International Litigation and Arbitration

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Carolina Academic PressLaw Casebook Series

Advisory Board

❦

Gary J. Simson, ChairmanCornell Law School

Raj K. BhalaUniversity of Kansas School of Law

John C. Coffee, Jr.Columbia University Law School

Randall CoyneUniversity of Oklahoma College of Law

John S. DzienkowskiUniversity of Texas School of Law

Paul FinkelmanUniversity of Tulsa College of Law

Robert M. JarvisShepard Broad Law Center

Nova Southeastern University

Vincent R. JohnsonSt. Mary’s University School of Law

Michael A. OlivasUniversity of Houston Law Center

Kenneth PortWilliam Mitchell College of Law

Michael P. ScharfCase Western Reserve University School of Law

Peter M. ShaneMichael E. Moritz College of Law

The Ohio State University

Emily L. SherwinCornell Law School

John F. Sutton, Jr.Emeritus, University of Texas School of Law

David B. WexlerJohn E. Rogers College of Law

University of Arizona

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International Litigation and Arbitration

Practice and Planning

Fifth Edition

Russell J. WeintraubProfessor of Law Emeritus

and Holder of the Ben H. & Kitty King Powell Chair EmeritusUniversity of Texas School of Law

Carolina Academic Press

Durham, North Carolina

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Copyright © 2006Russell J. WeintraubAll Rights Reserved.

ISBN 1-59460-221-2LCCN 2006921335

Carolina Academic Press

700 Kent StreetDurham, North Carolina 27701

Telephone (919) 489-7486Fax (919) 493-5668

E-mail: cap@cap-press.comwww.cap-press.com

Printed in the United States of America

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To my best friend and dearest love, my wife, Zelda

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Summary of Contents

Preface xxi

Acknowledgements xxiii

1. SUING FOREIGN DEFENDANTS 3Section 1. Problems of In Personam and In Rem Jurisdiction 3Section 2. Agreements to Litigate or Arbitrate Abroad 70Section 3. Enjoining Suit Abroad 121Section 4. Service of Process 132Section 5. Taking of Evidence 157Section 6. Currency Conversion 203

2. SUITS BY FOREIGN PLAINTIFFS 211Section 1. Forum Shopping and Forum Non Conveniens 211Section 2. Erie, Reverse Erie, and Litigation Strategy 250

3. RECOGNITION OF JUDGMENTS 271Section 1. Bases for Non-Recognition 271Section 2. Judgments Enforcing Public Law 294Section 3. The Uniform Act 298

4. THE ACT OF STATE DOCTRINE 309Section 1. Application and Exceptions 309Section 2. Intangible Property 324

5. FOREIGN SOVEREIGN IMMUNITY 331Section 1. The Foreign Sovereign Immunities Act 331Section 2. Commercial or Governmental 354Section 3. Enforcing a Judgment 373

6. EXTRATERRITORIAL APPLICATION OF PUBLIC LAW 391Section 1. Antitrust Law 391Section 2. Securities Law 454Section 3. Other Problems 464

7. CIVIL SUITS FOR ATROCITIES THAT VIOLATE INTERNATIONAL LAW 473Section 1. The Alien Tort Claims Act 473Section 2. The Torture Victim Protection Act 487

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8. DAMAGES RESULTING FROM INTERNATIONAL FLIGHTS:THE MONTREAL AND WARSAW CONVENTIONS 501

Section 1. Recovery Rules 501Section 2. Defining Convention Terms and Determining Preemption 519

9. INTERNATIONAL CHILD ABDUCTION 543Section 1. Duty to Return the Child 543Section 2. Exceptions to the Duty to Return 567

10. LETTERS OF CREDIT 577Section 1. Compliance with Terms of the Letter 579Section 2. Enjoining Payment 585Section 3. Political Risks 596

11. ARBITRATION 605Section 1. Conventions and Model Law 606Section 2. Judicial Assistance and Interference 634Section 3. Awards of the Iran-United States Claims Tribunal 644

