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Published online by Cambridge University Press: 17 January 2008
Even when a forum has completed the task of identifying, in any given case, the lex causae, there remains a possibility of further choice of law complexities as regards delimitation of the applicable law. The extent of leeway which a Scottish or English forum enjoys when purporting to apply the lex causae, in the question of whether that court should refer to,1 and apply, the whole corpus of the lex causae,2 is ultimately a matter for the forum's discretion, the exercise whereof admittedly few opportunities are afforded.
1 Subject, of course, to proof of foreign law by the parties.
2 Not in the sense of renvoi, but rather in the sense of picking and choosing only certain provisions of the lex causae; or in choosing to apply the lex causae at a certain date. These are minority cases; but the point is central to the remarkable instance under discussion.
3 [2002] 3 All ER 209.
4 Part III of the Private International Law (Miscellaneous Provisions) Act 1995 (the ‘1995 Act’) applies only to allegedly tortious acts and omissions occurring after the commencement date of 1 May 1996 (SI 1996/995, Private International Law (Miscellaneous Provisions) Act 1995 Commencement Order). The alleged wrong in the case in question occurred prior to 1 May 1996.
5 Four of the aircraft had been destroyed by coalition bombing in Northern Iraq, whilst the remaining six were detained, on IAC's behalf, in Iran. KAC sought return of the ‘Iran Six’ and payment of value in respect of the ‘Mosul four’.
6 In respect of the sums paid by KAC to IAC for the cost of keeping, sheltering and maintaining the aircraft.
7 [1999] CLC31.
8 [2002] 2 All ER (Comm) 360. According to Aikens, J, the test of causation was not satisfied, and the actions of IAC could not be said to be the real and direct cause of the loss: ‘KAC would have suffered the losses claimed even if IAC had not wrongfully interfered with the aircraft.’ ([2002] 3 All ER 209, para 6).
9 Para 174.
10 Appropriate or not, it was certainly fortunate that jurisdiction technically could be founded in England—even though, for the very reason of the awkwardness of the double rule in tort, England (a desirable forum in most commercial matters) was rightly viewed with caution in tortious actions before 1995.
11 Para 166.
12 As to history of litigation, see per Lord Nicholls at paras 5 to 11. The basis of lAC's forum non conveniens plea was that the United Nations Security Council had established an independent compensation commission for the purpose of dealing with claims against Iraq pursuant to Iraq's invasion of Kuwait, and that this commission provided the only appropriate forum for the resolution of the dispute. Evans J rejected IAC's plea, and his decision was not appealed. The Court of Appeal, in addressing IAC's three other challenges to the jurisdiction of the English Court (viz (1) service of the process on IAC at its London office was not effective; (2) IAC was entitled to immunity from suit in England; and (3) the proceedings related to acts which were not justiciable in the English courts), did not find it necessary to consider the forum non conveniens plea. In the House of Lords, reported at [1995] 1 WLR 1147, it was held that the writ had been properly served on IAC, but not on the State of Iraq; and (diss. Lord Mustill and Lord Slynn of Hadley) that IAC in its retention and use of the aircraft (as opposed to the removal thereof to Iraq as directed by the government of Iraq) was not acting under cover of sovereign immunity because its acts (in repainting two of the aircraft and using one for an internal flight) were not governmental acts, jure imperil.
13 See Spilkula Maritime Corporation v Cansulex [1986] 3 All ER 843, per Lord Goff at p 853, citing with approval Lord Kinnear in Sim v Robinow (1892) 19 R 665 at p 668.
14 See n 4 above.
15 The common law rule of double actionability is well documented: Dicey & Morris, The Conflict of Laws, 13th edition (2000), Chapter 35; and EB Crawford, International Private Law in Scotland (1998), para 13.13 et seq. Trace the line in England through The Halley (1868) LR 2 PC 193; Phillips v Eyre (1870) LR 6 QB 1; Machado v Fontes [1897] 2 QB 231; Boys v Chaplin [1971] AC 356; Johnson v Coventry Churchill International Ltd [1992] 3 All ER 14; and Red Sea Insurance Company Limited v Bouygues SA [1995] 1 AC 190; and in Scotland through McElroy v McAllister 1949 SC 110; Mitchell v McCulloch 1976 SLT 2; and James Burrough Distillers pic v Speymalt Whisky Distributors Ltd 1989 SLT 561.
