CONFLICT OF LAW

WEEK 1,WEEK 2-3

1:. David Gaukrodger, Foreign State Immunity And
Foreign Government Controlled Investors OECD
Working Papers on International Investment 2010/02.
1. What is State Immunity?
 Definition: Legal principle that prevents a foreign state from being sued or having its
property seized in another country's courts without its consent.
 Scope:
o Protects foreign states, their organs, enterprises, and agents.
o Acts as a procedural bar to legal proceedings.
 Waiver: A state can waive immunity in advance (e.g., contract) or later after a dispute.

2. Sources of Law on State Immunity

 International Law: Sets general rules.
 National Law: Interprets and applies those rules—practice differs across countries.
 Treaties:
o ECSI (1976): European Convention, limited adoption (8 states).
o UNCSI (2004): UN Convention adopting the restrictive theory; not yet in force
as of 2010.

3. Absolute vs. Restrictive Immunity

Absolute Immunity (older rule):

 States were immune from all legal proceedings.

Restrictive Immunity (modern trend):

 Immunity only applies to sovereign (governmental) acts.

 Immunity not granted for commercial or private acts (jure gestionis).
Trend:

 Began in civil law countries (e.g., Italy, Belgium).

 Confirmed in Germany's Empire of Iran case (1963).
 Supported in common law by US Tate Letter (1952), followed by the US FSIA (1976).

4. UNCSI & Mixed International Practice

 UNCSI codifies restrictive immunity.
 But not universally accepted:
o Countries like China still assert absolute immunity (e.g., Hong Kong case
involving DRC).
o Others like Japan switched to restrictive after signing UNCSI.

5. Rationales for State Immunity

 Sovereign Equality: Par in parem non habet jurisdictionem – One sovereign can't judge
another.
 Non-Intervention: Avoid interfering in internal affairs.
 Functional Need: Protect the dignity and independence of foreign state representatives.
 Economic Interests: States may shape immunity rules to attract foreign investment
(especially SWFs).

6. Sovereign Wealth Funds (SWFs) and Immunity

 SWFs: State-owned investment funds with varying structures:
o Separate legal entity (e.g., Temasek, GIC).
o Asset pool without legal personality (e.g., Norway, Chile).
 Key Legal Principle: Immunity depends on the nature of the act (commercial vs.
sovereign), not the entity's structure.

Importance of Structure:

1. Jurisdiction: Commercial acts usually ≠ immunity.

2. Execution: Structural independence matters for asset seizure.
3. Absolute Immunity: More likely for criminal/regulatory cases or central banks.
4. US vs. Europe:
o US FSIA includes some state-owned enterprises (SOEs) as
"agencies/instrumentalities".
 o ECSI/UK: Only SOEs that act sovereignly are immune.

7. Case Study – Sarrió v. Kuwait Investment Office (KIO)

 Facts: Sarrió sued KIO/KIA (Kuwaiti SWFs) over a commercial contract.
 Switzerland:
o KIO/KIA held separate bank accounts.
o Court denied immunity since:
 The acts were commercial.
 KIO/KIA were independent of the Kuwaiti state.
 UK:
o KIO/KIA did not claim immunity.
o Case dismissed for forum reasons (Spain had parallel case).

8. US FSIA and SOEs

 Defines foreign states to include some majority-owned companies.
 Immunity is removed for commercial acts.
 Extra protections remain:
o No pre-judgment attachment unless immunity is waived.
o Different rules for service, execution, and punitive damages.

Commercial Exception to State Immunity – Continuation

b. Immunity from Execution and the Commercial Exception

1. Difference Between Jurisdiction and Execution

 Jurisdiction immunity: Whether a court can hear a case against a foreign State.
 Execution immunity: Whether the court can enforce a judgment by seizing State
assets.
 Execution is more sensitive than jurisdiction because it involves direct coercion against
foreign property.

2. General Rule

 Even if a State loses immunity from jurisdiction, it may still retain immunity from
execution.
 Execution immunity is narrower in scope and often needs an explicit waiver.
 Most systems require separate waivers for jurisdiction and execution.
3. Use-Based Test for State Property

 Many civil law countries and some common law countries follow this test:
o No immunity for property used for commercial purposes.
o Immunity upheld for property used for sovereign/public purposes.

4. Examples of National Approaches

 Germany (Philippine Embassy case), Italy, and Spain: Execution allowed only for
property used commercially.
 UK, Canada, Australia: Allow execution against commercial-use property (as per
domestic laws).
 France and USA: Require a connection between the property and the original claim,
unless it's SOE property.

5. SOEs and Immunity

 When execution is sought against property of State-Owned Enterprises (SOEs):

o Immunity is weaker.
o In Sonatrach (France): Public entities with assets for private sector activities
can be subject to execution, even without a direct link to the original claim.

6. UNCSI Approach to Execution Immunity

 Article 18: Strict rules for pre-judgment attachments—rarely allowed.

 Article 19: Allows post-judgment execution:
o Against property used for commercial purposes.
o Must have a connection to the entity (not necessarily to the claim itself).
o Property must be located in the forum State.

Case Study: AIG v. Republic of Kazakhstan

Background

 AIG got an ICSID award against Kazakhstan and registered it in the UK.
 Tried to execute against assets held in London accounts by Kazakhstan’s sovereign
wealth fund (SWF), the National Fund.

Court’s Decision

 Even though the assets were actively traded and included UK securities, they were held
for sovereign purposes.
  The purpose of managing public wealth (even through private-like financial
transactions) made them immune.
 Key Point: Despite the private nature of the trading, the public purpose (enhancing
national reserves) made the assets immune.

Why It Matters

 Court focused on purpose, not nature, of activity.

 Risk: If purpose-based analysis prevails, SWFs may always get immunity, even when
acting commercially.
 Contrast: In the Sarrió case (Switzerland), nature of the transaction was the key—
Kuwait conceded it was commercial.

II. Foreign Central Banks and Reinforced Immunity from

Execution
1. Why Central Bank Immunity Matters

 Sovereign Wealth Funds (SWFs) are often connected to or managed by central banks.
 Many countries offer special or absolute immunity for central bank assets to:
o Attract foreign state reserves and investments (e.g., New York, London).
o Protect their status as international financial hubs.

2. Varying Approaches Across Countries

Country/Legal
Approach to Central Bank Immunity
System
Germany, No special immunity. Central banks treated like the State. Property not
Switzerland currently in sovereign use can be attached.
General rules apply. Property used for commercial purposes is not
Australia & Canada
immune.
UK, US, China,
Provide special or reinforced immunity. Varies in scope and conditions.
France
Provides absolute immunity for “property of a central bank”. Follows UK-
UNCSI (Art. 21)
like model.

3. UK – Broadest Protection (UK SIA § 14(4))

 Central bank property is always immune, regardless of use (commercial or sovereign).

 Definition not precise, but courts interpret it broadly.
 AIG v. Kazakhstan:
 o SWF managed by central bank = central bank has a "property interest".
o Result: Full immunity from execution, even though SWF assets were actively
traded.
o Court relied on UNCSI Article 21 to justify broad protection.

4. United States – FSIA Central Bank Protection

 Property of central bank is immune if “held for its own account”.

 Immunity can be lost if funds are used for third-party commercial transactions.
 US courts often avoid applying FSIA by treating the central bank and State as separate
legal entities:
o If central bank ≠ debtor, its property ≠ attachable.
o Examples:
 EM Ltd. v. Argentina
 LNC Invs. v. Banco Central de Nicaragua

5. France – Strong but Conditional Immunity (2005 Law)

 Applies to property that central banks:

o Own or manage for themselves or for the State.
o Includes SWF funds managed by central banks.
 Exception: If property is part of a commercial patrimony (“patrimoine… à une activité
privée”).
o Draws from Sonatrach case logic used for SOEs.
 However, most central bank activities are sovereign, so this exception is rarely applied.

6. China – Absolute Immunity (2005 Law)

 Law gives absolute immunity for central bank property in mainland China, Hong
Kong, and Macau.
 Purpose: To maintain Hong Kong’s financial hub status.
 Property covered includes: cash, bank deposits, securities, reserves, and real estate.
 Reciprocity clause: If another country gives less protection, China can reduce immunity
too.

7. UNCSI Article 21

 Mirrors UK law: States that central bank property is not considered commercial.
  Grants absolute immunity from execution.
 Leaves “property of a central bank” undefined—future interpretations may vary.
 AIG court used Art. 21 to justify broad protection.

IV. State Immunity in Criminal Proceedings

1. General Rule: Absolute Immunity in Criminal Law

 Unlike civil or commercial cases (where restrictive immunity applies), foreign States
retain absolute immunity in criminal matters.
 Reason: Criminal law leads to penalties or imprisonment, which may create serious
diplomatic conflict if enforced against a State.

📌 Hazel Fox (leading scholar): Immunity in criminal proceedings remains absolute, unlike the
restrictive approach in civil/private law.

2. Key Cases and Judicial Opinions

Case Holding/Remarks
Pinochet (No. 3) Court rejected Pinochet’s personal immunity, but confirmed that States
(UK) themselves retain absolute immunity from criminal proceedings.
Jones v. Saudi Lord Bingham stated that a State cannot be criminally responsible under
Arabia (UK) English or international law.
Civil Law Also reject applying the restrictive theory to criminal cases; maintain
Countries absolute immunity.

3. No Convention Covers Criminal Proceedings

Convention Coverage of Criminal Proceedings

UNCSI (UN Convention on State Does not cover criminal proceedings. Explicitly left
Immunity) outside the scope.
ECSI (European Convention on State Only applies to private law. Penalties or fines
Immunity) excluded.

📝 When UN adopted the UNCSI, it confirmed criminal jurisdiction was excluded from the
convention's scope.

4. National Laws on Immunity and Criminal Proceedings

  UK SIA: Applies only to civil proceedings. Criminal matters governed by common
law and customary international law.
 Australia & Canada: Same approach—state immunity statutes do not apply to
criminal cases.

📌 Default rule in the absence of statutory law = customary international law, which still
supports absolute immunity for States in criminal cases.

5. Possible Future Development: Limited Exceptions?

 Hazel Fox suggests that civil law developments might inspire future exceptions in
criminal cases—if certain conditions are met:
o Territorial connection: Crime occurred within the forum state.
o Commercial/private nature of the act.
o Proceedings limited to civil-type remedies (like compensation, not
imprisonment).

💡 This would mirror the commercial exception in civil law but adapted to criminal contexts
where penalties are compensatory.

6. Application to SWFs and State-Owned Enterprises (SOEs)

 The law remains uncertain for SWFs or SOEs.

 Key issue: Are they considered part of the “State”?
o If not part of the State under applicable law, or not performing governmental
functions, they may not enjoy immunity.
o If the entity is carrying out sovereign activities, immunity may apply.

V. State Immunity with Regard to Taxation

1. Why Taxation Matters in Sovereign Immunity

 Tax rules directly affect sovereign investments, especially for Sovereign Wealth Funds
(SWFs).
 Some countries offer tax exemptions to foreign states; others treat them like private
investors.
 Tax treatment may be based on substantive exemptions or procedural immunities (or
both).
2. Multilateral International Instruments
a. ECSI (European Convention on State Immunity)

 Article 29: Excludes tax and customs from its scope.

 Tax disputes are not considered private law, so they fall outside ECSI.

b. UNCSI (UN Convention on Jurisdictional Immunities)

 Tax was excluded from the final Convention.

 A draft article had proposed no immunity for tax matters unless States agreed
otherwise.
o But it was deleted to avoid conflict with the principle of sovereign equality.
 Final version: Tax matters governed by customary international law, not UNCSI.

c. OECD Model Tax Convention

 Does not directly address state immunity, but:

o Defines States as “residents” for treaty purposes (i.e., States can be taxed under
treaties).
o Treats States like private entities for claiming treaty benefits (e.g., dividends).
 Article 24(1): Non-discrimination clause doesn’t force States to extend domestic
exemptions to foreign governments.
 Article 28: Excludes diplomatic/consular fiscal privileges—but not general State
immunity.

3. National Tax Policies: Two Approaches

a. Substantive Exemption vs Procedural Immunity

Term Meaning
Substantive Exemption Tax not levied at all under tax law.
Procedural Immunity State cannot be sued to collect tax under civil procedure.

 Most countries with limited liability for States prefer substantive exemptions.
 Withholding taxes complicate this – as taxes can be collected without suing the foreign
State.
 Procedural immunities (e.g., from execution) may still apply even if tax liability exists.
b. US Supreme Court Example

 Case: Tax lien on foreign-state-owned immovable property.

 Court: Allowed lien under FSIA exception for immovable property rights.
 Implication: Even procedural immunities can be bypassed when exceptions apply.

4. Comparative National Approaches to Tax on Passive

Income (SWFs)
Overview

 Countries vary widely:

o Some treat SWFs like private investors.
o Others exempt only non-commercial (passive) investments.
o A few offer broad tax immunity.

Countries with No General Exemption (SWFs taxed like private investors)

Country Key Points

SWFs taxed like foreign corporations. Influenced by OECD
Germany
Model Art. 4(1).
Switzerland, Norway,
No special exemption for foreign governments.
Poland

Countries with Exemption for Non-Commercial Investments

Country Policy
Australia Administrative exemption (not law). Applies if <10% equity ownership.
Canada Limited exemption for portfolio income under reciprocity.
Exemption under 26 U.S.C. § 892 for non-commercial income and bank
United States
interest.
26 U.S.C. § 895 provides exemption for central bank investments.

Countries with Broad Tax Exemptions

 Country Key Features
United Exempts all income and gains of foreign governments from direct tax,
Kingdom commercial or not.
Japan Exempts interest and dividend income by administrative practice.
Portfolio income exempt by law; full exemptions can be granted
France
discretionarily.

5. How Countries Define "Foreign State" for Tax Purposes

Country Criteria for Immunity Eligibility
Entity must be government-owned and controlled, and income must be from
Australia
governmental functions.
Canada Based on whether SWF’s purpose is public/humanitarian or commercial.
CGI Art. 131 sexies: 4 categories—only States and Central Banks get statutory
France
exemption. Others may get discretionary relief.
Japan SWFs treated like foreign corporations (taxable).
Entity must be an “integral part” of government. If it is separately incorporated, it
UK
may be excluded.
§892 includes “integral parts” and “controlled entities”. Exemption applies
US
broadly to many SWFs.

Notable Case: Kuwait Investment Controversy (UK)

 KIA/KIO (Kuwaiti SWF) claimed tax exemption on BP shares.

 Later evidence showed Kuwait Petroleum Corp. (KPC) held the shares—considered
commercial, not exempt.
 Shows how entity structure and ownership affect tax immunity status

VI. State Immunity and Competition Law

🔹 Overview

 Focuses on how state immunity applies in competition law (antitrust law) in the U.S.
and EU, the two most active jurisdictions.
 Also includes a UK case study on Kuwait’s investment in British Petroleum (BP).

1. United States: Antitrust Law and State Immunity

a. U.S. Antitrust Law Overview
  Sherman Act §§ 1 & 2:
o Prohibits price-fixing, monopolization, and restraints of trade.
o Criminal and civil enforcement (DOJ/FTC and private parties).
 Clayton Act §§ 4, 15, 16:
o Authorizes equitable relief (e.g., injunctions) and treble damages for private
plaintiffs.
 No civil fines for violations of Sherman Act, unlike EU competition law.

b. Application of State Immunity

 FSIA: Does not exclude antitrust cases.

 No criminal prosecution of States noted in antitrust cases.
 Treble damages (punitive in nature) are not available against States, but may be
available against state-owned enterprises (SOEs).
 DOJ/FTC Guidelines: SOEs operating commercially are subject to U.S. antitrust law
like private firms.

🔸 Key U.S. Case Law

IAM v. OPEC (1981)

 Union sued OPEC for price-fixing.

 Dismissed:
o District Court: Actions were not commercial, so sovereign immunity applied.
o Appeals Court: Relied on the act of state doctrine, not FSIA.
o Supreme Court denied appeal.

Default Judgment Against OPEC (Later Case)

 Court ruled that OPEC’s price-fixing was commercial, and thus not immune.
 But case later dismissed for failure of proper service (OPEC was not properly notified
in Austria).
 Practical barriers (like service and enforcement) limit real antitrust enforcement against
foreign States.

2. European Union: Competition Law and State Immunity

a. EU Competition Law Overview

 Articles 101 and 102 TFEU:

o Art. 101: Prohibits cartels and restrictive agreements.
 o Art. 102: Prohibits abuse of dominance.
 Regulation 1/2003: Gives European Commission power to:
o Impose fines up to 10% of global turnover.
o Order remedies (structural/behavioral).
 Emphasis on public enforcement; private damages still rare.
 Fines are civil, not criminal, but can be very large (EUR billions in recent years).

b. “Undertaking” Test and Sovereignty

 EU law applies to "undertakings" — any entity engaged in economic activity.

 Even publicly-owned bodies can be undertakings if they act commercially.
 But entities acting in exercise of public powers (sovereign authority) are not
undertakings.
 This distinction is similar to the “jure gestionis / jure imperii” test in sovereign
immunity.

🔸 Key EU Cases Involving State Immunity

1. Aluminium Imports Decision (1984)

 Foreign trade orgs from socialist states were involved in market-sharing agreements.
 Held:
o These orgs were undertakings because they traded aluminium.
o Sovereign immunity rejected: Trade activity is commercial.
o Remedy: Declaration of violation only — no fines imposed.

2. SAT Fluggesellschaft v. Eurocontrol

 Eurocontrol (international organisation) sued for route charges; defense argued abuse of
dominance.
 ECJ:
o Ruled Eurocontrol not an undertaking — acts were public/sovereign.
o Did not rule on immunity — left that to Belgian courts.
 Advocate-General:
o Argued against absolute immunity, hinted at restrictive immunity approach.
o Emphasized: Economic test over legal form.

3. Selex v. Eurocontrol

 Selex (private firm) complained Eurocontrol was abusing dominance.

 Commission:
o Found Eurocontrol was not an undertaking (based on SAT).
 o Rejected immunity argument without much analysis.
 On appeal:
o Immunity plea ruled inadmissible (procedural grounds).
o Court didn’t engage with immunity on merits.

💡 Note: Both SAT and Selex decisions suggest if an international organisation acts
economically, it could be liable under EU law — but this has not been fully tested yet.

3. UK Case: Kuwaiti Investment in BP (1988)

Background

 Kuwait acquired 21.6% of BP, UK oil company, through KIO (Kuwait Investment
Office).
 Concern: A foreign state with strategic interests might influence BP.

Investigation by MMC (Monopolies and Mergers Commission)

 Found:
o Kuwait had material influence over BP’s policy.
o This influence conflicted with UK national interests.
 Kuwait offered deed of covenant:
o Promised to remain a passive investor, limit voting rights to 14.9%, and waived
immunity.
 UK Government:
o Found the offer insufficient.
o Required Kuwait to reduce its stake to 9.9% within 3 years.

Key Implications

 Though no court decision was made, this was a regulatory enforcement action against
a foreign State investor.
 Competition law concerns triggered intervention, despite the presence of sovereign
immunity principles.
 Later tax investigation suggested shares may have been held by KPC, a commercial
SOE, not KIO—raising regulatory and tax implications.

VII. General Considerations on the Application of

Regulation to Foreign State-Controlled Entities
🔹 Overview
  Applying state immunity in the context of regulation (e.g. administrative, financial, or
enforcement actions) is complex and unclear.
 Unlike criminal law, regulation is not explicitly excluded from most immunity
conventions, and there’s limited case law or commentary.
 National laws and practices vary widely, making it hard to form a consistent view
under customary international law.

1. Treatment in International Instruments

Convention Treatment of Regulatory Actions
ECSI (European Convention on
Excludes proceedings before administrative authorities.
State Immunity)
Unclear – seems to apply only to private/commercial
UNCSI (UN Convention)
claims, not public enforcement actions.