PROBLEM APPENDIX 651

TABLE OF CASES 655

INDEX 667

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Contents

Preface xxiAcknowledgments xxiii

1. SUING FOREIGN DEFENDANTS 3

Section 1. Problems of In Personam and In Rem Jurisdiction 3Introduction: Overview of Jurisdiction and Conflict of Laws 3Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) 11Notes. U.S. amicus brief in Helicopteros; foreign defendants’

vulnerability to suit despite Helicopteros; obsolete precedent relied on in Helicopteros; Calvo clauses 16

Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987) 17Notes. Implications of Asahi for injured users; split of authority

concerning “stream of commerce”; Japanese jurisdiction cases;use of national contacts in Federal Rule 4(k)(2) 24

European Union Regulation on Jurisdiction and Enforcement ofJudgments in Civil and Commercial Matters 27

Notes. Replacement of Brussels Convention; Lugano Convention;relevance of the provisions of the EU Regulation to assessing the reasoning in Asahi; jurisdiction under the Regulation;U.S. Supreme Court justices disagree on whether foreign materials are relevant to deciding U.S. constitutional issues;exorbitant bases for jurisdiction under the Regulation; transient presence as basis for jurisdiction; differences between jurisdiction under Regulation and in U.S. 42

Meier v. Sun International Hotels, 288 F.3d 1264 (11th Cir. 2002) 45Notes. Piercing the corporate veil 49Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446 (3rd Cir. 2003) 51Note. Jurisdiction based on internet activities 55Shaffer v. Heitner, 433 U.S. 186 (1977) 57Notes. Uses of in rem jurisdiction that survive Shaffer; English

“Mareva” injunction compared; local procedure may not permit prejudgment seizure; applicability of Shaffer footnote 36 to foreign judgments and arbitral awards; due process requirements affected by interest at risk; likelihood that Shaffer will beoverruled or limited 66

Louring v. Kuwait Boulder Shipping Co., 455 F. Supp. 630 (D. Conn. 1977) 69Notes. Meaning of “no other forum”; possibility that fewer forum contacts

needed for in rem than for in personam jurisdiction 70

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Section 2. Agreements to Litigate or Arbitrate Abroad 70The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) 70Notes. Exculpatory clauses invalid under German law; enforcement of

forum-selection clauses in cruise tickets; drafting of a choice-of-forum clause; limitation of vessel owner’s liability; the forum-selection clause in Carbon Black; recovery of damages for violation of derogation agreement; Convention on Choice ofCourt Agreements 77

Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528 (1995) 81Notes. Enforcement of forum-selection clauses; denial of interlocutory

appeal for refusal to enforce 84Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974) 86Notes. Overruling of Wilco v. Swan; enforcement of arbitral awards

under Foreign Sovereign Immunities Act and Act of State Doctrine; enforcement of forum-selection clauses against U.S.investors in Lloyd’s; type of fraud needed to invalidate choice-of-forum or choice-of-law clause 92

United Nations Convention on the Recognition and Enforcement ofForeign Arbitral Awards (“New York” Convention) 95

Notes. New York Convention widely ratified; Inter-American Convention on International Commercial Arbitration (“Panama” Convention);construction of Convention and Federal Arbitration Act;enforcement after judgment confirms award; procedure to enforceaward; forum non conveniens dismissal of Convention action;drafting of arbitration agreement; “manifest disregard of the law”as reason to vacate award; local awards not considered as “domestic”; discretion to adjourn enforcement proceeding;enforcing award set aside where rendered; resolving disputes over construction contracts; when a nonsignatory is bound; the “nonneutral” arbitrator; obtaining evidence in arbitration 97

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,473 U.S. 614 (1985) 109

Notes. Enforcement of arbitration awards and agreements; commentson Mitsubishi 117

Rhone Mediterranee Compagnia Francese v. Lauro,712 F.2d 50 (3rd Cir. 1983) 118

Notes. Standard for enforcement of agreement to arbitrate;“time” and “bareboat” charters 121

Section 3. Enjoining Suit Abroad 121Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren,

