CONFLICT F LAWS LECTURE NOTE 2015

CONFLICT OF LAWS LECTURE NOTE

Lecturer;Hussien A. (AAU School of Law)2015

Nomenclature

There are two names by which this course is known. These are private international law and
conflict of laws. Private international law is commonly used in civil law legal system while
the term conflict of laws is typical in the common law legal system. The purpose of this law
is to come up with the solution.

The function of this law is generally to enable the judge to decide jurisdiction in the first
place.

If the forum is selected the next issue is selecting the appropriate law. So generally it
provides guidelines in private litigation to select law in cases involving foreign element.

Foreign element can be understood from three directions. The first one is personal. It is where
one of the parties is foreigners or domiciliary of other countries or even residence of other
states. In such cases the issue of foreign element arise. So when we say personal it is the
parties to the case. The second one is local. And when we say local, it is a place where certain
event occur. The third one is material. This is a subject matter. It is about property whether
moveable or immoveable.

A case is said to be involved a foreign element if one of the following situation is fulfilled.
The first one is when a person is from another jurisdiction. The second one is where a
transaction is concluded in another jurisdiction and the third one is an immoveable or
moveable is situated abroad. Foreign element is a pre-condition for the existence of conflict
of laws.

Nature or Feature of Conflict Of Laws

The first nature is, it does not provide rights and duties of the parties. It only assists the judge
to select the appropriate forum and law. It is also relevant at national and international level.
So, it carries a case only half away until certain law is selected. And secondly it is relevant in
conflict of law that may arise both at national and international levels.

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Scope

The traditional view of the scope is three things. These are judicial jurisdiction, choice of law
and recognition and enforcement of foreign judgement and arbitral awards. The civil law
legal systems mainly focus on choice of law rules. In Ethiopia we have no comprehensive
codified system of conflict of law rules. Professor Rene David tried to compile certain rules
which he thought to be important. But the draft was rejected. There is also a draft
proclamation. Currently, these two legislations are the only sources even if they are not
binding. Art,4 of the draft provides scope of application. This proclamation follows the
traditional approach.

The motivating or the rational of this course

Necessity to harmonize, integrate or elevate diversity;diversity of laws and diversity of

jurisdiction. Addressing the issue of compensation is also another motivating factor.

Function of Conflict of Laws

The first one is to do justice in case involving foreign element.

The second one is to determine the rights and obligations of the parties appropriately. This is
what we call vested right approach

and thirdly, to prevent or reduce forum shopping. These are the three functions of private
international law.

We can avoid forum shopping by doing the following. The first one is by delineating the
boundaries of court’s jurisdiction in multi-state cases that have only one state that can
entertain the case (Proc. 25/1996).

The second one is to have one choice of law rule that directs to a fixed applicable law.

Historical Development of Conflict of Laws

In the Hellenic period of ancient Greek there were special courts. In ancient Rome too, there
was differential treatment of citizens. Especially,foreigners were treated differently. Laws
applicable to foreigners were different. The law that is applicable to Roman citizens ware not

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universally applicable. Foreigners were governed by other law. So these separate courts for
cases involving foreigners may be taken as the first step in the development of this course.

It is generally agreed upon that modern conflict of laws emerged in the 13th century in Greek.
This is connected with the work of professor Andricus. He is called the father of conflict of
laws. He developed the modern version of conflict of laws. He proposed that in certain cases
the court might apply the law of other state. He suggested that where ever a foreign element
is involved the judge has to compare the two laws before applying the forum law lexifori.

When there is a difference between the law of the forum and the foreign law in the same
subject matter, the judge should apply the more effective and useful law. However this is
vague because he failed to define what was the more effective and useful law.

Personal Laws or Statutes Theory

This theory held that the court should look to the nationality of the defendant in cases
involving a foreign element and they should apply the national law of the defendant. If he is a
foreigner we have to apply his national or personal law. Under this theory it is immaterial
where the events occurred. The main point to be considered in this theory is the nationality of
the defendant. So, it generally emphasis two things: citizenship and personal law of the
defendant.

During 13th Century, matters were divided into real and personal. If the matter is considered
to be personal, then the personal law of the defendant will be applicable. And in cases the
matter is considered to be the law of the place, like for example in case of immovable
property, the law of the place where that property exists will be applicable. Thus persons plus
moveable property are considered to be personal matters. Extra territorial application of laws
was not possible if the matter is related to immoveable property. So during the 13th century
personal theory was dominant in Europe.

