Jurisdiction in international law : United States and European perspectives

Abstract

This study starts with a quote by Professor Meessen: “The function of scholars of international law offers less opportunity for creative thinking [compared to scholars of conflict of laws]: they may compile and analyze state practice, but they cannot replace it with their own concepts.”[1] This study, which primarily looks at the phenomenon of jurisdiction through a (public) international law lens, rejects that limiting claim. While the current state of the international law of jurisdiction is described at length on the basis of State practice, a consistent doctrine of jurisdiction has been developed, on the basis of both State practice and rational thinking. The exercise of jurisdiction is in practice often characterized by a sheer lack of objectivity – which is not surprising as States, when unilaterally asserting jurisdiction – will almost variably emphasize their own interests over foreign States’ interests. A doctrine that gives States almost unlimited discretion to exercise jurisdicition as they see fit – the doctrine that was seemingly coined by the Permanent Court of International Justice in the 1927 Lotus case – is not workable, because it justifies the exercise of concurrent jurisdiction and allows powerful States to outmaneuver weaker ones. It is shown that there are no hard and fast rules of public international law that limit States’ jurisdictional assertions and confer jurisdiction on the State with the strongest nexus to a situation. Nonetheless, it is also shown that there are a number of international law principles that may serve to restrain the exercise of jurisdiction when the legitimate rights of other States would be encroached upon. The principles of non-intervention, sovereign equality, equity, proportionality, and the prohibition of abuse of law, have been cited in this context. While these principles are typically used in a non-jurisdictional context, this should, given their generic nature, not exclude their application to the law of jurisdiction. In chapter 5, the use of a jurisdictional rule of reason, as set forth in § 403 of the Restatement (Third) of U.S. Foreign Relations Law, is therefore advocated, pursuant to which States are entitled to exercise jurisdiction only if they do so reasonably. The jurisdictional rule of reason may not be a rule de lege lata, for there is insufficient evidence that States, if they restrained their jurisdictional assertions, have done so because international law obliged them to do so. Yet, undeniably, a system of international jurisdiction is only viable if States balance their regulatory interests with the interests of other affected foreign nations, as if they were a global regulator who objectively assesses the merits of any one State’s legal and policy interests. Jurisdictional reasonableness is the main focus throughout this study, and has been applied consistently to the different fields of the law studied. In the final part of this study, the principle of jurisdictional reasonableness is given more ‘body’. For one, it is argued that reasonable jurisdiction could emerge through transnational communicative networks wiring State, international, and private actors. For another, it is shown how States, in different legal contexts, if a situation has a stronger nexus to another State, tend to apply their own laws only on a subsidiary basis. This principle of subsidiarity serves to restrain the exercise of jurisdiction by giving the State with the strongest nexus the primary right to exercise jurisdiction. If the ‘primary’ State fails to exercise jurisdiction, even if, from a global perspective, such were desirable, the ‘subsidiary’ State has the right – and, it may be argued, sometimes the duty – to step in, in the interest of the global community. Such a jurisdictional system connects sovereign interests – on which the law of jurisdiction was traditionally based – with global interests, and ensures that impunity and globally harmful underregulation do not arise. Sovereignty then becomes a “relative” concept: international law and the international interest determine when States could invoke it.