Where am I now? Lawlink > Supreme Court > Speeches > Transaction Costs and International Litigation  Print page   Transaction Costs and International Litigation TRANSACTION COSTS AND INTERNATIONAL LITIGATION ADDRESS BY THE HONOURABLE J J SPIGELMAN AC CHIEF JUSTICE OF NEW SOUTH WALES TO THE 16TH INTER-PACIFIC BAR ASSOCIATION CONFERENCE SYDNEY, 2 MAY 2006 I welcome this opportunity to address this gathering of business lawyers from throughout the Asian-Pacific region. Your choice of “Free Trade Agreements” as the overall theme for this Conference reflects the increasing significance of such agreements in this, the most dynamic economic region of the world. The trend towards bilateral free trade agreements is, of course, a reflection of the difficulties that have been encountered in developing multilateral agreements [1] . The purpose of this paper is to identify a range of issues about the practice and procedure of international litigation that should be part of this international microeconomic reform agenda. Transaction Costs The expansion of international trade and investment over recent decades looks certain to continue. There has already been a dramatic increase in the frequency of cross border legal disputes. International litigation will continue to expand, despite the high level of risk, cost and delay that is involved. The transaction costs involved in the enforcement of the legal rights and obligations of international trade and investment operate as a burden on such trade and investment. International litigation involves: Additional layers of complexity. Additional costs of enforcement, indeed uncertainty about the ability to enforce contractual rights. Risks arising from unfamiliarity with foreign legal process. The risk of unknown and unpredictable legal exposure. Minimising the transaction costs of international litigation requires the attention of business lawyers and of commercial judges. I do not doubt the difficulties involved. The achievement of significant international micro-economic reform through free trade agreements, suggests that we should now take reform of international litigation out of the too hard basket. Minimising transaction costs is one of the central themes of the law and economics literature, which appears to be the dominant school of jurisprudence in the United States. That dominance is not reflected elsewhere. The focus on transaction costs is derived from the seminal work of the Nobel Prize winning economist, R H Coase, who advanced the Coase Theorem that efficient outcomes can be achieved by market participants without government regulation, as long as property rights are well defined and transaction costs are zero. Of course, transaction costs, notably legal costs, can never be zero. Economists concentrated on this artificial world, notwithstanding Coase’s [2] criticisms. Even without accepting the whole intellectual toolkit [3], it can readily be accepted that transaction costs which impede the beneficial mutual exchange of either trade or investment should be minimised. However, this objective has not been a significant feature of negotiations for bilateral free trade agreements. This may be because the costs and uncertainties of international litigation are so high, particularly when compared with domestic litigation, that there is a belief that nothing of substance can be achieved. I am not so sure. In any event, there will be international litigation and it is likely to expand. This is a matter that should be of significant concern to all business lawyers. It is only if the business lawyers of the region come to believe that there is some point in pursuing such matters that representatives of the respective governments around the negotiating table will take them up in bilateral or regional discussions. One commentator has described a business lawyer as a “transaction cost engineer” who facilitates commercial intercourse by reducing future transaction costs [4]. Well-drafted commercial arrangements avoid conflict with regulatory regimes; anticipate, and therefore avoid, future disputes; and create structures for dealing with the unknown or the unanticipated. By such advice, transaction lawyers add value to a transaction. Of course part of what businesses, your clients, call costs, and what economists call “transaction costs”, is what you call “income”. There is a tension here which requires three things: first, the maintenance of high standards of professional conduct; secondly, a level of regulation of the profession that is appropriate in each jurisdiction; thirdly, supervision of the litigious process by the active involvement of judges, particularly through effective case management and caseload management. The cost structure of much economic activity has been transformed over recent decades by new management techniques, by technology and by the reduction in barriers to trade through microeconomic reform. Lawyers are not and will not be immune to the gales of creative destruction, to use Schumpeter’s telling phrase, unleashed by contemporary entrepreneurs. Your clients are acutely conscious that one of the few areas of business expenditure that has not notably diminished over recent decades is the cost of dispute resolution. Unless business lawyers are seen to deliver a cost-effective service, you may very well find yourselves bypassed in the same way as some other sections of our profession have come to be bypassed in recent times, often by legislative intervention. International Comity and Reciprocity Multilateral and bilateral arrangements to facilitate international litigation manifest the principles of comity and reciprocity. The High Court of Australia has adopted an explanation of the principle of comity first advanced in the Supreme Court of the United States in the following terms: “ ‘Comity’, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and goodwill, on the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial act of another nation, having due regard both to international duty and convenience and to the rights of its own citizens or of other persons who are under the protection of its law.” [5] At the core of the idea of comity is the expectation of reciprocity: we will act in the way that our conduct will be treated by others. In this respect the principle of comity is based on an enlightened self-interest, not on some form of idealistic internationalist perspective. The principle of reciprocity is also reflected in bilateral treaties, such as free trade agreements. The minimisation of the transaction costs involved in international commercial litigation is well within the purpose and objective of such agreements. Law Reform Report In 1996 the Australian Law Reform Commission produced a report on legal risk in international transactions [6]. This report covered a wide range of the issues involved in international co-operation and legal enforcement for international transactions. It described itself as a feasibility study, directed to indicating subjects for further inquiry. Unfortunately, it has not led to much in the way of practical results. I will refer to some of the Commission’s recommendations when dealing with specific matters below. The report contained many useful suggestions, both for the courts and for the profession. Indeed, it is noteworthy that the report specifically mentioned this organisation, in the context of making the observation that it is practitioners who bear the frontline burden of dealing with cross border issues. The Commission said: “Work at this level is enhanced by professional associations like the Inter-Pacific Bar Association, Law Asia and the International Bar Association. These assist lawyers to become more familiar with cross border issues, to track down sources of legal advice in other jurisdictions and collectively to help develop better solutions to cross border problems. There are also several international judicial conferences which assist in a similar way.” [7] Interaction amongst lawyers in the region has grown considerably in the decade since these issues were considered by the Law Reform Commission. Similarly there has been a considerable expansion of contact between judges at conferences and in visits by delegations. A new sense of international collegiality has developed amongst judges and the level of understanding of each other’s practices is qualitatively different today. There is a solid foundation on which to build. International Commercial Arbitration Lord Goff described the international situation as “a jungle of separate, broadly based jurisdictions all over the world” [8]. Sometimes the process appears to be an application of the law of the jungle. The complexities of international litigation stand in invidious comparison to the well-established regime of international commercial arbitration. To some degree these are alternatives. I am a strong supporter of alternative dispute resolution. Not all judges are. It helps, coming from a busy court. Staying on top of the caseload of the Supreme Court of New South Wales is like trying to drink from a fire hose. We would not survive without settlements, which these days generally