CONFLICT OF LAWS

Intellectual history There is general recognition that conflict of laws rests on a general principle of territoriality that comes from public international law that is, that states have the right to regulate the activities and persons within their territories and, conversely, have no right to regulate conduct of persons beyond their borders. The instances of deference to foreign law are seen as an attempt to promote international harmony by accommodating the views of a foreign sovereign in the expectation of receiving reciprocal treatment. This is a principle of enlightened self-interest. Under the vested rights theory, there is no exception from the territorial application of law, since foreign law is never applied as such. Instead, local law simple recognize a right that had become vested in an individual under the foreign law at a time when the individual was subject to the foreign law. The theory emphasizes the individuals entitlement to his or her vested right than the courts politeness on concession to foreign sovereigns. Under the local law theory, conflict of laws is a branch of the local municipal law, and that local law alone determined what, if any, relevance and operation would attach to foreign law. Under this theory, no right was vested in individuals by the operation of any foreign law alone. Instead, the right became operational only after it was recognized and given effect by the local law, and the local law alone determined when that would happen. Every nation possesses an exclusive sovereignty and jurisdiction within its own territory. The direct consequence of this rule is that the laws of every State affect, and bind directly, all property, whether real or personal, within its territory; and all persons who are resident within it, whether natural born subjects or aliens; and also all contracts made, and acts done within it. A State may, therefore, regulate the manner

and circumstances under which property, whether real or personal or in action, within it shall be held, transmitted, bequeathed, or transferred, or enforced; the condition, capacity, and state of all persons within it; the validity of contracts, and other acts, done within it; the resulting rights and duties growing out of these contracts and acts; and the remedies and modes of administering justice, in all cases calling for the interposition of its tribunals to protect, vindicate, and secure the wholesome agency of its own laws within its own domain. No State or nation can, by its laws, directly affect or bind property out of its own territory, or persons not resident therein, whether they are natural born subjects or others. This is a natural consequence of the first proposition; for it would be wholly incompatible with the equality and exclusiveness of the sovereignty of any nation that other nations should be at liberty to regulate other persons or things within its territories. From these two maxims or propositions there flows a third, and that is, that whatever force and obligation the laws of one country have in another depends solely upon the laws and municipal regulations of the latter; that is to say, upon its own proper jurisprudence and polity, and upon its own express or tacit concern. The true foundation on which the administration of international law must rest is, that the rules which are the to govern are those which arise from mutual interest and utility, from a sense of inconveniences which would result from a contrary doctrine, and from a sort of moral necessity to do justice in order that justice may be done to us in return.

The topic called conflict of laws deals with the recognition and enforcement of foreign created rights. A right having been created by the appropriate law, the recognition of its existence should follow everywhere. Thus

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an act valid where done cannot be called in question anywhere. If the court finds that one state has an interest in the application of its policy in the circumstances of the case and the other has none, it should apply the law of the only interested state. If the court finds an apparent conflict between the interests of the two states, it should reconsider. A more moderate and restrained interpretation of the policy or interest of one state or the other may avoid conflict. If, upon reconsideration, the court finds that a conflict between the legitimate interests of the two states is unavoidable, it should apply the law of the forum. If the forum is disinterested, but an unavoidable conflict exists between the laws of the two other states, and the court cannot with justice decline to adjudicate the case, it should apply the law of the forum until someone comes along with a better idea. The conflict of interest between states will result in different dispositions of the same problem, depending on where the action is brought. (Lutong Macau Doctrine) The common law regarding the recognition and enforcement of foreign judgments is firmly anchored in the principle of territoriality. This principle reflects the fact that sovereign states have exclusive jurisdiction in their own territory. As a concomitant to this, states are hesitant to exercise jurisdiction over matters that may take place in the territory of other states. Jurisdiction being territorial, it follows that a states law has no binding effect outside its jurisdiction. Modern states, however, cannot live in splendid isolation and do give effect to judgments given in other countries in certain circumstances. Thus, a judgment in rem, such as a decree of divorce granted by the courts of one state to persons domiciled there, will be recognized by the courts of other states. Thus, our courts will enforce an action for breach of contract given by the courts of another country if the defendant was present at the time of the action or has agreed to the foreign courts exercise of

jurisdiction. This is in conformity with the requirements of comity, which has been stated to be the deference and respect due by other states to the actions of a state legitimately taken within its territory. Since the state where the judgment was given had power over the litigants, the judgments of its courts should be respected. PUBLIC POLICY, PUBLIC LAW CLAIMS Every legal system reserves an ultimate discretion to exclude the application of the foreign lex causea normally applicable under its choice-of-law principles if the result is offensive to forum public policy. The operation of this exception is not restricted to the choice-of-law level; public policy also provides defences to the enforcement of foreign decisions and judgments that would otherwise be entitled to recognition. Claims and judgments based on foreign sovereign or public rights are also vulnerable to exclusion. This is well established in the case of foreign tax and penal laws. Apart from these two classic examples, the jurisprudential terrain is still largely unexplored. English courts have no jurisdiction to entertain an action: 1. For the enforcement, either directly or indirectly, of a penal, revenue or other public law of a foreign state

The class of laws which will be enforced are those laws which are an exercise by the sovereign government of its sovereign authority over property within its territory or over its subjects wherever they may be. But other laws will not be enforced. By international law every sovereign state has no sovereignty beyond its own frontiers. The courts of other countries will not allow it to go beyond the bounds. They will not enforce any of its laws which purport to exercise sovereignty beyond the limits of its authority. The penal, revenue, public law, and public policy defences to the recognition of a foreign judgment are distinct from the

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natural justice defence. The natural justice defence is concerned with the fairness of the procedure by which the foreign judgment was obtained whereas the other defences rest on the substantive character of the foreign laws on which the judgment was based. The provisions of the law of a foreign country do not apply if their application would be manifestly inconsistent with public order as understood in international relations. [It is a generally accepted proposition that, to justify a refusal to recognize a foreign law or decision, the result must be offensive to fundamental forum public policy.] Conflict of laws jurisprudence is concerned essentially with the just disposal of proceedings having a foreign element. The jurisprudence is founded on the recognition that in proceedings having connections with more than one country, an issue brought before a court in one country may be more appropriately decided by reference to the laws of another country even though those laws are different from the law of the forum court. The laws of the other country may have adopted solutions, or even basic principles, rejected by the law of the forum country. These differences do not in themselves furnish reason why the forum court should decline to apply the foreign law. On the contrary, the existence of differences is the very reason why it may be appropriate for the forum court to have recourse to the foreign law. If the laws of all countries were uniform there would be no conflict of laws. Where public policy is successfully invoked as a defence to the recognition or enforcement of a foreign judgment, the result is plain the judgment will not be enforced. Similarly, where the exception is invoked to exclude a cause of action created by the impugned foreign law, the action will simply be dismissed. The exclusion of foreign penal law has deep roots: The common law considers crimes as altogether local, and cognizable and punishable exclusively in the country, where they are committed. No other nation,