🧠 Insight: Whether a public agency (e.g. a regulator) is bringing the case seems crucial in
determining if UNCSI applies.

2. Lack of Uniform State Practice

 Regulatory law is underdeveloped in state immunity doctrine.
 States use different approaches in tax and competition regulation:
o Some apply restrictive immunity.
o Others treat regulation more like criminal or public law, retaining immunity.
 Courts often avoid addressing immunity by relying on procedural reasons (e.g.
jurisdiction, service issues).

3. Regulatory = Criminal?
 Hazel Fox: Suggests grouping regulation with criminal law, since both involve the
contravention of public law.
 Australian Law Reform Commission: Regulation, like criminal law, should not be
governed by general immunity statutes. Issues should be resolved case-by-case by
governments.

4. Functional Test: Sliding Scale Approach

  Immunity from regulation should be evaluated case-by-case using functional criteria:

🔸 Factors to Consider

A. Nature of the Remedy

Type Immunity Impact

Compensatory (e.g. More likely to allow restrictive immunity (subject to
restitution) jurisdiction).
Punitive (e.g. fines, sanctions) May support absolute immunity or raise greater concerns.

📌 ECSI defines its scope by remedies, not just by legal domain, due to the blurred line between
public and private law.

B. Nature of the Enforcing Agency

 If initiated by public executive → courts may defer to government decisions.

 If brought by independent regulators on behalf of private parties → may be treated
like private claims, thus subject to restrictive immunity.

C. Definition of the Foreign State

 Varies across jurisdictions:

o Some treat SOEs as private entities (no immunity).
o Others (like the U.S.) treat many SOEs as part of the foreign State.
 If SOE is independent, applying restrictive immunity becomes easier.

D. Commercial Nature of the Act

 Acts that are clearly commercial (e.g. investment in real estate, financial trades) are less
likely to attract immunity.
 However, if courts classify SWF activity as sovereign (e.g. AIG v. Kazakhstan), it may
retain immunity, even in regulatory contexts.

E. Territorial Connection
  Strong connection between the act and the forum State strengthens claim to apply
domestic law:
o E.g. SWF buys a company in the forum State → forum has strong regulatory
interest.
o But if fund is managed abroad, jurisdiction may be weaker.

5. Summary: Suggested Analytical Framework

Factor Effect on Immunity
Compensatory remedy Supports restrictive immunity (State can be sued).
Punitive/public remedy More likely to trigger absolute immunity.
Enforcement by independent
May weaken immunity claim.
regulator
SOE is independent Treated like private company; no immunity.
Clear commercial act Supports application of restrictive immunity.
Strengthens forum State's interest in applying
Strong local connection
regulation.

2:. Pasquale De Sena and Francesca De Vittor, State

Immunity and Human Rights: The Italian Supreme Court
Decision on the Ferrini Case ,The European Journal of
International Law Vol. 16 no.1 © EJIL 2005
Ferrini Case: New Points for Study Notes

1. ❗ Landmark Nature of the Case

 First time the Italian Supreme Court directly addressed the tension between sovereign
immunity and human rights violations.
 Broke new ground by allowing Italian jurisdiction over Germany despite the act being
sovereign in nature.
 Contrasts with prior Italian case law which typically upheld strict sovereign immunity.

2. 🧠 Court's Method: 'Balancing of Values'

 Court engaged in a systematic interpretation of international law, balancing:

o Sovereign equality of states vs.
o Protection of inviolable human rights.
  It didn’t rely on a single clear-cut exception, but rather a broader value-based
interpretation of international norms.

3. ⚖️Role of jus cogens Norms

 Violations of fundamental human rights (e.g., deportation, forced labor) were classified
as violations of jus cogens.
 Jus cogens norms were treated not just as formally superior rules but as representing
values overriding state immunity.
 This approach differs from formalist uses of jus cogens—it focuses on substantive
justice and universal values.

4. 🔁 Link Between Individual and State Responsibility

 The Court analogy between functional immunity (of officials) and state immunity:
o If officials lose immunity for international crimes, so should states.
 Suggests a shift toward universal jurisdiction in civil claims when international crimes
are involved.

5. 🌍 Universal Civil Jurisdiction

 Court implied that universal jurisdiction could extend to civil suits concerning
violations of international criminal law.
 This deviates from traditional views that universal jurisdiction is only for criminal
proceedings.

6. 🇮🇹 Territorial Nexus – Not Dispositive

 Although the crime occurred in Italy (forum state), the Court:

o Mentioned this only in passing as an additional factor,
o Emphasized that even without territorial nexus, such crimes might allow
jurisdiction due to their gravity.

7. 🧾 No Need for Explicit Waiver

 Rejected the idea of an “implied waiver” of immunity in human rights cases (as in the
Greek Voiotia case).
 Instead, immunity is denied due to systematic conflict between immunity and
peremptory norms (jus cogens).

8. 🇩🇪 Germany's Own Conduct Considered

 Germany’s establishment of the “Remembrance, Responsibility and the Future”

Foundation (2000) was cited.
 Court viewed it as a form of acknowledgment of wrongful conduct, but not as a waiver
of immunity.
9. 🔄 Critique of US Antiterrorism Law

 Court criticized the Antiterrorism and Effective Death Penalty Act (AEDPA):
o Recognizes human rights violations,
o But applies only to select states (those labelled as terrorism sponsors),
o Thus, violates the principle of sovereign equality under international law.

10. Redress for Human Rights = No Time Limits

 Court implied that civil claims for human rights violations should:
o Not be barred by statutes of limitations,
o Reflecting how international criminal law treats such violations (e.g., crimes
against humanity not time-barred).

Analogy Between Functional Immunity (of State Officials) and State Immunity

1. 🧠 Logical Basis of the Analogy

 The Italian Supreme Court extends the logic of denying functional immunity (i.e.,
immunity of officials acting in their official capacity) in cases of international crimes, to
also justify denying state immunity.
 This approach treats both types of immunity as expressions of the same international
obligation (i.e., to refrain from exercising jurisdiction over foreign sovereigns).

2. ⚖️Critical Analysis of Court’s Reasoning

 While the Court’s logic may seem internally coherent, this analogy is not widely
supported in international or domestic case law.
 Most courts and scholars treat functional immunity and state immunity as distinct
doctrines.
 Therefore, drawing conclusions about state immunity from case law on official
immunity is controversial and not reflective of general state practice.

3. 📚 No Precedents Supporting the Analogy

 No existing case law on serious human rights violations has explicitly based denial of
state immunity on the denial of functional immunity for individuals.
 Even in international instruments like the ILC Draft Articles on State Immunity, the
two doctrines are treated separately.
4. 📌 Contrasts with Key Cases

🔹 Pinochet Case (UK House of Lords)

 Denial of functional immunity for torture (a jus cogens crime) upheld under universal
criminal jurisdiction.
 However, no suggestion was made that this reasoning applies to the state of Chile—only
to the individual (Pinochet).
 Lords Hutton and Millett clearly separated state immunity from individual
responsibility.

🔹 Letelier Case (U.S. – Chile dispute)

 Arbitral decision did not address Chile’s immunity in relation to the assassination—
focused only on individuals.

🔹 Gerritsen v. De La Madrid Hurtado (U.S.)

 Immunity of Mexican consular officials was resolved strictly under the Vienna
Convention, not involving any question of Mexico’s state immunity.

5. Domestic Case Law Does Not Support the Extension

 In the U.S., civil suits for international crimes (like torture) often proceed by classifying
the acts as “non-official” or “private acts” to bypass the Foreign Sovereign
Immunities Act (FSIA).
o Ex: Xuncax v. Gramajo, Cabiri v. Ghana.
 This tactic shows that U.S. courts avoid treating such crimes as official acts precisely
to prevent triggering state immunity.
 Therefore, they do not extend individual liability to the state, unlike Ferrini’s
reasoning.

6. 🔎 Critique of Supreme Court’s Reliance on U.S. Case Law

 U.S. courts use the Alien Tort Claims Act (ATCA) for jurisdiction—but their rulings:
o Apply only to individuals, not states.
o Depend on classifying conduct as not attributable to the state, to avoid invoking
FSIA.
 This contradicts the Italian Supreme Court’s method in Ferrini, which relies on
attributing the conduct to the state for jurisdiction.
7. 🧭 Role of the Eichmann Case (Israel)

 The Eichmann case (war crimes trial) was criminal, not civil.
 Though it implied no sovereign immunity for grave international crimes, it does not
serve as a civil precedent supporting Ferrini's approach to state immunity.

WEEK 3-4
1:Vienna Convention on Diplomatic Relations 1961
General Overview
 Adopted: 18 April 1961, Vienna
 Purpose: Codifies diplomatic privileges and immunities to ensure effective performance
of diplomatic missions.
 Legal Basis: Reflects both treaty law and customary international law.
 Applies to: Diplomatic agents, their families, and mission staff.

🔷 Key Definitions (Article 1)

 Diplomatic Agent: Head of mission or member of diplomatic staff.
 Mission Staff: Includes diplomatic, administrative & technical, and service staff.
 Private Servant: Not employed by the sending State, but works for a mission member.
 Premises of the Mission: Includes buildings used by the mission and residence of the
head.

🔷 Establishment of Diplomatic Relations (Articles 2–6)

 By Mutual Consent (Art. 2)
 Functions of Missions (Art. 3): Representation, protection, negotiation, information, and
promotion of friendly relations.
 Agrément Requirement (Art. 4): Consent of receiving State before head of mission is
appointed.
 Multiple Accreditations allowed (Art. 5–6), subject to notification and consent.
🔷 Appointment & Composition (Articles 7–8)
 Sending State appoints staff freely, subject to exceptions for military attachés (Art. 7).
 Diplomatic staff should ideally be nationals of the sending State (Art. 8).

🔷 Persona Non Grata (Article 9)

 Receiving State may reject or expel any mission member without explanation.

🔷 Notification Duties (Article 10)

 Details regarding arrivals, departures, and changes in status must be notified to the
Foreign Ministry.

🔷 Size and Location of Mission (Articles 11–12)

 Receiving State may limit mission size.
 Consent needed to establish branch offices outside capital.

🔷 Beginning of Functions (Articles 13–16)

 Starts upon presentation of credentials.
 Three Classes of heads of mission: Ambassadors, Envoys/Ministers, Chargés d’affaires.

🔷 Precedence and Etiquette (Articles 16–18)

 Based on order of assumption of duties.
 Uniform procedures for reception.

🔷 Acting Head of Mission (Article 19)

  Chargé d’affaires ad interim acts when head is absent.

🔷 Rights and Privileges (Articles 20–28)

 Right to use flag and emblem (Art. 20).
 Inviolability of mission premises (Art. 22).
 Tax exemption on premises and mission fees (Arts. 23, 28).
 Free movement, communication, diplomatic bags/couriers protected (Arts. 26–27).
 Mission property is protected from search/seizure.

🔷 Personal Immunities (Articles 29–31)

 Diplomatic agents:
o Inviolable (Art. 29)
o Exempt from arrest/detention
o Immune from criminal, civil, and administrative jurisdiction (with few exceptions,
Art. 31)

🔷 Waiver of Immunity (Article 32)

 Only the sending State can waive, and waiver must be express.

🔷 Social Security and Tax Exemptions (Articles 33–36)

 Exempt from:
o Social security (unless voluntarily joined)
o Personal and property taxes (with exceptions)
o Customs duties on personal/official goods

🔷 Privileges for Other Mission Members (Article 37)

 Administrative & Technical Staff: Limited immunity
 Service Staff: Immunity only for official acts
 Private Servants: Limited privileges
🔷 Special Cases (Articles 38–40)
 Nationals/permanent residents of receiving State get reduced immunities (Art. 38).
 Immunities continue for reasonable period after service ends (Art. 39).
 Immunities apply in transit through third States (Art. 40).

🔷 Duties and Prohibitions (Articles 41–42)

 Must respect laws, not interfere in internal affairs, and not use premises improperly.
 Cannot engage in private commercial or professional activities.

🔷 Termination & Protection Obligations (Articles 43–46)

 Function ends on notification or rejection (Art. 43).
 Even in conflict or severed relations:
o Mission property must be protected (Art. 45)
o Departure must be facilitated (Art. 44)

🔷 Non-Discrimination and Final Clauses (Articles 47–53)

 No discrimination between States (Art. 47)
 Open to all UN member States (Art. 48)
 Entered into force after 22 ratifications (Art. 51)
 Deposited with UN Secretary-General

2:Vienna Convention on Consular Relations 1963:

1. Scope of Functions – Consular vs Diplomatic

 Consular roles are more practical/administrative than diplomatic ones.

 Focused on:
o Issuing passports/visas
o Assisting nationals
o Commercial, economic, and cultural promotion
o Protecting nationals’ interests (succession, guardianship)
 o Acting as notary or civil registrar (Art. 5(f))
o Investigating shipping or air incidents involving their nationals

🔹 2. Consular Types and Classes

 Article 1 & 9:
o Consular officers include: Consuls-General, Consuls, Vice-Consuls, Consular
Agents
o Two categories: Career and Honorary consular officers
 Separate treatment in Chapter III for honorary consuls (not yet summarized here)

🔹 3. Exequatur Requirement (Art. 12)

 Exequatur = formal authorization by the receiving State required before the consular
officer begins duties.
 Refusal does not require explanation.

🔹 4. Temporary/Acting Consul Heads (Art. 15)

 If head is absent, an acting head may be appointed.

 Provisional arrangements must be notified and accepted by receiving State.

🔹 5. 'Persona Non Grata' for Consular Staff (Art. 23)

 Just like diplomats, consuls can be declared unacceptable, and receiving State can:
o Withdraw the exequatur
o Cease to recognize the person as a consular member
o No obligation to give reasons

🔹 6. Communication with Nationals in Custody (Art. 36)

 Unique to consular law:

o Right to visit, converse, and assist nationals who are arrested, detained, or
imprisoned.
o Authorities must inform the consulate without delay if a national is detained.
 o These rights are mandatory and immediate once requested by the national.

🔹 7. Information Duties of Receiving State (Art. 37)

 Receiving State must inform consular post of:

o Deaths of nationals
o Guardianship/trusteeship needs
o Shipwrecks or aircraft accidents

🔹 8. Inviolability of Premises – Limited Scope (Art. 31)

 Consular premises are inviolable only where used exclusively for consular work.
o Contrast: Diplomatic premises are absolutely inviolable.
o Authorities may enter with presumed consent in emergencies (e.g., fire).

🔹 9. Consular Bag – Conditional Protections (Art. 35)

 Bag can be inspected if suspected to contain unauthorized items.

o In contrast, diplomatic bag is absolutely inviolable.
 May be returned if inspection request is denied.

🔹 10. Reduced Immunities (Art. 43–44 of VCDR not repeated here)

 Consular officers do not enjoy full diplomatic immunity.

 Immunity generally limited to official acts.

🔹 11. Fees & Taxes (Art. 39)

 Consular fees are:

o Levyable inside the receiving State
o Exempt from local taxes

1. Consular Immunities – Limited Personal Inviolability (Arts. 40–45)

  Article 40: Consular officers must be treated with due respect; State must protect their
dignity.
 Article 41:
o No general immunity from arrest (unlike diplomats).
o Can be arrested only for grave crimes, with judicial authorization.
 Article 42: Arrest/detention of consular staff must be promptly notified to consular head
or sending State.
 Article 43:
o Functional Immunity only – applies only to acts done in official capacity.
o No immunity for:
 Private contracts (not made on behalf of the State)
 Vehicle/ship/aircraft accident claims (civil cases)
 Article 44:
o Can be called as witnesses.
o No coercion for consular officers who refuse.
o No obligation to testify on official acts or documents.
 Article 45:
o Express waiver of immunity by sending State required.
o Waiver in civil proceedings doesn’t imply waiver of enforcement unless stated.

🔹 2. Administrative Exemptions and Privileges (Arts. 46–52)

 Art. 46–47: Exempt from:

o Alien registration/residence permits
o Work permit requirements
 Art. 48: Exempt from local social security laws; exceptions apply if they employ local
staff.
 Art. 49: Exempt from direct taxes, except:
o Private property taxes
o Private income and capital gains in receiving State
o Service fees, estate/succession duties
 Art. 50: Customs exemptions for:
o Official goods
o Personal effects (on first installation)
o Personal baggage can be inspected in specific cases (quarantine/prohibited goods)
 Art. 51: Death of a consular member:
o State must allow export of movable property
o No estate duties on property present only because of consular presence
 Art. 52: Exempt from personal services and military obligations (e.g., billeting,
requisition)

🔹 3. Duration and Scope of Immunities (Art. 53–54)

  Art. 53: Immunities apply:
o From arrival/start of duty
o End upon departure or after reasonable time
o For official acts: immunity continues indefinitely
 Art. 54: Transit through third States:
o Must grant transit immunity to consular officials and their communications if
properly documented.

🔹 4. Duties of Consular Officials (Art. 55–57)

 Art. 55:
o Must respect local laws and avoid interfering in internal affairs.
o No improper use of consular premises.
 Art. 56: Must comply with insurance laws (e.g., for cars/boats).
 Art. 57:
o No personal business activities allowed for career consuls.
o Service staff and family lose privileges if they engage in gainful private work.

🔷 CHAPTER III – Honorary Consular Officers (Newly

Covered)

🔹 5. Limited Privileges for Honorary Consuls (Arts. 58–68)

 Art. 58: Only select articles apply; family members of honorary consuls get no
privileges.
 Art. 59: State must protect consular premises from disturbance or damage.
 Art. 60: Tax exemption on official consular property owned/leased by sending State.
 Art. 61: Archives are inviolable only if kept separate from personal documents.
 Art. 62: Customs exemptions limited to:
o Official items only (flags, stamps, office furniture)
 Art. 63: Must appear in criminal proceedings; trials should not hinder duties.
 Art. 64: State must protect honorary consul in their official role.
 Art. 65: Exempt from alien/residence registration only if not engaged in private
business.
 Art. 66–67:
o Tax exemption only on official State-paid remuneration.
o Exempt from personal services and military duties.
 Art. 68: Appointment of honorary consuls is optional, at discretion of States.
🔷 CHAPTER IV – General Provisions (New Content)

🔹 6. Special Types of Consular Posts and Functions (Arts. 69–71)

 Art. 69: States may choose to establish non-head consular agencies, with privileges
decided by agreement.
 Art. 70: Diplomatic missions can perform consular functions, but governed by
diplomatic law.
 Art. 71: Local nationals or permanent residents:
o Get limited immunity (only for official acts)
o Family members and private staff get no privileges unless granted by the
receiving State

🔹 7. Other Important Provisions (Arts. 72–79)

 Art. 72: Non-discrimination rule (same treatment for all States)

 Art. 73: Convention does not override other international agreements
 Arts. 74–79: Final procedural clauses:
o Signature, ratification, accession (Arts. 74–76)
o Came into force: 19 March 1967 (Art. 77)
o Secretary-General of UN is depositary (Art. 78

3; Cohen, Moshe, Corporate Governance Law: Firm

Heterogeneity and the Market for Corporate Domicile
(July 20, 2012). Available at SSRN:
https://ssrn.com/abstract=2116536 or
http://dx.doi.org/10.2139/ssrn.2116536
New Concepts from Moshe Cohen’s Paper (2012)
“Corporate Governance Law: Firm Heterogeneity and the Market for Corporate
Domicile”
🔹 1. State Franchise and Incorporation Taxes as a Pricing Mechanism

 Incorporation and franchise taxes function as the "price" of state governance packages.
 Despite their small absolute size, firms show high price elasticity—even slight tax
increases can trigger reincorporation.
 Two types:
o Incorporation Tax: Paid at incorporation or when increasing capital (e.g., more
authorized shares).
o Franchise Tax: Annual tax based on capital, shares, or paid-in capital.
 Delaware’s franchise taxes account for up to 25–33% of state revenue—highly
profitable despite low enforcement cost (<3%).
 Tax burdens are disproportionately influenced by authorized shares (not always
linked to issued shares).

