Welcome

Welcome to the latest issue of the Global DR Legal Update, our quarterly newsletter which aims to bring together the most important global developments in litigation and arbitration. If you have any questions, or if we can assist further, please get in touch with Benjamin Roe or Steven Adams. Alternatively you can speak to your local Baker McKenzie contact.

Asia Pacific

China

PRC court recognizes US court judgment on basis of reciprocity

The Wuhan Intermediate People’s Court recently handed down a decision recognizing and enforcing a civil judgment made by a US court based on the principle of reciprocity. This follows the recognition earlier this year of a Singapore court judgment by a Jiangsu court, and indicates that in the absence of a bilateral treaty for mutual recognition and enforcement of judgments, Chinese courts are starting to recognize foreign court judgments based on the principle of reciprocity. Read more

China

China signs Hague Convention on Choice of Court Agreements

China has signed the Hague Convention on Choice of Court Agreements. The Convention ensures that courts in participating countries will recognize a choice of court agreement between parties to cross-border litigation, preventing simultaneous litigation is multiple jurisdictions. All EU Member States (except Denmark) are members, as are Singapore and Mexico. China must now ratify the Convention before it takes effect. To date, the United States, Ukraine and Macedonia have all signed, but not ratified, the Convention. Read more

Hong Kong

Apology Law is first for Asia

Hong Kong has announced a new "apology law", which is the first of its kind in Asia. The law, which will become effective from 1 December 2017, aims to encourage the making of apologies with a view to facilitating the amicable resolution of disputes and so preventing them from escalating. The key change is that, once the new law takes effect, evidence of an apology will no longer be admissible for the purposes of determining fault or liability in civil, regulatory or disciplinary proceedings, allowing apologies to be made without any acceptance of liability. Read more

Hong Kong

HKIAC seeks views on rule changes

The Hong Kong International Arbitration Centre (HKIAC) has launched a public consultation on possible amendments to the 2013 Rules. HKIAC is considering a number of minor amendments, rather than wholesale revision. These include the establishment of an online repository for filing, the introduction of a voluntary “Arb-Med-Arb” mechanism, and adjustments to the provisions for joinder and consolidation. HKIAC is also seeking views on appropriate changes following the recent introduction of third-party funding for arbitration in Hong Kong, such as disclosure of funders and express powers for the tribunal to award the costs of third-party funding. Read more

India

Court's intervention suggests shift in attitudes to arbitration

Recent actions of the Supreme Court of India could signal a more pro-arbitration attitude to international disputes. The Court recently instructed the Mumbai Centre for International Arbitration to appoint an arbitrator to decide a long-standing international dispute between Sun Pharmaceutical Industries and Nigeria-based Falma Organics. This action marks the first time any Indian court — let alone the country’s highest court — has invoked section 11 of India's Arbitration and Conciliation Act of 2015 by asking an arbitral tribunal to assist with appointing an arbitrator. Read more

Singapore

Singapore High Court sets aside Lesotho investor-state award

The Singapore High Court has set aside a PCA-administered investor-state arbitral award on the basis that the tribunal exceeded its jurisdiction. It is the first case in Singapore in which a party has sought to set aside an investor-state arbitral award on the merits, and therefore builds upon the recent case of Sanum v. Laos in which the applicants unsuccessfully challenged a preliminary award on admissibility and jurisdiction. The decision further demonstrates the willingness of the courts of Singapore to deal with issues concerning public international law and investment arbitration. Read more

EMEA

Dubai

DIFC Courts show strong start to 2017

Data released by the Courts of the Dubai International Financial Centre (DIFC) shows a significant growth in both the value and volume of cases for the first half of 2017, underscoring its increasing influence in the region. As compared to the same period in 2016, the value of claims handled by DIFC's Court of First Instance (CFI) increased significantly, up 118% to AED 7.5 billion (approximately USD 2 billion), as well as a 57% increase in volume of cases it handled. Read more

England & Wales

Radical changes to civil disclosure laws proposed for England & Wales

New draft rules for disclosure in civil proceedings have been published which aim to reduce the cost and volume of disclosure. The draft rules provide for "basic disclosure" at the outset of a case, with an option to seek the court's approval for "extended disclosure" later in the case. The emphasis of the draft rules is on cooperative behavior by the parties and the efficient use of technology in document review. Consultation on the draft rules will close on 28 February 2018.Read more

European Union

Intra-EU BITs are compatible with EU law, says Advocate General

In an advisory opinion to the Court of Justice of the European Union (CJEU), Advocate General Wathelet rejected the argument that investor-state dispute settlement mechanisms in intra-EU bilateral investment treaties are inherently incompatible with EU law. The AG's views, which are contrary to those of the European Commission, are not binding on CJEU, although such recommendations are frequently adopted by the Court in its judgments. The case could have far-reaching consequences for investment arbitration within Europe. Read more

European Union

European Parliament approves amended electronic privacy law

An amended draft of the EU's new e-Privacy Regulation has been approved by the European Parliament. One major change is the introduction of blanket browser cookie settings, rather than asking permissions on every site, making it easier for browsers to refuse cookies. The new law has been hailed as a victory by privacy campaigners but criticized by advertising and media groups. If enacted, the proposed changes will be backed up by fines of up to EUR 20 million or 4% of global annual turnover, whichever is the greater. Read more