[2] If, finally, States, regulators, courts and various legal practitioners are searching for one useful jurisdictional rule of thumb in this study, it is this one: the State with the strongest nexus to a situation is entitled to exercise its jurisdiction, yet if it fails to adequately do so, another State with a weaker nexus (and in the case of violations of jus cogens without a nexus) may step in, provided that its exercise of jurisdiction serves the global interest. [1] See K.M. Meessen, “Antitrust Jurisdiction under Customary International Law”, 78 A.J.I.L. 783, 790 (1984). [2]PART I. GENERAL PART 14 CHAPTER 1: INTRODUCTORY CHAPTER 14 1.1. Scope and method of this study 14 1.2. Structure of the study 17 1.3. Jurisdiction as a concern of international law 18 1.4. The concept of jurisdiction in transnational private litigation 23 1.4.1. Adjudicative and subject-matter jurisdiction 24 1.4.2. The interplay of private and public international law 26 1.4.3. Distinguishing private and public international law rules 30 1.5. Concluding remarks 32 CHAPTER 2: PUBLIC INTERNATIONAL LAW APPROACHES TO JURISDICTION 32 2.1. The Lotus case 33 2.2. Customary international law 38 2.2.1. Persisting influence of Lotus 38 2.2.2. The priority of territorial jurisdiction under customary international law 38 2.2.3. Legitimate interests, foreign harm, power, and reasonableness 42 CHAPTER 3: THE TERRITORIALITY PRINCIPLE 46 3.1. Historical growth of the territoriality principle in continental Europe 47 3.1.1. Ancient times: personality prevailing over territoriality 48 3.1.2. Rome 48 3.1.3. Medieval Italy 49 3.1.4. Rise of territoriality in the 17th century 51 3.1.5. Extraterritoriality under unequal treaties 58 3.1.6. The continental-European view 58 3.2. The territoriality principle in England 59 3.3. The territoriality principle in the United States 62 3.3.1. Territoriality as a restraining principle derived from international law 63 3.3.2. Territoriality as a restraining principle derived from congressional intent: the presumption against extraterritoriality 67 3.4. Territorial jurisdiction over cross-border offences 79 3.4.1. Jurisdiction over cross-border offences in England 81 3.4.2. Jurisdiction over cross-border offences in the United States 84 3.4.3. Jurisdiction over cross-border offences in continental Europe 87 3.4.4. Territorial jurisdiction over cross-border participation and inchoate offences 91 CHAPTER 4 – THE PRINCIPLES OF EXTRATERRITORIAL CRIMINAL JURISDICTION 95 4.1. Continental Europe v. the common law countries 95 4.2. Active personality principle 98 4.2.1. Content 99 4.2.2. Continental Europe 101 4.2.3. England 103 4.2.4. United States 105 4.3. Passive personality principle 109 4.3.1. Content 109 4.3.2. Continental Europe and England 114 4.3.3. United States 116 4.4. Protective principle 120 4.4.1. Content 120 4.4.2. Continental Europe 123 4.4.3. England 124 4.4.4. United States 126 4.5. Universality principle 129 4.6. The curse of concurring jurisdiction: towards jurisdictional reasonableness 131 CHAPTER 5: THE JURISDICTIONAL RULE OF REASON 135 5.1. Comity 136 5.2. The jurisdictional rule of reason of § 403 of the Restatement (Third) of U.S. Foreign Relations Law (1987) 142 5.3. Relationship of the jurisdictional rule of reason with the presumption against extraterritoriality 149 5.4. The problematic character of the jurisdictional rule of reason as a norm of customary international law 151 5.4.1. Reasonableness-based international law principles 153 5.4.2. State practice in support of the jurisdictional rule of reason under international law 160 5.5. European reluctance at balancing interests 164 5.5.1. Ordre public v. comity 164 5.5.2. Explaining European uneasiness with interest-balancing 165 5.5.3. EC courts and comity in competition cases 167 5.6. The customary international law character of the rule of reason revisited: a way forward 174 5.6.1. Customary law de lege ferenda ? 