361 F.3d 11 (1st Cir. 2004) 121Notes. “Parallel proceedings” and the Conflict of Jurisdiction Model Act;

antisuit injunctions and stays of proceedings; parallel proceedings under EU Regulation; costs of EU “first seised” rule; comparative law on parallel proceedings 127

Section 4. Service of Process 132Hague Convention on the Service Abroad of Judicial and Extrajudicial

Documents in Civil or Commercial Matters 132

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Notes. Sources of multilateral conventions affecting international litigation and arbitration; Service Convention provision for reopening judgment; treatment of controversial issues in multilateral conventions; Inter-American Convention on Letters Rogatory; EU Regulation on service in member states 137

Service abroad under Federal Rule of Civil Procedure 4 139Note. Interpretation of Rule 4 139Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988) 140Notes. Special Commission report on Schlunk; refusal of service when

request forwarded by U.S. attorney; “send” in Article 10(a) and Japanese position on mail service; Council Regulation on service in EU; registered e-mail in Italy; American form of notification au parquet; due process notice requirements; whether Service Convention is mandatory 146

Federal Trade Commission v. Compagnie de Saint-Gobain-Pont-A-Mousson, 636 F.2d 1300 (D.C. Cir. 1980) 148

Notes. Legislation conflicting with international law; jus cogens;amendment of FTC service provisions 156

Section 5. Taking of Evidence 157Hague Convention on the Taking of Evidence Abroad in Civil or

Commercial Matters 157Société Nationale Industrielle Aérospatiale v. United States District

Court, 482 U.S. 522 (1987) 165Notes. Special Commission report on Aérospatiale; abandoned proposal

to amend FRCP 26(a); critique of conclusion that “may” indicates that Convention is optional; reservations under Article 23;discovery in aid of foreign proceedings under 28 U.S.C. § 1782;UK act; “GmbH”; lower court decisions after Aérospatiale;discovery in England; “Anton Piller” order; civil law discovery;EU regulation on taking of evidence 175

Restatement (Third) of the Foreign Relations Law of the United States § 442 179

Notes. Court supervision of discovery of evidence located abroad; effect of blocking statutes on discovery orders and sanctions 180

Societe Internationale Pour Participations Industrielles et Commerciales,S.A. v. Rogers, 357 U.S. 197 (1958) 180

Notes. How burden of proof may be affected by blocking statute;settlement of principal case; lifting of Swiss banking secrecy laws;effect of blocking statutes on decision to order production and on sanctions for disobedience 185

In re Uranium Antitrust Litigation, 480 F.Supp. 1138 (N.D. Ill. 1979) 186Note. “Balancing test” for ordering discovery and for extraterritorial

application of law 192United States v. First Nat’l Bank of Chicago, 699 F.2d 341 (7th Cir. 1983) 192Notes. Use of “Second” and “Third” in referring to Restatements of

Foreign Relations; deliberate use of foreign blocking statute;discovery on the jurisdictional issue; ordering discovery in violation of foreign law; self incrimination 195

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In re Asbestos Insurance Coverage Cases, [1985] 1 W.L.R. 331 (House of Lords) 197

Notes. England permits discovery in U.S. in aid of English proceedings;conversion of law lords into Supreme Court 202

Section 6. Currency Conversion 203Note. Analysis of currency-conversion problem 203In re Good Hope Chemical Corp., 747 F.2d 806 (1st Cir. 1984) 205Notes. Supreme Court precedent on currency conversion; “F.A.S”

and Guide to Incoterms; effect on U.S. judgment of payment of English judgment 209

2. SUITS BY FOREIGN PLAINTIFFS 211

Section 1. Forum Shopping and Forum Non Conveniens 211Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) 211Notes. Why an American forum is attractive to foreigners; disparity

between awards within EU; change in law because of change in forum; tactical use of transfers between federal courts; review ofruling on forum non conveniens motion; state forum non conveniens standards; defamation as exception to attractiveness of United States forum; obligation of courts in a magnet forum;Friendship, Commerce, and Navigation treaties; International Covenant on Civil & Political Rights, requirement of adequate alternative forum; examples of courts applying public and private convenience factors 220

