FOREIGN LAW IN DOMESTIC COURTS

• Published date: 01 December 2017
• Citation: (2017) 29 SAcLJ 194
• Author: David FOXTON QC MA BCL (Oxon), PhD (London); Barrister, Essex Court Chambers.
• Date: 01 December 2017

This article reviews the rules governing the ascertainment of foreign law in domestic proceedings. The competing approaches to ascertaining foreign law are reviewed: the traditional approach of proof by expert evidence; the alternative of referral to the foreign court on an ad hoc basis or pursuant to bilateral or multilateral conventions; the appointment of a judge from the relevant jurisdiction as a referee; or the ascertainment of foreign law on the basis of submissions. It concludes that the latter option, adopted in international arbitration, and now by the Singapore International Commercial Court, is the preferred approach, and best fits the forensic exercise in which both Bench and Bar are engaged when issues of foreign law arise.

I. Introduction

1 In common law systems, it has often been noted that foreign law is an issue of fact.1 Such is the rigour with which this classification has historically been applied, that misrepresentations as to foreign law were treated differently for legal purposes from misrepresentations of English law,2 and, even where the parties had conducted an arbitration on the basis that foreign law and English law were the same, the resultant “legal” decision was treated as an issue of fact rather than one of law when determining whether an appeal on a point of law could be brought under s 69 of the English Arbitration Act 1996.3

2 However, as has been observed, while foreign law is an issue of fact, it is “a question of fact of a peculiar kind”.4 In criminal and civil jury trials in England, issues of foreign law are determined by the judge rather than the jury.5 The process of cross-examining a foreign law expert bears a far greater resemblance to the Socratic dialogue between bar and bench when making legal submissions than to the cross-examination of a witness of fact, or even of a technical expert.6 David Steel J has observed that determining issues of foreign law “is much less dependent on the to and from of cross-examination, let alone impressions formed from demeanour of witnesses. It is much more concentrated upon analysis of the documents and the materials”.7 In EFT Holdings, Inc v Marinteknik Shipbuilders (S) Pte Ltd,8 Chief Justice Menon referred to “a discernible discomfort amongst courts in the common law tradition with the characterisation of foreign law as a pure question of fact, due to the legal quality inherent in this ‘fact’”. Perhaps for this reason, it has become relatively common for foreign law to be dealt with in international arbitrations by way of direct submission to the tribunal – written and oral – rather than through the service of expert reports and cross-examination of those experts. Judith Gill QC has referred to “the trend towards decreasing use of legal expert witness and more presentation of legal argument by way of submission” in international arbitration.9 In “Bermuda Form” arbitrations, involving disputes arising under an insurance policy governed by New York law but which take place under the English Arbitration Act 1996, this is invariably the way in which New York law is received.10

3 There is now provision for the Singapore International Commercial Court (“SICC”) to order that any question of foreign law be dealt with by way of submission, including by advocates qualified in the relevant law.11 Further, the Dubai International Financial Centre (“DIFC”) Court of Appeal has upheld a direction by which the laws of a foreign state should be established by adducing the relevant legal materials and receiving written submissions as to their effect rather than by way of expert evidence.12 These changes reflect the increasing globalisation of legal disputes, in which the link between the forum and the substantive law or lex causae it will apply in resolving the dispute has become increasingly flexible. Given the greater frequency with which issues of foreign law now fall for resolution in commercial litigation, and the different approaches on offer for their resolution, this article attempts a critical reappraisal of the manner in which issues of foreign law are addressed before domestic common law courts.

