International Litigationand Arbitration

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Carolina Academic PressLaw Casebook Series

Advisory Board

❦

Gary J. Simson, ChairmanCase Western Reserve University School of Law

John C. Coffee, Jr.Columbia University Law School

Randall CoyneUniversity of Oklahoma College of Law

Paul FinkelmanAlbany Law School

Robert M. JarvisShepard Broad Law CenterNova Southeastern University

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

Michael A. OlivasUniversity of Houston Law Center

Kenneth L. PortWilliam Mitchell College of Law

H. Jefferson PowellDuke University School of Law

Michael P. ScharfCase Western Reserve University School of Law

Peter M. ShaneMichael E. Moritz College of Law

The Ohio State University

Emily L. SherwinCornell Law School

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

David B. WexlerJames E. Rogers College of Law, University of Arizona

University of Puerto Rico School of Law

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International Litigationand Arbitration

Practice and Planning

Sixth Edition

Russell J. WeintraubProfessor of Law Emeritus

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

Carolina Academic PressDurham, North Carolina

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Copyright © 2011Russell J. WeintraubAll Rights Reserved

ISBN: 978-1-59460-910-7LCCN: 2010932710

Carolina Academic Press700 Kent StreetDurham, North Carolina 27701Telephone (919) 489-7486Fax (919) 493-5668www.cap-press.com

Printed in the United States of America

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

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Summary of Contents

1. SUING FOREIGN DEFENDANTS 3Section 1: Problems of In Personam and In Rem Jurisdiction 3Section 2: Agreements to Litigate or Arbitrate Abroad 72Section 3: Enjoining Suit Abroad 125Section 4: Service of Process 137Section 5: Taking of Evidence 155Section 6: Currency Conversion 200

2. SUITS BY FOREIGN PLAINTIFFS 209Section 1: Forum Shopping and Forum Non Conveniens 209Section 2: Erie, Reverse Erie, and Litigation Strategy 250

3. RECOGNITION OF JUDGMENTS 271Section 1: Bases for Non-Recognition 271Section 2: Judgments Enforcing Public Law 295Section 3: The Uniform Act 299

4. THE ACT OF STATE DOCTRINE 311Section 1: Application and Exceptions 311Section 2: Intangible Property 329

5. FOREIGN SOVEREIGN IMMUNITY 337Section 1: The Foreign Sovereign Immunities Act 337Section 2: Commercial or Governmental 365Section 3: Enforcing a Judgment 385

6. EXTRATERRITORIAL APPLICATION OF PUBLIC LAW 403Section 1: Antitrust Law 403Section 2: Securities Law 468Section 3: Other Problems 478

7. CIVIL SUITS FOR ATROCITIES THAT VIOLATE INTERNATIONAL LAW 487Section 1: The Alien Tort Claims Act 487Section 2: The Torture Victim Protection Act 503

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8. DAMAGES RESULTING FROM INTERNATIONAL FLIGHTS:THE MONTREAL ANDWARSAW CONVENTIONS 517

Section 1: Recovery Rules 517Section 2: Defining Convention Terms and Determining Preemption 534

9. INTERNATIONAL CHILD ABDUCTION 559Section 1: Duty to Return the Child 559Section 2: Exceptions to the Duty to Return 583

10. LETTERS OF CREDIT 593Section 1: Compliance with Terms of the Letter 595Section 2: Enjoining Payment 600Section 3: Political Risks 611

11. ARBITRATION 621Section 1: Conventions and Model Law 622Section 2: Judicial Assistance and Interference 651Section 3: Awards of the Iran-United States Claims Tribunal 662

Problem Appendix 669

Table of Cases 673

Index 687

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Contents

Preface xxiAcknowledgments xxiii

1. SUING FOREIGN DEFENDANTS 3

Section 1: Problems of In Personam and In Rem Jurisdiction 3Introduction: Overview of Jurisdiction and Conflict of Laws 3Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) 10Notes. U.S. amicus brief in Helicopteros; foreign defendants’ vulnerability

to suit despite Helicopteros; obsolete precedent relied on inHelicopteros; Calvo clauses 15

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

“stream of commerce”; Japanese jurisdiction cases; use of nationalcontacts in Federal Rule 4(k)(2) 23