therefore, has any right to punish them; or is under any obligation to take notice of, or enforce any judgment, rendered in such cases by the tribunals having authority to hold jurisdiction within the territory, where they are committed. The penal exception thus avoids the necessity for courts to engage in difficult value judgments about the fairness and wisdom of a foreign countrys criminal justice policies. Viewed in this light, the principle is essentially an a priori application of the general public policy exception. The penal exception is limited to denying a foreign sovereign the power to enforce its criminal laws outside the territory of their enactment. It does not preclude forum recognition of the relevant laws in other contexts. The rule that the courts of no country execute the penal laws of another applies not only prosecutions and sentence for crimes and misdemeanors, but to all suits in favour of the state for the recovery of pecuniary penalties for any violation of statutes for the protection of its revenue or other municipal laws and to all judgments for such penalties. The lex fori ultimately governs the characterization of a foreign law as penal. The revenue or tax exclusion has similarly deep roots to the penal law exclusion. No country ever takes notice of the revenue laws of another. Enforcement of a claim for taxes is but an extension of the sovereign power which imposed the taxes, and that an assertion of sovereign authority by one State within the territory of another as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties.

LEX FORI The local or territorial law of the country to which a court, wherein an action is brought, or other legal proceeding is taken, belongs. The forms of remedies, modes of procedure, and execution of judgments are regulated

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solely and exclusively by the laws of the place where the action is instituted. The lex fori is to decide who are proper parties to a suit. The lex fori governs as to the nature, extent, and character of the remedy. The lex fori decides as to deprivation of remedy in that jurisdiction. The insolvent laws of the various states which purport to discharge the debt are, at most, allowed that effect only as against their own citizens; as between their own citizens and strangers, where the claims of the latter have not been proved, they only work a destruction of the remedy in the state of the insolvency jurisdiction. Statutes of limitation affect the remedy only; and hence the lex fori will be the governing law. [If a statute in force in the place where the cause of action arose extinguishes the obligation, and does not merely bar the remedy, no action can be maintained in another jurisdiction after it has taken effect.] The right of set-off is to be determined by the lex fori. Liens, implied hypothecations, and priorities of claims, generally, are matters of remedy, but only, it would seem, where the property affected is within the jurisdiction of the courts of the forum. A prescriptive title to personal property, acquired in a former domicil, will be respected by the lex fori. Questions of the admissibility and effect of evidence are to be determined by the lex fori. The administration of a deceased persons movables is governed wholly by the law of the country where the administrator acts and from which he derives his authority to collect them (lex fori); and without regard to the domicil of the deceased; but the distribution of the distributable residue is governed by the lex domicilii. Usually the distributable residue is remitted to the administration of the domicil for distribution; but it is in the discretion of the court of the ancillary administration to distribute such residue. An action in tort for an act done in a foreign country will not lie in England unless the act

was a tort both in such foreign country and in England. The law of the forum as to the validity of a bequest will be applied to a gift by will, especially when this carries out and does not frustrate the testators intention, although the law of the state (of the recipient) may be different. The statutes of one state giving an action for wrongful death may be enforced in the courts of another state, if not inconsistent with the statutes and policy thereof.

LEX LOCI Lex loci contractus law of the place of making a contract Lex situs law of the place where a thing is situated Lex loci actus law of the place where a legal transaction takes place Lex loci celebrationis law of the place where a contract is made Lex loci solutionis law of the place where a contract is performed Lex loci delicti commissi law of the place where a tort is committed

[Lex loci contractus is used in a double sense in many of the cases. It is used sometimes to denote the law of the place where the contract was made, and at other times, to denote the law by which the contract is to be governed, which may or may not be the same as that of the place where it was made.] It is a general principle applying to contract made, rights acquired, or acts done relative to personal property, that the law of the place of making the contract, or doing the act, is to govern it and determine its validity or invalidity, as well as the rights of the parties under it, in all matters touching the modes of execution and authentication of the form or instruments of contract; and also in relation to the use and meaning of the language in which it is expressed, the construction and interpretation of it, the legal duties and obligations imposed by it and the legal rights and immunities acquired under it.

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The validity or invalidity of a contract as affected by the lex loci may depend upon the capacity of the parties or the legality of the act to be done. The capacity of the parties as affected by questions of minority or majority, incapacities incident to coverture, guardianship, emancipation, and other personal qualities or disabilities, is, it has been said, to be decided by the law of the place of making the contract. The question of disability to make a contract on account of infancy is to be decided by the lex loci; so, also, as to contracts made by married women. Personal disqualifications not arising from the law of nature, but from positive law, and especially such as are penal, are strictly territorial, and are not to be enforced in any country other than that where they originate. Natural disabilities, such as insanity, imbecility, etc., are everywhere recognized, so that the question whether they are controlled by the lex loci or lex domicilii seems to be theoretic rather than practical. A contract legal by lex loci well be so everywhere, unless (i) it is injurious to public rights or morals; (ii) or contravenes the policy; (iii) or violates a positive law of the lex fori; (iv) or violates any rule of procedure. The application of the lex fori is a matter of comity; and that law must, in all cases, yield to the positive law of the place seeking the remedy. It is held generally that the claims of citizens are to be preferred to those of foreigners. Assignments, under the insolvent laws of a foreign state, are often held inoperative as against claims of a citizen of the state, in regard to personal property in the jurisdiction of the lex fori. The interpretation of contracts is to be governed by the law of the country where the contract was made. The lex loci governs as to the formalities and authentication requisite to the valid execution of contracts. But in proving the existence of, and seeking remedies for, the breach, as well as in all questions relating

to the competency of witnesses, course of procedure, etc., the lex fori must govern. The lex loci governs as to the obligation and construction of contracts, unless, from their tenor, it must be presumed they were entered into with a view to the laws of some other state. This presumption arises where the place of performance is different form the place of making. It has been held that a lien or privilege affecting personal estate, created by the lex loci, will generally be enforced wherever the property may be found, but not necessarily in preference to claims arising under the lex fori, when the property is within the jurisdiction of the court of the forum. A discharge from the performance of a contract under the lex loci is a discharge everywhere. [A distinction is to be taken between discharging a contract and taking away the remedy for breach.] In cases of indorsement of negotiable paper, every indorsement is a new contract, and the place of each indorsement is in its locus contractus. [The place of payment is the locus contractus, however, as between indorsee and drawer, the place of acceptance of a draft is regarded as the locus contractus.] The validity of a contract cannot be secured by apparently subjecting it to a law by which it is not properly governed. It is said that the failure to comply with local requirement as to form, not affecting the obligation of the agreement, will not invalidate the contract. A contract valid by the laws of the place where made, although not in writing, will not be enforced in the courts of a country where the Statute of Frauds prevails. But where the law of the forum and that of the place of the execution of the contract coincide, it will be enforced, although required to be in writing by the law of the place of performance, because the form of the contract is regulated by the law of the place of its celebration, and the evidence of it by that of the forum. The general rule is that a defence or discharge, good by the law of the place where the contract is made or is to be