Harrison v. Wyeth Laboratories, 510 F. Supp. 1 (E.D. Pa. 1980) 228Note. Conditions on granting forum non conveniens motion 231In re Union Carbide Corp. Gas Plant Disaster at Bhopal, India,

809 F.2d 195 (2d Cir.) 231Notes. Uniform Foreign Money Judgments Act; review of denial of

forum non conveniens motion; collateral attack on Bhophal settlement; forum’s granting relief after forum non conveniens dismissal; India as inadequate forum; foreign legislative attempts to prevent dismissals in U.S. courts; waiver of limitations that ran before suit in forum 237

Lubbe v. Cape PLC, [2000] 1 W.L.R. 1545 (H.L.) 242Notes. Implications of eliminating public factors from forum non

conveniens analysis; dismissal under EU Regulation; “substantial justice” as a factor; public factors in Japan and Australia; factors resembling forum non conveniens in Germany and France; Quebec permits dismissal 248

Section 2. Erie, Reverse Erie, and Litigation Strategy 250Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300 (11th Cir. 2002) 250Notes. Options available to foreign plaintiffs when their suits are

dismissed in federal court; the Erie Doctrine and forum non conveniens; states that do not permit forum non conveniens dismissals or apply the doctrine restrictively as magnet forums;tactics to prevent removal to federal court 254

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Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988) 258 Notes. Result in Chick Kam Choo in Texas court; “reverse-Erie”

doctrine not applicable to forum non conveniens; Anti-Injunction Act not applicable when no ongoing state proceeding;“strangers” exception to Act 262

Smith Kline & French Laboratories Ltd. v. Bloch,[1983] 2 All E.R. 72 (Ct. App.) 265

Notes. Lord Denning’s views on forum shopping; development of forum non conveniens in England; forum non conveniens under the EU Regulation; foreign antisuit injunction as alternative to forum non conveniens dismissal 269

3. RECOGNITION OF JUDGMENTS 271

Section 1. Bases for Non-Recognition 271Hilton v. Guyot, 159 U.S. 113 (1895) 271Notes. Reciprocity as basis for judgment recognition; “intrinsic,” “extrinsic”

fraud; change in French law 275Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435 (3rd Cir.

1971) 276Notes. Collateral attack under the EU Regulation; jura novit curia;

recognition of inconsistent judgments; EU Regulation for enforcement of uncontested claims; exorbitant bases for jurisdiction; res judicata effect of failed collateral attack;recognition of U.S. judgments in Canada; enforcement of foreign decree freezing assets in the United States; extra-territorial service under United Kingdom and Australian law; law applicable to judgment recognition in federal courts; ALI proposal 280

Jet Holdings Inc. v. Patel, [1988] 3 W.L.R. 295 (Ct. App.) 284Notes. English bases for recognizing personal jurisdiction in foreign

courts; English requirement of “substantial justice”; English view of “presence” as a basis for jurisdiction; recognition of judgments for multiple or punitive damages; English view of collateral attack for fraud; application of EU Regulation to EU judgment recognizingjudgment from outside EU; application of Full Faith and Credit to sister-state judgment recognizing foreign judgment; recognition of foreign judgments; Hague Conference judgment-recognition convention; recognition abroad of U.S. judgments 289

Section 2. Judgments Enforcing Public Law 294United States of America v. Inkley, [1988] 3 W.L.R. 304 (Ct. App.) 294Notes. The “revenue rule”; recognition of judgments for family support 297

Section 3. The Uniform Act 298Uniform Foreign Money-Judgments Recognition Act 298Notes. Fraud as basis for collateral attack; “public policy” as basis for

nonrecognition; due process requirement; collateral attack after defense on merits abroad; enforcement of arbitral awards 300

Royal Bank of Canada v. Trentham Corp., 665 F.2d 515 (5th Cir. 1981) 302

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Note. Variety of reciprocity requirements in some versions ofMoney-Judgments Act 304