European Union Regulation on Jurisdiction and Enforcement of Judgmentsin Civil and Commercial Matters 27

Notes. The Brussels Regulation and the Lugano Convention; relevance of theprovisions of the EU Regulation to assessing the reasoning in Asahi;jurisdiction under the Regulation; U.S. Supreme Court justicesdisagree on whether foreign materials are relevant to deciding U.S.constitutional issues; exorbitant bases for jurisdiction under theRegulation; transient presence as basis for jurisdiction; differencesbetween jurisdiction under Regulation and in U.S 44

Meier v. Sun International Hotels, 288 F.3d 1264 (11th Cir. 2002) 47Notes. Piercing the corporate veil 51Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446 (3rd Cir. 2003) 53Note. Jurisdiction based on internet activities 57Shaffer v. Heitner, 433 U.S. 1886 (1977) 59Notes. Uses of in rem jurisdiction that survive Shaffer; English “Mareva”

injunction compared; local procedure may not permit prejudgmentseizure; applicability of Shaffer footnote 36 to foreign judgments andarbitral awards; due process requirements affected by interest at risk;likelihood that Shaffer will be overruled or limited 68

Louring v. Kuwait Boulder Shipping Co., 455 F. Supp. 630 (D. Conn. 1977) 71Notes. Meaning of “no other forum”; possibility that fewer forum contacts

needed for in rem than for in personam jurisdiction 72

Section 2: Agreements to Litigate or Arbitrate Abroad 72The Bremen v. Zapata Off-Shore Company, 407 U.S. 1 (1972) 72

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Notes. Exculpatory clauses invalid under German law; enforcement offorum-selection clauses in cruise tickets; drafting of a choice-of-forum clause; limitation of vessel owner’s liability; the forum-selection clause in Carbon Black; recovery of damages for violationof derogation agreement; Convention on Choice of Court Agreements 79

United Nations Convention on the Recognition and Enforcement of ForeignArbitral Awards (“New York” Convention) 83

Notes. New York Convention widely ratified; Inter-American Conventionon International Commercial Arbitration (“Panama” Convention);construction of Convention and Federal Arbitration Act; enforcementafter judgment confirms award; procedure to enforce award; forumnon conveniens dismissal of Convention action; drafting of arbitrationagreement; parties power to expand grounds for court review of award;“manifest disregard of the law” as reason to vacate award; local awardsnot considered as “domestic”; discretion to adjourn enforcementproceeding; enforcing award set aside where rendered; resolvingdisputes over construction contracts; when a nonsignatory is bound;the “nonneutral” arbitrator; obtaining evidence in arbitration 85

Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528 (1995) 102Notes. Enforcement of forum-selection clauses; denial of interlocutory

appeal for refusal to enforce; 2008 UNCITRAL Convention forcarriage of good by sea 105

Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) 106Notes. Separability of the contract and the arbitration agreement;

enforcement of arbitral awards under Foreign Sovereign ImmunitiesAct and Act of State Doctrine; enforcement of forum-selection clausesagainst U.S. investors in Lloyd’s; type of fraud needed to invalidatechoice-of-forum or choice-of-law clause; retroactivity ofN.Y. Convention 108

Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc.,473 U.S. 614 (1985) 112

Notes. Enforcement of arbitration awards and agreements; comments onMitsubishi 119

Rhone Mediterranee Compagnia Francese v. Lauro, 712 F.2d 50(3rd Cir. 1983) 121

Notes. Standard for enforcement of agreement to arbitrate; “time” and“bareboat” charters 124

Section 3: Enjoining Suit Abroad 125Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11

(1st Cir. 2004) 125Notes. “Parallel proceedings” and the Conflict of Jurisdiction Model

Act; antisuit injunctions and stays of proceedings; U.S. enactsUNCITRAL Model Law on Cross-Border Insolvency; parallelproceedings under EU Regulation; costs of EU “first seised” rule;comparative law on parallel proceedings; the Uniform LawConference of Canada codifies forum non conveniens 130

Section 4: Service of Process 137Hague Convention on the Service Abroad of Judicial and

Extrajudicial Documents in Civil or Commercial Matters 137

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Notes. Sources of multilateral conventions affecting international litigationand arbitration; Service Convention provision for reopeningjudgment; treatment of controversial issues in multilateralconventions; Inter-American Convention on Letters Rogatory;EU Regulation on service in member states 142