II. Conventional position: Foreign law must be pleaded and proved like any other fact

4 In both England and Singapore, the usual position is that foreign law must be pleaded and proved like any other fact.13 By contrast, under German law, foreign law is an issue of law, which the court independently investigates using whatever sources of information are available.14 In common law systems, if foreign law is not pleaded for

a cause of action governed by foreign law, then the law of the forum is applied,15 historically on the basis that the content of the foreign law is presumed to be the same as the law of the forum (the so-called presumption of identity or similarity) or because the law of the forum applies under a choice of law rule by default if the content of the relevant foreign law is not established.16 For foreign law to be pleaded, the pleading requirement is generally held to require not simply a generalised assertion that “the contract claims are governed by the law of X”, but rather the specific identification of the principles and provisions of foreign law relied upon. Previous editions of Bullen & Leake & Jacobs, a leading text of pleading precedents, provided that:17

… where a party relies on foreign law to support his claim or as a ground or a defence thereto, he must specifically plead the foreign law relied on … and he should plead full particulars of the precise statute, code, rule or regulation, ordinance or case law relied on, with the material sections, clauses, or provisions thereof.

In Ascherberg, Hopwood & Crew Ltd v Casa Musicale Sonzogno di Pietro Ostali SNC,18 Ungoed-Thomas J ordered the pleading of Italian law:19

… to include full particulars of the statements and propositions of Italian law including rules of construction relied on, with reference in each case to the Italian legal authorities relied on in support of it, and of any agreement and any passage or terms therein to which they are directed.

The direction was upheld in the Court of Appeal.20 To like effect in Singapore, G P Selvam J in The H15621 described a pleading which alleged “the governing law is Norwegian law” without pleading the

propositions of Norwegian law as suffering from “an egregious flaw”. Certainly, in the author's experience, foreign law tends to be pleaded in great detail and at great expense, with responsive pleadings (be they defences, replies or rejoinders) very often adding to the body of foreign law in play whose content is thereby revealed in stages in a costly dance of the seven veils.

5 This is not only expensive, but can have curious consequences. What happens where one party puts in play one aspect of the foreign law of contract – for example its rules on causation and remoteness – but not some other part (for example whether contributory negligence operates as a defence)? If the point is not specifically pleaded by the other party, does the trial proceed on the basis that (say) the French contractual provisions on causation and remoteness are to be applied, but English law is applied on the issue of whether there is a defence of contributory negligence? There could be occasions when this would produce an unsatisfying outcome: very often different legal systems address the same underlying concern through different concepts, and it would be unattractive for a litigant to achieve a result not available under either legal system by allowing him to mix a cocktail of the two. In Tamil Nadu Electricity Board v St CMS Electricity Co Ltd,22 Mr Justice Cooke refused to allow the presumption to be used as a means of introducing a new point of law at a late stage in a case which was proceeding on the basis that the relevant issues were governed by Indian law, suggesting it would be artificial to do so against a background where both parties had been permitted and had produced expert evidence of Indian law.23 However, that was a case in which the “new point” did not feature in the defined list of Indian law issues. Mr Justice Cooke also held that where a party had pleaded foreign law, but had declined or been unable to prove it, he could not rely on the presumption to fill the gap.24 By contrast, where the “gap” is some incidental issue of foreign law and the principal issues have been pleaded, the suggestion that a claim or defence should fail merely because the incidental issue was overlooked when the expert evidence was prepared is less attractive, and there is a stronger case here for allowing the law of the forum to fill the gap.25 There are other occasions

when allowing some mixture of laws – for example applying local rules of interpretation to a foreign statute in the absence of any evidence they differ – seems entirely proportionate. Professor Adrian Briggs has suggested that rejecting the case of a party who has advanced a case on foreign law, but failed to adduce evidence as to some part of it, would be to make “the best the enemy of the good”.26

6 The presumption of similarity (or default application rule) has never been absolute, and courts in England and Singapore are becoming increasingly wary of its application. It has been held that a court will not apply English legislation to a foreign transaction to which it would not otherwise have been applicable simply because there had been no proof of a foreign law which was applicable in circumstances for which English law had created some special institution.27 In Shaker v Al Bedrawi,28 the English Court of Appeal refused to proceed on the basis of a presumption that a Pennsylvania company was subject to legislation in its place of incorporation which was equivalent to the Companies Act 1985.29 Where the English statute was, on its face, not applicable to a foreign company, and there was no basis for concluding that it reflected or embodied some “generally...