1. See also on the universalism of the jus gentium paradigm, H Texeiro Valladao, Derecho internacional privado. Introducción y parte general (Ciudad de México, Editorial Trillas, 1987) 130. 67  See also the chapter by French and Ruiz Abou-Nigm in this volume. 68 See further R Collins, ‘The Slipperiness of “Global Law”’ (2017) 37 Oxford Journal of Legal Studies 714.

6 The Role of Global Values in the Evaluation of Public Policy in International Investment and Commercial Arbitration MARÍA BLANCA NOODT TAQUELA AND ANA MARÍA DAZA-CLARK

I. Introduction Public policy is an elusive concept in the area of both private and public international law. Attempting a comparison between its contours and applicability within each of these fields of law may prove a difficult exercise if not examined in the context of similar situations out of a narrow set of common features. An interesting area of comparison is that of international arbitration, both commercial and investment; a similar comparison has been made in the context of transparency in a separate chapter of this collection.1 Commercial and investment arbitration often concern similar disputes when they involve foreign investors and state owned companies,2 but while the private nature of international commercial arbitration is not likely to change, international investment arbitration’s confluence between private and public regulation continues in a state of flux.3 The question this contribution addresses is how the principle of public policy is treated under private and public international law, investigating at which point— if any—these two fields of law overlap, how they differ and if their respective approaches to public policy is broad or narrow. Moreover, we examine the way in which the principle of public policy serves as a ‘window’ enabling ideas external to both private and public international law to travel into the respective fields.4

1 

See chapter 9 by Foster in this volume. K-H Böckstiegel, ‘Commercial and Investment Arbitration: How Different Are They Today? (The Lalive Lecture 2012)’ (2012) 28 Arbitration International 577, 578. 3 See J Alvarez, ‘Is Investor-State Arbitration “Public”?’ (2016) Journal of International Dispute Settlement 7. 4  See chapter 2 by d’Aspremont and Giglio in this volume. 2  See

122 

María Blanca Noodt Taquela and Ana María Daza-Clark

One of our central arguments revolves around the idea that public policy under the rules of private international law, as grounds for rejecting the application of foreign law, judicial judgments and arbitral awards, has become narrower and offers more certainty after more than five decades of application of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards5 (New York Convention). Conversely, it appears that use of a public policy argument under public international law rules, in the context of investor-state arbitration, is often invoked by respondent states to protect their regulatory freedom; and thus the scope of application of a public policy defence appears to be widening. This is not a phenomenon that is being observed in international commercial arbitration even where such arbitration involves a state or state-owned entity. Typically, arbitral awards in international commercial arbitration are not perceived as restricting states’ regulatory freedom—ie, when a sovereign state has been sued under a breach of a concession contract or similar agreements. Additionally, breaches of a concession contract by a state or its publicly-owned entities are not considered sovereign acts, even though they are often linked to the provision of public services and other activities affecting the welfare of civil society. The scope of our analysis will be further circumscribed to study how the invocation of so-called ‘global values’ affects the evaluations that arbitrators and judges make of the public policy grounds for refusing the recognition and enforcement of arbitral awards (in private international law) and in the application of the standards of protection in international investment agreements, which fall within the scope of public international law. In both cases public policy constitutes an exception to the application of the provisions of an international treaty. Admittedly, the invocation of public policy in the context of international investment agreements is quite different from the application of public policy in the operation of the New York Convention. However, for the purpose of the comparison proposed in this chapter, we suggest to look at the public policy exception from the perspective of a contracting party to an international agreement—either within private international law or public international law—ie, where it is used to refuse to recognise the effects of an arbitral award under the New York Convention or to justify a potential breach of an international investment agreement. This contribution does not deal in particular with the set-aside or vacateur of arbitral awards (typically based on the national arbitration law of the seat of the arbitration); likewise, it does not address mandatory rules and whether they should be considered as part of a public policy assessment of the country where recognition and enforcement is sought. The contribution focuses on the analysis of public policy as those fundamental principles of the legal system of the ­country of recognition or the state subject to international investment arbitration.

5 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 330 UNTS 3, 10 June 1958 (157 states parties) (New York Convention).

Global Values and International Arbitration

 123

In so doing, the following issues are examined: (a) public policy as an exception to compliance with international obligations; (b) public policy and difficulties in its definition; (c) public policy as a narrow exception in private international law and a broad defence in public international law; (d) types of global values that ­influence international arbitration; (e) incidence of global values in the interpretation of public policy in international and commercial and investment arbitration; and (f) public policy concerning the merits of the dispute and the arbitral procedure.

II.  Public Policy as an Exception to Compliance with International Obligations Exceptions under international treaties, either applicable in the ambit of private international law or public international law are almost always to be interpreted narrowly. The public policy exception is not different, whether it is expressly included or not in international agreements such as the New York Convention, the Convention on the Settlement of Investment Disputes of 19656 (ICSID Convention) or international investment agreements; its meaning and the scope of its application, in case of disagreement among its contracting parties, is typically ascertained using the rules of treaty interpretation codified in the 1969 Vienna Convention on the Law of Treaties.7 In the context of the public policy exception, this contribution focuses the analysis on three instruments: the New York Convention, the ICSID Convention, and more generally international investment agreements, which include bilateral investment treaties (BITs) and free trade agreements. These are all primarily international agreements between sovereign States, directed to assist traders and investors in the enforcement of arbitral awards (New York Convention), facilitate the settlement of foreign investment disputes (ICSID Convention), and provide legal stability and predictability for foreign investors through the adoption of substantive standards of treatment (international investment agreements). These agreements bolster the benefits of swiftness, finality and neutrality of international arbitration; yet their application may be limited by different types of exceptions. One such exception is public policy, which may or may not be expressly incorporated in the agreement. Further complications arise from the difficulties in defining public policy once it has been invoked as grounds to refuse enforcement or to preclude responsibility for breach of international obligations. These issues are discussed in turn in the following sections.

6  Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 575 UNTS 159, 18 March 1965 (ICSID Convention). 7  Vienna Convention on the Law of Treaties, 1155 UNTS 331, 23 May 1969 (Vienna Convention).

124 

María Blanca Noodt Taquela and Ana María Daza-Clark

III.  Public Policy and the Difficulties in its Definition The concept of public policy in private international law was originally developed by Friedrich Karl von Savigny in 1849. He argued that when a state is bound to apply foreign law, that state makes an express or tacit reservation not to apply foreign law, when applying that law would be contrary to provisions in the law of the forum law that are completely compulsory (publica utilitatis).8 Charles ­Brocher was the first scholar who distinguished domestic public policy from international public policy: domestic public policy represents those rules that may not be dismissed by party autonomy; international public policy equates to those most basic and explicit principles of justice and fairness of all states. The application of a foreign law will be rendered inapplicable if it violates the international public policy of the forum state. The autonomy of the parties to create rules that apply to an international contract are limited by international public policy. Recognition and enforcement of foreign judgments or arbitral awards are also bound by international public policy. In a more general way one may say that any request for international judicial cooperation may be denied if the requested act violates the basic principles of international public policy of the forum state. In regard to the distinction between international and domestic public policy, statements by Uruguay in the 1970s are instructive.9 The Uruguay Declaration to the Inter-American Convention on General Rules of Private International Law of 1979 stated: ‘Nevertheless, Uruguay wishes to state expressly and clearly that, its interpretation of the aforementioned exception refers to international public policy as a juridical institution, not necessarily identifiable with the internal public policy of each state.’10 Therefore, the established Uruguayan position is that the approved formula conveys an exceptional authorisation to the various States P ­ arties to declare in a non-discretionary and well-founded manner that the precepts of foreign law are inapplicable whenever these manifestly offend the standards and principles essential to the international public order on which each individual State bases its legal individuality.11 8 FK von Savigny, Sistema de Derecho Romano actual vol VI (M Ch Guenoux, Jacinto Mesía and Manuel Poley trans, F Gongora y Compañía, Editores, 1879) ch CCCXLIX, 142–46; SJ Battello ­Calderón, El orden público en el Derecho Internacional Privado del Mercosur (Córdoba, Advocatus, 2012) 24–25. 9  See generally, CF de Aguirre, ‘Public Policy: Common Principles in the American States’ (2016) 379 Recueil des Cours 73. 10  See www.oas.org/juridico/english/sigs/b-45.html. Emphasis added. 11  Note that the distinction between internal and international public policy has found its way (via a proposal of the Uruguayan delegation) into the current Draft of the Preliminary Explanatory Report of the Draft Hague Convention on the Recognition and Enforcement of Judgments, prepared by the Hague Conference on Private International Law (HCCH). The Preliminary Explanatory Report, prepared by FJ Garcimartín Alférez and G Saumier (Preliminary Document No 7 of October 2017), deals with public policy as a ground for refusal of foreign judgments in paras 240–48. The Draft Convention updated to November 2017 and the Preliminary Explanatory Report are available on www.hcch.net/ en/projects/legislative-projects/judgments.

Global Values and International Arbitration

 125

The leading case in this matter is Parsons & Whittemore, rendered by the United States Second Circuit Court of Appeals in 1974.12 In this well-known judgment, the party resisting enforcement argued that its actions had been dictated by the severance of diplomatic relations between the United States and Egypt, to which the Court responded that: ‘[t]o read the public policy defence as a parochial device protective of national political interests would seriously undermine the ­Convention’s utility’.13 The distinction between domestic public policy and international public p ­ olicy has also found its way into international arbitration jurisprudence. Fouchard clearly explained this distinction following a judgment of the Paris Court of Appeals.14 The Court held that: a breach of domestic public policy—assuming that it has been established—does not provide the grounds on which to appeal against a ruling granting enforcement in France of a foreign arbitral award, because [the relevant provision of French law] only refers to cases in which the recognition or enforcement of an award would be contrary to ­international public policy.15

Thus, Fouchard concluded that the only relationship between international ­public policy and domestic public policy was purely negative, hence, as international public policy is at the heart of domestic public policy, a rule which is not even a matter of domestic public policy could not be considered as belonging to international public policy.16 Notwithstanding the difficulties that exist in defining the content of international public policy, the Swiss courts have identified by way of obiter dictum a long assortment of international public policy violations, including violation of the principle of pacta sunt servanda, abuse of right, failure of good faith, expropriation without just compensation, corrupt practices, racial, gender or ethnic discrimination, forced labour, and violations of human dignity.17 Another conception of public policy is the so called ‘truly international’ or ‘transnational public policy’ developed by Pierre Lalive, and which can be defined

12  Parsons & Whittemore Overseas v Société Générale de l’Industrie du Papier (RAKTA) [1974] 508 F.2d 969. 13  ibid, para 10. 14  E Gaillard and J Savage (eds), Fouchard, Gaillard and Goldman On International Commercial Arbitration (Dordrecht, Kluwer Law International, 1999) para 1647. The authors state that ‘The courts draw a clear distinction between domestic public policy and international public policy, pointing out that for the purposes of Article 1502 5° no account should be taken of the domestic public policy rules of a foreign jurisdiction, or indeed of the rules of French domestic public policy (in other words, of the mandatory provisions of French domestic law).’ See also case law mentioned in fn 367. 15  Intrafor Cofor v Gagnant, France, Court of Appeals Paris, 12 March 1985, 1985 Revue de l’arbitrage, 299, cited by Gaillard and Savage (n 14) fns 368, 203. 16  Gaillard and Savage (n 14) para 1647, 954 and case law mentioned in fn 369. 17  GA Bermann, Recognition and Enforcement of Foreign Arbitral Awards: the Interpretation and Application of the New York Convention by National Courts (London, Springer, 2017) 62. In a controversial decision of 2006, however, the Swiss Federal Tribunal held that competition law rules do not form part of International Public Policy, basically for lack of universality, ibid, fn 252.

126 

María Blanca Noodt Taquela and Ana María Daza-Clark

as public policy derived from the comparison of the fundamental requirements of national laws and of public international law in particular.18 In relation to the question whether there is a universal or transnational character to the concept of public policy, different jurisdictions have taken different approaches. The Italian courts have stated, for instance, that public policy refers to ‘a body of universal principles shared by nations of the same civilization, aiming at the protection of fundamental human rights, often embodied in international declarations or conventions.’19 Its closeness to public international law raises scepticism as to the suitability of this conception within the sphere of international commercial arbitration. As Reisman warns ‘its invocation becomes an easy way for those claiming to have an insight into the heart and the soul of international law to affect their own preferences without having to prove that they have become customary international law’.20 It is widely accepted that public policy within the meaning of Article V(2)(b) of the New York Convention refers to the principles of international public policy of the forum State. Indeed, Article V(2)(b) explicitly refers to ‘the public policy of that country’, in reference to the country where recognition and enforcement is sought.21 The UNCITRAL Digest on Commercial Arbitration provides a list of the types of public policy defences that may be successful in the context of an Article V(2)(b)(ii) enforcement action: (1) a fundamental principle of the law or morality or justice was violated; (2) the award fundamentally offended the most basic and explicit principles of justice and fairness or showed intolerable ignorance or corruption on part of the arbitral tribunal; or (3) the award was in conflict with a principle concerned with the very foundations of public and economic life. For example, the public policy defence would be applicable in cases where an arbitration award was procured through corruption, bribery, fraud and/or other serious procedural irregularities.22

18  P Lalive, ‘Ordre public transnational (ou réellement international) et arbitrage international’ [1986] Revue de l’arbitrage 329, and for an English version ‘Transnational (or Truly International) Public Policy and International Arbitration’ in P Sanders (ed), ICCA Congress Series no. 3, Comparative Arbitration Practice and Public Policy in Arbitration (1987) 257, cited by Gaillard and Savage (n 14) para 1648, 954–55 and fn 370. 19 UN Commission on International Trade Law (UNCITRAL), Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (2014) www. newyorkconvention1958.org/ (UNCITRAL Guide) para 14 and fn 23. 20  WM Reisman, ‘Law, International Public Policy (So called) and Arbitral Choice in International Commercial Arbitration’ in AJ van den Berg (ed) International Arbitration 2006: Back to Basics?, ICCA Congress Series 13/2007 (Dordrecht, Kluwer Law International, 2007), as quoted by N Junngam, ‘Public Policy in International Investment Law: The Confluence of Three Unruly Horses’ (2016) 45 Texas International Law Journal 81. 21  UNCITRAL Guide (n 19) paras 5–10. 22 UNCITRAL, 2012 Digest of Case Law on the Model Law on International Commercial ­Arbitration (New York, UN, 2012, www.uncitral.org/uncitral/en/case_law/digests/mal2012.html (UNCITRAL Digest) 160, para 132, with plenty of case law cited in fns 843–46.

Global Values and International Arbitration

 127

In international investment law, public policy is a broader concept, the contours of which follow ever-changing national, regional and global societal ­values. Hence, broadly speaking, public policy covers those societal values, which in turn inform the public interest. As noted by Maupin, while not all investment disputes originate from issues related to public policy, those that do are likely to negatively impact the public interest.23 Private and public international law share most of these common concerns, many of which have been addressed in international treaties, such as human rights conventions and covenants. Among those shared principles of public policy is good faith. It has been addressed by international investment tribunals, in cases where the investor acted in contravention of the domestic legislation of the host state when acquiring the investment. In Plama v Bulgaria24 the tribunal refused to enforce Bulgaria’s treaty obligations, concluding that the claimant could not rely on the protection of the Energy Charter Treaty. In so doing the tribunal stated that by obtaining the investment by deceitful means, in violation of Bulgarian law, the investment would be contrary to the principle nemo auditur propriam turpitudinem allegans … It would also be contrary to the basic notion of international public policy—that a contract obtained by wrongful means (fraudulent misrepresentation) should not be enforced by a tribunal.25

The essence of public policy reveals an approach that allows the courts to reject an award where there is a violation of it most fundamental norms of justice, but which may not have a precise definition. The October 2015 International Bar Association Report on the public policy exception in the New York Convention reviewed the use of the public policy concept in more than 40 jurisdictions, and confirms that it is difficult to clearly define the concept.26 However, a lack of precise legal definition is a hallmark of broad abstract principles and this is not problematic on its face. Under the narrow concept of public policy, enforcement of foreign arbitral awards may be denied on the basis of public policy only where enforcement would violate the forum state’s most basic notions of morality and justice. Several ­jurisdictions, such as Australia, Cyprus, France, Germany, Hong-Kong, India and Switzerland have relied on this concept of public policy.27 Along the

23  JA Maupin, ‘Public and Private in International Investment Law: An Integrated System Approach’ (2014) 54 Virginia Journal of International Law 6. 24  Plama Consortium Limited v Republic of Bulgaria, ICSID Case No ARB/03/24, Award of 27 August 2008. 25  ibid, para 143. 26 International Bar Association (IBA) Subcommittee on Recognition and Enforcement of ­Arbitral Awards, Report on the Public Policy Exception in the New York Convention, October 2015, www.ibanet.org/ LPD/Dispute_Resolution_Section/Arbitration/Recogntn_Enfrcemnt_Arbitl_Awrd/­ publicpolicy15.aspx. 27  UNCITRAL Guide (n 19) para 5, fn 6.

128 

María Blanca Noodt Taquela and Ana María Daza-Clark

same lines, the German courts have considered that an arbitral award contravenes public p ­ olicy when it violates a norm that affects the basis of German public and economic life or irreconcilably contradicts the German perception of justice.28 In 2006, a Swiss court held that an arbitral award contravenes public policy ‘if it disregards essential and widely recognized values which, according to the conceptions prevailing in Switzerland, should form the basis of any legal order’.29 The Court of Appeal of England and Wales considers that public policy is not a ­concept that lends itself to a precise definition; the Court acknowledged that ‘considerations of public policy can never be exhaustively defined.’30 More recently, the English courts have held that the defence that enforcement would be contrary to public policy is stated without an express burden of proof … This is no doubt because it must always be open to the court to take a point of public policy of its own motion.31

Commentators note that it is consistent with the letter and spirit of the New York Convention that, as a matter of principle, the mandatory rules of the enforcement forum should be considered as part of its public policy when they reflect that forum’s fundamental concepts of morality and justice, from which no derogation can be allowed.32 The UNCITRAL Working Group that prepared the Amendments to the ­Arbitration Model Law, adopted in 2006, noted that the notion of public policy was a very vague term, described as insusceptible to definition in a number of countries. The Working Group stated that there are at least three different types of public policy: (1) domestic public policy understood as covering all mandatory provisions of domestic legislation; (2) public policy rules specifically established in domestic legislation for international relationships; and (3) the very limited set of rules established at the transnational level and sometimes referred to as international public policy.33 In summary, the contents of public policy are a moving target which in the domestic context are likely to mutate as the values that shape the domestic legal order of states change over time. In order to minimise the risk of p ­ arochial outcomes, it has been argued that in the area of international commercial ­

28 Germany Oberlandesgericht [OLG] Munich, 28 November 2005, 34 Sch 019/05; Germany, ­ berlandes-gericht [OLG] Düsseldorf, 21 July 2004, VI Sch (Kart) 1/02; Germany, Hanseatisches O Oberlandesgericht [OLG] Bremen, 30 September 1999, (2) Sch 04/99; Germany, Bundesgerichtshof [BGH], 18 January 1990, III ZR 269/88, judgments mentioned by UNCITRAL Guide (n 19) para 9 and fn 12. 29  X SpA v Y Srl, Switzerland, Federal Tribunal, 8 March 2006, Arrêts du Tribunal Fédéral (2006) 132 III 389. 30  Deutsche Schachtbau-und Tiefbohrgesellschaft mbH v Shell International Petroleum Co Ltd, ­England and Wales Court of Appeal, 24 March 1987, [1990] 1 AC 295. 31  Gater Assets Ltd v Nak Naftogaz Ukrainiy [2007] EWCA Civ 988. 32  Gaillard and Savage (n 14) 996. 33  Report of the Working Group on Arbitration on the work of its thirty-eighth session, UN Doc A/ CN.9/524 (12–16 May 2003) para 38.

Global Values and International Arbitration

 129

a­ rbitration, public policy should encompass something more than a contravention of national laws.34 As the Constitutional Court of Colombia expressed: ‘The notion of “public policy” must be in accordance with international principles. Otherwise, Colombia will be condemned to economic isolation, unthinkable in the present century.’35 This seems to reaffirm that such international principles are best found in sources and relevant rules of public international law in order to guarantee a harmonised approach to international public policy.

IV.  Public Policy as a Narrow Exception in Private International Law and a Broad Defence in Public International Law Under the New York Convention, inconsistency with public policy of the state where recognition and enforcement of the arbitral award is sought is one of the grounds for refusal of foreign arbitral awards. Article V reads as follows: 2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: […] (b) the recognition or enforcement of the award would be contrary to the public policy of that country.

Similar provision can be found in Article 5 of the Inter-American Convention on International Commercial Arbitration36 and Article 36 of the UNCITRAL Model Law on International Commercial Arbitration.37 The European Convention on International Commercial Arbitration38 does not expressly mention the grounds of public policy, it only deals with it indirectly through rules on the setting aside of an arbitral award in the jurisdiction of the seat of the arbitration.39 The ICSID Convention provides for its own rules on enforcement of arbitral

34 

See G Born, International Commercial Arbitration 2nd edn (Dordrecht, Kluwer, 2014) ch 26.

35 ibid.

36 Inter-American Convention on International Commercial Arbitration, 1435 UNTS 245, 30 ­January 1975 (19 states parties). 37 UNCITRAL, Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006, www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_ arbitration.html. 38  European Convention on International Commercial Arbitration, 21 April 1961. 39  ibid, art IX, on setting aside of the arbitral award: ‘1. The setting aside in a Contracting State of an arbitral award covered by this Convention shall only constitute a ground for the refusal of recognition or enforcement in another Contracting State where such setting aside took place in a State in which, or under the law of which, the award has been made and for one of the following reasons: … 2. In relations between Contracting States that are also parties to the New York Convention … paragraph 1 of this Article limits the application of Article V(1)(e) of the New York Convention solely to the cases of setting aside set out under paragraph 1 above.’

130 

María Blanca Noodt Taquela and Ana María Daza-Clark

awards. ­Pursuant to Article 53, awards ‘shall be binding on the parties and shall not be subject to appeal or any other remedy except for those provided in the Convention.’ Article 54 states: ‘(1) Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary ­obligations imposed by that award within its territories as if it were a final judgment of a court in that State.’ It is clear that the Contracting Parties are under the obligation to recognise arbitral awards rendered under the ICSID Convention, making them directly enforceable. A number of Contracting Parties to the ICSID Convention have adopted specific domestic legislation in order to make the provisions of ­Articles 53 and 54 operative.40 The ICSID Convention is silent regarding any grounds—including public policy—to refuse recognition or enforcement of arbitral awards. This is because during its negotiation, proposals to introduce any level of refusal on the grounds of public policy were rejected by the Contracting Parties.41 ­Nevertheless, there have been a few instances in which domestic courts, requested to enforce ICSID awards, erroneously brought the issue of public policy into their analysis.42 Instead, the ICSID Convention offers its own mechanism of review under the annulment procedure, provided under Article 52(1). The parties to the dispute may request the constitution of an ad hoc committee to decide on a request of annulment under exhaustive grounds which include: (a) that the Tribunal was not properly constituted; (b) that the Tribunal has manifestly exceeded its powers; (c) that there was corruption on the part of a member of the ­Tribunal; (d) that there has been a serious departure from a fundamental rule of procedure; or (e) that the award has failed to state the reasons on which it is based.

Often, losing parties to an ICSID arbitration have attempted to use annulment proceedings as an appeal mechanism, re-arguing the merits of the case, rather— as Alexandroff points out—‘than as shield to defend an enforcement action by a claimant’.43 International investment agreements do not relate directly to the recognition and enforcement of foreign arbitral awards. These international agreements contain the substantive provisions, whose breach by a state (the state hosting the foreign investor) may give rise to international investment arbitration and the obligation to pay monetary compensation, enforceable in turn under

40 Barratt and Michael refer for instance to the United States and the United Kingdom. See JW Barratt and MN Michael, ‘The Automatic’ Enforcement of ICSID Awards: The Elephant in the Room?’ (2013) Global Arbitration Review 5. 41  ibid, 9. 42  See a brief discussion of Benvenuti & Bonfant v Congo and SOABI v Senegal in AS Alexandroff and IA Laird, ‘Compliance and Enforcement’ in P Muchlinki, F Ortino and C Schreuer (eds), The Oxford Handbook of International Investment Law (Oxford, Oxford University Press, 2008). 43  ibid, 1175.

Global Values and International Arbitration

 131

either the New York Convention or the ICSID Convention. We argue that their relevance in the public policy context has acquired increasing importance in connection to states’ rights to regulate versus treaty commitments to provide investors with a secure and stable business environment. This secure environment includes obligations such as no expropriation without payment of adequate compensation; to provide fair and equitable treatment and full protection and security to investors; and to not discriminate between investors. States will invoke defences for potential breaches of its international investment obligations, based on the broad notion of (international) public policy. As discussed in section 3, states’ defences under this conception of public policy include universal principles rooted in public international law, such as compliance with human rights obligations,44 or the protection of the environment, public health and safety.45 What, in international investment law, has become known as the ‘police power’ doctrine. Other states’ defences which are more akin to international commercial arbitration include the principle of good faith or claims that an investor has failed to comply with the domestic law of the host state.46 Conflicting decisions of arbitral tribunals in treating such broad public policy defences may have been one of the factors that has led some states to alter or renegotiate their obligations in a new generation of international investment agreements that have slowly emerged in the past 10 years.47 Generally speaking, this new generation of international investment agreements has narrowed down the scope of standards of protection, and have adopted clearer exceptions in favour of increased regulatory freedom for host states.48 However, a discussion regarding the new provisions embraced by these international agreements is outside the scope of this chapter.49 44  Compañia de Aguas del Aconquija SA and Vivendi Universal v Argentine Republic, ICSID Case No ARB/97/3; Azurix Corp v Argentine Republic, ICSID Case No ARB/03/30; SAUR International v Argentine Republic, ICSID Case No ARB/04/4; Sociedad General de Aguas de Barcelona SA, Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/03/19; Urbaser SA and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v The Argentine Republic, ICSID Case No ARB/07/26. 45  Philip Morris Brands Sàrl, Philip Morris Products SA and Abal Hermanos SA v Oriental ­Republic of Uruguay, ICSID Case No ARB/10/7; Chemtura Corporation v Government of Canada, under UNCITRAL Rules; Methanex Corporation v United States of America, under UNCITRAL Rules. 46  World Duty Free Company Limited v The Republic of Kenya, ICSID Case No Arb/00/7; Inceysa Vallisoletana, SL v Republic of El Salvador, ICSID Case No ARB/03/26; Plama Consortium (n 24); Yukos Universal Limited (Isle of Man) v The Russian Federation, under the UNCITRAL Rules 1976; among others. 47  See, eg, the 2004 United States Model BIT and the 2004 Canada’s Model Foreign Investment Protection and Promotion Agreement (FIPA), which are among the first investment agreements that clarified and amended certain provisions with a view to secure a state’s regulatory autonomy. Several international investment agreements negotiated after 2004 have found inspiration in the provisions of these two models. 48  See generally SD Frank, ‘The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing ­Public International Law rough Inconsistent Decisions’ (2005) 73 Fordham Law Review 1521. See also D Desierto, Public Policy in International Economic Law. The ICESCR in Trade, Finance, and Investment (Oxford, Oxford University Press, 2015). 49  See generally C Henckles, ‘Protecting Regulatory Autonomy through Greater Precision in Investment Treaties: The TPP, CETA, and TTIP’ (2016) Journal of International Economic Law 19.

132 

María Blanca Noodt Taquela and Ana María Daza-Clark

As discussed above, we suggest that there are a set of global values which influence and guide the application of the public policy exception in the context of international arbitration, and that in the context of treaty-based investment arbitration in particular, these global values have broadened the scope of the types of public policy claims that states can invoke to protect the public interest. The effect of this broadening has led to some degree of uncertainty and inconsistency in the application of the public policy defence in international investment cases. In contrast, we suggest the practice of international commercial arbitration shows that the concept of public policy as a defence to enforcement of an arbitral award is increasingly restrictive, providing more certainty to the decisions of arbitral ­tribunals and domestic courts seized with enforcement actions. The next section addresses a number of ‘global values’ that are likely to shape the international public policy of states, thus influencing international arbitration.

V.  Types of Global Values that Influence International Arbitration The internationalisation of communications, increased trade in goods and services, fierce competition for natural resources, economic integration, in sum, the phenomenon of globalisation, is being pushed by new global values that strongly influence international arbitration. Commercial contracts for the sale of goods, trade agreements and international investment agreements, among others, aim to provide parties with stability and predictability; yet, at the same time their execution, including their dispute settlement mechanisms, require efficacy, speed and finality. We briefly address four ‘global values’ which underlie the above-mentioned economic activities: party autonomy, free trade, rejection of corrupt practices and non-racial, gender, ethnic or other kind of discrimination. However, as will be further discussed below, not all these values are equally embraced by international investment and commercial arbitration; several factors support the argument that international investment law may be moving away from arbitral practices which are greatly influenced by free trade and party autonomy.

A.  Party Autonomy The ability of parties to a commercial transaction to determine how they consent to resolve their disputes is a valuable principle (party autonomy) central to the functional utility and popularity of international commercial arbitration in the past 50 years. International arbitral tribunals’ first line of enquiry is to determine the laws that the parties have chosen to govern substantive as well as the procedural aspects of their dispute. In both international investment and commercial

Global Values and International Arbitration

 133

arbitration this determination is pivotal, as the outcome of the dispute depends on the rules found to be applicable to the dispute.50 Investment arbitration presents some specific features in relation to the autonomy of the parties. Due to its nature, the contracting parties to an international investment agreement stipulate the arbitration agreement that will govern the disputes brought by their nationals. This means that in relation to one of the disputing parties, the foreign investor who is always the claimant, the choice would have been made. However, it is expected that the investor also gives its consent; there are several methods in which the investor may give consent to arbitrate. As explained by Banifatemi, the choice of law applicable to the dispute, as well as the arbitration agreement, are ‘deemed to be chosen by the parties to the arbitration’ by presuming a common consent when the investor accepts the offer to arbitrate ‘by filing the request for arbitration.’51

B.  Free Trade Trade liberalisation has rocketed since the beginning of the 1990s. The M ­ arrakech Agreement creating the World Trade Organization (WTO) has been followed by an unprecedented number of regional or free trade agreements, such as the North American Free Trade Agreement (NAFTA), Association of Southeast Asian Nations (ASEAN), Southern African Development Community (SADC), Common M ­ ­ arket for Eastern and Southern Africa (COMESA), EU-Canada ­Comprehensive ­Economic and Trade Agreement (CETA) and others. Between 1948 and June 2017 the General Agreement on Tariffs and Trade (GATT)/WTO have received 659 notifications of regional trade agreements.52 In addition, there are currently 2364 bilateral investment treaties in force.53 Encouraged by the ­economic benefits of these agreements, and the legal protection that many of them provide to nationals of the contracting states, through investment chapters, commercial agents and foreign investors regularly engage in trade and investment undertakings with foreign partners and in foreign states. Any of these undertakings is of course not without risk, either political or commercial, leading to commercial and investment disputes which are better solved through arbitration than in domestic courts. The protection of free trade and the economic and social benefits that allegedly accrue from it, are well reflected in the preamble of trade and investment

50  Y Banifatemi, ‘The Law Applicable in Investment Treaty Arbitration’ in K Yannaca-Small (ed), Arbitration under International Investment Agreements (Oxford, Oxford University Press, 2010) 192. 51  ibid, 194–95. 52 See WTO—Regional Trade Agreements Facts and Figures, www.wto.org/english/tratop_e/ region_e/regfac_e.htm. 53  See UNCTAD Investment Policy Hub, www.investmentpolicyhub.unctad.org/IIA.

134 

María Blanca Noodt Taquela and Ana María Daza-Clark

agreements. The object and purpose of these agreements revolves around the ­liberalisation of trade, the increase in economic integration and the promotion and protection of foreign investment.54 Their substantive provisions are ‘clear’, at least in respect to the protection owed to investors against discrimination and unfair treatment. In the same vein, their dispute settlement mechanisms are well established, seeking efficiency, effectiveness and finality. These aspects provide arbitrators with a clear mandate in their task to decide trade and investment disputes. Divergent interpretations as regards their substantive provisions will require adjudicators to look into the general rules of interpretation to clarify the original intention of the Contracting Parties, generally under the 1969 Vienna Convention on the Law of Treaties.

C.  Rejection of Corrupt Practices Arbitrators are bound to reject any kind of bribery and corrupt practices; furthermore the invalidity of the bribe agreement is to be decided by arbitral tribunals and also ex officio by the court in an enforcement action. The parties cannot waive its application, as the invalidity is not ordered for their protection but rather for the protection of greater common values that cannot be disposed of by agreement. In these situations, arbitral tribunals must also acknowledge the invalidity of the contract even if neither of the parties had pleaded this aspect.55 Bonnel and Meyer explained that arbitral tribunals have already had to decide on several cases in which an intermediary sought payment of his commission for facilitating the main contract and the bribe-payer then invoked the nullity of their agreement because it actually aimed at the payment of bribes. The claims for payment have so far always been rejected in all instances in which the arbitral tribunal was convinced that the contract with the intermediary actually served to camouflage corrupt enterprises.56 International efforts to deal with corrupt practices led to the adoption of the 1997 OECD Convention on Combating Bribery of Foreign Officials in ­International Business Transactions and the 2003 United Nations Convention

54  See, eg, the Preamble of the Marrakech Agreement: ‘Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising … a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services …’; the United States—Korea FTA: ‘Convinced that a free trade area will create an expanded and secure market for goods and services in their territories and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets’. 55  MJ Bonell and O Meyer, ‘The Effects of Corruption in International Commercial Contracts’, General Report to the XIXth International Congress of Comparative Law, Vienna 20–26 July 2014, 12. 56 ibid. O Meyer, ‘The Formation of a Transnational Ordre Public against Corruption: Lessons for and from Arbitral Tribunals’ in S Rose-Ackerman and P Carrington (eds), Anti-Corruption Policy (Durham, NC, Carolina Academic Press, 2013) 229, 237 et seq, quoted by Bonell and Meyer (n 55) fn 35.

Global Values and International Arbitration

 135

against Corruption.57 In the area of international investment law, these Conventions may be of assistance by providing definition of corrupt practices, which in several cases have been directly integrated in the text of international investment agreements.58 Arbitral tribunals deciding international investment disputes have adopted diverse approaches toward corrupt practices, often invoked by respondent States as a defence when it is claimed that the foreign investor’s corruption violates: (1) an investors’ obligation to acquire their investment in accordance with the laws of the host state; (2) transnational public policy; and (3) the clean hands doctrine.59

D. Non-Discrimination The adoption of international conventions on different kinds of human rights and in particular the International Convention on the Elimination of All Forms of Racial Discrimination60 are important milestones, which should not be dismissed by international arbitral tribunals. Furthermore, some states have implemented these Conventions within their national constitutions and other domestic legislation. Notably the creation of regional tribunals on human rights have allowed access of individuals to directly invoke possible human rights violations, among which discrimination is common.61 The application of non-discrimination principles is two-fold. First, in the area of international investment law, the implementation by host states of standards of protection such as the national treatment obligation could affect the realisation of certain human rights, such as the right to water.62 In order to avoid negative inferences of international investment agreements on human rights of the population in the State hosting the investment, arbitral tribunals should interpret these agreements in the light of human rights law.63 Second, foreign investors themselves may be the subject of discrimination on the basis of nationality by a host State’ changing policies. The wave of nationalisations and expropriations in Latin

57 

UN Convention against Corruption, 2349 UNTS 41, 31 October 2003 (183 states parties). S Mbiyavanga, ‘Improving Domestic Governance through International Investment Law: Should Bilateral Investment Treaties Learn From International Anti-corruption Conventions?’ (2017) OECD Global Anticorruption & Integrity Forum 4. 59  ibid, 5–7. See Plama Consortium (n 24), where the tribunal refused protection of the investment under ECT on grounds of international public policy and violation of domestic law of the host state at the time of the acquisition of the investment. 60  International Convention on the Elimination of All Forms of Racial Discrimination, 660 UNTS 195, 21 December 1965. 61  C Fresnedo de Aguirre, ‘Public Policy: Common Principles in the American States’ (2016) 379 Recueil des Cours 73. 62  F Ortino, ‘Non-Discrimination Treatment in Investment Disputes’ in PM Dupuy, F Francioni and E-U Petersmann (eds), Human Rights in International Investment Law and Arbitration (Oxford, Oxford University Press, 2009) 344–45. 63  ibid, 345. 58 

136 

María Blanca Noodt Taquela and Ana María Daza-Clark

American States such as Venezuela, Ecuador and Bolivia after the rise of left wing and populist governments may illustrate this view. Further, the new government in the United States campaigned on the promise of putting ‘America first’.64 Some of these types of economic discrimination may not rise to the level of the human rights violations relating to race, gender religion, etc, but they may nonetheless be relevant in the context of public policy assessments.