174 5.6.2. The workings of power 175 5.6.3. A way forward: tying reasonableness to the matter to be regulated 176 5.7. Alternative accounts of reasonableness: approaches based on law and economics, transnational solidarities, and global interests 178 5.7.1. Law and economics 179 5.7.2. Transnational solidarities 181 5.8. From the general to the specific part of this study: sovereignty as responsibility 185 PART II. SPECIFIC PART 185 CHAPTER 6: INTERNATIONAL ANTITRUST JURISDICTION 186 6.1. Pre-World War II international antitrust practice 188 6.2. The Alcoa case: the breakthrough of the effects doctrine in the United States 193 6.3. Justifying effects-based antitrust jurisdiction 197 6.4. The reach of EC competition law (cartels) 204 6.4.1. The Béguelin case 207 6.4.2. The Dyestuffs case 207 6.4.3. The Wood Pulp case 211 6.4.4. Effects versus implementation 215 6.5. The reach of EU Member States’ competition laws 221 6.5.1 Germany 221 6.5.2. United Kingdom 223 6.5.3 Other EU Member States 227 6.6. Direct, substantial, and reasonably foreseeable effects 230 6.6.1. Substantial effects 232 6.6.2. Direct effects 237 6.6.3. Foreseeable effects and intent 241 6.7. The jurisdictional rule of reason in antitrust cases 243 6.7.1. Timberlane: balancing interests 244 6.7.2. The Timberlane aftermath and the Laker Airways litigation 248 6.7.3. Hartford Fire Insurance: true conflict doctrine 251 6.7.4. Against the ‘unilateral’ true conflict doctrine: pro ‘multilateral’ interest-balancing 253 6.7.5. Reasonableness applied by enforcement agencies 264 6.8. The antitrust Comity Agreements between the U.S. and the EC 266 6.9. Personal jurisdiction over defendants in international antitrust cases 271 6.10. Jurisdiction over foreign antitrust harm 273 6.10.1. The subjective territorial principle in international antitrust law 273 6.10.2. Standing for foreign plaintiffs alleging foreign harm caused by a global cartel: the U.S. experience 277 6.10.3. Calculating fines for global antitrust harm: the European experience 291 6.11. Using antitrust law to secure foreign market access 294 6.12. International merger jurisdiction 297 6.12.1. General observations 297 6.12.2. International merger jurisdiction in the United States 299 6.12.3. International merger jurisdiction in Germany 301 6.12.4. International merger jurisdiction in the European Community 305 6.12.5. Transatlantic tensions over concentrations 314 6.13. Procedural peculiarities of U.S. antitrust litigation upsetting foreign nations 317 6.13.1. Criminal sanctions 317 6.13.2. Private enforcement of regulatory law 320 6.13.3. Treble damages 322 6.14. Concluding remarks from a transatlantic perspective 324 CHAPTER 7: JURISDICTION OVER CROSS-BORDER SECURITIES TRANSACTIONS 326 7.1. Securities fraud jurisdiction in the United States 328 7.1.1. Introduction 328 7.1.2. The conduct and effects tests 334 7.2. Securities antifraud jurisdiction in Europe 345 7.2.1. Securities misrepresentation as a tort 345 7.2.2. Securities misrepresentation as a crime: the case of England 356 7.2.3. Jurisdiction over cross-border insider-trading 360 7.3. Restraining antifraud securities jurisdiction under public international law 371 7.3.1. Applying the law of jurisdiction under public international law to international securities regulation 372 7.3.2. Limiting the effects test 376 7.3.3. Limiting the conduct test 378 7.3.4. Rethinking international securities regulation 383 7.3.5. Conferring primary jurisdiction on the State where the exchange is based: a feasible approach 388 7.4. Jurisdiction over takeovers 394 7.4.1. Applying conflict-of-laws theory to cross-border takeover regulation 394 7.4.2. Cross-border takeover regulation in Europe 397 7.4.3. Cross-border takeover regulation in the United States 405 7.4.4. A reasonable exercise of takeover jurisdiction 409 7.5. Foreign Corrupt Practices Act 411 7.6. The reach of securities disclosure and corporate governance requirements 412 7.6.1. Accommodation of foreign issuers’ concerns over U.S. registration requirements: the traditional SEC approach 413 7.6.2. The