🔹 2. Role and Treatment of State Corporate Income Taxes (SCIT)

 SCIT is not directly tied to incorporation but can indirectly influence firm choices:
o Based on nexus (physical presence like property, employees, or sales).
o Some states use a throwback rule (unallocated tax is taxed by home state).
 Firms may “punish” states with high SCIT by not incorporating there.
 SCIT affects perception of overall “tax climate” in a state, though not a dominant direct
factor.

🔹 3. Anti-Takeover Statutes (ATS Index)

Five major statutes forming the ATS Index (after Bebchuk and Cohen 2003):

1. Control Share Acquisition Laws – Restrict voting rights of large shareholders without
disinterested shareholder approval.
2. Expanded Constituency Statutes – Allow management to consider stakeholders other
than shareholders.
3. Fair Price Provisions – Limit price disparity in two-tiered takeover bids.
4. Business Combination Laws – Impose moratorium on deals with large shareholders
unless approved by board.
5. Poison Pill Endorsement – Legal support for strategies that deter hostile takeovers.

▶️Common view: These laws benefit management and deter value-enhancing takeovers.
🔹 4. Mandatory Governance Laws (MAND Index)

Mandatory laws (some enabling elsewhere) related to shareholder-manager power balance:

1. Cumulative Voting – Allows minority shareholders to elect directors.

2. Loan Restrictions – Prevent excessive/director-favoring loans.
3. Limits on Director Liability Waivers – Firms can't fully shield directors from duty
breaches.
4. Merger Vote Majority Requirements – Raise thresholds for approving mergers.

▶️Most of these laws promote shareholder rights and restrict managerial discretion.

🔹 5. Other Legal Features Impacting Incorporation

 Distribution Laws: Restrict shareholder payouts unless solvency tests are met (e.g.,
minimum assets-to-liabilities ratio).
 Ultra Vires Provisions: Laws that recognize corporate liability for acts beyond charter
scope (i.e., managerial overreach).

🔹 6. Federal Intervention and Uniformity

 Sarbanes-Oxley Act (2002) = Example of federal law overriding state governance on

director/officer loans.
 Federal reforms reduce state differentiation, thus lowering the value of firm choice.
 Simulated counterfactuals:
o Some states (like Maryland or Nevada) lose share under federal uniformity.
o Others (like Delaware) may gain due to overall governance reputation.

🔹 7. Quantifying Firm-Specific Preferences

 Firms value incorporation features differently depending on:

o Ownership structure (e.g., VC-backed or institutional shareholder influence)
o Life-cycle stage (older firms = stronger preference for antitakeover laws)
o Industry concentration
o Unobservable heterogeneity (captured through a random coefficients model)
 Preferences inform us about agency conflicts and internal governance needs.
🔹 8. Methodological Contributions

 Applies random coefficients discrete choice model (like Berry-Levinsohn-Pakes) to

finance:
o Each firm's incorporation decision = "product choice" among 51 state bundles.
o Firms vary across observable (ownership, structure, age) and unobservable
dimensions.
 Uses regression discontinuity design (S&P 500 membership as instrument) to control
for selection bias.
 Control function approach adjusts for nonlinearities and endogeneity.

🔹 9. Implications for Law & Policy Debates

 Challenges assumption that incorporation taxes are irrelevant.

 Refutes monopoly theory of Delaware: firms actively shop for incorporation venues.
 Informs "race to the top" vs "race to the bottom" debate:
o Evidence shows both state competition and management agency problems
matter.
 Offers empirical basis for evaluating federal intervention and state policy autonomy.

10. Data Construction & Sources

 Primary Data Sources:

o SEC filings (10-Ks & 10-Qs) for dynamic tracking of incorporation changes.
o Compustat for firm-level financials.
o Thompson SDC for IPO data.
o Lexis, Westlaw, CCH, and IRRC for laws and tax amendments.
 Data tracks ~2500 reincorporation moves from 1990 to 2007.

▶️Notes:

 Focus is on reincorporations that retain key identifiers (CUSIP, GVKEY), to isolate

governance-related motives.

🔹 11. Measuring the ‘Price’ of Incorporation

 Incorporation taxes vary by:

o Base (authorized shares, paid-in capital, etc.)
o Structure (fixed vs variable rates, caps, timing)
 Delaware: Max annual franchise tax = $165,000, triggered at thresholds of assets +
shares.
  Most taxes < $100K, yet have outsized behavioral impact, disproving assumptions of
irrelevance in legal literature.

▶️Insight:

 Incorporation tax is a small cost but sends strong signal of firm sensitivity to even
minor financial incentives.

🔹 12. Variation in Legal Defaults & Law Types

 Mandatory laws = No opt-out possible.

 Enabling laws = Firms may opt out, though rarely exercised.
 Laws reflect:
o Default bias in firm behavior (status quo is sticky)
o Negotiation power between management and shareholders

🔹 13. Use of Legal Indices

 ATS Index and MAND Index simplify analysis:

o Help quantify firm preferences for hostile takeover defenses vs shareholder
empowerment.
 Distribution Laws:
o Require solvency test before shareholder payouts (e.g., asset-liability ratios).
 Ultra Vires Recognition:
o Determines whether corporations are liable for unauthorized acts by managers.

▶️These provisions often reflect risk tolerance and liability shielding preferences.

🔹 14. Simulating Counterfactuals: Federal Uniformity

 The model simulates scenarios where:

o Federal laws eliminate state-level variation in governance laws.
 Findings:
o States with more management-friendly laws lose firm share under federal
uniformity.
o States like Delaware gain firms due to better judicial quality and reputation.
o Firm types shift per state: e.g., states that attracted strong-management firms lose
them, gain strong-shareholder firms.
🔹 15. Policy & Academic Implications

 Empirical support for:

o State-level competition: Supports “race to the top” for some firms.
o Managerial capture theory: Firms with entrenched managers choose laws
protecting them.
 Contributes to:
o Legal scholarship: Validates that firm choice reflects preferences and policy
design matters.
o Finance literature: Adds structural evidence to GIM-style governance debates.

▶️Integration: Shows how law, finance, and firm behavior interact via governance venue
shopping.

🔹 16. Final Methodological Notes

 Incorporation treated as a composite product:

o Price (taxes)
o Features (laws, courts)
o Firm-fit (ownership, risk tolerance, life cycle)
 Leverages:
o Berry-Levinsohn-Pakes (BLP) discrete choice model
o Regression discontinuity design (e.g., S&P 500 shocks)
o Control function approach to handle non-linear selection bias

1. Counterfactual Policy Simulation: Uniform Law Scenario

 Simulated policy:
o Eliminate all Anti-Takeover Statutes (ATS = 0)
o Impose all Mandatory Governance Laws (MAND = 4)
 Key Simulation Findings (2006 data):
o 8% drop in firms incorporating in home states
o Nevada loses 58% of its incorporation share
o Maryland loses 57%, showing it attracts mostly pro-management firms
o California gains 120% — firms no longer leave to avoid strict laws
o Delaware gains 8%, suggesting its appeal lies in judicial reputation and network
effects, not just “loose laws”

▶️Insight:
Uniform laws reduce the need for firms to shop for pro-management jurisdictions, which reveals
how important legal heterogeneity is to firm sorting.
🔹 2. Explaining Firm Preference Heterogeneity

 Observed heterogeneity:
o Institutional and venture-backed firms oppose ATS
o Firms with strong management prefer ATS and oppose MAND laws
o Life-cycle effect: Older firms show stronger preferences for antitakeover tools
o No significant patterns found based on director characteristics
 Unobserved heterogeneity:
o Significant variance remains after accounting for observable firm traits
o Preferences differ based on internal firm dynamics not visible in the data
o This confirms the importance of accounting for latent preference structures

🔹 3. Court Preferences and Geography

 Institutional shareholders prefer efficient, faster courts

 In contrast, firms generally prefer slow, high-volume courts (possibly for
predictability)
 Geographical distance is a deterrent — firms prefer to incorporate closer to home
 Explains the rise of Nevada as “Delaware of the West”

🔹 4. Policy Implications

 Incorporation choice reveals agency conflicts:

o Where shareholders are weak, managers dominate incorporation decisions
o When law choice is removed, pro-management firms stay in their home states
 Centralizing governance law may harm firms that benefit from choice
o One-size-fits-all regulation removes valuable flexibility
o Could stifle the evolving balance of shareholder vs. managerial interests
 Suggests a cautious approach to federalization:
o Instead of uniform laws, consider incentivizing states to improve governance via
tax or design reform

🔹 5. Taxation Reform Suggestions

 Incorporation taxes are currently too low and antiquated:

o Miss opportunity for meaningful revenue
o Do not reflect modern governance needs
  Proposal:
o Use taxes as price-based screens for firm types (e.g., high ATS-demanding firms
could pay more)
o States should redesign tax bases to better reflect governance-related risk

🔹 6. Governance Law – Conceptual Connections

 Choices on charter provisions, litigation venue, and governance regime are

interconnected
 Reinforces other corporate governance literature:
o Firms with strong institutional shareholder presence care more about
governance and prefer jurisdictions reflecting that
o There is no universal firm model; preferences vary widely

🔹 7. Future Research Directions

 Private firms should be studied separately:

o Different governance pressures, control structures, and decision dynamics
 Comparative studies across Europe and global jurisdictions:
o EU is increasingly seeing cross-border incorporations
o Could mirror or deviate from U.S. firm-sorting dynamics

🔹 8. Detailed Descriptions of ATS & MAND Laws

(Only previously unlisted or underexplored provisions)

🟠 ATS (Anti-Takeover Statutes)

 Freeze-Out Provisions (Business Combination Statutes):

Moratorium (2–5 years) on key transactions between a large shareholder and the firm
without board approval.
 Poison Pill Endorsements:
Statutory recognition of poison pill defenses; strength varies by state. Some allow judicial
review (e.g., NY, NC).

🔵 MAND (Mandatory Governance Laws)

  Limits on Director/Officer Loans:
Some states impose personal liability or shareholder approval for internal loans,
adding procedural rigor.
 Merger Vote Supermajority Requirements:
In 7 states, mergers must be approved by two-thirds of shareholders, and this threshold
cannot be lowered in charters.

🔹 9. Supplementary Governance Laws (Explored but Not Main Variables)

 Payout Restrictions:
Some states impose minimum asset-to-liability ratio before firms can issue dividends
(affecting leverage).
 Ultra Vires Recognition:
Imposes corporate liability for unauthorized acts by agents (beyond charter authority).
 Anti-Greenmail & Profit Recapture:
Restricts companies from buying out hostile blocks at premium without offering all
shareholders the same deal.
 Severance Pay / Labor Contracts:
Protect employee rights post-takeover. Mostly present in MA, PA, RI.
 MBCA (Model Business Corporation Act):
A unified legal framework adopted by some states — not a specific law but a proxy for
network effects.
 MISSING -4 Jonathan Brown, Diplomatic
TH

Immunity: State Practice under the Vienna

Convention on Diplomatic Relations, 37 Int'l &
Comp. L.Q. 53 (1988)
WEEK 5-6
3:Walter W. Heiser, The Hague Convention On Choice
Of Court, Agreements: The Impact On Forum Non
Conveniens, Transfer Of Venue, Removal, And
Recognition Of Judgments In United States Courts, U. Pa.
J. Int’l L. , Vol. 31:4, 1013
1. Legal Effect of the Hague Convention in the U.S.
  The Convention is a binding international treaty.
 Once ratified, it carries preemptive power under the U.S. Constitution’s Supremacy
Clause.
 It overrides conflicting federal or state laws in applicable civil or commercial matters
involving exclusive forum agreements.

🔹 2. Limitations of the Convention’s Application

 Applies only to exclusive choice of court agreements in civil or commercial matters.

 Non-exclusive (permissive) clauses are not covered.
 Consumer and employment contracts are excluded.
 Doesn't cover family law, wills, insolvency, antitrust, or tort claims like personal
injury.

🔹 3. Interaction with Forum Non Conveniens (FNC) in the U.S.

 In pre-Convention cases, U.S. courts can dismiss even valid forum-selected cases using
FNC.
 After Convention implementation:
o Courts in contracting states must hear the case if named in an exclusive
agreement.
o Forum non conveniens dismissals are prohibited when the Convention applies.
o This curtails courts’ ability to consider "public interest" and "third-party
inconvenience" factors to override agreements.

🔹 4. Impact on 28 U.S.C. § 1404(a) Transfers

 Convention narrows the discretion courts normally enjoy under § 1404(a).

 U.S. courts must respect exclusive choice clauses, even if a domestic transfer seems
“more convenient.”
 Prevents courts from transferring to another U.S. venue that contradicts the international
agreement.

🔹 5. Removal Jurisdiction & the Convention

 The Convention enforces choice of specific courts, including state-only courts.

 If parties select a state court exclusively:
o Defendants cannot remove the case to federal court.
 o Removal rights under 28 U.S.C. § 1441 can be waived by contract.
 Convention strengthens enforcement of removal waivers, making them binding
internationally.

🔹 6. Enforcement of Foreign Judgments under the Convention

 Judgments from a contractually chosen court must be recognized and enforced in

other contracting states.
 Eliminates concerns of:
o Re-litigation of jurisdiction.
o Substantive review of the foreign decision.
 Judgment enforcement under the Convention is more predictable and uniform than
under the current patchwork of U.S. state laws.

🔹 7. UFMJRA Grounds for Nonrecognition – Mandatory vs. Discretionary

✅ Mandatory Grounds:

1. Lack of personal or subject matter jurisdiction.

2. Judicial system lacks basic due process.

⚠️Discretionary Grounds:

1. Lack of notice.
2. Judgment obtained by fraud.
3. Inconsistent with another final judgment.
4. Contrary to a valid choice of court agreement.
5. Substantive law is repugnant to public policy (interpreted narrowly).

🔹 8. 2005 Revisions to UFMJRA

 Introduced two new discretionary exceptions:

o “Substantial doubt” about the integrity of the foreign court.
o Proceedings not compatible with due process (applies to specific cases).
 Clarified:
o Public policy objection can relate to the judgment or the cause of action.
o Burden of proof lies on the party resisting recognition.
🔹 9. UFMJRA Scope Limitations

 Applies only to monetary judgments.

 Excludes:
o Judgments for fines or penalties.
o Injunctive or declaratory relief.
 But: U.S. courts may still enforce non-monetary judgments based on international
comity.

🔹 10. Future Considerations & Policy Implications

 Federalization of governance law (e.g., incorporation law) not advised despite

Convention’s structure.
 The Convention respects firm heterogeneity and allows for forum shopping based on
governance needs.
 U.S. may adapt further once private international law convergence increases globally
(e.g., in Europe).

Remaining New Content from Heiser’s Article

🔹 1. Presumption of Exclusivity (New Conflict with U.S. Law)

 Convention Rule: A clause selecting courts of one state is presumed exclusive, unless
parties expressly state otherwise.
 U.S. Domestic Law: Courts typically presume a non-exclusive forum selection unless
explicitly stated.
 Effect: The Convention preempts this domestic interpretive rule where it applies.

▶️Key Conflict: The Convention shifts the default interpretation of forum clauses toward
exclusivity, leading to broader application of treaty protections.

🔹 2. Forum Non Conveniens (Clarified Limitations of Impact)

 General Convention Rule: Courts must not dismiss valid exclusive agreements under
FNC doctrine.
 Important Limitations:
o Many common FNC scenarios are excluded: personal injury, anti-trust, torts
outside contracts, etc.
 o Domestic FNC within U.S. states may still apply where agreements don’t
specify exact jurisdiction.
 Practical Effect: Although the Convention restricts FNC, its narrow scope in
applicable case types limits real-world impact on U.S. court practice.

🔹 3. Venue Transfers Under 28 U.S.C. § 1404(a)

 The Convention does not preclude federal courts from transferring cases across U.S.
federal districts.
 Why: Article 5(3)(b) permits “internal allocation of jurisdiction” within a Contracting
State.
 The Convention merely asks courts to give "due consideration" to the parties' chosen
forum—this matches the standard in Stewart v. Ricoh Corp.

▶️Conclusion: The Convention respects domestic transfer rules and does not override federal
venue transfer laws.

🔹 4. Removal Jurisdiction (28 U.S.C. §§ 1441–1447)

 Convention’s Silence: No clear language bars removal from state to federal court.
 Interpretation: Removal is considered part of internal allocation of jurisdiction, thus
permitted.
 But: If agreement specifically designates state court, federal courts will likely remand
to honor exclusivity under the Convention.

▶️Important Nuance: Removal is procedurally allowed, but substantively restricted by the duty
to uphold exclusive forum clauses.

🔹 5. Comparison with UFMJRA (Uniform Foreign-Country Money Judgments

Recognition Act)

 Both systems promote recognition of foreign judgments, but differ on:

✅ a) Discretion vs. Mandate

 Convention: All exceptions to enforcement are discretionary.

 UFMJRA: Some exceptions (e.g., lack of due process) are mandatory.

✅ b) Public Policy Exception

  Convention: Broader test — may refuse enforcement if judgment is manifestly
incompatible with public policy.
 UFMJRA (1962): Narrower — only if cause of action is repugnant to public policy.
 UFMJRA (2005): More aligned with Convention — covers both judgment and cause
of action.

▶️Result: Convention preempts stricter or narrower state laws when applicable.

🔹 6. Judgments After Transfer from Chosen Court

 Article 9 allows non-recognition if:

o Judgment arose after a discretionary transfer
o And party objected to transfer in the original court
 This provision is not available under UFMJRA, making it a unique safeguard under
the Convention.

▶️Example: If a plaintiff chooses a California court per contract, but case is moved to New York
over their objection, foreign court may decline to recognize judgment from NY court.

🔹 7. Non-Monetary Relief (e.g., Injunctions, Specific Performance)

 Convention’s Language: Not limited to money judgments.

 Domestic U.S. Law: Non-monetary judgments enforced only via comity, not obligation.

▶️Interpretive Pathways in the U.S.:

1. Treat as public policy exception, citing unfamiliarity with the remedy.

2. Argue enforcement is impossible where remedy unavailable domestically.

 U.S. courts will likely retain discretion not to enforce such foreign non-monetary
judgments, despite Convention text.

🔹 8. Reciprocity Clause Conflict

 Some U.S. states still require reciprocal recognition under their version of UFMJRA.
 Convention’s Rule: Provides for automatic reciprocity among Contracting States.
 Effect: Convention nullifies reciprocity requirements for judgments falling under its
scope.
▶️Takeaway: States must recognize valid foreign judgments under the Convention, even if
reciprocity is not otherwise shown.

🔹 9. Application in Non-UFMJRA States

 Not all U.S. states have adopted UFMJRA or its 2005 revision.
 Some may follow older or inconsistent common law standards.
 Supremacy Clause: The Convention overrides any conflicting law, ensuring uniform
treatment in all states once ratified.

