Michael Froomkin wrote:
> My assumption, on which I would welcome your comments, is that many (not
> all, but enough) foreign courts would enforce a US third party
> beneficiary theory if the agremeent specified a particular US state as
> the governing law of the agreement. I would have expected Canadian
> courts to do this -- would they?
>
> I agree that there is not uniformity among all US states, but that is an
> advantage -- pick the right state to get the best law for this problem,
> and all US and many foreign courts will respect your choice of law.
Conflicts just isn't my thing, but in general I think Canadian courts are
loathe to get into situations where they have to apply foreign law. In an
action involving a California corporation and an Ontario individual, for
instance, respecting a contract which stipulates the law of New York as the
governing law, an Ontario court would probably be quite receptive to
arguments that the matter should be adjudicated in either a California or
New York Court. A court in any other province of Canada would almost
certainly rule that the proper forum is either Ontario, California or New
York.
But Ontario courts are also loathe to enforce choice of law clauses where
there appears to be no 'real and substantial connection' between the chosen
law, on one hand, and the subject matter and/or parties on the other. A
contract between a California corporation and an Ontario individual can't
simply name Switzerland (or Tennessee, etc.) as the governing law, unless
there is a real and substantial connection between the subject matter and
Switzerland (or Tennessee, etc.) (as there would probably be if the contract
was about a joint venture project in Switzerland (etc.).
The risk with litigating in Ontario, then, is that the court will either
bounce the parties (with a strong suggestion that they go to California or
New York) OR take jurisdiction but disregard the choice of law clause and
steam ahead applying Ontario law, which one party might be quite happy with,
particularly if it is the one trying to avoid the application of a somewhat
unorthodox (from the Ontario point of view) principle. This kind of thing
happens fairly regularly, I think, in commercial litigation, where parties
have been trying to 'import' American contract principles into Ontario
common law for some time. Another common situation is where an American
party gets a default judgment against a Canadian party in a U.S. state, then
brings it up for enforcement against the Canadian party's assets in Ontario,
at which time the Canadian party convinces an Ontario court that the default
judgment was obtained in a jurisdiction with which neither the Canadian
party nor the subject matter had any real and substantial connection, and
therefore shouldn't be enforceable in Ontario.
Anyway, to my limited knowledge, choices of law are not automatically
enforceable in Ontario, unless there is a real and substantial connection
(the terms of art may have changed) between the parties/subject matter and
the chosen jurisdiction. I would be interested to hear from both Canadian
and American lawyers who know more about conflicts of laws than I do,
though. It sounds pretty off-IFWP, but as long as we can keep it tied to
the idea of contracts between ICANN (or its successor) and members of the
Internet community (named or unnamed), then maybe we will be indulged.
Craig McTaggart
Graduate Student
Faculty of Law
University of Toronto
[EMAIL PROTECTED]