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performed, is to be held of equal validity in every place where the question may come to be litigated. Damages for the commission of a tortious act are to be measured by the law of the place where the act is done. An action for a tort committed in a foreign country will lie only when it is based upon an act which will be considered tortious both in the place where committed and in the locus fori; in such case the law of the place where the tort was committed governs. In the English courts, it has been held that the proper law of the contract is the law or laws by which the parties to a contract intended, or may fairly be presumed to have intended, the contract to be governed.

LEX REI SITAE It is the universal rule of the common law that any title or interest in land, or in other real estate, can only be acquired or lost agreeably to the law of the place where the same is situated; and the law is the same in this respect in regard to all methods whatever of transfer, and every restraint upon alienation. The lex rei sitae governs as to the capacity of the parties to any alienation, whether testamentary or inter vivos, or to make a contract with regard to a movable, or to acquire or succeed to a movable as affected by questions of minority or majority; of rights arising from the relation of husband and wife; parent and child, or guardian or ward; and of the rights and powers of executors and administrators, whether the property be real or personal; and of devisee or devisor; So as to the forms and solemnities of alienation, and the restrictions, if any, imposed upon such alienation, the lex rei sitae must be complied with, whether it be a transfer by devise, or by a conveyance inter vivos. So as to the amount of property or extent of interest which can be acquired, held, or transferred; and the question of what is real property. The law of a country where a thing is situated determines

whether the thing itself, or any right, obligation, or document connected with the thing, is to be considered an immovable or a movable. And, generally, the lex rei sitae governs as to the validity of any such transfer. The validity, construction, and effect of wills of movables depend upon the lex rei sitae; but the law of the state where the will was made may be considered by the court of the situs in determining the meaning of certain words in it. The validity of a charitable devise depends upon the lex rei sitae, and so does the execution of a power of appointment of lands under a will, and the devolution of land, whether in case of intestacy or under a will. The acquisition of title to land by lapse of time (prescription) must be determined by the les rei sitae, except so far as the limitation to an action to recover land depends on the lex fori. An executor contract for the conveyance of lands not repugnant to the lex rei sitae will be enforced in the courts of the latter country by personal process.

*LAW MERCHANT The general body of commercial usage in matters relative to commerce [CUSTOM OF MERCHANTS]. Since, however, its character is not local, nor its obligation confined to a particular district, it cannot with propriety be considered as a custom in the technical sense. It is a system of law which does not rest exclusively on the positive institutions and local customs of any particular country, but consists of certain principles of equity and usages of trade which general convenience and a common sense of justice have established, to regulate the dealings of merchants and mariners in all the commercial countries of the civilized world. These usages, being general and extensive, partake of the character of rules and principles of law, not matters of fact, as do

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usages which are local or special. They constitute a part of the general law of the land, and, being a part of that law, their existence cannot be proved by witnesses, but the judges are bound to take notice of them ex officio; and this application is not confined to merchants, but extends to all persons in any mercantile transaction. The development of the law merchant as part of the common law has continued without ceasing. Evidence of living general usage is still admissible to add new incidents to its contents, provided they do not contradict any rule already received. DOMICILE AND RESIDENCE In private international law, it is traditionally though necessary to identify an individuals personal law the law of the community to which he/she has the most significant continuing connection. In common law systems, domicile has traditionally been regarded as the most appropriate connecting factor to establish personal law. This is in contrast to the position in most legal systems in continental Europe and South America where nationality began to be adopted as the dominant connection from the early 19th century forward. Nationality has several advantages. Whereas domicile incorporates an element of subjective intention, nationality is usually acquired by a formal objective governmental act and is thus much easier to ascertain. For the same reason, nationality is more likely to ensure international harmony in the choice of law applicable to personal law questions. On the other hand, the element is intention in domicile allows some room for choice whereas nationality may remain with a person long after he/she has sought to terminate real ties with the relevant country. Today, some variation of residence or simply real and substantial connection is more often the relevant concept. Domicile is a persons permanent home which requires the act of residence and the intention to remain there permanently.

While a person may have more than one home, he can only have one domicile. An existing domicile is presumed to continue until it is proved that a new ne had been acquired and the burden of proving a change in domicile lies on those who assert it. Domicile involves two elements the fact of residence and the intention to stay there permanently or indefinitely. It is well-established that a court must determine a persons domicile according to the rules for ascertaining domicile accepted by the lex fori. The conventional common law view is that residence, as an element of domicile, means very little more than physical presence. But it does mean something more. The court will ask whether the person is an inhabitant, in contrast to merely a tourist or casual visitor. The important issue, in other words, is what intention underlies the physical presence. Domicile connotes an exclusive connection no person can have more than one domicile at one and the same time. However, in countries organized on a federal model, it is possible for a person simultaneously to have two domiciles a federal domicile for the purposes of federal law and a domicile in one of the provinces or states for the purposes of provincial or state law. Alien status does not ipso facto preclude a finding of domicile and there is even authority that a person who is illegally in the country can still have the intention necessary to establish a domicile of choice there. Legal residence, inhabitancy, and domicil are generally used as synonymous. Two things must concur to establish domicil the fact of residence and the intention of remaining. These two must exist or must have existed in combination. Domicil is said to be of three kinds domicil of origin, or by birth, domicil by choice, and domicil by operation of law.