Service abroad under Federal Rule of Civil Procedure 4 144Note. Interpretation of Rule 4 144Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988) 145Notes. Special Commission report on Schlunk; refusal of service when

request forwarded by U.S. attorney; “send” in Article 10(a) andJapanese position on mail service; Council Regulation on servicein EU; registered e-mail in Italy; American form of notificationau parquet; due process notice requirements; whether ServiceConvention is mandatory 151

International Law’s Affect on Domestic Law 153

Section 5: Taking of Evidence 155Hague Convention on the Taking of Evidence Abroad in Civil or

Commercial Matters 155Société Nationale Industrielle Aérospatiale v. United States District Court,

482 U.S. 522 (1987) 162Notes. Special Commission report on Aérospatiale; abandoned proposal to

amend FRCP 26(a); critique of conclusion that “may” indicates thatConvention is optional; reservations under Article 23; discovery inaid of foreign proceedings under 28 U.S.C. §1782; UK act; “GmbH”;lower court decisions after Aérospatiale; discovery in England;“Anton Piller” order; civil law discovery; EU regulation on takingof evidence 172

Restatement (Third) of Foreign Relations Law of the United States §442 176Notes. Court supervision of discovery of evidence located abroad; effect of

blocking statutes on discovery orders and sanctions 177Societe Internationale Pour Participations Industrielles et Commerciales,

S.A. v. Rogers, 357 U.S. 197 (1958) 178Notes. How burden of proof may be affected by blocking statute; settlement

of principal case; lifting of Swiss banking secrecy laws; effect ofblocking statutes on decision to order production and on sanctionsfor disobedience 183

In re Uranium Antitrust Litigation, 480 F.Supp. 1138 (N.D. Ill. 1979) 183Note. “Balancing test” for ordering discovery and for extraterritorial

application of law 189United States v. First National Bank of Chicago, 699 F.2d 341 (7th Cir. 1983) 189Notes. Use of “Second” and “Third” in referring to Restatements of Foreign

Relations; deliberate use of foreign blocking statute; discovery on thejurisdictional issue; ordering discovery in violation of foreign law;self incrimination 192

In Re Asbestos Insurance Coverage Cases, [1985] 1 W.L.R. 331(House of Lords) 194

Notes. England permits discovery in U.S. in aid of English proceedings;conversion of law lords into justices of the Supreme Court 199

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Section 6: Currency Conversion 200Note. Analysis of currency-conversion problem 200In re Good Hope Chemical Corp., 747 F.2d 806 (1st Cir. 1984) 202Notes. Supreme Court precedent on currency conversion; “F.A.S” and

Guide to Incoterms; effect on U.S. judgment of payment ofEnglish judgment 207

2. SUITS BY FOREIGN PLAINTIFFS 209

Section 1: Forum Shopping and Forum Non Conveniens 209Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) 209Notes. Why an American forum is attractive to foreigners; disparity between

awards within EU; change in law because of change in forum; tacticaluse of transfers between federal courts; review of ruling on forum nonconveniens motion; state forum non conveniens standards; defamationas exception to attractiveness of United States forum; obligation ofcourts in a magnet forum; libel tourism; Friendship, Commerce, andNavigation treaties; International Covenant on Civil & Political Rights,requirement of adequate alternative forum; examples of courtsapplying public and private convenience factors 218

Harrison v. Wyeth Laboratories Division of American Home ProductsCorp., 510 F. Supp. 1 (E.D. Pa. 1980) 227

Note. Conditions on granting forum non conveniens motion 230In re Union Carbide Corporation Gas Plant Disaster at Bhopal, India,

809 F.2d 195 (2d Cir. 1987) 231Notes. Uniform Foreign Money Judgments Act; review of denial of forum

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

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

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

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

in federal court; the Erie Doctrine and forum non conveniens; statesthat do not permit forum non conveniens dismissals or apply thedoctrine restrictively as magnet forums; tactics to prevent removalto federal court 254

