Application Of Public Law In The Foreign-Related Civil-Commercial Disputes

Public law is an open concept, and it constantly enriches and expands with the development of history. The expansion of the department of public law caused the breaking of the public-private law division. Affected by the privatization of public law, pubic law began to adjust civil and commercial relations between private parties, including foreign-related civil and commercial legal relationship. In particular, for the purpose of maintaining a country’s economic sovereignty and security of the country’s economic interests, governments began to regulate foreign-related civil and commercial activities by means of legislation. These legislations made the application of public law become a challenge of the foreign-related civil-commercial cases, which puzzled the judges. In consideration of that public law involves national interests, in the foreign-related cases, the judges not only weigh private interests and national interests, but also balance the interests between different countries, which makes the cases more complicated.Faced with these challenges, scholars have kept attempting to advance theories about the application of public law. However, unlike private law, yet no system of law application has been established in the subject of public law, and judges treat these theories proposed by scholars with attitudes of indifference. Noteworthily, there are obvious distinctions in the theories of public law application between the civil law system and common law system. Specifically, the theory of "private international law" in the civil law system asserts an opinion that the system of law application is only used for solving conflicts in private law application, and thus should not be used for conflicts in public law application. On the contrary, the theory of "conflict of laws" in the common law system proposes that conflict of laws should be interpreted as the conflict of both public laws and the conflict of private laws. In spite of this, both civil law judges and common law judges have made a difference between the conflict of public laws and the conflict of private laws in foreign-related cases.Currently, the common law judges’differential treatments between the conflict of public laws and the conflict of private laws have raised queries from scholars. In the scholars’opinion, the aforementioned judges’practices may cause loss of national interests and unjust verdicts, but yet the judges do not care much about the scholars’ queries. There is no doubt that the judges and scholars have an enormous divergence about the application of public law. What causes the aforementioned divergence, this is something worthy of our consideration. Moreover, the application of public law in the common law countries still depends on the ’judeges’ discretion, which leaves a situation that full of confusions and variables.Under this context, this Thesis mainly focuses on the theoretical and practical issues of the application of public law. Firstly, why the theories of public law application proposed by the Anglo-American scholars have not gotten the judges’ favor, and are these theories at fault? Secondly, what are the key factors that influence the judges in judicial practice of applying the public law, and will these key factors change? Thirdly, but not least, can Chinese judges gain valuable experience from the judicial practice of the Anglo-American courts?In order to answer these questions, this Thesis employs empirical analysis as the basic research method, and chooses the constitution, tax law, foreign exchange law and competition law as research subjects. The Thesis investigates and studies the major considerations of the Anglo-American judges as regard to the public law application, the influence of the Anglo-American theories of conflict of laws in the judicial practice of applying public law, and the common law rules related to public law. The Thesis then analyses the merits and defects of the current judicial practice of the application of public law and the relevant theories of applicability of public law under the context of the value analysis of a legal system.Excluding the introduction part and conclusion part, this Thesis is composed of 7 chapters and the paragraphs are taken in a progression form general to specific, then back to general.The first chapter is about "the issues of applicability of public law in private international law". This chapter offers relevant background, and specifically includes: (a) the development of the concept of "public law", (b) the issues and approaches of the applicability of public law in the civil law system, and (c) the issues and approaches of the applicability of public law in the common law system.This chapter first introduces the confine of public law, and then concludes that public law is an open concept, which is growing under the influence of socio-economic transformation. Public law gradually developed from rulers’ command to regulations that limit state power, which in turn expanded to be national economic and social regulations. Since the economic and social regulations belong to the department of public law, the issue of the applicability of public law has become knotty in the foreign-related disputes.Secondly, this chapter undertakes a comparative study of the applicability of public law in the view of different legal systems. As to civil law system, the public-private division is the major reason of the issue of the applicability of public law. Based on this division, the scholars in the civil law systems generally recognise the opinion that the system of private law application should not be used for public law, and the issue of the applicability of public law is a special question in the foreign-related civil and commercial disputes, and thus should be treated differently. Under the influence of the privatization of public law, it is an urgent task to design some effective rules of public law application. For this reason, scholars in the civil law systems have concentrated on studies and provided relevant theories. Two of the most influential theories are the theory of "the special point of contact", which was first suggested by the German scholars Wengler and Zweigert, and the theory of "lois de police", which was proposed by the Greek-French scholar Francescakis. These theories show that