The Principles and Rules of Transnational Civil Procedure and their Application to New South Wales
The Principles and Rules of Transnational Civil Procedure and their Application to New South Wales*
Clifford R. Einstein** / Alexander Phipps***
While recent decades have witnessed a burgeoning interdependence of national and regional economies, international commercial litigation remains fraught with legal risk. In contrast to the situation concerning the international harmonisation of substantive law, rules of civil procedure in many jurisdictions remain characterised by idiosyncrasies that, while understandably reflecting local legal cultures, present significant obstacles to the unwary foreign litigant. This paper will examine the recent adoption and promulgation by the American Law Institute (ALI) and the International Institute for the Unification of Private Law (UNIDROIT) of model Principles of Transnational Civil Procedure to apply to international commercial litigations, accompanied by Rules of Transnational Civil Procedure, reproduced in a Reporters' Study,[1] and their congruence with the existing procedures of the New South Wales Supreme Court. It concludes that, given the extent of the similarities with the ALI / UNIDROIT Principles, as well as with the Rules, the procedural law of that State is already at the forefront of the shift towards greater international uniformity.
I. - INTRODUCTION : ALI AND UNIDROIT - A JOINT VENTURE
The American Law Institute (ALI) and the International Institute for the Unification of Private Law (UNIDROIT) Principles of Transnational Civil Procedure (November 2004) (hereinafter: the Principles) and the Rules contained in the Reporters' Study seek to correct the imbalance that has emerged in recent decades between the harmonisation of the substantive private law applicable to manifold international commercial transactions as compared to procedural law in the same area. [2] More specifically:
The Rules' purpose is primarily to provide an efficient and fair procedure for transnational cases. The authors' intent is for the draft Rules to apply in ordinary national courts, replacing domestic procedural rules whenever the plaintiff and defendant are nationals of different States or whenever property in one State is subject to claims (ownership or security interests) asserted by a party from another State. In such transnational cases today, one of the hardships - and hence one of the risks of international commerce - occurs when a party is forced to prosecute or defend its interests under a foreign procedural system containing elements that seem arbitrary or unfair.[3]
The legal basis for this dilemma is the axiom of the conflict of laws that, while contractual parties are at liberty to choose the substantive "governing" or "proper" law of their agreements,[4] "litigants who resort to a court to obtain relief must take the court as they find it" [5] in the sense that the procedural rules of the lex fori will always be applicable regardless of the transnational nature of the dispute. Further, and travelling beyond mere legal considerations, the drafters have suggested that the sluggish harmonisation of procedural law might be due to the "assumption that national procedural systems are too different from each other and too deeply embedded in local political history and cultural tradition to permit reduction or reconciliation of differences among legal systems." [6] Support for this hypothesis is readily available in practice, epitomised by the current state of foreign judgment enforcement law.[7] Notwithstanding rigorous attempts over the last decade to conclude a comprehensive, truly international treaty concerning the enforcement of foreign judgments, entrenched national and regional traditions concerning, principally, the acquisition and exercise of jurisdiction have ensured that the project remains incomplete. Mired in what might be deemed 'arbitrary' or 'unfair' procedural idiosyncrasies, the law in this area stands as a perfect illustration of the imperative of international procedural harmonisation such as that attempted by the new ALI / UNIDROIT instrument.
