The Principles of the Exercise of Jurisdiction

Without hierarchical power structure, international community leaves a great discretion for States to design jurisdictional rules under their sovereignty.¹⁹⁹ Because

196 Ralf Michaels, Some Fundamental Jurisdictional Conceptions as Applied in Judgment Conventions, Conflict of Laws in a Globalized World, Cambridge University Press (2007), pp. 35~39.

197 See: Arthur Nussbaum, Jurisdiction and Foreign Judgments, 41 COLUM. L. REV. 221, 225 (1941); 225;

Ronald A. Brand, Enforcement of Judgments in the United States and Europe, 13 J.L. & COMMMERCE 193, 201-2 (1994); Eugene. F. Scoles, Peter Hay, Patrick J. Borchers, Symeon C. Symeonides, CONFLICT OF LAWS 288 n.21 (4^th ed. 2004).

198 The direct jurisdiction means the jurisdiction of the rendering court, because the court is directly involved into the question whether or not it should exercise jurisdiction. The indirect jurisdiction refers to the jurisdiction of the requested court, because the court is engaged with the question indirectly, via the recognition procedure, whether or not the original jurisdiction was admissible. See: 李浩培：《国际民事程序法概论》，法律出版社1996年版，

第46页。

199 See: Anthony Aust, Handbook of International Law, 2^nd edition, Cambridge University Press (2010), p. 42.

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of lack of the uniform rule of jurisdiction in international level, the jurisdiction issues are regulated primarily by the municipal law. States design the rule of jurisdiction in line with their interest, so it is inevitable to cause the phenomenon of the conflict of jurisdiction. If the States of international community are all inclined to expand their respective jurisdiction, it will obstruct the establishment of a sound and stable international order. Therefore, it is necessary to elaborate the general principles to establish jurisdiction.

(1) Dual Considerations

Broadly speaking, there are various reasons from two perspectives to interpret why a court may be the suitable forum to decide a dispute in which foreign elements are involved.

(a) The Positive Considerations

At first, the consent of parties to litigation to the jurisdiction of a court constitutes the legitimate reason for that court exercising the jurisdiction. If both parties have agreed to the litigation to proceed in the forum State, its courts can exert the jurisdiction smoothly. For example, if Japanese company A and Chinese enterprise B are consent to submit to the jurisdiction of the court of China, there can be little opposition to the assumption of jurisdiction by the court of China.

Secondly, the establishment of jurisdiction may involve a set of elements, chief among which is connections between defendant and the court of forum State. Usually, the plaintiff should go to the court of the defendant‘s location filing a lawsuit. In international civil disputes, it seems more righteous for a person to have to defend a case in the court of his own State. The phenomena became a legal principle: ‗actor sequitur forum rei‘: a plaintiff should initiate legal proceedings in the court located in the area where the dispute subject or the defendant is situated. In the cases concerning State immunity, there is hardly any room to apply the principle ‗actor sequitur forum rei‘ on the face, because the litigation concerning State immunity is private suits against foreign States in domestic courts.

It is worth mentioning that the connections between defendant and the court of the forum State should not be interpreted in a narrow sense. Sometimes, other connections between the defendant State and the forum State can be taken into consideration. For example, in English law, the jurisdiction of English courts can be established, even if a foreign defendant is or has been present in England, because

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pursuant to English law the presence is recognized as a territorial connection between England and the defendant.

Thirdly, sometimes there is a connection between the substance of claim and the forum State, in this case the courts of forum State may be appropriate to exercise jurisdiction. But under this circumstance, a foreign defendant may be inconvenience to defend proceedings in the forum State.

(b) The Negative Considerations

These positive considerations are only one half of the coin. Although, in certain situations, the courts of a State are prima facie the suitable forum, there are good grounds for the court of another State to hear and judge the case.

There are various reasons may explain why a court of State A may be a more appropriate forum, notwithstanding the fact that there is a sufficient connection with State B to justify the assumption of jurisdiction by the courts of State B. For example, it may be more convenient for a party to litigation to be joined to related proceedings already pending in the court of State A, when it seeks to invoke the court‘s jurisdiction of State B.