involve mediation or arbitration. I am, myself, a strong advocate of a hands-off approach to the process of commercial arbitration. Judgments of the Supreme Court of New South Wales are, I believe, widely recognised in the commercial arbitration community as supporting the parties choice of dispute resolution mechanisms [9]. Nevertheless, when arbitrators meet, there is a continual refrain of complaint about interference by the courts. This refrain is not entirely altruistic. It is necessary to recognise the vital role that the courts play in maintaining the integrity of the commercial arbitration process. Things do go wrong. Arbitrators do manifest bias. Arbitrators have been known to commit errors of so fundamental a kind as, on any view, to justify intervention by a court. The court’s role in maintaining the integrity of the process should be welcomed by arbitrators. It enhances the attractiveness of arbitration to the commercial community. The advantages of arbitration are real, notably in a context in which parties have a continuing relationship. The ability to decide or influence the selection of the decision-maker is often seen to be an advantage of commercial arbitration. Another advantage is that arbitration takes place in private, or in secret, depending on your point of view. In commerce there is a reluctance to wash your dirty linen in public. Commercial arbitration offers privacy which the courts rarely can or should offer. It is also sometimes said that commercial arbitration minimises costs. Particularly in the area of commercial litigation I do not believe that is true in Australia to any substantial degree. Of course it is capable of being true, but it depends very much on the arbitrator and the parties. The ability to play some part in the selection of the arbitrator is not a fool- proof mechanism for protecting the integrity of the process. This is particularly so whenever one party is much more frequently involved in the process of selecting arbitrators than another – “repeat players” as they are called. It is also hard to ignore the fact that an arbitrator on a daily rate does not have a strong personal interest in minimising the time the process takes. Not all commercial disputes are appropriate to be resolved by mediation or arbitration. Subject to their contractual obligations, parties may choose to litigate in preference to arbitration. As with the submission to arbitration, their wishes should be respected. Furthermore, notwithstanding the high quality of the arbitrators, many of them are retired commercial judges, some disputes raise novel legal issues that can only be authoritatively determined by appellate courts. To some degree, commercial arbitration may suffer from the lack of coercive powers available to courts, e.g. compelling discovery or the attendance of witnesses and ensuring the preservation of assets. There is in place a coherent international system for resolving commercial disputes by arbitration, which stands in marked contrast to the complex, incoherent, “jungle” of diverse provisions for international litigation. I refer to the interlocked UNCITRAL Model Law [10], the New York Convention for Enforcement of Arbitral Awards [11] and the Washington Convention for Investment Disputes (ICSID) [12]. These international instruments have been widely adopted, including in Australia by the International Arbitration Act 1974 [13]. Perhaps, the most significant advantage that international commercial arbitration has over international litigation in courts is the ability to effectively and efficiently enforce arbitration awards virtually throughout the world, pursuant to the New York Convention. Nothing remotely like that exists if one obtains a judgment from a court. Venue Disputation The considerable expansion in international litigation has been attended by transaction costs which, in large measure, are unique to international trade and investment. Disputes as to the appropriate jurisdiction in which litigation should occur are now more common. This sometimes happens in domestic commercial litigation, notably in federal systems and in any jurisdiction in which there are separate courts with exclusive jurisdiction in a particular field, requiring the determination of precise legal boundaries. Nevertheless, such disputes are of a different order, and frequency, when cross border transactions are involved. As Justice Colman of the English Commercial Court recently said: "In recent years the Commercial Court has increasingly been called upon to resolve complex jurisdictional issues which have arisen even in the face of binding law and jurisdiction clauses. Such disputes arise because of the apparent inability of the parties even to attempt to apply commonsense to the choice of venue for resolution of their disputes. Parties to the Brussels, Lugano and San Sebastian Conventions and ultimately to EU Regulation 44/2001 have at least established a jurisdictional regime of reasonable certainty for international commercial disputes connected with the courts of Member States. Once outside that regime, the opportunities for disruption of the resolution of substantive claims by time-consuming and costly jurisdictional ancillary litigation are far too often relentlessly and needlessly pursued to the prejudice of all parties. The applications now before this court exemplify the futility of this kind of ancillary litigation and point up the urgent need for an international jurisdiction and judgments convention of the widest possible application." [14] Of course international trade has always thrown up such issues and there is a long history of disputes over such matters. There seems little doubt, however, that the scope and intensity of such disputation has considerably expanded over the last few decades. The publication of specialist journals and books on the subject reflects this growth [15]. Perhaps the best indicator, however, is the emergence of proceedings for anti-suit injunctions, both of a pre-emptive nature, and to prevent the continuation of proceedings in another jurisdiction. Some of the international litigation literature seems to make a virtue of this form of disputation by suggesting that once matters have been determined the disputes appear to lead to a commercial settlement. There is no room for self-congratulation here. The commercial settlement is almost always available from the outset. It is the uncertainty as to the jurisdiction, about both the formal rules that will be applied and the mode of their application, that delays the settlement. Jurisdictional disputes are always, and in all circumstances, a waste of money. They are, regrettably, necessary in the current and likely future structure of international institutional arrangements. They represent a transaction cost which is a peculiar imposition on international trade and investment and which, therefore, discourages such trade and investment. We should do whatever we can to minimise the occurrence of such disputation. The problem of course is that for a growing range of disputes there are at least two, and frequently more, options available for instituting proceedings. Exorbitant or long-arm jurisdiction is a feature of many nations. Australia, in the common law tradition, has rules of court which entitle a court to assume jurisdiction based on service in situations where connection with the jurisdiction is at best tenuous, perhaps amounting no more than residence, or even temporary presence or, in the case of tort, the fact that injury continues after the return of a resident to the jurisdiction [16]. Under the French Civil Code any French national may sue a foreign contractor in the French courts [17]. So may a resident of Belgium or the Netherlands in the courts of those nations. In Germany, the Code of Civil Procedure confers jurisdiction in proceedings against any person who possesses property in Germany [18]. These choices are made, at least in the first instance, by plaintiffs. This is not a neutral process. Initially plaintiffs determine where the proceedings are brought. They have a “first mover” advantage. Properly advised, they will take advantage of the options available. There is nothing neutral about the choice of jurisdictions, subject to self-denial on the part of the jurisdiction first chosen or an anti-suit injunction, which can be made effective, from another jurisdiction [19]. The inevitable has happened, in response to these defendant strategies there has emerged the pre-emptive anti-anti-suit injunction [20. There are numerous different tests adopted for determining when it is appropriate to decline to exercise long-arm jurisdiction. Even within particular nations there are differences between judges and differences over time with respect to the degree of parochialism or international comity manifest when these issues arise. This is a large topic to which justice cannot be done on an occasion such as this. However, I do wish to raise for consideration the possibility that, in a commercial context, this is a matter that can be alleviated, to some degree, in a bilateral treaty such as a free trade agreement. Particular