Whatever the cause, it is evident that the legal risk posed by foreign litigation governed by unfamiliar foreign procedure represents a major contributing factor to the popularity of arbitration - on 'neutral' territory and in accordance with procedures chosen by the parties - as an alternative means of settling international commercial disputes. For Alan REDFERN and Martin HUNTER, a fundamental advantage held by international arbitration over litigation is that:
Procedures can be adapted to fit the dispute, rather than the dispute being made to fit the available procedures, like a guest in some Procrustean Inn. Different disputes call for different approaches. For instance, in a dispute over intellectual property rights, the arbitral tribunal might find it appropriate to order fairly extensive disclosure of documents (under an appropriate protective order) and to administer interrogatories - an approach which would almost certainly be out of place in, say, a dispute over a failure to make payments under a joint venture agreement.[8]
Similarly expressed by Professor Herbert KRONKE, Secretary-General of UNIDROIT:
All bodies of rules of civil procedure, codified and judge-made alike, are based on the implicit assumption that both parties are residents of the forum State and familiar with its courts' ways of handling disputes. Increasingly, this is not the case as either one or even both parties are foreigners. This may result in an efficiency gap and a fairness gap. International arbitrators are used to this situation and ... routinely remedy undesirable consequences by modifying and adapting existing rules of procedure or by designing new rules with a view to accommodating the peculiar needs of transnational dispute resolution. Judges do not have the freedom to react creatively to this type of peculiarity of a case brought before them.[9]
Indeed, it is critical to note that ALI and UNIDROIT, with cognisance of the drawbacks of litigation in the international commercial context, do not envisage that even the extensive acceptance and adoption of the Principles or of the Rules will usurp the present fact that "arbitration has become the dispute-settlement mechanism of choice in international transactions." [10] Rather, "some cases will always find their way into the courtroom, and the authors' design provides greater procedural fairness in these situations." [11]
II. - BEYOND THE CIVIL/COMMON LAW DICHOTOMY : FUNDAMENTAL PROCEDURAL PRINCIPLES
Accordingly, the Principles seek to combine features of both the civil and common law arms of the Western legal tradition commensurate with this harmonising function. As such, given that United States civil procedure, while falling within the general aegis of the common law tradition, is unique in having (inter alia) broad oral and documentary discovery, 'notice' rather than 'fact' pleading and jury trial, [12] the idiosyncrasies of that procedure have been jettisoned so as to maximise the potential for the Principles to be accepted throughout disparate national legal systems. With these aspects of the US system aside, the "fundamental similarities among procedural systems" [13] discerned by the authors and with which the Principles deal cover areas including jurisdiction, commencement, pleadings, interlocutory orders and privilege.
As regards the Rules, it is important to note that their level of prescription must be read in conjunction with the Principles, with the relationship between the two instruments being that the "Rules as currently drafted are one example of how the Principles may be translated into the language of and made operational in one specific legal environment." [14] Given that, as recently identified by Professor KRONKE, that environment is a common law jurisdiction such as the United States [15] (and, by extension, Australia), it is submitted that the Rules rather than the Principles provide a substantially more certain and quantifiable basis upon which the feasibility of Australian participation in the ALI / UNIDROIT initiative can be analysed. Moreover, the presentation of abstract principles in addition to definite rules is consistent with the ALI and UNIDROIT's 'soft-law approach' [16] to harmonisation, involving the formulation of aspirational standards at the global level so as to avoid tension or direct conflict with more prescriptive regional provisions (such as those formulated by the EU or NAFTA). As Australia does not appear at present to be a member of any such comparable regional organisation, debate therefore need not remain in the abstract. A more comprehensive summary of the Rules, in tabular form, is attached as an appendix to this paper.
III. - A NEW SOUTH WALES PERSPECTIVE
In a 2001 paper addressing the potential incorporation of the Rules into Australian procedural law, Justice Bryan BEAUMONT of the Federal Court of Australia suggested that an "exploration of the relativities" demonstrates that "relevant Australian jurisdictions should have no real difficulty in accommodating the Draft Principles [upon which the Rules are based]." [17] With his Honour referring the reader to relevant provisions of the Federal Court Rules as an example of Australian domestic practice, the basis of this conclusion is the general similarity between the procedures required by the Rules and those already prescribed in most domestic superior court jurisdictions.
Indeed, with one exception in respect of the acquisition and exercise of jurisdiction (as discussed below), it is submitted that this conclusion particularly follows in respect of the existing procedures of the Supreme Court of New South Wales (hereinafter: the SCRs) and those dictated by the Rules.