VI.  Incidence of Global Values in the Interpretation of Public Policy in International and Commercial and Investment Arbitration International arbitrators as well as domestic courts have adopted a narrow interpretation of the exception of public policy and they have regularly emphasised the exceptional character of the setting aside remedy, as courts should in principle not interfere with the decision of the arbitral tribunal.65 The narrow interpretation of public policy, for instance, has led several courts to demand that the party alleging fraud present clear and convincing evidence to that effect, showing that the fraud in question was not discoverable during the arbitration and that it was materially related to an issue in the arbitration. In other words, in cases of fraud or bias, where the public policy exception under the New York Convention is invoked, courts often require additional factual evidence, namely that the defect is such to influence the outcome of the arbitration.66 In addition, the exceptional nature of the public policy defence explains the heightened standard of proof that courts normally require in order to refuse recognition and enforcement of a foreign arbitral award, under Article V(2)(b) of the New York Convention.67 Moreover, Article V(2)(b) provides a mere ability to the courts and not an obligation. In this line and according to the survey managed by the authors of the UNCITRAL Guide, there is international consensus as to the pro-enforcement bias of the

64 

The White House,‘America First Foreign Policy’, www.whitehouse.gov/america-first-foreign-policy. Digest (n 22) 135. Westacre Investments Inc v Jugoimport-SPDR Holding Ltd & others [2000] 1 QB 288; Karaha Bodas Co LLC v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Petarmina), Court of Appeal, Hong Kong, 9 October 2007, CACV 121/2003; Karaha Bodas Co LLC v Perusahaan Pertambangan ­Minyak Dan Gas Bumi Negara [2004] 364 F.3d 274. It is worth noting that the German courts apply the same approach as to fraud, namely that it should be such to influence the outcome of the arbitration, also to due process violations: see, Hanseatisches Oberlandesgericht [OLG] Bremen, Germany, 30 September 1999, (2) Sch 04/99; Bundesgerichtshof [BGH] Germany, 15 May 1986, III ZR 192/84. See UNCITRAL Guide (n 19) para 60 and fn 114. 67  Karaha Bodas Company, LLC v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and PT PLN (Persero), Alberta Court of Queen’s Bench, Canada, 24 October 2007, 2007 ABQB 616. See UNCITRAL Guide (n 19) para 58, fn 110. 65 UNCITRAL 66 

Global Values and International Arbitration

 137

New York Convention and the conservative manner in which the public policy defence should be employed.68 In contrast, international investment arbitral tribunals have approached ­allegations of fraud and corruption, made by the respondent State, in different ways. In Section IV we discussed the case of Plama v Bulgaria, where the arbitral tribunal denied the investor the protection of the treaty, since the investment had been acquired through corrupt practices.69 Previously, an arbitral tribunal in Duty Free v Kenya arrived to a similar conclusion under grounds of international public policy. The tribunal approached the principle of international public policy with caution. On one hand it stated that international public policy has a narrow meaning under Articles V(2) of the New York Convention and 36 of the UNCITRAL Model Law, but it is no different from domestic public policy, which application to foreign awards remains ‘subjective to each State.’70 On the other hand, the tribunal recognised that some decisions can and often contemplate a universal conception of (international) public policy or transnational public policy. However, the principles invoked under transnational public policy ought to be objectively identified, ‘through international conventions, comparative law and arbitral awards.’71 The tribunal determined that ‘claims based on … contracts obtained by corruption cannot be upheld by this Arbitral Tribunal.’72 The first reflection seems connected to private international law, while the second to public international law; all in all it favours the application of international public policy as strongly influenced by global values against corrupt practices. It is worth noting a different determination arrived at by the arbitrators in the Yukos arbitrations. In this highly controversial case, the arbitrators decided against barring the claimant from the substantive protections of the investment agreement—again the Energy Charter Treaty. The tribunal found unpersuasive the argument, invoked by Russia, that illegal acquisition and performance of the investment would preclude the application of the Energy Charter Treaty.73 It explained: ‘It would undermine the purpose and object of the ECT to deny the investor the right to make its case before an arbitral tribunal based on the same alleged violations the existence of which the investor seeks to dispute on the ­merits.’74 The ulterior motives of the tribunal—if any—to decide on the merits of the case are not within the scope of this analysis. However, whether this approach favours the underlying values of free trade and investment protection rather

68 

UNCITRAL Guide (n 22) para 61. Plama Consortium (n 24). World Duty Free Company Limited v The Republic of Kenya, ICSID Case No Arb/00/7, Award of 4 October 2006, para 138. 71  ibid, para 141. 72  ibid, para 157. 73  Yukos Universal Limited (Isle of Man) v The Russian Federation, under the UNCITRAL Rules 1976, Final Award of 18 July 2014, para 1354. 74  ibid, para 1355. 69 See 70 

138 

María Blanca Noodt Taquela and Ana María Daza-Clark

than adopting a strict stance against corruption, is a question that is worth asking. They did address on the merits the alleged bad faith of Yukos, invoked by Russia, by reducing damages in favour of the claimant due to its contributory fault.75 While tribunals have been increasingly willing to decide investment disputes on grounds of international public policy, investment arbitration tribunals continue to be cautious in treating human rights defences. In the early 2000s, as an effect of a severe economic crisis, Argentina had to adopt urgent regulatory and economic measures, which significantly affected the profitability and sustainability of several foreign investors providing public services, among which an important number of investors were providers of water services. Almost consistently, the respondent State—Argentina—invoked the obligation to protect the human right to water of its populations as a justification for the alleged breaches of various international investment agreements.76 The arbitral tribunals, while not denying that the access to water constitutes a human right, did not bring to a close the potential conflicting international obligations that Argentina alleged to be subjected to, namely the obligation to protect investors, under the investment agreement versus the obligation to observe the population’s human right to water. The tribunal in SAUR v Argentina agreed that the human right to water was to be observed when deciding the dispute, since human rights were integrated within the Argentinean legal order, under its Constitution.77 However, the tribunal also observed that Argentina’s human rights obligations were not incompatible with its obligations to protect foreign investors. In fact, both obligations operated at different levels; while the administration had the power to secure this fundamental right, this power was to be exercised, respecting the guarantees and rights granted in the BIT.78 Interestingly, while Bermann points out that ‘notwithstanding the prominence of the public policy defence in discussions of the [New York] Convention, in many jurisdictions the [public policy] defence has been the subject of little if any national court litigation’,79 public policy in the context of international investment arbitration offers a fertile soil to the development of new interpretations of international public policy.

75 

ibid, para 1827. Compañía de Aguas del Aconquija SA and Vivendi Universal v Argentine Republic, ICSID Case No ARB/97/3; Azurix Corp v Argentine Republic, ICSID Case No ARB/03/30; SAUR International v Argentine Republic, ICSID Case No ARB/04/4; Sociedad General de Aguas de Barcelona SA, Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/03/19; Urbaser SA and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v The Argentine Republic, ICSID Case No ARB/07/26. 77  SAUR International v Argentine Republic, ICSID Case No ARB/04/4, Decision on Jurisdiction and Liability of 6 June 2012, para 330. 78  ibid, para 331. 79  Bermann (n 17) 60. 76 

Global Values and International Arbitration

 139

A. Public Policy Concerning the Merits of the Dispute and the Arbitral Procedure Procedural laws have been considered part of public policy only when they set forth the basic principles upon which the procedural system is based or express fundamental procedural principles. Decisions have found that a violation of a party’s right to be heard could constitute a violation of procedural public policy, but only if there was a causal link between such violation of the right to be heard and the content of the award.80 The Swiss Federal Tribunal, nevertheless, distinguishes between substantive and procedural public policy (ordre public matériel et ordre public procédural): [t]here is a difference between substantive and procedural public policy … p ­ rocedural public policy guarantees parties the right to an independent judgment on their ­submissions and the facts submitted to the arbitral tribunal, in accordance with the applicable procedural law; substantive public policy is breached when fundamental and generally recognized principles are breached, leading to an untenable contradiction with the notion of justice, so that the decision appears incompatible with the values ­recognized in a state governed by the rule of law.81

Similarly in France, the compliance with the requirements of the French conception of international public policy is the only exception that allows the courts ­control over the arbitrators’ decision on the merits of a dispute. An error of fact or law by the arbitral tribunal, however blatant, will not constitute a ground on which an award can be set aside or refused enforcement.82 This is a general principle accepted in many jurisdictions but it is not always applied properly by domestic courts.83 Violations of due process may conceptually be considered against procedural public policy in many jurisdictions, but the narrow interpretation of the operation of the public policy exception leads in many instances to the rejection of the exception if the issue has not been raised during the arbitral proceedings. That is, the party which considers itself to be the victim of a violation of due process will not be entitled to rely on that breach at a later stage as a ground on which to have the award set aside, or not recognised, if the issue has not been dealt with during the arbitral proceedings.84 The most important principles associated with international public policy that appear in arbitration are procedural, namely the equal treatment of the parties,

80 UNCITRAL

Digest (n 22) 161, para 133. X SpA v Y Srl, Switzerland Federal Tribunal, 8 March 2006, Arrêts du Tribunal Fédéral (2006) 132 III 389, 392, mentioned by UNCITRAL Guide (n 19) para 29, fn 45. 82  Gaillard and Savage (n 14) 887, para 1634. 83  In 2004 an Argentine Court of Appeals, denied enforcement of the fees and other costs of arbitration, on the ground that the amount was excessive compared with the amount of the award, and as a consequence it was contrary to public policy. 84  Gaillard and Savage (n 14) 887 and 928, para 1606. 81 

140 

María Blanca Noodt Taquela and Ana María Daza-Clark

the impartiality of the arbitral tribunal and the right to a fair hearing. In particular, the courts have held, with respect to multi-party arbitration, that the public policy requirement of equal treatment of the parties means that each party must have had equal rights in the appointment of the arbitrators.85 Due process is related to the concept of international public policy as embodied in the broader concept of procedural public policy. Thus, the Paris Court of Appeal referred to ‘compliance with the fundamental notions of due process, within the French understanding of international public policy’.86 Violations to due process and the requirements of international public policy are the only procedural irregularities, which will constitute grounds to set an award aside.87 The 2014 Civil and Commercial Code of Argentina provides for arbitration contracts in Articles 1649 to 1665; Article 1649 has a definition of arbitration contract, that follows the usual concept of the arbitration agreement, but the provision excludes expressly violations to public policy.88 The only related provision is that of Article 1656 mentioning that if the arbitral award is in contradiction to the Argentine legal system, it may be set aside by domestic courts.89 This provision appears as an unusual extension of public policy, allowing for an expansive interpretation where the sole difference between the rules applied in the award and the provisions of Argentine law could lead to a violation of public policy. This expansive understanding had never been held by authorities and courts in Argentina before the enactment of the new Civil and Commercial Code. That expansive interpretation of the new provision would seem against the international developments in this field examined earlier in this chapter. The Supreme Court of Justice of Brazil rejected the opposition of the defendant to the recognition of an arbitral award rendered in Switzerland, where the seller was a German company and the buyer a Brazilian one; the Court considered that there was not a violation to public policy when the arbitrator applied the Convention on the Contracts of International Sales of Goods,90 adopted in Vienna, 1980, in the case that the parties had chosen Swiss law for their contract. The argument of the Supreme Court of Justice of Brazil followed a narrow interpretation of public policy; the Court held that they could not evaluate the merits of the award, and the control of the applicable law would mean an evaluation of the merits.91 The Brazilian courts have held this narrow interpretation even in cases of standard form contracts.92 On the same lines, the Supreme Court of Justice of Argentina 85 

ibid, 887, 936, para 1622.

87 

Gaillard and Savage (n 14) 887, 942 and 947, paras 1633, 1638. The text is available at www.infoleg.gob.ar/.

86 ibid. 88 

89 ibid.

90  UN Convention on the Contracts of International Sales of Goods, 1489 UNTS 3, 11 April 1980 (88 states parties). 91  Atecs Mannesmann GMBH v Rodrimar S⁄A Transportes Equipamentos Industriais e Armazéns Gerais, Brazil, STJ, SEC 3035, 19 August 2009. 92  Grain Partners SPA v Cooperativa dos Produtores e Trabalhadores Urbanos e Rurais de Sorriso LTDA—Coopergrao, Brazil, STJ, SEC 507, 18 October 2006.

Global Values and International Arbitration

 141

also held the narrow interpretation of public policy in several judgments, one of them was rendered in the recognition of an arbitral award made in London, where the arbitral agreement was included in charter party contract concluded through standard forms.93 Courts have also found a breach of procedural public policy where arbitrators have acted in a manner that breaches the principles of ­independence and impartiality.94 From a public international law perspective, perhaps the mechanism of ­annulment provided for in Article 52 of the ICSID Convention could serve as a useful comparison to the approach of private international law to procedural public policy. Section IV discussed the limited grounds under which a losing party may invoke the annulment of an ICSID arbitral award. The process of annulment focus strictly on the legitimacy of the ‘process of decision’.95 This exhaustive list, quoted above,96 focuses mainly on principles of due process common to procedural public policy. These are narrow grounds which arguably resemble the grounds of procedural public policy discussed, in the previous paragraphs of this section, in the context of international commercial arbitration. Perhaps the lack of an appeal mechanism under the ICSID Convention, as well as the unavailability of grounds to request refusal of recognition and enforcement of ICSID awards before domestic courts, has led losing parties to try to re-argue the legal merits of the case during the annulment proceedings. The ICSID ad hoc annulment committees’ response to these attempts has been somewhat varied; some committees have been deferential to arguments posed by the losing party, while other committees have given a very narrow interpretation to Article 52(1) grounds of annulment. As noted by Schreuer, parties requesting the annulment of the award always invoke various grounds of annulment simultaneously to challenge an award. In Enron v Argentina the request for annulment ‘listed more aspects of the Award that in Argentina’s view deserved annulment than one can reasonably count— a veritable area bombardment.’97

93  Armada Holland BV Schiedam Denmark c/ Inter Fruit S.A., Argentina, National Supreme Court of Justice, 24 May 2011, A. 1159. XLIII. Compare to the decision in José Cartellone Construcciones Civiles SA c/ Hidroeléctrica Norpatagónica SA o Hidronor SA s/ proceso de conocimiento, Argentina, Supreme Court of Justice, 1 June 2004, where it was held that parties may contest the arbitral award when it is contrary to the Constitution, illegal or unreasonable. This judgment had a wide impact, but it is important to keep in mind that it was not a foreign award and that there was an important interest of the Argentine State in the review of the amount of the award due that the defendant was a State corporation. In addition, the solution of Cartellone was not repeated frequently in other judgments. 94  UNCITRAL Guide (n 19) para 38. 95  C Schreuer, ‘From ICSID Annulment to Appeal Half Way Down the Slippery Slope’ (2011) 10 The Law and Practice of International Courts and Tribunals 212. 96  Art 52(1) of the ICSID Convention: ‘(a) that the Tribunal was not properly constituted; (b) that the Tribunal has manifestly exceeded its powers; (c) that there was corruption on the part of a member of the Tribunal; (d) that there has been a serious departure from a fundamental rule of procedure; or (e) that the award has failed to state the reasons on which it is based’. 97  Schreuer (n 95) 214.

142 

María Blanca Noodt Taquela and Ana María Daza-Clark

It is common ground that failure to apply the proper law may be subsumed within the grounds that the tribunal manifestly exceeded its powers. It is expected that the arbitral tribunal applies the proper law to the dispute, as a requirement of ‘parties agreement on the applicable law’.98 However, tribunals have often conflated the analysis of ‘application of the proper law’ with ‘the correct application of the law’. In this connection, different annulment committees arrived at different outcomes with regard to various requests of annulment brought by Argentina, related to the application—by arbitral tribunals—of Article XI of the US-Argentina Bilateral Investment Treaty which provides: This Treaty shall not preclude the application by either Party of measures necessary for the maintenance of public order, the fulfilment of its obligations with respect to maintenance or restoration of international peace or security, or the Protection of its own essential security interests.99

This public policy defence invoked by Argentina to justify economic emergency measures, addressing the 2000–01 economic crisis, was the object of diverse interpretations by ICSID tribunals.100 Tribunals’ expressed diverse views regarding the scope of public order, as well as the interpretation of necessity under Article XI, making the defence ultimately unavailable to the respondent State—Argentina.101 Whether this is true or not, the approach adopted by the ICSID annulment committees in these arbitrations had an important impact on the fate of the respondent’s economic emergency measures. Notably the annulment committee in CMS v Argentina adopted a very restrictive interpretation of Article 52(1) of the ICSID Convention. It concluded, in relation to the arguments that the arbitral tribunal had acted with excess of powers and failed to state reasons, that the tribunal had made errors in the application of the law. The tribunal went onto explain that: [t]hese two errors made by the Tribunal could have had a decisive impact on the operative part of the Award. As admitted by CMS, the Tribunal gave an erroneous interpretation to Article XI. … If the Committee was acting as a court of appeal, it would have to reconsider the Award on this ground.102

However, the committee concluded ultimately that errors and lacunas in the application of Article XI of the US-Argentina BIT could not be identify with

98 

ibid, 216. between United States of America and Argentina Concerning the Reciprocal ­Encouragement and Protection of Investment (14 November 1991), 34 ILM 124, art XI (emphasis added). 100  See, eg Sempra Energy International v Argentina, ICSID Case No ARB/02/16; CMS Gas Transmission Co v Argentina, ICSID Case No ARB/01/8; Enron Corporation and Ponderosa Assets, LP v Argentine Republic, ICSID Case No ARB/01/3; LG&E Energy Corp v Argentina, ICSID Case No ARB/02/1. 101 D Desierto, ‘Necessity and “Supplementary Means of Interpretation” for Non-Precluded Measures in Bilateral Investment Treaties’ (2010) 31 University of Pennsylvania Journal of International Law 835, quoting W Burke-White in fn 19. 102 See CMS v Argentina, Decision on Annulment, 25 September 2007, para 135. 99 Treaty

Global Values and International Arbitration

 143

manifest errors of power.103 Not all ICSID annulment committees have limited their own jurisdiction under Article 52 to this extent. However, there exists the risk that tribunals often cross the red line between appeal and annulment.

VII. Conclusions Public policy plays a fundamental role in both private and public international law, allowing States to either prevent the enforcement of foreign decisions or prevent the enjoyment by investors of treaty protections. From this broad perspective it is the decision of the State invoking public policy, whose societal values—as embedded in public policy—are to be protected at a given point in time. This chapter suggests that in international commercial arbitration and in international investment arbitration, public policy operates with different degrees of latitude. While international commercial arbitration adopts a restrictive approach to the public policy exception, taking recourse to the ‘international public p ­ olicy’ conception, investment treaty arbitration’s—arguably—extensive approach reflects recent adjustments in the field. When compared against the global values, introduced in Section V, one can argue that decisions adopted in the area of ­ international commercial arbitration constrain the application of public ­policy exceptions in favour of further international trade. On the contrary, while investment arbitration seeks to strike a balance between public policy and investment protection, a State’s regulatory freedom to protect public policy objectives has increasingly acquired recognition vis-à-vis the imperatives of trade and investment.104 This dichotomy, however, is not true for other global values, such as the fight against corruption. As discussed in Section VI, international commercial arbitration tribunals look into international law conventions to support the ‘objective existence’ of international (or transnational for that matter) public policy rules. In turn, investment tribunals have resorted to the methodologies developed in the area of commercial arbitration to incorporate a public policy analysis into assessment of investment claims. It is also worth noting that little judicial litigation is observed in regard to public policy defences in international commercial arbitration, especially in connection to the merits and subject matter of commercial disputes. This shows fundamental points of convergence on the promotion of international trade among most courts and tribunals around the world. In contrast, the public policy defence is more frequently used in procedural matters as a ground for refusal of recognition and

103  104 

ibid, para 136. See generally Henckles (n 49).

144 

María Blanca Noodt Taquela and Ana María Daza-Clark

enforcement of foreign arbitral awards; almost invariably as an expression of the increased importance that due process holds in international arbitration. Finally, while public policy principles constantly adapt, according to the needs and values embraced by society, its application by international arbitral tribunals requires consistent and sound legal interpretation in pursuit of global systemic coherence, both in international commercial and investment arbitration.

Part III

Exploring Linkages and Boundaries in International Law

146 

7 Reconciling Human Rights and Supply Chain Management through Corporate Social Responsibility KASEY McCALL-SMITH AND ANDREAS RÜHMKORF

I. Introduction The negative impact on human rights by business activity has been the focus of much academic and public policy debate. In no other field of law has the stubbornness of the public and private law divide been exposed more starkly and with such devastating effects for individuals.1 Much of the current debate is framed in terms of the intersection between human rights law and Corporate Social Responsibility (CSR), each of which is associated with a distinct legal field, the former with public international law and the latter with private law. In this contribution we aim to identify the primary challenges at the intersection between human rights and business by dissecting specific legal barriers in the public international law and private international law systems. It is intended that by clarifying the most significant barriers in each field, commonalities across the fields will be determined and coordinated responses to overcoming these barriers offered in order to develop a stronger response to human rights abuse by business. CSR in global supply chains became a prominent topic in recent years due to recurrent reports of gross human rights violations at resource collection point or supplier factories. The locale where these human rights violations occur are often developing countries whereas the companies that source from these suppliers and sell the end product are usually transnational corporations (TNCs)2 based in the

1  See, eg S Lagoutte, ‘The UN Guiding Principles on Business and Human Rights: A Confusing “Smart Mix” of Soft and Hard International Human Rights Law’ in S Lagoutte, T Gammeltoft-Hansen and J Cerone (eds), Tracing the Role of Soft Law in Human Rights (Oxford, Oxford University Press, 2016); D Kinley and R Chambers, ‘The UN Human Rights Norms for Corporations: The Private Implications of Public International Law’ (2006) 6 Human Rights Law Review 447. 2  Also referred to as ‘multinational corporations’.

148 

Kasey McCall-Smith and Andreas Rühmkorf

global North and West. This situation raises questions of legal liability which are linked to a determination of the appropriate duty-bearer, extraterritoriality, and the law applicable to cross-border TNC activities; all of which are addressed from a public and private international law perspective. The legal structure of the businesses involved also plays an important role in this regard. It is commonly recognised that human rights claims have ‘travelled’ into the private law setting as tort claims and criminal actions.3 The management of global supply chains is primarily concerned with the ­planning and organisation of the supply process that ultimately provides the buyer at the head of the chain with the goods or parts that they have ordered so as to maximise efficiency in terms of both delivery and costs. Preventing violations of human rights in those chains is a matter for CSR. This chapter explores the ways in which CSR can reconcile human rights and supply chain management. To that end, it will present the extent to which public and private international law permit the weaving of human rights accountability into global supply chain management and propose how the limits of these two fields could be reconciled. The discussion will be complemented by a case study of the smartphone industry, an area which reports frequent CSR violations in its global supply chains. Following the examination of domestic jurisdictions, specifically the United States (US) and the United Kingdom (UK), the authors argue for the development of a hybrid regulatory approach to the promotion of CSR, which transcends the limitations of public and private international law in supply chain management.

II.  CSR and Global Supply Chain Management: The Developing Legal Framework The CSR of TNCs is a much discussed topic due to frequent examples of ­irresponsible corporate conduct, particularly in global supply chains.4 There is no agreed definition of CSR, partly due to the longstanding debate about whether or not CSR is purely voluntary or can also be mandatory.5 Notably, in its 2011 c­ ommunication on CSR, the European Commission adopted a new

3 

On the concept of ‘travellers’, see the chapter by d’Aspremont and Giglio in this volume. eg International Trade Union Confederation (ITUC), ‘Raising the Floor for Supply Chain ­Workers: Perspectives from U.S. Seafood Supply Chains’ www.ituc-csi.org/raising-the-floor-for-­supply-chain; International Labour Organisation (ILO), ‘Conclusions Concerning Decent Work in Global Supply Chains’ (105th Session, Geneva, May-June 2016); EU Agency for Fundamental Rights (FRA), Severe Labour Exploitation: Workers Moving within or into the European Union (Luxembourg, European Union, 2015) 59 et seq. 5  For a discussion about definitions of CSR, see C Villiers, ‘Corporate Law, Corporate Power and Corporate Social Responsibility’ in N Boeger, R Murray and C Villiers (eds), Perspectives on Corporate Social Responsibility (Cheltenham, Edward Elgar, 2008) 91–93. 4 

Human Rights and Supply Chain Management

 149

definition of CSR as ‘the responsibility of enterprises for their impact on society’.6 This ­definition ­supersedes the Commission’s longstanding definition of CSR as ‘voluntary’ and suggests a more legal slant to CSR that potentially engages both public and p ­ rivate international law.7 The new definition recognises that CSR can no longer be ­considered a purely voluntary nor a purely private law consideration because CSR and human rights law overlap in several ways.8 Currently, legal approaches to CSR are widely discussed in the context of global supply chains.9 This is due to recent examples of human rights violations that gained widespread media attention, including the Rana Plaza building collapse, the Tazreen factory fire and reports about forced labour in the Thai fishing industry and on cocoa farms in West Africa.10 Another example is the smartphone industry, which is examined below.11 The supply chain (sometimes referred to as the ‘value chain’) includes all the different parties that contribute to the product that is sold to the customer.12 It therefore consists of the seller of the end product as well as the manufacturer, retailers, transporters and various sub-suppliers.13 At the head of the global supply chain is often a Western TNC, ie corporations that ‘are incorporated or unincorporated enterprises comprising parent enterprises and their foreign affiliates’.14 Global supply chain operations often reach across multiple countries. The organisation of the supply chain is the domain of the supply chain management, which includes the planning and management of 6  European Commission, ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A renewed EU strategy 2011–14 for Corporate Social Responsibility’ COM (2011) 681 final, para 3.1. 7  European Commission, ‘Green Paper: Promoting a European framework for Corporate Social Responsibility’, COM (2001) 366 final 20. 8  K Buhmann, ‘Integrating Human Rights in Emerging Regulation of Corporate Social Responsibility: the EU Case’ (2011) 7 (2) International Journal of Law in Context 139, 148. 9  See, eg the recent legislation in this area, discussed below: California Transparency in Supply Chains Act of 2010 (US) and the UK Modern Slavery Act 2015 s 54 on transparency in supply chains. 10  Many NGOs currently monitor and respond to the business impact on human rights, eg ­Business and Human Rights Resource Centre www.business-humanrights.org; CORE at www.corporateresponsibility.org/about-core. 11  See, eg J Wilde and E de Haan, The high cost of calling: critical issues in the mobile phone industry Labour conditions at mobile phone factories in China, India, Thailand and the Philippines (SOMO Centre for Research on Multinational Corporations, Report November 2006). 12  S Chopra and P Meindl, Supply Chain Management: Strategy, Planning and Operation 5th edn (Harlow, Pearson, 2013) 13. 13 ibid. 14  This definition of transnational corporations is used by the United Nations Conference on Trade and Development, www.unctad.org/en/Pages/DIAE/Transnational-corporations-(TNC).aspx. Whilst some scholars use the term ‘transnational corporation’ others prefer ‘multinational enterprises’. There is no agreed definition of the term ‘multinational enterprise’. The OECD Guidelines on Multinational Enterprises state that a clear definition was not required for the purpose of the guidelines, but note the following characteristic features: ‘They [multinational enterprises] usually comprise companies or other entities established in more than one country and so linked that they may coordinate their operations in various ways. While one or more of these entities may be able to exercise a significant influence over the activities of others, their degree of autonomy within the enterprise may vary widely from one multinational enterprise to another. Ownership may be private, State or mixed’, see OECD, Guidelines for Multinational Enterprises (2011 edition) 17.

150 

Kasey McCall-Smith and Andreas Rühmkorf

all sourcing, p ­ rocurement and logistics activities.15 It also includes coordination and collaboration with partners, particularly suppliers. Many examples of gross human rights violations occur in resource extraction projects and supplier ­factories at the bottom of global supply chains, which are usually based in developing countries. These suppliers are often subcontractors to subcontractors, far removed from the commissioning company at the top of the chain.16 The public attention focused on human rights violations at supplier factories has made global supply chain management not just an issue of cost saving, but also a reputational concern.17 ‘Responsible supply chain management’ captures the notion that companies include CSR policies in their supply chain management.18 Part of this responsible supply chain management is usually the development of a supplier code of conduct by TNCs which they incorporate into their supplier relationships, albeit in different ways and to varying legal effects.19 These supplier codes of conduct usually impose a variety of socially responsible terms, such as the prohibition of forced labour or anti-bribery policies, on the supplier based on the focus of the TNC at the top of the supply chain. Critics argue that globalisation enables TNCs to not only diversify and ­outsource their production, but also their legal liability due to the disjointed relationship between public and private international law.20 Although CSR is still primarily based on soft law and the voluntary engagement of companies, it has, in recent years, gained a more definite legal dimension.21 In particular, the home states of TNCs (ie the jurisdictions where TNCs are incorporated) have started to regulate CSR, including supply chain issues.22 This approach is in line with the

15 

For an introduction into supply chain management, see Chopra and Meindl (n 12). See G LeBaron, ‘Subcontracting is Not Illegal, But is it Unethical? Business Ethics, Forced Labor, and Economic Success’ (2014) 20 Brown Journal of World Affairs 237, 245. 17  H Petersen and F Lemke, ‘Mitigating Reputational Risks in Supply Chains’ (2015) 20 Supply Chain Management: An International Journal 495. 18  See M Andersen and T Skjoett-Larsen, ‘Corporate Social Responsibility in Global Supply Chains’ (2009) 14 Supply Chain Management: An International Journal 75; see also, the European C ­ ommission’s study on responsible supply chains: M van Opijnen and J Oldenziel, ‘Responsible Supply Chain ­Management, Potential Success Factors and Challenges’ (Brussels, European Union, 2011) www.foretica.org/wp-content/uploads/2016/01/Study_Responsible-Supply-Chain-Management_EN.pdf. 19  A Millington, ‘Responsibility in the Supply Chain‘ in A Crane, A McWilliams, D Matten et al (eds), The Oxford Handbook of Corporate Social Responsibility (Oxford, Oxford University Press, 2008) 365. 20  A Sobczak, ‘Are Codes of Conduct in Global Supply Chains Really Voluntary? From Soft Law Regulation of Labour Relations to Consumer Law’ (2006) 16 Business Ethics Quarterly 167. 21  This is reflected by the increasing literature on CSR from a legal perspective. See, eg the special issue on Legal Aspects of Corporate Social Responsibility (2014) 30 Utrecht Journal of International and European Law 1; D McBarnet, A Voiculescu and T Campbell (eds), The New Corporate Accountability: Corporate Social Responsibility and the Law (Cambridge, Cambridge University Press, 2007); R Pillay, The Changing Nature of Corporate Social Responsibility: CSR and Development in Context—The Case of Mauritius (Abingdon, Routledge, 2015). 22  B Cragg, ‘Home is Where the Halt Is: Mandating Corporate Social Responsibility through Home State Regulation and Social Disclosure’ (2010) 24 Emory International Law Review 735, 751. 16 

Human Rights and Supply Chain Management

 151

recommendations of the UN Guiding Principles on Business and Human Rights23 (UNGPs) which emphasise the importance of TNC home state r­egulation.24 Examples of this developing trend towards home state regulation of CSR include transparency duties such as those in the UK Modern Slavery Act 2015,25 the 2017 French Due Diligence Law26 and the California Transparency in Supply Chains Act.27 In the supply chain context, human rights norms are ‘travellers’ from public international law to private domestic legal systems.28 Whilst these are positive steps towards reconciling human rights and business through CSR, the lack of understanding of the basis of CSR principles and the function of international human rights law often lead to the failure of such laws. It is to the public international law dimension of CSR considerations that we now turn.

III.  The Barriers in Public International Law Public international law historically has been defined by the subjects to which it applies—states, and states alone.29 It is worth noting that international law, in its purest form, traditionally excludes those legal issues dealt with by private international law, often referred to as ‘conflict of laws’, as explained in the initial chapters of this volume.30 This distinction between the two fields is directly linked to the subjects and objects of the laws in each field and to what extent a state may exercise jurisdiction over a breach of those laws. This section highlights the three primary barriers to redress for harmful corporate conduct from the public international law perspective: the limited international legal personality of TNCs; the restraints of extraterritoriality in existing law; and the absence of binding international law applicable to TNCs.

A.  TNCs and their Limited International Legal Personality In the last half-century, the traditional public international legal system commenced a slow, but perceptible, migration away from the idea that states are 23 UN Human Rights Council, UN Guiding Principles on Business and Human Rights: I­ mplementing the United Nations ‘Protect, Respect and Remedy’ Framework, UN Doc A/HRC/17/31 (21 March 2011) (UNGPs). 24  ibid, UNGPs, Commentary to Principle 2. 25  Modern Slavery Act 2015, s 54(1). 26 Loi n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des ­entreprises donneuses d’ordre (1). 27  California Transparency in Supply Chains Act (California Civil Code Section 1714.43) s 3. 28  See the chapter by d’Asremont and Giglio in this volume. 29  M Dixon, Textbook on International Law 7th edn (Oxford, Oxford University Press, 2013) 117; R Higgins, Problems & Process: International Law and How to Use It (Oxford, Clarendon Press, 1995) 12. 30  See the Introduction and the chapters in Part I of this volume.

152 

Kasey McCall-Smith and Andreas Rühmkorf

the sole actors with international legal personality.31 Put simply, the number of ­international actors active in the international legal system has grown. It began with the recognition of international legal personality in individuals through courts32 and continued with the creation of binding obligations on states for the benefit of individuals through human rights treaties.33 The limited, but nonetheless evident, international legal personality of international organisations developed in tandem.34 International law continues to solidify the expanding cast of actors capable of exercising rights and responsibilities at the international level.35 Eventually, a private corporation appeared for consideration before the International Court of Justice in the Barcelona Traction case.36 In Barcelona Traction, the Court reasoned that the powerful role played by economic actors, such as TNCs, necessitated due account to be taken of these entities at the international level.37 Though public international law has not granted TNCs full international legal personality, the Court’s logic resonates in the twenty-first century struggle with CSR and supply chain management. How to reconcile the two different objects of public and private international law, individuals and TNCs, is the question that stands as the initial barrier from the public international law perspective. Human rights treaties place a duty on the state to protect individuals by outlining specific positive and negative obligations with which the state party must comply. International Labour Organization (ILO) treaties equally bind states to obligations for the benefit of individuals in the w ­ orkplace. At no point do these treaties suggest that TNCs play the

31 K McCall-Smith, ‘Tides of Change—The State, Business and the Human’ in R Barnes and VP Tzevelekos (eds), Beyond Responsibility to Protect (Cambridge, Intersentia, 2016) 219. 32 eg Jurisdiction of the Courts of Danzig, Advisory Opinion, 1928 PCIJ, Ser B, No 15, the Court held that ‘the very object of an international agreement, according to the intention of the contracting parties, may be the adoption by the parties of some definite rules creating individual rights and ­obligations …’ 17–18. 33  eg International Covenant on Civil and Political Rights (ICCPR), 999 UNTS 171, 16 December 1966; International Covenant on Economic Social and Cultural Rights, 993 UNTS 3, 16 December 1966. 34  Reparations for Injuries Suffered in the Service of the United Nations [1949] ICJ Reports 174, 178–86, recognised the UN as an international legal actor capable of possessing rights and responsibilities under international law. This idea is reinforced through the capacities granted to international organisations through their various founding treaties as well as bi-lateral treaties they agree with states and treaties they agree across both international organisations and states, eg, the Vienna Convention on the Law of Treaties between States and International Organisations or between International Organisations, UN Doc A/CONF.129/15 (21 March 1986) (not yet in force). 35  eg the 1982 UN Convention on the Law of the Sea, 1833 UNTS 3, 10 December 1982, permits private companies to enter into licensing agreements with the International Seabed Authority; the 1965 Convention on the Settlement of Investment Disputes, 575 UNTS 159, 14 October 1966, art 36 permits ‘[a]ny Contracting State or any national of a Contracting State wishing to institute arbitration proceedings shall address a request to that effect in writing to the Secretary-General who shall send a copy of the request to the other party’. Private actors are frequently party to international disputes in the area of international economic law, see the chapters by Noodt Taquela and Daza Clard and Foster in this volume. 36  Barcelona Traction case (Belgium v Spain) [1970] ICJ Reports 3. 37  ibid, para 39.

Human Rights and Supply Chain Management

 153

duty-bearer role or fall into the protected object category.38 However, an increasing body of case law delivered subsequent to the drafting of these treaties recognises the link between corporate action and human rights violations, albeit the tying factor becomes the state in order to ensure justice for wronged individuals when direct action against a corporate actor is unavailable under existing law.39 Courts recognise the positive duty on states to prevent human rights abuse by non-state actors.40 However, as noted by Mills, treaties are not always directly enforceable and, therefore, the positive duty is contingent on the extent to which the state has implemented its international human rights obligations in the national legal system.41 In terms of business and human rights, it is a breach of this positive duty which has enabled judgments to redress some of the harm suffered by individuals at the hands of private business, albeit with the state as the defendant and rightfully so where it has been complicit in the breach.42 Before the direct accountability of TNCs for human rights abuse can materialise at the international level, as many increasingly demand, the structural deficits in the international human rights system must first be addressed. The previous point regarding the ‘makers’ of international law must here be re-emphasised— states make international law, both private and public, thus it is states that must be convinced first and foremost, as otherwise no real changes can begin to take place.

B. Extraterritoriality The prohibition of applying national laws or international human rights obligations to conduct outside the jurisdiction of the state has long been viewed as a procedural impediment to addressing human rights abuse abroad, particularly in developing countries.43 This goes to the heart of the second public international law barrier. The prohibition on the extraterritorial application of national law stems from the principle of state sovereignty, a bedrock principle of public

38  A Grear and BH Weston, ‘The Betrayal of Human Rights and the Urgency of Universal Corporate Accountability: Reflections on a Post-Kiobel Lawscape’ (2015) 15 Human Rights Law Review 21, 22. 39  Examples from the European system include: Taşkin v Turkey (2006) 42 EHRR 50; Öneryildiz v Turkey (2004) 41 EHRR 20; Lopez Ostra v Spain (1994) 20 EHRR 277. 40 See X and Y v the Netherlands, Ser A No 91 [1985] 8 EHRR 235; Velásquez-Rodríguez v Honduras (Merits), Ser C, No 4, (1988) paras 172–75, the Inter-American Court of Human Rights opined that the failure to prevent harm by a third party triggered the international responsibility of the state; reaffirmed Ximenes-Lopes v Brazil, Ser C, No 149 (2006); Case No 55/96, SERAC and CESR v Nigeria, 15th Annual Report of the ACHPR [2002] 10 IHRR 282 (2003). See A Nolan, ‘Addressing Economic and Social Rights Violations by Non-state Actors through the Role of the State: a Comparison of Regional Approaches to the “Obligation to Protect”’ (2009) 9 Human Rights Law Review 225. 41  See the chapter by Mills in this volume. 42  Grear and Weston (n 38) 23. 43  ibid, 24. See discussion in the chapter by French and Ruiz Abou-Nigm in this volume.

154 

Kasey McCall-Smith and Andreas Rühmkorf

i­nternational law as outlined in the UN Charter.44 If looking at the traditional actors in public international law, both sovereign immunity and the necessity for state consent to jurisdiction tend to silence potential human rights claims yet, when viable, state-to-state claims are brought on the basis of international law breaches in an appropriate forum.45 An alternative, and more readily used option, is an individual action for breach of a human right at the domestic, regional or international level and thousands of such claims are raised annually, for example, with the European Court of Human Rights. Even where a limited exception exists to extraterritoriality, this is focused on individuals, not corporate actors.46 As actors on the international legal plane, TNCs circulate as subjects of private international law yet their conduct has had a marked impact on individuals—individuals who hold rights under public international law by virtue of the international human rights system. If a TNC operating in its home state breaches the rights of an individual in that locus, the individual has the right to access local courts to bring a claim for tortious or criminal conduct, depending on the national laws. When the same TNC engages in the same activity outwith the home state’s territory against nationals of another state, the ‘foreign-cubed’ claim is triggered.47 An example of the foreign-cubed claimant is that which the US line of cases starting with Filártiga hosted.48 Liability in Filártiga rested on the application of the Alien Tort Statute (ATS),49 which permits claims to be brought by non-US domiciled individuals for violations of the Law of Nations committed outside the US. Until the 2000s, the ATS was used solely to address tortious behaviour by individuals. However, a series of cases have experimented with the use of the ATS against a corporate actor, such as the infamous example Kiobel v Royal Dutch Petroleum.50 Ultimately, the US Supreme Court concluded that the concept of extraterritoriality could not be ignored with the application of the ATS and that any alleged activity must ‘touch and concern’ the US in a way that dispels the proscription against extraterritoriality.51 The Court was, however, silent on

44  Charter of the United Nations, 26 June 1945, art 2(1); see discussion in the chapters by Mills and d’Aspremont and Giglio in this volume. 45  A recent example includes the Jurisdictional Immunities case (Germany v Italy, Greece intervening) [2012] ICJ Reports 99, para 57. 46  The classic example being for breaches of international criminal law, see Rome Statute of the International Criminal Court, 2187 UNTS 3, 17 July 1998. 47  ‘Foreign-cubed’ refers to a foreign defendant committing a human rights violation against a foreign plaintiff in a foreign country, see SM Grant and D Zilka, ‘The Rise of Foreign Investors in Federal Securities Class Actions’ in Securities Litigation & Enforcement Institute 2004, 91, 96 (PLI Corp Law & Practice, Course Handbook Ser No B-1442, 2004) as cited in M Steinitz, ‘The Case for an International Court of Civil Justice’ (2014) 67 Stanford Law Review Online 75, 78, n 20. 48  Filartiga v Pena-Irala, 630 F 2d 876 (2d Cir 1980). 49  Alien Tort Statute, 28 USC § 1350, also often referred to the Alien Tort Claims Act or ATCA. 50  Kiobel v Royal Dutch Petroleum Co 565 US ___(2013), 133 SCt 1659. 51  Kiobel (n 50) part IV.

