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Transnational Dispute Resolution
University of South Carolina School of Law
McWilliams, Martin C.

Transnational Dispute Resolution – McWilliams & Samuels
Maymester 2010
 
       I.            Comparative Legal Institutions
a.       Conflict of Laws
                                                              i.      Interests of multiple countries/sovereigns/states
                                                            ii.      What substantive law does the court apply to resolve the dispute?
1.      Forum decides
2.      Can be outcome determinative, because laws are different in different places
                                                          iii.      Three aspects (internationally recognized categories):
1.      Jurisdiction – appropriate power of court over person or thing; in personam, in rem jurisdiction; includes corporations, LLCs, etc. as persons
a.       In personam – court must have personal jurisdiction to render judgment
b.      In rem – to render judgment that makes disposition of who owns some thing, court must have in rem jurisdiction over that thing
c.       Boils down to nexus – connection between jurisdiction where court sits and person or thing at issue
2.      Choice of law – what substantive law does the court apply when multiple sovereigns touched; local, other jurisdiction, etc.?
a.       Courts use own procedural laws (such as discovery, evidence) – substantive law is what raises issue
b.      Traditionally decided on territorial grounds
c.       Today, interest analysis – not physical territory, but which sovereign has greater interest in controlling outcome of dispute
d.      Problems:       
                                                                                                                                      i.      Characterization – distinction between substantive and procedural law; if court wants certain outcome and there is dispositive rule, court may characterize rule as procedural rather than substantive so it can apply its own rule
1.      Can have both tort and K issues – court can characterize either way depending on which way would favor its desired outcome
2.      Often used by courts to get to result they want
                                                                                                                                    ii.      Renvoi (rawn-vwah) – when court decides that entirety of some foreign body of law should be applied (including choice of law rules, e.g. SC) then choice of law rule would refer back, e.g. England, then that refers back (refers in circles), courts will often just apply their own law for simplicity’s sake
                                                                                                                                  iii.      Public policy – if public policy issue, courts can often use their own local law; many courts revert to this to solve the problem
                                                                                                                                  iv.      Proof of foreign law – how does court figure out what applicable law is?
1.      If SC court decides to apply English law, how does it prove what foreign law is
2.      Traditionally, matter of fact proved by expert witnesses (not appealable)
3.      Modern view is that this is matter of law, which can be appealed
e.       Systems of choice of law:
                                                                                                                                      i.      First Restatement – intended to be simple, clear, and therefore predictable; because it is simple, clear, and predictable, used in many states still (used in SC); directs court to controlling jurisdiction (should be governed by law in which dispute generated), meaning any court should arise at same conclusion
1.      Vested rights theory – rights vest at time and place of litigated event (e.g. rights vested at time and place where tort occurs)
2.      General rules:
a.       Torts – place of wrong (substantive law of jurisdiction in which tort took place); state where last event necessary to make actor liable took place
b.      Contracts – place of making; place where last act leading to enforceable K occurs (usually final signature)
                                                                                                                                                                                                              i.      With informal, unilateral Ks, normally place of offeree’s performance
c.       Real property – situs (where located); universal rule throughout all choice of law systems
                                                                                                                                                                                                              i.      Courts often reluctant to rule over foreign real estate rights
d.      Personal property – normally adjudicated according to place where property physically located at time of transaction
                                                                                                                                                                                                              i.      Domicile of parties is immaterial in terms of choice of law for personal property
e.       Succession on death – law of decedent’s domicile at time of death
                                                                                                                                    ii.      Modern theories have more to do with subjective matters
1.      Center of gravity approach (Second Restatement approach)
a.       Said to be dominant theory in US, with more than 20 States following this
b.      Rather than choosing governing law by assigning vested rights within territory, identifies State with most relationship to issue (grouping of contacts analysis) – looks at contacts
c.       Points to statutory directives; if state has statute that claims certain disputes as its own, state has strong contact with certain types of disputes and foreign jurisdiction should look to that; then, moves to State with most significant relationship
d.      Factors:
                                                                                                                                                                                                              i.      Needs of interstate and international systems (clarity, appropriateness of taking jurisdiction, etc.)
                                                                                                                                                                                                            ii.      Relevant policies of forum itself
                                                                                                                                                                                                          iii.      Relevant policies of other interested states
e.       These factors lead to presumptive rules (happen to be territorial like First Restatement, but presumptions less strong):
                                                                                                                                                                                                              i.      Most significant relationship factors can displace territorial rules (start with rebuttable presumptions of territorial rules)
                                                                                                                                                                                                            ii.      Procedure and evidence use forum law
                                                                                                                                                                                                          iii.      Real property uses law of situs
                                                                                                                                                                                                          iv.      Personal property upon death uses law of decedent’s domicile
                                                                                                                                                                                                            v.      Marital property uses state with most important relationship to property
                                                                                                                                                                                                          vi.      Torts uses law of place of injury, unless some other state has more significant relationship
                                                                                                                                                                                                        vii.      Contracts – choice of law clauses presumptively enforceable (when two parties to K decide that law of particular jurisdiction will govern); courts ignore choice of law clauses when purpose is to circumvent laws of forum (then use state with most significant relationship to K)
2.      Interest analysis – what jurisdiction has greater interest in controlling outcome (scholarly favorite)
a.       Inquires into States’ interests in applying their own law
b.      If only one of candidate states’ interests implicated, then there is a false conflict and no competing interests – in this case, SC law employed (if no true conflict, i.e. if only one state has interest)
c.       If more than one state has interest, true conflict exists and forum applies its own law
d.      If forum is not one of interested states, applies own law or chooses what it considers to be better law (fairer outcome)
e.       If no states’ interests would be advanced (unprovided for case), then forum provides own law
3.      Choice influencing considerations and better law (5 factors)
a.       Predictability of results (important in K and planning contexts, less so in torts because unplanned)
b.      Maintenance of interstate and international order – look to other jurisdictions to see if they have strong interests
c.       Simplification of judicial task – e.g. use local law
d.      Advancement of forum’s governmental interests (policies)
e.       Better rule of law
f.       Outcomes tend to be similar to First Restatement
3.      Judgments – what will be the effect of court rendering judgment?
a.       Almost always enforceable within jurisdiction, but will other jurisdictions/countries recognize?
b.      E.g. judgment in England; will it be recognized in US?
                                                          iv.      Two areas treated separately:
1.      Domicile – jurile home of a person; e.g. related to residency for tuition purposes
a.       Has a lot to do with jurisdiction, because jurisdiction in which you are domiciled will normally have in personam jurisdiction over you
b.      In theory, “person” can have only one domicile
                                                                                                                                      i.      For fictitious jurile persons, this is place of formation (e.g. LLC formed in SC, SC is place of domicile, even if activities take place elsewhere)
                                                                             

