Introduction to Conflict of Laws
• Part of English law which comes into operation whenever there’s a legal problem
which has a foreign element.
• Three aims:
1. JURISDICTION – set out the conditions under which a court is competent
to hear an action
2. CHOICE OF LAW rules – determine by what laws the rights of the parties
are to be ascertained
3. RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS –
where a dispute has already been litigated in a foreign country, to specify
the circumstances in which the foreign judgment can be recognised and
enforced by action in England
Jurisdiction:
Does the English court have the power to deal with the case at all?
Argued: English courts should be open for all (good for commerce, lucrative for English
lawyers, standards of British justice are internationally respected)
Counter: Proceedings should be heard only in APPROPRIATE courts (expensive &
inconvenient for witnesses & the defendant, forum shopping, no assets in inappropriate
forum)
Choice of Law:
In deciding the case, which country’s law would apply?
Courts not bound to apply their own law only. In apt cases, English courts can apply a
FOREIGN law to resolve the legal issue.
Choice of Law rules are rules that determine which law the court applies in a case
involving a foreign element. Application of choice of law rules leads to the lex causae
(applicable law).
Rationale of Choice of Law rules: achieving justice between the parties, protecting or
advancing public interest, achieving uniformity of decisions.
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How can Foreign Law be applied?
The English judge applies only the English choice of law rule.
Mechanics of the Process:
1. Classification or Characterisation
2. Connecting Factors
3. Proof of Foreign Law
➢ Classification or Characterisation: determine the juridical nature of the issue
Which law to use to classify the legal issue – the lex fori or the lex causae?
(i) lex fori:
Traditionally: It is for the English law to classify the facts or the legal issues into a
legal category:
Example: Apt v Apt and Ogden v Ogden
Advantages: simple, predictable and enables English court to maintain control
over its own conflict rules; otherwise, it “would no longer be master in its own
home” [Dicey, Morris & Collins (2012)].
Disadvantages: claiming to apply a foreign law but ignoring its classification can
result in applying a distorted law that is effectively the law of nowhere, similarity
between foreign law and English law may be superficial, what if no similarity at
all?
(ii) lex causae:
Legal rule should be classified according to the law which it is a part of,
otherwise, what’s the point?
Example: Re Maldonado’s Estate and Re Cohn
→ English courts:
Tend to classify all issues according to the lex fori:
Auld LJ in Macmillan Inc: ‘The proper approach is to look beyond the formulation
of the claim and to identify according to the lex fori the true issue(s) thrown up by
the claim & the defence.’
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(Recently, dicta: CoL doesn’t depend upon the application of rigid rules, look for
the appropriate law)
Exceptions to the lex fori approach:
- whether property is movable or immovable is to be determined by the lex situs:
Re Hoyle
- occasionally addressed by statutes
- increased Europeanisation of Conflict of Laws means that many concepts are
now given an autonomous meaning
➢ Procedure & Substance:
General Rule: matters of substance are governed by the lex causae while matters
of procedure are governed by lex fori.
Sometimes, it is difficult to differentiate between the two.
Issues of Substance: those relating to the ‘existence, extent or enforceability of the
rights or duties of the parties’: Rogerson
Previously: because of convenience or wanting to avoid foreign law, English
courts gave broad meaning to what constitutes as ‘procedure’.
NOW: English courts adopt a more balanced approach through a broader
interpretation of what constituted as substantive matter; limits procedure to matters
which govern & regulate mode and conduct of the proceedings.
Matters characterised as PROCEDURAL:
(i) Evidence
includes: admissibility of evidence, competence of witnesses, requirements of
written evidence
- Rome I and Rome II classify burden of proof & presumptions as governed by the
lex causae.
- Irrebuttable presumptions of law are rules of SUBSTANCE (Re Cohn) as are
many rebuttable presumptions.
(ii) Statutes of Limitations
laws laying down periods within which claims of various kinds can be brought
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Common Law: Procedural matter
^ replaced by Foreign Limitation Periods Act 1984:
it is a substantive matter, but S.2(1): a court can refuse to apply a foreign law
which conflicts with English policy; lex fori will then apply.
Harley v Smith: if foreign limitation period causes hardship to a party, lex fori will
apply.
See: Jones v Trollope Colls Cementation, The Times
Rome I and Rome II: Applicable law shall govern the limitation period.
(iii) Remedies and Damages:
Generally, the forum grants its own remedies. But, English law will refuse a
remedy if it is so different from that provided by the lex causae as ‘to make the
right sought to be enforced a different right’ [Phrantzes v Argenti].
Damages:
Boys v Chaplin: questions of remoteness of damage and heads of damage are to be
governed by the lex causae while measure or quantification of damages is a
procedural matter to be governed by the lex fori.
HOWEVER: Rome I and Rome II: assessment of damages is to be done according
to the lex causae.