Detamore v. Sullivan, 731 S.W.2d 122 (Tex. Civ. App. — Houston 1987) 305Note. Notice and opportunity to be heard under Money-Judgment Act 306

4. THE ACT OF STATE DOCTRINE 309

Section 1. Application and Exceptions 309Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) 309Notes. Conversion of bills of lading; the “Hickenlooper” amendment;

result on remand; application of letter-of-credit proviso;compensation for expropriated property under Charter ofEconomic Rights and South African law; “a claim of title or other right to property”; requirement of act by sovereign authority; “commercial” exception; Litvinov Assignment;application of doctrine; Libertad Act; arbitration involving sovereigns; investment insurance; doctrine in U.K.; change ofattitude by U.S. toward claims of Nazi survivors 319

Section 2. Intangible Property 324Allied Bank International v. Banco Credito Agricola de Cartago,

757 F.2d 516 (2d Cir. 1985) 324Notes. “Situs” of a debt; scope of Act of State doctrine; “sovereign risk”

and bank deposits in foreign branches 327

5. FOREIGN SOVEREIGN IMMUNITY 331

Section 1. The Foreign Sovereign Immunities Act 331Foreign Sovereign Immunities Act 331Notes. Other Code provisions affecting suits with foreign sovereigns;

Seventh Amendment right to jury; when an “agency or instrumentality” is “a citizen of the United States”; time for determining sovereign status; interlocutory appeal; choice-of-law under the FSIA; distinctions in FSIA between treatment of“foreign state” and “agency or instrumentality”; relationship between commercial and tort exceptions; pooling and tiering to determine sovereign ownership; application of the FSIA to individuals; service on defendant; “organ of a foreign state”;burden of proof; Bankruptcy Act provisions; legislation abroad;UN Convention; proposed amendments to FSIA 340

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480 (1983). 348Notes. Grounds for jurisdiction in Verlinden; background of Act;

retroactive application 352Republic of Austria v. Altmann, 541 U.S. 677 (2004) 353

Section 2. Commercial or Governmental 354Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992) 354Notes. Due process limits on personal jurisdiction under Act; sovereign

immunity in the United Kingdom; “direct effect”; attachment;RICO actions 357

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Saudi Arabia v. Nelson, 507 U.S. 349 (1993) 360Notes. “Direct effect”; commercial activity in U.S. 366International Association of Machinists v. OPEC,

649 F.2d 1354 (9th Cir. 1981) 367Note. Act is sole basis for jurisdiction over foreign sovereign 370MOL, Inc. v. Peoples Republic of Bangladesh,

736 F.2d 1326 (9th Cir. 1984) 370Notes. Choice between decision on act of state and sovereign immunity

grounds; commercial-governmental distinction 372

Section 3. Enforcing a Judgment 373Letelier v. Republic of Chile, 748 F.2d 790 (2d Cir. 1984) 373Notes. International Commission award re Letelier; why LAN was not

joined; discretionary function exception; implied waiver ofimmunity by violation of jus cogens standard; state-sponsored terrorism amendment of FSIA; “used for a commercial activity” 378

Joseph v. Office of the Consulate General of Nigeria,830 F.2d 1018 (9th Cir. 1987) 382

Notes. Drafting of lease to foreign consulate; use of state law to determine “scope of employment”; distinctions between consular and diplomatic immunity; discretionary function exemption;hiring as commercial activity; waiver of diplomatic immunity;implied waiver of sovereign immunity; International Organizations Immunities Act 388

6. EXTRATERRITORIAL APPLICATION OF PUBLIC LAW 391

Section 1. Antitrust Law 391Introduction: The Sherman and Clayton Acts 391Restatement (Third) The Foreign Relations Law of the United States

§§ 401, 402, 403, 415, 416 391Notes. “Jurisdiction to enforce”; “effects” basis for jurisdiction to

prescribe; “passive personality” principle; universal jurisdiction;§ 403’s multi-factor reasonableness standard; intended but no actual effect 394