🔹 10. Summary of Treaty Impact

Area Convention Impact

Enforceability of Clauses Strengthens enforcement; expands exclusivity presumption
Forum Non Conveniens Restricts in international commercial cases
Venue Transfer (1404(a)) No change; internal transfers allowed
Removal Jurisdiction Technically allowed; remand likely if exclusivity exists
Judgment Recognition Largely aligns with UFMJRA; broader discretion, stronger effect
Non-Monetary Relief Enforceable under treaty but likely limited via public policy
Reciprocity No longer a barrier if Convention applies

5:J. J. Spigelman, International Commercial Litigation:

An Asian Perspective, 37 HONG KONG L.J. 859 (2007).
Final Study Notes: Hague Convention on Choice of Court
Agreements (New Content)

🔹 1. Presumption of Exclusivity

 Convention Rule: Choice of court clauses are presumed exclusive unless explicitly
stated otherwise.
 Conflict: U.S. courts typically presume non-exclusivity without explicit language.
 Impact: The Convention’s presumption overrides conflicting U.S. interpretations,
broadening the scope of agreements that fall within its protection.
🔹 2. Limitations on Forum Non Conveniens (FNC)

 Convention limits the use of FNC where an exclusive clause exists and the case falls
within its scope.
 But: Many key FNC case types (e.g., personal injury, antitrust, non-contractual torts) are
excluded from the Convention.
 Result: Convention's FNC restriction has limited real-world impact in U.S. courts due
to exclusions.

🔹 3. Transfer of Venue (§ 1404(a))

 The Convention permits internal court transfers (e.g., from one U.S. federal district to
another).
 Article 5(3)(b): States may reallocate jurisdiction internally if they give "due
consideration" to the parties' original choice.
 U.S. courts retain broad discretion to transfer under Stewart v. Ricoh Corp., consistent
with the Convention.

🔹 4. Removal Jurisdiction

 Convention does not bar removal from state to federal court under 28 U.S.C. § 1441.
 But: If an agreement specifies state courts, the federal court will likely remand to
uphold exclusivity (Convention-compliant outcome).

🔹 5. UFMJRA vs. Hague Convention

Feature UFMJRA Hague Convention

Some mandatory (e.g., no
Exceptions All exceptions are discretionary
jurisdiction, no due process)
Public Narrow (e.g., repugnant cause of Broader (e.g., manifestly incompatible
Policy action) judgment)
Allows denial of recognition after objection to
Transfers No objection-based exception
discretionary transfer
Automatically provided within Convention
Reciprocity Sometimes required by state
states

🔹 6. Judgments After Discretionary Transfer

  Article 9: If a case is transferred from the chosen court, and a party objected in the
original court, recognition may be denied.
 Protection: This clause safeguards objecting parties where a transfer undermines their
chosen venue.

🔹 7. Enforcement of Non-Monetary Judgments

 Convention includes injunctive/specific performance judgments.

 But:
o U.S. courts may refuse enforcement if remedy is unavailable domestically.
o May invoke public policy exception if enforcement violates fundamental norms.
 Practice: U.S. courts often enforce such rulings only as a matter of comity, not
obligation.

🔹 8. Reciprocity Conflicts

 Some U.S. states deny enforcement of foreign judgments without reciprocity.

 The Convention removes this requirement for judgments within its scope.
 States must comply, even if the rendering state wouldn’t enforce judgments outside the
treaty.

🔹 9. States Without UFMJRA

 Not all U.S. states follow UFMJRA.

 If a state has common law or inconsistent rules, the Convention’s standards preempt
due to the Supremacy Clause.

🔹 10. Final Overview: Treaty vs. U.S. Practice

U.S. Practice (Without

Legal Concept Convention Effect
Convention)
Forum Clause
Presumed exclusive Presumed non-exclusive
Interpretation
Forum Non Conveniens Barred if treaty applies Broadly available
Venue Transfer (1404a) Allowed internally Allowed
Not barred, but may require
Removal (1441) Fully allowed
remand
 U.S. Practice (Without
Legal Concept Convention Effect
Convention)
Narrower (cause of action
Public Policy Exception Broader scope (judgment-focused)
focused)
Enforced via comity, not
Non-Monetary Judgment Enforceable (discretionary)
mandated
Reciprocity Implied within treaty Required by some states
Supersedes conflicting
Preemption State-specific variability
state/federal law

6; Anthony J. Colangelo, What Is Extraterritorial

Jurisdiction?, Cornell Law Review Vol. 99),1303 (2013)
Constitutional Basis for Extraterritorial Prescriptive Jurisdiction

 Two Dimensions of Constitutional Power: For U.S. law to be valid extraterritorially, it

must satisfy both:
o Subject-Matter Scope: The activity must fall within the constitutional power
(e.g., foreign commerce, piracy).
o Geographic Scope: The activity must occur in a place Congress is authorized to
regulate (e.g., “high seas” under the Felonies Clause).
 Bellaizac-Hurtado Case:
o U.S. lacked constitutional authority to criminalize drug trafficking in Panamanian
waters because such conduct did not violate international law, and the power to
punish offenses against the law of nations didn’t extend to it.
 Textual Limitations in Clauses:
o Example: The Felonies Clause only authorizes action “on the high Seas.” The
Foreign Commerce Clause requires a U.S. nexus; it doesn’t permit universal
regulation of foreign markets.
 U.S. Nexus Requirement:
o Congress cannot regulate foreign conduct with no demonstrable connection to the
U.S. under the Foreign Commerce Clause.

2. Differentiating Subject-Matter and Geographic Jurisdiction

 Subject-Matter Jurisdiction:
o Determines whether Congress can legislate on the type of activity.
 Geographic Jurisdiction:
o Evaluates whether Congress can regulate that activity when it occurs in a specific
foreign location.
 Illustration:
 o Regulating drug trafficking inside U.S. = valid under Interstate Commerce
Clause.
o Regulating drug trafficking in Panamanian waters = not valid unless linked to
U.S. (via Foreign Commerce Clause or another power).

3. Use of International Law to Define Jurisdictional Reach

 Territorial vs. Extraterritorial Characterizations:

o Courts may label conduct with foreign elements as “territorial” if some aspect
(e.g., harm) occurs within the U.S.
o This allows Congress to use domestic power to address transnational crimes.
 Objective vs. Subjective Territoriality:
o Subjective: Jurisdiction based on where the conduct began.
o Objective: Jurisdiction based on where the effects are felt.

4. Due Process Constraints on Extraterritorial Prescriptive Jurisdiction

 Fifth Amendment Framework:

o Focuses on ensuring “fair notice” to individuals that their conduct could fall under
U.S. law.
o Courts must determine if applying U.S. law abroad is arbitrary or fundamentally
unfair.
 Fractured Lower Court Jurisprudence:
o Courts disagree on whether a “nexus” with the U.S. is required.
 Some demand a significant connection.
 Others waive it in cases involving universal jurisdiction crimes (e.g.,
piracy, terrorism).
 Universal Jurisdiction & Fair Notice:
o U.S. courts may apply law without a nexus if the conduct falls under international
crimes universally recognized.
o However, courts must ensure that U.S. law accurately reflects the international
definition of the offense to satisfy fair notice.

5. Misuse of Adjudicative Standards in Prescriptive Contexts

 Confusion Between Jurisdiction Types:

o Courts sometimes wrongly apply “minimum contacts” (adjudicative standard) to
prescriptive jurisdiction.
o This creates two problems:
  Underinclusive: Fails to cover universal jurisdiction crimes despite U.S.
commitments.
 Overinclusive: Grants jurisdiction based on post-conduct presence, which
violates fair notice.
 Solution:
o Courts should distinguish clearly between:
 Adjudicative Jurisdiction (can court hear the case?)
 Prescriptive Jurisdiction (can Congress make the law for that activity?)

6. Statutory Construction in Extraterritorial Context (Morrison & Kiobel)

 Presumption Against Extraterritoriality:

o Courts presume statutes apply only domestically unless Congress clearly says
otherwise.
 Morrison v. National Australia Bank (2010):
o Focused on the “focus” of the statute to determine scope.
o If the statutory focus is abroad, it does not apply extraterritorially.
 Kiobel v. Royal Dutch Petroleum (2013):
o Tried to apply presumption to Alien Tort Statute (ATS), which is jurisdictional,
not prescriptive.
o Court created a new “touch and concern” test for when claims involve U.S.
interests.
 Legal Confusion:
o The Kiobel decision muddled Morrison’s clarity by treating jurisdictional and
prescriptive statutes the same.

7. Common Law Choice-of-Law & Extraterritoriality

 Functional Extraterritoriality via Choice-of-Law:

o When U.S. courts apply local law to international disputes, they effectively create
extraterritorial applications of domestic law.
 Drivers of Doctrinal Shift:
o Globalization: More cross-border transactions and disputes.
o Convergence of Public & Private Law: U.S. law is applied to human rights and
securities fraud cases, not just private torts or contracts.
 Public vs. Private Law Disparity:
o U.S. state law has broader extraterritorial reach via flexible methods.
o U.S. federal law is limited by stricter statutory construction standards.

Statutory Interpretation of “Extraterritoriality”

 Morrison v. National Australia Bank (2010):

 o Refocused the presumption against extraterritoriality to depend on the statute’s
“focus”, not just express language.
o Rule: If the conduct relevant to the statute’s focus occurred abroad, the statute
does not apply even if other conduct occurred in the U.S.
 Kiobel v. Royal Dutch Petroleum (2013):
o Applied the Morrison-style presumption to the Alien Tort Statute (ATS).
o Held: The ATS is jurisdictional, not substantive, yet imposed the same
presumption.
o Introduced the “touch and concern” test — claims must touch and concern the
U.S. with sufficient force to displace the presumption.
o Problem: Doctrinal inconsistency — blurred the lines between jurisdictional and
prescriptive scope.

🔹 9. Distinction Between Jurisdictional and Substantive Statutes

 Prescriptive vs. Jurisdictional Statutes:

o Prescriptive statutes (e.g., criminal laws): Govern conduct and require clear
intent for extraterritorial application.
o Jurisdictional statutes (e.g., ATS): Grant courts authority to hear cases, but do
not create substantive obligations.
o Issue: Kiobel incorrectly applied prescriptive analysis to a jurisdictional law,
causing analytical confusion in later cases.
 Key Takeaway: Courts should avoid applying the presumption against
extraterritoriality to purely jurisdictional provisions.

🔹 10. Functional Extraterritoriality Through Choice of Law

 State Law Reach:

o U.S. state law can apply extraterritorially through choice-of-law principles, even
when federal law cannot due to Morrison/ Kiobel limits.
 Public vs. Private Law Disparity:
o Private law (state tort, contract): More flexible application abroad via choice of
law.
o Public law (federal statutes like ATS, securities law): Constrained by formalist
doctrines of extraterritoriality.

🔹 11. Key Critique of the Current Framework

 Mismatch in Doctrinal Tools:

o Courts inconsistently apply prescriptive analysis to jurisdictional statutes.
 o Courts blur adjudicative jurisdiction (“minimum contacts”) with prescriptive
reach (“fair notice”).
 Resulting Problems:

1. Under-inclusive: Fails to allow prosecution of international crimes the U.S. is

bound to address (e.g., torture, terrorism).
2. Over-inclusive: Allows jurisdiction over foreign defendants without a clear U.S.
nexus — risks violating due process.

🔹 12. Suggested Doctrinal Reforms

 Separate Analyses Needed:

o Prescriptive jurisdiction: Focused on Congress’s power and fair notice to the
defendant.
o Adjudicative jurisdiction: Based on minimum contacts and procedural
fairness.
 Incorporate International Law Consistently:
o Courts should ensure U.S. laws align with customary international law,
especially in universal jurisdiction cases (e.g., piracy, genocide).
o This ensures due process and upholds U.S. treaty obligations.

🔹 13. Conclusion: Doctrinal Summary Table

Legal Concept Proper Doctrine Common Mistake

Jurisdictional Statute
Focus on whether court can hear case Misuse Morrison test
(e.g., ATS)
Prescriptive Whether Congress intended to apply Use of adjudicative “minimum
Jurisdiction law extraterritorially contacts”
Requires fair notice and legitimate Wrongly assumes removal or
Due Process Limit
interest presence cures defects
No nexus needed if crime is defined U.S. law must mirror global
Universal Crimes
in international law standard

MISSING:
Petr Briza, Choice-of-Court Agreements: Could the Hague
Choice of Court Agreements Convention and the Reform
of the Brussels I Regulation Be the Way out of the
GasserOwusu Disillusion, 5 J. PRIV. INT'l L. 537 (2009).
Louise Ellen Teitz, The Hague Choice of Court
Convention: Validating Party Autonomy and Providing an
Alternative to Arbitration, The American Journal Of
Comparative Law, Vol 53, 543
Guy S. Lipe and Timothy J. Tyler, The Hague Convention
On Choice Of Court Agreements: Creating Room For
Choice In International Cases, HOUSTON JOURNAL OF
INTERNATIONAL LAW , Vol 33,(2010) 1
Amucheazi Chibike Oraeto, A Critical Survey of the Rules
Determining Jurisdiction in a Conflict of Laws Case and Its
Impact on Parties’ Convenience in the Resolution of
International Commercial Disputes, Business Law Review
Volume 39, Issue 4 (2018) 120
WEEK 7-8
1;Joel R. Reidenberg, Technology and Internet
Jurisdiction, 153 U. Penn. L. Rev. 1951 (2005)
Technological Denial of Law = Legal Denial-of-Service (DoS) Attack

 Reidenberg frames early jurisdictional avoidance by internet companies as a "denial-of-

service" attack on the legal system.
 This metaphor implies that tech actors deliberately overwhelm or bypass sovereign legal
authority using technical arguments to block jurisdiction, choice of law, or enforcement.
 Such actions attempt to disable states from protecting citizens in the online environment.
2. Yahoo! Case as a Paradigm of Tech Resistance to Jurisdiction

 Yahoo! claimed immunity from French law for hosting Nazi memorabilia on U.S.
servers.
 French court rejected tech-based defenses and found that targeting French users with
French ads created jurisdictional contact.
 Yahoo! then sued in U.S. courts to deny enforcement of the French ruling — Reidenberg
critiques this as “forum shopping” and jurisdictional evasion.

3. End-to-End Architecture & Interactivity as Legal Nexus

 The Internet's "end-to-end" design (processing happens at the user's device) creates
personal jurisdiction contacts where the user is located.
 Sophisticated functions like JavaScript, pop-ups, streaming, and ad targeting utilize
user-side resources, forming a technical and legal connection to the forum state.

4. Technology Determines Jurisdictional Reach via User-Side Interaction

 Filtering and geolocation tools (e.g., RealNetworks, Yahoo! ads in French) demonstrate
deliberate targeting, making claims of unintentional contact untenable.
 The choice to filter or not filter becomes a normative legal decision — a failure to
avoid contact can constitute “purposeful availment.”

5. Reinvention of Geographic Boundaries Through Technology

 Though the Internet was built as a geographically indifferent space, commercial and
technical evolution (IPv6, geolocation) re-create geographic boundaries.
 This development supports a return to state-centric jurisdiction through architectural
means.

6. Safe Zones & Virtual Private Networks (VPNs) as Jurisdictional Spaces

 Reidenberg introduces the concept of "safe zones": network spaces (e.g., VPNs) with
defined legal rules and geographic localization.
 These zones could become jurisdictional compartments where users are authenticated,
and legal compliance is coded into system architecture.
7. Technological Enforcement: A New Sovereign Toolkit

 States may use electronic enforcement tools (filters, firewalls, interceptors, even denial-
of-service attacks) to electronically enforce laws without requiring traditional
recognition of foreign judgments.
 China’s firewall is referenced as an example of such electronic sovereignty.

8. Due Process and Constitutional Constraints on Tech Enforcement

 Enforcement using tools like electronic blockades or sanctions must meet:

1. Magnitude of threat to public order
2. Urgency of the violation
3. Effectiveness of the tool
4. Enforcement goal (e.g., deterrence vs. compensation)
 Enforcement must satisfy U.S. constitutional due process, including the First and Fifth
Amendments.

9. Risk of Collateral Harm to Third Parties

 Electronic enforcement may lead to collateral damage (e.g., over-blocking innocent

speech, cutting off unrelated services).
 States must minimize this risk under free speech guarantees (First Amendment,
ECHR Art. 10) and uphold procedural fairness.

10. Role of Intermediaries and Overreach Concerns

 States may deputize intermediaries (e.g., ISPs, payment systems) to enforce

compliance.
 Risk: abuse or overreach by intermediaries could violate civil liberties.
 Solution: clear legislation is needed to constrain intermediary enforcement roles.

11. International Law and Enforcement Tools

 Use of tech tools (e.g., firewalls, blockades) may raise international legal concerns:
o U.N. Charter restricts force, but such tools often target individuals, not states.
o Customary law is unclear on whether such acts equal use of force.
o Council of Europe Cybercrime Convention may even obligate signatories to
use effective enforcement mechanisms.
12. Prescriptive Hierarchy: Law Must Be Supreme Over Technology

 Reidenberg argues for legal supremacy over tech design: law should direct
technology, not the other way around.
 Denying law’s application empowers technologists to set societal rules — undermining
democratic legitimacy.

13. Public Values Must Drive Tech Design

 Without legal mandates, public policy tech solutions (e.g., PICS for child protection, P3P
for privacy) often fail due to market disinterest.
 Example: Yahoo! filtered users for ads but claimed it couldn’t filter for legal
compliance — reveals commercial bias in tech deployment.

14. Legal Pressure as Innovation Driver

 Court rulings that demand compliance stimulate innovation:

o E.g., Microsoft altered .NET Passport due to EU data privacy law.
o Congressional pressure drove development of filtering tools.

15. Failure to Assert Jurisdiction = Technological Stagnation

 When courts refuse to enforce laws due to current tech limitations (e.g., Reno v.
ACLU, Pappert), they disincentivize the creation of compliance tools.
 Accepting technological attacks on law entrenches “technological determinism” and
weakens the rule of law.

2:Phelps, Todd Matthew. (1999). Jurisdiction and the

internet. William Mitchell Law Review, 25(3), 1135-
1152.
1. Internet Jurisdiction and U.S. State Courts: No Clear Framework Yet

 The Granite Gate decision underscores the lack of a uniform legal framework in
Minnesota (and nationally) for handling jurisdiction based on Internet activity.
  The Minnesota Supreme Court affirmed the decision by default (3–3 split), without
establishing legal precedent or clear rules — leaving ambiguity.

2. Application of Minnesota’s Five-Prong Minimum Contacts Test

Minnesota courts apply a unique five-factor test to assess personal jurisdiction:

1. Quantity of contacts
2. Nature and quality of contacts
3. Connection between cause of action and contacts
4. State’s interest in providing a forum
5. Convenience of parties

This state-specific approach expands traditional “minimum contacts” doctrine.

3. Discovery Rulings & Adverse Inferences in Internet Jurisdiction Cases

 Granite Gate refused to reveal its mailing list, claiming it was owned by a Belizean
corporation.
 The Minnesota trial court made a legal presumption that a Minnesota resident was on
the mailing list.
 This illustrates how non-cooperation in discovery related to Internet communications
can lead to negative jurisdictional inferences.

4. Use of Local Statutes to Assert Jurisdiction Over Internet Actors

 The Minnesota Attorney General used Minn. Stat. § 8.31 to support jurisdiction — a
provision empowering the AG to enforce consumer protection laws.
 This tactic may provide government plaintiffs with stronger jurisdictional claims than
private parties, especially in Internet contexts.

5. State Interests in Regulating Internet Gambling

 Minnesota's interest in regulating gambling was a key justification for asserting

jurisdiction over an out-of-state Internet operator.
 This reflects state-level regulatory concerns overriding weak physical presence,
especially for potentially illegal or harmful online services.
6. Contract Clauses Involving One-Way Jurisdictional Consent

 WagerNet’s website allowed it to sue customers in their home states but limited
customers to suing only in Belize.
 The court cited this one-sided jurisdiction clause to reject the defendant’s claim that
Minnesota was an inconvenient forum.
 Lesson: Contractual clauses attempting to unilaterally restrict jurisdiction may backfire
when scrutinized by courts.

7. Judicial Error in Equating Internet Ads with Traditional Media

 The court wrongly analogized Internet ads to radio, TV, and direct mail, ignoring the
global, passive, and user-initiated nature of web ads.
 This flawed reasoning ignored the fact that Internet advertisers cannot meaningfully
limit geographic reach like traditional advertisers can.

