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This article is written by Rashi Singh currently pursuing LLB from Campus Law Centre, Faculty of Law, University of Delhi. The said article deals with the intricacies of Private International Law and how are international disputes settled under this concept of law.

Introduction

Conflict of laws (sometimes also called conflicts law), also known as private international law in some countries, arises because of the diversity in the world. Private international law pertains to the resolution of the conflicts arising due to the existence of different individuals, different countries with different legal systems, different systems of private laws, different procedures of courts and traditions. Every country follows different legal systems, some follow the common law system (United Kingdom, Canada, USA etc.), others follow the civil law system (France, Germany, Spain etc.). India follows a hybrid legal system (civil law, common law, customary law, religious law etc.). Many kinds of legal events like contracts, marriages, torts, decedent’s estate, business transactions are not confined to only one country. Courts of every involved country may claim jurisdiction over the concerned matter. Private international law deals with such complexities to decide on the said matter.

Private international law in contrast to public international law

Public international law or law of nations is a set of rules, norms and standards generally accepted by the sovereign states. The term was coined by Jeremy Bentham. International law works on a broad range of domains such as wars, trade, economic issues, human rights, space law etc. In a broad sense, International law provides guidelines, mechanisms, methods and a common language to international actors primarily states and international organizations. Public international law consists of treaties (Geneva Convention, United Nations Convention on Law of the Sea, Vienna Convention etc.), customs, the general principle of laws and some other sources. By contrast, private international law concerns the claim of jurisdiction by courts, and which country’s law applies in a particular situation.

Private International Law (PIL), must address three questions. First, when a legal problem touches upon more than one country, it must be decided which court has jurisdiction to adjudicate the matter. Second, after the jurisdiction of a particular court is decided, what law should be applied for the said question before the court. Third, after the court renders the judgment, PIL must address the enforcement of the judgment.

Various modes to settle disputes outside courts

The best way to save legal time and money involved in litigation is to go for out of court settlement. ADR (Alternative Dispute Resolution) mechanism works best for such settlements. Alternative dispute resolution can take place in various forms such as arbitration, mediation, conciliation, neutral evaluation etc. 

  • Arbitration: This is generally regarded as an alternative to court litigation. It produces a binding and in some cases non-binding decision made by a third party. Parties generally add a clause in their contract (before or after the dispute) to go through this method in case of any dispute. A claimant will typically send a document called “notice to arbitrate” or “request to arbitrate” to its opponent. An arbitrator is selected and a procedure for arbitration is also adopted. After hearings, the tribunal produces its award. Unless the award is challenged, it will determine the rights and obligations of the parties.
  • Mediation: This form of ADR involves a neutral third party to settle a dispute. Mediation is different from arbitration as it does not produce any binding decision on the parties. The job of the third party is to listen to the evidence, help the litigants to understand each other’s opinion regarding the dispute, and then facilitate the negotiation for the resolution of the dispute. In general, a mediator’s role is not to reach a decision but rather to help the parties to reach their own decision.
  • Conciliation: A conciliation is a form of ADR where a “conciliator” is appointed to resolve the dispute amicably between the concerned parties. The conciliator is appointed to propose solutions to reach a settlement whereas in the case of mediation a mediator tries to facilitate the parties to reach a mutual settlement. Again conciliation leads to non-binding procedures as opposed to arbitration.
  • Neutral Evaluation: Neutral evaluation generally provides the disputing parties with various possible appropriate dispute resolution options. A neutral third party is appointed to examine the evidence and listen to the disputing parties’ concerns and then finally present the parties his or her final evaluation regarding the matter. Though this technique of ADR is generally used as a prelude to other techniques such as mediation and arbitration.
  • Mini-trial: It is a mixture of mediation, settlement negotiation, and adjudication. Parties brief their cases in front of a panel as if they would do in a trial. A neutral advisor is appointed to sit on the panel. The neutral advisor must be independent and impartial. The parties file legal briefs to the advisor also known as “information exchange”. The final settlement agreement becomes legally binding on the parties. Also, if the parties cannot settle, proceedings terminate.

These are some of the most common methods of dispute settlement to avoid costly and time-consuming litigation.

Importance of choice of law in private international law

Choice of law is the most important aspect of Private International Law. Choice of law is a procedural stage in the adjudication of cases that involve the conflict of laws of different legal jurisdictions. The outcome of this procedural stage is potentially to identify which country’s law would be applied in a matter involving conflict of laws. The court exercising jurisdiction over the matter decides on the choice of law. The “traditional approach” says that territorial factors such as the domicile and nationality of the parties where the cause of action arose, plays the role in deciding the choice of law. After the Hague Conference on Private International Law, the “habitual residence” of the party also influences the choice of law. 

Key points of the doctrine of Renvoi

“Renvoi” comes from the French meaning send back or return unopened. The doctrine of renvoi is a legal process by which the court adopts or applies rules of any foreign jurisdiction concerning any conflict of laws that arises. The main idea behind using this doctrine is to avoid forum shopping (choosing the most favourable court for a claim) and the same law is applied to achieve the same outcome regardless of where the case is dealt with. The doctrine of renvoi is of two types: single renvoi and double renvoi.