Human Rights and Supply Chain Management

 155

the issue of whether a corporate actor is an appropriate defendant in such a claim. The Kiobel case and others brought under the ATS present foreign policy challenges to the US as foreign states think that this over-reach of US law could open up foreign government officials to potential civil liability in US courts.52 From a human rights approach, the barrier erected by the principle of extraterritoriality is frustrating in terms of what curative measures would satisfy both extraterritorial human rights claims and internal public policy concerns. There are many legitimate reasons for denying claims based on extraterritorial conduct, not the least of which considers the already extensive pressure put on national systems to process the claims of local citizens already before it. Reframing the issue in this way requires prioritisation of human rights claims, domestic versus international, which is precisely what should be avoided in light of the ‘interconnectedness and indivisibility’ of all human rights.53

C.  Absence of Hard Law Triggers Soft Law Development Human rights obligations are set out by treaties at the international and regional levels. As often noted, these instruments, binding as they may be, have variable or ‘manipulable’54 levels of obligation.55 This exacerbates the difficulty in formulating human rights ‘rules’ applicable to TNCs. As explained above, TNCs have limited international legal personality and no public international law instrument binds a TNC, though some states are working to develop a treaty that would do just that.56 Even with this recognition, public policy does not permit the international community to ignore certain realities when it comes to human rights and business.57 Globalisation ensures connectivity across the planet by enabling communications, people and business activity to transcend even the most far-afield borders. The connection between human rights and business activity is raised

52  VG Curran and D Sloss, ‘Reviving Human Rights Litigation After Kiobel’ (2013) 107 American Journal of International Law 858. 53  J Donnelly, Universal Human Rights in Theory and Practice 2nd edn (Ithaca, New York, Cornell University Press, 2002) 27–33. 54  Grear and Weston (n 38) 23. 55  See K McCall-Smith, ‘Interpreting International Human Rights Standards—Treaty Body General Comments as a Chisel or a Hammer’ in Lagoutte et al (n 1); K McCall-Smith, ‘Mind the Gaps: The ILC Guide to Practice and Reservations to Human Rights Treaties’ (2014) 16 International Community Law Review 263. 56  Human Rights Council, ‘Elaboration of an International Legally Binding Instrument on Transnational Corporations and Other Business Enterprises with Respect to Human Rights’ UN Doc A/ HRC/26/L.22/Rev.1 (26 June 2014); see C Rodríguez-Garavito, ‘Business and Human Rights: Beyond the End of the Beginning’ in C Rodríguez-Garavito (ed), Business and Human Rights: Beyond the End of the Beginning (Cambridge, Cambridge University Press, 2017) 32 et seq; JG Ruggie, ‘A UN Business and Human Rights Treaty?’ An Issues Brief, Harvard University, 28 January 2014. 57  On public policy, see further the chapter by Noodt Taquela and Daza-Clark in this volume.

156 

Kasey McCall-Smith and Andreas Rühmkorf

increasingly in international forums.58 These forums, particularly the UN, deliver a growing body of soft law designed to fill the gaps when harder forms of law, such as a human rights treaty, cannot be agreed or there is little will among states to codify new norms.59 The following provides an overview of key soft law initiatives currently influencing the human rights and business discourse. The UN Protect, Respect and Remedy: a Framework for Business and Human Rights60 (UN Framework) and the subsequently adopted UN Guiding ­Principles on Business and Human Rights: Implementing the UN ‘Protect, Respect and ­Remedy’ Framework61 (UNGPs) offer a roadmap for delegating human rights responsibilities between government and business. Together, the UN Framework and the UNGPs provide a common policy framework from a multi-stakeholder approach and key to three pillars—protect, respect and remedy—is the second pillar, which requires business to respect human rights. Under the second p ­ illar, the fundamental requirement for business is ‘to do no harm’.62 TNCs, under all circumstances, should apply best practice across all operations, including supply chain management, in order to prevent human rights abuse. A growing range of states and international organisations endorse the UNGPs, including the Organisation for Economic Co-operation and Development (OECD)63 and the ­International Finance Corporation,64 both of which adopted policies reflecting the intersection of business and human rights in line with the UNGPs, yet neither oblige businesses to change practices. The legal strength of the UNGPs comes from the obligation on states to protect human rights by complying with their pre-existing human rights obligations, thus the UNGPs simply reinforce existing international human rights treaties. This necessitates that states strengthen domestic laws to accordingly protect against human rights abuse and ensure redress in the event that TNCs contribute to human rights violations whether directly or indirectly. While this reinforcement of existing commitments is welcomed, it does very little to resolve the ­barriers of

58 S Deva and D Bilchitz (eds), Human Rights Obligations of Business (Cambridge, Cambridge University Press, 2013); S Deva, Regulating Corporate Human Rights Violations: Humanizing Business (Abingdon, Routledge, 2012); A Gatto, Multinational Enterprises and Human Rights (Cheltenham, Edward Elgar, 2011). 59  See the chapter by Albornoz and Collins in this volume; see also, J Cerone, ‘The Taxonomy of Soft Law’ in S Lagoutte et al (n 1); AE Boyle and C Chinkin, The Making of International Law (Oxford, Oxford University Press, 2007) 211 et seq. 60  J Ruggie, Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, ‘Protect, Respect and Remedy: a Framework for Business and Human Rights’, UN Doc A/HRC/8/5 (7 April 2008) (UN Framework). 61  UNGPs (n 23). 62  UN Framework (n 60) para 55. 63  OECD’s 2011 Guidelines for Multinational Enterprises www.oecd.org/corporate/mne/­oecdguide linesformultinationalenterprises.htm. 64 International Finance Corporation, Policy and Performance Standards on Social and Environmental Sustainability, 1 January 2012, www.ifc.org/wps/wcm/connect/c8f524004a73dae­ ca09afdf998895a12/IFC_Performance_Standards.pdf?MOD=AJPERES.

Human Rights and Supply Chain Management

 157

applying public international law due to the limited international legal ­personality of TNCs and the principle of extraterritoriality. Therefore, the value of the UNGPs must be examined from the perspective of what is most manageable in light of these barriers. Reflecting softer forms of public international law, the UNGPs articulate the key to respect for human rights through a well-understood business and private law term, due diligence.65 This crossing into the realm of private law and phraseology that is second nature to TNCs attempts to link public international and private law by clarifying the components to successful human rights due diligence. Strip away the human rights language of the UNGPs and what is left is transparency, a fundamental component of effective due diligence and a principle that has gained increased attention in public international law due to concerns about the democratic deficit in the international organisations that facilitate most of the contemporary public and private international law development.66 Greater transparency enables regulators to evaluate the potential or real harm at every level of an operation—across the entire supply chain—whether that activity takes place in the home state or a host state. It is an indispensable tool in bridging the divide between public and private law across several sectors and across the ­supply chain.67 The fundamental problem with supply chain management is that ­traditionally it has been only the bottom line, the final costs that interest a TNC in a competitive global market. Transparency, as set out in soft instruments of public international law, suggests that regulators, and ideally stakeholders, are able to trace every element of a product to its roots and that national laws will mandate social responsibility with the penalty that consumer choices will be altered in relation to the information available or TNCs will suffer business repercussions. These repercussions may reveal themselves in cross-border disputes such as those in the ‘foreign-cubed’ situation introduced above. In conjunction with the UNGPs and other business and human rights efforts at the international level, a multitude of transparency initiatives have been established, many of which are industry specific soft law mechanisms. For example, the Extractive Industries Transparency Initiative (EITI) monitors extraction operations in 51 states, including oil, gas and minerals, and suspends compliance certification for states that do not meet articulated EITI standards.68 The EITI monitoring focuses on the contracts entered into between governments and TNCs, including bilateral investment treaties or home government agreements, to tracing the revenue in order to keep all stakeholders fully apprised of

65 

UNGPs (n 23) principle 15(b). See, eg A Bianchi and A Peters (eds), Transparency in International Law (Cambridge, Cambridge University Press, 2013). 67  Transparency is also examined in respect of international investment arbitration in the chapter by Foster in this volume. 68  Extractive Industries Transparency Initiative, beta.eiti.org. 66 

158 

Kasey McCall-Smith and Andreas Rühmkorf

how the state is handling its natural resource income. The EITI does not specifically deal with extraction practices at the most remote end of the supply chain. This reveals the disconnect between top-down and bottom-up supply chain management considerations. The Public-Private Alliance for Responsible Minerals Trade (PPA) is a recent ­initiative focusing on supply chain management solutions in relation to conflict minerals, particularly in the most troubled areas of Africa, including the ­Democratic Republic of the Congo (DRC).69 It is a multi-stakeholder initiative which includes governments, civil society and corporations and was spear-headed by the US Department of State and US Agency for International Development. Motorola, Nokia and Apple, as well as several communications companies, have joined PPA since its founding in late 2011. The PPA was initiated in direct response to section 1502 of the Dodd-Frank Act,70 US legislation mandating that companies disclose if they use conflict minerals (eg tantalum) from the DRC or an adjoining country if the minerals are ‘necessary’ to the functionality or production of a product manufactured or contracted to be manufactured by the company. Where companies use such conflict minerals they are required to report about the exercise of due diligence on the source and chain of custody of their conflict minerals, thereby fulfilling the transparency requirement to the best of their ability. Is transparency alone enough? Though a commendable democratic principle, it has not proved to be a cure all nor is it always desirable in public international law.71 Furthermore, it is unclear how any negative human rights repercussions resulting from increased transparency monitoring might be addressed by current private international law instruments. Transparency must be coupled with further, tangible legal ramifications to respond to what is revealed by transparency rules. Dodd-Frank and the UK Modern Slavery Act attempt to remedy this to some extent; however, as currently drafted, these transparency requirements do not give any guidance on how to ensure that individual victims are protected or able to access justice, as they are under the private international law regime of the EU, discussed below. Are soft law initiatives simply too ‘insufficiently compelling’ in terms of real human rights protection?72 As international discourse and practice continues to expand on these issues, the real test will be the ground level protection of human rights, not the professed uptake of these international soft law instruments. And while soft law may not be sufficiently compelling, it does highlight the t­ension between the public and private spheres in terms of human rights protection.

69 

PPA website, www.resolv.org/site-ppa/. Dodd-Frank Wall Street Reform and Consumer Protection Act, s 1504, Disclosure of payments by resource extraction issuers. 71  See AE Boyle and K McCall-Smith, ‘Transparency in International Law-Making’ in Bianchi and Peters (n 66). 72  Grear and Weston (n 38) 39. 70 

Human Rights and Supply Chain Management

 159

IV.  The Barriers in Private International Law The fact that violations of CSR principles in global supply chains regularly occur at supplier factories in the developing world raises questions about the access to justice of victims. The problem that victims commonly face is that there are often weak legal standards in the countries where the human rights violations occur and/or weak law enforcement mechanisms. From the victim perspective, it is therefore important that they have access to remedies. A particularly important issue in this context is whether the TNC at the top of the supply chain can be held legally liable in tort law, or any other type of law, for the conduct that occurs throughout its supply chain, including factories of suppliers and sub-suppliers.73 The violation of human rights often also constitutes a tort, for example, where workers are injured due to poor workplace health and safety standards, excessive working hours or forced labour.74 Whilst gross violations of human rights can also constitute criminal offences, this section will focus on tort due to the scope of this chapter on private international law.75 This section will first analyse the applicable law in cases of human rights violations at supplier factories, then turn to the issue of jurisdiction before finally looking at the consequences of the legal structure within global supply chains.

A.  The Applicable Law With regards to the applicable law, the general principle that is traditionally applied by most legal systems is the law of the place of the tort (lexi loci delicti).76 This concept is linked to the idea of the territoriality of law, ie that ‘each state has the jurisdiction to regulate the activities taking place within its territorial boundaries’.77 However, in the context of supply chain liability, transnational tort litigation against the corporation at the head of the chain is an attractive avenue for tort victims, particularly when a remedy in the jurisdiction where the tort has occurred (eg in this context that is usually a developing country world where the supplier factory is located such as Pakistan) is unavailable. Transnational torts claims in the US under the ATS are often referred to by proponents of greater CSR as an e­ xample of how countries in the global West and North could impose

73  See generally M Eroglu, Multinational Enterprises and Tort Liabilities: An Interdisciplinary and Comparative Examination (Cheltenham, Edward Elgar, 2008); A de Jonge, Transnational Corporations and International Law (Cheltenham, Edward Elgar, 2011) 94. 74  de Jonge, ibid, 94. 75  Corporate criminal law will briefly be considered below. 76  D McClean and V Ruiz Abou-Nigm, Morris: The Conflict of Laws 9th edn (London, Sweet & Maxwell, 2016) 484. 77  J Zerk, Multinationals and Corporate Social Responsibility: Limitations and Opportunities in International Law (Cambridge, Cambridge University Press, 2006) 109.

160 

Kasey McCall-Smith and Andreas Rühmkorf

e­xtraterritorial l­iability on their companies for human rights violations that occur overseas.78 However, as mentioned above, following the decision of the US Supreme Court in Kiobel, it is uncertain to what extent this statute can be used for international torts litigation against corporations in the future.79 In the European Union, the applicable law in claims based on tort law is determined by the Rome II Regulation regarding the conflict of laws on the law applicable to non-contractual obligations.80 Article 4(1) of this regulation stipulates that the law applicable to non-contractual obligations arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the law of the country in which the event giving rise to the damage occurred and irrespective of the countries in which the indirect consequences of that event occur. As an exception to this, Article 4(2) of the Regulation determines that where the alleged perpetrator of the tort and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs the law of that country applies. Also, where the tort is manifestly more closely connected with a country other than the country in Article 4(1) or (2), then the law of the other country applies.81 The challenge that this legal regime in tort law establishes is that the place where the damage occurs is ‘narrowly circumscribed’.82 Recital 17 of the Rome II Regulation establishes that for cases of personal injury ‘the country in which the damage occurs should be the country where the injury was sustained.’83 Therefore, the usual situation is that when the tort is committed outside the UK, the applicable law to decide about the merits of the claim for damages will be determined by the law of the place where the damage/injury occurred. In the context of human rights violations at supplier factories this will be the law of the country in which the supplier factory is based, for example Bangladesh. In many instances, the applicable law is not fully developed. Consequently, tort victims in global supply chains must base their claim on the law of the country where the damage/injury occurred. They will therefore not have access to English tort law, which is well-developed, for example, in terms of law relating to workplace injuries. The rules of the Rome II Regulation therefore severely restrict the ability to apply English tort law extraterritorially to human rights violations at overseas factories which supply goods for transnational corporations in the United Kingdom.

78  D McBarnet and P Schmidt, ‘Corporate Accountability through Creative Enforcement: Human Rights, the Alien Torts Claims Act and the Limits of Legal Impunity’ in D McBarnet, A Voiculescu and T Campbell (eds), The New Corporate Accountability: Corporate Social Responsibility and the Law (Cambridge, Cambridge University Press, 2007) 175. 79  Kiobel (n 50). 80  Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II). This regulation is effective since January 2009. It has, by and large, replaced the Private International Law (Miscellaneous Provisions) Act 1995. 81  Rome II Regulation, art 4(3). 82  C Clarkson and J Hill, The Conflicts of Law 4th edn (Oxford, Oxford University Press, 2011) 265. 83  See further McClean and Ruiz Abou-Nigm (n 76) 484.

Human Rights and Supply Chain Management

 161

As many TNCs commonly incorporate CSR principles such as the prohibition of the use of forced labour into their supply contracts with their overseas suppliers as part of their supply chain management, it is also important to assess under what circumstances these contracts are governed by English law. If the rules of private international law stipulate that the contract is governed by English law, then this might lead to greater promotion of CSR due to the certainty that the established principles of English contract law provide. If an English court hears a contractual dispute in a global supply chain contract involving a UK-based TNC and an overseas supplier, the Rome I Regulation will determine whether English law is applicable.84 Under this Regulation, the parties have the choice to determine the law that is applicable to their contract.85 In fact, an analysis of supply chain contracts involving English TNCs has revealed that a choice of law specifying English law as the law governing the contract is regularly included.86 Contract law disputes regarding the violation of CSR principles in global supply chains of English TNCs are therefore likely to be governed by English law.

B.  Rules of Jurisdiction Although English tort law is unlikely to be applied to torts that occur at supplier factories far down the supply chain, the chances for the victims of those human rights violations to be awarded compensation might still be better if English courts have jurisdiction to hear the claim. As noted in the previous section, the law applicable to the case may be the law of the country where the tort occurred. Usually the place where the tort occurred, or where the damage occurred, are also connecting factors for the purposes of jurisdiction, ie they constitute ‘bases of jurisdiction’. However, given the difficulty in gaining access to courts in many developing countries where supplier factories are situated, for example due to corruption, tort victims might want to bring their claim in English courts. Hence, the analysis that follows focuses on the jurisdiction of the English courts rather than more generally on the different bases of jurisdiction potentially available for the victims. Four different sets of rules govern the jurisdiction of the English courts. The first is the Brussels regime, comprising the Brussels I Regulation (Regulation 44/2001) regulating proceedings instituted in the courts of Member States of the EU, including Denmark, before 10 January 2015, and the Brussels I bis ­Regulation

84  (Regulation EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations). Art 2 of the Regulation stipulates that the law specified by the Regulation shall be applied whether or not it is the law of a Member State. 85  Rome I Regulation, art 3(1). The parties have the autonomy to decide amongst themselves which law should govern them. 86 See A Rühmkorf, Corporate Social Responsibility, Private Law and Global Supply Chains ­(Cheltenham, Edward Elgar, 2015) 85.

162 

Kasey McCall-Smith and Andreas Rühmkorf

(also known as the Brussels I Recast) (Regulation 1215/2012)87 regulating ­proceedings instituted in the courts of Member States of the EU on or after 10 January 2015. The second is the Lugano Convention, between the Member States of the EU and European Free Trade Association (EFTA), which applies only as between the EU Member States and Iceland, Norway and Switzerland. The 2007 Lugano Convention’s text is, for the most part, identical to that of the Brussels I Regulation. The third is the Intra-UK regime,88 which is another variant of the European rules, based on Chapter II of the Brussels regime, allocating jurisdiction as between different parts of the UK. The fourth set is made up of the English traditional rules of jurisdiction, developed by the judges and now to be found in the Civil Procedure Rules. In civil and commercial matters, that is, within the scope of application of the European regime in this context, the technical basis on which the English courts apply the traditional rules is Article 6 of the Brussels I bis Regulation, which allows national law to apply in cases not caught by the other provisions of the Regulation.89 The analysis that follows, however, is solely based on the application of the Brussels regime, and within this regime, it only analyses the possibilities that this regime presents for bringing the claim before the English courts, rather than a fuller analysis of all the bases of jurisdiction provided for in the Brussels regime for this kind of claims. Article 4 of the Brussels I bis Regulation stipulates that persons who are domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State. Domicile for a company is defined by Article 63(1) of the Regulation as the place where the company has its statutory seat, its central administration or its principal place of business. In Article 63(2) it is clarified that in the UK statutory seat means the place where the company has its registered office or, where there is no such office, the place of incorporation or, where is no such place anywhere, the place under the law of which the formation took place. This rule means that companies incorporated in the UK and/or companies that are effectively run from the UK are to be sued in UK courts. As a consequence of this rule, a foreign subsidiary of a UK transnational corporation will usually not satisfy these requirements and therefore, can not be sued in English courts based on domicile as a connecting factor. The legal regime established by the Brussels Regulation therefore means that companies that are domiciled in the UK can be sued here, even for conduct that they have done elsewhere. Under the Brussels regime, E ­ nglish courts are not able to stay proceedings on grounds of forum non conveniens.90 87  Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 ­December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial ­matters (Brussels I bis). 88  See the chapter by Hood in this volume. 89  For a further discussion of the variable applicable regimes, see McClean and Ruiz Abou-Nigm (n 76) ch 5. 90  See discussion in the chapter by French and Ruiz Abou-Nigm in this volume.

Human Rights and Supply Chain Management

 163

However, courts are able to stay the proceedings in cases where proceedings are pending before a court of a third state at the time when a court in a Member State is seized of an action involving the same cause of action and between the same parties as the proceedings in the court of the third state.91 The condition for a stay of proceedings in this situation is that it is expected that the court of the third state will give a judgment capable of recognition and, where applicable, of enforcement in that Member State and if the court of the Member State is satisfied that a stay is necessary for the proper administration of justice. It has been pointed out that companies as potential defendants of lawsuits in the UK might ‘commence proceedings for a declaration of non-liability in the host jurisdiction’.92 Baughen notes that due to Article 33 of Brussels I bis companies are able to ask the court in the UK to exercise its discretion to stay the proceedings based on the fact that they had already commenced proceedings about the same cause of action in a third state (ie, a non-Member State of the EU). Given that it is already difficult to bring a claim against a UK TNC for torts occurring at its supplier factories, this rule restricts those circumstances even further. Overall, the rules in Brussels I bis severely limit the ability of victims of human rights violations at supplier factories to have their tort claims heard at English courts. In most cases, the company that owned the factory where the violation occurred will not be the TNC based in the UK, but a foreign company, either a foreign subsidiary, owned by the UK TNC or a foreign supplier which is completely independent. The jurisdiction for lawsuits against foreign companies, however, lies with the foreign courts where these companies are domiciled as there is no sufficient connection with the UK. Yet, with regard to claims that can be brought against TNCs in the UK, the ability to stay proceedings under Brussels I bis further restricts the access to remedies for victims of human rights violations at foreign supplier factories, though, admittedly, some view the discretionary power brought in by the recast regulation as having positive potential.93 To complete the discussion, we will briefly also refer to choice of court agreements here. Where a dispute arises relating to a CSR obligation imposed on a supplier in a global supply chain contract, English courts, too, have to apply the different regimes referenced above to determine whether or not they can assume jurisdiction. Article 25 of the Brussels I bis regulation stipulates that if the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. As with the applicable law, an analysis of

91 

Brussels I bis, art 33(1). S Baughen, Human Rights and Corporate Wrongs (Cheltenham, Edward Elgar, 2015) 176. 93  See chapter by French and Ruiz Abou-Nigm in this volume. 92 

164 

Kasey McCall-Smith and Andreas Rühmkorf

supply chain contracts involving English companies has revealed that these ­commonly include a choice of jurisdiction clause (choice of court agreement) outlining that any disputes arising should be heard in English courts.94

C.  The Legal Structure of Global Supply Chains The difficulties that victims of human rights violations in global supply chains experience in bringing tort claims for those violations are further exacerbated by the legal structure of those chains. Due to space constraints, we are unable to fully discuss the legal doctrines that contribute to those difficulties.95 However, there are two situations that briefly need to be addressed here to complement the ­picture that we have so far established. Global supply chains can be organised in a way which includes both foreign subsidiaries of the TNC and/or suppliers and sub-suppliers which are not owned by the TNC at the head of the chain and which are only linked with it through contract. First, in the context of corporate groups consisting of parent companies and their subsidiaries, it is important to note that there is no group liability within corporate groups in English law.96 This means that a parent company based (TNC) in the UK is not legally liable for the tort liabilities of its subsidiaries, no matter if these are based in the UK or abroad. In the case Adams v Cape Industries plc, the Court of Appeal rejected the idea of vicarious liability of parent companies for their subsidiaries.97 It dismissed the idea of a single economic unit between the different companies in the group, even in case of a wholly-owned subsidiary. The consequence of this approach is that the TNC as the parent company will not be vicariously liable for the torts committed by its subsidiaries. English law strictly treats parent and subsidiary companies as separate legal entities. The parent company is therefore effectively protected from liability. The only way to make the parent company legally liable in tort law is to establish that it has itself breached a duty of care that it directly owed to the employees of its subsidiaries. Second, the structure of global production processes has shifted from the ­traditional parent–overseas subsidiary company situation to a chain of ­suppliers and sub-suppliers, which are only linked with each other by contract.98 This shift

94  An example is Rio Tinto’s terms and conditions for purchase orders which contains the following clause in s 23(a) Law: ‘and the Supplier irrevocably and unconditionally submits to the exclusive jurisdiction of the English courts for all purposes in connection herewith’, procurement.riotinto.com/ documents/Purchase_Order_-_UK_-_London_-_Goods_(English)_-_1April16.pdf. Note also the 2005 HCCH Convention on Choice of Court Agreements in force between the EU Member States, Mexico and Singapore. 95  See A Rühmkorf, ‘Global Sourcing through Foreign Subsidiaries and Suppliers: Challenges for Corporate Social Responsibility’ in A de Jonge and R Tomasic (eds), Research Handbook on Transnational Corporations (Cheltenham, Edward Elgar, 2017) 194–219. 96 See Adams v Cape Industries plc [1990] BCLC 479. 97 ibid. 98 S Cavusgil, G Knight and J Riesenberger, International Business: The New Realities 3rd edn ­(Harlow, Pearson, 2014) 474.

Human Rights and Supply Chain Management

 165

makes it even more difficult to hold the corporation at the head of the s­upply chain legally liable as, contrary to subsidiaries, the suppliers and their sub-­ suppliers are not usually owned by the transnational corporation. This loose structure ­consisting of wholly independent companies exacerbates the situation from the point of view of providing access to justice for the victims of violations of CSR principles. The rules of private international law, discussed above, will make it difficult to apply English law to such scenarios or for English courts to assume jurisdiction to hear those claims. The law is therefore struggling to catch up with the business realities.99 Still, the situation for tort law and contract law differs: whereas current private international law regulation in the EU acts as a barrier to promoting greater corporate social responsibility in global supply chains in tort law, it acts as a facilitator with regards to contract law. However, as the victims of violations of CSR principles at supplier factories do not procure a remedy in contract against the transnational corporation through contractual CSR clauses, the effect of this difference is likely to be limited.100 The reason is that the enforcement of the contractual CSR obligations imposed on suppliers depends on the transnational corporations themselves.

D. Summary: The Barriers to Promoting CSR Posed by EU Private International Law Rules In summary, the European private international law regime is not very conducive to promoting transnational human rights in litigation based on tort law. Jurisdiction and applicable law rules in the EU regime severely restrict the extraterritorial application of English tort law in respect of violations of CSR occurred abroad. In consequence, victims of CSR violations at supplier factories overseas have to try and get justice in their own countries. Whilst it can be argued that this approach conforms to the territoriality principle of law, it also means that, in practice, the access to justice for the victims of harmful corporate conduct is often limited. In the absence of a binding international human rights framework on corporations, the consequence of this restrictive approach towards extraterritoriality means that the transnational corporations at the head of the supply chain can

99  Despite the focus of this chapter on English law, it is worth mentioning here that, at the time of writing, there is an ongoing case at the Regional Court of Dortmund against the German textile discounter KIK (Jabir u a / KiK Textilien und Non-Food GmbH, LG Dortmund, 7 O 95/15). The company is being sued by the relatives of victims of a factory fire at a Pakistan textile factory. The claim is based on tort law. In this case, the supplier company that ran the factory is not owned by KIK and is therefore not a subsidiary company. However, as KIK was the main buyer from that factory, the claimants’ lawyers argue that KIK had joint legal responsibility for the fire and would therefore have to compensate the relatives. The outcome of this decision might start an interesting discussion about the legal responsibility of transnational corporations for the violation of CSR principles at supplier factories. 100  Rühmkorf (n 86) 102–07.

166 

Kasey McCall-Smith and Andreas Rühmkorf

operate with significant legal impunity. Consequently, products that are tainted by modern slavery, for example, are often sold without anyone being held liable for this gross human rights abuse. Private international law in its European context therefore falls short of providing effective access to justice, which is, after all, a key principle of the UNGPs that have been adopted by both the European Union and the UK.101 Civil litigation against transnational corporations for torts in their supply chain therefore faces both serious procedural (private international law rules) as well as structural (corporate structures within groups of companies and networks of suppliers) barriers.102 And as noted, the systemic territorial principle of public international law reinforces and sustains the juridical divisions. These barriers are evident in the case study of the mobile phone industry discussed in the next section.

V.  Case Study of the Mobile Phone Industry In most cities and towns, locating an individual without a smart phone is by far rarer than the sighting of a smartphone. Smartphones increasingly are integrated into the daily lives of people from every socio-economic background, ­transcending commonplace economic identifiers associated with poverty. In 2015, 1,423.9 ­million smartphones were sold worldwide and it is anticipated that this number will rise to over 1,800 million by 2020.103 In light of the decreasing average price of a smartphone,104 use of these technological gadgets is becoming more commonplace than not in the West. Rarely, however, is a thought given to the way in which these devices appear in their perfectly designed packages at every other storefront on high streets across the West. Looking at the resourcing of materials used to create smartphones and the workforce used to assemble them, it is clear that responsible supply chain management has not been the forefront consideration for most of the world’s leading brands. Examining the supply chain for smartphones presents a range of CSR red flags: the use of conflict minerals, poor workplace conditions, substandard wages, the use of child labour and e-waste return to developing states are just a few of the issues easily identified.

101 UNGPs (n 23) part III. The UK published its National Action Plan on the implementation of the Guiding Principles in 2013 (4 September 2013) www.gov.uk/government/news/ uk-first-to-launch-action-plan-on-business-and-human-rights. 102  See de Jonge (n 73) 117. 103  Statista, Number of smartphones sold to end users worldwide from 2007–2015 (in millions of units) www.statista.com/statistics/263437/global-smartphone-sales-to-end-users-since-2007. 104 Statista, Global average selling price of smartphones from 2010 to 2019 (in U.S. dollars) www.statista.com/statistics/484583/global-average-selling-price-smartphones/.

Human Rights and Supply Chain Management

 167

Since its inception, the smartphone industry has been dominated by a h ­ andful of manufacturer/suppliers, including Nokia, Motorola and Apple.105 Continued success in the markets has been sustained by cost reduction strategies, which inevitably means the movement of manufacturing operations to the developing world.106 Developing countries often suffer from a lack of both legal and logistics infrastructure. Foreign direct investment has become crucial to provide support for basic infrastructure and development. This necessity often results in haphazard investment contracts or bilateral investment treaties that give little consideration to the impact on the local population. The smartphone supply chain is undoubtedly complex and very bottom-heavy in that the number of supply chain p ­ articipants is exponentially larger than the limited number of major ­manufacturers.107 Due to space limitations, this chapter will focus on the very bottom tier of the supply chain, the use of minerals mined in conflict areas. Tin, tantalum and tungsten are three of over 30 minerals found in every smartphone and have been widely acknowledged as conflict minerals that fuel the continued internal conflicts in several African states.108 Contrary to the claims by many top manufacturers, it is possible to ensure conflict-free minerals in the supply chain. Fairphone, a social enterprise business that started in 2010, works to deliver a transparent account of its suppliers, including the point of origin for minerals contained in its phones. Fairphone works with local conflict-free ­organisations to ensure that these three minerals, typically sourced from conflictridden African states, are certified conflict-free before entering its supply chain. This source-point attention to detail and responsibility takes time, effort and committed manpower, three commitments that the largest smartphone manufacturers have been unwilling to abide—time, effort and manpower delivered by Fairphone, with less than 50 employees. Fairphone is working to educate consumers on the creation of their phones from the bottom of the supply chain to the end of the life cycle. While Fairphone does not claim to be completely pure in its supply chain and acknowledges that the ills of the supply chain cannot be cured overnight, it has identified ‘literally thousands of social and ecological standards that can be improved in the production of smartphones, and [defined] interventions to gradually address some of them’.109 By partnering with the Conflict Free Tin Initiative (CFTI) and using Fairtrade certified gold, Fairphone is pushing toward the most responsible and sustainable

105  SOMO, Briefing Paper: Mobile Connections: Supply Chain Responsibility of 5 Mobile Phone Companies, (September 2008) www.swedwatch.org/sites/default/files/SOMO_Mobile_Connections_ Sept_20081_0.pdf. 106  ibid, 1. 107  ibid, 2. 108  S Lezhnev and J Prendergast, ‘From Mine to Mobile Phone: The Conflict Minerals Supply Chain’ Report’ (Enough, 10 November 2009) www.enoughproject.org/publications/mine-mobile-phone. 109  Fairphone Fact Sheet www.fairphone.com/wp-content/uploads/2015/06/Fairphone-factsheet_ EN.pdf.

168 

Kasey McCall-Smith and Andreas Rühmkorf

supply chain in the industry.110 Due to the potential thousands of suppliers that might contribute to the production of a single smartphone, responsible supply chain management is clearly not straightforward, but that does not mean it is not possible. At present, responsible smartphone supply chain management relies on ­voluntary standards due to weak home state regulation or avoidance tactics by large manufacturers that would otherwise be required to report potential c­ onflict mineral associations under laws such as Dodd-Frank.111 The disjointed home state transparency regulations continue to leave open broad gaps that enable smartphone manufacturers to comply with transparency initiatives without ­ meaningfully addressing supply chain problems relating to conflict minerals or other human rights abuses. With stronger accountability laws in addition to more effective transparency regulation, TNCs at the top of the smartphone supply chain will be compelled to ensure that they adhere to the CSR agenda.

VI.  Towards a Hybrid Regulatory Approach: Transcending the Limits of Private and Public International Law It is clear that mandatory accountability for human rights violations by TNCs is necessary to redress past abuses and those abuses continuingly suffered by countless individuals in developing countries.112 Though protection of human rights and accountability is often viewed as ‘precarious’113 or ‘elusive’,114 it need not be insurmountable or considered unobtainable. The current accountability gap has attracted a range of responses over and above those demanded by the soft public international law initiatives previously presented. One suggests that an international court be created expressly to cure access to justice issues and reconcile the connection between business and human rights violations, with claimants being victims of ‘mass torts’ rather than human rights violations.115 While an international civil court may be a long way off, there are two existing ways in which this gap has been tackled, through the passage of stronger legislation and

110 Fairphone www.fairphone.com/en/2016/06/20/fairphone-2-good-vibrations-with-conflict-freetungsten-2/. 111  US manufacturers have simply found new mineral suppliers from countries not identified as ‘conflict zones’ by Dodd-Frank, in order to maintain uninterrupted and unexamined supply chains for the specified minerals. 112 Grear and Weston (n 38); J Dine, ‘Jurisdictional Arbitrage by Multinational Companies: A National Law Solution?’ (2012) 3 Journal of Human Rights and the Environment 44. 113  Grear and Weston (n 38) 22. 114  Dine (n 112) 53. 115  Steinitz (n 47).

Human Rights and Supply Chain Management

 169

through ­progressive judicial interpretation of existing law. Looking at the US and the UK, we have examples of both. Examples of stronger legislation include the Dodd-Frank Act,116 the Torture Victims Protection Act,117 and the UK Modern Slavery Act 2015,118 while the line of cases based on the ATS represent the second approach. Both approaches have positive and negative aspects. Stronger domestic laws can undoubtedly cure the primary hurdles currently experienced in the crusade to hold TNCs accountable for human rights misconduct. Ensuring appropriate access to justice in the jurisdiction of the misconduct or for foreign victims of abuse in the TNC’s state of incorporation or headquarters would enable many to seek redress where they otherwise would be left without an avenue along which they might pursue justice. However, this alone will not fully repair the current problems with human rights accountability. National courts are not guaranteed to deliver a universal interpretation of human rights.119 This is particularly true due to the reinterpretation of human rights violations as private law claims. Commentators have suggested that approaches not employing the language of human rights, a civil tort suit for example, do not fulfil the object of human rights law.120 This chapter asserts otherwise. Whether under the guise of criminal, tort or some other legal designation, the key must be that individual victims of human rights abuse get access to justice. Streamlining all cases as human rights law breaches is the ideal, but should not any step forward be viewed as progress? Given the significant obstacles to the promotion of CSR in supply chains in both public and private international law, it is important to develop a framework that overcomes the barriers discussed so far. To that end, we propose a hybrid regulatory system that transcends the limits of private and public international law approach and which will, consequently, help reconcile CSR and supply chain ­management.121 In our proposed hybrid approach, different regulatory instruments would work together, including hard law, soft law, public international law, private international law and domestic law. It is argued that due to the myriad of challenges facing responsible supply chain management, it is necessary to rely upon a variety of different regulatory instruments. Both public and private international law present different hurdles for promoting CSR in global supply chains, particularly due to the way extraterritoriality is approached and due to the legal position and structures of the TNCs in those supply chains. However, it is argued here that it is possible to overcome these limitations without having to change the deeply entrenched doctrine of separate legal personality and the European R ­ egulations 116 

Dodd-Frank Wall Street Reform and Consumer Protection Act, 12 USC §53 (2010). Torture Victims Protection Act, 28 USC §1350. 118  Modern Slavery Act, 2015 Chapter 30. 119  McCall-Smith (n 55). 120  Grear and Weston (n 38) 36, 38. 121  See for a discussion of the term ‘hybrid’ is discussed in the context of regulation: M Vrielink, C van Montfort and M Bokhorst, ‘Codes as Hybrid Regulation’ in D Levi-Faur (ed), Handbook of the Politics of Regulation (Cheltenham, Edward Elgar, 2011) 35.5.2. 117 

170 

Kasey McCall-Smith and Andreas Rühmkorf

regarding applicable law and jurisdiction. Our model would aim to steer the behaviour of transnational corporations through the creative use of domestic laws in the home state of transnational corporations through a combination of extraterritorial corporate criminal liability and more stringent transparency laws.

A.  The Strategic Use of Home State Regulation Whilst it is admitted that the international regulation of transnational corporations would have the potential to achieve a more consistent and more coherent approach, no such framework is expected anytime soon. In the absence of such an international approach, small steps of addressing corporate power in the home state can achieve incremental change that leads toward reconciliation of human rights and supply chain management. This would prevent TNCs from merely paying lip-service to CSR, but rather push them to fully integrate CSR into their management strategies. The creative use of home state regulation can help fill the regulatory gaps that global supply chains exhibit in terms of human rights protection. The hybrid approach that we propose is capable of overcoming the three main challenges of the present situation that we identified above: first, the limitations that the absence of binding international human rights duties on corporations; second, the barriers towards extraterritorial civil litigation in the European private international law framework; third, the difficulty of holding transnational corporations vicariously liable in tort for the unlawful conduct of their subsidiaries or their suppliers. The strategic use of domestic law can particularly rely on corporate criminal law and transparency regulations. The former assertion is based on the model set out in the UK Bribery Act 2010 which makes the failure of commercial organisation to prevent bribery by a person associated with it a criminal offence.122 There is no requirement that the bribery occurred within the UK.123 The offence therefore has an extraterritorial dimension. What is required is that the offending company must be involved in business and be constituted in or carry on business or part of its business in the UK.124 Whilst it is unclear to what extent this criminal offence encompasses suppliers, it can be argued that regular suppliers are included.125 Notably, a company has a statutory defence if it can prove that it had adequate procedures in place designed to prevent associated persons from engaging in bribery.126 The government’s guidance expressly mentions due diligence

122 

UK Bribery Act 2010, s 7(1). s 12(5): ‘An offence is committed under section 7 irrespective of whether the acts or ­omissions which form part of the offence take place in the United Kingdom or elsewhere.’ 124  ibid, s 7(5). See also E O’Shea, The Bribery Act 2010: A Practical Guide (London, Jordans, 2011) ch 8. 125  Ministry of Justice, The Bribery Act 2010: Guidance (March 2011) 16. 126  Bribery Act (n 122) s 7(2). 123 ibid,

Human Rights and Supply Chain Management

 171

mechanisms as ‘adequate procedures’ supporting this defence.127 Due diligence is a key principle highlighted by the UNGPs. The model of the UK Bribery Act could be used for severe human rights violations in global supply chains such as forced labour, child labour and the exposure to very unsafe working conditions. In fact, it was suggested by some NGOs in the legislative process leading to the UK Modern Slavery Act 2015 that a criminal offence modelled on the Bribery Act should be the legislative choice for addressing modern slavery in global supply chains.128 However, this proposal was rejected in favour of the transparency clause.129 The advantage of the approach taken in the Bribery Act is the indirect imposition of due diligence requirements on companies. Whilst the threat of the criminal offence can be seen as the ‘stick’, the defence of due diligence is the ‘carrot’. It could therefore steer corporate behaviour away from the current voluntary and haphazard approach to CSR toward a more consistent, integrated CSR compliance system within a broader responsible supply chain management plan. CSR due diligence is thereby given a more prominent position than it currently has in many corporations. At the moment, TNCs often send mixed messages about their approach to CSR to suppliers. Whereas the purchase department often pushes for short-term and low-cost production, CSR department policies are seen as an additional burden on suppliers.130 However, the law needs to ensure that companies integrate CSR into their entire supply chain management and do not treat it as an ‘add on’. The proposed model gives CSR a more prominent standing than it has at present. This approach could overcome the limitations of public and private international law that contribute to the current neglect of CSR in supply chain management. The approach based on corporate criminal liability also touches on an issue discussed throughout the chapter: the idea of extraterritorial laws and jurisdiction. Extraterritorial jurisdiction is jurisdiction over an offence which has no connection with the territory of England or Wales, or other state in which the claim is being made.131 English courts only deal with conduct that is an offence against English law.132 They have jurisdiction over those criminal offences committed within the boundary of England and Wales.133 However, there are examples of extraterritorial jurisdiction being exercised in respect of British citizens for crimes, such as murder and manslaughter, committed in a country or territory outside the UK.134 The offence established by the Bribery Act is a further example 127 

Ministry of Justice (n 125) 16. Draft Modern Slavery Bill Joint Committee, Draft Modern Slavery Bill, 5: Supply chains, para 174, www.publications.parliament.uk/pa/jt201314/jtselect/jtslavery/166/16608.htm. 129  Modern Slavery Act (n 118) s 54. 130 See C Bader, ‘The Bangladesh Factory Collapse: Why CSR is More Important Than Ever’ (The Guardian, 7 May 2013) www.theguardian.com/sustainable-business/blog/bangladesh-factorycollapse-csr-important. 131  R Card, Card, Cross & Jones Criminal Law 21st edn (Oxford, Oxford University Press, 2014) 11. 132  ibid, 8. 133  ibid, 9. 134  Offences Against the Person Act 1861, s 9. 128 

172 

Kasey McCall-Smith and Andreas Rühmkorf

of when the English courts could exercise extraterritorial jurisdiction. There are currently few instances where a state is able to exercise jurisdiction for activity outside the normal territorial limits of its jurisdiction without domestic law specifically crafted to override the extraterritoriality limitations recognised by both public and private international law.