attention should be given to the effect of a choice of jurisdiction clause in contracts for international trade or investment. The futility of venue disputes is exemplified by one of the leading authorities from Australia. In Akai Pty Ltd v The People’s Insurance Co Limited the High Court was concerned with the Australian subsidiary of a Japanese corporation which obtained credit risk insurance over risks situated in Australia and New Zealand. At that time it was difficult to obtain such cover in Australia, so it sought cover from the People’s Insurance Company, a company incorporated in Singapore. That company proposed an express choice of Singaporean law. However, after negotiation, the contract expressly provided for English law to govern the contract. Following an insolvency, Akai commenced proceedings in the Supreme Court of New South Wales and claimed that the terms of the Australian Insurance Contracts Act overrode the choice of law clause. The High Court, by a bare majority of 3 to 2, upheld this contention, on the basis of the section of the Act which prevented parties from contracting out of its operation. This is a classic case of the effect to be given to what are called “mandatory rules”. However, what should be given the conclusory appellation of a “rule” that is “mandatory”, is frequently a difficult matter. The High Court decision in Akai widened the circumstances in which a foreign jurisdiction clause may be held to offend the public policy of the Australian forum. However, the defendant successfully invoked the jurisdiction of the English courts, which granted an anti-suit injunction on the basis of the express choice of forum. In any event, Singapore, the defendant’s home jurisdiction, and the location of its assets, would probably have refused to give effect to the Australian court’s decision. No doubt all of this informed the ultimate settlement of the case, but the transaction costs incurred before that was resolved were formidable [21]. The frequency and intensity of battles over jurisdiction indicate that parties attribute considerable significance to venue [22]. The clearest example of this, of course, is the size of damages awards that may be made if jurisdiction can be established in the United States. That nation offers pre-trial discovery which most jurisdictions regard as oppressive fishing expeditions; jury trials with awards of damages that are regarded everywhere else as exorbitant and statutory provision for treble damages – all driven by an entrepreneurial class of trial lawyers with a major financial interest in the result. In all multilateral negotiation on legal issues, this is the 1000 lb gorilla sitting in the corner [23]. Justice Einstein, a judge of my Court, has described the position of the United States as “one of the most intractable obstacles to be overcome in any move towards a substantially global judgment enforcement convention” [24]. I agree. No doubt for that reason, these matters are not covered in the Free Trade Agreement between Australia and the United States. Indeed, Australia felt the need to enact legislation many years ago, to protect its companies from treble damages actions [25]. Civil Procedure International commercial litigation does not, in principle, differ from domestic commercial litigation in its basic requirements. The first is speed. The adverse effects of delay are particularly acute in this context. In commerce, delay is not merely undesirable. Delay means that capital is tied up, for example in increased provision for contingencies; entrepreneurial energy is diverted; uncertainty and increased risk breed timidity and avoidance or increase insurance costs. Much litigation is concerned with dividing a pie. Delay in commerce means the pie is smaller. In most jurisdictions the particular requirements of commerce are recognised by special rules of practice and procedure. In many jurisdictions, as in New South Wales, this recognition is reinforced by devoting a group of judges, selected for their commercial expertise, to such cases on a full-time basis. This recognises the necessity for such litigation to be dealt with expeditiously and at the lowest cost consistent with a fair process. The Australian legal heritage, as is well known, is that of England. The Commercial Court in London is a well-established example of the special treatment of commercial cases. This was the model that we adopted in Australia. Indeed, we played a role in its creation. On 29 January 1889 a ship called The Sir Walter Raleigh, loaded with wool from Sydney, came to grief on the French coast at Cap Giz-Nez near Bourgogne. The cargo was salvaged and eventually found its way to London. The subsequent proceedings in the Queen’s Bench Division of the High Court of Justice were so mishandled by the trial judge that years of criticism by the London commercial community of the judiciary was brought to a head, leading to the establishment of the Commercial Court [26]. The trial judge was Mr Justice Lawrance whose only distinction was that he was the tallest man in the High Court. He was known as “Long John Lawrance”. He had been appointed by Lord Halsbury for his services to the Conservative Party, not for his legal skills. Lord Justice McKinnon would later describe him thus: “A stupid man, a very ill equipped lawyer, and a bad judge. He was not the worst judge I’ve ever appeared before: that distinction I would assign to Mr Justice Ridley; Ridley had much better brains than Lawrance, but he had a perverse instinct for unfairness that Lawrance could never approach.” [27] A dispute arose as to how the rules for salvage expenditure could be spread over the various owners of the cargo on The Sir Walter Raleigh. Junior counsel for the plaintiffs was the future Lord Justice Scrutton, already the author of the first edition of his work on Charterparties. He would later anoint Lawrance as the “only begetter of” the Commercial Court. Having listened to argument of counsel highly experienced in the field, Lawrance reserved his judgment for a period of six months until he was reminded about the case. Accordingly, he returned to court and commenced to deliver an ex tempore judgment in which he periodically stopped to ask counsel what the issues were, described an issue in terms which indicated he did not understand the reply, and had to be reminded at the end that he had not dealt with the more important issues in the case at all. This was the last straw for the commercial community that had long been critical of the unnecessary delays, technicalities and excessive costs of commercial litigation in the Queen’s Bench Division. In 1895 the Commercial Court was established. We followed very quickly thereafter. The New South Wales Commercial Causes Act was enacted 1903. The business lawyers of this city celebrated the centenary of our commercial list in 2003 [28]. The essential requirements of commercial litigation were established at that time and remain the same today. Technical rules and long encrusted practices and procedures must be set aside. The judge must be empowered to require the parties to identify the real issues in dispute at an early stage and, thereafter, must ensure the speedy and efficient determination of those issues. The Supreme Court of New South Wales continues to conduct a specialist List dealing with commercial, technology, building and construction matters in this manner. It was the origin of much of the approach to case management that has subsequently been adopted in other areas of litigation. Our practices had an influence on Lord Woolf, when he instigated the recent major reforms of civil procedure in England [29]. The same principles are relevant to international litigation of a commercial character. However, by reason of the cross border nature of the transactions, it is often difficult to apply case management practices to minimise delays and costs. The uncertainties associated with international litigation can be attenuated if the commercial community and its legal advisers develop a sense of familiarity with the civil procedure for commercial cases in foreign jurisdictions. The differences in legal traditions are such that harmony will never be attained. Nor do I regard it as desirable. Nevertheless, some degree of harmonisation with respect to the basic principles applicable to commercial litigation could play a significant role in taking away the sense of unfamiliarity that exists when a party is embroiled in foreign proceedings. I refer particularly to the Model Principles of Transnational Civil Procedure promulgated jointly by the American Law Institute (ALI) and the International Institute for the Unification of Private Law (UNIDROIT) [30] for application to transnational commercial transactions. These Principles combine features of both the civil and common law legal traditions and attempt to overcome the problem of exorbitant, long-arm jurisdiction by promulgating a “substantial connection” test. Although not free from difficulty in its practical application, in the commercial context with which the Principles are concerned, this is probably as good a starting point as one could have. The