During the 14th century professor Yntena developed the principle as to what statue should be
applicable and what statue is extra territorial. He developed certain detail rules. For example,
regarding the form of contract, itis governed by the law of the place where the parties agree
or lexilosi. Regarding substance of the contract, it governed by the law of the place where the
contract is concluded lexilosi contracts. Issue of performance is governed by the law of the
place of performance, lexi solution. Liability of torts governed by laws of the place of wrong,
lexilosidelicsi. Matters of procedure governed by the law of the forum, lexifori. This
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continues until 16th century when a French writer developed a theory called the theory of
party autonomy.

Theory of Party Autonomy

This theory says that, Dumoulin, “we have to get the intention of the parties rather than the
nationality of the defendant. Intention of the parties should be given emphasis particularly in
contract. Contract is based on the intention of the parties.

Territoriality Theory

During the 17th century, there is another theory developed by two Dutch writers. These
writers argued on the bases of political power of state. They have argued that states have the
sovereign power to regulate all things taking place in its territory. So according to them, even
if the defendant is a foreigner he will be subject to the law of the forum. In fact the
territoriality theory developed by these two writers contains three propositions.

The first one is, the law of each state are enforced when in the border of that state but not
beyond.

Secondly, all persons within the borders of the state whether they are residing permanently or
temporarily are subject to those laws so long as they remain there.

The third proposition is rights acquired in one state will be recognised in another state as long
as the interest of the second state is not prejudiced thereby. The third proposition is
important. It recognises the possibility of applying a foreign law if it is compatible with the
local law. It was dominant in the 17th century.

During the 18th century Europe was divided into two. It was between the personal and
territorial theory.

In fact the territoriality theory got more acceptance than the personal theory. Starting from
the 19th century another theory which is relevant to the nature of the conflict of laws emerged.
These theories tried to address why we apply conflict of laws. The first theory in this regard
is the comity theory.

Comity Theory

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Developed by Joseph S. Comity means in this case friendly relations of states. So according
to this theory, certain foreign law can be recognised and applied in other state in order to
strengthen or maintain a friendly relation between states. So it is giving respect to other
countries law. It said that states owe an imperfect obligation to recognise the law of other
states. This is because there is no compulsion the obligation based on only reciprocity and
mutual benefit.

Weakness of this theory is does not tell us what law is applicable. It simply answers the why
question – why foreign law should be recognised.

The Nationality Theory

Another theory developed during the 19th century is the nationality theory. Developed by
Mansini an Italian writer.This theory argues that law is personal not territorial. The law of
your nationality follows you everywhere. Because the law is made for people and goes with
the people. It is related to the personal law theory.

The Location of Legal Relation Theory

Another theory is the location of legal relation theory. Developed by Saviginy, the German
writer. He started with the territoriality theory but rejected other theories.

According to this theory there was a scientific basis for the solution of conflict problems.If
we properly apply certain principles then that may lead to the applicable law.

Secondly, it rejected the theory of comity and argued that conflict of law was part of
international law which is imposed by international common law of nations.

The forum was bound by principles of international law to recognise a foreign law in proper
case. Proper cases could be when there is foreign element. For example, in the law of status:
Succession and family cases,domicile is chosen,for immoveable property, the place where the
immoveable property is situated or situs and for tort it is place of fault.

Rights Theory

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It is developed by DiseEngland, Benhin USA and Pilet France. They maintained that foreign
created rights should be recognised when it is claimed by parties and when it is compatible
with the interest of the forum state. Interest in this case refers to public policy, morality etc.

JUDICIAL JURISDICTION

Jurisdiction refers to the power of court to entertain a case. It is a power of a court to decide a
matter in controversy. It is the power of a court to inquire into facts, applies law, make
decisions and renders judgements. There are three elements of jurisdiction. The first one is
local jurisdiction. This one is related with the place or the area within state in which the case
is to be tried. The second element is material jurisdiction. This tries to answer questions as to
which level or hierarchy of courts should exercise jurisdiction over certain specific matters.
The third element is Judicial Jurisdiction. It refers to the power of court of a particular state to
render a judgement by an individual or its property.

Basis of Judicial Jurisdiction

There are basis for a certain court to exercise jurisdiction. Basically there is a difference
between a common law and civil law countries in this case. In the common law legal system
it is the territoriality theory which has dominance. The place or the power of a sovereign state
can also be a base. On the other hand, in the civil law legal system it is domicile or
nationality that is given more focus. So, there are basis of different approach to in common
law and civil law countries.

