Just and Efficient Resolution of Private International Disputes: Israel’s New Theory of Jurisdiction

What is the guiding rationale according to which the rules of international jurisdiction to adjudicate private disputes are to be construed? Israeli law has been contemplating this question for some time now, as the traditional territorial theory seems to be on the decline and is therefore unsatisfactory as a basis for modern legal rules. Unfortunately, a thorough effort to choose an alternative theory is still missing. A painful reminder of this current state of affairs was given recently as the Israeli Supreme Court issued, on the very same day, two decisions concerning cases in which a foreign plaintiff, having no other effective forum in which to litigate his dispute with the defendant, sought relief from Israeli courts

The Problem of Selective or Sporadic Recognition: A New Economic Rationale for the Law of Foreign Country Judgments

Conventional law and economics analysis overlooks a significant feature of the law of recognition of foreign county judgments-an area of the law that regulates the private local practical use of such judgments. The existing literature on the topic current describes two competing economic hypotheses as relevant to modeling the incentives of countries to recognize foreign county judgments. The first describes a (repeated) prisoner\u27s dilemma game. An alternative economic hypothesis argues that countries envisage cooperation as a weakL dominant strategy. This Article offers a new economic rationale based on an asymmetric information explanation. I argue that no county can identify, at any given moment, whether or not another given country is applying a recognition regime that is as cooperative as the regime applied by it, or whether the foreign jurisdiction is applying a less receptive regime. Each county therefore fears that the foreign jurisdiction is implementing either a selective recognition regime, under which the relative lack of cooperation with the forum is driven by a deliberate agenda, or a sporadic recognition regime, under which the foreign county turns out to be less receptive to the forum\u27s judgments as a result of mere coincidence. The new economic rationale has several positive and normative implications, relating to cooperation between countries. Four are discussed in this Article. First, registration of foreign judgments, as a method for localizing foreign judgments, is shown to be superior to mere recognition, inasmuch as cooperation with other countries is the goal. Second, attempts to form inter-county recognition agreements (conventions and treaties) that ignore the problem of private information are exposed as futile. Third, the reciprocity requirement, the relevance of which as a prerequisite for recognition is currently the subject of heavy debate in the US, is also shown to be unnecessay. Fourth, countries should in limited, enumerated circumstances, concede to the local legal effect of certain unrecognized foreign judgments

The Law Applicable to a Derivative Action on Behalf of a Foreign Corporation - Corporate Law in Conflict

In corporate law, the derivative action mechanism allows minority shareholders and, in certain jurisdictions, single directors or even creditors to file and litigate on behalf of the corporation a lawsuit against an insider or a third party whose action has allegedly injured the corporation. The derivative action is a mechanism that corporate law furnishes to tackle agency problems because the corporate insiders who should initiate such claims occasionally become caught in a conflict of interests. Obviously, each jurisdiction decides whether to employ a derivative action mechanism and on what terms. However, in a globalized world that offers many attractive places in which investors can incorporate their businesses, corporate law regulation has become increasingly affected by surrounding regulatory environments. In many respects, conflict-of-laws rules manage the interaction between local and foreign regulatory rules. The purpose of this Article is to discuss the regulation of derivative actions when this mechanism is evoked in the context of a foreign corporation. This rather common scenario creates a choice-of-law question: should the terms and conditions for filing a derivative action on behalf of a foreign corporation (as opposed to the cause-of-action itself) be regulated by the law of the forum or by the law of the place of incorporation? For example, should the forum court enable plaintiffs to rely on the forum\u27s local derivative action mechanism when the foreign law of the place of incorporation rules out completely the possibility of derivative actions being filed? This Article analyzes the doctrinal contexts that may serve as a legal platform for resolving this question, as well as the relevant considerations to be taken into account. The Article subsequently argues that, in contrast to a prevailing perception, the law of incorporation should not always be applied. It is further argued that the public policy doctrine, rather than any other doctrinal context, is best suited to serve as a platform for adjudicating the choice-of-law question and that forum shopping concerns should be excluded from this question and confined to the context of jurisdiction ascertainment

Foreign Law as a Distinctive Fact--To Whom Should the Burden of Proof Be Assigned?