Sarbanes-Oxley Act 420 7.6.3. The extraterritorial effects of corporate governance regulation in the EC 442 7.7. Concluding remarks 444 CHAPTER 8: EXTRATERRITORIAL EXPORT CONTROLS (SECONDARY BOYCOTTS) 446 8.1. ‘Control’-based jurisdiction: Fruehauf and the Soviet Pipeline Regulations 448 8.1.1. The control theory 448 8.1.2. The Fruehauf case 450 8.1.3. Soviet Pipeline Regulations 451 8.1.4. Voluntary submission 455 8.2. The Helms-Burton and Iran Libya Sanctions Acts: secondary boycotts beyond the control theory 456 8.2.1. The Cuba Boycott 457 8.2.2. The 1996 Helms-Burton and Iran Libya Sanctions Acts 458 8.2.3. Double standards: U.S. opposition against the Arab boycott of Israel 460 8.2.4. Justifying the Helms-Burton Act under international law 462 8.2.5. Foreign (in particular European) reaction 466 8.2.6. The Helms-Burton and Iran Libya Sanctions ActS after 1997 469 8.3. Concluding remarks 471 CHAPTER 9: EXTRATERRITORIAL DISCOVERY 473 9.1. Rules of evidence-taking in the United States and in Europe 475 9.2. The transatlantic conflict over extraterritorial discovery: different conceptions of judicial sovereignty 479 9.2.1. Explaining the broad reach of U.S. discovery rules 479 9.2.2. Explaining the transatlantic conflict over extraterritorial discovery 480 9.2.3. Judicial sovereignty: private v. public international law 482 9.2.4. Controversy over discovery of foreign non-parties and foreign subsidiaries 486 9.2.5. A customary international law of extraterritorial evidence-taking? 487 9.3. Discovery and the foreign sovereign compulsion doctrine 489 9.4. Extraterritorial discovery and the Hague Evidence Convention 495 9.4.1. The Aérospatiale case 495 9.4.2. Aérospatiale progeny 498 9.5. Blocking statutes 504 9.5.1. The Uranium litigation 504 9.5.2. The United Kingdom Shipping Contracts and Commercial Documents Act 507 9.5.3. The British Protection of Trading Interests Act 508 9.5.4. The Laker Airways litigation 512 9.5.5. French blocking legislation 514 9.6. Extraterritorial discovery in the United Kingdom 515 9.7. Transnational discovery in EC competition proceedings 518 9.8. Sovereignty concerns over the use of U.S. discovery by parties in a foreign litigation: Intel v. AMD 519 9.8.1. Intel v. AMD: from the European Commission to U.S. federal courts 521 9.8.2. Foreign discoverability under 28 U.S.C. § 1782 522 9.8.3. The nature of the European Commission’s proceedings under 28 U.S.C. § 1782 524 9.8.4. The Supreme Court’s rejection of a foreign discoverability requirement 527 9.9. Reasonable extraterritorial discovery 533 CHAPTER 10: UNIVERSAL CRIMINAL JURISDICTION 539 10.1. Introduction to universal jurisdiction 539 10.1.1. Legality of universal jurisdiction 540 10.1.2. Justifying universal jurisdiction 542 10.1.3. The historical trail of universal jurisdiction 543 10.1.4. Aut dedere aut judicare 545 10.1.5. Universal jurisdiction over core crimes against international law 547 10.1.6. Universal jurisdiction in absentia 555 10.2. Universal jurisdiction over core crimes against international law in Germany 561 10.2.1. Code of Crimes against International Law 561 10.2.2. Case-law under the CCAIL 563 10.2.3. Universal jurisdiction before the enactment of the CCAIL 565 10.2.4. Concluding remarks 571 10.3. Universal jurisdiction over core crimes against international law in Spain 571 10.3.1. Article 23.4 of the Spanish Organic Law of the Judicial Power 572 10.3.2. Case-law 573 10.3.3. Concluding remarks 587 10.4. Universal jurisdiction over core crimes against international law in Belgium 588 10.4.1. The former regime 588 10.4.2. The new regime 592 10.4.3. Concluding remarks 599 10.5. Universal jurisdiction over core crimes against international law in France 599 10.5.1. War crimes 601 10.5.2. Rwanda and the former Yugoslavia 603 10.5.3. Nationality-based jurisdiction over crimes against international humanitarian law 604 10.5.4. Presence requirement 606 10.5.5. Torture as genocide 610 10.5.6. Subsidiarity 611 10.5.7. The first trial under the universality principle: Ely Ould Dah 612 10.5.8. Draft ICC law 614 