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The domicil of origin always remains in abeyance, as it were, to be resorted to the moment the domicil of choice is given up. Domicil by choice is that domicil which a person of capacity of his free will selects to be such. Domicil is conferred in many cases by operation of law, either expressly or consequentially. There may be a commercial domicil acquired by maintenance of a commercial establishment in a country, in relation to transactions connected with such establishments. Any person, sui juris, may make any bona fide change of domicil at any time. To constitute a change of domicil three things are essential: (1) residence in another place; (2) an intention to abandon the old domicil; and (3) an intention of acquiring a new one. The law of the place of domicil governs as to all acts of the parties, when not controlled by the lex loci contractus or lex rei sitae. The state and condition of the person according to the law of his domicil will generally, though not universally, be regarded in other countries as to acts done, rights acquired, or contracts made in the place of his native domicil; but as to acts, rights, and contracts done, acquired, or made out of his domicil, the lex loci will generally govern in respect to his capacity and condition. The disposition of, succession to, or distribution of the personal property of a decedent, wherever situated, is to be made in accordance with the law of his actual domicil at the time of his death. The principle applies equally to cases of voluntary transfer, of intestacy, and of testaments. Wills are to be governed by the law of the domicil as to the capacity of parties, and as to their validity and effect in relation to personal property; but by the lex rei sitae as to the transfer of real property. The forms and solemnities of the place of domicil must be observed.

The local law is to determine the character of property. And it is held that a state may regulate the succession to personal as well as real property within its limits, without regard to the lex domicilii. The interpretation of a will of movables is to be according to the law of the place of the last domicil of the testator. But so far as its validity is concerned, it does not matter that after the will was made in one domicil the testator obtained a new domicil where he died. But it must be valid under the law of the domicil. Distribution of the personal property of an intestate is governed exclusively by the law of his actual domicil at the time of his death. This includes the ascertainment of the person who is to take. The descent of real estate depends upon the law of the place of the real estate. The question whether debts are to be paid by the administrator from the personalty or realty is to be decided by the law of his domicil. An assignment of property for the benefit of creditors valid by the law of the domicil is generally recognized as valid everywhere, in the absence of positive statute to the contrary; but not to the injury of citizens of the foreign state in which property is situated.

JURISDICTION Jurisdiction is given by the law, and cannot be conferred by consent of the parties; Jurisdiction given by the law of the sovereignty of the tribunal is held sufficient everywhere, at least as to all property within the sovereignty, and as to persons on whom process is actually and personally served within the territorial limits of jurisdiction, or who appear and by their pleadings admit jurisdiction. But the appearance of a person on whom no personal service of process has been made, merely to object to the jurisdiction is not such an admission. Jurisdiction must be either of the subjectmatter, which is acquired by exercising powers conferred by law over property within the territorial limits of the sovereignty,

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or of the person, which is acquired by actual service of process or personal appearance of the defendant. The question as to the possession of the former is to be determined according to the law of the sovereignty; of the latter, as a simple question of fact. The courts of one state have no jurisdiction over persons of other states unless found within their territorial limits. Jurisdiction in rem over a non-residents property can be obtained by proceedings against it, of which notice should be given in order to give a binding effect to the proceedings; such notice may be actual or constructive. Any judgment obtained in such proceedings has no effect beyond the property in question; no other property can be reached under it; nor can any suit be maintained on it, either in the same court or elsewhere.

one to be determined by English law (as the lex fori). In the case of an individual, no difficulty usually arises. And the same can be said of foreign legal persons which would be recognized as such by our own law. The novel question which arises is whether a foreign legal person which would not be recognized as a legal person by our own law can sue in the English courts. Theories of territorial sovereignty give to the sovereign the right to control any person physically present in the territory. The corollary is an absence of power to regulate persons in other jurisdictions because that would constitute an interference with the sovereignty of that jurisdiction. So, at common law, English courts were entitled to assume jurisdiction over any person present in England on whom a writ could be served. Service of a writ on a defendant in England gave the English court jurisdiction as of right subject only to discretionary principles of self-restraint. Traditionally, the presence of the defendant within the territorial limits of the court or his voluntary submission to the authority of the court has founded jurisdiction in a personal action in that court. Traditionally, the view has been held that jurisdiction in a personal action rests upon physical power and the ability of the court to enforce any judgment it may render. Jurisdiction, therefore, normally depends upon the presence of the defendant within the territorial limits of the court or upon the voluntary submission of the defendant to the authority of the court. There are ways in which jurisdiction may be asserted against an out-of-state defendant: (1) presence-based jurisdiction; (2) consent-based jurisdiction; and (3) assumed jurisdiction. Presence-based jurisdiction permits jurisdiction over an extra-state defendant who is physically present within the territory of the court. Consent-based jurisdiction permits jurisdiction over an extra-state defendant who consents, whether by voluntary

While a non-resident defendant corporation may not lose its right of objecting to the jurisdiction of the court on the ground of insufficient service of process by pleading to the merits pursuant to order of the court after objections overruled, it does waive its objection and submits to the jurisdiction if it also sets up a counterclaim even though it be one arising wholly out of the transaction sued upon by plaintiff, and in the nature of recoupment rather than set-off. [Read: Merchants Heat & Light Co. v. Clow & Sons, 204 U.S. 286; 51 L. Ed. 488] JURISDICTION IN PERSONAM The status of an individual is occasionally relevant to questions of jurisdiction. There are some persons whose status prohibits them from bringing an action and there are some whose status confers immunity from action. Doing business doctrine Isolated transaction doctrine Estoppel The question whether a foreigner can be a party to proceedings in the English courts is

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submission, attornment by appearance and defence, or prior agreement to submit disputes to the jurisdiction of the domestic court. [Both bases of jurisdiction also provide bases for the recognition and enforcement of extra-state judgments.] Assumed jurisdiction is initiated by service of the courts process out of the jurisdiction. [This jurisdiction does not provide a basis for recognition and enforcement.] Where more than one forum is capable of assuming jurisdiction, the most appropriate forum is determined through the forum non conveniens doctrine, which allows a court to decide its jurisdiction on the ground that there is another forum more appropriate to entertain the action. A corporation has no legal status beyond the bounds of the sovereignty by which it is created. It exists only in contemplation of law and by force of the law, and where that law ceases to operate, the corporation can have no existence. It must dwell in the place of its creation, and cannot migrate to another sovereignty. This principle does not prevent a corporation from acting in another state or country with the latters express or implied consent. But every power which a corporation exercises as such in another state depends for its validity upon the laws of the sovereignty in which it is exercised. A corporation can exercise none of the functions and privileges conferred by its charter in any other state or country except by the comity and consent of such state or country. A corporation has the capacity to act and contract, by its agents, in a state or country other than that by which it was created, with the express or implied consent of that country or state, under the rules of comity. And by rules of comity binding upon the courts of a state, a foreign corporation has a right to do business therein, the consent of the state being presumed, except (1) where it is prohibited by express statutory or constitutional enactment, (2) where it is seeking to perform acts which are contrary to the public policy of the state, (3) where it is seeking to exercise extraordinary and

