In today’s world, where cross-border transactions are increasingly common, there are many disputes in which issues will be governed by foreign law. This may be because the governing law of a contract is a foreign law, and the foreign law is relevant for interpreting the terms of the contract and the rights and remedies that are available (for a discussion of the governing law of a contract, see China Business Law Journal, volume 3 issue 10, page 73: Governing law or proper law?). Alternatively, foreign law issues may be relevant as a result of the application of general principles under private international law. As a result, the question of how foreign law is determined is of critical importance for the legal system in every jurisdiction.

This article considers how foreign law is determined in court proceedings, and examines the issues comparatively in common law jurisdictions, civil law jurisdictions and in China. Finally, it notes the approach of the recently established Singapore International Commercial Court, which represents a departure from the traditional common law approach.

Common law jurisdictions

A key point to note in relation to common law jurisdictions is that the content of foreign law is considered to be a matter of fact and not a matter of law. Accordingly, as courts and judges are deemed to have no knowledge of facts, the content of foreign law must be proved by the parties, and the onus of proving foreign law is on the party who seeks to rely on it.

Unless the content of the foreign law is admitted by the other party, the party who seeks to rely on it must call a foreign law expert to provide evidence. This is because a party cannot prove foreign law simply by providing materials such as legislation and case law. Instead, the evidence of a foreign law expert is required to explain and interpret such materials.

Although the court will decide whether to accept or reject the evidence of a foreign law expert and the potentially conflicting evidence of a foreign law expert called by the other party, the court will not conduct its own research to determine the content of foreign law. This reflects the adversarial system in common law jurisdictions, where the role of the court is to determine the facts of the dispute on the basis of the submissions made by the parties, and as proved by the parties. Unlike the courts in civil law jurisdictions, the common law courts are not inquisitorial in nature; in other words, they do not undertake their own investigations to determine the facts. As a general rule, a common law court will not make its own investigations to determine the content of foreign law. It is only where the expert evidence is obviously false that a court can look at the relevant sources of foreign law to determine its content.

Because the content of foreign law is considered to be a question of fact, it is the choice of each party to the dispute as to whether to plead or rely on the foreign law in support of its case. There may be various reasons why a party may choose not to plead foreign law, even though it would otherwise be applicable. For example, the position under the foreign law may not be favourable to the party’s case. In addition, the party may decide that the benefits of pleading foreign law are outweighed by the cost of calling expert witnesses, and the uncertainty as to whether the expert evidence will be accepted by the court.

In circumstances where a party fails to plead the content of foreign law or the expert evidence provided by the party is not accepted by the court, the traditional principle in common law jurisdictions is that the court will presume that the foreign law is the same as the lex fori (i.e. the law of its own jurisdiction) and apply thelex fori. The presumption that foreign law is the same as the local law has been criticized by many judges and scholars on the basis that it is artificial. An alternative explanation is that if foreign law is not proved, the lex fori will apply by default. This approach is closer to the approach in civil law jurisdictions.

It is interesting to note that although foreign law is treated as a question of fact in common law jurisdictions, it is possible for appellate courts to overrule a judgment of a lower court on the basis that the foreign law had not been applied correctly. This is different from the general rule that findings of fact cannot be challenged on appeal.

There are two situations in which it is not necessary for a party to prove foreign law. The first is where the court is considered to have knowledge or “judicial notice” of the law in the other jurisdiction. This situation often arises in federal systems such as Australia, where the courts in one state are considered to have judicial notice of the legislation in another state. The second situation arises where arrangements are in place for the court to refer questions of foreign law to the judges in the foreign jurisdiction. For example, the Supreme Court of New South Wales in Australia has entered into agreements with the Supreme Court of Singapore and the New York courts to refer questions of law to judges in those jurisdictions for determination. A similar arrangement is in place between the member states of the EU.

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葛安德 Andrew Godwin
Andrew Godwin

A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at law.asia.