  1. Single renvoi: Countries such as Spain, Italy and Luxembourg use a single renvoi system. Single renvoi works as a system that refers to another jurisdiction’s choice of law rules. Like for example, where a testator, who was a French national, was habitually resident in England but domiciled in Spain, the court may need to consider A which forum will apply A to deal with the property under succession laws. Here, Spain is the law of the forum (where the property is situated), which applies the law of the deceased’s nationality i.e., French law. 

Now the French law observes the habitual residence of the deceased i.e., England. And England observes the domicile of the deceased which is Spain. Here two transfers (Spain to France and France to England) took place, now Spain (law of the forum) which uses a single renvoi system, will not accept it back and it will apply the law of England to decide on the matter. 

  1. Double renvoi: Countries like England and France use a double renvoi system i.e. they will accept renvoi twice. For example, suppose a testator, an Irish national, is habitually resident in Spain but is domiciled in Italy, leaves a moveable property in France. Now France being the law of the forum will examine the law of the deceased’s habitual residence which is Spain and will apply Spanish law. Spain will examine the nationality of the deceased which is Italy follows single renvoi and will not accept the double renvoi which will cause France to apply Italian law in this case.
  2. No renvoi: there are countries such as Denmark, Greece, and the US that do not accept renvoi.

Apart from these, total renvoi also exists which is difficult to apply. There are countries which do not follow any renvoi system causing impediment in case of conflict of laws. 

Considerations on the impact of the use of Private International Law

The difference in the conflict of laws of different countries may raise additional concerns such as of renvoi. Suppose if a forum’s law conflicts rules refer to the foreign law and that foreign law contains conflict rule to refer it back to the forum, will the forum accept that reference. Likewise, if a foreign rule contains a conflicts rule to refer to the third country, will the forum accept it. Such questions are answered by many legal systems of the countries by utilizing renvoi. But not all legal systems such as America use renvoi and some even exclude renvoi in the matters. As far as procedural issues are concerned, a court will always apply its law but then it is not clear which matter is procedural and which is substantive. In recent scenarios, Brexit has also impacted how private international law works in Europe.

ADR as an effective measure

ADR causes parties to save themselves from complex litigation and settle disputes out of court. Alternative dispute resolution is a cost and time-saving process. Parties involved in a dispute can reach a settlement faster and effectively through arbitration, mediation or conciliation. In the case of international disputes effectiveness of ADR is affected by a lot of factors. The extent of ADR can be smaller in one country as compared to the other country. Different kinds of disputes make the evaluation of ADR’s effectiveness difficult. The legal treatment and implication of ADR differs in different jurisdictions and is largely affected by local laws. But at the same time, the ADR process seems a better option, especially in developing countries. 

Challenges faced in dispute settlement

While dispute settlement seems easier using the ADR process, it poses several questions in a private international law setting:

  1. Which legal framework applies to the ADR procedure?
  2. Which law governs the effects that the ADR procedure has on the simultaneous judicial procedure in any jurisdiction?
  3. Which law (substantive law) applies to the subject matter and its relevance in the ADR process?
  4. Which law will govern the settlement agreement (in case of successful ADR)?
  5. And how will this settlement be enforced in a cross-border setting? 

Also, the doctrine of renvoi cannot be accepted as a general principle in the conflict of laws as lex fori does not take into consideration foreign law.

There are several challenges involved in adjudicating or settling a dispute when a conflict of laws arises. Choice of law, the doctrine of renvoi and the ADR process itself has various technicalities attached to them. 

Conclusion

Though the settlement of international disputes under private international law seems quite a cumbersome process, if alternatives such as arbitration, mediation, conciliation are used effectively, disputes can be resolved easily. Uniformity can also be achieved without the doctrine of renvoi or choice of law if countries adopt alternative rules in their private international law system. The ADR process in recent times has helped the disputing parties to resolve satisfactorily. Policymakers looking forward to increasing the efficiency of courts should allow ADR processes for cases that can be settled without going to courts. Every legal system in the world aspires to have a strong judicial system, conflict of laws adds to the burden of courts. To avoid such a predicament, countries should look forward to alternatives to resolve disputes involving conflict of laws.

References

  1. https://www.britannica.com/topic/conflict-of-laws/Choice-of-law
  2. http://www.legalserviceindia.com/legal/article-2109-doctrine-of-renvoi.html
  3. http://www.legalserviceindia.com/legal/article-2109-doctrine-of-renvoi.html
  4. https://corporate.findlaw.com/litigation-disputes/alternative-dispute-resolution-adr-may-be-an-effective-way-of.html
  5. https://www.mondaq.com/india/arbitration-dispute-resolution/935374/arbitration-a-perspective
  6. https://www.britannica.com/topic/international-law
  7. Five Ways to Keep Disputes Out of Court – Harvard Business Review

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