16 While English law emphasises, in the first place, the role of the lexfori, Scots law refers in the first instance to the lex loci delicti. The result is the same. Law Commission Working Paper No 87 and Scottish Law Commission Consultative Memorandum No 62, ‘Private International Law, Choice of Law in Tort and Delict’, para 2.42, and Crawford, op cit, paras 13.13 and 13.14.
17 Red Sea Insurance Company Limited v Bouygues SA [1995] 1 AC 190. Red Sea is the apogee of English common law development: it was a decision of the Privy Council, authorising thereafter the displacement for disposal by another law not only of an issue or issues, but of the whole claim; and not only the displacement of the locus delicti by the forum, but also elision of the lex fori in a suitable case.
18 See, for example, Ennstone Building Products Ltd v Stanger Ltd. [2002] EWCA Civ 916.
19 Law Commission Working Paper No 87 and Scottish Law Commission Consultative Memorandum No 62, Private International Law, Choice of Law in Tort and Delict, para 2.46: ‘This leaves the present law of Scotland in some uncertainty because Boys v Chaplin, being an English case, is not binding in Scotland. Its authority, however, might well be prayed in aid to modify the Scottish rule in appropriate cases.’ In pre-1995 days at least the Scottish courts seemed deaf to the hint and blind to the possibilities. The Scots approach in future (in applying section 13 of the 1995 Act) is a matter of speculation.
20 Per Lord Nicholls at para 12. As English (and Scots) law currently stands in relation to acts and omissions occurring after 1 May 1996, the general rule enshrined in section 11(1) of the 1995 Act would lead to the application of Iraqi law (unedited: section 11 in terms does not authorise the application of part of the applicable law—though section 12 permits segregation of issues, and the public policy discretion permitted by section 14 does not appear to envisage a selective approach—see n 63 below).
21 Para 13.
22 Pace Lord Scott of Foscote, dissenting, who drew a distinction between actions in rem and actions in personam. See below at 771.
23 To the effect that the transfer of title to tangible moveable property is, as a general rule, governed by the lex situs [subject to a limited policy exception: see Winkworth v Christie, Manson & Woods Ltd [1980] 1 Ch 496 at 501 and 510; and Halsbury's Laws of England, 4th edition, Volume 8 (1974), at 315, para 418): Cammell v Sewell (1860) 5 H&N 728; Todd v Armour (1882) 9R 901; Winkworth v Christie, Manson & Woods Ltd, above. Lord Nicholls explained that, ‘… governmental acts affecting proprietary rights will be recognised by an English court as valid if they would be recognised as valid by the law of the country where the property was situated when the law takes effect. Here, that was Iraq.’ (para 13) Notable confiscation cases include Princess Paley Olga v Weisz [1929] 1 KB 718, Luther v Sagor [1921] 3 KB 532 and The Jupiter [1927] P 122, at 250 (ineffective as judged extra-territorial), demonstrating the strength of the intra-territorial effectiveness principle.
24 Eg per Lord Nicholls at paras 21 (recognition by no state of Iraq's annexation of, or its authority in, Kuwait ie in old terminology, no recognition of the confiscating state as de iure in control: not seemingly disputed, however, that, for the purposes of the ‘act of state doctrine’, Iraq at the time in question, was de facto in control). Per Lord Steyn at para 114: ‘The present case is, however, a paradigm of the public policy exception’ (exception, that is, to the ‘act of state doctrine’, that sovereigns may act as they please within their own territorial limits). Per Lord Hope, at paras 135–137 and 140, culminating at para 149, ‘’ At para 148 ‘… I would hold that a legislative act by a foreign state which is in flagrant breach of clearly established rules of international law ought not to be recognised by the court of this country as forming part of the lex situs of that state.’ Not only, therefore, would Lord Hope disregard the confiscation on policy grounds; he would not even see it as part of the lex situs. See also para 168. Their Lordships endorsed the principle articulated in the Court of Appeal, that the ‘act of state doctrine’ suffers exception, as follows: ‘… the acts of a foreign state within its territory may be refused recognition because they are contrary to public international law … the Court of Appeal was right to extend the public policy exception beyond human rights violations to flagrant breaches of public international law.’ (Lord Steyn, para 114).