Timberlane Lumber Co. v. Bank of America, 549 F.2d 597 (9th Cir. 1976) 396Notes. Decision after remand in Timberlane; range of opinion on proper

territorial reach of U.S. antitrust law; forum non conveniens dismissal of Sherman Act claim 401

Laker Airways Ltd. v. Sabena, Belgian World Airlines,731 F.2d 909 (D.C. Cir. 1984) 403

Note. Territoriality and nationality as bases for jurisdiction to prescribe 409Agreement Between the United States and the United Kingdom

Concerning Air Services [“Bermuda II”] 410Note. Relevance of Treaty to antitrust suit; negotiation of new agreement

with EU 411British Airways Board v. Laker Airways Ltd.,

[1985] 1 A.C.58 (1984) (House of Lords) 411

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Notes. English, Australian, and Canadian “Clawback” Acts; enjoining suit by Laker’s liquidator; settlement of Laker litigation; Canadian blocking statute 418

Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993) 419Notes. Ambiguity of Justice Souter’s opinion; Justice Scalia’s treatment of

§ 403; relevance of McCarron-Ferguson exemption; circuit split over Hartford’s effect on comity; presumption against extraterritoriality 426

F. Hoffman-La Roche Ltd. v. Empagran, 542 U.S. 155 (2004) 428Notes. Decision on remand; effect of FTAIA 433Dee-k Enterprises, Inc. v. Heveafil Sdn. Bhd., 299 F.3d 281 (4th Cir. 2002) 434Notes. Burden of establishing effects on commerce; application

of FTAIA to import commerce 441Antitrust Enforcement Guidelines for International Operations — 1995 442Notes. Sovereign compulsion as defense; recommendation of

Organization for Economic Cooperation and Development (OECD) regarding cooperation on anti-competitive practices 443

Lucchino v. Foreign Countries of Brazil, et al, 476 A.2d 1369 (Pa. Cmwlth. Ct. 1984) 444

Notes. Pennsylvania “buy America” statute; United States-Germany Treaty of Friendship; state legislation that interferes with foreign affairs 446

Japan-United States: Agreement on Semiconductor Trade (1986) 448European Community Declaration Concerning Japanese-United States

Agreement on Semiconductor Trade 450Notes. Subsequent Japan-U.S. agreements; antitrust agreements between

U.S. and EU, Australia, France, Germany, Canada; International Antitrust Enforcement Assistance Act; recognition of “effects”doctrine abroad; The Court of Justice of the European Communities applies EU antitrust law to foreign producers (The “Wood Pulp Case”); OECD guidelines; U.S. companies obtain antitrust remedies against other U.S. companies from EU Commission; EU Merger Control Rules; comparative antitrust law 450

Section 2. Securities Law 454Zoelsch v. Arthur Andersen & Co., 824 F.2d 27 (D.C. Cir. 1987) 454Notes. Application of U.S. securities law to protect U.S. and foreign

investors; SEC regulations on tender offers for shares of foreign companies; forum non conveniens dismissals of actions under federal statutes; agreements between the U.S. and Switzerland and the U.S. and Japan on cooperation in enforcement of securities laws 460

Section 3. Other Problems 464Restatement (Third) The Foreign Relations Law of the United States § 414 464Notes. Distinction between branches and subsidiaries; Sarbanes-Oxley Act;

The U.S.S.R.-Western Europe Pipeline incident; acts of U.S.regulatory agencies affecting operations abroad; Iran & Libyan Sanctions Act; Cuban Liberty & Democratic Solidarity Act;extraterritorial application of other U.S. public laws; French court action against U.S. internet server; in rem jurisdiction under Anticybersquatting Act 465

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7. CIVIL SUITS FOR ATROCITIES THAT VIOLATE INTERNATIONAL LAW 473

Section 1. The Alien Tort Claims Act 473Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) 473Notes. State responsibility for acts of individuals; obligations of

transnational corporations; choice of law under the ATCA; statute of limitations; nonstate actors; ATCA suit v. U.S.; ATCA suits against U.S. corporations; forum non conveniens dismissal ofATCA suit; German and Austrian agreements on compensation for Nazi era atrocities; California legislation; federal statute permitting recovery for injuries by terrorism; codification in the United Kingdom of the European Convention on Human Rights; Belgium legislation 479

