Generally, the responsibility for interpreting foreign laws lies with the state commercial court. Parties have a right, but are not obliged to, render assistance and provide the court with information concerning statutory provisions of foreign laws. However, if the content of the foreign law is not ascertained with reasonable expediency, Russian law applies.
How to prove the foreign law and avoid such an ‘involuntary’ application of Russian laws – read in this article.
Basics: how do different countries treat foreign law?
Foreign countries apply various approaches in establishing the content of foreign laws, and this affects practical nuances of dispute settlement, primarily an allocation of the burden of proof and the court’s role.
The first approach is common in the Anglo-Saxon legal system (the UK, Malta, Cyprus, and Ireland, among others), and it treats the foreign law as a matter of facts. Parties share the burden of proof while the court takes a passive role, being guided only by evidence put forward by a relevant party. If neither party shows initiative, it is within the rights of the court to adjudicate a dispute according to the laws of its country.
The second approach is built on the principle of iura novit curia (‘the court knows the law’), and it treats the foreign law as a legal category. This approach is typical in European countries with Romano-Germanic legal system, such as Germany, France, Austria, Switzerland, and others. According to the iura novit curia maxim, the court independently analyses and establishes the substance of the foreign law, though the degree of its ‘independence’ may vary. In some cases, the court may impose a duty to establish the content of the foreign law on the parties.
In Russia, the court regards the foreign law as a legal category and undertakes active measures to ascertain its content. However, elements of the ‘factual’ nature of this process still can be traced.
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In commercial disputes the court may, taking into account the circumstances of the case and the principles of good faith, reasonableness, and fairness, impose, at its discretion, a duty to assist the court on the parties. Said duty does not arise automatically and requires a separate court’s order.
A party that fails to meet the duty loses its right to cite the court’s failure to establish the content of the foreign law, provided that the court took sufficient actions (e.g., it filed a request for assistance with the authorized bodies and received no answer within a reasonable time).
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As a general rule, matters of law may not be passed to the expert for examination, as it is the court’s role to interpret and apply the law. Establishing the content of the foreign law is the only situation in which matters of law may become a subject of the expert opinion.
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Information and documents concerning the content of the foreign law should be examined for admissibility and relevance in accordance with the rules for the evaluation of factual evidence.
Therefore, Russian courts increasingly state that the process of pleading and proving the foreign law is a process of proving factual circumstances. This does not seem quite correct in terms of the court’s role and consequences of a party’s failure to act, but this is an established practical approach.
Available methods of proof of foreign laws
Court’s request to competent authorities
Courts have a right to request assistance and clarifications from the Russian Ministry of Justice and other competent authorities or agencies in Russia and abroad in order to establish the content of foreign laws. There are no strict rules for choosing such organizations and institutions, i.e., said requests may also be filed with the Russian Ministry of Foreign Affairs, the Russian Chamber of Commerce and Industry, and the embassies of foreign nations.
This approach precludes any interference by the parties, as evidence is produced at the level of competent authorities and state organizations of other countries. However, since filing a request for assistance is solely the right of the court and the practice shows its inefficiency, the courts less and less often support the parties’ initiative in sending such a request.
The inefficiency of this tool is primarily due to a waiting period and a low chance of receiving any response. Cases of receiving a response are few.
The duration and poor efficiency of the procedure often trigger the parties’ attempts to initiate the request with the sole purpose to delay proceedings. This is the second reason why such requests are not popular: the courts are pushing back against abusive practices.
Courts tend to request for assistance in the event of contradictions in evidence provided by the parties, as a failure to do so may cause a reversal of the court’s ruling by a higher instance.
Thus, this tool is primarily used in the event other proof is not available in a case, or submitted documents contradict each other, or the court cannot trust either party.
Court-appointed expert examination
The court may by its order involve experts to assist in interpreting and establishing the content of the foreign law. This procedure is known as a ‘court-appointed expert examination’, and it is the only situation when the court relies on another person’s knowledge of the law.
However, the expert may not interfere in a legal assessment of relationship between the parties and evidence submitted. In other words, the expert cannot directly resolve the dispute itself. Therefore, an expert opinion should be detached from the particulars of the case, and this should be foreseen in advance, at the very stage of drafting the questions for the expert.
Case. The court addressed an expert with a question concerning the compliance of a contract with English law. The judgement was reversed by a higher instance, and it was pointed out that the court raised issues of the legal evaluation of evidence by the expert him/herself, which is totally unacceptable and substitutes the competence of the court.
Court-appointed expert examination has not seen widespread use, as compared to out-of-court expert examination usually conducted by the parties. Commercial courts of the Moscow Region are the only courts who use this tool from time to time, and the choice often falls on the experts of the Russian Institute of Legislation and Comparative Jurisprudence.