substantial connection test is that found in the Brussels Convention. There is a body of interpretation to draw on. Of further significance is the structure of civil procedure for which the Principles make provision with respect to joinder of parties, service of process, pleadings, the composition and impartiality of the court, default judgments and dismissals, mechanisms for settlement, for coercive interlocutory orders, case management, discovery, exchange of evidence, admissibility, privilege, burden of proof, cross-examination of witnesses, costs, appeals and enforcement provisions. In this comprehensive set of respects a serious attempt has been made to develop a hybrid model which is understandable to lawyers from both the civil law and the common law traditions. Although a uniform forum non conveniens test is not likely to be achievable, the ALI/UNIDROIT Principles are a useful model that could be more widely adopted with respect to practice and procedure. As a start, each jurisdiction could assess its own practices and procedures with a view to determining whether or not a greater degree of harmonisation could be achieved with respect to international litigation by moving towards that model. The present practice of the special regimes operating in many Australian jurisdictions, including New South Wales, generally accords with the model [31]. The development in each national commercial community of a belief that there is a degree of similarly and harmonisation in the procedures for commercial litigation in other jurisdictions of the Asia-Pacific region, would do much to remove the sense of unfamiliarity, even of bewilderment, which can sometimes be held by parties and their legal advisers who become embroiled in litigation in a foreign jurisdiction. Minimising the degree of uncertainty, as well as minimising transaction costs, is an objective worth pursuing on a jurisdiction by jurisdiction basis. This process would also be assisted by improving communications between courts. I have recently proposed a conference of judges from the region with a view to comparing case management practices for commercial litigation. The initial response has been quite positive. In a federal context such as Australia, mechanisms for ensuring harmonisation in this regard have been developed. We have a Chief Justices Council which includes all of the Chief Justices of the jurisdictions in Australia. We are advised by a Harmonisation Committee which has produced a number of reports on detailed practical issues, that have led to the adoption of similar regimes. It may well be that the Council of Asian Chief Justices could adopt a similar approach. Service of Process The Hague Service Convention of 1965 has many signatories, including the United States, China, South Korea and Japan [32]. For inexplicable reasons, Australia is not a contracting State. Service under the Convention includes the creation within each contracting State of a Central Authority, which effects service on behalf of other contracting states. An alternative method of service is allowed whereby consular officials of the delivering state effect service in the destination state [33]. The Convention also makes provision for service of documents by direct post, subject to an objection by the State of destination. This mechanism, which could reduce transaction costs, is principally used as a back-up to official service. A number of States have objected to the option [34]. In any event, postal service – “snail mail” as it is called – is technologically obsolete. In this, as in other respects, the Hague Convention is out of date. Pending the long process of multilateral reforms, bilateral arrangements could update practice in the field. Nevertheless, the Convention has coped for many years with the diversity of procedural mechanisms in the numerous jurisdictions to which it applies [35]. In 1996, the Australian Law Reform Commission recommended that Australia should “as a matter of priority” accede to the Convention [36]. It noted that it replicated the common form Rules of Court in Australia, including the New South Wales Supreme Court Rules. In some respects it was simpler. The report identified numerous advantages that the Convention would bring to Australia. There seems to be no reason why Australia should not accede to the Hague Service Convention. Earlier discussions, within the Australian federal context, did not lead to that happening primarily, it appears, because of the lack of priority given to the project, rather than because of any significant disagreement with its content. I raised this issue in an address earlier this year. I understand that it may be placed back on the agenda of the Standing Committees of Attorneys-General [37]. Pending ratification, this is a matter which is capable of being reflected in bilateral treaties, as in the treaties that Australia has entered into with South Korea and Thailand [38]. There seems no reason why it should not be a standard component of a free trade agreement. Indeed, provisions which further reduce the transaction costs involved in the Hague Convention itself could readily be developed. A free trade agreement could update and improve the system under the Convention. Assistance with Evidence The Hague Evidence Convention has been one of the most successful of the Hague Conventions [39]. However, it has not been widely adopted in the Asia-Pacific region. Australia is a party, as are China (including Hong Kong), the United States and Singapore [40]. No doubt the many nations in this region, who have not acceded, have their reasons. Free Trade Agreements could contain a provision promising accession or making alternative bilateral arrangements. I had occasion to consider judicially the Australian implementation of the Hague Evidence Convention pursuant to a letter of request from the United States of America, relating to the tobacco litigation in Washington DC. The United States Government instituted proceedings designed to recoup the billions of dollars of governmental expenditure on health, which it alleged were caused by the world’s largest tobacco companies. The government sought evidence from a number of former employees of those companies who were living in Australia and in the United Kingdom. Australian legislation implemented the Hague Evidence Convention in a form derived from the English legislation and adopted by most nations of the British Commonwealth [41]. The Court of Appeal, on which I sat, held that the Convention was intended to make available evidence in the form of pre-trial discovery as understood in our systems, but not the extensive form of pre-trial discovery available in the United States [42]. The New South Wales court found that legal professional privilege over the documents had been waived by reason of consent orders in other proceedings in the United States, which orders resulted in the legally privileged documents being published on the internet. A few months after our judgment, the English Court of Appeal had to decide the same question. It held that, in English law, the privilege had not been waived [43]. The division of the English Court of Appeal that decided that matter was presided over by Lord Justice Henry Brooke. In May 2005 both Lord Justice Brooke and I attended a conference in Washington and had the pleasure of calling in on the United States District Court for the District of Columbia to watch Judge Gladys Kessler preside over this case. I thought we had done the United States legal system a favour by making available the documents, and that the English Court of Appeal was unnecessarily curmudgeonly about this request. However, the Chief Judge of the United States District Court informed us that Judge Kessler had received several thousand pages of transcript of such foreign depositions. No-one had ever read them in the trial. No summaries had been made for the judge. Eventually that would occur. I came away with a view that perhaps it was Henry Brooke who had done her the favour, not me. The Hague Convention procedure for letters of request is now well established. National regimes have shown a capacity to adapt their own procedures so that the evidence they collect is more readily usable under the procedures of the requesting State. As one author has noted: “The German courts, for example, have developed a procedure for taking depositions in response to requests from foreign countries, with provision for cross-examination which appears entirely to meet the needs of common law countries; the French Code of Civil Procedure now allows a verbatim recording and a limited form of cross-examination to meet the needs of parties using the Convention.” [44] This Convention has been very successful. However, it preceded the considerable expansion of international litigation. It appears to involve some unnecessary expense and delay. In cases where the witness is co-operative, it is now regularly bypassed in Australia by taking evidence by videolink [45]. There is little doubt that, in the context of free trade agreements or other bilateral arrangements, more expeditious mechanisms could be adopted. This