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

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

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

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

3. RECOGNITION OF JUDGMENTS 271

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

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

(3rd Cir. 1971) 276Notes. Collateral attack under the EU Regulation; jura novit curia;

recognition of inconsistent judgments; EU Regulation forenforcement of uncontested claims; exorbitant bases for jurisdiction;res judicata effect of failed collateral attack; recognition of U.S.judgments in Canada; Uniform Law Conference of Canada adoptsjudgment recognition statute, foreign decree freezing assets in theUnited States; extra-territorial service under United Kingdom andAustralian law; law applicable to judgment recognition in federalcourts; ALI proposal 280

Jet Holdings Inc. v. Patel, [1988] 3 W.L.R. 295 (Ct. App.) 285Notes. English bases for recognizing personal jurisdiction in foreign courts;

English requirement of “substantial justice”; English view of “presence”as a basis for jurisdiction; recognition of judgments for multiple orpunitive damages; English view of collateral attack for fraud; UKForeign Judgments Act; application of EU Regulation to EU judgmentrecognizing judgment from outside EU; application of Full Faith andCredit to sister-state judgment recognizing foreign judgment;recognition of foreign judgments; Hague Conference judgment-recognition convention; recognition abroad of U.S. judgments 289

Section 2: Judgments Enforcing Public Law 295United States of America v. Inkley, [1988] 3 W.L.R. 304 (Ct. App.) 295Notes. The “revenue rule”; recognition of judgments for family support 298

Section 3: The Uniform Act 299Uniform Foreign Money-Judgments Recognition Act 299Notes. 2005 revision of the Act; fraud as basis for collateral attack; “public

policy” as basis for nonrecognition; due process requirement;collateral attack after defense on merits abroad; enforcementof arbitral awards 301

Royal Bank of Canada v. Trentham Corp., 665 F.2d 515 (5th Cir. 1981) 304Note. Variety of reciprocity requirements in some versions of

Money-Judgments Act 306Detamore v. Sullivan, 731 S.W.2d 122 (Tex. Civ. App.—Houston 1987) 306Note. Notice and opportunity to be heard under Money-Judgment Act 308

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4. THE ACT OF STATE DOCTRINE 311

Section 1: Application and Exceptions 311Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) 311Notes. Conversion of bills of lading; the “Hickenlooper” amendment; result

on remand; application of letter-of-credit proviso; compensation forexpropriated property under Charter of Economic Rights and SouthAfrican law; “a claim of title or other right to property”; requirementof act by sovereign authority; “commercial” exception; LitvinovAssignment; application of doctrine; Libertad Act; arbitrationinvolving sovereigns; bilateral investment treaties; investmentinsurance; doctrine in U.K.; change of attitude by U.S. towardclaims of Nazi-era survivors 321

Section 2: Intangible Property 329Allied Bank International v. Banco Credito Agricola de Cartago,

757 F.2d 516 (2d Cir. 1985) 329Notes. “Situs” of a debt; scope of Act of State doctrine; “sovereign risk”

and bank deposits in foreign branches 332

5. FOREIGN SOVEREIGN IMMUNITY 337

Section 1: The Foreign Sovereign Immunities Act 337Foreign Sovereign Immunities Act 28 U.S.C. 337Notes. Other Code provisions affecting suits with foreign sovereigns;

Seventh Amendment right to jury; when an “agency orinstrumentality” is “a citizen of the United States”; time fordetermining sovereign status; interlocutory appeal; choice-of-lawunder the FSIA; distinctions in FSIA between treatment of “foreignstate” and “agency or instrumentality”; relationship betweencommercial and tort exceptions; pooling and tiering to determinesovereign ownership; application of the FSIA to individuals; serviceon defendant; “organ of a foreign state”; burden of proof; BankruptcyAct provisions; legislation abroad; UN Convention; proposedamendments to FSIA 348

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480 (1983) 358Notes. Grounds for jurisdiction in Verlinden; background of Act;

retroactive application 362Republic of Austria v. Altmann, 541 U.S. 677 (2004) 362Notes. Arbitration after opinion; expropriation cases under FSIA 363

Section 2: Commercial or Governmental 365Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992) 365Notes. Due process limits on personal jurisdiction under Act; sovereign

immunity in the United Kingdom; “direct effect”; attachment;RICO actions 368

Saudi Arabia v. Nelson, 507 U.S. 349 (1993) 371Notes. “Direct effect”; commercial activity in U.S. 377International Association of Machinists v. Organization of Petroleum

