FROM THE INSTITUTE’S CHAIR

Dear members of the IICL, members of the Advisory Board, and Academy Alumni,

This is our second Newsletter of the Institute for International and Comparative Law. I hope you will enjoy this newsletter as much as you did the first one. It invites you to consider many things: to attend the 2010 Symposium, the first Advanced Academy, to nominate a deputy member to the Advisory Board, to join the IICL as an alumni member, and to send in articles or announcements for the third newsletter.

Please send your contributions (news, announcements, articles, or speeches) to our Vice President Mark Smith (msmith@cailaw.org), or Sandra Ritzmann (sritzmann@cailaw.org).

I hope to see many of you at the meeting of the June 14 Advisory Board, during the Symposium, or the Advanced Academy.

Dr. Anton G. Maurer
Chair

2010 SYMPOSIUM WITH IN-HOUSE COUNSEL

Please mark your calendar for the 2010 Symposium on June 15 and 16, 2010

I am very happy to report that we will organize the 2010 Symposium in cooperation with the Texas chapter of the Association of Corporate Counsel (ACC) and the Texas General Counsel Forum. We will select topics which are of very high interest for in-house lawyers as well as lawyers in private practice.

I am also pleased to report that  Richard Goetz (Dykema, Detroit, MI),  Todd Martin (Bank of America, Dallas, TX), Patricia Menendez Cambo (Greenberg Traurig, Miami, FL), Kerry Tassopoulos (Mary Kay, Inc., Dallas, TX), and  Carlos Velasquez de Leon (Basham, Ringe y Correa, Monterrey, Mexico) have accepted their nominations to co-chair the 2010 Symposium. They will organize an outstanding and exciting program, and I want to thank all of them for their help and assistance.

You should not miss the opportunity to meet a large number of in-house counsel during our 2010 Symposium.

Dr. Anton G. Maurer
Chair

OUR TRADE COMPLIANCE WORKSHOP
May 4-5, 2010 in Texas

Under the guidance of Dana Nahlen, Director, SunGard Systems, and Scott Sullivan, VP, Group Counsel – Global Trade & Strategic Transactions at Flowserve Corporation, the Institute is planning a workshop on international corporate compliance. It is designed for senior corporate lawyers and compliance officers and for senior law firm lawyers.  It will focus on practical trade compliance problems and solutions. Topics to be addressed include:

• Managing Third Party/Agent Relationships & Expectations regarding Import/Export Compliance Issues
• Best Practices for Reducing Anti-Bribery/FCPA Exposure in a Global Supply Chain & Managing Customs Clearance Risks
• Managing Technology Transfers and Deemed Exports to/by Third Parties
• Leading Practices and Benchmarking Survey
• Strategic Evaluation of Global Supply Chain Security & Customs Initiatives
• Trade Compliance in Emerging Markets
• U. S. Anti-Boycott Coverage
• Managing Trade Compliance Conflicts of Laws
• Ensuring Effectiveness of Training
• Meaningful Trade compliance Metrics and Reporting for Executive Management and the Board
• How to Operationalize Compliance

One product of the conference will be a benchmarking study on compliance policies and practices. For more information about the program, visit the CAIL website (www.cailaw.org) or contact Mark Smith at msmith@cailaw.org

ADVANCED ACADEMY

The Institute will hold its first Advanced Academy for Alumni beginning Thursday evening, June 17 and continuing through Saturday, June 19. This will take place following the annual Symposium and Transnational Arbitration Workshop. Attendance will  be open to both Academy alumni and other experienced international lawyers.

We are organizing a committee under the chairmanship of Lisandro Allende (Brons & Salas, Buenos Aires, Argentina) to explore the structure and topics for the Advanced Academy.

Those who have volunteered to assist in the development of the Advanced Academy include:

Shafie Ameermia (2001, South Africa)
Almudena Arpon de Mendivil, Gomez-Acebo & Pombo (1993, Spain)
Isil Baytok (1991, Turkey)
Jorge Carey (Chile)
Ricardo Castro (1986, Philippines)
Sebastian Cordova (1997, Argentina)
Andrew Derman  (US)
Siddharth Dhar (2007, England)
Emerico De Guzman (2005, Philippines)
Ana Carolina de Salles Freire (1995, Brazil)
Nicolas Gamboa (1975, Colombia)
Marcela Hughes (1989, Uruguay)
Irakli Kandashvili (2007, Georgia)
Giovanni Loi (2007, Italy)
Silvia Lucarelli (2007, Italy)
Jose M. Perez Arteta (Ecuador)
Anibal Sabater (2003, Spain/US)
Guilermo Salas (2001, Argentina)
Andres Sanguinetti (1995, Argentina)
John Stephenson (US)

ADVISORY BOARD NOTES

Save the Date for the next Advisory Board Meeting – June 14, 2010.