Definition of 'commercial' for the purposes of the Rules
Rule 2.1 dictates that "these Rules apply to disputes arising from transnational commercial transactions", with the 'transnationality' of the dispute determined by reference to the habitual residence of the parties, the location of property within the forum or the submission to arbitration in the forum. However, the expression 'commercial' is not subject to further definition, notwithstanding the fact that the commentary to the Principles states that the "adaptive document may include a more specific definition of 'commercial'." [18] In the New South Wales context, no difficulty would be posed in formulating such a definition so as to restrict proceedings to which the Rules apply to genuinely commercial matters, given that the New South Wales Supreme Court has, since the passage of the Commercial Causes Act 1903, been seised of a specialist commercial jurisdiction as a "direct progenitor" of the Commercial Court established in London eight years earlier.[19] Now, pursuant to SCR Pt 14 r 1(1), entry into the present Commercial List is conditional upon the relevant proceeding "arising out of trade or commerce" or being one "in which there is an issue that has importance in trade or commerce", in the sense that it "can be recognized as something which forms part of, or is an essential incident of, the commercial activities of the community." [20] In addition, Practice Note 100, which governs all proceedings commenced in or transferred to the List, contains procedural rules tailored specifically to the commercial context so as to further ensure the "just, quick and cheap resolution" of disputes arising therein (SCR Pt 1 r 3(1)). As stated in the commentary to the Rules:
Typically it would be convenient that a specialized court or division of court be established in a principal commercial city, such as Milan in Italy or London in the United Kingdom. Committing disputes under these rules to specialized courts would facilitate development of a more uniform procedural jurisprudence.[21]
In the Commercial List of the New South Wales Supreme Court, therefore, one has precisely such a specialised court in precisely such a regional commercial centre, whose existing procedures have long recognised the practical need to manage and dispose of commercial proceedings in a manner sensitive to the particular needs of litigants in that context.
Acquisition and exercise of jurisdiction : the problem of 'exorbitant' jurisdiction
On their face, the manner in which the jurisdiction of the court may be established in international disputes varies markedly between that set out in Rule 4 and that in Pt 10 r 1A of the SCRs. The starting point of Rule 4 is that a "substantial connection" must be established between the defendant and the forum before jurisdiction is acquired, on the reasoning that subjecting defendants to the coercive powers of the court on the basis of mere presence (or 'tag jurisdiction' as it is known in the United States) represents a denial of procedural fairness to litigants conducting the majority of their business elsewhere. Moreover, that substantial connection must relate to the transaction the subject-matter of the dispute specifically rather than to the forum at large. As stated by the commentary to the Rules:
The standard of "substantial connection" has been generally accepted for international legal disputes. Administration of this standard necessarily involves elements of practical judgment and self-restraint. That standard excludes mere physical presence, which within the United States is colloquially called "tag jurisdiction." Mere physical presence as a basis of jurisdiction within the American federation has historical justification that is inapposite in modern international disputes. The concept of "substantial connection" may be specified and elaborated in international conventions and in national laws. The scope of this expression might not be the same in all systems. However, the concept does not support general jurisdiction on the basis of "doing business" not related to the transaction or occurrence in dispute.[22]
Most prominent among the international instruments adopting the 'substantial connection' approach to the acquisition of jurisdiction are the European Union's Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters 1968 (hereinafter: the Brussels Convention) and the substantially similar Lugano Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters 1988, which "lay down a very elaborate system of jurisdictional rules, to which the court in which the original action is brought must adhere." [23] Taking the Brussels Convention as an example, in civil and commercial matters (Article 1) the basic principle is that persons "domiciled" in one Contracting State may be sued in the courts of that State, regardless of nationality (Article 2). Persons domiciled in a Contracting State may, however, only be sued in personam in the courts of another Contracting State when a connection exists between that defendant and that forum in the manner of (inter alia):
(a) Where a contract the subject of the dispute is or was to be performed in the forum (Article 5(1)).
(b) When a harmful event the subject of an action in tort or delict occurred in the forum (Article 5(5)).
(c) Where there are multiple defendants, when one of those defendants is domiciled in the forum (Article 6(1)).
In addition, special provision is made for the acquisition of jurisdiction in matters relating to insurance (Articles 7-12a), consumer contracts (Articles 13-15) and in rem jurisdiction when immovable property is located within the forum (Article 16).
It is thus from a similar conception of the permissible reach of the 'long arm' (or 'exorbitant') jurisdiction of the courts of the forum that Rule 4 provides for the acquisition of in personam jurisdiction over defendants who are not "habitual residents" (Rule 4.2.2) of that place in situations where (inter alia):
(a) the defendant consents to the acquisition of jurisdiction (by, for example, voluntary appearance) (Rule 4.2.1);
(b) the defendant is a company or other jural entity that is incorporated or has its "principal place of business or administrative headquarters" in the forum (Rule 4.2.3);
(c) the defendant has or has agreed to provide goods and services in the forum and the dispute concerns that transaction (Rule 4.2.4.1); and
(d) the defendant has committed "tortious conduct" in the forum, or conduct having "direct effect in the forum" (Rule 4.2.4.2).