B.  Steps Toward the Hybrid Regulatory Approach Ultimately, the best approach to reconciling human rights and supply chain management would be a private international law instrument that could effectively deliver a process for dealing with ‘foreign-cubed’ claims by clarifying options of choice of law and forum. Until that time, the following briefly outlines our views for a hybrid regulatory approach that will strengthen CSR in global supply chains. Step one is for home states to implement strict domestic transparency regulation for all TNCs operating outwith the home state. Such transparency regulation must include broad coverage of different types of business actors and mandate reporting in respect to all levels of the supply chain, including the most far-removed supplier. Stricter transparency regulation should also demand a well-defined design, featuring differentiated, clear and measurable reporting requirements and, in particular, binding reporting about the TNC’s due diligence mechanisms, external audits of its supply chain and facts and figures about human rights violations in its supply chain that were detected. Step two sees the home state imposing a due diligence obligation on all TNCs to protect against human rights abuse at every level of operation and a corresponding right to access remedy in the home state for victims when due diligence failures result in extraterritorial human rights abuse, reflecting international human rights law. Tracking the UN Framework approach to remedy, this could include administrative procedures or other non-judicial procedures in addition to tort liability. Equally, the failure of due diligence mechanisms could lead to criminal liability, such as in the Bribery Act model. In any case, what is important is that TNCs must no longer be able to avoid liability by purely paying lip-service to due diligence mechanisms without having a coherent and meaningful approach to supply chain due diligence that would significantly reduce the risk of human rights violations in their supply chain. Thus, step two sees public international law norms informing private law claims in the home state. Step three concerns the actions that TNCs take on the basis of the legal environment created by more stringent transparency regulation, due diligence obligations and corresponding liability potential in their home states. TNCs will need to react to new legal requirements, particularly by establishing supply chain due ­diligence. TNCs can choose how to meet the requirements of the home state laws, for example, how to incorporate CSR policies into their private supplier relationships (eg in supply chain contracts) and which due diligence procedures to impose on their suppliers. The third step therefore further entrenches the public-private

Human Rights and Supply Chain Management

 173

link upon which our hybrid model is built. TNCs can, for instance, choose to ­incorporate public international soft law standards on CSR issues such as the UN Framework. These non-binding instruments then become binding between the TNCs and their suppliers through the power of contract law. Thus, the hybrid approach builds upon existing opportunities in domestic law to allow public international law to inform regulatory choices and responses thereto.

VII. Conclusion Global supply chains have become synonymous with human rights violations. It is apparent that the CSR policies of TNCs have made few improvements in the working conditions in many supplier factories at the bottom of global supply chains. This is due to a number of legal challenges inherent in regulating such chains. Our chapter has sought to outline a legal framework designed to push for improvement of the all-too-often ineffective CSR instruments in the supply chain management of TNCs. To that end, the chapter demonstrated that currently public and private international law neither jointly or separately deliver the magic formula in terms of reconciling human rights and supply chain management. Strong, directed crossborder regulation building on existing domestic private law and softer public international law instruments, such as the UNGPs, could overcome some of the barriers identified above. Strengthening transparency regulation does little to serve the immediate interests of victims of human rights violations thus we further outlined the need for clear avenues for access to justice for due diligence failures by TNCs. Upon reflection and multiple iterations of our options, it is clear that further refined private international law rules, tailored to tackle the challenges posed by supply chain management in cross-border cases, could aid promoting CSR via both choice of law rules as well as providing for more adequate bases of jurisdiction in order to provide a better chance for victims to access justice. As set out at the beginning of this chapter, it is the victims that have fallen through the cracks in the law generated by the boundaries of existing public and private international law frameworks. Ultimately, it will take bold legal solutions to redress the current inadequacies of CSR in supply chain management. This chapter has outlined short turnaround approaches based on stronger home state transparency and due diligence regulation. We recognise, however, that ultimately, only a new subject-specific private international law instrument has the potential to overcome the existing public and private international law boundaries and ensure effective CSR and responsible supply chain management that respects and p ­ rotects human rights.

174 

8 Realising the Objectives of Public International Environmental Law through Private Contracts: The Need for a Dialogue with Private International Law Scholars ELISA MORGERA1 AND LORNA GILLIES

I. Introduction This chapter maps little-studied interactions between public and private ­international law by comparing experiences in using private contracts to specify the meaning of international environmental treaty objectives that relate to equity (namely, fair and equitable benefit-sharing). In particular, the chapter contrasts two possible approaches in relying on private contracts: a bilateral approach— that is, reliance on ad hoc contracts under the Nagoya Protocol on Access to Genetic Resources and Benefit-sharing (ABS) under the Convention on ­Biological Diversity (CBD)—and a multilateral approach, namely reliance on standardised contractual clauses that have been developed inter-governmentally under the International Treaty on Plant Genetic Resources for Food and Agriculture (­International Treaty). In both cases, private contracts have played a key role in specifying the meaning of certain obligations that were left vague in the Treaty text in relation to the objective of equity. The selected international environmental treaties serve to highlight more generally the significant private law dimension of public international law instruments 1  Prof Morgera’s contribution to this chapter was provided under the framework of the project ‘BENELEX: Benefit-sharing for an Equitable Transition to the Green Economy—The Role of Law’, funded by the European Research Council (November 2013–October 2018): www.benelex.ed.ac.uk. The authors are thankful to: the BENELEX team; BENELEX Advisors Duncan French, Colin Read and Claudio Chiarolla; BENELEX visiting scholar Dimitri Pag-yendu Yentchare; as well as to Shakeel Bhatti, Alex Mills and Verónica Ruiz Abou-Nigm, for helpful comments and suggestions on previous drafts of the chapter.

176 

Elisa Morgera and Lorna Gillies

on fair and equitable benefit-sharing,2 which should be included in a debate on a broad notion of private international law.3 The delegation of regulatory ­powers foreseen in public international law in the pursuit of common interests to private parties negotiating private law instruments that are generally governed by ­self-interest4 has the potential result that different contracts may give different meanings to international obligations to the point of undermining a treaty objective, rather than upholding it. Such potential should be seen in the light of the ‘deeply ideological’ nature of a choice between private or public law instruments, which ‘has shielded and perpetuated relationships of dominance in the past and present by the pretense that they belonged to the private realm’.5 The risks of contractualisation of environmental governance have already been discussed (to some extent) in public international environmental law scholarship with a view to emphasising the likely arising of a ‘limited and instrumentalist view of law.’ Such risks have been identified in the implicit bias towards market-based approaches and the protection of private interests on the basis of contractual freedom, private dispute resolution and confidentiality. These are seen to disadvantage other ‘­constituencies’ protected by the relevant international environmental agreements but that are ‘left out of contractual negotiation, implementation and ­enforcement.’6 This is still a partially developed debate, however, that has not engaged with the private international law dimensions of this phenomenon. For this reason, the chapter also serves to focus on private international law more narrowly and traditionally construed, in relation to its role in ensuring access to justice in the context of the implementation of the selected international instruments. This is another key aspect of realising equity through private contracts. Private international law rules equip States with legislative competence to adjudicate disputes and enforce decisions between private parties in different countries.7 The extent of private international law’s ‘just distribution of regulatory authority’,8

2 Another relevant instrument is World Health Organization (WHO), Pandemic Influenza ­ reparedness (PIP) Framework for the Sharing of Influenza Viruses and Access to Vaccines and Other P Benefits, WHO Doc. WHA64.5, 24 May 2011, which follows, to a great extent, the model of reliance on standardized contractual clauses of the International Treaty on Plant Genetic Resources for Food and Agriculture. 3  See the chapter by Mills in this volume. 4  A von Bogdandy, M Goldmann and I Venzke, ‘From Public International Law to International Public Law: Translating World Public Opinion into International Public Authority’ (2017) 28 European Journal of International Law 115, 119 and 136–39. 5  ibid, 124. 6  The quotations and arguments on these risks are by N Affolder, ‘Square Pegs and Round Holes? Environmental Rights and the Private Sector’ in B Boer (ed), Environmental Law Dimensions of Human Rights (Oxford, Oxford University Press, 2015) 12. 7  L Gillies, ‘Creation of Subsidiary Jurisdiction Rules in the Recast of Brussels I: Back to the Drawing Board?’ (2012) 8 Journal of Private International Law 489; A Mills, ‘Private International Law and EU External Relations: Think Local Act Global, or Think Global Act Local?’ (2016) 65 International and Comparative Law Quarterly 541, 562. 8  A Mills, The Confluence of Public and Private International Law, Justice, Pluralism and Subsidiarity in the International Constitutional Ordering of Private Law (Cambridge, Cambridge University Press, 2010); H Muir-Watt and F Fernandez Arroyo (eds), Private International Law and Global Governance (Oxford, Oxford University Press, 2014).

Public International Law Objectives

 177

however, depends on whether it operates as a fully-fledged ‘international system of rights protection.’9 On the one hand, the strategic use of private international law may impede access to justice, on the basis of political choices behind the technicalities of private international law.10 On the other hand, increasingly, private international law supports the recognition and enforcement of international human rights and fundamental rights frameworks.11 For example, the right to an effective remedy and to a fair and public hearing has been recognised and extended to parties in private disputes.12 Thus, the increasing13 role of the human right to have access to justice in the evolution of private international law needs to be considered from the perspective of public international environmental law, when its implementation relies on private contracts. Ultimately, comparing the opportunities, challenges and drawbacks arising from the interactions between public and private international law under the selected international environmental law treaties may help identify key questions that would benefit from a more systematic dialogue between public international lawyers and private international lawyers. These questions are both of a practical and principled nature. As to the former, questions are mainly due to unequal bargaining powers and the need to protect vulnerable parties to a contract, as well as the utility of bilateral and multilateral approaches to the resolution of disputes concerning contracts.14 As to the latter, the questions concern how the doctrine of comity in private international law enables States to reach non-State actors and provides contextual application of certain public international law obligations in furtherance of equitable objectives that go beyond the specific stakes and interests of parties to the contract. The modern construct of comity in private international law focuses on notions of ‘mutual trust’,15 and ‘mutual recognition of State ­interests’.16 It serves as an ‘expansive’17 technique to support the relationship between international law and domestic legal orders, to the benefit of the efficient ‘operation of systems of law’.18 Comity can operate in two principle ways. First, comity seeks equivalence through recognition of acts and judgments of foreign States. Second, it may operate to enforce contractual rights relating to

9 

Mills (n 3); Gillies (n 7). See chapter by Hood in this collection. L Gillies, ‘Fundamental Rights and Judicial Cooperation in the Decisions of the Court of Justice on the Brussels I Regulation 2009-2014: The Story So Far’ in S Morano-Foadi and L Vickers (eds), Fundamental Rights in the EU: A Matter for Two Courts (Oxford, Hart, 2015); L Gillies and Mangan (eds), The Legal Challenges of Social Media (Cheltenham, Edward Elgar, 2017). 12  Gillies (n 11) 224–25 with regard to art 47 of the Charter. 13  See words of caution in this connection in Mills (n 3). 14  C Chiarolla, ‘Biopiracy and the Role of Private International Law under the Nagoya Protocol’ IDDRI Working Paper No.2/February 2012, 15, http://www2.ecolex.org/server2neu.php/libcat/ restricted/li/MON-086724.pdf. 15  Gillies (n 11); Opinion 2/13 of the Court (Full Court), 18 December 2014, Opinion pursuant to Article 218(11) TFEU; Gillies in Gillies and Mangan (n 11). 16  Gillies in Gillies and Mangan (n 11). 17  S Breyer, The Court and the World American Law and the New Global Realities (New York, Knopf, 2015) 91–92. 18  Ecobank v Transnational Inc v Tanoh [2015] EWCA Civ 1309, para 132. 10 

11 

178 

Elisa Morgera and Lorna Gillies

jurisdiction or arbitration19 agreements or, more frequently, to limit foreign court proceedings.20 Against this background, the chapter starts by assessing the relevance of p ­ rivate international law in the context of the Nagoya Protocol and identifies ­questions that deserve further research regarding the reliance on ad hoc contracts to realise the Protocol objective of fair and equitable sharing of benefits. It then contrasts the reliance on standardised contractual clauses under the International Treaty, the role of private international law in that context and outstanding research questions. In particular, the chapter highlights the need for further consideration of choice of law and the effect of both overriding mandatory rules and public policy (ordre public) of the forum on private contracts. The chapter concludes with a broader reflection on the challenges arising from the intersection of public and private international law on the rationale, potential and pitfalls of the increasing reliance on private contracts in international environmental law.

II.  The Nagoya Protocol and Ad Hoc Private Contracts The Nagoya Protocol is an international environmental treaty that regulates transboundary aspects of bio-based research and development, with a view to contributing to the conservation and sustainable use21 of biodiversity,22 as well as broader sustainable development goals (such as global health and poverty e­ radication).23 The Protocol includes international obligations between countries that provide access to, and countries that use, genetic resources and the traditional knowledge of indigenous peoples and local communities.24 The Protocol’s objective refers explicitly to fairness and equity in sharing benefits in two scenarios: among States—that is, between a State providing genetic resources—as well as within States, with indigenous peoples and local communities that provide their traditional knowledge associated with genetic resources or genetic resources that they hold.25 The Protocol, however, does not specify how equity should be ensured in

19  Cresendo Maritime Co, Alpha Bank A.E v Bank of Communications Company Limited, Nantong Mingde Heavy Industry Stock Co Ltd, New Future International Trade Co Ltd, Bank of Communcations Company Limited Qingdao Branch [2015] EWHC 3364 (Comm); Ecobank v Transnational Inc v Tanoh [2015] EWCA Civ 1309, English Court of Appeal para 85–91 and 99. 20  D Holloway, ‘Case Comment England and Wales: Ecobank Transnational Inc v Tanoh’ (2016) International Arbitration Law Review N-16. 21  Nagoya Protocol Art 1. 22  The variability of life forms on earth: Convention on Biological Diversity (CBD), Art 2. 23  Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity (NP), preamble. 24  E Morgera, E Tsioumani and M Buck, Unraveling the Nagoya Protocol: Commentary on the Protocol on Access and Benefit-sharing to the Convention on Biological Diversity (Leiden, Martinus Nijhoff, 2014). 25  NP (n 23) arts 1 and 5, and preamble.

Public International Law Objectives

 179

either scenario, or whether efforts to that end should be monitored (either at the international or national level).26 Nevertheless, the Protocol is expected ‘to reduce enormous global asymmetries’ among developed and developing States,27 by guiding the development of domestic legislation and the arising interaction of rights and duties for individuals/ entities sharing benefits from different countries. The Protocol therefore aims at setting a multilateral framework coordinating domestic measures governing contractual transactions,28 and fostering international cooperation, thereby operating ‘across the public-private divide’.29 This should ultimately ensure the implementation of fair and equitable private-law contractual arrangements in each individual ABS transaction.30 These contractual arrangements (referred to in the Protocol as ‘mutually agreed terms’31 or MATs) are expected to set out conditions for access to genetic resources and traditional knowledge, and specific benefit-sharing obligations, in order to achieve the overarching equity objective of the Protocol in the context of specific ABS transactions.32 To add further complexity, the Nagoya Protocol’s open-ended provisions allow for a variety of legal approaches to implementation, through creative relations among international, national and local law, including the customary laws of indigenous peoples and local communities.33 MATs may be included in different types of contractual forms, and in effect an ABS deal may entail a plurality of contracts among different parties (individual researchers, private companies, indigenous and local communities, public research institutions or government entity).34 As a result, the question of who has the authority to enter into an ABS contract can also be quite complicated, particularly when traditional knowledge of indigenous peoples and local communities is at stake and national law does not clarify the issue.35 For the purposes of the

26 

Morgera et al (n 24) 48–52, 375–77. Dias, ‘Preface’ in E Morgera, M Buck and E Tsioumani (eds), 2010 Nagoya Protocol on Access and Benefit-Sharing in Perspective: Implications for International Law and Implementation Challenges (Leiden, Martinus Nijhoff, 2013) 1. 28  S Oberthür and K Rosendal, ‘Conclusions’ in S Oberthür and K Rosendal (eds), Global ­Governance of Genetic Resources: Access and Benefit Sharing After the Nagoya Protocol (London, Routledge, 2013) 237–39. 29 ibid. 30  T Young, ‘An International Cooperation Perspective’ in Morgera, Buck and Tsioumani (n 27) 457. 31  NP (n 23) art 5(1–2 and 5). 32  On the objective of the Nagoya Protocol, see Morgera et al (n 24) at 48–58 (where there is no reference to MATs). For a discussion on MATs, see Morgera et al (n 24) 131–32, 167–69, 283–92 and 375–76. See also CBD Art 15(7), second sentence. 33  NP (n 23) art 12(1). 34  F Bellivier and C Noiville, Contrats et vivant: les droits de la circulation des ressources biologiques, (LGDJ, 2006) 147–49; B Tobin, ‘Biodiversity Prospecting Contracts: The Search for Equitable Agreements’ in Sarah Laird (ed), Biodiversity and Traditional Knowledge: Equitable Partnerships in Practice (London, Earthscan, 2002) 287; T Young and M Tvedt, Drafting Successful Access and Benefit-sharing Contracts (Leiden, Martinus Mijhoff, 2017). 35  United Nations Conference on Trade and Development (UNCTAD), The Convention on ­Biological Diversity and the Nagoya Protocol: Intellectual Property Implications (Geneva, UN, 2014) 156. 27  B

180 

Elisa Morgera and Lorna Gillies

present chapter, attention will focus on potentially weaker parties to MATs, who are likely to be developing country research institutions and indigenous peoples’ representatives, who may have less exposure to transnational commercial practices and resources to tackle complex contractual negotiations. That said, because of the variety of contractual arrangements and of the type of parties to them, one should keep in mind that this is a generalisation that may not apply in a number of cases in practice. A simple example is provided by the MATs on Teff (an annual grass with e­ dible seeds)36 between the Ethiopian Institute of Biodiversity Conservation, which was authorised to conclude the contract on behalf of Ethiopia as the provider c­ ountry, and a Dutch company in 2005. According to this contract, the company was permitted to access and use genetic resources specified in an annex for developing non-traditional food and beverage products listed in another annex. The MATs also included a prohibition for the company to access, claim rights over, or make commercial benefit out of, the traditional knowledge of Ethiopian communities on the conservation, cultivation and use of Teff without their explicit written agreement. The Institute retained the right to grant access to, and export, Teff genetic resources to other parties, as long as the buyers did not use it to make any of the listed products in the contract with the Dutch company. Finally, the MATs listed four different ways for the company to share monetary benefits, and five ways to share non-monetary benefits (such as sharing research results with the provider institution; involving Ethiopian scientists in research; preferring local institutions for breeding purposes and establishing businesses in Ethiopia together with E ­ thiopian counterparts). Given the central role of MATs in the implementation of the Protocol, the private law dimension of the Protocol is quite evident, as is the potential for different contracts to offer a diversity of meanings to international obligations concerning benefit-sharing. For one thing, the Protocol does not require countries explicitly to entrust or limit contractual freedom with respect to ensuring fairness and equity, contributing to environmental sustainability and respecting human rights.37 The Nagoya Protocol provisions concerning MATs are invariably of a procedural ­character,38 with some reference to substantive guarantees only transpiring in the Protocol provision on States supporting the development by indigenous peoples and local communities of minimum requirements securing fairness and equity for MATs negotiations39 and providing capacity-building.40 This may be considered a missed opportunity, as contractual practice developed prior to the conclusion of

36  R Andersen and T Winge, ‘The Access and Benefit Sharing Agreement on Teff Genetic Resources: Facts and Lessons’ (FNI Report 6/2012. Lysaker, FNI, 2012) 60–63. 37  These are notably those of indigenous peoples and local communities: NP (n 23) arts 5–7 and see Morgera et al (n 24) 117–30, 145–56 and 170–77. 38  NP (n 23) arts 5, 6(3)(g), 15 and 18. 39  ibid, art 12(3)(b). 40  ibid, art 22.

Public International Law Objectives

 181

the Nagoya Protocol already provided an indication of the challenges and drawbacks encountered in that regard.41 As a mechanism in the ‘global ordering of private disputes’,42 private international law underscores the need to create the legislative preconditions at the domestic level. At this level, the operation of private international law in facilitating equitable sharing of benefits is prevalent in two, related respects. The first scenario arises from the inequality of bargaining power between providers (or their representatives) and users of genetic resources. Even where foreign parties could enjoy equal access to domestic courts in a certain jurisdiction, there is broad understanding that further measures are needed for those parties who wish to bring legal action before a court of a State other than that in which they are based.43 This may be particularly the case of providers of genetic resources or traditional knowledge that are party to a MAT, who can be presumed to lack the resources and knowledge of the relevant legal system to bring a case, probably of a long duration, in another country, where the R&D on their genetic resources is occurring, in order to obtain redress from a user that has allegedly breached MATs. As the next section will consider, parties to a MAT may specify which court has jurisdiction to interpret the MAT or hear a dispute relating to it. It could be argued that there should be an exclusive jurisdiction clause in favour of the provider of the genetic resources and traditional knowledge as the weaker MAT party, with a choice of their local law, as a protective measure, in an analogous way to consumer protection under EU rules on jurisdiction and choice of law.44 It remains to be seen, as discussed below, whether MATs may be negotiated so as to privilege access to the courts of the provider. The second scenario is the use of contractual devices to limit claims for breach of the ABS contract, which consequently makes it difficult for weaker parties to MATs to access justice and enforce rights. Here, the particular objective is to address procedural challenges for individual providers and users situated in different countries45 arising from situations of breach of contractual obligations.46

41  S Bhatti, S Carrizosa, P McGuire and T Young (eds), Contracting for ABS: The Legal and Scientific Implications of Bioprospecting Contracts (Gland, IUCN, 2009). 42  Muir Watt and Fernández Arroyo(n 7)); Gillies in Gillies and Mangan (n 8). 43  H Isozaki, ‘Enforcement of ABS Agreements in User States’ in E Kamau and G Winter (eds), Genetic Resources, Traditional Knowledge, and the Law Solutions for Access and Benefit Sharing (London, Earthscan, 2009) 442. 44  Regulation 1215/2012 Brussels I Bis, Arts 17–19; Regulation EC 593/2008 Rome I Regulation on Contractual Obligations, Art 6. 45  L Glowka and V Normand, ‘Nagoya Protocol on Access and Benefit-sharing’ in Morgera, Buck and Tsioumani (n 27) 36. 46  The breach of MAT has been termed ‘misuse’, in contrast to ‘misappropriation’ which generally refers to the appropriation of genetic resources and traditional knowledge in violation of the applicable domestic requirements, ie, generally without PIC and MAT. See C Chiarolla, ‘Role of Private International Law under the Nagoya Protocol’ in Morgera, Buck and Tsioumani (n 27) 427–28.

182 

Elisa Morgera and Lorna Gillies

A. The Interface between the Nagoya Protocol and Private International Law As MATs are concluded by parties in different jurisdictions, the Nagoya Protocol is notable among multilateral environmental agreements for providing an explicit link with private international law narrowly construed.47 It includes an article ­specifically devoted to three aspects of private international law: jurisdiction, applicable law, and mutual recognition and enforcement of foreign judgments and arbitral awards.48 As will be discussed, private international law has an important role to play in providing a balance of parties’ interests and rights in agreeing MATs, on the one hand, and in ensuring the principles of comity and respect for human rights when enforcing MATs, on the other.

B.  Choice of Jurisdiction With regard to the opportunity to seek recourse, the Nagoya Protocol aims to ensure opportunities to seek recourse in any party’s legal systems in case of cross-border dispute arising from MATs.49 This may be particularly complicated as domestic rules may vary on (and possibly prevent) standing for foreign government entities or for non-incorporated collective entities, such as indigenous peoples or local communities that are parties to MATs.50 The Protocol arguably aims to ensure that some remedies against breaches of MATs will be made available in all jurisdictions independently of the nationality of the claimant,51 taking into account de facto barriers such as costs and differing requirements about the entitlement to bring legal actions before foreign courts. In effect, the Protocol underlines the importance to identify the relevant providers and users to, or associated with, MATs. Providers may prefer to bring an action for breach of MATs in the jurisdiction of the user, with a view to obtaining a judgment that can be directly enforced against the user in his/her own ­jurisdiction.52 From a private international law perspective, this may be effected in a number of ways. The first option is to establish jurisdiction on the basis of an exclusive jurisdiction agreement in MATs. In essence, MATs should explicitly state in which jurisdiction a dispute arising from MATs will be brought.53

47  NP (n 23) art 18; see Chiarolla (n 46); and also M Tvedt, ‘Beyond Nagoya: Towards a Legally Functional System of Access and Benefit-Sharing’ in Oberthür and Rosendal (n 28) 172. 48  NP (n 23) art 18. 49  ibid, art 18(2); Glowka and Normand (n 45) 36. 50 C Godt, ‘Enforcement of Benefit-Sharing Duties in User Countries’ in Kamau and Winter (n 43) 422. 51  T Greiber et al, An Explanatory Guide to the Nagoya Protocol on Access and Benefit-Sharing (Gland, IUCN, 2012) 186. 52  Gurdial Singh Nijar, The Nagoya Protocol on ABS: An Analysis (Kuala Lumpur, CEBLAW, 2011) 12. 53  NP (n 23) art 18; and Chiarolla (n 46) 430.

Public International Law Objectives

 183

The ­second option is to sue a user where they are domiciled according to the ­procedural laws of the forum. The third option is to sue in the jurisdiction where the place of performance of the obligation in MATs occurs or is to occur.54 Provided that the jurisdiction to which dispute resolution processes will be subjected is expressly stipulated in MATs, the decision on which court will have competence will be made on the basis of domestic norms applicable in the given country, which are often influenced by an international or regional instrument on judicial cooperation.55 Two examples are instructive. First, the Hague Convention on Choice of Court Agreements 2005, currently in force between Mexico, S­ingapore and EU Member States, provides a basis by which parties may select a court of a State ‘for the purposes of deciding disputes which have arisen or may arise in connection with a particular legal relationship’.56 This provides that the parties to a contract may specify which court has jurisdiction, the effect of which if valid renders such agreement exclusive and ‘independent of the other terms of the contract’.57 The role of jurisdiction agreements is important since the Nagoya Protocol itself does not provide guidance on how the courts should decide whether they have jurisdiction over MAT-related disputes.58 Chiarolla suggested interpreting the expression, in the Nagoya Protocol, ‘consistent with applicable jurisdictional requirements’ of the party concerned as an acknowledgement or a safeguard clause that ‘the availability of recourse to courts will depend on applicable rules on the choice of jurisdiction, as established in contracts and accepted by the named court, or in their absence by [the] private international law of the seized forum’.59 Accordingly, the Protocol places a duty on State Parties to provide parties to MATs opportunities to seek recourse in an agreed place. Arguably to ensure that when such recourse is provided, the seized forum ‘should assert jurisdiction unless the complaint is apparently based on dubious, speculative or vexatious grounds (eg, where none of the parties to MATs have real connection with the forum)’.60 This may reflect rules designed to protect the role of the chosen court in the situation where there is a lis pendens in breach of that agreement; that is, when a claimant brings prior proceedings in another court before the chosen court’s jurisdiction can be established. The 2005 Hague Choice of Court Convention requires that a court which is not the parties’ chosen court must suspend or dismiss proceedings unless there is an issue with the agreement, its creation or its negative effect on the parties or the court seised.61

54 ibid. 55 

Greiber et al (n 51) 185. Hague Choice of Court Convention 2005, art 3(a). eg art 25 of EU Regulation 1215/2012 (Brussels I bis). 58  Chiarolla (n 46) 431. 59  ibid, 432. See also Greiber et al (n 51) 186. 60  Chiarolla (n 46) 432. 61  Hague Choice of Court Convention 2005, art 6. At EU level, art 31 of Brussels I bis confirms that if an exclusive jurisdiction agreement exists, ‘any other court must decline jurisdiction in favour of that court’. 56  57 

184 

Elisa Morgera and Lorna Gillies

Second, if the parties have not agreed the jurisdiction of any subsequent dispute, legal uncertainty may arise as to whether a national court in a given country where legal action has been brought will be deemed to have international jurisdictional competence to determine a dispute arising from MATs. The consequences may be that the rule of the user’s domicile would prevail as the general rule. If the parties have not selected an exclusive jurisdiction agreement in MATs, an alternative connecting factor is the domicile of the defendant. Domicile is generally determined according to the conflict of laws rules of the court seised. In the case of businesses, this is usually their principal place of business, central administration or statutory seat. In the case of individuals, their subjective intention and objective residence contribute to determining domicile. Alternatively, a special ground of international jurisdiction may apply. To establish an alternative basis of jurisdiction, it will be necessary to establish the ­characteristic function or purpose of MATs. The Bonn Guidelines on ABS,62 an international soft-law instrument that was adopted before the Nagoya Protocol and continues to provide helpful guidance for its application,63 suggest that it is possible to characterise MATs as equivalent in broad purposes to an international commercial contract. It should be noted that seeing MATs, as well as other environmental contracts, as international commercial contracts has been considered problematic by public international environmental lawyers, as it provides an indication that limited efforts have been made to shape a contractual agreement around its specific subject-matter (a global environmental objective, rather than the object of a transnational sale). In other words, public international environmental lawyers have identified the risk of undermining the protection of the public value at stake and bypassing the opportunity to resolve specific legal issues that do not normally arise in the context of common commercial transactions.64 From a private international law perspective, however, seeing MATs as ­international commercial contracts may serve for the purposes of establishing international special jurisdiction. For example, in the European Union (EU) Regulation 1215/2012 (Brussels I bis Regulation), a matter relating to contract is one where an obligation is freely provided by one party towards the other. This Regulation enables special jurisdiction to be established in the courts of the Member State where the place of performance65 of the contractual66 obligation67 in question occurs. The place of performance as a basis for establishing the jurisdiction is where the characteristic contractual obligation (the obligation underpinning the contract) is

62  Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilization, COP 6, Decision VI/24, paras 16(a)(ix) and 36(f), Appendix II. 63  CBD Decision X/1 (2010), preambular para 6, indicates that the Bonn Guidelines continue to be part of the ‘international regime’ on ABS, after the adoption of the Nagoya Protocol. 64  Affolder (n 6) 25. 65  Brussels I bis, art 7(1). C 12/76 Industrie Tessili Italiana Como v Dunlop AG [1976] ECR 1473; C-440/97 GIE Groupe Concorde v The Master of the Vessel ‘Suhadiwarno Panjan’ [1999] ECR I-6307. 66  C 14/76 De Bloos Sprl v Bouyer SA [1976] ECR 1497. 67 C-288/92 Custom Made Commercial Ltd Stawa Matallbau GmbH [1994] ECR I-2913.

Public International Law Objectives

 185

to be performed.68 If an ABS deal is compared to a sale of goods, it could be argued that the provision of genetic resources is the characteristic obligation of MATs. If an ABS deal is compared to the provision of a service, it could be equally argued that providing access to genetic resources or traditional knowledge would make the provider the characteristic performer; or that sharing benefits would make the user the characteristic performer. If instead we consider an ABS transaction as a contract that aims to realise an international environmental treaty objective, then the user should be seen as the characteristic performer and sharing benefits arising from the use of genetic resource or traditional knowledge as the characteristic obligation of MATs.

C.  Choice of Applicable Law Whilst the Nagoya Protocol reinforces the need for parties to specify their chosen jurisdiction, it also underscores the importance to identify in MATs the substantive law to be applied to resolve any dispute.69 The question of applicable law is particularly complex. The domestic court may have to make a choice, on the basis of private international law norms and taking into consideration the interest of the parties, between two different sets of law, such as for instance its own domestic law or the law of another country, or it may decide that different questions in a given case may be governed by different countries’ law.70 The Hague Conference’s Principles on Choice of Law in International Commercial Contacts 2015, which are a soft-law instrument, may offer general guidance to parties to international commercial contracts. Where adopted, and in order to determine the applicable law of MATs, the Principles give guidance on the operation of an express or implied choice of law agreement.71 If proceedings are brought before the courts of an EU Member State, the Rome I Regulation provides that parties may choose the applicable law governing their contractual obligations.72 This choice may apply to the whole or part of a contract (depecage), subject to the choice being demonstrated with reasonable certainty.73 Such choice may be dis-applied if it does not appear ‘manifestly incompatible with the public policy (ordre public) of the forum’.74 The choice could refer to non-State law, such as the customary laws of the provider indigenous or local community’s habitual residence.75

68  MATS ‘are closer and more similar to licenses and loan agreements, than to sales contracts’: UNCTAD (n 35) 156. 69  NP (n 23) art 18(1). 70  Godt (n 50) 423. 71  Introduction, para 1.12; however, the Principles do not apply to the law determining the jurisdiction of a MAT (art 1(3)(b)). 72  EC Regulation 593/2008. 73  art 3(1). 74  art 21. The choice is subject to art 9 (below). 75  See, eg Halpern v Halpern [2007] EWCA Civ 291. We are grateful to Alex Mills for the point.

186 

Elisa Morgera and Lorna Gillies

Absent an applicable law clause, legal uncertainty may arise as the determination of the law that will govern the dispute, which would be left to the domestic court where legal action has been brought, on the basis of the domestic norms on private international law in its jurisdiction. For this reason, it is necessary to establish the characteristic performer of MATs, since it is the law of that party’s habitual residence which will apply.76 As argued above, the characteristic performer is that party whose performance is regarded as fundamental to the ­purpose of the contract and from a public international law perspective, it could be the user of the genetic resources or traditional knowledge that is the characteristic performer of benefit-sharing. Whether the parties have specified a choice or not, the applicable law is subject to overriding mandatory rules, which are laws that ‘cannot be derogated from by agreement.’77 Overriding mandatory provisions of a country could be those regarded as crucial for safeguarding public interests.78 In the context of MATs, public interests may include the local or customary protections in place for providers such as indigenous peoples and their representatives. The circumstances upon which this might apply are two-fold, but both are likely to have limited effect. The first is where the applicable law is subject to the overriding mandatory rules of the forum.79 The protection for the provider of the genetic resource or traditional knowledge is likely to differ between jurisdictions. The ­second is where the mandatory rules of the place of performance render performance u ­ nlawful.80 However, this may point towards the mandatory rules of the user’s habitual residence, as the party undertaking the fundamental purpose of the contract. The utility of these provisions depends on the purpose of the relevant mandatory rule. In addition, it can also be argued that the public policy of the forum should be upheld if those earlier provisions are deemed manifestly incompatible with the forum’s public policy objectives.81 The potential consequences of a choice of law are therefore significant for providers, for example in determining the validity of a jurisdiction agreement, particularly if the jurisdiction specified is not that of the provider to MATs.

D.  Access to Justice and Recognition of Foreign Judgments With regard to access to justice and recognition of foreign judgments, the Nagoya Protocol requires the development of domestic measures on access to justice and

76  The Rome I Regulation, for instance, contains rules which determine the applicable law in the absence of choice: art 4(2). 77 Lord Collins of Mapesbury (ed), Dicey, Morris & Collins on The Conflict of Laws 15th edn (­London, Sweet & Maxwell, 2012) paras 32R–082. 78  eg overarching objective of art 9(1) of Rome I Regulation. 79  art 9(2). 80  art 9(3). 81  As arts 9(1) and (3) may require to be considered in the light of art 21.

Public International Law Objectives

 187

utilisation of mechanisms of mutual recognition and enforcement of foreign judgments and arbitral awards,82 with a view to supporting providers that usually do not have easy access to courts in third countries. It has been noted that this requires unilateral development of domestic measures, rather than the m ­ ultilateral development of harmonised requirements.83 It may also serve to underline that both Parties that see themselves as mostly users’ countries or providers’ countries have to develop such domestic measures. The Nagoya Protocol further obliges Parties to take effective measures, as appropriate, regarding access to j­ustice.84 It has thus been argued that human rights standards may be used as a yardstick to ensure that access to justice has been provided in a specific case under the ­Protocol.85 State Parties also have an obligation to adopt effective measures addressing the utilisation of mechanisms for the recognition and enforcement of foreign judgments and arbitral decisions.86 In other words, they are to support participation in existing mechanisms or establish new ones if they do not exist.87 Recognition of foreign judgments remains a complex matter.88 Where the parties have agreed a choice of jurisdiction, the 2005 Choice of Court Convention establishes an obligation to recognise or enforce a judgment from such a court.89 There are protections, however, where recognition may be refused such as the right to a fair trial, where ‘the judgment is incompatible with fundamental principles of procedural fairness.’90 By contrast, the recognition of foreign arbitral awards may be considered ‘generally easier’ as a high number of countries are Parties to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.91 There is also the possibility for Parties to conclude an ex post arbitration arrangement.92 In sum, as a key principle of dispute resolution concerning MATs, the Nagoya Protocol facilitates to a degree the autonomy of parties to MATs in selecting the jurisdiction and applicable law. State Parties to the Protocol, however, continue to have two important contributions. The first is through the application of private international law in the absence of choice by MATs parties. The second is to protect the provider of genetic resources or traditional knowledge, who is usually the weaker party to the MAT, from standard choice of law clauses, by subjecting the latter to overriding mandatory provisions or the operation of the public policy exception. 82 

NP (n 23) art 18(3). Glowka and Normand (n 45) 36. Greiber et al (n 51) 187. NP (n 23) art 18(3)(a). 85 A Savaresi, ‘The International Human Rights Law Implications of the Nagoya Protocol’ in Morgera, Buck and Tsioumani (n 27) 72. 86  NP (n 23) art 18(3)(b). 87  Chiarolla (n 46) 445. 88  CBD Working Group on ABS, ‘Report of the expert meeting on compliance,’ UNEP/CBD/WGABS/7/3. For a discussion based on the case of Japan, see Isozaki (n 43) 443–44. 89  art 8. 90  art 9(e). The grounds are broadly similar to those in Arts 36, 37 and 29 of EU 1215/2012. 91  Chiarolla (n 47) 444. 92 ibid. 83  84 

188 

Elisa Morgera and Lorna Gillies

E.  Alternative Dispute Resolution The Nagoya Protocol highlights the possibility for parties to MATs to agree upfront to settle disputes through alternative dispute resolution (ADR) mechanisms rather than domestic courts.93 This may be useful when such non-judicial means entail higher flexibility, simpler procedures and lower costs than judicial ­mechanism.94 The provision explicitly mentions mediation or arbitration, but does not exclude that parties to MATs may also agree to have recourse to other mechanisms, including community-based dispute resolution systems or an international institution that may facilitate the resolution of the dispute. State Parties’ obligations to encourage parties establishing MATs to include alternative dispute resolution mechanisms as options should be interpreted and implemented taking in due consideration indigenous peoples’ and local communities’ customary laws and procedures, when these communities are concerned by the ABS transaction.95 There may be an advantage in applying non-State law through such mechanisms. The Protocol, however, glosses over the complexity of utilising alternative dispute resolution mechanisms generally used in commercial law disputes for the purposes of achieving fair and equitable benefit-sharing, although it cannot be excluded that guidance on this aspect could be developed by the Protocol’s governing body at a later stage.96 The Nagoya Protocol does not specify which measures must be taken by State Parties, but qualifies the obligation by reference to ‘as appropriate’, thereby leaving flexibility to State Parties in its implementation. Parties can thus choose among various ways to facilitate access to courts or the ‘option’97 for alternative dispute resolution mechanisms for foreign users or providers. Insofar as indigenous peoples and local communities are parties to MATs, consideration must be given to their customary laws and procedures,98 in accordance with relevant international human rights norms and standards.99 In that regard, it has been recommended that States ensure the best means to attain access to justice in line with indigenous peoples’ self-determination and related rights to participate in decision-making affecting them.100 States are also expected to work with indigenous peoples and local communities to address the underlying issues that prevent them from having

93  NP (n 23) art 18(1). See for instance Art 8 of the ITPGRFA SMTA which provides for the following steps on dispute resolution: amicable dispute settlement, mediation and arbitration. 94  Isozaki (n 43) 446. 95  NP (n 23) art 12(1): see Morgera et al (n 24) 217–22. 96  Young (n 30) 451, 488. See Morgera et al (n 24) 335–36. 97  art 18(1)(c). 98  NP (n 23) art 12(1). See Morgera et al (n 24) 217. 99  See Morgera et al (n 24) 31–42. 100  Human Rights Council, ‘Expert Mechanism Advice No 5 Access to justice in the promotion and protection of the rights of indigenous peoples’, (2013) www.ohchr.org/Documents/Issues/IPeoples/ EMRIP/Session6/A-HRC-EMRIP-2013-2_en.pdf, Annex, para 4.