Did you appoint your Deputy Advisory Board Member? In June of 2009, the Advisory Board decided that each Member may appoint a Deputy Advisory Board Member. A few have taken advantage of this opportunity. What about you? To take advantage of this opportunity, please contact sritzmann@cailaw.org.

WELCOME TO NEW ALUMNI MEMBERS OF THE IICL

We have invited all Academy alumni to join the Institute for International and Comparative Law and its Advisory Board. The alumni who have taken advantage of this new membership category include: 

Eunice Bola Adelu (1995, Nigeria)
Shafie Ameermia (2001, South Africa)
Almudena Arpon de Mendivil (1993, Spain)
Isil Baytok (1991, Turkey)
Raffaella Betti Berutto (1993, Italy)
Christian Blum (2002, Germany)
Ricardo Castro (1986, Philippines)
Sebastian Cordova (1997, Argentina)
Ana Carolina de Salles Freire (1995, Brazil)
Nicolas Gamboa (1975, Colombia)
Irakli Kandashvili (2007, Georgia)
Gafar ‘Junie’ Lutian (2003 Philippines)
Anibal Sabater (2003, Spain/Texas)
Alexandra Schluck-Amend (2004, Germany)
Debebe Moges Sefineh (2000, Ethiopia)
Suwit Suwan (1975, Thailand)
Peter Szabo (1992, Hungary)
Rodrigo Velasco (1980, Chile)
Werner Walk (1997, Germany)
Jerry Yulin Zhang (1993, China)

The annual membership fee is USD 150. Individual members serve on the IICL Advisory Board, may attend the Symposium at no tuition cost and will receive a discount when attending other programs of the IICL. If you are not yet a member of the Institute, please join.

47th ACADEMY - – May 16-June 25, 2010

Applications are now being received for the 47^th annual session of the Academy of American and International Law. Continuing a new tradition, participants may receive a second certificate. In addition to the Certificate of Participation, which is awarded for class attendance, Academy students may take a series of short exams and earn the title of Academy Fellow.

IICL NEWS - ANNOUNCEMENTS

ARTICLES

Teresa Genta Fons (Academy Class of 1982, Uruguay) wrote an article on “Challenges of the Law and Development Practitioner”, published in The International Lawyer, Vol 41, No. 1, 2007. She also wrote “Building Legal Systems for Global Integration: A Development Perspective for the Latin American Context”, Law and Business Review of the Americas, vol 15, p. 165-183, 2009.

Update: New Regulation on Foreign Representative Offices in China -Enforcing the validity period of Registration Certificate  by Jerry Yulin Zhang (Academy Class of 1993, China)

In the past, the validity period of Registration Certificate of a representative office was required to be one year under the applicable regulations of 1983, but in practice Registration Certificates were issued with a validity period for more than one year. The Notice now stipulates that the validity period shall be one year only no matter the Certificate is obtained by applying for establishment or extension. Existing certificates of more than one year validity period shall be renewed according to the Notice when the representative offices apply for any change or extension.

Limiting the number of representatives

The Notice imposes a maximum limit of four representatives for a representative office. In the past, there is no limitation regarding the number of registered representatives. With respect to the existing representative office with more than four representatives, no additional representative can be registered.

Investigations into the illegal acts of representative offices

The competent administration for industry and commerce (“AIC”) shall conduct on-site inspection within three months after the establishment of a representative office and punish those submitting false documents for purpose of registration of the representative office. A representative office can only conduct liaison activities and no business activities with fee charging can be done according to PRC law. However, in practice, competent authorities seldom punish those which conduct illegal business activities in the past. This status quo may change since the Notice stipulates that those representative offices can be deemed as operating business without a proper business license and shall be punished according to relevant laws and regulations.