Indeed, the acquisition of in personam jurisdiction based upon the mere presence of the person is permissible only when "no other forum is reasonably available" (Rule 4.4). Like the Brussels Convention, however, in rem jurisdiction is enlivened when the proceedings concern claims for an interest in property located in the forum (Rule 4.3).
In contrast, the fundamental means of enlivening the jurisdiction of Australian superior courts remains that of service within the forum, notwithstanding the existence or otherwise of any further relevant connection other than the fact of that presence. As stated by DIXON CJ, WILLIAMS and WEBB JJ in Laurie v Carroll:[24]
In the case of personal service within the jurisdiction of a writ of summons in an action in personam the view seems to be accepted that it is enough that the defendant is present in ... [the forum] at the time of service. It does not matter why, so long as he has not been enticed there fraudulently for the purpose. It does not matter whether he is a foreigner or a subject of the Crown. It does not matter how temporary may be his presence, how fleeting may be his visit.
Indeed, in one famous case, service on a defendant present in England for a weekend at the Ascot races was held to be effective regardless of the lack of any other connection between the forum and either the defendant personally or the transaction the subject of the dispute.25 Accordingly, it is only when it becomes necessary for service to be effected overseas that any consideration of a 'substantial connection' between the defendant, the dispute and the forum is raised. Pursuant to SCR Pt 10 r 1A, service of originating process out of the New South Wales Supreme Court may take place outside Australia when the proceedings are founded on or in respect of (inter alia):
(a) a "cause of action arising in the State", such as promissory estoppel or misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) (r 1A(1)(a));
(b) a contract made, governed by the law of or breached in the State (r 1A(1)(c)(i), (iii) and (iv));
(c) a tort committed in the State (r 1A(1)(d));
(d) damage suffered in the State in respect of a tortious act or omission, wherever occurring (r 1A (1)(e));
(e) a defendant who is domiciled or ordinarily resident in the State (r 1A(1)(g)); or
(f) a defendant who has agreed to submit to the jurisdiction of the court (r 1A(1)(h)).
Moreover, there is no requirement in the SCRs for leave to be obtained prior to process being served overseas, although of course the defendant may apply (without appearing such as to constitute voluntary submission) to have the service set aside on the ground of want of jurisdiction: SCR Pt 10 r 6A(1). In such applications, the onus remains on the plaintiff to demonstrate that there are jurisdictional grounds upon which the service can be said to be effective.[26]
In terms of foreign legal persons, such entities will be 'present' within the jurisdiction for the purposes of service when they have either registered under the Corporations Act 2001 (Cth) as a foreign corporation and have a registered office within the forum (Corporations Act s 601CX), or when they have been 'carrying on business' within the jurisdiction, either directly or via an agent, at a fixed address and for a sufficiently substantial period of time.[27] Critically, the carrying on of business sufficient to establish the presence of a foreign corporation need not be in relation to the particular transaction the subject of the proceedings, contrary to the intent of the Rules.