10.5.9. Concluding remarks 615 10.6. Universal jurisdiction over core crimes against international law in the Netherlands 617 10.6.1. International Crimes Act 617 10.6.2. Knezevic 617 10.6.3. Bouterse 618 10.6.4. Universal jurisdiction in absentia 620 10.6.5. Subsidiarity 622 10.6.6. Cases under the International Crimes Act 623 10.6.7. Concluding remarks 624 10.7. Universal jurisdiction over core crimes against international law in the United Kingdom 625 10.7.1. Piracy 625 10.7.2. Torture 626 10.7.3. Crimes against international humanitarian law 627 10.7.4. Terrorism 630 10.7.5. Explaining UK opposition against the assumption of universal jurisdiction 632 10.7.6. Procedural features contributing to the assumption of universal jurisdiction 634 10.7.7. Zardad: the first trial 635 10.7.8. Concluding remarks 638 10.8. Universal jurisdiction over core crimes against international law in some other States 638 10.8.1. Denmark 638 10.8.2. Austria 640 10.8.3. Switzerland 641 10.8.4. Canada 643 10.9. Universal criminal jurisdiction: the role of the European Union 643 10.9.1. The 2002 and 2003 Decisions by the EU Council of Ministers: the establishment of a European network of contact points 645 10.9.2. A role for Europol and Eurojust 646 10.9.3. An approximation of jurisdictional rules in the European Union 649 10.10. The United States and universal criminal jurisdiction 651 10.10.1. U.S. State practice 652 10.10.2. Structural impediments to the assumption of universal criminal jurisdiction by U.S. courts 665 10.10.3. The 2004 report on universal criminal jurisdiction by the American Bar Association 672 10.10.4. U.S. opposition against the International Criminal Court 675 10.11 Concluding remarks on universal criminal jurisdiction 689 10.11.1. Legality of universal jurisdiction 690 10.11.2. The transatlantic divide over international criminal justice 692 10.11.3. Reasonableness and subsidiarity 699 10.11.4. A future for universal jurisdiction 711 CHAPTER 11: UNIVERSAL TORT JURISDICTION 713 11.1 The international law framework 713 11.2. Universal tort jurisdiction in the United States 721 11.2.1. Introduction 721 11.2.2. Sosa v. Alvarez-Machain 726 11.2.3. Jurisdictional restraint in ATS litigation 729 11.2.4. Reasonable ATS jurisdiction 753 11.3. Universal tort jurisdiction in Europe 754 11.3.1. Possibilities of exercising universal tort jurisdiction under European law 754 11.3.2. European State practice 757 11.4. Concluding remarks 763 11.4.1. A transatlantic divide over universal tort jurisdiction 763 11.4.2. Drawing lessons from jurisdictional restraint in ATS litigation 764 11.4.3. Raising awareness: the main objective of civil suits 766 11.4.4. Towards an International Civil Court? 767 PART III: A NEW PERSPECTIVE ON THE 768 INTERNATIONAL LAW OF JURISDICTION 768 III.1. Inevitability 769 III.2. The discontents of extraterritoriality 770 III.3. The reciprocity maxim and its limits 772 III.4. Substantivism 775 III.4.1. The substantivist approach 776 III.4.2. Substantivism in practice 778 III.4.3. The limits of substantivism 781 III.5. Devising a jurisdictional framework: using transnational regulatory and judicial networks 784 III.6. Subsidiarity 791 III.6.1. The Schutzzweck-based rule of reason 791 III.6.2. A transversal application of the subsidiarity principle 792 III.6.3. From nexus to international interests 799 III.7. A transatlantic gap over jurisdiction 801 III.7.1. Shedding common law restrictions on the exercise of economic jurisdiction in the United States 802 III.7.2. Shedding common law restrictions on the exercise of antitrust jurisdiction in Europe 803 III.7.3. U.S. exceptionalism and strict economic regulation 805 III.7.4. The transatlantic gap over international criminal justice 806 III.8. Final concluding remarks 808 BIBLIOGRAPHY 811 GENERAL PART 811 GENERAL CRIMINAL LAW 820 ANTITRUST LAW 825 SECURITIES LAW 845 EXPORT CONTROLS 852 DISCOVERY 856 UNIVERSAL CRIMINAL JURISDICTION 858 UNIVERSAL TORT JURISDICTION 867 MISCELLANEA 876nrpages: 880status: publishe

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