For those representative offices with Registration Certificate exceeding the validity period or conducting illegal activities such as changing its address without approval, the competent authorities shall establish credit books and conduct administration based on credit category. Through the joint efforts from the MPS, apparently SAIC will expect to obtain resources in administration of public security, particularly resources at border control which falls into the jurisdiction of the MPS, in the course of its administration of registration and operation of foreign representative offices. In practice, the Notice will tighten the government control exerted on foreign representative offices. Whether the requirement of pre-existence of the foreign entity for more than two years will apply in the future to other forms of investment (such as investment in a joint venture or wholly foreign owned entity) remains to be seen. The Notice currently only applies to registration and operation of representative offices of foreign companies.

Confirmation and Enforcement of Foreign Arbitral Awards in Brazil – by Fernando Eduardo Serec ( Academy Class of 1993, Brazil) & Antonio Marzagao Barbuto Neto (Tozzini Freire Advogados, Sao Paulo, Brazil)

Arbitral awards are enforceable in Brazil in the same manner as final and non-appealable decisions rendered by a judicial court. Enforcement occurs through the so-called Expedite Collection Procedure (“Execução”), which is designed to attach property to satisfy the money award, in which the judgment-debtor has limited grounds to challenge the merits of the decision.

“Foreign” arbitral awards, however, must be previously confirmed (or recognized) by the Brazilian Superior Court of Justice (“STJ”) before becoming legally enforceable in Brazil. All other courts are precluded from granting such recognition. Pursuant to the Brazilian Arbitration Act, foreign arbitral awards are those rendered outside the Brazilian territory.

Therefore, for purposes of assessing the award’s nationality, the mere fact that the arbitration panel issued its final decision within the Brazilian territory makes it a “domestic” arbitral award, and thus not subject to the STJ’s confirmation proceedings prior to enforcement. In other words, even awards rendered by international arbitral institutions (such as the ICC, ICDR, or LCIA) are still deemed domestic awards so long as they are actually issued in Brazil (even if all hearings were held outside Brazil).

Section 32 of the Brazilian Arbitration Act provides for the situations in which an award rendered in Brazil (domestic award) may be set aside: (a) the arbitration agreement is null and void; (b) the arbitrators lacked capacity; (c) the award fails to provide the grounds for the decision or comply with certain other formal requirements; (d) the award exceeds the scope of the arbitration agreement; (e) the award fails to decide the whole dispute submitted to arbitration; (f) the award was rendered through unfaithfulness, extortion, or corruption; (g) the award is entered after a period imposed on the arbitration has elapsed; or (h) the arbitrators fail to guarantee certain minimum procedural protections.

Foreign arbitral awards, on the other hand, may be challenged through the specific confirmation proceedings before the STJ described below.

RECOGNITION of foreign arbitral awards

The application for recognition (“homologação”) before the STJ must contain (a) the original foreign arbitral award or a certified copy thereof, duly notarized by the Brazilian Consulate and translated into Portuguese by a sworn translator in Brazil, and (b) the original agreement to arbitrate or a certified copy thereof duly translated into Portuguese by a sworn translator.

The standards regarding the recognition and enforcement of a foreign arbitral award under the Brazilian Arbitration Act are consistent with and essentially reproduce the wording of Article V of the New York Convention. Thus, according to the Brazilian Arbitration Act (Sections 38 and 39), the enforcement of a foreign arbitration award can be denied only if:

1. the parties to the arbitration agreement lack capacity; (b) the arbitration agreement is invalid under the law to which the parties agreed or the law of the place where the award was rendered; (c) the respondent was not given proper notice of the appointment of the arbitrator or of the arbitration proceeding or was otherwise unable to present his/her case and was unable to exercise his/her right of defense; (d) the award exceeds the limits of the arbitration agreement; (e) the commencement of the arbitration proceeding was not in accordance with the arbitration agreement; (f) the arbitration award is not yet binding on the parties or has been annulled or suspended by a court of the place of arbitration; (g) the object of the dispute is not eligible for arbitration as a matter of Brazilian law; (h) the award violates Brazilian public policy.

Additionally, the STJ’s internal regulation authorizes that court to (a) issue preliminary injunctions during confirmation proceedings, such as freezing assets while an application for recognition is pending; and (b) grant partial recognition of foreign arbitral awards.