The doctrine of forum non conveniens
Thus there exist significant and quite essential differences between the approach to the acquisition of jurisdiction in international disputes under the Rules and the SCRs respectively. With mere presence sufficient and an expansive long arm jurisdiction in place, the New South Wales Supreme Court is potentially seised of territorial jurisdiction over persons or companies with only the remotest factual nexus with the forum, leading to potential litigation in an alien procedural environment in precisely such a manner as the Rules are intended to avoid. Certainly, the conflict of laws doctrine of forum non conveniens applies in Australia in an almost identical manner as to that specified in Rule 4.6.2, being that the court should refuse to exercise jurisdiction when it determines that it is a "manifestly inappropriate forum relative to another forum that could exercise jurisdiction." As dictated by the High Court in Voth v. Manildra Flour Mills, an Australian court will refuse to exercise jurisdiction over a foreign defendant when it is a "clearly inappropriate forum" for the resolution of the dispute, in the sense that the continuation of the proceedings would be "vexatious or oppressive" to the defendant having regard to the factual nexus between him, her or it and the forum (such as the location of witnesses, the parties' usual place of business, the expense of the proceedings, and so forth). Importantly in the interests of unification, this test appears on its face to reflect far more closely the 'manifestly inappropriate' formulation of the Rules when compared to the test presently applicable in the United Kingdom, being that a court will refuse to exercise jurisdiction when there is a "clearly or distinctly more appropriate forum" available for the resolution of the dispute.[28]
However, it must be recalled that were proceedings to be conducted pursuant to the Rules, the doctrine of forum non conveniens would be of no relevance to a foreign defendant until a connection with the forum substantial enough to acquire jurisdiction as per the dictates of Rule 4 had been established. That is to say, whereas under the Rules the appropriateness of the forum as a venue for the resolution of the dispute is a consideration in respect of both the acquisition and exercise of jurisdiction, under present New South Wales procedures the appropriateness of the forum is applicable only to the latter question. Bearing in mind that the Rules apply exclusively to international commercial proceedings, a situation wherein entities with even the slightest of presences within the forum must expend time and money contesting jurisdiction, does not appear to be consistent with the goals of reducing the occurrence of disputes governed by unfamiliar procedures and making litigation a less onerous financial burden when compared to arbitration. As such, even if the adoption of the Rules (or procedures to the same effect) is perceived as a longer term project, the question of jurisdiction deserves attention as an issue in itself.
Formalised settlement machinery
Rule 16 sets out a formal mechanism for the exchange of offers and counter-offers of settlement between the parties before the final hearing of a matter, aimed at "encouraging compromises and settlements" and deterring parties from "pursuing or defending a case that does not deserve a full and complete proceeding." [29] The salient aspects of this procedure allow for either party to deliver an offer of settlement that must remain open for 60 days (Rule 16.1), within which the offeree may accept, reject or proffer a counter-offer that must itself remain open for 30 days (Rule 16.2). Such communications are on a strictly without prejudice basis (Rule 16.4) save as to the imposition of cost sanctions if the offeree fails to obtain a final judgment more advantageous than the relevant proposed settlement; Rule 16.5 provides that "[n]ot later than [30] days after notice of entry of judgment, a party may file with the court a declaration that such an offer was made but rejected."
Similarly, in 1989 Division 1 of Part 22 of the SCRs was amended to provide for a very similar mechanism to that envisaged by Rule 16, replacing the old 'payment into court' practice whose utility suffered from the fact that, inter alia, offers of settlement were available only to defendants (contra the present r 2), payment of moneys or security was required immediately upon the making of the offer (contra r 4) and the acceptance of the offer led only to a stay of proceedings rather than the opportunity to enter judgment accordingly (contra r 3(9)). As noted by the commentary to the Rules, procedures in the nature of Rule 16 and Part 22 of the SCRs are at variance with normal practice "in which the parties generally do not have an obligation to negotiate or otherwise consider settlement proposals from the opposing party." [30] In a commercial context characterised by a need for speed and cost efficiency in the disposal of litigation, however, such a 'carrot' and 'stick' [31] approach to the settlement of proceedings is particularly apt.
The reception of expert evidence
Rule 26, dealing with the manner in which expert evidence is to be received by the court, is significantly at variance with established practice in the common law world in deploying the civil law's preference for court rather than party-appointed experts. Moreover, the appointment of such an expert may be of the court's own motion in addition to that of the parties'. Rules 26.1 and 26.2, the operative provisions in this respect, are expressed in the following terms:
26.1 The court must appoint a neutral expert or panel of experts when required by law and may do so when it considers that expert evidence may be helpful. If the parties agree upon an expert the court ordinarily should appoint that expert.
26.2 The court must specify the issues to be addressed by the expert and may give directions concerning tests, evaluations, or other procedures to be employed by the expert, and the form in which the report is to be rendered. The court may issue orders necessary to facilitate the inquiry and report by the expert. The parties have the right to comment upon statements by an expert, whether appointed by the court or designated by a party.
In deference to what the commentary to the Rules designates an "intermediate position",[32] however, Rule 26.3 facilitates the adducing by a party of expert evidence regardless of whether the court considers such evidence to be necessary.