Hungary

Longer limitation periods likely to result in more corruption prosecutions

Hungary has amended its Criminal Code to increase the statutory limitation period for crimes of corruption, including public and commercial bribery, to 12 years. Previously, the limitation period had varied between five and ten years for different offenses. The changes are now effective but will not have retrospective effect. It is hoped that the longer limitation period should allow sufficient time for all corruption cases to be enforced before becoming time-barred. Read more

Netherlands

New commercial court to be launched for international disputes

Netherlands has issued draft plans to become one of several countries, in the EU and elsewhere, to establish an English-speaking commercial court. This will be known as Netherlands Commercial Court, and will target international dispute resolution. The Court will be based in Amsterdam, will work under Dutch procedural law, and is expected to launch before the end of 2017. Read more

Turkey

New regulation aims to increase efficiency in Turkish legal proceedings

Turkey has enacted a new regulation governing the time periods within which legal proceedings, including trials, prosecutions, and investigations, must be completed. The Regulation on the Determination and Enforcement of Target Investigation, Prosecution or Trial Periods came into force on 1 September and is a bid to improve efficiency and reduce costs within the judicial system. The scheme will initially run on a pilot basis, using targets determined by the Ministry of Justice in conjunction with the judiciary. Read more

Latin America

Argentina

Reform of arbitration regime revealed

Argentina has announced a plan to modernize its arbitration procedure by adopting the UNCITRAL Model Law on International Commercial Arbitration. With arbitration already widely accepted in Argentina, it is hoped that these reforms will reinforce its position, whilst also encouraging foreign investment. The draft bill has been presented by President Macri, has received preliminary approval from the Senate, and is expected to come into force during the next year. Read more

Brazil

PCA signs Host Country Agreement with Brazil

The Permanent Court of Arbitration (PCA) has signed a Host Country Agreement with Brazil, allowing PCA-administered proceedings to be conducted in Brazil on an ad hoc basis. The PCA has signed similar agreements with a number of countries around the world. In doing so, the PCA aims to make its dispute resolution services more accessible worldwide, by allowing parties to have access to PCA-administered proceedings without having to go to travel to the PCA, which is based at the Hague in the Netherlands. Read more

Colombia

Supreme Court decision on challenging the independence of an arbitrator

A recent decision of the Colombian Supreme Court clarified that recognition of a foreign arbitral award could only be refused when the conduct of the arbitrator violates Colombia’s international public policy. The Court relied on the 2014 IBA Guidelines on Conflicts of Interest in International Arbitration as non-binding but extremely persuasive. The Court also concluded that, since there are relatively few international arbitrators, it is inevitable that they will come across one another, and so their objectivity should only be called into question on this basis where their relationship goes beyond mere professional acquaintances. Read more

Venezuela

Tribunal makes significant award against Venezuela in nationalization dispute

An ICSID Tribunal has awarded a company approximately USD 53 million in its dispute with Venezuela. The dispute arose after Venezuela nationalized two coffee production facilities in which the company had invested. The Tribunal found Venezuela had significantly undervalued the facilities and failed to follow due process under Venezuelan law. The decision was also noteworthy because the tribunal ruled that it had jurisdiction to hear a dispute, despite the Netherlands-Venezuela BIT on which it was based having been terminated prior to the initiation of the arbitration. Read more

North America

Canada

Court of Appeal permits certification of extra-jurisdictional class members

The Ontario Court of Appeal recently adopted an expansive approach to class actions in the case of Airia Brands v. Air Canada, finding that the Ontario courts had jurisdiction over claims of class members outside Canada. The court focused on the fact the Defendants conducted business in Ontario. It is expected that leave to appeal to the Supreme Court of Canada will be sought, with a hearing to take place next year. Read more

Canada

Facilitation payments banned under foreign anti-corruption law

Canada has formally repealed the exception for “facilitation payments” in its foreign anti-corruption legislation, making it unlawful to pay any foreign public official in order to speed up the performance of their official duties. Such payments are now punishable by up to 14 years in jail for individuals and unlimited fines for businesses, with the latter also likely to be barred from doing business with the Canadian government for up to 10 years. Read more

United States

Proposed US legislation focuses on medical device cybersecurity A bill has been introduced in the US Senate which aims to protect patient safety from cyber attacks on medical devices. The Medical Device Cybersecurity Act of 2017 aims to improve medical device security through mandatory testing, the fast provision of fixes to known issues, and provision for emergency response. The need for the Bill highlights the challenges for national legislatures arising from increased connectivity of devices, often referred to as the "internet of things". Read more

United States

Arbitrator has final say on arbitrability under UNCITRAL rules, appeal court rules

In Brittania-U Nigeria v. Chevron USA, the Court of Appeals for the Fifth Circuit held that an agreement providing for arbitration under UNCITRAL Arbitration Rules constitutes a clear and unmistakable delegation to the arbitrator to decide arbitrability. Britannia also argued that the Federal Court deciding the case at first instance did not have jurisdiction under the New York Convention, in the absence of a non-US party. This was rejected on the basis that the presence of a foreign party is not necessarily required. Read more

United States

Managing companies in Michigan creates personal jurisdiction for German CEO

In MAG IAS Holdings v. Schmuckle, the US Court of Appeals for the Sixth Circuit held that a Defendant CEO, responsible for the worldwide operations of a group of companies, including subsidiaries in Michigan, had sufficient personal jurisdiction in the State. Although a Germany citizen based in Germany, the Defendant purposefully availed himself of the privilege of doing business in Michigan, the causes of action arose from the Defendant's activities in the State, and the Defendant's actions had a sufficient connection with Michigan. Read more