25 Para 39; see also per Lord Steyn at para 119: ‘[d]espite elaborate citation of authority, I am satisfied that the essential feature of the tort of conversion, and of usurpation under Iraqi law, is the denial by the defendant of the possessory interest or title of the plaintiff in the goods: see Todd, The Law of Torts in New Zealand, 3rd ed (2001), para 11.3 for an illuminating discussion. When a defendant manifests an assertion of rights or dominion over the goods which is inconsistent with the rights of the plaintiff, he converts the goods to his own use.’
26 Paras 21 and 107.
27 Para 20 per Lord Nicholls. The United Nations Security Council promptly condemned the invasion of Kuwait as a breach of international peace and security, and demanded immediate Iraqi withdrawal.
28 Para 111. Cf Lord Nicholls at para 27, ‘I return to the question whether as a matter of public policy an English court ought to decline to recognise RCC resolution 369 as effectual to divest KAC of its title to the aircraft.’
29 Para 134.
30 Para 30. The relevant tort in English law is that of conversion; IAC's acts would have been tortious if done in England (para 44). The claim under Iraqi law was for usurpation or misappropriation of the aircraft. By implication, it appears that, in principle, usurpation under Iraqi private law would satisfy the second limb of the double rule. Cf n 25 above.
31 Para 30.
32 Lord Nicholls, Lord Steyn, Lord Hoffman, and Lord Hope of Craighead. Lord Scott of Foscote dissented (qv).
33 Para 31.
34 Cf Lord Nicholls' remark at para 36: ‘[e]ffectively, the government of Iraq had stolen the aircraft from Kuwait.’
35 [1971] AC 356, per Lord Hodson at 378, and Lord Wilberforce at 391–2.
36 The main issue in Red Sea was, ‘… whether a defendant could rely solely on the lex loci delicti to establish liability in tort when the lexfori did not recognise such liability’ (para 152, per Lord Hope). Contrast the case in hand, where the converse question arose.
37 See L Collins ‘Comity in Private International Law’, Chapter 4, Reform and Development in Private International Law— Essays in Honour of Sir Peter North, J Fawcett, ed (2002).
38 As opposed to being a parochial policy of domestic English law.
39 Para 168.
40 Para 107 (Emphasis added). Cf para 117.
41 Para 117. Cf Lord Hope, at para 168.
42 See eg Crawford, op cit, at 2, n 6.
43 J Fawcett, op cit, Chapter 4, ‘Comity in Modern Private International Law’.
44 Ibid, p 110. Emphasis added.
45 [1976] AC 249, at 278.
46 Para 114.
47 However, in Williams and Humbert, (Court of Appeal) (n 50 below) at 399, Fox, LJ, in relation to Oppenheimer, remarks, ‘I think it is now clear that English law would not recognise such legislation at all.’
48 [1986] AC 368.
49 The distinction earlier drawn between confiscation, nationalisation and requisitioning seems nowadays to be of little significance.
50 ‘This pleading could be justified if English law abhorred the compulsory acquisition legislation of every other country, or if international law abhorred the compulsory acquisition legislation of all countries. But in fact compulsory acquisition is universally recognised and practised … ‘(Williams and Humbert v W & H Trademarks (Jersey) Ltd, per Lord Templeman at p 427). Cf Mann, F A, ‘The Effect in England of the Compulsory Acquisition by a Foreign State of the Shares in a Foreign Company’ 1986 LQR 191 at 192Google Scholar: ‘Compulsory acquisition of property is an institution common to all civilised nations.‘ However, Mann distinguishes between compulsory acquisition and confiscation of property, the latter of which he describes at 196 as ‘an entirely different institution generally rejected by civilised nations.’
51 FA Mann, The Effect in England… above at 195; and ‘Rumasa in America‘ 1988 LQR 346Google Scholar. See also Mann, , ‘Outlines of a History of Expropriation’ 1959 LQeR 188.Google Scholar
52 At 378–9. The categorisation was accepted by inference by the Court of Appeal in Williams and Humbert per Fox, LJ at 392; and was approved by Sir John Donaldson, MR, in Settebello Ltd v Banco Totta Acores [1985] 1 WLR 1050.