8. Critique of Passive vs. Active Internet Ads – Emerging Consensus

 Courts like Maritz and Inset viewed mere website posting as “active” conduct.
 Critics argue this logic dangerously assumes all global web presence equals purposeful
availment.
 This viewpoint is increasingly rejected in later cases like Hearst and Bensusan.

9. Hearst and Bensusan Cases – Jurisdiction Should Require More Than Web
Access

 These courts found that web access alone is insufficient for personal jurisdiction.
 If mere accessibility were enough, it would create global jurisdiction over every web
content provider, which they deemed unacceptable without federal law to support it.

10. Risk of Creating Worldwide Jurisdiction Through Internet Ads

 Courts must avoid treating every web publication as a purposeful entry into every
jurisdiction.
 Doing so would erode territorial limits on sovereign power and create an
unmanageable legal environment for online actors.
11. Policy Concerns: Chilling Effect on Internet Speech and Commerce

 If courts overextend jurisdiction based solely on web presence, it may chill free
expression and stifle digital commerce due to fear of litigation anywhere in the world.

12. Distinction Between Government and Private Plaintiffs in Internet

Jurisdiction

 Courts may be more willing to accept personal jurisdiction when government actors,
like state attorneys general, bring the claim.
 This may not extend to private parties, highlighting unequal application of
jurisdictional standards based on plaintiff identity.

13. Caution Against Overextending Internet Jurisdiction Without Legislative

Mandate

 Without clear federal legislation, broad interpretations of Internet jurisdiction (as seen in
Maritz or Inset) risk legal overreach.
 Courts are urged to wait for congressional action rather than judicially expanding state
reach over global cyberspace.

3;Covotta, Brian. (1998). Personal jurisdiction and the

internet: an introduction. Berkeley Technology Law
Journal, 13(1: Annual Review), 265-270.
1. Litigation Risk from Ubiquity of Internet Access

 The article introduces a new concern: legal uncertainty in Internet-based commerce

may chill electronic commerce.
 Because websites are accessible globally, businesses face unpredictable litigation risk
in any jurisdiction where their site can be viewed.
 This chilling effect is distinct from previous discussions that focused more narrowly on
fairness or enforcement.

2. Requirement for Statutory Authorization Before Jurisdiction

  Covotta clarifies that courts must first have statutory authority under state law to
assert jurisdiction, before even analyzing due process.
 Federal district courts must follow the long-arm statute of the state where the court sits
— a structural limitation not emphasized in previous readings.

3. Historical Evolution: From Pennoyer v. Neff to Minimum Contacts

 Unlike prior notes, Covotta provides a doctrinal history:

o Pennoyer v. Neff (1877): required physical presence for jurisdiction.
o Modern standard (from International Shoe): replaced this with the “minimum
contacts” + fairness test.
 This contextual history helps explain how technology has transformed personal
jurisdiction doctrine.

4. Globalization’s Role in Expanding Fairness Considerations

 Covotta notes that globalization, beyond just technology, led courts to consider five
fairness factors (from World-Wide Volkswagen), including:
1. Burden on defendant
2. Forum state’s interest
3. Plaintiff’s interest in convenient relief
4. Efficiency of judicial system
5. Shared interests of the states
 These broader policy-based factors can augment or defeat jurisdiction even when
minimum contacts exist, which was not stressed in earlier cases.

5. Zippo Sliding Scale Test – Introduced as a New Analytical Tool

 The Zippo test is a new doctrinal innovation not discussed in earlier notes.
 It introduces a spectrum to assess jurisdiction:
o Passive Websites (just information) → No jurisdiction
o Interactive Websites (some engagement) → Case-by-case
o Commercial Websites (contracting/selling online) → Jurisdiction likely
 This functional classification of website activity offers courts a more nuanced tool,
contrasting sharply with the flawed analogies used in Granite Gate and Inset.

6. Contrast Between Zippo and Bensusan

  Bensusan: Mere creation of a website = not sufficient for jurisdiction.
 Zippo: Actively contracting with and serving 3,000+ forum-state residents = strong
basis for jurisdiction.
 This contrast introduces a key jurisprudential divide: should web accessibility alone
suffice, or is targeted interactivity essential?

7. Reliance on Contracts with Forum-State ISPs

 In Zippo, the defendant didn’t just attract users — it contracted with Pennsylvania-
based Internet access providers.
 This contractual infrastructure linkage to the forum state goes beyond user behavior,
highlighting back-end tech partnerships as relevant for jurisdiction — a new
dimension not addressed before.

8. Emphasis on Tailored Personal Jurisdiction Analysis for Internet

 Covotta calls for a customized personal jurisdiction doctrine suited to cyberspace,

rather than stretching existing analogies (radio, mail).
 This is forward-looking jurisprudence, different from Granite Gate’s attempt to fit
Internet activity into outdated media models.

4; Clifford Chance and Singapore Academy of Law

Private International Law Aspects of Smart Derivatives
Contracts Utilizing Distributed Ledger Technology ( 12th
June 2021)
https://www.cliffordchance.com/content/dam/cliffordchan
ce/briefings/2020/01/PrivateInternational-Law-Aspects-
of-Smart-Derivatives-Contracts-Utilizing-DLT.pdf
1. Explosion of Internet Use & E-Commerce Litigation

 Over 35 million consumers and 190,000 businesses use the Internet, creating vast
potential for commercial transactions across state lines.
 Result: A surge in litigation related to jurisdiction over Internet-based activities,
particularly in trademark, contract, and fraud claims.
2. Lack of Jurisdictional Clarity Slowing E-Commerce

 Courts’ inconsistent application of personal jurisdiction doctrines for web-based contacts

creates uncertainty.
 Businesses cannot predict exposure to lawsuits across all jurisdictions where their site is
accessible—posing a deterrent to online growth.

3. Pennoyer to International Shoe: Evolution of Doctrine

 Early rule: Under Pennoyer v. Neff (1878), physical presence in the state was required
for jurisdiction.
 Modern standard: International Shoe v. Washington (1945) introduced the “minimum
contacts” test, aligning jurisdiction with fairness and due process.
 Significance: Shift from territorial presence to purposeful availment of forum benefits.

4. Key Requirements for Modern Jurisdiction

 Defendant must have purposefully availed themselves of the forum state’s laws and
benefits.
 Unilateral actions of the plaintiff (e.g., accessing a website) do not establish jurisdiction.
 Placing goods into the “stream of commerce” is insufficient unless defendant directs
them at the forum.

5. Five Fairness Factors (Post-World-Wide Volkswagen)

Courts may balance these factors to decide if asserting jurisdiction is fair:

1. Burden on defendant to litigate in the forum

2. Forum state's interest in resolving the dispute
3. Plaintiff’s interest in convenient relief
4. Judicial system’s interest in efficiency
5. Shared substantive policy interests across states

✅ New Point: A lesser degree of contacts may suffice if these fairness factors weigh heavily in
favor of jurisdiction—or vice versa.
6. Internet’s Legal Challenge: Borderless Communication

 The Internet’s global accessibility undermines traditional jurisdiction principles rooted in

geography.
 Raises risk of courts asserting universal jurisdiction over any website operator.
 Creates conflict between technological capabilities and territorial legal frameworks.

7. Case Law Contrast:

a. Bensusan Restaurant Corp. v. King (2d Cir.)

 Missouri defendant had a passive website accessible in New York.

 Court ruled no personal jurisdiction in New York—mere website presence ≠ purposeful
availment.
 Important takeaway: A “mere Internet presence” does not trigger jurisdiction.

b. Zippo Mfg. Co. v. Zippo Dot Com (W.D. Pa.)

 Pennsylvania court exercised jurisdiction over California-based defendant.

 Defendant had 3,000 paying subscribers and contractual relationships with
Pennsylvania ISPs.
 Court developed the influential “Sliding Scale” test:
o Active websites = jurisdiction likely.
o Passive websites = jurisdiction unlikely.
o Interactive websites = jurisdiction depends on the level and nature of
interactivity.

8. Zippo Sliding Scale Doctrine (New Analytical Framework)

 Courts evaluate websites based on degree of interactivity and commercial nature:

o High interactivity (e.g., contracts, payments): Satisfies purposeful availment.
o Low or passive interactivity (e.g., information only): Insufficient for
jurisdiction.
 This test represents the first structured approach tailored specifically to Internet-based
contacts.

9. Key Policy Concern

 Without a clear standard, courts may either overreach or under-protect online

consumers and businesses.
  Unchecked jurisdictional assertions may discourage innovation and growth in digital
commerce.

5: Prof Dr Dan Jerker B. Svantesson, (Private)

International Law for a Digitalised World – Collision,
Coexistence or Combination?, 6 th December 2020 ,
EAIPL Blog
I. Scope of Jurisdiction as a Distinct Concept (Not Just Personal or Subject-
Matter)

 New legal focus: The scope of jurisdiction is distinguished from personal or subject-
matter jurisdiction.
 This refers to the geographical reach of enforcement orders (e.g. takedown, block,
deindex).
 ⚠️If an order has global effect without requiring recognition/enforcement in other
jurisdictions, it bypasses the international legal safeguards designed to protect national
legal autonomy.

II. Undermining of Recognition and Enforcement Mechanisms

 Traditional private international law relies on the need for foreign judgments to be
recognized.
 Now, when global platforms comply directly with one court’s order (e.g., Chinese court
ordering takedown), global effect occurs instantly, without recognition procedures in
other states.
 ⚠️Public policy protections in other countries (like free speech in the Netherlands or
U.S.) are rendered irrelevant.

III. Real-World Example of Censorship Creep via Private Compliance

 Hypothetical: Chinese court orders removal of a post offensive to the CCP. U.S. platform
complies → global deletion.
 This produces de facto extraterritorial enforcement of Chinese censorship standards,
circumventing the laws of the Netherlands or U.S.
 ⚠️Public and private international law becomes ineffectual, creating a free speech
vacuum.
IV. CJEU’s Extension of Content Control: Precedent for ‘Equivalent’ Content
Removal

 The CJEU has ruled that platforms may be required to block not only specific content
but also future, similar content globally.
 Consequence: Proactive censorship of undefined, “equivalent” content.
 🔁 This risk was not previously covered in the Heiser or Reidenberg discussions on
intermediary liability.

V. Concept of ‘Hyperregulation’ in Internet Law

 Defined as a condition where:

1. The volume and variety of applicable laws make legal compliance effectively
impossible.
2. The risk of legal enforcement in multiple jurisdictions is real.
 Example: A social media post may trigger liability under:

o The law of the poster’s location, residence, citizenship,

o The target’s location/residence/citizenship,
o The country where the post is read/downloaded,
o And the jurisdiction where the cloud server is located.

VI. Liability Chains Extended by Re-publication and Storage Location

 Poster may also be liable in jurisdictions where reposted content is downloaded.

 Legal risk becomes unpredictable and unbounded, especially since users cannot
determine where their data is stored.
 ➕ Adds a data locality risk dimension not discussed in earlier jurisdiction cases.

VII. Distinction Between ‘Genuine’ and ‘Artificial’ Regulatory Challenges

 Genuine: Conflicting national interests (e.g. hate speech vs. free speech).
 Artificial: Problems caused by obsolete legal frameworks, relying on outdated
metaphors like sovereignty or territoriality.
 Key argument: International law is conceptually mismatched for the digital era.
VIII. Need for Doctrinal Innovation: Proposed Legal Framework Reforms

 Proposed innovations to address artificial challenges include:

o A new jurisprudence of jurisdiction
o A new type: ‘investigative jurisdiction’
o Reframing and updating the concept of ‘scope of jurisdiction’
o Clarifying the evolving meaning and relevance of sovereignty
 These are normative and structural proposals, not case-specific reforms.

IX. Disproportionate Influence of Private Norm Creators (e.g., Facebook)

 Facebook, with 2.45 billion users, affects more people than any single nation.
 Its private Terms of Service shape global speech rights more than state law in many
cases.
 This introduces a normative legitimacy problem: private actors wield more regulatory
power than public international law.

X. COVID-19 as a Catalyst for Legal Change

 The pandemic accelerated existing trends:

o Increased reliance on online life over physical world.
o Legal frameworks lag behind despite this shift.
 The need to address Internet legal issues is now urgent and mainstream, not peripheral.

XI. Call for Paradigm Shift in International Law Community

 International lawyers still treat the Internet as a niche issue.

 Need to recalibrate focus from conflict between law and Internet → toward
constructive engagement: using law to shape a healthy online public sphere.
 This call was not present in previous notes from jurisdictional case law.

6: Faye Fangfei Wang, Jurisdiction and Cloud

Computing: Further Challenges to Internet Jurisdiction,
Journal of Intellectual Property Forum. 98 (2012)
. New Definitions Introduced by Cloud Computing
  Cloud Computing refers to on-demand access to configurable computing resources (e.g.
storage, processing, software) via a public network, shifting control from internal to
external infrastructures.
 The public cloud environment increases legal complexity due to shared infrastructure
and data mobility across jurisdictions.

🔹 2. Novel Legal Challenges Arising from Cloud Computing

 Title Attribution Issues: The roles of cloud providers, customers, and users often
overlap with those of data controllers and processors, creating ambiguity in liability
attribution.
 Automated Contracts: Electronic agreements concluded without human interaction (e.g.
via automated systems) raise unique issues regarding the validity of jurisdictional clauses.

🔹 3. Legal Complexities from Cloud Deployment Models

 Service Models Introduced:

o SaaS (Software as a Service) – user-facing apps like Google Docs.
o PaaS (Platform as a Service) – platforms for app development.
o IaaS (Infrastructure as a Service) – hardware access like Amazon EC2.
 Hybrid clouds mix public and private resources, complicating risk allocation and multi-
tiered supplier responsibility chains.

🔹 4. Role Confusion Between Controllers and Processors

 According to the EU Data Protection Directive, a data controller determines

purpose/means of data use; a processor acts on behalf of a controller.
 A cloud provider may simultaneously be both, depending on whether it uses data for its
own purpose or merely provides backend services.

🔹 5. Jurisdictional Uncertainty Due to Cloud Data Location

 Users cannot always know or control where data is stored or processed (e.g., dynamic
relocation of data centers).
 This creates uncertainty in determining competent courts and applicable law,
particularly in cross-border disputes.
🔹 6. Unresolved Conflict Between Interoperability and IP Rights

 Cloud/data interoperability (enhancing efficiency) may clash with intellectual

property rights, which can be used to block competitive interoperation.
 Solution suggested: balancing IP and competition law via community-level legal
infrastructure.

🔹 7. Concerns from EU and US Public Consultations

 EU (2011): Highlighted lack of legal certainty, unclear responsibilities, and the need for
uniform service agreement models.
 US Federal Strategy (2011): Addressed data sovereignty, cross-border data access, and
global harmonization of cloud standards.

🔹 8. Validity of Jurisdiction Clauses in Cloud Contracts

 SLAs and Terms of Service are often pre-drafted, imposing exclusive forum clauses
(e.g., Google’s venue in Santa Clara County, CA) even when data is globally distributed.
 Such clauses help reduce uncertainty but may be invalid if not clearly consented to,
especially in automated contract environments.

🔹 9. Impact of Sub-Contracts in Cloud Supply Chains

 Cloud users often unaware of sub-contracts between providers and other

controllers/processors.
 Jurisdiction clauses in those sub-contracts might impact users unknowingly, raising the
need for informed consent obligations.

🔹 10. Interpretation of “Null and Void” Clauses Under Brussels I Recast

 Brussels I Regulation now includes the “null and void as to substance” test for
jurisdiction clauses.
 This brings it in line with the Hague Choice of Court Convention, yet opens debate on
its interpretative scope and enforceability.

🔹 11. Validity of Electronic Choice of Court Agreements

  Recognized under:
o Article 3(c) of the Hague Convention
o Article 23(2) of Brussels I Regulation (and Art. 25 in Recast)
 Validity requires:
o A durable record
o Mutual consent — problematic in automated systems without human
involvement

🔹 12. Case Illustrations Validating Electronic Jurisdiction Clauses

 Tilly Russ Case: Jurisdiction clause in printed bill of lading upheld.

 Estasis Salotti Case: Jurisdiction clause valid if signed and properly referenced.
 Implication: Clickwrap or auto-generated jurisdiction clauses may be valid only if user
is sufficiently informed and consents.

🔹 13. The Automated Contracting Challenge

 In cloud services, contracts may be auto-generated using algorithmic matchings (e.g.,

buyer-seller systems matching preferences and prices).
 Raises doubts about enforceability of forum selection clauses chosen by AI unless prior
agreement on system behavior exists.

🔹 14. Recommendations for Legal Certainty

 Adoption of international standards and harmonization (e.g., via the Hague Choice of
Court Convention)
 Model Terms and SLAs that clarify parties' rights and jurisdiction clauses in advance
 Emphasizing transparency and informed consent regarding subcontracted data
processing or cross-border data transfers.

1. Recognition of Jurisdiction Clauses in Oral and Implied Contracts

 A forum selection clause in a contract may still be valid even if only one party
confirms it in writing, provided the other party receives it and does not object.
 MSG v. Les Gravières Rhénanes SARL established that implied acceptance of
jurisdiction clauses through trade practices (like silent acceptance of invoices) is valid if
both parties are aware of such usage.
🔹 2. Validity of Electronic Jurisdiction Clauses in U.S. Case Law

 ProCD v. Zeidenberg: Shrink-wrap license upheld—user clicked acceptance.

 Carnival Cruise Lines v. Shute: Clause in small print was enforced—analogous to
clickwrap.
 Caspi v. Microsoft Network: Forum clauses in online agreements are enforceable if
users had adequate notice; courts determine validity as a matter of law.

🔹 3. Criteria for Valid Automated Jurisdiction Agreements

To ensure formal validity under EU/US law:

 (a) Parties must be fully aware of the jurisdiction clause,

 (b) Automated systems must be industry-accepted,
 (c) Usage must be known in international trade customs.

🔹 4. Contractual Formulas to Improve Predictability in Cloud Services

 Service contracts may include clauses like:

“Jurisdiction clauses automatically generated shall be valid and exclusive, provided they
are based on recipient’s choice of place of performance.”
 Clauses may require data storage in a single data center closest to service delivery,
improving enforceability and clarity.

🔹 5. Complex Transactions and Contradictory Clauses

 In complex financial agreements with conflicting jurisdiction clauses:

o UBS Securities LLC v. HSH Nordbank AG ruled that jurisdiction is determined
by the clause in the agreement at the commercial center of the transaction.
o Technical clauses may not control overarching commercial disputes.

🔹 6. The “Torpedo” Problem under EU Lis Pendens Rule

 The Lis Pendens rule (Brussels I, Art. 27) can be misused to delay disputes:
o Parties may file first in an undesignated forum to stall the designated court's
jurisdiction.
 This tactic, known as a “torpedo”, undermines choice-of-court agreements and causes
legal uncertainty.
🔹 7. Brussels I Recast: Solution to Torpedo Tactics

 Article 29(2) of the Brussels I Recast:

o Requires non-designated courts to stay proceedings once the designated court is
seized.
o Designated courts have priority to determine jurisdiction.
 Also introduced a six-month time limit for the first-seised court to rule on its
jurisdiction.

🔹 8. Data Privacy and Jurisdiction Challenges

 In absence of jurisdiction clauses, courts rely on:

o National data protection laws, private international law, and connecting
factors like controller location or data center placement.
 Unequal data protection standards across borders make jurisdiction unpredictable in
cloud-based disputes.

🔹 9. EU Response: General Data Protection Regulation (GDPR)

 Article 75(2): Jurisdiction lies with courts of the controller/processor’s establishment

or the data subject’s residence.
 Reinforces general and special jurisdiction rules.
 Clarifies the connection between jurisdiction and location of cloud providers, even if
they only process (not control) the data.