Public International Law Objectives

 189

access to justice on an equal basis with others, and facilitate their access to legal remedies including by supporting their capacity development in making use of legal systems.101 In private international law terms, ADR measures have been given recognition by courts and increasingly referred to in recent international private law ­instruments.102 A range of concerns, however, surround the recourse to ADR. From a public international law perspective, ADR (particularly arbitration) may well be more costly and less transparent than access to national courses,103 as arbitral awards are usually confidential. In addition, arbitrators are likely to be more familiar with (and therefore more inclined to give weight to) commercial law than international environmental law dimensions of the dispute. From a private international law perspective, a principled objection can also be identified: as discussed elsewhere in this volume,104 arbitration essentially ‘takes away from States altogether’ their regulatory authority over the private law questions at hand, and with that—we add—also the regulatory authority over the underlying public international law objectives. There is therefore a risk in diverting disputes from courts, as public bodies may be better entrusted to pursue public objectives. The risk consists in exposing parties to power imbalances in the resolution of the dispute, and the lack of similar standards of justice than those presumed to be inherent in courts.105 This flexible approach should be thus subject to three related conditions, which have already been identified in the previous discussion about the role of private international law under the Nagoya Protocol. First, recourse to ADR should not restrict access to a court and an appropriate remedy in line with international human rights law. Second, it should ensure private international law supports the principle of comity, by treating foreign laws in an equivalent manner and providing for the mutual enforcement of foreign judgments. Third, the option in the Protocol for alternative dispute resolution should support the provider of genetic resources or traditional knowledge, if that is the weaker party to MATs. These considerations call for further discussion at inter-governmental level on the role of protective jurisdiction and choice of law rules, as well as ADR, in resolving disputes arising from MATs.

101 

ibid, paras 8 and 10. the English High Court in Cable and Wireless Plc v IBM United Kingdom Ltd [2002] All ER (Comm) 1041; Recital 12 Regulation EC1215/2012, Hague Conference’s Principles on Choice of Law in International Commercial Contacts 2015, para 1.20. 103  While to date there has been nearly no national litigation on MAT, see: T ten Kate, L Touche and A Collis, ‘Benefit-sharing Case Study: Yellowstone National Park and the Diversa Corporation— Submission to the Executive Secretary of the Convention on Biological Diversity’ (22 April 1998) 17–18. 104  Mills (n 3). 105  L McGregor, ‘Alternative Dispute Resolution and Human Rights: Developing a Rights-Based Approach through the ECHR’ (2015) 26 European Journal of International Law 607, 609. 102  eg

190 

Elisa Morgera and Lorna Gillies

F.  Preliminary Observations In sum, as a key principle of dispute resolution concerning MATs, the Nagoya Protocol facilitates party autonomy in selecting the jurisdiction and applicable law. It remains doubtful, however, whether it is feasible to achieve the fairness and equity objectives of the Nagoya Protocol through contractual negotiations in the context of documented disparities in bargaining power among likely parties. From a public law perspective, one potential avenue to assessing this may be the multilateral Compliance Committee created under the Protocol.106 This nonadversarial Committee could assess the extent to which States exercise control over contractual negotiations and the degree of inter-State cooperation in ensuring access to justice and the recognition and enforcement of foreign judgments, with a view to providing advice to Nagoya Protocol Parties. From a private law perspective, State Parties to the Protocol continue to have two important contributions. The first is to determine the application and effectiveness of private international law to determine jurisdiction and applicable law in the absence of party choice. The second is to protect providers of genetic resources or traditional knowledge, who is usually the weaker party to MATs, from standard choice of law clauses. By subjecting the latter to overriding mandatory provisions or the operation of the public policy exception, preference is given to the laws and courts of the providers of genetic resources or traditional knowledge. However, this is subject to the overriding mandatory provision of the forum. The preceding analysis from a private law perspective has also identified a series of questions that have not yet received sufficient attention under the Nagoya Protocol: the role of human rights standards of access to justice in connection with the option of ADR and the characterisation of MATs as international commercial contracts, which has implications for establishing an international special jurisdiction. The Nagoya Protocol Compliance Committee could therefore potentially provide clarifications both on the broadly conceived private dimensions of the Nagoya Protocol, as well as on these technical questions arising from a narrow understanding of private international law, that also have a bearing on realising the equity objective of the Protocol.

III.  Standardised Contractual Clauses under the International Treaty The International Treaty on Plant Genetic Resources for Food and Agriculture has as its objective the conservation and sustainable use of plant genetic resources for

106 

NP (n 23) art 20; and Decision NPI-1.

Public International Law Objectives

 191

food and agriculture, as well as the fair and equitable sharing of benefits arising from their use, in harmony with the CBD, for sustainable agriculture and food security. Under the International Treaty, a multilateral system of access and ­benefit-sharing facilitates access to, and exchange of, a specified list of crops107 that are under the management and control of State Parties and in the public domain, as well as those held by a network of collections ‘in trust for the benefit of the international community’.108 The specified crops are then held in a common pool of plant genetic resources for food and agriculture that had been identified on the basis of criteria of food security and interdependence,109 called the Multilateral System. The crops in the Multilateral System are then exchanged according to the terms of the standard Material Transfer Agreement (SMTA), which is a standardised contract that was intergovernmentally negotiated and adopted by the Treaty’s Governing Body.110 Under the International Treaty, therefore, recourse is had to standard contractual clauses for the realisation of the Treaty objective of fair and equitable benefitsharing. This could in principle ensure that private contracts are drafted in a way that clearly contributes to the Treaty objective. As opposed to ad hoc private contractual negotiations under the Nagoya Protocol, the Treaty’s multilateral benefitsharing system provides a more direct line of accountability to achieve equity as it is intergovernmentally adopted. In other words, States, who are bound to achieve Treaty objectives, are responsible for devising contractual clauses such as to ensure that a private law instrument can achieve a public international law objective. To the authors’ knowledge, however, no study has been undertaken to assess whether and to what extent multilaterally standardised contractual clauses effectively serve to achieve equity, or to determine the relative advantages and shortcomings of bilateral and multilateral benefit-sharing approaches vis-à-vis realising equity.

A. The Interface between the International Treaty and Private International Law The private law dimension of the International Treaty lies in its reliance on ­standard contractual clauses in the SMTA that provide a choice between two

107  ITPGRFA, annex I. This section draws on E Tsioumani, ‘Exploring Fair and Equitable Benefit Sharing from the Lab to the Land (Part I): Agricultural Research and Development in the Context of Conservation and the Sustainable Use of Agricultural Biodiversity’ (SSRN, 2014) www.papers.ssrn. com/sol3/papers.cfm?abstract_id=2524337. 108  Agreement with FAO to Place the International Agricultural Research Centres of the Consultative Group on International Agricultural Research In-Trust Collections of Plant Genetic Resources under the Auspices of FAO (1994); and CGIAR Principles on the Management of Intellectual Assets (2012): E Tsioumani, ‘Beyond Access and Benefit-sharing: Lessons from the Law and Governance of Agricultural Biodiversity’ (SSRN, 2016). 109  ITPGRFA art 11(1) and preamble. 110  ITPGRFA Governing Body Resolution 2/2006 (2006).

192 

Elisa Morgera and Lorna Gillies

­ andatory monetary benefit-sharing options: a default scheme, according to m which the recipient will pay 1.1 per cent of gross sales to the Treaty’s benefitsharing fund in case of commercialisation of new products incorporating material accessed from the Multilateral System and if its availability to others is restricted; and an alternative formula whereby recipients pay 0.5 per cent of gross sales on all products of the species they accessed from the Multilateral System, regardless of whether the products incorporate the material accessed and regardless of whether or not the new products are available without restriction.111 Those that make their products available for further research and breeding without restriction, however, are exempted from mandatory payments. Notwithstanding the limited transaction costs associated with a standard contractual approach as opposed to the ad hoc one under the Nagoya Protocol, the SMTA is only used to a limited extent and no monetary benefits have been accrued yet.112 A process is underway under the International Treaty to develop an upfront subscription system (as fees for access to materials in the Multilateral System)113 that may replace or complement the current payment obligations after commercialisation. The proposed system is expected to further reduce transaction costs (as it would save the costs of tracking genetic resources up to the point of their commercialisation), and increase legal certainty.114 These negotiations are therefore expected to lead to an amendment of the standard contractual clauses.115 Regardless of its current or likely future form, the standardised contractual approach of the International Treaty may be capable to manage the risk, identified at the start of this chapter, arising from the delegation of responsibility to realise a Treaty objective to parties to a private contract. First, this is done through an express choice of law clause in the SMTA, which refers to ‘General Principles of Law, including the UNIDROIT Principles of International Commercial Contracts 2004, the objectives and the relevant provisions of the Treaty and, where necessary for interpretation, the decisions of the Governing Body’.116 This shows that a standardised contract allows a clearer, explicit connection with the public international law dimension of an ABS transaction, by making reference to the Treaty objectives and provisions as terms of reference for the interpretation of the contract.117

111 

see the ITPGRFA Standard Material Transfer Agreement, arts 6(7) and 6(11). Tsioumani (n 108). 113  IT/GB-6/15/6 Add.1 and Rev.1 (2015). 114  S Gagnon et al, ‘Summary of the Sixth Session of the Governing Body of the International Treaty on Plant Genetic Resources for Food and Agriculture’ (2015) 9(565) Earth Negotiations Bulletin. 115  That is expected in 2019: see Governing Body resolution (2017). 116  SMTA, art 7 (emphasis added). 117  C Chiarolla, ‘Plant Patenting, Benefit Sharing and the Law Applicable to the Food and Agriculture Organisation Standard Material Transfer Agreement’ (2008) 11 Journal of World Intellectual Property 1, observes ‘The reference to “the objectives and the relevant provisions of the Treaty” (ie, truly international standards) reflects the important public interest functions discharged by the SMTA.’ 112 

Public International Law Objectives

 193

If a dispute has been referred to arbitration, the arbitral tribunal would apply the UNIDROIT Principles. The 2004 Principles state that the applicable law is still to be determined by reference to the private international law rules of the forum.118 The clause, therefore, does not necessarily exclude the applicability of national law, as discussed by Chiarolla. National laws may have a supplementary role in addressing issues that are critical for the implementation of the SMTA, including the validity of the method of expressing acceptance of the SMTA to the enforceability of third party beneficiary’s rights, from the scope of intellectual property right protection, which can be claimed by recipients over a derivative product, to the enforcement of their benefit-sharing obligations.119

Questions of applicable law are quintessentially a technical matter of private international law and the resulting balance between non-national, international and national standards in the context of the SMTA may end up having a significant influence on the realisation of equity in this context.120 In other words, notwithstanding the careful management of the risks arising from the reliance on private contracts through a standardised approach, State Parties continue to play a significant role in the realisation of the Treaty objective. Second, to ‘ensure that the SMTA is interpreted and applied in a uniform manner across different jurisdictions, the recourse to national courts should be almost entirely excluded for any dispute concerning the SMTA’.121 In effect, under the International Treaty, the observance of the contractual terms and conditions of the SMTA by individual providers and recipients is guaranteed by the UN Food and Agriculture Organization (FAO) acting as the ‘Third Party Beneficiary,’ in accordance with the terms and conditions of the SMTA. FAO is the entity designated by the Treaty Governing Body to act on its behalf to request information to SMTA parties, initiate dispute settlement procedures regarding rights and obligations of SMTA parties, and in the context of dispute settlement, the right to request that the appropriate information, including samples as necessary, be made available by SMTA parties, regarding their obligations. FAO may receive and use information on cases of non-compliance from SMTA parties or any other person. Where FAO has received such information, it may request additional information from SMTA parties. If the information so gathered leads FAO to believe that a possible case of non-compliance might have occurred, FAO may trigger amicable negotiations through an initial notice to the parties to the SMTA. If the dispute cannot be resolved by negotiation, FAO shall commence or encourage SMTA parties to commence mediation proceedings.122 If the dispute has not been resolved

118  119 

UNIDROIT Principle of International Commercial Contracts 2004, Preamble 4(a), 3. Chiarolla (n 117).

120 ibid. 121 ibid.

122 www.fao.org/plant-treaty/areas-of-work/the-multilateral-system/operationalization/en/.

194 

Elisa Morgera and Lorna Gillies

by ­mediation within six months of the commencement of the mediation or if it otherwise appears that the dispute cannot be resolved within 12 months after the issuance of initial notice, FAO may submit the dispute to binding arbitration.123 As explained by Chiarolla, SMTA parties are free to choose the arbitrators and the lex arbitri; but if they do not do so, ‘the dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce, by one or more arbitrators appointed in accordance with the said Rules.’124 Because of the reliance of the Treaty SMTA on alternative dispute resolution, the point made above is valid also in the Treaty context: ADR should not prejudice the right to have recourse to standard dispute resolution, in order to ensure access to a court and a remedy in light of international human rights standards. This point is supported by the updated UNIDROIT Principles 2010.125 There may, thus, be a tension between ensuring the Treaty objective of equity through mandatory ADR under the Treaty and the need to balance also international human rights law considerations related to access to justice and a remedy, if the ADR provided for under the Treaty does not ensure similar standards to those presumed to be inherent in courts.126 In addition, private international law continues to play a role in this connection: State Parties must ensure comity—the equivalence of acts and judgments, and the enforcement of arbitral awards.

B.  Comparative Observations Compared to the Nagoya Protocol and its bilateral benefit-sharing approach relying on ad hoc contractual arrangements, the International Treaty and its multilateral benefit-sharing approach relying on standardised contractual approaches offer specific opportunities, both in terms of applicable law and access to justice, to ensure a coherent interpretation of the equity objective of the Treaty. As States, who are bound to achieve Treaty objectives, are to devise and agree upon contractual clauses, they play a direct role in ensuring that a private law instrument can achieve a public international law objective. As a result, the SMTA specifically calls for interpreting contractual clauses in light of the Treaty objective. In addition, it excludes disputes in national courts in different jurisdictions, thereby maximising the chances of applying the contractual clauses in a uniform manner thanks also to the role of FAO as the third party beneficiary acting in the interests of the providers. Even in this context, however, the operation of private international law is not excluded and the considerations made from that perspective in the analysis

123 www.planttreaty.org/content/what-third-party-beneficiary; SMTA art 8.4(c). The WHO PIP Framework includes in its Standard Material Transfer Agreements with private companies the same provision on settlement on disputes than the International Treaty. 124  Chiarolla (n 117). 125  UNIDROIT Principle of International Commercial Contracts 2010, Preamble 4(a). 126  McGregor (n 105) 609.

Public International Law Objectives

 195

of the Nagoya Protocol have some bearing, notably the continued equivalence of acts and judgments and enforcement of judgments via a multilateral agreement or through comity.127 In addition, the applicable law is still to be determined by reference to the private international law rules of the forum,128 and recourse to ADR cannot exclude access to standard dispute resolution if so required by relevant international human rights standards related to access to justice. These considerations are not only relevant by way of contrast with the ad hoc contractual approach of the Nagoya Protocol. They may also be relevant de lege ferenda, if the Parties to the Nagoya Protocol decide to internationally endorse model contractual clauses,129 whether generally or as a ‘predetermination of enforceability’ that would enable Parties to ensure their automatic recognition in domestic courts.130 This development could lead to a re-universalising experience of what was delegated to the contractual level to realise international treaty objectives.131 Specifically, the Nagoya Protocol creates a best-endeavour obligation for all Parties to support the development, update and use of model contractual clauses for MAT.132 This obligation can be undertaken unilaterally by State Parties establishing ‘default’ or ‘standard’ MAT for specific categories of genetic resources under their jurisdiction or for specific cases.133 Such default MAT would likely have to be accepted by a user upon applying for access to genetic resources and/or traditional knowledge, or could apply automatically unless different MAT are negotiated.134 Parties could also implement this obligation collectively in the context of bilateral or regional ABS frameworks,135 and at the multilateral level. This should be read in conjunction with the obligation for Parties to endeavour to support, as appropriate, the development by indigenous and local communities of model contractual clauses for benefit-sharing arising from the utilisation of traditional knowledge associated with genetic resources.136 On this basis, the Protocol’s governing body is to periodically ‘take stock’ of the use of standardised contractual clauses,137 seeking to tap into normative activities undertaken by various ABS stakeholders such as the research community, the private sector, indigenous peoples and local communities, and NGOs at the national (but also sub-national and transnational)

127 

Chiarolla (n 14). UNIDROIT Principle of International Commercial Contracts, Preamble 4(a), 3. 129  NP (n 23) art 19(2). 130 Young (n 30) 493. Such endorsement could be undertaken on the basis of Nagoya Protocol Art 26(4)(f). 131  The authors are grateful to Alex Mills for this comment during the first workshop organised in connection with this book project. 132  NP (n 23) art 19(1). 133  Morgera et al (n 24) 144. 134 See for instance the standard conditions that apply to bioprospecting activities with non-­ commercial purpose on Commonwealth territories in Australia: ‘Permits for Non-Commercial Purposes’, Government of Australia, www.environment.gov.au/node/14465. 135  See Morgera et al (n 24) 93. 136  NP (n 23) art 12(3)(c). See Morgera et al (n 24) 216. 137  NP (n 23) art 19(2). 128 

196 

Elisa Morgera and Lorna Gillies

levels as a bottom-up source of inspiration for multilateral discussions on ways to facilitate implementation of and compliance with the Protocol.138 In doing so, State Parties to the Nagoya Protocol would be well advised to take into account the private international law-related challenges arising from a standardised approach.

IV.  Overall Reflection There is a significant, and growing, trend in international environmental law of relying on private contracts for the contextual realisation of treaty objectives related to equity. This is particularly the case in relation to access to genetic resources for research and development, but it is also true in the specific area of deep seabed mining.139 That said, the type of decision making (consensus or other) and the representation of different States in the decision-making body tasked with the development of standard contractual clauses varies from one framework to another. In addition, the degree to which these clauses are open, if at all, to negotiations varies from one framework to another.140 Different examples can also be found and include, for instance, the use of private international contracts in the area of climate change,141 as part of a project-based mechanism to assist developed countries to achieve their emission reduction commitments and contribute to sustainable development.142 Experiences under international treaties that set out multilateral benefit-sharing systems seem to indicate that the international community can draw multilaterally a private contract that may limit risks in coherently pursuing a treaty objective related to equity. Whether the contracts are left to bilateral negotiations or to intergovernmental multilateral standardisation, however, the sheer technical complexity of the subject-matter makes it difficult to predict which contractual clauses can in practice contribute to achieve such a treaty objective.143 In informal s­ ectors (open-access seeds) where experimentation has been made on using contracts to proactively contribute to global goals, huge difficulties have been encountered in making contracts justiciable. Fear of potential intellectual property litigation (due to uncertain outcome, costs and protracted procedures) generally inhibits

138 

E Morgera, M Buck and E Tsioumani, ‘Introduction’ in Morgera, Buck and Tsioumani (n 27) 10. A separate discussion, however, is warranted for the contracts used by the International Seabed Authority under the UN Convention on the Law of the Sea, given the role of the International Tribunal for the Law of the Sea in that connection. 140 Under WHO and ISA, the international organisation engages in negotiations with private operators. 141  Emission Reduction Purchase Agreements. 142  Under the Kyoto Protocol Art 12: Clean Development Mechanism (CDM). A successor to this Mechanism is currently being developed under the Paris Agreement (Art 6). 143  We are grateful to Elsa Tsioumani for this observation. 139 

Public International Law Objectives

 197

small-scale users from enforcing contractual obligations of a proactive nature.144 Thus, even when standardised, contractual arrangements in practice disadvantage private parties with less means and knowledge. The need to couple reliance on standard contractual clauses with the provision of appropriate capacity building and other support from States in a treaty can thus be quite significant. In addition, reliance on private contracts and alternative dispute resolution techniques for the realisation of international treaty objectives also raises challenges in balancing confidentiality and the necessary degree of transparency linked to the pursuance of a global objective.145 Not enough literature has engaged with the rationale underlying this trend, its potential and pitfalls for the functioning and legitimacy of international cooperation. This chapter has identified several questions that require further consideration, through a dialogue among public and private international lawyers. Granted, such a dialogue would require, first of all, building a certain level of familiarity with (or interest in) highly technical international regimes such as those on ABS that may be difficult to achieve, particularly in those countries where legal capacity is a scarce resource to start with. Equally, such a dialogue requires that public international lawyers engage with very detailed and complex questions of private international law that are quite unfamiliar to them, to get to critical underlying policy choices. Nevertheless, such a dialogue is needed, as it is on the minute and complex details of these bodies of law that opportunities for realising equitable outcomes depend in practice. From a public international law perspective, the first question is whether and under which conditions private law contracts are appropriate instruments to realise international treaty objectives and whether they may lead to undue divergence in the interpretation and application of international treaty provisions. Under the Nagoya Protocol on Access to Genetic Resources and Benefit-sharing, a bilateral approach to the matter (ie leaving discretion to individual parties as to whether and to what extent to regulate private contractual negotiations) certainly has the greatest potential for misuse and divergent approaches, in consideration of the documented power imbalances among likely parties. Under the International Treaty on Plant Genetic Resources for Food and Agriculture, where a multilateral approach to benefit-sharing has been adopted, intergovernmentally adopted standard clauses may support coherence in interpretation but they may also prevent bottom-up practices that may be better suited to a particular reality or context. This is an opportunity, instead, that the Nagoya Protocol could seize with 144  E Tsioumani, M Muzurakis, Y Ieropoulos and A Tsioumanis, ‘Following the Open Source Trail Outside the Digital World: Open Source Applications in Agricultural Research and Development’ (2016) 14 tripleC 145. 145  These questions have arisen in the specific context of the International Seabed Authority, but could be relevant in other treaty settings. See ITLOS, 2011 Advisory Opinion of the Seabed Disputes Chamber of International Tribunal for the Law of the Sea on ‘Responsibilities and Obligations of States Sponsoring Persons and Entities with Respect to Activities in the Area’ para 225. We are grateful to Duncan French for drawing our attention to these points at the first workshop.

198 

Elisa Morgera and Lorna Gillies

regular stocktaking exercises of practices on the ground. Connected to this discussion, another point that has not received sufficient thought is the potential role of multilateral compliance committees to ascertain opportunities and risks for different contracts to offer a diversity of meanings of international obligations. From a private international law perspective, more discussion is necessary to understand the role of the doctrine of comity as a bridge between self-interest and common objectives in ensuring equivalence, recognition of party autonomy and the application of mandatory rules protecting the weaker party to a contract. This is necessary to ensure that States’ reliance on private contacts to implement international environmental obligations does not shield them from the responsibility to create the necessary legislative preconditions at the domestic level, including through private international law, for the realisation of the underlying public international law objectives. Specifically, private international law questions related to access to justice should be further discussed, including when recourse is made to alternative dispute resolution, in light of international human rights standards on access to an appropriate remedy. These considerations also have a bearing on the determination of the characteristic performance of ABS contracts, with a view to realising the equity objective pursed by relevant public international law, rather than by reference to prevalent transnational commercial practice.

9 International Investment Arbitration and the Arduous Route to Transparency SHARON E FOSTER*

I. Introduction Investor-state arbitration and the transparency demands that it has had to contend with is a fruitful area for exploring the interaction between private and public international law for at least two reasons. First, investor-state arbitration proceedings were mirrored on commercial arbitration proceedings between private parties where confidentiality and privacy have been and continues to be the norm. Second, it is now recognised that investor-state arbitrations may well involve ­public interests and therefore should be subject to transparency demands. ­Accordingly, we see a divergence rather than a convergence of private and public international law in this area of law. This chapter explores the discourse regarding the pros and cons of making investor-state arbitrations more transparent. In so doing it illustrates how international commercial arbitration and public international law interact. This chapter proceeds as follows. First, with a brief discussion of the history of arbitration in the private context and state versus state dispute resolution. Second, it will look at the rationales for confidentiality and privacy in commercial law and those for transparency in public international law. Third, it addresses how the functionality of confidentiality and privacy in private international commercial arbitration and the value of transparency in public international law interact. This section also examines how these two conceptualisations meet in terms of areas of accord and divergence as well as the state of the current global system of investor-state arbitration.

*  The author would like to thank the University of Arkansas, School of Law for its generous grant and Professor Ellen Hey for her contributions to this chapter.

200 

Sharon E Foster

Next, some basic rule of law principles are discussed as these principles appear to be a major component of the clash of private values with public values. For example, the debates surrounding the Transatlantic Trade and Investment Partnership (TTIP), the Trans-Pacific Partnership (TPP) and the Comprehensive Economic and Trade Agreement (CETA) exemplify public concerns regarding transparency in investor-state arbitration and rule of law issues.1 Finally, this chapter reaches a number of conclusions regarding transparency and investor-state arbitrations and whether there should be divergence or convergence regarding transparency in the private commercial arbitration sector.

II. History Investor-state arbitration is a reflection of international commercial arbitration. This is understandable given the long history and development of international commercial arbitration and the commercial component of investor-state disputes. However, the early history of international commercial arbitration establishes a pluralistic and transparent approach rather than the more recent attempt to create a universal closed system. Historically, international commercial arbitrations were often public even being conducted in a public venue. It is only in more recent times that commercial arbitrations have become more private and confidential in nature.2

A.  Modern International Commercial Arbitration Prior to the 1920s, international commercial arbitration was, to a large extent, governed by domestic arbitration rules with the possibility that both substantive and procedural domestic law would apply. Additionally, if the arbitration involved a foreign state, issues of sovereignty would complicate the dispute.3 Given the

1  See M Weaver, ‘The Proposed Transatlantic Trade and Investment Partnership (TTIP): ISDS Provisions, Reconciliation, and Future Trade Implications’ (2014) 29 Emory International Law Review 225. 2  DW Brown, ‘Let Me In: The Right of Access to Business Disputes Conducted in State Courts’ (2015) Journal of Dispute Resolution 207, 214. For a detailed historical analysis see O Gelderblom, ‘The Resolution of Commercial Conflicts in Bruges, Antwerp, and Amsterdam (1250–1650)’ in Merchants in the Low Countries. The Organization of Long-Distance Trade in Bruges, Antwerp, and Amsterdam (1250–1650) (Princeton, Princeton University Press, 2008); R Michaels, ‘The True Lex Mercatoria: Law Beyond the State’ (2007) 14 Indiana Journal of Global Legal Studies 447; J Resnik, ‘Courts In and Out of Sight, and Cite’ (2008) 53 Villanova Law Review 771, 78; BJ Sokol, ‘“The Merchant of Venice” and the Law Merchant’ (1992) 6 Renaissance Studies 60. Regarding information flows of reputation as a means to limit cheating in the Middle Ages, see generally A Greif, ‘Reputations and Coalitions in Medieval Trade: Evidence on the Maghribi Traders’ (1989) 49 The Journal of Economic History 857. 3  Dispute Settlement, International Commercial Arbitration, United Nations Conference on Trade and Development, 19 (2005).

International Investment Arbitration and Transparency

 201

vastly different domestic laws regarding the arbitrability of disputes, as well as concerns regarding foreign litigation, the need for greater acceptance on an international level for arbitration and recognition and enforcement of arbitral awards was perceived. To address these concerns, several multilateral international treaties were proposed.4 The concept of privacy and confidentiality in international commercial arbitrations was not the main impetus for the formulation of acceptable international dispute resolution; rather it was the perceived need for an impartial forum and enforceability of a favourable result.

B.  History of Investor-State Arbitration The difficulties mentioned above with regard to international commercial arbitration between private parties were even more pronounced in the investor-state dispute.5 Prior to 1965, investor-state disputes were handled through diplomatic channels with unsatisfactory results. The system required a foreign investor to either use the domestic judicial system of the State party to the dispute or the foreign investor would have to call upon its home government for assistance and protection. If the investor’s home government decided to take up the cause, a decision often premised upon political considerations, then the matter may have been resolved by arbitration between the two states with the investor being relegated to a real party of interest status. The diplomatic process was perceived, particularly by investors and ­capital exporting states, to be inadequate.6 This process politicised the dispute, the requirement that local remedies be exhausted may have meant a futile process in a corrupt system and all of this together with the lack of control over the process meant uncertainty and risk; which businesses deplore. In addition to the ­diplomatic process, sometimes states established ad hoc arbitral tribunals to resolve ­disputes.7 But this, too, proved to be inadequate for the same reasons the diplomatic investor-state process was inadequate.8 4  League of Nations, The Geneva Protocol on Arbitration Clauses (adopted 24 September 1923, entered into force 28 July 1924) 27 LNTS 157; League of Nations, Convention on the Execution of Foreign Arbitral Awards (adopted 26 September 1927, entered into force 25 July 1929) 92 LNTS 301; Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York ­Convention) (adopted 10 June 1958, entered into force 7 June 1959) 330 UNTS 38. Additionally, the ­International Chamber of Commerce adopted its first arbitration rules in 1922 (Dispute Settlement, ­International Commercial Arbitration, United Nations Conference on Trade and Development, 22 (2005)). ­UNCITRAL’s quest for internationally acceptable arbitration processes continued in the 1976 ­UNCITRAL Arbitration Rules (UN General Assembly Resolution 31/98, 15 December 1976). 5  For a discussion regarding additional investor-state dispute resolution issues see the chapter by Noodt Taquela and Daza-Clark in this volume. 6  A Newcomb and L Paradell, Law and Practice of Investment Treaties (Dordrecht, Kluwer, 2008) 2, 5–6. 7  ibid, 6–7. This practice dates to the 1794 Treaty of Amity, Commerce and Navigation between Great Britain and the United States, 19 November 1794, 52 Cons TS (the Jay Treaty). 8  Newcomb and Paradell (n 6) 7–8.

202 

Sharon E Foster

While trade and investment were important to the United Nations’ post-World War II economic efforts, a multilateral, universal international law approach to investor-state disputes was initially thwarted due to the objections of the United States.9 Given the resistance to a multilateral approach, bilateral treaties became the standard mechanism to afford investor protection. The first bilateral treaties addressing investor protections were in the form of Friendship, Commerce and Navigation (FCN) treaties. These FCN treaties focused on substantive issues, such as standards of protection for investors from expropriation. The first ­bilateral investment treaty (BIT) was between Germany and Pakistan in 1959. Unlike the FCN, the BIT is more focused on investor-state issues. It appears that the Chad-Italy BIT of 1969 marked the beginning of modern BIT investor-state arbitration practice.10 As it seemed unlikely that there could be any broad agreement on the substantive standards of protection for foreign investors, focus was shifted to a more procedural approach; that of dispute resolution. In 1965 the World Bank introduced the International Centre for the Settlement of Investment Disputes (ICSID) Convention, which allowed for arbitration of investor-state disputes at the ICSID.11 The ICSID dispute resolution focused on procedural rather than substantive issues. One of the main goals of ICSID arbitration was to depoliticise investorstate disputes.12 However, sovereignty concerns were still high for most States so jurisdictional limits restricted certain non-State parties from initiating arbitration and required State parties to consent to arbitration. These jurisdictional limits greatly reduced the practical effect of the ICSID Convention but were ultimately overcome by BITs which often contain provisions whereby the investor may initiate arbitration and the State consented to arbitration.13 Although there were some attempts at multilateral agreements, investment ­relations proceeded on a bilateral basis until the establishment of the World Trade Organization (WTO) in 1994.14 However, even after the ratification of the WTO Agreement, foreign direct investment disputes were left to bilateral treaties. While the WTO treaty does address investment issues in Trade-Related Investment Measures (TRIMS), the coverage is limited to national treatment as no broad consensus could be reached regarding investor-state issues.15 The TTIP and TPP were intended to provide a model to ultimately achieve a multilateral investor-state treaty.16

9 ibid, 19–22; JW Salacuse, ‘The Emerging Global Regime for Investment’ (2010) 51 Harvard ­International Law Journal 427, 436–40. 10  Newcomb and Paradell (n 6) 45. 11  Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 575 UNTS 159, 18 March 1965. 12  Newcomb and Paradell (n 6) 28. 13  Dispute Settlement, International Commercial Arbitration, United Nations Conference on Trade and Development (2005) 26–27. 14  Marrakesh Agreement Establishing the World Trade Organization, 1867 UNTS 154, 15 April 1994. 15  Newcomb and Paradell (n 6) 54. 16 Weaver (n 1) 246 (citing US Department of State, ‘Press Release: European Union Reaffirm ­Commitment to Open, Transparent, and Non-Discriminatory Investment Policies’ (10 April 2012)).

International Investment Arbitration and Transparency

 203

III.  International Commercial Arbitration in Private International Law: Confidentiality and Privacy as the Norm The private international law arbitration process discussed here relates to private international commercial arbitration proceedings. In private international commercial arbitration confidentiality is perceived as the ‘norm’ but that is not always the case. Part of the problem with this perception is that confidentiality is often confused with privacy, which is the standard in international commercial arbitration. Privacy is associated with the fact that arbitrations are not open to the p ­ ublic. Confidentiality addresses maintaining party anonymity and non-­disclosure of information obtained during the arbitration.17 Privacy in arbitration proceedings is provided for in most arbitral tribunal rules but confidentiality varies from jurisdiction to jurisdiction and with arbitral authorities.18 However, between ­arbitral rules that provide for confidentiality and the ubiquitous use of confidentiality clauses in arbitration agreements19 confidentiality is the de facto norm and claimed to be one of the most highly valued aspects of international commercial arbitration in present times.20 Arguments in favour of confidentiality in private international commercial arbitration include protection of intellectual property, trade secrets or business information,21 party autonomy (freedom of contract),22 promoting disclosure,23 gathering evidence including witness testimony which would be more difficult

17 

AJ Schmitz, ‘Assuming Silence in Arbitration’ (April 2011) 269 New Jersey Lawyer 16. example, in Australia arbitrations are not confidential (Esso Australia Res Ltd v Plowman, 128 ALR 391, 183 CLR10 (Austl l995)) but in England they are (Ali Shipping Corp v Shipyard Trogir, 11 2 All ER 136; 1 Lloyd’s Rep 643 (Eng Ct App 1998)). The International Chamber of Commerce (ICC) arbitration rules do not provide for confidentiality (art 6) while UNCITRAL rules (arts 34(5) and 38(3)) provide for confidentiality of the award but do not impose confidentiality on the parties and provide for transparency in investor-state arbitrations (art 1, para 4). The International Centre for the Settlement of Investment Disputes (‘ICSID’) provides for confidentiality of the award, secrecy of the Tribunal’s deliberations and confidentiality by the arbitrators (Rule 6(2), Rule 15(1), Rule 48(4)). AC Brown, ‘Presumption Meets Reality: An Exploration of the Confidentiality Obligation in International Commercial Arbitration’ (2001) 16 American University International Law Review 969, 995–96; AL Norris and KE Metzidakis, ‘Public Protests, Private Contracts: Confidentiality in ICSID Arbitration and the Cochabamba Water War’ (2010) 15 Harvard Negotiation Law Review 31, 46. 19  Schmitz (n 17) 17. 20 See CG Buys, ‘The Tensions Between Confidentiality and Transparency in International ­Arbitration’ (2003) 14 American Review of International Arbitration 122; Norris and Metzidakis (n 18) 43. Although some surveys indicate this is not the case. See Buys, ibid, 123. 21 SC Nelson, ‘Alternatives to Litigation of International Disputes’ (1989) 23 The International Lawyer 187, 198–99; Buys (n 20) 123; Schmitz (n 17) 16–17; Norris and Metzidakis (n 18) 53–54. 22 BK Robinson, ‘Arbitration: The Quest For Confidentiality’ (2010) 58 Louisiana Bar Journal 180, 181–82; LK Doréa, ‘Public Courts Versus Private Justice: It’s Time to Let Some Sun Shine in on Alternative Dispute Resolution’ (2006) 81 Chicago-Kent Law Review 463, 482; Norris and Metzidakis (n 18) 49–53. 23  Schmitz (n 17) 16–17. 18  For

204 

Sharon E Foster

because of arbitral tribunals’ lack of coercive powers,24 a lack of confidentiality would render arbitration superfluous,25 avoiding negative publicity,26 and facilitating settlement.27 Arguments in favour of privacy include prohibitive costs for public access and allowing third-party participation, that public access may ­promote transparency but is not a necessary feature of transparency, and a lack of public interest in the private commercial arbitral process.28 While some may contend that in international commercial arbitration only ­private parties are affected29 at times arbitral decisions may greatly affect the public at large and, thus, be of public interest.30 Additionally, public access and the disclosure of information will ensure proper administration of justice.31 Further, a withdrawal of the insistence of confidentiality and privacy in proceedings which directly affect the public increases the public perception of fairness and respect for the arbitral system as well as educates the public about the arbitral system.32 And while these benefits are very important as with civil trials, they are not ­absolute. Access to arbitral proceedings should be denied if there is an important public interest, which may not be protected by less restrictive means or if a private party clearly defines a serious, specific injury.33

IV.  Investor-State Arbitration in Public International Law: Transparency as the Demand Although investor-state arbitration initially reflected a convergence with international commercial arbitration regarding confidentiality and privacy, the lack of transparency in the investor-state arbitral setting has caused criticism as ­investor-state arbitral decisions usually do affect the public and these decisions 24 

Norris and Metzidakis (n 18) 55–56. ibid, 54–55. 26  ibid, 57; Buys (n 20). 27  Norris and Metzidakis (n 18) 59–60. 28  LE Peterson, ‘Investment Amicus Curiae Interventions: The Tail That Wags the Transparency Dog’ (Kluwer Arbitration Blog, 27 April 2010) www.kluwerarbitrationblog.com/blog/2010/04/27/ amicus-curiae-interventions-the-tail-that-wags-the-transparency-dog/; CA Rogers, ‘Transparency in International Commercial Arbitration’ (2006) 54 University of Kansas Law Review 1301, 1304–09. 29  JA Maupin, ‘Transparency in International Investment Law: The Good, the Bad and the Murky’ in A Bianchi and A Peters (eds), Transparency in International Law (Cambridge, Cambridge University Press, 2013) 148. 30  Brown (n 2) 207, 210; Gannett Co, Inc v DePasquale, 443 US 368, 386, n 15 (1979). Eg, see Dred Scott v Sandford, 19 HOW 393, 15 LED 691; Plessy v Ferguson, 163 US 537, 16 SCT 1138, 41 LED 256; Brown v Board of Education, 347 US 483, 74 SCT 686, 98 LED 873; University of California Regents v Bakke, 438 US 265, 98 SCT 2733, 57 LED 2d 750. 31  Publicker Indus, Inc v Cohen, 733 F 2d 1059, 1061 (3rd Cir 1984); Brown (n 2) 211. Transparency also enhances accuracy of decisions. Resnik (n 2) 784. 32  Global Newspaper Co, v Super Ct for Norfolk Cnty, 457 US 596, 606 (1982); Brown (n 2) 211. 33  Publicker Indus (n 31) 1070–71; Brown (n 2) 211, 215 (citing to Del Coal For Open Gov’t v Strine, 733 F 3d 510, 517 (3rd Cir 2013)). See Maupin (n 29) 159. 25 

International Investment Arbitration and Transparency

 205

increasingly deal with, and develop, complex issues of substantive law.34 While there has been a movement to make transparency the norm in investor-state arbitrations where transparency has been included in the arbitration rules the ability for the parties to ‘opt-out’ is still possible.35 To further complicate the issues, there is no universal definition of transparency. Rather, transparency has been demanded with respect to a wide variety of issues which can roughly be categorised as governance, substantive law and procedural law.36 While this chapter focuses on procedural transparency, a brief discussion below regarding transparency concerns with respect to governance and substantive law is necessary in order to clarify the distinctions and recognise that transparency with respect to procedural rules has an effect on governance and substantive rules.