Nevertheless, this method has a number of underestimated advantages.
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Expert examination has a clear qualitative advantage over official court’s requests for assistance to competent authorities. The expert opinion consists of interdependent conclusions concerning foreign legislation based on its practical application, rather than simple citations from statutes, which will most likely be included in the reply to the court’s request for assistance.
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In some cases, even a very well-drafted expert opinion may not provide the court with a complete picture of foreign legislation. Various questions requiring clarification will often arise in these cases. Given the expert’s special status, the court may request for his presence in the hearing to comment on the opinion.
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Calling for the expert examination suspends proceedings. This is beneficial for the court in terms of procedural deadlines and affords the parties a degree of foreseeability.
NB! Incorrect questions brought before the foreign law experts will cause a reversal of the court’s decision.
Out-of-court expert opinion
This kind of proof of the foreign law is the most popular among the parties in a dispute. However, it is vital to understand that a legal nature of the opinion drafted by the party-appointed expert drastically differs from the opinion of the court-appointed expert.
Unlike the Anglo-Saxon legal system, in Russia, expert opinions obtained by the parties beyond the court’s control do not constitute expert opinions in the meaning of the CPC but are instead given the status of ordinary documentary evidence.
NB! Expert opinions prepared by professionals engaged by the parties themselves are treated as ordinary documentary evidence rather than expert opinions.
Requirements for out-of-court expert opinions. The rules for assessing this kind of evidence are in fact similar to the rules for court-appointed examination.
Case. A bank submitted to the court a memorandum of a solicitor of the Supreme Court of England and Wales, who expressed an opinion on the lawfulness of the bank’s claims. The court established that the solicitor was a partner of the international law firm that represented the bank’s interests in bankruptcy proceedings. Since the law firm was directly interested in the bank’s success in the proceedings, the court concluded that the expert was biased.
Less straightforward links also raise questions. For example, the court will not favor a situation in which a law firm representing the party’s interests has already came across the expert engaged in the framework of another project.
Case. A defendant submitted an opinion of the expert who had held the position of Lord Justice in the Court of Appeal of England and Wales for 13 years, Judge of the High Court for 7 years, and before that had been a barrister at law and Queen’s Counsel. The courts found the opinion to be inadmissible evidence, as it contains an analysis of the parties’ relations and introduced evidence. However, the courts have found it possible to use court judgements with a notarized translation attached to an opinion as a source of law.
It should be noted that the courts are not completely consistent in the question of admissibility of out-of-court expert opinions containing an analysis of a dispute and the author’s opinion regarding the lawfulness of claims. The difference in judicial approaches may be to the benefit of the party, but in most cases, it will entail costs for adducing worthless evidence.
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The opinion must be prepared by a person possessing special knowledge of the foreign law and having prestige based on his/her belonging to a foreign legal system, occupying a senior position in a major law firm, or having a reputation in legal science. Thus, the partners of reputable law firms and experts of leading law faculties and institutes may be entrusted with this kind of works. The court’s failure to examine the qualifications of the out-of-court expert may cause the reversal of a judgment.
Form of the out-of-court expert opinion. As a matter of practice, parties submit out-of-court expert opinions in a form recognized by a legal system to which an author belongs. For example, a written witness testimony (affidavit) is commonly used in the Anglo-Saxon legal system. Taking into account the oath made in confirmation of the fact that the content of the affidavit is true, this document constitutes reliable written evidence.
Although such an institution is unknown to Russian law, it does not prevent the parties from using this form in order to prove the foreign law to Russian courts. This does not change the legal nature of the out-of-court expert opinion from the viewpoint of the CPC but may make a generally positive impression on the court. In a number of cases the courts emphasize that the author is not held liable for making a false statement, and if the opposing party fails to refute the affidavit by providing another convincing evidence, the court will find the content of a foreign law established.
A few words about disadvantages. When assessing the out-of-court expert opinion, the court may have questions that require the author’s appearance in the hearings. In foreign legal systems, the court may summon the author for cross-examination, and no legal obstacles exist. Same rights are provided to Russian courts in case of the court-appointed expert examination.
However, party-appointed experts may not be ordered to attend in the court, as they have no recognized procedural status – the CPC contains no relevant provisions. There are few cases where the courts called for the expert to attend the hearings in the status of a witness or a specialist, but it seems quite questionable because of the radically different nature of these institutions.
Sometimes the parties also invite the authors of out-of-court expert opinions to participate in the hearings as representatives under the power of attorney. However, these cases may give the court reason to doubt the expert’s objectivity.
By Anastasia Cheredova, Head of Special Projects, Vegas Lex