Wednesday, 31 January 2018

Must a Court to Defer to a Foreign Gov’t’s Interpretation of its Own Laws?

The United States Supreme Court has just agreed to hear an appeal to decide whether, when determining the content of a foreign law, a court must defer to a foreign government's characterization of its domestic law, due to comity.  In AnimalSciences Products v. Hebei Welcome Pharmaceuticals, a U.S. company that had been importing vitamin C from certain Chinese companies sued those companies for violation of U.S. anti-trust laws.  The plaintiffs alleged the Chinese companies had fixed prices and quantities of the vitamin.   The Chinese companies admitted it, but said they were required to do so under Chinese law, and that therefore the case should be dismissed.   The Chinese government confirmed this in an amicus curiae brief.   

The trial court ruled that price fixing was not mandated by Chinese law.  The case went to a jury that awarded $147,000,000 to the plaintiffs.   The U.S. Court of Appeals (Second Circuit) reversed, ruling that the Court must defer to the Chinese government’s interpretation of its law.    

The Ninth Circuit has also ruled in favour of deference.  The Fifth, Sixth, Seventh, Eleventh and D.C. Circuits have ruled that courts may independently review a foreign government’s interpretation.    Another court, I do not know which but not necessarily an appeal court, ruled that it must defer even if the foreign government is a party to the dispute.    The foreign government may have an interest in the outcome even if it is not a party.   In Animal Sciences, the Chinese government arguably has an interest in facilitating exports.

The exact question the Supreme Court will answer is: 
Whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law … or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court…

In Canada, the content of foreign law is a question of fact to be proven by way of expert witnesses, such as law professors from the foreign jurisdiction or lawyers practising in the foreign jurisdiction.     There is no obligation in Canada to defer to a foreign government on the meaning of a foreign law.     See Halsbury’s Laws of Canada, HCF-96 and MacDonald, Cross Border Litigation:  Interjurisdictional Practice and Procedure at p. 166.  

There are at least two reasons why courts ought not defer.  One is that the foreign government’s interest in the outcome.  The other is that to defer to a foreign government’s interpretation, instead of relying on expert evidence about cases decided by the courts of that country regarding that law, is in effect to disregard the separation of powers as between the executive and judicial branches of government. This undermines the rule of law.

I thank Ted Folkman, whose Letters Blogatory blog brought Animal Sciences to my attention.