🔹 10. Broadened Scope of “Establishment” under GDPR Proposal

 Includes processors, not just controllers.

 Also applies when services are offered or behavior monitored within the EU, regardless
of whether provider is based in the EU.

🔹 11. Complex Connecting Factors in Data Jurisdiction

 Courts may assess:

o Controller's location
o Data center placement
 o Place of harm or wrongful act
o Consumer's residence
o Use of cookies or trackers
 Jurisdiction depends on matter type: B2B, B2C, tort, contract—each triggering different
Brussels I Recast articles.

🔹 12. Special Jurisdiction for IP Rights in Cloud Services

 In IP cases:
o Harmful event’s place of occurrence or result governs jurisdiction (Brussels I,
Art. 5(3) / Recast Art. 7(2)).
 IP protection is harder due to:
o Multiple data center locations
o Software piracy risks
o Open-source vulnerability

🔹 13. Access Controls and Monitoring in IP Protection

 Cloud providers can’t be forced into general monitoring (ECJ rulings in SABAM v.
Netlog, Scarlet Extended).
 However, higher technological safeguards may be justified in cloud contexts.

🔹 14. SAS Institute Inc. v. World Programming Ltd – ECJ Ruling

 Functionality of software and programming languages not protected by copyright.

 Only expression (e.g., source code) is protected—encourages cloud interoperability
and innovation.

🔹 15. Final Recommendations

 Balance innovation vs. legal certainty.

 Standardize cloud service contracts, especially with uneven bargaining power.
 Modernize private international law for tech advancements like cloud services.
 National and international frameworks (e.g., EU and U.S. federal strategies) must
collaborate for consistent jurisdictional guidance.
 7; Luana Lund, Cyber-regulatory theories: between
retrospection and ideologies, JUNE 3,2019 The Official
Blog , ( 12th June 2021)
https://officialblogofunio.com/2019/06/03/cyber-
regulatory-theories-betweenretrospection-and-ideologies/
Andrew Murray’s Theory of Network Communitarianism (2007–2013)

 Murray rejects Lessig’s “pathetic dot” and proposes a more dynamic, communicative
model of regulation.
 Emphasizes community discourse over individual subjects; regulatees are members of a
communicative matrix, not isolated individuals.
 Legitimacy of regulation derives from the community, not external authority.
 Introduces "nodal governance" as a flexible alternative that adapts to cyberspace’s
complexity, replacing static, direct legal control with hybrid regulatory arrangements.

🧱 2. Theoretical Shift from Mechanistic to Communicative Regulation

 Earlier theories (Lessig’s modalities) are viewed as static and top-down.

 Murray draws from Luhmann and Habermas to advocate for communication-based
regulation within communities of belief and interaction.
 Reflects the evolution from law-centric control to social legitimacy-based
frameworks in internet governance.

🧭 3. Contemporary Scholars on Architecture and Power (2010s)

 Authors like Van Schewick, DeNardis, Mussiani, Ian Brown, and Christopher
Marsden emphasize how internet architecture itself is a mode of exercising power.
 Analysis of technical design choices (e.g., protocols, algorithms) becomes central to
understanding who controls and shapes digital spaces.

⚖️4. Theories Still Coexist and Remain Relevant

 Though presented as an evolution, all regulatory theories—libertarianism, paternalism,

hybrid models—remain theoretically valid today.
  The ideological fragmentation persists, meaning no universal consensus exists on how
cyberspace should be regulated.

💡 5. Universal Agreement on the Internet’s Transformative Nature

 All theorists, despite diverging on methods, agree on one fundamental idea: the
internet is uniquely transformative and reshapes political, social, economic, and legal
dynamics.
 The debate is not about whether to regulate but how and by whom.

🌐 6. Internet Regulation as an Ideological Battlefield

 Theoretical approaches differ not only in legal logic but also in ideological grounding.
 The current regulatory environment reflects a shifting ideological terrain, affecting even
traditional political and legal schools of thought.

📚 7. Baldwin, Cave, and Lodge on Multi-Level Theorization

 Internet regulation theories exist at multiple levels of abstraction and offer different
explanatory functions depending on context.
 They propose that ideologies act as interpretative lenses, shaping how scholars and
policymakers perceive and approach internet governance.

8: Ruth Miller, Personal Jurisdiction: An Architectural

Problem, 19 Lewis & Clark L. Rev. 791 (2015)
1. Jurisdiction as Executable Speech (Not Spatial)

 Jurisdiction historically stemmed from “speaking the law”, not drawing borders. Miller
revives this medieval concept to argue that legal authority is performative—created
through speech acts that “execute” law, similar to code in computation.
 This challenges the entire spatial/network contact framework dominant in traditional
jurisdiction analysis.

2. Architecture vs. Space: A New Jurisdictional Metaphor

  Miller proposes replacing the metaphor of “space” or “networks” with “architecture”—
understood as a computational and symbolic process.
 Jurisdiction is a result of design, planning, iteration, and data processing, not mapping
or connectivity.

🔣 3. Algorithmic Architecture in Law

 Draws from Luciana Parisi’s theory of “algorithmic architecture”: law behaves like
code—it processes input (facts, acts) into legal environments.
 International Shoe is reinterpreted not as a spatial decision, but as one where jurisdiction
is built through iterative, algorithmic legal speech.

🌀 4. Extraspatiality: Law Beyond Borders or Networks

 Introduces the concept of “extraspatial” environments—legal spaces built from

language and computation, not geography or online connectivity.
 Jurisdiction becomes a symbolic and abstract structure, not a container with
measurable borders or flows.

🧠 5. Jurisdictional Crises = Information Processing Failures

 Miller reframes what courts call “crises in jurisdiction” as failures of data processing,
not failures of spatial logic.
 Example: Nicastro’s “single machine” problem represents an algorithm failing due to
insufficient input, not a failure of spatial contact.

🔁 6. Iteration and Cascade Logic as Basis for Jurisdiction

 Jurisdiction builds when legal and commercial speech iterates (e.g., continuous
corporate activity, like salesmen in International Shoe).
 Miller argues these are computational feedback loops, not connections or flows in
space.

⚖️7. Sovereignty as Architectural Sovereignty

  Jurisdiction affirms sovereign power not by territorial control but by creating lawful
environments through structured processing.
 This revives a pre-modern model where legal authority is the power to “speak” reality
into form.

🔄 8. Singularities and Infinities as Jurisdictional Threats

 Nicastro and Daimler show how irrational inputs (e.g., one-off events or countless
contacts) disrupt jurisdiction-building.
 These cases aren't about being out of touch with tech but about computational
breakdowns, akin to coding loops or unprocessable data.

💬 9. Speech as a Dual Tool: Abstract and Concrete

 Law (like code) blurs the line between symbol and substance: speech isn't just
representational—it constructs legal environments.
 Hence, legal reasoning = active architecture, not descriptive mapping.

🔎 10. Critique of “Cyberspace” as a Legal Framework

 Miller critiques the popular framing of cyberspace as a space—arguing instead that

computation lacks spatial properties entirely.
 “Computational space” is a contradiction—a reminder that spatial metaphors may be
obscuring legal truths.

📐 11. Walden, Nicastro, and Daimler as Architectural Failure Cases

 Walden and Daimler don’t fail because of outdated legal ideas, but because they reveal
limits of algorithmic processing (e.g., no clear affiliation or single triggering act).
 These are not jurisdictional regressions, but demonstrations of jurisdiction’s intrinsic
irrationality.

🧭 12. Reframing the “Good vs. Bad” Case Binary

 Challenges the moralistic reading that International Shoe is “good” and Nicastro is
“bad.”
  Instead, says both cases reflect architectural logics, but Nicastro unsettles us because it
exposes the chaotic, irrational potential of jurisdictional processing.

9: Teressa Scassa and Robert J Currie , New First

Principles - Assessing the Internet's Challenges to
Jurisdiction, 42 Geo. J. Int'l L. 1017 (2010-2011)
I. Redefining Jurisdiction in a Borderless Internet Age

1. The Internet Challenges the Westphalian Model

o The traditional view of state sovereignty based on exclusive territorial
jurisdiction is disrupted by the borderless and decentralized nature of the
Internet.
o States must often act without a clear territorial nexus, forcing re-evaluation of
long-standing jurisdictional principles.
2. Sectoral Fragmentation of Legal Responses
o Legal scholarship often isolates jurisdiction by topic (e.g., cybercrime, e-
commerce, torts), which obscures systemic understanding.
o A holistic approach across legislative, judicial, and executive domains is
necessary to comprehend jurisdiction in cyberspace.

⚖️II. Public Law Foundation of Jurisdiction

3. Jurisdiction is Fundamentally a Public Law Concept

o Even when resolving private disputes, courts act as public organs of the state,
and their jurisdictional acts remain state functions.
o Arbitration, though often called “jurisdiction,” is better described as private
competence, and not public law jurisdiction.
4. Threefold Structure of State Jurisdictional Powers
o Jurisdiction is exercised via:
 Legislative (Prescriptive) – making and applying law
 Executive (Enforcement) – giving effect to law, including investigation
 Judicial (Adjudicative) – hearing and deciding disputes
o Internet regulation often involves simultaneous engagement of all three
branches.

🌍 III. International Law of Jurisdiction (Customary Law Focus)

5. International Law as the Real Battleground for Internet Jurisdiction

 o Unlike domestic jurisdiction, international jurisdiction governs inter-state
competence and conflict, making it central for cyberspace regulation.
o Key norm: a state may not infringe another’s sovereignty when exercising
jurisdiction.
6. Concurrent Jurisdiction and Legal Friction
o The Internet increases instances of overlapping jurisdictional claims, e.g., when
multiple states have legal authority over a single online act.
o States often negotiate ad hoc, but customary international law provides principles
to manage and prioritize these claims.

📜 IV. Five Customary International Law Bases of Jurisdiction

7. Territorial Principle (Primary Principle)

o A state has plenary authority over persons, conduct, and things within its
borders—including territory, airspace, and waters.
8. Nationality Principle
o A state may regulate its citizens’ conduct globally, regardless of where the act
occurs—widely accepted in civil law countries.
9. Protective Principle
o Allows states to exercise jurisdiction over foreign acts that threaten state
security (e.g., espionage, counterfeiting).
10. Universal Jurisdiction

 Permits all states to regulate grave crimes (e.g., genocide, piracy) regardless of where
they occur or who commits them.

11. Passive Personality Principle

 Permits jurisdiction where a state’s nationals are victims, even if the event occurred
abroad—commonly used in anti-terrorism laws.

🧭 V. Trends and Legal Tests in Modern Jurisdiction

12. Emerging “Substantial Connection” Test

 Increasing trend: state jurisdiction over extraterritorial acts must show a bona fide
connection between the matter and the asserting state.

13. Reasonableness as a Global Jurisdictional Filter

 While controversial in terms of binding force, “reasonableness” is used to test the

proportionality and legitimacy of extraterritorial claims.
🚔 VI. Enforcement Jurisdiction: Most Restrictive Domain

14. Enforcement Requires Explicit International Authorization

 A state cannot enforce its laws (e.g., arrest, investigation) in another state without
express permission or legal basis (e.g., treaty).

15. Strict Limits on Investigative and Coercive Powers Abroad

 No unilateral police action is allowed across borders—enforcement must respect host

state sovereignty, even in Internet crime contexts.

🤝 VII. Treaties and Suppression Conventions as Coordination Tools

16. Treaty-Based Coordination of Jurisdiction

 States increasingly rely on treaties to manage conflicts, e.g., UN Conventions on

Transnational Organized Crime and Terrorist Bombings.

17. Suppression Conventions and Cybercrime Treaties

 These treaties require states to assert and accept extraterritorial jurisdiction,

allowing coordinated enforcement and reducing friction.

18. Cybercrime Convention (Budapest Convention)

 The most relevant treaty for Internet-related jurisdiction, promoting cooperation in

investigation, prosecution, and data access.

1. Redefining Jurisdiction in the Internet Age

 The Internet’s borderless nature challenges the Westphalian model of exclusive state
sovereignty.
 States increasingly assert jurisdiction over issues with partial or uncertain territorial
links, such as cybersecurity and global commerce.
 Jurisdiction must now adapt to transnational digital realities, prompting reevaluation
of traditional legal frameworks.

⚖️2. Holistic and Multi-Branch View of Jurisdiction

  Jurisdiction is no longer solely about courts; it includes legislative, executive, and
adjudicative branches.
o Legislative jurisdiction: authority to make laws.
o Executive jurisdiction: enforcement and investigations.
o Adjudicative jurisdiction: courts resolving disputes.
 Internet jurisdiction often involves overlapping powers among these branches.

3. Public Law Nature of Jurisdiction

 Jurisdiction is inherently a public law function, even when resolving private law
disputes.
 Courts engaging in private international law disputes still act in a public capacity,
reflecting the state's coercive power.

🌐 4. International Law of Jurisdiction

 Focus is on customary international law, which governs when a state may exercise
authority over persons, places, or events.
 Four key principles of extraterritorial jurisdiction:
o Nationality principle: jurisdiction over nationals abroad.
o Protective principle: protection of state security.
o Universality principle: global jurisdiction over serious crimes (e.g. piracy,
genocide).
o Passive personality principle: jurisdiction based on harm to a state’s national,
even if the act occurs elsewhere.

⚖️5. Enforcement vs. Legislative Jurisdiction

 Legislative jurisdiction allows states to make laws with extraterritorial effect under
international law if a substantial connection exists.
 Enforcement jurisdiction is stricter—no state may enforce its laws in another state
without permission.
o Example: one state's police cannot investigate or arrest in another state's territory
unless agreed upon.

🤝 6. Managing Concurrent Jurisdiction

  Concurrent jurisdiction arises when multiple states have legal claims over the same
matter.
 Resolution often occurs via:
o Diplomatic agreements (e.g., deferring prosecution).
o Treaties that coordinate jurisdiction (e.g., Cybercrime Convention).
o Use of reasonableness and substantial connection tests to justify jurisdiction.

🧱 7. Treaties as Jurisdictional Tools

 Suppression conventions and bilateral treaties help states:

o Harmonize laws.
o Accept and coordinate extraterritorial enforcement (e.g., anti-terrorism,
cybercrime).
 Treaties often oblige states to prosecute or extradite offenders (e.g., aut dedere aut
judicare).

📊 8. Internet’s Impact on Private and Public International Law

 The line between public and private international law blurs in the digital age.
o Public laws (e.g. data protection) are enforced through private litigation.
 Need for predictability and coordination has pushed national courts to refine private
international law doctrines for online activity.

🔍 9. Fragmented and Evolving Frameworks

 The internet complicates jurisdiction by enabling simultaneous presence in multiple

territories.
 International law struggles to keep pace, prompting scholars to ask whether entirely new
jurisdictional principles are required for the digital era.

1. Multifaceted Concept of Jurisdiction

 Jurisdiction is no longer limited to judicial power; it also includes:

o Legislative jurisdiction: power to prescribe rules.
o Executive jurisdiction: power to enforce.
o Adjudicative jurisdiction: power to resolve disputes.
 A state’s legal reach over online activities involves coordinated action across all three
branches.
2. Jurisdiction as a Public Law Framework

 Even in private disputes (like e-commerce), public institutions (e.g., courts) enforce or
oversee outcomes.
 This reinforces that jurisdiction remains an extension of state authority—not a private
contractual matter.

3. Territoriality vs. Extraterritorial Reach

 The starting point for all jurisdictional claims is territorial sovereignty.

 But due to the non-territorial nature of the Internet, states now regularly invoke:
o Nationality principle (acts by nationals abroad).
o Protective principle (national security threats).
o Universality principle (global crimes).
o Passive personality principle (victim-based jurisdiction).

4. Shift in Enforcement Jurisdiction

 States may not enforce their laws inside another state without express consent.
 This includes:
o Investigations.
o Arrests.
o Data seizures.
 Violating this rule can infringe upon another state’s sovereignty.

5. Concurrent Jurisdiction and State Coordination

 Internet-based acts often trigger overlapping jurisdiction among multiple states.

 To avoid conflicts, states:
o Use “reasonableness” and “substantial connection” tests.
o Rely on ad hoc diplomatic arrangements.
o Establish treaty-based obligations (e.g., aut dedere aut judicare—extradite or
prosecute).

6. Rise of Hybrid Models

 National courts and international law are increasingly blending public and private legal
frameworks.
  Example: data protection laws now often rely on private enforcement in foreign
courts, applying public law principles.

7. Suppression Conventions as Control Mechanisms

 Treaties like the European Cybercrime Convention provide:

o Shared legal definitions.
o Jurisdictional bases.
o Mutual recognition of enforcement rights.
 They aim to harmonize cyber laws across borders to resolve fragmented jurisdictional
claims.

8. Challenges to Classical Models

 The article questions whether classical jurisdiction doctrines (like territoriality or passive
personality) are sufficient in a digital context.
 It calls for possible new jurisdictional “first principles” that account for the unique
features of cyberspace:
o Simultaneity of presence.
o Multi-nodal architecture.
o Decentralized governance.

V. STATE RESPONSES: NEW INSIGHTS

A. Unilateral Territorial Measures

 States have increasingly relied on qualified territoriality, asserting jurisdiction over

internet activities affecting their territory—even if actors are abroad.
 Actions like content filtering (e.g., Yahoo! France case) are seen as creating legitimate
extraterritorial spillovers, not actual extraterritorial jurisdiction.
 Courts may refuse to enforce judgments that infringe domestic constitutional values (e.g.,
First Amendment in U.S. vs. French censorship order).
 Key idea: Indirect extraterritorial effects are tolerated more than direct enforcement
across borders.

B. Jurisdictional Conflict

 Conflicts emerge due to overlapping jurisdiction claims, especially in cybercrime.

 Example: Gorshkov & Ivanov case – FBI lured Russian hackers to U.S., triggering
diplomatic protests over sovereignty violations.
 Other notable disputes:
o Antigua vs. U.S. at WTO over online gambling laws.
 o France vs. Yahoo! over Holocaust denial content—conflict of speech protection
vs. hate speech laws.
 Cyber-attacks by governments raise concerns over the weaponization of jurisdiction
through the Internet.

C. Formal Cooperation and Harmonization

 Cybercrime Convention (Council of Europe):

o Balances state sovereignty with cross-border cooperation.
o Emphasizes territorial jurisdiction, while extraterritorial access (Article 32) is
limited to open-source data or with consent.
 Private international law initiatives:
o UNCITRAL & Hague Conference struggle to harmonize e-commerce
jurisdiction.
o Most success: Hague Convention on Choice of Court Agreements (2005).
 Online Dispute Resolution (ODR):
o Proposed by UNCITRAL for low-value, high-volume cross-border e-commerce
disputes.
o Shifts jurisdiction to private adjudication mechanisms, with state enforcement
reserved.

📌 VI. RECOMMENDATIONS: POLICY PRECEPTS

A. First Principles Proposed by Authors

1. Notice to Individuals: Internet users must know which jurisdictions’ laws apply to them.
2. Internet as a Res Communis or Common Heritage:
o A shared domain not owned by one state but simultaneously within all states’
jurisdiction.
o Collective governance required, with both state and civil society participation.
3. Democratic Accountability: Architecture and regulation of the internet should involve
inclusive governance models.
4. Sector-Based Jurisdiction Development: International law of jurisdiction is unlikely to
evolve uniformly—instead, sector-specific coordination will reshape customary law.
5. Reliable E-Commerce Frameworks:
o Calls for secure digital environments with enforceable, neutral dispute
resolution systems.