A.  Public International Law and Transparency Transparency is a word given broad application despite definitional uncertainty. For example, demands for transparency seek to empower individuals and groups in society vis-à-vis those actors who exercise powers of governance.37 While demands for transparency were initially made of traditional public actors, states and their subcomponents in particular, increasingly these demands are also made of international organisations, given globalisation, and of private actors, given privatisation.38 Demands for transparency in general have been justified on the basis of, among other arguments, inherent rights,39 the value of human dignity requiring the curtailment of the exercise of arbitrary powers and the requirements of democratic governance.40 Transparency has also been described as a ‘tool of accountability’ which has significance for legitimacy of governance, substantive law and ­procedural law.41 While these developments are laudable, it has also been 34 

Maupin (n 29) 145. But see the 2012 Model US Bilateral Investment Treaty (art 29) where transparency in arbitration is required thus reducing the parties’ ability to contract around transparency. Available at www.state. gov/documents/organization/188371.pdf. 36  See Maupin (n 29) 145–46. 37  JE Stiglitz, ‘On Liberty, The Right to Know, and Public Discourse: The Role of Transparency in Public Life’ (27 January 1999) Oxford Amnesty Lecture. Available at www.gsb.columbia.edu/mygsb/ faculty/research/pubfiles/1475/Stiglitz_OnLiberty.pdf. 38  JB Auby, La globalisation, le droit et l’État 2nd edn (Paris, LGDJ, 2010). 39  See Weaver (n 1) 225, 232, 239, 253; KH Cross, ‘Converging Trends in Investment Treaty Practice’ (2012) 38 North Carolina Journal of International Law and Commercial Regulation 151, 176; A Robert (transl S White), ‘European Parliament backs TTIP, rejects ISDS’ (euractiv.fr, 13 Jul 2015) www.­euractiv.com/sections/global-europe/european-parliament-backs-ttip-rejects-isds-316142; bilaterals.org, ‘Open Letter of Civil Society against investor privileges in TTIP’ (bilaterals.org, ­ 27 Dec 2013) www.bilaterals.org/?open-letter-of-civil-society. 40  Stiglitz (n 37) 7–8. 41  See F Schauer, ‘The Mixed Blessing of Financial Transparency’ (2014) 31 Yale Journal on Regulation 809, 820. 35 

206 

Sharon E Foster

pointed out that we should be wary of the dark sides of transparency, for example ­transparency based on illegally obtained information.42 Additionally, transparency has been accused of reducing independence in the decision-making process of governmental institutions.43 Further, there is the fear that transparency will ­discourage open discussions.44 Transparency as a global or universal value initially resounded in particular in international environmental law, or the law as related to sustainable development, as evidenced by the 1992 Rio Declaration, where the focus was on the national level of governance.45 Since then it has found its way into a wide variety of environmental regimes,46 human rights documents47 and instruments of international organisations.48 Recently, the UN Secretary General in presenting his Synthesis report for the post-2015 sustainable development agenda entitled, The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet, also emphasised the importance of transparency in attaining the sustainable development goals.49 Transparency, moreover, plays an important role in the UN Global Compact in which participating companies annually are to issue a so-called Communication on Progress (COP) to their stakeholders on their ­progress in implementing the 10 principles of the UN Global Compact.50

B.  Investor-State Arbitration and Transparency With regards to investor-state arbitration, the modern private international law approach of confidentiality and privacy rather than transparency has been adopted. There are no rules requiring disclosure of arbitral decisions or pre-­ decision settlements, save the possibility that a settlement may have to be d ­ isclosed if a local law requires.51 Accordingly, public monies may be disbursed to a ­private party without the public’s knowledge. To some extent, transparency does exist in terms of published laws and, to a more limited extent, procedural rules.52 42 

Such as WikiLeaks. Schauer (n 41) 820. 44  Stiglitz (n 37) 22. 45 UN General Assembly, Rio Declaration of Environment and Development, A/CONF.151/26 Vol I (12 August 1992) Principle 10. 46  Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, 2161 UNTS 447, 25 June 1998. 47  Committee on Economic, Social and Cultural Rights, General Comment No. 15: The Right to Water, UN Doc E/C.12/2002/11 (2002) para 48. 48  World Bank Access to Information Policy (1 July 2015) EXC4.01-POL.01. 49  UN General Assembly, ‘The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet’ UN Doc A/69/700 (4 December 2014). 50  COPs are available on the website of the UN Global Compact, www.unglobalcompact.org/COP/ index.html. 51  Maupin (n 29) 161. In the United States, the Sunshine in Litigation Act would require courts to consider public health and safety issues before ordering settlements confidential. Despite the fact that a bill has been introduced several times it has yet to pass. On a discussion of the Sunshine in Litigation Act see Resnik (n 2). 52  See Maupin (n 29) 151. 43 

International Investment Arbitration and Transparency

 207

However, arbitration awards, pleadings and evidence are only published if the parties consent, and public observation and participation, through amicus briefs, are also limited.53 As discussed in more detail below, arbitration rules for investorstate arbitrations are requiring increased transparency, but the same cannot be said regarding settlements in the investor-state context. While some bilateral investment treaties (BITs) and regional investment treaties require various degrees of transparency of investor-state arbitrations,54 the UNCITRAL Transparency Rules illustrate that transparency remains controversial in this context.55 The UNCITRAL Transparency Rules basically determine that for new investment treaties, transparency applies unless otherwise agreed, while for existing investment treaties transparency will only apply if the parties to a dispute agree to apply the rules, thus suggesting that to some extent the principle of transparency has travelled across the public-private divide.56 For existing investment treaties, it follows that the UNCITRAL Rules may not apply to the thousands of investment treaties in place. The picture is not radically different at other arbitration facilities such as ICSID. This is despite the fact that many arbitration facilities have taken steps to encourage transparency, however, in most cases the parties to an arbitral procedure have the ultimate say in the matter.

V.  Clash of Public Values with Functional Approaches As with the historical concerns of commercial arbitration, investor-state arbitration has more to do with investors’ concerns with access to justice and protection 53 

ibid, 154–55, 161. International Investment Agreements (IIA) describes any general international investment agreement, including free trade agreements (FTAs) and bilateral investment treaties (BITs). Weaver (n 1) 226–27. 55  UN Commission on International Trade Law (UNCITRAL) Rules on Transparency in Treatybased Investor-State Arbitration (UNCITRAL Rules), which entered into force on 1 April 2014. Some commentators have argued that the norms of investor protection found in international investment law are so well defined that they constitute customary international law. See B Choudhurya, ‘International Investment Law As A Global Public Good’ (2013) 17 Lewis & Clark Law Review 481, 494; AT Guzman, ‘Why LDCs Sign Treaties That Hurt Them: Explaining the Popularity of Bilateral Investment Treaties’ (1998) 38 Virginia Journal of International Law 639, 686–87. For converse arguments, see AF Lowenfeld, International Economic Law 2nd edn (Oxford, Oxford University Press, 2008) 584; SM Schwebel, ‘The Influence of Bilateral Investment Treaties on Customary International Law’ (2004) 98 American Society of International Law 27, 28–30. Others have argued that transparency in investorstate relationships have also reached the level general principles of international law, if not yet customary international law: see JD Frya and OG Repousis, ‘Towards A New World For Investor-State Arbitration Through Transparency’ (2016) 48 NYU Journal of International Law and Politics 795, 801; AH Perina, ‘Black Holes and Open Secrets: The Impact of Covert Action on International Law’ (2015) 53 Columbia Journal of Transnational Law 507, 521–22. The disputes regarding what is and what is not customary international are voluminous and it is doubtful that there will be general agreement that investor-state transparency has become customary international law in the near future. That said, as states and individuals proceed on both bilateral and multilateral forums, the issue of customary international law needs to be considered. 56  For a discussion regarding travellers in public international law, see the chapter by d’Aspremont and Giglio in this volume. 54 

208 

Sharon E Foster

from expropriation.57 States are concerned with generating income and encouraging investments as well as with protecting domestic sovereignty and national public interest.58 Additionally, state parties may also be interested in avoiding public scrutiny from interfering with rational decisions such as settlement of disputes.59 Accordingly, from a functional perspective, investors should have little interest in protecting confidentiality and privacy. States, on the other hand, would be more concerned about confidentiality and privacy as it relates to national security and sovereignty interests.60 While the parties to an investor-state arbitration have limited legitimate interest in confidentiality and privacy, the public policy concerns are particularly focused on the destabilising of internal political process caused by a lack of transparency. For example, the ability of foreign corporations to utilise arbitration to directly challenge government policies and actions that corporations allege reduce the value of their investments.61 According to critics of current investor-state arbitration regimes private foreign corporations have a right to challenge health, environmental, labour and other public interest laws and regulations forcing governments to use taxpayer funds to defend such actions and, at times, compensate private foreign corporations.62 This interface of private business values conflicting with public values has been a prominent concern for critics of the current investor-state arbitration regime. For example, Philip Morris launched investor-state cases challenging anti-­ smoking laws in Uruguay and Australia. On 17 December 2015 the arbitral tribunal dismissed the case involving Australia but the record before the arbitral tribunal was subject to a confidentiality order dated 30 November 2012 and the tribunal’s awards, decisions and orders were subject to prior redaction of ­‘confidential’ ­information.63 Further, Australians allegedly paid more than $50 million of their tax dollars for legal costs to defend against the arbitration.64 Evidently, jurisdiction 57  JW Yackee, ‘Bilateral Investment Treaties, Credible Commitment, and the Rule of (International) Law: Do BITs Promote Foreign Direct Investment?’ (2008) 42 Law and Society Review 805, 807–08; Weaver (n 1) 233. 58  Weaver (n 1) 229; CE Anderer, ‘Bilateral Investment Treaties and the EU Legal Order: Implications of the Lisbon Treaty’ (2010) 35 Brooklyn Journal of International Law 851, 856–57. But see Yackee (n 57) 805, 810. 59  SC Nelson, ‘Alternatives to Litigation of International Disputes’ (1989) 23 The International Lawyer 187, 198–99. 60  See KA Miller, ‘The Future of Investor-State Arbitration: Greater Transparency on the Horizon For UNCITRAL Rules’ (2011) 3 Yearbook on Arbitration and Mediation 602, 603. 61  bilaterals.org, ‘Open Letter of Civil Society’. 62  ibid. For the matter of an arbitration under the Additional Facility Rules of the International Centre for Settlement of Investment Disputes, see Foresti v The Republic of South Africa (ICSID Case No ARB(AF)/07/1) 4 August 2010. For a discussion regarding systemic integration as a means of interpretation see chapter by d’Aspremont and Giglio, in this volume. 63  Philip Morris Asia Limited (Claimant) and the Commonwealth of Australia (Respondent) (PCA Case No 2012-12) para 36. 64 L Wallach, ‘Public Interest Takes a Hit Even When Phillip Morris’ Investor-State Attack on ­Australia Is Dismissed’ (Huffington Post, 1 May 2016) www.huffingtonpost.com/lori-wallach/publicinterest-takes-a-h_b_8918010.html.

International Investment Arbitration and Transparency

 209

was found in the action by Philip Morris against Uruguay but the arbitral tribunal ruled in favour of Uruguay.65

VI.  How Private Values and Public Values Meet If we examine the main goals of international commercial arbitration and investorstate arbitration, it is difficult to rationalise the implementation of rules of confidentiality and privacy in either but especially in investor-state arbitration. To recap these goals, historically private commercial arbitration was implemented to reduce costs, resolve disputes in an expeditious fashion, increase certainty, provide an impartial forum and enforceability of a favourable result. Investor-state arbitration sought to depoliticise the process, protect the investor from expropriation, provide certainty, reduce risk and furnish access to justice. While these two conceptualisations do have some different goals, they have in common providing certainty and access to impartial justice in terms of an impartial forum and an enforceable award. It is difficult to see how confidentiality and privacy advance those goals. As specified above, the alleged benefits of confidentiality and privacy are costs, a lack of public interest, protection of confidential information and freedom of contract. Decreased confidentiality would render arbitration superfluous, avoid negative publicity, facilitate settlement, and, for government parties, avoid public scrutiny from interfering with rational decisions such as settlement. These ‘benefits’ seem more like a rationalisation of the status quo rather than a necessary element of arbitration. Take, for instance, costs; true excessive costs could have a negative impact on access to justice, but the costs of arbitration have the same problem. Indeed, some of these ‘benefits’, such as avoiding negative publicity and avoiding public scrutiny, are ethically questionable considering the possible public consequences that may be involved. As for freedom of contract, assuming it is an important right in the investorstate arbitration context, it should be balanced against those important principles protected by transparency such as the rule of law, legitimacy and accountability, human rights, curtailment of the exercise of arbitrary powers and the requirements of democratic governance.66 As with many important rights, freedom of contract is not absolute.

65  Philip Morris Brands Sàrl, Philip Morris Products SA and Abal Hermanos SA (The Claimants) and Oriental Republic Of Uruguay (The Respondent) (ICSID Case No ARB/10/7), Award, 8 July 2016. 66 On the application of a balancing test in the international context see for example Sub-­ Commission on Human Rights Resolution, UN Doc 2000/7, E/CN.4/Sub.2/2000/7 (2000) para 1; Committee on Economic, Social and Cultural Rights, General Comment No 17: The Right of Everyone to Benefit from the Protection of the Moral and Material Interests Resulting from Any Scientific, Literary or Artistic Production of Which He or She is the Author, UN Doc E/C.12/GC/17 (12 January 2006)

210 

Sharon E Foster

Concerns regarding the lack of coercive powers of arbitral tribunals and facilitated settlement are, to some extent, addressed in some model BIT a­ greements.67 Nonetheless, there is no evidence that transparency would increase problems with lack of coercive powers and facilitated settlement. Similarly, there is no dispute that the certain privileged information such as intellectual property, trade secrets, and confidential business information should continue to be protected.68

A.  Lack of Harmonisation in International Investment Law Currently, there is no public or private international treaty in force to harmonise international investment law.69 Accordingly, we are dealing with a decentralised system comprised of thousands of treaties, primarily BITs.70 While such a oneoff bilateral approach could produce a plethora of possibilities, there has been an increasingly common normative approach regarding arbitration in most BITs. This normative approach is to provide for arbitration through specified arbitral tribunals such as ICSID, UNCITRAL, the International Chamber of Commerce (ICC), the Stockholm Chamber of Commerce (SCC), the London Court of International Arbitration (LCIA) and the Permanent Court of Arbitration (PCA).71 For example, the 2012 United States Model BITs form72 allows for arbitration submitted to the ICSID, UNCITRAL or other agreed arbitral tribunal (Article 24(3)). This approach incorporates the arbitral rules of the selected arbitral institution except to the extent modified under the BIT (Article 24(5)). It also requires transparency of the arbitral proceedings including document disclosure (subject to certain proprietary secret information or national security sensitive information) and public access to the proceedings (Article 29). The German 2008 Model BIT provides for arbitration to be submitted to ICSID, UNCITRAL, ICC, LCIA, the SCC, or other agreed arbitral tribunal (Article 10).73 The German 2008 Model BIT, however, does not require transparency in the arbitration process except to the extent which such transparency is provided for under the arbitration rules of the applicable arbitral tribunal.

para 15(1)(c); WTO Panel Report in United States-section 110(5) of the Copyright Act, WT/DS160/R, para 6.74, 15 June 2000; WTO Appellate Body in Korea—Various Measures on Beef, WT/DS19/AB/R, adopted 10 January 2001; WTO Appellate Body in Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AG/R, 7 April 2005. 67 

For example, see the 2012 United States Model BIT form at Art 26(3) relating to injunctive relief. Maupin (n 29) 159. 69  Choudhurya (n 55) 481, 486–90; Maupin (n 29) 143–44. 70  Maupin (n 29) 144. 71  ibid, 3, fn 11. 72  See the 2012 United States Model BIT. 73  2008 German Model BIT, art 10, www.italaw.com/sites/default/files/archive/ita1025.pdf. 68 

International Investment Arbitration and Transparency

 211

B. Pluralism Investor-state laws have elements of pluralism in terms of sources as well as ­systems.74 As the above sections indicate, the numerous BITs in force today to some extent evidence a plurality of substantive law.75 Further, parties to ­investor-state arbitration have a systems choice of various arbitral institutions, such as the PAC and the ICSID. With regards to the arbitral process, pluralism seems to be more procedural than substantive.76 That said, it appears that the overall investor-state system is more pluralistic than harmonised, which has led to criticism and attempts at harmonisation. Indeed, the US and EU intended to utilise TTIP as a template for future IIAs, and a multilateral agreement on investment, which would include ‘strong rules on transparency’.77 If this had been the case, it may have led to a more harmonised approach rather than the current pluralistic approach.78 However, even the ‘harmonised’ approach proposed in the TTIP, TPP and CETA appears pluralistic in terms of different norms relating to standing to sue. A primary criticism about investor-state arbitration centres on the foreign private parties ability to sue a government on the question of regulations when domestic private parties may be blocked from such suits due to sovereign immunity. This raises the issue of disparate treatment, a rule of law problem.

C.  Rule of Law While there are many different definitions for the term ‘rule of law’79 certain commonly accepted principles80 have been identified including: 1) no disparate treatment that favours the government and others in positions of power;81 74  JM Smits, ‘A Radical View of Legal Pluralism, Maastricht European Private Law’ (2012) Institute Working Paper No 2012/1, 4. 75  See WW Burke-White ‘Power Shifts in International Law’ (2015) 56 Harvard International Law Journal 1, 28–29. 76  JK Levit, ‘A Bottom-Up Approach to International Lawmaking: The Tale of Three Trade Finance Instruments’ (2005) 30 Yale Journal of International Law 125; PS Berman, ‘A Pluralist Approach to International Law’ (2007) 32 Yale Journal of International Law 301, 313. 77  Weaver (n 11) 225, 246. 78  See chapters by d’Aspremont/Giglio and French/Ruiz Abou-Nigm in this volume. 79  ER Carrasco, ‘Autocratic Transitions to Liberalism: A Comparison of Chilean and Russian Structural Adjustment’ (1995) 5 Transnational Law and Contemporary Problems 99; AV Dicey, Introduction to the Study of the Law of the Constitution 7th edn (London, MacMillan, 1908) 179–98. 80  Carrasco (n 79) 99. 81  J Brito, ‘Agency Threats and the Rule of Law: An Offer You Can’t Refuse’ (2014) 37 Harvard Journal of Law & Public Policy 553, 567–68; Dicey (n 79) 177–78; RH Fallon, Jr , ‘“The Rule of Law” as a Concept in Constitutional Discourse’ (1997) 97 Columbia Law Review 1; FA Hayek, The Collected Works of FA Hayek (B Caldwell ed, Chicago, University of Chicago Press, 2013) v, xv; FA Hayek, The Markets And Other Orders in Hayek, ibid, 178; J Rawls, A Theory of Justice, revised edn (Cambridge MA, Harvard University Press, 1999) 208; KJ Vandeveldea, ‘A Unified Theory of Fair and Equitable Treatment’ (2010) 43 NYU Journal of International Law and Politics 43, 50–51; S Wilson, ‘ US Rule of Law Assistance: A Guide For Judges’ (Washington DC, Federal Judicial Center, 2011).

212 

Sharon E Foster

2) no politicisation of the law, meaning that the law ‘is not subject to political ­bargaining or to the calculus of social interests’,82 and 3) legal certainty so people will know how to conduct their affairs.83 The rule of law in the international context has been addressed by the UN and is defined as follows: A principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards. It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency.84

This definition of the rule of law in the international context includes elements addressing disparate treatment (equally enforced), politicisation (all persons, institutions and entities, public and private, including the state itself, are accountable to laws, and equally enforced) and certainty (publicly promulgated and procedural and legal transparency). While all three commonly accepted elements are second order principles in that they relate to the implementation of substantive law, they can also act as a first order principle,85 in that they can impact the development of the substantive law.86 For example, despite the non-binding, persuasive nature of published arbitral decisions, certain decisions have had great influence on subsequent ­investor-state

82 

Rawls (n 81) 25. Brito (n 81) 553, 567–68. 84 CC Benson, ‘Jus Post Bellum in Iraq: The Development of Emerging Norms For Economic Reform in Post Conflict Countries’ (2012) 11 Richmond Journal of Global Law and Business 315, 346–47 (citing United Nations and the Rule of Law Website & Document Repository). 85  RS Summers, ‘The Principles of the Rule of Law’ (1999) 74 Notre Dame Law Review 1691, 1691–93. See also A Mills, ‘Towards a Public International Perspective on Private International Law: Variable Geometry and Peer Governance’ (Working Paper, March 2012) 5 (discussing private international law in terms of secondary norms), ssrn.com/abstract=2025616. 86  The due process clause of the United States Constitution is an example of a second order principle, enforcing the rule of law through procedural safeguards. US Const, amend V and XIV. Additional procedural safeguards are found in the United States Constitution, amendment IV (rule against illegal search and seizure) and amendment VI (relating specifically to criminal prosecutions). Finally, rules of evidence may also serve as second order (rule of law) principles. Dicey (n 79) 215–16; MA Drumb, ‘Rule of Law Amid Lawlessness: Counseling the Accused in Rwanda’s Domestic Genocide Trials’ (1998) 29 Columbia Human Rights Law Review 545, 634 (extremely flexible rules of evidence promotes uncertainty); P Gowder, ‘Equal Law in an Unequal World’ (2014) 99 Iowa Law Review 1021, 1023–24; RE Levy and SA Shapiro, ‘Government Benefits and the Rule of Law: Toward a Standards-Based Theory of Judicial Review’ (2006) 58 Administrative Law Review 499, 546; CB Robertson, ‘Due Process in the American Identity’ (2012) 64 Alabama Law Review 255, 260; P Selznick, ‘American Society and the Rule of Law’ (2005) 33 Syracuse Journal of International Law and Commerce 29, 31–32 (relating to ­disparate treatment or politicisation in terms of abuse of power). 83 

International Investment Arbitration and Transparency

 213

arbitral decisions.87 This creation of highly persuasive precedent makes trans­ parency more critical for rule of law purposes. Further, as indicated above regarding the history of commercial arbitrations, procedural and legal transparency enhance the reputation of the arbitral system, depoliticise the process and reduce informational asymmetries allowing the public access to relevant information regarding the parties. Additionally, procedural and legal transparency reduces uncertainty in the law, thus reducing a chaotic, unstable environment, as people know what is expected of them. Finally, procedural and legal transparency undermines arbitrary power, abuse of discretion and disparate treatment.88 Accordingly, lack of transparency reflected in confidentiality and privacy has significant rule of law problems.

VII.  Dispute Settlement in the Proposed TTIP, TPP and CETA Because of concerns regarding transparency in arbitration, arbitral rules such as UNCITRAL and ICSID have been revised to allow third-party involvement in the arbitral process (amicus curiae) and a waiver of confidentiality if both parties agree.89 However, the ability for the parties to ‘opt-out’ is still possible through the language in BITs.90 Nothing has been changed with regard to transparency of settlements. Currently, the European Union draft proposal for TTIP91 includes arbitration pursuant to ICSID, UNCITRAL or other rules agreed to by the parties.92 However, these arbitral rules are to be augmented by Article 18 of the draft text which requires: Article 18 Transparency 1. The ‘UNCITRAL Transparency Rules’ shall apply to disputes under this Section, with the following additional obligations.

87  For example, the jurisprudence stemming from the Iran—US Claims Tribunal. Newcomb and Paradell (n 6) 60, citing C Gibson and C Drahozal, ‘Iran-United States Claims Tribunal Precedent in Investor-State Arbitration’ (2006) 23 Journal of International Arbitration 521. 88  J Raz, ‘The Rule of Law and Its Virtue’ in The Authority of Law: Essays on Law and Morality (Oxford, Clarendon, 1979) 212–24. 89  Weaver (n 16) 262–74. 90  But see the 2012 Model US BIT (Art 29) where transparency in arbitration is required thus ­reducing the parties’ ability to contract around transparency. 91 Commission draft text Transatlantic Trade and Investment Partnership: Trade in Services, ­Investment and E-Commerce (TTIP), trade.ec.europa.eu/doclib/html/153807.htm. 92  ibid, art 6.

214 

Sharon E Foster

2. The request for consultations under Article 4, the request for a determination and the notice of determination under Article 5, the agreement to mediate under Article 3, the notice of challenge and the decision on challenge under Article 11 the request for consolidation under Article 27 and all document submitted to and issued by the Appeal Tribunal shall be included in the list of documents referred to in Article 3(1) of the UNCITRAL Transparency Rules. 3. Exhibits shall be included in the list of documents mentioned in Article 3(2) of the UNCITRAL Transparency Rules. 4. Notwithstanding Article 2 of the UNCITRAL Transparency Rules, the European Union or the United States as the case may be shall make publicly available in a timely manner prior to the constitution of the division, relevant documents pursuant to ­paragraph 2, subject to the redaction of confidential or protected information. Such documents may be made publicly available by communication to the repository referred to in the ­UNCITRAL Transparency Rules. 5. A disputing party may disclose to other persons in connection with proceedings, including witnesses and experts, such unredacted documents as it considers necessary in the course of proceedings under this Section. However, the disputing party shall ensure that those persons protect the confidential or protected information in those documents.93

The UNCITRAL Transparency Rules only apply to treaties after 1 April 2014 or if the parties agree.94 UNCITRAL Transparency Rules provide the arbitral tribunal with the discretion to accept submissions from third parties after consultation with the parties.95 The documents to be made available to the public under the UNCITRAL Rules on Transparency, Article 3(1) referenced in the EU Commissions draft text of TTIP at Article 18 include: Article 3. Publication of documents 1. Subject to article 7, the following documents shall be made available to the public: the notice of arbitration, the response to the notice of arbitration, the statement of claim, the statement of defence and any further written statements or written submissions by any disputing party; a table listing all exhibits to the aforesaid documents and to expert reports and witness statements, if such table has been prepared for the proceedings, but not the exhibits themselves; any written submissions by the non-disputing Party (or Parties) to the treaty and by third persons, transcripts of hearings, where available; and orders, decisions and awards of the arbitral tribunal.96

Further, pursuant to Article 6 of the UNCITRAL Rules on Transparency, arbitral hearings are to be public.97 Confidential information and information protected against disclosure under the laws of the State party may be protected from public disclosure.98 93 

ibid, art 18. UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (entered into force 1 April 2014) art 1. 95  ibid, arts 1(5) and 4. 96  ibid, art 3(1). 97  ibid, art 6. 98  ibid, art 7. 94 

International Investment Arbitration and Transparency

 215

The final draft of the TPP calls for arbitration pursuant to ICSID, UNCITRAL or other arbitration rules agreed to by the parties.99 Additionally, the arbitral ­tribunal, after consultation with the parties, may allow the submission of amicus curiae briefs.100 The TPP specifically addresses transparency in Article 9.24: Article 9.24: Transparency of Arbitral Proceedings 1. Subject to paragraphs 2 and 4, the respondent shall, after receiving the ­following ­documents, promptly transmit them to the non-disputing Parties and make them ­available to the public: (a) the notice of intent; (b) the notice of arbitration; (c) pleadings, memorials and briefs submitted to the tribunal by a disputing party and any written submissions submitted pursuant to Article 9.23.2 (Conduct of the Arbitration) and Article 9.23.3 and Article 9.28 (Consolidation); (d) minutes or transcripts of hearings of the tribunal, if available; and (e) orders, awards and decisions of the tribunal. 2. The tribunal shall conduct hearings open to the public … The tribunal shall make appropriate arrangements to protect [confidential] information …101

The TPP Final Text also appears to address many of the concerns raised by critics of privacy and confidentiality in investor-state arbitrations, specifically access to arbitral documents and records, public hearings and third-party participation.102 The CETA addresses transparency in paragraphs 38 and 39 of Annex 29-A which has a default to public disclosure of party submissions but allows the parties to opt-out of such public disclosure. Further, paragraphs 43–46 of Annex 29-A allows for amicus curiae submissions.103 Thus, it seems that current efforts to direct future investor-state arbitrations, whether realised or unrealised, are opening up to the principle of transparency.

VIII. Conclusions International commercial arbitration continues to prioritise confidentiality and privacy over transparency although the justifications for confidentiality and privacy are, at best, dubious. Investor-state arbitrations, however, appear to

99  TPP Full Text, 9.19(4), ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/ tpp-full-text. 100  ibid, 9.23(3). 101  ibid, 9.24. 102 ibid. 103  Council of the European Union, Interinstitutional File 2016/0206 (NLE): Comprehensive Economic and Trade Agreement between Canada, of the one part, and the European Union and its Member States, of the other part (CETA), 14 September 2016, Annex 29-A, paras 43–46.

216 

Sharon E Foster

be adopting a more transparent approach to the proceedings despite the initial wholesale adoption of international commercial arbitration procedures including confidentiality and privacy. This transition of investor-state arbitrations to a more transparent regime is taking place in the decentralised system of investor-state law reflected by numerous BIT agreements. This move towards transparency is not, yet, ubiquitous. Investor-state dispute resolution is still subject to a variety of options under the multitude of BIT treaties. But the movement towards a multilateral regime together with transparency being incorporated in arbitral rules at the ICSID and UNCITRAL reflects public interest and pressure for transparency in investor-state arbitrations. Given this public response, it is likely that some level of transparency in investor-state arbitrations will be a requirement regardless of the passage or failure of TTIP, TPP or CETA. To that end, the distinctions between private and public international law in the field of arbitration transparency is an interesting example of convergence between private international law and public international law in an early phase of investor-state arbitration, divergence due to public values pressure and, possibly, re-convergence as private international commercial arbitrations may reassess the pros and cons of confidentiality and privacy.

10 Protecting Whistleblowers: The Roles of Public and Private International Law DIMITRIOS KAGIAROS AND AMANDA WYPER

I. Introduction Financial crime, corruption and financial scandals are often revealed to the public by whistleblowers,1 individuals who in the course of their work become aware of information relating to misconduct, abuses of power or corruption and decide to alert the relevant authorities or the press.2 After proceeding to such disclosures of misconduct, whistleblowers are commonly exposed to retaliatory measures which may involve the imposition of employment or criminal sanctions for breaching the duty of confidentiality usually associated with employment.3 There is growing recognition amongst states that whistleblowers are in need of protection from such retaliation. Many states are in the process of developing whistleblower protection frameworks that offer legal remedies for any detriment to which the whistleblower was exposed for proceeding to a disclosure.4

1 ‘How to help whistleblowers’ The Economist (London, 8 December 2015) www.economist.com/blogs/freeexchange/2015/12/money-talks-0. See also ‘The Age of the Whistleblower’ The Economist (London, 3 December 2015) www.economist.com/news/business/21679455-life-gettingbetter-those-who-expose-wrongdoing-companies-continue-fight. 2 Whistleblowing can be defined as ‘the reporting by employees or former employees of illegal, irregular, dangerous or unethical practices by employers’. International Labour Organisation, ‘ILO Thesaurus’ www.ilo.org/thesaurus/defaulten.asp. On whistleblowing more broadly see M Miceli and J Near, Blowing the Whistle: The Organizational and Legal Implications for Companies and ­Employees (New York, Lexington Books, 1992), S Bok, ‘Whistleblowing and Professional ­Responsibility’ in P Tittle (ed), Ethical Issues in Business: Inquiries, Cases, and Readings (Ontario, Broadview Press, 2000). 3  For research on the various forms of employment-related sanctions and other forms of retaliation whistleblowers can be exposed to, see A Fred, Whistleblowers: Broken Lives and Organizational Power (Ithaca, NY, Cornell University Press, 2001) and PB Jubb, ‘Whistleblowing: A Restrictive Definition and Interpretation’ (1999) 21 Journal of Business Ethics 77. 4  On this see World Law Group, ‘Global Guide to Whistleblowing Programs’ (2016) www.gop.it/ doc_pubblicazioni/616_ub5zro2b1w_ita.pdf.

218 

Dimitrios Kagiaros and Amanda Wyper

These protections are usually found in employment law or dedicated statutes.5 Many private institutions also adopt internal whistleblowing policies to offer assurances to anyone reporting information in the public interest, to prevent them being retaliated against. A particularly complicated area of whistleblower protection relates to whistleblowers who proceed to disclosures with a cross-border element, especially in instances where a worker is temporarily posted6 in a country ‘other than that whose law is the governing law of the contract [of employment]’.7 When such whistleblowers proceed to a public interest disclosure, what protection can they expect and from which of the legal systems related to the disclosure? What happens where the whistleblower protection in the country of disclosure is less developed than the law governing the contract of employment? In their seminal work on this issue, Hyde and Savage illustrate the complications for whistleblower protection that arise in such disclosures that involve a cross-jurisdictional element.8 Building on this account, this contribution aims to, first, identify the private international law concerns that cross-border whistleblowing generates, and second, argue that public international law has the potential to incentivise states to find solutions to some of those concerns. This is due to the fact that there is a clear trend in international human rights law to recognise that unwarranted retaliation against whistleblowers who proceed to public interest disclosures constitutes a violation of their right to freedom of expression, thus reflecting the normative ‘traveller’ from public international law to private international and national law explained by d’Aspremont and Giglio.9 This may require states to become increasingly involved in cross-border whistleblowing and to be more vigilant and proactive in ensuring that no individual within their jurisdiction is faced with treatment that may violate their free speech rights. Human rights law, however, is not a panacea in this context. As this contribution explains, there are significant limitations to the capability of human rights law to effectively address all issues raised by cross-border disclosures. The authors argue that in spite of these limitations, public international law can play an important role in bringing some coherence to

5 ibid.

6  On the distinction between permanent and temporary workers see LC Piñeiro, ‘Labour Migration and Private International Law’ in V Ruiz Abou-Nigm and MB Noodt Taquela (eds), Diversity and Integration in Private International Law (Draft paper on file with author). See also Regulation (EC) 2008/593 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) OJ L 177/6; M McParland, The Rome I Regulation on the Law Applicable to Contractual Obligations (Oxford, Oxford University Press, 2015); B Yüksel, ‘The Relevance of the Rome I Regulation to International Commercial Arbitration in the European Union’ (2011) 7 Journal of Private International Law 149. 7  R Hyde and A Savage, ‘Whistleblowing without Borders: the Risks and Rewards of Transnational Whistleblowing Networks’ in D Lewis and W Vandekerckhove (eds), Developments in Whistleblowing Research 2015 (London, International Whistleblowing Research Network, 2015). 8 ibid. 9  See the chapter by D’Aspremont and Giglio in this volume.

Protecting Whistleblowers

 219

the fragmented nature of ­cross-border whistleblowing. Therefore, this scenario allows for a thorough examination of the interplay between private and public international law. The structure of the chapter is as follows. The first section considers issues of protection and regulatory design in whistleblowing regulation, using examples of cases which highlight the difficulties that arise for whistleblowing in a crossborder setting. The focus is on the financial services industry, as this is an industry which frequently encounters cross-border dealings and movement of employees and, consequently, jurisdictional issues for employees and protective private legislation. This section draws examples from regulatory design in the UK. The regulatory approach of the UK, as an example of a major financial centre, is considered here. Relying on the UK as an example also allows us to examine these issues through the lens of a state that is comprised of multiple sub-state entities. This will set the stage for a presentation of the private international law issues surrounding cross-border whistleblowing, before the chapter discusses the contribution of public international law in protecting whistleblowers from retaliation. The second section examines the contribution of public international law in this context. It begins by analysing the relationship between freedom of expression and whistleblowing in order to determine the obligations states have to protect whistleblowers from detriment. This leads to an examination of the responsibilities under international human rights law of the various states involved in the disclosure. U ­ ltimately, the research shows that despite that human rights protection may fail to provide effective solutions to all problems raised by disclosures in a cross-border setting, it serves as an impetus for further state cooperation on the matter.

II.  Regulatory Approaches to Whistleblowing: Protection and Incentives Financial regulation relies to some extent on business compliance and also on investigatory work by regulators. As it would be prohibitively expensive for national regulators to fully investigate the workings of authorised firms and institutions, regulation relies on an element of self-disclosure of compliance and also non-compliance. Reliance, however, is also placed on workers as ‘informational conduits’10 to assist regulators in identifying where resources should be targeted, and which firms should be investigated. Workers are increasingly relied upon for information-gathering, and have become a valuable component of the ­regulatory

10  A Savage and R Hyde, ‘The Response to Whistleblowing by Regulators: A Practical Perspective’ (2015) 35 Legal Studies 408.

220 

Dimitrios Kagiaros and Amanda Wyper

toolkit in the design of financial and other regulatory regimes. Information detailing corruption and financial crime is usually well-hidden. It can therefore be difficult for regulators to identify such misconduct and large-scale, industrywide problems, such as the personal pensions scandal or the payment protection ­scandal, both in the 1990s, may go undetected.11 New regulation often specifically provides for protection of whistleblowers on the basis that employees may be best placed to understand the workings of an organisation and may be better than regulators at identifying issues of concern that are in need of further ­investigation.12 In order for the workers to be effective in this regulatory design, adequate protection and incentives for the whistleblower must be in place. The problems associated with effective whistleblower protection are magnified where there is a cross-border element to the disclosure. The legal provisions of the law governing the employment contract may dictate that it is not possible for any remedies provided to the whistleblower to have extra-territorial effect or it may simply be the case that regulators are only concerned with activity within their own borders and would be unable to provide protection for retaliation the w ­ histleblower is subjected to in a third country. If whistleblowers have concerns about their protection, then this will lead to an unwillingness to report wrongdoing.13

III.  Domestic UK Whistleblowing Regulation In the UK statutory protection relating to disclosures in the public interest is found in the Employment Rights Act 1996 (ERA) as amended by the Public Interest Disclosure Act 1998 (PIDA).14 This statutory regulation is applicable in all three legal systems in the UK, ie England and Wales, Scotland and Northern Ireland. PIDA introduced protection from dismissal or other detriment for workers who make a protected disclosure relating to misconduct they have uncovered in the workplace.15 PIDA does not generate an obligation for workers to speak up.