While Part 39 of the SCRs contains a recently implemented procedure for the appointment of expert witnesses upon the Court's own motion, the anterior practice in the New South Wales Supreme Court adhered to the common law tradition of party-appointed experts. In the specific context of protracted commercial litigation concerning very technical issues of fact, however, such a procedure is replete with difficulties from both a time and cost perspective, an example of which is proffered by the commentators FRECKELTON and SELBY:
In a dispute about whether or not a computer installation is working to "as ordered" requirements, several experts may be retained by the disputing parties to report upon the components and performance of the installation. But how is the judge to choose among them? A solution is to seek the court appointment of an independent expert referee who can hear the conflicting views and then report back to the court.[33]
Indeed, such a solution is precisely what is contemplated by Part 72 of the SCRs, which provides for the reference out of any question or questions of fact and law arising in a proceeding to a referee for inquiry and report. Admittedly such procedures are far from novel in Anglo-Australian procedural law, with the Common Law Procedure Act 1854 (UK) - an instrument whose terms were subsequently replicated in many Australian colonial jurisdictions - and the Judicature Acts of 1873 and 1875, both empowering the relevant courts to refer questions regarding (in particular) technical matters of science, local knowledge or mere account to a referee for independent determination. Introduced in 1986, however, Part 72 is unique amongst Australian jurisdictions in terms of the breadth of the power conferred upon the trial judge to appoint a referee, allowing for the reference out on a party's or the court's own motion of the whole or part of the proceedings for inquiry and report (r 2(1)). It is the trial judge's responsibility to give directions in respect of the conduct of the reference (r 8(1)), a supervisory jurisdiction is retained during the currency of the proceedings (r 9) and, once submitted, the court holds a discretion to (inter alia) adopt, vary or reject the referee's determination (r 13(1)). Accordingly, the benefits of Part 72 in commercial litigation are self-evident, avoiding in suitable proceedings the time and expense incurred as a result of a battle between parochial, party-appointed experts and the inevitable time required by the non-expert trial judge to digest the mass of information presented. Reflecting this pragmatic utility, Practice Note 100 dictates both that the plaintiff must list on the summons any questions thought appropriate for reference (paragraph 6 [34]), a consideration which is further incumbent upon both parties during the course of the proceedings as a whole (paragraph 15).
Observations on the present state of New South Wales procedure
In summary, therefore, the reception of the Rules of Transnational Civil Procedure into the existing procedures of the New South Wales Supreme Court would not appear to pose any particular difficulties when compared with existing procedures. The overriding obligation of the Court in the application of its own rules, particularly in respect of matters in the Commercial List, is to "facilitate the just, quick and cheap resolution of the real issues" (SCR Pt 1 r 3), an object which is plainly on all fours with that of the Principles and Rules and aided by the existence of the above procedures - which are in many respects unique amongst Australian jurisdictions.
IV. - CONCLUSION
The purpose of the above conspectus has been to demonstrate that for the last two decades Australia generally and New South Wales specifically have been at the forefront of international legislative reforms designed to simplify the process of cross-border commercial dispute resolution. In the litigation context, the similarity between the ALI / UNIDROIT Principles and the accompanying Rules, and the existing procedures of the New South Wales Supreme Court, with the possible exception of the breadth of the latter's long-arm jurisdiction, is illustrative of the extent to which the latter is already cognisant of the imperative of cost and time efficiency in commercial proceedings. In addition, given this similarity and the fact that the ALI/UNIDROIT Principles represent a synthesis of the procedural traditions of disparate legal cultures, there is little in the practice of the New South Wales Supreme Court of such idiosyncrasy as to present to foreign litigants the procedural unfairness which this instrument seeks to minimise.