Recent arbitration cases decided by the STJ show significant improvements in both the timeframe and quality of the confirmation proceedings. Overall, proceedings can take from 2 to 14 months depending on whether the judgment-debtor challenges the award.  However, measures can be taken during this time to safeguard the judgment-creditor’s rights until a final decision on the merits of the recognition is rendered (i.e. freezing of judgment-debtor’s assets while the application for recognition is still pending before the STJ).

1. The STJ has repeatedly refused to allow challenges to the merits of foreign arbitral awards based on “public policy” grounds, which is a good sign of embracement of arbitration in Brazil. By contrast, recognition has been properly denied based on the non-compliance to formal requirements under the Brazilian Arbitration Act, such as the absence of an arbitral agreement, or the lack of proper summons to appear before the Arbitral Tribunal. In one well-known case among the Brazilian arbitration community, a request for recognition was denied by the STJ on the grounds that the Brazilian franchisee had not been properly summoned to appear before the Arbitral Tribunal. In another case,  recognition was denied unanimously by the court predicated on the fact that an English company failed to demonstrate the existence of an arbitral agreement signed by the Brazilian buyer.
   
   Once the foreign arbitration award is confirmed by the STJ, the judgment-creditor is entitled to enforce the now “nationalized” award in the same way as a domestic award, i.e. before a competent first instance judicial court.  Although merits-review continues to be prohibited at this stage, the foreign award may still be challenged on very limited grounds by the judgment-debtor during the Expedite Collection Procedure, as discussed below.
   
   As mentioned above, a domestic arbitral award is not subject to confirmation proceedings before the STJ, and may be directly enforced through the Expedite Collection Procedure.

Expedite collection procedure (“execução”)

Chances of judicial reexamination of an award at this point are very limited and a creditor will most likely move to enter judgment against the debtor in a straightforward fashion.

The Expedite Collection Procedure begins when the judgment-debtor is summoned by the competent court to pay the debt within 15 days under penalty of incurring an additional 10% fine over all due amounts.

The judgment-creditor is entitled to appoint which debtor’s assets should secure payment of the money judgment. These assets shall be attached if the judgment-debtor fails to comply with the court’s order in the above-mentioned deadline.

The judgment-debtor may present a challenge against the Expedite Collection Procedure within 15 days after attachment of the assets. As mentioned above, the judgment-debtor has very limited grounds to challenge a Collection Procedure based on a foreign arbitral award. A challenge may only touch procedural aspects of the Collection Procedure and is not intended to discuss the merits of the underlying award.

Upon the court’s decision on the challenge, the attached property will be appraised and taken to auction, where it will be legally disposed of. The proceeds of such disposal will be made available to the judgment-creditor, so that its credit is finally settled and the Expedite Collection Procedure is extinguished.

It is difficult to assess the precise duration of an Expedite Collection Procedure as it depends on many factors, such as on the court’s backlog and particularly on the good faith of the judgment-debtor (i.e. a possible procrastination through the filing of several groundless appeals). However, assuming that a particular judgment-debtor employs all available legal appeals and litigation tactics, it is reasonable to assume that this phase may take approximately 2 years until the attached property is finally sold and the proceeds are made available to the judgment-creditor.

Footnotes:

1 The STJ, however, is authorized to partially confirm foreign arbitral awards, i.e. confirm only those portions of the award that do not exceed the limits of the arbitration agreement.

2 Matters that are not subject to arbitration in Brazil are those over which the parties cannot dispose of.  That is the case, for example, of criminal law issues, family law disputes, or tax obligations. All contractual relationships between private parties, including an action for damages arising from contractual breach, are subject to arbitration.

3 The STJ has never denied confirmation based on the “public policy” defense, so it is difficult to establish with certainty what rules follow within this concept.  They could be viewed as absolutely essential to the Rule of Law, such as fundamental due process rights.  Therefore, their violation would be so egregious as to shock the conscience of the Court.  The STJ has consistently rejected attempts by judgment-debtors to invoke the “public policy” argument based merely on the alleged violation of Brazilian civil law principles, such as the “defense of unperformed contract” or “exceptio non adimpleti contractus”.
4 Superior Court of Justice - SEC no. 833 (Subway Partners v. HTP High Technology Foods Corporation S.A.). In this case, Subway Partners sought to confirm an award rendered by the American Arbitration Association (AAA) in New York against its Brazilian franchisee.
5Superior Court of Justice – SEC no. 967 (Plexus Cotton Limited v. Santana Têxtil S.A.).