Hague Convention, like the Hague Convention on service abroad, operates through an excessively bureaucratic regime of Central Authorities receiving a request from foreign courts. No doubt such governmental oversight is regarded in some places as protecting the national interest. An alternative mechanism is found in the UNCITRAL Model Law on Cross Border Insolvency, which gives recognition and standing to a “foreign representative”, being a person authorised to administer foreign proceedings [46]. Such a representative can apply directly to a court of a participating State. This mechanism would minimise the transaction costs imposed by a centralised bureaucratic regime. In its 1996 Report, the Australian Law Reform Commission considered the possibility of enhancing mutual co-operation in evidence collection by means of bilateral agreements [47]. A bilateral agreement could make provision for direct communication of a letter of request to a court. Furthermore, provision could be made for obtaining the assistance of a foreign court to compel a witness, even though the State has not made a declaration permitting this under the Hague Evidence Convention. Finally, when evidence is given for foreign proceedings, a bilateral arrangement could impose the sanction of a local prosecution for perjury or contempt. The Australian Law Reform Commission made a number of specific recommendations for the amendment of the Foreign Evidence Act 1994 [48]. There have been no amendments. A number of recommendations were made for review, by the Australian Attorney General, of certain evidentiary issues, including the scope of judicial assistance available in Australian courts; permitting foreign lawyers to conduct examinations after a letter of request; clarification of the meaning of “civil or commercial” in Australian statutes and establishing procedures for direct judicial co-operation between Australian and overseas courts in cases of overlapping jurisdiction [49]. I am unaware of what consideration has been given to these recommendations. Nothing much seems to have emerged. Cross Border Insolvency In the case of cross border insolvency, a high level of co-operation between courts of different nations is essential. That a company in liquidation has assets in more than one jurisdiction is now more frequently the case than ever. There is an understandable tendency for the courts in any particular jurisdiction to protect the interests of the creditors of that jurisdiction, particularly where they are likely to receive a higher dividend if they get access to the assets in their jurisdiction, than they would if those assets were placed into the general pool available to the liquidator. (“Ring fencing” as it is called.) There is much scope for disputation with respect to such matters. I am sure many of the people in this room have been involved in such disputes. I cannot say that there is anything improper about this attitude. After all, it is usually the case that there is a separate subsidiary vehicle incorporated within jurisdiction that holds the relevant assets and also owes the relevant debts. The separate legal personality of a subsidiary corporation remains significant for many purposes. Jurisdictions differ in their preparedness to lift the corporate veil. The fact that it is usual to have every subsidiary guarantee the debts of other members of the group adds a level of complexity. Nevertheless, the flow of trade and investment is impeded by increasing the transaction costs of corporate insolvencies. Delay in distribution of assets by liquidators prevents those assets being deployed in the most efficient way. The costs of an extended liquidation are a waste, except to lawyers and accountants. There is no single correct solution to these problems. However, international co-operation is obviously desirable. It has arrived in the form of the UNCITRAL Model Law on Cross Border Insolvency, 1997. It came into operation in Japan in April 2001, in the European Union in May 2002, in the United States on 17 October 2005 and in the UK on 1 April 2006. Australia has announced that in a process of law reform which has the less than delightful acronym of CLERP 8, the Model Law will be adopted in Australia [50]. The Model Law makes provision for the identification of “main proceedings” in the jurisdiction of the debtor’s “centre of main interests”. Although European experience with an equivalent regulation (No 1346/2000) indicates there is much scope for contention in the concept of “the centre of main interests”, there can be no doubt that the Model Law will substantially reduce the transaction costs involved in corporate insolvency. Significantly, the Model Law may prevent local creditors “ring fencing” local assets for themselves. Justice Barrett of the Supreme Court of New South Wales has summarised the key provisions of the Model Law: “A ‘foreign representative’ (i.e. person or body authorised to administer, or act as a representative of, the foreign proceedings) may apply directly to commence insolvency proceedings in a court of the participating state, without subjecting the debtor’s foreign assets or affairs to its jurisdiction for any other purpose. The foreign representative may also apply for recognition of foreign proceedings. The court will presume that the representative has been duly appointed and that documents submitted in support of the application for recognition are authentic. It must determine the application at the earliest possible time. Pending the outcome of the application, the court may grant interim relief unless the relief would interfere with the administration of a foreign main proceeding. Recognition activates the presumption that the debtor is insolvent. In respect of foreign main proceedings, there is an automatic stay on the commencement or continuation of individual proceedings in any other jurisdiction concerning the debtor’s assets, rights, obligations or liabilities. Execution against the debtor’s assets is also stayed and the right to transfer, encumber or otherwise dispose of any assets is suspended. … … The Model Law mandates cooperation and direct communication between a local court and foreign courts or foreign representatives. The means of cooperation may include: the appointment of a person to act as directed by the court; communication of information by any means considered appropriate by the court; coordination of the administration and supervision of the debtor’s assets and affairs; approval or implementation by the courts concerning the coordination of proceedings; and coordination of concurrent proceedings regarding the same debtor. ” [51] The significance of international cooperation for international commerce is emphasised by the fact that the Model Law is not dependent on reciprocity. It operates as a law, not a treaty. Freezing Orders A further area in which judicial assistance is essential arises in the case of special orders which we now call freezing orders, which we used to call Mareva injunctions, after the English case in which they were first promulgated. Freezing orders are designed to prevent a person dissipating assets in order to frustrate a potential judgment. Such orders may be of considerable significance in international litigation so long as jurisdiction will act in support of foreign proceedings abroad, not simply in support of proceedings within the court’s jurisdiction. The UNCITRAL Model Law of Cross Border Insolvency was motivated in part by the ability of insolvent debtors to fraudulently conceal assets, particularly by transfer to other nations. Such conduct is not limited to insolvent companies. As Lord Millett once said: “In other areas of law, such as cross border insolvency, commercial necessity has encouraged national courts to provide assistance to each other without waiting for such co-operation to be sanctioned by international convention. International fraud requires a similar response.” [52] I agree with his Lordship. This is clearly an area where courts can assist each other to the benefit of international trade and investment. A freezing order may conflict with a foreign law. Accordingly, English and Australian Courts have released from liability under such an order, persons who reasonably believed themselves to be obliged by foreign law to act otherwise than in accordance with a freezing order, including a person who is ordered by a foreign court to do so [53]. A bilateral treaty could lead to the amelioration of this constraint. In England the law is still based on traditional equity jurisprudence and is limited by a series of conditions laid down in The Siskina [54] which established three constraints. First, a freestanding freezing order in aid of foreign proceedings could not be given with respect to assets of the foreign respondent within the jurisdiction; secondly, the plaintiff must establish that a cause of action had accrued before an application can be made; and, thirdly, a freezing order will only be granted in protection of a cause of action which the court has jurisdiction to enforce by final judgment. Furthermore, it has been held that an English court does not have