Exporting Countries (OPEC), 649 F.2d 1354 (9th Cir. 1981) 378Note. Act is sole basis for jurisdiction over foreign sovereign 381

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MOL, Inc. v. The Peoples Republic of Bangladesh, 736 F.2d 1326(9th Cir. 1984) 382

Notes. Choice between decision on act of state and sovereign immunitygrounds; commercial-governmental distinction; agent of a sovereignwith apparent authority 384

Section 3: Enforcing a Judgment 385Letelier v. Republic of Chile, 748 F.2d 790 (2d Cir. 1984) 385Notes. International Commission award re Letelier; why LAN was not

joined; discretionary function exception; implied waiver of immunityby violation of jus cogens standard; state-sponsored terrorismamendment of FSIA; “used for a commercial activity” 390

Joseph v. Office of the Consulate General of Nigeria, 830 F.2d 1018(9th Cir. 1987) 394

Notes. Drafting of lease to foreign consulate; use of state law to determine“scope of employment”; distinctions between consular and diplomaticimmunity; discretionary function exemption; hiring as commercialactivity; waiver of diplomatic immunity; implied waiver of sovereignimmunity; International Organizations Immunities Act;the immovable property exception 400

6. EXTRATERRITORIAL APPLICATION OF PUBLIC LAW 403

Section 1: Antitrust Law 403Introduction: The Sherman and Clayton Acts 403Restatement (Third) The Foreign Relations Law of the United States §§401,

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

“passive personality” principle; universal jurisdiction; §403’smulti-factor reasonableness standard; intended but no actual effect 405

Timberlane Lumber Co. v. Bank of America, 549 F.2d 597 (9th Cir. 1976) 408Notes. Decision after remand in Timberlane; range of opinion on proper

territorial reach of U.S. antitrust law; forum non conveniensdismissal of Sherman Act claim 413

Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909(D.C. Cir. 1984) 415

Note. Territoriality and nationality as bases for jurisdiction to prescribe 421Agreement between the United States and the United Kingdom Concerning

Air Services [“Bermuda II”] 422Note. Relevance of Treaty to antitrust suit; new agreement with EU 423British Airways Board v. Laker Airways Ltd., [1985] 1 A.C.58 (1984)

(House of Lords) 423Notes. English, Australian, and Canadian “Clawback” Acts; enjoining suit

by Laker’s liquidator; settlement of Laker litigation; Canadianblocking statute 430

Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993) 431Notes. Ambiguity of Justice Souter’s opinion; Justice Scalia’s treatment of

§403; relevance of McCarron-Ferguson exemption; circuit split overHartford’s effect on comity; presumption against extraterritoriality 438

F. Hoffman-La Roche Ltd. v. Empagran, 542 U.S. 155 (2004) 440

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Notes. Decision on remand; effect of FTAIA 445Dee-K Enterprises, Inc. v. Heveafil Sdn. Bhd., 299 F.3d 281 (4th Cir. 2002) 446Notes. Burden of establishing effects on commerce; application of FTAIA

to import commerce 453Antitrust Enforcement Guidelines for International Operations — 1995 454Notes. Sovereign compulsion as defense; recommendation of Organization

for Economic Cooperation and Development (OECD) regardingcooperation on anti-competitive practices 455

Lucchino v. Foreign Countries of Brazil, et al., 476 A.2d 1369 (Pa. Cmwlth.Ct. 1984) 456

Notes. Pennsylvania “buy America” statute; United States-Germany Treaty ofFriendship; violation of the Vienna Convention on Consular Relations;state legislation that interferes with foreign affairs 458

Japan-United States: Agreement on Semiconductor Trade (1986) 461European Community Declaration Concerning Japanese-United States

Agreement on Semiconductor Trade (1986) 462Notes. Subsequent Japan-U.S. agreements; antitrust agreements between

U.S. and EU, Australia, France, Germany, Canada; InternationalAntitrust Enforcement Assistance Act; recognition of “effects” doctrineabroad; The Court of Justice of the European Communities applies EUantitrust law to foreign producers (The “Wood Pulp Case”); OECDguidelines; U.S. companies obtain antitrust remedies against otherU.S. companies from EU Commission; EU Merger Control Rules;comparative antitrust law 463