special franchises, and (4) where it is seeking to perform acts which are unauthorized by its corporate charter. A state, if it sees fit, may by legislation exclude a foreign corporation altogether or it may, subject to constitutional limitations, prescribe any conditions it may deem fit as a prerequisite to its right to do business within its limits. So a state may restrict the right of a foreign corporation to engage in business within its limits, and to sue in its court. The legal effects if a corporation would transact business in the Philippines without license are: (1) it cannot maintain by itself or assignee any suit for the recovery of any debt, claim, or demand whatever; (2) any officer, agent or person transaction for the said corporation shall be criminally liable; and (3) the contract entered into by said foreign corporation is null and void, being prohibited by law and contrary to public policy. A foreign corporation doing business in the Philippines without license cannot sue, but may be sued in out courts for a claim or demand. A foreign corporation not doing business in the Philippines may sue, but cannot be sued in our courts. A foreign corporation actually doing business in the Philippines, with or without license or authority to do so, is amenable to process and jurisdiction of local courts. If such foreign corporation has a license to do business, then summons to it will be served on the agent designated by it for the purpose, or otherwise in accordance with the law. Where such foreign corporation actually doing business here has not applied for license to do so and has not designated an agent to receive summons, then service of summons will be made pursuant to the provisions of the Rules of Court (lex fori). As a general rule, the court of one state will not exercise the power of deciding controversies relating merely to the internal management of the affairs of a corporation organized under the laws of another state or of determining rights dependent upon such management. Questions relating to

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the management of the internal affairs of a foreign corporation are to be settled by the tribunals of the state which created the corporation. A court, in deciding the question of whether or or a court outside is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including a) The comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court and in any alternative forum; b) The law to be applied to issues in the proceeding; c) The desirability of avoiding multiplicity of legal proceedings; d) The desirability of avoiding conflicting decisions in different courts; e) The enforcement of an eventual judgment; and f) The fair and efficient working of the forum legal system as a whole.
AND

*DISCRETION

TO DECLINE JURISDICTION RESTRAINT OF FOREIGN PROCEEDINGS:

The basic principle is that each jurisdiction is independent. There is therefore, no embargo on concurrent proceedings in the same matter in more than one jurisdiction. There are simply these two weapons, a stay (or dismissal) of proceedings and an antisuit injunction. Each of these has its limitations. The former depends on its voluntary adoption by the state in question, and the latter is inhibited by respect for comity. It follows that, although the availability of these two weapons should ensure that practical justice is achieved in most cases, this may not always be possible. In cases where jurisdiction has been founded as of right, i.e. where defendant has been served with proceedings within the jurisdiction, the defendant may apply to the court to exercise its discretion to stay the proceedings on the ground which is usually called forum non conveniens. [such plea can never be sustained unless

the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all parties and for the ends of justice.] The object of the words forum non conveniens is to find that forum which is the more suitable for the ends of justice, and is preferable because pursuit of the litigation in that forum is more likely to secure those ends. In order to justify a STAY, two conditions must be satisfied, one positive and the other negative: a) The defendant must satisfy the court that there is another forum to whose jurisdiction he is amenable in which justice can be done between the parties at substantially less inconvenience or expense, and; b) The stay must not deprive the plaintiff of a legitimate personal or juridical advantage which would be available to him if he invoked the jurisdiction of the courts. In the USA, the courts hesitate to disturb the plaintiffs choice of forum and will not do so unless the balance of factors is strongly in favour of the defendant. In Canada, the doctrine is that unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. If the court concludes that there is no other available forum which is clearly more appropriate for the trial of the action, it will ordinarily refuse a stay. If, however, the court concludes that there is some other available forum which prima facie is clearly more appropriate for the trial of the action, it will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted. The law relating to injunctions restraining a party from commencing or pursuing legal proceedings in a foreign jurisdiction has a long history, stretching back at least as far as the early 19th century. From an early stage, certain basic principles emerged which are now beyond dispute. First, the

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jurisdiction is to be exercised when the ends of justice require it. Second, where the court decides to grant an injunction restraining proceedings in a foreign court, its order is directed not against the foreign court but against the parties so proceeding or threatening to proceed. Third, it follows that an injunction will only be issued restraining a party who is amenable to the jurisdiction of the court against whom an injunction will be an effective remedy; Fourth, since such an order indirectly affects the foreign court, the jurisdiction is one which must be exercised with caution. As a general rule, before an anti-suit injunction can properly be granted by an English court to restrain a person from pursuing proceedings in a foreign jurisdiction, comity requires that the English forum should have a sufficient interest in, or connection with, the matter in question to justify the indirect interference with the foreign court which an anti-suit injunction entails. In an alternative forum case, this will involve consideration of the question whether the English court is the natural forum for the resolution of the dispute. Comity, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws. The courts have developed two forms of remedy to control the choice of forum by the parties. The first and more conventional device is a stay of proceedings. This enables the court of the forum selected by the plaintiff (the domestic forum) to stay the action at the request of the defendant if persuaded that the case should be tried elsewhere. The second is the anti-suit injunction, a more aggressive remedy, which may be granted by the domestic court at the request of a defendant, actual or potential, in a foreign suit. In the usual

situation the plaintiff in the domestic court moves to retrain the defendant from launching or continuing a proceeding in the courts of another jurisdiction. Occasionally, the defendant in a foreign jurisdiction who alleges that the plaintiff in that jurisdiction has selected an inappropriate forum seeks an injunction from the courts of the alleged appropriate forum, in which no proceeding is pending, to restrain continuation of the foreign proceedings. While the restraining order operates in personam on the plaintiff in the foreign suit and not on the foreign court itself, it has the latter effect and therefore raises serious issues of comity. Although both the remedy of a stay and an injunction have as their main objectives the selection of an appropriate forum for the trial of the action, there is a fundamental difference between them which is crucial to the development of principles which should govern each. In the case of the stay, the domestic court determines for itself whether in the circumstances it should take jurisdiction, whereas in the case of the injunction, it, in effect determines the matter for the foreign court. [Read: Laker Airways v. Sabena, Belgian World Airways, 731 F2d 909 (1984)] Parties to a contract often agree at the time of contracting on the applicable law and on the forum for resolution of dispute between them. There may be an agreement to use arbitration and not litigation to resolve disputes. In the not too distant past, the common law held such agreements void. It was contrary to public policy to oust the jurisdiction of the courts. Public policy now favours such clauses and the law defers to such agreements, although not absolutely. There are still issues concerning validity and interpretation of jurisdiction selecting and arbitration clauses - but they are not now void per se on grounds of public policy. Even where parties have agreed to submit their disputes to arbitration, they still may resort to the courts for other assistance.