jurisdiction to make a freezing order pursuant to a formal letter of request from another court [55]. In New South Wales, and most other Australian jurisdictions, freezing orders are now the subject of Rules of Court. Justice Campbell of the New South Wales Supreme Court has held that the Siskina constraints do not apply in Australia [56]. Accordingly, he made an order freezing the Australian assets of a defendant in support of foreign proceedings. The Harmonisation Committee of the Council of Chief Justices has recently developed a standard form set of rules with respect to both freezing orders and search orders (formerly called Anton Pillar orders). I expect this will soon be adopted in all Australian jurisdictions. Those rules will carry into formal effect the reasoning of Justice Campbell. The three Siskina constraints will be expressly overruled, so that freezing orders will be readily obtainable in Australia in support of proceedings brought in other jurisdictions. The principle of reciprocity in this regard could be incorporated in bilateral treaties, including in free trade agreements [57]. Australian courts will support foreign proceedings by preserving the assets of foreign defendants held in Australia. It is, therefore, reasonable to seek to ensure that a foreign court will preserve the foreign assets of a defendant in Australian proceedings. Enforcement of Foreign Judgments In Australia the enforcement of judgments operates in part by statute and in part at common law [58]. The Foreign Judgments Act 1991 (Cth) applies only to money judgments from jurisdictions which the government has determined provide reciprocity. These include Japan, New Zealand, Fiji, Hong Kong, Korea, Papua New Guinea, Solomon Islands, Taiwan, Tonga, Western Samoa and France. The common law principles apply to nations not scheduled, such as the United States, China and India [59]. There are a number of distinct categories of approaches to the recognition of foreign judgments [60]: A new action for debt is brought for which the foreign judgment is conclusive proof. This is the common law position. The common law applies in Australia in part, and also in Hong Kong, Malaysia, Singapore and Sri Lanka. In these jurisdictions express statutory provision is also made for registration of a foreign debt. On registration, the foreign judgment may be enforced as if it were a judgment of the local court, subject to challenges to the registration [61]. The common law requirement that a new action be brought has itself been codified by statute, subject to defences modelled on the 19th century common law. This approach generally provides a defendant with many more opportunities to avoid enforcement than may be the position under contemporary common law. This appears to be the position in India, Pakistan, Burma and Bangladesh [62]. A foreign judgment creditor is not required to commence a new action, but may apply for a judgment of execution that allows direct recognition. This approach is based upon the German Civil Code and applies in China, Japan, Korea and Taiwan [63]. Theoretically, under this method, the merits of a foreign judgment are not to be considered, but it does appear that this restriction is not of the same practical significance as may appear at first glance. Japanese courts distinguish between a review on the merits, which is not permitted, and a re-examination of the facts which, apparently, is permitted. In effect, therefore, enforcement proceedings are liable to become de facto trials with all the additional costs that entails [64]. Courts in some jurisdictions, which have no statutory provision for enforcement, examine the merits of the judgment creditor’s claim afresh. This category includes Afghanistan, Nepal, Indonesia and Thailand [65]. A specific regime, based on United States practice, is applicable in the Philippines where a foreign judgment is “in principle” enforceable [66]. However, it appears that clear mistakes of fact or law form a ground for refusing enforcement. Whenever jurisdictions adopt principles that encourage re-litigation of substantive issues, the transaction costs of international litigation are considerably increased. This is probably the most important area requiring attention, at least on a bilateral basis. It is also the most difficult. The diversity of procedural and substantive laws and of legal cultures is such that a global multilateral treaty on recognition of foreign judgments has never proven to be feasible. This is unlikely to change. Bilateral treaties or regional arrangements may be feasible in some cases. The most successful regional arrangement of this character is in Europe, through the Brussels Convention of 1968, now reflected in an EU Regulation [67]. That Convention was supplemented by the similar Lugano Convention which is open to a wider range of countries. As I understand the position, such a Convention would be unlikely to be attained, even in the core ASEAN grouping of nations, let alone on a broader regional basis. The Hague Conference’s attempt to draft a multilateral convention, commenced in 1994. By 2001 the talks had broken down as parties could not agree on even seemingly straightforward bases of jurisdiction such as habitual residence and the place at which a tort occurs. What was ultimately agreed was a convention on choice of court agreements in commercial contracts [68]. On 30 June 2005, the Convention on Choice of Court Agreements was concluded and is now open for signature. No state has yet acceded. This new Convention has the same core justification as the New York Convention on Arbitral Awards. Where parties have chosen a jurisdiction in a commercial contract, the same reasons for giving effect to the wish of the parties exist, as there are to give effect to their agreement for arbitration. The latter is widely, though not universally, adopted. There is a good case for doing the same with the new Convention. As one commentator has noted, the only difference between an arbitration agreement and a choice of court agreement is that one selects a private forum and the other selects a public forum [69]. Difficulties may arise when a contract is made with an allegedly commercial entity that is in substance controlled by the government. In such a context, the choice of court provision may not reflect a true commercial bargain. Another issue with the Convention is whether it makes adequate allowance for gross inequality in bargaining power. Although it does exempt individual consumers, many nations have legislation designed to protect small businesses which are not exempt from the scope of the Convention. There are good reasons for Australia to accede to this Convention. I do not know whether it is likely to become effective as a multilateral convention. I would have thought it was in the interests of the commercial community of each nation to ensure that each government does ratify a convention designed to implement the wishes of parties to a contract. No doubt a process of consultation is underway in each of the nations represented at this conference. Whether or not a multilateral convention emerges, this appears to be a perfectly reasonable matter to be raised on a bilateral basis, including in free trade agreements or on a regional basis, e.g. within the ASEAN framework. Some corporations have indicated an intention to create an exclusive jurisdiction arrangement between the company and their shareholders. Recently Rio Tinto, which has dual incorporation and listing in Australia and England, proposed amendment to its Articles of Association providing for exclusive jurisdiction in any dispute between the shareholders and directors or a the company to be, respectively, the Supreme Court of Victoria and the High Court of England and Wales [70]. The motivation of Rio Tinto appear to be clear. It reflects a matter which bedevils all attempts at international recognition of foreign judgments. It is US litigation, the 1,000 pound gorilla to which I have referred. Under the new Convention the chosen court has jurisdiction unless the agreement is null and void under the law of the designated State. A court not chosen does not have jurisdiction and must decline to hear the case. The Australian Akai decision would have been decided differently if this Convention has been in force. Australian accession to this Convention is likely to be delayed pending a review of Australian legislation designed to protect small businesses and others who have unequal bargaining power, but do not fall within the Convention exemption of natural persons acting for personal, family or household purposes. Such legislation may need to be amended to invoke the exemption in Article 6 of the Convention of agreements declared to be null and void under Australian law. This appears to require express provision or necessary implication. It goes beyond present doctrine for identifying a mandatory rule [71]. There is a high probability that some, perhaps all, of the protections in the Insurance Contracts Act, the Act in issue in Akai, will be so declared. The Australian/New Zealand Example Perhaps no two nations are more similar in their