Despite the still-growing influence of international arbitration, transnational litigation is on the rise as well. In a number of situations and circumstances, parties consciously decide against arbitration and favour the resolution of disputes before state courts, especially in countries known or thought to have an efficient and transparent court system. Other disputes, by their nature or owing to other constraints, are rarely subject to arbitration, either generally or at least in certain countries or under certain national laws. The often highly complex areas of patent and trademark validity, anticompetitive and cartel damages issues, securities disputes, and product liability come to mind.
The countries within the European Union, in particular, have observed an increase in transnational litigation as efforts are being made to harmonise more and more areas of law through European Union directives or comparable initiatives. In addition, mutual recognition and enforcement of civil judgments between EU member states has increasingly been facilitated, thus also doing away with the former thicket of divergent and not always compatible national requirements. Furthermore, there have been significant and successful moves to harmonise and unify private international law in many areas of commercial life (including contractual and non-contractual obligations), resulting in a greater foreseeability of the application of national law and less incentive to debate, which national law should apply.
Many practitioners are increasingly faced with the challenge of advising their clients regarding disputes not only in their home jurisdiction, but also at a transnational level. As multinational companies are more frequently faced with similarly situated disputes pending simultaneously or sequentially in multiple jurisdictions, the demands placed on the litigator change correspondingly. This includes not only the substantive demands, but the logistical management and coordination of disputes subject to different procedural standards and calendars on a global level. An example is the discovery by competition authorities all over the world of a global cartel spanning five continents. Those affected by the cartel would usually claim damages in their home jurisdiction, leaving the cartel members exposed to multiple lawsuits in various countries, all revolving around the same or similar questions. Successful coordination of these lawsuits requires knowledge and appreciation of several legal systems, court calendars, procedures and, of course, substantive standards, along with attention to the imponderables of lis pendens, res judicata and collateral estoppel elements.
The deadline for transposing the EU antitrust damages directive into national law, which expired at the end of 2016, marked the most notable development in European litigation. The EU antitrust damages directive’s overall aim is to remove practical obstacles to compensation for victims of infringements of EU competition law and to fine-tune the interplay between private damages actions and public enforcement of the EU competition rules by the European Commission and national competition authorities. Perhaps the most controversial aspect pertains to the possibility of obtaining disclosure of evidence through court orders, a legal concept that was (and still is) largely uncommon in German and continental European civil litigation, which may explain a certain delay in the transposition process in various jurisdictions. Other aspects relate to confidentiality obligations regarding leniency applications and settlement submissions to the EU Commission, certain protections of small and medium-sized companies, limitation periods for claims and the so-called passing-on defence.
It remains to be seen how the new rules will play out in practice. So far Germany – together with the UK and the Netherlands – were among the main forums within the European Union where cartel victims choose to bring their damages actions.
A transnational litigator’s practical and substantive knowledge of a foreign jurisdiction may enhance the ability to make informed decisions respecting choice of forum, forum shopping and jurisdictional defences.
In view of the above, GAR Know-how aims to provide valuable cutting-edge information on the key questions facing cross-border litigators and to assist in assessing possible advantages and disadvantages of litigating in multiple jurisdictions. It also serves as a valuable resource for those conducting comparative legal research in the international dispute resolution space.
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Richard Kreindler, Thomas Kopp and Johannes Schmidt Cleary
Gottlieb Steen & Hamilton LLP