11  J Black and R Nobles, ‘Personal Pension Misselling: The Causes and Lessons of Regulatory Failure’ (1998) 61 MLR 789. 12  The Pensions Act 2008 s56 makes specific detriment provisions in relation to auto-enrolment pensions and s 43F ERA 1996 makes provision for protection of whistleblowers where they report to the Pensions Regulator. 13 The Whistleblowing Commission, ‘Report on the effectiveness of existing arrangements for workplace whistleblowing in the UK’ (November 2013). 14  Whilst the Scottish and English legal systems are distinct, much of the financial regulation and employment law statues apply on a UK-wide basis subject to interpretation in the usual way by the separate legal systems of the UK. This is due to the fact that most aspects of employment are a matter reserved to the UK Parliament, see Scotland Act 1998 s5. 15  Employment Rights Act 1996 (ERA) s43B.

Protecting Whistleblowers

 221

This approach illustrates the balance between formal hard law regulation and soft law encouragement of appropriate culture and behaviour.16 Parliamentary debates,17 on the statutory reforms and compensation limits, acknowledged that it takes ‘special courage and a special person to blow the whistle in the workplace’18 and that cases such as the Maxwell scandal and the Bank of Credit and Commercial International19 in the 1990s before the passage of the Act underlined the need to protect those reporting wrongdoing in confidence. In treating the compensation for whistleblower dismissal differently from ordinary unfair dismissal, Parliament recognised the difficult position of whistleblowers and also tried to effect the cultural change by encouraging reporting of misconduct. In addition to trying to protect employees from detriment, the use of positive financial whistleblowing incentives, like those offered in the US,20 has recently been considered and rejected in the UK, with the exception of whistleblowers providing information about cartels.21 It was considered that the financial incentives would not increase the quality of whistleblowing and that instead the approach of improving behaviour in financial services was to be followed. The way of dealing with negative consequences of whistleblowing is therefore to regulate the contractual relationships and obligations between parties through private law. A contract of employment will require the employee to be loyal and keep the confidence of the employer, but whistleblowing may protect the employee from suffering detriment for breaching this confidence in prescribed circumstances. To be protected, the worker must make a qualifying disclosure22 whilst ­having a reasonable belief that it is required because of the occurrence of a criminal offence, breach of legal duties, miscarriage of justice, health and safety breaches, environmental damage or a general belief that the disclosure is in the public interest.23 Depending on the identity of the party the disclosure is made to, further conditions may need to be satisfied.24 For example, if the disclosure is made to an industry regulator, such as the Financial Conduct Authority, the worker must also believe that the matter falls within the supervision and control of

16  Parliamentary consideration of the compensation limits and legislative intention highlights this objective to encourage whistleblowing and better behaviours. See ch 5 for further consideration of soft law. 17  HC Deb 30 March 1999, vol 328, cols 875–82. 18  ibid Mr Healy, col 879. 19 Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), ‘Financial Incentives for Whistleblowers: Note by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) for the Treasury Select Committee’ (July 2014), www.fca.org.uk/publication/financial-incentives-for-whistleblowers.pdf. 20 Introduced by the Dodd–Frank Wall Street Reform and Consumer Protection Act Pub L No 111-203, 124 Stat 1376 (2010) (codified at 15 USC 78o (2012)). 21  FCA and PRA, ‘Financial Incentives for Whistleblowers’ (n 19) 7. 22  Section 43J(1) of ERA 1996 prevents contractual obligations preventing a protected disclosure. 23  ERA 1996, s43. 24  ERA 1996, s43C.

222 

Dimitrios Kagiaros and Amanda Wyper

that regulatory body and also that the information and allegations are true.25 A disclosure to the employer would simply need to follow the internal policy guidance on whistleblowing. As indicated previously, there is no financial cap on compensation in whistleblowing claims, and no requirement for a minimum period of service in the UK. From a private international law perspective, this could make the choice of law of Scots, English or the law of Northern Ireland more attractive from the employee perspective as a choice of law for the contract of employment. The attraction of unlimited compensation may mean that, in practice, the link between a particular complaint and a protected disclosure may sometimes be tenuous. It may encourage individuals to claim detriment under the whistleblowing provisions rather than under ordinary unfair dismissal where this is more appropriate. This may also have an impact on construction of the legislation as being for employment protection for the purposes of international private law rules. ­Workers must also be sure that the action is protected by the legislation as the disclosure of confidential information outside the prescribed protection is likely to amount to a breach of contract.26 The domestic UK whistleblowing legislation protects a category of ‘worker’ wider than just employees27 and relies on the contractual relationship and worker status, which may vary in different jurisdictions. Volunteers, interns, non-executive directors and those classed as self-employed will be excluded from the definition and protection; but some categories of worker usually excluded from the definition of employee, such as agency workers, police officers and some additional categories of health service workers, are protected. The differing levels of protection and exclusions in domestic legislation further complicates the rights of individual whistleblowers in cross-border cases and makes the legal position more difficult to understand without specialist legal advice. Even legal specialists may find the law unclear. For example, it was understood that partners in a limited liability partnership were not workers for the purposes of statutory UK employment protection until a recent UK Supreme Court decision reversed that, stating that partners of a Limited Liability Partnership are indeed considered to be within the category of ‘workers’ for the purpose of whistleblowing protection.28 This caused difficulties in a number of areas of employment law but highlights the desire to cover a broad scope of situations to encourage whistleblowing. In order to satisfy the protection provisions29 a certain standard of disclosure must be made and workers may not be protected if they pursue acts of

25 

ERA 1996, s43. Brandeaux Advisers (UK) Limited, Brandeaux Managers Limited, Brandeaux Administrators ­Limited v Ruth Chadwick [2010] EWHC 3241 (QB). 27  ERA 1996, s230(3). 28  Clyde & Co LLP v Bates van Winkelhof [2014] UKSC 32. 29  ERA 1996, S43L(3). 26 

Protecting Whistleblowers

 223

­ isconduct in order to gather evidence.30 The legislative approach is to encourm age internal disclosure to employers whilst allowing some protection for workers making an external disclosure to certain prescribed persons. Good faith was also a prerequisite for protection until 2013 but is no longer required.31 Whistleblowers must now demonstrate that the disclosure was made in the reasonable belief of the whistleblower that the disclosure is in the public interest. Domestic legislation offers protection to the whistleblower if the claim is brought in the courts of the legal systems of the United Kingdom and the law of England, Scotland or Northern Ireland is applicable to the contract of employment. These are two separate questions that need to be analysed taking into account the private international law rules applicable in these legal systems. This contribution turns to these issues next.

IV.  Private International Law When bringing a claim under the detriment provisions before an Employment Tribunal32 in the UK in cross-border cases, questions of jurisdiction and choice of law both arise. The main issues in relation to temporary workers and ­whistleblowers present challenges in the field of applicable law discussed below. It is important to note that, whilst the UK legislation envisages protection under its whistleblowing framework for workers—a particularly broad category that as discussed above includes volunteers, interns and others—when we consider the private international law rules on jurisdiction and choice of law our focus is on individual contracts of employment.33 The chapter will proceed to examine the issues relating to jurisdiction and applicable law in turn.

A. Jurisdiction Matters of jurisdiction are determined by the Brussels I bis Regulation when the defendant is domiciled in the EU, or there is a choice of court agreement ­selecting 30  Aspinall v MSI Mech Forge Ltd [2002] UKEAT 891. See also Bolton School v Evans [2006] EWCA (Civ) 1653, where a prospective whistleblower was found responsible for misconduct for hacking into his employer’s IT system to prove that it was not secure. 31  Enterprise and Regulatory Reform Act (ERRA) 2013, pt 2, para 18. 32 Governed by the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (SI 2013/1237), Employment Tribunals have jurisdiction to hear claims set out in the Employment Tribunals Act 1996, the jurisdiction of employment tribunals in England and Wales, and those in ­Scotland, is governed by Employment Tribunal Rules. 33  Different legal systems will have different criteria to identify a contract of employment but this may lead to uncertainty or conflicts where a worker is considered an employee, for whistleblower ­purposes, in one legal system but not another.

224 

Dimitrios Kagiaros and Amanda Wyper

the courts of the UK, or the Brussels I bis Regulation is otherwise engaged, for example, because the courts in England, Scotland or Northern Ireland have e­ xclusive jurisdiction, irrespective of the domicile of the defendant.34 If the B ­ russels I bis Regulation is not applicable, the rules of jurisdiction would be ­different depending on whether the issue is before the courts in England, Scotland or Northern Ireland, as these separate legal systems have their own jurisdictional rules different from each other for disputes outside the scope of application of the Brussels I bis Regulation or the 2007 Lugano Convention. In turn, an employment tribunal in the UK can only hear a case if England, Scotland or Northern Ireland have ­jurisdiction to hear the case according to private international law rules, either the Brussels I bis Regulation, the Lugano Convention, or the respective national jurisdiction rules. Where the Brussels or Lugano regimes do not apply, the determination on the issue of jurisdiction would be decided following the English common law rules of jurisdiction and the Civil Jurisdiction and Judgments Act 1982, in England and Scotland, respectively. With regard to the determination of jurisdiction at the sub-state level, Schedule 4 of the 1982 Act contains the ‘rules for allocation of jurisdiction within the UK’ (intra-UK jurisdiction),35 while Schedule 8 provides the Scottish internal rules on jurisdiction outwith the EU, the UK and the Lugano Convention states. In the case of Scotland, Schedule 8 also explicitly identifies the rules for ‘individual contracts of employment’.36 This analysis, however, reflects the regime that is followed when the Brussels regime applies. If the Brussels I bis Regulation is applicable, the relevant provisions on jurisdiction for individual contracts of employment are in Section 5 ­(Articles 20–23). The core protection for the employee is provided for in Article 21 that allows the employee to bring proceedings against the employer either in the courts of the employer’s domicile or (i) in the courts of the place where or from where the employee habitually carries out his work, or in the last place where he did so; or (ii) if the employee does not have a habitual place of work, in the courts of the place where the business which engaged the employee is or was situated. In the whistleblower scenario, the employee may also need to consider defending an action for breach of confidentiality by the employer. For cases where Brussels I bis applies, an employer may only bring proceedings in the courts of a Member State where the employee is domiciled.37 So if we were to have a whistleblower, domiciled in London, working for a company based in Scotland who is engaged to work in Abu Dhabi one month out of two, working from England the other month, the employee should have a jurisdiction option as a result of

34  Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L 351/1, 20 December 2012 (Brussels I bis). 35  See further, the chapter by Hood in this volume. 36  Civil Jurisdiction and Judgments Act 1982 Schedule 8 s4. 37  Brussels I bis (n 34) art 22.

Protecting Whistleblowers

 225

the application these rules. If the employee suffers detriment as a consequence of whistleblowing he could raise an action in Scotland, as the place of employer’s domicile or, perhaps, England as place where the employee is engaged and ­situated. If the employer wanted to raise an action to enforce confidentiality provisions, the employer would have to raise an action in England as place of domicile of the employee. Depending on the domicile of the defendant in the respective action these claims would be governed by Schedule 8 of the 1982 Act (defendant domiciled in Scotland, or in a non-EU/Lugano Convention State); Schedule 4 of the 1982 Act (defendant domiciled in other parts of the UK); Brussels I bis Regulation (defendant domiciled in other parts of the EU); or 2007 Lugano Convention (defendant domiciled in an EFTA state). It is to be noted that while there are certain differences between these regimes they are indeed very similar in the treatment of jurisdiction for individual contracts of employment. Hence, all these regimes provide that the whistleblower in our scenario would be able to bring his or her case of unfair dismissal in the courts of the place where the employer is domiciled,38 or ‘in the courts for the place where the employee habitually carries out his work or in the courts for the last place where he did so’,39 or ‘if the employee does not or did not habitually carry out his work in any one place, in the courts for the place where the business which engaged the employee is or was ­situated’.40 Under these provisions, the employer could only bring proceedings against the whistleblower (for breach of confidence for instance) ‘in the courts of the place in which the employee is domiciled’.41 It would then be for the courts of Scotland, England or Northern Ireland, respectively, to determine the law applicable to the proceedings, considering the nature of the contract, its special contractual terms, such as the existence of a choice of law clause, and the relevant private international law rules, namely the Rome I Regulation. In light of this, the subsequent section will examine the issues that arise in relation to the determination of the applicable law.

B.  Applicable Law Matters of choice of law in disputes involving individual contracts of employment are determined by the Rome I Regulation. The Regulation is to be applied by the courts of all Member States of the EU even if the application of those rules results in a non-EU law being the governing law or where some or all of the parties to

38  Brussels I bis (n 34) arts 21–22, Lugano Convention on Jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 2007, arts 19–20, and at the domestic level, Civil Jurisdiction and Judgments Act 1982 Schedule 4 s10 and Schedule 8 s4. 39  Civil Jurisdiction and Judgments Act 1982 Schedule 8 s4(2)(b). 40  Civil Jurisdiction and Judgments Act 1982 Schedule 8 s(2)(c). 41  ibid, s4(3).

226 

Dimitrios Kagiaros and Amanda Wyper

the dispute are non-European. The Regulation provides for individual contracts of employment to be governed by the law of the habitual place of work.42 This regime has been designed with permanent labour migration in mind; resorting to the habitual place of work as the connecting factor is not particularly helpful for temporary workers.43 However, employee and employer could agree on a more convenient law to govern their contract. Since employees are considered to be weaker parties a choice of law cannot deprive the employee of the protection afforded by non-derogable provisions of the law that would govern in the absence of choice of law.44 In addition, the employee is protected from having the country of habitual work being changed by temporary employment in another country.45 The European regime also provides for an escape to the lex loci laboris in favour of a closer law.46 The private international law approach is, therefore, flexible, to allow for the specific circumstances of individual workers. The most relevant questions in relation to whistleblowers concern the concept of domestic provisions non-derogable by agreement, as provided for in Article 8 of the Rome I Regulation, and the concept of overriding mandatory provisions as defined in Article 9 of the Regulation.47 In relation to Article 8 of the Rome I Regulation (providing for the governing law of the habitual place of work), the provisions of employment statutes would be, in most cases, within the remit of the second indent of Article 8(1), that is, provisions that cannot be derogated from by agreement, if the habitual place of work is in the UK. Moreover, these provisions may in some cases be even considered overriding mandatory provisions. The latter, according to Article 9(1) of the Rome I Regulation are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract.

In considering whether to give effect to these provisions as non-derogable (Article 8(1)) or overriding mandatory provisions (Article 9(1)) the nature and purpose of the provisions is considered.48 Statutory provisions containing employee protections, such as the Employment Rights Act, are likely to be included within the non-derogable category.49

42  Rome I Reg, art 8. For the different considerations underpinning the selection of the habitual place of work see Carballo (n 6). 43  Carballo (n 6). 44  Nevertheless, as workers are considered to be weaker parties a choice of law cannot deprive the employee of the protection afforded by the mandatory provisions of the law that would govern in the absence of choice of law, as required by Rome I Reg, art 8. 45  Rome I Reg, art 8(2). 46  ibid, art 8(4). 47  See generally Collins et al, Dicey, Morris and Collins The Conflict of Laws 15th edn (London, Sweet & Maxwell, 2012) 2044 ss, paras 33–278 ss, and 4th supplement (2017) 474–77. 48  Rome I Reg, art 9(3). 49  See discussion in Duarte v Black and Decker Corp [2008] 1 ALL ER (Comm) paras 55–63.

Protecting Whistleblowers

 227

Rome I, however, also provides in Article 21, that ‘the application of a provision of the law of any country specified by this Regulation may be refused only if such application is manifestly incompatible with the public policy (ordre public) of the forum’. It would be important at this stage to highlight how such ‘public policy’ exception operates and the differences from overriding mandatory provisions provided for in Article 9 of Rome I. Overriding mandatory rules ‘precede the application of the conflict rule and claim their application whatever the content of the governing law may be’.50 Conversely, a public policy exception applies ‘after the conflict rule has determined the governing foreign law’.51 More specifically, if c­ ertain rules are considered to be overriding, the court does not need to apply the foreign law on that point, to see if the result of that application contravenes its public policy. It can simply apply its own rules as overriding. When looking at the public policy exception, however, the court would have to apply the foreign law, unless the result of this application would contravene its public policy. Therefore, in the decision-making process, the court would have to consider the application of the relevant foreign provisions and then proceed to disregard them (as an exception to the applicable law rules of the instrument) if that application’s result is against the public policy of the forum.52 It is for the national law to determine which rules are overriding mandatory provisions. If Scots law is chosen as the applicable law in a contract of employment then clearly the whistleblower protection, discussed above, would apply. If a choice of a different law is provided under the contract, but the choice of law rules would indicate the application of Scots law as the law governing the contract otherwise, then the detriment provisions would apply as non-derogable if the employee works in the UK.53 The general rule is that a statute of the United Kingdom will not be applied to a contract unless the governing law of the contract is the law of Scotland, England or Ireland or if it is overriding and applicable despite normal conflict of law rules.54 In this regard a provision might be required to be applied to the contract to meet the protection of Article 8, even where a different choice of law is specified, but not be considered an overriding mandatory provision for the purposes of Article 9. This is likely to be significant if there is a difficulty establishing the nature of the employment protection as the Article 9 provisions are wider in scope (not limited to employment protection) but Article 9 is of much narrower interpretation (only overriding mandatory provisions, of the law of the

50 M Pauknerová, ‘Mandatory Rules and Public Policy in International Contract Law’ (2010) 11 ERA Forum 29, 31. 51  ibid (emphasis added). 52  See also indicatively V Pavic, ‘Bribery and International Commercial Arbitration—the role of mandatory rules and public policy’ (2012) 43 Victoria University of Wellington Law Review 661–87; M Wojewoda, ‘Mandatory Rules in Private International Law’ (2000) 7 Maastricht Journal of European and Comparative Law 183–213. 53  Dicey (n 47) 33-258. 54  ibid, 32-089.

228 

Dimitrios Kagiaros and Amanda Wyper

forum,55 or of the law of the place of performance if those overriding mandatory provisions would render the performance of the contract unlawful).56 Thus, up to what extent these provisions could also constitute overriding mandatory provisions of the law of the forum in the terms of Article 9 of the Rome I Regulation when the dispute is heard in a court in the UK is of crucial importance and is discussed further below.57 As indicated above there are many statutory provisions which regulate the employment relationship which are applicable throughout the legal systems of the UK. Many of these pieces of legislation are non-derogable, as discussed above, so even a contractual choice of law cannot evade the requirements. The ERA58 provides that for the purposes of the act it is immaterial what law governs the employment and so it appears to apply to all contracts considered by a UK court and might be considered a non-derogable provision under Article 8. In relation to whistleblowing protection, it will depend on construction of the statutory provisions, such as rights under ERA and PIDA,59 in light of the circumstances of the case.60 The provisions will apply where the employee is working in the UK but other connections may also be sufficient to establish that the legislation should apply to the facts. There is no ‘hard and fast rule’61 but the courts must consider the extent of connection with Great Britain and British employment law. The effects of statutes, and particularly the question of connection to the UK for the purposes of protection by statutory employment legislation, including whistleblower protection, has been considered by the Employment Appeal Tribunal and the UK Supreme Court. The unfair dismissal case of Ravat v Hilliburton Manufacturing and Services Ltd (Scotland)62 established the accepted test in contracts of employment. Where the employee is not undertaking work in the UK then the question is whether the connection is still strong enough to assume that parliamentary intention would be to cover the matter and permit access to an employment tribunal. This case considered whether the complaint of unfair dismissal could be heard in Scotland. The general rule is that the place of work is decisive but subject to exceptions. In this case the individual was described as ‘a UK commuter’.63 He resided in Great Britain64 but agreed to

55 

Rome I Reg (n 6), art 9(2). ibid, art 9(3). This is addressed in s VI. 58  Employment Rights Act 1996 s204(1). 59  As discussed above. 60  Lawson v Serco Ltd [2006] UKHL 3, [2006] ICR 250. 61  Duncombe v Secretary of State for Children, Schools and Families (No 2) [2011] UKSC 36 at 16. 62  Ravat v Hilliburton Manufacturing and Services Ltd (Scotland) [2012] UKSC 1. 63  ibid, para 3. 64  ibid. The facts describe the individual working for the appellant (based in Aberdeen) in London from 1990–95 and at several points the court considered the connection between Great Britain and the employment relationship rather than the constitutent legal systems within the UK (see paras 4, 6, 9, 12 and 14). 56  57 

Protecting Whistleblowers

 229

change his ­working pattern so that he worked 28 days in Libya and then returned home for 28 days, job sharing with another who did his job in Libya when he was at home. Lord Hope highlighted the difficulties of the facts and consideration of choice of law.65 The question is more than one of substantial connection66 and when considering an exception to allow jurisdiction where the work takes place away from the UK the connection must be sufficiently strong to justify the exception, the exception being justified on the basis that ‘parliament must have intended that section 94(1) should apply to’ the facts.67 The proper law of the contract was UK and the employee was given assurances that this would continue and so the statutory reach protection should not be altered by the agreement of parties to vary it. These factors were extremely important in identifying the British employment law system68 as being that to which the employment had the closest connection. A subsequent Employment Appeal Tribunal case,69 which alleged unfair ­dismissal as a consequence of making protected disclosures, considered whether this test should be wider for cases of whistleblowing where the public interest of encouraging the whistleblowing would justify the extension. In this case the Italian banking employee with an employment contract and residence in Singapore, worked for a bank in Singapore which had its head office in the UK. It was argued that previous authority established that domestic law70 should be used to interpret domestic legislation in a way which is wide enough to give effect to freedom of expression.71 It was also argued that the public interest in ensuring the disclosure which had an impact on UK banks justified the extension. Both arguments were rejected finding that the sufficient connection test of Ravat should be applied.72 This section has demonstrated the difficulties that cross-border cases may ­present to ensure legal protection to whistleblowers who suffer detriment from the employer as a consequence of their actions. Whilst national statutory protection protects domestic workers, those whose employment is cross-border in nature may suffer difficulties in establishing jurisdiction or choice of law. International Private Law rules seek to protect employees from having employment rights eroded by contractual choice of law to their detriment. However, the protection is not uniform and, in cases where there is insufficient connection

65 

Lawson v Serco Ltd (n 60) Quoting Lord Hoffman’s speech from para 1. Ravat (n 62) para 10. 67  ibid, para 12. 68  ibid, para 33. 69  Smania v Standards Chartered Bank [2014] UKEAT/0181/14. 70  Bleuse v MBT Transport Ltd and another [2007] UKEAT/0339/07. 71 Council of Europe, The Convention for the Protection of Human Rights and Fundamental Freedoms (European Convention on Human Rights, ECHR) (ETS No 005, 3 September 1953) art 10. Council of Europe, European Social Charter (ETS No 035, 26 February 1965) art 11. 72  Ravat (n 62), para 55. 66 

230 

Dimitrios Kagiaros and Amanda Wyper

to the British s­ ystem, whistleblowers may not be protected and may find that traditional conflicts rules specify a choice of law which provides less protection than they expected. The next section will consider the protection afforded to workers under the right to freedom of expression as provided for by public international law.

V.  The Contribution of Public International Law to Whistleblowing The chapter has thus far discussed the issues of jurisdiction and applicable law raised by instances of cross-border whistleblowing where the nature of the disclosure, or the location in which the disclosure is made, engages a multitude of states and regulatory frameworks. The chapter has identified how such crossborder disclosures generate conflict of laws and has discussed the means by which jurisdiction and the choice of applicable law can be relied upon to find solutions for the whistleblower. As Hyde and Savage demonstrate, however, cross-border whistleblowers still face significant hurdles in receiving protection from detriment for blowing the whistle.73 The preceding analysis on these issues does not paint the full picture of the protection a whistleblower can expect. Although the dispute in a cross-border, private sector setting discussed in the chapter may prima facie exclude any meaningful role for public international law, a closer inspection suggests that such a role does exist. This section argues that under international human rights law, and more specifically, the right to freedom of expression as protected in international human rights instruments, states may have a duty to protect whistleblowers who face detriment for proceeding to public interest disclosures. In developing this point, this section will examine first, the connection between whistleblowing, human rights law and freedom of expression. It will argue that this relationship suggests that in cross-border disclosures, state obligations under human rights law may require, in specific circumstances, that all states involved in the crossborder disclosure use the means at their disposal to protect whistleblowers from any retaliation they may face for proceeding to disclose information in the public interest. This duty exists regardless of the fact that the dispute between the whistleblower and their employers (who may be based in different states) is one lacking a clear public law element. However, the section will suggest that this duty under international human rights law is not boundless. It will highlight that, in practice, there are significant limits to the protection the cross-border whistleblower can expect under human rights law. After addressing these limitations, the chapter

73 

Hyde and Savage (n 7).

Protecting Whistleblowers

 231

will conclude that although international human rights law may not resolve all issues raised by cross-border whistleblowing, it can serve to incentivise states to more actively seek to ensure that the cross-border whistleblower is not unjustifiably retaliated against. This could include a duty of the courts to rely on overriding mandatory provisions where the human rights of the whistleblower are at stake, especially where the state exercising jurisdiction is party to the European Convention on Human Rights (ECHR or the Convention). This is due to the fact that, as this part will demonstrate, the ECHR whistleblower protection system is particularly advanced with multiple judgments of the European Court of Human Rights (ECtHR or the Court) confirming the link between freedom of expression as protected under Article 10 ECHR and whistleblowing. This suggests that a state that is party to the ECHR would have a Convention-based duty to protect the whistleblower, and this would be a good reason not to apply a foreign law that would result in a violation of a whistleblower’s freedom of expression. Therefore, this case study on whistleblowing illustrates the link between private and public international law while also identifying the boundaries of this interaction.

A.  Whistleblowers and Freedom of Expression Freedom of expression is a protected right under the Universal Declaration of Human Rights (UDHR)74 and the International Covenant on Civil and Political Rights (ICCPR).75 The ICCPR, which aimed to adapt provisions of the UDHR into ‘legally binding obligations’,76 in Article 19(2) provides that: Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice.77

Whistleblowing is an activity that is protected under freedom of expression and has strong support in international human rights law. The connection between whistleblowing and free speech is discussed in reports by the UN Special Rapporteur on freedom of opinion and expression,78 while the Special Rapporteur

74  Universal Declaration of Human Rights, UNGA Res 217 A(III) (10 December 1948) (UDHR) art 19. 75  International Covenant on Civil and Political Rights, 999 UNTS 171, 16 December 1966 (ICCPR) art 19. 76 P Alston, R Goodman and HJ Steiner, International Human Rights In Context: Law, Politics, Morals—Texts and Materials 3rd edn (Oxford, Oxford University Press, 2007) 263. 77  ICCPR art 19(2). 78  ‘Individuals should be protected from any legal, administrative or employment-related sanctions for releasing information on wrongdoing, viz. the commission of a criminal offence or dishonesty, failure to comply with a legal obligation, a miscarriage of justice, corruption or dishonesty or serious failures in the administration of a public body’. UNCHR, ‘Civil and Political Rights including the question of Freedom of Expression.’ UN Doc E/CN.4/2000/63 (18 January 2000) para 44.

232 

Dimitrios Kagiaros and Amanda Wyper

on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health has also focused on the primary role of ­whistleblowers in alerting the public to misconduct in the healthcare system.79 The Special Rapporteur on the situation of human rights defenders in her 2013 report found that ‘[t]hose who disclose information of public interest about wrongdoing or illegal activities (whistleblowers), particularly concerning issues of corruption of public officials, face a high risk of retaliation’80 and stressed that ‘Articles 32 and 33 of the United Nations Convention against Corruption underscore the need to protect the rights of whistle-blowers and witnesses of ­corruption’.81 Finally, the 2015 report of the Special Rapporteur on the Promotion and the Protection of the Right to Freedom of Opinion and Expression addressed the issues surrounding the protection of sources of information and whistleblowers, arguing that ‘basic protections [for confidential sources and whistleblowers] are critical to an effective right to freedom of expression, accountability and ­democratic governance’.82 At the regional level, in the Council of Europe (COE), the Civil Law Convention on Corruption (1999) requires each party to provide in its internal law for appropriate protection against any unjustified sanction for employees who have reasonable grounds to suspect corruption and who report in good faith their suspicion to responsible persons or authorities.83

Furthermore, the Parliamentary Assembly of the COE with Resolution 1729 (2010) on the protection of whistleblowers, recognised the connection between ‘concerned individuals who sound an alarm’ and the objective of strengthening accountability and bolstering ‘the fight against corruption and mismanagement, both in the public and private sectors’.84 It explicitly prompted Member States to adopt comprehensive whistleblowing legislation that would cover ‘both public and private sector whistleblowers’.85 Finally, Parliamentary Assembly Resolution 2060 (2015) on ‘Improving the Protection of Whistle-blowers’, stressed ‘the importance of the case law of the European Court of Human Rights (ECtHR), upholding the right to privacy, freedom of speech and the protection of w ­ histle-blowers’.86 79  UNCHR, ‘Report of the Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, Anand Grover’ UN Doc A/HRC/20/15 (10 April 2012) para 26. 80  UNCHR, ‘Report of the Special Rapporteur on the situation of human rights defenders, ­Margaret. Sekaggya: Mission to Ireland (19–23 November 2012)’ UN Doc A/HRC/22/47/Add.3 (26 February 2013) para 92. 81 ibid. 82  UNGA, ‘Report of the Special Rapporteur on the promotion and protection of the right to ­freedom of opinion and expression’ UN Doc A/70/361 (8 September 2015). 83  Council of Europe, Civil Law Convention on Corruption (ETS No 174, 1 November 2003) Art 9. 84 Council of Europe Parliamentary Assembly, Resolution 1729 (2010) ‘On the protection of whistleblowers’. 85  ibid, para 6.1.2. 86  Council of Europe Parliamentary Assembly, Resolution 2060 (2015) ‘Improving the protection of whiste-blowers’ para 4.

Protecting Whistleblowers

 233

Thus, apart from the soft law instruments discussed above, in its case law, the ECtHR has fully embraced the notion that whistleblowing falls within the ambit of Article 10 of the ECHR, which protects freedom of expression. With the landmark judgment in Guja v Moldova,87 ‘the first case to deal explicitly with the practice of whistleblowing’,88 the ECtHR established the criteria a whistleblower had to satisfy in order to claim protection under freedom of expression for any retaliation they faced.89 Furthermore, this judgment provided valuable insight into the circumstances under which a contracting party to the ECHR would be in breach of its obligations for not protecting the whistleblower from retaliation. While recognising that the very nature of employment requires that workers are bound ‘by a duty of loyalty and discretion’,90 the Court held that a worker: in the course of his work, may become aware of in-house information, including secret information, whose divulgation or publication corresponds to a strong public interest. The Court thus considers that the signaling … of illegal conduct or wrongdoing in the workplace should, in certain circumstances, enjoy protection. This may be called for where the employee or civil servant concerned is the only person, or part of a small category of persons, aware of what is happening at work and is thus best placed to act in the public interest by alerting the employer or the public at large.91

The Court in this case found that the detriment suffered by a civil servant for revealing to the press irregularities in the Special Prosecutor’s office violated ­Article 10 ECHR. The approach of the ECtHR in this case has been confirmed in a series of subsequent judgments which broadly share the same facts.92 The protection offered to whistleblowers under Article 10 ECHR in the Guja case was directed to public sector employees, this, however, does not preclude private sector employees from seeking similar protection. The ECtHR has accepted93 that ­protections under free speech may require employers in the private sector to

87 

Guja v Moldova App no 14277/04 (ECtHR, 12 February 2008). Rainey, E Wicks and C Ovey, Jacobs, White and Ovey: The European Convention on Human Rights 7th edn (Oxford, Oxford University Press, 2017) 442. 89  More specifically, the ECtHR provided free speech protection for public disclosures of information on wrongdoing if the whistleblower could demonstrate: a) that they had made use of other means to raise concern if these were available to them (for instance internal mechanisms for raising concerns within their institution or regulatory bodies), b) the interest in disclosing the information outweighed the interest in keeping the information secret or the interest in protecting the reputation of the empoyer, c) in disclosing the information, they did not act for personal gain or due to a personal grievance against their employer. On this see D Kagiaros, ‘Protecting “National Security” Whistleblowers in the Council of Europe: an Evaluation of Three Approaches on How to Balance National Security with Freedom of Expression’ (2015) 19 The International Journal of Human Rights 408, especially 411–13. 90  Guja v Moldova (n 87) para 70. 91  ibid, paras 72, 75. See also J Lewis, J Bowers, M Fodder and J Mitchell, Whistleblowing: Law and Practice (Oxford, Oxford University Press, 2012) 11.140, 11.141. 92 See Heinisch v Germany App no 28274/08 (ECtHR, 21 July 2011); Bucur and Toma v Romania App no 40238/02, (ECtHR, 8 January 2013); Matuz v Hungary App no 73571/10 (ECtHR, 21 October 2014). 93  Fuentes Bobo v Spain App no 39293/98 (ECtHR, 29 February 2000). 88  B

234 

Dimitrios Kagiaros and Amanda Wyper

ensure that any sanctions on their employees are imposed ‘in a manner compatible with Convention expectations’.94 Furthermore, states undertake an obligation to ensure that ‘employment tribunals can provide effective redress … where an employee’s dismissal constitutes a manifestly disproportionate sanction’.95 This obligation will be further developed and explained in the following section.

VI.  Which States are Responsible for Providing Protection in a Cross-border Disclosure? As the previous section has explained, the practice of whistleblowing engages the whistleblower’s right to free speech. As freedom of expression is a qualified right, in order to avoid being found in breach of its international human rights law obligations, a state must ensure that any interference or restriction to this right must be prescribed by law, must serve a legitimate aim and must be necessary in a democratic society.96 In the context of cross-border disclosures, however, there is more than one state that may owe human rights obligations to the whistleblower. Apart from the state in which the disclosure is made, there is a possibility that other states involved in the cross-border disclosure may have human rights obligations towards the whistleblower. This section argues that while there is little doubt that the state of disclosure has obligations towards the whistleblower under human rights law, the state whose courts exercise jurisdiction according to private international law rules, may also have human rights obligations in this context.

A.  Human Rights Obligations of the State of Disclosure The state in which the disclosure took place has the primary responsibility of ensuring that a whistleblower disclosing information in the public interest within its jurisdiction is not subjected to disproportionate sanctions. As discussed above, this would apply even where the employment relationship is in the private sector. This is due to the fact that human rights obligations under international law are not limited to the negative type of protection that traditionally is synonymous with civil and political rights, and calls upon the state to refrain from any ­unwarranted interference with the enjoyment of a right.97 There is also a

94 RJ Reed and JL Murdoch, Human Rights Law in Scotland 4th edn (London, Bloomsbury ­Professional, 2017) 904. 95  ibid quoting Palomo Sanchez and others v Spain App nos 28955/06, 28957/06, 28959/06, 28964/06 (ECtHR, 12 September 2011). 96  ECHR art 10(2), ICCPR art 19(3). 97  See A Mowbray, The Development of Positive Obligations Under the European Convention on Human Rights by the European Court of Human Rights (Oxford, Hart, 2004).

Protecting Whistleblowers

 235

­ ositive dimension which requires the state to act preventatively and to protect p the individual from wrongful acts that threaten the enjoyment of her rights and are attributable to third persons or general situations.98 This duty also includes the obligation to provide redress to the victim of a violation by a third party, to carry out investigations on the facts surrounding the violation99 or to punish the third-party wrongdoer. This positive dimension of rights is where the obligation of states to protect whistleblowers employed in the private sector would be located, as it requires the state to take action, or at least not to remain passive, in order to protect the rights-holder from sanctions that could engage international human rights obligations, namely freedom of expression. The existence of this obligation creates a further incentive on the state to ensure that their whistleblower protection framework provides sufficient remedies to whistleblowers for their public interest disclosures, especially in sectors with high corruption rates, such as the financial sector, where disclosures of wrongdoing would be particularly beneficial. In practice, however, there are limits as to how this protection under free speech has been successfully applied at the domestic level to benefit whistleblowers. The degree to which the whistleblower will be able to rely on freedom of expression in the state where the information is disclosed is conditional on the extent to which the state in question implements its international human rights obligations by effectively protecting whistleblowers through its employment law or other legal regime. For instance, as Vaughn argues, ‘in countries that view constitutional or human rights protections as limiting government rather than requiring it to protect its citizens’100 such as the US, there could be a situation where the domestic constitutional framework ‘imposes few affirmative obligations on government’.101 According to Vaughn, in the US, ‘this lack of affirmative duties applies to freedom of expression’.102 Another important factor in this context would be the degree to which domestic courts recognise the link between freedom of expression and whistleblowing. As the relationship between the two is still nascent, it may not be possible for a whistleblower to utilise free speech in their favour in a whistleblowing dispute, especially where they have to rely on the persuasive value of international instruments, such as reports by special rapporteurs that do not generate binding legal

98  For this see X and Y v the Netherlands App no 8978/80 (ECtHR, 26 March 1985) and in the I­ nter-American Court of Human Rights, Velásquez-Rodríguez v Honduras (Merits), Ser C, No 4, (1988), paras 172–75 and Ximenes-Lopes v Brazil, Ser C, No 149 (2006) 55/96. 99 See for instance Nachova and others v Bulgaria App nos 43577/98 and 43579/98 (ECtHR, 6 July 2005). 100 R Vaughn, The Successes and Failures of Whistleblower Laws (Cheltenham, Edward Elgar, 2012) 297. 101 ibid. 102 ibid.

236 

Dimitrios Kagiaros and Amanda Wyper

obligations on states.103 Even in a state that is a party to the ECHR, which, as ­discussed above, has articulated clearer standards of whistleblower protection under free speech, it may not be easy to identify the impact this has had at the domestic level. As Hyde and Savage explain, relying on the UK as an example, it may be difficult to determine the extent to which UK employment tribunals ­sufficiently take into account the Strasbourg jurisprudence on free speech and whistleblowing when examining whistleblower claims.104 Nevertheless, the positive obligations imposed on states to protect the rightsholder can play an important role in galvanising more active involvement to protect the whistleblower who is ‘caught up’ in a cross-border disclosure. As the international human rights law protection framework builds on its understanding of the connection between free speech and whistleblowing, states will be required to demonstrate that they have not remained passive where a f­oreign whistleblower faces detriment from a private entity within their jurisdiction. Apart from human rights law however, there are further incentives for the state where the disclosure takes place to ensure that such whistleblowers are not retaliated against. As Hyde and Savage argue, ‘the legal jurisdiction which benefits from the disclosure’105 may want to protect its citizens from the misconduct the whistleblower has uncovered, or in the case of financial services, it may want to recoup significant sums from tax evasion, cartel schemes or other types of financial impropriety in which private entities could engage. Therefore, states may have good reasons to build international cooperation mechanisms, through ­treaties, international agreements and soft law instruments to ensure better exchange of information between various regulators, or to set clearer standards on whistleblower protection in this context. But returning to the key theme of the volume, namely the interaction between private and public international law, the following section will argue that even the state whose courts exercise jurisdiction over the employment dispute owes human rights obligations to the whistleblower. The following section will argue that this may impact the approach the court follows when applying rules of private international law. The section will primarily focus on states who are party to the ECHR as it is the human rights regime offering the most advanced protection to whistleblowers.