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*FOREIGN LAW The courts do not take judicial notice of foreign laws, and they must, therefore, be proved as matters of facts, and pleaded. Written laws, by the text, or a collection printed by authority, or a copy certified by a proper officer, or, in their absence, perhaps, by the opinion of experts as secondary evidence; they may be construed with the aid of text-books as well as of experts. Where experts are called, the sanction of an oath is required. Where a statue of another state has been properly brought to the notice of the court, it will in all future cases take notice of that statute and presume the laws of the foreign state to be the same until some change is shown. A copy of the authorized statute-book is recognized as proof of a foreign law; and the construction of those statutes may be proved either by the reports of cases, or by one familiar therewith. In the absence of proof as to what the law of a foreign state or country is, the court, when it takes judicial notice that the foreign state has fundamentally the same system of law as that of the forum, will presume that the law of the foreign state is the same (exclusive of statutory changes) as that of the law of the forum. Foreign unwritten laws, customs, and usages may be proved, and are ordinarily proved, by parol evidence; and when such evidence is objected to on the ground that the law in question is a written law, the party objecting must show that fact. The manner of proof varies according to circumstances. As a general rule, the nest testimony or proof is required; for no proof will be received which presupposes better testimony available by the party who offers it. When the best testimony cannot be obtained, secondary evidence will be received. Exemplified or sworn copies of written laws and other public documents must, as a general thing, be produced when they can be produced; but should they be refused by

the competent authorities, then inferior proof may be admitted. When our own government has promulgated a foreign law or ordinance of a public nature as authentic, that is held sufficient evidence of its existence. The usual modes of authenticating them are by an exemplification under the great seal of a state, or by a copy proved by oath to be a true copy, or by a certificate of an officer authorized by law, which must itself be duly authenticated. Proof of unwritten law is usually made by the testimony of witnesses learned in the law and competent to state it correctly under oath. Foreign laws have, as such, no extraterritorial force, but have an effect by comity. In the absence of pleading and proof to the contrary, the laws of another state are presumed to be like those of the state in which the action is brought. The effect of foreign laws when proved is properly referable to the court; the object of the proof of foreign laws is to enable the court to instruct the jury what is, in point of law, the result from foreign laws to be applied to the matters in controversy before them. The courts are, therefore, to decide what is the proper evidence of the laws of a foreign country; and when evidence is given of those laws, the courts are to judge of their applicability to the matter in issue.

*NOTES: The power of determining whether, or how far, or with what modification, or upon what conditions, the laws of one state or any rights dependent upon them shall be recognized in another, is a legislative one. The comity involved is a comity of the states, and not of the courts, and the judiciary must be guided in deciding the question by the principle and policy adopted by the legislature. When a statute or the unwritten or common law of the country forbid the recognition of the foreign law, the latter is of no force whatever. When both are silent, then the question arises, which of the conflicting

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laws is to have effect. Each sovereignty must determine for itself whether it will enforce a foreign law. Generally, force and effect will be given by any state to foreign laws in cases where from the transactions of the parties they are applicable, unless they affect injuriously her own citizens, violate her express enactments, or are contra bonos mores. In general, the mode of conveying, encumbering, transmitting, devising, and controlling real estate is governed by the law of the place of situation of the property. The law governing the mortgage, as such, is the law of the situs of the land which the mortgage covers; but the debt is governed by the law of the domicil of the party to whom it is due, no matter where the property be situated; and that when the money is invested on the land for which the mortgage is given, the lex sitae prevails. For the purposes of taxation, a debt has its situs at the domicil of the creditor. Bills of exchange and promissory notes are to be governed, as to the validity and interpretation, by the law of the place of making, as are other contracts. The residence of the drawer of a bill of exchange, and the place of making a promissory note where no other place of payment is specified, is the locus contractus. On a bill of exchange drawn in one state and payable in another, the time within which notice of protest must be mailed is determined by the law of the latter state. A statute of limitations of a foreign state providing that an action on a note shall be brought within a certain time after the cause of action accrues bars the debt itself if not brought within the time limited, and may be pleaded in bar of an action brought on the note in another state. The damages recoverable on a bill of exchange not paid are those of the place where the plaintiff is entitled to reimbursement. A note made in one state and payable in another, is not subject to the usury laws of the latter state, if it is valid in that respect in the state where it was made.

Chattel mortgages valid and duly registered under the laws of the state in which the property is situated at the time of the mortgage, will be held valid in another state to which the property is removed, although the regulations there are different; and it will be enforced in the state to which the property has been removed, although it would have been invalid if made in that state. [But Warton believes that the law in regard to chattel mortgages is governed by the lex rei sitae, etc.] Questions of priority of liens and other claims are, in general, to be determined by the lex rei sitae even in regard to personal property. The existence of the lien will generally depend on the lex loci. In an action brought in one state for injuries done on another, the statutes and decisions of the courts of the latter state must fix the liability. The validity of an assignment of documents, such as policies of insurance, or negotiable instruments, is determined by the law of the place where the assignment is made. Executors and administrators, in the absence of a specific statute authorizing it, have no power to sue or be sued by virtue of a foreign appointment as such. Guardians have no power over the property, whether real or personal, of their wards, by virtue of a foreign appointment; they must have the sanction of the appropriate local tribunal. Judgments and decrees of foreign courts relating to immovable property within their jurisdiction are held binding everywhere. And the rule is the same with regard to movables actually within their jurisdiction. Thus admiralty proceedings in re, are held conclusive everywhere if the court has a rightful jurisdiction founded on actual possession of the subject-matter. Voluntary assignments of personal property, valid where made, will transfer property everywhere, but not as against citizens of the state of the situs attaching prior to the assignees obtaining possession.

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An involuntary assignment by operation of law as under bankrupt or insolvent laws will not avail as against attaching creditors in the place of situation of the property. Discharges by the lex loci contractus are valid everywhere [butit is held that a state insolvent or bankrupt law may not have any extra-territorial effect to discharge the debtor.]

Credit is not to be given to judgments of another state if they were wanting in due process of law. Thus, a judgment against a defendant who was not served with proper process, and who did not appear, would be entitled to no credit in another state [but facts establishing the want of jurisdiction must be shown].

*FOREIGN JUDGMENT It is a general rule that foreign judgments are admitted as conclusive evidence of all matters directly involved in the case decided, where the same question is brought up accidentally. Such judgments and decrees in rem, whether relating to immovable property or movables within the jurisdiction of the foreign court, are binding everywhere. It is the better opinion that judgments in personam, regular on their face, which are sought to be enforced in another country, are conclusive evidence, subject to a reexamination, in the courts where the new action is brought, only for irregularity, fraud, or lack of jurisdiction as to the cause or parties. [Note: It was formerly held that they were prima facie evidence merely.] Foreign judgments may be evidenced by exemplifications certified under the great seal of the state or country where the judgment is recorded, or under the seal of the court where the judgment remains; by a copy proved to be a true copy or by the certificate of an officer authorized by law, which certificate must itself be properly authenticated. Proceedings will lie in equity to enjoin the enforcement of a judgment obtained by fraud in a foreign state. If the court of the foreign state has jurisdiction over the parties, its parties cannot be impeached, even if it went upon a misapprehension of its own law. The foreign judgment must be given the same faith and credit as is given to domestic judgments. If a judgment or decree is enforceable in the state where it is rendered, it is enforceable in any other state.

*RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS AND ARBITRAL AWARDS: It is fundamental tenet of territorial sovereignty that the laws and orders of one sovereign cannot be directly enforced in the territory of another. The corollary is that all jurisdictions have rules that provide for conversion of foreign orders to local orders, enforceable by local processes. Nothing prevents a sovereign from waiving the right to require conversion. Similarly, nothing prevents one state denying recognition to judgments and orders of all other states but such a degree of non-cooperation is not considered to be in the self-interest of the state. The traditional common law rules require the foreign judgment creditor to persuade the forum that: 1. The foreign judgment is final and conclusive; and 2. The foreign court has jurisdiction in the international sense. SEE: Girsberger v. Kresz, 2000, 47 OR (3d) 145 (SCJ) Colt Industries v. Sarlie (no. 2), 1966, 1 WLR 1287 (CA) A defendant in an action on a foreign judgment, whether or not it is a reciprocally enforceable judgment, on proof that an appeal or other proceeding in the nature of an appeal is pending, or the time for an appeal has not expired, may apply for an order staying the proceeding until the determination of the appeal or other proceeding on terms that the court may impose. A foreign court will be held to have had jurisdiction in the international sense for

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purposes of recognition and enforcement of a particular judgment if: 1. The defendant was present in the jurisdiction at the time the action was commenced; 2. The defendant voluntarily submitted to the jurisdiction of the foreign court; OR 3. There was a real and substantial connection between the action and the jurisdiction. SEE: Schibsby v. Westenholz, 1870, LR 6 QB 154 Forbes v. Simmons, 1914, 20 DLR 100 (Alta. SC) Re Carrick Estates Ltd. And Young, 1987, 43 DLR (3d) 161 (Sask. CA) Moore v. Mercator Enterprises Ltd., 1978, 90 DLR (3d) 590 (NS SC) First National Bank of Houston v. Houston E&C Inc., 1990, 5 WWR 719 (BCCA) Clinton v. Ford, 1982, 137 DLR (3d) 281 (Ont. CA) The merits of a foreign judgment, in rem or in personam, are not examinable at all whether the judgment is relied upon by the plaintiff as a cause of action or pleaded by the defendant as a bat to an action instituted against him. The English rule, also prevailing in Canada, is: a final judgment, if rendered by a court of competent jurisdiction and if free from fraud, is conclusive on the merits and not open to re-examination. A valid foreign judgment creates a new right in the judgment plaintiff and imposes a new duty on the judgment defendant, these rights being independent of and distinct from the cause of action alleged in the suit wherein the judgment was rendered. A suit on this judgment being one on a new right, it is immaterial whether or not a valid cause of action existed prior to the judgment. Castel: Provided that the foreign court has jurisdiction to pronounce a judgment in personam, in principle, it is immaterial to the recognition and enforcement of the foreign

judgment that the foreign court lacked authority by the law of its own sovereign to adjudicate concerning the cause of action or subject matter that resulted in the alleged judgment or concerning the person of the alleged judgment debtor. Dicey: A foreign judgment cannot, in general, be impeached on the ground that the court which gave it was not competent to do so according to the law of the foreign country concerned. The correctness in fact or in law of a foreign judgment is irrelevant in an action to enforce that judgment in Canada. This is so regardless of whether the foreign judgment followed a trial of the merits or a default. As the correctness of the decision of the foreign court is irrelevant, it follows that the merits of the claim or the merits of defences to the claim are equally irrelevant. A foreign judgment which is otherwise enforceable will not be enforced if it was obtained by fraud. [The fraud relied on must be something collateral or extraneous, and not merely the fraud which is imputed from alleged false statements made at the trial, which were met by counter-statements by the other side, and the whole adjudicated upon by the Court...] In principle, the courts of a common law territory will not enforce a foreign penal law or judgment, either directly or indirectly. A penal law is one which imposes punishment for some breach of duty to the state as opposed to a remedial law directed at securing compensation for a private person who has suffered damage as a result of a breach of duty owed to him or her. Enforcement of a foreign judgment will not be refused on the ground that the foreign law on which the judgment is based is more harsh than the law of the forum.

ARBITRAL AWARDS: 1958 New York Conventions on the Recognition and Enforcement of Foreign Arbitral Awards 1985 UNCITRAL Model Law on International Commercial Arbitration Read:

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Four Embarcadero Center Venture v. Kalen (1988) 27 CPC (2d) 260, 65 OR (2d) 551, 10 ACWS (3d) 9 (HCJ) Waterside Ocean Nav. Co., Inc. v. International Nav. Ltd. 737 F2d 150 (1984) *CHOICE-OF-LAW METHODOLOGY: Choice of law is an integral part of all legal systems, both in practical terms and in terms of conceptual structure. To all intents and purposes, it is a practical necessity because no reasonably developed system of justice could function with a principle of strict territoriality. Lawyers gave developed legal rules for choice of law. There are rules according to which, where it is felt to be more consonant with justice, peoples right and obligations can be determined by reference to a law other than that of the forum (the country in which a court sits). These rules allow people and property to move from one country or province to another, and to undertake transactions that straddle borders, without having the disparities in local laws undermine their personal status or the security of their rights, at least not without good reason. So a marriage that is valid under the law of the country where it is celebrated usually stays valid in the eyes of other countries to which the parties may move. An interest in property that is duly acquired under the law of one country is usually not divested by the owner of the property moving to another country. An act that is perfectly legal in the country where it is done is usually not turned into a tort just because the person who did it can be hailed before the court of another country, and so on. Some areas of private law can do without choice-of-law rules. Our reason is that in certain matters the courts jurisdiction may be such as to exclude disputes that are closely linked to another countrys law. Another reason why choice of law is virtually excluded in some areas is that the law on these subjects is internationally