                vi.      On the side, take year-long “law school,” which is like bar prep à Inns outsourced content of law
1.      At the Inns, learn ethics, how to present arguments, etc.
                                                                                                                                vii.      After training at Inn, seek pupilage – group of barristers invites you to come work with them as intern
1.      Only about 35% of student barristers get pupilages
                                                                                                                              viii.      After pupilage, you become a practicing barrister
                                                                                                                                  ix.      Every barrister is an independent contractor – no hierarchical law firm structure for barristers with partners and associates
1.      Must find own clients, but sometimes given by other barristers with too much
2.      Get paid $0 by chambers – must generate fees from own work
i.        Filters:
                                                                                                                                      i.      Expensive public school
                                                                                                                                    ii.      University where earn nothing
                                                                                                                                  iii.      Expensive conversion course
                                                                                                                                  iv.      Paid nothing at Inn
                                                                                                                                    v.      Pay for law school course
                                                                                                                                  vi.      Barely paid for pupilage
                                                                                                                                vii.      Paid nothing for being barrister until clientele
                                                                                                                              viii.      à MEANS MUST HAVE MONEY TO START (white, upper-class, male, second-son)
j.        Judiciary are far less diverse than in US – we have enormous melting-pot diversity, including women on Supreme Court
                                                                                                                                      i.      Inns are trying to change this by giving scholarships in an effort to change the caste of barristers
k.      Not uncommon to have two barristers in one room (office) and even for those two to be adverse in a lawsuit
l.        Tight, homogenous source of judges – heavily socialized
                                                                                                                                      i.      P. 353
                                                                                                                                    ii.      Widely differs from American judges
m.    Intense professionalization
                                                                                                                                      i.      P. 347 almost never appointed for political reasons, and normally can’t even declare political party (Scottish judge fired for allowing political picture to be taken of him in robes)
n.      In US, almost no state courts have life tenure, whereas here all do
o.      Biggest difference between US and English judges is political influence
p.      US judges are also paid less than English judges
q.      The English appellate judge is more professionally oriented; the American, more politically and socially oriented
r.        Diversity of US judges makes sense because system is more flexible
c.       The Legal Professions
                                                              i.      Barristers
1.      Make court appearances in High Court and above
2.      Do research and office work called Consultations
Very small size, its centralized structure and homogeneity, the special relations between barristers and judges, and the degree to which a barrister is truly an officer of the court, and thus a guardian of the judicial process and not merely a