(iv) The method of enforcing a judgment:
The lex fori determines what properties of D are available to satisfy the judgment
and in which order.
Rome I: subject to lex causae
(v) Parties:
Proceedings cannot be commenced in the name of a dead person even if allowed
under lex causae: Goukassow.
HOWEVER, if a foreign entity enjoys legal personality under the law where it was
established, it can participate in English proceedings: Bumper Development Corp.
→ A number of matters that were previously classified as procedural would now
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be classified as substantive which is a good thing because some matters were
previously treated as procedure just for convenience. The function of choice of
law rules is to identify the most appropriate law and apply it as a whole, as much
as is possible.
Harris (2004): Matters should only be classified as procedural if English court is
‘genuinely procedurally incompetent’ to apply the foreign law.
➢ Connecting Factors:
Choice of Law rules identify the governing law by means of a connecting factor
which is a link between an event/thing/transaction/person & a country.
No foreign law becomes potentially applicable until there has been a reference
made to it by an English choice of law rule with an English connecting factor:
- lex domicilii
- lex situs
- lex patriae (nationality)
- habitual residence
- lex fori
- lex contractus (law which governs the contract)
- lex loci delicti (where tort was committed)
- lex loci actus (where a transaction was carried out)
- lex loci celebrationis
- lex loci incorporationis (place of incorporation)
- lex protectionis (under which legal protection of an IP right is conferred)
➢ Incidental Question:
RARE – usually in remarriage and/or divorce cases
For an incidental question to arise:
(i) there must be a main issue governed (under English choice of law rules)
by a foreign law.
(ii) there must be a subsidiary question involving a foreign element with its
own choice of law rule.
(iii) this should lead to a different conclusion than that which would have
been reached by (i).
See, for example: Schwebel v Ungar and Lawrence v Lawrence
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Solution:
- no general rule
- Lipstein: favours the law governing the main issue
- Dicey, Morris and Collins: determination of the problem will depend on the
nature of the individual case & forum’s policy towards it.
- Clarkson: general rule should be the use of lex fori BUT if policy or justice so
demands, as an exception, the lex causae approach should be adopted.
➢ Proof of Foreign Law:
English court will apply foreign law ONLY if:
(i) relevant Choice of Law rule points to the foreign law, and
(ii) litigant must plead and prove that law
Suisse Atlantique:
Many cases which have foreign elements are litigated without any reference to
foreign law because it is either not pleaded or not proved,
Aluminium Industrie Vaasen BV:
English court will NOT apply a foreign law of its own motion.
English judge only applies the relevant Conflicts Rule. If foreign law is applicable,
it must be proved as a matter of fact.
Onus is on the person alleging that foreign law is applicable. If fails to prove,
English law will be applied: Szechter v Szechter.
Proved by testimony of EXPERTS (knowledge/experience of foreign law, usually
lawyers – need not be practising – judges, academics)
Treated as a FACT and so, wouldn’t be precedent, which was expensive and
inconvenient.
SO: S. 4(2) of Civil Evidence Act 1972: any such decision, if reported in citable
form, will be admissible as evidence in any later case as establishing the relevant
foreign law unless contrary is proved.
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Exclusion of Foreign Law:
English court would not apply foreign penal, revenue, public laws or those contrary to
public policy:
1. Penal Laws:
The Antelope:
“The courts of no country execute the penal laws of another.”
Huntington v Attrill:
“A penal law means a law under which a fine or other pecuniary penalty is
recoverable, or property forfeited, for a crime or other breach of public law, at the
instance of the state or someone representing the public.”
^ won’t enforce directly or indirectly
Government of India v Taylor:
won’t enforce because it would amount to recognizing “as assertion of sovereign
authority by one state within the territory of another”.
US v Inkley:
It is up to the English courts to decide whether or not the foreign law is penal in
nature. CA laid down the criteria to determine whether a foreign law or judgement
is penal:
(i) party in whose favour the right was created
(ii) purpose of the foreign law
(iii) general context of the case
SOMETIMES: English courts broadly interpret what constitutes as penal; for
example, in Worms, Re Selot’s Trusts and Re Langley’s ST.
2. Revenue Laws:
Government of India v Taylor:
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Tax gathering is NOT a matter of contract but of authority and administration as
between the states and those within its jurisdiction. Includes: income tax, custom
duties, capital gains tax, succession duty & a municipal contribution.
KC Sethia:
won’t enforce because English courts ‘do not sit to collect taxes for another
country’.
So: public authorities of a foreign country cannot recover in English court any sort
of tax or duty payable under its law.
3. Public Laws:
can’t entertain proceedings for the enforcement of a public law of a foreign state.