Section 2: Securities Law 468Morrison v. National Australia Bank Ltd., 130 S.Ct. 2869 (2010) 468Notes. Application of U.S. securities law to protect U.S. and foreign investors;

SEC regulations on tender offers for shares of foreign companies; forumnon conveniens dismissals of actions under federal statutes; agreementsbetween the U.S. and Switzerland and the U.S. and Japan on cooperationin enforcement of securities laws 476

Section 3: Other Problems 478Restatement (Third) The Foreign Relations Law of the United States §414 478Notes. Distinction between branches and subsidiaries; Sarbanes-Oxley Act;

the U.S.S.R.-Western Europe Pipeline incident; acts of U.S. regulatoryagencies affecting operations abroad; Iran & Libyan Sanctions Act;Cuban Liberty & Democratic Solidarity Act; extraterritorial applicationof other U.S. public laws; French court action against U.S. internetserver; in rem jurisdiction under Anticybersquatting Act 479

7. CIVIL SUITS FOR ATROCITIES THAT VIOLATE INTERNATIONAL LAW 487

Section 1: The Alien Tort Claims Act 487Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) 487Notes. State responsibility for acts of individuals; obligations of transnational

corporations; choice of law under the ATCA; statute of limitations;nonstate actors; ATCA suit v. U.S.; ATCA suits against U.S. corporations;forum non conveniens dismissal of ATCA suit; German and Austrianagreements on compensation for Nazi era atrocities; California legislation;

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federal statute permitting recovery for injuries by terrorism;codification in the United Kingdom of the European Conventionon Human Rights; Belgium legislation 494

Section 2: The Torture Victim Protection Act 503Torture Victim Protection Act 503Note. Tolling of time limitations under the TVPA 504Kadic v. Karadzic, 70 F.3d 232 (2d Cir. 1995) 504Notes. Jurisdiction over Karadzic; judgments against Karadzic; political

question doctrine; international criminal tribunals; immunity ofindividuals under the FSIA; international law as federal law;head-of-state immunity 513

8. DAMAGES RESULTING FROM INTERNATIONAL FLIGHTS:THE MONTREAL ANDWARSAW CONVENTIONS 517

Section 1: Recovery Rules 517Montreal Convention 517Note. Ratification by U.S. and entry into force; special drawing rights;

plaintiff strategy; important issues under Montreal Convention 524Warsaw Convention 526Civil Aeronautics Board Order Concerning Hague Protocol and

Montreal Agreement 532Note. Protocols amending Warsaw Convention; IATA agreement

removing liability limits for personal injury and death; recoveryand preemption issues 533

Section 2: Defining Convention Terms and Determining Preemption 534Olympic Airways v. Husain, 540 U.S. 644 (2004) 534Notes. Meaning of “accident” 539Morris v. KLM Royal Dutch Airlines, King v. Bristow Helicopters Ltd.,

[2002] 2 A.C. 628 (H.L. 2002) 542Note. Recovery for psychic injury 549Zicherman v. Korean Air Lines Co., Ltd., 516 U.S. 217 (1996) 549Notes. Choice of law under Warsaw Convention; amendment of Death

on the High Seas Act to permit recovery of non-pecuniary damages;forum non conveniens dismissal of action under Convention 552

El Al Israel Airlines, Ltd. v. Tseng, 525 U.S. 155 (1999) 553Notes. Convention preemption of injunctive relief or prejudgment interest;

defining Convention terms; Athens Convention on Carriage by Sea 555

9. INTERNATIONAL CHILD ABDUCTION 559

Section 1: Duty to Return the Child 559Hague Convention on the Civil Aspects of International Child Abduction 559Notes. United States ratification; implementing legislation and regulations;

Permanent Bureau Guide to Good Practice; return under UniformChild Custody Jurisdiction Act and Uniform Child Custody Jurisdictionand Enforcement Act; Convention’s distinction between ratifyingcountries; Inter-American Convention on International Repatriationof Children; European Convention on Recognition and Enforcement

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of Decisions Concerning Custody of Children and on Restorationof Custody of Children; applicable law when both Hague andEuropean Conventions are in force 566