53 Lord Nicholls, para 36.
54 Para 145.
55 See generally J Fawcett, op cit. Comity traditionally has also included a sizeable portion of reciprocity. It is, of course, the policy of any legal system to protect its nationals/domiciliaries. From the comity angle too, high-mindedness is mixed with an awareness of the protection of national image, as pointed out by Carter, PB ‘The Rôle of Public Policy in English Private International Law’ 1993 (42) ICLQ 1, at 4.CrossRefGoogle Scholar
56 Paras 166 and 167.
57 Cf the notion of ‘community public policy’ which is integral to the public policy of individual European member states (Giuliano and Lagarde Report on the Law Applicable to Contractual Obligations [1980 OJ C282, at 38]). Nevertheless, concepts of the concept of comity vary over the years: thus in Luther v Sagor [1921] 3 KB 352, per Scrutton, LJ at 558, ‘[b]ut it appears a serious breach of international comity, if a state is recognised as a sovereign independent state, to postulate that its legislation is ‘contrary to essential principles of justice and morality'.’ His Lordship's point was that such judicial pronouncements might become a casus belli and were the province of the Sovereign and his ministers not of the judges. A more modern reason inhibiting non-recognition is adverted to per Lord Templeman in Williams and Humbert at 431, where he refuses to admit any attack on the moral quality of a compulsory acquisition by the government of Spain, essentially on the basis that we do not query the actions of a foreign friendly state, in this case one about to become a member with us of the EEC.
58 Princess Paley Olga v Weisz, above; Novello & Co v Hinrichson Edition Ltd [1951] Ch 1026; Frankfurther v Exner [1947] Ch 629. Crawford, op cit, para 3.13. Dr Morris suggested (Morris, The Conflict of Laws, 3rd edition (1984), p 380, n 46) that if a confiscatory decree could be viewed as ‘penal’ (in the sense of discriminatory on eg racial grounds), ‘it probably will not be recognised as divesting the owner of his property, even if it was situated within the territory controlled by the foreign government at the time of the decree, if it is in England at the time of the action.’ Authority is scarce. The view is repeated in the 4th edition (1993), at 338, and the 5th edition (2000), at 414 (both J D McClean), reliance on each occasion being placed on Banco de Vizcaya v Don Alfonso de Borbon y Austria [1935] 1 KB 140, where, however, the securities judged by an English court to be beyond the reach of a Spanish republican decree had never been situated in Spain (see per Lord Templeman in Williams and Humbert at 431). However, confiscations by nature are unfair and it is notoriously difficult to discriminate between them. See Luther v Sagor above, per Scrutton, LJ at 559, again making the point that these judgments are political decisions: ‘I do not feel able to come to the conclusion that the legislation of a State recognised by my Sovereign as an independent sovereign State is so contrary to moral principle that the judges ought not to recognise it.’
59 As can be seen, in recent years, from the treatment of Nazi confiscated works of art. The Spoliation Advisory Panel, established by the UK Government in 2000, to help resolve claims in respect of cultural objects looted during the Nazi era (1933–5), has been charged with the task of giving due weight to the moral strength of claims. ‘Conclusions on questions of law are not determinative of the parties' legal rights.’ (Report of the Spoliation Advisory Panel, 18 January 2001, paras 6.2 and 6.3). Any recommendation made by the Panel, however, shall not be legally binding upon claimants or defendants, leaving the question of ownership of relevant cultural objects rather uncertain.
60 Para 140.
61 Para 45.
62 Para 47.
63 Indeed, famously vilified in Machado v Fontes [1897] 2 QB 231 (where the forum turned a blind eye to the absence of civil remedy, choosing to be satisfied by the presence in the Brazilian lex loci ‘delicti’ of the crime of libel). And though segregation of issues and the possibility of depecage is permitted in section 12 of the 1995 Act, section 14 (disapplication on the grounds of public policy) appears to take a broad approach. One cannot ‘blue-pencil’ the lex loci delicti; see per Lord Steyn, para 112, and Lord Hope, para 136.
64 Eg Martin v Buret 1938 SLT 479, and Buckle v Buckle [1956] P 181 (regarding penal incapacities). See Crawford, op cit, paras 9.18 and 10.14. Consider also the Matrimonial and Family Proceedings Act 1984, which permits the forum to ‘add’ to a foreign order.