In the civil law legal system it is domicile of the defendant as primary basis of jurisdiction.
This goes in line with the personal and nationality law theory. In the common law legal
system the physical presence of the defendant within the territorial jurisdiction of a forum is a
basis of jurisdiction. This is in line with the theory of territoriality.

The Power or Territorial Theory

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It begins with the concept of physical power exercise by arresting country. This is common
with respect to criminal cases. In civil cases such practice is long abandoned. But if the
defendant physically appears in the territorial area of the court that court can avail itself
jurisdiction. So, power theory explains jurisdiction in terms of the relationship of the person
or a thing to the forum. The weakness of this theory is its compulsion. It compels a person in
transition or who unintentionally enters into the territorial jurisdiction of a court. The
assumption of this theory is specifically enforcement of judgement. But still there is
limitation for this assumption. One is, even if you assume that judgement will be enforced in
the territory of the jurisdiction, this assumption works only if the defendant has sufficient
resource to satisfy the claim of the plaintiff in the rendition forum. The second limitation is
less probability for recognition and enforcement of such judgement because of unwillingness
and compulsion and the issue of fairness could be raised. There are also other issues. This
theory is also deficient because the jurisdiction cannot be extended so as to rich the defendant
who already leaves the forum.

Minimum Contact Theory

Minimum contact theory is a term used in the US law of civil procedure to determine when
it is appropriate the foreign court in one state of personal jurisdiction over a defendant from
another state. The US Supreme Court decided a number of cases and defines the concept of
minimum contact. The court argued that it is unfair for the court to assert jurisdiction over a
party unless that party has reasonable contact in that state. This jurisdiction must not offend
traditional notions of fair play and substantial justice. Minimum contact is only relevant in
personal jurisdiction. It is only relevant for cases affecting persons.

Non residence defendants have minimum contact with the forum state if they have first,
direct contact with the state, second, have contact with a resident of the state, third, have
placed their product into the stream of commerce with the forum, fourth, seek to serve
residents or forum state. So it could be with the state itself or its residence of the state.
Consent and waiver is also possible.

Fairness Theory

This approaches to the problem of judicial jurisdiction from various perspectives. It says that
fairness requires the forum state to try a case when it is convenient, fair and just for the

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parties. Major justification for fairness theory is the assumption that resolution of a dispute
based on fairness, guarantee,and recognitionelsewhere.

Consideration of three relational circumstances for fairness

First, the relationship between the litigants and the forum, second, the relationship between
the underlying controversy and the forum, third, the controversies substantive relation to the
forum and the fourth is domicile, residence nationality as basis of jurisdiction. Particularly
domicile in the civil law countries is used to determine jurisdiction. This is because a person
is unlikely to be inconvenient when he is sued. Another reason is traditional justification. It is
based on benefit burden rational privilege and protection reciprocal duties.

Forum Selection Clauses or Consent Submission Theory

This means you can simply determine the future court by granting consent. First by
agreement before the dispute arises, or by prior consent and second, is its submission after
the case has been commenced.

Limitations for the Exercise of Judicial Jurisdiction

These limitations represent on the exercise of jurisdiction are significant in private

international law. This refers to the situations where a court which has jurisdiction refuses to
exercise it. This is what we call restraints. The court decline jurisdiction after the case
presented before it because of the following grounds.

The first one is forum non convenience. It refers to a general discretionary power of a court to
decline to exercise a possessed jurisdiction on the base of the appropriate forum to entertain
the case is another forum or when it is convinced that the local forum is inappropriate. So,
this forum non convenience presupposes at least two forums having jurisdiction on certain
matter. Basically, it is the feature of common law legal system. It has wider scope in US.

There are private and public interest factors for forum non convenience. Some of the private
interest factors includes, ease access to resources of proof. The other is existence of
compulsory procedure for attendance of witness or low cost to obtain attendance of willing
witness. There are also other practical problems like expeditious or speedy trial or cheap trial.

There are public interest factors to determine forum non convenience. These are
administrative difficulties of the forum, availability of amicable dispute settlement means,

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avoidance of unnecessary problems in conflicts of laws or in the application of foreign law

and the unfairness of citizens in unrelated forum.

