Judicial Decision Making Comity And Balancing
As a matter of judicial decision-making, how might jurisdictional clashes be avoided, or at least mitigated, while still achieving the policy objectives of the two jurisdictions? One approach has been to refine the concept of jurisdiction. Jurisdiction to prescribe and jurisdiction to enforce have been further divided into the primary and secondary competence to prescribe and enforce. Economic sovereignty has been introduced as a notion for refining discussions of jurisdiction. While the concept of jurisdiction can narrow the issues, it is not definite enough to provide complete answersMoreover, it does not assist to resolve the situation where more than one state has jurisdiction to prescribe or to enforce.
The two concepts which common law courts have invoked to mitigate a clash of jurisdictions are comity (the English approach) and balancing interests (the US approach). Comity means that, in decision-making, courts ought to have due regard to the position of persons affected by foreign law. English courts have had regard to comity, both in defining the reach of foreign legislation and in judicial decision-making. In the leading banking cases47, orders against, respectively, the head office of a UK bank, and the London branch of a US bank, were set aside.
In the first, the Court of Appeal held that, although it could make the order under the Bankers' Books Evidence Act 1879, it should not in its discretion do so because of the danger of a conflict of jurisdictions between the High Court in England and the foreign court (which previously had refused to make such an order). In the second, the judge set aside an order under that Act, and a subpoena, because there was an alternative remedy available to the plaintiff in a foreign jurisdiction (actually New York), and it was not a case of 'hot pursuit'.
Comity, however, is an ill-defined concept, and for that reason can be arbitrary in its application.
Moreover, comity requires abnegation: in its absence, the doctrine is still-born in practice. Comity has appealed to US academic writers, but in recent times only occasionally to its courts. In the main the US courts have accorded overwhelming weight to US interests in cases involving foreign banking laws.Balancing interests is another approach to minimizing jurisdictional clashes. The law of one jurisdiction may require a bank to act, but in breach of the law of another, so that the courts of the first will balance the different interests carefully before deciding to apply it.
Developed by the US courts in the context of antitrust activities, the notion of balancing interests is now incorporated in general terms in the Restatement on Foreign Relations Law. This provides that, when it is not unreasonable for each of two states to exercise jurisdiction to prescribe in relation to a person or activity, but the prescriptions of the two are in conflict, each state has an obligation to evaluate its own, as well as the other state's, interest in the light of all the relevant factors, and to defer to the other if that state's interest is clearly greater.
While balancing might once have provided a method of reconciling jurisdictional conflicts, it no longer provides much hope.
As a general technique, it fails unless some weight is assigned to the various interests, in particular those of the foreign state. The Restatement provides only that the foreign state's interests must clearly be greater before the United States exercises its jurisdiction to prescribe. No weights are attached to the interests identified for the making of production orders. In any case, is the weight to be attached, say, to bank secrecy laws for one jurisdiction to be greater than that which attaches to those of another?
Collins has suggested:It is one thing to pay respect to Swiss secrecy laws; they have their origin in the protection of basic human rights and not in the facilitation of fraud and crime, and Switzerland is a country with a strong international currency and an indigenous banking business. Can the same respect be due the Cayman Islands? The banking business there consists of branches of foreign banks which act largely as accommodation addresses for the transfer of funds.
In practice, balancing when invoked by US courts has almost invariably resulted in a finding that jurisdiction lies. While referring to the laws of other jurisdictions, US courts have given them short shrift.
One can also question whether, as a matter of institutional competence, the judiciary is in the best position to evaluate what is essentially a foreignpolicy issue, the weight to be given to the interests of a foreign state.
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