Section 2. The Torture Victim Protection Act 487Torture Victim Protection Act 487Note. Tolling of time limitations under the TVPA 488Kadic v. Karadzic, 70 F.3d 232 (2d Cir. 1995) 488Notes. Jurisdiction over Karadzic; judgments against Karadzic; political

question doctrine; international criminal tribunals; immunity of individuals under the FSIA; international law as federal law;head-of-state immunity 497

8. DAMAGES RESULTING FROM INTERNATIONAL FLIGHTS:THE MONTREAL AND WARSAW CONVENTIONS 501

Section 1. Recovery Rules 501Montreal Convention 501Note. Ratification by U.S. and entry into force; special drawing rights;

plaintiff strategy; important issues under Montreal Convention 509Warsaw Convention 510Civil Aeronautics Board Order Concerning Hague Protocol and

Montreal Agreement 516Note. Protocols amending Warsaw Convention; IATA agreement

removing liability limits for personal injury and death; recovery and preemption issues 517

Section 2. Defining Convention Terms and Determining Preemption 519Olympic Airways v. Husain, 540 U.S. 644 (2004) 519Notes. Meaning of “accident” 524Morris v. KLM Royal Dutch Airlines, King v. Bristow Helicopters Ltd.,

[2002] 2 A.C. 628 (H.L. 2002) 526Note. Recovery for psychic injury 533Zicherman v. Korean Air Lines Co., Ltd., 516 U.S. 217 (1996) 534Notes. Choice of law under Warsaw Convention; amendment of Death on

the High Seas Act to permit recovery of non-pecuniary damages;forum non conveniens dismissal of action under Convention 536

El Al Israel Airlines, Ltd. v. Tseng, 525 U.S. 155 (1999) 537Notes. Convention preemption of injunctive relief or prejudgment

interest; defining Convention terms; Athens Convention on Carriage by Sea 540

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9. INTERNATIONAL CHILD ABDUCTION 543

Section 1. Duty to Return the Child 543Hague Convention on the Civil Aspects of International Child

Abduction 543Notes. United States ratification; implementing legislation and regulations;

Permanent Bureau Guide to Good Practice; return under Uniform Child Custody Jurisdiction Act and Uniform Child Custody Jurisdiction and Enforcement Act; Convention’s distinction between ratifying countries; Inter-American Convention on International Repatriation of Children; European Convention on Recognition and Enforcement of Decisions Concerning Custody of Children and on Restoration of Custody of Children; applicable law when both Hague and European Conventions are in force 550

Mozes v. Mozes, 239 F.3d 1067 (9th Cir. 1999) 554Notes. Review of finding of “habitual residence”; meaning of “habitual

residence”; “rights of custody”; problems of enforcement in some signatory countries; different treatment of custody and access rights; international comity; contemporaneous proceedings;when petition moot 562

Section 2. Exceptions to the Duty to Return 567Danaipour v. McLarey, 386 F.3d 289 (1st Cir. 2004) 567Notes. “Intolerable situation”; EU Regulation; child’s objections; waiver

of Convention rights; acquiescence in removal; rights of fugitive from justice; UN Convention on Rights of the Child; no full faith and credit to state custody award 571

10. LETTERS OF CREDIT 577

Introduction: Operation of letters of credit; U.S. banks’ inability to guaranty;Uniform Customs and Practice for Documentary Credits; UCC Article 5;Convention on Independent Guarantees and Standby Letters of Credit;International Standby Practices 577

Section 1. Compliance with Terms of the Letter 579Banco Espanol de Credito v. State Street Bank and Trust Co.,

385 F.2d 230 (1st Cir. 1967) 579Notes. Strict compliance; high percentage of document discrepancy and

rejection; “advising bank”, “confirming bank”, “nominated bank”,“drawee bank”; inspection certificates; jurisdiction in wrongful dishonor suit 583