legal heritage and culture than Australia and New Zealand. Co-operation on all of the matters I have discussed above is more readily achievable in such a context. Similarities in legal culture may be an essential precondition for the achievement of substantial harmonisation of procedural and substantive laws and the establishment of close co-operation between legal systems. The European Union has been able to achieve much in this respect. To a lesser extent, the same has occurred in Latin America. It is by no means clear that anything of this character will be achievable in Asia and/or the Pacific Region. Nevertheless, further bilateral arrangements are possible, including between Australia and New Zealand. Under the Australia and New Zealand Closer Economic Relations Trade Agreement, 1983 [72] considerable convergence has been achieved in substantive law, particularly with respect to the consumer protection and competition regimes. This reflects the high degree of integration between the two economies, which the CER agreement sought to foster. There are memoranda of understanding on business law and business law co-operation and joint standards for food. In competition law, both the principles and the regulatory mechanisms have been integrated by legislation [73]. Parallel legislation has facilitated the taking of evidence, including by way of subpoena of witnesses, save in criminal and family proceedings. There is express provision for the taking of evidence and the making of submissions by video link or telephone. Proof of certain matters such as public documents and acts of state is facilitated [74]. At present there are no special arrangements between the two countries for service of documents. New Zealand is recognised as providing reciprocity under the Foreign Judgments Act in the case of money judgments. The common law applies to other judgments. In August 2005 a Working Group published a detailed discussion paper setting out a range of recommendations for expanding co-operation including the recognition and enforcement of judgments; provision of interim relief including freezing orders, extending to search orders; consideration of the applicable forum non-conveniens rules; expanding the regime for trans-Tasman evidence and the use of technology. The discussion paper sets out a range of practical difficulties that have arisen in these respects and makes detailed recommendations for their amelioration. In the case of service, understandably, the model that has been proposed is that which operates within the Australian federal system amongst the States [75]. This is a system which permits service in the other jurisdiction without leave and with the same effect as if it occurred in the place where the proceedings were filed. With respect to final judgments the proposal is for registration and, thereafter, recognition and enforcement can only be refused on public policy grounds. It is also recommended that judgments that require someone to do or not to do something (such as an injunction or an order for specific performance) would be enforceable. Furthermore, it is proposed that interim relief should be available in support of foreign proceedings, pursuant to express statutory authority to be conferred on each court. There is a level of incoherence between the conflict of laws principles applicable in each nation. New Zealand’s Courts apply the English “more appropriate forum” test [76]. Whereas Australia applies a “clearly inappropriate forum” test [77]. The Working Group proposes that a new statutory test be adopted with respect to cases of overlapping jurisdiction. Proceedings in one country should be stayed if a court in the other is “appropriate to decide the dispute”, taking into account a list of factors including any choice of court provision [78]. Depending on the level of confidence and understanding that exists between legal systems, provisions of this character could be adopted in other bilateral agreements. Conclusion One of the difficult issues which impedes further development in this field, is the variation in the quality, independence and impartiality of the judiciaries of different nations. To a substantial degree, again setting aside the particular situation of government controlled entities and unequal bargaining power, the choice can be left to bargaining between parties to a commercial relationship. Nevertheless, this problem does inhibit bilateral agreements because, in terms of enforcement there will not be reciprocity, as a matter of substance. Important steps have been taken over recent years throughout the Asia-Pacific region to ensure that nations that do not have a long tradition of judicial independence strengthen their judiciary. Nevertheless, this process is not complete in all nations of the region. In particular there remain real questions about corruption within the judiciary in some places. It is, however, pertinent to remember that not all businessmen regard a corruptible judiciary as a bad thing. I am pleased to say that corruption has never been an issue in Australia. The Australian judiciary has a long tradition of complete integrity. There has never been a whiff of corruption associated with any judge of the Supreme Court of New South Wales in its 182 year history. The number of cases in which there have been elements of corruption in the judiciary anywhere in Australia, at any level, can be counted on the fingers of one hand. This is an important institutional strength which we maintain to this day. It is possibly not polite to mention doubts about the integrity of another nation’s judiciary in diplomatic negotiations, whether multilateral or bilateral. The suggestions I have made for consideration in free trade agreements may not be appropriate in all cases. There is an understandable fear on the part of a business which is based in one nation that a national of the jurisdiction in which proceedings are heard will receive a “hometown advantage”. There is some empirical evidence that there is such an advantage in the United States courts [79]. I am reasonably confident that there is no such advantage in Australian courts, at least amongst specialist commercial judges. Nevertheless, the suspicion is a natural one, which can only be overcome by improving the mutual understanding of each other’s systems amongst business lawyers and judges. Your organisation makes an important contribution to improving such understanding and, thereby, establishing rhe requisite level of confidence that all litigants will receive fair treatment. END NOTES On the Australian position see Brian Mercurio “Should Australia Continue Negotiating Bilateral Free Trade Agreements? A Practical Analysis” (2004) 27 UNSWLJ 667. See RH Coase The Firm, the Market and the Law Uni. of Chicago P. Chicago 1988 pp 13-16, 174-179. For an outline of transaction cost economics see Oliver Williamson The Economic Institutions of Capitalism The Free Press 1985; and for an updated summary see Oliver Williamson “Why Law Economics and Organisation?” (2005) Annual Rev. Law Soc Sci 369, accessible at www.ssrn.com. For an application to international litigation see D Schmidtchen, R Kirstein and A Neunzig “Conflict of Law Rules and International Trade: A Transaction Cost Approach” Center for the Study of Law and Economics, University of the Saarland Discussion Paper 2004-01, March 2004, accessible at www.ssrn.com. See Ronald J Gilson “Value Creation by Business Lawyers: Legal Skills and Asset Pricing” (1984) 94 Yale LJ 239; L Berstein “The Silicon Valley Lawyer as Transaction Costs Engineer” (1995) 74 Univ Oregon LRev 239. See also D Driesen and S Ghosh “The Functions of Transaction Costs: Rethinking Transaction Cost Minimisation in a World of Friction” (2005) 47 Ariz LRev 61. Hilton v Guyot, 159 US 113 (1895) at 163-164 quoted with approval in CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345 at 395-396. See Australian Law Reform Commission Legal Risk in International Transactions: Report No 80, Commonwealth of Australia (1996). ALRC 80 supra at par 2.29. Airbus Industry GIE v Patel [1999] 1 AC 199 at 132. See Raguz v Sullivan (2000) 50 NSWLR 236. Model Law on International Commercial Arbitration (1985). United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1959) 330 UNTS 38. Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1966) 575 UNTS 159. For an overview of the commercial significance of the New York Convention see J. L. Amundsen “Membership Has its Privileges: The Confidence Building Potential of the New York Convention Can Boost Commerce in Developing Nations” (2003) 21 Wisc Int’l LJ 383. Advent Capital plc [2005] 2 Lloy’d Rep 607 at 610. See eg, Andrew S Bell, Forum Shopping and Venue in Transnational Litigation Oxford Uni Press, Oxford, 2003 and note the references set out at p2 fn 8 and 9; See also Mary Keyes Jurisdiction in International Litigation Fed Press Sydney, 2005. See, eg Uniform Procedure Rules 2005 (NSW) Pt 11. French Civil Code, Art 14. German Code of Civil Procedure, Art 23. On defendant strategies see Bell supra Ch 4. See Ibid pars 4.137-4.142. See Akai Pty Limited v People’s Insurance Co Ltd (1996) 188 CLR 418; Akai Pty Limited v People’s Insurance Co Limited [1998] 1 Lloyds Rep 90; See Keyes supra at pp84-87; Bell supra at pars 2.50-51, 4.233. See Bell supra at pars 1.31-1.43, Ch 2. See the observations of Lord Denning in Smith, Kline and French Laboratories v Bloch [1983] 1 WLR 730 at 733-4. See Justice C R Einstein and Alexander Phipps “Trends in International Commercial Litigation in Australia” (2005) IPRax, 273, 365 at 367. This article which comprehensively surveys many of the issues considered in this paper and from which I have benefited is accessible on the New South Wales Supreme Court website at www.lawlink.nsw.gov.au/sc under Speeches. Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth). See Nygh and Davis infra par 9.48. (The relevant proceedings alleged price fixing by exporters of uranium.) See V V Veeder “Mr Justice Lawrance: The ‘True Begetter’ of the English Commercial Court” (1994) 110 LQR 292. The appeal to the House of Lords in the case is reported: Rose v The Bank of Australasia [1894] AC 687. Sir Frances McKinnon, “The Origin of the Commercial Court” (1944) 60 LQR 324, quoted in Veeder supra at 294. My address on this occasion is accessible on the New South Wales Supreme Court website www.lawlink.nsw.gov.au/sc under Speeches. See Access to Justice: Final Report London HMSO (1996), section 2. ALI/UNIDROIT, Principles of Transnational Procedure Civil Procedure (2004) Unif L Rev 759. See B Beaumont “The Proposed ALI/UNIDROIT Principles of Transnational Civil Procedure and their Relationship to Australian Jurisdictions” (2001) 6 Unif L Rev/Rev Dr Unif, 951; Clifford R Einstein and Alexander Phipps “The Principles and Rules of Transnational Civil Procedure and their Application to New South Wales” (2004) 9 Unif L Rev/Rev Dr Unif 815. The Einstein and Phipps Paper is available on the New South Wales Supreme Court website www.lawlink.nsw.gov.au/sc under Speeches. Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters (1965) 658 UNTS 163. As is expressly contemplated as a consular function by Article 5(j) of the Vienna Convention on Consular Relations 1963. See David MacLean International Co-operation in Civil and Criminal Matters (2002) at 35-36. See e.g. MacLean supra at 55. See ALRC 80 supra at 87. See my address “The Judicial Exchange between Australia and Japan” accessible at the New South Wales Supreme Court websitewww.lawlink.nsw.gov.au/sc under Speeches. Treaty on Judicial Assistance in Civil and Commercial Matters between the Government of Australia and the Government of the Republic of Korea [2000] ATS 5; Agreement between the Government of Australia and the Government of the Kingdom of Thailand on Judicial Assistance in Civil and Commercial Matters and Cooperation in Arbitration [1998] ATS 18. Convention on Taking Evidence Abroad (1970) 847 UNTS 231. See generally David MacLean supra at 107. See D McLean and C McLachlan, The Hague Convention on the Taking of Evidence Abroad: Explanatory Documents Prepared for Commonwealth Jurisdictions (1985). The Convention is implemented in New South Wales by the Evidence on Commission Act 1995, Part 4. See British American Tobacco Australia Services Limited v Eubanks for the United States of America (2004) 60 NSWLR 483 esp at [22]-[40]. On the widespread rejection of the US approach to discovery see A Lowenfeld, International Litigation and the Quest for Reasonableness Oxford, Clarendon Press 1996 esp at 137; L Collins “The Hague Evidence Convention and Discovery: A Serious Misunderstanding” in L G Collins Essays in International Litigation and the Conflict of Laws Oxford Unit P New York, (1994) esp at 289, 299; R C O’Brien “Compelling the Production of Evidence by Non-Parties in England Under the Hague Convention” (1997) 24 Syracuse J of Int’l Law 77 esp at 86-87. See British American Tobacco (Investments) Limited v United States of America [2004] EWCA Civ 1064. See MacLean supra at 118-119. See also D R Shemanski “Obtaining Evidence in the Federal Republic of Germany: The Impact of the Hague Evidence Convention on German American Judicial Co-operation” (1983) 17 International Law 465. See, eg, Evidence (Audio and Audio Visual Links) Act 1998 (NSW). UNCITRAL, Model Law on Cross-Border Insolvency 1997. See esp Art 2(d). See ALRC 80 at par 4.14-4.15. See ALRC 80 supra Recommendations 13, 17 and 24, although s26 of the Foreign Evidence Act appears to deal with the latter. ALRC 80 supra Recommendations 11, 15, 16. See R I Barrett “Cross Border Insolvency: Aspects of the UNCITRAL Law” a paper presented by Justice Barrett of the Supreme Court of New South Wales to the 22nd Annual Banking and Financial Services and Practice Conference, August 2005; also his speech at that conference accessible on the Court website at www.lawlink.nsw.gov.au/sc; His Honour considers in detail the European caselaw on “centre of main interest”. See also Baird “Cross Border Insolvency and the UNCITRAL Model Law” (2006) 18 Aust Insolvency Journal 4; Commonwealth Department of Treasury, Cross Border Insolvency: Promoting International Co-operation and Co-ordination (2002). R I Barrett supra at pp2-3. Credit Suisse Fides Trust SA v Cuoghi [1998] QB 818 at 827G. See Bank of China v NBM LLC [2002] 1 WLR 844; Walter Rau Neusser Oel Unt Fett AG v Cross Pacific Trading Limited [2005] FCA 399. Siskina v Distos SA (The Siskina) [1979] AC 210; see also Steven Gee, Commercial Injunctions (5th ed) Sweet & Maxwell, London 2004 par 12.001. Fourie v Le Roux [2005] EWCA Civ 204. See Davis v Turning Properties Pty Limited (2005) 222 ALR 676. See Peter Biscoe, Mareva and Anton Pillar Orders: Freezing and Search Orders Lexis Nexis Butterworths Australia (2005) Ch 5; Peter Biscoe “Transnational Freezing Orders” (2006) 27 Aust Bar Review 161. See P E Nygh and M Davies, Conflict of Laws in Australia 7th ed Lexis Nexis Butterworth Australia (2002) Ch 9; M Tilbury, Davis and Opeskin, Conflict of Laws in Australia Oxford Uni Press Sydney (2002) Ch 6. See Foreign Judgements Regulations 1992 (Cth), Schedule 1. This characterisation is based on Bradford A Caffrey International Jurisdiction and the Recognition of Enforcement of Foreign Judgments in the LAWASIA Region: A Comparative Study of the Laws of 11 Asian Countries Interse and with the EEC Countries CCH Australia, Sydney (1985). Australia: see Hong Kong: see Foreign Judgments Act 1991; Hong Kong: see Foreign Judgements (Reciprocal Enforcement) Ordinance cap 319. Malaysia: see Reciprocal Enforcement of Judgements Act 1958; Phillip Koh TN, ‘Malaysia: Digest’ (2004) in N Stephan Kinsella (ed) Digest of Commercial Laws of the World. Singapore: see Reciprocal Enforcement of Foreign Judgements Act 1959. Sri Lanka: Enforcement of Foreign Judgements Ordinance 1937. India: see Code of Civil Procedure, ss 13 and 14. Japan: see Code of Civil Procedure, Arts 200. Korea, see Code of Civil Procedure, Arts 203, 476–477. Taiwan, Compulsory Execution Law Art 43; Code of Civil Procedure Art 407. China: Code of Civil Procedure, Art 267; David C Buxbaum, “China, the People’s Republic of: Digest” (2005) in Stephan Kinsella (ed) Digest of Commercial Laws of the World. See L Gamertsfelder “Cross Border Litigation: Exploring the Difficulties Associated with Enforcing Australian Monetary Judgments in Japan” (1998) 17 Aust Bar Review 1961. Indonesia: see Richard Cornwallis, “Indonesia: Digest” (2005) in N Stephan Kinsella (ed) Digest of Commercial Laws of the World. See Soorajmull Nagarmull v Binalbagan – Isabela Sugar Co Inc (1970) 67 Philippine Reports 170; Hector M de Leon, “Phillippines: Digest” (2004) in N Stephan Kinsella (ed) Digest of Commercial Laws of the World. See Council Regulation 44/2001, 2001 OJ (L12) 1. See W E O’Brian Jr “The Hague Convention on Jurisdiction and Judgements: the Way Forward” (2003) 66 Mod L. Rev 491; J S Yackee “A Matter of Good Form: The (Downsized) Hague Judgements Convention” (2003) 53 Duke LJ 1179; Myers supra pp236-244. Yackee supra at p1181. See Australian Financial Review, 11 April 2006, p12. C/f Keyes supra at pp80-90. Australia New Zealand Closer Economic Relations Trade Agreement [1983] ATS 2 (“CER”). Memorandum of Understanding on Harmonisation of Business Law 1988; Memorandum of Understanding on Business Law Coordination 2000; Trans-Tasman Mutual Recognition Arrangement; Joint Food Standards Setting Treaty [1996] ATS 12. For further discussion, see Productivity Commission, Australian and New Zealand Competition and Consumer Protection Regimes (2004). See Evidence and Procedure (New Zealand) Act 1995 (Cth) and Evidence Amendment Act 1994 (NZ). Service and Execution of Process Act 1992 (Cth). Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 followed in Longbeach Holdings Ltd v Bhanabhai & Co Ltd [1994] 2 NZLR 28. Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 See Trans-Tasman Court Proceedings and Regulatory Enforcement: A Public Discussion Paper by the Trans-Tasman Working Group Attorney-General’s Department (Aust) and Ministry of Justice (NZ) August 2005. U. Bhattacharya, N Galpin and B Haslem “The Home Court Advantage in International Corporate Litigation”, February 2004, accessible on www.ssrn.com.
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