In the US the following factors are taken into consideration to grant the motion on forum
noneconvenient. Like for example, the location of potential witnesses, relevant evidence and
records, it neither entails a res judicata effect nor prohibits it and availability of adequate
alternative forum for the plaintiff. There are certain norms of forum non convenience. The
first one is its antidote to excessively wide basis of jurisdiction. So, it limits the wide basis of
jurisdiction. The other is providing flexibility. The other is preventing forum shopping.

Critics against forum non convenience say that it poses a greater potential for abuse by court
exercising the jurisdiction. So it is abuse of power. It can also delay justice and add extra
coasts.

The other ground is pendency. Pendency refers to a situation where parallel proceeding
involving the same parties and cause of action at the same time. The risk is a possibility of
conflicting judgement. In order to avoid this many states have pendency rule. That is for
exclusionary or mandatory decline or sustaining of jurisdiction. The first one is doctrine of
forum non convenience. The other is the first seized approach and the third one is recognition
from notice(prediction of recognition of judgment by another state.

The last point with respect to limitation is osteon close. In the common law legal system,
power to decline jurisdiction because of ostensible clause is discretion. But in the civil law
legal system a decline of jurisdiction is mandatory where there isostensible clause.

Scope of Courts Judicial Jurisdiction

General vs. Special or Limited Jurisdiction

Courts may have general or special jurisdiction. There is no uniformity in this case. So there
are different approaches of defining scope of court’s jurisdiction. Some states like US state
courts are regarded as general jurisdiction whereas federal courts are regarded as courts of
limited jurisdiction. In some other countries neither federal nor state courts are regarded as
general or special jurisdiction. In countries like Germany,neither federal nor state courts are
identified by general or limited jurisdiction.

In Ethiopia the issues of private international law are generally reserved to the federal
government. Pro, 25/1996 tries to define under art. 5/2 and 5/4 provides for federal courts
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have jurisdictions over suits between persons permanently resides in different regions and
over cases to which a foreign national is a party. Pursuant to Art, 11/2 a and c, the federal
high court shall have first instance jurisdiction over a case involving private international law
and sub C application regarding the enforcement of foreign judgement. The federal high court
of Ethiopia has jurisdiction of private international law.

Draft Proclamation on Private int. law Art. 9/2 provides the general jurisdiction of courts.
Section two of this proclamation also provides for special jurisdiction. Exclusive jurisdiction
is provided under Art, 26 and 27 of the draft proclamation. The first one is jurisdiction over
immoveable property situated in Ethiopia. The second one is when there is an agreement by
forum selection close.

A federation of dual polity may adopt a unitary judicial system. So there are two kinds of
federal court system. These are unitary and dual court structure. The form of government
does not necessarily imply the court structure. In a federal states which adopted a unified
scheme of administration of justice there is one national Supreme Court at the apex.
India,Canada&Australiaare examples of unitary court system. Dual judicial system is a direct
indication of the federal system. According to this system each government establishes its
own hierarchy of courts in federal and state level which is autonomous and self-contained.
There are dual supreme courts at federal and state level. Typical example is the USA.

Judicial Jurisdiction in Ethiopia

Countries try to divide the jurisdiction of the courts either into general jurisdiction or special
or limited jurisdiction. For instance, the court of USA, the federal court is special jurisdiction
and state courts have general jurisdiction. In some other countries their constitution or
relevant laws doesn’t classified into general and special. The jurisdiction will be determined
by other factors for example by domicile of defendant.

The connecting factor for Ethiopian courts to assume general jurisdiction is the domicile of
the defendant as article of draft proclamation of PIL. Dispute of Interstate conflicts lay in
federal high court. This supported by federal court establishment 25/1996. Art 5/2 and 5/4
provides that the jurisdiction of PIL or interstate is the jurisdiction of federal court. These
provisions indirectly preclude the state court exercising general jurisdiction. The other
relevant provision is that art 11/2 /a and C also indicate that this power is given to federal
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high court. Therefore, the general jurisdiction under Ethiopian law for the dispute of PIL is
exclusively given to the federal courts particularly federal high court.

Exclusive Jurisdiction

Exclusive jurisdiction implies that certain courts have jurisdiction. Other courts cannot
entertain that case. Look at article two6 of draft proclamation. A selected court by parties in
their contract has exclusive jurisdiction.