Section 2. Enjoining Payment 585Mid-America Tire, Inc. v. PTZ Trading Ltd.,

768 N.E.2d 619 (Ohio 2002) 585Notes. Enjoining payment on a letter of credit 592Foxboro Co. v. Arabian American Oil Co., 805 F.2d 34 (1st Cir. 1986) 594

Section 3. Political Risks 596Note. Problems arising from letters of credit issued before the revolution

in favor of Iranian beneficiaries 596

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Harris Corp. v. National Iranian Radio and Television,691 F.2d 1344 (11th Cir. 1982) 596

Declaration of Algeria Concerning Settlement of Claims by the United States and Iran 602

Note. UNCITRAL arbitration rules website 603

11. ARBITRATION 605

Introduction: reasons to prefer arbitration to litigation 605

Section 1. Conventions and Model Law 606Inter-American Convention on International Commercial Arbitration 606Notes. Ratification of Inter-American Convention; comparison of

Inter-American and New York Conventions; arbitration under the North American Free Trade Agreement 607

Convention on the Settlement of Investment Disputes Between States and Nationals of Other States 610

Notes. Ratification; immunity of a State from execution 621UNCITRAL Model Law on International Commercial Arbitration, 621Notes. Enactments of Model Law; “ex aequo et bono”, “amiable

compositeur”, “lex mercatoria”; enforcing agreements that arbitrators apply lex mercatoria 632

Section 2. Judicial Assistance and Interference 634Introduction. Court review of arbitration awards; developments in

England 634Pioneer Shipping Ltd. v. B.T.P. Tioxide Ltd. (“The Nema”)

[1982] A.C. 724 (House of Lords 1981) 635Notes. English standards for appeal from award; interim judicial

assistance; stay of confirmation of award; exclusion from Brussels Convention and Council Regulation 641

Section 3. Awards of the Iran-United States Claims Tribunal 644Ministry of Defense of Islamic Republic of Iran v. Gould Inc.

887 F.2d 1357 (9th Cir. 1989) 644Notes. Tendency to enforce international arbitral awards; relevance

of awards of Iran-U.S. Claims Tribunal 649

Problem Appendix 651

Table of Cases 655

Index 667

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Preface

The volume of international civil litigation and arbitration continues to increase.Lawyers outside the huge firms that conduct the lion's share of international practiceare likely if not now, soon, to be faced with the problem of asserting claims by oragainst foreign parties. Moreover, a lawyer must know what issues arise in internationalpractice in order to draft agreements that put the client in the best tactical positionshould there be a dispute.

These materials survey the problems arising in international litigation and arbitra-tion. The focus is on proceedings in the United States, but the book contains muchcomparative material.

Two subjects that might logically have been included receive only incidental treat-ment—choice of law and admiralty. Coverage of those topics is left to courses in con-flict of laws and admiralty. There is a note on "Choice of Law" in the introduction ofChapter 1, which is intended to provide background for those who have not studied thesubject. Chapter 6, Extraterritorial Application of Public Law, explores an important as-pect of choice of law.

A new feature in this edition is an introduction to Chapter 1, which surveys fourtopics of conflict of laws, or, as the subject is referred to in civil law countries, privateinternational law—jurisdiction to adjudicate, jurisdiction to prescribe, choice of law,and recognition and enforcement of judgments. The introduction also discusses the or-ganization and subject matter jurisdiction of United States state and federal courts. Afeature carried forward from the Fourth Edition is a Problem Appendix.

With regard to form, the omission of text is indicated by * * *. Citations and foot-notes are omitted without indication. When a footnote is retained, it bears its originalnumber.

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Acknowledgments

Before the publication of the First Edition, I had been teaching from temporary edi-tions of these materials for almost ten years. Many colleagues taught from these materi-als or read them and made helpful comments. Users of the first four editions have com-mented on the book. I am grateful to these colleagues for assisting me in shaping thecontents. I am indebted also to my students, here and abroad, who joined with me indiscussion and argument. A special thanks to my secretary, Consuelo Akin, for her ableassistance.

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