Appendix Summary of the Rules of Transnational Civil Procedure
Rule(s) | Subject-Matter | Comment |
4 | Jurisdiction | Provides for the acquisition and exercise of jurisdiction over foreign defendants when there is a sufficient connection between the forum and either the transaction or the parties to it, and the exercise of same when not “manifestly inappropriate” to do so. |
5 and 6 | Joinder/Addition, Cross Claim/Third Party Procedure and Amicus Curiae Intervention | Provides for the joinder or addition of, or the commencement of cross-claim proceedings against, any person amenable to jurisdiction and ‘substantially connected’ to the subject-matter of the proceedings. Provision for amicus curiae intervention is made in anticipation of proceedings giving rise to questions of international trade custom. |
7 | Service of Process | Provides for the defending party to be given notice of the proceedings either by act of the moving party (as in common law systems) or the Court (as in civil law systems). The originating document must specifically advise that the Rules are being invoked. |
9 | Composition of the Court | It is left to forum law to determine the composition of the Court, thus accommodating procedural idiosyncrasies such as the civil law’s preference for collegiate courts at first instance and jury trial in common law systems. |
10 | Impartiality of the Court | The decisional authority (judge, referee, arbitrator, and so forth) must not hear a case if there are “reasonable grounds to doubt” his or her impartiality. Parties have the right to challenge the decisional authority’s ability to sit. |
11, 12 and 13 | Pleadings | Provides for the commencement of proceedings by statement of claim, in which the moving party must plead specifically to all material facts and (in a departure from the traditional common law position) outline both the evidence supporting those factual assertions and the conclusions of law which flow from them. Claims not traversed in the Statement of Defence are deemed admitted. |
14 | Amendments | Allows for parties to amend their pleadings when to do so “does not unreasonably delay the proceeding or otherwise result in injustice.” |
15 | Default Judgment and Dismissal | Provides for the entry of judgment against a defending party in default of appearance or defence, or the dismissal of proceedings upon the moving party failing to prosecute with “reasonable efficiency.” The entry of default judgment upon the former ground is conditional upon the court first being satisfied that it has jurisdiction over the defending party. |
16 | Settlement | Provides for a formalised, without prejudice offer and counter-offer procedure. |
17 and 20 | Coercive Interlocutory Orders | Provides for the Court, by the granting of “provisional relief”, to “restrain or require conduct of a party or other person when necessary to preserve the ability to grant effective relief by final judgment or to maintain or otherwise regulate the status quo.” |
18 | Case Management | Provides for the close case management of proceedings via a series of pre-trial conferences similar to the Federal Court of Australia’s ‘individual docket system.’ Interestingly from a common law perspective, provision is made for the Court to “[s]uggest amendment” of the pleadings and the claims therein. |
21, 22 and 23 | Discovery, Exchange of Evidence and Affidavits | Provides for documentary discovery, the exchange of witness proofs and the giving of evidence in chief on affidavit. Given that civil law systems have a very restricted concept of discovery, only those records that are “relevant” to the proceedings must be produced. |
25 and 26 | Admissibility of Evidence | Provides that relevance is to be the fundamental touchstone of admissibility, and adopts the civil law practice of Court rather than party-appointed experts. |
27 | Privilege | Prescribes client-legal and without prejudice privileges as of right, leaving forum law to determine the extent of any further confidentialities (for example, doctor-patient or accountant-client). |
28 | Burden of Proof | Provides that “[a] party has the burden to prove all the material facts that are the basis of that party’s case.” |
29 | Final Hearing | Provides for a concentrated, plenary final hearing and a right of cross-examination in the manner of common law systems. Following the civil law tradition, however, the Court as well as the parties may examine witnesses. |
32 | Costs | Provides that the successful party will ordinarily be entitled to an award of “all or a substantial portion” of its “reasonable costs.” This is in contrast to the usual United States practice of each party bearing its own costs. |
33 | Appellate Review | Provides for a right of appeal against both final judgments and, with leave, interlocutory orders. |
35 | Domestic Enforcement | Provides that a final judgment is enforceable immediately and prescribes mechanisms by which the successful party may obtain satisfaction. |
36 | International Enforcement | Provides merely that “[a] final judgment in a proceeding conducted in another forum in substantial compliance with these Rules must be recognized and enforced unless substantive public policy requires otherwise.” |
END NOTES
* The published version of this paper is to be found in Uniform Law Review NS - Vol. IX, 2004-4, at page 815
** A Justice of the Supreme Court of New South Wales (Australia).
*** Commercial List Researcher, Supreme Court of New South Wales (Australia).
1 The ALI / UNIDROIT Principles of Transnational Civil Procedure are reproduced in this issue of Uniform Law Review at 758; the Rules of Transnational Civil Procedure are reproduced as a Reporters' Study and appear in an Appendix to ALI / UNIDROIT Principles of Transnational Civil Procedure, Cambridge University Press (2005).