Some jurisdictions allow a civil claim to be based on foreign law. Those jurisdictions that consider the foreign law to be a question of fact need to decide the legal result of the claimant\u27s failure to prove the contents of the applicable foreign law. Conventional doctrine usually assigns the burden to prove the contents of foreign law (in the sense of persuasion) to the party whose claim is based upon that law, and thus failure to meet that burden ends in the claim being dismissed. The only two exceptions are cases in which the presumption of an identity of laws (presumption of similarity) is evoked or cases in which failure to prove foreign law straighforwardly prompts the court to apply local law as subsidiary law. In these exceptional cases, the application of the law of the forum results in the burden of proof shifting onto the opponent of the claim. Against this backdrop, I propose a new approach for assigning the burden of persuasion regarding the contents of an applicable foreign law. I argue that when foreign law is treated as fact, its unique features as such should be recognized by lawmakers. As a fact, foreign law usually necessitates expert witness testimony, but is relatively easy to ascertain (that is, evidence can always be found). On the other hand, foreign law is also expensive to prove and occasionally more accessible to one litigant than to the other. Moreover, litigants cannot argue that they were surprised by the reassignment of the persuasion burden. Thus, I argue that while the burden to persuade the court as to the content of foreign law ordinarily should rest on the litigant who asserts a claim based in foreign law, the burden should also shift more easily to the other party to promote cost-efficient truth-discovering. The normative part of the paper starts by arguing that the persuasion burden should shift in cases in which the rationales supporting the presumption of identity of laws or the straighfforward application of local law as subsidiary law apply, notwithstanding the contents of the law of the forum and whether or not applying it would benefit the party attempting to prove an applicable foreign law. Such an approach is justified at least on grounds of coherence, as the persuasion burden already shifts whenever the law of the forum is applied instead of the applicable foreign law. Indeed, the contents of the law of the forum, per se, should not become a factor in the decision on how to allocate the persuasion burden. The paper then moves on to develop a broader argument. As a general rule, it is suggested that the burden of persuasion with regard to the contents of an applicable foreign law shift f the opposing litigant enjoys a clear comparative advantage in providing proof as to the content of that foreign law, while the costs of providing such proof should be assigned on a loser pays basis

The Problem of Selective or Sporadic Recognition: A New Economic Rationale for the Law of Foreign Country Judgments

Conventional law and economics analysis overlooks a significant feature of the law of recognition of foreign county judgments-an area of the law that regulates the private local practical use of such judgments. The existing literature on the topic current describes two competing economic hypotheses as relevant to modeling the incentives of countries to recognize foreign county judgments. The first describes a (repeated) prisoner\u27s dilemma game. An alternative economic hypothesis argues that countries envisage cooperation as a weakL dominant strategy. This Article offers a new economic rationale based on an asymmetric information explanation. I argue that no county can identify, at any given moment, whether or not another given country is applying a recognition regime that is as cooperative as the regime applied by it, or whether the foreign jurisdiction is applying a less receptive regime. Each county therefore fears that the foreign jurisdiction is implementing either a selective recognition regime, under which the relative lack of cooperation with the forum is driven by a deliberate agenda, or a sporadic recognition regime, under which the foreign county turns out to be less receptive to the forum\u27s judgments as a result of mere coincidence. The new economic rationale has several positive and normative implications, relating to cooperation between countries. Four are discussed in this Article. First, registration of foreign judgments, as a method for localizing foreign judgments, is shown to be superior to mere recognition, inasmuch as cooperation with other countries is the goal. Second, attempts to form inter-county recognition agreements (conventions and treaties) that ignore the problem of private information are exposed as futile. Third, the reciprocity requirement, the relevance of which as a prerequisite for recognition is currently the subject of heavy debate in the US, is also shown to be unnecessay. Fourth, countries should in limited, enumerated circumstances, concede to the local legal effect of certain unrecognized foreign judgments