uniform, or nearly so. This uniformity can be established by a multilateral treaty. Choice-of-law principles have traditionally been expressed in rules that say that a particular type of legal issue is to be determined according to the internal law of a country with which the case has a defined connection. (by internal law is meant the law that applies to a case arising entirely within that country.) Each choice-of-law rules identifies a category of legal issue for example, formal validity of a marriage or liability in tort and says that an issue falling under that category must be declined according to the law of a country designated by means of a connecting factor place of celebration of marriage, domicile, place of commission of the tort, or place in which the case is being heard. The designated legal system may be that of another province, a foreign nation, a state, or the forum itself. As a practical matter, a choice-of-law rule only comes into play if a party to the legal dispute (1) pleads that an issue should be decided by a law other than that of the forum (a foreign law) AND (2) proves, as a fact, that the outcome of the issue is different under the foreign law than it is under the law of the forum (the lex fori). If none of the parties to a dispute raises the question of choice of law, the court must simply decide the issue according to the rules of its own legal system. The same applies, even if a party does rely on a foreign legal rule, if that party fails to satisfy the court as to what the relevant foreign legal rule is or how it applies to the facts. Again, the court must apply its own law. Without doubt, most potential choice-of-law issues are never raised, either because the foreign law would just lead to the same result as the lex fori, or because it is not worth anybodys while to marshal the evidence to prove the foreign legal rule. Choice-of-law rules are sometimes described as multilateral, in the sense that they determine the respective fields of application of the lex fori and of foreign legal systems. They function as a kind of umpire, giving the nod to a rule of the lex

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fori or a rule of foreign law based on the legal systems to which the connecting factor in the rule points. This distinguishes them from unilateral choice-of-law rules, which indicate only when one countrys (usually the forums) internal legal rule should apply to a particular issue, without saying anything about when any other countrys internal legal rule should be applied. Unilateral choice-of-law rules are inadequate to be the basis of a complete choice-of-law system. If a case falls outside the scope of application of the relevant countrys rule, as indicated by the unilateral choice-of-law, there is nothing to tell you which other countrys rule ought to apply. The process of applying a choice-of-law rule is usually analyzed in a quasichronological fashion. First, you characterize the issue (is it within the category of issues to which the rule applies?). Then you follow the connecting factor to a particular legal system (what is the country of the place of celebration, domicile, or other relevant factor?). Finally, you apply the law that you find in the country to which the connecting factor has led you. Any party who relies on a foreign legal rule must justify its application by invoking a choice-of-law rule. Different legal systems use different approaches to choice-of-law. For instance, common law jurisdictions traditionally decide issues relating to personal status (marriage, legitimacy, etc.) by applying the law of the persons domicile. Civil law jurisdictions traditionally apply the law of the country of which the person is a citizen, which may be a completely different country. So, it is quite possible for a choiceof-law question to be decided according to one countrys law if the issue arises in the court of a common law jurisdiction and by another countrys law if it arises in the court of a civil law jurisdiction. There is no such thing as an internationally accepted system of choice of law. So the choice-of-law rule invoked by a party must be drawn from a specified jurisdiction.

That jurisdiction is, and must be, the forum itself. Choice-of-law rules, whether judgemade or statutory, are, in positivist terms, commands to the court by the law-making authorities of the courts own country. The law says to the judge: Here is the basis on which you must decide whether to apply a rule of our own internal law or a rule of foreign law to decide on a particular persons legal rights. You are not free to apply or not to apply rules of foreign law as the spirit moves you. You can only apply rules of foreign law if the choice-of-law rules says that you can. Even if the relevant choice-of-law rule otherwise indicates that a certain foreign internal legal rule is applicable to a case, there are still a number of reasons why this may not happen. Some of these are exceptions to the applications of a choiceof-law rule and others are due to ambiguities that are inherent in the choiceof-law system itself. The major exceptions to a choice-of-law rule take two forms. One is simply the existence of a more specific choice-of-law rule that mandates a different result. Usually, the more specific choice-of-law rule takes the form of a statutory directive of the lex fori. The other exception is that the foreign rule of law may be barred from application by being a rule of penal law, a rule of tax law, or against the public policy of the forum.

*INVOKING AND DETERMINING FOREIGN LAW: Under the long-established common law view, foreign law is not engaged simply because the choice-of-law rules of lex fori support its application. Instead, foreign law is conceived as a question of fact. As such, its applicability must be pleaded expressly and its content and effect then proved according to the ordinary rules of evidence by expert testimony. The common law conception of foreign law as fact is by no means universal. Most legal systems in continental Europe and Latin

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America treat foreign law as law with the result that it must (or at least may) be applied ex officio by the court whether or not invoked by the parties. Although the parties can be (and usually are) enjoined to assist in ascertaining the foreign law, the court has the final word. Information and opinions on the relevant foreign law are often obtained from university-based comparative law institutes. In addition, the European Convention on Foreign Law (the London Convention) provides a system to assist national courts in determining the application of a foreign law in cases having a private international law component. English laws treatment of foreign law is straightforward. As traditionally conceived, its approach may be expressed in four principles. The first, from which the others follow, is that foreign laws are facts not laws. As such, they are beyond the scope of judicial notice, being unknown and unknowable to the judge. Secondly, being facts, foreign laws must be formally proved, generally by expert evidence, for a judge is unaware of their content. Thirdly, being facts, foreign laws are subject to such principles of pleading as govern other facts. This means that one who relies upon foreign law must expressly plead it, but, equally, one who does not so rely need not do so. Fourthly, if foreign law is not pleaded, or is pleaded but not adequately proved, a court will apply English law instead, for knowing only English law it presumes foreign law to be the same. As with any other question of fact, the burden of pleading and proving foreign law lies on the party who wishes to base his or her claim or defence on it. However, neither party is under an obligation to invoke or prove foreign law. The law of the forum applies by default no matter how patent the foreign elements in the case may be. Read: Fernandez v. The Mercury Bill, 1986, 3 FC 454 (CA) Morgardshammar AB v. HR Radomski & Co, Ltd., 1983, 145 DLR (3d) 111 (Ont. HC)

When a foreign statute has been proved by admission, in the absence of proof to the contrary, the court will assume that the rules of construction in the foreign country are the same as those of the lex fori. Two classes od expert witness first, those who have practiced or applied the relevant foreign law as lawyers or judges, and second, law teachers and others whose office or position requires them to have a working knowledge of the relevant foreign law. In certain circumstances, the courts will not apply foreign laws even if they are applicable and properly proven. Such is the case when the foreign law is penal in nature a determination made by the lex fori. Also, courts will neither directly nor indirectly enforce the revenue laws of another country. A foreign law may further fail to apply where it is fundamentally offensive to the public policy of the forum. Of course, foreign law need not be proved formally if the parties can agree on its legal effect. Typically, this will be done by an agreed statement of the facts submitted prior to trial but the foreign law can be admitted, like any other question of fact, at any point in the proceedings.

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