Robert v. Tesson, 507 F.3d 981 (6th Cir. 2007) 569Notes. Review of finding of “habitual residence”; meaning of “habitual

residence”; “rights of custody”; problems of enforcement in somesignatory countries; different treatment of custody and accessrights; international comity; contemporaneous proceedings;when petition moot 576

Section 2: Exceptions to the Duty to Return 583Danaipour v. McLarey, 386 F.3d 289 (1st Cir. 2004) 583Notes. “Intolerable situation”; EU Regulation; child’s objections; waiver

of Convention rights; acquiescence in removal; rights of fugitivefrom justice; UN Convention on Rights of the Child; no full faithand credit to state custody award 586

10. LETTERS OF CREDIT 593

Introduction: Operation of letters of credit; U.S. banks’ inability to guaranty;Uniform Customs and Practice for Documentary Credits; UCC Article 5;Convention on Independent Guarantees and Standby Letters of Credit;International Standby Practices 593

Section 1: Compliance with Terms of the Letter 595Banco Espanol de Credito v. State Street Bank and Trust Co., 385 F.2d 230

(1st Cir. 1967) 595Notes. Strict compliance; high percentage of document discrepancy and

rejection; “advising bank”, “confirming bank”, “nominated bank”,“drawee bank”; inspection certificates; jurisdiction in wrongfuldishonor suit 599

Section 2: Enjoining Payment 600Mid-America Tire, Inc. v. PTZ Trading Ltd., 95 Ohio St.3d 367,

768 N.E.2d 619 (2002) 600Notes. Enjoining payment on a letter of credit 608Foxboro Co. v. Arabian American Oil Co., 805 F.2d 34 (1st Cir. 1986) 609

Section 3: Political Risks 611Note. Problems arising from letters of credit issued before the revolution

in favor of Iranian beneficiaries 611Harris Corp. v. National Iranian Radio and Television, 691 F.2d 1344

(11th Cir. 1982) 611Declaration of Algeria Concerning Settlement of Claims by the United States

and Iran 617Note 619

11. ARBITRATION 621

Introduction: Reasons to prefer arbitration to litigation 621

Section 1: Conventions and Model Law 622

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Inter-American Convention on International Commercial Arbitration 622Notes. Ratification of Inter-American Convention; comparison of

Inter-American and New York Conventions; arbitration underthe North American Free Trade Agreement 623

Convention on the Settlement of Investment Disputes between States andNationals of Other States 626

Notes. Ratification; immunity of a State from execution 636UNCITRAL Model Law on International Commercial Arbitration 1985 636Notes. Enactments of Model Law; “ex aequo et bono”, “amiable

compositeur,” “lex mercatoria”; enforcing agreements thatarbitrators apply lex mercatoria 649

Section 2: Judicial Assistance and Interference 651Introduction: Court review of arbitration awards; developments in England 651Pioneer Shipping Ltd. v. B.T.P. Tioxide Ltd. (“The Nema”), [1982]

A.C. 724 (House of Lords, 1981) 653Notes. English standards for appeal from award; interim judicial assistance;

stay of confirmation of award; exclusion from Brussels Conventionand Council Regulation 658

Section 3: Awards of the Iran-United States Claims Tribunal 662Ministry of Defense of the Islamic Republic of Iran v. Gould Inc., 887

F.2d 1357 (9th Cir. 1989) 662Notes. Tendency to enforce international arbitral awards; relevance of

awards of Iran-U.S. Claims Tribunal 666

Problem Appendix 669

Table of Cases 673

Index 687

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Preface

The volume of international civil litigation and arbitration continues to increase.Lawyers outside the huge firms that conduct the lion’s share of international practice arelikely if not now, soon, to be faced with the problem of asserting claims by or againstforeign parties. Moreover, a lawyer must know what issues arise in international prac-tice in order to draft agreements that put the client in the best tactical position shouldthere be a dispute.

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

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

An introduction to Chapter 1 surveys four topics of conflict of laws, or, as civil lawcountries refer to the subject, private international law—jurisdiction to adjudicate, ju-risdiction to prescribe, choice of law, and recognition and enforcement of judgments.The introduction also discusses the organization and subject matter jurisdiction ofUnited States state and federal courts. A Problem Appendix affords the opportunity ofteaching or reviewing chapters by having class discussion focus on the problems.

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

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Acknowledgments

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

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