B. Forecasts and Policy Innovation

 Kohl’s Dichotomy: Future of jurisdiction lies between:

o “More global law” (harmonization and treaties),
o Or a “less global Internet” (localized, tech-enabled regulation).
 Schultz’s Dual Track:
 1. Vertical track: States use tech (like geofencing) to assert territorial jurisdiction.
2. Horizontal track: Private e-commerce platforms develop self-contained legal
orders (e.g., eBay dispute resolution).
Internet as a Venue for Deliberative Democracy:

o Emphasizes transnational norm-setting through participatory processes.

o Reflects a shift from state-centric governance to multi-stakeholder frameworks.

MISSING : Information Technology (Intermediary

Guidelines and Digital Media Ethics Code) Rules, 2021,
(ii) Information Technology (Reasonable Security
Practices and (iii) Procedures and Sensitive Personal Data
or Information) Rules, 2011 (iv) Information Technology
Act 2000
WEEK 9-10
1;Symeon C. Symeonides, Rome II and Tort Conflicts: A
Missed Opportunity, The American Journal Of
Comparative Law, Vol 56 173
STATE RESPONSES TO INTERNET JURISDICTION
CHALLENGES – FINAL NOTES

I. Territorial Regulation with Extraterritorial Effects

 States often regulate Internet content and access within their own territory, leading to
spillover effects abroad.
 Example: France imposed filtering on Yahoo! to block Nazi memorabilia—though
Yahoo! is a U.S. company.
o These are termed “extraterritorial spillovers,” which are politically contentious
but legally legitimate under international law.
II. Limits of Extraterritorial Jurisdiction

 True extraterritorial enforcement (like sanctions or criminal prosecution for actions

abroad) is rare and highly sensitive.
 Most states avoid such jurisdiction due to sovereignty concerns.
 Instead, they enforce domestic laws that happen to have international impacts.

III. Jurisdictional Conflict Examples

 Gorshkov & Ivanov Case: FBI lured Russian hackers to the U.S.; Russia claimed
sovereignty violation.
 U.S.–Antigua Gambling Dispute: WTO ruled U.S. restrictions violated free trade,
awarded Antigua rights to pirate U.S. content.
 Yahoo! in U.S. vs. French Rulings: U.S. refused to enforce France's speech-restricting
order due to First Amendment.

IV. International Cooperation & Cybercrime Convention

 The Council of Europe Convention on Cybercrime promotes:

o Harmonized laws (e.g., hacking, child porn, IP theft).
o Mutual legal assistance between states.
o Article 32 allows foreign data access only if:
 It’s publicly available, or
 Voluntary access is given by a lawful data holder.

V. Challenges to Harmonization in Private Law

 UNCITRAL and Hague Conference have struggled to:

o Create global rules for jurisdiction, recognition, and enforcement.
o So far, only limited success (e.g., Convention on Choice of Court Agreements,
2005).
 Online Dispute Resolution (ODR) promoted as alternative:
o Efficient for low-value cross-border disputes in e-commerce.
o Reduces state jurisdiction; enforcement still depends on national courts.

VI. Emerging First Principles

 No new legal doctrines but policy-level shifts are forming:

 1. Users need legal clarity (about which laws apply online).
2. Internet seen as a "shared resource" (res communis or common heritage).
3. Collective governance is essential, not state monopoly.
4. Democratic accountability needed in internet governance.
5. Sector-specific legal evolution will reshape international jurisdiction.
6. Stable e-commerce laws + fair ODR systems are crucial.

VII. Future Scenarios and Predictions

 Kohl’s Model:
o States will choose either:
 "More global law" (harmonized treaties), or
 "Less global Internet" (state-controlled through tech filters).
 Schultz’s Theory:
o Internet will divide into:
 Vertical domains: regulated by state laws.
 Horizontal domains: governed by private online communities (e.g.,
eBay, Amazon).
 Deliberative democracy: Internet allows multi-stakeholder norm creation, beyond
state boundaries.

1. Unilateral Territorial Measures (with Extraterritorial Spillover)

 States regulate Internet content within their borders but effects spill across borders.
 These are “extraterritorial spillovers”, not true extraterritorial jurisdiction.
 Example: France v. Yahoo! – France’s filtering order caused indirect effects on a U.S.
company, but was still legally justified.

2. Enforcement vs. Legislative Jurisdiction

 True power lies in enforcement jurisdiction (not just passing laws).

 States are cautious about actual extraterritorial enforcement due to sovereignty
conflicts.
 Most state regulations are territorial with cross-border impact, not true extraterritorial
claims.

3. Jurisdictional Conflict Scenarios

 Cybercrime and hacking often trigger state disputes:

 o E.g., Gorshkov and Ivanov: FBI accessed a Russian hacker's data remotely—
Russia protested but had no enforcement recourse.
o Antigua v. U.S. WTO Case: Antigua allowed copyright infringement as
retaliation for U.S. blocking online gambling.
o Courts refuse enforcement of foreign judgments if they violate constitutional
rights (e.g., free speech in the U.S.).

4. Formal International Cooperation

 Cybercrime Convention (Council of Europe):

o Encourages harmonized national laws (e.g., hacking, online IP theft).
o Article 32 allows limited access to cross-border data only if:
 Publicly available, or
 Access is voluntarily given by lawful possessor.

5. Harmonization Challenges in Private Law

 UNCITRAL and Hague Conference failed to create a full treaty on jurisdiction.

o Only partial success with 2005 Convention on Choice of Court Agreements.
o UNCITRAL ODR (Online Dispute Resolution) proposed for low-value cross-
border e-commerce disputes.

6. First Principles for Internet Jurisdiction (Policy Proposals)

 No new legal doctrine—only refined principles:

o Jurisdiction is a tool of policy and should provide clear notice of applicable law
to individuals.
o The Internet as res communis – a shared resource requiring collective
governance.
o Democratic accountability in digital governance is essential.
o Sector-based harmonization (rather than global principles) is the future path.

7. Predictions: Two Models for the Future

a. Kohl’s View:

 Two strategies:
 1. “More global law” – treaty-based harmonization of jurisdiction and substantive
law.
2. “Less global Internet” – territorial zoning using tech (e.g., IP-based filtering).

b. Schultz’s Dual Streams:

 Internet will split into:

o Vertical Stream: State-regulated zones (geo-targeted content).
o Horizontal Stream: Self-regulated online communities (eBay, Amazon) with
private norms and dispute systems.

8. Deliberative Democracy & Governance

 Internet is an ideal setting for participatory global governance.

 Emphasizes equal stakeholder participation and inclusive policy-making beyond state
dominance.

9. Conclusion: Status Quo and Emerging Trends

 No truly “new” legal principles yet.

 But growing need to address concurrent jurisdiction and reduce uncertainty.
 Technology is helping re-enforce traditional jurisdictional boundaries (via geo-
fencing, ISP filters).
 Yet, global dialogue and private governance models are steadily increasing.

A. STATE RESPONSES TO JURISDICTIONAL CHALLENGES

1. Erosion of State Jurisdiction

 Internet challenges the practical capacity of states to govern activities impacting their
territory.
 Private arbitration by tech corporations (e.g., Facebook, Google) reduces the state’s
adjudicative authority.
 Citizens gain empowerment through information access, reducing state control in
authoritarian and democratic regimes alike.

2. Three Patterns of State Response

 1. Participation in Internet architecture governance (e.g., ICANN).
2. Facilitating normative ordering (legal rules for online behavior).
3. Extending reach of domestic laws onto global Internet platforms.

B. UNILATERAL TERRITORIAL MEASURES

3. Territorial Regulation with Extraterritorial Spillover

 Example: France imposed Yahoo! to filter Nazi memorabilia – affecting U.S. business
but justified as domestic enforcement.
 Such measures are not true extraterritorial jurisdiction but territorial actions with
cross-border effects.
 Legal vs. Political: Legal problems arise from extraterritorial jurisdiction; political
tensions arise from spillovers.

4. Legitimacy of Spillovers

 Goldsmith: These spillovers are inevitable, common, and legitimate.

 But still demand comity-based restraint or harmonization efforts to avoid overreach.

5. Limits of Enforcement Jurisdiction

 Legislative jurisdiction is meaningless without enforceability.

 Enforcement jurisdiction is the real test of state power.
 Most states avoid exercising enforcement beyond their borders due to international law
constraints.

C. INTER-STATE CONFLICTS

6. Cybercrime Triggers Jurisdictional Conflict

 Gorshkov & Ivanov case: FBI remotely accessed Russian servers; Russia accused U.S.
of sovereignty violation.
  U.S. courts often reject foreign judgments on constitutional grounds (e.g., First
Amendment protections in Yahoo! case).
 WTO case: Antigua sanctioned U.S. over online gambling restrictions—was awarded
permission to violate U.S. IP rights as remedy.

7. Extreme Overreach: Cyber Attacks

 Enforcement actions like state-sponsored cyberattacks risk violating both foreign

domestic laws and international law (even laws of war).

D. FORMAL COOPERATION & HARMONIZATION

8. Cybercrime Convention (Council of Europe)

 Harmonizes national laws on cybercrime and provides tools for mutual legal
assistance.
 Restricts transborder access to:
o Publicly available data,
o Or consent-based access from a legal owner (Article 32).

9. UNCITRAL’s Online Dispute Resolution (ODR)

 Targets small-value, high-volume e-commerce disputes.

 Reduces the cost and inefficiency of cross-border litigation.
 State jurisdiction ceded to private mediators; enforcement remains territorial.

10. Limited Success in Private Law Treaties

 Hague Conference failed to create a full jurisdiction and enforcement treaty.

 Only succeeded in Choice of Court Agreements Convention (2005).

E. EVOLUTION OF LEGAL THINKING

11. No New Principles Yet, But Normative Shifts Emerging

 Jurisdiction remains rooted in sovereignty and qualified territoriality.

 Internet is evolving into a res communis or common heritage model.
 Enforcement remains local, but prescriptive and adjudicative authority is diffusing.

12. Kohl’s Future Models

1. More Global Law:

o Harmonized laws and treaties.
2. Less Global Internet:
o Territorial “zoning” (geo-fencing, IP filtering).

13. Schultz’s Prediction: Two Internet Streams

 Vertical Stream: State-regulated (public law).

 Horizontal Stream: Privately governed platforms with autonomous legal norms (e.g.,
eBay dispute resolution system).

F. DEMOCRATIC GOVERNANCE & DELIBERATIVE MODELS

14. Need for Democratic Accountability

 Future Internet regulation requires:

o Inclusive stakeholder participation,
o Transparency and civil society input,
o Democratic oversight of infrastructure and law.

15. Deliberative Democracy Online

 Internet enables transnational deliberation—collective decision-making that is

legitimate and participatory.
 Ideal for building global consensus on jurisdictional policies.
2: Milena Sterio, Corporate Liability for Human Rights
Violations: The Future of the Alien Tort Claims Act, 50
Case W. Res. J. Int'l L. 127 (2018)
rosion of State Control & Rise of Private Power

 Internet undermines states' ability to exercise jurisdiction due to:

o Globalized operations of corporations like Google and Facebook.
o Preference for private arbitration, bypassing court systems.
o Citizen empowerment from increased access to global information.

II. State Responses to Internet Jurisdiction Challenges

A. Unilateral Territorial Measures

 States regulate online content within their territory even if it has global impacts.
 Example: France v. Yahoo! – territorial filtering imposed, with spillover effects.
 Not true extraterritoriality, but accepted as legitimate under qualified territoriality.
 Spillover effects are common and often unavoidable; courts may still refuse to enforce
such foreign judgments (e.g., U.S. courts citing the First Amendment).

B. Conflict

 Cybercrime enforcement has led to inter-state tension:

o Example: Gorshkov case – U.S. accessed Russian server; Russia claimed
sovereignty breach.
o WTO Case: Antigua vs. U.S. – U.S. blocked online gambling; Antigua retaliated
through WTO-approved IP rights violation.
 Conflict emerges due to enforcement jurisdiction limits and value clashes (e.g., free
speech vs. content control).

C. Formal Cooperation and Harmonization

 Cybercrime Convention (Council of Europe):

o Encourages harmonization of cybercrime laws.
o Limits cross-border enforcement (e.g., Article 32 allows access to data only if
public or voluntarily disclosed).
 Private Law Harmonization Efforts:
o UNCITRAL and Hague Conference tried to harmonize rules but had limited
success.
o ODR systems proposed for small-value e-commerce disputes to bypass courts.
III. Key Policy Trends and Legal Forecasts

A. No Emergence of New Jurisdictional Principles

 Despite novel challenges, states still rely on traditional tools like territoriality, nationality,
and protective principles.
 Enforcement remains state-based and territorial.

B. Evolving Models of Global Internet Governance

1. Kohl’s Dual Models:

o “More global law” (harmonized legal standards).
o “Less global Internet” (geographical filtering and zoning).
2. Schultz’s Twin Streams:
o Vertical stream: State-controlled online zones.
o Horizontal stream: Private e-commerce ecosystems with self-governing norms.

IV. First Principles for the Future (Policy Guidelines)

1. Notice: Individuals must have clear knowledge of applicable laws and jurisdictional
reach.
2. Global Commons: Internet may be treated as a shared global resource (res communis).
3. Governance Beyond States: Calls for stronger public-private partnerships and civil
society involvement.
4. Democratic Accountability: Internet governance should ensure transparency and
participation.
5. Specialized Solutions: Sector-based coordination will guide the evolution of
international jurisdiction norms.
6. E-Commerce Protections: Users require secure infrastructure and fair cross-border
dispute resolution.

WEEK -11
1: Khanderia Saloni, Indian Private International Law vis
a vis party autonomy in the choice of law, 18(1)
OXFORD UNIVERSITY COMMONWEALTH LAW
JOURNAL (2018).
1. Core Concept: Party Autonomy

 Party autonomy allows parties in international commercial contracts to choose the law
that governs their contract.
 This concept has become central to private international law globally, replacing older
doctrines like:
o Lex loci contractus (place of contract)
o Lex loci solutionis (place of performance)

📌 2. Indian Legal Position (Current Status)

 Indian private international law supports subjective interpretation of party autonomy.

 Parties can choose any legal system, even one unconnected with the contract, as long
as:
o The choice is bona fide
o It does not contravene Indian public policy
o It does not violate overriding mandatory rules

This aligns India with international best practices and the Hague Principles on Choice of Law
(2015).

📌 3. Evolution of Indian Case Law

Earlier Approach (Restrictive)

 Earlier cases (e.g., British India Steam Navigation, Delhi Cloth Mills) implied parties
must choose laws connected to the contract.
 Influenced by Cheshire’s objective theory (requirement of “real connection” between
chosen law and contract).

Modern Approach (Liberalized)

 Supreme Court in NTPC v. Singer (1992) marked a shift: upheld party autonomy
without requiring geographic connection.
 Modi Entertainment v. WSG Cricket (2003) confirmed that parties can select neutral
laws, even if unrelated to India.
📌 4. Judicial Uncertainty: What Is “Bona Fide” & “Public Policy”?

 Indian courts lack clear criteria to define:

o When a choice of law is not bona fide
o What exactly constitutes a public policy violation
 Scholars suggest using:
o Indian Contract Act sections (like §§23, 27, 28) for public policy indicators
o Hague Principles, Article 11, for guidance

📌 5. Non-State Laws (e.g., Lex Mercatoria, UNIDROIT Principles)

 Indian courts have not clearly ruled on whether parties can choose non-state rules as
governing law.
 Current law supports this only in arbitration (under Arbitration and Conciliation Act,
1996, §28).
 Litigation acceptance is uncertain; only one Delhi High Court case National Highways
Authority v Sheladia briefly mentions it in obiter.
 Suggestion: Courts may follow Hague Principles Article 3, which allow non-state
norms if they are neutral, widely accepted, and not contrary to public policy.

📌 6. Recommendations

 Indian judiciary should:

o Define ‘bona fide’ more precisely in future judgments.
o Accept non-state rules as valid choices of law in litigation, where appropriate.
o Refer to international instruments like the Hague Principles to evolve domestic
rules

2: Volker Behr, Rome I Regulation A—Mostly—Unified

Private International Law Of Contractual Relationships
Within—Most—Of The European Union, JOURNAL OF
LAW AND COMMERCE (Vol. 29) 233
1. Overview
  The article critiques the Indian legal approach to party autonomy in international
contracts.
 Focuses on whether India allows parties to choose any governing law, including
foreign or non-state legal systems, and to what extent.
 It compares Indian jurisprudence with the Hague Principles on Choice of Law in
International Commercial Contracts (2015).

⚖️2. Key Doctrinal Contributions

A. Expansion of Party Autonomy

 Indian law permits parties to choose the governing law freely, even if there’s no real
connection between the contract and the chosen law.
 This marks a departure from earlier “objective” theories like lex loci contractus and
lex loci solutionis.

B. Subjective Approach in India

 Indian courts now apply a subjective interpretation:

o Focuses on actual intention of the parties
o Permits selection of any foreign legal system
 However, this is subject to:
o Public policy
o Bona fide choice
o Indian mandatory rules

⚠️3. Limitations in Indian Legal Framework

A. Lack of Statutory Codification

 Unlike civil law countries, India does not have a codified private international law
regime.
 Relies heavily on case law, creating uncertainty and inconsistency.

B. Undefined Key Terms

 Indian courts have not clearly defined:

o What qualifies as a “bona fide” choice
o The exact contours of “public policy”
 Leads to judicial discretion and unpredictability.

C. Use of Indian Contract Act

  Sections like §23 (unlawful consideration) and §28 (restrictions on legal proceedings)
help identify violations of public policy.
 Still, there is no direct guidance in these provisions about foreign law choices.

🌍 4. Non-State Law and India’s Position

 Globally, there's increasing recognition of non-state norms like:

o Lex mercatoria
o UNIDROIT Principles
 Hague Principles (Art. 3) allow these norms if they are:
o Widely accepted
o Neutral
o Not against public policy

Indian Legal Position:

 Litigation: No express judicial endorsement of non-state law as governing law.

 Arbitration: Allowed under §28 of the Arbitration and Conciliation Act, 1996.
 Only one obiter reference (Delhi High Court, 2021) touches this issue.

✅ 5. Recommendations for Indian Law

1. Adopt the Hague Principles to codify and modernize Indian private international law.
2. Explicitly recognize party autonomy to choose non-state law even in courts (not just
arbitration).
3. Create clear judicial guidelines on:
o How to assess bona fides of law selection
o What counts as public policy violations
4. Provide a statutory framework, reducing reliance on fragmented case law.

🧠 6. Critical Insights

 The article emphasizes that flexibility and clarity in party autonomy enhance India’s
attractiveness as a business jurisdiction.
 Calls for a proactive judicial role in shaping cross-border commercial predictability.

📋 Quick Summary Table

 Theme Current Indian Position Suggested Reform
Permitted, even with Codify in statute; follow Hague
Party Autonomy
unconnected laws Principles
✅ Should be accepted (as per Hague Art.
Non-State Law ❌ Not accepted in litigation
3)
Define using Indian Contract Act +
Public Policy Limits Vague; no clear test
Hague Art. 11
Bona Fide
Unclear definition Judicial clarification needed
Requirement
Governing
Based on case law only Recommend statutory codification
Framework

📍 1. Central Thesis

India has embraced the doctrine of party autonomy in international commercial contracts,
allowing parties to choose the governing law. However, this practice remains judicially
constructed, with no statutory codification and uncertain boundaries, especially regarding:

 “Bona fide” limitations,

 “Public policy” exceptions,
 Use of non-state laws.

⚖️2. Core Legal Position

 Indian courts allow freedom of choice of governing law, even if the law has no
connection to the transaction, as long as:
o The choice is bona fide
o It does not contravene public policy
o It respects Indian mandatory rules
 This approach aligns India with modern international practices, including the Hague
Principles on Choice of Law (2015).

📚 3. Key Developments in Case Law

A. Liberal Interpretation

 NTPC v. Singer (1992) and Modi Entertainment v. WSG (2003) confirm that parties
may choose any foreign law.
 Rejects the older English common law requirement of a “real and substantial connection”
with the chosen law.
B. Continuing Uncertainties

 Courts haven’t defined what counts as a “bona fide” choice or what violates Indian
“public policy”.
 Raises unpredictability in cross-border commercial disputes.