Examples: laws about nationalization, exchange control & laws regulating the
duties of those employed in security services
Re State of Norway’s Application (Nos. 1 & 2):
HL: There is a category of ‘other public laws’ which might not be revenue or
penal but which for similar reasons, are unenforceable in England.
Example: Spycatcher cases:
4. Public Policy:
An otherwise applicable foreign law/rule or otherwise recognizable &/or
enforceable foreign judgment or decree won’t be given effect if to do so would be
contrary to English public policy: Vervaeke v Smith.
Kuwait Airways Corporation:
“It is as though it did not exist.”
(i) SHIELD (to deny the application of an otherwise applicable foreign law) & not
a sword (to invoke the application of an otherwise inapplicable law).
(ii) entirely the creation of COMMON LAW (doctrine itself, its ambit, extent,
manner in which it is to be applied).
While it is now enshrined in legislation and EU regulations, the meaning and role
of public policy must still be ascertained according to common law.
^ it can only be invoked where ‘manifestly’ contrary to public policy:
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‘manifestly’ = very high burden to clear: Kellman
and so, will be invoked only in ‘truly exceptional’ cases: Golubovich
Limited Scope of the Doctrine:
The doctrine of public policy is used relatively sparingly in English conflict of
laws because:
(i) many English conflicts rule have a forum-oriented basis & so, applicable law is
English law. Therefore, there is no need to invoke public policy.
(ii) many choice of law rules are structured so as to give English law ultimate
control & thus, prevent the unfettered application of foreign law:
For example, the use of the double-actionability rule in defamation and the use of
English OMPs.
(iii) many Conflicts rules perform the same function as the doctrine of public
policy:
Example:
- requirement of due process before a foreign judgment can be enforced
- defence of natural justice
- defence of fraud
(iv) English judges recognise that public policy is an ‘unruly horse’ (per Lord
Hodson in Boys v Chaplin & that, ‘care must be taken to ensure that this animal is
not allowed to wreak havoc in international pastures’ Carter (1993).
Should be invoked exceptionally and carefully as per Lord Nicholls in Kuwait
Airways. If in doubt, don’t invoke: Lord Hope.
(v) Foreign law appears strange to English eyes; if public policy were to be used to
deny the application of all such laws, the result would be a complete emasculation
of the conflicts process.
Sachs J in ex p Arias:
“Those who live in legal glass houses, however well-constructed, should perhaps
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not be over-astute to throw stones at the laws of other countries.”
Distinction between Domestic Public Policy and International Public Policy:
If it offends purely English interests, it is not necessarily to be regarded as
contrary to public policy when set on an international stage & having no direct
impact upon, or posing no direct threat to, English institutions.
(vi) The growing acceptance by English judges of international comity has
resulted in a decline of the use of public policy.
Lord Diplock: “Judicial chauvinism has been replaced by judicial comity.” [The
Abidin Daver]
Enonchong (1996): “It is like throwing stones at your neighbour’s home.”
Re Fuld’s Estate (No.3): “An English court will refuse to apply a law which
outrages its sense of justice and decency…” but “before it exercises such power, it
must consider the foreign law as a whole.”
So, instead of referring to English public policy, refer to it as offending English
notions of ‘substantive justice’ (especially in foreign divorces and nullity decrees,
example: Gray v Formosa).
HOWEVER: abolished by FLA 1986: can only refuse to recognise matrimonial
decrees if contrary to public policy.
Commercial Judgments: CA revived the doctrine of substantive justice in Adams v
Cape Industries plc.
Scope of the Doctrine:
appears to be invoked in TWO classes of cases:
(i) to apply the foreign law would offend fundamental English ideas of morality,
decency, human liberty or justice:
- refusal to enforce rules prohibiting inter-racial marriage
- refusal to enforce a rule which prohibits the guilty party to a divorce from
remarrying before the innocent party (Scott v AG)
- Oppenheimer v Cattermole: Nazi law depriving absent German Jews of
their nationality and confiscating their property
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- champertous contracts
- incapacities imposed on account of slavery (Somersett’s case) or religion
(Re Metcalfe’s Trusts)
- if against international law (Kuwait Airways Corp v Iraq Airways Co)
- won’t give effect to foreign discriminatory confiscatory laws (Williams v
Hambert)
- refusal to enforce an obligation relating to foreign land arising from
equitably unconscionable conduct (Deschamps v Miller)
- contract to sell a slave
In such cases, public policy can be invoked even if no English interests are
affected.
(ii) where English interests are threatened:
includes the application of English domestic rules which invalidate contractual
provisions in order to protect the English public interest, to contracts governed by
foreign law:
- restraint of trade clauses
- trading with the enemy (Dynamite AG v Rio Tinto Co)
- contracts breaking the laws of friendly foreign countries (Foster v Driscoll)
- gambling contracts if taking place in England.
Must be affecting England in particular. If limited to abroad, enforceable.
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