The jurisdictional inquiry of a State should take into account of the countervailing factors which may declines the assumption of jurisdiction of the courts of the State by virtue of inconvenience.²⁰⁰

(2) Quad Requirements

Concretely speaking, there are 4 rules regulating and directing a State to establish its jurisdiction in international proceedings.

(a) Sovereignty and Public Interest

Jurisdiction is the stretch of sovereignty of States, and the design for jurisdiction is related to the realization of the functions of the sovereign. In general, States should take State interest into account when they the draft the rules of jurisdiction. It is not difficult to understand that a State will put the issues regarding political institutions, economic outlooks and public policies in the list of its exclusive jurisdiction.

Therefore, foreign States‘ sovereign power is kept out of jurisdiction in those issues, and the litigants also could not submit to the jurisdiction of foreign courts via their agreement. Moreover, for the purpose of getting a better position on the contention of jurisdiction in international level, States are inclined to take advantage of an open

200 See: C. M. V. Clarkson & Jonathan Hill, The Conflict of Law, 4^th edition, Oxford University Press (2011), pp.

59~60.

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legislative technique to design more connections of jurisdiction so as to endow their own with more jurisdictional opportunities. Furthermore, in certain circumstances, for its sovereignty and public orders, the forum State usually refuses to recognize and enforce the judgment of a foreign State by invoking the reservation of public orders.

On the other hand, as Confucius said: ‗Never impose on others what you would not choose for yourself‘.²⁰¹ In international community, States need to comply with the rule: ―do unto others as you would be done by‖ as well, which implies that a State ought to give respect for the sovereignty of other States while insisting on the recognition of its own sovereign rights. As an outcome of sovereign compromise and concession, the law of State immunity demands States to restrain their respective jurisdiction in the association.

(b) Fairness and Justice

The purpose of a lawsuit is to settle an argument or a dispute. Legal proceedings undertake the task not only to protect the rights of individuals but also to achieve fairness and justice. Legal proceedings observe a certain order and procedure, and the establishment of jurisdiction lies on the first stage of the order system. Actually, the jurisdiction concerns the legitimacy of the litigation and the justifiability of the application of law. States hereby ought to be very prudent to set up the criterion of exercise of jurisdiction. They must find a balance among the value of protection of individual rights, keeping the peace of society and implementation of fairness and justice of law. Sometimes, the principle of fairness and justice can redress the partiality from the concept of sovereignty.

In practice, the restrictive doctrine of State immunity was in large part affected by the principle. On the one hand, limited by the international principle of the equality of sovereignty, a court should prevent itself to exercise jurisdiction on the occasion of the defendant being a sovereign State. If not, it will be regarded as contempt for the dignity of foreign States. The impolite action may give rise to the hostility among States, and endanger the peace and security of international community. On the other hand, as States were involved in the commercial activities more and more frequently, if the dispute between States and individuals could not be settled by litigation, it will harm the due rights of the private. This approach is full of prejudice. On the account, some States redefine the scope of State immunity via analyzing the concept of State or

201 《论语·颜渊》

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distinguishing the act of State, and propose that State cannot invoke immunity in the field of commercial transactions. The practice shapes the restrictive immunity which balances the sovereignty of States and the rights of individual in a proper way. It is obvious that the principle of fairness and justice has played an important role in shaping the jurisdictional rule of international community.

(c) Equality and Reciprocity

It is widely known that the modern international community is an egalitarian society in which every State is on equal terms in sovereignty. Although some people still hold that almost everywhere society was hierarchically arranged, in matters of vital interest to the Great Powers, there was little reason to expect precisely equal treatment, however, more and more international practice demonstrates that all States enjoy sovereign equality.²⁰² They have equal rights and duties and are equal members of the international community, notwithstanding the differences of an economic, social, political or other nature. As the Chief Justice of United States John Marshall pointed out, ―No Nation has ever yet pretended to be ‗the custos morum‘ of the whole world.‖²⁰³

The principle of sovereign equality and independence conceives the idea of reciprocity in international intercourse.