2 See, for example, the United Nations Convention on Contracts for the International Sale of Goods 1980, or the Hague Convention on the Law Applicable to Certain Rights in respect of Securities held with an Intermediary 2002.
3 Geoffrey C. HAZARD, et al, "Transnational Rules of Civil Procedure: Rules and Commentary", 30 Cornell International Law Journal (1997), 493 at 493-494.
4 Vita Foods Products Incorporated v. Unus Shipping Company Ltd (in liq) [1939] AC 277.
5 John Pfeiffer Pty Ltd v. Rogerson (2000) 203 CLR 503 at 543 [99], per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.
6 "Introduction" in: ALI / UNIDROIT Principles of Transnational Civil Procedure, Cambridge University Press, supra note 1.
7 As recently detailed by the authors in a two-part article: "Trends in International Commercial Litigation" - Part I "The Present State of Foreign Judgment Enforcement Law"; Part II "The Future of Foreign Judgment Enforcement Law", to appear in Praxis des Internationalen Privat- und Verfahrensrechts (IPRax), issues 3 and 4 respectively (2005).
8 Alan REDFERN / Martin HUNTER, Law and Practice of International Arbitration, Sweet & Maxwell, London (2003), 23.
9 Herbert KRONKE, "Efficiency, Fairness and Macro-Economic Functions: Challenges for the Harmonisation of Transnational Civil Procedure", Unif. L. Rev. / Rev. dr. unif., 2001, 740 at 742.
10 HAZARD, et al, supra note 3, 493 at 494.
11 Ibidem.
12 "Introduction", supra note 6.
13 Ibidem.
14 KRONKE, supra note 9, 740 at 748.
15 Ibidem.
16 Herbert KRONKE, "UNIDROIT 75th Anniversary Congress on Worldwide Harmonisation of Private Law and Regional Economic Integration: Hypotheses, Certainties and Open Questions", Unif. L. Rev. / Rev. dr. unif., 2003, 110 at 16.
17 Justice Bryan BEAUMONT, "The Proposed ALI / UNIDROIT Principles of Transnational Civil Procedure and their Relationship to Australian Jurisdictions", Unif. L. Rev. / Rev. dr. unif., 2001, 951 at 969.
18 ALI / UNIDROIT Principles of Transnational Civil Procedure, supra note 1, paragraph P-B.
19 Challenge Bank Ltd v Raine & Horne Commercial Pty Ltd (1989) 17 NSWLR 297 at 299, per Rogers CJ Comm D.
20 NRMA Insurance Ltd v Flanagan [1982] 1 NSWLR 585 at 591, per Hunt J.
21 ALI / UNIDROIT Principles of Transnational Civil Procedure, supra note 1, paragraph R-3B.
22 Ibidem, paragraph P-2B.
23 Lawrence Collins (Ed.), Dicey and Morris on The Conflict of Laws, Thirteenth Edition, Volume 1, Sweet & Maxwell, London (2000), 266.
24 (1958) 98 CLR, 310 at 331.
25 Maharanee of Baroda v. Wildenstein [1972] 2 QB 283.
26 Voth v. Manildra Flour Mills Pty Ltd (1990) 171 CLR, 538 at 564, per Mason CJ, Deane, Dawson and Gaudron JJ.
27 BHP Petroleum Pty Ltd v. Oil Basins Ltd [1985] VR, 756.
28 Spiliada Maritime Corp v. Cansulex Ltd [1987] AC, 460 at 477-478 [emphasis added].
29 ALI / UNIDROIT Principles of Transnational Civil Procedure, supra note 1, paragraph R-16A.
30 Ibidem.
31 Maitland Hospital v. Fisher (No 2) (1992) 27 NSWLR, 721 at 724, per Kirby P, Mahoney JA and Samuels AJA.
32 ALI / UNIDROIT Principles of Transnational Civil Procedure, supra note 1, paragraph R-26D.
33 I. FRECKELTON / H. SELBY, Expert Evidence, Looseleaf Service, The LawBook Co (2003), paragraph 1.110.
34 The same rule applies, as per paragraph 7, to the statement of defence.
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