State and Federal Jurisdiction

There are two types of federal court structures. Federal states may have unitary or dual court
structure. For example, Canada or other have unitary court structure even if they are federal
state. Unitary court structure indicates uniform administration of justice or laws all over the
country. There is one national Supreme Court at apex. Examples of unitary court system are
India, Canada and Australia.

Most federal states are expected to establish dual court structure. Dual court is about
independence of jurisdiction of courts at federal and state. This means cases entertained by
states courts are not federal courts even by federal supreme. The dual court structure has no
uniform administration of justice.

Ethiopian court structure is neither dual nor unitary system. This is because, the constitution
established dual court structure of two supreme courts at federal and state level but, when we
see the practice , the federal supreme court give a final decisions over any decisions even
over the decision of state supreme court cassation.

What is federal and state matter? Cassation over cassation is jurisdictional issue. Can the
federal cassation federal law or state law for case come from state? It applies federal laws
many times. This rejects the power of the state supreme court impliedly. So, Ethiopian court
structure is unique. It is neither dual nor unitary. Actually, it shares the features of both dual
and unitary. Cassation over cassation is constitutional because of art 80/3/a is one argument.
The phrase “Particulars determined by other laws” is another issue of argument.

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The other argument about dual court is that the decision of the cassation of federal supreme
court by judges will be binding at all courts at federal and state level. So, when we see the
practice, it seems unitary system.

Art, 183 up to 191 of domicile is a law of PIL. Art 8/two, art two0/1, two0/two of civil
procedure are relevant for jurisdiction of PIL. 647 of commercial code maritime code art
two08 and two37 are also relevant.

3 Approaches with respecting the involvement of cases of foreign elements

The first approach is Silence regarding judicial jurisdiction, the other approach is using civil
procedure code and third approach is using the general jurisprudence.

CHOICE OF LAWS

Choice of law is the core element of private international law. There are three methods of
approaching choice of law problems.

These are the first one is unilateralism, the second one is multilateralism and the third one is
substantive law approach.

The first two methods are old whereas the third one is the new method. The unilateralism
basically says that, state can only determine when its own law could be applied to a case. It
determines the special breach of certain states substantive laws.

the other is multilateralism. It is in case of multi state transactions in the legal systems. So
we have to choose legal systems or the law with which the law has the issue or case has
strong relationship or has most close connection should be selected.

Renvoi

Renvoi is a French term. It literally means sending back. This doctrine is involved in the
process of choice of law. Therenvoi can be double, total or true. It also sometimes called
English renvoi. It is called English renvoi because this doctrine is developed particularly in
English legal system. There is also what we called partial or single renvoi.

Solutions for Renvoi

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The first method is rejecting renvoi. This means the reference to the foreign law does not
include the choice of law rules of the latter. So the case is referred to only to the internal law
of certain country. This is to the exclusion of foreign choice of law rules. The second
mechanism is accepting renvoi. If state X’s choice of law rules refers to state Y’s law and
state Y’s choice of law rules refers back to state X’s law, then the second reference will be
understood as Y refuses to apply its law…

Art, 7 of the draft proclamation talks about characterization. So the process of

characterization according to this proclamation is mainly based on identification of the nature
of the law as to whether it falls under the substantive or procedural law. Characterization or
classification should be in accordance with the Ethiopian law Art, 8 talks about full faith and
credit. In America in case of interstate conflict of law are duty bound to respect to the laws,
cases and public records of another state. In this art, to one state should give full faith and
credit to the law of another state. Any state in Ethiopia is duty bound to give full faith. The
draft proclamation also deals with the applicable law generally starting from Art. 33. Art, 33
talks about scope of conflict of laws. It says unless otherwise provided in this proclamation,
the law significantly connected to the case shall apply to both international and interstate
conflict of laws. Von Savaginy said that the applicable law should be selected based on centre
of gravity. And centre of gravity should be determined based on the connecting factors and
the collecting matters which are closely connected to the case. So, this Art, seems to follow
von savingny’s approach. Because it says “the law significantly connected to the case”.
Another is place of occurrence or place of performance of something could be the connecting
factor.

Sub Art, 2 say that “where this proclamation refers to the foreign law, the reference shall
compass all provisions that are applicable to the case according to that law. Thus, our law
recognises renvoi. When we refer we don’t limit Art. 35 specifically talks about renvoi. Sub
Art, of this article follows the acceptance approach. So the draft proclamation recognises the
reference to the whole law which gives rise to renvoi and also tries to solve the problem of
renvoi by acceptance approach.

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