65 As is evinced by Rome I, Article 16, and the 1995 Act, section 14. One can cite mirror image cases such as Regazzone v Sethia [1958] AC 301 (refusal, not grant, of a remedy) and Foster v Driscoll [1929] 1 KB 470.
66 The nearest thing to a comparison is found in Lord Hope's remarks at para 159.
67 III. above.
68 Cf Lord Hope's remark at para 159 to the effect that, ‘[i]t cannot be said that the lex loci delicti has no real connection with these proceedings, as one of the parties to the action has its principal place of business in Iraq where the alleged acts of conversion took place.’
69 Para 190.
70 Para 194. Lord Scott's judgment is concerned principally with tort—and not with property except so far as he distinguishes between different considerations pertaining to actions in rem and actions in personam; nevertheless, one can infer from para 194 that on the confiscation point, his Lordship does not dissent from his brethren.
71 [1902] AC 176, atp 189: ‘… I am of the opinion that no English tribunal is capable of going behind that declaration and saying that the Sultan of Muscat was wrong in his exposition of his own law … [I]t appears to me that any other decision would be open to very serious questions of policy, if, in every case where the lord of a country has declared what the law of his own country is, it were open to an English tribunal to enter into the question and to determine, as against him, what was the law of his country.’ (Para 184).
72 [1976] AC 249.
73 Para 195. (That is to say, while we would not order the delivery up to IAC of the aircraft positioned at Heathrow Airport [as to which see Morris, above, n 58], it is not justifiable for us to deny the content of Iraqi law at the time in question).
74 [1976] AC 249, at 278.
75 See PB Carter, op cit, and R Leslie ‘The Relevance of Public Policy in Legal Issues Involving other Countries and their Laws’ 1995 JR All.
76 Para 198. His Lordship's bar on litigation in England (‘cannot be sued on in England’) relates not to the issue of jurisdiction, but rather to the issue of choice of law. Cf Lord Reid in nullity: Ross Smith v Ross Smith [1963] AC 280 at 306. This is the mirror opposite of The Halley, above, and can be contrasted also with Szalatney-Stacho v Fink [1947] 1 KB 1. But of course the discretion now available under the 1995 Act, section 12, renders possible regulation by English law of the forum the consequences of injurious actings abroad, which were not actionable where done—not perhaps so extreme a scenario as Lord Scott's, however. This could arise by reason of failure to prove the foreign law, perhaps where the claimant wished to secure a tactical advantage in terms of a longer prescriptive period under the lexfori, or absence of a statutory cap on damages by that law. However, in general, there can be no denying the truth of Lord Scott's remarks, and, it is submitted, the wisdom of his misgivings.
77 See R Leslie, op cit, ‘The Relevance of Public Policy in Legal Issues Involving other Countries and their Laws’ 1995 JR All. Then Dr Leslie notes, at 479, the question is ‘with what do we replace it?’ Cf 771 above.
78 Even where the forum intends to apply the foreign law as it would be applied by the foreign court, and not as filtered by the forum, it is significant that, in many cases, the foreign law will be misapplied. (Rodger, BJ and Doom, J Van ‘Proof of Foreign Law’ 1997 ICLQ 154Google Scholar, citing Zweigert (1973) 44 Colorado L Rev 283, 298: a survey showed that in 32 out of 40 cases where foreign law was pleaded, it was misapplied by the American courts).
79 Ie between Stage 1 (property) and Stage 2 (tort).
80 Cf remarks at VII. above.
81 Para 195.
82 Cf Carter, P B ‘Rejection of Foreign Law: Some Private International Law Inhibitions’, 55 BYBIL (1984) 111, at 124Google Scholar, ‘[i]t is to be noticed that in this framework within which resort to public policy operates there is implicit something of an ‘all or nothing’ attitude. If a foreign law is unacceptable, it is totally unacceptable regardless of the context.’ Cf n 63 above.
83 That is to say, the property decision enabled the first limb of the tort rule to be satisfied, and made it difficult for the second limb not to be satisfied.
84 Applying only to those cases where the allegedly tortious act or omission occurred before 1 May 1996, and in defamation claims (section 13, 1995 Act).
85 In relation to the findings of fact, see the decision of Steel, J: Kuwait Airways Corporation v Iraqi Airways Corporation [2003] QBD (Comm Ct.); [2003] EWHC 31.