103 The persuasive value of such instruments and soft law in general at the domestic level is c­ontested. For example, on the use of treaty bodies’ general comments in domestic case law, see K McCall-Smith, ‘Interpreting International Human Rights Standards: Treaty Body General Comments as a Chisel or Hammer?’ in S Lagoutte, T Gammeltoft-Hansen, J Cerone (eds), Tracing the Role of Soft Law in Human Rights (Oxford, Oxford University Press, 2016). See chapter by Collins and Albornoz in this volume. 104  ‘[B]ecause the employment tribunal judgments are placed on a closed register, it is difficult for researchers to determine the application and effectiveness of these provisions in practice’ Hyde and Savage (n 7) 7. 105  ibid, 3.

Protecting Whistleblowers

 237

B. Human Rights and Private International Law in the Context of Cross-border Whistleblowing As the previous part demonstrated, the ECHR system, by linking any retaliation whistleblowers faced for a public interest disclosure to a violation of Article 10 ECHR, has clearly articulated state obligations towards whistleblowers under the Convention. Relying on the example of the ECHR, and its particularly welldeveloped regime of whistleblower protection, it would be important to assess the impact of Convention rights to the choice of applicable law in the whistleblowing scenario the chapter examines, where the state whose courts are hearing the dispute is different to the state in which the disclosure took place. How should a contracting party to the ECHR employ the tools of private international law to ensure that it upholds its Convention obligations? Would the state’s human rights obligations take precedence over what the framework of private international law dictates in relation to the applicable law? In addressing this issue, this part argues that where the choice of law rules point to a foreign law, the application of which would result in the violation of a contracting party’s obligations under the ECHR,106 the contracting party in question would have a human rights obligation to protect the whistleblower from this foreign law, as the court would be expected to ensure that any outcome in the dispute before it would not violate the whistleblower’s Article 10 ECHR rights. In relation to the interaction between the ECHR and private international law, as Kiestra notes, ‘there is not much case law in which the [European] Court [of Human Rights] has examined the impact of the rights guaranteed in the ECHR on the applicable law in private international law’.107 ­Nevertheless, this issue has ‘spawned lively debate in the literature’.108 While there may not be a conclusive approach in this regard, this contribution argues, for reasons that will be developed below, that the court exercising jurisdiction (the forum) could make use of the concept of ‘overriding mandatory provisions’ discussed above to address the plight of the whistleblower. In his analysis on the impact of the ECHR to private international law, Kiestra explains that Article 1 ECHR requires contracting parties to ‘secure to everyone within their jurisdiction the rights and freedoms defined’109 in the Convention. Where the law of a non-contacting party to the Convention is applied, Kiestra argues that the state applying the foreign law would be in violation of its Convention obligations if the application of the law would violate the ECHR.110

106  See L Kiestra, The Impact of the European Convention on Human Rights on Private International Law (Den Haag, TMC Asser Press, 2014) 150. 107 ibid. 108 ibid. 109  ECHR, art 1. 110  Kiestra relies on the admissibility decision of Ammdjadi v Germany (dec), no 51625/08, 9 March 2010 to illustrate this point, Kiestra (n 106) 152.

238 

Dimitrios Kagiaros and Amanda Wyper

Where the foreign law belongs to another contracting party to the ECHR, Kiestra envisions a situation where the two states would both be ‘co-responsible’111 if the application of the foreign law constitutes a Convention violation.112 This analysis provides a useful starting point to examine the impact of human rights, or more broadly public international law, to the private international law issues discussed in the first part of the chapter. Where the forum has to determine whether any sanction the whistleblower experienced for proceeding to a public interest disclosure in another state was lawful, if choice of law rules point to the application of foreign law, the forum must still take into account its own state’s human rights obligations. This could mean that the court should be more inclined to make use of the flexibility provided under Article 9 of the Rome I Regulation to protect the whistleblower from any type of sanction that would violate his freedom of expression. This would apply regardless of whether the foreign state whose law is to be applied is a contracting party to the Convention or not. This is an important facet of the state’s positive obligations under international human rights law. Where positive obligations are concerned, the state is asked to activate, as far as possible, those means at its disposal which are suitable to realise the goal of preventing and stopping any wrongful conduct that will result in the violation of the rightsholder’s rights. As far as the means are concerned, the state has the discretion to select the one that it prefers between equally fruitful means.113 The state’s response is assessed based on the circumstances of the ­particular case. More specifically, it is based on doing what was necessary to avert the unwanted result and also what it could do as far as the means at its disposal, as well as other related parameters, such as whether or not based on the facts of each separate case, it was in a position to know and predict the imminent danger of a human rights violation.114 Applying this to the scenario at hand, the means the state has at its disposal to offer protection to the cross-border whistleblower are the rules giving it the flexibility to disregard (via the public policy exception, Article 21 of the Rome I Regulation) or override foreign law (via the provisions in Article 9 of the Rome I Regulation as discussed above), if the outcome of applying the foreign law would be an ECHR violation. Therefore, in such a state, regardless of what the foreign law

111 

ibid, 153. ibid. Kiestra concludes that in fact the possibility of such co-responsibility has not been accepted by the Strasbourg organs. 113  T Stephens (Rapporteur) and D French (Chair), ILA Study Group on Due Diligence in International Law Second Report (July 2016), ila.vettoreweb.com/Storage/Download.aspx?DbStorageId=1 427&StorageFileGuid=ed229726-4796-47f2-b891-8cafa221685f. This report suggests that ‘states have significant latitude in the choice of means they employ when taking all measures they could reasonably be expected to take’ at 7. 114  See in detail O De Schutter, International Human Rights Law 2nd edn (Cambridge, Cambridge University Press, 2014) 462–518. 112 

Protecting Whistleblowers

 239

mandates in relation to whistleblower protection, the court would attempt, to the best of its abilities, to ensure that the whistleblower’s rights are not violated. This approach of giving precedence to human rights obligations is not foreign to courts in the UK. In the case of Kuwait Airways Corporation v Iraqi Airways Company and Others (Nos 4 and 5)115 for instance, Lord Nicholls noted that: When deciding an issue by reference to foreign law, the courts of this country must have a residual power, to be exercised exceptionally and with the greatest circumspection, to disregard a provision in the foreign law when to do otherwise would affront basic principles of justice and fairness which the courts seek to apply in the administration of justice in this country. Gross infringements of human rights are one instance, and an important instance, of such a provision.116

Therefore, as the human rights framework develops in the direction of stronger human rights protection for whistleblowers, especially in cases where they disclose transnational financial crimes that may potentially impact on more than one state, courts applying rules of private international law will have increasingly convincing reasons to follow an approach that gives primacy to the whistleblower’s rights under freedom of expression. An important caveat to this analysis, however, is that this proposition the paper advances has yet to fully be tested in practice. It is hoped that the clear trend in adding human rights to the armoury of whistleblowing protection will allow courts to more effectively discharge their duties in protecting cross-border whistleblowers from unwarranted retaliation.

VII. Conclusions This case study of whistleblowing in the financial sector has examined the public and private international law frameworks to explore their interactions and boundaries. The first part of the chapter has highlighted the approaches under private international law in this sphere. The second part went on to assess whether state obligations under international human rights law could provide additional protection to whistleblowers under these circumstances. As far as the state where a disclosure takes place is concerned, human rights law has a significant role to play. Developing international standards tying retaliation against whistleblowers to free speech violations, requires states to take action to ensure that whistleblowers do not face detriment within their jurisdictions for proceeding to public interest disclosures. This would also apply in cases where the whistleblower faces retaliation from a private entity. If the courts hearing the dispute are in a different state from

115  116 

Kuwait Airways Corporation v Iraqi Airways Company and Others (Nos 4 and 5) [2002] UKHL 19. ibid, [18].

240 

Dimitrios Kagiaros and Amanda Wyper

the state in which the disclosure took place, the obligations under human rights law may require the court to apply private international law rules in a manner that protects the whistleblower’s rights under free speech. There are, however, particularly strong reasons for states to agree at the international level to take further steps both in private and public international law frameworks to better protect individuals involved in cross-border whistleblowing from retaliation. As the editors argue in the introduction, there is increasingly not a private and a public international legal order, but to be effective, it must be neither.

INDEX

access to justice: commonalities, 23 costs, 209 genetic resources contracts, 186–7, 194 global supply chain, 159, 165–6, 168–9, 173 International Treaty on Plant Genetic Resources, 194–5 investor-state arbitration, 207–8, 209 Nagoya Protocol and, 186–7, 188, 190 private international law and, 86, 97–8, 177, 198 Albornoz, María Mercedes, 5–6, 105–20 alternative dispute resolution: genetic resources contracts, 188–9, 193–4 American Association of Private International Law (ASADIP), 97 ancient Greece, 34 Apple, 158, 167 applicable law: corporate social responsibility and, 159–61, 165 correct application, 142 ECHR and, 237 EU and UK, 65–6 methodology, 28–9 Nagoya Protocol and, 182, 185–6, 190, 194, 195 public policy and, 71 Rome I Regulation, 38 self-limitation method, 114 UNCLOS, 101 UNIDROIT Principles, 193 whistleblowing in UK, 223, 225–30 windows, 42 arbitration: commercial arbitration see international commercial arbitration investment see investment arbitration investor-state see investor-state arbitration law of the sea, 89, 101–2, 103 Argentina: Ara Libertad (Argentina v Ghana), 89, 101–2, 103 economic crisis (2000), 142 human rights and international arbitration, 138 public policy, 140–1, 142 US-Argentina BIT, 142–3

ASEAN, 133 Australia, 27, 127, 208 autonomy see party autonomy Bangladesh, 149 Bank of Credit and Commerce International (BCCI), 221 Baughen, S, 163 Baxter, Richard, 109 Belgium: Arrest Warrant of 11 April 2000 (DRC v Belgium), 89–90, 91 Belgium v Switzerland (ICJ), 15, 99–100, 103 Bermann, GA, 138 bilateral invesment treaties (BITs), 123, 202, 207, 210, 211, 213 see also investment arbitration; investor-state arbitration Biodiversity Convention (CBD), 7, 175, 191 Bolivia: nationalisations, 136 Bonell, MJ, 134 Bonn Guidelines on Access to Genetic Resources, 184 boundaries: international law, 7–9 Brazil: public policy, 140 Brexit, 55, 63 bribery, 134–5, 150, 170–2 Brocher, Charles, 124 Brussels Convention (1968), 15, 63 Brussels I bis Regulation (1215/2012) (Brussels I Recast): choice of court agreements, 163–4 CSR and, 161–2 decoding, 42–3 domicile, 162 lis pendens, 88 meaning of contract, 184 procedural windows, 41 prorogation, 63–5 whistleblowing and, 223–4, 225 Brussels I Regulation (44/2001), 103, 161 Brussels II bis Regulation (2201/2003), 62, 64 Bulgaria: public policy exception, 127, 137 Canada: CETA, 133, 200, 211, 215 private international law: role, 27 cartels, 221, 236

242 

Index

Chad-Italy BIT, 202 Chiarolla, Claudio, 183, 193, 194 child abduction, 62 child labour, 166, 171 Chinkin, Christine, 111 choice of court see jurisdiction choice of law see applicable law CIDIP (Inter-American Specialized Conference on Private International Law), 115 CJEU (Court of Justice of the European Union): forum non conveniens and, 40 ‘Italian torpedo,’ 45–6, 64 jurisdiction, 102 UK courts and, 57 Unamar v Navigation Maritime Bulgare, 39 unifying role, 87, 99, 103 Collins, Richard, 5–6, 105–20 Colombia: public policy, 129 COMESA, 133 comity: English law and, 41, 44–5 mutual trust and, 177 Nagoya Protocol and, 195 principle, 16–17, 18, 26, 31, 177–8 compatibility clauses, 94 Conflict Free Tin Initiative (CFTI), 167 conflict minerals, 158, 166, 167–8 Congo (DRC): Arrest Warrant of 11 April 2000 (DRC v Belgium), 89–90, 91 conflict minerals, 158 connections: functional commonalities, 21–4 historical links, 18–21 methodology, 28–31 overview, 13–31 policy incorporation, 25–6 principles, 16–18 shared objectives, 26–8 sources, 14–16 contract: EU meaning, 184 fraudulent misrepresentation, 127 freedom of contract see party autonomy genetic resources assessment, 196–8 bargaining power, 179–80, 187 International Treaty and, 8, 175, 190–6, 197 Nagoya Protocol and, 178–90, 194–6, 197–8 standardised clauses, 190–6 international environmental law and, 7–8, 175–98 Nagoya Protocol and, 178–90, 194–6 alternative dispute resolution, 188–9 applicable law, 185–6 assessment, 190, 197–8 jurisdiction, 182–5 recognition of foreign judgments, 186–7

Principles on Choice of Law in International Commercial Contracts, 115, 116 Rome I Regulation see Rome I Regulation UN Convention (1980), 140 corporate social responsibility (CSR): due diligence, 171, 172 EU definition, 148–9 globalisation and, 150–1 human rights, 7, 147–8 hybrid approach, 168–73 home state regulation, 170–2 steps, 172–3 private international law and applicable law, 159–61 choice of court agreements, 163–4 global supply chain, 159–66 jurisdiction rules, 161–4 legal structure of global supply chain, 164–5 public international law and barriers, 151–8 extraterritoriality, 153–5 limited legal personality of TNCs, 7, 151–3 soft law, 155–8 smartphone industry, 166–8 soft law, 7 supply chain management, 7, 147–8 developments, 148–51 home state regulation, 170–2 hybrid approach, 168–73 private international law barriers, 159–66 public international law barriers, 151–8 transparency, 151, 157–8, 171, 173 corruption, 134–5, 137–8, 217, 232, 235 Court of Justice of the European Union see CJEU customary law, 84, 90–1, 110, 126, 179, 185, 186, 188 Cyprus: public policy, 127 D’Aspremont, Jean, 4, 33–52, 218 Daza Clark, Ana Maria, 6, 8, 121–44 decoders: new descriptive tool, 37 private international law, 42–3 public international law, 49–50 Denmark, 62, 161 divorce, 64, 65 Djibouti: Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v France), 100 due diligence, 157, 158, 170–1, 172, 173 due process see fair trial/hearing Ecuador: nationalisations, 136 effectivité, 49 Egypt: US diplomatic relations, 125 Energy Charter Treaty, 127, 137

Index English law see United Kingdom environmental protection: Nagoya Protocol and private contracts, 178–90 public international law and private contracts, 7–8 public policy and, 131 transparency and, 206 equality: bargaining power, 181 equality before the law, 212 gender, 2 non-discrimination value, 135–6 sovereign equality, 17–18, 25, 26, 31, 77 estoppel, 89 Ethiopian Institute of Biodiversity Conservation, 180 European Convention on Corruption (1999), 232 European Convention on Human Rights: EU law and, 69 fair trial, 98, 102–3 free expression, 232–4, 237–8 UK devolved legislatures and, 61 whistleblowing and, 231 European Convention on International Commercial Arbitration (1961), 129 European Court of Human Rights: Avotiņš v Latvia, 102–3 UK employment tribunals and, 236 whistleblowing, 231, 232–4, 237 European Free Trade Association (EFTA), 15, 162, 225 European Union: CETA, 133, 200, 211, 215 CJEU see CJEU corporate social responsibility, 148–9 free circulation of judgments, 81–2 Hague Conference membership, 61–2 Kiobel v Royal Dutch Petroleum and, 22 private international law see also specific instruments applicable law, 65, 160–1 choice of courts, 63–5, 183 CSR and, 161–3 forum non conveniens and, 162 harmonisation, 115 instruments, 15 intra-UK situation, 68 lis pendens, 88 objectives, 20 prorogation, 63–5 protection of weaker parties, 67 public policy, 67, 68 role, 27 succession, 65 rule-based system, 112 TTIP, 200, 202, 211, 213–14

 243

UK and, 57–8 Brexit, 55, 63 devolved legislatures and, 61 influence on English law, 45 state sovereignty, 62–70 Extractive Industries Transparency Initiative (EITI), 157–8 fair trial/hearing, 98, 102–3, 139–40 Fairphone, 167–8 Financial Conduct Authority (FCA), 221 financial services: financial crime, 217, 235 whistleblower regulation, 219–23 Food and Agricultural Organisation (FAO), 112, 193, 194 forced labour, 125, 149, 150, 159, 161, 171 forum necessitatis, 97–8 forum non conveniens, 28, 39–40, 44, 87–8, 97, 162 forum shopping, 26, 44, 86 Foster, Sharon, 8, 199–216 Fouchard, Phillipe, 125 France: Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v France), 100 Due Diligence Law (2017), 151 due process, 140 public policy, 125, 127, 139, 140 Serbians Loans (France v Yugoslavia), 31 SS Lotus (France v Turkey), 83, 90, 91, 99 fraud, 136–7 fraudulent misrepresentation, 127 free expression: COE Convention, 232 ECHR, 232–4 ICCPR, 231–2 positive state obligations, 235–6 United Nations, 232 whistleblowers, 9, 231–4 responsible states, 234–9 free trade: global value, 133–4, 137–8 free trade agreements see also international commercial arbitration; investor-state arbitration arbitration, 123 growth, 133 French, Duncan, 1–9, 75–104 friendship, commerce and navigation (FCN) treaties, 202 functional commonalities, 4–6, 21–4 Gaillard, E, 125 general principles of law see also specific principles connections, 16–18 examples, 89 genetic resources contracts, 192

244 

Index

ICJ, 89, 111 increasing internalisation, 5, 76 jurisdiction and, 76, 95–6 private international law, 89 public international law, 89 windows, 47 genetic resources: Bonn Guidelines, 184 contracts alternative dispute resolution, 188–9, 193–4 applicable law, 185–6, 193 assessment, 190, 196–8 bargaining power, 179–80 International Treaty and, 8, 175, 190–6 jurisdiction, 182–5, 192 Nagoya Protocol and, 178–90, 194–6 recognition of foreign judgments, 186–7 intellectual property, 196–7 Germany: Germany-Pakistan BIT, 202 Jurisdictional Immunities of the State (Germany v Italy: Greece Intervening), 92 Model BIT: arbitration, 210 public policy, 127–8 Ghana: Ara Libertad (Argentina v Ghana), 89, 101–2, 103 Giglio, Francesco, 4, 33–52, 218 Gillies, Lorna, 7–8, 175–98 Global Compact, 206 global governance: confluence of public and private international law, 105–8 deformalisation, 106, 108, 109–13 emergence, 109–13 scope, 106–7 soft law, 5–6, 105–20 private international law, 113–18 public international law, 109–13 responding to law’s globalisation, 118–20 global issues, 2 global supply management see supply chain management good faith, 49, 125, 127, 131, 138, 223 governing law see applicable law Greece: Jurisdictional Immunities of the State (Germany v Italy: Greece Intervening), 92 Hague Conference on Choice of Law in International Commercial Contracts (2015), 185 Hague Conference on Private International Law: EU and, 61–2 global governance, 107 instruments, 115 objectives, 114–15 Principles on Choice of Law in International Commercial Contracts, 115, 116

role, 15, 20–1, 27, 31, 93 UK state sovereignty and, 61–2 Hague Convention on Child Abduction (1980), 62 Hague Convention on Choice of Court Agreements (2005), 61–2, 93, 183, 187 Hague Convention on Parental Responsibility (1996), 62 Hague Convention on the International Protection of Adults (2000), 61 Hague Protocol on Maintenance Obligations (2007), 62 Harvard Convention (1935), 84 health and safety: public policy and, 131 history: connections, 18–21 Hong Kong: public policy, 127 Honoré, Tony, 34 Hood, Kirsty, 4, 53–71 human rights: access to justice, 177, 194 access to water, 138 corporate social responsibility and, 7, 147–8 extraterritorial jurisdiction and, 154–5 hybrid approach, 168–73 home state regulation, 170–2 steps, 172–3 non-discrimination, 135–6 positive obligations, 235–6 private international law and jurisdiction, 161–4 whistleblowing, 237–9 public policy and, 131 international arbitration, 138 smartphone industry, 166–8 soft law, 109, 110, 155–8 supply chain management, 147–8 home state regulation, 170–2 hybrid approach, 168–73 legal structure of global chain, 164–5 private international law barriers, 159–66 public international law barriers, 151–9 transparency and, 158, 206 UK state sovereignty and, 68–9 devolution, 61, 69 whistleblowers, 9, 218, 230–1 private international law and, 237–9 public international law obligations, 234–6 responsible states, 234–9 Hyde, R, 218, 219, 226, 230 Iceland, 162 ICSID Convention see New York Convention impact jurisdiction, 91 inbound travellers, 37 India: public policy, 127

Index indigenous peoples: customary laws, 179, 185, 188 genetic resources see genetic resources Inter-American Convention on General Rules of Private International Law (1979): Uruguay Declaration, 124 Inter-American Convention on International Commercial Arbitration (1975), 129 Inter-American Specialized Conference on Private International Law (CIDIP), 115 International Bar Association, 127 International Chamber of Commerce (ICC), 116–17, 194, 210 international commercial arbitration: costs, 209 genetic resources, 188–9, 193–4 global values, 132–6 anti-corruption, 134–5, 138 free trade, 133–4 interpretation of public policy, 136–43 non-discrimination, 135–6 party autonomy, 132–3 history, 200–1 New York Convention see New York Convention privacy and confidentiality, 8, 199, 203–4 public policy, 6, 121–44 interpretation of global values, 136–43 public v private values, 209–13 recognition of foreign judgments, 187 International Committee of the Red Cross (ICRC), 112 international community: concept, 80 International Convention on the Elimination of All forms of Racial Discrimination (ICERD), 135 International Court of Arbitration, 117 International Court of Justice: Arrest Warrant of 11 April 2000 (DRC v Belgium), 89–90, 91 Article 38(1) paradigm, 89, 111 authority, 112 Barcelona Traction, 152 Belgium v Switzerland (ICJ), 15, 99–100, 103 Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v France), 100 general principles of law, 89, 111 jurisdiction, 28 Jurisdictional Immunities of the State (Germany v Italy: Greece Intervening), 92 Pulp Mills on the River Uruguay, 51 International Covenant on Civil and Political Rights (ICCPR): free expression, 231–2 International Finance Corporation, 156 International Labour Organization (ILO), 7, 112, 152–3 International Law Commission, 47, 95–7 International Monetary Fund (IMF), 112

 245

International Treaty on Plant Genetic Resources for Food and Agriculture: assessment, 197 objectives, 190–1 private/public international law interface, 191–4 standardised contract clauses, 8, 175, 190–6 internet, 78, 84, 85 investment: arbitration see investment arbitration bilateral treaties: origins, 202 dispute settlement, 28 treaties dispute resolution, 210 global values, 132 growth, 133–4 lack of harmonisation, 210 public policy, 131 transparency and, 207 investment arbitration: anti-corruption, 134–5 enforcement, 130–1 fraud and, 137 free trade value, 133–4 global values, 132–6 interpretation of public policy, 136–43 good faith, 127 investor-state arbitration see investor-state arbitration non-discrimination, 135–6 party autonomy, 132–3 public policy, 6, 127 interpretation and global values, 136–43 investor-state arbitration: history, 201–2 jurisdiction, 208–9 lack of harmonisation, 210 pluralism, 211 public interest and, 8 public international law and, 204–7 public v private values, 209–13 rule of law, 211–13 transparency and, 8, 199, 204–5, 206–7 CETA, 215 public values v functional approaches, 207–9 TPP, 215 TTIP, 213–14 Iraq: invasion of Kuwait (1990), 25 Italy: Chad-Italy BIT, 202 ‘Italian torpedo,’ 45–6, 64 Jurisdictional Immunities of the State (Germany v Italy: Greece Intervening), 92 public policy, 126 Renaissance and PIL, 18–19 ITLOS: Ara Libertad (Argentina v Ghana), 89, 101–2, 103

246 

Index

jurisdiction: bases, 76, 81–5 private international law, 81–3, 85 public international law, 83–5 choice of court agreements, 163–4, 182 genetic resources, 192 Hague Convention, 61–2, 93, 183, 187 compatibility clauses, 94 connections, 4–5, 75–104 coordinating, 76, 92–103 general principles of international competence, 76, 96–8 international judicial oversight, 76, 98–103 rule-based systems, 76, 93–6 TRANSJUS Principles, 97–8 definition, 76, 77–8 developments, 76, 92–103 EU and UK, 63–6 exclusive agreements, 182 extraterritorial jurisdiction, 76, 153–5 fair trial and, 98 forum necessitatis, 97–8 forum non conveniens, 28, 39–40, 44, 87–8, 97, 162 general principles, 76 genetic resources contracts, 182–5, 193 globalisation and, 78–81, 84 international oversight of domestic decisions, 76 investor-state arbitration, 208–9 maximum effectiveness clauses, 94 Nagoya Protocol and, 182–5 passive personality, 84, 92 priority clauses, 94 private international law, 28–9, 81–9 barrier to CSR, 161–4 bases, 81–3, 85 CSR and, 161–4 forum non conveniens, 28, 39–40, 44, 87–8, 97, 162 general principles, 89 parallel proceedings, 76, 85–9 prorogation, 63–5, 83 significance, 22–3 public international law, 24 bases, 83–5 consent, 83 extraterritoriality, 83–4, 95 immunity, 90, 92 impact jurisdiction, 91 law and power, 89–92 universal jurisdiction, 91 subordination clauses, 94 synergies, 5 territoriality, 78 unilateralism v global coordination, 76 whistleblowing in UK, 223–5 jus gentium, 120

Kagarios, Dimitrios, 8–9, 217–40 Kenya, 137 Kiestra, L, 237–8 Klabbers, Jan, 111 Krisch, Nico, 113 Kuwait: Iraqi invasion (1990), 25 Lalive, Pierre, 125–6 Latvia: Avotiņš v Latvia, 102–3 legal certainty, 40, 79, 111, 117, 132, 161, 186, 192, 209, 212, 213 legal reasoning: methodology, 33–52 Roman law, 34–5 linkages: international law, 7–9 lis pendens, 28, 86, 88, 183 London Court of International Arbitration (LCIA), 210 Lugano Convention, 15, 100, 162, 224 McCall-Smith, Kasey, 1–9, 147–73 McCarthy, J, 84 MacCormick, N, 56–7 Mancini, Pasquale, 19, 20, 80 maximum effectiveness clauses, 94 Maxwell, Robert, 221 methodology: connections, 4, 28–31 decoders, 37, 42–3, 49–50 description, 2 legal reasoning, 33–52 new descriptive tools, 36–7 travellers, 37, 43–6, 51, 218 windows, 36, 37–42, 46–9, 95 Mexico, 183 Meyer, O, 134 Mills, Alex, 3–4, 13–31, 58–9, 107, 114–15, 120, 153 mining industry, 157–8 mobile phone industry, 149, 166–8 Moldova: free expression, 233 Montesquieu, Charles de, 40 Morgera, Elisa, 7–8, 175–98 Motorola, 158, 167 mutual trust, 59, 177 NAFTA, 133 Nagoya Protocol: Compliance Committee, 190 developing countries and, 180 objectives, 178–9 private contracts and, 7, 178–90, 194–6 alternative dispute resolution, 188–9 applicable law, 185–6 assessment, 190, 197–8 jurisdiction, 182–5 recognition of foreign judgments, 186–7 nationalisations, 135–6

Index nemo auditur propriam turpidinem allegans, 127 New York Convention (ICSID Convention, 1965): annulment of awards, 130, 141, 142 finality of judgments, 129–30 fraud and, 136 origins, 202 pro-enforcement bias, 136–7 public policy exception, 122, 123, 126, 127, 129, 138 Nokia, 158, 167 non-discrimination: global value, 135–6 Noodt Taquela, María Blanca, 6, 8, 121–44 Northern Ireland, 56, 60–1 Norway, 162 objectives: shared objectives, 26–8 OECD, 134–5, 156 Organization of American States (OAS), 115 outbound travellers, 37 pacta sunt servanda, 125 Pakistan: Germany-Pakistan BIT, 202 parallel proceedings, 76, 85–9 participation, 204, 207, 212, 215 party autonomy: Hague Principles, 116 investor-state arbitration, 209 meaning, 53 Nagoya Protocol, 190 private international law, 24, 83, 203 European Union, 67 United Kingdom, 68 public policy and, 124, 132–3 public v private international law, 105, 108, 116 state sovereignty and, 53–5 passive personality jurisdiction, 84, 92 Permanent Court of Arbitration (PCA), 210 Permanent Court of Justice: Serbians Loans (France v Yugoslavia), 31 SS Lotus (France v Turkey), 83, 90, 91, 99 Philip Morris, 208–9 policy incorporation: connections, 25–6 populism, 136 praesumptio similitudinis, 43 principles see general principles of law priority clauses, 94 private international law: applicable law see applicable law corporate social responsibility and, 159–66 decisional harmony, 26, 27 decoders, 42–3 distinctiveness, 35–6 domestic law, 13–14 foreign judgments see recognition and enforcement of foreign judgments forum shopping, 26, 44, 86

 247

global governance and, 107–8 jurisdiction see jurisdiction methodology, 29–30 origins, 18–19 outlook, 1 party autonomy, 24, 67, 68, 83, 108, 203 public policy and, 25–6, 129–32 self-limitation method, 114 soft law, 113–18 sources, 14–16 terminology, 13–14 travellers, 43–6 whistleblowing and, 223–30, 237–9 windows, 37–42 prorogation, 63–5, 83 public interest: applicable law and, 186 international commercial arbitration, 204, 209 investor-state arbitration and, 8, 199, 208, 216 private international law and, 23 public policy, 127, 132 Rome I Regulation and, 38, 66 US choice of forum and, 88 whistleblowing, 9, 218, 220–1, 223, 226, 229, 233 public international law see also specific subjects corporate social responsibility and, 151–8 decoders, 49–50 distinctiveness, 35–6 environmental law, 7–8 fragmentation, 29 jurisdiction, 21, 23, 83–5, 89–92 public policy exception, 129–32 public v private values, 209–13 soft law, 109–13 sources, 14–16 sovereign equality, 17–18, 25, 26, 31, 77 transparency, 199, 205–6 travellers, 51 whistleblowing and, 230–6 windows, 46–9 public policy: defining, 121, 123, 124–9 global values, 131, 132–6 shared concepts, 127 due process, 139–40 EU private international law and, 67, 68 exception, 40n23, 123 consistency, 129–30 genetic resources, 187 interpretation of global values, 136–43 merits of disputes, 139–43 narrow interpretation, 122, 136–7 pro-enforcement bias, 136–7 scope, 129–32

248 

Index

fraud and, 136, 137 global values, 122 anti-corruption, 134–5, 137–8 free trade, 133–4 influencing arbitration, 132–6 interpretation, 136–43 merits of disputes, 139–43 party autonomy, 132–3 treaties, 132 human rights and, 138 international commercial arbitration, 6, 121–44 Rome I Regulation, 227, 238 transnational public policy, 125–6 types, 128 United Kingdom, 25–6, 68, 128, 239 Public-Private Alliance for Responsible Mineral Trade (PPA), 158 racism, 135–6 Rana Plaza building collapse, 149 reciprocity, 41, 104 recognition and enforcement of foreign judgments: English law, 41 European Union, 67, 103, 161 ICSID awards, 130, 141 Lugano Convention, 15, 100 Nagoya Protocol, 186–7 Reisman, WM, 126 res judicata, 28, 89 Rio Declaration (1992), 206 Roman law, 33, 34–5, 39–40, 120 Rome Convention (1980), 15, 40 Rome I Regulation: choice of law clauses, 40, 185 corporate social responsibility and, 161 employment contracts, 226 intra-UK situation, 68 mandatory rules, 38, 66–7, 226 overriding rules, 38–40, 227, 238–9 public policy, 227, 238 whistleblowing in UK, 225–8, 238 Rome II Regulation, 68, 160 Rühmkorf, Andreas, 7, 147–73 Ruiz Abou-Nigm, Verónica, 1–9, 75–104 rule of law, 34, 108, 139, 200, 209, 211–13 Russia: Yukos arbitration, 137–8 Ryngaert, C, 80, 91, 104 SADC, 133 Savage, A, 218, 219, 226, 230 Savage, J, 125 Savigny, Friedrich Karl von, 19–20, 80, 124 Schreuer, C, 141 Scotland: devolution, 56 forum non conveniens, 39, 44, 87

legislative competence: limits, 60–1 Scots law and UK law, 58 self-limitation method, 114 separation of powers, 212 Shelton, Dinah, 110 Singapore, 183 slavery, 151, 158, 169, 171 smartphone industry, 149, 166–8 soft law: corporate social responsibility, 7, 155–8 filling gaps, 110 global governance, 5–6, 105–20 normative effects, 110 private international law: governance technique, 113–18 public international law, 109–13 responding to law’s globalisation, 118–20 soft organisations, 112 state practice, 110 uncertainty, 111 sources: connections, 14–16 decoding, 50 principles of law see general principles of law sovereignty see state sovereignty stare decisis: international law, 48 state immunity, 92, 95 state practice, 110 state sovereignty: concept, 53–4 extraterritorial jurisdiction and, 153–4 individual autonomy and, 53–5 balance, 62–70 UK case study, 55, 56–70 investor-state arbitration and, 202 sovereign equality principle, 17–18, 25, 26, 31, 77 United Kingdom, 56–8 EU rules and, 62–8 human rights, 61 individual autonomy and, 55, 62–70 Stockholm Chamber of Commerce (SCC), 210 Stockholm Declaration (1972), 109 subordination clauses, 94 succession, 65 supply chain management: applicable law, 159–61 corporate social responsibility, 7, 147–8 developing law, 148–51 hybrid approach, 168–73 private international law barriers, 159–66 public international law barriers, 151–8 smartphone industry, 166–8 soft law, 155–8 extraterritoriality, 153–5 human rights violations, 149

Index hybrid approach, 168–73 home state regulation, 170–2 steps, 172–3 international legal personality and, 151–3 jurisdiction issue, 161–4 choice of court agreements, 163–4 EU regime, 161–3 legal structure of global chain, 164–5 Switzerland: Belgium v Switzerland (ICJ), 15, 99–100, 103 Lugano Convention and, 162 public policy, 125, 127, 139 synergies, 3–4, 5 Tazreen factory fire, 149 teff, 180 terrorism jurisdiction, 92 Thailand: forced labour, 149 torts: applicable law, 159–61 extraterritorial jurisdiction, 154–5 jurisdiction, 81, 161–4 Trans-Pacific Partnership (TPP), 200, 202, 211, 215 Transatlantic Trade and Investment Partnership (TTIP), 200, 202, 211, 213–14 TRANSJUS Principles, 97–8 transnational corporations (TNCs): corporate social responsibility, 7, 147–73 hybrid approach, 168–73 due diligence, 171, 172 home state regulation, 170–2 jurisdiction, 153–5, 160–1, 161–4 legal structure of global supply chain, 164–5 limited international legal personality, 7, 151–3 private international law and, 159–66 public international law and, 151–9 smartphone industry, 166–8 supply chain management, 147–73 vicarious liability, 164 transparency: CSR and, 151, 157–8, 171, 173 defining, 205 downsides, 206 international environmental law, 206 investor-state arbitration and, 8, 199, 204–5, 206–7 CETA, 215 lack of harmonisation, 210 public v private values, 209–13 public values v functional approaches, 207–9 TPP, 215 TTIP, 213–14 public international law and, 199, 205–6 rule of law and, 211–13 UNCITRAL Rules, 207, 213–15

 249

travellers: new descriptive tool, 37 private international law, 43–6 public international law, 51 whistleblowing, 218 TRIMS, 202 Turkey: SS Lotus (France v Turkey), 83, 90, 91, 99 UNCITRAL, 126, 128, 129, 136–7, 207, 210, 213–15 UNCLOS: arbitration, 89, 101–2, 103 unfair dismissal, 228–9 UNIDROIT Principles, 192–3 United Kingdom: applicable law, 42, 65–6, 225–30 Brexit, 55, 63 comity, 41, 44–5 CSR and Bribery Act (2010), 170–2 Modern Slavery Act (2015), 151, 158, 169, 171 vicarious liability, 164 devolution, 56 human rights, 61, 69 dualism, 57 employment tribunals, 224 EU legal influence on, 45 extraterritorial jurisdiction and, 160–1, 170, 171 financial scandals, 221 human rights, 61, 68–70 intra-UK jurisdictions CSR and, 162–4 state sovereignty, 58–62, 68 whistleblowers, 224 ‘Italian torpedo’ and, 46, 64 judicial discretion, 39 jurisdiction basis, 82–3 EU, 63–5 forum non conveniens, 39–40, 44, 87–8 Kiobel v Royal Dutch Petroleum and, 22, 100 Kuwait Airways v Iraqi Airways, 25–6 praesumptio similitudinis, 43 prorogation, 63–5 public policy, 25–6, 68, 128, 239 reciprocity, 41 state sovereignty, 56–8 EU membership and, 57–8, 62–70 individual autonomy and, 55, 62–70 intra-UK divisions, 58–62, 68 supply chain management, 7, 148 unfair dismissal, 228–9 whistleblowing applicable law, 225–30 jurisdiction, 223–5

250  regulation, 219, 220–3 Strasbourg jurisprudence and, 236 windows, 39 United Nations: CSR framework, 172, 173 Global Compact, 206 Guiding Principles on Business and Human Rights, 151, 156–7, 166 Protect, Respect and Remedy, 156 rule of law: definition, 212 soft law, 109, 110, 112 state sovereignty principle, 153–4 trade, investment and, 202 transparency and, 206 UNSC authority, 112 UNSC permanent members, 17 UNSC resolutions: bindingness, 48, 51 United Nations Anti-Corruption Convention (2003), 134–5, 232 United Nations Convention on the Contracts of International Sales of Goods (1980), 140 United Nations Environment Programme (UNEP), 112 United States: Alien Tort Statute, 154, 159 comity, 18 corporate social responsibility, 158 discrimination, 136 Dodd-Frank Act, 158, 168, 169, 221 extraterritorial jurisdiction, 154–5, 159–60 FCN treaties, 202 free expression, 235 hierarchy of law, 16, 17 human rights obligations, 235 investor-state arbitration and, 202 jurisdiction basis, 82 forum non conveniens, 44, 88 passive personality jurisdiction, 92 Kiobel v Royal Dutch Petroleum, 22, 160 Model BIT: arbitration, 210 private international law, 20 public policy, 125 supply chain management, 7, 148, 151 Torture Victims Protection Act, 169 TTIP, 200, 202, 211, 213–14 US-Argentina BIT, 142–3 whistleblowing regulation, 221 Universal Declaration of Human Rights (UDHR), 109, 110 Uruguay, 124, 208–9

Index values: equality before the law, 212 global values anti-corruption, 134–5, 137–8 free trade, 133–4 non-discrimination, 135–6 party autonomy, 132–3 public policy exception, 122 public v private values, 209–13 rule of law, 34, 108, 139, 200, 209, 211–13 separation of powers, 212 shared values, 3–4 transparency see transparency Vaughn, R, 235 Venezuela: nationalisations, 136 vicarious liability: TNCs, 164 Vienna Convention on the Law of Treaties: coordination role, 94 free trade agreements and, 134 New York Convention and, 123 scope, 50 Wales, 56, 58, 60, 61 Weil, Prosper, 111 whistleblowers: cross-border element, 218, 220 responsible states, 234–9 financial services, 219 private international law and applicable law, 225–30 human rights, 237–9 jurisdiction, 223–5 UK overview, 223–30 protection, 8–9, 217–40 public interest, 9, 218 public international law, 230–4 free expression, 231–4 human rights, 9, 218, 230–1, 234–7 regulatory approaches, 219–23 UK regulation, 219, 220–3 windows: coordination, 95 new descriptive tool, 36 private international law, 37–42 public international law, 46–9 working conditions, 171, 173 World Bank, 112, 202 WTO, 28, 112, 133, 202 Wyper, Amanda, 8–9, 217–40 Yugoslavia: Serbians Loans (France v Yugoslavia), 31