maintaining national interests is a key factor to mandatory application of national public law and international comity is the basic for enforcing foreign public law. As to common law system, the theory of conflicts of law proposes that conflict of laws should be interpreted as the conflict of public laws and the conflict of private laws, so that the Anglo-American courts use the same methods to solve the public law conflicts and the private law conflicts. That said, the Anglo-American courts do have a different attitude as regard to the public law application and the private law application. In particular, as to foreign public law, the Anglo-American courts’attitude of the public law application is cautious and inimical.For instance, based on the "revenue law doctrine", "penal law doctrine" or "public law doctrine", the judges refuse to recognize the applicability of foreign public law. However, scholars in common law system also call into question the rationality of these common law doctrines and call for reforms in judicial practices of the application of public law.The second chapter is about "the development of theories of conflict of laws" which introduces the most prevalent theories of conflict of laws in common law system. There are two stages in the development of theories of conflict of laws, and the "revolution of law of conflicts" is regarded as the turning point that sets the two stages apart. Prior to the period, Story’s "international comity" and Dicey and Beale’s "vested rights" were the most prevailing theories, which regarded sovereignty as a starting point to solve the conflict of laws, and emphasized the territoriality of legal validity. The laws have jurisdiction over persons and actions only within national territory, while have no jurisdiction over persons and actions outside of the territory. Under the influence of these theories, public law enjoys the territorial effect, and does not have extraterritorial effect. With the development of theories of conflict of laws. national interest gradually became a vital tactor to solve conflict of laws, just like sovereignty. The theories of interests analysis assert a view that maintaining national interests is a starting point for law application and the responsibility of judge. Based on the view that the domestic interest is above the foreign interest and private interest, these theories expanded the effect of unilateralism in conflict of laws. As to the application of public law, unilateralism gives domestic public law the extraterritorial effect, and it strictly restricts the application of foreign public law.The third chapter is about "application of constitution in foreign-related civil and commercial cases". The main content is empirical analysis of application of constitution. A deep-going research indicates that not all countrys’constitutions can be applied in foreign-related civil and commercial cases. The applicable constitutions must have two prerequisites:one is statutorization, the other is justiciability. As the British constitution is an unwritten constitution, it rarely is invoked in specific judicial practice. By contrast, the US Constitution is a written constitution and it sets a judicial review system. In practice, the US Constitution not only directly deals with private litigation, but also deals with private litigation indirectly. In addition, while the US Constitution solve both the domestic cases and foreign-related cases, only the Commerce Clause, Full Faith and Credit Clause, and Due Process Clause can be applied in foreign-related cases. Among these clauses, the Due Process is the most common clause that is applied to review the confirmation of jurisdiction and application of law, and it indirectly deals with foreign-related cases. In recent US foreign-related cases, confirmation of jurisdiction gradually becomes the major objection of judicial review of the Due Process Clause, and the judicial review of application of law decreases gradually. There are two reasons caused the above phenomena:the confirmation of jurisdiction is a preposition of application of law, and the standard of application of law meets the demand of Due Process Clause.The fourth chapter is about "application of tax law in foreign-related civil and commercial case". The main content is empirical analysis of application of tax law. The judicial practices show that tax authorities pursue cross-border tax payment through civil lawsuit in foreign court without bilateral tax treaties. These civil lawsuits are the main reason for applying foreign tax law, and such legal proceedings are divided into two forms:one is the direct lawsuit which the tax authorities bring a suit in their own name before the foreign court and require the tax defaulters to compensate the damage and return the property; the other is indirect lawsuit which tax authorities appoint a liquidator and ask the liquidator to bring a suit in his own name to require defaulters to compensate the damage, in order to complete the tax payment requirement. The above indirect lawsuit is usually cross-border insolvency proceedings. In the face of these lawsuits, the UK/US court would refuse the applicability of foreign tax law through their common law rule named "tax law doctrine". The recent cases show that tax law doctrine will still be a core standard for the UK/US court to apply foreign tax law. While there are defects in this doctrine, the UK/US court has realized the negative influence and thus set some exceptions of application of this doctrine. Specifically, the US court would recognize the effect of foreign tax law, in case that it would not contradict to complex policy objectives and would not cause an unjust verdict. The UK court would indirectly apply the foreign tax law based on the requirements of the bilateral tax treaties and the EU legislation.The fifth chapter is about "application of foreign exchange control law in foreign-related civil and commercial case". The main content is empirical analysis of application of foreign exchange control law. In view of facts that foreign exchange is an important part of the international trade, the UK/US court has to consider the applicability of foreign exchange control law in foreign-related cases. In practices, the major form of foreign-related commercial cases involving application of foreign exchange control law is that the contract parties invoke the