📌 4. Non-State Law in Indian Courts

A. Global Trend

 Instruments like UNIDROIT Principles and lex mercatoria are gaining recognition
worldwide.
 Hague Principles (Art. 3) support application of such rules when:
o They are widely accepted
o They are neutral
o They do not violate public policy

B. India’s Position

 Arbitration: §28 of the Arbitration and Conciliation Act, 1996 permits application of
non-state rules.
 Litigation: Courts have not accepted non-state law as a governing law in contractual
disputes.
 The Delhi High Court (2021) briefly mentioned this issue in obiter dicta, without firm
endorsement.

⚠️5. Structural Weaknesses in Indian Law

Issue Current Situation Consequence

No codified PIL
Based only on case law Fragmented, inconsistent rulings
regime
"Bona fide" and "public policy" not Creates legal uncertainty and
Undefined concepts
judicially settled discretion
Non-state law Accepted in arbitration, unclear in Limits innovation in contract
validity litigation design

✅ 6. Recommendations by the Author

1. Codify party autonomy into a structured private international law statute.

2. Adopt the Hague Principles to:
 o Legitimise non-state legal systems in both courts and arbitration.
o Provide international uniformity.
3. Define “public policy” and “bona fide” based on:
o Indian Contract Act principles (e.g., §23, §27, §28).
o Hague Principle Article 11 (limits based on public interest, human rights, etc.).
4. Allow neutral, transnational laws like UNIDROIT in court-based litigation for
commercial contracts

3: GP Miller, T Eisenberg, The Market for Contracts, 30

Cardozo L. Rev. 2073 (2008-2009) Erwin Spiro, The
Evolution of the Closest (Most Significant) Connection in
the Conflict of Laws53 THRHR 74 (1990)
The article analyses the extent to which Indian private international law (PIL) recognizes party
autonomy—i.e., the ability of contracting parties to freely select the governing law in cross-
border contracts.

📌 2. Key Argument

India’s courts recognize party autonomy, allowing parties to choose foreign law as the
governing law, even when that law has no territorial nexus to the contract. However, this
recognition:

 Lacks statutory codification;

 Faces interpretive inconsistencies, particularly regarding:
o What constitutes a “bona fide” choice;
o The boundaries of “public policy”;
o Whether non-state laws (like UNIDROIT principles or lex mercatoria) can be
applied.

⚖️ 3. Legal Evolution in India

 Early Indian law followed the English common law requirement of a real connection
with the chosen law (e.g., Delhi Cloth Mills).
 The modern subjective approach allows choice of law regardless of connection, as
confirmed in:
o NTPC v. Singer (1992) – Party autonomy upheld;
 o Modi Entertainment v. WSG (2003) – Reinforced the freedom to choose neutral
law.

🚫 4. Unresolved Doctrinal Issues

Legal Concept Current Status in India Impact

Creates uncertainty; scope
Bona fide choice Not defined by statute or case law
unclear
Public policy Undefined and interpreted inconsistently Courts apply broad discretion
Mandatory
Applicable even when foreign law is chosen Can override party choice
rules
Largely absent; no comprehensive PIL statute Leads to fragmented
Codification
exists jurisprudence

🌍 5. Non-State Law and India’s Approach

 Globally, instruments like UNIDROIT Principles and lex mercatoria are used to
govern contracts where parties want neutrality and flexibility.
 Hague Principles (Art. 3) permit parties to choose non-state law if widely accepted and
neutral.
 India's stance:
o Arbitration: §28 of the Arbitration and Conciliation Act (1996) allows non-state
norms.
o Litigation: No express recognition. Only one obiter reference in a Delhi High
Court case (2021).

🧩 6. Comparative Influence: Hague Principles

 Though India is not a signatory, Hague Principles provide a globally accepted soft law
framework.
 Key relevant provisions:
o Article 2: Validates choice of foreign law regardless of connection.
o Article 3: Permits non-state rules (under specific criteria).
o Article 11: Explains when public policy can limit application of chosen law.

✅ 7. Recommendations by the Author

1. Codify party autonomy within a comprehensive Indian PIL statute.

 2. Define “bona fide” choice using objective factors.
3. Use Indian Contract Act §§23, 27, and 28 as guidance for identifying “public policy”
limits.
4. Permit non-state law in litigation settings (not just arbitration).
5. Draw from Hague Principles for doctrinal development and harmonization

6:Sixto Sánchez Lorenzo, Choice Of Law And Overriding

Mandatory Rules In International Contracts After Rome
I, Yearbook of Private International Law, 2010
⚖️1. Central Thesis

The article critically evaluates India's recognition of party autonomy in private international
law, particularly in international commercial contracts. While Indian courts permit parties to
choose a governing law irrespective of its connection to the contract, the legal framework
remains uncodified, fragmented, and doctrinally ambiguous, especially on the use of non-
state law, the scope of public policy, and the meaning of a bona fide choice.

📌 2. Doctrinal Foundations

A. Party Autonomy

India permits parties to freely select a foreign law to govern their contract, even if the chosen law
lacks territorial or substantial connection with the transaction, provided:

 The choice is genuine (bona fide),

 It does not contravene public policy,
 It does not override Indian mandatory rules.

B. Modern Approach

This liberal stance aligns with the global shift from traditional doctrines (e.g., lex loci contractus,
lex loci solutionis) to subjective party autonomy, placing emphasis on the express intentions
of the contracting parties.

⚖️ 3. Indian Case Law Development

Case Name Contribution

NTPC v. Singer (1992) Upheld choice of foreign law by parties
 Case Name Contribution
Affirmed that the chosen law need not be connected to
Modi Entertainment (2003)
the transaction
British India Navigation and Delhi Earlier decisions requiring territorial connection—now
Cloth Mills outdated

This judicial transition reflects a departure from English common law and movement toward a
more internationalist interpretation of choice-of-law clauses.

⚠️4. Persistent Gaps and Ambiguities

Issue Status in Indian Law Consequences

Leads to unpredictability and judicial
Codification ❌ Absent
discretion
"Bona fide"
❓ Undefined No objective test available
choice
Public policy Courts have wide latitude in invalidating
❓ Broad and undefined
limits choices
Only accepted in arbitration (§28 ACA
Non-state law ❌ Not permitted in litigation
1996)
✅ Apply irrespective of chosen
Mandatory rules Can override party autonomy
law

🌍 5. Non-State Law and Hague Principles

A. Global Trend

Instruments such as the UNIDROIT Principles and lex mercatoria are widely accepted
internationally to govern transnational contracts. The Hague Principles on Choice of Law
(2015)—though non-binding—provide persuasive authority and explicitly permit:

 Use of non-state law (Art. 3),

 Freedom to choose any governing law (Art. 2),
 Public policy exceptions (Art. 11).

B. Indian Perspective

 Arbitration: Non-state rules are allowed under §28 of the Arbitration and Conciliation
Act, 1996.
 Litigation: No Indian court has expressly recognized non-state law in contractual
litigation. Only a Delhi High Court decision (2021) briefly discussed it in obiter without
formal adoption.
🧩 6. Need for Legal Reform

Recommendations from the Article:

1. Codify India’s party autonomy doctrine into a formal private international law
framework.
2. Incorporate the Hague Principles as guiding tools for judicial interpretation.
3. Develop objective tests to assess “bona fide” selection of law.
4. Define the contours of public policy using relevant sections of the Indian Contract Act
(§§23, 27, 28).
5. Permit non-state laws to be chosen in court-based proceedings where they do not
conflict with public policy or Indian mandatory norms

MISSING- 5: Michael Pyrles, Reflections on

Transnational Public Policy, 24 J. Int'l Arb. 1 (2007)
WEEK -12
1: Abhijit Kumar Pandey and Roshan Santhalia Inter-
Country Abductions and Private International Law, 3
NUJS L Rev 229(2010)
Study Notes: Indian Private International Law vis-à-vis Party
Autonomy in the Choice of Law
Author: Saloni Khanderia
Published in: Uniform Law Review, 2021 (Oxford University Press)

⚖️1. Purpose of the Article

The article explores how Indian private international law treats party autonomy—the freedom
of parties in international contracts to choose the law that will govern their relationship. It argues
that although Indian courts permit such choices, there is no clear legal framework, especially in
cases involving non-state law, public policy, and mandatory Indian rules.
📌 2. What is Party Autonomy?

Party autonomy means the parties can decide which country’s laws will apply to their contract.
In India:

 The chosen law does not have to be connected to the contract.

 This is allowed as long as the choice is:
o Genuine (not done in bad faith),
o Not against Indian public policy,
o Does not violate Indian mandatory laws.

⚖️ 3. How Did This Evolve in India?

Older cases followed the English law idea that there must be a link between the chosen law and
the contract.
But later, the Supreme Court of India changed this:

Case Importance
NTPC v. Singer (1992) Approved party autonomy, even for unrelated foreign laws
Modi Entertainment (2003) Supported party freedom in choosing neutral law

❗ 4. What is Still Unclear in Indian Law?

Legal Concept Problem

“Bona fide” Choice Not defined—Courts do not explain what counts as bad faith
Public Policy Vague—No clear rules on what makes a foreign law invalid
Non-State Law Not accepted in court (only allowed in arbitration)
Mandatory Indian Rules Can override chosen law—but what counts as mandatory is unclear

🌐 5. Role of Non-State Law and Hague Principles

In many countries, businesses choose non-state laws like:

 UNIDROIT Principles
 Lex mercatoria (customary international trade rules)

The Hague Principles (2015) support this. Article 3 allows parties to choose non-state laws if:

 They are commonly used,

 They are neutral,
 They don’t violate public policy.
In India:

 Arbitration: Non-state laws are accepted under Section 28 of the Arbitration Act.
 Litigation: Courts have not clearly allowed non-state laws. Only one case (Delhi High
Court, 2021) mentioned it briefly.

🧩 6. What the Author Recommends

1. Make party autonomy a part of written law (codify it).

2. Use Hague Principles as a model to improve clarity.
3. Explain what “public policy” and “bona fide” mean.
4. Allow non-state rules in court cases, not just in arbitration.
5. Use Indian Contract Act (Sections 23, 27, 28) to define policy boundaries.

2: Meena Ketan Sahu, Conversions to Other Religions

Vis-à-Vis Conflict of Matrimonial Laws in India: A
Socio-Legal Study, 24 ALJ 308 (2016-17)
Unique Conflict: Conversion vs. Matrimonial Law

 The article examines how religious conversion creates interpersonal legal conflicts,
especially under different personal laws.
 Focus is on the absence of a uniform civil code (UCC), which causes courts to rely on
discretion, leading to inconsistent decisions.
 Courts and litigants often strategically shift personal laws based on benefit, which
causes instability in matrimonial law applications.

🧪 2. Challenges in Proving Conversion

 A major gap in Indian law is the lack of a formal mechanism to declare or register
religious conversion.
 The Betsy v. Nil case is used to highlight the difficulty in proving religious conversion,
especially when done informally.
 The article suggests a statutory affidavit-based system for registering conversion,
which would improve legal certainty and prevent unnecessary litigation.

📌 3. Legal Gaps in Inter-Religious Marriages

  Indian courts struggle with which personal law to apply when spouses belong to
different religions or when one converts post-marriage.
 In such cases, judges often rely on pre-nuptial law (law applicable at the time of
marriage), though some courts have applied post-conversion law, creating doctrinal
confusion.
 This has caused a patchwork of conflicting judgments, exposing the lack of clear
legislative guidance.

🌐 4. The Role of the Special Marriage Act, 1954

 The Special Marriage Act is highlighted as the only secular legal route that supports
inter-faith marriage without conversion.
 Unlike personal laws, it ensures continuity of matrimonial ties even after religious
conversion, reflecting India's secular ethos.
 Conversion under SMA does not impact legal obligations or rights unless followed by
dissolution under that Act.

5. Socio-Legal Case Study: Kandhamal, Odisha

 The article uniquely investigates religious conversion in Kandhamal, offering a

ground-level sociological view.
 Three waves of conversion identified:
1. Animism → Hinduism
2. Hinduism → Christianity
3. Christianity → Hinduism (reconversion)
 Factors driving conversion:

o Access to education, healthcare, and social equality offered by missionary

institutions.
o Loss of caste stigma within Christian institutions was attractive to marginalized
communities.
o Reconversion driven by caste restoration incentives, access to government
reservations, or social pressure from groups like RSS/VHP.

🔥 6. Rise of Religious Polarization

 The article explains how reconversion movements are often politicized through:
o Uniform rituals (yajnas, sankirtans, trishul ceremonies)
o Narratives of religious defilement and threat to Hinduism
 o Active role of Swami Lakshmananand and Sangh Pariwar in re-induction into
Hinduism
 This is seen as part of a broader identity politics project, creating internal religious
divisions and conflict.

⚠️7. Practical Consequences of Conversion

 Converted Christians (especially SCs) often lose reservation benefits, unlike STs,
who retain them even after conversion.
 Many reconvert to Hinduism only on official records to regain government benefits,
highlighting an economic rationale behind religious identity manipulation.
 Legal identity (as Hindu) is retained for reservation, while religious practice may still
reflect Christian faith—a split between de jure and de facto identity.

📑 8. Criticism of Current Legal Framework

 The article emphasizes the lack of a unified conversion law, which results in:
o Uncertainty in marriage validity
o Arbitrary decisions in maintenance, custody, or dissolution
o Over-reliance on judicial discretion
 Recommends codified legislation that regulates:
o Registration of conversion
o Impact of conversion on personal status and matrimonial rights
o Protection from coerced or incentive-driven conversions

📌 9. Key Constitutional Argument

 While Article 25 protects religious freedom, the author warns against using it as a cover
for mass conversion schemes or strategic religious manipulation.
 Calls for balancing individual liberty with legal safeguards to prevent misuse and
conflict.

MISSING :3AND 4; Akolda M Tier, The Relationship

Between Conflict of Personal Laws and Private
International Law, 18 JILI 241 (1976) Aude Fiorini, Rome
III – Choice Of Law In Divorce: Is The Europeanization Of
Family Law Going Too Far? International Journal of Law,
Policy and the Family, Vol. 22, No. 2,(2008)
WEEK -14
Pedro A De Miguel Asensio, The Rome I & Rome II in
International Commercial Arbitration , The Impact of EU
law on International Commercial Arbitration, New York ,
Juris 177 (2017)
1. Distinction Between Rome I, Rome II, and Arbitration

 Rome I (Contractual Obligations) and Rome II (Non-contractual Obligations) do not

directly apply to arbitration proceedings.
 However, their principles often guide arbitral tribunals, especially in determining
applicable law where the seat of arbitration is in an EU Member State.

2. Party Autonomy in Arbitration Context

 Central in both Rome I and Rome II: parties can freely choose the law applicable to their
disputes.
 In arbitration, party autonomy is broader: parties may choose rules of law (not
necessarily national law), including transnational principles like UNIDROIT or lex
mercatoria.
 Arbitrators are more flexible than national courts in interpreting party autonomy,
especially when interpreting implied choices or trade usages.

3. Rome I Principles Used in Arbitration

 Rome I recognizes express and implied choice of law.

 If no choice is made, the default rule is the law of the country where the party performing
the characteristic obligation has their habitual residence.
  These ideas are echoed in institutional arbitration rules (e.g., ICC Rules), which
emphasize party choice but offer default mechanisms when no law is selected .

4. Rome II and Tort Claims in Arbitration

 Rome II governs non-contractual obligations and provides uniform conflict-of-law

rules.
 Though Rome II doesn’t apply to arbitration directly, its structured approach helps
arbitrators dealing with tort claims arising in commercial contexts.
 Priority of habitual residence and closer connection principles influences arbitral
reasoning when determining governing law for delicts.

5. Methodologies for Determining Applicable Law in Arbitration

 Arbitral tribunals may:

o Use a choice-of-law analysis similar to Rome I/II.
o Apply the “closest connection” doctrine if no clear party choice exists.
o Consider transnational principles in the absence of national rules.
 Courts must typically use national conflict-of-law rules, but arbitrators have greater
discretion.

6. Mandatory Rules and Public Policy Limits

 Rome I and II both respect mandatory provisions of the forum and public policy
(ordre public).
 In arbitration, tribunals might refuse to apply a chosen law if it conflicts with:
o International public policy
o Overriding mandatory rules (e.g., anti-corruption, antitrust laws)
 Enforcement of arbitral awards may be denied under New York Convention (Article
V(2)(b)) if the award violates public policy.

7. Comparative View: Rome Regulations vs Arbitration Law

 While the Rome Regulations are binding on Member State courts, arbitral tribunals
adopt them for guidance, not obligation.
 Rome I and II help ensure predictability and consistency, even in international
arbitration contexts.
  The UNCITRAL Model Law and arbitral institutional rules allow broader flexibility
than Rome Regulations, especially in selecting rules of law.

3: Xandra E. Kramer, EU Overriding Mandatory Law

and the Applicable Law on the Substance in International
Commercial Arbitration,
1. Applicability of Rome I & II Regulations in Arbitration

 Rome I (Contracts) and Rome II (Torts) are EU regulations for civil and commercial
law conflicts.
 They do not directly apply to arbitration, but they influence arbitral decisions,
especially in the EU.
 Courts enforcing or annulling arbitral awards may apply Rome Regulations.

📌 2. Party Autonomy in Arbitration

 Party autonomy is fundamental under Rome I (Article 3) and Rome II (Article 14).
 In arbitration, this autonomy extends beyond national law – parties may choose rules of
law (e.g., UNIDROIT).
 Arbitral tribunals often accept non-state legal systems if chosen by parties.

📌 3. Determination of Applicable Law by Arbitrators

 If no party choice is made, tribunals typically:

o Use closest connection test (Rome I Article 4, Rome II Article 4).
o Consider laws linked to characteristic performance (Rome I).
 Arbitrators may deviate from Rome Regulations' hierarchy, using international
practices or trade usages.

📌 4. Rome II and Non-Contractual Claims in Arbitration

 Rome II offers rules for torts (e.g., unfair competition, environmental damage).
 Arbitral tribunals apply Rome II principles for delictual claims, especially when:
o Claims involve cross-border harms.
o The tort is closely connected to a contract.
📌 5. Role of Mandatory Rules and Public Policy

 Rome I & II permit application of overriding mandatory provisions (Article 9 Rome I,

Article 16 Rome II).
 Arbitral tribunals may:
o Apply mandatory laws of the seat or affected country.
o Reject chosen law if it violates international public policy.
 NY Convention Article V(2)(b) allows refusal of enforcement on public policy grounds.

📌 6. Differences in Conflict of Laws: Courts vs Arbitral Tribunals

 Courts: must apply Rome Regulations when determining applicable law.

 Arbitral tribunals:
o Not strictly bound by Rome I/II.
o Have broader discretion, often following institutional rules (e.g., ICC, LCIA).
o More likely to apply transnational principles if parties so choose.

📌 7. Impact on Enforcement and Annulment of Awards

 National courts may revisit choice of law decisions during enforcement.

 Misapplication of applicable law may lead to:
o Refusal of enforcement
o Setting aside under seat-of-arbitration laws
 Importance of aligning tribunal’s conflict-of-law approach with Rome Regulation logic,
especially in EU.

📌 8. Policy Considerations and Harmonization

 Rome Regulations promote certainty, predictability, and uniformity in conflict-of-

laws.
 Arbitration respects these goals but adapts them for commercial flexibility.
 Arbitral practice embraces pragmatism over strict adherence to Rome hierarchy.
 MISSING:1 -Micheal Pryles , Arbitration: The
International Journal of Arbitration, Mediation and
Dispute Management, Volume 63, Issue 3 (1997)