―…… Through the late colonialist period of the League of Nations, the international legal system remained essentially a matter of inter-state convenience, a bilateral system of „transactions‟ and mutual benefits designed to serve the common interest of nations that qualified as sovereign and independent. The system was ethically enhanced, but not transformed, by the Covenant. Its chief claim to be a system of justice was the principle of reciprocity.‖²⁰⁴

As to the international jurisdiction, the equality and the reciprocity imply that the any foreign State, no matter how powerful and wealthy it is, has the right to be equally treated before the court. If a court takes discriminate actions against a foreign State, the State reserves the right to take similar measures. The principle of equality and reciprocity ensures that in the design of the rule of jurisdiction, every State should give enough deference to other sovereigns and avoid observing unilateral policy. The

202 朱晓青：《国际法学》，中国社会科学出版社2012年版，

203 U.S. v. The La Jeune Eugenie, 26 F. Cas. 832, 847 (No. 15,551), (CC. Mass. 1822).

204 Douglas M. Johnston, The Historical Foundations of World Order, Martinus Nijhoff Publishers (2008), p. 74.

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reciprocity based on the equality is a pragmatic legal system binding State actions rather than a suggestion. For example, Article 3 of the Law of China on Judicial Immunity from Compulsory Measures concerning the Assets of Foreign Central Banks stipulates that,

―For countries that do not provide assets of the Central Bank of the People's Republic of China and finance administration organs of Special Administration Regions with judicial immunity, or provide immunity below the measures, the People's Republic of China will deal with in line with principle of reciprocity.‖

Obviously, Chinese government complies with the reciprocity in international legal practice.

Although there are some critiques of the principle of reciprocity and nor do all States practice strict reciprocity, at least, most of States are affected by reciprocity.

For example, after Foreign Sovereign Immunities Act 1976, the US turned to restrictive principle of sovereign immunity. But in practice, the US is more flexible to deal with the case in which foreign sovereigns involved. The US Supreme Court is inclined to treat State immunity as a matter purely of discretion,²⁰⁵ and the reason is that the US must take the feeling of other sovereigns into account.

(d) The Facilitation of Litigation

In view of the jurisdiction‘s great influence on the legal action, selecting a proper court not only ensures the litigation proceeds smoothly, but also reduces the cost of lawsuit and promotes optimal allocation of law resources. Therefore, in the process of formulating the rules of jurisdiction, the lawmaker of a State should regard the principle of facilitation of litigation as an important guideline.

The principle of facilitation includes two aspects: facilitate bringing an action for parties and facilitate accepting and hearing a case for courts. On the one hand, designing the rule of jurisdiction, the lawmaker should pay attention to the convenience of parties to attend the litigation. On the behalf of parties‘ interest, the international practice gradually accepted the jurisdiction by agreement. That means in many cases the parties are granted the right to select the jurisdictional court based on their agreement.

205 See: Hazel Fox CMG QC, The Law of State Immunity, 2^nd edition, Oxford University Press (2008), p.14.

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On the other hand, a general principle has now emerged that a State may exercise jurisdiction if there is a sufficiently close connections between the subject matter and the State. If the connections are unsubstantial, the court may face difficulties in the subsequent proceedings, so it is necessary to give the court the discretion to decide whether exercise its jurisdiction or not. Actually, in the Anglo-American system on jurisdiction, the flexible discretion to stay actions on the basis of forum non conveniens is an effective solution. This gives competent courts an opportunity to refuse to try cases on the condition that there is a clearly more appropriate foreign forum for trial. The forum non conveniens reflects the principle of facilitation during the establishment of jurisdiction in an indirect way.

The principle of facilitation, however, was never absolute. While the convenience may be the rationale for jurisdiction, it is not necessary the criterion for its existence.