requirement of foreign exchange control law as a defense in order not to bear liability for breach of contract. In practice, as cases involve foreign exchange control law of the forum, the UK/US court usually applies this foreign exchange control law. As applicable law and foreign exchange control law belong to the same country’s legislation, the UK/US court would regard the foreign exchange control law as part of applicable law to be applied in most circumstances. As cases involve the third country’s foreign exchange control law, the UK/US may recognize the effect of this foreign exchange control law. Specifically, the attitude of the US court would be depended on the attitude of court of applicable law, while the UK court would enforce this foreign exchange control law based on two conditions:one is that the foreign exchange control law is a part of lex loci contractus. The other is that the country enacting the foreign exchange control law is a party of the IMF.The sixth chapter is about "application of antitrust law in foreign-related civil and commercial case". The main content is empirical analysis of application of antitrust law. In practice, there is private enforcement of antitrust law in the US and UK. Nevertheless, the private enforcement mechanism in UK is more complicated and the source of laws is more complex. The sources of UK antitrust law include domestic law, EU law and case law of the CJEU. Therefore, the pattern of UK private enforcement of antitrust law is usually the follow-on case. In comparison, the pattern of US private enforcement of antitrust law is a triple punitive damage case.In addition, both US and UK courts approve that the domestic antitrust law enjoy the extraterritorial effect. However, their attitude of applying antitrust law has been changed so that the US/UK court limits the extraterritorial application of their competition law based on international comity. As to applicability of foreign antitrust law, the US/UK courts refuse to recognize its extraterritorial effect based on the purpose of protecting the economic sovereignty and domestic interest. It is noteworthy that the UK court can apply the foreign antitrust law based on the clause of Rome II. But there is no case that the UK court has applied foreign antitrust law through this clause.The seventh chapter is about "the analysis of judicial practice in foreign-related civil and commercial case". The main content is a summary from chapter three to chapter six. There are two patterns of public law in the foreign-related civil and commercial case. One of them directly includes the private right of action, such as the constitution and antitrust law. As to the above pattern of public law, public laws usually belong to lexfori and provide litigants causes of action. Therefore, the UK/US courts only consider the scope of domestic public law and do not determine the applicable law based on conflict rules. Once the issues do not belong to the scope of domestic public law, the UK/US court would agree with revocation of this lawsuit. The other pattern of public law does not include the private right of action, such as tax law and foreign exchange control law. It does not provide litigants with causes of action but provides a defense to litigants, and the US/UK courts still determine the applicable law of foreign-related issues based on domestic conflict rules. In such circumstance, the key process of application of public law is analysis of the relationship among the lex fori, lex causae and public law. Faced with this problem, the attitude of the UK/US courts are prudent, they not only determine the legislative intent of the national public law and foreign public law, but also study the international treaties and the effect of application of foreign public law for sovereignty and domestic interest purposes.In addition, the second section of this chapter is a comprehensive combing of Chinese legislation and judicial practice of application of public law. As to legislation, China has set up some mechanisms of application of domestic public law, but not yet for foreign public law, which still depends on the discretion of the Chinese judges. In practice, only a low proportion of foreign-related civil-commercial cases refer to application of domestic public law, and the cases involving application of foreign public law are so rare that the attitude of Chinese court applying foreign public law is difficult to determine. Compare with the judicial practice of the UK/US court, there are two valuable suggestions to Chinese court, which are, the conflict rules in private international law should not apply to conflicts of public law, and the principle of reciprocity is a prerequisite of application of foreign public law.Throughout the judicial practice of the US/UK court, the development of theories of conflict of laws has an important influence to the attitude of UK/US court about application of public law. Since maintaining domestic interest became a vital factor of law application, the UK/US court has graduallv recognized the extraterritorial effect of domestic public law, and limited the applicability of foreign public law, which is a concrete manifestation of unilateralism. However, such attitude of the UK/US court has began to change so that the standard of extraterritorial application of domestic public law has been upgraded and the limiting condition of application of foreign public law are becoming loose. However, based on the regime of "check and balance" and the administrative role of the court, if the UK/US court does not give up national interests as a vital factor for application of law, the pattern of application of public law could not be fundamentally changed.As to application of domestic public law, Chinese court would face the same problems like the UK/US courts, which is, the unilateralism has a seriously impact on application of public law. In Chinese court’s practice, directly applicable law would become a major method to apply domestic public law. How to precisely define the mandatory rules of directly applicable law? It would be a key question to restrict on abusing of public law. As to application of foreign public law, Chinese court should take ground that conflict rules in private international law would not fit for conflicts of public law, and principle of reciprocity is a prerequisite of application of foreign public law.