MEMBERS IN THE NEWS

Advisory Board Member Larry B. Pascal, head of the Haynes and Boone, LLP Americas Practice Group, has been appointed by the Texas Supreme Court to Chair a Task Force that will make recommendations on the modernization of international law practice rules in Texas. Mr. Pascal, a former chair of the State Bar of Texas International Law Section, previously led an effort to reform the state’s rules on foreign legal consultants established in Texas.

Ijaz ul Ahsan (2008, Pakistan) was appointed as Judge of the Lahore High Court by the President of Pakistan last year. The High Court is the highest court of the province/state and has appellate as well constitutional jurisdiction. Ijaz writes: “The decision to leave an established commercial law practice, that I had done for the past about 20 years, to join the bench was not easy. But with the benefit of hindsight, I can say, I am glad I decided to join the bench. To be able to administer justice in accordance with law and the constitution has its own rewards. Having the power and ability to do good, to do justice and to act freely and independently in accordance with ones conscience is a great feeling. To lay down the law and interpret the constitution and to protect rights of citizens are challenging but very satisfying pursuits. The intense intellectual and academic debates on all sorts of legal, constitutional and jurisprudential issues, at the Academy, with the best professors in the US, have clearly done an excellent job. I feel more confident in dealing with the wide variety of issues and legal questions that are brought before my court in a regular basis.

I fondly remember, Dallas, the Academy, all my friends, the staff and the professors who made this experience so rich, rewarding and memorable. Let us keep in touch and hope that our paths cross again.”

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Christian Blum (2002, Germany) “In 2002, I had the honor to attend the 39th Academy of American and International Law. I am still amazed at how many of the wonderful people I met back then I am still in touch with today. Indeed, many of those new contacts have since matured into close and valued friendships. Looking back, I can say that the time I spent at the Academy was both valuable and enriching. The Academy broadened my interest in and my awareness of international legal issues. I am now a member of the Junior Chamber International Stuttgart. I also lecture in international succession management at the Stuttgart University of Cooperative Education (Duale Hochschule). I have been chairman of the examining committee for aspiring inheritance law specialists at the Stuttgart Chamber of Lawyers since 2005 and member of the Inheritance Law Committee of the German Chamber of Lawyers since 2008 and I chair the advisory board of the Steinbeiß Institute for Corporate Succession. I have just been made partner with CMS Hasche Sigle, Germany. As a new Alumni member of the Advisory Board, I am greatly looking forward to renewing contact with my fellow attendees from 2002 and getting to know other former participants.”

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Irakli Kandashvili (2007, Georgia) ”Having enjoyed the wonderful experience of the 2007 Academy, as well as being elected Secretary General of the Alumni Association, I continue to enjoy the fruits of my labor here in Georgia. I feel that the benefit from my attendance at the Academy has helped me in my career.  Upon my return, I became the Managing Partner of the Law Firm Andronikashvili, Sachsen-Altenburg Baramidze & Partners and also an Assistant Professor of Tbilisi State University and University of Georgia in Private Law. In 2008, I worked with the American Bar Association in Trial Advocacy Skills and became an ABA trainer in Trial Skills and  Legal Ethics - and of Unicef in Juvenile Justice as well as a local expert of the United Nations Development Program, Office of the High Commissioner for Human Rights in Georgia. I look forward to the increasing bond which is being established between the Alumni Association and the Institute of International and Comparative Law and would urge all the Alumni to become members. I sincerely believe that my membership and the networking that is involved is a helpful productive tool in my everyday practice of law.”

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Maria Leonor Tobia (2008, Uruguay) received the first “Future Latin America Jurists” Award. “I believe that the Dallas experience not only enhanced my curriculum vitae but it also allowed me to be more open-minded regarding the law. That invaluable contribution of the Academy is definitely one of the reasons I was able to access to this opportunity that has and will, without a doubt, keep changing my life … ” The Tecnologico of Monterrey (TEC) and the Spanish law firm Garrigues have awarded for the first time the "Future Latin American Jurists" award. The purpose of the prize is to recognize the excellence of the young Latin American lawyers and to contribute to the implantation of the concept of legal community in the region. 202 universities of Latin America were invited to submit nominations and 67 of them introduced candidates